LT Weekly: Jun 27, 2025

In a paper this week called “The Illusion Of Thinking”, Apple researchers’ called into question the reasoning capabilities of the most powerful LLMs, essentially concluding that the AI industry is significantly overstating the ability of top AI models such as OpenAI’s o3, Anthropic’s Claude 3.7, and Google’s Gemini. “While these models demonstrate improved performance on reasoning benchmarks, their fundamental capabilities, scaling properties, and limitations remain insufficiently understood.” The paper is rather technical and for that those that want to delve in that level of details, see  Apple Researchers’ Report. But our quick takes are below.

-> With all this said, Apple has promised a suite of Apple Intelligence tools for its devices like the iPhone and MacBook in the fall of this year; Hopefully it will be ready for prime time!

-> Also, on this topic of Apple & AI, reports surfaced this week that Apple has had internal discussions about acquiring Perplexity but that these talks are at an early stage and Apple has apparently not yet approached Perplexity’s mgmt about a bid directly (link)

Apple’s Findings In Its New Paper – “The Illusion Of Thinking”

• Apple criticizes existing approaches to LLM benchmarking: “Existing evaluations predominantly focus on established mathematical and coding benchmarks, which, while valuable, often suffer from data contamination issues and do not allow for controlled experimental conditions across different settings and complexities”
  • “To understand the reasoning behavior of these models more rigorously, we need environments that enable controlled experimentation”
• Apple’s differing approach to benchmarking: They used “controllable puzzle environments” and the team estimated the AI models’ ability to ‘think’…they ‘probe[d] the reasoning mechanisms of frontier LRMs through the lens of problem complexity”
• Bottom line findings for standard large language models (LLMs) and frontier large reasoning models (LRMs): (all models had equivalent inference compute…)
  • Standard LLMs performed the best with simpler, low-compositional problems
  • LRMs performed better as problem complexity “moderately” increases
  • Both models collapsed when problems reached “high complexity with longer compositional depth”
    • “Particularly concerning is the counterintuitive reduction in reasoning effort as problems approach critical complexity, suggesting an inherent compute scaling limit in LRMs”
    • LRMs also didn’t perform better when given explicit algorithms to solve the problem

• Researchers pointed to “complexity-dependent patterns”:
  • For simpler problems: “Reasoning models often identify correct solutions early but inefficiently continue exploring incorrect alternatives – an ‘overthinking’ phenomenon”
  • For moderate complexity problems: “Correct solutions emerge only after extensive exploration of incorrect paths”
  • Beyond a certain complexity threshold: “Models completely fail to find correct solutions…this indicates LRMs possess limited self-correction capabilities that, while valuable, reveal fundamental inefficiencies and clear scaling limitations”

• The researchers challenge currently professed LRM capabilities:
  • “These insights challenge prevailing assumptions about LRM capabilities and suggest that current approaches may be encountering fundamental barriers to generalizable reasoning”
  • “While these LLMs demonstrate promising language understanding with strong compression capabilities, their intelligence and reasoning abilities remain a critical topic of scientific debate”

• BUT the researchers also acknowledge that their work has limitations as well
  • Their benchmarking approach represents “a narrow slice of reasoning tasks and may not capture the diversity of real-world or knowledge-intensive reasoning problems”
  • “Most of our experiments rely on black-box API access to the closed frontier LRMs, limiting our ability to analyze internal states or architectural components”
  • “The use of deterministic puzzle simulators assumes that reasoning can be perfectly validated step by step”
  • “In less structured domains, such precise validation may not be feasible, limiting the transferability of this analysis to other more generalizable reasoning”

Google had a busy week…which was headlined by rolling out a series of AI product launches & feature updates that underscore its commitment to the AI strategy outlined at Google I/O. Key announcements included the debut of Gemini CLI, a powerful open-source tool that brings natural language capabilities to developer terminals, and the full release of Gemma 3n, a lightweight multimodal model optimized for edge devices. Google also introduced new AI-driven monetization tools like Offerwall for publishers, launched Doppl, a virtual fashion try-on app, and enhanced YouTube search with AI-generated video summaries. These moves reflect Google’s push to integrate AI across its ecosystem. But Google wasn’t the only one with headline grabbing AI product updates… Meta announced that WhatsApp will soon offer AI-generated chat summaries for unread messages, starting in the U.S.

