2026-07-02 21:19:30
Meta has a problem. Well, two of them, actually.
First, after years and years spent trying to diversify, their business is still almost entirely advertising-based. To be clear, it's a great business – one of the best ever created, in fact. It's a good problem to have, but it's still a problem. Because if that business ever slows... Look out below.
That leads to the second problem. The latest way Meta thinks they can fix the first problem is with AI. Sure, they'll use AI to super-charge the ads business, but ideally it will also unlock other businesses for them. Again, to diversify. Currently, they view it as the key to their devices strategy, led by their smartglasses. But they're also working on other products and ways to potentially monetize AI beyond just selling ads. But the problem here is that it's expensive to build out those AI capabilities. Like, insanely expensive. Like the most expensive endeavor in human history, perhaps.
Wall Street doesn't like this. Specifically, Wall Street doesn't like this for Meta. Why? That first problem. Because unlike their Big Tech peers also clearly determined to pour all of their free cash flow into the AI build out, Meta doesn't have an obvious, direct way to monetize the capabilities. Again, there are ads, but that's indirect. Amazon, Google, and Microsoft are all selling their AI directly.
Are you seeing it yet? These two problems have a single solution. It's not simple, but it is fairly straightforward: Meta needs a cloud business.
It's a notion and solution that's so obvious that I've been noting it for quite some time now. After Meta bought Manus late last year (before they were forced to un-buy them), it occurred to me that at least part of the play was to get Meta into the business of selling products to other businesses. That is, enterprise sales. Granted, Meta has been trying to do this for years – remember Workplace, their short-lived Slack competitor? – but nothing has really worked. Again, Meta has remained the ads-based social media company. But Manus was already working. And beyond their consumer angle, there was clearly a big business brewing in selling agentic workflows to enterprises. As I concluded that post:
This deal seemingly makes a lot of sense for Meta on a few fronts. And it also may point to the start of a renewed push into enterprise. Again, easier said than done, but don't be shocked if this is a wedge of sorts. If they can keep Manus expanding into businesses, we should see other Meta cloud offerings follow, putting them more in line with those aforementioned Big Tech peers. And perhaps easing some concerns Wall Street has with regard to their AI spend.
Well, again, Manus, sadly, didn't really work out for Meta. But not because the business or the strategy wasn't good – if anything, those may have been too good, to the point where China took one look at the deal and said essentially: "yeah, no." Honestly, Meta probably should have used the "hackquisition" method to try to do the deal, but again, they clearly wanted the Manus actual business, not just the employees and some "non-exclusive rights". But I digress... The point is that with Manus, you could see a path for Meta to get a toehold into enterprise sales and expand from there – perhaps all the way up to a true cloud offering.
A few weeks later, another bit of Meta news made this general game plan even more obvious, at least to me. As I wrote about the formation of "Meta Compute" – their formal AI infrastructure play:
When I read about this new initiative within Meta, I can’t be the only one who assumes it will eventually lead to a full-on Meta Cloud, right?
Again, it seemed fairly obvious, though a number of people pushed back on the notion. Specifically because it would be so far afield from Meta's core business – and a huge potential headache, going up against the aforementioned Amazon, Google, and Microsoft clouds. That's obviously true, and I noted as much – in particular how it has taken Google years and several micro-pivots to be able to effectively compete in the space. Why? Because for as massive as Google is, and as good as they have always been with infrastructure, they didn't have the muscles to really do enterprise sales. It took bringing in someone like Thomas Kurian from Oracle to make that happen. And he has made that happen. To the tune of $20B in revenue a quarter – fast approaching a $100B/year business for Google. That makes it nearly 20% of Google's overall revenue – and again, rising.
My point is simply that Google, a company once knocked as being a one-hit wonder thanks to their ads business – again, one of the best businesses ever created – eventually found a way to diversify. It was painful and took a long time, but it worked. No one talks about them being a one-trick pony anymore. Meta has tried many things to diversify – going so far as to change the name of the company to one of those bets that, at least thus far, has not panned out – but they haven't tried the one that has worked so well for Google.
And so while some thought Meta doing a cloud business would be crazy because it's so far from their core, I viewed that as sort of the point. Again, they need to diversify! But one final element really drove this notion home: the AI build-out.
When Meta rolled out their first "Muse Spark" models in April, the most interesting element to me wasn't the models themselves but the idea of how they might sell access to them. As I wrote at the time:
One more thing: perhaps the most interesting element of the Muse movement is the notion that Meta intends to sell access via APIs. A first step towards a bigger Meta Cloud offering? You don't spend $140B a year for table stakes.
