Good morning. As you can imagine, there’s an awful lot of chatter going ’round about what another Trump presidency means for business and tech. (Our cheat sheet on the areas to watch is below.)
I’ve been thinking about a lot of things in the wake of the election results. One of them is the voters who feel like current circumstances aren’t working for them. By almost every measure the U.S. economy is strong—but that’s not how it feels to a lot of folks right now, particularly in Pennsylvania, where I grew up.
Will the continued march of technology ease or exacerbate those feelings? Will the AI revolution lead to broader, rather than merely greater, prosperity? I can’t decide. Reply and share your thoughts; I’d love to hear them. —Andrew Nusca
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What Trump means for tech
Donald Trump’s return to the White House will probably touch every corner of tech.
From AI and antitrust to chips and social media—not to mention cars, space, and crypto—Trump and his backers have policies to push, interests to serve, and grudges to pursue.
A couple of outcomes are highly likely, such as the deregulation of crypto and the defenestration of controversial Federal Trade Commission chair Lina Khan, who is arguably Big Tech’s biggest foe. But the surest thing is that Trump will be as chaotic and unpredictable as ever.
He might ignite a trade war with China, causing huge problems for TSMC and other Taiwanese chipmakers who keep the world ticking. Or he might use Taiwan as a bargaining chip in some potential deal with Beijing. Either would up-end the chip industry.
Elon Musk may soon be in a position to favor xAI in his plans for a sweeping reorganization of the U.S. government. Those in Trump’s circle could encourage the president to sponsor a Manhattan Project-style project for bringing about the genesis of superhuman artificial general intelligence. And Trump’s likely avoidance of meaningful AI regulation would be a boon for misinformation and discriminatory uses of AI.
Whatever happens, it’s certainly true that the likes of Mark Zuckerberg and Jeff Bezos, who have recently gone out of their way to avoid enraging Trump, made at least the right strategic decision. —David Meyer
Canada orders TikTok business shutdown
Canada has ordered TikTok to dissolve its business in the country, though it didn’t go so far as to block access to the TikTok app by the almost six million residents who use it.
The shutdown decision was made for national security reasons and was based in part “on the advice of Canada's security and intelligence community and other government partners,” said Innovation Minister Francois-Philippe Champagne in a statement.
Government officials in Ottawa have been reviewing TikTok’s business plans in Canada since last year. (TikTok, of course, is owned by China’s ByteDance.) The Great White North had already banned the TikTok app from government-issued devices.
TikTok said it would challenge the order in court. In the meantime, the company is fast-approaching its January 19 deadline to sell its U.S. business to an approved buyer—again, for national security reasons—or face a ban. Some 170 million people in the U.S. use the app. —AN
EU opens antitrust probe against Corning
You don’t often hear about antitrust proceedings against a 173-year-old glass company, but there’s a first time for everything.
Corning—which developed bulb-shaped glass for Thomas Edison, manufactured displays for virtually every TV in the 1960s, and invented your mom’s Corelle dishes—found a new cash cow in the 21st century with its Gorilla Glass, installed on a smartphone near you.
The stuff is so popular, in fact, that the company now faces antitrust scrutiny from the European Union over whether it abused its market power—and exclusive agreements with phone makers—to out-maneuver competition.
“The agreements that Corning put in place with OEMs and finishers may have excluded rival glass producers from large segments of the market,” reads a European Commission statement, “thereby reducing customer choice, increasing prices, and stifling innovation to the detriment of consumers worldwide.”
Corning said it would comply with the probe. If found in violation, Corning could be fined up to 10% of its annual global revenue. —AN
Freshworks to lay off 13% of workforce
The Silicon Valley cloud software company Freshworks said Wednesday that it would lay off 660 people, or 13% of its workforce. It expects to complete its restructuring by Dec. 31.
The news comes in the wake of rather strong quarterly earnings. Demand for its AI-driven services led the 14-year-old company to raise its annual revenue and profit forecasts—to as much as earnings of 39 cents on revenues of $716 million—driving its share price up by double digits, to about $15, in after-market trading.
“We're proud of the operational efficiencies we're creating while scaling our business,” CEO Dennis Woodside said during a conference call.
Founded in Chennai, India, Freshworks is the company behind the IT service management platform Freshservice and customer service tool Freshdesk. It sells its software to companies including American Express, Databricks, Nucor, and Sony and competes with Salesforce and ServiceNow. —AN
Take-Two earnings show gamers are willing to spend again
In the year ahead, the video game industry’s hopes are banking on two things: a successor to the Nintendo Switch and Grand Theft Auto VI.
But a little confidence now doesn’t hurt, eh?
On Wednesday Take-Two Interactive, the New York City gaming company behind the GTA franchise, beat Wall Street’s expectations for quarterly earnings ($1.47 billion) and profit, sending its shares up about 5% to $173.
The company’s long-term outlook is, of course, bright. In addition to GTA VI, which is expected to rake in billions of dollars, Take-Two has Borderlands 4 and Mafia: The Old Country in the pipeline.
Take-Two expects to generate up to $5.65 billion this fiscal year—in line with analyst estimates—and “sequential increases and record levels” in the GTA VI-filled years that follow, per CEO Strauss Zelnick. To quote one of the series’ characters: It’s called capitalism. —AN
More data
—Chat.com is now controlled by OpenAI. Who said AI would kill the web?
—Twice as many pro-crypto candidates vs. anti-crypto were elected to the U.S. House.
—Arm dims its Q3 revenue outlook to about $945m. Sluggish chip demand to blame.
—JPMorgan’s Onyx blockchain platform now called Kinexys. Marks a shift to real-world asset tokenization.
—Australia weighs social media ban for kids under 16. Enforcement is the trick.
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