Welcome to the Tech Meme Right Home for Thursday, April 3rd, 2025. I'm Brian McCullough. Today, well, we gotta talk about this tariff thing because the early indications are this could impact almost every nook and cranny of the tech industry. Could we get an announcement about TikTok within days? I think I figured out why CoreWeave's stock popped back up and how Nintendo plans to fight the scalpers. Here's what you missed today in the world of tech.
You all know I try to keep politics out of this show as much as possible, but the obvious exception is when politics affects the tech industry in a meaningful way. So take as read that I don't have a personal opinion on whether these tariffs are good or bad policy. But I can tell you at the time of this writing, Apple stock opened down nearly 8%. Amazon opened down 6%. Meta down 6.5%.
Alphabet down 3.3%, Microsoft down 2.2%, Nvidia down 5%. Now, obviously, by the time you hear these words, all these stocks could have come roaring back, but... Let me just read some headlines for you. The US announced a 34% reciprocal tariff hike on China, taking effect from April 9th. Economists say the average U.S. tariff on Chinese products is now at least 65%. Tons of gadgets get imported from China, right? So lots of companies have been trying to diversify away from China for that reason.
But President Trump announced a 46% tariff on goods from Vietnam and 26% on goods from India. So that alone could account for the Apple weaknesses. That was where they had been going to try to diversify away from China. The White House said de minimis tariff exemptions for up to $800 packages from China and Hong Kong will end on May 2nd. So once again, wither Temu and Xi'an. And if you think crypto is immune from this, well, according to Bloomberg,
even though many of the largest Bitcoin miners are based in the US, the supply chain for mining equipment is rooted in Asia. And one more thing you have to keep in mind as it stands right now, this only affects imports. of things U.S. tech companies might want to sell, but countries around the world could announce tit-for-tat tariffs of their own, the very definition of a trade war, thereby making Silicon Valley tech more expensive to sell overseas, and perhaps dampening sales. So, quoting CNBC,
We will supercharge our domestic industrial base. We will pry open foreign markets and break down foreign trade barriers, Trump said during his speech. Ultimately, more production at home will mean stronger competition and lower prices for consumers. Apple is going to spend $500 billion. money like that here, Trump said. They're going to build their plants here.
The Nasdaq just wrapped up its worst quarter since 2022, dropping 10% in the first three months of the year, though the tech-heavy index rose in each of the first two days of the second quarter, end quote. Though at the time of this writing, the NASDAQ is down 4.4% at 16,800. It was above the 20,000 point mark as recently as mid-February. Bitcoin is down 5% at time of this writing. Ether down 7%. Solana down... 13%, quoting the New York Times.
The proposed tariffs threaten to compound the pressure on Apple's business. The company is already dealing with 20% tariffs on products imported from China, where Apple makes about 90% of the iPhones it sells around the world. Mr. Trump said that the rate would go to 34%. under his new tariff plan. The cost of reciprocal tariffs, as Mr. Trump calls them, could put Apple's business in a jam.
The iPhones, iPads, and Apple Watches that the company sells deliver three quarters of its nearly $400 billion in annual revenue, with Mr. Trump saying he won't allow products to be exempted from tariffs. Apple will have to either pay those fees, which will reduce its profit.
or indirectly pass those added costs on to customers by raising prices. Apple will take these new tariff numbers and put them in models they have built and know within hours how big of a problem they have, said Anna-Katrina Shedletsky, the founder.
of Instrumental, a Bay Area company that uses artificial intelligence to improve manufacturing performance. She previously worked at Apple. The tariffs on iPhones and other devices imported from China will increase Apple's annual cost by $8.5 billion without any... relief from the Trump administration, according to Morgan Stanley. That would reduce the company's profit next year by 52 cents per share or about $7.85 billion. That would be a roughly 7% hit on next year's profits.
In 2017, as Mr. Trump started an office, Apple began setting up assembly lines for iPhones in India. It took five years for it to train workers and build the infrastructure to make its newest iPhones in the country. It is in the process of increasing production there, with hopes the country's factories... manufacture about 25% of the 200 million iPhones that it sells annually.
The company also began shifting production of AirPods, iPads, and MacBooks to Vietnam. The country became a destination for Apple and others after COVID-19 shut down factories in China in 2020, and Vietnam's factories accounted for more than 10% of the top 200 suppliers that the
company had in 2023. Vietnam was an appealing location because of its proximity to China. India was alluring because Apple wanted to boost sales of iPhones in that country, which is the world's second largest smartphone market.
