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Instagram Proves When You’ve Lost the Kardashians, You’re Screwed

Instagram Proves When You’ve Lost the Kardashians, You’re Screwed

Hello, friends. My name is Kate Knibbs, and I’m a senior writer at WIRED covering culture and media. I’ll be your substitute Plaintext guide this week, as my colleague Steven Levy has generously lent me his newsletter. “Have fun doing my newsletter, please don’t go off on a tangent about the Kardashian-Jenner Industrial Complex,” he said before heading out, if I remember correctly. My bad!

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The Plain View

Instagram sucks now. What was once a repository for photos of friends and family is now a junkyard stuffed with knockoff TikToks known as “Reels.” Looking at Reels is almost like looking at TikTok, except instead of an algorithm pulling videos to precision-match your interests, Reels are a chaotic hodgepodge of acquaintances selling gut health supplements for multilevel marketing schemes, strangers pushing sponsored content, amateur stand-up performances, advertisements, and—if you’re a parent—grim videos of sick babies. Sometimes there’s an occasional cute-dog clip, but all in all, Reels are an embarrassing attempt to copycat a rival social network that only serves to dilute Instagram’s appeal and alienate its users.

This isn’t an original complaint—in fact, a horde of pissed-off influencers have been stewing about this all week. Reality star Kylie Jenner reposted a viral plea from a photographer named Tati: “MAKE INSTAGRAM INSTAGRAM AGAIN. (stop trying to be tiktok i just want to see cute photos of my friends.) SINCERELY, EVERYONE.” Her older sisters Kim and Kourtney Kardashian reposted the meme shortly thereafter. The Kardashian-Jenners have even more reason to be irked by this change than I do; after all, they use Instagram to sell themselves and their wares, so a shift in its functionality poses a threat to their multimillion dollar business interests in addition to their ability to see cute photos of their friends.

Prior to this kerfuffle, Kylie most recently made news for taking unbelievably wasteful 14-minute private jet rides for fun. I do not endorse her behavior. But when she’s right, she’s right. And, as Verge reporter Ashley Carman pointed out, Kylie has a track record for tanking social platforms with her criticism. In 2018, when she casually noted that she stopped using Snapchat after its redesign, the company lost $1.3 billion in market value. For social networks, if you’ve lost Kylie, you’re in trouble. Should a 24-year-old climate villain have this much influence? No. But she does.

And now Instagram is in crisis mode. Adam Mosseri uploaded a frantic-eyed front-facing vlog the day after Kylie’s post, attempting to convince people that the shift to video is good, actually. Adam, Adam, Adam. Don’t piss on our legs and tell us it’s raining!

The Chip Shortage is Easing—But Only For Some

The Chip Shortage is Easing—But Only For Some

But the turnaround is far from uniform. Everstream’s data shows that lead times for some advanced chips needed for medical devices, telecommunications, and cybersecurity systems, is around 52 weeks, compared to a prior average of 27 weeks.

Automotive companies that were badly affected by the pandemic because they initially canceled orders for components, were then blindsided by an uptick in demand, and had no spare inventory and little negotiating leverage when it came to ramping back up. Modern cars can have thousands of chips, and future models are likely to pack even more computing power thanks to more advanced in-car software and autonomous driving functionality.

“Anything automotive—or competing with capacity for automotive—is still highly constrained,” says Jeff Caldwell, director of global supply management at MasterWorks Electronics, a manufacturer of printed circuit boards, cables, and other electronics products. Actify CEO Dave Opsahl, whose company sells operation management software to automotive companies, says the supply of chips has not improved for carmakers, and in fact shortages of raw materials like resin and steel, as well as of labor, has also gotten worse.

Frank Cavallaro, chief executive officer at A2 Global, a company that finds, procures, and tests electronic components for manufacturers, says the current situation reflects the complexity of the chip market and supply chain. Many end products include numerous semiconductor components sourced from all over the world, and also require devices to be packaged by companies that are mostly in China. “It’s macro, it’s micro, it’s down to individual regions,” he says.

Gerdman of Everstream says the appearance of the new BA5 Covid variant in China has raised fears of draconian lockdowns that could hamper the production of chips and other products. She adds that uncertainty around future capacity as well as geopolitical restrictions on chip exports makes it difficult to plan ahead.

The geopolitical picture may well significantly increase global capacity to produce advanced chips. Legislation making its way through the US Senate would provide $52 billion in subsidies to increase domestic chip production. The US share of global chip production has fallen from 37 percent in the 1980s to 12 percent today. But while chip shortages have been cited by boosters of the subsidies, much of the money would go towards reshoring production of advanced chips. The country’s most advanced technology, from Intel, lags behind that of TSMC, presenting a potential weakness in America’s access to technology that promises to be vital for everything from AI to biotechnology to 5G.

