Imagine: China deploys hundreds of thousands of autonomous drones in the air, on the sea, and under the water—all armed with explosive warheads or small missiles. These machines descend in a swarm toward military installations on Taiwan and nearby US bases, and over the course of a few hours, a single robotic blitzkrieg overwhelms the US Pacific force before it can even begin to fight back.  Maybe it sounds like a new Michael Bay movie, but it’s the scenario that keeps the chief technology officer of the US Army up at night. “I’m hesitant to say it out loud so I don’t manifest it,” says Alex Miller, a longtime Army intelligence official who became the CTO to the Army’s chief of staff in 2023. Even if World War III doesn’t break out in the South China Sea, every US military installation around the world is vulnerable to the same tactics—as are the militaries of every other country around the world. The proliferation of cheap drones means just about any group with the wherewithal to assemble and launch a swarm could wreak havoc, no expensive jets or massive missile installations required.  While the US has precision missiles that can shoot these drones down, they don’t always succeed: A drone attack killed three US soldiers and injured dozens more at a base in the Jordanian desert last year. And each American missile costs orders of magnitude more than its targets, which limits their supply; countering thousand-dollar drones with missiles that cost hundreds of thousands, or even millions, of dollars per shot can only work for so long, even with a defense budget that could reach a trillion dollars next year. The US armed forces are now hunting for a solution—and they want it fast. Every branch of the service and a host of defense tech startups are testing out new weapons that promise to disable drones en masse. There are drones that slam into other drones like battering rams; drones that shoot out nets to ensnare quadcopter propellers; precision-guided Gatling guns that simply shoot drones out of the sky; electronic approaches, like GPS jammers and direct hacking tools; and lasers that melt holes clear through a target’s side. Then there are the microwaves: high-powered electronic devices that push out kilowatts of power to zap the circuits of a drone as if it were the tinfoil you forgot to take off your leftovers when you heated them up.  That’s where Epirus comes in.  When I went to visit the HQ of this 185-person startup in Torrance, California, earlier this year, I got a behind-the-scenes look at its massive microwave, called Leonidas, which the US Army is already betting on as a cutting-edge anti-drone weapon. The Army awarded Epirus a $66 million contract in early 2023, topped that up with another $17 million last fall, and is currently deploying a handful of the systems for testing with US troops in the Middle East and the Pacific. (The Army won’t get into specifics on the location of the weapons in the Middle East but published a report of a live-fire test in the Philippines in early May.)  Up close, the Leonidas that Epirus built for the Army looks like a two-foot-thick slab of metal the size of a garage door stuck on a swivel mount. Pop the back cover, and you can see that the slab is filled with dozens of individual microwave amplifier units in a grid. Each is about the size of a safe-deposit box and built around a chip made of gallium nitride, a semiconductor that can survive much higher voltages and temperatures than the typical silicon.  Leonidas sits on top of a trailer that a standard-issue Army truck can tow, and when it is powered on, the company’s software tells the grid of amps and antennas to shape the electromagnetic waves they’re blasting out with a phased array, precisely overlapping the microwave signals to mold the energy into a focused beam. Instead of needing to physically point a gun or parabolic dish at each of a thousand incoming drones, the Leonidas can flick between them at the speed of software. The Leonidas contains dozens of microwave amplifier units and can pivot to direct waves at incoming swarms of drones.EPIRUS Of course, this isn’t magic—there are practical limits on how much damage one array can do, and at what range—but the total effect could be described as an electromagnetic pulse emitter, a death ray for electronics, or a force field that could set up a protective barrier around military installations and drop drones the way a bug zapper fizzles a mob of mosquitoes. I walked through the nonclassified sections of the Leonidas factory floor, where a cluster of engineers working on weaponeering—the military term for figuring out exactly how much of a weapon, be it high explosive or microwave beam, is necessary to achieve a desired effect—ran tests in a warren of smaller anechoic rooms. Inside, they shot individual microwave units at a broad range of commercial and military drones, cycling through waveforms and power levels to try to find the signal that could fry each one with maximum efficiency.  On a live video feed from inside one of these foam-padded rooms, I watched a quadcopter drone spin its propellers and then, once the microwave emitter turned on, instantly stop short—first the propeller on the front left and then the rest. A drone hit with a Leonidas beam doesn’t explode—it just falls. Compared with the blast of a missile or the sizzle of a laser, it doesn’t look like much. But it could force enemies to come up with costlier ways of attacking that reduce the advantage of the drone swarm, and it could get around the inherent limitations of purely electronic or strictly physical defense systems. It could save lives. Epirus CEO Andy Lowery, a tall guy with sparkplug energy and a rapid-fire southern Illinois twang, doesn’t shy away from talking big about his product. As he told me during my visit, Leonidas is intended to lead a last stand, like the Spartan from whom the microwave takes its name—in this case, against hordes of unmanned aerial vehicles, or UAVs. While the actual range of the Leonidas system is kept secret, Lowery says the Army is looking for a solution that can reliably stop drones within a few kilometers. He told me, “They would like our system to be the owner of that final layer—to get any squeakers, any leakers, anything like that.” Now that they’ve told the world they “invented a force field,” Lowery added, the focus is on manufacturing at scale—before the drone swarms really start to descend or a nation with a major military decides to launch a new war. Before, in other words, Miller’s nightmare scenario becomes reality.  Why zap? Miller remembers well when the danger of small weaponized drones first appeared on his radar. Reports of Islamic State fighters strapping grenades to the bottom of commercial DJI Phantom quadcopters first emerged in late 2016 during the Battle of Mosul. “I went, ‘Oh, this is going to be bad,’ because basically it’s an airborne IED at that point,” he says. He’s tracked the danger as it’s built steadily since then, with advances in machine vision, AI coordination software, and suicide drone tactics only accelerating.  Then the war in Ukraine showed the world that cheap technology has fundamentally changed how warfare happens. We have watched in high-definition video how a cheap, off-the-shelf drone modified to carry a small bomb can be piloted directly into a faraway truck, tank, or group of troops to devastating effect. And larger suicide drones, also known as “loitering munitions,” can be produced for just tens of thousands of dollars and launched in massive salvos to hit soft targets or overwhelm more advanced military defenses through sheer numbers.  