-> Alphabet shares rose +6.3% this week, but is down -6.4% YTD (lagging behind other Big Tech names like Amazon up +1.8% YTD, Microsoft up +17.7%, and Meta up +25.3%

Google Enhances Key Developer Products

• Google launched Gemini CLI this week, which is an open source tool that lets developers make natural language requests into terminals by connecting Gemini models to local codebases (link/link): It complements Google’s broader AI developer ecosystem, including Gemini Code Assistand Jules, its asynchronous AI assistant
  • This tool competes with –
    • OpenAI’s Codex CLI
    • Anthropic’s Claude Code
  • It will be mostly free (unlike competitors): Allows 60 model requests per minute & 1,000 per day, which is about double the avg usage during testing
    • There will be some paid Enterprise use cases
  • What can it do?
    • Explain complex code
    • Write new features
    • Debug
    • Run shell commands
    • Plus, it can also generate videos using Google’s Veo 3 model, create research reports with Deep Research agent, & access real-time data via Google Search

Source

• Google also fully released Gemma 3n this week (in a limited preview phase): It is a lightweight, open-weight multimodal AI model with the following features/capabilities (link/ link)
  • Efficient: Capable of running on devices w/ as little as 2GB of RAM, making it highly accessible for edge and mobile applications
  • Supports multimodal inputs: Text, image, audio, and video
    • But only outputs text right now: Future updates are expected to expand output capabilities
  • Supports 140 languages for text-based input: Enables multimodal understanding in 35 languages, enhancing global usability
  • Released w/ open weights: Allowing developers to download, inspect, fine-tune, & deploy the model freely
  • Platform availability: Hugging Face, Kaggle, & Google AI Edge Gallery
  • Performance: Reportedly outperforms several leading compact models in chat and general-purpose tasks, including –
    • Llama 4 Maverick 17B-128E
    • Phi-4
    • GPT-4.1-nano

Source: link

Google Brings More Monetization Tools To Content Owners

• Google is helping brands monetize content in new ways…it officially launched Offerwall which is a new monetization tool integrated into Google Ad Manager: Allows publishers to offer flexible, user-friendly ways for readers to access content—without relying solely on traditional ads or subscriptions (link/link/link)
  • Different ways that users can unlock content –
    • Micropayments (i.e., pay a small fee for 24-hour access)
    • Watching a short ad
    • Completing a survey
    • Signing up for a newsletter
    • Choosing topics of interest for ad personalization
  • Offerwall is powered by AI to optimize when and how it appears to users, but publishers can also set their own rules
  • Why is this important? As AI-generated search summaries (like Google’s AI Overviews) reduce traffic to publisher websites, Offerwall helps monetize the audience that does arrive, rather than relying on high traffic volume
  • Does it work? In a year-long beta w/ 1k+ publishers, Offerwall led to an avg +9% rev uplift, w/ some seeing up to +20% increases
  • It has global appeal: It is gaining traction especially in emerging markets like India, LATAM, and MENA, where mobile-first behavior and local payment systems make it more viable

• Google launched its new AI-powered fashion app called Doppl which allows users to visualize how different outfits might look on themselves using a digital avatar (link): It builds on Google Shopping’s recently launched capabilities that allow you to try on clothes virtually; This is how Doppl works…
  • You upload a full-body photo of yourself
  • You can then use photos or screenshots of outfits – whether from a store, a friend, or social media
  • Doppl generates a virtual image or video of you wearing the outfit, helping you see how it might look in real life
  • You can save, browse, and share your virtual try-ons

• Google’s YouTube also this week launched a new AI-powered search results carousel for Premium users in the US, similar to Google’s AI Overviews (link/ link):
  • When it appears: For searches related to shopping, places, or things to do in a specific location
  • What it shows: A carousel of video clips with AI-generated headlines and summaries, offering quick insights without needing to watch full videos
  • How it works: The carousel appears at the top of search results and lets users swipe through AI-curated video highlights; Tapping a clip plays it or opens the full video from where the preview left off
    • This feature aims to make content discovery faster and more intuitive, though some creators worry it might reduce direct engagement w/ their videos

-> Google wasn’t the only one with AI product/feature updates this week…Meta also annc’d that AI-powered chat summaries for un-read messages are coming to WhatsApp; It’s rolling out in the US and only supports English at the moment but the Co plans to expand to more languages and regions later this year; Meta stressed that neither it nor WhatsApp can access a person’s messages or the summaries (link)

We have been of the view that shoppable TV is poised to gain momentum in the media industry, so it was interesting to see Disney join the parade this week, introducing two new ad formats for streaming TV… “Shop the Stream,” which lets viewers scan a QR code to buy products inspired by what they’re watching (first up: Calia by Dick’s on Project Runway), and “Virtual Concession Stand,” a snack-delivery tie-in with Gopuff across ESPN, Hulu, and Disney+. This follows moves by players like Amazon Prime and NBCU (among others), who have already launched initiatives in this area.

Bottom line, we expect to see video streaming platforms increasingly integrate real-time shopping features directly into video content, allowing viewers to purchase items they see on screen – like clothing, gadgets, or home décor – without leaving the stream, or their couch! This also will enable content creators and media companies to unlock new monetization avenues beyond traditional ads and subscriptions.

