| | | | | | | Presented By Ericsson | | | | Axios Login | | By Scott Rosenberg · Jul 27, 2022 | | July's final days are packing in extra news under the wire before August kicks in, because under the laws of summer news, nothing is supposed to happen in August — except that law gets broken every year. Situational awareness: Spotify delivered a strong earnings report this morning and said it's seeing little sign of a recession. Today's newsletter is 1,218 words, a 4.5-minute read. | | | | | | 1 big thing: Chip funding bill staggers toward finish line |  | | | Illustration: Aïda Amer/Axios | | | | A Senate vote Tuesday teed up the latest version of Congress' effort to fund domestic chip manufacturing for final approval this morning and likely, though not certain, House passage by the weekend. Yes, but: Congress has been deadlocked on this issue for over a year now, and has only reached this point after intense lobbying and by prioritizing the chips bill over many other proposals — including virtually all of those that involve the tech world. The big picture: Time was, passing bills that spend money to support domestic manufacturing was an easy lift for Congress. Today, it requires a year of Herculean effort. - Meanwhile, a legion of other tech-related proposals and bills are essentially stuck on hold at a moment when Congress is about to go on recess. When lawmakers return, we'll be in the midterm election season — when Congress has rarely gotten much done, even before it was so bitterly divided.
Our thought bubble: At this rate, we can expect each two-year sitting of Congress to advance at most a single tech-related law. Choose wisely! Here's what's in the Senate version of the bill, per Axios' Margaret Harding McGill: - $52.7 billion for chip manufacturing, research and production, including $2 billion for legacy chip production — those essential to the auto industry and the military.
- a 25% tax credit for investments in semiconductor manufacturing, worth about $24 billion.
- $1.5 billion for the development of open-architecture, software-based wireless technologies, known as ORAN, that's meant to reduce reliance on foreign telecommunications equipment.
The bill also authorizes roughly $200 billion for scientific research, but doesn't actually appropriate the funds, so the spending will require further action from Congress. The authorizations include: - $81 billion for the National Science Foundation, to be used in part for a Directorate for Technology, Innovation and Partnerships meant to expand NSF to also fund applied research and commercialization efforts.
- The NSF authorization is also meant to help bolster the STEM workforce, including establishing an artificial intelligence scholarship-for-service program.
- Separately, the bill authorizes $50 billion for the Department of Energy's Office of Science.
What's next: Once the Senate passes the bill, it's over to the House, which is scheduled to leave for its August recess after Friday. |     | | | | | | 2. Google earnings defy worst fears of ad slump |  | | | Illustration: Lazaro Gamio/Axios | | | | As tech's earnings-palooza week kicks in, Google parent Alphabet on Tuesday reported numbers that narrowly missed Wall Street expectations but did not support the industry's fears of a blowout, Axios' Sara Fischer and Ashley Gold report. Meanwhile, Microsoft, too, missed the numbers analysts expected in earnings reported Tuesday. - But investors were cheered by the company's optimistic forecast of double-digit revenue growth over the next year.
The big picture: Industry watchers don't doubt that we're in the middle of a slowdown. But so far that's not turning into evidence for a rout or a major tech downturn. - Most in danger are smaller firms that overextended, startups that haven't husbanded their cash, and companies in sectors that appear to be in the process of cratering (see: crypto).
- On his earnings call, Microsoft CEO Satya Nadella suggested that hard times would only help his business, as cost-cutting companies squeeze down expenses by migrating to the cloud.
What's next: Meta/Facebook reports today after the market closes. | | | | | | | | 3. Instagram head defends TikTok-like features |  | | | A screencap of Instagram CEO Adam Mosseri's post addressing complaints that the social media platform is becoming more like TikTok. | | | | Instagram head Adam Mosseri responded to a slew of criticisms Tuesday from some of the app's top celebrity users, including Kim Kardashian, Kylie Jenner and Chrissy Teigen, over new designs that make the social media platform more video-focused, Sara Fischer reports. Why it matters: For many in Instagram's community, the pivot to video feels like an abandonment of the Meta-owned service's roots as an artistic photo-sharing app. Driving the news: The public backlash to Instagram's changes began Monday, when Kylie Jenner, the third-most-popular Instagram user globally, bashed the app in a re-shared Instagram Story for "trying to be like" TikTok. - "Make Instagram Instagram again," the post, which originated from another user, read. "i just want to see cute photos of my friends."