As a result, Miller, along with large swaths of the Pentagon and DC policy circles, believes that the current US arsenal for defending against these weapons is just too expensive and the tools in too short supply to truly match the threat. Just look at Yemen, a poor country where the Houthi military group has been under constant attack for the past decade. Armed with this new low-tech arsenal, in the past 18 months the rebel group has been able to bomb cargo ships and effectively disrupt global shipping in the Red Sea—part of an effort to apply pressure on Israel to stop its war in Gaza. The Houthis have also used missiles, suicide drones, and even drone boats to launch powerful attacks on US Navy ships sent to stop them. The most successful defense tech firm selling anti-drone weapons to the US military right now is Anduril, the company started by Palmer Luckey, the inventor of the Oculus VR headset, and a crew of cofounders from Oculus and defense data giant Palantir. In just the past few months, the Marines have chosen Anduril for counter-drone contracts that could be worth nearly $850 million over the next decade, and the company has been working with Special Operations Command since 2022 on a counter-drone contract that could be worth nearly a billion dollars over a similar time frame. It’s unclear from the contracts what, exactly, Anduril is selling to each organization, but its weapons include electronic warfare jammers, jet-powered drone bombs, and propeller-driven Anvil drones designed to simply smash into enemy drones. In this arsenal, the cheapest way to stop a swarm of drones is electronic warfare: jamming the GPS or radio signals used to pilot the machines. But the intense drone battles in Ukraine have advanced the art of jamming and counter-jamming close to the point of stalemate. As a result, a new state of the art is emerging: unjammable drones that operate autonomously by using onboard processors to navigate via internal maps and computer vision, or even drones connected with 20-kilometer-long filaments of fiber-optic cable for tethered control. But unjammable doesn’t mean unzappable. Instead of using the scrambling method of a jammer, which employs an antenna to block the drone’s connection to a pilot or remote guidance system, the Leonidas microwave beam hits a drone body broadside. The energy finds its way into something electrical, whether the central flight controller or a tiny wire controlling a flap on a wing, to short-circuit whatever’s available. (The company also says that this targeted hit of energy allows birds and other wildlife to continue to move safely.) Tyler Miller, a senior systems engineer on Epirus’s weaponeering team, told me that they never know exactly which part of the target drone is going to go down first, but they’ve reliably seen the microwave signal get in somewhere to overload a circuit. “Based on the geometry and the way the wires are laid out,” he said, one of those wires is going to be the best path in. “Sometimes if we rotate the drone 90 degrees, you have a different motor go down first,” he added. The team has even tried wrapping target drones in copper tape, which would theoretically provide shielding, only to find that the microwave still finds a way in through moving propeller shafts or antennas that need to remain exposed for the drone to fly.  EPIRUS Leonidas also has an edge when it comes to downing a mass of drones at once. Physically hitting a drone out of the sky or lighting it up with a laser can be effective in situations where electronic warfare fails, but anti-drone drones can only take out one at a time, and lasers need to precisely aim and shoot. Epirus’s microwaves can damage everything in a roughly 60-degree arc from the Leonidas emitter simultaneously and keep on zapping and zapping; directed energy systems like this one never run out of ammo. As for cost, each Army Leonidas unit currently runs in the “low eight figures,” Lowery told me. Defense contract pricing can be opaque, but Epirus delivered four units for its $66 million initial contract, giving a back-of-napkin price around $16.5 million each. For comparison, Stinger missiles from Raytheon, which soldiers shoot at enemy aircraft or drones from a shoulder-mounted launcher, cost hundreds of thousands of dollars a pop, meaning the Leonidas could start costing less (and keep shooting) after it downs the first wave of a swarm. Raytheon’s radar, reversed Epirus is part of a new wave of venture-capital-backed defense companies trying to change the way weapons are created—and the way the Pentagon buys them. The largest defense companies, firms like Raytheon, Boeing, Northrop Grumman, and Lockheed Martin, typically develop new weapons in response to research grants and cost-plus contracts, in which the US Department of Defense guarantees a certain profit margin to firms building products that match their laundry list of technical specifications. These programs have kept the military supplied with cutting-edge weapons for decades, but the results may be exquisite pieces of military machinery delivered years late and billions of dollars over budget. Rather than building to minutely detailed specs, the new crop of military contractors aim to produce products on a quick time frame to solve a problem and then fine-tune them as they pitch to the military. The model, pioneered by Palantir and SpaceX, has since propelled companies like Anduril, Shield AI, and dozens of other smaller startups into the business of war as venture capital piles tens of billions of dollars into defense. Like Anduril, Epirus has direct Palantir roots; it was cofounded by Joe Lonsdale, who also cofounded Palantir, and John Tenet, Lonsdale’s colleague at the time at his venture fund, 8VC. (Tenet, the son of former CIA director George Tenet, may have inspired the company’s name—the elder Tenet’s parents were born in the Epirus region in the northwest of Greece. But the company more often says it’s a reference to the pseudo-mythological Epirus Bow from the 2011 fantasy action movie Immortals, which never runs out of arrows.)  While Epirus is doing business in the new mode, its roots are in the old—specifically in Raytheon, a pioneer in the field of microwave technology. Cofounded by MIT professor Vannevar Bush in 1922, it manufactured vacuum tubes, like those found in old radios. But the company became synonymous with electronic defense during World War II, when Bush spun up a lab to develop early microwave radar technology invented by the British into a workable product, and Raytheon then began mass-producing microwave tubes—known as magnetrons—for the US war effort. By the end of the war in 1945, Raytheon was making 80% of the magnetrons powering Allied radar across the world. From padded foam chambers at the Epirus HQ, Leonidas devices can be safely tested on drones.EPIRUS Large tubes remained the best way to emit high-power microwaves for more than half a century, handily outperforming silicon-based solid-state amplifiers. They’re still around—the microwave on your kitchen counter runs on a vacuum tube magnetron. But tubes have downsides: They’re hot, they’re big, and they require upkeep. (In fact, the other microwave drone zapper currently in the Pentagon pipeline, the Tactical High-power Operational Responder, or THOR, still relies on a physical vacuum tube. It’s reported to be effective at downing drones in tests but takes up a whole shipping container and needs a dish antenna to zap its targets.) By the 2000s, new methods of building solid-state amplifiers out of materials like gallium nitride started to mature and were able to handle more power than silicon without melting or shorting out. The US Navy spent hundreds of millions of dollars on cutting-edge microwave contracts, one for a project at Raytheon called Next Generation Jammer—geared specifically toward designing a new way to make high-powered microwaves that work at extremely long distances. Lowery, the Epirus CEO, began his career working on nuclear reactors on Navy aircraft carriers before he became the chief engineer for Next Generation Jammer at Raytheon in 2010. There, he and his team worked on a system that relied on many of the same fundamentals that now power the Leonidas—using the same type of amplifier material and antenna setup to fry the electronics of a small target at much closer range rather than disrupting the radar of a target hundreds of miles away.  