Headlines this week - Jun 26, 2022
Big Tech platforms exploring new monetization models. A startup wants to compete with Google in Search. The emerging risks of "Metaverse fake content". A new privacy regulation under way in the US
The post-pandemic economy
Is a (massive) skill shortage the reason why technology has not really boosted productivity?
Fast-changing world creates training challenge - New industries will require new knowhow — but shortfalls in more basic skills also need to be remedied (FT)
The “gadget boom”, driven by “stay-at-home” policies, seems to be over…
Gadgets Were Hot. Now They’re Not - Not long ago, it seemed impossible to find a laptop. The pandemic has upended that, too (NYTimes)
Platform trends
Apple might be over-valued, because the coming recession might be different from the last one
Apple Isn’t Priced for a Recession - The battered stock has still outperformed many tech peers even as consumer spending looks poised to decline (WSJ)
Big Tech platforms are exploring new revenue sources / monetization models
Google Says It’s Time for Longtime Small-Business Users to Pay Up - Google is charging some small businesses for email and other apps after more than a decade of free use. Business owners say Google is being callous (NYTimes)
Twitter Adds Shopping Feature for Shopify Merchants - Initiative is the latest effort from social-media companies to make it easier for users to buy goods directly from businesses (WSJ)
TikTok seems to be growing much faster than its rivals
TikTok Turns On the Money Machine - ByteDance’s hit video app is on track to triple revenue this year to $12 billion, threatening Facebook’s hold on social media. (Bloomberg)
Advertising is not dead. It is actually the big hope for streaming services (including Netflix)
Free Streaming Services Attract More Viewers—and Advertisers - Ad-supported platforms from Roku and deep-pocketed parents including Fox, Paramount and Amazon are moving beyond bargain-basement programming (WSJ)
Netflix in a Race Against Time With Advertising - Partnerships would allow streaming giant to enter ad business faster as inflation and market saturation make subscriber growth harder (WSJ)
But (advertising) obviously has challenges too. Facebook continues under massive regulatory pressure, and is even changing its technology
Meta Agrees to Alter Ad Technology in Settlement With U.S. - The Justice Department had accused Meta’s housing advertising system of discriminating against Facebook users based on their race, gender, religion and other characteristics (NYTimes)
More experimentation with new monetization models: games and urban mobility platforms:
There’s something devilish about Diablo Immortal’s business model - Though free to play on mobile phones, the new game comes loaded with controversial microtransactions (FT)
Uber and Lyft Want to Share the Wealth, Cheaply - Ride-hailers are catering to the cost-conscious consumer with relaunch of shared rides; drivers might be unexpected beneficiaries (WSJ)
Digital building blocks
Artificial Intelligence
An innovative AI startup wants to beat Google (in Search!). Looks exciting, but challenging
You.com is taking on Google with AI, apps, privacy, and personalization - Award-winning AI research? Check. Startup and enterprise experience? Check. Venture capital and Mark Benioff backing? Check. Is that enough for Richard Socher's you.com to take on Google? (ZDNet)
Meanwhile, Google / Alphabet has large expectations on applying AI to health care
Alphabet is spending billions to become a force in health care - Can it finally shake up the stodgy multi-trillion-dollar industry? (TheEconomist)
Microsoft recognizes that face-recognition is not mature enough yet (and suffers algorithmic bias)
Microsoft Scraps Some AI Facial-Analysis Tools, Citing Risk of Bias - Software giant will stop selling programs that infer emotional state, gender and age (Bloomberg)
Cloud
Walmart wants to build its own Cloud. Good luck with that
Walmart Amps Up Cloud Capabilities, Reducing Reliance on Tech Giants - Retailer says new hybrid system allows the company to switch between cloud providers and its servers, saving time and money (WSJ)
Tech finance trends
VC
Difficult times for Venture Capital. Investors have started to prioritize “centaurs” ($100m/yr revenues) vs. “unicorns”
Tech’s $1 Billion Unicorns Eclipsed by Centaurs - Dreams of instant fortunes are giving way to the slog of actually operating profitably. (Bloomberg)
Specific challenges in BioTech and FinTech, discussed by the FT this week
Biotechs face ‘funding Sahara’ as easy money runs dry - Early-stage drugmakers face difficult decisions as public markets turn hostile (FT)
Fintechs face reckoning as easy money dries up - Valuations have collapsed even faster than they climbed, making fresh funding hard to come by (FT)
Crypto
Even more difficult times for crypto. But crypto-fans are still bullish!
