The app “routinely caused” users to incur overdraft fees, the CFPB said.
The CFPB has fined Hello Digit $2.7 million fine for offering a faulty personal finance app.
The CFPB said Wednesday that it has imposed a $2.7 million fine on Hello Digit, an app that claims to help users put aside money for rainy days but that the regulator said messed up their finances.
Hello Digit, which was acquired by Oportun Financial Corporation in 2021, used a “faulty algorithm” that led to “overdrafts and overdraft penalties for customers.”
“Hello Digit was meant to save people money, but instead the company falsely guaranteed no overdrafts with its product, broke its promises to make amends on its mistakes, and pocketed a portion of the interest that should have gone to consumers,” the CFPB said.
In addition to the fine, Hello Digit was ordered to pay redress to affected customers. An Oportun spokesperson said a company investigation found that the Hello Digit app’s “success rate” was “better than 99.99%.” An app transaction “caused an overdraft fee for one of our members less than 0.008% of the time,” the spokesperson said. Oportun said it has paid back 1,947 members who were affected by overdraft fees.
“While we disagree with the CFPB on this matter, we are happy to have it settled,” the company said.
A consumer who signs up for the Hello Digit app pays a $5 monthly subscription fee and agrees to give the company access to their checking accounts, the CFPB said.
The app then makes automated transfers from the consumer’s account, called “auto-saves,” to a separate account “held in Hello Digit’s name for the benefit of the consumers,” the agency said. The app’s algorithm analyzes the consumer’s data to figure out “when and how much to save for each consumer.”
But the CFPB said the Hello Digit app “routinely caused” users to incur overdraft fees charged by their banks. The company then often rejected customers’ demands to recoup their funds, despite assurances that they would be reimbursed if they were hit with an overdraft charge.
Hello Digit also “pocketed interest that should have gone to consumers,” the agency said.
“Companies have long been held to account when they engage in faulty advertising, and regulators must do the same when it comes to faulty algorithms,” CFPB Director Rohit Chopra said in a statement.
Benjamin Pimentel ( @benpimentel) covers crypto and fintech from San Francisco. He has reported on many of the biggest tech stories over the past 20 years for the San Francisco Chronicle, Dow Jones MarketWatch and Business Insider, from the dot-com crash, the rise of cloud computing, social networking and AI to the impact of the Great Recession and the COVID crisis on Silicon Valley and beyond. He can be reached at [email protected] or via Google Voice at (925) 307-9342.
TikTok owner ByteDance is taking some cues from Meta for its upcoming VR headset: The device will feature an RGB camera to offer color pass-through video of one’s surroundings, according to information included in a recent Bluetooth certification document.
That’s very similar to a key feature of Meta’s upcoming Project Cambria headset. Both companies are expected to announce their new devices in the coming weeks.
In a listing with the Bluetooth SIG, Bytedance subsidiary Pico describes the new device as a “premium VR all-in-one headset” that will be smaller than the company’s current-gen Neo 3 headset. Codenamed Phoenix, the headset will feature a higher-resolution display than its predecessor and clearer optics, according to the listing.
Codenamed Phoenix, the headset will feature a higher-resolution display than its predecessor and clearer optics, according to the listing. Image: Pico/FCC
The entry doesn’t reveal any detailed specs about the device, but it does mention that it will have “a high quality RGB camera to unlock a new level Mix-Reality [sic] experience.” It also notes that integrated face and eye tracking will make for “a more real avatar.” Protocol was first to report in July that Pico plans to launch a Pro model of its upcoming headset with face and eye tracking functionality.
According to the Bluetooth SIG listing, the device will include four cameras “and many other sensors.” It will support dual 6DOF controllers as well as hand tracking, and the controllers will feature “wide band” linear resonant actuators “to make the haptic experience more immersive.” The headset will also have automatic hardware IPD adjustment to adapt to a person’s pupillary distance for a “more accurate and comfortable vision experience.”
ByteDance acquired Pico in 2021, and has since been working to reposition the startup with a broader consumer focus. Pico began selling its current Neo 3 Link headset to consumers in Europe this spring, and started to build out a content unit called Pico Studios in the U.S. this year — all moves that indicate it is looking to directly compete with Meta’s VR hardware.
The Diablo Canyon nuclear plant will live to deliver power to the grid another day.
In a bipartisan vote, California lawmakers backed Gov. Gavin Newsom’s pitch to lend utility PG&E $1.4 billion to keep the plant open for five more years. Assuming PG&E’s bid to extend its operations wins federal approval, the plant will run at least through 2030.
Located on the state’s central coast, the plant was slated to close in 2025 due in part to concerns that its location adjacent to a fault line left it vulnerable to earthquakes. However, in the midst of dangerous heat waves that led to rolling blackouts in 2019 and subsequent years, Newsom began to reconsider the plant’s fate.
Diablo Canyon is California’s single largest source of electricity, generating 6% of the state’s power in 2021. Not only that — that electricity comes without carbon emissions. Because nuclear plants can run 24/7, it also means that carbon-free power doesn’t come with the intermittency concerns that solar and wind do.
Newsom said this week that keeping Diablo Canyon “is critical in the context of making sure we have energy reliability going forward,” which echoes what the nuclear industry has been saying as it tries to chart a course to being part of the climate solution.
“That energy provides baseload and reliability and affordability that will complement and allow us to stack all of the green energy that we’re bringing online at record rates,” Newsom said of nuclear power more broadly.
However, in addition to the potential safety concerns that led to PG&E’s decision to ultimately shutter Diablo Canyon six years ago, some environmental advocates worry that relying on nuclear power could put the state’s renewable energy goals in jeopardy. The nonprofit Friends of the Earth described Newsom’s now-successful attempt to keep the plant open as “reckless beyond belief.” The group has cited the risk of earthquakes and the cost of nuclear power — which is generally more expensive than renewables and fossil fuels — as reasons for the state and PG&E to move forward with shuttering the plant.
While Newsom initially raised the idea of bailing out Diablo Canyon in May, he officially introduced the proposal to lend PG&E money two weeks ago, and lobbied the legislature throughout August. Central to his plea was the argument that a shutdown could prompt more rolling blackouts, which put vulnerable Californians at risk.
The vote in support of Newsom’s plan comes as yet another brutal heatwave is expected to torch California, and potentially test the grid’s reliability yet again. The state legislature also set a new target of reducing carbon emissions at least 85% by 2045. Diablo Canyon may be shuttered by then, but it will help buy time for renewables and battery storage to come online.
The U.S. has begun to impose fresh restrictions on exports of advanced chips necessary for AI-related applications to Russia and China, blocking the sale of the semiconductors that power systems sold by the likes of AMD and Nvidia without a license.
Nvidia disclosed Wednesday that it had received a notification from the U.S. government that new licensing requirements are being implemented that affect sales of its advanced line of server GPUs to Russia or China. AMD confirmed that it received a similar notification from the U.S. for its line of GPUs that are suited for performing AI-related computing.
