Latest / Connecting the Dots / Tariffs, Trademarks, and Tunes: A Tense but Profitable Tech Tuesday

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Tariffs, Trademarks, and Tunes: A Tense but Profitable Tech Tuesday · Connecting the Dots

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  Today's tech news moves fast, but understanding
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  it shouldn't be hard. That's why Snarful Solutions
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  Group brings you Connecting the Dots, where we
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  break down what's happening in tech and why it
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  matters to you. Now, let's dive in with your
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  hosts. Welcome to Connecting the Dots. I'm Alex.
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  And I'm Morgan. It's Tuesday, November 4th, 2025.
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  And we are definitely connecting some big dots
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  today. We are indeed. We're looking at how global
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  tech rivalry, a key AI legal ruling, and even
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  Spotify's latest numbers are all kind of intertwined.
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  Shaping your tech, your wallet, maybe even national
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  security. But first things first, let's get a
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  quick picture of what's happening out there.
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  So weather -wise, it's actually pretty calm here
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  for us. haze, then partly sunny later, high around
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  71, pretty nice November day. Lucky you. Yeah.
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  Nationally, though, it's a different story. There's
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  a pretty potent atmospheric river hitting the
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  northwest. That means heavy rain, potential flooding,
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  high winds, even mountain snow through Wednesday.
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  Yeah, definitely messy out there. And the northeast
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  isn't totally quiet either, looking at gusty
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  winds, maybe some isolated showers. You know,
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  check your local forecast. Good advice. No markets.
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  Monday was, well, not great. No, definitely a
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  down day. The Dow Jones finished off 360 .65
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  points. That's a down 0 .76%. And the S &P 500
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  followed suit down about 30 points or 0 .44%.
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  Seems like some jitters out there. Big time.
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  And you really see it with Bitcoin. Dropped over
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  $2 ,600. Just in the day, that's nearly two and
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  a half percent. But the weekly number? Wow. down
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  almost eight percent. Nearly eight percent in
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  a week. That tells a story, doesn't it? It really
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  does. Signals some serious investor nervousness.
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  Probably linked to some of the geopolitical stuff
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  we're about to get into. Right. OK, before we
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  dive into all that from our Morningstar tech
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  report, we want to give a shout out to our sponsor,
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  -L when you check out. Find them at oldglory
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  .com. OK, so let's connect these dots. All three
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  of our main stories today really revolve around
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  this global battle for tech dominance. Story
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  number one takes us right into the U .S.-China
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  tech conflict. Yeah, this is a big move. President
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  Trump has brought in a new export ban. This one
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  targets NVIDIA's top tier Blackwell AI chip.
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  That's right. Basically stopping sales to mainland
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  China and other international markets as well.
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  So why this specific chip? What makes the Blackwell
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  chip such a, you know, critical piece here. It's
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  all about strategic advantage. The president
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  was pretty blunt, saying only U .S. clients should
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  get these chips because, in his words, they're
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  10 years ahead of anybody else's. 10 years? That's
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  a bold claim. It is an even called Nvidia CEO
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  Jensen Hong one of the great geniuses of our
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  time. So the thinking is clearly keep this potentially
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  game changing tech out of the hands of strategic
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  rivals especially for AI and military uses and
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  it sounds like some in Congress feel even more
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  strongly. Oh definitely the hardliners are pushing
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  hard. We saw that quote from Republican congressman
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  John Willen are comparing selling this chip to
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  China to giving Iran weapons grade uranium. Wow.
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  OK, so that really frames it as a direct national
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  security threat in their eyes. Exactly. Not just
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  economic competition, but military power. But
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  here's where it gets, well, complicated and potentially
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  painful for, you know, regular folks. This ban
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  isn't happening in a vacuum. You mean retaliation?
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  Precisely. China is already signaling they might
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  tighten up export controls on critical rare earths.
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  And that hits us right back. OK, rare earths.
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  Remind us why those are so critical. We hear
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  about them, but what do they actually do? They're
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  basically essential ingredients for, well, almost
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  all modern tech. Think iPhones, Tesla batteries,
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  drone motors, but also really critical military
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  hardware. F -35 fighter jets, Tomahawk missiles,
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  they all need these elements. And China controls
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  a huge chunk of the supply, right? The vast majority.
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  Somewhere between, you know, 80, maybe 90 % of
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  processing. So if they restrict exports. What
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  happens? Prices for our gadgets go up. That's
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  the immediate consumer impact, yeah. Your next
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  phone, your next EV could cost more. But the
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  bigger worry, this sort of national, so what,
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  is the defense angle. If U .S. military contractors
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  can't get these rare earths reliably. It impacts
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  readiness, our ability to build essential defense
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  systems. Exactly. It goes from being an economic
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  headache to a real national security vulnerability.
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  Suddenly, you're trading access to future AI
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  chips for a potential weakness in current defense
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  capabilities. That's a tough calculation. And
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  this is all happening against the backdrop of
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  those massive tariff threats, too, right? Yep.