The similarity is not a coincidence: Two engineers from Next Generation Jammer helped launch Epirus in 2018. Lowery—who by then was working at the augmented-reality startup RealWear, which makes industrial smart glasses—joined Epirus in 2021 to run product development and was asked to take the top spot as CEO in 2023, as Leonidas became a fully formed machine. Much of the founding team has since departed for other projects, but Raytheon still runs through the company’s collective CV: ex-Raytheon radar engineer Matt Markel started in January as the new CTO, and Epirus’s chief engineer for defense, its VP of engineering, its VP of operations, and a number of employees all have Raytheon roots as well. Markel tells me that the Epirus way of working wouldn’t have flown at one of the big defense contractors: “They never would have tried spinning off the technology into a new application without a contract lined up.” The Epirus engineers saw the use case, raised money to start building Leonidas, and already had prototypes in the works before any military branch started awarding money to work on the project. Waiting for the starting gun On the wall of Lowery’s office are two mementos from testing days at an Army proving ground: a trophy wing from a larger drone, signed by the whole testing team, and a framed photo documenting the Leonidas’s carnage—a stack of dozens of inoperative drones piled up in a heap.  Despite what seems to have been an impressive test show, it’s still impossible from the outside to determine whether Epirus’s tech is ready to fully deliver if the swarms descend.  The Army would not comment specifically on the efficacy of any new weapons in testing or early deployment, including the Leonidas system. A spokesperson for the Army’s Rapid Capabilities and Critical Technologies Office, or RCCTO, which is the subsection responsible for contracting with Epirus to date, would only say in a statement that it is “committed to developing and fielding innovative Directed Energy solutions to address evolving threats.”  But various high-ranking officers appear to be giving Epirus a public vote of confidence. The three-star general who runs RCCTO and oversaw the Leonidas testing last summer told Breaking Defense that “the system actually worked very well,” even if there was work to be done on “how the weapon system fits into the larger kill chain.” And when former secretary of the Army Christine Wormuth, then the service’s highest-ranking civilian, gave a parting interview this past January, she mentioned Epirus in all but name, citing “one company” that is “using high-powered microwaves to basically be able to kill swarms of drones.” She called that kind of capability “critical for the Army.”  The Army isn’t the only branch interested in the microwave weapon. On Epirus’s factory floor when I visited, alongside the big beige Leonidases commissioned by the Army, engineers were building a smaller expeditionary version for the Marines, painted green, which it delivered in late April. Videos show that when it put some of its microwave emitters on a dock and tested them out for the Navy last summer, the microwaves left their targets dead in the water—successfully frying the circuits of outboard motors like the ones propelling Houthi drone boats.  Epirus is also currently working on an even smaller version of the Leonidas that can mount on top of the Army’s Stryker combat vehicles, and it’s testing out attaching a single microwave unit to a small airborne drone, which could work as a highly focused zapper to disable cars, data centers, or single enemy drones.  Epirus’s microwave technology is also being tested in devices smaller than the traditional Leonidas. EPIRUS While neither the Army nor the Navy has yet to announce a contract to start buying Epirus’s systems at scale, the company and its investors are actively preparing for the big orders to start rolling in. It raised $250 million in a funding round in early March to get ready to make as many Leonidases as possible in the coming years, adding to the more than $300 million it’s raised since opening its doors in 2018. “If you invent a force field that works,” Lowery boasts, “you really get a lot of attention.” The task for Epirus now, assuming that its main customers pull the trigger and start buying more Leonidases, is ramping up production while advancing the tech in its systems. Then there are the more prosaic problems of staffing, assembly, and testing at scale. For future generations, Lowery told me, the goal is refining the antenna design and integrating higher-powered microwave amplifiers to push the output into the tens of kilowatts, allowing for increased range and efficacy.  While this could be made harder by Trump’s global trade war, Lowery says he’s not worried about their supply chain; while China produces 98% of the world’s gallium, according to the US Geological Survey, and has choked off exports to the US, Epirus’s chip supplier uses recycled gallium from Japan.  The other outside challenge may be that Epirus isn’t the only company building a drone zapper. One of China’s state-owned defense companies has been working on its own anti-drone high-powered microwave weapon called the Hurricane, which it displayed at a major military show in late 2024.  It may be a sign that anti-electronics force fields will become common among the world’s militaries—and if so, the future of war is unlikely to go back to the status quo ante, and it might zag in a different direction yet again. But military planners believe it’s crucial for the US not to be left behind. So if it works as promised, Epirus could very well change the way that war will play out in the coming decade.  While Miller, the Army CTO, can’t speak directly to Epirus or any specific system, he will say that he believes anti-drone measures are going to have to become ubiquitous for US soldiers. “Counter-UAS [Unmanned Aircraft System] unfortunately is going to be like counter-IED,” he says. “It’s going to be every soldier’s job to think about UAS threats the same way it was to think about IEDs.”  And, he adds, it’s his job and his colleagues’ to make sure that tech so effective it works like “almost magic” is in the hands of the average rifleman. To that end, Lowery told me, Epirus is designing the Leonidas control system to work simply for troops, allowing them to identify a cluster of targets and start zapping with just a click of a button—but only extensive use in the field can prove that out. Epirus CEO Andy Lowery sees the Leonidas as providing a last line of defense against UAVs.EPIRUS In the not-too-distant future, Lowery says, this could mean setting up along the US-Mexico border. But the grandest vision for Epirus’s tech that he says he’s heard is for a city-scale Leonidas along the lines of a ballistic missile defense radar system called PAVE PAWS, which takes up an entire 105-foot-tall building and can detect distant nuclear missile launches. The US set up four in the 1980s, and Taiwan currently has one up on a mountain south of Taipei. Fill a similar-size building full of microwave emitters, and the beam could reach out “10 or 15 miles,” Lowery told me, with one sitting sentinel over Taipei in the north and another over Kaohsiung in the south of Taiwan. Riffing in Greek mythological mode, Lowery said of drones, “I call all these mischief makers. Whether they’re doing drugs or guns across the border or they’re flying over Langley [or] they’re spying on F-35s, they’re all like Icarus. You remember Icarus, with his wax wings? Flying all around—‘Nobody’s going to touch me, nobody’s going to ever hurt me.’” “We built one hell of a wax-wing melter.”  Sam Dean is a reporter focusing on business, tech, and defense. He is writing a book about the recent history of Silicon Valley returning to work with the Pentagon for Viking Press and covering the defense tech industry for a number of publications. Previously, he was a business reporter at the Los Angeles Times. This piece has been updated to clarify that Alex Miller is a civilian intelligence official. 

