Tech Brew Ride Home - Tue. 03/25 – Napster Lives! Again!

Episode Date: March 25, 2025

Looks like the EU is bringing down the hammer on Meta. Waymo’s next city is Washington DC. Napster continues to live! And it has a new owner! Maybe domestic chip production can be cost competitive? And what happens if Europe decouples from Silicon Valley? Sponsors: Tonal.com promocode RIDE for $200 off Links: European Union to slap Meta with fine up to $1B or more for breaching strict antitrust rules: sources (NYPost) EToro Files for IPO Showing Commissions Jumped 46% Last Year (Bloomberg) Waymo plans robotaxi launch in Washington, DC in 2026 (The Verge) Napster pioneered music sharing over 25 years ago. It just got bought for $207 million (CNBC) Producing wafers at TSMC Arizona is only 10% more expensive than in Taiwan: TechInsights (Toms Hardware) Trump’s Aggression Sours Europe on US Cloud Giants (Wired) 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 Tuesday, March 25th, 2025. I'm Brian McCullough today. Looks like the EU is bringing down the hammer on meta. Waymo's next city is Washington, D.C., Napster continues to live and it has a new owner. Maybe domestic chip production can be cost-competitive after all, and what happens if Europe decouples from Silicon Valley? Here's what you miss today in the world of tech. Sources are telling the New York Post that the European Commission is expected to find that meta violated the DMA. And will there, thereby fine the company hundreds of millions of dollars, possibly over $1 billion.

Quoting the New York Post. The EU's probe into the Facebook and Instagram parent company is expected to finish up as early as this week, with an announcement about the Commission's enforcement action to follow immediately after the insiders added. EU officials are also expected to hit META with a cease and desist notice, essentially informing the company of what it must change to get into compliance, according to the sources. Earlier this month, Reuters reported that Apple and META were likely to face mod. FIntyreys Fines for DMA breaches. EU antitrust chief Teresa Rivera previously said a decision on enforcement actions for both companies was coming in March. Aside from META, companies deemed gatekeepers

under the DMA include Google Parent Alphabet, Amazon, Apple, booking.com, TikTok parent, bite dance, and Microsoft. E.U regulators and other proponents say the law prevents tech giants from crushing smaller rivals through anti-competitive behavior. Officials focused on meta's rollout of a subscription service in 2023 in which users could pay. the equivalent of $14 per month for an ad-free experience on the apps or consent to META using their personal data for targeted ads. This binary choice forces users to consent to the combination of their personal data and fails to provide them a less personalized but equivalent version of META's social networks,

the European Commission said in a statement at the time. In a public compliance report published earlier this month, META grumbled that it has, quote, continued to receive additional demands that go beyond what is written in the law, despite efforts to adhere to the DMA's rules. In June 2024, Apple became the first company to be charged with DMA violations for allegedly preventing rival app developers from easily steering customers to services outside of its app store. In November, reports surface that Apple was likely to be fined. Aside from drawing sharp criticism from big tech, the law has increasingly drawn the ire of President Trump, who has accused Europe of ripping off

the U.S. and vowed to impose retaliatory tariffs to level the playing field. Trump issued a memo last month warning that his administration will, quote, consider responsive actions like tariffs to combat the digital service taxes or DSTs, fines, practices, and policies that foreign governments levy on American companies. President Trump will not allow foreign governments to appropriate America's tax base for their own benefit, the White House said at the time. Met a CEO Mark Zuckerberg, who has cozied up to Trump since his election win, has said the EU's fines targeting big tech companies are, quote,

almost like a tariff and have become sort of like an EU-wide policy for how they want to deal with American tech. During an appearance on the Joe Rogan Experience podcast in January, Zuckerberg argued that Trump should fight back against the fines. I think it's a strategic advantage for the United States that we have a lot of the strongest companies in the world, and I think it should be part of the U.S. strategy going forward to defend that, Zuckerberg said, end quote. On my continued watch to see if the markets are opening up for tech exits, here's another one, E. Toro has filed for an IPO with plans to list on the NASDAQ and reported $12.6 billion in 2024 revenue and a $192 million net income. But this is another case where being a marketplace for crypto is a very good business because about 96% of their revenue came from crypto assets.