Nvidia’s disclosure indicates that the fresh export controls are not aimed at the specific chips themselves but at the performance thresholds that are closely associated with Nvidia A100 processors — the current generation of chips deployed in the field. The controls affect AMD’s competing product, the MI200.
Wednesday’s disclosure is another sign that the U.S. is undergoing a significant shift in its approach to China and its ability to make and use advanced chips. Under the Biden administration, the U.S. Commerce Department has implemented a new rule that could block the export of chip design software that’s necessary to build the next generation of chips. Part of the administration’s thinking revolves around its plan to choke off access to technology needed for AI-related applications.
“While we are not in a position to outline specific policy changes at this time, we are taking a comprehensive approach to implement additional actions necessary related to technologies, end-uses, and end-users to protect U.S. national security and foreign policy interests,” the Commerce Department said in a statement. “This includes preventing China’s acquisition and use of U.S. technology in the context of its military-civil fusion program to fuel its military modernization efforts, conduct human rights abuses, and enable other malign activities.”
The administration also plans to hamper China’s ability to manufacture chips with a current generation of transistors called FinFETs — known as “fin field-effect transistors” — by choking off access to the equipment needed to fabricate such chips. FinFET designs have been common for years and are currently found in the latest smartphone and server processors.
China represents a significant portion of Nvidia’s sales and, according to an SEC filing, could affect as much as $400 million in quarterly sales. In a statement, Nvidia said that it was working with customers in China to divert its purchases to alternative products, and may seek a license where replacements wouldn’t work. AMD sells far fewer AI chips into China and does not believe the restrictions would have a material effect on its revenue.
This story was updated with a statement from the U.S. Commerce Department.
Arm launched a lawsuit against Qualcomm Wednesday, alleging that the semiconductor giant violated a license agreement that governed the use of Arm’s chip designs by its recently acquired Nuvia unit.
Nuvia had been developing new Arm-based chips as an independent company and had purchased a license from Arm to use its technology in server processors. But after it was acquired by Qualcomm in 2021, Arm alleged that Qualcomm failed to secure the proper permission to transfer Arm’s tech and the chip schematics based on it, or make its own chips based on what Nuvia was developing.
“These technological achievements have required years of research and significant costs and should be recognized and respected,” Arm said in a statement. “As an intellectual property company, it is incumbent upon us to protect our rights and the rights of our ecosystem.”
“Arm’s lawsuit marks an unfortunate departure from its longstanding, successful relationship with Qualcomm. Arm has no right, contractual or otherwise, to attempt to interfere with Qualcomm’s or NUVIA’s innovations. Arm’s complaint ignores the fact that Qualcomm has broad, well-established license rights covering its custom-designed CPU’s, and we are confident those rights will be affirmed,” said Ann Chaplin, general counsel of Qualcomm, in a statement.
Arm’s lawsuit said that it terminated the licenses Nuvia had in March 2022, which ended Qualcomm’s right to develop chips based on what Nuvia had made or market such processors as based on Arm’s technology. The lawsuit seeks to force Qualcomm to destroy several designs based on Nuvia’s processors.
The litigation also asks for compensation for trademark infringement, and injunction to prevent further use of Arm’s trademarks related to the chip designs that Nuvia developed. Arm is asking for an unspecified amount of damages related to its allegations.
Qualcomm bought Nuvia for over $1 billion in 2021. Nuvia was founded by several former Apple and Google chip engineers in 2019 and was developing a number of Arm-based server chips ahead of the acquisition.
At the time of the acquisition, Qualcomm said Nuvia would shift its focus to consumer chips, and Qualcomm has announced its intention to make a desktop processor that would rival Apple’s in-house M series processors .
But a recent report suggested that Qualcomm had once again revived its server-chip efforts — a previous attempt to crack the server market died years ago — leading to speculation among chip industry insiders that it planned to update Nuvia’s original efforts based on Arm designs.
This story was updated throughout as additional information became available, and later to include comment from Qualcomm.
Cloudflare said Wednesday that it’s not likely to terminate services for controversial customers in the future, following online protests asking the company to stop providing service to a site linked to hate and harassment.
One of Cloudflare’s popular security services is anti-DDoS protection, which blocks attempts to flood a website with traffic in order to knock it offline. Without Cloudflare’s service, it’s unlikely that Kiwi Farms — a site with a long history of harassment that has been blamed for several suicides — would be able to stay online.
In a blog post Wednesday, Cloudflare co-founder and CEO Matthew Prince and Alissa Starzak, vice president and global head of public policy, said the company’s leadership has concluded that “the power to terminate security services for [controversial] sites was not a power Cloudflare should hold.”
“Just as the telephone company doesn’t terminate your line if you say awful, racist, bigoted things, we have concluded in consultation with politicians, policy makers, and experts that turning off security services because we think what you publish is despicable is the wrong policy,” the Cloudflare executives said in the post.
The executives said that Cloudflare has previously cut off service to sites on account of “reprehensible” content on two occasions — the neo-Nazi site Daily Stormer in 2017 and 8chan, a forum linked to hate crimes and conspiracy theories, in 2019.
“To be clear, just because we did it in a limited set of cases before doesn’t mean we were right when we did. Or that we will ever do it again,” Prince and Starzak said in the post.
Multiple times in the post, the executives said terminating service to such sites represents a “dangerous precedent.”
Noting that more than 20% of websites currently use Cloudflare, “when considering our policies we need to be mindful of the impact we have and precedent we set for the Internet as a whole,” the executives said. “Terminating security services for content that our team personally feels is disgusting and immoral would be the popular choice. But, in the long term, such choices make it more difficult to protect content that supports oppressed and marginalized voices against attacks.”
Online protests against Cloudflare have been growing in recent weeks after transgender activist and Twitch streamer Clara Sorrenti was forced into hiding by a campaign organized on Kiwi Farms. Sorrenti was “swatted” and later tracked down at hotels by users of the site.
A report in Time said research shows that “although just one in five websites across the mainstream internet are hosted by Cloudflare, it hosts one in three websites known primarily for spreading hate speech or misinformation.”
Cloudflare had remained silent up until the blog post Wednesday.
“Our conclusion — informed by all of the many conversations we have had and the thoughtful discussion in the broader community — is that voluntarily terminating access to services that protect against cyberattack is not the correct approach,” the Cloudflare executives said in the post.
Businesses that offer crypto financial services in California would need to get a license under a bill just approved by state legislators this week.
The bill, titled the Digital Financial Assets Law, would require companies that offer services that involve investing, lending or trading cryptocurrencies to register with the state’s Department of Financial Protection and Innovation.
The bill was approved by the state Senate on Monday, and by the state Assembly on Tuesday. If signed into law by Gov. Gavin Newsom, it would mark California’s move toward stricter regulation of the fast-growing industry, which has deep roots in the state. Some of crypto’s major players are based in California, including Coinbase and Ripple.
Assemblymember Timothy Grayson, who introduced the bill, said that with the vote, “California is now set to forge a path for responsible innovation.”
