Big Tech in December 2025: the light and the dark

In December 2025, GAFAM made huge investments and pruned their businesses at the same time, and their answers to the management question of what to bet on and what to let go came into sharper focus than ever. Money is flowing toward generative AI and next-generation infrastructure, while a quiet wind of restructuring is blowing through the areas that have stalled. To my eyes, each company’s medium- to long-term strategy is finally starting to take shape.

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The light side

Google and Adobe team up on video generation: Google and Adobe expanded their strategic partnership on AI-powered video production. Google’s latest AI models are being integrated into Adobe’s creative apps, making it possible to generate high-quality footage with fine-grained control [1]. Creators and companies will gain a kind of expressive power they have never had before, and the wave of AI adoption is likely to spread to video production in Japan as well.

Amazon starts selling its latest AI chip to outside customers: Amazon began selling Trainium 3, its latest in-house AI chip, to external customers. With the generative AI boom driving a surge in demand for high-performance chips, Amazon is drawing on the design expertise it built up in its cloud business, AWS, to chase Nvidia, which dominates the GPU market [2]. More competition should mean price competition and steadier supply, and Japanese companies are likely to benefit from having more choices.

Apple brings satellite messaging to Japan: Apple launched messaging via satellite in Japan for iPhone 14 and later (iOS 18) and Apple Watch Ultra 3 (watchOS 26) [3]. Users can send and receive text and emoji even outside cellular coverage, and the feature is expected to serve as an emergency contact method in the mountains and during disasters. It is a real gain in both convenience and peace of mind for users in Japan.

Google and NextEra partner on clean energy: Google and the major power company NextEra Energy announced a deeper partnership to build large-scale data centers for the AI era. The two will jointly develop several gigawatt-scale data center campuses and secure the clean power they need through long-term contracts [4]. A model that delivers a stable supply of renewable energy to power-hungry AI facilities helps reduce environmental impact and supports local economies, and it could serve as a reference for Japanese companies sourcing decarbonized power.

Meta makes a big AI startup acquisition: Meta (formerly Facebook) announced it will acquire Manus, a Singapore-based AI company. It is a large deal, with an estimated valuation of $2–3 billion (roughly ¥300–450 billion), and it gives Meta general-purpose AI agent technology that automates digital work [5]. Meta plans to build the technology into its consumer and enterprise services to strengthen its position in the AI race. Its AI-powered services in the Japanese market may become more capable as a result.

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The dark side

Japan drifts away from Apple: The iPhone’s long-standing lead in Japan’s smartphone market is wavering. In one survey, the OS share among major smartphones came out at 48.3% for iPhone and 51.4% for Android, the first time Android had come out ahead [6]. With the weak yen driving iPhone prices up in recent years, more than 40% of users say they might switch to Android next, and the preference for Android is especially strong among older people. Apple is under pressure to rethink its strategy for Japan, and the challenge now is balancing price and user experience, not just performance.

The court takes a scalpel to search exclusivity and shortens contracts: A US federal court ruled that Google’s exclusive search deals must be limited to one year, with renegotiation required every year [7]. The long-term deal with Apple that made Google the default search engine in Safari must also come to an end, and Google has been ordered to share some search data with competitors. This will change the competitive landscape of the search market, and it may reach Japanese search services such as Yahoo in the form of more choice for users.

Meta shrinks its metaverse investment and changes course: Meta decided internally to cut its metaverse budget by up to 30% next year [8]. It has poured more than $60 billion into VR and AR, but growth has fallen short of expectations, and the aim is to shift resources toward other areas such as AI wearables. Reports also say job cuts may follow the budget reduction, and Meta is at the point of revising its “post-Facebook” strategy. The metaverse fever that spread to Japanese companies may now cool, with the focus shifting toward practical AR devices and AI services.

Warnings about Black Friday scams: Cyber scams targeting the year-end shopping season became a social problem. Amid a surge in phishing during Black Friday, Amazon sent warning emails to more than 300 million customers, urging them to watch out for fake delivery notices and suspicious links [9]. One study found that scam emails impersonating Amazon rose 620% in November compared with the start of the month, so consumers in Japan also need to tighten their security during the big year-end sales.

Microsoft announces steep Microsoft 365 price increases: Microsoft revealed that it will revise prices for its business-oriented Microsoft 365 from July 2026, with increases of up to 33% depending on the plan [10]. It cites the more than 1,100 new features added over the past few years, including the AI assistant Copilot and security features. The increase puts cost pressure on Japanese companies too, so they will need to think carefully about what they actually get from it and whether to review their plans.

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Money and talent are gathering around generative AI, while the areas that do not pay their way have begun to be cut back. December looks like the month GAFAM got ready to move into its next stage.

…An owl doesn’t take off the moment it spots its prey. It reads the wind and the distance and waits for the surest moment. This month’s moves give me the same sense: rather than rushing, each company is carefully sizing up where its next big contest will be.

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References

[1] Adobe and Google Cloud expand strategic partnership to advance the future of creative AI (Adobe Newsroom) (in Japanese)

[2] Competition heats up in AI chip sales as Amazon gives chase with its latest version (Ryukyu Shimpo) (in Japanese)

[3] Messages via satellite now available on iPhone and Apple Watch in Japan (GIGAZINE) (in Japanese)

[4] Power demand surges as AI spreads: NextEra deepens major partnerships with Google and Meta (Plus Web3) (in Japanese)

[5] Meta to acquire China’s Manus, maker of general-purpose AI agents, at a $2–3 billion valuation (Reuters) (in Japanese)

[6] Are Japanese users leaving the iPhone? Why the iPhone’s share is falling (Sumaho Life PLUS) (in Japanese)

[7] Court rules Google’s default search contracts must be shortened to one year and renegotiated annually to ensure fair competition (mashdigi) (in Japanese)

[8] Meta reportedly cuts metaverse budget by up to 30%; shares rise 4% (Reuters) (in Japanese)

[9] Amazon warns that scams posing as Amazon Black Friday deals are rampant (GIGAZINE) (in Japanese)

[10] Business Microsoft 365 to see its biggest price increase since Copilot launched (GIGAZINE) (in Japanese)