Quoting Bloomberg, E. Toro's filing follows moves to go public by several other high-profile firms with investors eyeing a rebound in the IPO market this year. E. Toro's platform allows users to trade and follow top investors in assets, including stocks and crypto. Founded in 2007, the Israel-based company previously tried to go public through a merger at a $10.4 billion valuation with a special purpose acquisition company. The parties agreed to terminate that deal in 2022, end quote. I told you, once they cracked the code, they were going to go for scale city by city by city. Waymo is coming to Washington, D.C. next year. Waymo playing ends to launch its Waymo One Ride Hailing Service sometime in 2026. One small issue, the city currently

prohibits autonomous vehicles without safety drivers behind the wheels, so they have some legislative work to do, quoting the Verge. Waymo announced that Washington, D.C. will be its next Robotaxy City. The company aims to launch its Waymo One ride hailing service in the nation's capital in 20206, though it acknowledged that it will first need to change the city law prohibiting fully autonomous vehicles without safety drivers. Currently, companies that want to test autonomous vehicles in D.C. are required to have a human driver behind the steering wheel in case something goes wrong. Tech advocates have been pressing the City Council to loosen the restrictions to allow fully autonomous vehicles on public roads. A spokesperson for the D.C. Transportation Department did not

immediately respond to a request for comment. The alphabet-owned companies' manually driven vehicles have been spotted around D.C. since last year. A Waymo product manager told a local news outlet that the company was primarily focused on neighborhoods like DuPont Circle, Foggy Bottom, and Penn Quarter. Waymo has not commented on the size of its service area nor which neighborhoods it is targeting if it launches next year, end quote. So the idea is to use the company's own ride hail app Waymo 1. They're not partnering with the likes of Uber like they're doing in other cities, which is interesting. But there are other considerations too. This is trying out autonomous vehicles in the hometown of the federal regulators. Federal authorities have generally deferred autonomous

vehicle regulation to state governments, allowing them to craft individualized safety frameworks. Congressional efforts to expand AV presence nationwide have remained deadlocked for more than seven years, with legislators divided over safety concerns, accountability questions, and appropriate exemptions from federal vehicle safety requirements. But also, have you driven around D.C. and the suburbs? The traffic there is nuts, one of the worst gridlocked situations in the country. Population growth has outpaced infrastructure development there for a long time. Waymo has, until now, expanded in what we might think of as easy cities with decent infrastructure. DC maybe represents their most challenging market rollout to date.

Waymo has not disclosed the planned size of its DC vehicle fleet. Napster has a new home. 3D tech company Infinite Reality is buying Napster for $207 million. CEO John Acunto says the one-time file-sharing phenomenon will be used for marketing in the metaverse, which leads to the question what, but also the question we always ask when Napster gets acquired by someone, Napster's still around, and it's still around to the tune of $200 million? Quoting CNBC, Infinite Reality plans to create virtual 3D spaces that allow music fans to enjoy concerts or listening parties together and let musicians or label sell physical and

virtual merchandise. When we think about clients who have audiences, influencers, creators, I think it's very important that they have a connected space that's around music and musical communities, Akunto said. We just don't see anybody in the streaming space creating spaces for music. Napster is the latest iconic technology brand from decades past to get a new life, following acquisitions from rivals in recent years of Kodak, Nokia, and luxury audio brand Macintosh. I think there's no better name than Napster to disrupt, Akunto said. Napster was launched in 1999 by Sean Fanning and Sean Parker and became the first significant peer-to-peer file sharing application. It allowed PC users to swap MP3 files, which could be played in a media player

