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  • TikTok Shop’s Era of Super Subsidies Is Ending

    TikTok Shop’s Era of Super Subsidies Is Ending

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    The days of buying ultracheap stuff on TikTok Shop may be winding down.

    Starting today, the fees TikTok charges sellers increase from 2 percent to 6 percent of the price of each order. They will creep up to 8 percent in July. The changes may mark a crucial moment for people who shop on TikTok and for the platform itself, potentially forcing up prices and testing shopper’s loyalty to the social app’s ecommerce play.

    TikTok Shop launched in the US in September with strikingly low prices compared to other online stores, thanks to its subsidies to sellers and shoppers. Influencers and entrepreneurs embraced the opportunity: TikTok saw a surge of sellers that outpaced growth in vendors at competitors like Shopify and Amazon, according to a March report from SimilarWeb, which tracks web traffic. But from the beginning TikTok Shop has hosted deals that appear too good to be true, such as deeply discounted—and possibly counterfeit—snail mucin skin care products and Stanley tumblers, as well as jewelry, socks, and other odds and ends for less than $1.

    After a successful holiday shopping season, TikTok Shop’s fee increases see the platform trying to prove it can become a sustainable, habit-forming mainstay in ecommerce. “The true test for [TikTok Shop’s] longevity and its sustainability will be as these incentives start to roll back,” says Jasmine Enberg, principal analyst for social media at Insider Intelligence, a market research firm. “A lot of the sellers that have found success on TikTok Shop are smaller businesses that really benefited from the incentives.”

    If TikTok Shop continues to increase its fees, those sellers may struggle, Enberg predicts. TikTok did not provide a comment on the fee changes for this story.

    TikTok Shop’s seller fees are still lower than many fees for Amazon sellers, which vary by type of product. The lowest are 5 percent, for low-cost apparel, but they generally range between 8 and 20 percent for jewelry and fine art. But TikTok Shop is a different beast than the everything store. While many people turn to Amazon to search for necessities, on TikTok Shop buyers often find products they didn’t know they wanted through influencers and algorithmic discovery—more similar to Temu or Shein.

    TikTok sellers face the additional challenge of needing their pitches to stand out from the parade of loud, viral video content the app services up. Influencers and brands selling through TikTok Shop have to convince people scrolling for entertainment to stop and shop. People are often “in the app to do something completely different,” says Michael Yamartino, an ecommerce expert and CEO of Route, a platform that helps brands ship orders.

    Sellers that respond to higher fees by raising prices may discover that they’ve lost a key ingredient needed for success in TikTok’s ecommerce model. To get TikTok users’ attention and items into their virtual carts, “you have to be loud,” Yamartino says. “You have to be shockingly cheap, shockingly engaging, and super on trend.”



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  • My Favorite Things an Amazon Echo Show Can Do (2024)

    My Favorite Things an Amazon Echo Show Can Do (2024)

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    There are a ton of tricks that smart displays can do. But not all of them are created equal or are worth doing on this style of advice.

    The basics are easy—just about anyone knows how handy it is to ask any smart speaker or smart display to tell you the weather or play music. And you should! It’s their best use case, especially since smart displays like the Echo Show can give you more weather details onscreen. But that’s not all these handy devices do, and for the price you should get the most out of any smart display you buy.

    Amazon’s Echo Shows have their own special tricks and ways to activate them. Here are my three favorite uses for an Echo Show and how to fix my least favorite feature. Do you think you would prefer another system? Don’t forget to check out our guides to the Best Smart Speakers and How to Set Up Your Smart Home.

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    Play With Widgets

    Widgets are my favorite casual feature of Echo Shows. They’re little squares with shortcut content that you can customize, ranging from a sticky note or calendar to managing your smart home, quick access to certain music, and so much more.

    Originally, they were only on the massive Echo Show 15, but they’re now available on the Echo Show 8 and 10 as well. On the Echo Show 15, the widgets are constantly onscreen thanks to the large real estate, and there’s a widget panel that can fit up to 10 widgets. For the Echo Shows 8 and 10, they appear in the slideshow that rotates onscreen. You can display up to four widgets on the Echo Show 8 and up to six on the Echo Show 10.