Even with these new models out there in the wild, and Meta's AI pivot from their failed Llama strategy seemingly on the cusp of being complete, Wall Street continued to throw up all over the company due to their CapEx spend without that clear path to directly monetize it.
Given their valuation as a private company, investors have started to worry about this as well for OpenAI. And so unsurprisingly, the company has started to say that they might be able to launch a cloud offering of sorts to help support their infrastructure build out. I've called this "Field of Dreams Economics" in the past – that is, if you build it (the data centers), they will come (the cloud customers). It's unproven at best, and folly at worst.
In walks Elon Musk...
In a way, Meta and xAI found themselves in the same boat having spent billions to try to catch up in AI and not having much to show for it. At first, it looked like throwing money at the problem would work, but now it looks more like they've built out and up a ton of compute capacity without the demand to truly put it to work. Amazon, Google, and Microsoft don't have this problem, because beyond the varying degrees of success for their own AI products, they have third-party customers. Which is to say, they have their clouds.
As a result, if anything, they each have the opposite problem: they're having a hard time striking the right balance between their own needs and those of their customers. In a way, at the highest level, this is clearly what drove Microsoft to push OpenAI away. As a customer of their cloud services – the most massive customer – they were eating Azure alive. These days, we have Google telling Meta that they need to cut back their compute usage. Anyway, what this all showcases is that the cloud demand is there – and rising.
And beyond AI services, raw compute is driving much of this. This, in turn, led Elon to connect the obvious dots on his own problem.
In an age where data center capacity is king, xAI found itself holding the crown jewels. They clearly didn't want to be in that position – they'd love for demand for xAI models to take up all available compute – but it's actually not a bad position to be in given the current situation. And that's especially true if you're, say, about to IPO and need a good narrative around why you merged your cash-incinerator (xAI) with your cash machine (SpaceX).
xAI is not a cash-incinerator, as it turns out – well, it still is, but not as big of one because it's also now a cash generator in the form of a neocloud!
Yes, Elon figured out a way to turn his space company into a cloud company too. He wants it to be an AI company, and it is, to some extent, but the better narrative is the cloud, because it's the far better business at the moment. And while the "neocloud" business isn't exactly what Amazon, Google, and Microsoft offer, it's arguably a far more straightforward cloud business. Granted, it's one that may be a moment-in-time thing given the capacity constraints that are even forcing even Big Tech to cut deals with the neoclouds to try to boost their capacity. Still, it's better than just burning money with nothing to offset it!
Zuckerberg clearly saw Elon's jujitsu maneuver in getting first Cursor to sign up to use xAI's compute, and then Anthropic, and finally Google. And saw how the market reacted: a huge potential weakness (AI costs) got turned around to help fuel the largest IPO in history. If everything else above made it clear that Meta would need to have a cloud business at some point, the SpaceX neocloud made it an imperative to happen – or at least be talked about – now.
Meta's stock is in the dumps? Zuck could simply pull the "Elon Lever".
And now he has. I've buried the lede some 1,750 words in, but yes, Meta is planning to launch a cloud business, reports Riley Griffin and Kurt Wagner for Bloomberg:
Meta Platforms Inc. is developing plans for a cloud infrastructure business that will sell access to AI computing power and models, setting up a new vector of competition with industry leaders like Amazon Web Services, Microsoft Azure and Google Cloud.
Meta, which has been rushing to secure expensive data centers and other infrastructure to fuel its own artificial intelligence ambitions, is forming a business to generate revenue from excess computing power sold to outside customers, according to people familiar with the matter, who asked not to be named as the details aren’t public.
There we go. But they're also seemingly torn in terms of what their cloud should offer:
One potential plan includes selling access to various AI models that are hosted on Meta’s existing AI infrastructure, an approach similar to AWS’s Bedrock offering, the people said. Meta would run the data centers and chips that power the models, including its own Muse Spark models, and charge developers to access them.
The company is also considering selling access to “raw” computing capacity, akin to other so-called neocloud businesses like CoreWeave Inc., the people said. Development of these new business lines is part of Meta Compute, an internal initiative to build and manage the company’s AI infrastructure efforts, according to a person familiar with the plans. Meta Compute is led by Santosh Janardhan, Meta’s head of infrastructure; Daniel Gross, a leader inside the Meta Superintelligence Labs AI unit; and Meta President Dina Powell McCormick.
The answer may end up being both. The reality is that it will end up being whatever the market demands. And what investors end up liking. And sure enough, Meta's stock, after months in the Wall Street doghouse, shot up nearly 10% yesterday on this news.
Now, maybe it's all a head fake just to juice the stock, but it certainly doesn't seem that way. It seems like Meta is figuring out a way to launch a cloud service that will add to their top and bottom lines. And that should, in turn, help to diversify their business away from ads.
