Tech Brew Ride Home - Thu. 10/17 – Sigh Of Relief From Chip Stocks

Episode Date: October 17, 2024

Now Amazon is building some modular nuclear reactors. TSMC’s results cheer up the chips industry. Uber but for buying plane tickets. No, I mean, really, use Uber to buy plane tickets. And the controversial reason Meta is reportedly laying off some folks. Sponsors: Lumen.me/ride Links: Amazon goes nuclear, to invest more than $500 million to develop small modular reactors (CNBC) TSMC Hikes Revenue Outlook in Show of Confidence in AI Boom (Bloomberg) The FTC is finally making it easier to cancel your gym membership (The Verge) Uber explored takeover bid for Expedia (FT) Meta is laying off employees at WhatsApp, Instagram, and more (The Verge) Meta fires staff for abusing $25 meal credits (FT) Analogue’s 4K Nintendo 64 launches next year for $249 (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 Thursday, October 17th, 2024. I'm Brian McCullough today. Now Amazon is also building some modular nuclear reactors. TSM's results cheer up the chips industry. Uber, but for buying plane tickets. But, I mean,

really, soon you could use Uber to buy plane tickets. And the controversial reason meta is reportedly laying off some of their folks. Here's what you miss today in the world of tech. I mean, how many confirms a trend? Amazon has signed three deals now to help. develop small modular nuclear reactors in the U.S., with Amazon's Climate Pledge Fund, leading a $500 million series C1 in Startup X Energy, quoting CNBC. Amazon Web Services is investing more than $500 million in nuclear power, announcing three projects from Virginia to Washington State. AWS, Amazon's subsidiary in cloud computing, has a massive and increasing need for clean energy

as it expands its services into generative AI. It's also a part of Amazon's path to net zero carbon emissions. AWS announced it has signed an agreement with Dominion Energy, Virginia's utility company, to explore the development of a small modular nuclear reactor or SMR, near Dominion's existing North Anna nuclear power station. Nuclear reactors produce no carbon emissions. An SMR is an advanced type of nuclear reactor with a smaller footprint that allows it to be built closer to the grid. They also have faster construction times than traditional reactors, allowing them to come online sooner.

Amazon is just the latest large tech company to buy into nuclear power to fuel the growing demands from data centers. Earlier this week, Google announced it will purchase power from SMR developer Kairos Power. Constellation Energy is restarting Three Mile Island to power Microsoft data centers. Virginia is home to nearly half of all the data centers in the U.S. with one area in Northern Virginia dubbed Data Center Alley, the bulk of which is in Loudoun County. An estimated 70% of the world's internet traffic travels through. through Data Center Alley each day. Dominion serves roughly 3,500 megawatts from 452 data centers

across its service territory in Virginia. About 70% is in Data Center Alley. A single data center typically demands about 30 megawatts or greater, according to Dominion Energy. Bob Blue, its president and CEO, said in a recent quarterly earnings call that the utility now receives individual requests for 60 megawatts to 90 megawatts or greater. Dominion projects that power demand will increase by 85% over the next 15 years. AWS expects the new SMRs to bring at least 300 megawatts of power to the Virginia region. AWS plans to invest $35 billion by 2040 to establish multiple data center campuses across Virginia, according to an announcement from the state last year. Amazon also announced a new agreement with utility company Energy Northwest,

a consortium of state public utilities to fund the development, licensing, and construction of four SMRs in Washington state. Those reactions, will be built owned and operated by Energy Northwest, but will provide energy directly to the grid, which will also help power Amazon operations. Under the agreement, Amazon will have the right to purchase electricity from the first four modules. Energy Northwest has the option to build up to eight additional modules. That power would also be available to Amazon and utilities in the Northwest to power homes and businesses. The SMRs will be developed with technology from Maryland-based X Energy, a developer of SMRs and fuel. Along with Amazon's other announcements, Amazon's

climate pledge fund disclosed it is the lead anchor in a $500 million financing round for X Energy. The Climate Pledge Fund is its corporate venture capital fund that invests in early stage sustainability companies. Other investors include Citadel founder and CEO Ken Griffin, affiliates of Ares Management Corporation, NGP, and the University of Michigan, end quote. It seems chip stocks are breathing a sigh of relief over the last 36 hours or so. That's probably because TSM reported Q3 revenue up 39% year-on-year to around $23.6 billion, and net income up 54.2% year-on-year to 10.1 billion, both above estimates. This was boosted by strong sales of Nvidia AI chips, so maybe it calms fears in the chips sector just a bit. Quoting Bloomberg.

