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    America has a plan to throttle Chinese chipmakers

    MAKING CHIPS is complex work. Semiconductor manufacturers such as Intel, Samsung and TSMC themselves rely on machine tools built by an array of firms that are far from household names. The equipment sold by Applied Materials, Tokyo Electron, ASML, KLA and Lam Research is irreplaceable in the manufacture of the microscopic calculating machines that power the digital economy. A supply crunch, coming after years of ructions between America and China over control of technology, has made governments around the world more aware of the strategic importance of chipmaking. The significance of the kit used to make chips is now being recognised, too.The tools handle the complications involved in scratching billions of electric circuits into a silicon wafer. Those circuits shuttle electrons to do the mathematics that draws this article on your screen, allows your fingerprint to open your phone or plots your route across town. They must be perfect. KLA makes measurement tools which are essentially electron microscopes on steroids, scanning each part of a finished chip automatically for defects and errors. Some Lam Research tools are designed to etch patterns in silicon by firing beams of individual atoms at its surface. Applied Materials builds machines which can deposit films of material that are mere atoms thick.The Chinese government’s efforts to develop a large and advanced semiconductor industry at home using this mind-boggling technology has led to a rapid shift in the source of the revenues for the firms making it over the past five years. In 2014 the five main toolmakers sold gear worth $3.3bn, 10% of the global market, to China. Today the country is their largest market by a significant margin, making up a quarter of global revenues (see chart). Of the $23bn in sales for Applied Materials, the largest equipment-maker, during its latest fiscal year, $7.5bn came from China. It accounts for over a third of Lam Research’s revenues of $14.6bn, the largest share of any big toolmaker (though the firm notes that some portion of Chinese sales are made to multinational firms that operate there).This new reliance has created political and commercial problems, particularly for the trio of American toolmakers: Applied Materials, KLA and Lam Research. The Chinese government has thrown hundreds of billions of dollars at the country’s chipmakers. As each of the American trio is dominant across different steps of the chipmaking process, the unavoidable conclusion is that America’s most advanced technology is furthering China’s economic goals. There is strong bipartisan agreement in Washington that this is unacceptable. America’s government has long sought solutions to this uncomfortable reality. In December 2020 it placed SMIC, China’s leading chipmaker, on an export blacklist. Any American company wishing to sell products to SMIC had to apply for a licence. But tools have kept flowing to the Chinese firm, in part because America acted alone. The Chinese government’s lavish subsidies have instead started finding their way to non-American competitors. Applied Materials noted that this might help other firms as, in effect, shutting it out of China “could result in our losing technology leadership relative to our international competitors”. The issue is becoming ever more acute. SEMI, the global semiconductor-tooling trade body, announced on April 12th that worldwide industry revenues from China grew by 58% in 2021, to $29.6bn, cementing its place as the world’s largest market. So is political pressure. In March two Republican lawmakers wrote to America’s Department of Commerce demanding a tightening of export controls on chip technology going to China, specifically mentioning semiconductor-manufacturing equipment.China’s appetite for chipmaking tools is also causing commercial difficulties for non-Chinese chipmakers, depriving them of equipment and hence their capacity to manufacture chips. On April 14th C.C. Wei, the boss of TSMC, said the Taiwanese firm had encountered an unexpected “tool delivery problem” that threatened its ability to make enough chips. Though he did not blame China, chip-industry insiders claim it as the likely cause. TSMC has warned Apple and Qualcomm, two of its largest customers, that it may not be able to meet their demand in 2023 and 2024, according to two independent sources.Over the past four months the American toolmakers have started working with the government, through Akin Gump, a firm of lawyers and lobbyists based in Washington, DC, to find a way round the problem. The toolmakers formed the Coalition of Semiconductor Equipment Manufacturers late last year to further those aims, hiring Akin Gump to represent them. Lawyers have been poring over the products of Applied Materials, Lam Research and KLA in an attempt to identify workable export controls under which less advanced tools that are no use for cutting-edge manufacturing might still be sold to China, while more advanced tools would still be prohibited. That would allow the toolmakers to keep a portion of their Chinese revenues. Efforts to figure out where to draw the line continue. Akin Gump has been lobbying cabinet members and legislative leaders on behalf of the coalition, and is in ongoing discussion with both the Biden administration and members of Congress. “The plan is being driven by the Biden administration,” the Coalition said in a statement on April 25th.The proposal hinges on getting America’s allies—in particular Japan and the Netherlands, home to Tokyo Electron and ASML—to enforce the same export controls on their toolmakers. The chances of this have increased since Russia’s assault on Ukraine. Officials around the world have been regularly putting their heads together to understand the effect America’s bans on trade with Russia will have on their countries. That has created channels through which the complex task of shutting China out of advanced chipmaking, a far trickier task than curbing sales of widgets, might take place.The plan may yet fall apart. China is unlikely to accept it meekly. Hawks in Washington may push for harder restrictions. Defining what equipment can still be exported to China may prove too difficult. But if it works, Chinese chipmakers would need decades to catch up with the West. And America would have met the goals of suppressing Chinese semiconductor development while causing minimal harm to its own industry.For more expert analysis of the biggest stories in economics, business and markets, sign up to Money Talks, our weekly newsletter. More