That doesn't mean they'll offer everything that Amazon, Google, and Microsoft do – and they probably shouldn't even try to do that. But they should probably have some sort of neocloud offering, at least to start, mixed with that 'Bedrock' competitor, which would include selling their own models via APIs. And perhaps they can even hark back to their "open source" AI roots by serving up DeepSeek models and the like.
Maybe down the road, Meta starts to augment their AI cloud with other types of cloud services. And maybe one day 'Meta Cloud' even makes up a double-digit percent of revenue. Or maybe it doesn't work, just as many of Meta's recent initiatives haven't.1 But it's certainly worth trying, for the optics alone, if not the actual business potential. It has been obvious and inevitable for a long time now.
1 Certainly I'm more than a little worried about Meta's ability to execute on much of anything, as I'm currently on day 3 of getting continuously banned by WhatsApp which they can't seem to fix...
2026-07-01 04:59:40
A couple years back, I was banned by Instagram. Because I happen to know a few people there,1 I got it resolved and my account back online relatively quickly. But I never got an answer for what actually happened.2 A few months later, I found myself banned again. Again, I pinged some people. Again I was reinstated. Again, I got no explanation other than someone – or something – messed up. Again.
While those bans also instantly took out Facebook and Messenger, I was lucky that it left WhatsApp alone. Because, living in Europe, I'm forced to run a lot of my actual life through WhatsApp because it's the service many people rely on here as their primary messaging service. Boy, it would suck if I was banned from WhatsApp.
As I just learned first-hand tonight.
Yes, that's right, for a third time in as many years, I've been banned by Meta. What for? Do you really have to ask? Nobody knows. My suspicion is that it's directly tied to the claiming of usernames on WhatsApp, which Meta opened up yesterday. After I claimed mine, it seemingly logged me out of my other active instances. And when I went to log back in... boom.3 Banned.
No explanation. No warning. Just a note that "This account can no longer use WhatsApp." As with Instagram and Facebook, you can submit a review of the ban and they say they'll look at it and let you know within 24 hours – but no promises. When I did this the first go-around with Instagram, I actually lost the appeal. Why? Nobody knows. Again, it took a personal plea. And I'm insanely lucky to be able to do that. As my replies then and now can attest, many are not so lucky. Many are just banned and never heard from again. At least on those services.
This is bullshit. How do I know this is bullshit? Because it literally happened to me! And, in fact, keeps happening to me! And I'll get it fixed again because I just so happen to know people, which is arguably worse bullshit!
But hopefully this blogpost, perhaps summoning some spirit from my late friend Om Malik, can help light a fire under Meta to actually fix some of this nonsense. I don't know who is minding the ship over there, but my fear is that no one is. That they've automated the shit out of all of these systems. And that they've laid off the people who used to be in charge of such things and stopped it from happening. And that AI is going to make all of this so much worse.
Further, the fact that Meta "hackquired" a company to be able to outsource the management of WhatsApp to India isn't making me feel better about any of this. I'm sure it's unfair, but it also sure looks like Meta is saying that a core social property, a service they acquired with billions of users, is no longer important enough to be run by their core team. [Update: I had written initially that the service would be run out of India, which wasn't clear at first, but apparently CRED founder Kunal Shah will be moving to Meta HQ, which is good, but the main point stands.]
They will, of course, suggest the opposite is true. That because the rest of the world is so important to WhatsApp that it should be run by a "hackquired" entrepreneur from that part of the world. But all I see in the news is that Meta was having a hell of a time monetizing WhatsApp after years and years and they think they found someone who can do that. Also, how have those other "hackquisitions" worked out for everyone? What I see is Meta no longer giving a shit about the product or the experience, just the monetization. They're ready to fucking milk it.
Why? To try to diversify away from their 98% reliance on advertising. Why? To try to get permission from Wall Street to keep spending on AI. Why? To try to finally find "what's next" now that they can no longer acquire entities like Instagram and WhatsApp. And also because AI will help them automate and supercharge the ads that they so heavily rely upon. And also the content moderation that they hate having to pay people to do. You know, like on WhatsApp.
Hold on. I just spoke to a friend who I communicate with primarily on WhatsApp. Apparently, they're sending me messages right now with no indication that I've been banned and that they're not getting through. What the fuck?!
I've fallen too far into the Meta org weeds here. Let me just point out that I run a lot of my household through WhatsApp – including childcare. Imagine if there was an issue with a child and someone was frantically trying to get ahold of me and couldn't because I've been banned? Honestly, should that even be legal?
