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Brian McCullough
Welcome to the Tech Meme. Write home from Monday, March 17, 2025. I'm Brian McCullough. Today, Europe wants to wean itself off of foreign big tech. Could this be the sign of a future rift with Silicon Valley? The weird case of rippling versus Deal Klarna lands a big fish what the core weave IPO could mean for tech, and how the new iPhone air signals a big hardware design change at Apple. Here's what you missed today. In the world of tech, we're used to countries increasingly looking at technology as a geopolitical imperative. If you rely on tech produced elsewhere, not only does that open you up to potential spying and hacking, but also in a time of conflict, you could be without access to key tech. We're used to this sort of thinking vis a vis China and the west. But what this segment suggests is that there are multiple angles of concern here. More than 100 EU companies have penned a letter to European lawmakers to take quite radical action to cut the reliance on foreign big tech by fostering a so called Eurostack. Quoting TechCrunch. Companies spanning areas including cloud, telecoms, defense, along with several regional business and startup associations have put their names to a letter which was sent to the commission on Sunday, urging the bloc to switch its technology strategy onto a quasi war footing by committing to support sovereign digital infrastructure. The plan pushes for reducing reliance on foreign owned big tech by actively fostering development of a so called Eurostack. The European digital infrastructure pitch is not coming out of thin air. A Eurostack paper written by, among others, the competition economist Cristina Cafara was published in January fleshing out the strategy in some detail. There has also been, over the last half year or so, a smattering of conference chatter, turning over the potential for enterprising Europeans to seize a geopolitically fraught moment to press the case for the EU to adopt a digital industrial strategy that's squarely focused on favoring local innovation. The rallying call to put European tech first, backed by companies including Airbus, Element, Ova, Cloud, Marina, nextcloud and Proton, to name a few, follows the shock of the Munich security conference where U.S. vice President J.D. vance tore into Europe like an attack dog, leaving delegates in no doubt that the post war international order is in tatters and all bets are off when it comes to what the US might do under President Trump. Key tech infrastructure that's owned and operated by US companies doesn't look like such a solid buy from a European perspective if a presidential executive order can be issued forcing US firms to switch off service provision or terminate a supply chain at a pen stroke. Imagine Europe without Internet search, email or office software. It would mean the complete breakdown of our society. Sounds unrealistic. Well, something similar just happened to Ukraine, Wolfgang Oles, COO of the Berlin based tree planting search engine Ecosia, one signatory to the letter that was already taking steps aimed at reducing its dependency on US big tech suppliers, tells TechCrunch Trump switched off access to vital infrastructures because Ukraine was not ready to cede its land and hand over its minerals, Uls said. Europeans need sovereignty and critical infrastructure, and those do not only consist of energy and health, but certainly also digital ones. The latter suggests the bloc could help stoke demand and unlock investment by adopting public procurement requirements that would require at least a portion of public bodies digital requirements to come from local providers AKA a bi European mandate favoring European led and assembled solutions. End quote Here's a wild one HR service Rippling is suing rival startup Deal, accusing it of hiring a mole in its Dublin office to comb through trade secrets discovered via a honeypot Slack channel it set up, quoting the New York Times. We're all for healthy competition, but we won't tolerate when a competitor breaks the law, vanessa Wu, Ripling's general counsel, said in a statement. A Deal spokeswoman declined to comment. Both companies have turned the seemingly humdrum business of human resources into multi billion dollar operations. Rippling was most recently valued at $13.5 billion, according to the data provider Pitchbook, while Deal was valued at more than $12 billion. Aggressiveness also runs in their DNA, especially at rippling, whose co founder and CEO Parker Conrad is known for an especially hard charging managerial style. The two have clashed repeatedly in recent years, with Conrad barring former Rippling employees who decamped to Deal from participating in secondary stock sales. A Ripp is also tied to a lawsuit in Florida accusing Deal of violating Russia sanctions. Rippling is now accusing Deal of perpetrating a brazen act of corporate theft. In the lawsuit, Rippling said that the employee it had accused of being a plant referred to in the complaint as DS started searching for mentions of Deal in its Slack messaging system at an elevated rate starting in November. The goal, Rippling asserted, was to find information relating to sales leads involving Deal customers, pitch decks and more. Rippling said it began to suspect a mole when Deal tried to hire at least 717 members of its global payroll operations team via WhatsApp, which requires knowing those people's phone numbers and when a reporter for the information asked for comment about internal Slack messages relating to payments into Russia in violation of sanctions. A security review showed that DS had searched for those messages. Rippling said it had also discovered correspondence between DS and Alex Boaziz, Deal's CEO and co founder. Earlier this month, Wu sent a letter to three people, including Philippe Boaziz, Deals chairman and CFO and father of Alex Boaziz. The letter referenced referenced a Slack channel that Wu implied had embarrassing information about Deal but was really set up as part of the trap. Within hours, DS started searching the channel, the company asserts. Rippling said it obtained a court order last week forcing DS to turn over his phone. But when a court appointed lawyer showed up at Rippling's Dublin office and demanded that the employee hand over the