- "[W]e don't wanna make videos Adam lol," tweeted supermodel turned author Chrissy Teigen in reply to a video posted by Mosseri about changes on the platform.
In response to critics, Mosseri took to Instagram to record a video explaining why Instagram is experimenting with new approaches, and conceding that some may not be ready yet. - The overall shift to video is for real, Mosseri said, and it's "occurring in response to user behavior" — but "we're going to continue to support photos."
- A new "full-screen experience" for both photos and videos is a test, he said, but "it's not yet good and we're going to have to get it to a good place if we're going to ship it to the rest of the Instagram community."
- Users' feeds will show more recommended content from posters the user doesn't follow, he said, because "it's an effective and important way to help creators reach more people."
The big picture: TikTok's rise has challenged both Instagram and its sister app Facebook, and both are now remaking themselves in TikTok's image. | | | | | | | | A message from Ericsson | | Digital technology can cut global emissions by 15% | | |  | | | | Adding renewables isn't enough — companies must make operations more energy efficient to meet sustainability goals. Why now: Reaching a net-zero future requires rapid transformational changes that rely on technology, innovation and cross-industry collaboration. Learn how 5G can help. | | | | | | 4. Meta raises VR headset prices by $100 | | Meta announced Tuesday that it would raise the price of both models of its core virtual reality product, the Quest 2 headset, by $100 effective Aug. 1, Axios Gaming's Stephen Totilo reports. Why it matters: Tech hardware prices almost always go down over time, or customers get more for the same price. But Meta is betting it can raise prices even as it's trying to push the entire market toward its metaverse promised land. Details: The entry-level Quest 2 will go from $299 to $399; a model with more storage will increase from $399 to $499. - The company cited rising costs to "make and ship our products" and said the higher price was necessary to "continue to grow our investment in groundbreaking research and new product development" in VR.
The big picture: Meta announces quarterly earnings today, and the price change is arriving alongside reports of internal pressure from leadership for the company to produce results. - Three months ago, the company reported revenue of $28 billion for Q1 2022, $7 billion in net income.
- But its Reality Labs division, which includes its VR work, has lost billions each of the last three years.
Between the lines: Meta needs to speed adoption of VR technology if its full metaverse vision is to take hold, but hiking headset prices is likely to depress sales. - The company renamed itself Meta last year, and founder Mark Zuckerberg has regularly demoed company headsets, including an upcoming post-Quest model, to show how he expects people to interact with the more connected virtual landscape his company is creating.
- But adoption of VR headsets has been slow, and Meta has avoided saying how many it has sold.
| | | | | | | | 5. Take note | | On tap: ICYMI: - Shopify plans to lay off roughly 1000 workers, or 10% of its employees, as e-commerce growth slows. (The Wall Street Journal)
- Twitter set a Sept. 13 date for shareholders to vote on the company's acquisition by Elon Musk, who is also being sued by the firm to complete the deal. (CNBC)
| | | | | | | | 6. After you Login | | Apparently, an octopus' change in color can indicate that it is dreaming. | | | | | | | | A message from Ericsson | | How 5G accelerates climate action | | | | | | | | 5G's connectivity and reliability, along with the IoT ecosystems and massive data it supports, can enable sustainable use cases like: - Smarter electricity grids.
- Sustainable transport.
- Precision agriculture.
- Smart factories.
Discover how these use cases can help mitigate climate change. | | |  | | Are you a fan of this email format? It's called Smart Brevity®. Over 300 orgs use it — in a tool called Axios HQ — to drive productivity with clearer workplace communications. | | | | | | Axios thanks our partners for supporting our newsletters. If you're interested in advertising, learn more here.
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