Sure, I could not use WhatsApp, but again, I sort of have to. I can't force all of Europe to switch over to iMessage – though I would certainly like to right now! And so it feels like that Meta shouldn't just be able to ban you from a service you use to operate your life – especially since it's tied to your phone number. Maybe that's why they're switching to usernames? But fine, ban me, but tell the person trying to communicate with me – potentially about very important things in my life – that they need to reach me some other way. That these messages will not get through to me.
This is fucking insane, Meta.
Honestly, I would love to pull the plug on all Meta services in my life. I get little joy out of them anymore and far more pain and annoyance. It's just not clear to me that anyone at Meta really cares anymore, perhaps ever since the ill-fated name change of the company. They just keep searching for what they want to be next – gambling, GAMBLING! – while constantly neglecting what they actually are.
Update June 30, 2026: Well, as expected, I was un-banned... for about 5 minutes. I went to log-in to WhatsApp on computer and... immediately re-banned!
Update July 1, 2026: Was reinstated this morning. Went to log-in on my computer and surprise: immediately banned again. It's clearly amateur hour over at Meta right now. Or worse, AI hour?
1 I was/am user #28 of the service, having started using it months before it was actually live to the world. I've been verified for years. Still banned with no pings or warnings. ↩
2 And the wording was pretty wild. So wild that I won't even repeat it... ↩
3 My best guess would be that I use a lot of different devices and because of WhatsApp's clunky authentication process, they may not like seeing so many machines get logged in so quickly? I'm honestly not sure. But it all seems pretty clearly tied to the username situation. Which, if true, is stupid. Who could have known? ↩
2026-06-29 21:20:02
We're just six months from Comcast casting off their cable networks to the island of misfit toys in the form of the wonderfully generically named 'Versant'. Now Comcast is at it again:
Comcast, just months after shedding most of its cable TV business into Versant Media, is now again cleaving itself into two separate companies: one housing its namesake cable and tech operations, and the other comprising the NBCUniversal and Sky media biz.
Under the proposed separation, announced Monday, Comcast intends to make a tax-free spin-off of NBCUniversal and Sky. After the transaction is completed, Comcast shareholders will own shares in both Comcast and NBCUniversal.
The big question, of course, would be "why?" The answer, of course, would be "buy." As in seemingly no one is buying Comcast shares of late, with the stock down quite a bit post-Versant spin-off. At the same time, no one is yet buying Versant, the company, which was long thought to be the whole reason for the split.
Paramount Skydance's deal for Warner Bros Discovery probably threw a wrench into those plans. Because until David Ellison came along, the plan was for Warner Bros and Discovery to also split into two this year – and boy wouldn't it seemingly make sense for Discovery and Versant to be one bucket of assets that no one really wants, but at scale? A Netflix deal still could have made that work as they didn't want the networks, but sadly, the path for Paramount to win the deal was to buy the whole thing.
Anyway, unless the soon-to-be Paramount Skydance Warner Bros Discovery – or, as I like to call it, MountDanceWarBroDisco – wants to also pick up Versant (or sell off some of their cable assets to Versant),1 we're about the have three different public companies whereas once there was one in Comcast. Presumably it's a bit of a "the sum of the parts will be greater than the whole" play. But also presumably a big part of that wouldn't be to have three different public companies, but instead for someone to buy at least two of them.
Beyond Versant, the obvious one would be NBC Universal, which has a long, illustrious history of being merged, bought, and sold. Netflix, having lost the Warner Bros sweepstakes would be the obvious buyer here. But it's also not as clean and clear as Warner Bros. The Universal IP isn't as good and the great TV shows associated with NBC are often owned/controlled by someone else. Unlike with Warners, they'd also get one of the broadcast networks, which the current administration may not like too much, and Netflix may not want the headache of owning. Also, they'd get Sky, which could be an international headache.
They'd also get some theme parks, which maybe they'd be interested in to beef up their "experiences" play and better take on Disney – but who knows?
Would Apple be interested? They might look as some of their content would help bulk up Apple TV, but probably not for all the headache reasons. YouTube? Maybe, but they might not be allowed to buy such a property given their rising strength. Disney, which owns ABC, wouldn't be allowed to buy another network. MountDanceWarBroDisco wouldn't be able to for the same reason and more. Amazon? Maybe? There are some sports rights...
Speaking of, the talk has long been that Peacock would need to merge with someone to get to a scale that can hold a candle to Netflix and Disney+. The thought there has also long been HBO Max and/or Paramount+. But now Peacock is sort of the player without a seat with the music stopping in musical chairs. Perhaps that's what prompted this move as well.