The support for the bill “received reflects both the efforts we’ve taken to craft a smart, balanced policy and the Legislature’s understanding that a healthy cryptocurrency market can only exist if simple guardrails are established,” Grayson said in a statement.
When he introduced the bill in June, Grayson had argued that “while the newness of cryptocurrency is part of what makes investing exciting, it also makes it riskier for consumers because cryptocurrency businesses are not adequately regulated and do not have to follow many of the same rules that apply to everyone else.”
California had been known for taking a more hands-off approach to regulating cryptocurrencies than other states. It legalized bitcoin in 2014 and regulates the fiat-currency money-transmission activities of some cryptocurrency businesses but doesn’t have an equivalent to New York’s BitLicense, for example.
The crypto industry was critical of the proposal. The Blockchain Association, a major crypto lobby organization, had opposed the bill, which it said “would be detrimental to California’s efforts to support innovation in the crypto and Web3 ecosystem throughout the state.”
“The bill would effectively outlaw all of the crypto businesses that are currently thriving in California unless they are able to navigate an onerous, uncertain, and likely expensive licensing regime,” A. Jae Gnazzo, a senior policy manager at the Blockchain Association, said in a letter to California legislators.
The association warned that the proposal “would likely cut California off from the burgeoning crypto industry, forcing entrepreneurs to relocate to other jurisdictions with more tailored and appropriate regulatory requirements.”
The turbulent beginnings of a global payments system may soon be fodder for TV’s voracious content factory, if author Jimmy Soni and showrunner Mark Goffman’s plans to give PayPal the Hollywood treatment come to fruition.
As PayPal veterans celebrated the 20th anniversary of the company’s audacious 2002 IPO at Peter Thiel’s mansion in Los Angeles over the weekend, a crew filmed interviews with some attendees, according to multiple people present for the event.
Attendees for the weekend bash included co-founders Elon Musk and Max Levchin, sources said, as well as early PayPal employees like Deb Liu, now the CEO of Ancestry. Party entertainment included a band, a magician and photo booths, alongside a spread of lobster.
On the day of PayPal’s IPO, Thiel celebrated by playing multiple simultaneous games of chess against his employees. The anniversary party also featured chess sets, but attendees seemed to prefer networking.
The project is based on Soni’s book “The Founders,” a history of PayPal’s early days that digs deep into the company’s origins and highlights untold stories of how the company was built. Former PayPal COO David Sacks revealed in a podcast recorded in March that his production company and another one owned by PayPal veteran Jack Selby had acquired the rights to the book. He also disclosed Goffman’s involvement, saying that he hoped “this turns into a TV show à la ‘The Last Dance.'”
The project now appears to be further along. The on-camera interviews recorded at the party — a prime opportunity for filming, given the presence of so many key players — were meant to be part of a pitch for the series. Goffman is an accomplished writer and producer whose credits include the CBS series “Bull.”
Daniel Brunt, chief of staff to David Sacks of Craft Ventures, is also involved, according to a message Goffman sent. His role is not clear, but he is credited as a co-producer along with Sacks on the 2005 comedy “Thank You For Smoking,” Sacks’ first venture into Hollywood. Brunt is also listed as a co-president of Sacks’ Room 9 Entertainment.
Sacks, Soni and Goffman did not immediately respond to requests for comment.
Streaming series and cable networks have shown an appetite for stories about Silicon Valley recently, from Apple TV+’s “WeCrashed,” about the fall of WeWork, to Showtime’s “Super Pumped,” adapted from Mike Isaac’s book about Uber.
Update: This story was updated on Aug. 29 with additional details about the project’s producers.
The Federal Reserve’s FedNow real-time payments systems will launch between May and July 2023, Fed vice chair Lael Brainard said Monday.
The Fed has previously given vague timelines for the launch of the service, which will mark the Fed’s first new payment rails in decades and allow bill payments, paychecks and other money transfers to move instantaneously.
“The FedNow Service will transform the way everyday payments are made throughout the economy, bringing substantial gains to households and businesses through the ability to send instant payments at any time on any day,” Brainard said at a workshop for early FedNow adopters.
FedNow will be competing with the RTP network launched by large banks, as well as services such as Venmo and Cash App.
There are more than 120 organizations already testing the service through a pilot program, including U.S. Bank, Exchange Bank and payment processors such as Alacriti, according to the Fed.
Even after its launch, Brainard said wider buy-in will be necessary to make real-time payments more common in the U.S.
“The shift to real-time payment infrastructure requires a focused effort, but the shift is inevitable,” she said. “The time is now for all key stakeholders — financial institutions, core service providers, software companies and application developers — to devote the resources necessary to support instant payments.”
Despite the size of the U.S. economy and its well-developed financial sector, the country has been behind others in the move to real-time payments. India’s UPI, Australia’s New Payments Platform and Brazil’s Pix are among the real-time payments systems that have launched in recent years, lowering costs and speeding up transactions for a broad range of consumers and businesses in those countries.
Geoff Ralston is stepping down as president and CEO of Y Combinator, a position he’s held since 2019, he announced Monday. Garry Tan, founder and managing partner at Initialized Capital, will take over for him after Ralston’s year-end departure.
“My goal has been to cement YC as an institution that will endure for decades — not only through organizational changes but by leading a team that has scaled the community we bring together, the products and capital we provide to startups, and the software we build,” Ralston wrote in a blog post. “Garry, the visionary hacker, designer and builder who has described how YC is ‘engraved on his heart’ believes in this future and is precisely the right person to take over as YC’s chief executive.”
Tan, the 10th employee at Palantir, was a YC founder in 2008 and co-founded the blogging platform Posterous before selling it to Twitter. He joined YC as a partner in 2010, writing some of the core software the accelerator still uses internally, Ralston said. Tan left YC in 2015 to focus on Initialized.
Initialized president Jen Wolf and general partner Brett Gibson are taking over as managing partners of Initialized effective immediately, according to a blog post on the firm’s website. Tan will remain at Initialized as founder and partner until leaving for YC early next year.
Correction: This story was updated Aug. 29, 2022, to correct how many years Geoff Ralston had been the president of YC.
Shares of Affirm tumbled Thursday after the “buy now, pay later” company reported a weaker-than-expected outlook that underlined an “uncertain macroeconomic backdrop.” Affirm’s stock, which gained about 3% in regular trades, plunged 13% after hours.
The company reported a loss of 65 cents a share, which was wider than the consensus estimate of 59 cents a share. Affirm posted revenue of $364.1 million, beating Wall Street’s expectation of $354.8 million.
But Affirm said that for the current quarter, the company expects revenue of $345 million to $365 million, weaker than Wall Street’s expectation of $386 million.
“In light of the uncertain macroeconomic backdrop, we are approaching our next fiscal year prudently while maintaining our focus on driving responsible growth and continuing to invest in strengthening our leadership position,” Chief Financial Officer Michael Linford said in a statement.
Affirm’s outlook will likely highlight growing concern about the impact of the economic downturn on consumer spending and on the “buy now, pay later” market which the company pioneered.
