Wed. 02/05 – Shein And Temu In Deep Trouble

Feb 5, 2025 15m

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Temu And Shein got a reprieve from the USPS, but they are still in deep, deep trouble. I’ll explain why. Alphabet earnings disappoint their investors but cheer investors of Nvidia. Google and Meta going in different directions when it comes to AI. And why are people increasingly refusing to pay ransomware?

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USPS Resumes Accepting Packages From China After Unexpected Suspension (Wired)
Google expects to spend $75 billion this year on the AI race (The Verge)
Google drops pledge not to use AI for weapons or surveillance (The Washington Post)
Meta says it may stop development of AI systems it deems too risky (TechCrunch)
After a bruising year, Sonos readies its next big thing: a streaming box (The Verge)
35% Year-over-Year Decrease in Ransomware Payments, Less than Half of Recorded Incidents Resulted in Victim Payments (Chainalysis)
Apple Launches New 'Invites' App (MacRumors)

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AI-Generated Summary

USPS and the E-commerce Shakeup

The United States Postal Service recently reversed its decision to halt mail acceptance from China and Hong Kong, a move that follows recent trade policy changes and tariffs initiated by the Trump administration. This decision is crucial for Chinese e-commerce platforms like Temu and Shein, which rely heavily on imports into the U.S. However, the increase in tariffs, which affects more than 30% of parcels from these companies, threatens their operations. The impact of the postal suspension was notable, causing confusion and disrupted logistics for many e-commerce businesses relying on swift mail services. Furthermore, Temu's and Shein's potential decline could hurt the online advertising market where they heavily invest, shaping broader economic consequences for advertising firms like Meta and Alphabet.

Alphabet's Earnings and CapEx Spending

Alphabet's Q4 earnings report showed a revenue increase of 12% year-on-year, but disappointed investors with its projected capital expenditures of $75 billion for 2025, far exceeding market expectations. This announcement led to a significant decrease in its stock price, while Nvidia's stock rose, reflecting market preferences for firms with strong AI capabilities. Alphabet's investment will likely strengthen its AI infrastructure amid increasing competition in the AI domain, as revenues from Google Cloud and YouTube continue to rise.

Diverging AI Strategies: Google vs. Meta

Google and Meta are taking contrasting approaches to AI development. Google has relaxed its previous commitments regarding the ethical applications of AI, indicating a willingness to engage in projects deemed beneficial for security and governance, even if they involve risks. This shift comes as Google positions itself to lead in AI amidst global competition. Meanwhile, Meta is maintaining strict guidelines on the types of AI systems it is willing to develop, categorizing certain applications as too risky, which may potentially limit its versatility in the AI space.

Ransomware Trends and Payments

The landscape of ransomware has shifted dramatically, with 2024 seeing a 35% decline in ransom payments, as victims are increasingly opting to refuse payment. Motivations for this trend include bolstered law enforcement actions against ransomware groups and victims feeling more empowered in negotiating their situations. This decline has led to a change in tactics from attackers, who are adapting by developing faster operations and new strains of ransomware. The broader context suggests that organizations are becoming more resilient against extortion efforts.

New Product Launches from Apple and Sonos

Apple has launched a new app called 'Invites' designed for event planning, allowing users to create customizable invitations and share details directly with invitees in a user-friendly format. Also notable in the product space is Sonos' upcoming release of an Android-based streaming box called Pinewood, which aims to provide a comprehensive solution for connecting and managing various streaming services under one interface. This product will also enhance audio experiences in home theaters, addressing previous connectivity issues.