    I love using mine to put a calendar view, my smart-home favorites, and the weather in an easy-to-see place. They’re great for customizing your smart-home control if you want your device to focus on that; the Echo Hub (8/10, WIRED Recommends) depends entirely on widgets as a smart-home-focused device.

    Tabletlike device sitting on wooden surface in the corner of a room. The screen displays a schedule the weather and...

    Photograph: Nena Farrell

    Check on Your Kids and Cats

    Echo Shows also have a camera at the top of the screen that can be used for both video calls and as an indoor security camera–well, sort of. There are two main features under this umbrella: Live Feed, which allows you to view live feeds happening from an Echo Show device, and Home Monitoring, which you can use with other smart-home devices and set up routines.

    You can ask any Echo Show to give you the live feed of another Show device, as long as you know the name of the device (or you can just choose it from the device list if you don’t want to use voice commands). This is an easy way to quickly check in on say, pets and kids, without a full-blown security camera. The device will alert anyone in the room that someone is using the Echo Show to monitor the room, so it’s not as discreet as a true security camera.

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  • Blink Mini 2 Review: Small Size, Big Value

    Blink Mini 2 Review: Small Size, Big Value

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    I set the camera to record clips when it detected a person, and it hasn’t made many mistakes. (It has categorized a couple of clips with people in them as motion, but there have been no false positives.) Most recorded events seem to have been captured in full, but a couple of times, it missed the beginning of someone walking into the frame. You can also tweak the motion sensitivity and set privacy or activity zones by graying out squares in a grid to reduce false positives or cut out areas you don’t want triggering recordings.

    While the overall sound quality isn’t great, it is better than the original Blink Mini. You can carry on a two-way conversation with minimal lag. Certain sounds and weather cause distortion, so it sounds better indoors but is passable in a pinch. Blink cameras also work well with Alexa, but there’s no official support for Google Home or Apple HomeKit. However, there are lots of IFTTT integrations that provide workarounds to use Blink with Google, Samsung SmartThings, and other platforms. One last feature I like in the app is the biometric lock, so you can open it with your fingerprint or face.

    Subscribe or Pass

    You can use Blink cameras without a subscription if you buy a Sync Module 2 ($50) and stick a USB flash drive in it to record locally, but I can’t recommend the Blink Mini 2 without a subscription. Only subscribers get person detection, live view recording, cloud recording with 60-day video history (30 days in the UK and Europe), video sharing, rapid access, and a few other perks. Person detection is a must unless you want lots of false positives.

    Without the subscription, your live views are limited to five minutes, and recorded videos may be much slower to load. This is because videos are uploaded to the cloud from your USB flash drive and then sent to your phone. I have tested without the subscription. With a fast internet connection and flash drive, my videos loaded fairly quickly, taking maybe a couple of seconds longer on average, though they occasionally took much longer. If you subscribe but already have a Sync Module 2, it defaults to a once-a-day backup of your videos. (You can also stick the drive into a computer to review recorded events.) You can see the complete subscription comparison here.

    You get a 30-day trial of the subscription with each Blink camera. After that, the Blink Basic subscription, covering one camera, costs $3 per month or $30 per year, which is about as cheap as it gets nowadays. The Blink Plus subscription, covering unlimited cameras, costs $10 per month or $100 per year. Since Amazon owns Blink, you can connect your Amazon account and manage your subscription through the Amazon site.

    Many of the best indoor security cameras require you to subscribe to enjoy all their features. But if you can’t abide another subscription, the Cync Indoor Smart Camera ($70) or TP-Link Tapo C110 ($30) are good alternatives. You can find better, but not cheaper, outdoor options in our Best Outdoor Security Cameras guide.

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  • Let’s Not Make the Same Mistakes with AI That We Made With Social Media

    Let’s Not Make the Same Mistakes with AI That We Made With Social Media

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    The reason for these outcomes is structural. The network effects of tech platforms push a few firms to become dominant, and lock-in ensures their continued dominance. The incentives in the tech sector are so spectacularly, blindingly powerful that they have enabled six megacorporations (Amazon, Apple, Google, Facebook parent Meta, Microsoft, and Nvidia) to command a trillion dollars each of market value—or more. These firms use their wealth to block any meaningful legislation that would curtail their power. And they sometimes collude with each other to grow yet fatter.