See more details below. (link / link / link / link / link / link)

Disney just intro’d 2 new commerce-enabled ad formats for its streaming services

• Shop the Stream: A 2nd-screen digital storefront powered by Shopsense AI, accessible via QR code from a streaming ad -> Shopsense AI previously enabled shoppable experiences for Paramount, TelevisaUnivision, and Tastemade
  • Functionality: Lets viewers shop curated items (i.e., fashion, products) inspired by the content they’re watching across Disney platforms (series, movies, sports, etc,)
  • First Partner: Calia by Dick’s Sporting Goods, featured in an upcoming episode of Project Runway

• Virtual Concession Stand: A snack delivery ad experience powered by Gopuff
  • Functionality: Ads for CPG brands appear on ESPN, Hulu, and Disney+, linking to a concession site via QR code for on-demand delivery
  • Data Integration: Uses Disney’s clean room tech to match viewer data with Gopuff consumers, targeting “snack-minded shoppers”

Other Shoppable TV Efforts

• Amazon: Offers “Shop the Show” via Prime Video and its shopping app and in April 2025 expanded that to 1,300+ titles

• Tubi: In March 2025, launched shoppable digital storefronts inspired by its Super Bowl LIX red carpet event, allowing viewers to purchase themed items via shop.tubi.tv

• LG Electronics: Unveiled at CES a “click-to-search” feature for the Co’s new webOS smart TVs which enables viewers to select items on-screen & purchase them using LG’s integrated webOS Pay

• Paramount: Made the 2024 MTV VMAs shoppable, following a successful pilot during the CMAs

• NBCUniversal: Launched “Virtual Concessions” on Peacock during the Paris 2024 Olympics (summer 2024), integrating snack delivery into the programming experience; Expanded this initiative in November due to its success

• TelevisaUnivision: Annc’d in April 2024 that it will make on-screen content shoppable across TelevisaUnivision’s linear and streaming platforms, debuting w/ curated collections during the Latin American Music Awards

• Roku & Shopify: Partnered in mid-2023 to enable merchants to sell products directly on TV screens; Roku is actively encouraging Shopify vendors to leverage its platform for targeted, shoppable TV ads & launched an advertiser portal to run these campaigns

Supportive Stats…(link/link/link)

• Russell Research cited by Amazon Prime
  • 94% of adults have browsed, shopped, or made a purchase inspired by something they watched on TV
  • 89% of viewers who are inspired to shop begin their search the same day – often immediately after watching
  • 81% of target adults have made a purchase inspired by what they watched; Clothing is the most common category
  • 76% agree they’d be more likely to purchase if it were easier to find products featured on TV or in movies
• E-Marketer (Jan 2025)
  • 63% of US consumers discover new brands or products from TV, and 39% searched online to consider buying something that they saw on TV
  • 54% of consumers said they are at least somewhat likely to shop in a digital marketplace with items featured on a TV show
  • eMarketer forecasts ~80mn US shoppable media buyers in the US in 2025, +4% y/y and expected 109mn shoppable media buyers by 2027
• LG Ad Solutions’ CTV report (April 2025)
  • 95% of CTV viewers multitask while watching TV – with more than a 25% saying they always multi-task while watching TV, up 8% y/y AND as they multi-task, 44% said they’re shopping online

Two new reports out this week highlight how broadband usage is steadily rising, and what network providers will need to keep up. Zayo’s latest report points to growing demand for both long-haul (across cities or states) and metro (within a city) fiber, with AI, digital tools, and cloud adoption driving much of the increase. The report estimates the US will need 120mn long-haul fiber miles and 70mn metro fiber miles by 2030 to stay ahead of capacity needs. OpenVault’s Broadband Insights adds to the picture, showing that data usage is not only rebounding, but picking up speed. Q1 2025 saw the strongest y/y usage growth for Q1 since 2022. Upstream traffic in particular, driven by video calls, cloud backups, and IoT, grew at an even faster pace, jumped 17%+ y/y.

That context helps frame some of the updates out of the connectivity space this week, which were fast and furious. T-Mobile shared launch dates for its satellite-powered service with Starlink, which is designed to expand coverage to remote areas where traditional cell towers don’t reach. Comcast is rolling out faster mobile data plans (QCI 8) to most Xfinity Mobile customers at no extra cost, aiming to boost performance in busy areas and match offerings from competitors like Charter, as well as the Big 3 telcos. And Verizon introduced new AI-powered customer service tools, including 24/7 live chat and an upgraded app experience, all part of a broader push to make support more helpful and efficient.

On the home broadband side, Comcast introduced simplified, all-in internet plans with unlimited data, while DirecTV is testing a satellite-free streaming-only model in select markets. And in traditional Pay-TV, Disney and Charter expanded their distribution agreement to bring Hulu to Spectrum TV customers, while DirecTV and Paramount struck a deal to add key broadcast and entertainment networks to DirecTV’s newly launched Genre Packs.

All in all, the connectivity sector was a key focus this week and there was a lot to unpack…see below.

