These two products dominate every non-technical industry. I think MSFT makes mediocre software. But as long as those two gravy trains exist, they'll never lose.
All Intel did was just report a new operating structure and re-allocate revenue and costs to that segment. So essentially expenses that went into manufacturing before are now just thrown under IFS. It's just a bunch of financial engineering.
it's all internal revenue. IFS is charging Intel Products for making chips. 2023 was a down year bc of weaker cloud & IT demand. Outside of NVDA, semiconductor companies had a poor 2023.
"Revenue was $18.9 billion down $8.6 billion from 2022. Internal revenue was $18.0 billion, down $9.1 billion driven by lower intersegment volume. External revenue was $953 million, up $479 million from 2022, driven by higher packaging revenue"
I doubt it will backfire on them at all. No one cares about who is spending money on Twitter. Moreover, Twitter is an irrelevant advertising platform and also an atrocious one as well (still lacks DR). Twitter's influence is exaggerated by media dependence and loquacious users.
Twitter has 360m MAUs, 225m DAUs globally. That's less than what Facebook does in Europe.
"By the numbers: Engagement metrics are down across the board.
App downloads fell roughly 38% globally between October 2022 and September 2023, according to Sensor Tower estimates. In the U.S., mobile app downloads fell 57% in the same time period. Data from Data.AI, another app tracking firm, shows similar trends.
Usage has also decreased, with monthly active Android users falling 14.8% globally and 17.8% with mobile users in the U.S. year-over-year for the month of September, per SimilarWeb.
Average time spent, daily per user, fell 2% year-over-year globally in the third quarter of 2023. Sessions dipped 4% in that same time period, per Sensor Tower.
User churn, or users who stop using the app, increased more than 30% year-over-year as of September 2023, per Sensor Tower.
Web traffic was down 7% globally and 11.6% in the U.S. for the first nine months of 2023 compared to the same period in 2022, per SimilarWeb."
Twitter has always been a power-user platform, but lacks mass appeal.
MAUs are down 15-20% YoY, gross churn is up 30%, but time spent is only down 2%.
Each time the Chinese market rallies, it's another opportunity to sell.
Investing in China was already a thorny issue, you cannot trust the government at all as a foreign investor and there's 0 transparency. Now, there's 0 growth as well.
The last part is the most important as it will cap any thought of entering China again. If the government stimulates the economy massively, investors will return for a short period.
Iirc, the NP structure was implemented to attract top AI talent from FAANG. Then they needed investors to fund the infrastructure and hence gave the employees shares or profit units (whatever the hell that is). The NP now shields MSFT from regulatory issues.
I do wonder how many of those employees would actually go to MSFT. It feels more like a gambit to get Altman back in since they were about to cash out with the tender offer.
Looking back, Altman's ace in hand was the tender offer from Thrive. Idk anyone at OpenAI, but all the early senior personnel backed him with vehemence. If the leaders hand't championed him strongly, I doubt you get 90% of the company to commit to leaving.
I'm sure some of those employees were easily going to make $10m+ in the sale. That's a pretty great motivation tool.
Overall, I do agree with you. The board could not justify their capricious decision making and refused to elaborate. They should've brought him back on Sunday instead of mucking around. OpenAI existing is a good thing.
Of course the options for Meta are limited on what they could do with that cash. M&A is a non-starter, and there isn't much more they could do in FB/IG/WA. Meta already does share buybacks as well. However, the opportunity cost, such as offer cloud services or SaaS products, is what they've lost. I'm sure investors hope they become more rational in their RL capital allocation and investors would certainly prefer more share buybacks instead.
Investing in RL is not a bad idea if it can drive significant top-line growth. However, unless RL turns into one of the best businesses on earth (like FoA), it will never delivered a positive ROI since its inception.
US debt is similar in that it's invested capital, but it does provide a positive contribution to GDP. If the US stops growing, our debt will become a massive issue.
>You literally cannot make good decisions when you have to base everything around what will make the most profit for the shareholders this quarter
Ironically, Google doesn't care about their shareholders and quarters like other tech companies. They don't provide a guidance, their earnings calls have little substance, and their disclosure is atrocious.
Reality Labs is going to burn at least $16 bn in '23 and '24. Meta can't really spend much more money on this business. I think investors will mandate clarity on how the spending is bucketed and see a mix shift to HW rather than Metaverse SW.
Financially, RL is the worst business on earth. No other business has lost this much money in such a short period of time.
Sure, some people do, but the majority of people are not looking to exercise while gaming. It's a niche use case. The Wii lost its novelty pretty quickly.
If you're gaming for 3-4 hours, watching a movie, or using the device for productivity you're going to be seated or standing still.
Also, Vision Pro can be a mobile device, albeit for <2 hrs. Imo, Gaming will not be the primary use case for these devices.
Although these devices will be compared to each other ceaselessly, I think they're targeting two distinct markets. Apple believes that Vision Pro is the future of personal computing. Meta keeps marketing the Quest as social-connected VR gaming device. The former market is far larger and anything that displaces the PC will be transcendental.
Although Meta will sell more units in the short-term due to Apple's pricing, I do think they will have a tough time catching Apple on the hardware. The eye-tracking, <12ms image processing and display, and the M2 are things that Meta is well behind on.
Zuck mentioned that activity and "doing things" are Meta advantages, but people don't want to exercise while gaming or consuming entertainment.
Every GW of Blackwell generates more revenue than the entire gaming business does in 1 year.