Techmeme Ride Home - Mon. 02/17 – Folks Are Circling Intel

Release Date: February 17, 2025 | Host: Brian McCullough

Welcome to the detailed summary of the Techmeme Ride Home podcast episode titled "Folks Are Circling Intel." Hosted by Brian McCullough, this episode delves into significant developments in the tech world, including Intel's precarious position, OpenAI's stance on Elon Musk's bid, Zelle's surge in the P2P payments landscape, TikTok Shop's impressive sales growth, advancements in AI-powered robotics by Meta and Apple, and the growing challenges faced by tech unicorns.

1. Intel Under Scrutiny: Potential TSMC and Broadcom Deals

Timestamp: [00:00 - 10:00]

Brian McCullough opens the episode by discussing the tumultuous situation surrounding Intel. Recent reports suggest that Taiwan Semiconductor Manufacturing Company (TSMC) is contemplating taking a controlling stake in Intel's U.S. factories. This move follows a request from the Trump administration, aiming to bolster domestic chip manufacturing. According to Bloomberg, the potential partnership might involve major American chip designers investing equity in Intel, supported by the U.S. government. However, a White House official expressed skepticism, stating, “the president is unlikely to support a foreign entity operating Intel's factories.”

Additionally, Broadcom has shown informal interest in acquiring Intel's chip design and marketing unit, contingent upon securing a partner for Intel's foundry business. However, no formal proposals have been made, and discussions remain preliminary. McCullough notes, “These potential deals would have been unthinkable until Intel's recent struggles made it an acquisition target.”

Frank Yeary, Intel's interim executive chairman, is at the forefront of these negotiations, balancing the interests of shareholders with national security concerns. The fragmentation of Intel could signify a broader industry shift towards specialization in either chip manufacturing or design, rather than both.

2. OpenAI Rejects Elon Musk's $97 Billion Bid

Timestamp: [10:00 - 15:00]

The podcast shifts focus to OpenAI, where McCullough reports that the organization's board has officially rejected Elon Musk's $97.4 billion bid to take over the nonprofit. Brett Taylor, OpenAI's board chairman, stated, “OpenAI is not for sale,” emphasizing the board's unanimous decision to decline Musk's offer. This rejection was announced despite the bid not being in the best interest of OpenAI's mission to build AI that benefits humanity.

Elon Musk, through his AI venture Xai, has been attempting to disrupt the competitive landscape, but OpenAI remains steadfast in its commitment to its foundational goals. Legal representatives for Musk argued that OpenAI was open to selling its assets, albeit at a discounted rate, which Musk disputed as self-dealing and not aligning with the organization's altruistic mission.

3. Zelle Emerges as the Dominant P2P Platform

Timestamp: [15:00 - 20:00]

Zelle, often overshadowed by fintech giants like Venmo and PayPal, is making significant strides in the peer-to-peer payments sector. McCullough highlights that Zelle's payment volume surpassed $1 trillion in 2024, with a user base growing by 12% year-over-year to reach 151 million accounts. The total dollar value of transactions increased by 27%, positioning Zelle as a formidable player in the market.

CNBC reported that Zelle's advantage lies in its integration with major U.S. banks, including JP Morgan, Chase, Bank of America, and Wells Fargo. This integration facilitates instant money transfers within the apps of thousands of member institutions. Leonard, a spokesperson, mentioned, “We want to continue to be top of mind for those consumers to be able to use this every day,” underscoring Zelle's commitment to daily financial transactions.

Despite facing criticisms regarding fraud investigations and reimbursement processes, Zelle has implemented measures to enhance security, boasting that “99.95% of transactions are free of fraud and scams.”

