Photo by Josh Appel on Unsplash
News about massive acquisitions, mergers, and government fines can make it easy to lose track of the true value of a dollar.
WeWork and Uber continue to struggle justifying their value and become cash-flow positive. Google, through all of their own self-inflicted wounds are being treated like a piggy bank for foreign and the US governments.
Meanwhile critics of IT companies keep touting the value of data over the value of hard cash. Interesting times indeed.
Acquisitions/Investments
None this week
Artificial Intelligence
- How to Build Artificial Intelligence We Can Trust
For certain A.I. tasks, the dominant data-correlation approach works fine. You can easily train a deep-learning machine to, say, identify pictures of Siamese cats and pictures of Derek Jeter, and to discriminate between the two. This is why such programs are good for automatic photo tagging. But they don’t have the conceptual depth to realize, for instance, that there are lots of different Siamese cats but only one Derek Jeter and that therefore a picture that shows two Siamese cats is unremarkable, whereas a picture that shows two Derek Jeters has been doctored.
In no small part, this failure of comprehension is why general-purpose robots like the housekeeper Rosie in “The Jetsons” remain a fantasy. If Rosie can’t understand the basics of how the world works, we can’t trust her in our home.
https://www.nytimes.com/2019/09/06/opinion/ai-explainability.html
Cloud
- Attorneys General Launch Probe of Google
Texas Attorney General Ken Paxton, a Republican, announced the probe in front of the U.S. Supreme Court building, joined by about a dozen other attorneys general. In all, 48 states are part of the investigation of the Alphabet Inc. unit, plus Puerto Rico and the District of Columbia, officials said.
Mr. Paxton said the states for now would focus on Google’s practices in online advertising markets. “But the facts will lead where the facts lead,” he said, adding, “We don’t know all the answers.”
The states sent Google a civil subpoena on Monday seeking information about its ad practices, officials said.
https://www.wsj.com/articles/attorneys-general-launch-probe-of-google-11568055853
- Google, Amazon and Microsoft in Battle to Store Health Data in the Cloud
Google will announce Tuesday a 10-year deal with the Mayo Clinic to store the hospital system’s medical, genetic and financial data. Providence St. Joseph Health in July said it reached a data-storage agreement with Microsoft. Later that month, Cerner Corp. CERN -0.24% , one of the largest electronic-health-record companies, unveiled its cloud-storage agreement with Amazon’s cloud-computing unit, Amazon Web Services.
Some hospital-system and company officials said they expect to jointly develop new software by combining data and expertise of health-care companies with tech giants’ computing power and engineering know-how. “Google can’t do this alone. We can’t do this alone,” said Cris Ross, Mayo’s chief information officer. The terms weren’t disclosed.
Patient records will be kept private and access will be controlled by Mayo, Mr. Ross said. Data used to develop new software will be stripped of any information that could identify individual patients before it is shared with the tech giant.
Security/Privacy
- Big Tech’s Hands-Off Era Is Over
Over the years, these growing companies have successfully skirted legal recourse for bad actors on their sites. They have had the law on their side: Section 230 of the Communications Decency Act of 1996 shields internet platforms from liability for what others post.
Now, as global behemoths, it seems that with greater power comes greater legal responsibility. The U.S. Court of Appeals for the Third Circuit earlier this year held that a customer in Pennsylvania could sue Amazon over a product that was allegedly unsafe. Meanwhile, Facebook was recently fined $5 billion over privacy violations—the largest privacy-related fine in the history of the Federal Trade Commission. Google was also just hit with a $170 million FTC fine over its YouTube operation, for which the company made changes such as disabling comments on children’s videos.
https://www.wsj.com/articles/big-techs-hands-off-era-is-over-11567762389
- 51 tech CEOs send open letter to Congress asking for a federal data privacy law
Many privacy advocates (and even some tech CEOs) believe tech companies aren’t really looking after users’ interests, but their own. There’s a belief that companies are trying to aggregate any privacy lawmaking under one roof, where lobby groups can water-down any meaningful user protections that may impact bottom lines.
Many companies make money by selling customers’ personal or device-usage data to online advertisers. A privacy framework with too many teeth could prevent companies from selling certain types of data.
To help speed up the legislative process, the Business Roundtable group released their own consumer privacy framework [more here] that they’d like Congress to analyze and use as a base for any future law. This proposal includes many of the same provisions of the EU’s General Data Protection Regulation (GDPR); however, in very broad terms.
- 1B Mobile Users Vulnerable to Ongoing ‘SimJacker’ Surveillance Attack
Researchers on Thursday disclosed what they said is a widespread, ongoing exploit of a SIM card-based vulnerability, dubbed “SimJacker.” The glitch has been exploited for the past two years by “a specific private company that works with governments to monitor individuals,” and impacts several mobile operators – with the potential to impact over a billion mobile phone users globally, according to by researchers with AdaptiveMobile Security.