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    Elon Musk is taking Twitter’s “public square” private

    ELON MUSK, the world’s richest man, has described Twitter as the “de facto public town square”. On April 25th he struck a deal to take it private in what will be one of the largest leveraged buy-outs in history. Mr Musk, the boss of companies including Tesla, a carmaker, and SpaceX, an aerospace firm, put together an all-cash offer worth about $44bn. He is stumping up the bulk of the financing himself, in the form of $21bn in equity and a $12.5bn loan against his shares in Tesla. If it is a big deal in business terms, it could be bigger still in what it means for the regulation of online speech.Twitter isn’t an obviously attractive business. With 217m daily users it is an order of magnitude smaller than Facebook, the world’s largest social network, and has slipped well behind the likes of Instagram, TikTok and Snapchat. Its share price has bumped along for years: last month it was lower than at its flotation in 2013. It is like a modern-day Craigslist, writes Benedict Evans, a tech analyst: “Coasting on network effects, building nothing much, and getting unbundled piece by piece.”But Mr Musk isn’t interested in Twitter as a business. “I don’t care about the economics at all,” he told a TED conference earlier this month. “This is just my strong, intuitive sense that having a public platform that is maximally trusted and broadly inclusive is extremely important to the future of civilisation.”His willingness to spend a big chunk of his fortune on making Twitter more “inclusive” follows a period in which it has tightened its content moderation. A decade ago Twitter executives joked that the company was “the free-speech wing of the free-speech party”. But the presidency of Donald Trump and the covid-19 pandemic persuaded the company (and most other social networks) that free speech had some drawbacks. Mr Trump was eventually banned from Twitter, as well as Facebook, YouTube and others, following the Capitol riot of January 2021. Misinformation about covid and other subjects was labelled and blocked. In the first half of 2021, Twitter removed 5.9m pieces of content, up from 1.9m two years earlier. In the same period 1.2m accounts were suspended, an increase from 700,000.How might Mr Musk change things? He has said that he will publish Twitter’s code, including its recommendation algorithm, in a bid to be more transparent. He proposes to authenticate all users and to “defeat the spam bots”. And he will be “very cautious with permanent bans”, preferring “time-outs”, he told TED. This suggests a reprieve for Mr Trump and other banned politicians, as advocated by groups including the American Civil Liberties Union, which counts Mr Musk as one of its largest donors. The spectre of reinstating the tweeter-in-chief appals many on the left. So does Mr Musk’s impatience with what he describes as “woke” culture (“The woke mind virus is making Netflix unwatchable,” he tweeted earlier this month, following the video-streamer’s loss of subscribers). A poll in America by YouGov this month found that whereas 54% of Republicans thought that Mr Musk buying Twitter would be good for society, only 7% of Democrats agreed.Since Twitter users lean Democratic, his plan could prove unpopular. Even apolitical users may not like the look of Twitter with freer speech. Moderation weeds out bullying, abuse and other forms of speech that are legal but make for an unpleasant experience online. Social networks that began life with the aim of allowing anything legal, such as Parler and Gettr, eventually tightened up their censorship after being deluged with racism and porn.If Twitter were to take a purist line on free speech, the immediate winners might therefore be its more censorious rivals, suggests Evelyn Douek, an expert on online speech at Harvard Law School. Until now, the main social networks have set roughly similar content-moderation policies, each reluctant to be an outlier. “You can imagine a Twitter with Trump back on its platform just being in the headlines all day, every day, while the other platforms sat back and ate their popcorn,” she says.Mr Musk has never seemed to mind being in the headlines. Even so, he may find it harder than he expects to do away with moderation. Boycotts by advertisers, who provide nearly all of Twitter’s revenue, may not bother him. But Twitter’s app relies on distribution by Apple’s and Google’s app stores; both suspended Parler after the Capitol riot. Governments are also tightening their laws on online speech. On April 23rd the European Union announced that it had agreed on the outline of a new Digital Services Act, which will oblige social networks to police speech on their platforms more closely. Britain is cooking up a still-stricter Online Safety Bill. Twitter fielded 43,000 content-removal requests based on local laws in first half of 2021, more than double the number two years earlier.Another question is whether Mr Musk will manage to stick to his own principles. Social networks face a conflict of interest when the people setting moderation policies are also in charge of growth, notes Ms Douek. Would Mr Musk’s approach to free speech be swayed by his many other interests? Tesla, for instance, hopes to expand in China, whose state media are given prominent warning labels by Twitter. As a Twitter user, Mr Musk has a record of using the platform in a vindictive way. He was sued (unsuccessfully) after labelling one online enemy a “pedo guy”; last week, after a spat with Bill Gates, he posted an unflattering picture of the Microsoft founder with the caption “in case u need to lose a boner fast”.Mr Musk insists that as the platform’s owner he will be even-handed. “I hope that even my worst critics remain on Twitter, because that is what free speech means,” he tweeted on April 25th, shortly before the company’s board accepted his offer. Some users had other ideas: on the same day, one trending topic was “Trump’s Twitter”.For more expert analysis of the biggest stories in economics, business and markets, sign up to Money Talks, our weekly newsletter. More

