Welcome to the Tech Mean Brain Home for Tuesday, January 14th, 2025. I'm Brian McCullough. Today, break out your 2025 headline bingo cards. Did you have Elon Musk maybe buying TikTok on there? You're a better bingo player than I am. Is the EU going to back off tech in the Trump era? More layoffs come to Meta, the big streaming sports play that isn't going to happen now. And why is Barcelona a hub for spyware companies? Here's what you miss today in the world of tech.
I guess I shouldn't have been surprised by this, because if you think about it, this makes logical sense for all the parties involved. What if Elon bought TikTok? According to Bloomberg, Chinese officials are evaluating an option involving Elon Musk acquiring TikTok US. X would take control of TikTok US and run the business concurrently. Quote,
Beijing officials strongly prefer that TikTok remains under the ownership of Parent ByteDance, the people say, and the company is contesting the impending ban with an appeal to the U.S. Supreme Court. But the justices signaled during arguments on January 10th that they are likely to uphold the law.
Senior Chinese officials had already begun to debate contingency plans for TikTok as part of an expansive discussion on how to work with Donald Trump's administration, one of which involves Musk, said the people asking that to be identified, revealing confidential discussions.
A potential high-profile deal with one of Trump's closest allies holds some appeal for the Chinese government, which is expected to have some say over whether TikTok is ultimately sold, said the People. Musk spent more than $250 million supporting Trump's re-election and has been tapped for a prominent role in improving government efficiency.
after the Republican takes office. Under one scenario that's been discussed by the Chinese government, Musk's ex, the former Twitter, would take control of TikTok US and run the business together, the people said. With more than 170 million users in the US, TikTok could bolster ex's efforts to attract advertisers.
Musk also founded a separate artificial intelligence company, XAI, that could benefit from the huge amounts of data generated from TikTok. Chinese officials have yet to reach any firm consensus about how to proceed, and their deliberations are still preliminary, the people said.
It's not clear how much ByteDance knows about the Chinese government discussions or whether TikTok and Musk have been involved. It's also unclear whether Musk, TikTok, and ByteDance have held any talks about the terms of any possible deal. Musk and his representatives did not respond to a request for comment.
Posted in April that he thinks TikTok should remain available in the U.S. Quote, In my opinion, TikTok should not be banned in the USA, even though such a ban may benefit the X platform, he wrote on X. Doing so would be contrary to freedom of speech and expression. It is not what America... end quote. Now, for its part, TikTok is denying all this, calling it pure fiction, but I don't know. Quote,
We can't be expected to comment on pure fiction, a TikTok rep said in a reply to Variety's request for comment. Beijing-based ByteDance has not indicated that it is exploring the sale of its approximately 40% stake in TikTok to an entity or investor group that would meet with you. US approval. Meanwhile, Chinese officials previously indicated that if ByteDance did try to sell the stake in TikTok, such a move would be blocked because it would represent a technology export, end quote.
As Alex Heath pointed out on X, quote, in Elon Musk's very first meeting with then Twitter employees, he told them he wanted this app to be a lot more like TikTok, end quote. you Meanwhile, sources are telling the Financial Times that the EU is reviewing its DMA probes into US tech giants, which began from March of last year, as US groups urge Trump to intervene in these regulatory interventions.
interventions. The EU says, quote, there is no such review, but again, I can see the angles here, quote. Brussels is reassessing its investigations of tech groups, including Apple, Meta, and Google, just as the US companies urge President-elect Donald Trump to intervene against what they characterize as overzealous EU enforcement. The review, which could lead to the European Commission's
scaling back or changing the remit of the probes will cover all cases launched since March last year under the EU's digital markets regulations, according to two people briefed on the move. It comes as the Brussels body begins a new five-year term amid mounting pressure over its hands.
of the landmark cases and as Trump prepares to return to the White House next week. It's going to be a whole new ballgame with these tech oligarchs so close to Trump and using that to pressure us, said a senior EU diplomat briefed on the review. so much is up in the air
All decisions and potential fines will be paused while the review is completed, but technical work on the cases will continue, the official said. While some of the investigations under review are at an early stage, others are more advanced. Charges in a probe into Google's alleged favoring of its App Store
had been expected last year. Two other EU officials said Brussels regulators were now waiting for political direction to take final decisions on the Google, Apple and Meta cases. The review comes as EU lawmakers call for the commission to hold its nerve against US pressure.
Silicon Valley chiefs hail Trump's return as the start of an era of lighter tech regulation. Mark Zuckerberg, met as chief executive on Friday, called on the president-elect to stop Brussels fining U.S. tech companies, complaining that EU regulators had forced them to pay, quote, more than $30 billion.
in penalties over the past 20 years. Zuckerberg, who recently announced plans to abolish fact-checking on Facebook and Instagram, potentially running foul of EU rules, said he was confident the incoming Trump administration wanted to defend American interests abroad. End quote.
