Good morning. Chilling stuff in yesterday’s New York Times about President Trump’s position on tariffs—chilling, at least, if you’re a businessperson who relies on shipping goods from somewhere to the United States.
“In the corporate community, many had been clinging to the view that he saw tariffs only as a tool of leverage,” the article reads. But that hasn’t proven true this time around, driving down the markets and catching many executives on their heels.
Off to recalibrate expectations, I guess. Anyone got a line on a drone-making facility? Asking for a friend. —Andrew Nusca
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Alphabet is reportedly in talks (again) to acquire Wiz
Google’s parent company nearly acquired the cloud cybersecurity company Wiz last summer for $23 billion before the startup spurned the offer.
Turns out a deal may be back on the table…for a cool $30 billion.
The Wall Street Journal reports that the two parties are back at it, discussing what would be Google’s largest-ever acquisition. It “could come together soon,” according to the report, “barring any last-minute snags.” Ahem.
Last time around, some of those snags included concerns about regulatory approval. With a change in federal administrations, the issue seems less concerning. (Though Google is currently in the midst of two antitrust lawsuits: one regarding ad technology, the other regarding its search business.)
“I think consolidation in the security market is truly a necessity,” Wiz cofounder and CEO Assaf Rappaport said in an on-stage interview last summer at Fortune’s Brainstorm Tech conference in Park City, Utah. “It’s too fragmented, we’re going to see the consolidation.”
Wiz appeals to Google because it can help bolster the larger company’s cloud computing efforts, which trail behind rival offerings from Amazon and Microsoft.
But it comes at a steep price. At a reported $30 billion, Wiz would be almost three times the price of the $12.5 billion deal Alphabet struck for Motorola Mobility in 2012. —AN
A new, premium generation of Amazon devices will arrive this fall
Amazon plans to expand its Alexa-enabled device portfolio by moving upmarket.
The company is preparing to launch “a premium tier” of next-gen, AI-enabled gadgets, according to a Bloomberg report, that promise more robust sound, battery life, and security.
They’ll be the first in the reign of devices chief Panos Panay, who took the job in late 2023 after nearly two decades working on consumer devices at Microsoft. (He left as chief product officer.)
Amazon has sold millions of Alexa devices since the debut of the Echo in 2014. Amazon’s connected devices (which today start as low as $50 for the Echo Dot) remain a powerful flywheel for the company to drive subscriptions to its $139-per-year Prime service.
Prime, a catchall moneymaker that includes everything from free parcel delivery to streaming from Prime Video and Amazon Music, enjoyed more than 200 million subscribers globally—180 million in the U.S.—at the end of last year.
Amazon is also gearing up for an improved Alexa. The company last month announced a smarter iteration called Alexa+ that promises to execute multi-step household tasks like booking a dinner reservation. Amazon hopes a more capable Alexa will make its devices indispensable. —AN
Intel’s new CEO maneuvers to reduce middle management
Incoming Intel boss Lip-Bu Tan wants to slash middle management and revamp operations at the company’s contract manufacturing Foundry business, Reuters reports.
Tan had been an Intel board member until last August, and it was reported at the time that his departure had something to do with then-CEO Pat Gelsinger’s unwillingness to tackle bloat in middle management. It seems he saw this bloat as a factor in slow decision-making, but the board rejected his proposals.
Reuters’ sources said he would now focus on “aggressively wooing” new customers for the Foundry business, and also on reviving Intel’s faltering AI server-chip plans. Interestingly, the publication noted that Intel would now look beyond such chips, to see what can be done in areas ranging from robotics to AI foundation models.
Tan’s plans seem to put paid to the idea that Intel’s chip design and manufacturing sides should be split up; instead, he wants to keep control of the Foundry plants and just make them more attractive to potential customers like Nvidia and Broadcom, and perhaps even longtime Intel rival AMD.
All this remains to be proven, but the markets certainly like the story Tan has to tell. Intel’s shares rose by over 6% Monday, even in the context of a wider slump. And that’s coming after the week in which Tan’s appointment was announced, and Intel’s share price rose by nearly 15%. Perhaps the company is not to be written off after all. —David Meyer
More data
—Rippling sues Deel. One HR software company sues another with accusations of planting a mole (!) to steal trade secrets.
—Pavel Durov leaves France. The founder-owner of the messaging app Telegram, arrested in August for cybercrime allegations, receives court authorization to temporarily leave.
—Klarna wins Walmart business. The fintech company will replace Affirm later this year for “buy now, pay later” services in the U.S.
—Bumble’s founder returns as CEO. Whitney Wolfe Herd retakes the top job and rolls out identity verification.
—Roblox open-sources Cube 3D. It’s the first version of the company’s AI foundation model for generating three-dimensional objects.
—EU companies petition for “Euro stack.” A hundred firms urge legislators to shrink the bloc’s reliance on foreign infrastructure.
—“AI slop” is hijacking social media. Surreal, unsettling AI-generated content is successfully overtaking the algorithms that inform what you see online.
—Alphabet spins off Taara. The laser-based internet company competes with Starlink and graduates from the famed X ‘moonshot’ incubator.
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