Some Key Insights On The Future Of Broadband Usage From “The Zayo Bandwidth Report: Key Trends Driving the Bandwidth Boom” (link/link)

• More fiber capacity will be needed…the Co expects that 120mn long-haul fiber miles & 70mn metro fiber miles will be needed to meet capacity projections by 2030
  • W/o this addtl infrastructure, a bandwidth shortage is imminent

• Bandwidth’s growth rate is “astronomical”
  • B/w 2023-2024 –
    • Metro dark fiber purchasing incr’d +268%
    • Long-haul dark fiber purchasing incr’d +53%
  • Over the next 5 yrs –
    • Metro fiber demand & long-haul fiber demand are expected to continue to grow by an avg of ~20% & ~35%, respectively

• The shift to higher-capacity bandwidth is accelerating
  • In 2024, 400G wavelengths accounted for the largest total terabits (Tb) purchased, outpacing 10G and 100G solutions

Source

• Broadband customers are purchasing more wavelength capacity at once
  • In 2024, over twice as many customers purchased 1 Tb+ of wavelength capacity compared to 2020, with repeat buyers leading the charge

• Big buyers are getting bigger and consuming the lion’s share of high-capacity infrastructure
  • Between 2020-2024, hyperscalers and carriers made 91.2% of all metro dark fiber purchases and 66.8% of all wavelength deals exceeding 1TB of capacity

• AI and digital transformation are pushing bandwidth needs to record levels
  • Hyperscalers, software, and tech Cos are driving the surge in large-scale wavelength and fiber purchases, fueled by new AI use cases and the race to gain a competitive edge

• That said, while AI will be the primary driver of bandwidth demand, quantum computing will begin to emerge as a new bandwidth consumer

• Vertical mkts are also seeing record bandwidth demand growth
  • The software and technology industry saw a +450% increase in wavelength capacity purchased due to demand for more bandwidth to handle growing data demands, power cloud services, and ensure seamless performance
  • The manufacturing sector saw a +364% growth in wavelength capacity purchased as a result of digital acceleration and rapid reindustrialization across North America
  • Data centers sector saw a +326% increase
  • Public sector saw a +261% increase

• Incr’d access to remote areas are also causing addtl demand
  • Partnerships between major network providers and satellite companies are helping eliminate dead zones and improve emergency communication, but they also increase bandwidth demand

OpenVault Provides Updates On Q1 Consumption In Its Quarterly “Broadband Insights” Report (link)

• The monthly average data consumed by subscribers in Q1 was up +9.5% y/y, the highest y/y growth for Q1 since 2022
  • After growing by nearly 50% during the pandemic year of 2020, the rate of growth for avg daily consumption declined steadily in the ensuing years
  • Q1 2025 was notable in that avg total usage not only rebounded but also accelerated

Source

• Upstream consumption growth rates have outpaced downstream for several consecutive qtr as video calls, cloud backups, IoT uplinks, etc. are becoming more significant in the subscriber mix
  • Q1:25 saw the highest upstream data growth rate for Q1 since 2021, up +17.6% y/y from 40.4 GB in Q1 2024 to 47.5 GB
  • Although downstream usage growth rebounded from three years of declining growth rates, the increase was more modest vs the upstream, up +8.9% y/y to 616.2 GB

Source

Telcos Expand Coverage, Speed, & Service With New Product Upgrades

• T-Mobile annc’d launch dates for commercial satellite & data svs (link/link)
  • July 23, 2025 – commercial launch of messaging svs
    • Launch of T-Satellite, the Co’s satellite-to-cell svs, for SMS texting, MMS, picture messaging, and short audio clips on Android (support audio clips on iOS will follow at a later, unspecified date)
    • Will be the initial phase of the commercial rollout, enabling basic communication outside traditional cell coverage.
  • October 1, 2025 – launch of data svs
    • Will expand the service to include mobile data, enabling app usage and internet access over the satellite network
    • Users will be able to run supported apps (i.e, WhatsApp, X, AccuWeather, etc.) in mobile dead zones vs just sending/receiving messages
  • Will be available to both T-Mobile and non-T-Mobile customers
    • Will be included in T-Mobile’s new “Experience Beyond” plan, or offered for $10/month to non-T-Mobile customers, including those on AT&T and Verizon
  • Will automatically connect to most smartphones made in the last four years, with no special equipment or setup required
  • The svs is powered by over 657 Starlink satellites, and aims to eliminate mobile dead zones across 500k+ sq miles in the US
    • These areas are unreachable by cell towers operated by T-Mobile, Verizon, or AT&T
  • 1.8mn+ people have already signed up since the beta launched in late 2024, including thousands of AT&T and Verizon customers
    • Users have sent more 1mn+ messages from areas unreachable by any terrestrial provider, the operator said, such as national parks, oil fields, and remote areas of the country.
    • Up until now, users of the beta version of T-Satellite have had access to it for free, but billing will start to kick in for many with the commercial launch