device, Diaz locked himself in a bathroom. He later fled the scene, it said. Rippling is playing hardball. Its lead lawyer on the lawsuit is Alex Spiro of Quinn, Emanuel, Urguart and Sullivan, known for representing Elon Musk, Jay and Mayor Eric Adams of New York City. This was not an isolated act of misconduct. It was a deliberate attack perpetrated for over four months, designed to steal and weaponize critical competitive data, the complaint reads. End quote. Walmart's OnePay says Klarna will replace a firm to offer Buy now, Pay later to US Walmart shoppers later this year and OnePay can buy a stake in Klarna. Klarna is of course expected to IPO soon, so a big win ahead of that. Affirm's stock is down more than 10%, quoting CNBC. OnePay, which updated its brand name from One this month, will handle the user experience via its app, while Klarna will make underwriting decisions for loans ranging from three months to 36 months in length and with annual interest rates from 10 to 36%, said the people. The new product will be launched in the coming weeks and will be scaled to all Walmart channels by the holiday season, likely leaving it the retailer's only buy now, pay later option by year end. The move heightens the rivalry between Affirm and Klarna, two of the world's biggest BNPL players, just as Klarna is set to go public. Although both companies claim to offer a better alternative for borrowers than credit cards, Affirm is more US centric and has been public since 2021, while Klarna's network is more global. As mentioned, Klarna's latest deal comes at a strategic moment as it prepares for one of the first big tech IPOs of the year that we've been waiting for as discussed previously, the company's private valuation has seen dramatic swings, peaking at $46 billion in 2021 before plummeting 85% amid broader fintech declines. Under CEO Sebastian Siemiatowski, Klarna has worked to strengthen its position, highlighting its use of generative AI to reduce costs and staff. After returning to profitability in 2023, analysts now value the company at approximately $15 billion, nearly on par with competitor affirms public market value. Si Miatowski described the OnePay agreement as a game changer for Klarna. The partnership is equally significant for Walmart's OnePay, which has rapidly grown to a $2.5 billion pre money valuation just two years after launching its the startup boasts over 3 million active customers and generates revenue at an annual rate exceeding $200 million. Walmart executives view OnePay as potentially becoming a comprehensive financial solution for Americans underserved by conventional banking institutions. And then there's coreweave and the first IPO of the AI era, as I've described it. What does that potential listing mean for the larger tech industry? Quoting Semaphore, Coreweave, which calls itself an AI hyperscaler, rents out GPUs, CPUs, and other computing equipment to tech companies so they don't have to purchase and maintain their own. Its IPO would represent one of the first in recent years from a major company supporting the expansion of AI, making it a bellwether for both the tech industry and how the public market perceives AI in the years ahead. There are a few recent tech IPOs investors can glean from when evaluating how CoreWeave might perform. British chip designer ARM listed in 2023amid an IPO slump, raising $4.87 billion in the offering in the year's largest IPO and a promising sign of the times, ARM is now trading at more than double its original sales price. Social media company Reddit, which entered the public market last year, raised $748 million, and it's offering another encouraging signal since the IPO. Reddit has announced a data licensing agreement with OpenAI, and its stock is up 250% since launch. Coreweave is reportedly looking to raise $4 billion at a $35 billion valuation. This year's other AI IPO candidates include customer service tool provider Genesis analytics platform Databricks and chipmaker Cerebras. All three have reportedly delayed their IPO plans on market volatility for the former two and in Cerebras case, a delayed US National Security review of one of its investors. The AI IPO market is still in the nascent stage, and it will likely take a few years to establish a robust pipeline of new publicly traded AI firms, especially a pipeline that some investors hope would include model heavyweights OpenAI and anthropology. But these early listings can set the tone for how confident executives can be about their public market aspirations. One of CoreWeave's biggest risks to its IPO performance is the lack of diversification in its customer base. Last year, 62% of its $1.9 billion in revenue came from Microsoft, according to Coreweave's SEC filing, leaving it hugely exposed to the whims of one business, the Financial Times reported. Microsoft recently pulled some of its commitments over delivery and deadline issues, though Core Weaver disputed that claim. Just this week, coreweave added one more customer to its power hitter list after signing a five year, $11.9 billion contract to supply AI infrastructure to OpenAI. If distributed evenly, Core Weave's annual income from that deal alone will surpass its total 2024 revenue, which grew nearly Eightfold from 2023, largely on Microsoft's business end quote. If someone would have told me that there are science backed ingredients that could help me feel 15 years younger in a matter of months, I would not have believed it. Then I tried Qualiosinolytic as we age, everyone accumulates senescent cells in their body. Senescent cells cause symptoms of aging such as aches and discomfort, slow workout recoveries, sluggish mental and physical energy you know, associated with that middle age feeling. Also known as zombie cells, they are old and worn out and not serving any useful function for our health anymore. But they are taking up space and nutrients from our healthy cells. Much like pruning the yellowing and dead leaves off a plant, Qualia Senolytic removes those worn out senescent cells to allow for the rest of them to thrive in the body. 