We'll see who buys what. Regardless, people are at least buying up the stock once again on this news – Comcast is currently up 23% in pre-market trading.
One more thing: Given that the current co-CEO of Comcast, Mike Cavanagh, will be the CEO of NBCU, maybe they believe the more likely asset to be sold is the Comcast telecom business, where the old Comcast CFO, Michael Angelakis, is coming back to steer the ship? Given all the talk about SpaceX trying to tie-up with Charter to use their spectrum to help launch a consumer satellite/cellular hybrid wireless service for Starlink... well guess who else has wireless spectrum?
Is this a quick play for SpaceX to buy Comcast ahead of partnering with Charter?!
1 Perhaps there's a way for Paramount to sell off CNN to Versant and/or the new NBCU to placate some state attorney generals (and CNN itself)? ↩
2026-06-29 03:09:36
As cliche as it is to write, I need to write it: I wouldn’t be where I am today without Om Malik. He was arguably the single most important person in the push to “professionalize” blogging. He was inarguably one of them. And that, in turn, opened the door for me to switch careers, sending me down a path professionally that seemed extremely unlikely.
I’m honestly still a bit speechless about Om’s passing. But I also know he would be the first to tell me to blog about it, as a type of catharsis. And because that's what we do.
Om’s obituary in The New York Times pulls heavily from an interview he gave a decade ago with The Techies Project. It’s a great encapsulation of his story and reading it over, I was surprised and frankly, honored, to see that he mentioned me. Specifically noting that I, like himself, was perhaps part of a group of “natural born bloggers”.
I love this for a number of reasons, but reading it in this context gives me some clarity on my own life. While from the outside, it seems like we stumbled into the world of blogging — and this is what I have long told people — it was perhaps more of a calling. An outlet to do what we innately sensed that we needed to do. And again, he figured out a way to professionalize it, which paved the way for me to do the same.
I owe him a great debt for this that I can now never repay.
When I made that jump two decades ago, Om was right there from the get-go, in my ear and in my inbox, encouraging me. Even though we were ostensibly rivals — first when I was at Matt Marshall’s VentureBeat and then when I was at Michael Arrington’s TechCrunch, which all sprung up around the same time as his own GigaOm — he was always so nice to me. Honestly, it unnerved me a bit at first because my natural instinct was to compete. But the reality was that we were all part of a group that was eating the lunch of the world he came from in “traditional” publications and journalism, and forcing change upon the industry.
It was an exhilarating time to be blogging and Om was the linchpin of it all. As my inbox from back then confirms, he was the one behind the scenes pulling it along and holding it all together. Those of us more junior at the time – in tenure, if not in age – looked to him as a sort of Yoda. Blogging Yoda.
Looking at my emails and social media messages from back then is just a treasure trove. Om was always quick with a compliment about something I had written but also with a criticism at times. He clearly just read endlessly and couldn’t help but share his opinions, even if privately. In person too he was amazingly candid and honest. He would complain how annoyed he was if you beat him to some story — but complain even louder if he felt like he actually beat you but wasn’t getting enough credit. He was clearly competitive too.1 And he was correct in his assessments, because again, he was honest.
We often had discussions about working together in some form, and I’m sad that never happened. His heart attack was sort of a wake up call for many about the downsides of the always-on, always-writing blogging lifestyle.
And that perhaps put him on a path he also helped chart for me: shifting to venture capital. His thoughts on the differences between writing stories and writing checks in that Techies interview is far better than any answer I’ve ever given on the topic. Again, because it’s honest.
To me, Om was and will always be such a singular individual. There will never be anyone quite like him. He’s the only person I know who could be both humorously downtrodden and insanely optimistic at the exact same time. Again, he just seemed to wear his emotions on his sleeve.
So I find myself sad not just about his passing but for all of us who will no longer get to read his unvarnished opinions on various topics.2 And that’s perhaps especially troubling in tech with AI on the verge of upending everything. The world now needs Om’s voice and pushback – not to mention context – more than ever just as we’re losing it.
Because I moved several thousand miles away,3 to a city in which he once also lived, London, I didn’t get to see him nearly as much in recent years. That saddens me, but the notes continued. The last thing we spoke about was — perfectly — debating the merits of different newfangled blogging platforms.
Rest now, in peace, my friend. The true natural born blogger.
1 I can't begin to tell you how annoyed/upset I was back in 2010 when he scooped me in unveiling Instagram to the world. ↩
2 In looking back, I was taken by just how many posts I had written over the years that were spurred by Om's posts. It's undoubtedly because he had such a wide variety of thoughts and opinions. He did not fit, nor stick, into one box as many writers – perhaps especially in tech – tend to do. ↩
3 One of my favorite posts of Om's that still sticks in my head was about losing the sense of "home" in San Francisco during the pandemic with the world on fire, literally and figuratively. Per above, it drove me to riff on it a bit myself. ↩
2026-06-25 23:45:32
Just how big of a deal are these price increases for Apple? Well, just look at their strategy for announcing them.