CEO Max Levchin has argued that Affirm is in a good position to weather the storm because “buy now, pay later” offers “more cash-flow flexibility” compared to credit cards, which the company considers its main competitor.
Levchin reaffirmed that belief on Thursday as he noted how “the growth of online commerce is falling back to pre-COVID levels.”
“The secular trend toward adopting honest financial products is gaining momentum,” he said in a statement. “Not only does this make our mission more important but it also plays directly into Affirm’s strengths.”
Affirm also highlighted key gains. The company said its total number of active consumers jumped 96% year-over-year to 14 million. The number of transactions per active consumer also rose 31% to three.
Affirm’s gross merchandise volume, which measures the total value of its sales, climbed 77% to $4.4 billion.
China conceded that its solar manufacturers are hoarding materials, exacerbating the problems facing installers and utilities in the U.S.
The Chinese Industrial Ministry called out hoarding, saying in a notice issued Wednesday that the practice is “strictly prohibited” and that there is an “urgent need to deepen industry management” in what is the world’s largest solar manufacturing market.
This appears to confirm the suspicions of the utility NextEra, whose chief financial officer Kirk Crews said on an earnings call in April that Chinese multinational companies in Southeast Asia were withholding shipments of both solar modules and the cells that comprise them. The reason: a Commerce Department probe into solar suppliers in the region that’s ongoing.
That probe, which has inspired the ire of both the public and the private sector, is examining whether solar companies operating out of Cambodia, Malaysia, Thailand and Vietnam are evading long-standing U.S. tariffs by building panels in Southeast Asia using Chinese materials. These four countries supply roughly 80% of the panels in the U.S., and the uncertainty has placed utilities in a bind.
The hoarding may have had the desired effect. In June, the Biden administration agreed to wave tariffs on solar panels from the four countries caught up in the probe for two years, a major win for the Chinese industry. While the warning from Beijing may lead to some blowback, it’s unclear what the consequences might be.
In its statement, the ministry encouraged solar companies to establish backup reserves of polysilicon and other materials. Doing so could help balance the supply chain and smooth out fluctuations in panel prices, which have seen wild swings recently.
Eight of the 10 largest solar companies in the world are Chinese, and the country controls much of the industry’s supply of raw materials. The Biden administration is trying to bolster the American solar industry, including invoking the Defense Production Act for panels manufactured in the U.S. earlier this year. American solar developers have also agreed to pony up $6 billion for panels made in the U.S. For now, though, China still holds most of the cards.
Government agencies in the U.S. and China are working on a deal that would prevent hundreds of Chinese companies from being kicked off of U.S. stock exchanges. Unnamed sources told the Wall Street Journal that an agreement could be reached as early as September, allowing the U.S. Public Company Accounting Oversight Board to scrutinize the financial audits of Chinese companies.
Audits would occur on-site in Hong Kong. The China Securities Regulatory Commission has already started preparing some domestic accounting firms for the possible deal, sources told the Wall Street Journal.
The U.S. authorities will reportedly only allow the deal to go through if the PCAOB has full access to audit materials. SEC commissioner Gary Gensler indicated as much in a July speech, where he maintained that inspectors would not be “sent to China and Hong Kong unless there is an agreement on a framework allowing the PCAOB to inspect and investigate audit firms completely.” He also said that, while important, an audit framework would be “merely a step in the process.”
China faced pressure to come to an auditing agreement beginning in late 2020, when then-President Donald Trump signed into law the Holding Foreign Companies Accountable Act. That legislation required any foreign security issuer to submit to an audit by the PCAOB, disclosing whether government entities held a controlling financial interest. The law came in response to concerns that Chinese companies failed to fully disclose ties to the CCP. It effectively set a 2024 deadline for the U.S. and China to strike an agreement to avoid delistings.
For Chinese companies, losing access to U.S. exchanges would come at an enormous cost. Since Chinese firms took to U.S. exchanges in 1999, over 400 companies have been able to raise more than $100 billion from investors. The STAR Market, which was launched in 2019 as a China-based alternative to U.S. equity markets, failed to gain much traction.
The beneficiaries of U.S. equities markets include many of China’s biggest technology players, including Alibaba, Baidu and JD.com. Shares of those companies rose more than 8% on Thursday, when news of the potential agreement broke.
China had previously moved to make it more difficult for domestic companies to share information abroad. A Data Security Law passed in June 2021 made it illegal for companies to share data with overseas regulators without explicit permission from Beijing.
Chinese officials contended that they never prohibited or prevented accounting firms from providing audit papers to overseas regulators. In 2021, the China Securities Regulatory Commission called the Holding Foreign Companies Accountable Act “obviously discriminatory.”
If an agreement isn’t reached, U.S. stock exchanges and Wall Street banks stand to lose out considerably too. Around 300 China- or Hong Kong-based businesses are listed on U.S. exchanges, representing over $2.4 trillion in market value. The looming delisting threat cooled the appetite for Chinese companies to pursue U.S. IPOs, and several of China’s largest state-owned enterprises already initiated the delisting process.
Though the potential audit agreement is a big deal, it’s also only a first step. Tensions between the U.S. and China are as high as ever, as evidenced by the high-stakes cat-and-mouse game being played around Taiwan. U.S. investors will likely remain leery as well of China’s more aggressive regulatory stance towards its domestic tech giants. These tensions were on full display when Beijing intervened in DiDi’s New York Stock Exchange debut, in part over concerns that the U.S. could obtain sensitive data through the process.
Google has changed the way it calculates the climate impact of air travel in a way that dramatically undercounts key factors in aviation’s contribution to climate change.
Reporting from the BBC revealed that the company started excluding all global warming impacts of flying besides carbon dioxide from its climate calculator tool as of July.
That might not sound like a big change, but as a result, estimates of carbon emissions per passenger are now drastically lower than they were before the change. That’s because non-carbon dioxide emissions and effects like contrail formation contribute to more than half of the real impact of flying on the climate. Google itself acknowledged the issue when it quietly announced the change on GitHub last month, saying that non-carbon dioxide “factors are critical to include in the model, given the emphasis on them” in the latest Intergovernmental Panel on Climate Change report.
“Google has airbrushed a huge chunk of the aviation industry’s climate impacts from its pages” Doug Parr, chief scientist of Greenpeace, told the BBC.
Contrails are the wisps of ice crystals that form in the wake of a plane. They’re also a huge contributor to the climate impact of flying and are responsible for more than half of flights’ climate impact and up to 2% of total global warming. That’s a big number, and one that academics and some in the aviation industry are working on cutting down.
Being able to accurately estimate and predict the climate impact of contrails is still a difficult task given the time of day, temperature and altitude of a flight can all play a role in how severe the impact is. Yet Google has chosen to exclude the factor entirely from its flight emissions calculator.
Public knowledge of the climate impact of contrails is already low. But the new changes by Google to its flight calculator put them further out of sight, out of mind. The calculator’s reach spreads beyond Google’s pages; the BBC notes that it’s used by Skyscanner, Expedia and other major travel sites.
