Dec 12, 2018

Axios AM

🇬🇧 Good Wednesday morning.

Situational awareness: U.K. Prime Minister Theresa May faces a no confidence vote from her Conservative Party early evening London time, and will be out if she loses. (CNN)

D.C. readers: Please join Axios managing editor Kim Hart tomorrow at 8 a.m. for a breakfast conversation about how AI will impact our jobs and lives. RSVP here.

1 big thing: Big Tech scrutiny "here to stay"
Alex Wong/Getty Images

The sudden scrutiny and skepticism hitting Google and other Big Tech companies is "here to stay," Google CEO Sundar Pichai told Axios in an interview yesterday after testifying for more than three hours on Capitol Hill.

  • "[T]he stakes are higher, the technology is getting more powerful, with the technologies like AI coming up," Pichai told us. "So, I think it’s here to stay, and it’s a good thing, right? ... I think it’s important that more people than engineers are able to weigh in on these things."
  • Like Apple CEO Tim Cook in our "Axios on HBO" interview, Pichai made it clear that tech accepts that new regulation is inevitable, and will now try to work with Washington to get the balance right.

The big picture: Pichai has been the least public of the top tech CEOs, and he and Google are beginning an effort to engage more consistently and directly with policymakers. Kim Hart, David McCabe and I talked with him after lawmakers grilled him (at times clumsily) on perceived search bias and consumer data abuses.

  • Pichai said he recognized that more conversations need to happen between Mountain View and Washington: "There needs to be deeper, different engagement than what happens today."
  • Pichai said the backlash now hitting tech is part of a cycle that could abate, and said he hopes that in the meantime, "we don’t lose that sense of optimism we have about technology."

Pichai said the company is exploring instances in which certain user settings would default away from collecting the data that fuels the company’s ad-targeting machine, and instead let consumers opt in to that data collection.

  • "[P]rivacy is an area where you have constantly evolving user expectations," he said. "I think people may legitimately have questions saying: 'I do want a different construct.'"
  • He wouldn't say which default settings the company might change. (He said the team might say to him: "Sundar, that was a stupid idea.") But he said that location data is one area it is working to simplify settings for users.
  • And he said that despite the rising skepticism, people still want Google to be smart about them: "One of the common complaints ... is when we get the language wrong when you're traveling and don't give it — people [get] very upset at us."

On concerns about AI's power, Pichai said the only way to thwart fake videos is to develop technology advanced enough to sniff them out:

  • "The worst thing you can do is to stop progress on A.I. [while] someone else is making progress on manipulation of A.I."

What's next: When asked if foresees a U.S. effort to break Google up, Pichai made the case for bigness: "There are some advantages of big companies, which is we do invest for the long term in foundational technologies."

  • And he made it clear that Google will keep making runs at more penetration in China, despite current controversies: "We really aspire to serve everyone.  And so, knowingly not serving someone is ... not a natural state for us."
2. Quote du jour: "Peanut stuff"

Asked during a Reuters interview in the Oval Office yesterday about business dealings with Russians around the 2016 campaign, President Trump said:

  • "The stuff you’re talking about is peanut stuff."

Bonus 1: "It’s hard to impeach somebody who hasn’t done anything wrong and who’s created the greatest economy in the history of our country."

  • "I’m not concerned, no. I think that the people would revolt if that happened."

Bonus 2, when asked if he discussed campaign finance laws with Michael Cohen:

  • "Michael Cohen is a lawyer. I assume he would know what he’s doing."
3. Why Dems are taking Beto seriously for 2020
Rep. Beto O'Rourke (D-Texas) at the Capitol on Nov. 16. (Bill Clark/CQ Roll Call via Getty Images)

Here's why the political world isn't writing off a potential presidential candidate who's mainly known for a failed Senate race, Axios' Alexi McCammond writes:

  • The last two presidents have been disruptive candidates who didn't have much political experience either — and who weren't the nominees the party establishments wanted.

Barack Obama had only been a U.S. senator for two years before launching his presidential campaign, and Donald Trump had never held elected office at all.

  • Now, a poll from the progressive group MoveOn suggests that Beto O'Rourke could blow up the 2020 Democratic primary.
  • That's a sign that it doesn't matter who the parties want anymore, because it's up to the voters.
  • The MoveOn poll found that O'Rourke has emerged as the most popular Democratic candidate, even beating former Vice President Joe Biden.

Beto's appeal:

  • Mikal Watts, a major Democratic money bundler based in Texas: "We’ve had a politics of division for so long. Young voters are so turned off by that and Beto is so unapologetically optimistic and forward-looking ... There’s a huge demographic swath that will get behind Beto just because he’s different."
  • Dan Pfeiffer, Obama alumnus and "Pod Save America" co-host, has written that O'Rourke should run based on the enthusiasm he generates, his appeal to independents and his innovation quotient: "He held town halls every night and seemed to enjoy the back and forth with voters that is key to a successful Iowa campaign."

Why it matters: The Beto for President buzz is a culmination of what he mastered in 2018...

  • He raised $80 million for his Senate bid against Cruz, and most of that came from online donations.
  • He used Facebook to live-stream videos of everything from his campaign rallies to eating lunch at Whataburger (which got 124,000 views).
  • He talked about racial injustice and police brutality against black people.
  • He won over moderate Republicans in the suburbs of Texas while also attracting women and people of color, and won voters under age 30 by 42 points.
  • His race lifted other Democrats in Texas. He came closer to winning a statewide race in Texas than any Democrat in decades. His campaign helped Democrats win 12 state House seats, two state Senate seats and two U.S. House seats.
  • He visited all 254 counties in Texas. That would make visiting all of Iowa's 99 counties a breeze.
4. Divided government

Great moments from the impromptu televised debate in the Oval Office yesterday ...

