Happy Thursday.
The current thing in tech and business is the trial decision against Meta and YouTube, which found them liable for a woman’s mental health crisis.
Today’s lineupSanta Clara University School of Law Professor Eric Goldman at 12:15 PM
SALT & STONE Founder & CEO Nima Jalali at 12:30 PM
DVx Ventures Co-Founder & CEO Jon McNeill at 1:00 PM
Linear Co-Founder and CEO Karri Saarinen at 1:20 PM
Neion Bio Co-Founder & CEO Dimi Kellari at 1:30 PM
Suno Co-Founder Mikey Shulman at 1:40 PM
Deveillance Founder & CEO Aida Baradari at 1:45 PM
Stedi Founder & CEO Zack Kanter at 2:00 PM
Plaid Co-Founder & CEO Zach Perret at 2:10 PM
**We’re folding in a new format to compliment John and Jordi’s op-eds: the Executive Summary. Here, we’ll round up the news we’re paying the most attention to and hit the most salient / significant aspects of each story for newsletter readers. Feedback appreciated!
Executive Summary: Meta’s Bellwether Trial, Arm Pumps, Sanders and AOC’s datacenter moratorium Image: AlamyK.G.M. v. Meta & YouTube
Yesterday a Los Angeles jury found both Meta and YouTube liable for a 20-year-old woman’s mental health crisis in a bellwether trial that treated the platforms as “defective products” and potentially marks the end to the “absolute immunity” nature of Section 230.
In the case, the plaintiff’s lawyer Mark Lanier argued that Meta and YouTube built “digital casinos” that use neurobiological techniques similar to those employed by slot machines. The jury found that specific features of Meta and YouTube are designed to be addictive: infinite scroll creates an environment where there are no natural stopping points; algorithmic recommendations feed users highly engaging content; autoplay removes users’ agency in choosing whether to watch the next video; notifications pull users back in by exploiting their need for validation; IG beauty filters contributed to the plaintiff’s body dysmorphia; features like the “Like” button exploit users’ biological need for social approval.
The decision awards the plaintiff $6 million in total damages. This is obviously a trivial amount for these companies, but the bellwether nature of the outcome has significant implications for social media. There are over 10,000 individual personal injury cases, almost 800 school district claims, and 40 state-level cases pending nationwide that are similar to K.G.M. v. Meta & YouTube. More broadly, the social media industry’s reliance on Section 230, which has up until now shielded them from liability for user generated content, may no longer be enough to protect them from litigation like this. If the decision makes it through appeals, platforms may be forced to redesign their user experience and algorithms, put up age verification, even deprecate infinite scroll. Obviously, changes like this would have an effect on both these platforms’ ad-based revenue models.
Meta and Google plan to appeal the decision, and it’s not hard to imagine this one making its way to the Supreme Court. — Brandon
Arm Pumps
Arm pumped 15% over the last few days on the news that they will sell their own chips. The British chip designer normally just licenses out its IP, and very successfully. They made $4B in revenue last year and nearly $800M of net income. Their CEO, Rene Haas, said Arm expects the chips to generate $15 billion in revenue by 2031. Its market cap sits at $166B now.
This is a big shift in strategy. Arm is by no means an AI loser, but it certainly hasn’t gotten the attention that the GPU makers have. CPUs are far from dead though. In fact, we are in what seems like a pretty severe CPU crunch. Intel can’t make CPUs fast enough, Nvidia is starting to sell CPUs as standalone products, and agents need more and more CPUs to make tool calls and operate in plenty of useful environments.
Arm has an interesting backstory, I actually made a 25 minute YouTube video about the company back in 2023. But to recap, it was a joint venture between Acorn Computer, Apple, and VLSI to design a low-power CPU for mobile devices. Before phones, the major product was “PDAs” - PDA stands for Personal Digital Assistant, which is a buzzword just begging to make a comeback in 2026. But the whole premise was that, while the traditional semiconductor industry was focused on servers, desktops, and other larger format computing devices, there was a gap in the market for a chip that could run in a plastic shell and be powered by a battery.
Later, then-CEO Robin Saxby set a goal for Arm to become the global standard for CPUs. In the 1990s, there were lots of different CPU makers, and slight differences in architectures could limit interoperability. So the ARM instruction set architecture (ISA) ultimately let Apple design their own chips, but within architectural guidelines set forth by Arm. This means Apple pays a license to Arm for every chip Apple sells, and Arm also works with Android phone makers, Amazon for Graviton chips, and tons of other tech companies.
