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Thanks for reading The Briefing, our nightly column where we break down the day’s news. If you like what you see, I encourage you to subscribe to our reporting here.
Greetings! Before we get to today’s big tech developments, be sure to check out the scoop we just published about Meta Platforms asking companies like Microsoft and Amazon to help fund its Llama AI development. It’s a sign that the enormous costs of AI are straining even the coffers of one of the richest companies in tech… Right now, it’s all tech antitrust, all the time. As Meta’s former No. 2 executive, Sheryl Sandberg, was nearing the end of her testimony during the company’s antitrust trial on Thursday morning, a judge across the river in Virginia issued her ruling on the second of two Justice Department antitrust cases against Google. Like last summer’s edict on Google search, the ruling went against the tech giant, finding that it has a monopoly in the sale of ads on independent websites—a business known in the industry by the jargony term of “ad tech.” Next week, a judge in Washington D.C. will start hearings on how to dismantle Google’s illegal monopoly in search. Given that the government hopes to force Google to divest assets in both cases—the Chrome browser in the search case and parts of its ad tech business in the other case—you can imagine it could try to negotiate a settlement of both at once, pushing for an overall restructuring of Google. You can bet Google will resist that, however. It has promised to appeal in both instances (see our deep dive on today’s ruling). One problem with resisting a settlement is that pursuing appeals surely means years of uncertainty for Google and its shareholders as the litigation plays out. The management distraction is real, particularly for Google’s search unit, which is already battling competition from ChatGPT and other new AI chatbots. Surely it would be better for Google to resolve these cases before too long, even if selling Chrome and parts of its ad tech slightly shrinks its ad business. (Google’s ad business may shrink anyway, thanks to the impact of artificial intelligence.) Long term, Google shareholders should brace for the possibility that the company’s cloud business will become more central to its future. At least no one can accuse Google, No. 3 in cloud, of having a monopoly there. As for Meta, one part of today’s Google ruling may encourage the social network. A key part of the Federal Trade Commission’s case against Meta is that its acquisitions of Instagram and WhatsApp were “anticompetitive,” done to neutralize potential competitors. That’s similar to the Justice Department’s argument that Google’s acquisition of two ad tech firms, DoubleClick in 2008 and Admeld in 2011, were anticompetitive. But that was one part of the Google case that the judge dismissed. And she did so citing the fact that the government allowed both acquisitions to close after completing the antitrust review. The same thing happened with Meta: Following antitrust reviews, the FTC permitted both the Instagram and WhatsApp acquisitions to go forward in 2012 and 2014, respectively. The Google judge also noted that when Google bought DoubleClick, it didn’t have a monopoly in the ad tech market, and that it bought Admeld to “fill a gap in its portfolio” rather than to snuff the smaller company out. You could argue that both points also apply to the Meta acquisitions in question. It’s hard to get excited about Netflix’s quarterly earnings these days, as nothing changes much (revenue and profit margins keep rising). So when Netflix reported its first-quarter results on Thursday, the biggest news was that co-founder Reed Hastings has pulled back from involvement even more. (See more on the results.) Netflix said Hastings had “transitioned” from his executive chair role to chair of the board and a nonexecutive director. The executive title typically means you have more involvement in the management of a company, so the new title suggests he has bowed out completely from day-to-day affairs and simply shows up to board meetings. Given how much Hastings has been in the news with his ski resort and philanthropic affairs, you could be forgiven for thinking he had already made this switch. Well, now it’s official. • OpenAI late last year discussed acquiring Anysphere, developer of popular coding assistant Cursor, according to a person familiar with the talks. Around that time, OpenAI was in similar discussions with a number of other coding assistant startups, the person said. • Nvidia CEO Jensen Huang said the company is willing to deepen its presence in China during a visit in Beijing on Thursday, days after the U.S. tightened restrictions on the sale of its AI chips to the country. • Taiwan Semiconductor Manufacturing Co., the largest chip manufacturer in the world, said on Thursday it had not observed any changes in customer behavior as a result of new U.S. tariffs. Introducing: Applied AI. This new newsletter explores how businesses and leaders are using AI to innovate, improve efficiency, and foster collaboration. Stay ahead with insights and stories on the transformative power of AI. Sign up here.
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