Mar 5, 2020

Axios Login

By Ina Fried
Ina Fried

Don't worry. I washed my hands for 30 seconds before hitting send on today's newsletter.

Today's Login is 1,472 words, a healthy, 6-minute read.

1 big thing: Why TikTok and Huawei are in lawmakers' sights

Illustration: Lazaro Gamio/Axios

Policymakers in D.C. are targeting a handful of specific Chinese-owned companies as they try to thread the needle between protecting U.S. security and avoiding wider disruption of the two nations' interdependent economies.

The big picture: A new wave of proposals in Congress is turning TikTok, Huawei and other specific companies into proxies in Washington's broader power struggle with Beijing, Axios' Kyle Daly reports.

What's new: Sen. Josh Hawley will soon introduce a bill to ban federal employees from using TikTok on government devices, he announced at a Wednesday hearing centered on Chinese technological threats.

  • During a separate Senate hearing Wednesday on 5G supply chain security, Sen. Roger Wicker said he expects a bill to help small telecom providers ditch Huawei equipment to be signed by President Trump "with some fanfare in the next few days."

Yes, but: Breaking up with China isn't easy.

  • "The reality is, there's no decoupling from China in a macro sense. Our economies are tied together intimately because we rely on the supply of cheap goods from China," Jamil Jaffer, senior vice president at IronNet Cybersecurity and founder of George Mason University's National Security Institute, told Axios. "If we hurt one another, that's going to be painful for everyone."
  • Gear from Chinese companies like Huawei and drone maker DJI not only tends to be some of the cheapest on the market, but increasingly it's also top quality.
  • That's happened in part because Beijing has supported Chinese companies with cheap financing and direct cash infusions and by long sanctioning infringement of Western intellectual property that can then be built upon, Jaffer said.

Meanwhile: China's enormous middle class has become a major market for U.S. companies like Apple. China, like many other countries, also continues to rely heavily on the U.S. for software, hardware components, and other tech.

  • Similarly, the supply chains of many U.S. and European device and equipment makers — including Huawei's global rivals in the 5G supply market, Nokia and Ericsson — extend back to China.

Tech and telecom firms have become lawmakers' first stop in targeting China for three reasons:

  • They're potential security risks. There's no solid public evidence that companies like Huawei or DJI have been spying on Americans for Beijing. But many policymakers and cybersecurity experts argue that deploying their tech widely and opening even the theoretical possibility isn't worth the risk. Meanwhile, companies like TikTok could potentially be tapped for behavioral data to train AI systems.
  • They're among China's strongest growth sectors and are increasingly central to modern life. Efforts to cripple and isolate Chinese tech and telecom companies strike at the heart of the country's ability to overtake the U.S. in sheer global economic power.
  • They're guilty by association, in the public eye, with China's authoritarianism and surveillance-state tactics.

Between the lines: The U.S. has had its own issues with government surveillance programs, and American tech companies are wrestling with the federal government over its demand for encryption back doors to aid law enforcement.

  • Those concerns may be a factor as some countries, including the U.K., shrug off U.S. warnings to avoid building 5G wireless networks with Chinese equipment.

What's next: Coronavirus-driven supply chain disruptions may soon end up teaching American companies more about how to get along without Chinese counterparts than any Congressional mandate.

2. Coronavirus drives more conference changes

The TED conference in Vancouver and IBM's Think conference are the latest major gatherings to be affected by the coronavirus.

Driving the news: As I scooped yesterday, TED organizers plan to either postpone the event to July or hold a digital-only gathering. IBM will make Think, which last year drew 30,000 people to San Francisco, into a digital event.

Why it matters: Travel restrictions are increasingly making large-scale events unfeasible in the short term, with many companies now restricting domestic, as well as International travel as the coronavirus spreads in a number of U.S. cities.

Where it stands: In a note to attendees, TED curator Chris Anderson insisted the event wasn't being canceled. "We have two compelling options for how to outwit this virus, and we need your input."

  • "We're presently working to figure out what makes the most sense for the health and safety of our community," TED organizers said in a statement to Axios. "We've narrowed it down to two options — either postpone the conference to July 26–30 (still in Vancouver) or go digital."
  • The organization is currently discussing the options with attendees and expects to make a decision by the end of the day on Monday.

IBM, for its part, did more than just cancel the in-person version of Think. It is also suspending domestic travel for internal meetings and for participation in all external events with more than 1000 attendees. International travel is limited to "only business-critical situations when virtual methods are insufficient.

