Mar 1, 2021

Axios Login

The Golden Globe for staring at their screen for an entire year goes to ... you. Seriously, thanks for reading. I know it's been a tough year. Here's to March only lasting 31 days this year.

Today's Login is 1,296 words, a 5-minute read.

1 big thing: Trump's assault on Chinese tech left loose ends galore

Illustration: Sarah Grillo/Axios

President Trump's haphazard war on Chinese tech has left the Biden administration with a raft of unfinished business involving efforts to restrict Chinese firms and products in U.S. markets, Axios' Kyle Daly and I report.

Driving the news: The Chinese and American tech industries are joined at the hip in many ways, and that interdependence has shaped decades of prosperity. But now security concerns and economic rivalries are wrenching them apart.

Here's where things stand between the U.S. and several key Chinese tech powerhouses:

Xiaomi
SMIC
  • China's largest chip foundry was added to the so-called entity list in late December, notably limiting the firm's access to key gear from the U.S., especially equipment used in the newest generation of semiconductors.
  • Why it matters: Much of the gear used to turn silicon wafers into chips is made by U.S. companies like Applied Materials. However, the U.S. move against SMIC also hurts global chipmaking capacity during a time of significant shortage.
Huawei
  • The Chinese telecom giant remains the tech company most in U.S. crosshairs, facing actions and restrictions from the Justice Department, Commerce Department and FCC. Huawei is challenging many of these actions in court.
  • Why it matters: Huawei is one of a handful of companies that make the gear needed for 5G — and it undersells rivals like Nokia, Ericsson and Samsung, making it particularly successful in developing countries.
TikTok
  • Trump's effort to force a sale of the Chinese-owned video-sharing app by imposing a U.S. ban was his noisiest campaign against a Chinese company. But several key components of the effort ran aground in court, and the Biden administration has paused talks around the would-be sale.
  • Why it matters: Some lawmakers have suggested Beijing could force TikTok to hand over Americans' data or otherwise somehow exploit the app for spying or hacking purposes.
WeChat
  • When Trump issued his order against TikTok, he paired it with a ban on WeChat, the chat app used globally by Chinese speakers. But that bid, too, got derailed in court.
  • In his final weeks in office, Trump then sought to ban WeChat Pay from the U.S., along with other Chinese-owned payment platforms.
  • Why it matters: WeChat is widely used not only by people in China but throughout the global Chinese diaspora. Banning it could cut off a critical communications link between people around the world and their relatives and friends in China.

Between the lines: China is running into growing pains of its own in the push to own the future of technology.

The bottom line: The Biden administration now has to sort out which Trump initiatives to drop — because they were botched, thrown out in court or self-defeating — and which can still serve America's long-term goals of competing with China and limiting Chinese security threats.

2. FireEye CEO: Next war will hit Americans online

FireEye CEO Kevin Mandia. Photo: "Axios on HBO"

Any future real-world conflict between the U.S. and an adversary like China or Russia will have direct impacts on regular Americans because of the risk of cyber attack, FireEye CEO Kevin Mandia told Axios editor-in-chief Nicholas Johnston on last night's epsiode of "Axios on HBO."

What they're saying: "The next conflict where the gloves come off in cyber, the American citizen will be dragged into it, whether they want to be or not. Period."

  • "Apps won't work. Appliances may not work. People don't even know all the things they depend on. All of a sudden, the supply chain starts getting disrupted because computers don't work."

Why he matters: As CEO of the company that was first to discover the massive SolarWinds hack, Mandia sits at the nexus of online security and attempts by criminals, mischief makers and foreign governments to break into computer systems around the world.

Mandia warns that unclear rules or criteria for retaliation will lead to continued attacks that leave us "shocked but not surprised."

  • "And I don't know if you will get people to agree to rules on espionage because of the asymmetry where most countries can't beat us with tanks, can't beat us with airplanes. But in cyber, maybe that's where they can make investments and beat us."

The bottom line: "We're playing goalie and there are slap shots coming at us every millisecond."

Go deeper: You can see a clip from the interview here.

3. Reddit CEO doesn't plan to ban pornography

Reddit CEO Steve Huffman. Photo: "Axios on HBO"

Reddit CEO Steve Huffman told "Axios on HBO" that the company supports pornography on its platform, as long as it's not exploitative.

Why it matters: Most other social media platforms — such as Facebook, Instagram, YouTube and Tumblr — have some form of ban on pornographic content, Axios' Erica Pandey reports.

  • "You can look at [porn] as exploitative. And, indeed, much of it is. And that's not the content that we want on Reddit," Huffman said. "But there's another aspect that's empowering. And these are people sharing stories of themselves, pictures of themselves. And we are perfectly supportive of that."

Of note: Twitter still allows pornographic content, although it must be labeled as sensitive content so that people see a warning first.

Huffman also spoke to Reddit's involvement in the GameStop frenzy. He told "Axios on HBO" he was proud of r/WallStreetBets, the forum on Reddit that was largely responsible for making GameStop's stock go haywire.

  • "That community exposed a gap between those who have access to the financial markets and those who are on the outside," Huffman said.
4. Restaurant software meets the pandemic moment

Illustration: Annelise Capossela/Axios

Delivery companies have predictably done well during the pandemic. But restaurant software providers are also having a moment, as eateries race to handle the avalanche of online orders resulting from in-person dining restrictions, Axios' Kia Kokalitcheva reports.

Driving the news: Olo filed last week for an IPO and Toast is rumored to be preparing to do the same very soon.

  • Toast's listing would come just a year after it laid off about half of its employees due to a revenue drop of more than 80% in March.
  • Now that the company has expanded from primarily a point-of-sale business to one offering more online ordering tools, it's said to be seeking a valuation of about $20 billion, up from $5 billion when it raised funding a year ago.

The big picture: When the pandemic shuttered dining out almost overnight, restaurants had to quickly pivot to take-out and deliveries.

  • That meant turning to software to make their menu and ordering accessible online. Many also signed up for delivery services.
  • Even apps adapted to the pandemic, like reservations-focused Tock, which shifted to helping restaurants manage takeout orders instead.

Between the lines: Unlike delivery companies, those only selling software tools to restaurants don't have to manage large labor pools — and the associated costs.

5. Take note

On Tap

  • More eyes will be on Zoom today. Well, more eyes will be on the company, that is. Zoom is slated to report earnings after the markets close.

Trading Places

ICYMI

  • Drone maker Skydio raised $170 million at a more than $1 billion valuation, in a Series D round led by Andreessen Horowitz. (Financial Times)
  • In a since-deleted tweet, Verizon recommended users turn off 5G in order to save battery life — a message a bit at odds with the company's heavy promotion of the new tech. (The Verge)
  • Hacking group Distributed Denial of Secrets says it has obtained a massive trove of user data from far-right-friendly platform Gab. (Wired)
6. After you Login

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