On Our "Virtual Route 66" This Week": On Our World

 

As we remember how far we've come, we present a snapshot of the week that was with thoughts courtesy the Information and other leading thinkers throughout the World this week: 

August 12, 2022

As the U.S. government sets in motion two of its most enterprising tech spending endeavors in recent memory, a cautionary tale from across the Pacific offers a dash of hope for American triumph.  It’s been nearly a decade since an ascendant Chinese government launched the so-called Belt and Road Initiative, a hugely ambitious effort to spark its economy and expand the republic’s geopolitical influence. In the time since, Chinese officials have doled out hundreds of billions of dollars in direct spending and loans to regional neighbors, largely for basic infrastructure projects in emerging nations. They hoped that the show of goodwill would engender political support—not to mention strategic economic benefits—from countries like Pakistan, Singapore, and Malaysia amid an escalating rivalry with the U.S. But as Nikkei Asia reported this week in the first of a three-part series, the Belt and Road Initiative has since become something of a boondoggle. Recipients of Chinese loans are unable to meet their debt obligations, triggering political strife. Locals resent intrusive construction projects that come with costly strings attached. Corruption and mismanagement have roiled nations benefiting from the largesse. “Now it is an open question whether the BRI is a net economic benefit—or even, in many cases, a liability for its chief recipients,” Nikkei Asia reporters wrote. The Belt and Road Initiative stands in sharp contrast to a pair of landmark pieces of tech-related legislation that have consumed Congress this summer: a science bill that contains $52 billion in subsidies for the semiconductor manufacturing industry, and a climate-and-tax bill that includes potentially billions of dollars in electric vehicle tax credits. President Joe Biden signed the science bill, commonly known as the CHIPS-Plus Act, earlier this week, while the House is expected Friday to approve the climate-and-tax legislation following the Senate’s signoff last week. Whereas the Belt and Road Initiative sought to curry favor by making recipient countries’ political leaders indebted to the government by exporting money and labor, the two American drives at building economic and political power take a decidedly more free-market, nationalist approach. Both bills aim to bring high-tech infrastructure onto U.S. soil, using incentives to lure domestic and foreign investment in the States.  Rather than propping up industry-leading semiconductor manufacturers in pseudo-ally Taiwan and steadfast ally South Korea, both of which are imperiled by their proximity to China, federal policymakers hope the subsidies push companies to expand operations within American borders. In a similar vein, automakers and suppliers likely will need to quickly increase their levels of mining, sourcing, and manufacturing within the U.S. if they want to benefit from proposed electric vehicle tax credits. The two bills also deal directly with long-established corporations that answer to eagle-eyed shareholders, bypassing the fickle and unscrupulous heads of state that complicated China’s campaign.  The U.S. legislation seeks to cajole Samsung, Taiwan Semiconductor Manufacturing Company, Volkswagen, Honda, and Toyota, to name a few. China, meanwhile, is dealing with the fallout of political miscalculations and outright greed within the governments of Cambodia, Sri Lanka, and other still-developing countries. Most of all, Congress’ push focuses on the high-tech industries that power global trade and economic leadership. While China is busy building and financing rudimentary infrastructure, American legislators are angling to position the U.S. as a premier destination for pioneering electronics and automotive technology.  Congress’ big-government push certainly bears its fair share of critics.  Some Republicans oppose the semiconductor subsidies, making a fair case that highly profitable manufacturers don’t need an inefficient federal bureaucracy underwriting their lucrative operations.  The electric vehicle tax credits, which force companies to source battery components and vital minerals from North American companies, also drew rebukes this week from overseas. The European Union’s governing body decried the sourcing mandates Thursday as discriminatory against foreign automakers and a potential violation of World Trade Organization rules. South Korean political and business officials, including electric-car battery executives and top brass at automaker Hyundai, lodged similar complaints Friday, according to Bloomberg. At a minimum, though, the U.S. government isn’t going down the same error-laden path as China with its influence effort. While Chinese leaders ventured outside of their borders to find prosperity, the U.S. wants all roads to lead to America.

