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The Mother Of All Meta Layoffs?
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Is Meta about to do the mother of all layoffs? New AirPods Max 2. Why OpenAI delayed its sexytime chat… the calls to do so were coming from inside the house. What does it mean if the San Francisco real estate market is ripping again? And what if it ends up Apple has played a blinder by sitting out AI CAPEX spending?
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Welcome to the Tech Brew Ride home for Monday, March 16, 2026. I'm Brian McCullough. Today is Meta about to do the mother of all layoffs New AirPods Max 2 why OpenAI delayed its sexy time chat the calls were coming from inside the house. What does it mean if the San Francisco real estate market is ripping again? And what if it ends up Apple has played a blinder by sitting out the AI capex spending spree. Here's what you missed today in the world of tech. Rumors were swirling over the weekend that Meta plans sweeping layoffs that could affect 20% or more of the company amid mounting AI infrastructure costs. Meta had around 79,000 employees as of Dec. 31, quoting Reuters. Top executives have recently signaled the plans to other senior leaders at Meta and told them to begin planning how to pare back. Two of the people said the sources spoke anonymously because they were not authorized to disclose the cuts. This is speculative reporting about theoretical approaches, meta spokesperson Andy Stone said in response to questions about the plan. If Meta settles on the 20% figure, the layoffs will be the company's most significant since a restructuring in late 2022 and early 2023 that it dubbed the year of efficiency. It employed nearly 79,000 people as of Dec. 31, according to its latest filing. The company laid off 11,000 staffers in November 2022, or around 13% of its workforce. Time around four months later, it announced it was cutting another 10,000 jobs. Over the last year, CEO Mark Zuckerberg has been pushing Meta to compete more forcefully in generative AI. The company has offered huge pay packages, some worth hundreds of millions of dollars over four years, to court top AI researchers to a new superintelligence team. The company has said it plans to invest $600 billion to build data centers by 2028. Earlier this week, it acquired Multbooks, a social networking platform built for AI agents. Meta is also spending at least $2 billion to buy Chinese AI startup Manus, Reuters previously reported. CEO Zuckerberg has alluded to efficiency gains from the investments, saying in January he was starting to see, quote, projects that used to require big teams now being accomplished by a single, very talented person. Meta's plans reflect a broader pattern among major US Companies, particularly in tech. This year, executives have pointed to recent improvements in AI systems as one reason for the changes. In January, Amazon confirmed it would cut some 16,000 jobs, amounting to nearly 10% of its workforce. Last month, the fintech company blockchopped nearly half of its staff, with CEO Jack Dorsey explicitly pointing to AI tools and their growing capability to help companies do more with smaller teams. End quote Quoting Sign null on X the ZIRP era created a weird implicit social contract which was that if the company is healthy then jobs were safe. That contract is now gone. The replacement is closer to the old industrial logic which is that labor is a cost to be minimized at every point in the cycle. And now End quote and quoting Vishvanand Submaranean on threads Crazy part about this article is they're directly saying they'll convert the savings from reduced payroll to dump into capex for chips. Wild times. End quote. Wait, are we getting another week of soft Apple product refreshes this week? Quoting TechCrunch in a surprise launch on Monday, Apple unveiled the AirPods Max 2, the long awaited successor to its premium headphones that launched in 2020. The Max 2 costs $549 and feature Active Noise Cancellation, Apple's audio specific H2 chip support for live translation, better sound quality and more. The headphones will be available for Pre order start 25th in midnight, starlight, orange, purple and blue colors and will be available early next month. Apple says the new headphones Active noise cancellation is up to one and a half times more effective than their predecessor and the Adaptive Audio feature lets the headphones automatically adjust the levels of ANC and transparency based on the user's surroundings to optimize the listening experience. The company says transparency mode is now more natural thanks to a new digital signal processing algorithm designed for the H2 chip and the AirPods Max microphone array so users can stay aware of their surroundings and the people around them. The headphones come with Live Translation, which helps users communicate across languages in person. They also feature Voice Isolation, which uses advanced computational audio to prioritize your voice during calls and block out ambient noise. Apple says the AirPods Max 2 has a new high dynamic range amplifier for cleaner audio, and spatial audio is said to be better with improved localization of instruments, better bass response and natural mids and highs. The headphones also support Camera Remote, a feature that lets you trigger the iPhone or iPad's camera shutter from a distance. On the max 2, you press the digital crown to take a photo or start and stop video recording in the camera app or compatible third party camera apps on iPhone or iPad. Additionally, Apple says the headphones loud sound reduction feature helps protect users from loud environmental noise while preserving the sound signature of what they're listening to. Apple says the headphones mic allows interviewers, podcasters, singers and other creators to capture content, content with higher quality audio and more natural vocal texture. End quote. Wait, I just assumed that this had happened a long time ago. Encyclopedia Britannica and its Merriam Webster subsidiary are suing OpenAI for allegedly misusing their