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There’s something going on over in Microsoft’s Xbox division and it isn’t good. Don’t take my word on that. Apparently the bosses over there are circulating an email to staff talking about how properly fucked everyone is if something doesn’t change soon.
Xbox CEO Asha Sharma and Xbox Game Studios head Matt Booty just sent an email out to all Xbox employees with a clear, yet terrifying message: “this cannot continue.”
Shared publicly via Xbox Wire, the email paints a picture of a broken division, bogged down by the weight of both years of unsuccessful investments and unchecked excess, and battered by the winds of outside economic forces. Sharma, now having been in charge for 100 days, has made it clear that what she is spearheading is indeed going to be a hard reset, complete with hard decisions that will make or break the division and ripple out through the lives of its thousands of employees.
The letter itself attempts to paint a rosy picture at the outset, but then lays out the challenges. The Xbox division has a 3% margin, which is laughably low. The crises in pricing and availability of computer component parts is out of control and likely to get much worse, thanks in no small part to the bumbling buffoons who currently run the country. Complex internal and vendor relationships have led to communication issues and speed-to-market deficiencies throughout the division. Pretty much everyone agrees that there are mass layoffs coming to the Xbox division as a result of the above. And then there’s this:
We expanded our studio system when we needed a pipeline of content to meet multiple strategies across subscription, streaming, and devices. In the process, we have found ourselves over extended as we executed on changing strategies in a landscape of more readily available content. We are the fortunate stewards of industry-defining franchises that have enormous potential and player demand, but we have not adequately funded them to compete and win. At the same time, as we saw this past weekend at Showcase, a reliable pipeline of first- and third-party exclusives and new IP are critical to our success. We need to reassess the balance between these and our investment priorities for the next 5 years.
There are two, separate things being stated here. Let’s take them in order, because both are important.
The expansion of the studio system being a problem is absolutely hysterical. Xbox does indeed have a hefty portfolio of studios operating under its ownership. More than half of those studios came over to Microsoft in the Zenimax and Activision Blizzard acquisitions. Both acquisitions came with regulatory challenges, the latter being far more involved from the FTC. Both acquisitions also got past regulators in the courts specifically by being positioned as vertical acquisitions rather than horizontal acquisitions, meaning that there wouldn’t be “efficiency layoffs” as a result of bringing them on board, and that the acquisition would lead to lower prices, better games, and faster development for the gaming public.
Here is the Xbox people themselves saying that it isn’t working and that the sprawl of the studio system itself is having a negative effect on game production.
Oh, and about those layoffs that wouldn’t happen? They began happening in January of ’24, leading the FTC to point out to the court that it had been lied to. Then came the Zenimax studio layoffs in May of ’24 and more Xbox layoffs in July of ’25. All while the current, new Xbox bosses complain that they are overextended in terms of their studio sprawl? Cool.
Then there’s the second half of the quote, in which it appears that the Xbox strategy will return once more to a strategy built in part of stupid, dumbass console exclusives to try to entice people to buy Xbox devices. Matt Booty, Xbox Chief Content Officer, elaborated on this recently in an interview.
“[We] want people to have a reason to get on board with Xbox,” Booty said. “We want them to have a reason to buy an Xbox reason to be an Xbox fan. At the same time we want to reward all our players that have been with us for a long time. We know that exclusives are important. That’s why we got Gears coming in 2026, Clockwork in 2027.”
He continued, “We also want to be clear, our big multiplayer games, live service, games are going to continue to be multiplatform. If we’ve promised something to players already, we’re going to honor that promise, right? And then we’re going to really, I think Asha said it, we’re going to make the right decision, not the fast decision.”
The Xbox team has never been able to get its story straight on console exclusives. But when you’re clearly running in third place in a console war that consists of 3 consoles, and you’re not particularly competitive at that, trying to coerce your way into console success by holding games hostage to your platform is a recipe for destroying gaming franchises and still losing the console wars.
There’s a very good reason that the trend over the past decade or so has been one of less exclusivity, not more. Getting games out there, particularly when you’re directly publishing a bunch of games because of that same studio sprawl we talked about earlier, is the most important thing for the bottom line. Xbox should want all the games it publishes itself to be on every platform everywhere, in order to maximize sales. Spending money on third-party exclusives makes little sense, either, particularly when you clearly have a console series in decline.