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    The finance secrets of big tech

    AMERICA’S TECH giants make ungodly amounts of money. In 2021 the combined revenue of Alphabet, Amazon, Apple, Meta and Microsoft reached $1.4trn. These riches come from a wide and constantly expanding set of sources: from phones and pharmaceuticals to video-streaming and virtual assistants. Analysts expect the tech quintet’s combined sales to have surpassed $340bn in the first three months of 2022, up by 7% compared with the same period last year. In a quarterly ritual that kicks off on April 26th, when the big five start reporting their latest earnings, the staggering headline numbers will once again turn into headline news.Big tech firms are understandably eager to trumpet these impressive figures, as well as their diverse offerings. They are considerably more coy about how much many of their products and services actually make. Annual reports and other public disclosures tend to lump large revenue streams together and describe them in the vaguest terms. Last year, for example, the five giants’ sales were split out into 32 business segments in total. That compares with 56 segments for America’s five highest-earning non-tech firms. Apple breaks its sales into five slices; Meta into only three (see chart 1). The category that Alphabet labels as “Google Other” made $28bn in revenue last year. It includes Google’s app store, sales of its smartphones and other devices, and subscriptions from YouTube, a subsidiary. Last year YouTube’s advertising revenue, which Alphabet first revealed only in 2020, reached $29bn. That means that in 2021 Google Other and YouTube’s ad business each generated more money than four-fifths of the companies in the S&P 500 index of the biggest American firms.The opacity makes business sense. Keeping rivals in the dark helps ensure that they will not try to replicate a prized business unit and eat into its margins. Andy Jassy, Amazon’s boss, has lamented at the prospect of breaking out his firm’s financials because they contain “useful competitive information”. Annoyingly for Mr Jassy and his fellow tech barons, the veil of secrecy is getting thinner. Regulators, lawmakers and investors see it as a problem, and are calling for more transparency about everything from how big tech’s payments platforms work to the amount of carbon emissions the companies belch out. And new sources of information are emerging, from brokers’ reports, hedge-fund analyses and, most revealing, antitrust court cases brought by would-be competitors and competition regulators around the world. All these are bringing to light details about the inner workings of big tech. To understand it all, The Economist has rifled through court documents, internal emails, analyst notes and leaked files about Alphabet, Amazon, Apple and Meta (Microsoft has managed to avoid antitrust scrutiny this time around, so secret information about its finances is scarcer). What emerges is a picture of big tech in which the titans appear more vulnerable than their superficial omnipotence suggests. Their secretive profit pools are indeed deep. But the firms’ finance secrets betray weaknesses, too. Three stand out: a high concentration of profits, waning customer loyalty and the sheer sums at risk from assorted antitrust actions.Start with the profit pools. The biggest of these tend to be transparent. The iPhone remains Apple’s profit engine, Amazon rakes in most of its money from cloud computing and Alphabet and Meta couldn’t survive without online advertising. The firms are considerably more coy over disclosing details about their smaller but fast-growing units.Perhaps the biggest untrumpeted sources of profits for Alphabet and Apple are their app stores. The firms take a commission on all in-app spending on these platforms, usually of around 30% (though in a bid to appease regulators, they are increasingly offering lower rates for small developers and those whose apps rely on subscriptions). The revenue streams are middling. In 2019 they were around $11bn for Google, according to one case brought against it in America by a group of state attorneys-general. Analysts estimate that for Apple’s store it was $25bn last year.Because the costs of maintaining the app stores are low, however, the profit margins are vast. The operating margin for Apple’s app store has been estimated at 78%, according to one case brought against the firm by Epic Games, a video-games maker. For Google the figure is 62%. That compares with an operating margin of 35% for Apple’s overall business and of 31% for Alphabet’s business as a whole (which continues to rely on advertising for revenues).The app stores are booming. Revenues from related commissions for Google and Apple has roughly doubled between 2017 and 2020, according to the Competition and Markets Authority (CMA), Britain’s trustbusting agency. In 2020 Google’s store had 800,000-900,000 developers offering 2.5m-3m apps. That made it slightly bigger than Apple’s, which was home to 500,000-600,000 developers