 | Nov 14, 2024 | | | | Supported by  | | | | | Happy Thursday! Donald Trump has picked Matt Gaetz as attorney general. A judge in Washington ruled that the Federal Trade Commission's antitrust case against Meta Platforms will go to trial. Klarna has filed confidentially for a U.S. IPO.
| | | | President-elect Donald Trump on Wednesday said he will nominate Matt Gaetz as attorney general, putting forward a congressman who has previously called for the breakup of big tech companies, supports Federal Trade Commission Lina Khan and opposed passage of the law that could ban TikTok in January. The Republican congressman from Florida was one of 15 House Republicans to vote against the bill, passed in April, that would require a ban of TikTok in the U.S. if it didn't cut ties with its Chinese parent company ByteDance. At the time, Gaetz said the app posed a national security concern and "should be banned," but called the bill "bad" and "overbroad." Trump has said several times he opposes a ban because, he says, it would strengthen Meta Platforms' Facebook. Though it will likely be hard to repeal the law, Trump could direct his new attorney general not to enforce the legislation or drop the case. Gaetz's other views, such as on tech company breakups and Khan, suggest Trump's election may not change the environment for tech mergers very much from the Biden administration. | | | | The Federal Trade Commission's bid to break up Meta Platforms moved a step forward Wednesday after a judge in Washington ruled the case will go to trial. The FTC sued Meta in 2020, accusing the company of gaining an illegal monopoly over social media through its acquisitions of Instagram and Whatsapp. The case was dismissed in 2021, but the FTC later refiled an amended complaint. Meta tried to stop the case moving to trial, but the U.S. District Judge James E. Boasberg determined Wednesday that it will proceed. The judge's full opinion is yet to be publicly released. In response to the order, a Meta spokesperson said in a statement that the company is "confident that the evidence at trial will show that the acquisitions of Instagram and WhatsApp have been good for competition and consumers." On the other side, FTC spokesperson Douglas Farrar said the case "represents a bipartisan effort to curtail Meta's monopoly power and restore competition to ensure freedom and innovation in the social media ecosystem." | | | | Instalment lender Klarna has filed confidentially for a U.S. initial public offering, the company announced Tuesday. The number of shares and the pricing for the potential offering have not been set, Klarna said. Klarna was valued as high as $46 billion in 2021, amid a surge in e-commerce and fintech investment, but slashed its valuation to $6.7 billion in a funding round the next year. More recently, mutual funds and secondary trades have valued the company around $10 billion. Sequoia Capital is the company's largest outside shareholder and controls just over 20% of the company, according to Klarna's 2023 annual report. Stockholm-based Klarna has returned to profitability after losing money while the company expanded aggressively over the past few years. Klarna's revenue grew 27% from a year earlier in the six months ending in June to $1.23 billion, up from a 15% increase in the same period last year. (See The Information's Klarna org chart here.) | | | | Amazon has launched its Temu-like discount storefront under the name "Haul." As of Wednesday morning, the storefront was visible on mobile in beta to some U.S. shoppers, offering items like $3 handbags and $14 pajama sets. The launch of Haul comes after a yearslong debate inside Amazon about how to respond to the rise of Chinese discount apps Temu and Shein. Similarly to those sites, Amazon is keeping prices low on Haul by shipping individual packages directly to U.S. shoppers via airfreight from China. Haul features much slower shipping times and tighter return policies than Amazon's primary e-commerce store. Ahead of Haul's launch, Amazon set aggressive price caps for Chinese sellers who wanted to list their wares on the site. That's a significant departure from Amazon, which has typically incentivized sellers to lower their list prices but is not known to set hard-and-fast rules. The storefront's launch also comes as retailers grapple with a potential crackdown on U.S.-China trade under the forthcoming Trump administration, which will likely hurt direct-from-China services like Haul, Temu and Shein. | | | | OpenAI said Wednesday it had shared information with U.S. government officials about how to build a data center for artificial intelligence that is five times larger than any data center that's currently being developed. The AI firm's top policy executive, Chris Lehane, said at an event in Washington that the company shared information about the potential impact of a data center requiring 5 gigawatts of energy—or enough to power five cities the size of Salt Lake City, Utah. The idea appears to resemble Stargate, the codename of a $100 billion supercomputing data center that OpenAI has discussed with its primary backer, Microsoft. In the meantime, OpenAI is working with data center providers to develop what could be a 1 gigawatt data center, according to the AI Data Center Database. Lehane