Image: Maurizio Pesce / Protocol
Jensen Huang’s SMIC problem

Good morning! Shakeel here — I'll be writing Source Code this week while David takes a much-deserved break. This Monday, SMIC sanctions could cause big problems for Nvidia, everything you need to know before the Apple-Epic hearing, and TikTok lives to see another day.
Also, check out our new manual about how technology is helping small businesses to cope with the strain of the pandemic. We've kicked things off today with a state of play and an interview with Etsy's CTO (who explained how it stopped showing beauty products to mask buyers). More stories are coming all week.
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Look, a U.S.-China story that isn't about TikTok! On Friday, The Financial Times reported that the U.S. Commerce Department sent a letter to American companies warning them that they'd now need licenses to continue supplying certain tech to SMIC. And the timing couldn't be worse for Nvidia.
This all has a whiff of Huawei about it. Things aren't quite that bad yet: SMIC still isn't on the Entity List, and we still don't know which tech will require licenses, or how generous the Commerce Department will be with issuing them. But the Huawei sanctions started off loose, before steadily getting stricter — until now "survival is the goal," as Huawei's chairman said last week.
But the repercussions could be bigger than with Huawei: A ban would go to the heart of China's ambitions to domestically produce 70% of the chips it uses by 2025.
This could be a "tipping point for U.S.-China relations," Eurasia Group analyst Paul Triolo told the FT, and it comes at a very sensitive time. Last week, The Wall Street Journal reported that Chinese authorities were debating whether to release their blacklist of U.S. companies before or after November's election. The SMIC saga could escalate things.
The big day's finally here: At 9.30 a.m. PDT, Apple and Epic go to Zoom court for their big Fortnite hearing. Judge Yvonne Gonzalez Rogers will decide whether to grant an injunction, forcing Apple to restore Fortnite to the App Store and maintain Unreal Engine's access to Apple's developer tools; whether to keep things as they are; or whether to let Apple ban both. Ahead of the hearing, tensions between the companies have gotten awful heated. I dug through the court filings to find the best bits — which should give a sense of what to expect today.
Epic is very sure that Apple's behavior violates antitrust laws. In the bigger case where it tries to prove that, it thinks it is "highly likely to succeed on the merits." Apple's take? "Epic will not succeed on the merits of its antitrust claims." That pretty much sets the scene for the hearing.
Epic also thinks "the balance of harms strongly favors Epic." Tim Sweeney said that "there is a significant risk that frustrated iOS users driven away from Fortnite due to Apple's actions will never return to the app," adding that could "stunt Fortnite's continued evolution from a social video game into a more immersive and varied social space." Meanwhile, Epic argues, nothing bad will happen if Apple restores Epic's access.
But Apple says this is all Epic's fault. "Epic started a fire, and poured gasoline on it, and now asks this Court for emergency assistance in putting it out," Apple said. That, in Apple's view, isn't acceptable: "Epic's asserted harm is the self-inflicted and self-fixable result of its own cheating ... and thus not irreparable," the company argues, saying that provides reason to deny the injunction. "Epic is a saboteur, not a martyr," it says.
Remember what happened last time the two were in court: Back in August, Judge Rogers issued a temporary restraining order, saying that with respect to Fortnite, Epic had "not yet demonstrated irreparable harm," and that "the current predicament appears of its own making." But she also said that Apple couldn't retaliate against the Unreal Engine, in part because that could cause "potential significant damage to both the Unreal Engine ... and to the gaming industry generally."
It must have been a nerve-wracking weekend for Vanessa Pappas. But it all ended fairly well for TikTok: Yesterday, a federal judge blocked the Commerce Department's ban on new Tiktok downloads. For now, at least, that means the app is still alive.
TikTok argued that the ban violated the First Amendment, while the Justice Department said not granting the ban would "infringe on the President's authority." Judge Carl Nichols sided with TikTok — kind of.
Though he halted last night's App Store ban, the Nov. 12 order is still in effect for now. That order, which bans U.S. companies from providing internet hosting and content delivery network services to TikTok, would essentially stop the app working even for existing users.
Introducing QuickBooks Commerce, a new way for small businesses to grow
Small businesses need to attract and sell to new customers, but many worry about adding operational complexity – especially right now. QuickBooks Commerce is a new platform to manage multiple online and in-store sales channels and better maintain inventory while getting profitability insights – all from one central hub.
Facebook Messenger's Stan Chudnovsky said he's asked Apple to let users change their default messaging app:
An anonymous Facebook exec said it's not the platform's fault that right-wing content thrives:
Elon Musk isn't happy about that OpenAI-Microsoft partnership:
Ajit Pai is really into mac-and-cheese:
Palantir and Asana are both expected to go public on Wednesday. Both are doing so via direct listings, so their first-day performance will be very closely watched.
The House antitrust subcommittee has a hearing Thursday, where it will discuss "proposals to strengthen the antitrust laws and restore competition online." The subcommittee is also expected to release a report about Big Tech's behavior soon.
Google will announce the Pixel 5 on Wednesday, alongside a new smart speaker and Chromecast. As Protocol's Janko Roettgers reported back in May, the latter will likely have a totally new UI and might be Nest-branded.
The source code for Windows XP leaked last week, on 4Chan of all places. And mixed in with all the files and a suspiciously Apple-looking secret theme is a 30-minute conspiracy theory documentary called "Bill Gates' Plan to Vaccinate the World." Presumably it was placed among the files by the leaker. Because disinformation spreads everywhere now — even to 19-year-old operating systems' source code.
Introducing QuickBooks Commerce, a new way for small businesses to grow
Small businesses need to attract and sell to new customers, but many worry about adding operational complexity – especially right now. QuickBooks Commerce is a new platform to manage multiple online and in-store sales channels and better maintain inventory while getting profitability insights – all from one central hub.
Today's Source Code was written by Shakeel Hashim. Thoughts, questions, tips? Send them to shakeel@protocol.com, or our tips line, tips@protocol.com. Enjoy your day, see you tomorrow.
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