and 1.8m apps. There is no sign of the growth slowing down or margins shrinking, according to Apple’s Epic case and the CMA probe. The gross margin on Google’s app store has ticked up by a few percentage points in recent years.In Apple’s annual report its app store revenues fall into a category called “services”, which made $68bn in sales last year, or 19% of Apple’s total. But the app store is not the most profitable subset of Apple’s services. Though the exact figure is unknown, the gross margin on Apple’s search-advertising segment is even larger than on its app emporium, the CMA reckons. That, according to the regulator, is down to a deal struck between Apple and Google. The terms mean that Google search is the default option on most Apple devices. In exchange, Google gives Apple somewhere between $8bn and $12bn a year (2-3% of Apple’s total revenue). This arrangement costs Apple close to nothing, so it is nearly all pure profit.Amazon and Meta are (a bit) less secretive about the sources of their revenues and profits. Despite its rebranding and pivot to the virtual-reality “metaverse”, Meta isn’t shy about admitting that it continues to make 97% of revenues from online advertising. Amazon is even happy to disclose revenues of its controversial Marketplace, where third-party vendors sell their wares, paying the equivalent of 19% of those sales for the privilege (up from 11% in 2017) and competing with Amazon’s own retail business. Marketplace contributed $103bn to Amazon’s top line in 2021, a six-fold increase from 2015 and 22% of the company’s total. But it took digging by analysts to estimate that Instagram accounted for $42bn of Meta’s revenues last year, nearly two-fifths of the total and up from a reported $20bn, or a quarter of the total, in 2019. The photo-sharing app’s role in the social-media empire’s prospects has risen dramatically, in other words. And it was a lawsuit brought by the attorney-general of the District of Columbia that revealed Marketplace’s profit margins to be 20%, four times higher than those of Amazon’s own retail business (the case does not specify whether the margins in question were gross, net or operating). All this makes for plenty of deep profit pools. Look closer, though, and they also turn out to be surprisingly narrow. In Apple’s app store, for example, games account for 70% of all revenues, according to documents uncovered during the Epic court battle. Most of this comes from in-app purchases, such as wacky accessories for avatars or virtual currencies. In 2017, 6% of app-store game customers accounted for 88% of the store’s game sales. Those heavy users spent, on average, more than $750 each year.The Epic trial also revealed that the biggest spenders, who made up 1% of Apple gamers, generated 64% of sales and splurged an average of $2,694 annually. Internally these super-spenders were known as “whales”, like their casino equivalents. An investigation by the CMA found a similar pattern at Google’s app store. In 2020 around 90% of the store’s British sales came from less than 5% of its apps. Once again spending on in-app features in games made up the vast majority of revenue.Spending is concentrated in the online ad industry, too. Another CMA probe looked at data on British advertisers who spent a combined £7bn ($8.9bn) in 2019 on Google Ads, an ad-buying tool aimed at small businesses. The top 5-10% of advertisers by spending made up more than 85% of revenue for Google Ads. The highest-spending sectors were retail, finance and travel. A similar exercise showed an even greater concentration at Facebook. The top 5-10% of the social network’s advertisers made up more than 90% (see chart 2). In terms of sectors, retail, entertainment and consumer goods splurged most.Concentration is also present at the level of “impressions”, as each incident of an advert appearing on a user’s screen is known in the business. That was one finding of internal research by Google, which was unearthed as part of a case bought against the tech giant by another group of American state attorneys-general. The study found that in America 20% of all impressions produce 80% of web publishers’ ad revenue. High-value impressions are ones aimed at users likely to make a purchase. Google referred to this phenomenon internally as “cookie concentration”.Besides a heavy reliance on a few big profit generators, another undisclosed weakness is customer churn. Tech giants’ customers are often assumed to be devoted to their products and services—or even hooked. The companies do not challenge this assumption in public, since it conveys the sense of captive markets, which are beloved of investors. In fact, their markets may not be quite so captive. The Epic case revealed that roughly 20% of iPhone users switched to another smartphone in 2019 and 2020. Leaked documents from Meta show that fewer teenagers are signing up to Facebook, its largest network, and those that do are spending less time on it. Even Instagram, Meta’s youth-friendlier platform, is losing out to rivals. A leaked internal