I imagine it must be a very uncomfortable time to be an Xbox employee. And that’s too bad. I have no doubt there are a ton of good people working there and at their studios. But I’m not going to pretend to be surprised that Xbox overall as a platform is not doing well, considering all the lies, the acquisitions that probably shouldn’t have been allowed, and the chaos in messaging that has come out of that group.
Of course, that discomfort apparently applies directly to some of the top execs who reported directly to Booty, who have started to get out before the situation gets even worse.
Filed Under: asha sharma, exlusives, layoffs, matt booty, xbox
Companies: microsoft
This article is republished from The Conversation under a Creative Commons license. Read the original article.
During a Washington Nationals baseball game on May 17, 2026, three people unfurled a large banner from the upper deck of Nationals Park displaying a link to a white nationalist website.
The website, warning of the replacement of whites by people of color, called for the deportation of 100 million people from the United States.
The disturbing incident reflects the broader ascendance of the “great replacement theory,” the xenophobic conspiracy theory asserting that shadowy elites are embracing permissive immigration policies to replace native-born white Americans with immigrants of color.
Prominent Republicans, including President Donald Trump, Speaker of the House Mike Johnson and conservative podcaster Tucker Carlson, have echoed ideas associated with the great replacement theory. And conservative media outlets, such as Fox News, have disseminated them to millions of viewers.
But are the xenophobic ideas recently expressed at Nationals Park limited to a small number of extremists, or are they also endorsed by the broader public? If the latter, how do political and media elites contribute to their spread?
To answer these questions, our team has conducted several nationally representative surveys that ask Americans about their support for key tenets of the great replacement theory.
We consistently found that a substantial minority of Americans agree with the sentiment that new immigrants threaten the political, cultural and economic power of white Americans. In our latest poll of 1,000 Americans fielded in March 2026, 36% agreed with the statement: “Native-born Americans are losing their economic, political, and cultural influence in this country because of the growing population of immigrants.”
A notable number of Americans – 26% – also believed political elites are trying to “replace” the existing white population, agreeing with the statement: “There are people who secretly work to make sure immigrants will eventually replace real Americans.”
Support for these beliefs is concentrated most heavily among white Americans, Republicans, conservatives and self-identifying members of Donald Trump’s Make America Great Again movement. Indeed, more than 3 in 4 members of the MAGA movement and close to 6 in 10 Republicans agreed with the statement: “Immigrants invade and colonize the United States.”
But what explains this spread of the great replacement theory?
In our newly published, peer-reviewed study, we used nationally representative panel survey data that tracked over 500 white Americans over time to attempt to answer this question.
We found that white Americans who identified as Republican, who are conservatives and who have negative views of people from other racial backgrounds are all more likely to express support for key tenets of the great replacement theory. Moreover, we uncovered clear evidence that white Americans who watch Fox News are also more likely to agree with the conspiracy theory.
Given the popularity of Fox News, we believe this latter point deserved further investigation. As detailed in our paper, while 39% of all white Americans agree that immigrants invade and colonize the U.S., 61% of white Americans who watch Fox News agree with this view. Even when taking into account partisan identification, ideology, racial attitudes and demographic characteristics, Fox News viewership remains significantly associated with more support for the great replacement theory.
Additionally, because we tracked white Americans over time, we could observe changes in their support for the conspiracy theory in response to variations in their viewership of Fox News. Simply put, the more Fox News programming that a white American watches, the more likely they are to adopt the conspiracy theory.
Our research builds on decades of work showing that public opinion is strongly influenced by media consumption. Recent scholarship, in particular, highlights the influence of Fox News on public opinion. It shows how exposure to Fox News leads Americans to express more conservative attitudes about the COVID-19 pandemic, immigration policies and criminal justice issues.
Given the attention that Fox News hosts, elected officials and pundits dedicate to the great replacement theory, our results suggest that this coverage has indeed influenced the views of white Americans. The great replacement theory is no longer purely on the fringes of society.
In our view, this is troubling, not only because the conspiracy theory treats immigration as an existential issue — where the stakes are framed as the very preservation of one’s self and country — but also because the theory is also linked to numerous instances of political violence directed at people of color and religious minorities.
As America approaches its 250th birthday, the nation will no doubt continue to grapple with the topic of immigration, race and what it means to be an American.
