Photo by Annie Spratt on Unsplash
Hitting goals is critical for a business, especially in the tech world. We are seeing companies trade their culture in order to hit business targets (see Google and Amazon). The media is coming down hard on Google for these shifts, but as we have seen with WeWork, the time of the unicorn darlings is over and the stock market is demanding profits once again.
SoftBank and Masayoshi Son are another root cause for this tonal shift. At the moment, many of SoftBank’s investments are performing poorly (again see WeWork and Uber). Son’s investment strategies enabled many of the wayward valuations over the last few years and a market course-correction was in order.
If a good idea doesn’t make a profit (somehow), it isn’t going to survive. Capitalism is cruel and wonderful beast.
Acquisitions/Investments
- Here’s a Masayoshi Son Shopping List for 2020
The numbers are so bad, you have to laugh. Uber: down 37% since IPO. WeWork: valuation cut by 80%. Wag: sold back to founders at a loss. But Son will bounce back. He has to, because he has another Vision Fund to raise and run. Instead of being cowed into humility, it’s more likely he’ll double down and make even more fantastical bets with other people’s money. To help him out, I did a multivariate analysis(1) based on past SoftBank deals to come up with a list of investments he ought to consider.
Also:
Saudi AramcoTo be frank, Saudi Arabia’s state oil company isn’t really the kind of thing SoftBank should be putting money into because oil is just not futuristic enough. Data is said to be the new oil anyway. But then, taking Saudi money is something many believe Son shouldn’t be doing at all in light of the murder of writer Jamal Khashoggi. Son has pledged not to abandon the Saudis — after all, they gave $45 billion to the Vision Fund — and so that commitment may as well include throwing support behind Crown Prince Mohammed bin Salman and his nation’s largest asset. Riyadh ended up settling for a $1.7 trillion market cap at IPO, after previously assuring everyone that it was worth at least $2 trillion. While it hit that figure within days of listing, the shortfall at IPO is equivalent to three Vision Funds. After WeWork’s $40 billion drop in value, Masa will feel right at home.
- IBM Bet Everything on an Acquisition in 2019. Now It Needs to Grow Again.
The Red Hat deal is just one in a decadeslong series of IBM moves to keep up with shifting technology trends. Keep in mind that IBM over the years built and later unloaded large businesses in desktop computers, laptops, printers, microprocessors, chip manufacturing, and typewriters. (Didn’t you once own an IBM Selectric?) The latest move will help IBM stay relevant in a world in which cloud-based services have come to dominate the information technology landscape.
While IBM over the last decade has made a lot of noise about Watson, the company’s cloud-based artificial intelligence software platform, the company has been slow to establish a leadership position in the public cloud, falling behind the market leaders: Amazon.com’s (AMZN) Amazon Web Services, Microsoft’s (MSFT) Azure, and Alphabet’s (GOOGL) Google Cloud Platform.
https://www.barrons.com/articles/ibm-bet-everything-on-red-hat-in-2019-51577479288
Artificial Intelligence
- Google AI Beats Doctors at Breast Cancer Detection—Sometimes
The model is the latest step in Google’s push into health care. The Alphabet Inc. GOOG 0.07% company has developed similar systems to detect lung cancer, eye disease and kidney injury.
Google and Alphabet have come under scrutiny for privacy concerns related to the use of patient data. A deal with Ascension, the second-largest health system in the U.S., allows Google to use AI to mine personal, identifiable health information from millions of patients to improve processes and care.
The health data used in the breast-cancer project doesn’t include identifiable information, Google Health officials said, and the data was stripped of personal indicators before given to Google.
https://www.wsj.com/articles/google-ai-beats-doctors-at-breast-cancer-detectionsometimes-11577901600
- Illinois says you should know if AI is grading your online job interviews
It’s not just that we don’t know how these systems work. Artificial intelligence can also introduce bias and inaccuracy to the job application process, and because these algorithms largely operate in a black box, it’s not really possible to hold a company that uses a problematic or unfair tool accountable.
A new Illinois law — one of the first of its kind in the US — is supposed to provide job candidates a bit more insight into how these unregulated tools actually operate. But it’s unlikely the legislation will change much for applicants. That’s because it only applies to a limited type of AI, and it doesn’t ask much of the companies deploying it.
Also:
“It’s hard to feel that that consent is going to be super meaningful if the alternative is that you get no shot at the job at all,” said Rieke. He added that there’s no guarantee that the consent and explanation the law requires will be useful; for instance, the explanation could be so broad and high-level that it’s not helpful.
Cloud
- Amazon Has Long Ruled the Cloud. Now It Must Fend Off Rivals.