Last month, Donald Trump pushed the boundaries of government and financial ethics by announcing a contest: whoever bought and held the highest amount of the $TRUMP meme coin for an entire month would win an invite to a private dinner with the President. That dinner took place on Thursday at the Trump National Golf Course in Virginia, with attendees reportedly dropping nearly $394 million on $TRUMP in order to win the privilege. According to an analysis by The Guardian of the winners’ wallets, over half of them lost money participating in this contest. But that’s only if you’re analyzing the wallets visible on the contest site’s leaderboard. The real money was being made elsewhere.“Bet you 10 percent of dinner participants are doing this”I interviewed an enthusiastic crypto trader who figured out how to win the contest without losing any money: buy enough $TRUMP to get onto the leaderboard — and then in a separate wallet on a separate exchange, buy $TRUMP perpetual futures that would be profitable if (or as he saw it, when) the value of $TRUMP dropped. Yes, he did The Big Short, except with Donald Trump’s meme coin. “Bet you 10 percent of dinner participants are doing this,” he told me before the contest ended. “Everyone knows $TRUMP price will fall inevitably as more supply comes online in the future and gets dumped on retail.” When I spoke to him again after the dinner, he told me that “the majority of people I spoke with, particularly the crypto traders and folks who are very close to the crypto ecosystem, are like, ‘Yeah, I dumped this. I already sold the coin.’” “A lot of people put on the same hedge trade as I did, because they didn’t wanna take risk on the coin,” he added.I can’t reveal his name, his position on the leaderboard, how much he spent, or the dates of specific trades he made. I can say that he did this for shits and giggles. But as he told me, when there’s such a clear and obvious set of financial incentives behind the $TRUMP dinner contest, it’s worth making the gamble.Did it pay off? “Um, I basically was flat,” he said. “I originally wanted to make some money, but I think the shorting I did — it was okay?” He did, however, get a free dinner out of it. The following interview has been edited for clarity.Let’s just start from the beginning. What made you want to enter this? I think meme coins have a lot of staying power because humans just want things to gamble on. What was fascinating when the Trump token launched in January right before the inauguration, was that it effectively was like a black hole that sucked money away from all these other tokens in the ecosystem. That’s why the Trump token ran up to some preposterous number immediately after it was dropped. When I saw this competition launch, it was clear that there was going to be a tremendous amount of grift in this space, and the presidential family was only interested in self-enrichment and all that. 
It was clear that there was going to be a tremendous amount of grift in this spaceBut putting that aside, I’ve just been interested in the Trump token and I think I’ve just been structurally bearish, because the Trump token has a bunch of supply that’s currently controlled by, effectively, the Trump family and the associates. It’s only a matter of time before the supply unlocks. When that supply unlocks, in the crypto community, people call this dumping: they’ll just dump it onto retail and that’s how they get their exit liquidity. So that’s one way the Trump family can make money. The other way is obviously whenever there’s trades that happen, the trading fees also accrue to the family. I know that the Trump token is going to go down. If you put a gun into my head and ask, what will the price be two years from now? It’s going to be much lower than where it is today. When this contest launched, I was like, okay, this is clearly a way for the affiliates and the Trump family to find a way to drive up the price temporarily. And having been in this space for a while, it’s clear that these events only drive the price up for a period of time and then people lose interest. Unless you feed them something else, it’s going to drop. Everyone expects the token to dumpThey launched the contest right around when the first tranche of Trump tokens were going to unlock, which was supposed to be 90 days after the launch of the token back in January. And so this whole contest was kind of timed at an apt moment where it’s like, okay, supply’s going to unlock. Everyone expects the token to dump. But then, on Twitter, they agreed to delay the unlock for another 90 days. But once the unlock happens and they start dumping, that’s when the price is going to drop a lot. 
So this contest was interesting. I was like, okay, well, I feel like I can put on a trade here where I’m not taking on any real risk and I think it’ll be cool to meet random people at this dinner and see who else is interested. It seems like there are a lot of folks from out of the country who are flying in to attend the dinner, and a lot of crypto whales. There’s one that I follow, he’s mentioned in his Telegram that he’s one of the big holders. He’s talked these last few days about how he’s preparing for this dinner. So talk me through how you generated the funds to buy the Trump coin. Did you use your own personal funds?I use my personal funds. All the crypto trading I do is with my personal funds. Some of the trading I do is on Coinbase through a centralized exchange. And the rest of the trading I do is on chain through self-custody wallets. When this opportunity came up, the only way you can actually be in a position to be in the top 220 is if you own $TRUMP tokens in a self-custody wallet. Some of the exchanges, including Coinbase, allow you to buy the $TRUMP token, but that would not count towards this contest. What I did was I moved stablecoins like USDC to my Solana wallet, and then I used a decentralized exchange to buy the $TRUMP token. The way the contest works is you have to register your wallet before you are counted towards the ranking system. And unfortunately, I did that like a couple days late, so I had to size up a little bit more to ensure that I could catch up to the people who had registered a couple days prior. But that’s a nuance. So explain the process of shorting $TRUMP coin on a secondary market. Like how does one do that? I am a dumb person who only understands shorting markets through watching The Big Short. Basically when you short, you’re hoping that the price goes down, right? And the mechanism of shorting here is slightly different than shorting stocks, but we don’t need to go into the specifics here. The way to short [crypto] is, you can do it in two ways. One is through a centralized exchange that offers, effectively, shorting services. And what I mean here by shorting services is, there is a “perpetual future” that is offered at these exchanges. When I talk about exchanges that offer this, it’s mostly going to be like Binance or Bybits and some of the bigger exchanges outside of the US. Coinbase is very far behind when it comes to offering derivative products that goes above and beyond just buying the token. I couldn’t do it through Coinbase, and I can’t short through an exchange like Binance, because there’s a lot of restrictions around who can actually use Binance. I’m in the US and Binance has very strict VPN rules. I can’t just open a Binance account and short. The only real way for me was to short on a decentralized exchangeSo the only real way for me was to short on a decentralized exchange, which has actually become really popular in the last year or so. It’s like the same concept as shorting on Binance, but you can do it on chain. I use a service called Hyper Liquid, which is a very popular decentralized exchange. And on this exchange, they offer derivative products that basically track the movement of different tokens. And so they offer, effectively, $TRUMP perpetual futures, and you can effectively initiate a short position through that. I’m happy to go into the details if you want, but that’s like the high level. Yeah, yes, please please tell me these details. So that is basically how to set up the short position. Conceptually, there’s a few things to keep in mind. First thing is: because I’m shorting in a separate wallet that’s completely detached from $TRUMP, 
I have to put up additional capital in another wallet to do this. It’s not like I can just use my $TRUMP tokens as collateral and use the same pool of money to short. And the way shorting works and the way perpetual futures work in general is you put up a certain margin. So let’s keep it simple: say I put up $100k in margin and I choose to short the $TRUMP token. Now, if $TRUMP goes up in price, then I’m hurting, because I’m betting on the token falling. If the $TRUMP token doubles in price, well, then I will have lost a hundred thousand dollars in which case, my margin gets wiped out and this [futures] contract will have to be closed because I’ve lost all my money. If the token goes down in price, that’s when I profit — as long as I close out the position in the green. So you basically are juggling two wallets. One is the wallet in which you’re holding all this $TRUMP coin. 
