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Welcome back to Forests Over Trees, your weekly tech strategy newsletter. It’s time to zoom out, connect dots, and (try to) predict the future.

Here’s the plan:

• Tech News Takes — super-short analysis and commentary

• Tool of the Week — tools you’ll find useful

• Strategy Tips — strategy nuggets (for business and life)

• F/T Shoutouts — sharing launches, tech events, and other reads

A Humane Ending

Plus: X vs Germany; China friendly to tech (again?)

⚡ Tech News Takes ⚡

China Warms Up To Tech 

• What’s up: Earlier this week, Chinese President Xi Jinping met with top tech executives from China, including leaders of Tencent, BYD, DeepSeek, and most notably — Alibaba (Jack Ma). After giving a speech in 2020 that offended Xi, Ma had to cancel the IPO for his fintech company, Ant Group… and he ended up retreating from public view for several years. Plenty of other Chinese tech leaders followed suit, stepping down or keeping a low profile. With the meeting, Xi signaled an end to Beijing’s regulatory crackdown on tech. But at the same time, he encouraged alignment with government priorities/policies, and offered protection (presumably from state-owned competition and from US tariffs, etc.).

• So what: For one thing, we should be cautious about reading too much into positive signals by Xi/Beijing. For example, as recently as 2023, after lots of signaling that they were ending the tech crackdown, they left strict regulations in place… But that being said, the timing here feels more appropriate — and mutually beneficial. For Xi — China needs internal growth to combat the dampened demand that the US/China tariffs create. So it makes sense that they’re looking to the sector with the highest growth potential. And Xi also wants to prioritize chip-making and AI, which have growth and military/geopolitical implications. For the Chinese tech community — they would welcome a more hospitable atmosphere, making it easier to incentivize investment and compete globally.

HP Buying Humane for $116M

• What’s up: Humane is closing up shop. They’re shutting down sales and support for their AI Pin wearable and selling software, patents, and technical talent to HP. After February 28, Humane will cut off cloud services to the previously sold pins, so users will lose calling, messaging, and AI responses. HP plans to integrate Humane’s technology into AI-driven PCs, printers, and workplace solutions under a new division called HP IQ.

• So what: First, this isn’t a surprise — when Humane’s AI pin launched in April 2024, it got positively lambasted by reviewers like MKBHD (”worst product I’ve ever reviewed”). Second, while any sale is better than no sale, this is pretty meager. Apparently, they were shopping around right after launch at a valuation 10x higher than this. Third, it’s yet another reminder of the core lesson from Humane: Going into an isolation chamber with fistfuls of cash, and building a product that tries to do 100 things (and does them all poorly), is a recipe for disaster. Focusing on one thing — and nailing it — gives you ‘permission’ to go build a second thing.

X Refuses to Help Germany ID Election Interference

• What’s up: X is fighting a German court ruling. The ruling ordered X to give researchers realtime access to election-related data (likes and shares of political content) under the EU’s Digital Services Act (DSA). According to the court, X’s refusal to allow access was blocking them from monitoring potential election interference. There have been multiple reports that Russia is interfering using social media, and the election is February 23. The case is one of the first major legal tests of the DSA.

• So what: The backdrop for this is that US tech companies have been extra firm in their pushback on EU regulators since Trump took office. Zuckerberg reportedly complained to the President pre-inauguration about the fines the EU imposes when companies violate antitrust laws (like the DSA), and asked Trump to intervene. And then last week, JD Vance gave an impassioned speech at the Paris AI Summit about deregulation in AI. To be fair, the regulations are intense… But it feels like data sharing to help identify and combat election interference is a pretty reasonable, easy request. I wonder if Elon is concerned about engagement numbers, and that’s part of the reason for not wanting to give access…

🛠️ Tool of the Week 🛠️

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🧭 Strategy Tips 🧭

A Humane Ending

Today's strategy tip is all about building the right things rather than just “all the things”.

Along the way, we’ll get introduced to the Capability Trap and use it to unpack why Humane struggled so mightily.

Let’s meet the framework.

The Capability Trap

The framework describes how companies – especially when they have a crazy-ambitious vision – get stuck doing more instead of doing better.

Here’s how things unravel:

1. Overcommitment: They try to innovate in too many areas at once.

2. Lackluster execution: Instead of perfecting anything, they ship “good enough” versions of everything.

3. Spiraling: Performance suffers and users get frustrated, so the company comes up with new, crazy-ambitious ideas to save the day.

Sound familiar?

For my visual learners, ze visual!

How Humane Got Caught in the Trap