Big AI & Big Streaming
Google's Q2 • EU vs. App Store • Skydance/Paramount Deal Clears • AppleCar One Service • Feeding the AI Monster • Ted Lasso Returns
Has OpenAI moved the goalposts when it comes to 'Stargate'? Yes. Though I'm not sure how much that actually matters as long as they get their compute in the end. It was always more of a political branding exercise anyway. And there's a lot of branding and rebranding going on around AI in general these days... And the political showmanship could be worse, it could be this!
Meanwhile, AI may soon help you write without needing to type. Or even move. Which is pretty amazing. And while AI may help you put something on the page, that's not actually the valuable element of writing to many of us: it's the writing process itself and what it does to your brain.
Has Disney finally found a partner to offset some of the ever-rising costs of sports rights – something especially key as the economics of the entire package shifts as we move to streaming? If so, they may have the perfect one – and launch partner for the flagship ESPN streaming service – in the NFL. Because not everyone is Netflix, who can just put anything on and make it a success.
Is it strange that basically all of Big Tech own big portions of basically all of Big AI and no one really talks about it all that much? I mean, maybe beyond the Microsoft/OpenAI relationship because it's so dysfunctional and dramatic that they simply demand that you talk about it. Often.
• Written on an M4 MacBook Air 💻
• Sent from London, England 🏴 Notebook
📈 Alphabet's Q2
The biggest takeaway is that they're raising CapEx projections for the year – again. $85B is the new $75B. Amazingly, last year, the thought was that Google would spend a "mere" $59B on CapEx this year. I mean, we might see $100B hit before the year is through given the intense competition going on... Otherwise, Google beat across the board, driven by Cloud, which is now a $50B business (annually) on its own for Google, with YouTube likely near $40B. That makes three businesses (with Google Ads) which are now at or above 10% of Google's overall business – diversification! Add in the potential for Waymo and you have what seems to be a pretty undervalued company, certainly relative to their peers, IMO (yes, I worked there for over a decade, but haven't for over a year now). Though yes, the actual monetization of AI (in so far as it relates to Search ads) remains... well, the ultimate question. Especially with all that spend. No surprise that they have 2B MAUs on the AI they're baking right into search, but 450M MAU for the Gemini chatbot itself seems impressive – relative to ChatGPT – presumably that's juiced by integration into Gsuite and other places? Just wait until it fully rolls out in Chrome! [CNBC]
🇪🇺 The EU Accepting Apple's App Store Changes
After what has seemed like an endless war of words, and back-and-forths, and piecemeal changes by Apple, their battle may be over with the EU. At least around the App Store. At least for now. It's unclear if the EC is just reading the political winds in the midst of broader tariff talks (they say "no" but come on), or if they feel like they got Apple to actually move enough here. More interesting to think about: might the high level tweaks become the new App Store standards around the world? Probably wishful thinking but an 80/20 split (dropping to 87/13 for small businesses) seems a lot more reasonable for Apple in 2025. Also, the ability for Apple to take 5% - 15% for facilitated transactions outside the App Store is certainly better than 0% – which is the case right now in the US – from their perspective! [Reuters]
⛰️ The FCC Approving the Skydance/Paramount Deal
This will definitely go down as one of the strangest and most surreal M&A transactions ever. I mean the NYT article closes with the following: "This week, 'South Park' ran an episode featuring Mr. Trump in bed with Satan, with Jesus urging the denizens of South Park to strike a bargain with the president to avoid corporate interference." Not to mention prolonged. Paramount studios should be in a good spot going forward (as that's clearly what David Ellison cared about anyway) but where will this leave CBS and the other stations? And what will they do with the (weirdly branded) streaming service? Clearly there will be more purges. I still like my general game plan, but it's all so stupidly politicized now. [NYT]
📲 The New $20/Month 'AppleCare One'
