National

Character.ai raises $150 million to create personalized chatbots

Artificial intelligence

After a record economic expansion, the coronavirus pandemic sent the U.S. economy into a recession as unemployment soared to staggering heights. The country now faces urgent questions about how much stimulus is needed for reeling consumers and businesses, and what a recovery might look like.

Economy & Business

From the Valley to D.C., Big Tech players like Facebook, Google and Amazon are under more scrutiny than ever as new technology develops and privacy and antitrust concerns grow in lockstep with companies’ ambitions.

Technology

The banker run on Silicon Valley Bank

Silicon Valley Bank

Air taxis are coming to Chicago

Aviation

TikTok CEO faces U.S. critics in House hearing

TikTok

President Biden has made the COVID-19 crisis and a post-Trump return to national unity and traditional democratic ideals his top priorities. From vaccinations to stimulus to schools, Biden is seeking bipartisan compromise while showing a willingness to use executive authority and bare Democratic majorities in the U.S. House and Senate to implement his policies. Republican leaders are navigating deep party divisions over if and how to move beyond former President Trump.

Politics & Policy

42% Americans are living with obesity

Obesity

The U.S. faces a range of health care flashpoints — unaffordable drugs, opioids, vaping — as we debate whether to adopt universal care. For now, the Affordable Care Act is the law of the land, but Republicans want to issue it a final death blow.

Health

Manhattan DA sends scathing response to GOP’s request for testimony

House GOP investigations

China would "resolutely oppose" forced sale of TikTok

Book ban attempts reach "unparalleled" 20-year high in 2022

Books

Pro Rata

Axios Pro Rata

Silicon Valley Bank remains for sale, in whole or in pieces, with bids reportedly due tomorrow. But some of SVB's top bankers are already gone.

Driving the news: Stifel this morning announced that it's hired Jake Moseley, Matt Trotter and Ted Wilson as managing directors in its venture lending business.

Why it matters: While everyone's been focusing on the assets, some of SVB's rivals have been focusing on the people. And the people could be of greater long-term value.

What they're saying: Stifel CEO Ron Kruszewski tells Axios that venture lending, like wealth management, is heavily reliant on relationships. 

"Senior secured loans, for example, can be more about doing business with the institution because they're more of a commodity," he argues. "That's different from what is needed to work with a company just getting started."

"I think there's a high probability that the venture lending market will change, because of what's happened, but that doesn't change the fact that venture needs banking and lending services."

The bottom line: The longer it takes for the FDIC to resolve ownership of SVB, the less value it may have. 

SVB is for sale, but some of its top bankers have already left.

Illustration of a piggy bank with gradually smaller piggy banks falling into it

Tech Policy

TikTok's CEO Shou Zi Chew is defending the company from charges that it poses a national security threat at a the House Committee on Energy and Commerce hearing Thursday. 

Why it matters: The White House and TikTok's critics in Congress say the popular short-video app puts U.S. users' data at risk because TikTok is owned by ByteDance, a Chinese company.

What they're saying: TikTok should be banned, House Energy and Commerce committee chair Cathy McMorris Rodgers (R-Wash.) said at the kickoff of the hearing.

"ByteDance is beholden to the CCP, and ByteDance and TikTok are one and the same," she said, accusing the platform of lying about ties to the Chinese government.

"When you celebrate the 150 million American users on TikTok, it emphasizes the urgency for Congress to act ... that is 150 million Americans that the CCP can collect sensitive information on, and control what we ultimately see, hear and believe."

Chew argued in his opening remarks that Bytedance is a private company, beholden to shareholders and its board, not the Chinese government.

Chew said he had not spoken to any representatives of the Chinese Communist Party since taking his leadership role at TikTok.

Rep. Anna Eshoo (D-Calif.) brought up China's National Security Law, which compels companies to share information with the government. "How do you convince the Congress of the United States that there can be a clean break?" she asked.

"Our plan is to move American data to be moved to American soil," Chew said. "I have seen no evidence that the Chinese government has access to [U.S. user] data."

Details: Lawmakers vacillated between grilling Chew on TikTok's alleged ties to the Chinese government and challenging him on the same issues that plague all social media platforms including privacy, impact on children's mental health and addiction.

Members of both parties asked Chew about TikTok's content policies before quickly launching into accusations that the company is hiding connections to the CCP behind the scenes.

Chew repeatedly said the app is no threat to Americans, declined to answer questions about his compensation and how much profit the company makes. He often told lawmakers he'd get back soon with specifics and that he "didn't believe" TikTok sells user data. He also said the app doesn't collect any more information on users than any other industry competitor.

State of play: On the eve of Chew's first-ever testimony before Congress, the Biden administration indicated it would prefer to see a sale or spin-out of TikTok over a threatened ban of the app.

