Tech Brew Ride Home - Mon. 09/14 – Has Oracle Saved TikTok (In The US)?

Episode Date: September 14, 2020

Has Oracle saved TikTok, in the US at least? Let me explain why it’s not actually buying anything, probably isn’t solving the security problem Microsoft says it would have, and China is keeping its hands on the algorithm. On a normal day, news of Nvidia buying ARM would have been the headline. Airtable is an interesting raise. And who has more pie on their face: OnePlus or US Customs agents? Sponsors: PayPal App BuyRaycon.com/tech Links: Oracle Wins Bid for TikTok in U.S., Beating Microsoft (WSJ) It’s Official- NVIDIA Acquires Arm For $40 Billion To Create What Could Be A Computing Juggernaut (Forbes) Verizon to Buy TracFone in Deal Valued at Up to $7 Billion (WSJ) Airtable raises $185M and launches new low-code and automation features (TechCrunch) Feds proudly announce seizure of ‘counterfeit Apple AirPods’ that are actually OnePlus Buds (The Verge) The LG Wing’s twisting screen offers a new spin on the dual-screen smartphone (The Verge) 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, September 14th, 2020. I'm Brian McCullough. Today has Oracle saved TikTok, in the U.S. at least.

Let me explain why it's not actually buying anything. Probably isn't solving the security problem Microsoft says it would have solved and why China is keeping its hands on the algorithms. On a normal day, news of Nvidia buying arm would have been the headline and who has more pie on their face, One Plus or U.S. customs agents. Here's what you miss today in the world of tech. Sources everywhere are reporting that Oracle has apparently won the bidding for the U.S.

operations of TikTok, although the deal will not include TikTok's vaunted algorithms, and the deal will likely not be structured as an outright sale anyway. No actual assets might be changing hands. Instead, Oracle will be TikTok's, quote, trusted tech partner. So in essence, I guess Oracle is going to be kind of. TikTok's technology vendor in the U.S. or something, quoting the Wall Street Journal. Two people familiar with the Oracle deal said it was more appropriate to call it a partnership rather than an acquisition, suggesting that there wasn't an exchange of significant assets.

At least some of BightDance's existing investors, including U.S. investment firm, Sequoia Capital, and General Atlantic, will get stakes in the venture as part of the deal, said people familiar with the matter. The possibility that a deal might not involve an outright sale was previously reported by the Wall Street Journal. Microsoft, which had teamed up with Walmart earlier Sunday said in a statement that it was notified earlier in the day of the decision by ByteDance, quote, we are confident our proposal would have been good for TikTok's users while protecting national security interests, the statement said. To do this, we would have made significant changes

to ensure the service met the highest standards for security, privacy, online safety, and combating disinformation, and we made these principles clear in our August statement, end quote. In a statement late Sunday, Walmart suggested it is considering joining the Oracle group, saying it is continuing discussions with bite dance leadership and other interested parties, end quote. Oracle's interest in TikTok is primarily driven by kick-starting its fledgling cloud computing business, which remains far behind market leaders, Amazon, and Microsoft, people familiar with the matter said. Microsoft's plans were more ambitious than Oracle's, said one person. Owning TikTok would help Microsoft have more presence among everyday consumers,

an area it had mostly abandoned to chase after corporate users with the exception of its Xbox gaming business. TikTok would also give Microsoft a treasure trove of data on young and mostly female users, an area it doesn't have much insight into now, end quote. Yes, I want to come back to that passive-aggressive statement from Microsoft that I read to you about 30 seconds ago. Quote, we would have made significant changes to ensure the service met the highest standards for security, privacy, online safety, and combating disinformation, end quote. I read that as Microsoft essentially saying, they were all along approaching doing a deal for TikTok in good faith, hoping to acquire a valuable asset, yes, but also attempting to ameliorate the security concerns the U.S. government swore all

along was the reason why they wanted TikTok sold in the first place. But now, not only is the sale not really a sale, it turns out Oracle is just going to become TikTok's new hardware vendor, but without any apparent promises to even address the security concerns that caused all of this. So was this all just kabuki theater? Quoting Alex Stamos, a deal where Oracle takes over hosting without source code and significant operational changes would not address any of the legitimate concerns about TikTok and the White House accepting such a deal would demonstrate that this exercise was pure grift, end quote. Now, on the one hand, hearing that previous analysis suggests that Oracle wanted this deal to kickstart its cloud computing business, I have to say, that's the first rationale for why Oracle wants TikTok that actually makes sense to me. Though I've also heard whispers that all Oracle really wants are the bigger deals with the Pentagon, like that Jedi contract it lost out on. So it's maybe really thinking of this as a foot in the door for that sort of thing. it really does sort of feel like Larry Ellison held some fundraisers for Trump, and somehow this is the payoff to that original investment years ago.