    This cycle is clearly starting to repeat itself in AI. Look no further than the industry poster child OpenAI, whose leading offering, ChatGPT, continues to set marks for uptake and usage. Within a year of the product’s launch, OpenAI’s valuation had skyrocketed to about $90 billion.

    OpenAI once seemed like an “open” alternative to the megacorps—a common carrier for AI services with a socially oriented nonprofit mission. But the Sam Altman firing-and-rehiring debacle at the end of 2023, and Microsoft’s central role in restoring Altman to the CEO seat, simply illustrated how venture funding from the familiar ranks of the tech elite pervades and controls corporate AI. In January 2024, OpenAI took a big step toward monetization of this user base by introducing its GPT Store, wherein one OpenAI customer can charge another for the use of its custom versions of OpenAI software; OpenAI, of course, collects revenue from both parties. This sets in motion the very cycle Doctorow warns about.

    In the middle of this spiral of exploitation, little or no regard is paid to externalities visited upon the greater public—people who aren’t even using the platforms. Even after society has wrestled with their ill effects for years, the monopolistic social networks have virtually no incentive to control their products’ environmental impact, tendency to spread misinformation, or pernicious effects on mental health. And the government has applied virtually no regulation toward those ends.

    Likewise, few or no guardrails are in place to limit the potential negative impact of AI. Facial recognition software that amounts to racial profiling, simulated public opinions supercharged by chatbots, fake videos in political ads—all of it persists in a legal gray area. Even clear violators of campaign advertising law might, some think, be let off the hook if they simply do it with AI. 

    Mitigating the risks

    The risks that AI poses to society are strikingly familiar, but there is one big difference: it’s not too late. This time, we know it’s all coming. Fresh off our experience with the harms wrought by social media, we have all the warning we should need to avoid the same mistakes.

    The biggest mistake we made with social media was leaving it as an unregulated space. Even now—after all the studies and revelations of social media’s negative effects on kids and mental health, after Cambridge Analytica, after the exposure of Russian intervention in our politics, after everything else—social media in the US remains largely an unregulated “weapon of mass destruction.” Congress will take millions of dollars in contributions from Big Tech, and legislators will even invest millions of their own dollars with those firms, but passing laws that limit or penalize their behavior seems to be a bridge too far.

    We can’t afford to do the same thing with AI, because the stakes are even higher. The harm social media can do stems from how it affects our communication. AI will affect us in the same ways and many more besides. If Big Tech’s trajectory is any signal, AI tools will increasingly be involved in how we learn and how we express our thoughts. But these tools will also influence how we schedule our daily activities, how we design products, how we write laws, and even how we diagnose diseases. The expansive role of these technologies in our daily lives gives for-profit corporations opportunities to exert control over more aspects of society, and that exposes us to the risks arising from their incentives and decisions.

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  • Europe’s Digital Markets Act Is Breaking Open the Empires of Big Tech

    Europe’s Digital Markets Act Is Breaking Open the Empires of Big Tech

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    Citizens of the European Union live in an internet built and ruled by foreign powers. Most people in the EU use an American search engine, shop on an American ecommerce site, thumb American phones, and scroll through American social media feeds.

    That fact has triggered increasing alarm in the corridors of Brussels, as the EU tries to understand how exactly those companies warp the economy around them. Five years ago, Shoshana Zuboff’s book The Age of Surveillance Capitalism neatly articulated much of lawmakers’ critique of the tech giants, just as they were preparing to enforce the flagship GDPR privacy law. Now as the EU enacts another historic piece of tech regulation, the Digital Markets Act, which companies must comply with starting tomorrow, March 7, a different critic du jour sums up the new mood in Brussels.

    In his 2023 book, Technofeudalism, Yanis Varoufakis argues the big US tech platforms have brought feudalism back to Europe. The former Greek finance minister sees little difference between the medieval serf toiling on land he does not own and the Amazon seller who must subject themselves to the company’s strict rules while giving the company a cut of each sale.

