Social media lawsuits Meta and YouTube lost a lawsuit filed by someone who said that their products were designed to be 'addictive', that she used them a great deal as a child, and that this damaged her mental health. The damages are immaterial to the companies (single-digit millions), but the meaning, of course, is the precedent - hence claims that this is a 'big tobacco moment'. There are a few things to unpack here. Legally, this case bypassed the famous 'Section 230', which says companies aren't liable for third-party content on their platforms, by looking at product liability and hence the design of the product itself instead. But 'addiction' is being used here more as a metaphor than anything specific that a company could decide to do or not do - how do you not get sued, now? Are you sure? What's the test? Is it anything deeper than "trying to get people to use the product more"? Is Netflix's 'next episode' button OK? Swiping in Tinder? Again - are you sure? 'Tobacco' is a seductive metaphor, but there was one clear chemical involved, and clear statistical and biochemical evidence that tobacco killed people, and we do not have either here (much as people like to claim that "everyone knows!"). Hence, uncertainty. There will now be more legal process, that I can't comment on. But it strikes me that a better metaphor than tobacco might be app stores, another case where a group of people decided that their opinion of how a product should work was a moral and legal matter and then plunged into a decade of battles over court cases and legislation. Apple and Google largely won on app stores, but social media is wide open - Australia has tried banning 'social media' for children, but didn't initially include YouTube, a defendant here, and now only bans accounts for those under 16, not use, which points to how hard it is to go from slogans to policy. LINK OpenAI's refocus OpenAI's decision to narrow its focus continues: the 'adult' option for ChatGPT has apparently been put on hold, and the Sora social video network is being shut down. Sora got a lot of attention when it launched six months ago, but it never got past the basic challenge for every new social app - you have to do something cool and eye-catching to break out, but then you have to make that into more than a fad, and make it a habit that sticks once the novelty wears off. This is a graveyard (remember Clubhouse?), and Sora never got traction once we'd played with it for a few days. Also, all that video generation was massively expensive. Still, there's collateral damage in the $1bn deal with Disney, which is now cancelled. SORA, DISNEY, ADULT Some things grind on as usual, though - OpenAI just hired a 12-year veteran for Meta to run the ads team, and (earlier this month) asked the UK competition authority (the CMA) to include it on any search choice screens in Chrome and Android. LINK, CMA Cursor's Chinese models A year ago, Cursor was the red-hot AI coding style, but now it's been left behind by agentic approaches from Anthropic and OpenAI. This week, it released a big new model, and it quickly emerged that this was a version of the Chinese lab Moonshot's open-source model Kimi. Behind the big labs burning billions of dollars on each next frontier model, a lot of people are using open source and settle for a few steps behind the frontiers at much lower cost (even if out of necessity). Even so, it says something that even a company that raised a $2.3bn round in November is leaning on China. LINK Apple's AI reset Apple is getting close to relaunching its AI strategy, and after announcing a deal with Google to use its Gemini models, the leaks are accelerating. It seems that the Gemini contract is very broad, allowing Apple to do so-called 'distilling', in which it trains and improves its own models on Gemini, which is especially useful for making smaller models that can run on-device. Meanwhile, Bloomberg reports that Apple will open up the OS, or at least the Siri assistant, to all sorts of third-party assistants (which was always obvious in some form). There's a view going around now that Apple and Tim Cook are being geniuses in sitting out the AI capex surge, which doesn't make much sense to me. On one hand, AI is existential to those companies in ways that it is not to Apple: AI changes what Google is, so it has to spend whatever it takes, while a lot of the money is going on meeting demand for enterprise APIs, which Apple doesn't do. And on the other, Apple spent an entire hour at WWDC in 2024 laying out a comprehensive vision for how AI would transform its software and then failed to ship any of it - that was a screw-up, not a strategy. Apple has the best consumer hardware and its chips have by far the best performance per watt, and a lot of AI will run at the edge on premium high-margin Apple hardware - great. And Apple will be the enabler and integrator of other people's services, just as the App Store was. But it needs Siri 2.0, now two years late, to be great. And meanwhile… the 'Liquid Glass' redesign is an embarrassment, the iPad now has three (3) different windowing systems, none of them satisfactory, and the Apple Watch has 50 or so watch faces but only a handful of them support the once-per-second screen update that's been shipping since 2024. There is a lot of drift here. GEMINI, APPLE Manus gets in trouble Last year, Meta bought the agentic AI startup Manus for $2bn, and it's been busy deploying the tech in its ad business. But the company was founded in China in 2022 and had moved to Singapore in 2025, and now the Chinese government has raised several eyebrows and what might look like an artificial attempt to get around regulations on the sale of Chinese companies - there are already investigations, but now two of the co-founders (CEO and chief scientist) have been barred from leaving China. As ever - is China investable? LINK The week in AI Anthropic's fight with the Department of Defence is winding its way through the courts, with the first judge granting a stay. LINK The US Army is partnering with two PE firms, Carlisle and KKR, to build a pair of AI data centres at $2bn each. LINK, RELEASE Spotify is trying to get on top of spammers posting AI-generated near-clones of artists's work to collect the royalties. LINK Router security The FCC banned imports and use of all new home Wi-Fi routers that are made outside the USA without specific approval, on the ground that the Chinese government (or others) could compromise them and this is a national security risk. Obviously, all routers are made outside the USA. Really, this is about bringing the entire space under a regulatory umbrella - everyone will need to get the FCC to sign off on their products. LINK, ANALYSIS Alternative theory: this is just because Trump is upset at Reuters. LINK Apple ads in Maps Apple will start selling ads inside Apple Maps. There's a business case here and even a product use case, but it's characteristic that Apple launches this now as Google deploys Gemini directly inside Google Maps. (On the other hand, it's also characteristic that Google Maps is the most confusing app on my phone since I deleted YouTube. LINK Mr OnlyFans died Leonid Radvinsky died this week, aged 43. He picked up an obscure British website and turned it into a powerhouse platform where millions of people sell sexual content directly, taking a 20% cut. In the latest annual accounts, it had 377m users paying $7.2bn (gross), it paid $163m of corporation tax, and had a net profit of $520m. There are only 46 staff. Analysing our attitudes to this space is a career in itself, and you will probably already have an opinion, but I'll make two observations. First, this is an anomalous capital model for tech and startups, since most funds can't (or won't) buy or invest in a company in the space (often their LP terms won't let them), and on the other end exits are equally tough, both M&A and IPO, and so instead they tend to be run for cash, paying out all the value in dividends. Second, the openness of OnlyFans, filing accounts every year in the UK (as 'Fenix International') instead of trying to disappear offshore, and paying full UK corporation taxes, is very unusual. There are two or three big and very low-key companies that own most of the streaming sites and there's very little public information about them: 'Manwin' got bought by an entity with the glorious name 'Ethical Capital' and who is that? LINK, ACCOUNTS Other news Remember when Fortnite was a new kind of game that would have permanent platform power? These days it's only in the news as its quixotic crusade against app stores peters out in the courts, and this week it cut 20% of staff. LINK The new head of the UK's BBC is Matt Brittin, former manager of Google EMEA. LINK Drone trades Ukraine is doing deals in the Persian Gulf to trade its expertise and cheap, scalable drone-to-drone interceptors for the Gulf's stocks of Patriot SAMs that Ukraine can use to shoot down Russian missiles (and also presumably for cash). America has decided it doesn't want to be a reliable ally, and attacked Iran while forgetting that Iran has pioneered cheap drones at scale, so America's former allies will need to make their own deals. LINK | 
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