• Xfinity Mobile is getting a network performance upgrade (link/link/link)
  • Xfinity Mobile, Comcast Business Mobile, and NOW Mobile customers are being moved to premium data plans that use Quality of Service Class Identifier (QCI) 8: The change is expected to give those users better performance when using the cellular network
    • What is QCI 8? A network traffic mgmt system that delivers faster speeds and lower latency, especially in congested areas (i.e. stadiums or concerts), improving performance for streaming, gaming, and app usage
  • Aligns Comcast’s offering with that of Charter’s Spectrum, which has supported QCI 8 since 2018
  • Previously only available on select plans, QCI 8 is now being rolled out broadly at no addtl cost, enabled by Comcast’s agreement with Verizon (its MVNO partner)
    • Users will receive the upgrade automatically via a device restart or airplane mode toggle
    • Comcast and Charter are reportedly paying a premium to Verizon for prioritized access: The new premium plan is focused on a higher end of the mkt that has largely been the domain of AT&T, T-Mobile, and Verizon

• Verizon launches AI-powered customer svs features (link)
  • First carrier to offer a dedicated Customer Champion for complex issues, who stays with the case until full resolution and provides updates via the My Verizon app, text, or callback
    • “The goal: customers only need to call once, and we take it from there”
    • Leverages Google Cloud AI, including Google’s Gemini models
  • First to expand customer support call hours with live agents and introduce new 24/7 live chat support, catering to diverse customer schedules and preferences
  • New My Verizon app now includes a “cutting-edge” AI-powered Verizon Assistant and Savings Boost
    • The new, personalized experience provides greater transparency and control, giving consumers the ability to easily become a customer, manage upgrades, add new lines, ask billing questions, take advantage of savings and more

Comcast Xfinity Introduced Simplified, Unlimited, All-In Internet Plan

• Comcast’s Xfinity now includes unlimited data in all internet plans along with “all-in” pricing (link/link/link)
  • Introduced four streamlined tiers, all of which include…:
    • Unlimited data (a major shift from its prior 1.2TB data cap policy, which previously triggered overage charges of up to $100/mo unless subscribers paid for a separate unlimited add-on)
    • 300 Mbps, 500 Mbps, 1 Gbps, and 2 Gbps speed options
  • …along with three pricing options, designed to cater to different customer preferences
    • Lower monthly rate with a 1-yr price guarantee
    • Slightly higher monthly rate with a 5-yr price lock
    • A flexible Everyday Price with no long-term commitment or price guarantee
  • Each plan includes an Xfinity WiFi Gateway and a free line of Xfinity Mobile w/ unlimited svs for 1 year
  • Current Xfinity subscribers can stay on their legacy plans unless they opt into one of the new tiered options

Source

DirecTV Edges Away From Dish 

• DirecTV will no longer offer satellite subscriptions for new customers in some markets (link /link)
  • Under a trial run, DirecTV is currently experimenting in certain locations with only allowing new subscribers to sign on to its streaming svs
    • According to DirecTV, “In select markets this limited-time trial will increase awareness and adoption of our satellite-free streaming service, which has quickly become the preferred solution for new consumer customers”
  • DirecTV did not share how many or which markets are a part of the trial run

Pay-TV Strikes New Distribution Deals This Week

• Disney and Charter signed an expanded distribution agreement that adds Hulu and restores some cable networks to Spectrum (link/link)
  • Brings Hulu (With Ads) to all Spectrum TV Select customers at no additional cost
    • Adds to existing complimentary access to ad-supported Disney+ and ESPN’s soon-to-launch streaming svs, anticipated by the fall of 2025
    • TV Select customers will now have access to “a premium entertainment experience” with a retail streaming value of $100+/mo, per Charter
  • Also marks the return of eight Disney-owned linear networks to Spectrum’s channel lineup: Disney Jr, Disney XD, Freeform, FXX, FXM, Nat Geo Wild, Nat Geo Mundo and BabyTV.
  • Financial terms of the agreement were not disclosed

• DirecTV & Paramount reach agreement to include “popular broadcast, entertainment, news and sports networks” in DirecTV’s Genre Packs (link/link/link)
  • Paramount channels, including CBS, MTV, Comedy Central, BET, and Nickelodeon, will begin rolling out in DirecTV’s Genre Packs starting immediately across the MySports, MyNews, MyEntertainment, and MiEspañol offerings, in addition to the new MyKids pack (just launched – link)
  • Fills in a key blank space in MySports, which launched earlier this year without CBS Sports and other Paramount networks: Now includes 15 CBS owned and operated local stations as well as CBS Sports Network. Those new offerings join ESPN, ESPN2, ACC Network, FS1, Golf Channel, SEC Network, TBS, TNT, truTV, and USA Network

The pressure on Big Tech continued to simmer as this week the UK’s Competition and Markets Authority (CMA) said that it is looking to give Google “strategic market status” under new rules designed to tackle its dominant hold on online search. The CMA’s proposal includes measures to boost competition and transparency, like giving users more options for search providers, making sure publishers have fair control over their content (especially with AI features) and improving data portability. While the CMA isn’t accusing Google of anti-competitive behavior, the plan lays out some big changes that have the potential to reshape how UK consumers and businesses use Google’s search services. See below for the details. (link/link/link)