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  Remember, President Trump floated, adding another
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  100 % tariff on Chinese goods on top of the existing
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  30%. That threat alone. previously tanked it
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  out by almost 900 points. So that looming possibility
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  just adds another layer of uncertainty. Markets
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  hate uncertainty. Although I did see a mention.
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  Wasn't there some talk about maybe allowing a
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  less powerful version of the Blackwell chip,
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  a sort of watered down one for China? Yeah, that
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  possibility was floated. Trump apparently hasn't
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  totally ruled out a less potent iteration for
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  Chinese businesses. But honestly, given the political
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  pressure from Congress right now, seems unlikely.
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  It feels like a long shot. The push seems to
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  be for maximum restriction on anything advanced.
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  It's really about controlling the foundational
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  tech for the future, whether that's the chips
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  themselves or the raw materials needed to build
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  everything else. OK, so while that's happening
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  on the hardware side, this whole other battle
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  is raging over the software, the IP, the brains
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  behind AI. Let's pivot to story number two. AI
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  and copyright law. Specifically, this Getty Images
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  versus Stability AI ruling out of London. Right,
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  and this one is messy. London's High Court handed
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  down a split decision today. Stability AI, the
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  company behind the stable diffusion image generator,
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  actually won on the main copyright infringement
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  claim. They won. But Getty was arguing Stability
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  AI trained its model on millions of their copyrighted
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  images without permission. How did Stability
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  AI win that? Well, it wasn't because the court
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  said it was okay to use the images. They won
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  on a technicality, basically. A jurisdictional
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  loophole. A loophole. Explain that. That sounds
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  important. It is. And potentially infuriating
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  for creators. Getty had to drop that core claim
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  because the actual training of the AI model,
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  the part where it ingested all that data, it
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  didn't happen in the UK. Wait, so just because
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  they did the heavy data processing somewhere
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  else? UK copyright law couldn't touch them for
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  that specific act. Exactly. Since the training
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  occurred outside the court's jurisdiction, Stability
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  AI argued they weren't liable under UK law for
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  that infringement. The judge even admitted the
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  ruling was extremely limited in scope because
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  of this. Huh. So theoretically, an AI company
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  could just set up its training servers in a country
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  with Maybe weaker copyright laws, scrape global
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  data, and dodge liability in places like the
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  UK. That's precisely the concern this ruling
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  raises. It sort of incentivizes offshoring the
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  training process to avoid legal challenges, highlighting
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  that current laws weren't really built for this
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  kind of global, large -scale AI training. It's
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  a massive gap. But Getty didn't walk away empty
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  -handed, right? They won something. They did.
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  They got a key win on trademark infringement.
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  The court found Stability AI was liable because
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  it's model -generated images that still had the
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  Getty image's watermark clearly visible. Ah,
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  okay. And who did the court blame for that? The
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  user who typed the prompt or Stability AI itself?
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  This is crucial. They blame Stability AI, the
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  model provider, not the end user. That's huge.
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  So the responsibility for the output, even the
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  infringing output, like watermarks, falls on
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  the company that built the AI. That's the precedent
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  this sets in the UK, yes. It puts the onus on
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  AI developers to clean up their models' outputs.
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  And maybe more importantly, the court did establish,
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  as fact, that Getty's copyrighted images were
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  used to train stable diffusion without a license.
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  So even though Getty couldn't win damages for
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  the training in the UK because of jurisdiction,
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  the court basically confirmed their central accusation
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  that their stuff was taken. Pretty much. The
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  court acknowledged the infringement happened,
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  even if it couldn't penalize it directly under
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  UK copyright law due to where it happened. The
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  judge essentially said, look, Our laws aren't
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  equipped for this. It's time for parliament to
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  step in. Passing the baton to lawmakers, huh?
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  Exactly. The ruling makes it clear new rules
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  are needed for the AI industry. And you can bet
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  Getty will be taking these factual findings from
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  the UK court straight into its bigger lawsuit
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  in the US. Where they're seeking massive damages,
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  right? Like over a billion dollars. Up to 1 .7
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  billion dollars, yeah. So this UK ruling, even
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  though split, definitely adds fuel to that fire.
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  It validates their core claim factually. in a
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  court of law wow okay a fractured legal picture
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  escalating tech tensions let's shift to something
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  maybe a bit more straightforward possibly even
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  some good news spotify's q3 earnings sounds like
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  they did pretty well pretty well is uh putting
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  it mildly it was a blowout quarter honestly spotify's
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  q3 2025 results crushed expectations strong growth
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  soaring profits it really shows their strategies
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  paying off okay give us the headline numbers
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  how's user growth looking impressive monthly
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  active users or meus jumped 11 % year over year.
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  They hit $713 million. That's huge. $713 million
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  active users. And what about paying subscribers?