  • "While many companies are imposing similar limits, IBM is one of the biggest when it comes to corporate travel.

Meanwhile: In other coronavirus-related tech news:

  • Microsoft is encouraging all its Seattle-area employees to work from home, prohibiting non-essential travel to the Bay Area and Puget Sound and other areas with active COVID-19 infections.
  • Google is shifting all in-person job interviews to video conferences using Hangouts Meet, while other tech companies are also making moves in that direction.
  • Shares of video conferencing firm Zoom, which have risen sharply, fell after the company's financial guidance wasn't as rosy as some investors had hoped. "For Q4 we did not see any direct impact from the coronavirus — we did see an uptick in users but on the free usage side ... but it's early," CFO Kelly Steckelberg said on an earnings conference call. 
  • Apple and Netflix dropped out of SXSW, as effectively did Microsoft and IBM with their new policies. As of Wednesday, though, SXSW organizers were insisting the event would continue despite the many withdrawals and a petition signed by more than 47,000 people to cancel the event.
3. Twitter testing a Stories-like feature in Brazil

Illustration: Sarah Grillo/Axios

Twitter became the latest company to introduce a feature akin to Snapchat Stories, with Twitter Fleets, messages being tested in Brazil that disappear after 24 hours.

Why it matters: Similar features have already come to Facebook, Instagram and even LinkedIn. There was even a meme around Microsoft adding "Excel Stories," though that has yet to happen.

What they're saying: Twitter acknowledged the similarities between Fleets and other "stories" products.

"I know what you're thinking: 'THIS SOUNDS A LOT LIKE STORIES!' Yes, there are many similarities with the Stories format that will feel familiar to people. There are also a few intentional differences to make the experience more focused on sharing and seeing people's thoughts."
— Twitter product chief Kayvon Beykpour, in a tweet

Go deeper: Everyone's ripping off Snapchat's Stories

4. AT&T plans job cuts to slash costs

AT&T will look to cut tens of billions of dollars in costs over the next few years, including job cuts in the near term, AT&T president John Stankey said at a Morgan Stanley conference this week.

Why it matters: Critics were quick to point out that AT&T's cost-cutting plans come despite previous promises to increase investment and create jobs as part of the case for corporate tax cuts and the easing of net neutrality rules.

Driving the news: Speaking at the Morgan Stanley Technology, Media & Telecom Conference on Tuesday, Stankey said that the company has been focused on "10 broad initiatives that we believe can generate double digits of billions over a three-year planning cycle."

  • The efforts are roughly evenly split into those taking place over the next 12 months, those that will take one to two years, and those that will take more than two years.
  • Headcount reduction is part of the first year's cost-cutting efforts, Stankey said, with opportunities in call centers and other areas.
  • The company plans to focus DirecTV on areas with few broadband options, with its recently launched AT&T TV as the focus for live TV customers elsewhere.

What they're saying: An AT&T spokesman noted that the company invested more than any other company in the U.S. between 2014 and 2019, including 20% more in capital expenditures than Verizon.

  • As for the tax cut pledge, a representative said, "When tax reform was enacted in late 2017 we announced our intent to invest an additional $1 billion in the U.S. in 2018, and we met that commitment."

Yes, but: AT&T plans to spend in the "$20 billion range" on capital expenses this year, down from $23.7 billion last year and $23.2 billion in 2018.

5. Take Note

On Tap

  • A lot of people working from home for the foreseeable future.

Trading Places

  • Dropbox named AltSchool founder Max Ventilla as VP of new frontiers, leading its product incubator, and Alastair Simpson, formerly of Atlassian, as VP of design.
  • Google hired Sony's Shannon Studstill to run a new LA studio for its Stadia Games and Entertainment unit.


  • In a reversal, Apple will allow marketing messages in push notifications, so long as users consent. (Axios)
  • A court affirmed that former Uber autonomous driving exec Anthony Levandowski owes Waymo $179 million. (Axios)
  • Utah has signed a 5-year contract worth $20 million and handed over a ton of data to a start-up called Banjo to build a massive surveillance operation for law enforcement. (Vice)
  • Hewlett-Packard Enterprise will use AMD chips to build its massive El Capitan supercomputer for the Department of Energy. (ZDNet)
  • A judge threw out Tulsi Gabbard's lawsuit against Google, in which she claimed the company violated her free speech rights by briefly suspending her ad account. (TechCrunch)
  • HP rejected a takeover bid from Xerox, saying the $35 billion offer undervalued the company. (Wall Street Journal)
6. After you Login

Go little robot, go.

Ina Fried