Good morning. One brief news update and one brief shameless plug before we hit the weekend.
On the news: The White House clarified Thursday that its extraordinary 125% China import tariff comes on top of the 20.8% average tariff on Chinese goods that was in place when the current administration began, sending the grand total to 145%. Tech stocks fell between 2% and 7% yesterday.
As for the shameless plug: We’re one month away from Fortune Brainstorm AI London, three months from Brainstorm AI Singapore, and—somehow—only five months from our flagship Brainstorm Tech summit in Park City. Want to join us? Register your interest ASAP—capacity is limited.
Have a great one. —Andrew Nusca
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Apple airlifted 600 tons of iPhones to try to beat tariffs
As high tariffs were set to hit some of its biggest suppliers, including China, India, and Vietnam, Apple reportedly chartered cargo flights to fly 600 tons, or about 1.5 million iPhones, to the U.S.
Since March, about six planes with 100-ton capacities have flown iPhones from India to the U.S., according to a Reuters report.
The company also apparently lobbied Indian airport authorities to cut down customs to six hours from a usual 30 hours at Chennai International Airport in southern India to speed up the airlift.
Apple “wanted to beat the tariff,” a source told Reuters.
Apple is also increasing production at its iPhone plants in India by adding workers and opening the largest factory from Foxconn, Apple’s chief supplier, on Sundays, which is usually a rest day, according to the report.
In recent years Apple has shifted some production to India as the U.S. and China have ramped up tensions. The company assembled as much as 14% of its iPhones in India in 2024, according to Bloomberg.
Apple remains in a dicey situation regarding its supply chain, wrote Dan Ives, the Wedbush Securities tech analyst, in a Wednesday note.
“China remains the biggest X variable related to Apple and the broader supply chain,” Ives wrote. —Marco Quiroz-Gutierrez
Meta’s AI research lab is ‘dying a slow death’
When Meta’s head of AI research, Joelle Pineau, announced her departure last week, many wondered what was going on with FAIR, the famed Meta AI lab she had led for the past two years.
FAIR (an acronym for Fundamental AI Research) was once the crown jewel of AI development at Meta.
But the lab has been “dying a slow death,” according to seven former Meta employees who spoke to Fortune over the past week—shoved aside by more commercially focused AI groups within the company.
In an email to Fortune, Yann LeCun, Meta’s chief AI scientist, said the lab is on the cusp of “a new beginning in which FAIR is refocusing on the ambitious and long-term goal of what we call AMI (advanced machine intelligence).”
But the former Meta employees, who include ex–FAIR researchers, say the organization has been slowly but surely withering in recent years as “blue sky” research within Big Tech companies has slowed.
“This is happening industrywide,” said a former FAIR researcher who left in 2021. “More and more people are being forced to move into generative AI.”
Yet Erik Meijer, a former Meta engineer and researcher whose team was laid off in 2022, said he was “never a fan” of research divisions inside companies like Meta.
“If companies want to do fundamental research, they should give money with no strings attached to universities,” he said, adding: “I think it is great … that Meta is putting, to borrow a Google saying, ‘More wood behind fewer arrows.’” —Sharon Goldman
Amazon’s employees are wrapped up in red tape
In his annual letter to Amazon shareholders, Andy Jassy wrote that he asked employees to send examples of red tape at the company. He received almost 1,000 responses.
“Builders hate bureaucracy. It slows them down, frustrates them, and keeps them from doing what they came here to do,” Jassy wrote. “As leaders, we don’t always see the red tape buried deep in our organizations, but we can sure as heck eliminate it when we do.”
Jassy said Amazon had already made more than 375 changes based on this feedback. “We need to move fast, and we are committed to rooting out bureaucracy that ties up time and dispirits our teammates,” he added.
The CEO also encouraged the company to operate like a “startup,” emphasizing there was a difference between process and bureaucracy.
“When you’re running something at scale, you need mechanisms to deliver the right experience and constant improvement for customers. However, as companies grow and add more managers, unneeded processes get layered on that add little value,” he wrote.
Compressing company hierarchies has been a wider trend across the tech industry.
For the last two years, Meta CEO Mark Zuckerberg has been advocating for a “flatter” company structure. Google also laid off some of its middle management positions in 2023. And last year, Shopify announced it was “flattening” its organization structure to incentivize more employees to become individual contributors. —Beatrice Nolan
More tech
—OpenAI updates ChatGPT. A new memory feature references past chats for answers.
—SentinelOne to cooperate with U.S. clearance review. Trump signed an executive order targeting two outspoken officials from his first term.
—China was behind Volt Typhoon hacks. The apparent reason? Escalating U.S. support for Taiwan.
—Google to discount Workspace for U.S. agencies. A move for market share amid federal government cost-cutting.
—Zoox begins robotaxi tests in Los Angeles, though it won’t say where.
—Thinking Machines Lab valued at $10 billion. A $2 billion fundraise is reportedly underway for former OpenAI exec Mira Murati’s startup.
—Valve under fire in UK. Its Steam platform removed a game centered on sexual violence.
—Block settles for $40 million with New York State over “critical gaps” in its anti-money laundering program.
—Power-hungry data centers. Electricity consumption could jump 100% globally by 2030.
—DoorDash and Coco begin robot deliveries in Chicago, Los Angeles.
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