Sunset of the smartphone age

Hey, this is Vlad in Hong Kong. I’m ready to declare the smartphone age over. But first...Three things you need to know today:• Anthropic sa [View in browser]( [Bloomberg]( Hey, this is Vlad in Hong Kong. I’m ready to declare the smartphone age over. But first... Three things you need to know today: • Anthropic said Biden AI meeting was an “[incredible first step](” • Germany readied [€20 billion in aid]( for chip output • Adobe’s $20 billion [Figma deal faces EU probe]( The internet’s youngest child When an epoch in human progress comes to an end, its defining feature doesn’t disappear. We still use iron and the principles of industrialization today. The smartphone now appears to be fading as the primary driver of change, perhaps superseded by artificial intelligence. By one measure, AI is already ahead. The world’s foremost contract chipmaker, Taiwan Semiconductor Manufacturing Co., last quarter made 44% of its revenue from high-performance computing, the segment that houses AI accelerators and data center processors, compared with 33% for smartphones. It was the first time the segment’s lead over smartphones hit a double-digit percentage gap, representing a landmark shift for a company that for the past decade and a half rose on the wings of perpetually growing demand for mobile chips. But look at the mobile landscape today: Meaningful innovation has slowed to a trickle, Chinese handset makers are clinging on for dear life, and only Apple Inc. and Samsung Electronics Co. are able to draw much profit from the undertaking. It’s a commodity business, selling mostly on brand recognition, customer habit and biennial upgrade cycles — the last of which have been upset by wooziness in the global economy. AI has the makings of a smartphone-level revolution: catalyzing an explosion of multibillion-dollar companies that let us socialize, work and entertain ourselves in whole new ways. The internet is the common thread between the way smartphones changed the world and the promise of AI. Phones were a gateway to the web and global connectedness in our pockets, letting us buy things with a tap, stay in touch with friends and enjoy countless funny cat videos. To win the AI race, companies will have to do likewise, turning their technology into a platform akin to Apple Inc.’s iPhone App Store and ecosystem. This was the [assessment of industry pioneer Kai-Fu Lee]( back in March, and everything I’ve seen since then confirms the point. One more thing, for people who fret about creative jobs going extinct because of faster and cheaper AI: Look at what smartphones did for jobs. Sure, the need for personal assistants and concierge services dried up, and some printers saw sales drop as everything went digital — but the value born out of the smartphone is much larger than whatever was lost. Where we are with AI right now is comparable to 2007, the year the first iPhone came out. We couldn’t then have predicted the rise and importance of things like Android, Instagram, TikTok or Uber. As fast as AI’s ascent has been, it will still take time to mature, and it will do so by building on the revolutionary technology that preceded it. —[Vlad Savov](mailto:vsavov5@bloomberg.net) The big story - AI is rewriting the rules for the $200 billion games sector, [upending how videogames are made]( and putting hundreds of thousands of jobs on the line. One to watch [Watch the Bloomberg Technology TV interview]( with Anthropic President Daniela Amodei on AI. Get fully charged Vital Biosciences unveiled new technology that it says can use a few drops of blood for [50 lab-grade tests in 20 minutes](. The idea will give cold sweats to any investor familiar with Theranos. Walt Disney is reviewing its schedule of film releases through the rest of the year and may delay some titles because [striking actors won’t help promote]( the pictures. Suspected Chinese hackers who infiltrated the emails of US Commerce Secretary Gina Raimondo and government officials from around the world may have had [access beyond emails](, according to a cloud security firm. Apple is asking suppliers to produce about [85 million units of the iPhone 15]( this year, roughly in line with the year before. Weeks after it started taking orders in Malaysia and exhibited at a motorsports festival in the UK, Tesla disclosed more sales than ever [outside the US and China](. 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