Week in IT Digest #64

The single most important news this week is Google’s settlement with Epic, which forces sweeping Play Store changes and cements a broader shift toward open app distribution. For entrepreneurs and developers, this is a once-in-a-decade chance to cut fees, own customer relationships, and reinvent go‑to‑market on mobile.

TL;DR

• App distribution is opening up: Google–Epic settlement and iOS third‑party stores in Japan will lower fees and expand payment options.

• AI assistants scale via partnerships: Apple leans on Gemini for the next Siri; Snap embeds Perplexity; Google adds AI modes across products.

• Infra bottlenecks intensify: power limits and heat drive innovations from advanced cooling to space‑based compute concepts.

• Chip economics stay hot but tricky: AMD and Arm grow briskly while system integrators face tighter margins.

• Threat landscape escalates: AI‑assisted malware, a critical React supply‑chain vuln, and big funding for device security.

• AI governance matures: UK ruling eases IP fears for model training; ethical benchmarks and data provenance pressure rise.

• Enterprises go pragmatic: composable architectures and narrow, ROI‑focused agents over moonshots.

Change Summary

The center of gravity is shifting from closed app ecosystems to more open, regulated marketplaces. The Google–Epic settlement and Apple’s move to allow third‑party stores in Japan rewire distribution economics: lower fees, alternative payments, and more paths to users. Second‑order effects: CACs and take rates compress, product-led growth becomes cheaper, and cross‑platform app stores/SDKs gain leverage. Expect renewed experimentation with direct billing, device‑native subscriptions, and bundling models as developers re-evaluate lifetime value under new fee structures.

AI’s infrastructure bottlenecks are catalyzing a hardware and energy renaissance: from novel cooling and rack‑scale designs to the audacious idea of space‑based compute. Power scarcity and grid interconnect delays will favor companies that vertically integrate energy (PPAs, on‑site generation) and optimize inference efficiency. This will tilt the field toward latency‑tolerant, hybrid edge/cloud patterns and smaller, domain‑tuned models that hit the accuracy–cost frontier—exactly the pragmatic arc many enterprises are following with composable architectures and tightly scoped agents.

Meanwhile, the agentic wave is colliding with platform policy and security reality. As autonomous agents start to transact (shopping, support, operations), platforms will tighten guardrails and monetize access, and CISOs will demand provenance, least‑privilege, and kill‑switch controls as AI‑driven malware evolves. Legal clarity around training data (e.g., the UK ruling) lowers IP overhang for foundation-model builders, accelerating open and commercial ecosystems alike—yet increases pressure to audit datasets, document consent, and measure bias with rigorous benchmarks. The winners will pair distribution freedom with trust-by-design.

Change Patterns

The prior digests provide little explicit history, but compared with recent weeks across 2025 several patterns stand out: platform openness is compounding (DMA-driven changes in Europe now echoed in Japan and reinforced by Google–Epic), pushing fees down and enabling alternative payments—this has persisted all year and is now accelerating. Capital continues to chase security and AI infra at ever-larger checks, while operators confront persistent constraints: power access, cooling, and supply volatility; the power crunch theme has stayed front-and-center and now spurs unconventional ideas like orbital compute.

Agentic AI keeps meeting resistance from incumbent platforms (e.g., Amazon vs. Perplexity), a recurring friction pattern that suggests near-term adoption will favor compliant, policy-aware agents with strong governance layers. Legal clarity around training data is slowly improving (UK ruling) even as scrutiny of data provenance intensifies (Common Crawl accusations), a push-pull dynamic visible for months.

For builders, the enduring trends are: diversify distribution, design for resource efficiency, bake in security and compliance by default, and prefer smaller, focused AI that delivers measurable ROI over grand demos—an arc that continues to strengthen week over week.

Topic Clusters

Platforms crack open: app stores, fees and distribution are shifting

1. Google and Epic Games reach settlement for antitrust lawsuit read full article

2. Google will modify Play Store policies to expand developer choice, reduce fees, and allow third-party app stores and alternative payments on Android devices, marking a major change in app distribution.

3. iOS 26.2 to Allow Third-Party App Stores in Japan Ahead of Regulatory Deadline read full article

4. Apple will enable third-party app stores in Japan to comply with new regulations, echoing similar concessions in the EU and signaling broader platform openness.