While Apple is the most prominent tech company to feel the sting of tariffs, most other tech companies will see an impact directly or indirectly. Google and Microsoft, for example, are not as heavily dependent on international suppliers but they do have notable consumer electronics businesses. and the tariffs could increase the cost of building the massive new data centers the companies are planning on to build new artificial intelligence technology, end quote. And quoting Bloomberg.
Tariffs at the proposed level would shrink Chinese exports to the U.S. by some 80%, according to Bloomberg Economics. China is now facing a 1-2 percentage point loss to growth as a result of the hikes, according to economists at BNP Paribas. Society General. Oversee Chinese banking and ING Bank, many said Beijing would ramp up stimulus to offset the impact. President Xi Jinping has just under a week before tariffs take effect to calibrate Beijing's response with prospects for negotiating a deal.
in that window looking slim. Talks so far have stalled at lower levels with the world's most powerful men not speaking since the Republican leader returned to the White House. That's the longest a U.S. president has gone without talking to his Chinese counterpart.
post-inauguration in 20 years. Beijing has responded to Trump's previous tariffs with targeted measures designed to avoid hurting its own economy, which is battling a property crash and facing its longest spell of deflation since the Mao Zedong era. Retaliation has included restricting exports of critical minerals, putting tariffs on U.S. agricultural goods, often produced in Trump voter heartlands, and investigating U.S. firms including Google, which has little business in China.
Today's action could harden views in Beijing and lead to serious escalation far beyond tariffs using the tools Beijing has sharpened over the past four years, said Martin Chorzempa, senior fellow at the Peterson Institute for International Economics in Washington. quote. The information has a source who says that President Trump plans to announce TikTok America, a company that will be around 50% owned by U.S. investors and 19.9% owned by ByteDance, the new entity with licensed the TikTok app.
algorithm from ByteDance. Quote, that structure would put ByteDance's ownership just under the 20% threshold required in the US law passed last year requiring TikTok to sever ties with its parent company or face a ban. With the new structure, Trump could deem a qualified divestiture has happened under the law, which was passed by Congress last year and upheld by the Supreme Court.
The planned announcement comes ahead of a Saturday deadline, which Trump set to delay enforcement of the divest or ban law. The Trump administration is expected to spell out a time frame of roughly 90 to 120 days from Wednesday to finalize a deal, the person said. The proposed new company name is not finalized and could change, the person said. It's unclear which new investors will participate in the deal
In recent days, media outlets have reported that Andreessen Horowitz and private equity firm Blackstone have mulled taking a stake. Amazon also submitted a last-minute bid to acquire TikTok U.S. operations, according to a person familiar with the bid, though parties involved
in the TikTok sale talks do not appear to be taking Amazon's bid seriously. The New York Times earlier on Wednesday reported Amazon's interest. It's unclear whether the Trump administration has approval for the proposed structure from the Chinese government, end quote. you AI video startup Runway has raised $308 million, led by General Atlantic, sources say at a $3 billion-plus valuation, and plans to use the money to hire more filmmakers, screenwriters, and others, quoting Bloomberg.
The New York-based company kicked off the frenzy around AI video generators in early 2023 with the release of a model that could produce slightly choppy-looking three-second clips based on written prompts such as drone footage of a desert landscape.
Two years later, the competition has increased significantly, with tech companies including OpenAI and PICA rolling out similar services. Earlier this week, Runway unveiled a new AI model called Gen4 that aims to let users create videos with consistent characters, objects, and...
backgrounds, a milestone that may mark a leap ahead of some of its rivals. As the company's software improves, co-founder Chris Valenzuela said it's becoming increasingly possible to use it to speed up the filmmaking process.
Films, in my opinion, should work in shorter timelines, Valenzuela said, adding that the goal is to enable creatives to move at a pace closer to the show Saturday Night Live. If you have a good story, you can probably go from Monday to Saturday and make it like... SNL does, end quote. AI, AI, AI. Seemingly half the show these days is AI news, but do you still feel like you barely understand the technology? Well, this podcast is sponsored by Udacity.
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In short, they might be close to solving that, but they only have one big customer concern investors were voicing. The information also has a source that is telling them that Google is in advanced talks to rent NVIDIA Blackwell chips from CoreWeave, highlighting how NVIDIA customers are struggling with AI chip availability. Quote, The potential deal shows how major NVIDIA customers like Google are struggling to get enough chips to meet rising demand from their own customers.
It also shows how CoreWeave's special relationship with NVIDIA and its ability to move quickly in setting up AI-focused data centers is attracting business from large cloud providers and major AI developers like OpenAI and Meta Platforms. OpenAI, for instance, says it also
can't get enough NVIDIA chips as usage of its ChatGPT service accelerates, hurting its ability to run new features like the chatbot's image generation tools. In the past two weeks, Google executives have also asked other CoreWeave competitors for access to spare GPUs, that the firm is capacity constrained, according to two other people involved in those conversations.