While Tim Cook and team have been hinting for months that the unprecedented situation with memory chip demand was likely to impact their margins, as time went on and it was clear the situation was not resolving itself, those whispers started to shift towards actual price increases. While others had taken such action already, others don't operate like Apple, where the pricing simplicity and consistency has long been a point of pride. While prices have evolved over time, if anything, Apple's products are now cheaper, relatively speaking, than they've ever been.
This is sort of a "narrative violation" when it comes to Apple – long seen to many as the sort of unnecessarily expensive option with big margins. But often left unsaid about Apple's margins is that just as big of a factor in them being nice and fat was the command Apple had over their manufacturing capabilities and the sway over their component suppliers. Even as inflation ravaged economies around the world, Apple was able to hold prices fairly firm.
But this situation is clearly quite different. Last week, Apple had obviously seen enough to know it wasn't going to ease any time soon.1 Tim Cook gave an interview to Rolfe Winkler at The Wall Street Journal to tell the market that price increases were coming. There was a question as to just how soon – could Apple hold out until the iPhone 18 event in September, a more "natural" time to shift prices? The answer, of course, was "no." A week after that interview, the increases are here.
But even this execution is interesting in that Apple actually didn't increase the all-important iPhone prices. Yet. And that last bit is the key, as such increases for Apple's top-selling device are clearly coming as well. But Apple didn't want to shock the system all at once. Today's increases, in a way, are also a path to guide towards the inevitable iPhone price increases coming in September – assuming Apple can hold out that long!
Wall Street doesn't seem to be appreciating the nuance here, with Apple's stock currently dropping around 5% in trading – pushing it back below Google and risking falling below the $4T market cap mark. But Apple is clearly worried about the bigger picture here.
The iPhone isn't just a part of their product lineup, it's the device that dominates it, both in terms of volume and revenue. While Services has been slowly chipping away at the lead, the iPhone is still the product that consistently brings in over half of Apple's revenue each quarter. Even with all the product diversification over the years, it's still very much as goes the iPhone, so goes Apple.
And so if and when Apple has to raise the price of that device, it's going to have an impact on the business, obviously. And sadly for Apple, it's unlikely to be the Veblen variety – where higher prices lead to more sales. Instead, higher prices are going to lead people to push out would-be purchases. And that is going to hurt Apple's quarterly earnings, obviously.
So the move to increase prices nearly across the board today – from the HomePod to the MacBook Pro to even the sad selling Vision Pro – is yet another signal of what's to come. That way, when John Ternus takes the stage in early September – in his first event as Apple's CEO – when he announces the iPhone 18 models with a new, higher starting price, the market is fully braced for it. Apple will have guided towards the change, twice.
In a way, it's probably a good thing that Apple is said to be splitting the iPhones 18 unveiling into two timetables going forward. The 'Pro' models are set to be unveiled this Fall, with the 'regular' models due in the Spring. Given Apple's clear reluctance to raise prices, they probably didn't make this change on purpose, but it could end up a bit lucky because the would-be 'Pro' buyers are naturally going to be less price-sensitive than the 'regular' model buyers. And by the time those devices come next Spring, they'll effectively have had three warnings of pricing changes.
That's not going to make the new iPhone Ultra/Fold price any easier to swallow – could the thought-to-be $1,999 starting price now look more like $2,499?! – but it's something.
Another interesting wrinkle to watch for here: if this price change telegraphing actually pulls forward iPhone sales this quarter leading up to the new iPhone launch. Another way to look at what Apple is saying in not raising the iPhone price now is: get your orders in now if you want to lock in the current price. Normally, this would be the worst time to buy the current generation of iPhone models, with new ones so close, but now it might actually be the best time – especially if you're in the market for the 'regular' models or the iPhone Air, again, both of which are not expected until the Spring. This could lead to a weird situation where Apple's numbers actually jump this quarter to get ahead of the price changes.
Regardless, this is an unprecedented time for Apple – certainly the modern Apple. Yes, that's true for many companies given the chip shortages, but as the most important consumer device company, it's especially true for Apple. And it's yet another sign of the shifting landscape in which they operate.
For years, Apple has been able to dominate and dictate to their suppliers thanks to their scale. But the Asian operations which Tim Cook so famously set up, have been upended, like most everything else, by AI. From TSMC on down, Apple is no longer the customer dictating terms for the entire industry, it's now the company which has taken over the mantle as the most valuable one in the world: NVIDIA.