AI assistants and search go mainstream via mega-partnerships

1. Apple will reportedly use a custom version of Gemini to power the new Siri read full article

2. Apple plans to run a custom Gemini model on its Private Cloud Compute to supercharge Siri, reportedly paying Google around $1B per year while working toward its own trillion-parameter model.

3. Snap and Perplexity sign $400 million deal to put AI search directly in Snapchat read full article

4. Perplexity's conversational search will be embedded in Snapchat, creating a massive new distribution channel for AI answers and a new revenue stream for Snap starting in 2026.

5. Google Maps' Gemini integration will make hands-free navigation more conversational read full article

6. Gemini adds natural language interactions to Maps so users can ask about routes, landmarks and tasks hands-free, rolling out on Android and iOS.

AI infrastructure squeeze: power, cooling, and orbits

1. The AI Data Center Boom Is Warping the US Economy read full article

2. Mega-cap tech is pouring capital into AI data centers, making AI infrastructure a primary driver of US economic activity.

3. Power crunch threatens to derail AI datacenter construction read full article

4. Electricity constraints are emerging as a critical bottleneck for scaling AI capacity.

5. Google contemplates putting giant AI installations in low-earth orbit read full article

6. Project Suncatcher explores space-based, solar-powered AI compute using TPU-equipped satellites, with prototypes targeted by 2027.

7. This startup’s metal stacks could help solve AI’s massive heat problem read full article

8. Alloy Enterprises' additive manufacturing approach aims to boost liquid cooling performance for AI server racks.

Compute market pulse: chips, royalties, and margins

1. AMD reports Q3 revenue up 36% YoY to $9.24B read full article

2. AMD beat expectations with strong data center growth but guided cautiously for Q4 amid intense AI competition.

3. Arm reports Q2 revenue up 34% YoY to $1.14B; royalty revenue up 21% read full article

4. Arm's accelerating royalties signal rising AI and mobile demand for Arm-based designs.

5. Supermicro admits building AI infrastructure is a tricky, low-margin business ... for now read full article

6. Even with torrid AI demand, system integrators are navigating tight margins and volatile supply dynamics.

Security escalates: AI-driven threats and software supply chain risk

1. Google warns that a new era of self-evolving, AI-driven malware has begun read full article

2. Threat actors are actively deploying adaptive malware powered by AI, raising the stakes for defenders.

3. Attackers abuse Gemini AI to develop ‘Thinking Robot’ malware and data processing agent read full article

4. Reports detail the weaponization of AI assistants for automated malware design and espionage.

5. JFrog discloses CVSS 9.8 React vulnerability putting millions of developers at risk read full article

6. A critical RCE in the React ecosystem's CLI tooling underscores software supply chain fragility.

7. Alphabet’s CapitalG backs $435M round for connected device security startup Armis read full article

8. Massive funding for Armis highlights enterprise urgency around securing the exploding device edge.

Governance, IP and ethics: rules of the AI road

1. UK High Court sides with Stability AI over Getty in copyright case read full article

2. The court found that models that do not store or reproduce copyright works are not infringing copies under UK law, setting an important precedent.

3. Common Crawl accused of feeding paywalled content to AI companies read full article

4. Claims that paywalled journalism entered training corpora raise new questions about data provenance and licensing.

5. Amazon and Perplexity are fighting over the future of AI shopping read full article

6. A dispute over agentic purchases on Amazon spotlights the coming friction between platform rules and autonomous AI agents.

7. Sony has a new benchmark for ethical AI read full article

8. Sony's FHIBE provides a consent-based global dataset and metrics to measure and reduce bias in computer vision systems.

Enterprise AI operating model: agents, composability and process intelligence

1. AI agents are redefining how enterprises connect their digital worlds – theCUBE analysis read full article

2. Agentic systems are breaking data silos and enabling cross-functional decision networks.

3. The new blueprint for enterprise AI: Composable architecture at scale read full article

4. Modular, data-first architectures are replacing monoliths to deliver operational AI with measurable outcomes.

5. Think Smaller: The Counterintuitive Path to AI Adoption read full article

6. A pragmatic approach favors well-scoped, high-ROI AI over moonshots, aligning teams and systems for steady wins.