Tech Brew Ride Home - Mon. 04/07 – Will Tech Raise Prices Cause Of Tariffs?

Episode Date: April 7, 2025

TikTok lives! Again. Again. At least for another 75 days. Meta’s big new Llama models are out. AI coding assistant Cursor has become the big breakout hit of the AI moment. And then yes, we get into the tariff situation, including, me polling tech execs who make consumer facing gadgets: do you plan to raise prices? Here’s what they told me. Sponsors: Robinhood.com/gold Qualialife.com/ride and code RIDE Links: Trump extends TikTok deadline for the second time (CNBC) Meta releases two Llama 4 AI models (The Verge) AI Coding Assistant Cursor Draws a Million Users Without Even Trying (Bloomberg) Tariffs are tanking tech stocks, so why is Microsoft escaping the worst of the bloodbath? (Fortune) Learn more about your ad choices. Visit megaphone.fm/adchoices

On April 4th, 2023, around 2 in the morning, a man was found stabbed multiple times on a sidewalk in downtown San Francisco. Hey, who did this to you? What happened next turned the story into a political firestorm. Reports have identified the victim as Bob Lee, the founder of Cash App. From Bloomberg Podcasts, this is Foundering, the Killing of Bob Lee, beginning April 16. Welcome to the Tech Meme right home for Monday, April 7th, 2025. I'm Brian McCullough today. Tick-Tock lives again, again, at least for another 75 days. Meta's big new Lama models are out. AI coding assistant cursor has become the big breakout hit of the AI moment. And then yes, we get into the tariff situation, including me polling tech execs who make consumer-facing gadgets. Do you plan to raise prices? Here's what they told me. And here's what you miss today in the world of tech. Okay, we'll get to the stock market and the tariff issue at the end of the show. It's kind of hard for me to cover that because things can change so much by the time my words get to your ears. But let's make sure we don't miss this. Over the weekend, President Trump apparently signed an executive order to keep TikTok running for 75 more days as, quote, the deal requires more work to ensure all necessary approvals are signed, end quote. Mark Gurman sources say Apple, at least, is keeping TikTok and other bite dance apps on its U.S. app store for at least that further.

75 days following assurances from Attorney General Pam Bondi, quoting CNBC. We hope to continue working in good faith with China, who I understand are not very happy about our reciprocal tariffs, necessary and fair and balanced trade between China and the USA, Trump said in a post on truth social. Bightdance has been in discussion with the U.S. government. The company told CNBC, adding that any agreement will be subject to approval under Chinese law. An agreement has not been executed, a spokesperson for BytDance said in a statement, there are key matters to be resolved. Trump previously said he may consider reducing China tariffs to help facilitate a TikTok deal. The president also said that it's possible he would give ByteD.

another extension if there was not a finalized deal. Last month, Vice President J.D. Vance told NBC News that a TikTok-related deal could potentially happen by the April deadline. There will almost certainly be a high-level agreement that I think satisfies our national security concerns allows there to be a distinct American TikTok enterprise. Vance said at the time, end quote, indeed. Sources told Reuters that a TikTok U.S. deal, which was largely finalized by April 2nd, was put on hold after China indicated it would reject the deal over the tariffs. Quote, the deal was approved by existing investors, new investors, bite dance, and the U.S. government, the source said, the deal, the structure of which was largely finalized by Wednesday,

according to one of the sources would have spun off TikTok's U.S. operations into a new company based in America and owned and operated by a majority of U.S. investors. Bite Dance would hold a minority position of under 20 percent, end quote. Also over the weekend, meta launched Lama for Maverick with 400 billion parameters and Scout with 109 billion parameters and previewed behemoth with two trillion total parameters. Quoting the Verge. The two new models also available to download from meta or hugging face are Lama 4 Scout, a small model capable of fitting in a single

