Griffin on Tech: Zuckerberg feels the heat, chip makers feel the pain

The Federal Trade Commission’s antitrust case against Meta is underway this week, and co-founder Mark Zuckerberg has already appeared to argue that his purchases of WhatsApp and Instagram were fair business moves.

Meta is prepared to go toe to toe with the FTC in court, but the Wall Street Journal published a fascinating piece this week outlining the behind-the-scenes negotiations Zuckerberg engaged in to settle with the FTC in a bid to avoid the case going to trial. In late March, Zuckerberg called the head of the FTC with an offer - US$450 million to settle the case out of court.

This followed a twin-track process of lobbying and personally schmoozing politicians and Donald Trump himself, with Zuckerberg paying a visit to Mar-a-Lago and the White House, settling a $25 million lawsuit with Trump and donating $1 million to his inauguration fund.

The FTC’s response to Zuckerberg’s proposal? How about $18 billion and a consent decree, which would basically settle the matter without Meta accepting any guilt? Zuck said no and found himself in court this week, no doubt miffed that the investments made in courting the President have amounted to nothing. That may well change down the line, as Trump could intervene via executive order to save Zuckerberg.

This week, in a Washington D.C. court, he defended the acquisitions of the fledgling social media platforms that are now integral parts of the Meta empire alongside Facebook. Meta’s approach appears to be to paint the acquisitions of emerging rivals as an answer to Facebook’s inability to innovate internally with new products, rather than to kill off competitive threats.

"Many more times than not, when we've tried to build a new app, it hasn't gotten a lot of traction," he said this week.

Let’s not forget, the FTC approved those acquisitions at the time. But the Meta emails the court has access to reveal Zuckerberg was nervous about anti-trust action, knowing how powerful those acquisitions made his social media business.

"As calls to break up the big tech companies grow, there is a non-trivial chance that we will be forced to spin out Instagram and perhaps WhatsApp in the next 5-10 years anyway," he wrote in a 2018 internal email. 

Zuckerberg, it emerged this week, also considered spending $6 billion to buy another rival, Snap, in 2013 and banned ads on his platform from global competitors, including WeChat and Kaka,o which he considered emerging rivals. So while Meta is doing its best to present a case of the difficulties in innovating new products, there’s evidence to suggest Facebook’s leadership was scanning for competitive threats and taking proactive steps to block the competition. As always, Future Media’s Ricky Sutton is delivering great day-to-day coverage of the case via his Substack. The case is scheduled to run for several weeks, so there will be many more gems within the testimony no doubt.

The chips are down

Semiconductor and computer chip makers are starting to calculate exactly what the Trump administration is going to cost them in the coming years - and that’s before they consider the impacts of tariffs on imports from other nations. In early April, US chip makers like AMD, Intel, and Nvidia received word from the US Government that new restrictions would be placed on export to China of certain types of computer chips useful for AI applications.

In Nvidia’s case, that means no more exports of its H20 chips to China and a handful of other countries. As CNBC explained: “Nvidia’s H20 chip is comparable to the H100 and H200 AI chips used in the U.S. and other countries, but it has slower interconnection speeds and bandwidth. It’s based on a previous generation of AI architecture called Hopper introduced in 2022.”

DeepSeek used a fleet of H20 chips to develop and train its large language models, giving China a leg up in the AI arms race in the process. Now Nvidia says it will take a US$5.5 billion quarterly charge because it can no longer sell those H20 chips to the Chinese and others. Ouch.

The same goes for AMD, but on a smaller scale. It will take an $800 million hit this year because it is no longer allowed to sell its MI308 graphics processing units (GPUs) into China. These exporters can apply for specific licences to resume trading, but in the current geopolitical climate, there’s a fair chance those applications will be turned down. Intel hasn’t put a figure on what the restrictions will cost it, but it is dealing with the fallout from revelations that its new CEO, Lip-Bu Tan, a seasoned Silicon Valley investor, has put funding into hundreds of Chinese tech firms, including at least eight with links to the People's Liberation Army. His next dinner with President Trump might be a bit awkward given the tense relationship with China amidst the tariff war.

DOGE done right

Elon Musk’s Department of Government Efficiency continues to steamroll its way through US government departments in a bid to slash waste and fraud and shave $1 trillion from the country’s annual budget deficit. This week, Politico revealed, the Pentagon’s “tech swat team” quit en masse rather than feel the cold knife of the DOGE team descending. 

It was that team, after all, that was set up a decade ago to introduce a measure of Silicon Valley-style innovation into national security. Like many in the US Government, its employees decided to jump before they were pushed. It’s a chaotic scene in the public sector state-side at the moment. 

But most people can relate to the idea of a more efficient government. So, how can DOGE be done right? That’s what I set out to find out this week on The Business of Tech podcast, where I assembled a guest panel including former Te Whatu Ora chair Rob Campbell, futirust Ben Reid, and crypto and blockchain expert Paul Quickenden.

Rob Campbell said were was little of value to be achieved in the US DOGE approach that amounted to a man-made wielding an axe stalking the halls of government agencies.

He emphasised the critical importance of understanding systemic models, not just slashing budgets or headcount: “If you don’t understand the machinery, you’ll cause destruction, not creation."  Campbell highlighted NZ’s own struggles with siloed systems, such as healthcare’s “ramshackle assembly” of incompatible financial tools. 

Reid, author of Fast Forward Aotearoa, contrasted the US’s “brokenist” political climate with NZ’s inertia-driven bureaucracy.  He warned against Musk’s “dismantle-first” strategy, advocating instead for digital-first governance built on open-source platforms and API-driven services. Easy Crypto’s Paul Quickenden added that blockchain could address transparency gaps but stressed that solutions must align with outcomes, not ideology.

Check out that discussion as we head into the long Easter weekend. Put your phones down and detox from the global forces that are washing over us. Hopefully President Trump gives everyone a break and heads for the golf course.