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Thanks for reading The Briefing, our nightly column where we break down the day’s news. If you like what you see, I encourage you to subscribe to our reporting here.
Greetings! Woo-hoo—it’s Memorial Day weekend, which means summer is just around the corner. And in a typical year, we would expect to soon see tech reviewers telling consumers not to upgrade their iPhones now, because new models will be coming in September. Not surprisingly, the June quarter is typically Apple’s weakest for iPhone sales. But this year, things may be different. President Donald Trump’s threat on Friday that he’ll impose 25% tariffs on iPhones that aren’t made in the U.S. should be enough to prompt anyone wavering on a new purchase to rush out now and get it done. For that reason, it’s tough to parse how the tariff threat will affect sales in the June quarter. (Trump later clarified that the tariff would affect all smartphones starting at the end of June, Bloomberg reported, although as Apple has more than half the U.S. market, it is the most exposed.) Worries about the impact that tariffs on Chinese imports would have on iPhone prices appear to have fueled sales in the first quarter. IDC reported earlier this month that while the global smartphone market barely grew in the first quarter, the U.S. market expanded more than 5%, which it attributed partly to people accelerating their purchases to avoid price increases. Apple had tried to dodge the China tariff threat by selling mostly India-made iPhones in the U.S. in the June quarter. But that didn’t satisfy Trump: hence his latest threat. There’s no question a 25% duty would be disastrous for the industry. Even without tariffs, consumers have been holding onto their phones for longer than they used to, as each new update has become more incremental. This year Apple was banking on new AI features to persuade people to upgrade, but it has delayed the best of those new features thanks to development problems. Predictably, Apple’s stock fell 3% on Friday, bringing its year-to-date decline to 22%, far more than any other major tech firm. Still, let’s not overstate the risk for Apple. Given Trump’s track record of retreating on his most extreme tariff threats, there’s a very good chance he’ll back off on this one as well. After all, even if moving production of phones to the U.S. is possible—and that’s debatable—it certainly can’t be done quickly. Perhaps that is why Apple's stock continues to trade at a premium valuation to other companies, most obviously Alphabet. Artificial intelligence is becoming the only story in tech (apart from tariffs). This week OpenAI revealed it was buying Jony Ive’s AI hardware startup (something we had foreshadowed a few weeks ago), while Google unveiled a bunch of different AI updates and products. Whether OpenAI’s hopes for hardware will pan out is far from certain, as we explain here and here. Elon Musk’s xAI, meanwhile, is moving toward an enterprise sales business to sell to government agencies and companies. (Here’s another angle on xAI.) Abridge, a seven-year-old health AI software startup, is raising money at a $5 billion valuation. If you want a sense of the financial performance of some AI startups, check out our report on Perplexity’s finances, showing how its revenue in 2024 compared with its expenses. The picture isn’t pretty. This accompanying analysis highlights Perplexity’s accounting of expenses, which makes its gross margin look healthier than it otherwise would. The question of whether companies can replace employees with AI is a sensitive one, particularly when tech companies tell customers their AI products can save them money on labor costs. This report looks at Microsoft’s experiences on this subject. But outside AI, life goes on. Amazon scored a win this week when Nike returned to selling on the e-commerce giant’s site, six years after pulling its product over concerns about counterfeit products. And we dug into how Amazon is dealing with the tariff threats. Meanwhile, we looked at how streaming services and YouTubers are learning to live with each other. And we revealed how banks are exploring using stablecoins, ahead of legislation moving through Congress to regulate the crypto asset. And start your weekend off with this profile of the two tech bros behind TBPN, originally known as The Technology Brothers, the popular-in-tech podcast. • OnlyFans’ owner, Fenix International, is in discussions to sell the subscription platform, best known for explicit content, to an investor group at a valuation of about $8 billion, Reuters reported. The Information Weekend covers what happens when Silicon Valley logs off—the trends and people shaping culture, technology and everything in between. Subscribe for free today.
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