    The idea that a handful of big tech companies have subjugated internet users into digital empires has permeated through Europe. Technofeudalism shares bookshelf space with Cloud Empires and Digital Empires, which make broadly similar arguments. For years, Europe’s wanna-be Big Tech rivals, like Sweden’s Spotify or Switzerland’s ProtonMail, have claimed that companies like Google, Meta, and Apple unfairly limit their ability to reach potential users, through tactics like preinstalling Gmail on new Android phones or Apple’s strict rules for the App Store. “It’s not a problem to be a monopoly,” says Sandra Wachter, professor of technology and regulation at Oxford University’s Internet Institute. “It becomes a problem if you’re starting to exclude other people from the market.”

    Crowbarred Open

    In answer to that problem, Brussels’ politicos agreed to the Digital Markets Act in 2022. It is designed to rein in the largest tech companies—almost all of them from the US—that act as gatekeepers between consumers and other businesses. A sibling regulation, the Digital Services Act, which focuses more on freedom of expression, went into effect last month. Wachter says they follow a long tradition of laws trying to protect the public and the economy from state power, wielded either by the government or the monarch. “With the rise of the private sector and globalization, power has just shifted,” she adds. Tech platforms rule over digital lives like kings. The DMA is part of the attempt to keep up.

    The rules change tomorrow for platforms deemed “gatekeepers” by the DMA—so far including Alphabet, Amazon, Apple, Meta, Microsoft, and TikTok parent Bytedance. The law essentially crowbars open what the EU calls the gatekeepers’ “core services.” In the past regulators have proposed containing corporate giants by taking them to pieces. EU lawmakers have adopted the motto “Don’t break up big tech companies, break them open.”

    In theory, that means big changes for EU residents’ digital lives. Users of iPhones should soon be able to download apps from places other than Apple’s app store; Microsoft Windows will no longer have Microsoft-owned Bing as its default search tool; Meta-owned WhatsApp users will be able to communicate with people on rival messaging apps; and Google and Amazon will have to tweak their search results to create more room for rivals. There will also be limits on how users’ data can be shared between one company’s different services. Fines for noncompliance can reach up to 20 percent of global sales revenue. The law also gives the EU recourse to the nuclear option of forcing tech companies to sell off parts of their business.

    Homegrown Challengers

    Most tech giants have expressed uncharacteristic alarm about the changes required of them this week. Google has spoken of “difficult trade-offs,” which may mean its search results send more traffic to hotel or flight aggregators. Apple has claimed that the DMA jeopardizes its devices’ security. Apple, Meta and TikTok have all filed legal challenges against the EU, saying new rules unfairly target their services. The argument in favor of the status quo is that competition is actually thriving—just look at TikTok, a technology company launched in the past decade, now designated as one of the so-called gatekeepers.

    But TikTok is an exception. The DMA wants to make it normal for new household names to emerge in the tech industry; to “drive innovation so that smaller businesses can really make it,” as the EU’s competition chief Margrethe Vestager explained to WIRED, back in 2022. Many hope some of the new businesses that “make it” will be European. For almost every big tech service, there is a smaller homegrown equivalent: from German search engine Ecosia to French messaging app Olvid and Polish Amazon alternative Allegro. These are the companies many hope will benefit from the DMA, even if there is widespread skepticism about how effective the new rules will be at forcing the tech giants to change.

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  • Amazon Just Got Banned From the EU Parliament

    Amazon Just Got Banned From the EU Parliament

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    Amazon has become the second company ever to have its lobbyists banned from the European Parliament, amid accusations the company does not take the institution seriously.

    The ban, which means the 14 Amazon employees who had access to the European Parliament can no longer enter the building without an invitation, follows the company’s decision not to attend a January hearing about working conditions inside its fulfillment centers. In December, Amazon also rejected MEPs’ [members of European Parliament] requests to tour its fulfillment centers, citing how busy they were over the Christmas period.

    “This is not a serious way to treat the European Parliament,” says Dragoș Pîslaru, the Romanian MEP and chair of the Parliament’s Committee on Employment and Social Affairs, who formally requested the ban. “We are representing 500 million citizens and it is not a joke. You cannot just say that your senior representatives are not available when the parliament is asking you.”

    Companies originating outside Europe should take the EU Parliament as seriously as the US Congress, he adds. “The European Parliament is not holding grudges,” he says. “This is about us requesting to be respected as an institution.”