reference materials to train its AI models. Quoting Reuters, Britannica said in the complaint on Friday that Microsoft backed OpenAI used its online articles and encyclopedia and dictionary entries to teach its flagship chatbot, ChatGPT, to respond to human prompts, and cannibalized Britannica's web traffic with AI generated summaries of its content. Our models empower innovation and are trained on publicly available data and grounded in fair use, an OpenAI spokesperson said on Monday in response to the lawsuit. Britannica's lawsuit said that OpenAI unlawfully copied nearly 100,000 of its articles to train GPT large language models. The complaint said that ChatGPT produces, quote, near verbatim copies of Britannica's encyclopedia entries, dictionary definitions and other content, diverting users who would otherwise visit its websites. Britannica also accused OpenAI of infringing its trademarks by implying that it has permission to reproduce its materials and wrongfully citing Britannica and false AI hallucinations. Britannica requested an unspecified amount of monetary damages and a court order blocking the alleged infringement. End quote Foreign. Sources tell the journal that OpenAI faced intense backlash from its advisory council over a planned chatgpt so called Adult Mode, which was delayed earlier this month due to technical and other issues. Quote In January, OpenAI's handpicked Council of Advisors on well being and AI met with the company's representatives for an update about a controversial new feature called Adult Mode. Citing the need to treat adult users like adults, OpenAI chief executive Sam Altman had last year floated the idea of enabling erotic conversations in its ChatGPT chatbot and dropping its ban on such X rated content. The plan sparked vigorous debate internally over the potential risks. Council members with backgrounds in fields like psychology and cognitive neuroscience had also expressed strong reservations. Then OpenAI dropped a bombshell. Despite the concerns, it was forging ahead with its erotica plans when they assembled for the January meeting. Council members were unanimous and furious. They warned that AI powered erotica could foster unhealthy emotional dependence on ChatGPT for users and that minors could find ways to access sex chats, according to people familiar with the matter. The people said that one council member, citing cases where ChatGPT users have taken their own lives after developing intense bonds with the bot, claimed that OpenAI risked creating a, quote, sexy suicide coach the debate is the latest flashpoint in the continuing conversation about how to anticipate the potential positive and negative impacts of AI on the economy, society and individuals. In proposing to allow sexually explicit conversations with its popular chatbot, OpenAI exposed fractures over how to balance rapid user growth and digital freedom with safety and child protection, issues that many believe were belatedly confronted when social media made its debut a generation ago. Earlier this month, OpenAI announced it would delay the launch of Adult Mode, previously slated for the first quarter, saying it was prioritizing other products. The change was also due in part to internal concerns and technical challenges, the people said, but the company made clear it does plan to release it eventually. One issue the company is tackling its New Age prediction system aimed at keeping minors from having adult themed chats, was at one point misclassifying minors as adults about 12% of the time, people familiar with the matter said. That error rate could allow millions of the company's approximately 100 million under 18 users each week into erotic chats. The company has also wrestled with how to lift ChatGPT's restrictions on erotica while still blocking scenarios that the company wants to keep off limits, like those featuring non consensual behavior or child sexual abuse, the people added. When the adult mode launches, OpenAI plans to allow text conversations but restrict ChatGPT's ability to generate erotic images, voice or video. Even within those limits, OpenAI staffers have identified several risks, including the potential for compulsive use, emotional over reliance on the chatbot, a drive toward more extreme or taboo content, and crowding out offline social and romantic relationships, according to documents reviewed by the Wall Street Journal. End quote. Bad news for small teams. You're still a target for cybercriminals who know lean teams often lack the resources to prevent or respond to a breach. The good news is your team, regardless of size, can foil cybercrime with 1Password. They provide simple security to help small teams manage the number one risk that bad actors weak passwords take the first step to better security by securing your team's credentials. Find out more@1Password.com Ride so you can secure every login. That's 1Password.com Ride Cap Table Management. Who needs it? Well, you probably do, but that doesn't mean it should drain your time or derail your budget. Pulley knows there's a better way. That's why they help take the complexity and surprises out of equity management. Pulley's intuitive workflows, built in compliance tools and decision ready reporting are designed to work for you, not against you. Pulley helps you issue, track and manage equity, stay compliant with up to date 409 valuations, complete stock based compensation reporting and more. Learn more and get started at pulley.com brew that's pulley.com brew