Looks like that year of efficiency is bleeding into New Year's. Meta plans to cut around 5% of its lowest performers this year, including those who have been with Meta for a long time. What does that mean? Quoting Bloomberg.
I've decided to raise the bar on performance management and move out low performance faster, Chief Executive Officer Mark Zuckerberg said in the memo. We typically manage out people who aren't meeting expectations over the course of a year, but now we're going to do more extensive performance-based... end quote.
The company expects to reach 10% of, quote, non-regrettable attrition by the end of the current performance cycle, which includes roughly 5% non-regrettable attrition from 2024, the memo shows. Quote, this means we are aiming to exit approximately another 5% of our current employees who have Zuckerberg noted that the company would, quote, provide generous severance, end quote.
What was I just saying about big private startups so flush with cash they may not need to IPO right away? Well, this is kind of that. Sources say Databricks secured more than $5 billion in its largest debt raised to date from lenders including Blackstone and Apollo after raising $10 billion. billion in equity just in December, quoting Bloomberg.
The tech firm, which is one of the world's most valuable, closely held companies, tapped JPMorgan Chase to arrange the financing last year and plans to use the proceeds to offset tax burdens associated with stock sales from staffers, Bloomberg reported. The debt deal comes alongside a $10 billion equity funding round Databricks announced at the end of last year that lifted its valuation to $62 billion. Direct lenders are providing a $2.25 billion
term loan as well as a $500 million delay draw tranche that Databricks can tap later, said the people who asked not to be identified because the details of the transaction are private. The debt, which has a structure tied to the company's annual recurring revenue,
Pays four and a half percentage points over the secured overnight financing rate, they said. ARR loans have become a popular avenue for private credit firms to extend loans to fast-growing software companies that are yet to turn a profit. In ARR loans, creditors' safeguards are... on measures of a company's recurring revenue, which is typically based on long-term contracts.
instead of earnings. Databricks said in December it expects to cross $3 billion in annualized revenue and to generate positive free cash flow in its fourth quarter, which ends January 31st. Sales increased more than 60% in the prior three-month period, a rapid pace of expansion at a time when many software makers are struggling with growth.
The company said it will use proceeds from its $10 billion equity raise for new AI products, acquisitions, and a significant expansion of its international go-to-market operations, as well as to buy shares owned by current and former employees. Thrive Capital led that funding round alongside firms. including Andreessen Horowitz and DST Global. Databricks makes software to ingest, analyze, and build artificial intelligence apps with complicated data from a variety of sources.
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Disney, Fox, and Warner Brothers Discovery all decided to walk away from their venue sports streaming joint venture and will focus instead on existing products and distribution channels. This was a big deal because basically, what if Netflix? But just for sports, right?
Netflix is new to live events full stop and sports generally, but the big studios have long relationships with leagues and existing rights deals. So it seemed like, you know, an interesting thing to try. But, quoting The Hollywood Reporter, The decision to discontinue venue comes at the end of an eventful week for the companies, with dealmaking looking to revive the service's fortunes before a fresh legal threat appeared to put it in limbo once more.
On Monday, in a shocking move, Disney announced a deal to merge its Hulu Plus live TV service with competitor Fubo. The combined venture would be the second biggest streaming NVPD after YouTube TV and would be run by Fubo's executive team, even with Disney main... maintaining majority ownership.
In connection with the deal, Fubo agreed to end its antitrust case against Venue. A couple days later, the two major satellite TV firms, DirecTV and EchoStar, argued that the court should reconsider any request to lift an injunction previously issued in the case.
that they may take action. A source familiar with the decision says that the move to unwind venue was made in the past few days and that the legal limbo contemplated by the satellite companies played a role. Disney, Fox, and WBD announced their plan to launch a joint streaming service. Nearly a year ago, the service would be structured like other VMVPDs like, say, YouTube TV or Fubo, but with a dramatically smaller lineup of channels.
Fox, for example, would provide the Fox broadcast networks and FS1, but not Fox News, while Disney would provide ABC and the ESPN networks, but not FX or Disney Channel. Fubo sued shortly after the announcement, arguing that venue violated antitrust rules. Fubo, after all, considered itself a sports-focused streaming service but was unable to cut a deal with the companies to offer the same limited set of channels they were giving to their own platform."
More on why this fell apart from CNBC. Together, Disney, Fox, and WBD control more than 50% of all U.S. sports media rights and at least 60% of all nationally broadcast U.S. sports rights, according to the judge in the antitrust case. The news that it would not launch came as a shock to venue employees who found out
late Thursday night. According to people familiar with the matter who spoke anonymously to discuss internal matters, they believed they had a pathway forward to launch the service after Disney agreed earlier this week to merge its Hulu Plus Live TV with Fubo. settling all litigation over venue. But the judge's response in Fubo's lawsuit questioned the legality of cable bundling in general, prompting Disney to strike the deal with Fubo.
through which Disney would take 70% control of the resulting company, and two days ago, satellite providers DirecTV and Dish sent letters to federal court arguing that the legal questions brought up by the judge remained unanswered. Rather than risk an extended lawsuit that could jeopardize bundling in general, including Disney's efforts to bundle its own streaming entities, ESPN, Hulu, and Disney+, the three companies decided to pull the plug on Venue, according to the people familiar.
Warner Brothers Discovery's business model relies heavily on negotiating bundled carriage agreements for its many cable networks, including CNN, TNT, HGTV, and Food Network. Disney is targeting a debut of ESPN Flagship, an all-inclusive ESPN streaming service for August 2025. The still-unnamed ESPN streaming service will include everything that airs on ESPN's linear network, unlike ESPN+.
Disney's deal with Fubo, along with the company's recent carriage renewal with DirecTV, also gives the company new ways to package so-called skinny bundles, narrower selections of channels for less money. This was the idea behind venue, selling a smaller number of linear channels for less money than traditional cable TV, end quote.
Finally today, this is a weird one. Sources and business records TechCrunch has seen detail how Barcelona has emerged as an unlikely hub for spyware companies raising concerns from digital rights groups. apart from Palm Beach Networks, as it was known at the time.
Barcelona is home to several exploit and spyware makers that are making the most of the city's sunny, temperate weather, fresh seafood, and vibrant expat community. Among them are Paradigm Shift, which was founded by former employees of Varistan in the aftermath of...
that company's collapse last year, and Epsilon, which is led by Jeremy Fetevau, an industry veteran who used to work for a division within U.S. defense giant L3 Harris that was created after the company acquired the Australian startup Azimuth.
Fetevu did not return a request for comment. The city is said to also be home to an unnamed group of Israeli researchers who moved to Barcelona from Singapore to work on developing zero-day exploits. The existence of this unnamed team, as well as Epsilon's presence in Barcelona, was first reported by Israeli newspapers, who sparked coverage in local newspapers and news websites. Other cybersecurity companies have a presence in Barcelona, even if they are not headquartered there.
Andrija Sekolark, the chief executive of Austrian cybersecurity company... Safa lives in the city, according to her public LinkedIn profile. Safa has sponsored offensive cybersecurity conferences, including OffensiveCon and Hexacon, and employs at least two security researchers with past experience at spyware companies, according to their public LinkedIn profile.
Secularic did not respond to requests for comment. These Zero Day and spyware companies are part of a broader cybersecurity and startup ecosystem in Barcelona. As of last year, according to the Catalan regional government, there were more than 10,000 people working for more than 500 cybersecurity companies in Barcelona, or around 50% more workers than five years earlier. Barcelona isn't just a hotbed for surveillance tech makers, but startups in general.
with some ranking the city among the top startup hubs in Europe. The city is the founding home for food delivery startup Glovo, which competitor Delivery Hero valued at 2.3 billion euro in 2021 when it... Acquired a majority stake in the Catalan company. Orthodontics startup Impress, which raised $125 million in 2022 and $114 million last year. And business travel management platform Travelperk, which raised $105 million in 2024. than 22
other startups, according to the Barcelona and Catalonia Startup Hub, a local government project that tracks the startup ecosystem in the region. The city is attractive to workers because its cost of living is cheaper than other European startup hubs like London, Amsterdam, and Berlin.
Then there's the perhaps more obvious reasons, at least for anyone who's been to Barcelona. The city has nice beaches, similar to Tel Aviv, Cyprus, and Greece, places that are or were home to spyware companies like Anaso Group, Circles, and Intelexa.
Having Barcelona become a crucial regional outpost for offensive cybersecurity companies puts the spyware problem squarely on the doorstep of Europe, which has a fractious relationship with surveillance tech due to scandals in Cyprus, Greece, Hungary, and Poland, all involving Israeli spyware makers.
It is a concerning development if a major city in Europe becomes a hub for spyware makers. Natalia Krapiva, the legal counsel at Nonprofit Access Now, which specializes in investigating and researching spyware, told TechCrunch. Grapeva said that the spyware business, quote, goes hand in hand with corruption and abuse of power, end quote. Nothing more for you today. Talk to you tomorrow.