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For a natural anytime snack, try any of their nine delicious flavors including Mint Chocolate Chip, Chocolate Sea Salt, Banana Nut, Toasted Coconut Chip, Lemon Blueberry and Peanut Butter chip. With over 20,000 5 star reviews and counting, more people than ever are starting their days on the right foot with IQ Bars, Brain and Body Boosting Bars, Hydration mixes and Mushroom Coffees. Iqbar has become the morning breakfast routine for my wife and I both. So join us right now. IQ Bar is offering our special podcast listeners 20% off all IQ Bar products plus get free shipping to get your 20% off, text Techmeme to 64,000, text Techmeme to 64 thousand. That's Techmeme to 64,000. Message and data rates may apply. See Terms and finally today, another Mark Gurman Apple Scoop. It is Monday, after all. Mark says the forthcoming iPhone 17 air model will lay the foundation for major design changes in future devices, including possible portless and foldable iPhones. Like the MacBook Air. This new iPhone will be thinner than the rest, but include a mix of pro level and low end features. Also, like the original MacBook Air, which debuted in 2008, the phone will jettison longtime features, use fresh components and leverage new design standards. And eventually, if all goes to plan, these changes will make their way to the rest of the product line. The new Air phone won't seem all that different when you're looking at the front. It will have a screen that's around 6.6 inches, slim borders like the iPhone 16 Pro line promotion for smooth scrolling, and a standard sized dynamic island interface. It also will include enhancements like the camera control button. And despite being far thinner, the model will have a battery life that's on par with current iPhones. But the inner workings of the phone, codenamed D23, represents a Herculean effort by several Apple teams. Skinnier phones require thinner batteries, and that often means fewer hours of battery life. Apple didn't want to compromise here, so it sent engineers back to the drawing board to redesign display and silicon components as well as software to make the device more efficient. That said, Apple did have to make some compromises to slim down the device. The company is shaving about 2 millimeters off the phone's depth, reducing it by roughly a fifth. And that's hard to do without sacrifices. The back of the aluminum phone has just a single 48 megapixel camera, matching the approach of the $599 iPhone 16e. That compares with the multiple lenses on other models. It includes a standard A19 chip rather than the higher end A19 Pro coming to the Pro version, and it will lack a physical SIM card slot. That's already the case with Apple's other iPhones in the US but such a feature is available in some other markets and a critical item for many buyers in China. At the same time, the phone is some forward looking technologies. For one, the new model includes Apple's in house modem chip dubbed C1 that first came to the iPhone 16e in February. This modem is far more power efficient than those from Qualcomm and it will help the Air model pull off the thin design. The chip, however, does lack support for mm wave technology. A faster variant of 5G service support will remain on the Pro models for the foreseeable future. But all of these changes were supposed to be just the tip of the iceberg. Apple had originally hoped to get ever more ambitious with this model. When it first started work on the phone, it prototyped a device with a 6.9-inch screen matching the Pro Max. Apple pulled the plug on that over fears of a thin device with a giant screen being susceptible to bending. The company suffered such a controversy in 2014 Bend gate when the iPhone 6 Plus would sometimes warp when in a tight pocket. An even bigger idea was to make the Air device Apple's first completely port free phone. That would mean losing the USB C connector and going all in on wireless charging and syncing data with the cloud. The world is probably ready for the change already. IPhone users can get around fine without plugging in their phone, whether it's to charge, connect to their car or download information. The Apple Watch exclusively charged wirelessly since the beginning, so many users are already accustomed to the idea. But Apple ultimately decided not to adopt a port free design with the new iPhone, which will still have a USB C connector. One major reason there were concerns that removing USB C would upset European Union regulators, who mandated the iPhone switch to USB C and are scrutinizing the company's business practices. But that's just the case for now. The iPhone 17 Air represents the beginning of a sea change for Apple, ushering in a new industrial design that accompanies this year's revamped iOS. Apple executives say that if this new iPhone is successful, the company intends to again attempt to make port free iPhones and move more of its models to this slimmer approach. Apple is preparing to use technologies from the iPhone 17 Air to create future models that break more ground. That includes a foldable version that would be similar to Samsung Electronics Galaxy Z Fold but with less of a screen crease when it's open. The device, arriving as early as 2026 would take advantage of the Air's battery, display, modem and chip advances. It also would be part of a wave of new models that could help commemorate the iPhone's 20 year anniversary. Apple is planning to rework the look and feel of its pro level phones as part of the shakeup. The current approach dates back to the 2023 iPhone 15 Pro, but it has strong roots in 2020's iPhone 12 Pro design. In other words, Apple's pro phones don't look much different than they did five years ago and that will continue to with this year's crop. But by 2026 or 2027 we should see more meaningful changes, including the shift of some components from the dynamic island to underneath the display. That would shrink the cutout at the top and get Apple that much closer to its dream of a phone with an uninterrupted screen. End Quote sure, it was a bit late getting out the door today. The morning just kind of got away from me. Tomorrow it's gonna be super early because I have an early afternoon doctor's appointment and then Wednesday it's gonna be especially late because I have a morning doctor's appointment that I couldn't move and it took me about six months to get this so I've gotta do it anyway. Show early tomorrow, show late Wednesday. Talk to you tomorrow.
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