NVIDIA H-100 GPU, and Lama 4 Maverick, which is more akin to GPD-40 and Gemini 2.0 Flash. Meta says it's still in the process of training Lama 4 behemoth, which META CEO Mark Zucker says is the highest performing base model in the world. According to meta, Lama 4 Scout has a 10 million token context window, the working memory of an AI model, and beats Google's Gemma 3 and Gemini 2.0 Flash light, models, as well as the open source mistral 3.1, quote, across a broad range of widely reported benchmarks while still fitting in a single Nvidia H100 GPU. Meta makes similar claims about its larger Maverick models performance versus OpenAIs GPD240 and Google's Gemini 2.0 flash,

and says its results are comparable to Deepseek V3 encoding and reasoning tasks using less than half the active parameters. Meanwhile, Lama 4 Behemoth has 288 billion active parameters with 2 trillion parameters in total. While it hasn't been released yet, Meta says Behemoth can outperform its competitors, in this case GPT4.5 and Claude Sonnet 3.7 on several STEM benchmarks. For Lama 4, Meta says it switched to a mixture of experts' architecture and approach that conserves resources by using only the parts of a model that are needed for a given task. The company plans to discuss future plans for AI models and products at its LamaCon conference, which is taking place on April 29th. As with its past models, Meta calls the Lama 4 collection Open Source, although Lama has been

criticized for its license restrictions. For instance, the Lama 4 license requires commercial entities with more than 700 million monthly active users to request permission from meta before using its models, which the Open Source Initiative wrote in 2023, takes it, quote, out of the category of open source, end quote. Sources say AI coding startup AnySphere, whose assistant cursor has helped lead to the vibe coding movement, hit more than one million daily active users in March, driven largely by word-of-mouth growth. Quoting Bloomberg, cursor is an AI-infused code editor that can analyze a programmer's actions and suggest the next few lines. It also offers a chatbot that users can

prod with code-related questions. Curser is neither the only coding assistant available nor the first, but users have taken to its interface, which was built atop Microsoft's popular code editor visual studio code and its support for a wide range of large language models, including its own and those of OpenAI and Anthropic. It just makes a thing that you do every day better and faster, says Enesphere President Oscar Schultz. In January, AnySphere hit $100 million in annual recurring revenue by March that had doubled, and more than a million people were using Cursor each day, according to a person familiar with the matter who asked not to be named while discussing private information. Cursor offers monthly subscription plans, $20 for a pro account for individual

are $40 for a business account. Nearly all of Cursor's revenue still comes from individual users, said Schultz, many of whom work at companies that aren't paying for it directly. This intense interest from Coder shows how attention in the AI industry is shifting towards tools that can harness AI models rather than just the models themselves. Any spheres founders, Michael Truel, now the company's chief executive officer, Amon Sanger, Arvind Linnemark, and Soli Asif started working on Cursor in 2022. Before they released the product the following year, GitHub made its own code editor, GitHub co-pilot, broadly available. OpenA.I. also introduced ChatGPT, sparking a global frenzy that allowed Cursor to arrive just as companies, coders and consumers, were primed to experiment with new AI tools. Among the early adopters were software engineers at Near AI, a startup co-founded by Ilya Polozsukin, a co-author of a research paper that helped usher in the current age of AI. Curser cuts down on time spent hunting around on Google or coding resources, such as stack overflow for answers to coding-related questions. The tool is not chasing human coders out of their jobs. Pollushkin says Cursor can fall short when it comes to carrying out more complicated

coding-related tasks that require multiple steps. That said, the app is able to quickly solve problems on its own, according to software product designer Daniel Destifanus. He's using Cursor to build an iOS app, a stylish standby clock display for when a gadget is charging. Occasionally the software does screw up, he says, but it's generated the vast majority of the code for his app, which he expects to finish in April or May. Using AI coding tools provides what Destafanus calls a kind of creative momentum. Cursor's particular strengths, he says, are its lengthy memory, which can retain the context of a coding project and its ability to fix bugs that in the past would have left him stuck. It just lets me focus on the fun part, the design part, and handles