said OpenAI is also calling on the federal government to help expand the country's data center energy capacity so that it can maintain its lead in AI over China, which is part of Donald Trump's stated agenda. OpenAI suggested the government speed up permitting processes for AI data centers and establish a "National Transmission Highway Act" to expand energy capacity and backstop high-cost energy projects by committing to buy power in order to lessen the credit risk of such projects, among other things. In an apparent nod to the president-elect, Lehane shared a presentation slide titled "Build Big Again," detailing why supporting large AI infrastructure projects would reindustrialize the country and "revitalize the American Dream." | | | | Chip designer AMD, the second-largest provider of graphics processing units for training and running AI software, is laying off around 1,000 employees as part of what it described as an effort to focus on its "largest growth opportunities," according to a report from tech news site Wffctech. The layoffs represent 4% of AMD's global work force of roughly 26,000 people. AMD's move comes more than two weeks after its third-quarter earnings report, which seemed to underscore for some investors the degree to which it is trailing behind GPU market leader Nvidia. AMD's shares dropped 7% after the report and are down more than 16% from their levels before it disclosed the financial results. Although AMD has raised its sales forecast for artificial intelligence chips that compete with Nvidia's, the name of the game in AI today is speed, and investors apparently don't think AMD is moving quickly enough to gain ground. | | | | The percentage of Americans who say they use Elon Musk's X platform has dropped slightly in the past couple of years, while usage of Meta's WhatsApp has grown, according to a survey released Wednesday by the Pew Center. The survey was conducted between February and June of this year. As of June, 21% of Americans said they used X, formerly known as Twitter, down from 23% in 2021 but the same proportion as in 2016. X draws the lowest proportion of the audience of any social media platform. The survey shows that 85% of the population said they used YouTube, far higher than any other social media service, with Facebook second with 70% and Instagram third at 50%. Notably, the proportion of the population saying they use WhatsApp—which like Facebook and Instagram is owned by Meta Platforms—has risen to 30% from 20% in 2019. Another popular service is Pinterest, used by 36% of the population, and TikTok, at 33%, just ahead of LinkedIn. Most other services, such as Reddit, Snapchat, Nextdoor, X and BeReal, follow. | | | | Marc Lore's food delivery company, Wonder, plans to acquire Grubhub in a deal valued at $650 million including debt, the companies said Wednesday, confirming a Tuesday report. Wonder is paying $150 million in cash and will assume $500 million in Grubhub debt, and expects to complete the transaction in the first quarter of 2025, according to the companies. Wonder also said on Wednesday that it had raised $250 million from new investors, though it did not disclose who those investors are. Wonder plans to add some restaurants that are currently listed on Grubhub to the Wonder app, Lore said in a statement. Shares of Amsterdam-based Just Eat Takeaway, which acquired Grubhub for $7.3 billion in 2021 but has been exploring a sale since 2022, jumped 17% on Wednesday. | | | | Polymarket is being investigated by the U.S. Justice Department for allegedly letting U.S. users bet on the platform, Bloomberg reported. The prediction platform reached a settlement with the CFTC in 2022, which had argued it was running an unregistered, illegal derivatives market. Polymarket agreed to block U.S. traders from accessing the platform. The site rose to prominence during the U.S. election this year and became the biggest prediction market by trading volume. Unlike Kalshi, which caters to U.S. users, it's not registered with the CFTC. The FBI executed a search warrant on Shayne Coplan, Polymarket's CEO, and seized his phone and electronics, Bloomberg, Axios and the New York Post reported. A company spokesperson said "this is obviously political retribution by the outgoing administration against Polymarket for providing a market that correctly called the 2024 presidential election." | | | | Meta Platforms plans to introduce advertisements to its microblogging app Threads early next year, The Information reported. Threads plans to launch the effort by allowing a small number of advertisers to create and publish ads on the app starting in January. Meta's leaders in the past have said the company will eventually introduce ads to Threads without providing a specific timeline. The app's short-term goals are adding users and improving engagement, executives have said. Threads has nearly 275 million monthly active users, Meta CEO Mark Zuckerberg said in late October. Still, the company has suggested it will introduce ads to Threads slowly. Chief Financial Officer Susan Li said last month that Meta doesn't expect Threads to be "a meaningful driver of 2025 revenue." | | | | | Popular articles By Stephanie Palazzolo, Erin Woo and Amir Efrati
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