• The UK’s Competition & Markets Authority (CMA) said it is consulting on a proposal to give Google “strategic market status”
  • A designation under new competition rules for tech firms that hold entrenched power in a certain market
• CMA is not accusing Google of anti-competitive behavior, but said its investigation suggests there are opportunities to make the search market more open and competitive
• The CMA laid out a roadmap of measures for Google if its strategic market status designation is successful, including –
  • Choice screens to help people easily select and switch between search svs
  • Fair & non-discriminatory search rankings
  • Control over how publishers’ content is used (including for AI-generated responses)
  • Portability of consumer search data to support product innovation

• Some businesses warned of unintended consequences, citing examples from the EU
  • EasyJet said EU search reforms diverted traffic to online travel agents that misrepresented its services
  • UK Hospitality (a trade association) cautioned against overly prescriptive rules that could disrupt digital visibility for sectors like travel and restaurants

• AI-specific implications for news content is also in focus –
  • The News Media Association said these measures could bring long-needed transparency to how publishers’ content is used in AI tools like Google’s AI Overviews
  • News orgs like the BBC have raised concerns about their content being used in AI tools without consent, which is a key issue the CMA aims to address through proposed controls over how publisher content appears in search and AI Overviews

• Google responds…the outcome of such changes “could have significant implications for businesses and consumers” in the UK
  • “The CMA has today reiterated that ‘strategic market status’ does not imply that anti-competitive behavior has taken place — yet this announcement presents clear challenges to critical areas of our business in the UK”
  • “We’re concerned that the scope of the CMA’s considerations remains broad and unfocused, with a range of interventions being considered before any evidence has been provided”

• A final decision will be made by October following a public consultation
  • Google plans to “continue working constructively with the CMA” to avoid such measures from being imposed

Just when you think that Amazon is maxed out on their ability to get products to more people faster…they take that to another level!  Disclosed on its last earning call, the Co was offering same-day delivery in more than 100 metro areas across the US, and the Co had not seen diminishing returns from improving the speed of delivery as customers, more than not, buy more when faster delivery is available. In 2024, 300mn+ items were available with same-day or next-day delivery for Prime members in the US and the Co delivered 9bn+ units the same or next day globally. The Co expanded the number of same-day delivery sites by 60%+ last year. (link)

Fast forward to this week, Amazon annc’d that 4k+ smaller US communities will also gain access to same and next day delivery by the end of 2025. The Co further indicated that thus far in 2025, it has seen a +30% y/y increase in items delivered within a day. With this initiative, the Co is especially focused on enabling fast delivery for everyday essentials – which are made up of things that people go to their local grocery or drug store for, potentially adding some incremental pressure there.

While all these new communities might not be up and running with this speedy delivery in time for Amazon’s upcoming Prime Day, which is scheduled for July 8-11 (and will be the longest Prime Day event ever!), they should, at least in part, be enabled by the important holiday selling season.

How are they doing this? The lower cost to serve, AI driven enhancements, and their regionalization strategy (bringing inventory closer to the customer) are all contributing.

And if more people buy more products because of the fast shipping, it is a win-win.

More details are below. (link)

• Amazon’s annc’d expansion: Over 4k smaller U.S. communities will gain access to same-day & next-day delivery by the end of 2025
  • The Co has realized a 30% y/y increase in items delivered within a day so far in 2025
• Investment: Amazon is investing over $4bn to triple the size of its delivery network by 2026
• Amazon is prioritizing Same-Day Delivery for everyday essentials, including –
  • Groceries
  • Household goods
  • Paper towels, diapers, pet food, and more

-> In Q1 2025, this category grew 2x as fast as all others in the US; Over 90% of the top 50 repurchased items in rural Same-Day areas are everyday essentials

• Amazon is introducing three AI-driven advancements to enhance delivery –
  • Improved delivery location accuracy
  • Smarter product demand prediction
  • Intelligent robotics for faster fulfillment

• Infrastructure
  • Hybrid rural hubs store inventory locally for faster delivery
  • Will have 170+ jobs per new facility
  • Amazon uses advanced algorithms to stock items based on local preferences

Source

Layoffs in the tech & media ecosystem surfaced this week as Cos recalibrate in response to shifting market dynamics and evolving strategic priorities. Bumble is cutting a massive 30% of its workforce for the 2nd time in two years, though at the same time, raised its Q2 guidance, which investors cheered. Microsoft is preparing yet another wave of cuts, this time at Xbox, adding to thousands of job reductions that have already taken place throughout the year. Google and Disney are both paring back headcount in select areas while continuing to hire elsewhere, as Google is shifting smart TV resources to markets like India as it pivots toward YouTube, while Disney is reallocating within product & tech to focus on higher-priority initiatives. BET is also trimming staff as part of Paramount’s broader 3.5% workforce reduction. See details below.

