Headlines this week - Jul 3, 2022
Concerns grow about how data is making us more vulnerable to authoritarian governments. Amazon and Meta in (different types of) crisis. Is AI failing to deliver? Markets get bearish on chips
Emerging consumer risks
Fears in the US about authorities potentially using citizens’ online data are growing, in the context of the new abortion ruling
Our Data Is a Curse, With or Without Roe - There is so much digital information about us out there that we can’t possibly control it all (NYTimes)
Google closes data loophole amid privacy fears over abortion ruling - Researchers welcome move to restrict developers’ ability to see which other apps are installed on people’s phones (FT)
Google to Delete User Data on Trips to Abortion Clinics - Internet giant acts as concerns rise on personal data privacy. Google will also make it easier to delete period information (Bloomberg)
Opportunities keep growing for authoritarian governments to implement a “surveillance state”. Biometric technology is specially risky for this
We must stop sleepwalking towards a surveillance state - Biometric technology is valuable for medical research but can also have malign uses (FT)
At the same time, “technology democratization” is increasing cybersecurity risks
How much does it cost to orchestrate a cyber attack in 2022? - It’s probably less than you think (FT)
New, emerging types of video games are creating additional addiction (and mental health) risks
Studios Battle for Players of ‘Hypercasual’ Videogames, the Latest Mobile Distraction - Mobile games that require little brainpower to play are becoming more sophisticated as their publishers try to cling on to fickle—and monetizable—players (WSJ)
Platform trends
Amazon in transition. Amazon Prime loses steam, and the company is looking for new growth: programmatic data from physical retail stores? sports rights?
Amazon’s Prime Day Isn’t Quite the Blockbuster It Once Was - Sales growth for the shopping event has slowed as retailer contends with high inflation, consumers’ shifting habits and cost cuts (WSJ)
Amazon Plans to Share Cashierless Store Data With Brands and Advertisers - Store Analytics tool offers granular data on shopper behavior. Program could help recoup costs of ‘Just Walk Out’ system (Bloomberg)
Amazon signs Champions League football streaming deal in UK - The US online retailer and video platform will split TV rights with BT Sport from 2024 (FT)
Meta in crisis: Zuckerberg gave a rather pessimistic internal speech last week
Mark Zuckerberg Prepares Meta Employees for a Tougher 2022 - In an internal meeting this week, Mr. Zuckerberg said the tech giant was facing one of the “worst downturns that we’ve seen in recent history.” (NYTimes)
The Metaverse could be a (potential, and still immature) solution. But initial resistance to some monetization plans is already emerging
Meta sparks anger by charging for VR apps - Facebook parent faces backlash from developers and accusations of ‘hypocrisy’ over virtual reality store terms (FT)
Other large platforms are looking for new monetization models
Snapchat Parent Launches Monthly Subscription Plan - Snapchat+ will cost $3.99 a month and give users access to exclusive features (WSJ)
Netflix Disrupted Entertainment With Binge Viewing. Now Can It Avoid Disruption Itself? - With the final two episodes of ‘Stranger Things,’ Netflix may offer a business lesson in how to respond when the conditions of a company’s early success change (WSJ)
Substack is having problems
Substack Lays Off 14% of Its Workforce Amid Uncertain Macroeconomic Outlook - Newsletter platform says move should prevent it from having to rely on fundraising to fund the business (WSJ)
Digital building blocks
Artificial Intelligence
AI might be failing to deliver on (high) expectations…
Tech Giants Pour Billions Into AI, but Hype Doesn’t Always Match Reality - Google, Meta and OpenAI are investing heavily in the technology, which is increasingly capturing the public imagination (WSJ)
… and maybe the problem is that we overestimated our ability to predict human behavior (through technology)
The internet is a constant recommendations machine — but it needs you to make it work. Why can’t the internet tell you what to read, watch, and eat? Because you’re complicated (TheVerge)
This same problem could be affecting Elon Musk in his plans to change Twitter (using data)
Elon Musk Got Twitter’s Data Dump, Next Comes the Hard Part - Billionaire has access to the company’s fire hose of tweets, but data specialists say analyzing it isn’t easy (WSJ)
China’s most valuable AI company (a face recognition specialist) is having problems, as international concerns grow about the technology
SenseTime shares fall almost 50% after lock-up expires - China’s most valuable AI company has been blacklisted by Washington over its facial recognition technology (FT)
Connectivity
Replacing traditional network vendors with “open” solutions is revealing to be more difficult than expected
BT Asks UK for More Time to Remove Huawei Core as Ban Approaches - BT faces January deadline to remove Chinese firm’s core. UK ordered a phased ban on Huawei’s use in networks in 2020 (Bloomberg)
Elon Musk’s Starlink makes progress as an alternative network technology
SpaceX Wins Permission to Connect Planes, Boats and Other Vehicles to Starlink Internet Service - FCC authorized Elon Musk-led company to link vehicles through its Starlink unit (WSJ)
Infrastructure
Is the “golden era” of (neutral) data center infrastructure reaching the end?