The decision to remove contrails from Google’s calculations is particularly worrisome for the climate because, unlike reducing carbon dioxide emissions, cutting down on contrails and their warming impact could have immediate benefits. That’s because while carbon dioxide stays in the atmosphere for centuries, contrails’ warming impact is fairly short term. Reducing them would cut down on climate damage in the near term, even as the aviation industry works to cut carbon emissions over the long haul.
Sources familiar with the company’s work told Protocol in April that Google was working with industry experts on better integrating contrails into its carbon calculator. As recently as last October, the page stated that Google Flight’s emissions estimates include both carbon dioxide emissions and non-carbon dioxide effects, including contrails, using estimates based on “lower bounds from scientific research,” citing a 2018 Nature paper.
Any mention of contrails has since been removed from the page. In last month’s GitHub announcement, Google said it’s working with researchers and other partners to improve modeling non-carbon dioxide factors, and that it would be “sharing updates at a later date.”
“We strongly believe that non-CO2 effects should be included in the model, but not at the expense of accuracy for individual flight estimates,” a Google spokesperson said in an email noting that the company is working “on soon-to-be-published research” on the topic.
Update: A comment from Google was added to this story on Aug. 25, 2022.
Sony is taking an unprecedented step to combat global economic pressures by raising the price of its flagship PlayStation 5 game console in dozens of major markets, though notably not in the U.S. The company announced the price hike in a blog post published Thursday.
“We’re seeing high global inflation rates, as well as adverse currency trends, impacting consumers and creating pressure on many industries,” wrote PlayStation chief Jim Ryan. “Based on these challenging economic conditions, SIE has made the difficult decision to increase the recommended retail price (RRP) of PlayStation 5 in select markets across Europe, Middle East, and Africa (EMEA), Asia-Pacific (APAC), Latin America (LATAM), as well as Canada. There will be no price increase in the United States.”
The PS5 launched as both a digital-only console without a disc drive and a slightly more expensive standard edition with a Blu-ray drive. In the U.S., where competition with Microsoft’s Xbox is arguably most fierce, the PS5 will still retail for $399 for the digital edition and $499 for the standard. In Europe, however, Sony is raising the price by 10% to 549.99 euros (a nearly equal value in U.S. dollars) for the standard version and 449.99 euros for the digital version. There are similar price hikes in Australia, Canada, China, Japan, Mexico and the U.K.
Sony is estimated to have sold 21 million consoles so far, coming in below the preceding PlayStation 4 at the same time in the two devices’ life cycles. That’s because of ongoing supply shortages. Though Sony is still leading the current generation of hardware, Microsoft’s Xbox is beginning to catch up. As of last month, the Xbox Series X and Series S devices were the best-selling consoles in the U.S. for the past three quarters, and market research firm Ampere Analysis estimates Microsoft has sold close to 14 million units.
Competition with Xbox is likely one reason why Sony is skipping over the U.S. with its price hike. Another reason is, as Ryan noted in his blog post, “adverse currency trends.” Much of the consumer electronics supply chain is pegged to the U.S. dollar, and with the economic downturn being felt worldwide, the dollar has grown much stronger in recent months relative to foreign currencies.
“However, with inflation and price increases being felt through the component supply chain, much of that priced in US dollars, alongside continued high costs in distribution, Sony has now had to pass on some of those cost increases to try and maintain its hardware profitability targets,” wrote Ampere Analysis researcher Piers Harding-Rolls. “Price increases will take place in at least 45 markets globally, but not in the US, due again to the strength of US dollar currency. The US is the biggest console market globally, and where Sony competes with Microsoft most closely for market share.”
Harding-Rolls predicted that Sony won’t see a substantial drop in sales given sky-high demand for the PS5 and weak supply since the product launched in the fall of 2020. “[T]he high pent up demand for Sony’s device means that this price increase of around 10% across most markets will have minimal impact on sales of the console,” he wrote. “We expect Sony’s sales forecast for the PS5 to remain unchanged.”
Sony said in July it still expects to sell 18 million PS5s in the current fiscal year, which would put the console close to 40 million units sold by 2023.
California is on the brink of dealing another blow to the future of the internal combustion engine.
The California Air Resources Board is expected to adopt a rule as soon as Thursday that would ban the sale of new gas-powered cars by 2035. The state will also set interim targets requiring 35% of the new vehicles sold be emissions-free by 2026, and 68% by 2030, ensuring a smooth transition. (Today, emissions-free vehicles account for 12% of new vehicle sales in the state.)
“California will now be the only government in the world that mandates zero-emission vehicles,” Margo Oge, who led the Environmental Protection Agency’s transportation emissions program under three separate administrations, told the New York Times.
But the state may soon have company, if history is any indication. California has long been a trendsetter in cleaning up transportation, creating tailpipe emissions standards that are stricter than those of the federal government and setting aggressive zero-emission vehicle sales goals even before this latest development. More than a dozen states have adopted California’s standards.
This led to a firestorm when the Trump administration challenged the state’s ability to set its own standards and led to a protracted legal battle. In a decision backed by 19 other states and the District of Columbia, though, the Biden administration reinstated California’s ability to set its own vehicle standards in May.
At least 12 states could adopt California’s new mandate in the near future, and several more are likely to follow suit in the next year, according to the Times. That would mean roughly one-third of the U.S. auto market would end the sale of gas-powered vehicles by 2035. That could speed up the electric vehicle transition currently underway.
Most of the large automakers that initially supported the Trump administration’s challenge have also pivoted to recognize the state’s authority since the former president left office. Toyota became the latest when the company’s North America chief administrative officer Christopher Reynolds wrote in a letter to CARB and Gov. Gavin Newsom on Tuesday that “[a]lthough we have shared challenges before us, we are committed to emission reductions and vehicle introductions consistent with CARB’s programs.”
The transportation sector represents the largest share of emissions in the U.S. California’s rule could have a major effect on reducing those emissions, especially if adopted more widely. (For comparison, it’s much more aggressive than President Joe Biden’s executive order calling for half of all new vehicles sold in the U.S. to be electric or plug-in hybrid by 2030.)
However, an association representing large U.S. and foreign automakers expressed skepticism about the news. John Bozzella, president of the Alliance for Automotive Innovation, told the New York Times that meeting the mandate would be “extremely challenging” due in large part to factors outside automakers’ control, such as “inflation, charging and fuel infrastructure, supply chains, labor, critical mineral availability and pricing, and the ongoing semiconductor shortage.”
Still, a growing number of automakers are setting aggressive electrification goals and investing in charging infrastructure, which could up the Golden State’s odds of success.
While California may be ahead of national policy, efforts by the Biden administration and Congress could put the state’s target even more within reach. The Inflation Reduction Act includes tax incentives for EVs and the bipartisan infrastructure law has $7.5 billion set aside for EV charging infrastructure. The administration also released new charging standards to help standardize the nation’s growing network and encourage drivers to buy EVs free of range anxiety.