Tim Cook's never-ending quest for Services revenue continues – and perhaps quickens, with the looming Google Search default payments decision looming. It's hard to get too excited about this one as it's really just an insurance play (while it's not quite the level of say, Sony's insurance business, it's perhaps a start!). But I suppose if you both have a lot of Apple products and break/lose a lot of Apple products, it's a slightly better deal than the one-off AppleCare plans. I tend not to need such services – except when my phone is stolen! – but my wife sure does, so I'm debating it. Still no official "Apple Prime" combining perhaps this and Apple One while throwing in a free iPhone each year... [Bloomberg 🔒]
Loose Leaf
After a long wait, we may just be a couple weeks away from GPT-5. Will it be unified? Will it be AGI? But first, we may get that (itself delayed) first "open" (open weight) model from OpenAI. [Verge]
Intel will end the year having cut 25,000 jobs – roughly a quarter of its workforce. Wild numbers, but undoubtedly the kind of drastic moves needed by Lip-Bu Tan to turn around the troubled ship... [NYT]
Well, Cognition sure played that well. After getting a bunch of love as the white knight cleaning up a messy "hackquisition", they could now be about to leap over even Cursor in terms of valuation (though perhaps not for long). At $10B that may mean a nice quick markup for those Windsurf employees too (depending on how the deal was structured). [Forbes]
The OpenAI movie finds its Elon Musk – people will most likely know Ike Barinholtz as Sal Saperstein in Apple TV+'s The Studio. [THR]
Apple is trying their luck again with the Apple Intelligence news summaries. This time, it's extra super opt-in just to be safe... [Verge]
Dude, no one is buying a Dell, so they're putting their COO in charge of PC sales. At the same time, the company is clearly becoming more of an AI server play, giving them an $85B valuation... [Bloomberg 🔒]
In his leaked memo, Dario Amodei sure seems to say a lot of quiet things out loud to his Anthropic team regarding taking money from the Middle East. I appreciate the transparency, and perhaps he felt it was needed given the backtrack on prior stances, but it's awfully blunt for corporate comms – even internal! [Wired]
Speaking of memos, I found Fidji Simo's to OpenAI employees to be a bit too vague and a bit bland, TBH. As she gets ready to start her role as the "CEO" of Applications. Still, feels like a key hire at a key time. [OpenAI]
You know the gold medal that Google just earned at the International Math Olympiad? Well, Meta just poached three of the key researchers who helped create that model as the AI talent wars continue. [Information 🔒]
Amazingly, the Meta 'Superintelligence' team is said to already be around 3,400 people (presumably most brought over from Meta's other internal AI teams) – while DeepMind is around 5,600.
Microsoft has also poached "more than 20" out of DeepMind – which Microsoft AI lead Mustafa Suleyman, of course, co-founded. Google implies the headcount is going both ways. [FT 🔒]
With Grok 4 now in the wild, and without a key Big Tech partner (well, beyond Elon's other companies, I suppose), no surprise that xAI is incinerating cash and needs to keep raising more, pronto. [WSJ 🔒]
Is "Enshittification" just a reality of economics – one that's especially pronounced on the internet given network effects? Yes. [Paul Krugman]
I Quote…
"Google and the other platforms realize that — if not by virtue of public policy then by virtue of technology — the platforms' access to unlimited web data is about to end. And so they need to have licensing relationships in place, or there won’t be any blood to put in the veins of the AI monster."
– David Gehring, chief executive officer of Distributed Media Lab, a company that works with publishers and advertisers, on the rumored talks ongoing between Google and publishers to figure out a path forward in the Age of AI. Of note, Gehring used to work on such relationships at Google (though he says he has no actually knowledge about these talks and/or initiatives).
I Spy...
The band back together as Ted Lasso season 4 filming is officially underway. It sounds like almost the entire cast is back and things will kick off in Ted's (and Jason Sudeikis') hometown of Kansas City before shifting back to Richmond. Also: they're clearly set up for this to be another three-season story arc, so this very likely isn't just a one-off return.
This return was always inevitable given that it was Apple's first true hit – and for a long while, their only hit – but now that Apple is seemingly doing better content-wise, might it propel Ted Lasso even further? Also, how are they going to tie in the MLS deal? Because obviously that's going to happen.
