Trending Thursday #10

Aug 12: Live Podcast w/ Milana Kuzmanovic: World Innovation Lab's Senior Director talks about bridging LPs, founders, and the future. Sign up on Luma!

Aug 13: Caffeine & Capital: The next round of our morning coffee series. Come ready to get caffeinated and talk startups. Sign up on Luma!

Aug 20: Product Manager Invite-Only Dinner: If you are a product manager interested in joining this event and community, please reply to this email!

Sep 9: Live Podcast w/ Meka Asonye: First Round Capital's Partner talks about GTM strategy, founder support, and building startups from Day 0. Sign up on Luma!

Trump's 100% Chip Tariffs: These tariffs that somehow exempt everyone already building here, as TSMC shares jump 4.89% on the "punishment"

The $10M Nvidia Smuggling Ring Gets Busted: DOJ catches two Chinese nationals routing H100 chips through Malaysia like it's the Silk Road 2.0

China's "National Champions" Dream Collapses: Beijing's forced megamerger plan fails because sellers won't take losses and buyers won't overpay

Apple's $100B Tariff Insurance Policy: Tim Cook announces massive US investment hours before Trump's announcement

AI Companies Fight for Scraps: Anthropic offers Claude to feds for $1 total, Perplexity gets caught scraping sites that blocked them, and OpenAI goes "open-weight"

The Details: During an announcement alongside Apple's new $100B US investment pledge (see below), Trump laid out his semiconductor strategy in classic Trump fashion: punitive tariffs with a massive carrot for domestic production. Companies like Apple, TSMC, and Nvidia, all of whom have committed to U.S. manufacturing, get a free pass.

Market Reaction: Investors are loving it as TSMC shares jumped 4.89% in Taipei, while Samsung and SK Hynix also closed higher after South Korea confirmed its memory chip giants would dodge the tariffs thanks to existing trade agreements.

For companies already investing billions in US fabs, it's welcomed news!

For everyone else? Time to reconsider those expansion plans or pay double.

The Smugglers: Two Chinese nationals running ALX Solutions in California just got caught red-handed smuggling millions of Nvidia's most advanced H100 chips to China by routing 20+ shipments through Malaysia and Singapore to dodge export controls.

Nvidia's Take: "Even relatively small exporters are subject to thorough review," the chipmaker said, adding that smuggled chips get zero support or updates; basically, expensive paperweights.

The Inside Job: TSMC just uncovered what appears to be industrial espionage at the heart of the world's most crucial chip factory. Taiwan prosecutors arrested three ex-TSMC employees for allegedly stealing proprietary tech after the company detected "unusual activity related to employee files."

The Stakes: TSMC produces most of the world's advanced chips for Apple and Nvidia, so any leak hands over the keys to the semiconductor kingdom. The three engineers (two still on the payroll) have all been fired.

The Plan: China's government tried to orchestrate megamergers among chip equipment makers to create giants that could rival Applied Materials and Lam Research.

The Problem: Nobody can agree on price as sellers don't want to take losses, buyers don't want to overpay, and local governments (major stakeholders) refuse to be accused of "losing the country's assets."

Failed Deals Mounting: So far, eight announced semiconductor acquisitions have already collapsed in 2025. Even a shoe manufacturer and a knitting machinery company tried (and failed) to buy chip assets.

The New Playbook: Firms are embracing scale over sophistication with 43% of Greater China firms now using generative AI (up from 8% a year ago). Further, Chinese labs have cut AI inference costs by 10x, with more drops coming.

The Liangzhu Effect: This leafy Hangzhou suburb has become China's AI mecca, with investors flocking to meet founders in what officials hope will rival Silicon Valley. Fun fact: it's also home to 5,000-year-old archaeological sites, because China loves reminding everyone about its civilizational longevity.

Plot Twist on Video AI: Chinese companies dominate video AI rankings (ranking 14 out of the top 20), beating out US darlings like Runway and Luma. But here's the catch: AI video is a chip hog, and the H20 chips China can legally buy aren't cutting it for scale.

Cook's History Lesson: "We've rarely been first," reminding employees that Apple was late to PCs, smartphones, and tablets but still won those categories, so it’s “strategic” to be two years behind on AI.

The Pipeline Tease: "It's amazing, guys. It's amazing," while revealing that 40% of Apple's 12,000 new hires went to R&D (catching up is expensive).

The Money Quote: AI is "ours to grab," which is an interesting choice of words when everyone else already grabbed it and ran.

The Details: Apple commits $100B on top of their previous $500B pledge, announced right as Trump threatens 100% semiconductor tariffs. Even though Apple gets exempted from tariffs, they already ate $800M in tariffs last quarter, expecting $1.1B this quarter.

What They're Building: Every iPhone will soon have Kentucky-made cover glass; a Houston server facility for "Apple Intelligence;" and an "Apple Manufacturing Academy" in Detroit.

The Supply Chain: Apple's creating an "end-to-end silicon supply chain" to produce 19B chips in 2025 that involves GlobalWafers making wafers in Texas, TSMC making chips in Arizona, and Amkor packaging them next door.

🎭 OpenAI Goes "Open-Weight" (Not Open-Source): OpenAI released two models that run locally on your computer (gpt-oss-120b and gpt-oss-20b), marking their first venture into "open-weight" territory. Before you get excited, this isn't true open-source: they're keeping training code and data secret, just releasing the weights.

🤖 Claude Opus 4.1: Now With 0.1 More Claude: Anthropic dropped a point release featuring a 74.5% score on SWE-bench. Partners like GitHub praise its "multi-file refactoring" while Windsurf reports "one standard deviation improvement," which is statistician speak for "it's better, trust us."

🏛️ Anthropic's $1 Government Special: Anthropic plans to offer Claude to federal agencies for literally one dollar in what might be the most aggressive loss-leader strategy in AI history. The company just got approved (alongside OpenAI and Google) for the government's Multiple Award Schedule, and immediately went crazy on pricing. 

🕷️ The Perplexity Web Scraping Drama Escalates: Cloudflare caught Perplexity red-handed using fake browser identities to scrape websites that explicitly blocked them, documenting "tens of thousands of domains and millions of requests per day." Perplexity fired back, calling it a "sales pitch" and claiming the bots weren't even theirs.

🔍 Reddit's $70M Weekly User Search Play: CEO Steve Huffman announced Reddit is going all-in on becoming a "go-to search engine," with core search already hitting 70M weekly users and their AI-powered Reddit Answers jumping from 1M to 6M users since Q1. Now, if Google starts keeping that traffic for itself, Reddit needs a backup plan.

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