While there’s plenty of room for disagreement over immigration policy, conspiracy theories make it much harder to find common ground or craft political compromises. What we’ve found is that when prominent media embrace conspiracy theorizing, increased public endorsement of conspiracies will follow.
Adam Eichen is a Ph.D. Candidate in Political Science at UMass Amherst; Jesse Rhodes is Associate Professor of Political Science at UMass Amherst, and Tatishe Nteta is Provost Professor of Political Science at UMass Amherst
Filed Under: conspiracy theories, great replacement theory, immigration, rupert murdoch
Companies: fox news, news corp.
UK Prime Minister Keir Starmer is not having a particularly good time of being the UK’s leader. Basically everyone thinks he’s doing a terrible job and it seems unlikely that he’ll be in the role much longer. Apparently desperate to turn the tide on being historically disliked, he’s decided to grab the most reliable life preserver in modern politics: the techlash. Over the last few weeks, everything he’s done can be summarized in a single sentence: “let’s blame the internet for everything bad.”
It started a week ago with an announcement that if internet social media companies didn’t wave a magic wand and make all sexting disappear… he would start putting tech execs in prison.
“Today I’m calling on tech companies operating in this country to introduce device controls that prevent children from sending and receiving sexually explicit images,” Starmer said in a speech at London Tech Week. “This is not an impossible challenge.”
Under the new plans, firms like Apple and Google would have to build or activate technical solutions on smartphones and tablets to detect and block nude images for children. Adults would still be able to take, share or view nude content through an age verification process.
If companies did not act within three months, the government said it would bring forward legislation to force them to do so or risk facing fines or, as a last resort, the threat of criminal liability for bosses.
This is very much the magical “nerd harder” thinking by a technologically clueless bureaucrat who thinks that societal problems can be solved by making tech companies do the impossible: stopping humans from doing stupid things.
That magical wishcasting continued this week with Starmer announcing that the UK would be following Australia’s completely failed experiment in “banning” kids from social media, by putting in place an even stricter ban of teens from even more internet services.
The U.K. plans to follow the same model for a social media ban as Australia, which last year became the first country to bar under-16s from holding social media accounts. Platforms that fail to take reasonable steps to exclude children younger than 16 could be punished with multimillion-dollar fines.
The U.K. said its ban will apply to platforms including Snapchat, TikTok, YouTube, Instagram, Facebook and X, but not YouTube Kids or messaging services like WhatsApp and Signal. Starmer stressed that enforcement action will target tech companies, not children.
The prime minister also said he will go further than Australia’s measures.
He said the government will act to prevent strangers from contacting children on gaming and livestreaming platforms. Authorities are also considering additional measures including overnight curfews and breaks in infinite scrolling for those under 18. More details are expected next month.
This is more nerd harder nonsense. Again, Australia’s ban has been a total joke, with the vast majority of kids figuring out how to get around the ban, and the ones most hurt by the ban being teens who have lost access to the communities that were most important to them. Again, every detailed study on the subject has found that the number of teenagers who have negative experiences on social media is tiny.
But the media and politicians absolutely love to blame the internet for any sort of societal problem, and it makes a wonderful scapegoat for their own policy failures.
Even Ian Russell — a prominent UK child safety activist who has spent years blaming social media for anything bad that happens to children — finds this whole thing particularly pointless. Russell, who became an activist after his daughter died by suicide (which he blames on her social media experience), has pointed out that these kinds of teen bans are the kinds of headline grabbing measures politicians love, but do nothing to actually help kids.
Starmer also promised me personally that he would implement effective measures to strengthen regulation and finally address the harm caused by social media. He has failed to keep either promise.
He also promised bereaved parents after the recent consultation on children’s social media use that he would follow the evidence and take the time to consider his response then act decisively. Instead, he has rushed out a ban.
Indeed, the evidence has long suggested that these kinds of bans actually can make things worse by isolating kids who are at most at risk and who need support. At a time when fear mongering and moral panics have cut off basically everywhere that kids can be kids with each other and without adults hovering over them at every moment, social media became that kind of digital third space. Social media didn’t become the default digital third space because it’s uniquely ‘addictive’ — it became the default because adults have spent decades overreacting and shutting down every other place kids could gather and communicate without supervision.
And that’s not even getting into the fact that pretty much all experts agree that age verification technology itself makes kids way less safe online.
