Google sees more than other AI companies
Also: Does the stock market love layoffs or not?
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Things That Matter
Stocks move, as they are wont to: Consumer fintech SoFi’s shares were down sharply this morning after it announced a $1.5 billion share sale at $27.50 per share on Thursday evening, lower than its previous close. Consumer streaming service' DocuSign’s stock is off around 6% this morning after beating trailing earnings expectations and raising its guidance; investors had hoped for more. Cybersecurity shop SentinelOne is down thanks to a “muted outlook,” Reuters reports, Meanwhile, Rubrik (another cybersecurity concern), is soaring after delivering a strong quarterly report.
Netflix’s shares are also down a few points this morning after it said it would buy Warner Bros. Discovery’s Warner Bros unit for $82.7 billion (enterprise value, equity worth of $72 billion). The deal is inclusive of Warner’s film and television studios, HBO Max and HBO.
WBD intends to cleave off its cable assets and take them public as a unique entity. Paramount is pissed, understandably.
The EU fines X €120M: The European Commission has fined X (previously Twitter) around $140 million for “breaching its transparency obligations under the Digital Services Act.” Transgressions include X failing to bring its advertising repository in line with transparency and accessibility requirements; a lack of public data access to researchers; and the sale of account verification, which the Commission says “deceives users.”
Surely everyone will be OK with an American company that’s owned by an administration-friendly figure being fined for (allegedly) breaking EU laws. Right?
Micro1 joins the $100M ARR club: Following the meteoric rise of startups like Mercor this year, another startup that helps connect major AI labs with experts has reached the $100 million annual recurring revenue milestone, TechCrunch reports.
Micro1 started the year with around $7 million in ARR, and it reported ARR of $50 million when it raised $35 million in September. That’s what strong growth looks like these days, I guess.
The Mercor-Micro1 startup cluster is fascinating. But I do wonder what their gross revenue-net revenue split is, and what their gross margins look like under each revenue reporting regime. What are the markups and how is pass-through-like spend accounted for?
How much does Google see? One thing I have noticed when using both Google’s AI mode and ChatGPT contemporaneously is that Google’s AI search seems to read a lot of the Internet before answering queries — seemingly much more compared to OpenAI’s chatbot.
It turns out that Google can see a lot more Internet than its rivals. Cloudflare’s Matthew Prince told Wired as much:
Prince says Cloudflare found that Google currently sees 3.2 times more pages on the internet than OpenAI, 4.6 times more than Microsoft, and 4.8 times more than Anthropic or Meta does. Put simply, “They have this incredibly privileged access,” Prince says.
How Google managed to catch up and overtake everyone in the AI game so quickly is an interesting question. Undoubtedly, a large portion of the roaring improvement from the pizza-glue days to the halcyon-like launch of Gemini 3 was due to hard work and insight. And, it seems, the ability to see and learn more than its rivals. If data is AI gold, having more gold to mine is probably a benefit, yeah?
Another turn in the Nvidia-China story: Following news that the Trump administration was considering green-lighting sales of Nvidia’s H200 chips to China, the Senate is pushing back. A bipartisan group is proposing a new law that would block any such loosening of export rules for a few years.
China wants GPU self-sufficiency, but China hawks here in America want to starve the country of Stateside silicon. Nvidia may make a few sales somewhere in the middle, but it seems some trade lanes between the two nations will not unfreeze any time soon.
Does the stock market love layoffs?
Meta’s stock is trending higher after the New York Times reported on Thursday that the social giant would make large cuts to its metaverse project — the Reality Labs VR stuff — including cuts to as much as 30% of the budget and some staffing.
Despite its popular sunglasses, the metaverse effort has proved a consistently disastrous use of funds: Reality Labs posted operating losses of $4.4 billion against revenue of $470 million in Q3 2025.
The obvious thoughts here are: “It’s about time Meta shoveled less money into the Reality Labs money pit,” and “I guess this will free up free cash flow for AI investments, right?”
Both are valid.
Investors are hitting buy on Meta’s shares following the news, but not that much. The stock rose about 5% immediately after the news yesterday, and they’re up 1.4% today. (The Nasdaq is also higher today.)
Surprised that the gains aren’t sharper? I was. It turns out that when we examine the share price movements of tech-ish companies with massive layoffs this year, it’s tough to directly correlate valuation jumps with staffing cuts. I had expected the opposite.
For example:
Verizon’s shares are largely flat after it announced 13,000 job cuts in November.
Amazon’s stock is largely flat since its plans to cut were reported (and later confirmed), despite a warm reaction to its Q3 earnings.
Even Meta, a company with a division that you could argue really does need a cull, isn’t seeing its shares fundamentally reprice in the wake of the layoff news. Will a somewhat muted market reaction to some layoffs announcements make job cuts less attractive? Not enough to warrant their end. One could argue that a flat reaction from traders is net-positive for the company in question: who doesn’t want a flat valuation to post greater EPS against?
I wonder if the market doesn’t see layoffs as the heroic de-layering of corporate structure like tech folks would like everyone to think they are. Perhaps it looks more like weakness, or, in the case of Meta, a long-anticipated return to fiscal sanity.
Regardless, it’s a grain of peace that the stock market isn’t handing companies market cap gains of more than 10% simply for letting people go. For the workers, that is.