Correction: An earlier version of this story misstated when the Biden administration reinstated California’s ability to set its own vehicle standards. This story was updated on Aug. 24, 2022.
Makeup retailer Sephora will pay $1.2 million to resolve a complaint by the California attorney general that the company sold customers’ data obtained through its app and website despite claiming not to.
The settlement, announced on Wednesday by state Attorney General Rob Bonta, also included allegations that Sephora ignored requests from consumers who used a mechanism to opt out of all sales of their data with a single click rather than having to go to each individual website that might be interested in their information.
The complaint shows that the state is escalating enforcement of its landmark privacy law, the California Consumer Privacy Act, and getting more aggressive in pursuing action against retailers that fail to honor such global opt-outs.
“Today isn’t only about Sephora,” Bonta told reporters. “Today’s settlement sends a strong message to businesses about the California DOJ’s ongoing efforts to enforce the CCPA.”
The complaint suggested that, while Sephora didn’t get paid by third parties that had access to location data and other information about customers, the nationwide chain received other benefits in violation of CCPA’s definition of sale, which goes beyond the exchange of money. In Sephora’s case, the company received analytics or “the opportunity to purchase online ads targeting specific consumers” from unnamed third parties. The company in turn frequently kept the data and used it “for the benefit of other businesses, without the knowledge or consent of the consumer.”
Bonta said Sephora was one of several businesses that received notice about its practices, but it did not fix them within 30 days. The attorney general also announced an “investigative sweep” of additional, unnamed companies that might not be honoring the all-in-one opt-out requests, which use a technology called Global Privacy Control and often operate at the browser level.
California’s enforcement of CCPA requires companies to honor GPC signals, and Bonta has looked to global opt-outs as a way to broaden consumer rights, calling them “powerful tools” on Wednesday. Many companies, however, treated a similar approach as non-binding in the years before CCPA, and according to Bonta, some still ignore the state’s interpretation of the law.
Those businesses still have 30 days to comply without facing action from Bonta’s office, he noted, but the “notice and cure” approach expires at the end of the year.
“The kid gloves are coming off,” he said.
In response to the settlement, Sephora said it was not admitting wrongdoing and lamented that CCPA’s definition of “‘sale’ includes common, industry-wide technology practices such as cookies.” The company said it has “allowed consumers to opt-out of the sale of personal info, including via the Global Privacy Control” since last November.
This article was updated Aug. 24 to include a statement from Sephora.
Microsoft Gaming CEO Phil Spencer said he’s confident in the progress his company is making with regulators on getting the landmark $70 billion Activision Blizzard deal closed, according to a new interview with Bloomberg.
“I feel good about the progress that we’ve been making,” Spencer said, “but I go into the process supportive of people who maybe aren’t as close to the gaming industry asking good, hard questions about ‘what is our intent? What does this mean? If you play it out over five years, is this constricting a market? Is it growing a market?'”
The Activision deal, announced in January amid ongoing lawsuits alleging a pervasive culture of sexual harassment and discrimination at Activision Blizzard, is the largest in the history of the game industry by a wide margin. The deal has raised many questions about whether Microsoft could harm competition by owning the Xbox hardware ecosystem, a fast-growing internal division of game development studios and, if the deal passes, major video game franchises like Call of Duty, Candy Crush, Diablo, Overwatch and World of Warcraft.
Spencer’s comments are among the most robust public statements regarding the deal from a Microsoft executive since shortly after it was announced. In recent regulatory filings in Brazil and elsewhere, Microsoft and Sony have butted heads over the potential ripple effects of the deal and what it could mean for the game console market, the game industry at large and lucrative game series like Call of Duty. While Saudi Arabia became the first country to formally approve the acquisition, Microsoft’s biggest hurdles remain clearing the deal with the U.S. Federal Trade Commission, the E.U.’s European Commission and the U.K.’s Competition and Markets Authority.
Spencer told Bloomberg he believes Activision leadership is capable of fixing the company’s broken culture. “I believe they’re committed to that,” Spencer said. “When I look at the work that they’re doing now — there’s always more that can be done — but I believe from the studio leaders there that I know very well, some of them former Xbox members, that they’re committed to this journey. And I applaud that regardless of the deal.”
Spencer also touched on subjects related to the deal that have struck a nerve with the larger game community, including a growing unionization movement both inside Activision and beyond and concerns Microsoft may use its ownership of Activision to withhold products from its primary competitor, Sony.
“I’ve never run an organization that has unions in it, but what I can say in working through this is we recognize workers’ needs to feel safe and heard and compensated fairly in order to do great work,” Spencer said. “We definitely see a need to support the workers in the outcomes that they want to have.” Activision-owned studio Raven Software became the first major video game studio to unionize earlier this year after workers were victorious in their National Labor Relations Board election.
The union, consisting of more than two dozen quality assurance testers, has since inspired similar efforts at Activision studio Blizzard Albany. Though despite Microsoft’s pledge not to fight unions and an unprecedented agreement with the Communications Workers of America, Activision leadership has insisted on deploying union-busting tactics against Blizzard Albany in a manner similar to its failed attempts to undermine the union at Raven, according to CWA representatives and members of Game Workers Alliance Albany group who are organizing the union.
On the subject of Call of Duty, Spencer echoed comments he and Microsoft made back when the Activision deal was first announced, including commitments to keep the popular shooter series on the PlayStation console both through existing agreements with Sony over the next few years and beyond that. Spencer said a new game release made exclusive to one hardware platform “is something we’re just going to see less and less of” over time, though Microsoft is making upcoming Bethesda releases it took ownership of, as part of its 2020 acquisition of ZeniMax Media, exclusive to its Xbox and Game Pass platforms.
“Maybe you happen in your household to buy an Xbox and I buy a PlayStation and our kids want to play together and they can’t because we bought the wrong piece of plastic to plug into our television,” Spencer said. “We really love to be able to bring more players in reducing friction, making people feel safe, secure when they’re playing, allowing them to find their friends, play with their friends, regardless of what device — I think in the long run that is good for this industry. And maybe in the short run, there’s some people in some companies that don’t love it. But I think as we get over the hump and see where this industry can continue to grow, it proves out to be true.”
The Inflation Reduction Act isn’t just poised to cut carbon pollution. It could also save up to $1.9 trillion over the next three decades.
The Office of Management and Budget assessed the bill’s benefits, releasing the analysis on Tuesday. The analysis is based on modeling from Princeton University, Rhodium Group and Energy Innovation, all of which have found the bill could cut carbon by roughly 40% by 2030.
The OMB analysis runs out to 2050, though, and assumes that the rate of emissions reductions modeled by the three groups in 2030 would continue for the next 20 years. It then looks at what those continued emissions cuts could mean for public health, property and other livelihoods that would otherwise be put at risk by the climate crisis. This is the OMB’s first published estimate of avoided climate-related damage as a result of legislation.