BOUGHT AND SOLD MEDIA/TELECOM Meet Axios’ New Owners: Old-Money Atlanta Billionaires Hungry for the Next Big Thing By Abram Brown The pitch Sebastian Thrun made to investors in 2014 was an alluring one. Thrun—former head of Google X, the company’s top-secret skunkworks—had already raised over $20 million for his buzzy online-education startup, Udacity. Now he wanted more. He promised to profoundly disrupt education through online courses that put students through a warp-speed curriculum, matriculating them with university-level “Nanodegrees” earned in a fraction of the time. The model was still unproven. “It was super aspirational. Lots and lots of unknowns,” said Gabriel Dalporto, who became Udacity CEO in 2019. But Thrun got his funding—and a roughly $200 million valuation. Andreessen Horowitz ponied up in the $35 million Series C, as did Columbus, Ohio–based Drive Capital and another firm far removed from tech’s coastal power centers: Atlanta-based broadband and media conglomerate Cox Enterprises. Cox Enterprises, which is owned by a sprawling, eponymous clan of billionaires, has been placing a lot of bold bets over the past decade, posting at least 70 venture deals in that time and 40 in the past three years alone. In addition to its investment in Udacity—which hit a billion-dollar valuation in 2015 and has “nine-figure” revenue today, Dalporto said—Cox has quietly backed electric truck company Rivian; Caffeine, a promising livestreaming platform; FaZe Clan, an e-sports team that recently completed a SPAC deal; PadSplit, a housing marketplace app; Enlace Health, a maker of medical payments software; and Clearcover, a car insurance startup. Cox Enterprises’ existing digital portfolio also includes brands such as Autotrader, which it launched in 1999, and Dealertrack, financial software for car dealerships, which it acquired for $4 billion in 2015.    READ THE FULL STORY     Samsung Electronics Vice Chairman Jay Y. Lee was pardoned today by South Korean President Yoon Suk-yeol following the former's imprisonment over a bribery conviction. Lee was released on parole a year ago after serving 18 months in jail for bribing a predecessor to Yoon. He has been Samsung's de facto leader since 2014. More: The largely symbolic pardon ends a five-year ban on Lee's official return to Samsung management. He is now allowed to rejoin Samsung's board, conduct business activities more freely, and travel internationally to broker deals. Lee is needed to help deter a “national economic crisis," South Korea’s Justice Ministry said. Lee is a grandson of Samsung’s founder, Lee Byung-chul. His father, Lee Kun-hee, was also given presidential pardons following corruption and tax evasion convictions in 1996 and 2008. Overall, Yoon pardoned nearly 1,700 people on Friday. The majority had been convicted of traffic violations and white-collar crimes. Related: In May, Samsung said it would invest roughly $355B in core businesses including semiconductors and biopharmaceuticals over the next five years. Samsung, the world's largest maker of smartphones and TVs, has also announced plans for a chip-making factory near Austin, Texas. Earlier this week, Samsung unveiled its latest foldable phones, the $1,000 Galaxy Z Flip 4 and the $1,800 Galaxy Z Fold 4, which arrive on Aug. 26 in the U.S. THE WALL STREET JOURNAL  Meditation app startup Calm reportedly laid off 20% of its workforce, or about 90 people, according to the Wall Street Journal. The publication obtained a memo that Calm.com CEO David Ko sent to employees yesterday. Ko wrote that Calm leaders looked into the "investment thesis" for every project before deciding on changes intended to help stabilize the company.  More: Leaders reportedly cited macroeconomic trends and earlier efforts to lower expenses to avoid the cuts, according to a laid-off employee. San Francisco-based Calm is known for its wellness and meditation app of the same name. Founded in 2012, it reached unicorn status in 2019 and a $2B valuation following a $75M funding round in 2020. The startup counts Salesforce Inc. Co-Chief Executive Marc Benioff, TPG, Lightspeed Venture Partners, and Goldman Sachs Group among its investors. Ko was formerly the CEO at Ripple Health Group, a healthcare technology company that Calm acquired in February. THE WALL STREET JOURNAL  Dutch authorities arrested an alleged developer of U.S.