You all know I'm a deep believer in capitalism, and capitalism is built on the rule of law, especially rock solid property rights. Capitalism functions best on a level playing field where all players have equal access to the same information and opportunities. But it looks like, in this case, here you had the U.S. government, moving to force the divestment of a privately held asset with questionable nods to due process, while the entire predicate for that proposed divestment is seemingly being given up as just a smokescreen in the first place. And instead, a deal of some form is being given to a favored party by the government, which created the entire situation in the first place. That's not capitalism. That's a form of governance and economics that has a different name. But also, forgetting all of that,

remember, China is getting exactly what it wanted. That vaunted algorithm is staying in their hands, the smoking gun slash prized asset, however you want to look at it, as Alex Cantowitz and I discussed on the weekend bonus episode this past weekend. So even that, it was all a big to do about nothing, it seems. Again, quoting Alex Stamos on Twitter, the People's Republic of China blocking a sale that would set precedent for its national champions was completely predictable. This is why it is important for the U.S. to think through these difficult areas of internet governance and work with allies instead of playing drunk checkers against go champions, end quote. As Dan Premack said in his newsletter this morning, no one is buying TikTok. The question now is if Oracle and Bight Dance have successfully devised a workaround to avoid President Trump's threatened ban, end quote. So, either absolutely nothing will be different about TikTok a year from today, or Oracle will be.

well on the way to probably driving it into the ground. Good job, everybody. On a normal newsday, this would have been the lead story for sure, because again, this is another sign of the complete transformation of the chip sector that we've been talking about so much recently. NVIDIA is officially going to buy Arm from SoftBank in a $40 billion deal. Invita says it will keep arms headquarters in the UK and will actually expand R&D facilities there. Oh, and they intend to keep Arms open licensing business model, which is, obviously, an attempt to reassure arms existing license partners and not blow up the existing arm business prematurely. As Jane mentioned Wong tweeted, I wonder how the Nvidia acquisition of Arm will affect the

neutrality of the arm architecture. For example, how will that affect Apple Silicon in the future whose processing unit is currently arm-based, considering that Apple and Nvidia don't really have a good relationship, end quote. To which I'd say, yeah, but you don't buy a business just to immediately piss off the partners that make that business valuable in the first place. Plus, doesn't Apple have something like a perpetual arm license? Also, it increasingly feels to me like Apple is going to go its own way in chip development and won't really need Arm in a few years' time. The fact that they weren't even looking to buy Arm themselves is what makes me think that in the first place. thorough analysis of what this deal means comes from Patrick Moorhead at Forbes.

Essentially, this is going to impact nearly every chip market segment, quote. The Nvidia Arm deal is not only the largest semiconductor deal by dollar volume at $40 billion, but I believe the one with the most significant impact. I think the deal fits like a glove and that arm plays in areas that Nvidia does not or isn't that successful, while Nvidia plays in many places Arm doesn't or isn't that successful. NVIDIA brings incredible capitalization to Arm, which, as we have seen since its softbank acquisition, Arm has increased its market presence and competitiveness. SoftBank's investment has enabled arms thrust into the data center, automotive, internet of things,

and NPU markets. I believe the NVIDIA adder can only make it stronger, as long as it sticks to its commitment to let Arm do what they do best, which is creating and licensing IP in a globally neutral way, which it is committing to. Software is a key part of the combined company's vision. Arm CEO Simon Sagar's framed it well when he told me, quote, we're moving into a world where software doesn't just run in one place. Your application today might run in the cloud, it might run on your phone, and there might be some embedded application running on a device. But I think increasingly, and with the rollout of 5G and with some of the technologies that Jensen was just talking about, this kind of application will become spread across all of those places. delivering that and managing that, there is a huge task to do, and it all requires a computing

architecture that can scale from the tiniest sets all the way up to the biggest supercomputer, and we can address that, end quote. Quick note about the price of the deal. Softbank paid $32 billion to acquire Arm back in 2016, so that rumored $40 billion price tag suggests a 25% return on Arm, except for two things. as Dan Primack pointed out, SoftBank's only going to get about $33 billion back right now. The rest is tied up in retention, compensation, and possible earnouts. But even if you were generous and gave SoftBank credit for a 25% return in four years,