And so it leads to situations like this one as relayed by Winkler in his story on the price hikes today for The Wall Street Journal:
In an interview Wednesday night, Micron Chief Business Officer Sumit Sadana said the company couldn’t make investments during the memory market’s last downturn, when Micron’s gross profits went negative, in part because certain customers took advantage to pay rock-bottom prices.
“We told a couple of the customers who were being very aggressive with pricing at that time that this is not constructive,” he said, without naming Apple, adding that low prices discouraged capital investments. “A lot of the industry investments got shut down in 2023 because of really poor pricing and really poor margins.”
Again, he didn't explicitly call out Apple there, but come on. Apple is widely known to be a major Micron customer. And the company was obviously taking advantage of the last contracts they negotiated to hold prices steady as market prices surged. Micron clearly didn't like that situation too much! But whereas previously they may have had to grin and bear it given Apple's position and importance in the industry, there's a new world order now, in terms of who orders for the world.
Perhaps Apple would have been better positioned had they taken the AI wave more seriously to start. But again, they're hardly alone here. The only companies in great positions here right now are the memory chip makers. If the "Tim Cook Doctrine" had guided them in that direction, Apple would certainly be a $5T company now. But that's easy to say in hindsight – then again, Samsung is right there!
And NVIDIA is right there, first in line, not Apple.
Apple is used to shifting markets. To bending others to their will. Now Apple is the one being bent. Being forced to shift strategy. It must be uncomfortable.
1 And the worst news on that front is buried in today's WSJ piece: Micron now thinks the pressure on memory chip supply will last throughout not just 2026, but all of 2027 too... ↩
2026-06-24 01:10:20
Why did Amazon walk from their OpenAI movie? It doesn't seem too hard to figure out. Last I checked, $50B is bigger than $50M. And that, mixed with the notion that the film may not just be anti-OpenAI, but anti-AI in general and, well...
Inklings is a newsletter featuring links and commentary from M.G. Siegler on timely topics found around the web.
😎 The 'Meta Glasses' – I think their strategy is smart here. Meta started with a known/proven brand and style in Ray-Ban (and later Oakley) and are now branching out on their own (still with the help of EssilorLuxottica – in which Meta is now a large shareholder, remember). And they don't have Meta's dumb, droopy logo front-and-center (which must have been tempting given that the logo looks like goggles), but rather hidden on the back of the stems. And the glasses look... good? Pretty standard stuff. But one suspects it's easy to get this wrong given that they're front-and-center on your face. The most important aspect, of course, is what it means for the price: $299 – a full $80 cheaper than the latest Ray-Ban branded variety. It's a solid price point and a further poke in the eye of their old rival Snap, as this makes their um, $2,195, price point for Specs seem all the more untenable. Yes, they're different – one is pretty full-on AR while the other are just glasses with AI – but my point would be that we're not ready for the AR variety yet anyway so... releasing the Specs at that price point just looks like a sort of silly move to many, including Wall Street. Anyway, the "Kylie" variety of Meta's glasses are obviously not meant for me, but I'm genuinely curious how well (or not) those sell in the market. Meta loves to try to get celebrities involved in their products (I mean, so do all the tech companies with marketing teams) but it doesn't ever seem to work as they'd hope. But hey, they have a gemstone here. And yes, her AI voice. Will their 'Muse Spark' models be fully up to the task? Can Meta fully escape their brand baggage? The "glasshole" issue? Your move, Apple. [Wired 🔒]
☁️ Microsoft’s Hybrid AI Dreams — The strangest thing about Satya Nadella’s ongoing blitz against Big AI — well, beyond the fact that Microsoft is deeply partnered with all the players, and yes, owns 25%+ of OpenAI — is that they just started going full bore at creating their own frontier models. Is the goal not to get the most amount of people to use those? Or perhaps it’s an acknowledgement that no matter the work they may do at the frontier, they’re not going to be able to catch Anthropic and OpenAI at this point. Or perhaps it’s simply Nadella reading the room and tea leaves, thinking that the ‘Fable’ situation is another DeepSeek moment where it causes everyone to rethink how they’re working on AI. An acknowledgment that Anthropic’s tussle(s) with the US government is causing many to think that they shouldn’t be all-in with one AI provider — even if it’s one of the Big Tech players. That instead, they should seek a diversified provider of models, like, say, Microsoft. Which, by the way, is happy to offer you DeepSeek models! Why? Costs. The other elephant in this room Nadella may be reading. Even if Microsoft can catch up on the frontier, their customers may not want to pay for such compute — certainly not for everything. Here, open source models are their friend, even if they may have been distilled from their partner OpenAI… [WSJ 🔒]