    The row has erupted as concerns about working conditions in Amazon fulfillment centers are mounting in Europe. In January, the French data protection authority fined Amazon €32 million ($34 million) for operating what it called an “excessively intrusive system for monitoring employee activity”. In November, Amazon workers in Germany and Italy walked off the job on Black Friday to demand better pay and working conditions. Amazon says it has 150,000 employees within the EU.

    “The fact that Amazon refuses to come and present their arguments whenever we call them is worrying,” says Pîslaru. “This is not my subjective opinion. This is based on how the parliament should work.”

    Pîslaru first requested Amazon’s lobbying permits be revoked in a February 6 letter sent to the Parliament’s president, following Amazon’s January no-show. “This issue extends beyond disrespect for the European parliament; it concerns the well-being, fundamental rights and working conditions of hundreds of thousands of Europeans working in Amazon warehouses,” he said in that letter. It is unreasonable for Amazon to lobby MEPs while denying them the right to probe the company’s labor practices, the letter added.

    The idea to ban Amazon’s lobbyist had been around since 2021, when the company first rejected a European Parliament invite to attend another hearing on working conditions, says Pîslaru. But following his February letter, the European Parliament confirmed last night that access badges for Amazon lobbyists would be revoked. That means Amazon becomes the second company ever to have their access to the European Parliament revoked, following a ban on Roundup-maker Monsanto in 2017. The Monsanto ban lasted until the company was acquired by Bayer the following year.

    In a statement published on its website, Amazon said it was “disappointed” by the decision. The company described the January hearing, which it did not attend, as “one sided and not designed to encourage constructive debate.” The company said it had extended “dozens of invitations” to visit its facilities to Committee members and staff. On February 5, Amazon wrote to Pîslaru inviting his committee to visit one of its 80 European fulfillment centers. However, official EU missions aren’t allowed to take place so close to the EU’s June elections, says Pîslaru. “They were seemingly open to inviting us, knowing that we cannot go.”

    Amazon’s lobbying passes can be reinstated once the EU’s employment committee says the company is showing genuine willingness to cooperate, says Pîslaru. That is unlikely to happen before the elections, as MEPs rush to wrap-up unfinished legislation and prepare their campaigns. Until their passes are reinstated, Amazon lobbyists can only enter the EU Parliament if they are invited by people working inside. “They can still lobby individual MEPs and they can meet them outside of the parliament,” says Bram Vranken, a researcher focusing on big tech at campaign group Corporate Europe Observatory. “It’s mostly a really important political signal that the company went too far.”

    For Vranken, the ban is a good first step. “We would like to see the ban made permanent and extended to all big tech companies,” he says, adding this would prevent big tech companies from watering down crucial legislation.

    “Having a permanent ban is not necessarily justified,” says Pîslaru. “Unless, of course, their behavior continues to mock the institution in the future.”

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  • Amazon Echo Hub Review: Bare-Bones Smart Display

    Amazon Echo Hub Review: Bare-Bones Smart Display

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    Widgets are one of my favorite features of Echo Show devices, and I love that the Hub is entirely focused on them. My Echo Show 8 ($150) won’t always show me my widgets, and the Echo Show 15 ($280) is great for widgets but too big to, well, put anywhere. But the Echo Show is a perfect little screen with my favorite widgets, the smart home controls I need, and no obstacles to get to them.

    Amazon Echo Hub

    Photograph: Nena Farrell

    Smart Home Power

    With the widgets and menus on the almost-always-live dashboard, it’s easy to quickly control your home. There’s plenty of info stuffed into the main homepage. While it’s not exactly beautiful, it’s easy on the eyes and simple to navigate, and it’s easy to swipe through the smart-home devices that the Hub is connected to.

    In the side menu, you can tap the Routines button to access the routines you’ve made in the Alexa app and activate them. You aren’t able to edit or create new routines on this page, so you’ll need the app handy if you want to make changes. Below that is the room list. My Echo Hub showed the Living Room, Office, and Nursery, since those are the three rooms I’ve created within the Alexa app.

    There’s a final bottom menu where you’ll see entire categories of devices, such as lights, cameras, and plugs. You can tap these to see all the devices of that type at once; I see 10 different lights from my home when I open on the generic Lights option. But even without opening it, that little menu also shows me the total number of lights on in my home, so it’s handy at a quick glance. Finally in the list of menus is the classic top-down menu that matches an Echo Show device. It’s where you’ll find the device’s settings, alarms, brightness, and more.