4. TikTok Shop Overtakes Shein and Temu in U.S. Sales

Timestamp: [20:00 - 25:00]

In the e-commerce arena, TikTok Shop has outpaced competitors Shein and Temu in U.S. sales as of January 2025. Bloomberg's analysis reveals that TikTok Shop experienced a 153% growth, surpassing Shein's 26% and Temu's 28%. This surge is attributed to TikTok's effective integration of app shopping features, capturing a significant market share from Shein, especially in transactions valued over $25—a segment where Shein traditionally dominated.

Industry experts suggest that TikTok's social media prowess and targeted marketing strategies have been pivotal in attracting consumers away from established players like Shein and Temu. However, Shein faces mounting pressures, including a potential reduction in its valuation ahead of a possible London IPO, signaling a challenging road ahead for the fast fashion retailer.

5. Meta and Apple's Robotics Ventures

Timestamp: [25:00 - 35:00]

The episode delves into the burgeoning field of AI-powered robotics, highlighting Meta's and Apple's respective initiatives.

Meta's Ambition: Meta is reportedly planning substantial investments in AI-powered humanoid robots, initially targeting household chores. A new team within Reality Labs is spearheading this effort, focusing on developing AI sensors and software to be utilized by various manufacturing partners. Mark Whitten, previously of General Motors Cruise and Unity Software, leads this initiative. Andrew Bosworth, Meta's CTO, emphasized the company's complementary advancements in AI, stating, “The core technologies we've already invested in and built across Reality Labs and AI are complementary to developing the advancements needed for robotics.”

Apple's Approach: Contrastingly, Apple is exploring robotics with a distinct strategy centered around full ecosystem control—integrating hardware, software, and AI seamlessly. Apple’s robotics efforts are part of a broader AI research initiative within its machine learning group, aiming to develop a humanoid robot that showcases Apple's AI capabilities and tight hardware-software integration. While still in the exploratory phase, Apple envisions a humanoid robot that could eventually rival offerings like Tesla's Optimus. However, Apple faces challenges in catching up with competitors in AI development, crucial for realizing its robotics ambitions.

Brian McCullough references Mark Gurman's insights, noting that Apple is also innovating within its Vision Pro headset, planning to enhance it with Apple Intelligence and improved user modes to boost its appeal.

6. The Plight of Tech Unicorns: A Growing Concern

Timestamp: [35:00 - 45:00]

McCullough addresses the unsettling trend facing tech unicorns—startups valued at over $1 billion—that are struggling to secure further funding or achieve successful exits. Data from CB Insights reveals that a record 1,200 venture-backed unicorns have yet to IPO or be acquired. Carta's analysis shows that fewer than 30% of unicorns from 2021 have raised funding in the past three years, signaling severe challenges in maintaining valuations.

Ilya Streblev from Stanford Graduate School of Business highlights the precarious situation: “A reckoning that has been looming for years is becoming painfully tangible.” Many unicorns have either gone public through less favorable channels like SPACs or have been acquired at significantly reduced valuations. The sustainability of these startups is in question, with many facing the threat of becoming "zombie unicorns"—entities that persist without growth or meaningful financial success.

Chelsea Stoner of Battery Ventures points out that the current investment climate is unforgiving, with private equity firms acquiring struggling startups at minimal valuations. Greg Martin of Archer Venture Capital adds that unless there's a resurgence of investor enthusiasm or favorable market conditions akin to the pandemic-era zero interest rates, many of these unicorns may fail to survive.

Conclusion

In this episode of Techmeme Ride Home, Brian McCullough provides a comprehensive overview of pivotal developments in the tech industry. From the potential restructuring of Intel and OpenAI's firm stance against Elon Musk's ambitious takeover bid to Zelle's rise in the P2P payments market and TikTok Shop's e-commerce triumph, the landscape is rapidly evolving. Additionally, the strides made by Meta and Apple in AI-driven robotics underscore the relentless pace of technological innovation. However, amidst these advancements, the challenges faced by tech unicorns highlight the volatility and unpredictability inherent in the startup ecosystem.

Stay tuned for more updates and in-depth analysis in future episodes of Techmeme Ride Home.