The current downtown may only contribute to instability further down the semiconductor supply chain. “Unfortunately, a slowing economy brings with it the risk of some suppliers going into financial distress or liquidity crunch if they cannot access capital,” says Bindiya Vakil, CEO of Resilinc, a company that sells AI-based supply-chain management tools. “This can introduce a lot of risk into the supply situation. Companies should really monitor supplier financial health and collaborate closely with suppliers to give them favorable payment terms, upfront payments and so on, to help them with liquidity.”

The cyclical nature of the semiconductor industry even has some, including Syed Alam, who leads the global semiconductor practice at consulting firm Accenture, envisioning the shortage turning into a glut. “A rising concern for 2023 is the possibility of overcapacity for chip production,” he says. “Companies need to be focused on building an agile and resilient supply chain for the longer term, and be prepared to react.”

Even Twitter Thinks Elon Musk’s Tweets Are Out of Control

Even Twitter Thinks Elon Musk’s Tweets Are Out of Control

Hi, folks. If inflation makes everything more expensive, why are stock prices falling? Asking for a 401(k).

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The Plain View

In all the months since Elon Musk has been maneuvering to control Twitter, not once have his impulses seemed to make any sense. Here is a guy who has concentrated on leveraging big science to solve big problems. He runs two huge and inspirational corporations, Tesla and SpaceX, both with considerable challenges for him to grapple with. He has another company that wants to solve the brain, and yet another to tunnel under big cities. He’s got seven kids … sorry, nine. He’s got to figure out how to get to Mars. Yet something made him obsessed with taking charge of a 16-year old enterprise based on short bursts of self-expression, to the point of venturing billions of his own dollars and endless distraction in order to do so, at least until he changed his mind.

The only explanation seems to lie in Musk’s own use of the platform—18,600 tweets. Twitter can make people crazy. It makes them do and say things they otherwise might not. And few have fallen as hard for it as Elon Musk.

So it’s no accident that in the wake of Musk withdrawing his buyout offer, Twitter’s suit demanding that Musk go through with the deal relies heavily on … his tweets. Right in the filing, the company’s lawyers screenshotted them to build their case, starting with the irreverent puns that Musk made indicating he was about to make a tender offer. (He cited the Elvis tune “Love Me Tender” and invoked F. Scott Fiztgerald’s 1934 novel Tender Is the Night.) The filing uses Musk’s tweets to disabuse his claim that the deal was void because the company had misled him on the volume of bot traffic on the platform. It also included multiple instances where Musk used Twitter to disparage Twitter, the company he ostensibly wanted to buy. Perhaps most damning was Musk’s response to Twitter CEO Parag Agrawal’s thread about the company’s efforts to contain bots: a tweet consisting of a single poop emoji. To quote the brief: “For Musk, it would seem, Twitter, the interests of its shareholders, the transaction Musk agreed to, and the court process to enforce it all constitute an elaborate joke.”

Though I’m not a lawyer, this seems like a clever legal tactic. I know from personal experience with a junior-high-school vice principal that people in authority don’t like it when you think the whole process is a laughing matter. Even the most impartial judge might be disinclined to embrace Musk’s arguments while he’s thumbing his nose at the revered regulations that lend order to our financial system.

Is this behavior Twitter’s fault? I’m sure it’s a pretty common thing for high-powered executives to talk trash in the privacy of their corner offices. But Twitter lures impulsive people to share those private thoughts with the world at large. Musk, whose riches must have made him feel invincible to begin with, has 100 million followers rewarding his online activity with likes, retweets, and supportive comments. Apparently, it was all too easy—and clearly plenty of fun—to add trolling to takeover.

FaZe Clan Is Going Public—Just as the Creator Economy Shifts

FaZe Clan Is Going Public—Just as the Creator Economy Shifts

FaZe Clan is a powerhouse that’s on track to do the unthinkable for an esports organization: go public as a NASDAQ-listed company. Later this year, you might be able to diversify your investment portfolio by adding “FAZE” to the mix.

While FaZe Clan members compete in esports tournaments and play Call of Duty on Twitch, the company’s not-so-secret sauce is its high frequency of brand deals. Moving beyond obvious collaborations like headphones and gaming keyboards, FaZe Clan has recently helped sell everything from Nissan cars to the crispy chicken sandwich at McDonald’s.

AdAge declared the group one of 2021’s top marketers for a reason. It appears as though every marketing executive striving to forge a better connection with Gen Z has already asked their assistant to try to ink a deal. Here’s just a small sample of FaZe Clan’s collaborators: DraftKings, Totino’s Pizza Rolls, HyperX, Takashi Murakami, Disney, the National Football League, and DoorDash.