📉 Is Google Behind In AI? Again?! — Speaking of, at least Wall Street seems concerned that the departure of both Noam Shazeer — not even two years after bringing him back on board for $2.7B, now bolting for rival OpenAI — and now their Nobel Prize-winning DeepMinder John Jumper — who is John jumping to rival Anthropic — signals a problem within Google’s AI ranks. Again. That mixed with the fact that their latest Gemini flagship models weren't ready for their I/O conference, and still have yet to be released, and whispers that when they are, they still won’t be Mythos/Fable caliber… It’s obviously hard to know exactly what is going on here until those models are out in the world but there are definitely some Meta Llama vibes out there at the moment. But if Nadella’s read per the above note is correct, how much should Google even care about being at the absolute bleeding edge? It’s optically a black eye, obviously when a company with basically infinite resources can’t compete with the startups. But those have their own advantages too in being more nimble and not being bogged down by the baggage of billions of users across a wide range of products in a wide range of industries. But if costs start to matter more and there’s a push for more hybrid AI systems… Google should be fine. Just like Apple, which of course fumbled the AI bag far worse! But it is a weird vibe! [Bloomberg 🔒]
👁️ OpenAI Takes Their Ads Pitch to the Ads Pitchers — Increasingly, this does feel like the single-most important thing for OpenAI at the moment. If they can jumpstart their ads business, they suddenly have a narrative that Anthropic can't — because they won’t — match. It won’t totally negate the fact that Anthropic’s top and bottom lines now look more attractive, but given ChatGPT’s scale, it can be compelling. If the ads work, that is. And the jury is still very much out there. I’m still of the mind that they need to come up with new formats that are AI-native as CPC and CPM models don’t seem to make much sense, at least with the way the chatbots are currently built and serve up information. For queries with commerce intent, you can probably see it — and OpenAI says 1/5th of the queries they see are in that vein? — but shopping has already had fits and starts for them. The fact that Google is already working on this too is actually good news for OpenAI. If anyone can figure it out… But the bigger concern may remain that OpenAI clearly wants to be in the business that Anthropic is currently dominating and has diverted most resources in that direction. Can they really do both here? [FT 🔒]
🕹️ The Chip War Could Kill Consoles — Valves new Steam Machine sounds (and looks) interesting. As with the Steam Deck, it feels like they’re one step ahead of Microsoft. But the problem, of course, is price. It starts at $1,049 and goes all the way up to just under $1,500. The latter is double the highest end Xbox price. It’s triple the Switch 2 price. Yes, it’s a PC too, but if you wanted to use it as a PC, you should… buy a PC? The whole value proposition is the ease of use and access to gaming in the living room, but it’s not exactly plug-and-play — at least not yet. And it’s apparently no more powerful than a PS5 — which is over 5 years old (that itself is sort of wild). Anyway, it points to the bigger issue in the console market itself which is under siege due to the component prices. That basically makes any PS6 or ‘Project Helix’ Xbox a non-starter anytime soon. Xbox may really want to get back to being Xbox, but it’s going to be tough if the next Xbox is $1,000 or more. [Verge]
"You can’t say, hey, all white-collar jobs are gone and this could even be a weapon and we will use all the power to build data centers."
– Satya Nadella, making a simple point about the rhetoric coming out of many of the AI companies. It's obviously exaggerated to make the point, but it's also not wrong! No one should be confused why AI has a bad reputation, certainly in the US. It may be more than a messaging problem, but it's also a messaging problem!
And yes, such talking points are coming back to bite in other ways too. Shocking, I know.
Not bad. Nothing groundbreaking design-wise. And they're certainly not Specs...
"I think you need to take anything they do seriously. They’re good at hardware, they’re good at design. There’s a number of places where we won’t necessarily be able to build the same quality consumer experience when paired with the phone, and so I think they’re taking advantage of that."
– Alex Himel, Meta's head of wearables, when asked about the prospects of Apple entering the smartglasses space. Kudos for answering the question, but he was also clearly coached to bring up the connection talking point.
I suspect we're going to hear this come up from Meta more and more over the next year – especially once Apple actually enters the space. There will obviously be a push to deem the pairing with the iPhone as anticompetitive. The EU will probably launch a probe just based off of the rumors of such a product.
Technical connection capabilities aside, the dominance of the iPhone clearly remains a problem for Meta. And will remain one for some time, one imagines...
🎶 Listening to "Unbroken Horses" by John Mark McMillan
🍺 Enjoying a Guinness
☘️ Sent from Dublin, Ireland