like Winamp and build collections of digital popular music for free. The record industry quickly took aim at Napster, accusing the company of allowing people to share pirated files, heavy metal banned Metallica sued Napster and was followed by the Recording Industry Association of America. After bankruptcy, Napster's assets were sold off to a series of owners, current CEO John Vlasposos told CNBC. Since 2016, Napster has been a music streaming service offering on-demand streaming of licensed tracks currently for $11 per month. It's a small player in a world dominated by Spotify and Apple Music. In 2022, Napster was bought by blockchain company Algarand, whose investors brought on Valisposos. Napser holds official licenses to stream millions of tracks,

agreements that were attractive to infinite reality, which says that its version of Napster will disrupt legally. And Algarand's background in Blockings, blockchain technology was intriguing to Infinite Reality, which also develops Web3 technology, Akunto said. Alongside streaming music, the combination with Infinite Reality will allow Napster to offer more social features, digital merchandise, and shopping. Artists will be able to create crazy environments that are really only limited by their imaginations in Napster. Vlasposos said, as an example, he imagined a reggae artist who might want to create a beach hangout environment. Akuto says that when music fans can share a virtual space together, it will be

like Clubhouse Times a Trillion. He was referring to the entertainment and virtual events app that became popular during the pandemic before petering out when society reopened, end quote. This quietly might be a pretty big deal. Tech Insight says that the costs of 300 millimeter wafers at TSM's FAB 21 near Phoenix, Arizona are set to only be around 10% higher than those of similar wafers produced in Taiwan. So basically, US-based chip production will only be about 10% more expensive than in Taiwan, thereby competitive. Good news for domestic production. Quoting Tom's hardware, comments made by TSM founder Morris Chang about high fab building costs in Arizona and higher operating costs in the U.S. created the impression that producing chips in America is way too expensive

to be financially viable. However, analysts from Tech Insights believe that this is not the case. According to the firm's recent study, the costs of wafers at TSMC's FAB 21 near Phoenix, Arizona, are only about 10% higher than those of similar wafers, in Taiwan. It costs TSM less than 10% more to process a 300-millimeter wafer in Arizona than the same wafer made in Taiwan, wrote G. Dan Hutchison from Tech Insights. While it definitely costs more to build a fab in the U.S. than in Taiwan, TSM's cost was significantly higher because it built its first overseas fab in decades at a brand new site with a new, sometimes unskilled workforce, according to Hutchinson. According to people familiar with the fab building process,

it does not cost twice as much to build a fab in the USA than in Taiwan. The dominant factor of semiconductor production costs is the cost of equipment, which contributes well over two-thirds of overall wafer expenses. Tools made by leading companies like ASML, Applied Materials, KLA, lamb research, or Tokyo Electron costs the same amount of money in Taiwan as the U.S. They effectively neutralize location-based cost differences. A major source of confusion about wafer prices comes from labor costs. Wages in the U.S. are roughly triple those in Taiwan, which many mistakenly take as a significant factor in chip production. However, with the advanced automation of today's wafer fabrication facilities,

labor accounts for less than 2% of the total cost, according to Tech Insights Waifer Cost Model. Based on this model, the overall expense gap between operating costs of a fab in Arizona and Taiwan is minimal, despite big differences in salaries and other local costs. It should be noted that Wafers that TSM currently produces at FAB21 travel back to Taiwan to get diced, tested, and packaged. Some of them then go to China or elsewhere to be put into actual devices. Some will travel back to the U.S., though. Therefore, their logistics are somewhat more complicated than those of typical wafers produced

in Taiwan. However, this hardly dramatically adds to costs, and TSMC now plans to build packaging capacity in the U.S. Nonetheless, TSMC is rumored to charge a 30% premium for chips made in the U.S., end quote. And finally today, I keep harping on this. but this, quietly, could be a bigger deal that I think people are aware of yet. By this, I mean the potential decoupling of Europe from Silicon Valley. Wired takes a look at how some EU organizations are weighing moving away from AWS, Google, and Azure cloud services over U.S.

