EARNINGS

Earnings: Not Bad

The biggest companies in the U.S. had a solid first quarter, given the circumstances. Here’s a breakdown, categorized by primary revenue streams. 

Ads

Facebook: The company says “a record number of people” are using the FB family of services. Though it has seen a drawdown in its ad business, FB’s Q1 revenue was $17.7 billion, an annual leap of nearly 18%. 

• FB’s non-ad revenues were up 80%. Translation: Users are buying Portals and Oculus headsets. 
• “I’m quite pleased with how Quest is doing and I wish we could make more of them,” CEO Mark Zuckerberg said. 

Google: Alphabet reported $41.2 billion in quarterly revenue; advertising accounted for 82% of that. Alphabet’s “Other Bets,” which tickle the imagination of emerging tech writers, pulled in $135 million in revenue (21% YoY decrease) and lost $1.1 billion (widening 29%). 

• Alphabet hopes its Other Bets, most notably autonomous vehicle unit Waymo, will eventually shift from eccentric research projects into cash cows. 

Twitter: “Monetizable” daily active users grew to 166 million in Q1, a 24% YoY leap. Twitter reported $808 million in quarterly revenue, beating expectations.

Hardware 

• With both supply and demand disrupted by the coronavirus, Apple reported $58.3 billion in revenue, essentially flat from the year before. iPhone revenue was down 7%, while services revenue spiked 16%. But don’t worry about Apple—it has $192.8 billion of cash on hand. 
• Qualcomm expects smartphone shipments to drop 30% below prior estimates this quarter. But the company still thinks its earlier estimates for 5G phone shipments will hold for 2020. I’m on record predicting the opposite. 
• Tesla achieved a narrow Q1 profit of $16 million and reported $6 billion in revenue. Citing concerns about production, CEO Elon Musk referred to the Bay Area’s shelter-in-place orders as “fascist” during the earnings call. First and most likely last time that word will be in this newsletter. 

A bit of everything

Amazon said it will sink its entire Q2 operating profit, around $4 billion, into coronavirus-related expenses. Net sales in Q1 rose 26% annually to $75.5 billion. 

Microsoft, which had quarterly revenues of more than $35 billion, said COVID-19 had a minimal impact on business. The company reported strong growth in its cloud and personal computing lines. 

Zoom out: We’ll see the fuller COVID-19 picture after Q2.

AI

They’re In a Simulation

That’s not a screenshot of Animal Crossing, it’s Salesforce’s “AI Economist.” The company’s research team is testing different tax schemes on a community of AI agents who live in a coronavirus-free computer simulation. The idea is to optimize social outcomes in the real world.

How it works: Using reinforcement learning, researchers built communities in which agents collect/trade resources and build houses. The goal is to find an optimal tax framework that minimizes inequality and maximizes productivity and economic #growth.  

• In tests, Salesforce says the AI economist improved the “balance between equality and productivity by at least 16%.” 

In the AI Economist’s world, anything’s fair game. The project has simulated millions of years worth of economic life and tested all sorts of arrangements, including a world without taxes. That situation isn’t optimal, per Salesforce. 

What we’re all wondering: How generalizable are the findings? Salesforce says they’re an improvement over Econ 101 models (shout out to the rational consumer). Down the road, the company plans to add more complexity into the AI Economist model.

SPONSORED BY MONGODB

Data Conference Does the Virtually Impossible

You don’t have to be a data maven to understand just how good MongoDB is at making data remarkably easy to work with.

In fact, you can be familiar with data on any level and still benefit from MongoDB’s fully virtual, completely free, and jam-packed event: MongoDB.live.

In response to COVID-19, MongoDB has completely reinvented their global annual event by making it a free virtual conference on June 9th and 10th—replete with all the same features and programming you’d get from the real deal. 

Everything from interactive learning lounges to a virtual “community cafe” will be in full swing come June, not to mention these data-drenched highlights:

• Keynote: Hear about the future of data development, plus MongoDB’s latest products and feature rollouts.
• 1:1 Technical Consulting Sessions: Get your questions answered by a MongoDB technical expert in a free, 20-minute consulting session.

No matter your experience level with MongoDB and data, there’s something for everyone during MongoDB.live.

Get all the details here.

VC

Fundraising During COVID-19, Ed. 4

AR: Mojo Vision, a California startup creating AR smart contact lenses, announced $51 million in Series B-1 funding on Wednesday. Mojo Vision created significant hype when it demoed a prototype earlier this year.

3D printing: Velo3D, a California 3D printing startup, announced a $28 million Series D on Tuesday. Interesting tidbit: Velo3D supplies printers to SpaceX. 

In Emerging Tech Brew recently: Brain Corp., which provides autonomous mobile robot (AMR) technology, said Monday it’s raised a $36 million round led by SoftBank. A few weeks ago, Brain Corp. told me AMRs were doing 8,000+ hours of cleaning work a day.

Relevant right now: 

• Cheetah, an SF company that offers a platform for contactless pickup/delivery of food, announced $36 million in Series B funding. 
• Robocath, a French developer of robotic systems for vascular disease treatment, raised $44 million in Series C funding.
• Medici, an Austin telehealth startup, raised $24 million in Series B funding.

BITS & BYTES

Stat: Apple and Google have released their initial contact tracing tools, rechristened “exposure notification,” to developers. A WaPo/U. Maryland poll found that three in five Americans would be unable or unwilling to use an Apple/Google-built system. Of the 82% of Americans who have a smartphone, half said they’d be willing to download the app. 

Quote: "We've seen some massive shifts in user behavior...people are listening more to classical and chill music"—Spotify CEO Daniel Ek to the WSJ. 

Read: The United States Patent and Trademark Office ruled that only humans can be inventors. Sorry, AI. 

SPONSORED BY MASTERWORKS

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WHAT ELSE IS BREWING

• Andreessen Horowitz closed its second crypto fund with a pot of $515 million. 
• TikTok passed 2 billion downloads. Third-party tracker Sensor Tower called TikTok’s Q1 the “best quarter for any app ever.”
• Facebook Research released Blender, an open-source chatbot.
• Amazon bought 1,500 thermal cameras from Dahua, a Chinese firm that’s supplied wares to help monitor and suppress the country’s Uighur Muslims, Reuters reports. Separate note: Thermal cameras are about to be ubiquitous.  
• 76% of U.S. households with broadband internet subscribe to an over-the-top streaming service, according to Parks Associates.
• OpenAI released Jukebox, a neural net that generates music. 

GOING PHISHING

You can’t go to the aquarium to see fish, but you can come here to go phishing. Three of the following news stories are real; one is fake. Can you spot the odd one out?  

1. NY Jets QB Lamar Jackson has a VR game. 
2. U.S. soldiers named a tank “Crippling Depression.”
3. Microsoft filed a patent to mine cryptocurrency using brain waves. 
4. A Kansas company gave a board seat to an AI system  

TECH THINGAMABOBS

For some good news: South Korea reported zero new COVID-19 cases for the first time since February. 

For the young’uns: On his 68th b-day, Wired cofounder Kevin Kelly shares 68 bits of advice. 

For storm-chasers: The best weather forecast ever.

GOING PHISHING ANSWER

A Kansas company did not give a board seat to an AI system.