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Greetings! While U.S. tech executives were tucking into their turkey on Thursday or guzzling Koia shakes, Australian lawmakers were approving a law that bans children under 16 from having a social media account. Whoa! Australia is a relatively small country whose revenue contribution to Meta Platforms, Snap or TikTok is likely minuscule. But investors have to consider the possibility that the land Down Under is the canary in the coal mine of social media regulation. After all, the Australian law is a more aggressive variation on laws passed by many U.S. states over the past couple of years, all aimed at protecting children from the worst of social media. The U.S. state laws vary widely: some states, such as Tennessee, require social media firms to verify that parents consent to their children having an account. Age verification, to ensure social media firms know when a child holds an account, is becoming more common. (Here’s a summary of state laws, passed and pending.) It’s hard to say whether these efforts have had much of an impact. Then again, tech industry lobby groups have sued to block implementation of many of these laws. Tech companies are also trying to dodge responsibility for verifying who’s a kid and who’s an adult. Meta argues that the responsibility should sit with the mobile app store providers, Apple and Google. Apple says the opposite, as this Wall Street Journal report detailed. But last week, The Washington Post reported that two Republican congresspeople were preparing a federal bill making the app stores responsible. Social media firms aren’t ignoring the broader issue. Meta, for instance, recently made Instagram accounts for teens private by default, which should make it a bit harder for creepy adults to stalk kids. But given the pressure—including from mothers, as The Information recently reported—such efforts aren’t likely to be enough for social media’s critics. To be sure, how exactly Australia plans to enforce the law is very unclear, particularly as it says social media companies can’t require state IDs as an age verification tool. If politicians are as worried about kids’ safety online as they claim to be, they wouldn’t make it difficult for social media firms to verify ages. (This story we ran last week shows one age verification approach.) Tech companies have to prepare for the possibility that Australian-style bans could spread to other countries. That would be particularly damaging for Snap, whose Snapchat app skews younger than those of other social media firms. But it wouldn’t be good for TikTok, Meta or even Reddit either. If nothing else, the Australian law adds to a growing assembly of international regulations that threaten to mire tech firms in an ever expanding bureaucratic bog. While engineers are tech’s most valuable source of talent today, one day soon lawyers may take precedence. The Information’s Stories of the WeekThe most interesting story of the week might have been Wayne Ma and Qianer Liu’s scoop about the details of next year’s Apple iPhones, including the revelation that Apple is grappling with a problem with the widely expected slim iPhone—it’s too thin to fit a physical tray for SIM cards. That could make it impossible to sell in China. There’s lot’s more in this story. - Also from Qianer is this excellent piece describing how Taiwan Semiconductor Manufacturing Co. is finding it harder to stay neutral in the escalating geopolitical battle between the U.S. and China.
- On the artificial intelligence front, we reported this week that a little-known U.S. startup, a Chinese quant trading firm and Alibaba have each released reasoning models that do well against OpenAI’s. That’s a surprise given that OpenAI’s groundbreaking advances in reasoning AI were hard for Google and Microsoft to replicate. We also talked with OpenAI’s chief commercial officer in this Q&A. And we broke news about Amazon’s upcoming large language model and how its video-processing capabilities might draw users. We also revealed the challenges TikTok’s parent, ByteDance, is having with its hopes of competing globally in AI.
- Software stocks have been rallying lately, and this piece by Jon Victor and Kevin McLaughlin helps explain why: Private software startups are seeing an improvement in growth after a long downturn. One software startup that appears to be doing well is Ramp, which Cory Weinberg reported was discussing a share-sale deal for employees at a valuation of $11 billion, 35% above its 2022 level.
- In other scoops, we broke the news that Sriram Krishnan was leaving Andreessen Horowitz and was in discussions with Elon Musk about joining the Department of Government Efficiency.
- Start your weekend reading with this fun piece about how billboards are evolving—to the benefit of consumer startups. And don’t forget our 2024 gift guide.
In Other News- Canadian news publishers sued OpenAI for copyright infringement, the Associated Press reported.
In Other NewsIndustry experts call The Electric, an exclusive publication covering the nascent battery and electric vehicle revolutions, a must-read. Start reading today.
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