Now, with the new chip-making initiative, Arm will be working with Meta Platforms and OpenAI. This will mean a shift in the economics of the business. Arm is famous for commanding 97% gross profit margins, but the chip side of the business will look more like 50%. Of course this is all offset by huge gains in market size and revenue potential. The company has one of the highest multiples in semiconductors, roughly 90 times forward earnings, so there’s a lot to live up to, but there’s a lot of value coming from AI agents that have access to plentiful CPU resources.
The industry dynamics here are particularly interesting. Nvidia sells an Arm-based CPU, so even though they are sort of competing on this front, they are also in some ways working together to challenge the x86 options from Intel and AMD. Even if this new business line doesn’t have a strong moat like CUDA, data center builders and AI companies will be happy to have Arm going up against Nvidia in the Arm-based CPU market so they don’t get squeezed. — John
Sanders and AOC introduce data center moratorium bill
Yesterday, Senator Bernie Sanders and AOC introduced a new bill (The AI Data Center Moratorium Act of 2026) that if enacted would require all current and planned data centers to halt production. It would even block “upgrading” existing AI data centers, which are designed based on power demands, cooling capabilities, and more. The bill would halt all new data center construction and upgrades until more legislation is put in place to guarantee the following (from Sanders’ Site):
AI is safe and effective — preventing executives in the AI industry from releasing harmful products into the world that threaten the health and well-being of working families, our privacy and civil rights and the future of humanity.
The economic gains of AI and robotics will benefit workers, not just the wealthy owners of Big Tech.
AI does not increase electricity or utility prices, harm communities or destroy the environment.
One thing I noticed from the announcement was that they are using AI leaders’ own statements against them, and it’s easy to see how this would resonate with their constituents.
“In December, Elon Musk, who leads xAI, said he had ‘a lot of AI nightmares’ and would ‘certainly slow down AI and robotics’ if he could.”
“In January, Demis Hassabis, the head of Google’s Deepmind, said he would support an AI pause if he knew other countries and companies also paused development. In February, Dario Amodei, the head of Anthropic, said he was ‘absolutely in favor of trying’ to slow down AI development if other countries also slowed down.”
But the problem, of course, is that there is zero movement on getting other countries to slow down, so it’s really hard to argue that America should slow down before there are any international agreements in place. Sanders is failing to acknowledge the full picture laid out by AI leaders and is focusing on quotes that have a very important caveat, global competitiveness matters here.
The Act has a long way to go and it seems like the odds of it getting into law are low, but not zero. It’s safe to say that, as written, the requirements in the bill would be an incredible gift to America’s adversaries, and catastrophic for overall AI progress. — Jordi
We send this email every weekday, right as our show goes live. Subscribe to get it in your inbox.
HeadlinesNYT: Meta and YouTube Found Negligent in Landmark Social Media Addiction Case
WSJ: Arm’s Timing Is Good, but Big Chip Move Now Has to Go Perfectly
Sanders and AOC unveil data center moratorium bill
TIME: SpaceX’s Gwynne Shotwell Aims to Put AI on the Moon
FT: OpenAI puts erotic chatbot plans on hold ‘indefinitely’
WSJ: Sheryl Sandberg’s Lean In Sheds Quarter of Staff, Will Focus on Manosphere Fight
Bloomberg: Amazon Offers $1,000 Prizes for Drivers Who Say Why They Love Their Job
Axios: Trump tells Iran to “get serious” in negotiations “before it is too late”
WSJ: Nvidia-Backed Startup Seeking to Counter Chinese AI Eyes $25 Billion Valuation
WSJ: OpenAI Backs New AI Startup Seeking Bot Army Breakthroughs
Axios: Behind the Curtain: How Anthropic’s Pentagon deal could get revived
WSJ Opinion: Thou Shalt Not Steal
FT: Brussels targets big porn platforms over child safety concerns
Google Research launches TurboQuant
Matt Shapiro: We’re Going To Need Humans More
Eric Seufert: Meta partners with Stripe for in-ad shopping
Posts of the DayTBPN is brought to you by Ramp.Ramp is the all-in-one finance automation platform that helps businesses save time and money with smarter corporate cards, spend management, and bill pay.
Special thanks to our sponsors: Shopify, Graphite, ElevenLabs, CrowdStrike, MongoDB, Fin, NYSE, AppLovin, Phantom, Gemini, Cognition, Labelbox, Public, Kalshi, Restream, Vanta, Console, Railway, Figma, Plaid, Okta, Linear, Turbopuffer, Lambda, Gusto, Vibe.co, Sentry, and Cisco.