• Bumble annc’d a 30% cut in workforce as it raises its quarterly outlook (link)
  • Will eliminate ~240 roles globally as the Co “realigns its operating structure to optimize execution on its strategic priorities”
    • As a result, the Co expects to incur ~$13-18mn of non-recurring charges, consisting primarily of employee severance, benefits, and related charges, for impacted employees
    • Expects that the charges will be incurred primarily in Q3 & Q4
    • Expects to achieve up to $40mn of annual cost savings in connection with the global workforce reduction; The Co will reinvest “the substantial majority” of these savings in strategic initiatives including product and technology development
    • As a reminder – last year in February, Bumbled laid off ~350 employees which was also about ~30% of its workforce at the time (link)
    • Competitors are also cutting employees: Match, which owns rival apps like Tinder and Hinge, annc’d in May that it was laying off 13% of its staff, or ~325 employees, to reduce costs and streamline its organizational structure (link)
  • Raised its Q2 revenue & adj. EBITDA outlook by +3.1% and +11.0%, at the mid-pt: To rev of between $244-$249mn & adj EBITDA between $88-$93mn
    • Up from prior outlook of rev between $235-$243mn & adj EBITDA between $79-$84mn

-> Bumble surged +25% on the day of the announcement and ended the week up +24%

• Microsoft continues to make employee cuts…its reportedly planning layoffs at Xbox Gaming Division (link/link)
  • This will be the fourth round of layoffs at Xbox in the past 18 months, following three major cuts last year and the closure of several subsidiaries
    • Will be part of a Co-wide reorg in Microsoft’s Xbox division
  • Latest signal in the ongoing chatter around broader cuts at Microsoft: As of a report last week, Microsoft is planning to cut thousands of jobs, particularly in sales; The cuts are expected to be annc’d early next month, following the end of the Co’s fiscal yr (link)
    • This all comes after the Co laid off 3% of employees in May across all levels, teams and geographies, affecting ~6,000 people, likely its largest round of layoffs since cutting ~10,000 roles in 2023 (link)
    • It also cut another 305 employees earlier this month in its Redmond office (link)

• There were also some reductions across media …
  • Google cut roles on its Google TV & Android TV team after a 10% budget reduction (link): The layoffs affected up to 25% of the ~300-person team, particularly in the US, as Google scales back its ambitions to compete in the smart TV OS space; The Co is instead shifting resources to intl growth, with plans to backfill headcount through hiring in markets like India; The move reflects a broader strategic pivot toward YouTube, now central to Google’s connected TV business
  • Disney initiated another round of layoffs (link/link): The Co conducted its 2nd round of layoffs this month, cutting under 2% of staff in product & technology; Despite the cuts, Disney continues to hire in the group, reallocating resources to higher-priority areas
  • BET laid off staff amid Paramount’s broader 3.5% workforce reduction (link): # of layoffs and financial impact were not disclosed, but BET Media Group president and CEO Scott Mills said that “BET is not immune to the conditions necessitating these actions, so we too must reduce staff within our organization”

A robotaxi ride in Atlanta now covers more ground than the entire island of Manhattan, and it’s fully autonomous. This week, Waymo and Uber made a splash by officially launching their driverless ride-hailing service across 65 sq miles of Atlanta, deepening their partnership in a 2nd market following Austin. Atlanta is quickly emerging as a hub for AV activity, as Amazon’s Zoox has been testing its tech downtown, while Lyft is expected to roll out its own AV service with May Mobility as soon as this summer. Meanwhile back to Austin, Tesla has begun early testing of its robotaxi program with invite-only riders, though reactions have been mixed.

More on all the above is below.

• Waymo and Uber begin robotaxi svs in Atlanta (link/link)
  • The Waymo robotaxis’ availability through the Uber app will cover ~65 sq miles around Atlanta, but will not yet travel on highways or to the airport
  • Marks the 2nd mkt that Uber and Waymo are partnering in, with the first being Austin
    • Per Uber, customers in Austin have been happy with the autonomous experience so far, w/ riders rating their Waymo trips 4.9 out of five stars on avg
  • Atlanta is poised to become a competitive mkt in the AV space –
    • Lyft is expected to launch an autonomous ride-hailing svs, with safety operators onboard, in partnership with May Mobility “as soon as this summer”
    • Amazon’s Zoox has also been testing its driverless tech in the city’s downtown area

-> Uber ended the day of the launch up +7.5% and ended the week up +9.3%

• Over in Austin…Tesla finally rolled out its first batch of robotaxi testing (link/link/link)
  • Availability: Operates for invite-only riders (no kids allowed), in “limited areas of Austin,” with a safety monitor, between the hours of 6am and 12am, and reportedly not at all in the event of “inclement weather”
  • Tesla Model Ys were spotted early Sunday (June 22^nd) in the South Congress neighborhood w/ no one in the driver’s seat but one person in the passenger seat
    • Front-seat riders act as “safety monitors,” though it remained unclear how much control they had over the vehicles
  • The rides were made available to a select group of Tesla fans: Tesla had sent invites to a select group of influencers; All the rides on Sunday cost $4.30, regardless of distance
    • While some were all praises…: According to one rider, “we took a route through a park with dirt roads and traffic cones, yet the car was able to navigate perfectly and picked us up right at our exact location”
    • …other noted some concerns: In one YouTube video, the robotaxi drove on the wrong side of the road, while a separate YouTuber posted a video in which the robotaxi kept driving past its destination for several minutes
  • The svs also had its first reported “safety concern” (link): According to Austin’s AV incident dashboard, a Tesla robotaxi allegedly braked hard twice for stationary police vehicles that were outside its driving path; The safety concern was reported to have occurred on the launch day, June 22

