Platformonomics TGIF is a weekly roll-up of links, comments on those links, and perhaps a little too much tugging on my favorite threads.
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Barring a five-alarm blogging emergency, there will be no newsletter next week or the following week. Tune back in December 12th, when we inevitably scrutinize Oracle’s latest quarterly attempt to pump their stock. In the meantime, there are situations to monitor!
My Writing: Remember Maine!
That headline warranted a post.
News
Further Discounting Oracle’s Remaining Performance Obligation
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Discounting Oracle’s Remaining Performance Obligation, CAPEX vs. HyperCAPEX: Oracle Edition, They Still Don’t Have the CAPEX: Oracle, They Still Don’t Have the Margins: Oracle Edition, They Don’t Have the Margins, They Don’t Have the Money, They Don’t Have the Money: Oracle and Tik Tok, Remaining CAPEX Obligation, Why Can’t Oracle Afford Data Centers?, Why Can’t Oracle Build Data Centers?, Oracle Still Can’t Build Data Centers, Oracle’s Data Center Difficulties, Oracle’s Data Center Difficulties: FY25 Q1, Oracle’s Data Center Difficulties: FY25 Q2, ClownWatch™: Oracle FY25 Q3, Why Can’t Oracle Build Data Centers? FY25 Q4 Edition, Words are Cheap, CAPEX is Expensive: Oracle Edition, Why Can’t Oracle Build Data Centers? (Or Subcontract Them?), Follow the CAPEX: The Clown Car Race Checkered Flag, Stargate Struggles to Get Out of Gate, Stargate: “Science fiction, just like the movie it is named after”, CAPEX Clues: The B Word, And You Thought Softbank Was the Dumb Money, Follow the CAPEX: Cloud Table Stakes 2024 Retrospective, Stargate: So Many Mouths to Feed, CAPEX Clues: Softbank Needs More Cash, Stargate: $5 Trillion and Counting, Stargate: A New Hope?
Slopfight Dispatches: The G in ChatGPT is for Group Chat
OpenAI adds to its arsenal for the slopfight with Meta. A consumer emphasis, with a vague nod to business collaboration.
I’ve been asked how Google fits into the slopfight hypothesis. Google is now fully in the AI game (at long last), executing extremely well, and creating “tough vibes” at OpenAI. AI has even made Google Cloud less of a hobby. In the slopfight, Google’s main role is to deny any pricing power to Meta (who could use the revenue) or OpenAI (who could really, really use the revenue). The existential question to be monitored is what happens to Google’s search business (shades of Microsoft’s winning the browser war but losing its platform in the process).
I refer to Meta as “the runt” amongst the hyperscalers, but “trying to punch above its weight” is perhaps a more charitable characterization by MoffetNathanson. They also bluntly state: “Meta lacks a comparable coherent pathway for monetizing GenAI directly”.
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Dark Benioff: Darker Yet
The Information reports:
Salesforce’s Slack has told customers in mainland China, Hong Kong, Macau and Taiwan that they must migrate their accounts to partner Alibaba Group before February if they want to continue using its instant-messaging service, according to a Slack customer in mainland China and an Alibaba Cloud employee.
If true, Benioff has quickly gone from authoritarian-curious to totalitarian-friendly. We are monitoring whether Benioff takes a position on recent Chinese diplomatic calls for the new Japanese Prime Minister to have her head cut off.
Antitrust Coherence: A Death Blow for Hipster Antitrust?
This case really is the raison d’être of the “break them up!” hipster antitrust movement. Someone, after monitoring this case since inception, described it as:
The Instagram acquisition is hipster antitrust’s original sin, white whale and metaphorical last war all rolled into one. That acquisition both haunts and animates the movement…
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A New Antitrust Doctrine, Antitrust Incoherence: China and the US Policy Becoming Indistinguishable, Antitrust Incoherence: Elon Musk Edition, Antitrust Incoherence: The Google Ruling, Antitrust Incoherence: Entertaining If Nothing Else, From Hipster Antitrust to Grifter Antitrust, Antitrust Incoherence: Hipster Antitrust Incoherence, Antitrust Incoherence: Don’t Make Me Complain to the Authorities About a Deal I Signed but Want to Renegotiate, Pedal to the Meta: Hipster Antitrust’s Day in Court, Antitrust Incoherence: iRobot Elegy Edition, Antitrust Incoherence: Existential Amazon Questions Edition, Antitrust Incoherence:Dodging DOGE Edition, Antitrust Incoherence: The Emerging Trump Doctrine?, Antitrust Incoherence: The Consistently Incoherent Lina Khan, Antitrust Incoherence: New Administration, Continuity of Incoherence, Antitrust Incoherence: Google Breakup Rumors, Antitrust Incoherence: Breaking Up Google #monopolist, Antitrust Incoherence: Google Verdict,Antitrust Incoherence: Competitive Harassment Edition, Antitrust Incoherence: Don’t Forget Microsoft, Antitrust Incoherence: Isn’t Market Division Illegal?, Antitrust Incoherence: Roomba Aftermath Edition, Antitrust Incoherence: Apple Edition, Antitrust Incoherence: Spotify Edition, Antitrust Incoherence: Roomba Edition, The Incoherence Doctrine: The FTC Strikes Again, The DOJ Play at Home Game
No Revenue? No Problem!
Unlike other AI startups, xAI has next to no revenue and no path to material revenue. Meta is getting hammered for not having a path to revenue to pay for its AI investments, yet xAI is apparently close to raising at a $230 billion valuation (plus trying to get subsidies from Tesla). 🤔
The delay of Grok 5 is also interesting. Sheer industrial GPU scale isn’t enough? Need more time to game the benchmarks? (Because the extent of xAI’s strategy, beyond anime companions, seems to be “look at our benchmarks”.) We’re monitoring!
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They Do Have the Debt, Never Take a Dependency on Elon Musk: The Chaos Continues, Antitrust Incoherence: Elon Musk Edition, Ask Not What Elon Can Do For You, Ask What You Can Do For Elon, Fractional CEO Adds to Responsibilities, Company Killed By Its Customers, Never Take a Dependency on Elon Musk: Grok Enterprise Value Proposition Really Coming into Focus, Never Take a Dependency on Elon Musk: xAI MechaHitler Edition, Never Take a Dependency on Elon Musk: Where to Even Start?, Never Take a Dependency on Elon Musk: Chapter 150, Never Take a Dependency on Elon Musk: Grok API Edition, Do Not Take a Dependency on Elon Musk: Chapter 147, Do Not Take a Dependency on Elon Musk: Chapter 148, Do Not Take a Dependency on Elon Musk: Chapter 149, What is Elon’s Tesla Strategy?
Another Turn of the OOPS Loop
We’ve been monitoring Lumen (nee CenturyLink, CenturyTel, Qwest, US West, AT&T, but distinct from the far more interesting Lumon Industries) for some time. Lumen, currently masquerading as an AI networking company, is foundational to our OOPS Loop theory, which is most visibly manifested in stadium sponsorships:
Instead of fixing network bottlenecks known for decades, CenturyLink has spent that money and much more on multiple corporate rebrands (most recently from CenturyLink to Lumen, which evokes either an apt anatomical orifice or a failed Lululemon ramen brand), and stadium sponsorships.
Lumen is nothing without its stadium branding.