This Week in Startups
Using GPUs as leverage, MSFT beats the case, FTC fails under Khan | E1775
Tue Jul 11 2023Description
The episode covers topics such as innovation and venture, new styles and startups, crypto solutions and remote work, office routine and tech industry relationships, startup investments and antitrust probes, FTC and antitrust law, Microsoft's acquisition and FTC cases, FTC actions and tech industry cases, and Elizabeth Warren and the tech industry.
Insights
Innovation and Venture
Innovation and venture are exciting. Some venture firms like Benchmark are great at what they do.
New Styles and Startups
The game can change with new styles, like Stephen Curry's three-point shooting in basketball. Lemon.io offers vetted engineers from Europe for product development. OpenPhone brings business calls, texts, and contacts into one app. VEED makes it easy to create engaging video content. Microsoft beat the FTC case regarding the Activision deal but is facing an EU antitrust probe over bundling teams. There is a GPU shortage in tech startups looking to integrate AI applications. Inflection AI raised $1.3 billion with support from Microsoft, Nvidia, Reid Hoffman, Bill Gates, and Eric Schmidt. Nvidia may be using the GPU shortage as leverage to take ownership positions in startups.
Crypto Solutions and Remote Work
Consumers and businesses were open to hearing about crypto solutions, but found them too complicated and lacking value. AI language models and tools are becoming popular because they make work faster and eliminate repetitive tasks. Cutting spending can help maintain or improve earnings, as demonstrated by companies like Facebook, Twitter, Microsoft, and Google. Remote work productivity varies, with around 20% more productive at home, 50% less productive, and the rest as productive as in the office. Smaller teams may be able to function remotely better than larger ones due to training and onboarding challenges. The psychological impact of remote work on young people is a concern, as it may lead to isolation and unusual behavior. Europe's longer breaks over the summer could make working in the office more tenable if implemented in the American system. Missing unproductive parts of being in an office, such as water cooler talk and personal interactions with colleagues.
Office Routine and Tech Industry Relationships
The speaker preferred the routine of going to the office and having dedicated work hours. Using personal phones for business can lead to issues like privacy concerns and data leakage. Open Phone offers a business phone solution that is affordable and allows for shared numbers. NVIDIA invested in CoreWeave alongside Daniel Gross and Nat Friedman. Daniel Gross and Nat Friedman are offering a GPU cluster to their portfolio startups. There are overlapping relationships and collaborations among investors and entrepreneurs in the tech industry. Different podcast clusters have formed with their own opinions and tensions between members. The speaker admires the strategy of using extra GPUs as leverage for startup investments.
Startup Investments and Antitrust Probes
Nat and Daniel have created a cluster and are using it to attract startups for investment. They have carved out extra GPUs on the side for this purpose. This strategy is like Wall Walk Empire, with different parties vying for the next deal. Daniel Gross is competing with Y Combinator by reaching out to startups before them. AI entrepreneurs may prefer going to Nat and Daniel if they need direct access to GPUs. Most startups can use APIs from companies like Chatshin or Google instead of needing direct GPU access. The approach taken by Nat and Daniel is innovative in the venture capital space. The game has changed, similar to how players like Steph Curry changed basketball dynamics in the past. Microsoft is facing an EU antitrust probe over bundling Teams into its Office suite for free. Slack filed a complaint about this issue in 2020, leading to the investigation. Teams was added as a free product to Office 365 in 2017, resulting in significant growth compared to Slack.
FTC and Antitrust Law
Lena Khan was appointed to the FTC because she was anti big tech and wanted to preserve competition in the future. Politicians were concerned about the power of tech companies like Facebook, Twitter, and YouTube. Lina Khan's premise is similar to the concept of pre-cogs in the movie Minority Report, where they can predict crimes before they happen. The FTC executes laws but doesn't create them. They are responsible for calling fouls and strikes, not deciding how many runs are scored or how many bases there are. Lina Khan has been going after big tech companies without strong justifications, such as targeting Facebook over a VR app called Beat Saber. American antitrust law prohibits price fixing, market allocation, collusion, bid rigging, predatory pricing, and bundling. A simple solution would be to promote more interoperability and open platforms for monopolistic companies like Apple by allowing other app stores on iOS. Microsoft's bundling strategy with Teams could be seen as market allocation. Apple should be asked to allow Amazon, Microsoft, and Google Play store on their platform.
