Pushing back to bring people in
Tech insiders call out Shopify, Nvidia reinflates the AI bubble, GameStop is in denial about its store closures.
Hi there. Artificial general intelligence — AI that can think and perform on a human level — is the tech sector’s holy grail, but many are skeptical that it is even possible. But one prominent thought leader thinks he has figured out the answer: his staff needs to stop being so lazy.
Google co-founder Sergey Brin said in a memo that AGI would be attainable if its staff hit the so-called “sweet spot” of productivity — working 60 hours a week. And doing that work in the office, for some reason. One thing Brin didn’t cover: how to get people to get excited about working harder on something that has been promised to replace them.
CANADIAN TECH
Shopify's influence isn't absolute
A letter supporting DEI signals a lot of the tech sector is willing to push back against its biggest success story.
An open letter advocating for the tech industry to protect diversity, equity, and inclusion within its companies topped 800 signatories this week. Though the letter doesn’t mention Shopify by name, it does call out two incidents that have put the Canadian tech giant in the spotlight this month: providing ecommerce tech Kanye West used to sell a swastika-emblazoned t-shirt — and shutting his store down not for promoting hateful content, but because of potential risk of fraud — and laying off teams supporting Black, Indigenous, and women entrepreneurs.
The letter was written by leaders of Canadian tech community and learning organizations: Laura Gabor, founder of What In the Tech, Sarah Stockdale, founder of Growclass, and Avery Swartz, CEO of Camp Tech.
Prominent signatories include Arlene Dickinson, Willful CEO Erin Bury, Toast CEO Marissa McNeelands, and Startup Canada CEO Kayla Isabelle.
How we got here: The pushback against DEI programs predates Donald Trump’s re-election in the U.S., but it has further emboldened the anti-DEI crowd. Corporate DEI is far from perfect — equity advocates have been skeptical of efforts that don’t have full buy-in from leadership or outright ignore the concerns of staff — and in some cases, companies are taking an excuse to cut spending on things they don’t think is worthwhile. But the rhetoric from the administration, its supporters, and those looking to replicate it in Canada has made DEI an indirect way to target and scapegoat equity-seeking groups — as some have put it, critics are saying DEI “with a hard r.”
Cutting DEI and other so-called “woke” policies was a quick and easy way some tech companies tried to kowtow to Trump.
Why it matters: Almost as important as what the letter’s signatories are standing up for is who they are standing against. Shopify is revered in some corners of Canada’s tech sector, where it has a similar status to Google’s in Silicon Valley — the fact that someone is ex-Shopify staff is often a headline item when they start a new company or get hired in a new gig. But this many people signing the letter shows that the industry is not a monolith, and there could also be resistance to other rightward shifts Shopify and like-minded founders have been hoping for.
Other tech organizations and lobbying groups, though identifying as non-partisan, use their influence to promote right-leaning policies, like lower taxes, cutting government spending, and looser regulations.
Build Canada is a new group aiming to influence government policy, with the likes of Shopify’s Tobi Lütke', Borrowell’s Andrew Graham, and Wealthsimple’s Michael Katchen among the ranks. It is promoting ideas such as a DOGE-reminiscent effort to reform the federal workforce to be “lean [and] agile” to lower costs, as well shifting immigration policies that would cut back humanitarian migration and refugees in favour of more skilled talent.
Elsewhere: Apple investors rejected a proposal to scrap DEI efforts, another suggestion that not every tech company is ready to pull the plug, but it also said it may “make adjustments.” Montreal tech conference Startupfest publicly reaffirmed its commitment to diversity in its speakers, while also doubling the number of discounted passes it offers to founders from underrepresented backgrounds.
IN OTHER NEWS
RIP Skype. Microsoft is shutting down the video call service on May 5, pushing users to make the switch to Teams. Despite having a huge head start, Skype stumbled against competitors like Zoom during the COVID-19 pandemic, with Microsoft and Google both pushing services integrated with their business services. (TechCrunch)
OpenAI says its new model isn’t a big deal. The newly released GPT 4.5, its largest-ever LLM. Though it has slightly better writing capabilities, pattern recognition, and refined interactions, OpenAI stressed that it doesn’t have many new capabilities compared to “reasoning” models like o1 or o3-mini, which can perform multi-step tasks — basically, GPT 4.5 is bigger, but that doesn’t mean it necessarily works better. (The Verge)
Meta apologizes for turning Instagram Reels into a stream of gore. An error in the recommendation algorithm caused many users to be repeatedly shown videos depicting graphic scenes of violence, animal abuse, murders, and dead bodies. The company said it was glitch and not related to its recent rollback of content moderation — unless you count the fact that these videos are on Reels in the first place as “related.” (404 Media)
Bitcoin set for biggest weekly dip since FTX collapse. Impending U.S. tariffs have some crypto traders worried about resulting inflationary pressures and economic destabilization that could dampen growth. Others are frustrated by the fact that Donald Trump has yet to follow through on vows to deregulate crypto, which sent Bitcoin prices surging following his reelection. (Reuters)
BUSINESS
Nvidia brushes off DeepSeek, to investors' delight
Re-inflating the AI bubble.
Nvidia reported its fourth quarter earnings this week, with a stronger-than-expected 78% growth in revenue, despite comparisons to another historically strong quarter in 2023.
That quarter ended in December, so it doesn’t include the impact of DeepSeek, an AI model released earlier this year that can go toe-to-toe with models from OpenAI, despite being developed on a fraction of the budget. But that didn’t stop CEO Jensen Huang from predicting the growth would continue, which has sent its stock price back up and recover from investor unease.