“Simjacker has been further exploited to perform many other types of attacks against individuals and mobile operators such as fraud, scam calls, information leakage, denial of service and espionage,” said researchers with AdaptiveMobile Security in a post breaking down the attack, released Thursday.
https://threatpost.com/1b-mobile-users-vulnerable-to-ongoing-simjacker-surveillance-attack/148277/
Infrastructure/Hardware
- The mainframe business is alive and well, as IBM announces new z15
IBM announced last month that it was making OpenShift, Red Hat’s Kubernetes-based cloud-native tools, available on the mainframe running Linux. This should enable developers, who have been working on OpenShift on other systems, to move seamlessly to the mainframe without special training.
IBM sees the mainframe as a bridge for hybrid computing environments, offering a highly secure place for data that when combined with Red Hat’s tools, can enable companies to have a single control plane for applications and data wherever it lives.
https://techcrunch.com/2019/09/12/the-mainframe-business-is-alive-and-well-as-ibm-announces-new-z15/
Other
- California Bill Makes App-Based Companies Treat Workers as Employees
The bill passed in a 29-to-11 vote in the State Senate and will apply to app-based companies, despite their efforts to negotiate an exemption. On Wednesday morning, the Assembly gave its final approval, 56 to 15. California’s governor, Gavin Newsom, endorsed the bill this month and is expected to sign it. Under the measure, which would go into effect Jan. 1, workers must be designated as employees instead of contractors if a company exerts control over how they perform their tasks or if their work is part of a company’s regular business.
The bill may influence other states. A coalition of labor groups is pushing similar legislation in New York, and bills in Washington State and Oregon that were similar to California’s but failed to advance could see renewed momentum. New York City passed a minimum wage for ride-hailing drivers last year but did not try to classify them as employees.
https://www.nytimes.com/2019/09/11/technology/california-gig-economy-bill.html
- Mark Hurd, the co-CEO of Oracle, is taking a leave of absence, citing health reasons
With Hurd’s departure for now, Catz will become the sole CEO of Oracle. Ellison, who remains the company’s CTO, is also expected to take on some of Hurd’s responsibilities, says CNBC.
https://techcrunch.com/2019/09/11/mark-hurd-the-co-ceo-of-oracle-is-taking-a-leave-of-absence-citing-health-reasons/
Safra Catz has long been Oracle’s secret weapon, and analysts say that it’s her time to shine as sole CEO: ‘This will test her, but she will prevail’Ray Wang of Constellation Research described Catz as “an extraordinary operator” who has not drawn as much attention as Oracle’s other high-profile — and sometimes controversial — top execs.
“Many folks underestimate her because she doesn’t want to take the limelight, but she has a silent power,” he told Business Insider. “I think she’s not sought the limelight but internal folks will always tell you she’s the one running the company in the background. Her biggest weakness is a strength in today’s climate. She’s not seeking the limelight. She’s focused on getting the job done.”
https://www.businessinsider.com/safra-catz-profile-oracle-sole-ceo-2019-9
- Jack Ma officially retires as Alibaba’s chairman
Ma will continue serving on Alibaba’s board until its annual general shareholders’ meeting next year. He also remains a lifetime partner of Alibaba Partnership, a group drawn from the senior management ranks of Alibaba Group companies and affiliates that has the right to nominate (and in some situations, appoint) up to simple majority of its board.
Ma said in last year’s announcement that he plans for his departure from Alibaba Group to be very gradual: “The one thing I can promise everyone is this: Alibaba was never about Jack Ma, but Jack Ma will forever belong to Alibaba.”
https://techcrunch.com/2019/09/09/jack-ma-officially-retires-as-alibabas-chairman/
- Google to pay $549 million fine and $510 million in back taxes in France
This is a settlement, which means that French authorities are dropping charges against Google in France. It covers activities from 2005 to 2018.
According to previous reports, the company owed around $1.3 billion in taxes. In 2014, Google started putting aside some money for a potential fine.
- WeWork and Uber are proof valuations are meaningless
Up top, we dug into WeWork and the latest from the company’s continuing IPO saga. The question regarding the co-working company’s public offering has changed to whether the IPO will happen this year, not just at what price the firm can entice enough investment to actually get public.
Alex has written about the company’s cash appetite a few times now, which raise the question of how long the company can survive without some sort of large, external investment. If SoftBank is willing to commit more capital is an open question
https://techcrunch.com/2019/09/13/wework-and-uber-are-proof-valuations-are-meaningless/
WeWork’s Latest Threat: Old-School Landlords Trying to Copy WeWorkWeWork started off as a great customer of Hines Interests LP and other landlords, leasing unused space and renting it to businesses too tiny to be ordinary tenants, Hines executive Charlie Kuntz said in a presentation after dessert, according to several people present.
But WeWork didn’t stop there. It began cutting deals with large corporations too, making it a threat to Hines’s core business. WeWork’s move reminded some at the dinner of how Airbnb Inc. stole business from hotels and how taxicab companies saw Uber Inc. eat their lunch.
“It’s not too late for us,” Gerald Hines, the 94-year-old family patriarch and CEO’s father, told the group.
This June, the big landlord punched back. It launched its own co-working business, called Hines Squared, as a direct competitor to WeWork.