The other one is like, how would you describe it? Is that the money that you’re generating in order to pay for participating in the contest? The most important wallet here is the Solana wallet with the $TRUMP tokens, because that’s what’s being used by the contest organizers to determine who makes the top 220. But as I mentioned earlier, I am structurally bearish on the $TRUMP token and I wouldn’t want to go for dinner and like, see my money go down when the $TRUMP token goes down in price. I decided I wanted to basically put on a hedge, where, using the other wallet and the short position, I’m basically agnostic to any sort of price movement. That’s the reason why I set up the other wallet. I could have taken on the price risk, but that’s pretty risky, because typically what happens with these events is that as we get close to the end of the contest date, people start dumping the $TRUMP tokens. The value of the $TRUMP token will have gone down — let’s say it went down to 90,000 — it would be offset by the short wallet, which would be like 110,000. And then they add up to 200,000, which is how much I hypothetically put in from the start. 
Did you make money off of this?Um, I basically was flat. I originally wanted to make some money, but I think the shorting I did — it was okay? I basically just broke even on this entire tradeLet me take a step back.
So initially I shorted the same amount as the token. But then as the time went on, as we got close to the contest end date, I decided to increase the size of the short position, because I thought that based on the thesis I had, people are going to start selling because there’s nothing to look forward to. And so I increased that size. But it just so happened that towards the end of the contest was also when the crypto markets started ripping after May 8th. So net-net, I think I basically just broke even on this entire trade.Define the crypto markets “ripping.”May 8th was basically the Thursday right before that weekend when the US representatives were going to meet the Chinese representatives in Switzerland [for tariff negotiations]. That day was also when the UK deal announcement was made. And so the market basically took that as a bullish sign, and then that got parlayed into the positive euphoria of the US-China negotiations. Everything started going up. Okay. So every market just started getting bullish. 
Yeah, all the tokens ran up a lot. If you look at the token price, $TRUMP coin on May 7th was roughly 11 bucks, and then on May 9th it was like 14 bucks. Over time that token has come down in price. But yeah, it ran up 40 percent in the span of like two days.What was the strategy going into the end game? 
Because it sounds like it was super volatile around the end and that’s why you needed to increase your short position. I thought that towards the end, I could opportunistically make some profits by shorting more than I owned, if that makes sense.[The previous week, the contest organizers announced a new incentive for winners to not sell the coin before the dinner: a rare “TRUMP DIAMOND HANDS” NFT.]What is the point of encouraging people to go diamond hands by offering this NFT? So I think this goes back to the incentives of Trump’s affiliates, right? They have a lot of supply that they own. Last I looked, they own eighty percent of the supply. But all of that, as with many other [crypto] projects, gets locked up and only gets released over time, so that you don’t have all this supply pressure on day one. Because then no one wants to buy the token. The whole point of the NFT and this subsequent rewards program that they’ve talked about, but haven’t given the details for, is to incentivize people to hold the token longer. The longer people hold the token, then the price arguably would not fall as much. 
The only way to keep the price high is if you introduce all these little games to keep retail engagedThe eventual setup, I’m sure, whether that’s in three months or in a year or two, is that the affiliates will then have their supply unlock, and they will want to sell. They obviously want to sell at a higher price. And the only way to keep the price high is if you introduce all these little games to keep retail engaged and interested in holding tokens. How do you get the NFT now? Do you have to rebuy all the coin?Yeah, my understanding based on that tweet they sent is, they basically look at your wallet holdings on the day of the dinner and compare that to your wallet holdings on the last day of the contest. And so if those match or if you own more, then they’ll give you an NFT. I was kind of dumb. What I should have done was, right before the 1:30PM cut off, I should have sold like, 90 percent of my tokens. In this way, on the dinner day, I would only have to buy 10 percent of what I bought previously, and I think I would qualify for this NFT. 
Wow. Have people done that? Well, the NFT hasn’t been dropped yet.
I don’t know the specifics. There are definitely people who sold before the end of the deadline, and that’s clear from even looking at that leaderboard page, right? There’s one column with current holdings and a bunch were zeroed out, but they are still in the top 220 because it’s a time-weighted calculation.Why did they do time-weighted calculations rather than like, just a cumulative amount of money you held at the end? I think this goes back to solving not only how much do you hold, but how long do you hold it for, and rewarding people differently. So if you held $60 over the entire stretch of the contest, you should be rewarded more than someone who held like $200 for one day on the last day. I think the time-weighted calculation effectively is trying to normalize for that. They also gave me a call the same day, which I thought was spam for a secondHow have the organizers been in their interactions with you for the contest and for the dinner and everything?They emailed me the day of, as soon as the
contest ended, saying that I had made it into the top 220. And they also gave me a call the same day, which I thought was spam for a second. But when the voicemail thing came up, I’m like, oh, this is actually a real thing. So I picked up the phone and then they just confirmed that I got the email and that I would have to do a KYC [Know Your Customer check, part of anti-money laundering regulatory compliance for banks, crypto exchanges, and other entities] in order to qualify for the dinner. Please give us your data, references, whatever. 
Yeah, nothing that sophisticated. They outsourced it to another party and I just provided my name, my nationality, where I live. No social security number or anything like that. Plus my birthday. and I think they just ran like an external check to make sure that I wasn’t a criminal or anything like that. I feel like it was pretty light vettingHow thoroughly do you think they’re been vetting you, how professional has the process been? I feel like it was pretty light vetting. I talked to someone about, let’s say, getting into the White House and it’s a lot more strict in terms of, you have to show your passport and all that. And here, you don’t really have to do that. You just have to show your ID at the door. At least that’s what they said. And as long as your ID matches the information you gave, you’re fine. So I don’t think the security is that strict, per se, but it’s good enough, I guess. Have you participated in any contests like this or heard of anything similar? No, I have not.That’s wild. This is rather innovative if one thinks about it in a “divorced from most governmental ethics” manner. Did you read about how it’s possible that Trump just doesn’t show up to this?I did see something that basically said, yeah, based on the terms and conditions, the president does not have to be there, I think. Honestly, I think a lot of people aren’t really there to see Trump. I could be totally wrong, but I get the sense from, let’s say, like looking at the crypto whales’ Telegram, that [they’re] more interested in just meeting other crypto folks so that [they] can network. If Justin Sun is there, that’s pretty good, right? Like being able to talk to him and maybe, you know, get his contact information and all that. RelatedThe many escapes of Justin SunI think for me and probably other people, we’re more interested in seeing if there’s any other interesting news that comes out of this dinner. I will have my wallet ready, and if some great news gets dropped at the dinner, that could potentially positively influence the $TRUMP token price or any other token price, I will buy it on the spot and try to profit. This is something that other attendees are thinking about doing too?I can’t say with certainty, but based on that one Telegram guy, it seemed like it was implied. Like, if they announced a rewards program for a Trump thing – say, the NFT will be used for this, and then the rewards will give you some really impressive thing in three months, that could probably move the price. Then I would take on a short-term trade literally at the dinner table. That’s why after the $TRUMP token dropped right before inauguration, I finally decided to download Truth SocialThat’s a first mover advantage right there.In crypto, half of it is just being a first mover advantage. That’s why after the $TRUMP token dropped right before inauguration, I finally decided to download Truth Social. I only follow Trump. He’s the only guy I follow and I have notifications on, which actually served me well. Was it April 9th when he sent out that tweet saying that tariffs are now delayed for 90 days? That was first out on Truth Social and I saw that immediately, and I’m like, oh, time to trade my equities, because I will be first to the news. So he’s dropped some nuggets for sure on his account. So the dinner itself is a good money making opportunity?Possibly. It’s hard to say, but in the event that it does, there is some information that gets dropped, that could be actionable.Is there anything you’re particularly proud of about the process of executing this short?I don’t know if there’s anything I’d really brag about or be like, super proud of.
