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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The CAPEX retrospective is almost done. Really. Numbers that big just take time to parse. In the meantime…
News
Did OpenAI Find the Money this Week?
Pace Michael Pollan: Raise money. Not enough. Mostly circular.
Previous:
Is OpenAI’s Too Big to Fail Strategy Working?, Did OpenAI Find the Money This Week? (Nov 7), Did OpenAI Find the Money This Week? (Oct 31), Did OpenAI Find the Money This Week? (Oct 24) Did OpenAI Find the Money This Week? (Oct 17), They Don’t Have the Money: OpenAI Edition, They Don’t Have the Money
Private Equity is an Advanced Persistent Threat
Yet another private equity cybersecurity catastrophe. At this point we must conclude cybersecurity is incompatible with private equity ownership of software companies.
Rob Leahy is the former chief information officer for NASA’s Goddard Space Flight Center. He declined to discuss NASA specifically but said the Ivanti incidents underscored concerns he has about private equity-owned cybersecurity companies.In his experience, Leahy said, private equity firms often prioritize increasing profits and paying down debt over continuous investment in product development.
“This should be part of a risk assessment when you’re looking at a product: What is the ownership structure? Are they investing in the future or are they not? Over the years, have we seen them shift dollars from investing into paying off debt? To me, that’s a big risk,” he said.
Private Equity in Action: Come for the Subpar Returns, Stay for the Illiquidity
This should be obvious, but don’t let private equity in your 401k…
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Private Equity in Action: From Famed to Fraught, Private Equity in Action: I’m Lovin’ It, Private Equity in Action: Narrative Collapse?, Private Equity in Action: The Great Garage Door Service Wars, Private Equity in Action: Having to Show Their Math is New Experience, Private Equity in Action: Underperforming, Perfidious Private Equity
Software Migration Alert: Highspot
To my friends at Highspot hopefully you got liquid, but this sure looks like a private equity roll-up. When private equity rolls up, customers need to roll out! Two! Four! Six! Eight! Migrate!
Lyrdnyk Kyndryl
Forgot this last week.
No, that’s not a cat walking across a keyboard. Kyndryl is the Finnish word for “toxic waste” and incidentally the name of an IBM spin-out. The SEC has some questions, the CFO and general counsel have decided to spend more time with their families, and the spotlight is again on the IBM school of financial engineering (even as aspiring quantum meme stock IBM is no doubt preparing their next toxic spin-out).
Viewer Mail Episode 4 – All the Posts About the Washington Post
In response to my plea for substantive writing — not just self-indulgent exercises in entitlement, nostalgia and rage — about what the Washington Post should do/have done, Richard sent this piece by a journalism professor:
I found it unpersuasive:
- It is still wrapped around the axle of being a “newspaper”. That world is gone. Acceptance is one of those stages you’re supposed to go through. The Washington Post of Woodward and Bernstein is not coming back.
- The logic of Bezos somehow now becoming the poster boy for the multi-decade decline of the newspaper is difficult to follow:
- “The past two decades have not been kind to the newspaper business. More than 3,500 U.S. papers have closed in that period, according to the most recent State of Local News report from Northwestern University’s Medill School. By destroying The Washington Post, the very institution he had previously done so much to build up, Jeff Bezos has transformed himself into the poster boy for that decline.”
- This was a profound insight and needs to be more broadly shared in journalism circles:
- “I’ve learned through years of reporting that the generous profit margins that once characterized newspapers have all but disappeared.”
- Detailing different ownership models for some of the newspapers still clinging to life doesn’t address journalism’s fundamental challenges in a digital world:
- Billionaires subsidizing a bygone way of life is great work if you can get it, kind of like being a re-enactor at a billionaire-owned medieval village hosting student field trips. But it is not a great foundation for the vital societal function of journalism.
- Becoming a non-profit newspaper really doesn’t change anything except maybe reinforces to employees their world has changed. Regardless of official tax status, they’re almost all non-profits (including the Washington Post).
- Somehow we’re supposed to believe the Seattle Times being family-owned is a solution to journalism’s problems. Eventually we’ll examine their pathologies.
- Arguing for smaller, more regionally focused newspapers that are “rooted in the communities they cover” seems exactly the path the Post is now on. Why does that model require foreign correspondents?
- Claiming other newspapers can ignore the New York Times is profound denial of both reality and the dynamics of digital products:
- “The Times, as the nation’s leading newspaper, is unique, and the extent to which other publishers can learn from its example is limited.”
- Nary a word about journalism’s trust issues
- I don’t understand how endorsing Kamala would have changed the Post’s trajectory (or the outcome of the election), yet defenders of “ye olde newspaper” seem singularly hung up on this event.
- Jason Pontin has a similar reaction to the Bezos bashing boom.
Surely there is better thinking about the future economic model for journalism out there?
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Quick(er) Hits
Never Take a Dependency on Elon Musk: Is safety is ‘dead’ at xAI? Or is there a vast market for “unhinged” enterprise AI?
Data Center Moratoria: The Moratorium Mirage (Josh Wolfe)
Not Available in Europe: AI tools for EU parliamentarians. Can’t have regulators too familiar with the technologies they are regulating…
Not Available in Europe: Competitiveness
Not Available in Europe: AI productivity gains
Books: I read Andrew Ross Sorkin’s 1929: Inside the Greatest Crash in Wall Street History–and How It Shattered a Nation. It is a fluid and lively account of the crash told through contemporary accounts, but Lords of Finance is a much better book if you want to understand the underlying dynamics.
