Decentralization, acceleration, and the EU's technology tipping point
Welcome to Cautious Optimism, a newsletter on tech, business, and power. Modestly upbeat.
The Rundown
📈 Trending Up: Nasdaq futures this morning, after yesterday’s mess … Volvo stock … TSMC, after reporting 40% revenue growth … on-device AI … Microsoft on iOS … NPCs … garbage time … InMobi’s IPO chances …
📉 Trending Down: CEXs … transformers? … Nokia … bitcoin mining in the AI era … Taiwan’s safety (or not?) …
🤔 What Else?
Netflix earnings after the bell: The street expects revenue of $9.53 billion and earnings per share of $4.74. Both figures are sharply higher than revenue ($8.19 billion), and profit ($3.29 per share) it earned in the year-ago period.
Crypto support and political logic: Ethereum’s Vitalik penned a lengthy essay on politics and crypto that is worth reading. In it, the well-known crypto figure worked to connect the blockchain crypto ethos to the cryptography privacy ethos. Vitalik argues that both sets of “technological freedoms” are as “foundational” as each other.
So what? The essay is a polite pushback against the current hype amongst cryptocurrency fans throwing their weight behind certain politicians. Vitalik also drew an interesting point on decentralization versus acceleration, arguing that the two can be at odds. Now that is a spicy take.
Europe faces technology tipping point
The European Union is learning that there is a limit to how far American tech companies will bend to its will.
Earlier this year, Apple announced that it would not bring its upcoming ‘Apple Intelligence’ features to the EU market. Why? Apple said that the choice was due to ”the interoperability requirements of the [Digital Markets Act]” that it says would “compromise the integrity of [its] products in ways that risk user privacy and data security.”
This week, Meta said that it would not bring its upcoming multi-modal Llama AI model to the EU “due to the unpredictable nature of the European regulatory environment.”
Lick the stamp and send it, friends, we’ve got a trend on our hands.
There’s been an unspoken agreement between EU regulators and American tech companies. The latter could make lots of money in the EU, so long as they accepted regular wrist taps and fines from the local government.
My very loose perspective was that so long as the EU didn’t push too hard or charge too much, the center would hold. European citizens would get slightly more unlocked digital services, while we in the United States would have to put up with higher walls around our digital gardens. Two governance models, two sets of outcomes, happy consumers, and irked but muddling-through-it tech companies in the middle.
No longer. The DMA has been hard enough on U.S.-based tech giants operating in Europe that when it comes to AI and the like, they are throwing up their hands and not bringing their latest and greatest to the EU. Of course, you can still buy an iPhone in Aachen or use Facebook in Besalú, but EU users will be ring-fenced inside the past as their American peers and many around the world get cooler stuff, sooner.