The Chinese government says it "resolutely opposes" a forced sale.

Catch up quick: TikTok's fate in the U.S. has been clouded since former president Donald Trump tried to force its sale in 2020. 

Negotiations at the Committee on Foreign Investments in the U.S. (CFIUS) have dragged on for years without offering a resolution.

TikTok says its plan to host all U.S. data with Oracle, firewalled from overseas access, will keep the app safe.

But critics, including U.S. intelligence officials, say Chinese law means any company would be required to share data with the government.

This story is breaking news and will be updated.

Shou Zi Chew will be grilled by members of Congress as pressure mounts on TikTok's owners.

WASHINGTON, DC - MARCH 23: TikTok CEO Shou Zi Chew testifies before the House Energy and Commerce Committee in the Rayburn House Office Building on Capitol Hill on March 23, 2023 in Washington, DC.

TikTok CEO Shou Zi Chew testifies before the House Energy and Commerce Committee in the Rayburn House Office Building on Capitol Hill on March 23, 2023 in Washington, DC.

Manhattan District Attorney Alvin Bragg’s office on Thursday rebuffed a request from top House Republicans for testimony and documents about his investigation into former President Trump.

Why it matters: Bragg’s response leaves Republicans with little room to maneuver in their effort to dent the probe’s credibility – forcing them to decide whether to venture into the uncharted territory of subpoenaing a local prosecutor.

Driving the news: In a letter to Judiciary Committee Chair Jim Jordan (R-Ohio), Oversight Chair James Comer (R-Ky.) and House Administration Chair Bryan Steil (R-Wisc.), Bragg’s general counsel Leslie Dubeck said the GOP request is “an unprecedented inquiry into a pending local prosecution.”

The House GOP's request to Bragg “only came after Donald Trump created a false expectation that he would be arrested the next day and his lawyers reportedly urged you to intervene,” she wrote. “Neither fact is a legitimate basis for congressional inquiry.”

What she’s saying: Dubeck listed four ways in which, she argues, the House GOP’s request for testimony is improper.

The letter seeks “non-public information about a pending criminal investigation, which is confidential under state law.” 

The requests are an “unlawful incursion into New York’s sovereignty” under the Tenth Amendment, which is understood to prevent congressional inquiries into matters delegated to the states. 

Congress is “not the appropriate branch” to review a pending criminal case. Instead, Dubeck wrote, the courts are the “proper forum” for a challenge.

Requests for information about the use of federal funding are “an insufficient basis to justify these unconstitutional requests.”

Yes, but: Dubeck said they would be willing to “meet and confer to understand whether the Committee has any legitimate legislative purpose in the requested materials that could be accommodated without impeding [New York’s sovereign police power].”

She also said the DA’s office is “preparing and will submit a letter describing its use of federal funds.”

The other side: “Alvin Bragg should focus on prosecuting actual criminals in New York City rather than harassing a political opponent in another state,” the House Judiciary Committee GOP tweeted after the release of the letter. 

Alvin Bragg’s office said the GOP’s request is “ unlawful incursion into New York’s sovereignty.”

Manhattan District Attorney Alvin Bragg steps out of a black suburban onto a sidewalk covered by scaffolding.

Manhattan District Attorney Alvin Bragg. Photo: Angela Weiss/AFP via Getty Images.

Donald Trump

Attempted book bans in 2022 nearly doubled from 2021, hitting an "unparalleled" 20-year record, according to new data from the American Library Association (ALA).

Why it matters: There were more than 1,250 book challenges at school and public libraries in 2022, suggesting that the recent surge in attempted book bans is not abating.

By the numbers: A total of 2,571 unique book titles were targeted for censorship in 2022, up 38% from 2o21.

A vast majority of the targeted books were written by or were about members of the LGBTQ community and people of color, according to the ALA.

58% of censorship attempts were directed at books and materials in school libraries, classroom libraries or school curricula, while 41% of them targeted materials in public libraries.

The organization said that 90% of individual challenges involved multiple books at a time.

The big picture: ALA said the skyrocketing number of challenges is in part the result of the use of book lists compiled by censorship groups.

Prior to 2021, most challenges involved a single book.

What they're saying: "Overwhelmingly, we're seeing these challenges come from organized censorship groups that target local library board meetings to demand removal of a long list of books they share on social media," Deborah Caldwell-Stone, an ALA director, said in a statement.

"Each attempt to ban a book by one of these groups represents a direct attack on every person's constitutionally protected right to freely choose what books to read and what ideas to explore," Caldwell-Stone said.

"The choice of what to read must be left to the reader or, in the case of children, to parents. That choice does not belong to self-appointed book police."

