Larry Ellison, Satya Nadella, and Trump, the power trio of tech deals, are getting the band together again
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This week: Larry, Satya, and Trump, the power trio of tech deals, are getting the band together again for a hot China gig
Once upon a time, August was the slow news month for tech. VCs and bankers went on holiday, tech moguls repaired to Sicily for Google's summer camp, and tech companies hunkered down as they readied September's big product launches.
Not so this year. A nonstop drumbeat of stunning news, involving the world's most powerful tech companies and spanning the business, political and cultural spheres, have left observers and insiders dazed. If Microsoft buying a viral video app to defuse national security concerns is confusing, wait until Larry Ellison jumps into the fray. And as you wrap your head around that (and get up to speed on the mysterious powers of CFIUS), Apple's App Store has been attacked by Fortnite. Oh, and did you hear Uber might call it quits in California?
It's a lot to take in. So here are some updates on a couple of the biggest, evolving stories:
- Epic Games is trying to blow up Apple's well-tended and heavily fortified walled garden, the App Store. The Fortnite maker quickly won the opening battle with a devious trap and sharp video barb.
But... Apple is already hitting back with its trademark ferocity. The history of tech companies that tried to take on Apple and regretted it is instructive — remember Adobe Flash?
Epic may be emboldened by the support it's received from other app-makers, like Spotify and Match. But this alliance of the aggrieved (even with Facebook showing support) remains well short of the critical mass necessary to force the hand of a company now worth $2 trillion. - Microsoft and Oracle are now both in talks with China's ByteDance about acquiring TikTok's US operations, much to President Trump's delight. The potential deal is setting off alarm bells in Silicon Valley because of the uncertainty it raises for VC investors and startups considering investing in China.
Does this cast of characters look familiar? Microsoft and Oracle were both involved in another controversial tech deal overseen by the US government during Trump's tenure: The Pentagon's $10 billion JEDI contract.
As a refresher: Amazon was the favorite to win the lucrative cloud deal, but Microsoft walked away with the prize. Amazon claimed in a lawsuit that Trump's animus towards Amazon founder Jeff Bezos led the Pentagon to improperly award the contract to Microsoft (a court ruling has halted the deal and sent it back to the Pentagon for review).
Some analysts believe Microsoft would never have had a credible shot at winning the contract if not for an assist by Oracle — a legal challenge that delayed the bidding process long enough for Microsoft to improve its offering (and for Oracle to strike a symbiotic cloud partnership with Microsoft that positions Oracle to get a piece of the JEDI action).
So, here we are again. Microsoft, Oracle, and Trump — a power trio band if ever there were one — are back together for a hot tech deal. I hear they're big in China.
Turnover alert:
Sound bite of the week:
"The US today is the fourth most popular country for the files app, which is interesting because we never designed it for the US."
— Josh Woodward, director of Google's Next Billion Users division, discussing Google Files, a file transfer and management app created for users in India with low-end smartphones.
Snapshot: An electric Bauhaus loft on wheels
If Tesla's video-game inspired Cybertruck is too avant-garde for you, check out the Canoo, an electric minivan that's more like a mobile living room than an automobile.
With configurable sofa-like seats for seven and 22 windows, the Canoo's style was inspired by the Bauhaus philosophy of minimalism and functionality that emerged in Germany's interwar years, according to the company's design chief. Even with its concrete (yes, you read that right) floor, the Canoo will apparently have a range of 250 miles when it's released in 2022.
The car will only be available through a monthly subscription, so you won't be able to own one. But thanks to Canoo's plans to go public through a $600 million SPAC merger, you'll soon be able to own stock in the company.
Recommended Readings:
The 18 leaders at Google Health shaping the tech giant's secretive healthcare business
Not necessarily in tech:
OK, that's all for this week. Thanks for reading, and if you like this newsletter, tell your friends and colleagues they can sign up here to receive it.
— Alexei