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May 27, 2022

Hello one last time from Europe. We'll be off Monday for Memorial Day, but back in your inbox (from San Francisco!) on Tuesday.

Today's newsletter is 1,199 words, a 5-minute read.

1 big thing: Davos crowd sees power and perils of data

Illustration of the famous Davos sign as binary code
Illustration: Sarah Grillo/Axios

"Data is the new oil" has long been a popular idea in tech. This year's Davos event grappled with the double-edged nature of that saying.

Why it matters: With autonomous cars, satellites and ubiquitous sensors capturing ever more of what happens in our world, data accumulation will only keep accelerating. While these stockpiles can help society, their risks keep growing too.

The big picture: On the positive side of the ledger, emerging technologies have the power to track global warming and provide visual evidence to counter dangerous misinformation.

Blockchain advocates point to a world in which people have the nuanced ability to share only specific and necessary elements of data.

  • For example, today, a bar verifying your age checks your driver's license — and gets to see a raft of your personal info. A blockchain-based ID system could limit that to just sharing your photo and age.
  • "These new technologies allow you to only convey those facts, and preserve your data," Decentraland cofounder Esteban Ordano told me at Davos.

Yes, but: More data means more opportunities for governments to spy on their own citizens.

  • To do their jobs, autonomous cars must capture images of everything in their path. That will potentially make vast new libraries of information available to authoritarian governments and overzealous law enforcement authorities.
  • As U.S. states criminalize abortion, prosecutors could turn to tech data hoarders for evidence such as the purchase of a pregnancy test online, fertility information from a period-tracking app or location data placing a user near a health clinic.

At Davos, human rights groups called for a moratorium on the sale and use of spyware, such as NSO group's Pegasus.

  • Access Now executive director Brett Solomon told Axios that spyware is only the "pointy end" of a much bigger surveillance-industry spear: "The surveillance sector is a massive multi-billion-dollar market which is currently under-regulated and has insufficient controls within it." 
  • The rise of biometrics — such as face recognition and eye-scanning — makes the problem "much worse," he added.

Between the lines: Creators and operators of data-gathering tech are beginning to accept that they need to take responsibility for their immensely powerful tools.

  • "This idea has got to die that we are a neutral platform," Will Marshall, CEO of satellite imagery company Planet, told Axios.
  • Marshall is a firm believer that some technologies have an intrinsic bent toward good and others toward harm. Either way, he says, it's the responsibility of product developers to recognize, interrogate and minimize the potential for misuse.

Be smart: Much of the personal data is being collected without the explicit permission of the people the data identifies. And data you share with one purpose in mind can easily be used for a different one you might not want — or that could harm you.

2. Roblox partners with videogame prescribed for ADHD

EndeavorRx. Screenshot: Akili Interactive

Users of a video game that functions as an FDA-approved treatment for attention-deficit/hyperactivity disorder will soon be able to get rewards in Roblox for playing, Axios' Stephen Totilo reports.

Why it matters: The partnership is a sign of growing enthusiasm around video game technology that is harnessed for health.

Details: The therapeutic side of the Roblox deal involves Akili Interactive, a decade-old company that makes a racing game called EndeavorRx that can be prescribed to children ages 8 to 12 to help improve attention.

  • The game will digitally connect to the popular Roblox platform, unlocking badges, pets and avatar customization options that pull from the styles in EndeavorRx.
  • Rewards will be offered to the game’s young players for using the medicine and hitting key milestones.

What they're saying: Akili CEO Eddie Martucci tells Axios he hopes that patients and their families will find it empowering to show off their winnings in Roblox.

  • "These are populations that have been stigmatized previously," he says.

Between the lines: Akili has faced years of skepticism that a video game can serve as an effective medicine, but clinical trials and the FDA's approval in 2020 have won it more support.

  • Akili says EndeavorRx has about 1,000 unique prescribers, though it hasn’t released its number of patients. It says the medicine shouldn’t be considered to be in full release until the fall.
  • EndeavorRx currently costs $150 without insurance, with about 5% of prescriptions covered by insurance.

The big picture: Akili's push for games as medicine has been less lonely of late.

What's next: The EndeavorRx connection to Roblox will be tested this summer, as Akili monitors how the reward system works, Martucci says..

  • "We have envisioned metaverse experiences for fashion, entertainment, sports and education on Roblox," Roblox's chief business officer, Craig Donato, tells Axios. "We are hopeful for experiences that promote mental health and wellness."

3. Crypto startups brace for a long bear market

Illustration of a bear being stubborn with its arms crossed.
Illustration: Aïda Amer/Axios

As the crypto industry stares down its latest market troubles and its startups are being told to look for ways to extend their runways and tighten belts, gigantic new venture funds are still being announced, Axios Crypto's Brady Dale reports.

Why it matters: Money in crypto VC funds is like a runway for the whole industry.

  • If this bear market is real and lasting, then startups would just wind down without VC money.
  • With billions committed, though, VCs can simply fund more time for startups and pay to launch a zillion new ones. With enough money, eventually, they hope, something will stick.

Situational awareness: Despite their well-resourced benefactors, crypto startups tell Axios that they are expecting leaner days ahead.

Zooming out: Just this week we've learned about Andreessen Horowitz raising a new $4.5 billion crypto fund and Standard Crypto closing a $500 million fund.

What they're saying: Joseph Kelly, CEO of bitcoin-backed lender Unchained Capital, tells Axios that his firm isn't raising funds now, but, "I can confirm that firms I've spoken with have either a) seen bitcoin or crypto deals where term sheets have been pulled and b) are prioritizing existing portfolio companies for the time being over new deal flow."

  • Joseph DeLong is building Astaria, a decentralized finance lender that hasn't released a lot of details yet. He tells Axios that his team and his peers are all planning for a long bear.
  • Bears present opportunities, though. "Prolonged downtrends like this are always good for teams that are prepared to pick up new talent that is otherwise occupied during a bull market," he said.

The bottom line: "I can sometimes feel like I’m swimming in an ocean but dying for thirst," Leighton Cusack, creator of PoolTogether, says. "That is, I'm surrounded by lots of money, but it's hard to actually get money for a specific thing."

4. Take note

On Tap

ICYMI

  • Instacart and Microsoft are the latest tech companies to confirm they have slowed hiring. (Bloomberg)
  • A Twitter shareholder is suing Elon Musk alleging he has manipulated the price for personal gain. (The Verge)
  • Tech industry groups are winning privacy regulation battles at the state level, continuing a trend Axios reported on earlier this year. (The Markup)

5. After you Login

A woman in burgundy pants enjoys a stunningly gorgeous May afternoon in the mountains of Davos
Photo: Ina Fried/Axios

Even without snow, Davos is kinda pretty.