Microsoft's Acquisition and FTC Cases
They're like, yeah, it's in the operating system now. So that's a much simpler execution, I think. It's actually better for consumers. Consumers do not-- there's no consumer harm if Microsoft buys You know, activation. Microsoft releases teams. But there is harm when they do it for free or if they said Activision is only gonna have their games on Xbox for the first two years. The federal judge denied the FTC's attempt to delay Microsoft's acquisition of Activision Blizzard. The acquisition was announced in January 2022 and would be Microsoft's largest acquisition ever. In April 2023, the UK formally blocked the deal while the EU approved it. On July 11th, Microsoft won against the FTC and can now close the deal as soon as this month. The judge ruled that the FTC failed to show that this was going to result in harm. Reuters reported that the UK is now open to looking at the deal again and changing its decision. Conditions could be put in place to preserve consumer choice and ensure equal availability of games across platforms.
FTC Actions and Tech Industry Cases
Lena Khan's role as referee or umpire is questioned. Microsoft's Satya Nadella made a brilliant move with Call of Duty. FTC's argument against Microsoft being too big is countered by Phil Spencer. Governments are not giving up control of fiat currency to crypto. Ongoing cases against Meta, Illumina, and Amazon by the FTC. Dark patterns and misleading practices in subscriptions are targeted by the FTC. $60 million recovered for Amazon delivery drivers under Lena Khan. $520 million fine paid by Epic Games for violating COPA.
Elizabeth Warren and Tech Industry
Elizabeth Warren should focus on going after actual cases of people breaking the law and anti-competitive tactics. Changing laws should be done through informing other branches of government, not by her. Her job is to call balls and strikes, not pick winners or push for longer game series. The Biden administration's actions against tech companies seem like anti-tech pro-union nonsense. Elon Musk was not invited to the EV summit despite his significant contributions in the industry. Interoperability benefits businesses and fosters competition, as seen with Tesla's approach to allowing others to use their charging stations. Tesla charges the same price for using their stations to all car manufacturers, avoiding favoritism. All In Summit tickets are almost sold out, with a few VIP tickets remaining. Videos of the summit will be released later on YouTube channel 'This Week in Startups'. Remaining VIP tickets can be purchased by typing 'allsum' and following instructions. Free tickets are only available for LPs (limited partners) and launch one members.
Chapters
- Innovation and Venture
- New Styles and Startups
- Crypto Solutions and Remote Work
- Office Routine and Tech Industry Relationships
- Startup Investments and Antitrust Probes
- FTC and Antitrust Law
- Microsoft's Acquisition and FTC Cases
- FTC Actions and Tech Industry Cases
- Elizabeth Warren and Tech Industry
Innovation and Venture
00:00 - 06:58
- Innovation and venture are exciting.
- Some venture firms like Benchmark are great at what they do.
New Styles and Startups
06:41 - 13:18
- The game can change with new styles, like Stephen Curry's three-point shooting in basketball.
- Lemon.io offers vetted engineers from Europe for product development.
- OpenPhone brings business calls, texts, and contacts into one app.
- VEED makes it easy to create engaging video content.
- Microsoft beat the FTC case regarding the Activision deal but is facing an EU antitrust probe over bundling teams.
- There is a GPU shortage in tech startups looking to integrate AI applications.
- Inflection AI raised $1.3 billion with support from Microsoft, Nvidia, Reid Hoffman, Bill Gates, and Eric Schmidt.
- Nvidia may be using the GPU shortage as leverage to take ownership positions in startups.
Crypto Solutions and Remote Work
13:00 - 19:04
- Consumers and businesses were open to hearing about crypto solutions, but found them too complicated and lacking value.
- AI language models and tools are becoming popular because they make work faster and eliminate repetitive tasks.
- Cutting spending can help maintain or improve earnings, as demonstrated by companies like Facebook, Twitter, Microsoft, and Google.
- Remote work productivity varies, with around 20% more productive at home, 50% less productive, and the rest as productive as in the office.
- Smaller teams may be able to function remotely better than larger ones due to training and onboarding challenges.
- The psychological impact of remote work on young people is a concern, as it may lead to isolation and unusual behavior.
- Europe's longer breaks over the summer could make working in the office more tenable if implemented in the American system.
- Missing unproductive parts of being in an office, such as water cooler talk and personal interactions with colleagues.