Amazon’s success in the cloud, more recently, has suffered setbacks beyond the lost Pentagon deal. Last year, one of its biggest banking customers, Capital One Financial Corp. , had more than 100 million customer records stolen that were stored on Amazon’s cloud. And more big corporations are turning to other cloud vendors. Some are worried the online retail giant could become a competitor, according to people familiar with the matter. Many large multinationals have longstanding relationships with Microsoft or Oracle, but not with Amazon.
“What we’re seeing now is there’s another wave of late-adopter customers coming to market. These are customers that have never used cloud before, so they’re investigating,” said Raj Bala, research director at Gartner. “A fair number of these customers will certainly end up at [Microsoft’s] Azure, because they meet that profile: they run a lot of Windows, they tend to want to play it safe, and the decision makers in that camp tend to favor Azure to a large extent.”
https://www.wsj.com/articles/amazon-has-long-ruled-the-cloud-now-it-must-fend-off-rivals-11578114008
Security/Privacy
- What California’s New Privacy Law Means for You
Not everybody will have to comply with the law. The CCPA only applies to companies that earn more than $25 million in gross annual revenue, collect personal data on more than 50,000 users, or make more than 50 percent of their revenue selling user data.
It’s also worth highlighting that while the bill technically took effect on January 1, California’s Attorney General has stated enforcement isn’t likely to begin until sometime this summer, giving lawmakers some additional time to work out some early kinks, clarify murky language, or water down existing requirements upon lobbyist request. Already we’re seeing that some companies aren’t complying with the law.
Groups like the Electronic Frontier Foundation say they spent the better part of 2019 trying to keep lobbyists from numerous industries from weakening the bill, since empowered, informed consumers will inevitably opt out of data sales, costing companies billions.
https://www.vice.com/en_us/article/z3bvyx/what-californias-ccpa-new-privacy-law-means-for-you
Other
- Former Google human rights chief says he was ‘sidelined’ over censored Chinese search engine
As Google pushed for deals in authoritarian Saudi Arabia and launched the Google Center for Artificial Intelligence in Beijing, LaJeunesse says, he pushed for a company-wide human rights program that would bring new oversight to product launches. But Google rebuffed the idea, and eventually brought in a colleague to oversee policy issues related to Dragonfly.
“Just when Google needed to double down on a commitment to human rights,” LaJeunesse writes in the blog post, “it decided to instead chase bigger profits and an even higher stock price.”
The issues extended to the broader culture within the company as well, according to LaJeunesse. He says, at one point, during an all-hands meeting, his boss at the company suggested Asian employees “don’t like to ask questions.”
https://www.theverge.com/2020/1/2/21046522/google-china-dragonfly-ross-lajeunesse-human-rights-chief-censorship
Google has little choice to be evil or not in today’s fractured internetGoogle used to have a lot of agency, which is unfortunately declining very, very rapidly.
I’ve talked about the fracturing of the internet into different spheres of influence for quite literally years. Countries like China in particular, but also Russia, Iran and others, are seizing more and more exacting control of the internet’s plumbing and applications, subsuming the original internet’s spirit of openness and freedom and placing this communications medium under their iron fists.
As this fracturing has occurred, companies like Google, or Shutterstock, or even the NBA, have increasingly faced what I’ve called an “authoritarian straddle” — they can either work with these countries and follow the local rules, or they can just get out, with serious ramifications for their home markets.
- Amazon threatens to fire critics who are outspoken on its environmental policies
Amazon’s external communications policy “is not new and we believe is similar to other large companies,” company spokeswoman Jaci Anderson said in a statement. In response to whether Amazon was trying to stifle workers, Anderson said employees are “encouraged to work within their teams,” including by “suggesting improvements to how we operate through those internal channels.”
Tech workers have recently become more outspoken about concerns over their employers’ policies. During a Sept. 20 protest, thousands of Amazon employees walked out and criticized the company’s climate policies and practices. In November 2018, thousands of Google employees walked off the job to protest of the company’s handling of sexual harassment claims. Workers at Google, Amazon and Microsoft have spoken out in criticism of facial-recognition technology from their companies, fearing misuse by law enforcement and other government agencies.
https://www.washingtonpost.com/technology/2020/01/02/amazon-threatens-fire-outspoken-employee-critics-its-environmental-policies/
Additional Comments:
This isn’t a union situation, but it feels similar to when Regan broke the unions in the 80’s. The air traffic controllers thought they couldn’t be replaced… and then Regan replaced them. Those people were barred from air traffic control jobs for years until Clinton granted amnesty.
https://www.npr.org/2019/12/13/788002965/episode-958-when-reagan-broke-the-unions