Go deeper: Texas abortion ban architect turns to libraries

Texas abortion ban architect turns to libraries

A majority of the books were written by or were about the LGBTQ community and people of color.

A person holding "Gender Queer: A Memoir" by Maia Kobabe in front of a banned book section at a Chicago library in September 2022.

A person holding "Gender Queer: A Memoir" by Maia Kobabe in front of a banned book section at a Chicago library in September 2022. Photo: Chris Sweda/Chicago Tribune/Tribune News Service via Getty Images

Markets

Axios Markets

Data: EPI analysis of the Current Population Survey; Chart: Axios Visuals

Pay rose at historically fast rates for low-wage workers in the U.S. between 2019 and 2022, even after adjusting for inflation, according to an analysis from the Economic Policy Institute released Thursday morning.

What happened: The tight labor market and disruptions from the pandemic gave folks at the lowest end of the pay scale unprecedented amounts of leverage over employers.

The mass layoffs of 2020 combined with ample relief money from the government, actually put workers in a better position — with time away from work and resources to fall back on — to find new jobs once the market came back.  

"For so many people, they didn't actually realize that there might be better opportunities out there," said Elise Gould, a senior economist at the progressive think tank, who co-wrote the analysis.

Reality check: These folks are still not making much money. 

In 2022, the 10th percentile hourly wage, i.e. the workers at the bottom, was $12.57. 

That's not considered enough for one person to maintain an adequate standard of living anywhere in the U.S., according to EPI's calculations.

Worth noting: Those at the very, very top saw enormous gains. 

Wages for the top 1% and 0.1% rose 16.1% and 29.2% between 2019 and 2021, according to Social Security Administration data also analyzed by EPI.

Pay soared for the lowest-wage workers over the past three years

Wages

Sneak Peek

Axios Sneak Peek

The Biden administration has a simple response to the army of TikTok influencers who swarmed Capitol Hill yesterday: The app can stay — if ByteDance agrees to sell it.

Why it matters: The White House is under intense pressure from Republicans — and President Biden's fellow Democrats — to protect the nation from potential security threats posed by the Chinese ownership of TikTok, the wildly popular app with 150 million active users in the U.S.

At the same time, many young — and progressive — Americans use TikTok as though their life depends on it.

Democrats close to the White House are concerned that Biden could face a political reckoning if his actions lead the app to be deleted from the phones of young Americans — a voting group that was crucial to Democrats' surprising success in last year's elections.

Driving the news: Ahead of TikTok CEO Shou Zi Chew's testimony to Congress on Thursday, a U.S. official told Axios: "The administration can achieve its national security goals without necessarily banning the app, including by ByteDance selling TikTok.”

It was the Biden administration's most explicit official statement yet about its preferred outcome in the debate over TikTok. 

The big picture: The official's comments come as the administration, Congress and TikTok are amplifying their arguments on whether the app that features user-generated videos should be sold, banned or modified.

For TikTok, that's being done largely by its army of users, influencers and content generators — a powerful alliance the White House has long recognized and courted.

The strategy isn't unique, but the scale is: TikTok's users in the U.S. — a little less than half the nation's population — are on notice that the app could be wiped from their phones.

“Some politicians have started talking about banning TikTok,” Shou said Tuesday night, on a TikTok video. “Now this could take TikTok away from all 150 million of you.”

Rep. Jamal Bowman (D-N.Y) is leading the congressional defense of the app in the face of bipartisan efforts to ban it in the U.S. He held a press conference Wednesday night to make his case.

The other side: Senate Intelligence Committee Chair Mark Warner (D-Va.) has been warning about the risks posed by TikTok.

He told reporters yesterday he is concerned about "the notion of this many Americans' data in jeopardy, and the ability to have this platform to be used for propaganda purposes."

Warner and Sen. John Thune (R-S.D.) are lead sponsors of the RESTRICT Act, which would give the Commerce secretary more latitude to restrict and potentially ban companies from countries such as China and Iran.

That plan has the support of the White House.

Another bipartisan, bicameral effort led by Sen. Marco Rubio (R-Fla.) would ban TikTok entirely. Sen. Josh Hawley (R-Mo.) and Rep. Ken Buck (R-Ohio) also have proposed a bill to ban it.

Team Biden to TikTok's owners: Just sell it

The administration's preferred outcome in the TikTok debate is becoming clear.

A TikTok supporter holds up a sign during a news conference in front of the U.S. Capitol on Wednesday. (Photo by Alex Wong/Getty Images)

Summer will test just how well airlines have recovered from the chaos of this past holiday season.

The big picture: Summer travel and the holidays are airlines’ biggest stress tests. The holidays were a nightmare, as Southwest Airlines entered full meltdown, and a host of other challenges could complicate summer travel, too.