-sanctioned crypto mixing service Tornado Cash. The blockchain-based crypto mixing service enables anonymity in crypto asset transfers. The U.S. Treasury Department on Monday added Tornado Cash to a list of sanctioned crypto-tools, prohibiting U.S. residents from using the service.  More: The Fiscal Information and Investigation Service, a Dutch agency that investigates financial crimes, announced its arrest of the alleged developer today. It did not name the 29-year-old individual, who it said is suspected of facilitating money laundering and concealing criminal financial flows. The agency noted that it hasn't ruled out multiple arrests. Tornado Cash and other mixing services pool various cryptocurrencies to anonymize transactions. The U.S. government outlawed the mixing tool after North Korean hackers used it to launder stolen money. According to the U.S. Treasury, Tornado Cash has been used to launder $7B+ worth of virtual currency since 2019. TECHCRUNCH  Amazon-owned MGM and Big Fish Entertainment are producing a video clip show based on Ring security camera footage. Stand-up comedian and actress Wanda Sykes will host  "Ring Nation," a syndicated TV show described as a modern take on "America's Funniest Home Videos." It will feature viral clips from Ring owners who submit videos in the U.S. More: Set to premiere on Sept. 26, the show will feature videos from Ring home security and doorbell cameras as well as home videos. Many are sent directly to the show or were previously shared online, a Ring spokesperson said.  According to Deadline, the content will include "neighbors saving neighbors, marriage proposals, military reunions, and silly animals." Amazon owns MGM, Big Fish, and Ring, the household video security brand. Zoom-out: Critics have argued that it's an attempt to normalize Ring's home surveillance network. Amazon is known to provide customer video footage to U.S. law enforcement. In the first six months of 2022, it provided such footage to police 11 times without a warrant or permission. DEADLINE  The Federal Trade Commission (FTC) has launched an effort that could eventually lead to new rules restricting how companies gather data and surveil users. By issuing an early notice of proposed rulemaking, the FTC hopes to gather public feedback about what it calls “commercial surveillance” and lax data-security practices by businesses. The public feedback will help the FTC determine whether to draft new data privacy and security rules, a process that would take years. More: The broad notice seeks public comment in many areas, including harm to children and consumers, automated systems, biased surveillance systems, discrimination, and costs and benefits of current practices.  In a statement, FTC Chair Lina M. Khan said commercial data collection happens at "a massive scale and in a stunning array of contexts." For example, companies collect location data, surveil social networks and online activity, and browsing history and analyze it with algorithms before selling it in a "massive opaque" market for consumer data, Khan said. The FTC's Democratic majority approved the Advanced Notice of Proposed Rulemaking in a 3-2 vote along partisan lines. CNN  Chinese tech giant Xiaomi today unveiled a full-size humanoid robot ahead of Tesla's planned reveal of its own human-like robotic prototype. Xiaomi is the world's second-largest manufacturer of smartphones but has been expanding into robotics in recent years. More: Xiaomi's new CyberOne robot stands at 177 centimeters (5 foot 9 inches) and weighs around 52kg (115 pounds). It can walk and imitate human movement with arms and legs controlled by joint motors. Xiaomi claims the bot can identify human emotion and generate 3D visual reconstructions of its surroundings. The company didn't specify exact use cases. The robot is not in mass production. It costs $89,100 to $104,000 but is considered a "technological showcase" of Xiaomi's robotics capabilities. Meanwhile, Tesla plans to introduce its own humanoid robot prototype, called  Optimus, during Tesla AI Day on Sept. 3. TECHCRUNCH