The report uses what’s known as the social cost of carbon, an economic metric that puts a dollar price per ton on the benefits of not emitting carbon dioxide or other greenhouse gases. Lowering carbon dioxide emissions will slow climate impacts like extreme heat and sea level rise, and it will also result in a drop in air pollution tied to burning fossil fuels.
Previous estimates of what climate change could cost the federal government range between $25 billion to $128 billion annually. Those costs come from addressing climate change-fueled distasters after they happen and include disaster relief, flood and crop insurance, health care spending and wildfire management.
OMB said in the report that there are likely “significant underestimates of the full public benefits of reducing greenhouse gas emissions,” since it only focuses on domestic emissions reductions and excludes other potential impacts like ocean acidification. The law could very well spur more aggressive climate action abroad, which is vital since the U.S. is only responsible for roughly 14% of the world’s annual carbon dioxide emissions. (Though, it should be noted, the country is the largest historical carbon polluter.)
Gernot Wagner, a climate economist at Columbia Business School, agreed, telling Axios that the OMB analysis doesn’t include assumptions about potentially unquantifiable climate damages or how the law will speed up research and deployment of clean energy and all-electric technology. Bringing down the costs of those technologies here could again have knock-on effects by making them cheaper around the world, further spurring their adoption.
The Inflation Reduction Act “will help ease the burden that climate change imposes on the American public, strengthen our economy, and reduce future financial risks to the Federal Government and to taxpayers,” wrote OMB associate director for Climate, Energy, Environment and Science Candace Vahlsing in a briefing.
Apple employees launched a petition Monday pushing back on the company’s return-to-office policy, saying workers have “performed exceptional work” inside and outside traditional office environments.
Apple Together, the group of workers behind the #AppleToo movement, is urging the company to allow each employee to work directly with their manager to determine what kind of work arrangement is best for them. Employees also ask that work arrangements not require “higher level approvals, complex procedures,” or the providing of private information.
The petition is a response to CEO Tim Cook’s memo last week that tells employees to return to the office at least three days a week beginning Sept. 5. Workers are required to be in the office on Tuesdays, Thursdays and a third day to be determined by their team.
Apple Together organizers wrote in the petition that the policy doesn’t consider “the unique demands of each job role nor the diversity of individuals.” They added that workers have several reasons and circumstances for wanting flexible work arrangements, from disabilities to “just plain being happier and more productive.”
“We believe that Apple should encourage, not prohibit, flexible work to build a more diverse and successful company where we can feel comfortable to ‘think different’ together,” organizers wrote in the petition.
Apple did not immediately return a request for comment. Apple Together organizers are reportedly collecting signatures this week and plan to send the petition to company executives, according to The Guardian. About 100 people had signed the petition as of Monday morning.
After an aborted effort to enter the server chip market about five years ago, Qualcomm has decided to make another attempt, according to Bloomberg News.
Qualcomm has elected to build a new server chip from within its Nuvia unit, and is courting AWS as a potential client as it is searching for buyers, according to the report. The details are light, however, and it wasn’t clear whether Qualcomm planned to use an Arm-based core design for the chip, or even what type of data-center chip the company was aiming to produce.
Qualcomm and AWS declined to comment.
Nuvia was founded by several former Apple and Google chip engineers in 2019, and was developing a line of Arm-based server chips when Qualcomm acquired it in 2021 for over $1 billion. AWS uses Arm designs for its in-house Graviton chips, and startups such as Ampere have built server chips based on Arm tech that aim to break into the server-processor market, which has been dominated by Intel and AMD for years.
In a recent interview with Protocol, Arm CEO Rene Haas estimated that its technology makes up 5% to 10% of the data center market at this point. Chips based on the company’s designs have a reputation for using energy more judiciously than rival x86 processors, and those chips — including ones made by Qualcomm — are already used extensively inside smartphones and tablets.
Arm declined to comment about Qualcomm’s possible server chips.
Qualcomm’s last attempt to make a server chip launched in 2017, and several cloud computing providers such as Microsoft and Cloudflare expressed interest in adopting the design, which was called the Centriq 2400. Ultimately, the company shut down the project less than a year after its announcement, and former Intel veteran Anand Chandrasekher, who led the effort, departed Qualcomm.
Under the leadership of CEO Christiano Amon, Qualcomm has attempted to broaden its business beyond smartphones and wireless chips. The diversification efforts include a greater push into automotive and industrial chips, and PC chips based on Arm designs that aim to compete with Intel and AMD.
In recent months, the market for chips in consumer devices such as smartphones and PCs has softened considerably as inflation has led consumers to hold off on new purchases.
Some of the most popular reproductive health apps lack strong privacy labels and security practices, according to a report published by Mozilla Wednesday.
Mozilla gave 18 out of 25 reproductive health and fertility apps a “Privacy Not Included” warning label, meaning that these apps collect tons of personal data and then share it widely. Jen Caltrider, the lead at Mozilla’s Privacy Not Included project, said she hopes the report serves as a wake-up call for users who allow these apps to collect health data that could be used against them in a post-Roe world.
“There’s going to be a tipping point where it just becomes bad enough that people realize, ‘This is a problem that I need to take more seriously,'” Caltrider told Protocol. “Is this a tipping point where people start to realize that our privacy is gone, and it’s starting to have real-world harms?”
The organization looked at period-tracking apps, including Flo, Ovia and Glow, and found that the data that most of these apps collect includes phone numbers, IP addresses and app activity like cycle length, date of last menstrual period and pregnancy due date. The data is used to target ads toward pregnant people and expecting families. It’s also shared with third-party businesses, research institutions and sometimes even employers. Just one app, Euki, earned Mozilla’s “Best Of” badge. The app stores data locally on devices, meaning only the user has access to the information. It also has a two-entry passcode requirement.
Caltrider said the most worrying part of these apps’ data collection practices is that the information can be subpoenaed by law enforcement in abortion-related cases, which is a concern that privacy advocates have raised for some time now. Mozilla found that most apps have “vague boilerplate statements” on when and how much user data could be handed over to officers. “It is so gray right now, what can be shared [with law enforcement],” Caltrider said.
Just last week, Facebook gave Nebraska police private chats in an abortion-related case. (Facebook expanded its end-to-end encryption on Messenger shortly after; the company said that it was unrelated to the case.) Caltrider said there are other ways this data could be used. Anti-abortion protesters could hypothetically get the information from a data broker and harass individual users, she said.
Microsoft has finally broken its silence on a sales figure secret its kept close to its chest for more than half a decade.
In a regulatory filing in Brazil related to its Activision Blizzard acquisition — a proceeding that’s already revealed some explosive details related to the console gaming market — Microsoft finally admitted how badly the Xbox One lost to Sony’s PlayStation 4.
“Sony has surpassed Microsoft in terms of console sales and installed base, having sold more than twice as many Xbox in the last generation,” admits Microsoft, as translated from Portuguese (via The Verge). Gaming news site Game Luster was first to report the filing. With its March 2022 final tally at 117.2 million units (Sony no longer reports PS4 sales), the PS4 ranks as one of the best-selling consoles of all time, while the Xbox One has sold fewer than 58.5 million units.