I think this hedge trade, for someone who’s pretty involved in crypto, would be fairly obvious. Net-net, I think I broke even because I did basically go a bit big around my short towards the end of the contest. So that made up for some of the fees I had to pay and whatnot. I’m pretty happy.
I feel like I didn’t take on any risk and I’m able to go to this dinner. That’s probably a win in my books. One thing is, if I had real capital, I would have tried to make the top 25. That requires a lot of money, which I don’t have. I don’t really care about seeing Trump at all. I care more about seeing who else is there, of the top 25I think it’s like a couple million.I think you’d have to have 200,000 tokens, so yeah, roughly like two, three million USD. 
And if you want to not take on the risk of the token price moving, you’d want to take a short position of roughly the same size. It would be like a four or five million dollar capital outlay to make it happen. But the benefit of being in the top 25 is you get to meet Trump, and also get to be in a more intimate networking session, which I would actually enjoy being at. I don’t really care about seeing Trump at all. I care more about seeing who else is there, of the top 25. What was the minimum size of the wallet that made 220, do you know? It’s hard to say because what someone could have done is they could have bought a lot initially, and then halfway through they sold most of them, because they were pretty confident that they would make the top 220, because it’s time weighted. [Calculating out loud omitted.] I guess only fifty thousand [if you held the total amount from day one through the end].Honestly, that’s not a lot. It’s not. 
Realistically that number is probably higher. The thing is, this is not like a $50,000 disbursement where you’re never seeing that money again. After the dinner, you could choose to sell your token. Now, maybe the price will have moved from when you first bought it to when you sold it, but the actual loss, or potentially profit, is not obvious.Oh, that makes this some really interesting campaign finance implications. I guess the one thing I’ll say is, the Trump team probably won’t sell for a couple months at very least. And so whatever happens between now and then theoretically doesn’t really impact the team, right? Because if they had not launched this dinner contest and they did nothing, and then right before the unlock happens, they launch another campaign or they do something weird like this, then that will immediately pump up the price because crypto is so reflexive. And they can then sell into the strength of the price movement, theoretically. But here, I think what they want to do is actually show that this $TRUMP token has utility, and that it’s actually useful rather than just being a meme coin. And this is one way of making the $TRUMP token worth holding, because it’s not just a meme. If you buy it, you can go to dinner, you can earn points. You can get an NFT. It’s basically the playbook that a lot of folks will potentially run if they’re launching a meme coin with utility value. Oh, utility value is definitely a good way of saying it. Yeah, utility value in the sense that yeah, you can go to dinner, you can get an NFT, you can earn points that will get you something in the future. But yeah, this is a little bit different from memes like Pepe or Doge or Shiba Inu. Those have zero utility values. They’re literally just a meme. You can’t go to a dinner if you own a lot of it. It’s just a meme. The morning after the dinner:How are you? How was your crazy night out?It was good. And yeah, there was a sponsor who wanted to do an afterparty afterwards. They basically rented out the rooftop bar on top of the Marriott. I stayed out until 1 AM. But it was good. The actual event was quite interesting. The protests outside the dinner obviously were just kind of off-putting. I was like, damn, should I really walk into this thing?Activists staged an “America Is Not For Sale” protest while President Trump hosted the winners of his meme coin contest at the Trump National golf club. Getty ImagesI’ve actually never been to the Trump National. How is it as a venue? It’s on the Potomac River. When you are in the club you can see the really nice golf course and then the river is right there. The room was long and the podium was right up in the front and the tables were almost set up in a way where there were many rows of tables, but not that many columns, if it makes sense.I didn’t recognize this until maybe like, after an hour in, but people started taking seats because they wanted to be closer to the podium. And eventually, I’m like, damn, I gotta get a seat. But all that didn’t end up mattering because when Trump walked in, basically like a celebrity, everyone rushed up to the front and pulled out their phones and started recording. Who did you meet that was interesting or fun?Justin Sun was there, it was just that everyone wanted to talk to him. I guess the only thing I could do was just say hi to him. There were a bunch of international folks. A few folks were from Poland, who came all the way here from Portugal, where they now live. There was a lot of Asian people there. I met some folks from South Korea. Some guys from France, Italy. There was this hedge fund manager from Croatia who came just to check this out. Some guy from Sweden.There were also some market-making firms, like really big in crypto, like Wintermute. And then another guy who works at Kronos Research. The organizers also brought some folks, like the founder of the Moonshot app. I guess Moonshot had partnered with folks with the $TRUMP launch back in January. He said he didn’t buy any tokens because none of the employees are allowed to trade [the meme coins on their own platform, because it would be a conflict of interest], and so he was just invited by the organizers.[According to Crunchbase, Moonshot, an app that enables users to purchase meme coins, was acquired by Jupiter, a Solana trading platform. No named individuals appear to be publicly associated with either enterprise, although Jupiter’s founder is apparently someone going by the name “Meow.” The guest interviewed by The Verge did not recognize Meow from photos. – Ed.]There were a bunch of folks in the crypto ecosystem, now that I think about it, who actually had effectively insider knowledge that Trump was gonna launch a coin. They didn’t know exactly what that was gonna be, but they knew it was coming and it was gonna be a real coin.
For the first hour or two [after the announcement], people were wondering if Trump’s account got hacked. I just thought that was interesting, that it was effectively prewired to a lot of folks. Ah, so like: if those people knew, then they had that first mover advantage for that full hour – that it was a legitimate coin?Yeah, the public didn’t know whether it was an intentional drop or if some hackers hacked the Twitter account. I ended up meeting one of the top winners, and he was telling me how he hedged his tradeDid you find any really diehard MAGA people there?I’m sure that there were a couple of folks.