report from March last year found that teenagers were spending more than twice as much time on TikTok, a hip short-video app that has since grown hipper. Young people are not the only group of customers beginning to retreat from the platforms. Another are young companies. Last year was a bonanza for startups. Global venture-capital funding reached $621bn, more than double the previous year’s total. According to a report by Bridgewater Associates, the world’s largest hedge fund, of all the money invested in early stage companies about a fifth is spent on the cloud, a market dominated by Alphabet, Amazon and Microsoft. Another two-fifths goes on marketing, which in the digital realm is dominated by Alphabet, Meta and, increasingly, Amazon. Bridgewater estimates that, all told, around 10% of total revenue of Alphabet, Amazon and Meta is derived from the startup ecosystem. That is the equivalent of $84bn each year. That flow of money may be ebbing. Fears about rising inflation, Russia’s war in Ukraine and the chance of a recession has sent the share prices of tech firms tumbling. The NASDAQ, a tech-heavy index, has fallen by 20% from its peak in November. The falling public markets are filtering down to the startup world. On March 24th Instacart, a grocery-delivery firm, cut its own valuation by 38%. Lower valuations will in turn make it harder for firms to raise capital. Investors say they expect to see startups tightening their belts in the coming months. That means less spending on the cloud and ads.What do all these vulnerabilities add up to? In the worst-case scenario, where the toughest-talking regulators in America, Britain and the EU get their way, the answer is an awful lot. Europe poses the biggest threat. The Digital Markets Act (DMA) is a sweeping new set of EU rules designed to rein in big tech that was finalised last month. It will only affect some business units and is targeted at tech’s European operations. Bernstein, a broker, finds that Alphabet, Apple, Amazon and Meta make $267bn of revenue, about a fifth of their combined total, in Europe. A back-of-the-envelope calculation by The Economist suggests the DMA puts perhaps 40% of the four firms’ European sales at risk. Globally, Alphabet is the most exposed, with nearly 90% of European revenues in danger, equivalent to 27% of the company’s global sales. In America Google’s search monopoly is being targeted in a case brought by a team of state attorneys-general. The Department of Justice is thinking about following suit. That puts American search revenue of $70bn, a quarter of Alphabet’s total, at risk of antitrust action. If Alphabet reduced its commission on in-app payments from 30% to 11%—the share agreed in a deal between Google and Spotify on March 23rd—American app-store revenues would plummet from $11bn to $4bn. Together these actions could imperil perhaps $150bn of Alphabet’s revenue, or about 60% of its global total. Apple’s worst-case exposure is smaller but still significant. If trustbusters put a stop to its sweetheart search deal with Google, that would imperil $12bn-15bn a year. Should Apple follow Alphabet’s lead and slash app-store commissions, or be forced to do so by new laws, its app-related earnings would also drop, from about $25bn to $9bn. Apple’s total exposure would be roughly $35bn, or a tenth of global revenue. Amazon stands to lose up to $77bn per year, or 16% of its global revenue, if it is barred from mixing its own retail operations with those of third parties on Marketplace. Some lawmakers and regulators have been murmuring about breaking up Amazon altogether, into a retailer and a cloud-computing provider, for example. The rump Amazon would either be deprived of its e-commerce sales (about 70% of current revenues) or its cloud profits (about three-quarters of its bottom line). The same voices are calling to split Meta. If America’s Federal Trade Commission got its way and forced the social-media conglomerate to hive off Instagram and WhatsApp, the company could lose $42bn in revenues from Instagram and another $2bn from WhatsApp—or two-fifths of its total.All told, if everything went against big tech, perhaps $330bn in revenues would be at risk. That is about a quarter of the total for Alphabet, Amazon, Apple and Meta. That is before including the two antitrust bills making their way through America’s Congress. Among other things, these aim to stop platform owners, such as app stores and search engines, giving preferential treatments to their own products. The financial impact of such rules is hazy but could, as in Europe, be substantial.This catastrophic case for big tech is unlikely to materialise. Many attempts to check the power of the platforms have gone nowhere. The current crop is likely to be watered down and could take years to take effect. But just a few successful tech-bashing efforts could make a meaningful dent in the firms’ prospects. And by lifting the veil on tech titans’ secret finances, they are already alerting challengers to where exactly margins are ripest for eating into. More