But, even more to the point, the UK spent years supposedly crafting what they insisted was a very balanced policy in the Online Safety Act. We always found those claims to be ridiculous as the bill seemed bad from the very start, but if they spent all these years crafting this policy, which only just went into effect, it seems pretty ridiculous to then immediately jump to a way more extreme and less carefully thought out plan.
However, that’s what we should expect for every single nonsense bit of internet regulation that is being pushed for by a political class “for the children.” Because the bills misrepresent the real problems they do nothing to solve them. Rather than admit that their policies were misguided and a kneejerk reaction to a moral panic, politicians will always blame others: in this case the tech companies, and immediately come up with more draconian regulations that serve no purpose other than to get flailing politicians headlines for “doing something.”
Perhaps the perfect encapsulation of how stupid all this is was the question of how Bluesky would be handled (disclaimer: I am on the board of Bluesky). When the ban was first announced, the government had said it would apply to sites that meet the following description:
This would capture user-to-user platforms, whose purpose is to enable social interaction and which allow users to post material, alongside algorithms. The ban will therefore include platforms like Snapchat, TikTok, YouTube, Instagram, Facebook and X. We do not intend for messaging services like WhatsApp and Signal to be included in the social media ban.
Some right wing nonsense peddler sites absolutely lost their shit at the lack of Bluesky being mentioned, claiming that the extremely centrist Starmer was somehow creating an exemption for the supposedly “left-leaning” Bluesky. However, when asked about it, the UK government apparently said that Bluesky was covered and would be required to ban teens like those other platforms.
But does that even make sense? If the supposed problem with all these sites is that they allow for the sharing of content “alongside algorithms,” Bluesky doesn’t actually do that. There are recommendation algorithms, but they are totally in the control of users themselves. They don’t need to use them. Or they can use one of the over 100k feeds that others have created. Or they can easily create their own feeds. It’s wholly different than all the other platforms named, which focus on telling you what they think you’ll want to see (or what maximizes their own profits).
Either way, this shows how random this policy is. Bluesky either does or doesn’t meet the requirements (depending on how you read “alongside algorithms” which is already painfully vague), but as soon as there was a right wing freakout about it, the UK government said “oh, yeah, sure, them too.”
This is not thoughtful policy. This is not considered policy. This is not protecting children. This is a desperate politician with no clue how any of this works announcing nonsense to grab headlines.
Filed Under: keir starmer, protect the children, social media ban, teen safety, uk
Yesterday we wrote about the Trump administration forcing Anthropic to shut down Fable 5 and Mythos 5. The short version: dumb. Today, Axios got White House officials on the record, and it turns out the real reason is even dumber than we thought. In that original piece, we had pointed out that cybersecurity expert Katie Moussouris had been able to review the jailbreak and found that it was actually a useful way for cybersecurity defenders to fix and patch cybersecurity flaws, rather than a tool to be weaponized.
As we noted in that piece, it’s entirely possible that there was some real danger involved in the jailbreak, but we doubted that the administration would be honest about it. And it sounds like we were right to be suspicious. Axios got White House officials on record with the actual reason: Anthropic had asked Moussouris to review the jailbreak, and the administration decided she was a “radical Democrat.” That’s it. That’s the reason the models are offline.
- “We never wanted this to happen. Our number one priority is innovation but our hands were tied,” the White House official said.
- The optics added fuel to the fire. Anthropic came out with a blog post dismissing the Amazon report. Then the company enlisted a cybersecurity expert viewed by the administration as a “radical Democrat,” who was then by Chris Krebs, who Trump just fired.
First off, Krebs wasn’t “just fired.” Krebs was fired (somewhat famously) all the way back in 2020, and not because he’s some sort of “radical Democrat,” but because he pointed out that the 2020 election was shown to have been quite secure. And since that ruined Trump’s big lie that he had really won the election, he had to fire Krebs (whom he had hired in the first place).
So… it appears that the Trump admin shut down the most advanced versions of Anthropic’s AI tools not because they posed a serious risk… but because Anthropic asked someone to review the supposed threat, and that person got a shout-out from someone Trump hates for once telling the truth about election cybersecurity.
As promised, this story just keeps getting stupider.
Axios, as it’s known to do, doesn’t emphasize how absolutely fucking bonkers all of this is, but does its usual horse race nonsense, suggesting that if only Anthropic had sucked up to Trump’s ego more, all of this mess could have been avoided:
“Anthropic has not done a great job at trying to speak to the administration and appreciate the ideological differences,” one source familiar with the administration’s thinking said.