Mark Wilson/Getty Images
Mark Wilson/Getty Images
Mark Wilson/Getty Images
Mark Wilson/Getty Images
Brendan Smialowski/AFP/Getty Images
Brendan Smialowski/AFP/Getty Images
5. Self-driving cars don't exist (yet)

Illustration: AĂŻda Amer/Axios

Thanks to advances in robotics and artificial intelligence, humans are on the cusp of being removed from the driver seat. But as drivers are asked to do less, they are becoming more complacent — and complacency breeds danger, writes Axios' Joann Muller.

Why it matters: Autonomous vehicles promise safer roads and more freedom for the poor, the elderly and the disabled. But they're not ready to drive themselves yet. Some people are relying too heavily on their car's automated features, resulting in avoidable crashes and dangerous incidents that threaten to undermine public confidence in self-driving cars.

  • The danger occurs as drivers become more comfortable with these convenience features and mistakenly believe their car can drive itself.
  • The risk is compounded by misleading marketing names attached to the technologies — Tesla's Autopilot, Nissan's ProPilot Assist and Volvo's Pilot Assist, for example.
6. Disney's magic

"Ralph Breaks the Internet" (Disney via AP)

"Disney’s feature film success is one of the great business case studies of the 21st century," Matthew Ball writes for REDEF.

Check out these stats Ball pulled together (and follow him on Twitter if you care about smart media biz thinking): 

  • Disney produced the top-grossing film for the past three years — "and 2018 is assured thanks to 'Avengers: Infinity War.'"
  • "It produced all of the top five in 2016, 6 of the top ten in 2017, both records."
  • "In the last decade, only 29 films have crossed the $1 billion mark globally, 16 of which come from Disney — with half of those films released during the past two and half years."
  • "Nine of the 10 largest opening weekends in U.S. history now belong to the House of Mouse."
7. The loneliest generation

"Americans, More Than Ever, Are Aging Alone ... Loneliness undermines health and is linked to early mortality — and baby boomers are especially feeling the effects," The Wall Street Journal's Janet Adamy and Paul Overberg report (subscription):

  • "Baby boomers are ag­ing alone more than any gen­er­a­tion in U.S. his­tory, and the re­sult­ing lone­li­ness is a loom­ing pub­lic health threat."
  • "About one in 11 Amer­i­cans age 50 and older lacks a spouse, part­ner or liv­ing child, cen­sus fig­ures and other re­search show. That amounts to about eight mil­lion peo­ple in the U.S. with­out close kin, the main source of companionship in old age, and their share of the pop­u­la­tion is pro­jected to grow."

"Pol­icy mak­ers are con­cerned this will strain the fed­eral bud­get and un­der­mine baby boomers’ health."

  • "Re­searchers have found that lone­li­ness takes a phys­i­cal toll, and is as closely linked to early mor­tal­ity as smok­ing up to 15 cig­a­rettes a day or con­sum­ing more than six al­co­holic drinks a day."
  • "Lone­li­ness is even worse for longevity than be­ing obese or physically inactive."
8. China behind Marriott hack

"The cyberattack on the Marriott hotel chain that collected personal details of roughly 500 million guests was part of a Chinese intelligence-gathering effort that also hacked health insurers and the security clearance files of millions more Americans," reports the N.Y. Times.

Why it matters: "The discovery comes as the Trump administration is planning actions targeting China’s trade, cyber and economic policies, perhaps within days."

  • "The moves stem from a growing concern within the administration that the 90-day trade truce negotiated two weeks ago by President Trump and President Xi Jinping in Buenos Aires might do little to change China’s behavior — including the coercion of American companies to hand over valuable technology if they seek to enter the Chinese market, as well as the theft of industrial secrets on behalf of state-owned companies."
9. How we searched 2018

Google's top U.S. trending search queries for the year — those that had the highest spike in traffic over a sustained period in 2018 as compared to 2017:

  1. World Cup
  2. Hurricane Florence
  3. Mac Miller
  4. Kate Spade
  5. Anthony Bourdain
  6. Black Panther
  7. Mega Millions Results
  8. Stan Lee
  9. Demi Lovato
  10. Election Results
10. 1 🎬 thing
Gal Gadot in "Wonder Woman" (Clay Enos/Warner Bros. Entertainment via AP)

"Female-led films have consistently outperformed male-led movies at the box office, according to a study initiated by Time's Up, the organization formed by prominent women in the entertainment industry to promote gender equality," AP's Jake Coyle reports:

  • "The study analyzed the 350 top-grossing films worldwide released between January 2014 and December 2017."
  • Researchers for Creative Artists Agency and the tech company shift7 "found that in films with small, medium and large budgets, all averaged better global grosses when a woman was listed as the lead star."

"[T]he study found that films that passed the Bechdel test do better, too. The Bechdel test, an invention of the cartoonist Alison Bechdel, rates whether a movie features two female characters having a conversation about something other than a man."

  • Researchers found that "every $1 billion film at the box office — including films like 'Star Wars: The Force Awakens,' 'Jurassic World' and 'Beauty and the Beast' — passed the Bechdel test."

"Of the 350 films studied, 105 qualified as female-led and 245 registered as male-led."

  • "In movies with a budget greater than $100 million, there were 75 male-led films and 19 female-led films."