Hedge fund manager Jim Chanos’s next ‘big short’ is data centres - Short seller bets against Reits that own big server warehouses on risks that customers will become rivals (FT)
Cloud
Meanwhile, investors seem to believe that Amazon’s cloud golden era is just starting
Amazon Cloud Unit on Course for $3 Trillion Value, Redburn Says - Amazon.com Inc.’s cloud-storage business is on a clear path toward a $3 trillion value, almost triple what the whole company is worth now in the stock market, according to a Redburn Ltd. analyst (Bloomberg)
Semiconductors
Negative mood among investors towards semiconductor stocks, as demand for hardware slows down
Bear Market Looms for Taiwan Stocks After a Chipmaker-Led Slump - Chip stocks, including TSMC, lead declines after BofA report. National Financial Stabilization Fund closely monitors market (Bloomberg)
Micron Foretells a Rough Chip Patch Ahead - Memory-chip maker’s disappointing forecast has strong implications for others across semiconductor space (WSJ)
Geo-politics keeps shaping the chip industry. In the US, making Taiwan leaders invest locally seems easier than developing a local industry
Taiwan Firms Step Up US Investments to Mitigate Chip Concerns - GlobalWafers and MediaTek announce plans to expand in America. Washington is concerned with reliance on Taiwan for chips (Bloomberg)
US still lagging in delivering on chip ambitions - Washington delays over subsidies are frustrating the industry, while longer-term challenges remain (FT)
Korea (the country of Samsung) shows how difficult is to get full “chip sovereignty”
South Korea struggles to decouple from Japan in key chipmaking materials - Three years after Tokyo imposed export controls, reliance continues (Nikkei)
Samsung beats TSMC in commercializing the most advanced chips to date
Samsung Is First to Start Mass Production of 3-Nanometer Chips - Beats close competitor TSMC to next stage of chip fabrication. South Korean tech giant had promised 3nm in first half of 2022 (Bloomberg)
Arm plans to use their IPO proceeds to acquire complementary companies
Arm signals push for deals and more staff with IPO proceeds - Chief executive Rene Haas lays out ambitious course of expansion for the UK chip designer despite tech downturn (FT)
Tech finance trends
VC
Venture Funding Set to Hit Lowest Level Since 2020 - New data show that tech investing for the quarter to date is down 27% (Bloomberg)
China
Inside Didi’s $60 Billion Crash That Changed China Tech Forever - Beijing chills sector by accusing Didi of endangering security. Didi saga led some investors to call China uninvestable (Bloomberg)
Crypto
Bitcoin Set for Biggest Quarterly Drop in More Than a Decade - Bitcoin’s 58% drop is biggest since third quarter of 2011. JPMorgan analysts say deleveraging process may end soon (Bloomberg)
DeFi’s Existential Problem: It Only Lends Money to Itself - Crypto lenders’ exclusive focus on other crypto projects suggests their problems run much deeper than a Lehman-style liquidity crisis (WSJ)
Themes for the future & Deep Tech stories
Metaverse
China embraces the hype with a (rather freaky) dating app
Metaverse dating app popular with young people in China vies for HK listing - Tencent-backed social media app Soul uses avatars instead of pictures and connects people using algorithms (FT)
Electric Vehicles
Tesla tightens its belt, to adapt to current cost pressures
Tesla Lays Off Some Staff in Closing San Mateo, Calif., Office - Electric-vehicle maker is pursuing cost cuts amid inflationary pressures, supply-chain disruptions (WSJ)
Space
USA and China in direct competition to look for extraterrestrial life
Webb Telescope Will Look for Signs of Life Way Out There - The first question astronomers want to answer about exoplanets: Do they have atmospheres friendly to life? (NYTimes)
China Reveals Massive Project to Find ‘Earth 2.0’ - A new 115-page paper reveals in detail China's plan to find "Earth 2.0" and answer the question: Are we alone in the universe? (Motherboard)
Meanwhile, plans to return to the Moon seem to be accelerating within NASA
NASA’s Return to the Moon Starts With Launching a 55-Pound Cube - NASA has grandiose plans for sending astronauts back to the moon. Those start with a microwave-size private spacecraft about to lift off. (NYTimes)
Biotechnology
We might have seen just the beginning of the CRISPR revolution (including new policy rules that will be required)
CRISPR, 10 Years On: Learning to Rewrite the Code of Life - The gene-editing technology has led to innovations in medicine, evolution and agriculture — and raised profound ethical questions about altering human DNA (NYTimes)
The politics of the digital economy
Safety / Privacy
Europe pressures Google about tools for users to check and define how their data are used
European, U.S. Groups Plan Salvo of Privacy Complaints Against Google - Complainants invoke ‘privacy-by-design’ provision of EU law in arguing that Google complicates opting out of data-collection (WSJ)
California accuses social networks of creating addiction in children
Meta, TikTok Could Face Civil Liability for Addicting Children in California - Social-media platforms are lobbying to stop first-in-the-nation proposal allowing government attorneys to sue them for features alleged to harm minors (WSJ)
Singapore ‘s proposed rules confirm the trade-offs between online safety and privacy
Singapore’s proposed online safety laws look like more censorship in disguise - If the government appoints itself Guardian of the Internet, its citizens will never learn how to navigate a messy online world (RestOfWorld)
Europe prepares to regulate crypto
EU finalises sweeping rules for ‘wild west’ crypto industry - Authorities agree standards designed to protect consumers and increase transparency from companies (FT)
New world order
We might need better rules to control globalization, rather than stopping it
In an era of disorder, open trade is at risk - Action is needed to shore up the global commons — and less powerful countries must take the initiative (FT)
The Tech Cold War
Some American politicians still want TikTok to be banned…
FCC Member Calls On Apple, Google to Banish TikTok - Citing security risks, Brendan Carr asks tech giants to remove TikTok from their app stores (WSJ)
… and TikTok defends itself with new plans, but recognizes that US data is being accessed from China
TikTok says it is working to ‘safeguard’ US data and national security - Popular ByteDance-owned app seeks to allay lawmakers’ concerns about China’s access to sensitive information (FT)
TikTok Confirms Some China-Based Employees Can Access US User Data (Bloomberg)
Political debates are delaying US tech regulations against China
Tech Investment Bill to Counter China Hits New Hurdle - McConnell warns USICA won’t advance if Democrats move ahead with separate climate and drug package (WSJ)