Catch-up: Based in China, DeepSeek not only used fewer chips to create its R1 model, it had to use the Nvidia H800 — a less-capable version of the H100 chips most other developers use, but doesn’t contravene U.S. trade policies that have limited AI chip supplies in China. There has been suspicion that DeepSeek may have used backchannels to get its hands on other chips, but it almost certainly didn’t have the massive stockpiles other companies have been gathering.
The rosy view: Huang expects that so-called “reasoning” AI models — which are capable of more complicated, multi-step tasks and include DeepSeek’s R1 — will still need a lot of computing power, which will drive orders for its next-generation Blackwell GPUs from those looking to train and run them. Even if those models are leaner, like DeepSeek’s, it will still fuel more adoption and development, meaning more chips will still get sold.
Okay but: It’s not neccessarily that DeepSeek itself is going to take the knees out from every AI developer and their hardware providers. It’s that there a company out there credibly suggesting that tossing more money and chips at AI isn’t the only way to make it work better, which has been the industry’s central thesis for growth and created what most in the industry agree is an AI bubble.
That means more AI competitors — especially those who can’t afford rooms full of servers — might try and succeed at that other path, helped by the fact that DeepSeek open-sourced its methods.
Bottom line: DeepSeek is probably not going to cause Nvidia’s collapse this quarter — or even the next one, or the one after that. But most of the billions being pumped into AI are going straight to Nvidia, and downplaying the impact a processor-light model could be another example of a “don’t worry about the bubble” statements that have come before other economic bubbles popping through history. But hey, with how the stock price has been performing, investors seem fine with squeezing some more gains out of the bubble, at least for a little while longer.
Oh, and: The other potential snag that wasn’t included in Nvidia’s Q4 was some of its RTX-series GPUs — used primarily in PC gaming — having a hardware issue that caused them to underperform. This came after production on Blackwell chips was delayed due to design flaws and issues with overheating — and even though Nvidia says the issues have been fixed, some believe the chips could fry again, since not every customer will use them in ideal conditions.
GAMING
GameStop blows its last life
Kids are apparently too woke to buy Funko Pops and Mario keychains.
I know this happened last week, but I can’t stop thinking about how GameStop CEO Ryan Cohen glibly pointed to “high taxes, liberalism, socialism, progressivism, wokeness, and DEI” for the decision to sell its stores in Canada and France.
Even with the most generous attempt at connecting the dots, I can’t find the logic as to how wokeness would make people buy less video games. But it is also a ridiculously defensive excuse for how badly GameStop responded as a business to a really interesting shift in its sector — answering the rise of PC gaming by selling merch.
PC gaming has been growing faster than console gaming for several years. What used to be the realm of die-hards has become much more accessible thanks to a wealth of online guides and video tutorials, which means it is easier for people to learn how to build a gaming PC powerful enough to run top-of-the-line games.
Then you have game publisher Valve, which also runs Steam, a digital storefront that has become the way PC gamers buy and review software. Those two factors combined mean there’s a whole swath of ideal GameStop customers who are no longer buying physical media.
That group has also gotten bigger because of Steam Deck, Valve’s attempt at cramming the power of a gaming PC into a handheld device. Though the Steam Deck will cost someone about the same as a home console, it is significantly cheaper than a high-end PC, and without the trouble of assembling all of the different components. Laptop makers like Asus and Lenovo have released their own attempts to reach what is evidently a boom market.
There are still plenty of people buying the home console games that line GameStop’s shelves. Nintendo’s roster of first-party games (Mario, Zelda, Animal Crossing, etc.) are still a big reason why the Switch was able to have an eight-year lifecycle. But the few exclusive franchises Sony and Microsoft still have are not enough to resist the allure of a PC’s versatility, which offers access to nearly all of the buzziest games in a given year. Developers also release their games in early access on PC to give customers an early look and get some real-world play testing, and the more technically-minded out there have built super dedicated communities that modify and tweak PC games to add their own twists and features to games.
Independent developers — which rarely deal with the overhead of putting out too many physical copies of their games in the first place — are also more able than ever before to find audiences for games that lack the high-end polish of ones from big studios, but can be more creative, interesting, and innovative. That’s helped by reviews on Steam, word-of-mouth recommendations online, or the growing number of video game websites and podcasts.
So with indie games from Balatro to Hades creating just as much buzz as their big-budget counterparts and free-to-play games like Fortnite, Minecraft, and Overwatch commanding huge audiences decades after they are first released, there’s a lot of gamers that exclusively play titles they couldn’t find in a GameStop if they wanted to.
So what was GameStop’s bold plan to meet this change in their industry? Based on what’s on display in their stores, it was to sell merch, t-shirts, and various other knick-knacks related to someone’s favourite gaming IP.
Regardless of how people get their games, they are always going to need hardware to run them, and this is really where GameStop has really fumbled. In its online store, there is only a very limited selection of keyboards, mouses, and headphones. There are no components or hardware to speak of, which is especially baffling because unlike consoles — which are a one-and-done purchase — PC owners are constantly replacing and upgrading various chips and fans and other parts in their machines. Valve is the only entity selling Steam Decks, but there’s nothing stopping them from stocking Asus’ ROG Ally and letting people try out how it feels in their hands.
And there is so much other stuff someone would rather get a look at in person before buying. Wouldn’t they want to see how good the picture is on a monitor? Wouldn’t they want to sit in a gaming chair? Hell, maybe they’d even go to an in-store workshop on how to build a computer or mod a game.
It’s wild to imagine GameStop’s execs sitting in boardroom, looking at graphs outlining all of these market shifts, only for the smartest guy in the room to stand up and say “we should sell more Funko Pops.” Yes, gamers can be fiercely loyal to their most beloved franchises, but merch like that is typically more of an impulse buy, and those only happen if you’ve given someone another reason to make the trek into your store.