Though Google is one of the largest buyers of Nvidia chips, much larger than CoreWeave, Google has struggled to set up enough of its own data centers to power the newest ones, which have proven especially tricky to use. The situation echoes what happened in 2023 when sudden demand for Nvidia chips after the launch of ChatGPT triggered a worldwide shortage. CoreWeave and other upstart AI-focused cloud providers, however, were...
able to buy sizable amounts of chips from NVIDIA and grow rapidly. NVIDIA saw these firms as friendlier customers compared to cloud providers like Amazon, Google and Microsoft, which have been developing their own AI chips to reduce reliance on NVIDIA chips. has placed more than $10 billion of orders for Blackwell chips and began making those chips available to select customers in February.
Leasing chips from CoreWeave would expand Google's capacity to rent out the chips to cloud customers that develop AI, which include Anthropic, Apple, Character AI, and GitLab. Google and CoreWeave are also in preliminary discussions for a separate deal in which Google would lease space in CoreWeave's data centers to house the Google...
TPUs, suggesting that Google is facing a crunch in data center space for its own chips. It isn't clear whether Google has such arrangements with other data center providers." Amazon is planning to launch the first 27 satellites for its Project Kuiper internet network on April 9th after launching two prototype satellites in October 2023, quoting Reuters. In a statement, Amazon said it will launch the Kuiper Atlas One mission on April 9th at noon Eastern Daylight Time.
from the Cape Canaveral Space Force Station in Florida. The mission will kick off Amazon's full-scale deployment of Kuiper, a mesh-like network designed to top 3,000 satellites in low-Earth orbit that will provide high-speed internet globally and rival SpaceX's Starlink.
Amazon announced Project Kuiper in 2019 with plans to invest $10 billion into the network's development after hiring a team of engineers who had been leading Musk's Starlink before he fired them the prior year, end quote. And quoting The Verge. The KA-01 mission satellites, short for Kuiper Atlas-1, will launch on an Atlas-5 rocket from United Launch Alliance.
Amazon's other Project Kuiper launch partners include Arianespace, Blue Origin, and, yes, SpaceX. As a global service offering, Amazon's space internet service will eventually be available from virtually any location on the planet. Users will need terminal antennas. to tap into the satellite constellation. In 2023, Amazon said that its smallest dish, a 7-inch square design weighing just one pound, would offer speeds up to 100 Mbps, making it a Starlink Mini alternative.
will further compete with SpaceX by offering larger dishes for residential and enterprise use, offering speeds of up to 1 gbps. Amazon expects to produce the terminals for less than $400 each, which may or may not be subsidized to attract users. Notably, the satellites flying on KA-01 are coated in a dielectric mirror film unique to Kuiper that scatters reflected sunlight. That should help make them less visible to ground-based astronomers, according to Amazon.
Although Amazon already launched a pair of Project Kuiper prototype satellites, its upcoming mission will include a number of firsts that introduce risk. We've done extensive testing on the ground to prepare for this mission, but there are some things you can only learn in flight, and this will be the first time we've flown our final satellite design, and the first time we've deployed so many satellites at once.
said Rajiv Badyal, vice president of Project Kuiper. No matter how the mission unfolds, this is just the start of our journey, and we have all the pieces in place to learn and adapt as we prepare to launch again and again over the coming years, end quote. Finally today, one more quick additional word on that Nintendo Switch 2 announced. You know how with gaming hardware launches, it can take months or even years before you can...
get your hands on one, sometimes because the hardware can't be made quickly enough, but also often because scalpers get them first and then try to sell them at a big markup. Well, it seems Amazon has a solution, quoting The Verge. If you want to pre-order a Switch directly from Nintendo, you'll need to make sure you have at least 50 hours of gameplay on the original Switch as of April 2nd, 2025. Nintendo revealed the anti-scalper mechanism on its pre-order registration page where...
It says it will prioritize registrants who meet the gameplay requirements and have purchased at least a 12-month Switch Online membership. For Nintendo to track your gameplay hours, you'll need to have opted in to share gameplay data with Nintendo. You can check if you opted in by logging into your Nintendo account and checking your privacy settings.
Nintendo says it will send out its first round of pre-order invites on May 8th, 2025, with additional batches of invitation emails sent periodically until purchasing on My Nintendo Store is open to everyone. When you receive an email, you'll have 72 hours to pre-order the Switch, too. Pre-orders at participating retailers will open to everyone on April 9th in North America or on April 8th in Europe." Nothing more for you today. Talk to you tomorrow.