Big Tech companies aren’t afraid of antitrust regulators, but they sure do dance for activist hedge funds

If you’re wondering how that’s going, here’s a recent scorecard:

– In late February, Amazon closed its $3.9 billion acquisition of One Medical, a major expansion into primary health care that the retail giant felt comfortable moving ahead with despite not having the FTC’s blessing. 

– In 2022, Amazon acquired Hollywood studio MGM for $8.5 billion.

– The FTC’s attempt to block Facebook-parent Meta from acquiring a small VR fitness app crumbled in February, after a federal judge rejected the agency’s rationale for blocking the deal. 

– And, according to Reuters, Microsoft’s $69 billion acquisition of Activision is set to get approved by the European Commission, which would be a key step towards the deal’s completion. 

Big Tech is clearly still getting deals done. The big fish may not be swallowing startups with the same gusto as in past years (Google-parent Alphabet announced 34 acquisitions in 2014 compared to just 10 in 2022, according to Wikipedia’s tally), but Big Tech is not shying away from giant, transformative deals, à la Microsoft-Activision or Amazon-One Medical, out of fear that antitrust regulators will stop them.

But if Big Tech companies aren’t afraid of the antitrust police, they may be more intimidated by another powerful group: activist investors.

Witness Salesforce’s decision earlier this week to disband its M&A committee. The decision effectively puts an end, at least temporarily, to a multiyear buying binge that included the $27.7 billion acquisition of Slack, the $15.7 billion of Tableau, and the $6.5 billion of Mulesoft.

With at least five activist investors including Elliott Management and Starboard Value meddling in Salesforce’s affairs, the $187 billion company concluded that it had no choice but to acquiesce.

Of course, many Big Tech companies like Meta and Alphabet, have dual share stock structures that offer some protection against activist investors. Still, it’s hard not to see the irony in the differing outcomes achieved by activists and regulators.

If the FTC’s Lina Khan really wants to stop tech companies from doing acquisitions, she might want to call Elliot Management’s Jesse Cohn for advice.

Want to send thoughts or suggestions to Data Sheet? Drop a line here.

Alexei Oreskovic

Data Sheet’s daily news section was written and curated by Andrea Guzman. 

NEWSWORTHY

Neuralink blocked from starting human trials. The U.S. Food and Drug Administration rejected Neuralink’s application to begin human trials, Reuters reported, citing seven unnamed current and former employees. The FDA questioned how Neuralink’s brain chip technology can be implanted or removed without damaging the organ. The regulator also considered the potential for the wires that Neuralink uses to pass electrical signals from the brain to the computer to have unintended effects on movement or feeling.

Nevada Tesla factory is expanding. Tesla will expand its vehicle battery facilities east of Reno, and receive more than $330 million in tax breaks from the state to carry out the project. While the automaker expects to create 3,000 new jobs for the area, some state lawmakers expressed concern. Since Tesla and state officials signed a nondisclosure agreement, legislators only had three days to review a 20-year tax abatement. “There is little to no opportunity to explore how this deal may affect housing supply, public schools, public safety, and other vital government services in the region,” said Democratic State Sen. Dina Neal.

Ford eyes patent for repossession-linked technology. Miss a car payment and your car could drive off to a site where a tow truck could collect it. That’s just one of the ideas Ford recently filed a patent for. Other proposals include tech that could remotely shut down the radio or air conditioning, lock a driver out of their vehicle, or have the car ceaselessly beep after a missed payment. For now, Ford doesn’t have plans to use these ideas. “We submit patents on new inventions as a normal course of business, but they aren’t necessarily an indication of new business or product plans,” Ford said.   

Biden’s cybersecurity plan. The White House released a cybersecurity plan yesterday that calls for software companies to take more responsibility for the security of their products. “Companies that make software must have the freedom to innovate, but they must also be held liable when they fail to live up to the duty of care they owe consumers, businesses, or critical infrastructure providers,” the strategy document says. A trade group known as the Software Alliance, which has Oracle, Microsoft, Adobe, and others as members, told the AP that it looks forward to working with the administration on any proposed legislation to promote best practices.

FOOD FOR THOUGHT

How are satellites affecting the work of astronomers? Researchers analyzed a dataset of images from the Hubble Space Telescope from 2009 to 2021 and found a higher chance that a satellite trail would taint one of Hubble’s photos in 2021. That timeline corresponds to the rise of satellite constellations like Starlink and OneWeb. Publishing their findings in Nature Astronomy on Thursday, the researchers concluded that astronomers may have to move telescopes further away from the Earth to get clearer images, an action that would increase the cost and complexity of those efforts.   

From the article: 

Scientists have long grumbled about the interference posed by bright satellites crossing the sky. SpaceX has tried to account for their concerns by testing new satellite designs that are less reflective, such as its DarkSat design, which uses a less reflective coating. Astronomers note that these experimental designs do work in lowering brightness, but not by enough to remove interference entirely.

To make matters potentially worse, SpaceX is now launching larger satellites that astronomers say are even brighter than earlier iterations.

IN CASE YOU MISSED IT

Microsoft’s venture arm M12 is undergoing a big strategy shift—and insiders have left the fund, by Anne Sraders

Elon Musk says A.I. is ‘quite dangerous technology,’ but Bill Gates says ‘there’s no threat’, by Steve Mollman

Databricks had one of the worst pitch decks Ben Horowitz has ever seen. Now it’s riding the A.I. boom as one of the world’s 10 most valuable startups, by Jessica Mathews

The fired Google engineer who thought its A.I. could be sentient says Microsoft’s chatbot feels like ‘watching the train wreck happen in real time’, by Tristan Bove

As America obsesses over ChatGPT, it’s losing the race with China on tech in 37 out of 44 key areas, study funded by the State Department says, by Prarthana Prakash

BEFORE YOU GO

Charge your phone in under 10 minutes. Smartphone manufacturer Realme will begin selling its GT3 phone to international users this summer after announcing it at MWC, a mobile technology event that took place in Barcelona this week. The phone goes for $649 and boasts a full battery after charging for just nine and a half minutes. Even a 30-second charge is enough for three hours of music, a two-hour call, or an hour of video playback. The company says the phone’s battery is also long-lasting, maintaining 80% capacity after 1600 charge cycles. But it faces some competition. Smartphone maker Redmi posted a proof of concept of 300W fast charging tech that can reach 100% charge in five minutes.