“Historically, music was the driver of youth culture,” FaZe Clan CEO Lee Trink told AdAge in 2021. “But now, gaming is youth culture.” The sentiment is bombastic and unsurprising to hear from someone who leads an esports media company, but he’s not wrong.

Trink cut his teeth as president of Capitol Records, and others who built careers in the music industry are joining his endeavor. Jimmy Iovine, cofounder of Interscope records, not only invested in FaZe Clan, but also helped lead a round of funding for it in 2020. Artists like Offset are putting skin in the game as well. The group’s new president and chief operating officer, Zach Katz, was poached from the music industry. Even Snoop Dogg got in on the action and transformed into FaZe Snoop.

The over 90 members of FaZe Clan are split into two primary categories: content creators and professional players. Many of the content creators, like FaZe Deestroying and FaZe Rug, have a cultural cache that their competitors lack. Even so, the group is no stranger to controversies. A former member sued FaZe Clan over contract disagreements and a current member repudiated the LGBTQ community in June over social media, but neither have deterred the company’s ability to turn charismatic gamers into influencers and attract lucrative brand deals as a result.

A few months after snagging the cover of Sports Illustrated in 2021, the group announced a planned SPAC merger with a valuation at $1 billion. The unicorn horn may disappear before the company goes public, though. Sports Business Journal reports that an amended SEC filing from FaZe Clan put it beneath the $1 billion mark.

Even a well-funded marketing machine doing everything possible to tap into youth culture (and parents’ pocketbooks) will have trouble maneuvering through the turbulent 2022 economy. The sheen has begun to fade from a once booming industry as creator-focused startups lay off employees and sponsorships feel tenuous to influencers.

As the threat of recession looms, entrepreneurs on LinkedIn gas each other up by spreading lists of companies formed during recessions. Microsoft, Venmo, and Airbnb did it—why can’t you? By going public during a potential downturn, FaZe Clan’s situation becomes even harder to navigate. The company could become an inspiring investment story or an overhyped cautionary tale.

China Built Your iPhone. Will It Build Your Next Car?

China Built Your iPhone. Will It Build Your Next Car?

Rumors of an Apple electric car project have long excited investors and iPhone enthusiasts. Almost a decade after details of the project leaked, the Cupertino-mobile remains mythical—but that hasn’t stopped other consumer electronics companies from surging ahead. On the other side of the world, people will soon be able to order a vehicle from the Taiwanese company that mastered manufacturing Apple’s gadgets in China. Welcome to the era of the Foxconn-mobile.

In October 2021, Hon Hai Technology Group, better known internationally as Foxconn, announced plans to produce three of its own electric vehicles in collaboration with Yulon, a Taiwanese automaker, under the name Foxtron. Foxconn, which is best known for assembling 70 percent of iPhones, has similar ambitions for the auto industry: to become the manufacturer of choice for a totally new kind of car. To date it has signed deals to make cars for two US-based EV startups, Lordstown Motors and Fisker.

Foxconn’s own vehicles—a hatchback, a sedan, and a bus—don’t especially ooze Apple-chic, but they represent a big leap for the consumer electronics manufacturer. Foxconn’s ambitious expansion plan also reflects a bigger shift across the auto world, in terms of technology and geography. The US, Europe, and Japan have defined what cars are for the last 100 years. Now the changing nature of the automobile, with increased electrification, computerization, and autonomy, means that China may increasingly decide what car making is.

If Foxconn succeeds in building a major auto-making business, it would contribute to China becoming an automotive epicenter capable of eclipsing the conventional powerhouses of the US, Germany, Japan and South Korea. Foxconn did not respond to requests for an interview.

The automobile industry is expected to undergo big transformations in the coming years. An October 2020 report from McKinsey concluded that carmakers will dream up new ways of selling vehicles and generating revenues through apps and subscription services. In some ways, the car of the future sounds an awful lot like a smartphone on wheels.

That’s partly why there’s no better moment than now for an electronics manufacturer to try car making, says Marc Sachon, a professor at IESE Business School in Barcelona, who studies the automotive industry. Electric vehicle powertrains are simpler than internal combustion ones, with fewer components and fewer steps involved in assembly. The EV supply chain is simpler to manage than the conventional supply chain, which is one of the core competencies of established carmakers. China, Sachon adds, has a strong EV ecosystem, from batteries to software, and even the manufacturing of components.

China is especially well positioned to lead the charge towards electrification. The country already has some of the world’s most advanced battery manufacturers, including CATL and BYD, the latter of which also produces cars. Carmakers in the region may gain an edge in terms of understanding and harnessing new battery technologies simply by virtue of proximity—much in the same way as software companies benefit from being close to chip design firms.