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    After a fat year, tech startups are bracing for lean times

    AFTER A STUNNING run during the pandemic, which put a premium on all things digital, tech stocks have hit a rough patch. The NASDAQ, a technology-heavy index, has fallen by 15% from its peak in November, weighed down by a new outbreak of covid-19 in China and the Russia-Ukraine war, which are gumming up supply chains, and inflation, which erodes the value of future cashflows, making risky growth stocks less attractive to investors. On April 20th the market value of Netflix crashed by a third, or $54bn, after the video-streaming titan reported the first quarterly net loss of subscribers in more than a decade.Listen to this story. Enjoy more audio and podcasts on More

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    Startups for the modern workplace

    GREAT UPHEAVALS always spark innovation. The covid-19 pandemic is no different. The share of new patent applications in America connected to remote-working technologies more than doubled between January and September 2020. Opportunities abound to invest in a host of transformative early-stage ideas. The pitches below are from startups that aim to improve the modern workplace and are inexplicably struggling to raise capital. Are you in?Listen to this story. Enjoy more audio and podcasts on More

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    Elon Musk’s Twitter saga is capitalism gone rogue

    Editor’s note (April 21st 2022): After this article was published, Elon Musk said he has received funding to finance a takeover of Twitter, and that he is exploring whether to launch a tender offer to all Twitter shareholders.IDA TARBELL, author of an exposé of the Standard Oil Company in 1904, described its founder, John D. Rockefeller, as “the most successful man in the world”. By that she meant “the man who has got the most of what men most want”. These days Elon Musk fits that description to a tee. Not only is he worth more than God. He invents things that are changing the world, from electric cars to space rockets. A word from him—on anything from crypto to meme stocks—turns retail investors into slobbering Pavlovians. With millions of adoring fans, he is an idol of modern capitalism.Listen to this story. Enjoy more audio and podcasts on More

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    Netflix sheds subscribers—and $170bn in market value

    IN JANUARY NETFLIX warned investors that it expected to add only 2.5m subscribers in the quarter ahead, causing a sell-off that knocked nearly 30% off its share price. On April 19th the video-streamer admitted that the reality was worse: Netflix lost 200,000 customers in the period, its first net drop in more than a decade. The firm expects to lose another 2m between April and June. By April 20th it was worth 35% less than the day before—and 63% less than at the start of the year, wiping out nearly $170bn in market value and making it the worst-performing stock in the S&P 500 index.Listen to this story. Enjoy more audio and podcasts on More

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    Big tech wants to bootstrap carbon removal into a big business

    A GROUP OF rich do-gooders tried a bold experiment 15 years ago. The Gates Foundation, a charity, and five countries put $1.5bn into a pilot project aimed at encouraging research and development in a previously neglected area. The “advanced market commitment” (AMC) they created promised rewards to drugmakers that came up with an effective vaccine against pneumococcus, a disease which killed many children in poor countries. Defying sceptics, three vaccines have since been developed. More than 150m children have been immunised, saving 700,000 lives.Listen to this story. Enjoy more audio and podcasts on More