By the numbers: Just 69.1% of domestic U.S. flights departed on time in December 2022, according to the U.S. Department of Transportation. Southwest's struggles dragged down the average for all carriers.

That figure is generally between 75%-80% in a typical month, albeit with predictable dips in the busy — and often meteorologically challenging — summer and winter travel seasons.

Zoom in: Denver International Airport, Seattle-Tacoma International Airport and Austin-Bergstrom International Airport posted some of the country's worst on-time performance rates in December, at 57.4%, 61.7% and 66.4%, respectively.

What we're watching: All indications so far suggest Southwest has recovered nicely since December — but the industry is grappling with a fresh set of challenges.

The busier travel season will also be a test for pilots, air traffic controllers and other stakeholders after a string of alarming incidents in recent months.

The Federal Aviation Administration issued a “safety call to alert”  Wednesday to remind pilots, airlines and others of best practices for safe flying, following a string of alarming incidents in recent months.

Also on Wednesday, a key Senate committee indefinitely delayed a vote on President Biden’s pick to run the FAA amid mounting opposition to his candidate, Phil Washington. 

The FAA has been without a Senate-confirmed administrator since March 2022.

Airlines' summer stress test

It'll be airlines' first big test after a rough December.

Illustration of a travel postcard with an airplane appearing in the text of a scream.

Airlines

Data: Anti-Defamation League; Note: The count includes criminal and non-criminal incidents (defined as vandalism of property, or as harassment or assault on individuals and/or groups) reported to ADL by victims, law enforcement, the media and partner organizations; Chart: Nicki Camberg/Axios

Antisemitic incidents in the U.S. jumped to a record level in 2022, up 36% from the year before, an annual audit by the Anti-Defamation League shows.

Why it matters: It's the third time in five years that reported episodes of antisemitism — from the distribution of hate propaganda to threats, slurs,  vandalism and assault — were the most on record since the ADL began tracking such incidents in 1979.

The big picture: The surge in antisemitic cases comes as the FBI and human rights groups warn about rising numbers of hate crimes in the U.S. — and amid concerns that some public officials and social media influencers are fueling the problem by normalizing incendiary rhetoric.

The alarming numbers are likely understating the problem: A rising number of law enforcement agencies are opting not to share hate crime statistics with the FBI. 

By the numbers: The ADL found reports of 3,697 antisemitic incidents in 2022. Incidents skyrocketed in each of the major audit categories:

Antisemitic harassment rose by 29%, while antisemitic vandalism increased by 51%, the audit said.

The ADL also found activity doubled among organized white supremacist groups, which were linked to 852 incidents of distributing antisemitic propaganda.

The audit didn't assess the total volume of antisemitism online, but it did include cases in which individuals or groups were harassed online via antisemitic content in direct messages, on listservs or social media.

Zoom in: States with the most incidents were New York (580), California (518), New Jersey (408), Florida (269) and Texas (211). 

Those five states accounted for 54% of the total incidents.

Zoom out: The ADL audit includes criminal and non-criminal acts of antisemitism.  

Data from separate sources, such as the Center for the Study of Hate and Extremism at California State University, San Bernardino, focus only on criminal acts. The center reported antisemitic hate crimes trended higher last year in several major cities.

State of play: An FBI report in December said hate crimes in the U.S. fell slightly in 2021, but the agency warned the figures likely were off because of a shift to a new reporting system that led some of the country's biggest police departments not to report numbers.

A supplemental report from the FBI released this month indicated that hate crimes increased in 2021.

What they're saying: "This report lays bare some data around why the Jewish community has been feeling so vulnerable," Oren Segal, vice president of the ADL's Center on Extremism, told Axios.

Some public officials and social media influencers have helped normalize antisemitism by posting and repeating bigoted things, Segal said.

He cited Ye, formerly known as Kanye West, who last year posted antisemitic messages and a swastika to his 32 million Twitter followers — more followers than "than there are Jews on Earth," Segal noted. Ye was suspended from Twitter. 

Flashback: A British national held four people hostage in a Texas synagogue in January 2022 after the synagogue's 10 a.m. Shabbat services.

The 10-plus-hour standoff caused more anxiety among synagogues across the county just a few years after the Tree of Life synagogue shooting.

Between the lines: A growing number of elected Republicans are openly promoting "white replacement theory," a decades-old conspiracy theory that's animated terrorist attacks.

"White replacement theory" is rooted in the idea that there is a plot to change America's racial composition by methodically enacting policies that reduce white Americans' political power.

The conspiracies encompass strains of anti-Semitism as well as racism and anti-immigrant sentiment.

What's next: The ADL is recommending that elected officials more aggressively denounce antisemitism and that federal and state governments do more to prevent antisemitism online.

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