the stuff that I either don't have the skill set for, or it would just take me too long, he says. The software has even helped lead to a new style of programming known as vibe coding, where users simply accept the suggestions the AI assistant gives over and over. The term appears to have been coined in February by OpenAI co-founder Andre Carpathie, who described it on Social Network X as software programming where you fully give in to the vibes, embrace exponentials, and forget that the code even exists. Carpathy didn't respond to a request for comment. Investors betting that coding assistance will be a profitable application of cutting-edge AI have pumped $175 million into any sphere. Its backers include venture capital firms and Drison Horowitz and Thrive Capital, plus OpenAI and AI luminaries

such as OpenAI co-founder John Schulman and Google Deep Mine Chief Scientist Jeff Dean. It was very clear, pretty early on, that they were doing something special, says Martin Casado and Andreessen Horowitz's partner and Ennisphere board member. AnySphere is in talks to raise hundreds of millions more at a valuation of nearly $10 billion. The company declined to comment on the status of any future funding, end quote. Okay, on to the whole tariff fallout. you might have heard that Nintendo delayed pre-orders of the Switch 2. Nintendo of America President Doug Bowser said the company is actively assessing the impact of U.S. tariffs, which, quote, weren't factored into its switch-to pricing.

Nintendo's and Sony's stocks closed down 7.85 percent and 10.04 percent on April 7th, amid a broad Japan sell-off driven by the tariff news. Most switches are assembled in China and Vietnam, apparently. Stubhub, Clarna, Eitoro, and AdTech Group Mountain have reportedly paused their IPO plans as the public markets are roiling. Some more details I read over the weekend. The Times of India says Apple sent five planes full of iPhones and other products from India to the U.S. in just three days in the final week of March to avoid the 10% tariff. Trump's tariffs may reduce ad spending on meta platforms, which rely heavily on small and medium businesses globally. That's according to the Times.

10% of meta's 2023 revenue was from Chinese advertisers like Temu, which again, I think we talked about before as a risk for them. But analysts say Microsoft, whose shares fell the least among top tech companies in recent days, is shielded from the worst tariff impacts due to Azure and a broad enterprise base. Quoting Fortune, analysts told Fortune that Microsoft has an edge because it doesn't deal much in physical or consumer products, so it has less direct exposure to tariffs. What's more, Microsoft's focus on enterprise customers means that a big portion of its revenue streams are tied to long-term contracts, giving Microsoft extra stability. In Microsoft's fiscal year 2024, its cloud segment, which includes Azure, was the company's largest revenue contributor, generating about 43% of the company's total revenue. The companies that have low exposure to tariffs and higher enterprise revenue mix will likely be safe havens. Daniel Newman, CEO of analyst firm The Futurum Group, told Fortune, Microsoft is among the best. quote. Rishi Jaluria, managing director software equity research at RBC Capital Markets pointed out that

Microsoft is not immune to tariffs, but it should be generally well positioned. The largest piece of their business is enterprise software where they're selling cloud applications and infrastructure to corporate customers, he said, even if there were reciprocal tariffs, I don't know how you would tariff proper software services. Apple, on the other hand, would be heavily impacted by the tariffs if, say, iPhones become very expensive and the U.S. economy slips into a recession, said Patrick Moorhead, founder and chief analysts at More Insights and Strategy. Meanwhile, he said, Amazon buys most of its products from China, big tariff risk, end quote. Now, for years, I've had a relationship with folks who listen to the show, startup founders,

venture capitalists, but also folks in the C-sweets at tech companies, large and small, including magnificent seven companies. So this weekend I reached out to some of those executives with one simple question. If these tariffs hold, what is the plan? Eat the tariffs or pass them on to consumers? What's the thinking here? This is what they told me. None of them said they were going to raise prices for now. But not out of any sort of altruistic impulse, more out of a cover-your-butt impulse. In short, nobody wants to be seen as going first and being accused of, as one of them put it, sabotaging the project. Another person used the example of Apple to say if Apple came out tomorrow and announced the iPhone was starting at $1,600, quote, Trump would bring holy hellfire down on them. In short, everyone will attempt to hold down prices as long as they can, A, to hope this blows over, but more importantly, B, not to make themselves a target. Though another person told me this could all be a moot point. They pointed out that there are other sectors like auto manufacturers or aircraft builders for whom this could become an existential issue quickly. If the choices between raising prices and going out of business,