- “It’s like they just speak in different languages,” the source said, adding that the company has simply not figured out how to communicate with this administration.
Oh come on. This is the presidential administration of the most powerful country on earth, and we’re supposed to accept that companies need to tiptoe around “appreciating ideological differences” or face having their entire service banned? Who in their right mind would think that’s reasonable?
The Axios piece concludes with the dumbest suggestion on this entire thing: that it’s somehow Anthropic that needs “an attitude fix.”
- Absent that, a source familiar with the administration’s thinking said it may simply come down to an attitude fix where, instead of feeling dismissed, “everyone feels safe, secure and happy.”
Anyone who thinks it’s Anthropic’s fault for not hiring a MAGA chud to lobby on their behalf is simply endorsing blatant corruption. But in this era of cowed political journalists, apparently framing capitulation to that corruption as savvy PR advice is the only thing they can think of.
In the meantime, dozens of the biggest names in cybersecurity have signed onto a “Free Fable” letter, telling the administration how incredibly counterproductive all of this is:
It is our understanding that underlying model capabilities in the original research that triggered this action:
- Were focused on determining whether a human-prompted section of code was insecure. This is a necessary capability in any model that is intended to write secure code and should not be considered an offensive capability.
- Can be replicated on GPT-5.5, Opus, Sonnet and even Chinese models like Kimi 2.7. The justification for this unprecedented action was that Fable provides a unique “uplift” of capabilities beyond other AI models, but AI has been finding bugs and generating working exploits at superhuman levels since last year.
- Anthropic is addressing the research. As security professionals, we recognize that our work does not lead to a simple end-state where a system is fully safe, and the purpose of research like this is to enable continuous improvement, not to ban the technology.
As a result, this action has taken the best models away from defenders, created market uncertainty, and risked America’s AI leadership without any real risk to justify it.
Yeah, sure, but did you see that Anthropic hired someone who got a thumbs-up from someone Trump fired six years ago! In the MAGA universe, that’s all that actually matters.
So we have dozens of the top cybersecurity professionals around saying that this administration just deliberately weakened American defenses, handing an advantage to adversaries… all because of some weird partisan freakout. And the administration’s response is that it’s Anthropic that needs an “attitude fix”?
Filed Under: ai, chris krebs, corruption, donald trump, fable 5, katie moussouris, maga, mythos, politics
Companies: anthropic
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Filed Under: daily deal
Just once I’d like to see this administration engage in the slightest bit of subtlety. Just once. It would be a refreshing change from literally everything it has done during this current iteration.
Sure, it’s easier to prove actions are vindictive if they’re transparently vindictive. On the other hand, too many courts and judges (which would be any number greater than “zero”) still pretend the Trump administration is acting in good faith, even when the administration makes it blatantly clear that it isn’t.
There’s another election on the horizon. And Trump/MAGA aren’t entirely sure they’ll be able to maintain their majorities, so we’re seeing a bunch of mid-term redistricting, executive orders on mail-in ballots, and pretty much anything else the Trump administration thinks might (1) skew the results in its favor or (2) allow it to engage in second round of election denialism, but with the threat of government/non-government violence behind it.
That’s why voter records were seized in Georgia. It’s belated revenge against Georgia Secretary of State Brad Raffensberger, who refused to “find” the 12,000 pro-Trump votes needed to swing the 2020 election in Trump’s favor.
And that’s why the FBI has just raided the offices of an Ohio group that’s instrumental in getting residents registered to vote.
Federal law enforcement officials on Thursday raided the offices of an Ohio organizing group that ran one of the state’s biggest 2024 voter registration efforts, seizing computers and other materials from the group’s Cleveland office, according to people familiar with the law enforcement action.
[…]
The warrants executed Thursday appeared to focus on the group’s 2024 voter registration efforts, according to the people familiar with the action. Prentiss Haney, a former executive director of the Ohio Organizing Collaborative who sits on the group’s board, said that around 25 FBI agents arrived at the office to seize the devices.
The DOJ has refused to comment on the raid, other than saying the usual stuff about the warrant being signed by a judge… as if that were evidence in and of itself of the raid’s lawfulness. It certainly says nothing about the perception it creates, which would be just more vindictive activity from people who should fucking know better.