keep in mind that over that exact same time period, the NASDAQ has returned a whopping 115%. Which continues to belie the claim that Masasan and SoftBank are some sort of investing geniuses. It can't be, right, when all you'd have to do is have bought the triple-Q's ETF and gotten a multiple better return than they did without all of the extra hassle. And actually, the smart buy would have been Nvidia itself. As Alistair Barr pointed out on Twitter, when SoftBank bought Arm in 2016, Nvidia was worth about $30 billion. Now, Nvidia is valued at $300 billion, end quote. I guess today is just a day of deals. Verizon has

also announced it is agreed to buy prepaid wireless reseller Trackphone for up to $7 billion in cash in stock, quoting the Wall Street Journal. Trackphone, a unit of Mexico's AmericaMovil SAB, operates in the U.S. under its namesake brand as well as Straight Talk and Net 10. The company doesn't run its own physical network in the U.S. and instead rides on other cell phone carriers' systems for a fee. About 13 million of track phones, 21 million subscribers already used Verizon's network through an existing agreement. Verizon said the deal will include about $3.125 billion of cash and $3.125 billion in Verizon shares. Track phone could get an additional $650 million cash payment tied to some performance measures and other commercial arrangements.

Verizon is the biggest U.S. provider with about $120 million connections, but it has been competing in a mature market that is now dominated by three providers. T-Mobile became the number two provider buys subscribers after swallowing sprint earlier this year. Track phone backed by Mexican billionaire Carlos Slim Heliou grew into the biggest U.S. cell phone reseller by catering to frugal customers through Walmart stores and other independent dealers. It offers service for as little as $15 a month with limits on internet data as well as the number of texts and phone calls, end quote. Remember us discussing how no code is among the new hotnesses in the tech world?

Interesting raise Monday then. Low-code database service Airtable has raised a $185 million Series D at a $2.58 billion post-money valuation. Airtable also took the opportunity to launch what is calling Airtable apps, a JavaScript-based no-code development tool. Quoting Frederick Lardinwa in TechCrunch, quote, previously, airtable users could use pre-built blocks to add maps, Gant charts, and other features to their tables. But while being a no-code service surely helped Airtable's users get started, there's always an inevitable point where the pre-built functionality just isn't enough, and users need more custom tools. Airtables founder and CEO Howie Lou calls this an escape valve. So with Airtable apps, more sophisticated

users can now build additional functionality in JavaScript, and if they choose to do so, they can then share those new capabilities with other users in the new Airtable marketplace. You may or may not need an escape valve, and obviously we've gotten this far with 200,000 organizations using Airtable without that kind of escape valve. Liu noted. But I think that we open up a lot more use cases when you can say, well, AirTable by itself is 99% there, but that last 1% is make or break. You need it. And then just having that outlet and making it much more leverage to build that use case on Airtable with 1% effort, rather than building the full stack application as a custom-built application is all the difference, end quote.

Liu told me a number of investors approached the company since it raised its series C round in 2018, in part because the market clearly realized the potential size of the low-code-slash-no-code market. Quote, I think there's this increasing market recognition that the space is real and the space is very large, he told me. While we didn't strictly need the funding, it allowed us to continue to invest aggressively into furthering our platform, vision, and really executing aggressively, without having to worry about, well, what happens with COVID? There's a lot of uncertainty, right? And I think even today there's still a lot of uncertainty about what the next year will bear, end quote. A charge leveled at a lot of tech hardware makers is that their designs are often so close to the hardware designs of other companies, especially when that other company is Apple, that it can be difficult to tell various pieces of hardware apart. They all look the same. Well, US Customs apparently seized a shipment of One Plus Buds, the AirPy, the AirPymp.

competitors from Oneplus because the customs agents thought they were counterfeit Apple AirPods. They couldn't tell the difference. Insert your own joke here, quoting the verge. US Customs and Border Protection tonight tweeted that its officers had, quote, recently seized 2,000 counterfeit Apple AirPods from Hong Kong valued at $398,000 had they been genuine, end quote. There's also this press release on the situation which praises CBP officers for, quote, protecting the American public from various dangers on a daily basis and says that, quote,

the interception of these counterfeit earbuds is a direct reflection of the vigilance and commitment to mission success by our CBP officers daily, end quote. The only problem is, based on the agency's own photos, the seized products appear to be legitimate one-plus buds, transported in a box that plainly says as much. But CBP proudly tweeted, quote, that's not an apple, as if its people had astutely detected a forged piece of 18th century art. It's not clear if all of the 2,000 blocked units were 1-plus buds, though the CBP images are unmistakable. The Verge has reached out to 1-plus. There might be a retailer or customer who didn't get their expected buds because of this, and CBP for more information

on the action at JFK Airport. Was it an embarrassing gaff by border officers or a wake-up call that earbud makers need to be a little more original? Maybe both. You've got to figure the blue one plus buds probably would have had a better chance of getting through, end quote. Finally today, you know that I've been rooting for photo phones because, number one, the concept actually appeals to me because I like the idea of having a bigger screen when I need one, while still being able to carry around a device small enough that can fit in my pocket. But also, I just really like to see any sort of hardware innovation in the smartphone space that has been just, you know, giant slabs of glass for way too long.