you raise prices, cross your fingers and pray. So the point there is that if other sectors have to raise prices on mass, that would be the time when tech would raise prices because they'd have cover. One person was more sanguine than I anticipated because even though the Chinese have already taken retaliatory actions, they thought other countries might wait a while to raise tariffs themselves because the hope would be that the stock market crash would force the administration's hand to do some sort of reversal. If other countries can take some short-term pain, they might do so in hopes they never have to raise tariffs themselves because markets would a full-blown trade war for them. But several of them mentioned that essay I did a couple weeks ago

about sovereign tech stacks and the danger of the world decoupling from Silicon Valley. Brian, one person told me, you know how everybody has been shifting their supply chains away from China because they wanted to mitigate the risk of being caught in a trade war, why won't countries do the same to us? Sure, if it ends up being a global trade war, that's a moot point. But even if this all gets resolved quickly, people now have the fear that trading with the U.S. is an iffy proposition. Lots of people using the phrase, you can't put the toothpaste back in the tube. But also, lots of people mentioning that it's not just one supply chain that could break. It's that the whole global supply chain is so interconnected, it kind of is one single supply chain, as we saw in COVID times. One person

used the analogy of Nvidia chips, and I realize this is not a perfect analogy for a lot of reasons, but go with this for a second. Let's say you're somebody looking to get your hands on the latest top-of-the-line AI chips. Let's say you temporarily get sent to the back of the line because of tariffs, and so those chips go to companies in other countries because it's easier, even if the tariffs blow over, do you get your place back in line, or are you stuck at the back of the line? Not picking on Apple again, but to use them as a different imperfect analogy, as someone pointed out, Apple and everyone else signs long, multi-year forward-looking contracts. Now, TSM, say, isn't going to break contracts with the likes of Apple, but if you're a

small hardware manufacturer and all your supply chain is overseas, and it's too expensive for your suppliers to do business with you, or you're unable to deliver the volume you promised, they will break their contracts and you're dead. In fact, one person said the supply chain breaking alone could reap a whirlwind. They said, Wall Street always worries in times like this that some hedge fund blows up or some bank blows up and margin calls and stuff which lead to a recession or worse. But this person said, again, COVID times taught us there can be singular pinch points in the global supply chain that can break under stress. Remember, these are folks who sell gadgets that have a supply chain of like 40 different countries. I saw this echoed a lot on social

media this morning. The fear that some supplier you've never heard of suddenly goes bankrupt, but whoopsie, it turns out that company supplies 90% of the world with some part or component or mineral or whatever that it turns out is absolutely vital to the global supply chain. Whoopsie. And then there's just the fear of recession. Even if the president declares victory next week and reverses the tariffs until that point, what are all of us doing, this person said? We're hitting pause. Just look at what Nintendo did with the Switch. You think they want to pause the key driver of how they had mapped out their next 10 years? And what's the definition of what causes a recession when everybody pauses or pulls back at the same time? So lots of fear of a recession of some form

is baked in already. Again, these are not my opinions. I'm just telling you what I heard from some of the very plugged in people who work in Silicon Valley who listen to the show every day. If you want to be one of those Silicon Valley whispers for me, get in touch anytime at bryan at Techmeme.com. The deal I've always made with folks is you don't have to give me scoops about your company or what you're doing. I'm more interested in vibes what people are really thinking in the background. And it's all on background, as you saw with this essay. Again, that was a little bit of an essay, but this time I couldn't hold it for the weekend because, you know, things are moving so quickly. Talk to you tomorrow.