privacy fears under President Trump. If Europe does create its own tech stack, what does that do to sales for, you know, the likes of Amazon, Google, Microsoft, etc.? Quote, there are early signs that some European companies and governments are souring on their use of American cloud services provided by the three so-called hyperscalers. Between them, Google Cloud, Microsoft, Azure, and Amazon Web Services host vast swaths of the internet and keep thousands of businesses running. However, some organizations appear to be reconsidering their use of these company's cloud services, including servers, storage, and databases, citing uncertainties around privacy and data access fears under the Trump administration. There's a huge appetite in Europe to

de-risk or decouple the over-dependence on U.S. tech companies because there is a concern that they could be weaponized against European interests, said Margesti Shake, a non-resident fellow at Stanford's Cyber Policy Center and a former decade-long member of the European Parliament. The moves may already be underway. On March 18th, politicians in the Netherlands House of Representatives passed eight motions asking the government to reduce reliance on U.S. tech companies and moved to European alternatives. Days before, more than 100 organizations signed an open letter to European officials calling for the continent to become, quote, more technologically independent and saying the status quo creates, quote, security and reliability risks. Two European-based cloud service companies,

exoscale and elastics, tell wired that they have seen an uptick in potential customers looking to abandon U.S. cloud providers over the last two weeks, with some already starting to make the jump. Multiple technology advisors say they are having widespread discussions about what it would take to uproot services, data, and systems. We have more demand from across Europe, says Matthias Nowbauer, the CEO of Swiss-based hosting provider Exoscale, adding there has been an increase in new customers seeking to move away from cloud giants. Some customers were very explicit, Nowbauer says, especially customers from Denmark being very explicit that they want to move away from U.S. hyperscalers because of the U.S. administration and what they said about Greenland.

It's a big worry about the uncertainty around everything, and from the Europeans' perspective that the U.S. is maybe not on the same team as us any longer says, Joachim Oman, the CEO of Swedish cloud provider Elastics. Those are the drivers that bring people or organizations to look at alternatives, end quote. Concerns have been raised about the current data-sharing agreement between the EU and U.S., which is designed to allow information to move between the two continents while protecting people's rights. multiple previous versions of the agreement have been struck down by European courts. At the end of January, Trump fired three Democrats from the Privacy and Civil Liberties Oversight Board, which helps manage the current agreement. The move could undermine or increase uncertainty around the agreement. According to some, in addition, Olin says he has heard concerns from firms about the Cloud Act, which can allow U.S. law enforcement to subpoena user data from tech

companies potentially including data that is stored in systems outside of the U.S. Stefan Schmidt, the CEO of Medicus Data, a company that provides text-to-speech services to doctors and hospitals in Europe, says that having data in Europe has always been a must, but his customers have been asking for more in recent weeks. Since the beginning of 2025, in addition to data residency guarantees, customers have actively asked us to use cloud providers that are natively European companies, Schmidt says, adding that some of his services have been moved to Nobauer's exoscale. Harry Strait, a spokesperson for AWS, says it is, quote, not accurate that customers are moving from AWS to EU alternatives. Our customers have control over where they store their data and how it is encrypted, and we make the AWS cloud sovereign by design, straight says. AWS services support encryption with customer-managed keys that are inaccessible to AWS, which means customers have complete control of who accesses their data.

Straight says the membership of the PCLOB does not impact the agreements around EU-US data sharing and that the Cloud Act has, quote, additional safeguards for cloud content. Google and Microsoft declined to comment, end quote. It's been a while since I've done a rant on this show, but I've got one brewing about that very issue that we just talked about in that last segment. Is Silicon Valley losing one of its major advantages, i.e. everybody you use. our stuff? For 30 years, Silicon Valley has enjoyed unfettered access to basically every market in the world, save maybe China. But in this era of tech-stack sovereignty being a geopolitical imperative, is that coming to an end? And what would that mean for the tech industry?

As I say, I've got something of an essay brewing. Stay tuned. Talk to you tomorrow.