    Hub in Name Only

    Ironically, for a device named Hub, there is no smart-home hub built in. You’ll find that in certain Echo Shows, such as the newest Show 8 and the Show 10, and the screen-free Echo (4th Gen), but not this device.

    A smart-home hub is needed for certain products to work and communicate with each other. Philips Hue has always needed a hub for its lights, and smart security systems often have hubs and base stations too. But fewer products require an individual hub to work—Abode’s security system has a hub, for example, but then offers a suite of products that are hub-free.

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  • 12 Best Amazon Echo and Alexa Speakers (2024): Earbuds, Soundbars, Displays

    12 Best Amazon Echo and Alexa Speakers (2024): Earbuds, Soundbars, Displays

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    Amazon’s family of Alexa-enabled devices is vast. From the spherical Echo to the swiveling Echo Show 10, you can get Alexa into your home in many ways. These devices can answer your questions, help you order essentials, set timers, play all sorts of audio content, and even function as the control hub for your growing smart home. These are our favorite Echo- and Alexa-compatible speakers for every home and budget.

    The best time to buy any Amazon speaker is during a major sale event like Black Friday or Amazon Prime Day, as there usually are steep discounts. If you’re trying to decide which smart devices might be best for you, be sure to check out WIRED’s picks in our roundups: Best Smart Speakers, Best Smart Displays, and Best Bluetooth Speakers. We also have guides on setting up your Echo speaker, creating Alexa routines, and Alexa skills that are actually fun and useful to help you get started.

    Updated February 2024: We’ve added the Echo Show 8 (3rd Gen) as our new smart display pick. We’ve also added advice for controlling content shown on your Echo Show device.

    Special offer for Gear readers: Get a 1-year subscription to WIRED for $5 ($25 off). This includes unlimited access to WIRED.com and our print magazine (if you’d like). Subscriptions help fund the work we do every day.

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  • Amazon’s Cloud Boss Likens Generative AI Hype to the Dotcom Bubble

    Amazon’s Cloud Boss Likens Generative AI Hype to the Dotcom Bubble

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    As CEO of Amazon’s dominant cloud computing platform AWS, Adam Selipsky is one of the most powerful people in computing at a time when the industry is racing to adopt generative artificial intelligence. Although a fan of the technology, he also has a warning for anyone trying to make sense of the moment: Some AI companies at the center of the storm are massively overhyped.

    Selipsky likens the generative AI rush to the early days of the dotcom bubble, when expectations spread that the internet would transform many industries almost overnight. Although in the long term the internet was indeed transformative, in the short term many projects came to nothing, and swathes of Silicon Valley companies went bust.

    “If you go back to, say, 1997 and you ask, ‘Was the internet underhyped or overhyped?’ I would argue it was underhyped,” says Selipsky, who spoke with WIRED during a conference at Harvard Business School on February 4. “But if you then ask, ‘Were the companies who were the leaders then dramatically overhyped?’ Yes, they were.” Selipsky didn’t name the companies he has in mind. The most prominent in generative AI so far include Amazon’s cloud rival Microsoft and its partner and ChatGPT developer OpenAI.

    Selipsky says that companies looking for ways to apply generative AI to their own business or industry need to be careful they aren’t misled by the hype. “Many companies and organizations are struggling to understand, ‘Out of these hundred pilots or proofs-of-concept that I have going on, which ones do I take into production?’” he says. “And they’re starting to see that it can be very expensive once they go into production.” The implication? A lot of generative AI projects hastily born over the past year may not have long to live. The technology can be expensive to deploy because of the many high-powered computer chips required for generative AI projects.

    Amazon has not been widely seen as a leader in the generative AI boom, which was triggered by OpenAI’s surprise hit ChatGPT—perhaps giving Selipsky reason to downplay its impact. But despite the problems he sees, he says that Amazon does see a long-term technological shift underway. “We do believe that generative AI will be transformative, will change the way that virtually every application in the world works, and will eventually transform the way that people work,” he says.

