Towards the end of last year, Meta released SAM 3, which stands for the third version of its Segment Anything Model. The way it generally works is that it allows you to detect, edit, and experiment with things in images and videos. For example, if you were looking at a video of a street, you could ask it to find all the scooters (which I did below), count the number of pedestrians wearing black pants, blur all the license plates on the cars, and so on.

This is immediately useful for a company like Meta because it allows for object-level modifications across its content creation platforms. So if you took a video of someone dancing and you desperately wanted to give them a bobblehead, SAM 3, I'm told, would allow you to quickly do that. Other AI models, such as Gemini, can also segment, but supposedly the SAM models are better and more precise at this specific task.

Beyond bobblehead videos, the potential of this model seems enormous for real estate, cities, and, of course, many other things. Using the above image as an example, you can quickly imagine SAM 3 being used to count and track modal splits across a city, and then make planning decisions based on real-time data.

People are also using it for real estate purposes. Pair the model with satellite images, and you can ask it to tell you how many houses have a pool, which houses recently had their roof replaced (and have solar panels), how many cars are parked on a street, how many cars are parked at Canadian Tire, and the average building lot coverage in an area.

You could also use it to swap out finishes in a real estate listing (including in videos), and get material/area takeoffs ahead of a construction project. I don't know for sure, but I would also imagine that this model would make a great building condition inspector. Come to think of it, I'd love a SAM 3 that could walk our construction sites and document every little detail!

Of course, a lot of these use cases are already being tackled. But the models are getting that much better. And that will lead to even more innovation.

Cover photo by Above Horizon on Unsplash

Sometime last year, Instagram changed its bottom menu bar to the following:

Bookended by the home button and the user profile button are now video reels, DMs, and the explore page. The create a new post button, which was formerly here in the center, was moved up to the top of the screen in a far less conspicuous place. These changes felt weird at first, but they were, of course, based on real user data. What people do on Instagram these days is watch reels and then share them with their friends. The era of posting beautiful square photos with nice filter edits died a long time ago.

But even today's world of video reels and TikTok videos is in massive flux. AI is flooding the system, and it's impossible to know what is "real" anymore. The name of the game with social media used to be authenticity. This is how individuals gained distribution control from institutions and large brands; they were more real and authentic. But today, we are in a world where AI-generated content can be entirely indistinguishable from "real" or captured content.

I have felt this change myself. As someone who has been a hobby photographer since undergrad some 20+ years ago, I have noticed myself grabbing my Fujifilm camera a lot less over the last year. Instead, I've just been using my phone and spending more time playing around with AI. And, of course, it's not just me. I see my architect and real estate friends using AI to test concepts, create presentation renderings, and more. So, where does all of this leave a platform like Instagram that was designed around individuals creating and sharing their own content?

A few days ago, Adam Mosseri, the head of Instagram, published these twenty slides about how the company sees the world as we head into 2026. They're an interesting read because they mark a shift in messaging. Previously, the narrative was all about connecting the world and empowering creators. Now it's about labeling, mediating, and controlling this new world. In the words of Silicon Valley journalist and entrepreneur Om Malik, "deep down, Instagram is frightened."

But there is a path forward (excerpt also from Malik):

It starts by verifying who is behind an account, embedding provenance in media, and rewarding trust signals. Over time, Meta may tighten control and aim to be an identity broker for everyone. Instagrams want [sic] you to be prepared for this new era of tighter control over identity, authenticity, and content provenance.

One of the most important slides in Mosseri's post for me is this one here:

I've been arguing for years that crypto has an important role to play in a world filled with AI. When nobody knows what is "real" anymore, there's value in being able to say with finality that, hey, this thing over here is authentic and comes from this source. Social media (web2) showed us that people would rather tie something back to an individual instead of a large faceless brand. AI is disrupting this chain of provenance, but I think crypto will bring us back to it, somehow. Whether Instagram will be a part of it, of course, remains to be seen.

Cover photo by Jakob Owens on Unsplash

Yesterday we looked in the rear-view mirror. Today we're looking forward:

• The market consensus right now is that this cycle of interest rate increases has come to an end, and that we should see rates start to come down next year. Having confidence that rates won't go any higher in the near future is what markets need in order to start making more decisions. So this is, of course, positive. At the same time, I don't think anyone should expect a return to ultra-low rates. Rates today are still low when viewed historically.