The main chipmaker to Nvidia and Apple now expects sales to climb roughly 30% in U.S. dollar terms this year up from previous projections for about a mid-20% rise. That's after TSM reported better than expected earnings for the September quarter, and it foresees capital expenditure rising in 2025 from roughly $30 billion this year. TSM's American depository receipts rose as much as 10% after trading opened in New York, reaching their highest level since the securities began trading in the U.S. in October 1997. Invidia's stock gained as much as 3.2% and is on track to hit a record close if the gains hold. TSM's outlook should help tamp down concerns that investors misjudged AI and semiconductor demand. Those fears crystallized

after chip industry linchpin ASML holding stunned markets by reporting about half the orders investors had expected. On Thursday, TSM chief executive officer CCWI sought to dispel those doubts. The demand is real and I believe it's just the beginning, we said, echoing a number of executives, including NVIDIA's CEO. In terms of overall chip demand, quote, everything stabilized and start to improve, end quote. TSM's shares have surged more than 70% this year, outpacing many of Asia's biggest tech firms in a reflection of strong sales of the Nvidia chips, vital to artificial intelligence development. Still, investors had watched for deviations in TSM's outlook after ASML blamed slower than expected recovery in the automotive, mobile, and PC markets for

stalling chip plant expansion plans. AI remains a bright spot, its executive said. TSM is not just an AI machine, said Ben Beringer, technology analysts at Quilter Chevi-O. They are much better positioned than both Intel and Samsung, which have had their own well-documented issues. TSM has positioned itself well, and should any real downturn hit the sector, it should be in a strong position to weather this and emerge in a good place, end quote. The results show, quote, no end in sight to AI-driven strength. Wedbush analysts wrote in a note while raising their price target and reiterating their rating of outperform, end quote. The USFTC has adopted its final click-to-cancel rule requiring businesses to make canceling a subscription as easy as signing up after proposing the rule back in 2023, quoting the verge.

Under the rule, businesses can't force customers to cancel a subscription using a method different from how they signed up. For example, if you signed up for a subscription with an online form, companies can't require you to call them or chat with a live agent to cancel. The FTC will also require businesses to clearly disclose the terms of their subscriptions and get customer consent before charging them. The rule, which was first proposed last year, applies to any automatically renewing subscription ranging from difficult to cancel gym memberships to magazine subscriptions and monthly payments for services like Amazon Prime. It also covers free trials that charge if you don't cancel in time, along with continuity. plans where you'll receive periodic product shipments until you cancel. The Click to Cancel rule is part of the FTC's broader crackdown on shady subscription practices. Earlier this year, the agency sued Adobe for offering, quote, deceiving subscriptions that are hard to cancel. The FTC also sued Amazon over claims

it tricked people into signing up for Prime and slammed Microsoft's recent changes to its Xbox GamePass subscription. Most of the provisions in the Click to Cancel rule will go into effect 180 days after it's published in the Federal Register, end quote. You know how when you book a flight, they also try to upsell you on a car rental? Well, what if things went in reverse? Sources are telling the Financial Times that Uber has explored a possible bid for Expedia as it seeks to grow into a super app. Expedia, which is valued at nearly $20 billion, would be Uber's largest acquisition ever.

Quoting the Financial Times, Uber approached advisors in recent months after the idea of an Expedia acquisition was broached by a third party to examine whether such a deal would be possible and how it could be structured, according to three people familiar with the process. A focus of Uber's discussions was the role of Uber Chief Executive Daracostor Shahi, who served as Expedia's CEO from 2005 to 2017 and remains a non-executive director on its board. That makes it likely that any approach would be friendly and that he would recuse himself from deal discussions. The people briefed on the matter cautioned that Uber's interest was at a very early stage, and it was possible that a deal would not transpire. No formal approach has been made to Expedia, and there are no current

discussions, one person said. Kosra Shahi is a protege of Barry Diller, the serial dealmaker, who serves as Expedia's executive chair. The Uber chief worked at Diller's internet and media group IAC for seven years, and has described him as a, quote, great mentor of mine. Uber, Expedia, and Diller declined to comment. Following the Financial Times report, Expedia shares jumped 7.6% in after-hours trading, while Uber fell nearly 2.7%. In recent years, Uber has expanded from its ride-hailing routes into train and flight bookings, food delivery, corporate logistics, and advertising as it seeks to transform itself into a super app akin to the multi-purpose platforms built by Chinese tech groups such as WeChat. Kroshaji told the Financial Times this week,

quote, anywhere you want to go in your city and anything that you want to get, we want to empower you to do so. Adding Expedia and its booking technology would turbocharge those ambitions, the fourth-largest online travel company generated $12.8 billion in revenue for 2023 amid a post-pandemic tourism boom, but it cautioned this summer that it faced a slowdown in travel demand. Uber's M&A firepower has been strengthened by an 85% surge in its stock over the past year, giving it a market capitalization of $173 billion. In February, the San Francisco-based company reported its first year of operating profitability, driven by resurgent demand for ride-hailing alongside its food delivery logistics and fast-growing advertising arm. Chief Financial Officer Prashant Mahendra Rajah said in August