Crypto enthusiasts are betting the house on creative destruction - Despite the recent rout, private digital money seems more likely to mutate than die (GillianTett @FT)
Do Kwon’s Crypto Empire Fell in a $40 Billion Crash. He’s Got a New Coin for You - Luna’s relaunch may be the ultimate act of chutzpah by Mr. Kwon (WSJ)
Themes for the future
Future of AI
“AI celebrity” Yann LeCun doesn’t believe that scaling up language models is enough to get General Intelligence. He’s working on new approaches
Yann LeCun has a bold new vision for the future of AI- One of the godfathers of deep learning pulls together old ideas to sketch out a fresh path for AI, but raises as many questions as he answers. (MITTechReview)
Metaverse
Metaverse advocates promote open standards to catalyze progress, but some critical players (Apple, Niantic, Roblox) are not part of the effort
Microsoft, Meta, and others are founding a metaverse open standards group -No Apple or Roblox yet (TheVerge)
An emerging challenge from VR: the ability to distinguish it vs. “actual” reality. And the opportunities for (more) fake news
Passing the visual Turing test: The inside story of our quest for visual realism in VR (Meta Blog)
Amazon Is Training Alexa to Imitate Voices of Real People, Including the Dead - E-commerce giant says its virtual assistant needs less than one minute of an audio recording to mimic someone’s speech (WSJ)
For now, brands see the metaverse as a driver for “real world” sales. So advertising is an obvious revenue opportunity
The Metaverse Lures Brands Like Nike and Gap With New Ways to Market and Make Money - Much of the activity is focused on generating sales in the real world (WSJ)
Crypto / Web3
Big uncertainty (and volatility) continues around NFTs, still with many legal gaps
The promising future of NFTs remains in a state of flux - Non-fungible tokens may be disrupting art and gaming but a real revolution requires proper legal and regulatory debate (FT)
NFT Startup Magic Eden Valuation Surges Tenfold to $1.6 Billion - Funding round comes during downturn that’s hit crypto startups (Bloomberg)
Electric Vehicles
GM and Ford fighting to consolidate as “the alternative to Tesla”
GM and Ford, Driving to Beat Tesla, Turn on Each Other - Detroit’s greatest rivalry is intensifying in the race to dominate in electric vehicles; Silverado vs. F-150 Lightning (WSJ)
Ford will build electric cars in Spain. But jobs will be cut
Ford Picks Spain for Production of New Electric Vehicle - Decision leaves future of Ford plant in Saarlouis, Germany, uncertain (WSJ)
Ford warns of ‘significant’ job cuts as it picks Valencia for electric car plant - Decision will lead to end of production at Saarlouis facility in Germany and deep cutbacks in Spain (FT)
Batteries
Lithium may be the “new oil”, but we need financial tools to better connect demand and supply
Elon Musk’s Appeals for Lithium Are No Substitute for Better Price Signals - The energy transition will require a lot more of the key battery metal. A busier marketplace would help show capital where to flow (WSJ)
Energy
Nuclear energy could help us fight against climate change. But construction techniques have to be improved
Energy security gives climate-friendly nuclear-power plants a new appeal - To make good on it they have to get easier to build (TheEconomist)
War in Ukraine is creating incentives for this
How Russia’s war could revive America’s uranium industry - The climate crisis and invasion of Ukraine are transforming the politics of nuclear power (TheEconomist)
A US startup may have crossed a milestone towards commercial nuclear fusion. But many analysts remain skeptical
A Big Step Toward Fusion Energy Is Hailed by a Seattle Start-Up - Zap Energy said its experimental reactor core was ready for a milestone test. Skeptics routinely question whether the technology is currently possible. (NYTimes)
The politics of the digital economy
Safety / Privacy
US privacy legislation is coming. Not the best timing for Big Tech
Online Privacy Bill Clears Early Hurdle in House - Legislation to establish broad consumer privacy rights passes subcommittee vote but faces uncertain fate in Senate (WSJ)
According to US policymakers, Apple might not be so privacy-friendly as they claim
Lawmakers Want FTC to Investigate Apple, Google Over Mobile Tracking - Identifiers built into iOS and Android facilitate the collection and sale of personal data, Democrats say (WSJ)
Meta becomes very explicit against the new UK online safety bill
Meta Says UK Bill Risks Messages Being Surveilled, Censored - Online Safety Bill is winding its way through Parliament. Lawmakers have received letters from LEGO Group to dating apps (Bloomberg)
The Tech Cold War
China’s efforts in semiconductors are seen as a threat by the Americans. And they might not be doing enough to win
Semiconductor Dependency Imperils American Security - The U.S. Innovation and Competition Act is only the first step in preventing Chinese dominance (WSJ)
The “Second Cold War” has reached the space industry. Partnerships with China are now under suspicion in the West
The corporate feud over satellites that pitted the west against China - How a clash of cultures — and geostrategic interests — sank a German-Chinese joint venture competing in the new space race (FT)
This climate may affect Tesla’s interests in China
Elon Musk’s Starlink aid to Ukraine triggers scrutiny in China over US military links - ‘Silicon Valley Iron Man’ is under pressure over satellites as Chinese rivals close in on Tesla (FT)
Green new deal
Adoption of renewable energies is now a regulatory problem, rather than a technological one
Green Energy’s Big Looming Problem Is Red Tape - Declining technology costs and low interest rates helped solar and wind take off; physical constraints could hamper future growth (WSJ)