At the same time, a ton of you out there seem to think of photo phones as a gimmick, so you'll probably think that this is a gimmick as well. But again, innovation, people. Say hello to the LG Wing, a smartphone with a 6.8-inch main twisting display. Yes, a display that twists around revealing a 3.9-inch display underneath that main 6.8 inch display so that you can, well, you could actually do quite a bit of things with this, quoting Hym Gartenberg in The Verge. The new phone is inspired by LG's current trends of dual-screen smartphones like the G8X, Think Q, and the Velvet, along with the company's

classic swiveling, LGVX-9400 feature phone released over a decade ago. The wing is set to be the first device under LG's new Explorer Project branding aimed at exploring ways to, quote, breathe new life into what makes a smartphone, end quote. Wing's most interesting feature, of course, is the two OLED panels. Instead of folding out for two full size or one flexible panel side by side, the wing's main display twists around and up to reveal the second screen in a shape that looks a lot like a Tetris T-block. The idea is that when in swivel mode, you'd use the main display for whatever your primary task is,

while the second display serves as a supplemental window for another app or extended functionality. For example, LG imagines using the secondary panel for camera controls while using the camera application, freeing up the main display as an uncluttered viewfinder. Flip it around and you can use the main display as a massive widescreen keyboard while you respond to a message thread displayed on the smaller vertical display. Video applications can use the second display for media and volume controls. A lot of this, though, will depend on third-party developers embracing the second display, to extend their apps. Otherwise, it'll end up a cool feature limited to just LG's own software. Of course, you could also use it to simply run to applications side by side.

Play a mobile game on your main panel while streaming it online to friends and fans using the second display or read Twitter while watching the latest football match. The wing doesn't just have to be used in landscape format either. LG is just as enthusiastic about using the main display in a standard candy bar portrait mode as it is the more obvious widescreen format with the secondary panel serving as an auxiliary display of sorts while you navigate on Google Maps or read the latest document from work. The secondary half display can also be disabled while flipped out using a grip lock feature, allowing you to use it as a useful handle when watching a movie, for example.

The wing's unique form factor also leads to one of the phone's most interesting features, a gimbal mode that allows for the secondary display to be used as a grip, complete with joystick controls for adjusting the camera. LG actually included a second dedicated ultra-wide camera on the back to capture footage while the main display is in its swiveled landscape mode with a rotated sensor to match the orientation. It's also equipped with a new hexamotion sensor that the company says helps avoid interference. The wing can also shoot in a dual recording mode, capturing video from the front, and rear cameras at the same time, end quote. No word on pricing or release dates, but honestly, if a simple flutterable phone can't catch on,

with you naysayers. Maybe this one won't either. I'm getting today's show out a little bit early because since all the big news broke last night, I was able to write half the show before going to bed last night. But warning that tomorrow's show will probably be later than usual, since tomorrow is an Apple event, and it doesn't start until 1 p.m. As in the past, I can't write and record a show until the news actually happens, of course. And actually, that reminds me to make a bit of a house keeping note. Long time listeners will know that my deadline for posting has always been 5 p.m. Eastern time. Usually the show got out around 4 p.m. in the pre-COVID times. Since the lockdown, I've been posting around 2 or 3 p.m. since, you know, if the show was done, why would I wait to

post it? It's amazing the amount of time, especially in the morning, is freed up by not having a commute, I guess. Later this week, however, the kids start going back to school, so I expect I'll lose an hour or more in the morning to that nightmare of getting a four-year-old and a six-year-old out the door every day. Anyway, this is a long way of saying, expect the shows to start posting later, probably returning to that 4 p.m., maybe 5 p.m. window. Not a big deal. You know, you can listen to the show whenever you want to listen to it, but for those of you that have told me, they sit around waiting for the show to drop so they can download over Wi-Fi before jumping in the car or train. thought you should know, show will start to come maybe an hour, hour and a half later than you've been used to these last few months. Anyway, tomorrow the show will definitely be late. 4 p.m. would be a miracle, probably closer to 5. Talk to you then.