• Lower rates are good for levered assets such as real estate, but I don't think that our industry has fully felt and processed the impacts of higher rates. Unfortunately, I think that things will get worse (in 2024) before they get better (maybe toward the end of 2024 or perhaps in 2025). This is when a "risk-on" approach will return in commercial real estate. A year ago today, I thought 2023 would be the year for this, but as I said yesterday, I was overly optimistic in terms of my timing.

• On the residential resale side, I think we will see greater optimism sooner, certainly for the most in-demand cities and areas. There is pent up demand waiting on the sidelines and, once we can get past the current bid-ask spreads and deadlock, I believe we'll return to a more balanced market in 2024. To be clear, I'm not expecting bidding wars and the like. And because of our housing affordability crisis, I also think the Bank of Canada will be more resistant to lowering rates compared to other central banks. This will help the Canadian dollar.

• If you're a buyer of real estate, I generally believe that 2024 will turn out to be a pivotal year for you. Roughly speaking, you win acquisitions in one of two ways: either (1) you pay the most or (2) you believe in something that most other people in the market don't. This second approach is harder to achieve in bull markets. But in slower markets, the door is open and history has taught us that it can be the foundation in which great fortunes are made.

• As I mentioned yesterday, I agree with the prognostications that hard costs will soften further next year (perhaps even more than 5% on average). Obviously every market is different. But here in Toronto, I just don't see us returning to the level of construction starts that we have seen over the last number of years.

• Since 2021, I have used my hyper scientific Jimmy the Greek Reopening Index to keep tabs on office utilization and the overall return to office. And based on this, 2023 was a positive year. Initially, souvlaki consumption appeared dramatically lower on days like Monday. But I noticed discernible increases as the year went on. However, if you look at actual data, such as what we have from swipe cards, the great return to office seems to have stalled out at around 50%. I don't think this will hold, though. I continue to believe that of the people who work in offices, most will spend > 50% of each week there. And we will see that in 2024.

• 2023 was the year of AI. But Fred Wilson makes an excellent point, here. AI is 40+ years in the making. Last year only became the year of AI because a consumer-facing app -- ChatGPT -- was revealed that captured everyone's attention. Crypto will eventually have this moment, but it will likely need to marinate a bit longer. Instead, I think 2024 will be the year of augmented reality (AR) and a further blurring of our offline and online worlds. Think digital art, fashion, and other collectibles (such as NFTs).

• Right now, autonomous vehicles feel like they're in the trough of disillusionment (within the hype cycle). There were moments last year where it felt like we were finally moving beyond this phase. But then some very suboptimal things happened. I think AVs are our reality in the next 5+ years, which means that for next year we likely want to be focused on the inputs: vision/LIDAR, battery tech, etc.

• Zooming out, we should be thinking about the above two trends in the context of a broader shift toward greater automation. I think it will feel more insidious than immediate (certainly in 2024), but the longer-term impacts are going to be profound for our society. The so-called gig economy is likely to be impacted first. Eventually the overall economy will create new jobs, but we are still going to need to manage this transition toward more automation.

• TikTok Shop is where to look for the future of shopping. I think the platform will continue to see strong adoption and ultimately prove to be a dominant e-commerce platform throughout 2024. Amazon, Meta, and others will see this, and try their best to catch up and copy it.

• At the time of writing this post, the total crypto market capitalization is about $1.74 trillion. This is down from nearly $3 trillion at the peak of the market in 2021. The recent gains suggest that the so-called "crypto winter" might be over, and so combined with lower interest rates and more real-world use cases, I think that 2024 will be another strong year for crypto. Total crypto market cap at the end of the year will exceed its 2021 peak.

And there you have it. My current thoughts for this upcoming year. I should note that I'm not an economist, analyst, or an expert on souvlaki demand for that matter. But I enjoy writing this post as an annual discipline. It forces me to think critically about the topics that interest me. And in the paraphrased words of Howard Lindzon, it gives me an archive that I can go back to and either cringe at or think to myself, "hey, I could have been a somebody!"

And with that, a big thanks to everyone who has read this daily blog over the last year. This year marked its 10th anniversary. I wish you much success and happiness in 2024. Happy new year!