Office Routine and Tech Industry Relationships
18:42 - 25:04
- The speaker preferred the routine of going to the office and having dedicated work hours
- Using personal phones for business can lead to issues like privacy concerns and data leakage
- Open Phone offers a business phone solution that is affordable and allows for shared numbers
- NVIDIA invested in CoreWeave alongside Daniel Gross and Nat Friedman
- Daniel Gross and Nat Friedman are offering a GPU cluster to their portfolio startups
- There are overlapping relationships and collaborations among investors and entrepreneurs in the tech industry
- Different podcast clusters have formed with their own opinions and tensions between members
- The speaker admires the strategy of using extra GPUs as leverage for startup investments
Startup Investments and Antitrust Probes
24:34 - 31:01
- Nat and Daniel have created a cluster and are using it to attract startups for investment
- They have carved out extra GPUs on the side for this purpose
- This strategy is like Wall Walk Empire, with different parties vying for the next deal
- Daniel Gross is competing with Y Combinator by reaching out to startups before them
- AI entrepreneurs may prefer going to Nat and Daniel if they need direct access to GPUs
- Most startups can use APIs from companies like Chatshin or Google instead of needing direct GPU access
- The approach taken by Nat and Daniel is innovative in the venture capital space
- The game has changed, similar to how players like Steph Curry changed basketball dynamics in the past
- Microsoft is facing an EU antitrust probe over bundling Teams into its Office suite for free
- Slack filed a complaint about this issue in 2020, leading to the investigation
- Teams was added as a free product to Office 365 in 2017, resulting in significant growth compared to Slack
FTC and Antitrust Law
30:41 - 37:40
- Lena Khan was appointed to the FTC because she was anti big tech and wanted to preserve competition in the future.
- Politicians were concerned about the power of tech companies like Facebook, Twitter, and YouTube.
- Lina Khan's premise is similar to the concept of pre-cogs in the movie Minority Report, where they can predict crimes before they happen.
- The FTC executes laws but doesn't create them. They are responsible for calling fouls and strikes, not deciding how many runs are scored or how many bases there are.
- Lina Khan has been going after big tech companies without strong justifications, such as targeting Facebook over a VR app called Beat Saber.
- American antitrust law prohibits price fixing, market allocation, collusion, bid rigging, predatory pricing, and bundling.
- A simple solution would be to promote more interoperability and open platforms for monopolistic companies like Apple by allowing other app stores on iOS.
- Microsoft's bundling strategy with Teams could be seen as market allocation. Apple should be asked to allow Amazon, Microsoft, and Google Play store on their platform.
Microsoft's Acquisition and FTC Cases
37:24 - 43:53
- They're like, yeah, it's in the operating system now. So that's a much simpler execution, I think.
- It's actually better for consumers. Consumers do not-- there's no consumer harm if Microsoft buys You know, activation.
- Microsoft releases teams. But there is harm when they do it for free or if they said Activision is only gonna have their games on Xbox for the first two years.
- The federal judge denied the FTC's attempt to delay Microsoft's acquisition of Activision Blizzard.
- The acquisition was announced in January 2022 and would be Microsoft's largest acquisition ever.
- In April 2023, the UK formally blocked the deal while the EU approved it.
- On July 11th, Microsoft won against the FTC and can now close the deal as soon as this month.
- The judge ruled that the FTC failed to show that this was going to result in harm.
- Reuters reported that the UK is now open to looking at the deal again and changing its decision.
- Conditions could be put in place to preserve consumer choice and ensure equal availability of games across platforms.
FTC Actions and Tech Industry Cases
43:25 - 49:35
- Lena Khan's role as referee or umpire is questioned
- Microsoft's Satya Nadella made a brilliant move with Call of Duty
- FTC's argument against Microsoft being too big is countered by Phil Spencer
- Governments are not giving up control of fiat currency to crypto
- Ongoing cases against Meta, Illumina, and Amazon by the FTC
- Dark patterns and misleading practices in subscriptions are targeted by the FTC
- $60 million recovered for Amazon delivery drivers under Lena Khan
- $520 million fine paid by Epic Games for violating COPA
Elizabeth Warren and Tech Industry
49:26 - 51:59
- Elizabeth Warren should focus on going after actual cases of people breaking the law and anti-competitive tactics.
- Changing laws should be done through informing other branches of government, not by her.
- Her job is to call balls and strikes, not pick winners or push for longer game series.
- The Biden administration's actions against tech companies seem like anti-tech pro-union nonsense.
- Elon Musk was not invited to the EV summit despite his significant contributions in the industry.
- Interoperability benefits businesses and fosters competition, as seen with Tesla's approach to allowing others to use their charging stations.
- Tesla charges the same price for using their stations to all car manufacturers, avoiding favoritism.
- All In Summit tickets are almost sold out, with a few VIP tickets remaining.
- Videos of the summit will be released later on YouTube channel 'This Week in Startups'.
- Remaining VIP tickets can be purchased by typing 'allsum' and following instructions.
- Free tickets are only available for LPs (limited partners) and launch one members.