that Uber's top priority for deploying capital was investing in growth, including via acquisitions. Expedia stock has risen more than 50% in the past year, but it's only a tenth of its potential suitor's size with a market valuation just below $20 billion. Uber has made a few large deals since it went public in 2019. It expanded into food and beverage delivery via the acquisitions of Postmates for $2.65 billion and Drizley for $1.1 billion, entered the freight and logistics business through the $2.25 billion purchase of Trans Place and struck a $3.1 billion deal for Kareem, a Middle Eastern ride-hailing business, end quote. I debated whether to even cover this, but the interwebs are chattering all about this,

so here you go. Apparently, META has been laying off focus. at WhatsApp, Instagram, and reality labs. Only around 24 people so far. So not that big a deal, right? But the rumors around why the layoffs are happening are why people are chattering. From the Verge, here are the straight facts. Quote, Meta has begun laying off employees across various departments, including WhatsApp, Instagram, and reality labs, according to people familiar with the matter. Rather than a mass company-wide layoff, these smaller cuts seem to coincide with reorganizations of specific teams. Today, a few teams at Meta are making changes to ensure, resources are aligned with their long-term strategic goals and location strategy.

Company spokesperson Dave Arnold said in a statement shared with The Verge, this includes moving some teams to different locations and moving some employees to different roles. In situations like this, when a role is eliminated, we work hard to find other opportunities for impacted employees, end quote. But then, from the Financial Times, quote, meta has fired about two dozen staff in Los Angeles for using their $25 meal credits to buy household items, including acne pads, wine glasses, and laundry detergent. Like most big tech companies, META offered free food to employees based out of its sprawling Silicon Valley headquarters as a perk. Staff based in smaller offices without a canteen are offered Uber Eats or Grubhub credits, for example, for food to be delivered

to the office. Staff are given daily allowances of $20 for breakfast, $25 for lunch, and $25 for dinner, with meal credits issued in $25 increments. Those who were fired were deemed to have a abused the food credit system over a long period of time, said one person familiar with the matter. Some had been pulling their money together, they said, while others were getting meals sent home, even though the credits were intended for the office. Those who violated the company rules only on occasion were reprimanded but not terminated, the person added. In one post on anonymous messaging platform blind seen by the Financial Times, one former meta staffer wrote they had used $25 credits on items such as toothpaste and tea from the pharmacy right aid, adding, quote,

on days where I would not be eating at the office, like if my husband was cooking or if I was grabbing dinner with friends, I figured I ought not to waste the dinner credit, end quote. The person who indicated they had a salary of about $400,000 at Meta and worked nights and weekends wrote that they had admitted to the oversight when Human Resources investigated the practice before later being unexpectedly fired. It was almost surreal that this was happening, the person wrote, end quote. quoting from a different blind post, quote, last week metafired 30-plus people for policy violations because they use their $25 grubhub

credits for non-food items, shared credits with people, or went above budget. They were given a warning to stop, which most of them did, but were still fired three months later, even after stopping. Now it seems like internal auditors are going after other policy violations like badging into offices in different counties to meet the three to five in office days. Expensing non-food items on business trips, more than 20 visitors in a calendar year, etc. Seems like warnings don't mean anything and more people will be fired over the next few months. I understand policies can be stringent, but this seems egregious.

Layoffs without severance, end quote. I offer all that without comment. Just again trying to re-up my efforts to give you the TLDR about what folk in tech are chattering about. Finally today, thanks to many of you who sent this to me overnight. given the Golden I-N-I-S64 episode I just did with Gruber. This from the Verge, quote, Analog is finally ready to share details on its take on a Nintendo 64. The Analog 3D will launch early next year.

The company says Q1-2020-5 and will cost $249. It comes in either black or white, and pre-orders kick off on October 21st at 11 a.m. Eastern Time. First announced at the beginning of the year, the analog 3D is a modern take on the N-64, or similar to previous analog consoles covering the NES, S-NES, Sega Genesis, and Game Boy. The new console can upscale classic games to 4K and includes multiple display modules to mimic the look and feel of a CRT display. Analog says it's, quote, designed with a bespoke purpose-built 4K upscaler.

The company says the Analog 3D is 100% compatible with the N64's cartridge library. It's also region free by utilizing FPGA technology, which allows it to function like the original console. This is good news for the N64 in particular, which has proven notoriously hard to emulate. The analog 3D supports Bluetooth, has four original controller ports, two USB ports, and an SD card slot. It doesn't come with a controller, but 8-bit do has created an updated version of the N64 game pad minus the third prong that is being sold separately for $39. You can see it in the photo at the top of this article. It has a Hall Effect Stick and is also compatible with the Switch, Android, and PC. You can also

also just use any original and 64 controllers you have lying around, end quote. Now somebody, somehow, make this thing do golden eye matches over online, and we're in business. Frigan old golden eye cartridges would be going for like thousands of dollars if you did that. That there was kind of my one more thing for today. Check out the GoldenEye 64 episode on the Rad History Feed. If you don't know why people think that game is such a big deal, talk to you tomorrow.