If you don't have a satellite megacluster are you even a nation-state?
Friends, we’re going to get GTA6 before Databricks lists.
Welcome to Cautious Optimism, a newsletter on tech, business, and power.
Publishing note: We tend to paywall CO on Tuesdays, but today it’s open for all since I went a bit off-piste. — Alex
📈 Trending Up: Tech spats between the United States and China … tariff concerns … Google’s AI chops … the U.K.’s (misplaced) view of its economic primacy … justice …
📉 Trending Down: U.S. industrial production … transparency in government … working for Amazon safely … India’s birth rate … the German government …
Today in insanity: Incoming President Donald Trump is suing a pollster who got a poll wrong before the election. The argument is that pollster Ann Selzer and The Des Moines Register committed election interference by getting a poll wrong.
Yeah, this is bonkers and legal experts do not expect Trump to win the case. But having the leader of the executive branch signaling that he’s willing to use his wealth and soon-to-be-increased power to go after media companies and polling groups that earn his displeasure is a good indication of where the world is going for the next four years.
Free speech indeed.
The TikTok tick tock: TikTok has gone to the Supreme Court to try and get itself out of its current, sticky situation. Facing a divest-ban option — the run-pass option of forced corporate divestiture — TikTok wants to get the law forcing it to make a hard choice tossed out on free speech grounds.
Or perhaps stall the matter long enough for Trump to return to office and try to stop the effort — that he once supported — now that one of his chief backers is a stakeholder in its parent company. How well that suit will go is not yet clear.
What is, however, is TikTok’s continued growth. The New Consumer and Coefficient Capital have a dataset out this week digging into consumer spend trends. One chart in particular snagged my eye this morning:
My gut says that this chart overstates TikTok Shop’s aggregate size while correctly showing its general growth rate. Instinct aside, the above is one reason why TikTok doesn’t want to leave the United States market. Do you know where the consumer is currently weak? China. And where consumers are spending? The United States.
What do you need to be a real economic power in the future?
When I was but a wee lad, my father told me that every nation wants to produce its own food. If memory serves, this was back in my learning about trade, libertarian politics, and Chicago economics phase, which I never fully kicked. No matter, his point was that self-sufficiency and the desire for it can, at times, trump hard-nosed economic calculations; you might accept slightly higher prices and endure less efficient production if it means that your country can feed itself in the event of war or embargo.
Geopolitically, it’s not hard to see why being able to build or create your own x if x is critical to national security matters. Recently, we’ve seen Europe struggle thanks to an inability to fuel its own energy needs; China is very reliant on imported oil products via the Malacca Strait; and there’s a push for national, or at least bloc-level AI capabilities.
The AI example is perfect for the moment. China and the United States are leading the world in AI development, leaving Europe and its Atlantic frenemy the United Kingdom hunting for their own champion. Perhaps Mistral will manage.
There are other good examples of the national self-sufficiency point. GPS is one of my favorites. The United States runs the GPS network. Russia uses GLONASS, China its BDS system, and the EU the Galileo system. Do we, as a species, need four redundant GPS-ish systems? No, but given how fractured we are as a people, it makes sense.
Enter Iris. Not the ocular version, but the upcoming EU-based satellite Internet project that bears the name and garnered formal go ahead this week. TechCrunch writes:
The European Union is forging ahead with plans for a constellation of internet satellites to rival Elon Musk-owned Starlink, after signing a €10.6 billion ($11.1 billion) deal to launch nearly 300 satellites into low- and medium-Earth orbits by 2030. The bloc wants the space tech to boost its digital sovereignty by providing secure comms to governments.
Satellite Internet is akin to GPS. The United States, loosely, has Starlink and the upcoming Amazon-predicated Kuiper project. Both are private, but as their parent companies (SpaceX and, well, Amazon) are ingrained to either American defense contracting or the domestic economy, they count I reckon.
Over in China, the GuoWang supercluster of satellites that will beam Internet are now launching as the EU gets its own Starlink competitor underway.
How does satellite-derived Internet fit into national security? You could ask Ukraine, but I think that recent FT reporting on Taiwan is also worth our time:
Taiwan’s government is in talks with Amazon’s Project Kuiper subsidiary about co-operating on satellite-based communications, as Taipei broadens its efforts to make its mobile phone and internet infrastructure less vulnerable to a potential Chinese attack.
Yep.
There’s been lots of talk recently about chip independence being added to food and energy security. I think that you need a lot, really, to have a shot at economic leadership in the coming decades. This list doesn’t include basics like democratic governance and the like, mind:
Quick-cadence space launch capabilities
Diverse, deep Internet connectivity including space-based capabilities
Domestic semiconductor production down to at least the 2 nm level
A vibrant AI industry with the ability to create and distribute cutting-edge models
A GPS-like system that is accessible and cheap to use
Attractive capital markets that can support domestic and foreign listings
Warmwater ports
Secured access to required but not controlled natural resources
From that perspective, the EU spending $11 billion or so to check a key box for the future is cheap at 10x the price. The move shows, I think, a lack of desire amongst Europeans to become an effective American economic vassal-bloc, if you’ll allow the slightly de novo phrasing.
Good. I want strong, democratic allies in our camp. And democracy needs more than one champion — something I think we’ve all become a bit more aware of lately as the United States turns inward in foreign policy terms, leaving some of our too-comfortable comrades in arms stuck staring down a long-deferred bill for their own defense.
So, three cheers for the EU. And when Iris winds up costing 50% more as it will, it will still be cheap in terms of ensuring that Europe can compete in the future. Otherwise it won’t own a material portion of the future.
Databricks will never go public
A few years back I would regularly ask Databrick’s CEO Ali Ghodsi when his company was going to go public. The answer was always later, which made sense as Ghodsi and crew were able to secure infinite capital from the private markets at attractive prices.
I regret to inform you that this has just happened:
The 11-year-old company is now valued at $62 billion after securing $10 billion from investors including Andreessen Horowitz and Thrive Capital. The new funding, announced Tuesday, is among the largest in the history of venture capital. […]
[After buying Tabular earlier this year] Ghodsi began debating whether or not to take Databricks public by the summer of 2025. Instead, he chose to raise another private funding round. The company intends to use some of the new cash to buy out employee shares and the taxes associated with them.
Alas.
For all the kvetching that I have heard from VCs in recent years that their own backers need cash returns and not paper gains, the same investor group seems pretty content to let any company that can, stay private. Effectively forever.
Friends, we’re going to get GTA6 before Databricks lists.