I just never got a chance to speak with someone who’s like, super pro-Trump. I’d say the majority of people I spoke with, particularly the crypto traders and folks who are very close to the crypto ecosystem are like, yeah, I dumped this. I already sold the coin. A lot of people put on the same hedge trade as I did, because they didn’t wanna take risk on the coin. I ended up meeting one of the top winners, and he was telling me how he hedged his trade. So effectively, he was taking on no price risk. Now the only thing is when you short these tokens, there’s a funding cost, but because he had such a big position the funding was actually pretty significant. 
So he said he paid, I don’t know, like $50,000 in funding costs, but to him it was still worth it, especially since he got a watch that’s supposedly worth $100,000 if you’re in the top four. Wait, they gave out watches?
Yeah. When Justin went up and gave the speech, after that, he got the watch.Honestly $50,000 to meet the president and get a watch that’s twice that amount, is a pretty good deal. Yeah. I had no idea yet that there’s a TrumpWatches.com. I think the host referenced this — like, if you want a watch, just go on the website. I was like, this is real? And then I actually went on the website and it turned out it is. Swiss-made chrono movement – oh my God, there are so many watches. Do you see that one on the very front page? They gave out two of those as prizes for raffle winners. Oh, that’s only $500, man.Yeah, I know, right?Lame. I guess you can’t yet buy the $100,000 watch on this website. They were specially designed and they only were able to have two ready for the event, and the other two will get shipped to the winners. 
[The website currently lists the “Crypto President Tourbillon Watch” for pre-order, claiming that “only 10” have been made. – Ed.]A commemorative hat.Did people post photos or selfies, or was there a sense of discretion?There were obviously crypto traders who didn’t wanna give their real names, and some folks who were trying to be camera shy and avoid the limelight, but I feel like for the most part, people were taking selfies and they were just having a good time. And there were photographers walking around taking photos of everyone. And then at the end, this was after Trump and after all the gifts were given out, the host was like, everyone put on your hat that you got — it’s in my bag,
it’s a Trump meme dinner hat — let’s all put it on and take a photo and then hashtag “trumpmemedinner” or whatever.[The White House is refusing to release the guest list with names of attendees. The New York Times has since said that it has acquired a copy of that list.Although photos of the gifted hats have circulated on social media, no related hashtag seems to have taken off. – Ed.] Oh, okay, so they actually encouraged you to put it on the Internet. 
I guess the host took the photo and it was like a selfie or something. The other funny moment was during the Trump speech. For the most part, it was just him talking about his campaign, and about how he beat Biden, and blah, blah, blah, how we were in a terrible place with crypto before he got elected and now we’re in a great place. That sounds exactly like a thing Trump would say. That was pretty accurate. At one point, the microphone made a cracking sound and then he was like, whoops, my ear. and he made a joke referencing the assassination attempt. A poster promoting the afterparty.How did you figure out about the afterparty? Was it the official afterparty? 
A lot of folks were saying there was gonna be some afterparty exclusive to VIPs, like the top 25 holders. There were a few folks who were trying to get into this party, but then it turns out it was actually not that exclusive. This MemeCore group, the number two holder, they rented out space at the rooftop of this Marriott and effectively invited everyone. So when you were leaving the venue, they had a couple buses that would come every 10 minutes and they were like, yeah, feel free to take this bus and we’ll take you to the after-party. A lot of people ended up going. 
[On TikTok, an attendee wearing a giant mask of what appears to be the MemeCore mascot, was accused of covering his face “to hide their identities” at “Trump’s crypto bribery event.” – Ed.] How was the afterparty? Was it well funded? They had an open bar, free drinks. It was fine, nothing like that noteworthy.
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If the question, “Who is Meta’s biggest rival?” were on a Family Feud survey, TikTok would likely be the winning answer. In the Federal Trade Commission’s antitrust case against the Facebook and Instagram owner, the government’s response probably wouldn’t even make the top 10: a small blockchain-based platform called MeWe. MeWe looks a fair amount like Facebook at first glance, except that you make an account using the Frequency blockchain — which the company explains is a decentralized protocol that lets you move your social connections to other (mostly hypothetical at this point) apps that support Frequency. The company says 20 million users have joined, but when I make a MeWe account and log in, I scroll through my autopopulated feed and think, “Who are these people?” I search for a few of my Verge colleagues, figuring if anyone has tried this obscure app, it might be one of them, but I come up short. I try some public figures: Tim Cook? Jeff Bezos? Mark Zuckerberg? There are some accounts with these names, but it seems unlikely they’re the ones I have in mind.The claim that MeWe is a closer competitor to Facebook and Instagram than TikTok might be baffling if you’re not steeped in antitrust law or the specifics of the FTC’s complaint. Meta CEO Zuckerberg testified he hadn’t even heard of the app before this case was filed. But the FTC has spent the past three weeks laying out its logic. Using Meta’s own internal discussions about how it views itself and its competition, it says that Meta has historically, and to this day, competed in a market for connecting with friends and family online — and when it saw its dominance in that space threatened by the rise of Instagram and WhatsApp, it bought them to squash the competition.Whether Judge James Boasberg buys this could determine who wins the case — if the FTC can also show that Meta acted illegally through its acquisitions of Instagram and WhatsApp to solidify its alleged monopoly power.Antitrust law is supposed to ensure fair competition, which usually means that people have options for a useful class of goods and services — what’s known as a relevant market. The FTC says that here, that market is “personal social networking services,” or PSNs: spaces where a core purpose is helping people connect with friends and family. While there are many online platforms that overlap with Meta’s services, the FTC argues that virtually none of them serve that market. If internet users want to find and hang out with people they know — as opposed to, say, watching influencers or making work connections — then it’s Mark Zuckerberg’s way or… in the government’s telling, Snapchat, BeReal, and MeWe. Beyond that core definition, PSNs have some other unique features and norms: The apps feature a social graph of users’ friends and family connections, as opposed to mapping users primarily based on their interests. Users can look up and find people they know in real life. And they come to the app to share personal updates with those people.Facebook and Instagram increasingly display videos and photos from influencers and celebrities, but the FTC argues personal social networking remains a core service. It used Instagram chief Adam Mosseri’s testimony to most clearly make this point. In that testimony as well as posts to his own Instagram account, Mosseri said that it’s still important for the app to connect users with their friends. The FTC argues that even if that use case is a smaller portion of what Meta’s apps do these days, it’s still a significant need users have that can virtually only be fulfilled by Facebook and Instagram. While someone might connect with people they know in real life on LinkedIn, they likely won’t primarily share personal updates there. And while they also could follow and interact with people they know on TikTok or YouTube, they’re more likely to passively watch videos from people they don’t.Meta says this is an entirely wrong way to think about it. Social media platforms compete for users’ time and attention, so whether a particular app is squarely aimed at so-called friends and family sharing is beside the point. Facebook and Instagram have evolved to show more content from people like influencers, shifting further from the use case the FTC says Meta has illegally dominated. The company has already landed some important points that could help its