Not only did the FBI raid the group’s offices, but dozens of federal officers from the FBI and HSI (Homeland Security Investigation) wandered around the state (without warrants or subpoenas) to hassle members of the organization at their homes, presumably in hopes of scoring a few warrantless searches/arrests.
Supposedly, this has something to do with registering people who aren’t allowed to vote (read: immigrants). And this did happen nearly a decade ago.
In 2017, a canvasser working for the Ohio Organizing Collaborative pleaded guilty to state charges of fraudulently registering more than three dozen people to vote.
But that has all been adjudicated and we’ve had two presidential elections since then. No further allegations have been raised about the OOC or credible accusations made about recent registration fraud.
While the DOJ may try to pretend a case it has already closed justifies another bite of this apple, the real reason for this current raid is more than likely something that isn’t actually illegal. It’s just something Trump and his administration officials don’t like:
The group registered more than 100,000 Ohioans to vote in the 2024 elections and was active in organizing against Republicans’ 2025 redistricting efforts in the state.
Now, you may recall that Donald Trump won the 2024 election. Given that, it seems incredibly stupid to claim there’s a bunch of voter fraud going on that needs to be dealt with. Even if true (which it certainly isn’t), it didn’t prevent Trump from being elected. One could even make the argument that any election fraud may have helped Trump retake the White House after being forced to take a four-year break from ruining the country.
Useful idiot/MAGA acolyte Secretary of State Frank LaRose claims he has referred “1,200 criminal cases” alleging voting fraud to the DOJ. And, once again, one has to wonder why someone might do this in a state where Trump secured 55% of the popular vote in the last election… unless all of these MAGA idiots think the GOP won’t be nearly as successful in upcoming elections. But this is the same Frank LaRose who thinks 60% of the vote should be the minimum needed to pass voter initiatives (especially ones in support of abortion rights), but has no problem with Trump’s 55% score in the last election.
Once again, this is a purely vindictive move from an administration pretty much solely defined by its vengeful activities. Even if this goes nowhere, it will have served its purpose: reminding people opposed to Trump that Trump holds the power and he’s more than willing to abuse it.
Filed Under: doj, fbi, gop, ohio, trump administration, vindictive prosecution, voter suppression
Last week Elon Musk successfully conned America and U.S. regulators into signing off on his preposterous SpaceX IPO, which immediately generated Musk $75 billion by comically over-stating the value of SpaceX, xAI, and Starlink. Then bone-grafting the entire pile of bullshit to the U.S. economy and your retirement account under the pretense that space data centers and Mars colonization are just around the corner.
A handful of remaining useful journalists have repeatedly explained how xAI and Musk’s racist 5th place chatbot — which comprises the lion’s share of the ridiculous IPO valuation — is a gargantuan loser. Both SpaceX and xAI aren’t profitable and may never be, and the claims of Mars colonization and space data centers are unworkable bullshit designed to distract people with toddler-level critical thinking skills.
Anyway I’m sure it will go fine.
As a multi-decade telecom beat reporter I’d say I’m better positioned to talk about Starlink — the only actually profitable company in the SpaceX IPO prospectus (and that’s assuming Starlink is being honest about their financial numbers in a country too corrupt to have working financial regulators).
I’ve long noted how Starlink is great for people with no other options, but data has shown how it’s too congested to meaningfully scale. It’s also often too expensive for the sorts of Americans struggling with access. There’s also the problem with it ruining astronomical research and degrading the ozone layer. So Starlink is great for RVs or a guy with an extra cabin in the woods, but it’s not a miracle.
In terms of broadband policy, it’s supposed to be a niche solution. The kind of technology you use to fill in the gaps after you’ve pushed fiber, 5G, and fixed wireless out as far as you can into unserved areas.
But as I’ve mentioned previously, folks in the Trump administration and extended Rogan infotainment universe see Starlink as akin to magic. They think it’s just a sort of pixie dust you sprinkle over the entire of U.S. connectivity woes. There was a soggy Bulwark interview last week with Jason Calacanis that kind of reveals how deep the delusion goes in terms of what Starlink actually is:
The SpaceX IPO insists — and Calacanis dutifully believes — that it’s trivial for Starlink to jump from a niche satellite broadband solution with a little over 10 million subscribers to a massive economic powerhouse with 300-500 million subscribers. Calacanis waxes poetic about Starlink providing bandwidth to every phone in the world and surpassing even Netflix in terms of total subscribers.