    Company executives and boards in all kinds of industries are currently under pressure to explore and experiment with generative AI. Investors, academic studies, and industry reports have all predicted major disruption ahead for businesses, with trillions of dollars in future revenue on the table.

    At the same time, although generative AI has clearly boosted the businesses of AI providers like OpenAI and some hardware companies like Nvidia, the payoffs from generative AI for business applications have been less clear. Problems such as algorithmic bias and hallucination continue to plague generative AI deployments, and disputes over copyrighted data fed to AI models have also cast a legal cloud over some applications of the technology.

    The Great AI Race

    Selipsky first joined AWS as a marketing executive in 2005 but left in 2016 to become CEO of analytics company Tableau, which was later sold to Salesforce. He was hired back to lead AWS in 2021 by Andy Jassy, who had just vacated that position to succeed Jeff Bezos as Amazon CEO, and had originally hired Selipsky to his first stint at Amazon.

    Although Amazon has been the clear market leader in cloud computing for years, its primary rival, Microsoft, has crucial support in the contest for AI thanks to its being the primary backer of ChatGPT maker OpenAI. Amazon’s other main cloud rival, Google, long seen as a leader in AI development, has gone all-in on generative AI, aggressively developing a rival to ChatGPT and plugging the technology into many of its services.

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  • Google Parent Alphabet’s Spending on Acquisitions Cratered in 2023

    Google Parent Alphabet’s Spending on Acquisitions Cratered in 2023

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    Pennies were pinched in Mountain View last year. For much of its existence as a public company, Google had made a headline-grabbing acquisition at least once a year as it used the profits from its surging ads business to bet on new frontiers. Billions of dollars went to scooping up Motorola, Nest, HTC, and Fitbit to build up it hardware business. Apigee, Looker, and Mandiant rounded out Google’s cloud computing unit. But Alphabet’s latest annual report reveals that the splurging stopped in 2023.

    Alphabet omitted a section describing acquisitions over the past year in the annual report filed this week to the US Securities and Exchange Commision, meaning any dealmaking wasn’t significant enough to flag to shareholders. New financial results released by Amazon and Meta Thursday showed their own spending on acquisitions also dipped significantly in 2023.

    The slowdown suggests pressure from antitrust regulators concerned about corporate power and investors who demanded cost cuts as interest rates jumped is forcing tech giants to pull back from one of their signature strategies. The European Commission and other regulators have increasingly challenged deals that they view as a threat to fair competition, forcing companies such as Amazon and Adobe to abandon planned purchases. Alphabet, Amazon, and Meta each laid off thousands of workers last year.

    “Deals from mega cap companies are being much more scrutinized,” says Angelo Zino, who studies tech stocks as vice president and senior equity analyst at CFRA Research. “In addition, 2023 was more of a cash preservation year.”

    Google and Amazon declined to comment. Apple and Meta did not respond to requests for comment.

    Chilling Effects

    Since Google first went public in 2004, the company has never until 2023 had a year without a section in its annual report on acquisitions. The new filing says Alphabet did spend $495 million net in cash on acquisitions or “intangible assets” last year, an outlay that is the company’s lowest since 2017. Intangible assets could reflect standalone purchases of patents or trademarks.

    Apple has also pulled back. It spent $306 million in cash on acquisitions during the year ended September 2022, but had so little to disclose for the year ended September 2023 that it removed the line item about deals from its annual report and instead bundled any such spending into a line called “other,” where spending fell 36 percent.

    The latest financial results released by Meta and Amazon Thursday suggest that cost cutting can help boost profits, though that may not be their primary motivation. At Meta, cash investment in acquisitions or tangible assets dropped by half to $629 million in 2023, after two years of growing spending. Those savings along with layoffs and additional cutbacks led Meta’s profits to soar about 69 percent in 2023.

    Amazon’s results show that it swung to a $30.4 billion profit in 2023 from a $2.7 billion loss the year earlier. The fact that net cash spending on acquisitions “and other” dipped from $8.3 billion in 2022 to $5.8 billion last year certainly contributed after years of ups and downs in those expenditures.

    The dive in acquisitions comes after several years of increasingly aggressive enforcement of antitrust laws from Washington and EU regulators and threats from lawmakers to impose new restrictions. While companies still consider acquisitions, they have in some cases decided that the potential pushback could be too much to bear.

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