• Nike says its toughest qtr is in the rearview and sets sights on stabilization (link/link)
  • FQ4 earnings came in in-line/better than expected
    • Rev of $11.1bn beat cons $10.73bn (down -11% y/y)
    • EPS of $0.14 beat vs cons $0.13
    • Gross margin of 40.3% was in-line
  • Though FQ4 profits did fall -86% y/y as it worked to clear out stale inventory, bring back wholesale partners and reset its digital business
    • The largest hit to margins came from Nike’s use of discounts & clearance channels to offload inventory, along with its shift back to wholesale
    • The Co has warned the strategy would lead to lower near-term profits, but would leave the business in a healthier position in the long term
  • Looking ahead – the Co expects sales & profit declines to moderate (and was better than consensus)
    • FQ4 saw the “largest financial impact” from its turnaround and headwinds are expected to moderate moving forward
    • FQ1 rev are expected to be down MSD% y/y which is better than cons -6.9% and gross margin is expected to be down 350-425bps y/y
  • Expects current tariff rates to pose a gross incremental cost increase of ~$1bn, but intend to “fully mitigate” that cost over time as it makes changes to its supply chain, works with its factory and retail partners and implements price increases
    • Currently, ~16% of its supply chain is in China and it expects to reduce that to the HSD % range by the end of its current fiscal year, which ends next summer
  • Will consider cost cuts, but its highest priority remains stabilizing its biz, which requires investment
  • “The results we’re reporting today in Q4 and in FY2025 are not up to the NIKE standard. But as we said 90 days ago, the work we’re doing to reposition the business through our Win Now actions is having an impact. From here, we expect our business results to improve. It’s time to turn the page,” said CEO Elliott Hill
    • ‘Win Now’ is the brand rehabilitation strategy Hill put in place that recenters Nike’s focus on sports and athletes

• Roblox is pushing hard for creators…it intro’d 2 new initiatives under its Creator Rewards system (link/link)
  • Daily Engagement Reward: Creators earn 5 Robux for each “active spender” who –
    • Spends at least 10min in their experience in a day
    • Has spent $9.99 or more on Roblox in the past 60 days
    • Launches the experience as one of their 1st three of the day
    • Roblox may adjust the 5 Robux payout in the future
    • Additional Monetization Options: In-experience transactions (the primary rev source), ads, subscriptions, and physical goods sales
    • Replaces: Current engagement-based payout system, which was limited to Premium subscribers and lacked transparency or incentives for user acquisition/reactivation
  • Audience Expansion Reward: A rev-sharing model for creators who bring new or returning users to Roblox
    • Users must either – 1) join via a creator’s link or 2) Search for and play the creator’s experience by name for at least 10 minutes
    • Creators receive 35% revenue share up to the first $100 spent by those users w/in their first 2 months
    • Replaces: Existing Creator Affiliate program
  • The Co is “on track” to pay creators $1bn+ in 2025, up from $922mn+ in 2024 (and vs Epic Games’ paying $352mn to Fortnite creators)

• Apple is reportedly considering starting its own theatrical film distribution unit on the back of “F1” movie release (link)
  • Apple has spent ~$250mn on the upcoming Brad Pitt movie “F1” and they’re investing heavily in its success
    • Shot on special cameras for IMAX screens
    • Kicked off its recent Worldwide Developers Conference with a promotional video for the movie
    • Offering a discount on tickets bought with Apple Pay, which is the first time it has done that for a film
    • CEO Tim Cook has personally marketed the movie alongside Pitt and Formula One racer Lewis Hamilton (Cook typically only comes out for Apple’s most important launches)
    • Hamilton is also a producer on the movie, and his league has marketed “F1” at its races.
  • Apple is exploring an in-house theatrical distribution unit to gain more control over release timing and marketing, reducing reliance on third-party studios
    • Warner Bros. is distributing F1 and earns a cut of box-office revenue that scales with ticket sales
    • A Warner spokeswoman said the film will receive a “robust global marketing campaign that befits a film of its size”
    • BUT Warner is also releasing Superman, its most important title of the year, just two weeks after F1, potentially limiting promotional bandwidth
  • Apple’s existing model helps avoid the overhead costs of running a distribution arm, BUT it leaves Apple dependent on studios that may prioritize their own projects over Apple originals