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Experian well, is this bullish or bubblish? San Francisco's housing market is apparently seeing a big rebound, driven by the AI boom. Apartment list says rents in San Francisco rose 14% year on year in February, the fastest growth in the US Quoting the Journal At a Pacific Heights open house in January, a line of people made their way up the steps of a two bedroom one bath cooperative. There were 85 of them. Steps, not people. Eight flights, no elevator. The property received 14 offers and sold for over $1.62 million, more than $400,000 over the asking price. While much of the US housing market has been stuck in a rut, slowed by elevated mortgage rates and home prices near record highs, pockets of San Francisco are rebounding in a big way. The AI boom, a new mayor and other changes in municipal leadership have helped to bring the city back, reversing a years long slump that was compounded by the ripple effects of the pandemic, crime and persistent struggles with homelessness. Rents citywide were up 14% year over year in February, the fastest growth in the country, according to Apartment List. Mansions have been getting snapped up. An uptick in demand, coupled with the city's notorious lack of housing supply, means that few fierce bidding wars are breaking out again for single family homes and condominiums in desirable neighborhoods. Condo prices, which had been sluggish for years, grew 12% year over year as of February, ahead of the spring peak. According to the real estate brokerage Compass, the median sale price was $1.23 million. Single family home prices are up 23%, with the median price at $1.96 million. By comparison, year over year, median increases for existing home sales nationwide is just 0.33%, according to the National association of Realtors. Last month, 16 homes in San Francisco sold for $5 million or more, a 220% year over year bump, Compass reported. It's just skyrocketed, said Kelsey Carlson, 34 years old, an attorney who is expecting her first child in June and who has been house hunting with her husband since April. You're way more likely to get outbid by an all cash offer, they said. Carlson was outside a packed open house for a three bedroom, two bath condo on Buchanan street in Pacific Heights. The area, known for its breathtaking views and a mix of mansions, Victorians and pre war apartment buildings, has long been sought after. Carlson and her husband have been outbid on four properties so far, even a house in nearby Presidio Heights that needed hundreds of thousands of dollars of work. With AI, everyone's coming in with these huge salaries, she says. We just can't keep up the pace. The Buchanan street property closed less than two weeks later for $3.4 million, a full million over the listing price, according to Arianne Binnings with Christy Serrano. There were nine offers for them, all cash. The buyers accepted the third highest offer since it was a fast seven day close, Binning said. Inventory is especially scarce right now, as would be Sellers continue to hang on to their low rate mortgages. There were 35% fewer homes on the market during the first week of March compared with the same week last year, and 50% fewer compared with two years ago, according to Citi Real Estate, a local firm. Demand is up too, in recent months, creating the perfect conditions for a frenzy in certain neighborhoods. Many buyers have been up against tender offers and the anticipated IPOs of anthropic and others when things are likely to get even more competitive, according to David Cohen with Citi Real Estate. People are rushing in, says Cohen. You add increased demand because of all this AI money and the fear of competing against those AI buyers. End quote. Finally today, we've not heard from good old Horace Dedju in a while. Good to hear from him again, he says. As AI models commodify, Apple's plans to spend just $14 billion on 2026 capex, spending far below the combined $650 billion of the hyperscalers, which represents more than 90% of their cash flow, may end up being a genius move. The hyperscalers are now spending 94% of their operating cash flows on AI infrastructure. Amazon is projected to go negative free cash flow this year with as much as $28 billion in the red. Alphabet's free cash flow is expected to collapse 90%, from $73 billion to $8 billion. These companies used to be the greatest cash machines ever built. Now they're borrowing money to keep the data center lights on. The big five raised $121 billion in bonds in 2025 alone. Morgan Stanley projects $1.5 trillion in tech debt over the coming years. For the first time in history, hyperscalers hold more debt than cash. Perhaps this is why their PE ratios slumped from the mid-30s to the mid-20s. And what are they getting for that? $650 billion. AI services generate roughly $35 billion in total revenue, or 5% of what's being spent on their infrastructure. There are dreams of more, of course, but the business models of AI have yet to resonate, especially for consumers. Now here is where Apple's bet becomes genius. AI models are commoditizing faster than anyone predicted. Software and hardware both have tendencies to commodify. Protections exist, but they have to do with integration and distribution. Deepseek built a model for $6 million that matches systems costing 100 million. Open source models now power 80% of startups seeking VC funding. The moat these companies are spending hundreds of billions of dollars is evaporating. Apple understood this before anyone else. It didn't build its own AI model. It's licensed Google's Gemini for about a billion dollars a year. Why spend $100 billion building a factory when outsourcing costs costs a billion? And if a better model appears next year, Apple just switches vendors. But Apple is not sitting still. It just dropped the M5 chip. With a 16 core neural engine and neural accelerators built into every GPU core. It runs 70 billion parameter AI models locally. Eventually on your phone. The M5 delivers 4x the AI performance of the M4. And Apple doesn't need $200 billion in data centers because Apple turned 2 billion devices into the data center. Every iPhone, Mac, iPad gets distributed AI at scale no server farm can match. While its rivals burn cash, Apple is doing the opposite. $90.7 billion in stock buybacks. Last fiscal year, its competitors combined buybacks collapsed 74% from their peak. Apple didn't miss the AI revolution. It just bet that the winners won't be the ones who build the infrastructure. They'll be the ones who own the customer. And no one else on earth owns the best customers. End quote. All I can say is Max Dalman, if you know, you know. Talk to you tomorrow.