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  Also, strong growth there. Premium subscribers
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  reached $281 million. That's up 12 % from last
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  year. And that translated to the bottom line.
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  Oh, absolutely. The financials were stunning.
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  Operating income was $582 million, up 43%. And
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  that led to a net profit of $899 million. Just
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  think, this time last year, they had net loss.
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  It's a massive turnaround. Healthy is an understatement.
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  And the CEO, Daniel Eck, he's stepping aside
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  soon, right? Yeah, he announced he's moving to
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  executive chairman early next year in Q1, 2026.
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  He's handing the CEO reins over to two co -CEOs,
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  Gustav Soderstrom and Christian Nordstrom. He
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  basically said the business is healthy and, you
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  know, the numbers back that up. Seems like a
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  good time for him to make that move. So what's
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  driving all this momentum? Is it just one region
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  or? No, it's pretty broad -based. They sell growth
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  across all regions, but particularly strong in
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  Latin America and North America. The other big
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  factor, product innovation. They're constantly
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  adding new things. How many new things are we
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  talking? Get this. They launched 30 new features
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  just in Q3. 30. In three months, what kind of
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  features? All sorts. Things like lossless audio
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  options, new tools for mixing playlists, even
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  an integration with ChadGPT. It's all designed
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  to do one thing, really. Keep you hooked. Keep
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  you listening longer. Exactly. Increase engagement.
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  Increase the time you spend on the platform.
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  The more time you spend, the more ads you hear
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  if you're on the free tier, and the less likely
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  you are to switch if you're a premium subscriber.
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  It builds loyalty. Okay, sounds like clear skies
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  for Spotify then. But knowing you, there's probably
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  a little footnote somewhere. A small cloud. Huh.
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  You know me too well. Yes. While the big picture
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  is rosy, there are a couple of, let's call them
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  softening trends if you dig into the details.
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  Specifically around monetization. Okay, what's
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  softening? Well, premium ARPU, that's average
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  revenue per user, actually slipped by 4 % compared
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  to last year. Hold on. ARPU down 4%. So even
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  though they have more paying subscribers, they're
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  making slightly less money from each one on average.
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  That's right. It often happens when you have
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  aggressive promotional pricing to attract new
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  users or when a lot of your growth comes from
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  regions where subscription prices are just generally
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  lower. Gotcha. And you mentioned another softening
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  trend. Yeah. Ad -supported revenue was down 6%.
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  Now, Spotify pointed out it was flat. If you
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  adjust for currency fluctuations, they call it
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  constant currency. Constant currency. OK, break
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  down that finance jargon for us. Sure. It just
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  means if exchange rates between, say, the euro
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  and the dollar hadn't changed over the year,
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  their ad revenue would have been flat. But because
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  the dollar might have strengthened when they
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  convert that foreign ad revenue back into euros,
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  it looks like less. So in real reported numbers,
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  ad revenue dipped slightly. Correct. It suggests
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  maybe a little pressure on the ad market side
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  of their business. So big picture. Users are
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  flocking in, engagement is up, profits are beaming,
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  but they're maybe sacrificing a tiny bit of revenue
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  per user right now to achieve that massive scale
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  and user lock -in. Ah, playing the long game.
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  Prioritizing market share and that stickiness
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  factor over maximizing every dollar today. Makes
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  sense. That seems to be the strategy, yeah. Yeah.
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  Global dominance first. All right. Before we
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  wrap this all up, one more quick thank you to
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  com. OK, so let's quickly tie this all together.
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  What are the big takeaways from today? Well,
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  first, we saw that new, very solid fence going
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  up around advanced AI chips with the U .S. banning
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  exports of Nvidia's best to China and the immediate
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  reaction. China threatening those critical rare
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  earth minerals, which creates a genuine strategic
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  risk for the U .S., impacting everything from
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  consumer goods to defense. Then we looked at
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  the messy legal side of AI. That UK ruling on
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  Getty vs. Stability AI really highlighted a major
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  loophole train -your -AI offshore, potentially
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  avoid copyright claims. It basically kicked the
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  can down the road to lawmakers to fix the rules,
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  but it did establish that Getty's work was used,
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  which helps their US case. And finally, Spotify.
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  just booming user growth, massive jump in profits,
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  showing real strength as CEO Daniel Eck prepares
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  to transition. But we did note those slightly
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  softer monetization trends, like ARPU dipping
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  a bit, as they focus hard on global expansion
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  and keeping users engaged with tons of new features.
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  Covered a lot of interconnected ground there.
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  Hopefully you feel a bit more plugged into how
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  these big tech stories are shaping things. We're
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  here to help at Snarful, so reach out on our
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  website if you have any more questions. That's
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  a wrap on today's top stories. Remember, tech
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  doesn't have to be complicated, and we're here
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  to help connect the dots. If you've got questions
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  or want to learn more, visit us at snarful .com.
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  Thanks for listening, and we'll catch you next
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  time.