But in a way that’s highly representative of modern Silicon Valley, Calacanis doesn’t actually care about how the tech works, or even if it works. Calacanis is interested in unchecked wealth accumulation, and propping up the unbridled profit-seeking of a personal friend.
The thing is: to meaningfully grow, Starlink will need to start seriously competing on price to counter competitors (like Amazon) coming into the space. But the cost of endlessly replacing LEO (low Earth orbit satellites) is immense (SpaceX says each satellite has a five year lifespan, but it’s arguably much lower). And ARPU is already dropping for Starlink as the company tries to drum up new subscribers.
Calacanis insists Starlink’s just a hop, skip, and a jump from being even bigger than Netflix. But for Starlink to even sniff those kinds of numbers, it would have to intensely compete with deeply-entrenched and politically-powerful telecom monopolies, and fiber optic broadband and 5G/6G networks less constrained by the rules of physics. They’ve also got to compete with a rising tide of community-owned fiber.
As Starlink grows its subscriber base, it’s not only going to see its ARPU drop faster, but data shows it’s going to run into new capacity constraints. That means more annoying network management practices that throttle video, limit services, and generally degrade performance. We’re already starting to see the impact of this with network slowdowns and “congestion fees” ranging upwards of $750 in some areas.
And this is, so we’re clear, a company that’s never seen fit to meaningfully invest in customer service, so as these problems grow, it’s unlikely they’ll be able to handle customer annoyance well.
Anybody claiming that Starlink is the ticket to vast riches is either lying to you or doesn’t understand how the technology actually works. Even if it can maintain its success as a viable niche connectivity option useful in rural markets and global battlezones, the high cost of maintenance means this is never going to be a major money maker. Though they clearly hope it will prove to be a semi-useful backbone for a major pump and dump scheme.
The ace Elon Musk is holding is corruption and cronyism leading to regulatory favors and massive new subsidies, but it’s not clear even that’s going to be enough.
Cecilia Kang at the New York Times has an interesting article about how the Trump FCC has been doing cartwheels trying to prop up the Musk IPO — especially as it pertains to Starlink. That has included not just abandoning any meaningful regulatory oversight of “space junk” and orbital safety, but launching dodgy investigations into companies that hold spectrum Musk wants for himself.
Elon Musk bought himself a Presidency, and it continues to pay off handsomely:
“Carr has taken multiple actions for which Musk was the prime beneficiary,” said Blair Levin, an adviser to New Street Research, an investment research firm, and a former chief of staff at the F.C.C. He added that Starlink “has gotten a huge amount from the Trump administration and Carr.”
Carr has tried to justify his favoritism of Musk by saying he’s also rubber stamped the LEO satellite policy interests of Jeff Bezos and Amazon. But as we’ve consistently established around here, nothing Carr does is driven by any sort of good faith concern about the public interest.
The funny part is that the New York Times doesn’t even mention that the Trump administration has also hijacked the 2021 infrastructure bill to redirect potentially billions of dollars to Elon Musk and Jeff Bezos (I should have an upcoming feature on this over at The Verge). This is money being directed away from affordable fiber and toward two billionaires — for networks they already planned to build.
More specifically, the Trump NTIA under former Ted Cruz staffer Arielle Roth changed the language of the $42.5 billion Broadband, Equity, Access, and Deployment (BEAD) program so that Musk and Bezos would be the prime beneficiaries. They also stripped out any language requiring that internet access built with taxpayer money had to be affordable or equitably deployed with an eye on fairness.
Musk and Calacanis types try to brush functional oversight for taxpayer spending as unnecessary “wokeness.” But the ongoing BEAD saga involves an historic hijacking of Congressionally-mandated funds by bad faith actors; so it’s curious the New York Times didn’t think it was worth mentioning in a story about how unethically cozy the Trump administration and Musk are.
Like most of the SpaceX IPO this will all be proven out over time. Long after people have had their retirements account raided, or small towns have had their infrastructure hopes hijacked. Consumers, taxpayers, and labor will, as is usually the case, be left holding the bag. And the folks that made it possible will already be off to the next big thing leaving people of conscience to clean up the mess.
Filed Under: competition, corruption, cronyism, elon musk, fcc, leo satellites, spacex ipo, taxpayers, telecom
Companies: spacex, starlink, twitter, x, xai
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