case, and it will get more time to push back on the agency’s framing when it calls its own witnesses in the coming weeks.But as the FTC’s case-in-chief continues into its fifth week, its argument for Meta’s dominance is becoming a lot clearer.Why do people use Facebook?When defining a market, each side is trying to answer a key question: why are people choosing one particular company’s product? A lot of goods and services compete with each other in some sense, but this doesn’t mean they serve the same niche. In the case of sodas, for example, “you could buy lemon-lime, but many people would never see that as a close substitute for buying Coke or Pepsi,” says George Washington Law professor and former FTC Chair Bill Kovacic. In the tech world, Netflix has claimed its biggest competitors are Fortnite and sleep — but those comparisons probably wouldn’t stand up in court.The FTC says that outside of Facebook and Instagram, only apps like Snapchat and MeWe can fulfill a users’ desire to broadcast personal updates with friends and family online. To make its case, it brought in a string of executives from other social media companies to explain why their apps can’t quite scratch the same itch for users. Strava’s former VP of connected partnerships Mateo Ortega testified that sure, users of the fitness-tracking social media app could share baby photos on the platform, but they probably wouldn’t unless it was in a running stroller. “It’s all about fitness, and while you can post other stuff, it just doesn’t seem as relevant,” he said. “You could buy lemon-lime, but many people would never see that as a close substitute for buying Coke or Pepsi”Pinterest’s former head of user growth Julia Roberts testified that users who come to Pinterest “expecting it to be like other social media apps … tend to be confused about how to use the product.” That’s because the app is so much not about connecting with other people that it works much differently from other social media platforms. Pinterest is more about finding things users are interested in, she said, so “following is not a big part of the Pinterest experience.”TikTok has a tab where users can watch videos from their friends — identified as people who mutually follow each other. But head of operations Adam Presser testified only about 1 percent of videos watched on the platform are there. The company doesn’t think of itself as competing with Meta’s apps for personal social networking, he testified. And even though side-by-side screenshots of TikTok, Instagram Reels, and YouTube Shorts look identical, Presser said, “when you click out of this view for these other platforms, you would get to essentially what I think of as their core business,” which for Instagram, includes a feed and stories that often contain at least some content from family and friends.At times, Meta’s cross-examination of rival company executives showed the limits of apps’ similarities. When questioning Apple director of product marketing Ronak Shah, Meta sought to show that group chats in Apple’s messaging feature could serve as a social media feed for friends and family sharing. But Shah testified that feed would be limited to 32 people at most, and users can’t just look up each others’ profiles like they would on social platforms. Still, Meta pointed out, Apple’s messages app is listed under social media on its own app store.However, Meta also made important arguments about why the judge should question the FTC’s framing. It pointed out that some documents from TikTok and YouTube owner Google claiming their products are very different from Meta’s were submitted to foreign officials to try to avoid getting drafted into potentially frustrating regulations. It also pointed out when TikTok briefly went dark in the US ahead of a (now-aborted) ban, users flocked to Meta apps, showing consumers see it as a substitute on at least some level. That’s because, Meta argued, competition for users is really about winning their time and attention.Companies can “sometimes make mistakes. They misjudge who their users are”But X VP of product Keith Coleman testified it’s not that useful to think about competition this way. Instead, “it’s much more helpful to understand what people are trying to accomplish in their lives and to try to help them accomplish that.” Under former CEO Jack Dorsey, then-Twitter leaned into focusing on news and users’ interests, Coleman testified, because that’s why people were coming to the platform. Coleman was later surprised at how his own website characterized the product in its help center as a “service for friends, family, and coworkers to communicate and stay connected through the exchange of quick, frequent messages.” “I can’t believe that’s on the website,” he said. “That’s pretty wacky.”This point was “a caution that not everything a company writes down or says is necessarily decisive in establishing what the boundary of a market is,” Kovacic said. Companies can “sometimes make mistakes. They misjudge who their users are.”There are real ramifications for internet users here. Going back to Netflix’s comparisons, if the streaming video service went down, some people would probably be happy to play a video game or get a few hours of shut-eye instead. But others would be frustrated that they couldn’t watch a movie, which is why it’s good that Hulu, HBO, and Amazon Prime Video also exist. The FTC’s argument isn’t that Meta owns the only social apps on the internet, it’s that the company faces little competition for a service many people specifically want — so the fact that you probably don’t know anyone using MeWe is sort of the point.How will the judge decide?Ultimately, Boasberg’s market definition — whether it’s Meta’s, the FTC’s, or his own — will come down to a few things: how Meta views itself, how competitors see it, and his own intuition, says Kovacic. ”Notice how much the FTC has been questioning Meta witnesses on the basis of its own internal documents,” he says. “Does the story in the courtroom match the story of your own internal documents?” So far, the documents have shown that Meta has clocked that at least some portion of users come to its products to connect with family and friends, but also that the rise of TikTok has had it looking over its shoulder. In September 2020, Meta told its board that Instagram revenue would be “meaningfully lower” than planned in the second half of the fiscal year because TikTok was drawing users’ attention. But other internal documents have shown Meta’s well aware that at different points in time, users have come to its apps to connect with family and friends, and worriedly took note of other apps entering that space. In a 2018 presentation, Meta found that the highest percentage of surveyed users said they come to Facebook, Instagram, and Snap to “see daily casual moments” and “see special moments.” By contrast, users came to Twitter’s feed for news and YouTube’s for entertainment. And even as Instagram expands into entertainment, the FTC notes that it still advertises its sign-up page as a place to “see photos and videos from your friends.”“Instagram will always need to focus on friends”In a 2018 email, Zuckerberg told Mosseri that “Instagram will always need to focus on friends.” And even though a lot has changed in the social media landscape since then, Mosseri testified that to this day on the app, “friends are an important part of the experience.” Even though users may share fewer of their own updates on Facebook and Instagram, Mosseri admitted that two friends talking in the comments of a public figure’s post counts as an interaction between friends — and one that Instagram actively tries to facilitate.Meta has argued that this special focus on friends and family sharing makes up a shrinking portion of its offerings as it works to compete with fierce rivals like TikTok. But the FTC says it’s still significant enough to monopolize. It’s a scenario that came up in another major tech monopolization case, Kovacic says: the late-1990s lawsuit US v. Microsoft. In that case, Microsoft argued the Justice Department was ignoring how computing would soon move beyond the personal computer to the Internet of Things, meaning it couldn’t truly lock up the computing ecosystem as much as the government alleged.“Judge Jackson in the Microsoft case said, yeah, those things are happening, but not happening fast enough to deny you real market power in this PC and laptop-based market that the Justice Department is emphasizing,” Kovacic says.Still, he adds, a market niche can at some point become so small that it’s no longer significant in the eyes of antitrust law. “You can have a process of change that ultimately renders the market segment unimportant,” he says. “And the hard task of analysis for the judge is to say, has it already happened?”See More: