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Meta To Abandon The Metaverse?
00:21:52
On the one hand, Meta poached Apple’s design head in a major coup to make hardware and software for AI, but there are signs Zuck is souring on the Metaverse could even abandon it entirely. Is Amazon about to abandon your mailman? And why Dario Amodei is playing a blinder right now.
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Welcome to the Tech we write Home for Thursday, December 4th 4th, 2025 I'm Brian McCullough today on the one hand, Meta poached Apple's design head in a major coup to make hardware and software for AI. But there are also signs Zuck is souring on the Metaverse. And could they even abandon the Metaverse entirely? Is Amazon about to abandon your mailman and why Dario Amodai is playing a blinder right now. Here's what you missed today in the world of tech.
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Boy, this AI stuff really has been shaking things up in the boardrooms of the big tech companies of late. Apple has confirmed that VP of Human Interface Design Alan Dye is leaving the company to join Meta. This is a pretty major coup. Dye has headed Apple's user interface design team since 2015. Tim Cook says Apple UI designer Stephen Lemay will replace Dai, quoting Mark Gurman in Bloomberg. The move represents a seismic shift in Silicon Valley and shows that Meta is committed to becoming a brand name maker of hardware devices. For Apple, the departure extends an exodus of talent suffered by the design team since the exit of visionary executive Jony I've In 2019, Dye had taken on a more significant role at Apple after I've left, helping define how the company's latest operating systems, apps and devices look and feel the executive informed Apple this week that he decided to leave, though top management had already been bracing for his departure, the people said. With the die higher, Meta is creating a new design studio and putting him in charge of design for hardware, software and AI integration for its interfaces. He will be reporting to Chief Technology Officer Andrew Bosworth, who oversees Reality Labs. That group is tasked with developing wearable devices such as smart glasses and virtual reality headsets. Dai's major focus will be revamping Meta's consumer devices with artificial intelligence features. He will serve as chief design officer for the group starting December 31st. Dye most recently oversaw the interface of the Vision Pro headset and a sweeping redesign of Apple's operating systems. He was also central to designing the company's apps, the Apple Watch and the iPhone X. His team has been helping develop a slate of new smart home devices at well, Bloomberg News has reported. Dai's exit is a major loss for Apple, which is already coping with some critical departures in recent weeks. Jeff Williams, the company's longtime chief operating officer, retired last month, and artificial intelligence head John Giannandrea just announced his departure this week following years of struggles to catch up in AI last fall. Apple's former hardware chief Dan Riccio also retired. The turnover is expected to continue, with many of the remaining top leaders, including Tim Cook, nearing typical retirement ages. Johnny Shrugi, Apple's silicon chief, and Lisa Jackson, Apple's head of government environment initiatives, have both been evaluating their futures at the company, Bloomberg has reported. End quote. But again, let me underline, because on threads, Mark Zuckerberg confirmed that they were creating a new creative studio in Meta's Reality Labs, which will be led by Dai, who will be joined by senior director of Apple design team Billy Sorrentino. So this is actually the news of two huge departures now related to that. Sources are also telling Bloomberg that Meta plans deep budget cuts to its metaverse efforts in 2026, potentially as high as 30% and most likely will lead to layoffs as early as January. The proposed Metaverse cuts are part of the company's annual budget planning for 2026, which included a series of meetings at Mark Zuckerberg's compound in Hawaii last month, the people said. Zuckerberg has asked Meta executives to look for 10% across the board, which has been the standard request during similar budget cycles the past few years, they added. The Metaverse group was asked to cut deeper this year given that Meta has not seen the level of industry wide competition over the technology that it once expected, they said the majority of the proposed cuts are likely to hit Meta's virtual reality group, which makes up the bulk of the Metaverse related spend. The people said cuts would also target Horizon Worlds. The entire Metaverse effort has drawn scrutiny from investors who have seen it as a drain on resources, as well as from watchdogs who have alleged that children's privacy and safety have been compromised in the virtual worlds. Shares of Meta jumped as much as 5.7% after markets opened in New York, their biggest intraday gain since July 31st. Meta's vision for the metaverse has not taken off, despite Zuckerberg's conviction, which he still has, that people will one day work and play in virtual worlds in 2021, as Facebook was facing fallout for user safety and privacy issues, Zuckerber rebranded the whole company around the idea of the Metaverse and started spending heavily on the vision. The Metaverse group sits within Reality Labs, the Meta division focused on long term bets like VR headsets and AR glasses. That group has lost more than $70 billion since the start of 2021. Zuckerberg has largely stopped mentioning the Metaverse in public and on company earnings calls and is instead focused on developing the large AI models that underpin AI chatbots and other generative AI products, as well as the hardware products that are more linked to those experiences, like Meta's Ray Ban display glasses. Some analysts and investors have long advocated that Zuckerberg rid himself of Reality Labs products that continue to drain resources without providing much revenue in return. In April, Mike Prolux, a vice president at research and advisory firm Forrester, predicted that Meta would shutter its Metaverse projects like Horizon Worlds before the end of the year. End quote.
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Sources are telling the Washington Post that Amazon, the U.S. postal Service's top customer with more than $6 billion in revenue in 2025, is considering ending its deal with the post office at the end of 2026 and expanding its own delivery network instead. Quote Amazon has long been the Postal Service's top customer, providing more than $6 billion in annual revenue in 2025, said two of the people who, like others in this report, spoke on the condition of anonymity to share. Conf.
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Would account for roughly 7.5% of the agency's revenue in the past year. The Postal Service does not disclose its financial relationships with major shippers. Amazon has been in talks with the Postal Service over what the mail agency calls negotiated service agreements, which set rates and hasten delivery for its largest clients. The company had hoped to come to a new agreement that would have locked in favorable rates and set higher benchmarks for package volume, but formal talks have largely concluded without a deal, the people said. Now, Amazon is readying plans to pull the billions of packages it sends through the Postal Service by the end of 2026, the people said. The people caution that the plans are not final and could change. Postmaster General David Steiner met virtually with Amazon Chief Executive andy Jassy on November 14, and the company hopes to reach an agreement, the people said. The loss of Amazon's business could spell disaster for the mail agency, which in recent years has drawn more revenue from packages than paper mail. It has posted multi billion dollar loss nine of the past ten years, even as it has hiked prices, the people said. Industry groups have begun huddling with key lawmakers to craft a rescue package for the Postal Service, which received $107 billion in financial assistance from Congress as recently as 2022. Partnerships with large shippers such as Amazon are the backbone of the Postal Service's competition business model, in which its prime competitors send certain parcels through the postal system and deliver others independently. Amazon had sought a four year extension of its contract. Two of its agreement expires October 1, 2026. Amazon spokesperson Steve Kelly, in a statement, called the Postal Service a long standing and trusted partner and said the company remained committed to working with the agency. The company was seeking ways to extend our partnership and increase our spend with the Postal Service as part of the recent negotiations, he said. The Postal Service declined to comment. The system has benefited both sides. The deliveries are profitable for the Postal Service, while private sector shippers offload shipments that would cost more to deliver on their own. End quote.
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At the DealBook summit, Anthropic's Dario Amodai suggested some AI companies are taking on too much risk by his words, yoloing and committing to spending hundreds of billions of dollars on data centers. Quoting Bloomberg in an interview with the New York Times DealBook Summit on Wednesday, Amadei said the industry faces a real dilemma from balancing the need to make costly investments in data centers, which can take multiple years to set up, with uncertainty in how quickly the economic value is going to grow from AI. We as a company try to manage as responsibly as we can, he said. And then I think there are some players who are yoloing, he added, adding an abbreviation that means you only live once. Without naming any firms, Amodi said some companies pull the risk dial too far. Founded in 2021 by former OpenAI staffers, Anthropic has aimed to be a more responsible AI steward than its competitors. The company has largely concentrated on growing its enterprise business rather than focus on consumers. The company raised $13 billion at a $183 billion valuation in September.
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As I said last night on the socials, Dario is absolutely playing a blinder all of the sudden. Go with Google chips as a hedge Against Nvidia dependency, IPO ahead of OpenAI Go with Pay business, not waves hands. Everything under the sun like OpenAI does. Present yourself as the sane AI play, secure that bag and batter Sam while he's down.
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AI legal software startup Harvey raised $160 million, led by A16Z at an $8 billion valuation, which is up from a $3 billion valuation after raising $300 million back in February, taking Harvey's total funding in 2025 to $760 million. I'm mentioning this one for a very specific reason. From an investing and startup ecosystem perspective, it would be healthy for a big model maker like Anthropic to go public and start showing profits. But even healthier would be one of these what would we call them? Second order AI companies that take AI and apply it to specific domains to go public and crucially start showing profits as well. If that were to start happening, that's when you'd see a dot com era style Cambrian explosion of AI companies rushing to do IPOs and the money would really start sloshing around Silicon Valley. The way I would imagine that would happen would be some of the coding. AI companies would go out the door first and then specialists like say, a Harvey quoting the Times Alongside the new round, Harvey also plans to allow some employees to sell their shares in the company, letting them cash in on its growth. The pace and size of Harvey's capital raising underscore how the fervor for investing in AI startups extends well beyond the makers of large language models such as OpenAI and anthropic. Even as concerns about a bubble wobble public market technology stocks, creators of tools for white collar professionals including coders, marketers and doctors have gained interest among investors who foresee the technology driving drastically improved efficiency. In Harvey's case, that means helping lawyers write and review drafts of legal documents, answer case law questions and create automated processes for many tasks. The nearly four year old startup, named after one of the lead characters in the TV show suits, has been among the most prominent of those, even getting name checked by Jensen Huang, the chief executive of the AI chip giant Nvidia. Harvey was founded by Winston Weinberg, a former junior litigator at the law firm O' Melvey & Myers, and his one time roommate Gabe Perera, a researcher who worked at the AI lab, Google, DeepMind and at Meta. The company now says that about half of the Am Law 100 group of big law firms, including Omelvi, A and O Shearman and Latham and Watkins, use its software. They've become the de facto leader in AI legal assistance, said David George, a partner at the venture capital firm Andreessen Horowitz, who led the fundraising round. It's very clear to me that at some end state a lawyer will be using Harvey or some product like Harvey. Other participants included T. Rowe Price and the investment firm Wonderco, both new to Harvey and the existing backers Sequoia Capital, Kleiner Perkins Conviction and Elad Guild. The angel investor Harvey also counts as customers the in house legal departments of big companies such as Comcast, the hedge fund Bridgewater Associates and the energy giant Repsol. Mr. Weinberg said that nearly 35% of its customers are regular companies who often use Harvey software for tasks like contracts and fund formation. To help cater to those users, Harvey is introducing a product that allows them to collaborate with their law firms in shared virtual spaces, an offering that Mr. Weinberg said required figuring out how to prevent confidential data from spilling out of different projects. It is part of an effort, he said, to get non law firm users to expand their use of the product. Harvey's growth has accelerated this year, according to Mr. Weinberg, with its annual recurring revenue surpassing $150 million, triple amount at the beginning of the year. But AI enabled legal tools remain a fiercely competitive business. Harvey faces pressure from both fast growing rivals like Legora, a Swedish startup that is now valued at $1.8 billion, and from established players including Luminance and co counsel of Thomson Reuters. Mr. Weinberg added that he also worried about some competition from the big AI makers like OpenAI, Harvey's first major investor, which have been hiring professionals like investment bankers to help train its software. Some skeptics of companies like Harvey have also argued that they essentially just sell new interfaces for better known chatbots. Part of the solution to that problem, he said, was to keep building complex new services catering specifically to legal users that the large model makers would not be able to recreate. The bigger problem, Mr. Weinberg added, was simply to keep adding users and persuading law firms to adopt its tools. There's such an enormous amount of growth here, he said. This is an industry that technology has not not penetrated that much, end quote.
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Finally today, Reddit CEO Steve Huffman says the company is moving away from R Popular, the default feed for new users, and will replace it with more personalized feeds. Quoting the Verge For a long time we were known as the front page of the Internet, but we've outgrown a singular front page for everyone, huffman says. You have different interests than I do, and your your Reddit should look different from mine and from your neighbors or your co workers or your best friends. Regarding R Popular, he says that in theory it's what's most popular on Reddit, but it's actually what is liked by the most active users on Reddit, which is not the same thing. Having it as a default feed gives the false impression of a singular Reddit culture, one that is neither representative of Reddit nor appealing to new users or anyone at all, imo. So in the near future, Reddit is going to stop showing it to new users and unless you read it regularly, will remove it from the core group of feeds in the app. The changes to R Popular will start showing up to some users as early as this week, spokesperson Tim Rothschimidt tells the Verge. Reddit originally made R Popular the default for logged out users in 2017. End quote.
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So I've heard from a lot of you over the last couple of days that like the last minute of the shows recently has been cut off. I think I've diagnosed the problem there, but do let me know if it continues today. Although if it does continue to cut off the last minute or so, you might not even hear this. So who knows? What did you miss when the show got cut off the last two days? Well, yesterday I was telling you about the new Rad History episodes. If I have time, the first Hair Metal episode will come out this afternoon. And also on Tuesday I told you of my love for the TV show Pluribus. Can't wait for the next episode to drop tomorrow. And today I know I'm late to this one, but I'm telling you about my sudden complete infatuation with Brooklyn's own Geese. Geese, a group of kids from just a couple of neighborhoods over from me. I have not fallen this fully and this instantly in love with a band in years. So to sum up Rad History, check out the Hair Band episodes coming out these next few days. Also, I recommend checking out Pluribus, though your mileage may vary on that, but I'm obsessed with the show. And also check out the band Geese. Love em. There endeth Brian's recommendation chat. Hopefully you get to hear it today. Talk to you.
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Tomorrow.
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