Microsoft hasn’t reported sales figures of its Xbox hardware since 2016, at which point it was clear the sales gap between Sony’s new console and the Xbox One, both released in 2013, had grown dire. Instead, Microsoft chose to focus on the number of Xbox Live accounts and spent the next few years focusing its efforts on building a more powerful Xbox, its Game Pass subscription platform and, eventually, the new Xbox Series X and Xbox Series S consoles.
Of course, Microsoft is in a much better position now than it was in the aftermath of the messy Xbox One launch and its years spent playing catchup to the PS4. Under Microsoft Gaming CEO Phil Spencer, who took charge of the Xbox division starting in 2014, Microsoft has grown Game Pass to more than 25 million monthly subscribers, acquired dozens of new studios and invested heavily in forward-thinking initiatives such as cloud gaming and cross-platform play. New Xbox hardware is also performing much better and even outpacing sales of Sony’s PlayStation 5 due to ongoing production shortages.
But for years now, players and analysts have wondered, how far behind did Xbox fall during the seventh console generation that spanned 2013 to 2020? Some analysts using independent data had estimated Xbox One sales to be around 50 million units, and now we know just how accurate those estimates were.
The U.S. Commerce Department has implemented an export control on advanced chip design software that’s necessary to produce next-generation processors, expanding on existing controls that target chipmaking tools with the goal of hampering Chinese efforts to build the most complex chips domestically.
The new export restrictions targets electronic design automation, or EDA, software produced by the likes of Cadence and Synopsys. The goal is to hamper Chinese companies pursuing AI applications and prevent them from building chips with an emerging technology called gate all around, according to a person familiar with the Biden Administration’s plans. The advanced design tools are necessary to make chips with gate-all-around designs that are capable of delivering substantially more computing horsepower with far less energy than today’s chips.
The Commerce Department issued the new rule Friday, though Protocol first reported on the pending plan to block advanced EDA software exports earlier this month.
China’s effort to manufacture the most-advanced chips has roughly stalled at the 14-nanometer level, a process that the likes of TSMC, Samsung and Intel perfected about eight years ago. In recent weeks, a report emerged that China had successfully made a 7-nanometer chip, though experts in some corners of the industry were skeptical of the claims.
Nanometer naming conventions can be misleading, however. At one point they referred to the size of a specific feature on a chip but today mostly amount to marketing terminology.
In addition to blocking advanced design software, officials said the U.S. would restrict gallium oxide and diamond, materials that are used to make chips work under extreme temperature or energy conditions that are often useful for the military.
The Commerce Department said it is implementing the chip-related restrictions that were agreed upon in December by the 42 countries who participate in the Wassenaar Arrangement, an international arms control agreement.
What was supposed to be a blockbuster crypto merger has morphed into a legal brawl. Galaxy Digital said Monday that it has terminated its $1.2 billion bid to buy BitGo, which it accused of failing to produce “audited financial statements.”
BitGo quickly hit back, announcing that it plans to sue the crypto financial services company for “its improper decision to terminate the merger agreement.”
Galaxy Digital said it had “exercised its right to terminate” the deal, originally struck in May 2021, after BitGo failed to deliver 2021 financial records “that comply with the requirements of our agreement.” The company also said no termination fee has to be paid.
BitGo denied Galaxy Digital’s claim. R. Brian Timmons, a partner with Quinn Emanuel, which represents BitGo, said the company has “honored its obligations thus far, including the delivery of its audited financials.”
“The attempt by [Galaxy Digital CEO] Mike Novogratz and Galaxy Digital to blame the termination on BitGo is absurd,” Timmons said in a statement.
BitGo said it would seek more than $100 million in damages. BitGo said Galaxy Digital had promised to pay a $100 million “reverse break fee” in March when it tried “to induce BitGo to extend the merger agreement.”
Timmons suggested that Galaxy Digital wanted to end the deal because of recent business troubles. “It is public knowledge that Galaxy reported a $550 million loss this past quarter, that its stock is performing poorly, and that both Galaxy and Mr. Novogratz have been distracted by the luna fiasco,” he said, referring to the failed cryptocurrency whose failure in May hit Galaxy’s stock price.
He said Galaxy Digital must pay the termination fee “or it has been acting in bad faith and faces damages of that much or more.”
Novogratz, who is also Galaxy Digital’s founder, said in a statement that it still hopes to “list in the U.S.” and transform the company into “a one-stop shop for institutions.”
Andreessen Horowitz is betting big on Adam Neumann’s return to the real estate startup game.
A16z co-founder Marc Andreessen wrote in a Monday blog post that the firm would partner with Neumann on a new startup called Flow, which is focused on the residential real estate market. Neumann was famously pushed out as leader of WeWork in 2019 after the firm pulled its IPO plans, and his personal and professional antics — padding around barefoot, investing in a wave-pool startup — have provided fodder for books and an Apple TV+ series.
“We think it is natural,” Andreessen wrote, “that for his first venture since WeWork, Adam returns to the theme of connecting people through transforming their physical spaces and building communities where people spend the most time: their homes. Residential real estate — the world’s largest asset class — is ready for exactly this change.”
While the blog post did not disclose the size of the investment, The New York Times reported it at $350 million at a $1 billion valuation. That deal is the largest individual check a16z has written to a startup, according to the Times. Andreessen will also join Flow’s board.
Despite that big check, details on Neumann’s new company are sparse. Its website says only “Live life in flow. Coming 2023,” with an email sign-up link. Andreessen’s blog post hinted that the company’s vision is “rethinking the entire value chain, from the way buildings are purchased and owned to the way residents interact with their buildings to the way value is distributed among stakeholders.”
Neumann has been “quietly acquiring majority stakes in more than 4,000 apartments valued at more than $1 billion in Miami, Atlanta, Nashville, Tenn., Fort Lauderdale, Fla., and other U.S. cities,” The Wall Street Journal reported in January.
Andreessen wrote that the nation’s housing is in crisis. “In a world where limited access to home ownership continues to be a driving force behind inequality and anxiety, giving renters a sense of security, community, and genuine ownership has transformative power for our society.”
That pronouncement comes a week after The Atlantic first reported that Andreessen had contacted officials in the ultra-wealthy Bay Area town of Atherton opposing a plan to add multifamily housing. Andreessen was among a list of Silicon Valley luminaries fighting against the plan, The New York Times reported.
The size of the check from a16z is sure to raise some eyebrows, especially given Neumann’s history. He was ousted from WeWork — which investors once valued at $47 billion — after the firm’s failed IPO put his leadership decisions and the company’s huge losses under the microscope. WeWork has since gone public through a SPAC and is valued around $4 billion.
A16z earlier this year invested in Flowcarbon, a startup co-founded (but not directly managed) by Neumann that plans to use blockchain technology to track carbon credits.
“We understand how difficult it is to build something like this and we love seeing repeat-founders build on past successes by growing from lessons learned,” Andreessen wrote.