Apr 27, 2020

Axios Login

By Ina Fried
Ina Fried

Welcome back. (Not that you went that far.)

🎬 Tonight "Axios on HBO" returns at a new time! The show kicks off with revealing interviews from New York Gov. Andrew Cuomo (clip) and Walmart CEO Doug McMillon (clip). Plus, I talked with Joe Walston, who heads the Wildlife Conservation Society's Global Program, about wet markets and how to prevent the next pandemic. 

  • Catch the episode at 11pm ET/PT on all HBO platforms.

🦠 Also, Axios is hosting a live virtual event on COVID-19's impact on education, hosted by Axios co-founder & CEO Jim VandeHei and Cities correspondent Kim Hart. Join us Tuesday, April 28 at 12:30pm ET for a conversation with Arkansas Gov. Asa Hutchinson, Coursera CEO Jeff Maggioncalda and Common Sense Media CEO Jim Steyer

Today's Login is 1,489 words, a 6-minute read.

1 big thing: The U.S. rift with China has tech on edge

Illustration: Sarah Grillo/Axios

As Google, Facebook, Apple, Amazon and Microsoft all report their first set of pandemic-era earnings this week, the industry will get a clearer fix on just how much pain the falling-out between the U.S. and China will inflict, Axios' Kyle Daly reports.

The big picture: For decades, tech's leaders have bet big on China as a manufacturing hub, supply chain provider and, increasingly, a lucrative market — but trade frictions, national-security tensions and now coronavirus blame games are imperiling that partnership.

Context: China has become a flashpoint in the coronavirus crisis, thanks to questions about Beijing's forthrightness and revved-up criticism of China on the presidential campaign trail.

What's happening: In their earnings reports this week, the tech giants will have to tell the public how the crisis and disrupted supply chains earlier this year have already affected their businesses. They'll also get pressed by analysts to talk about just how big a threat they face from rising enmity between the U.S. and China.

Why it matters: If the "great decoupling" that was already underway pre-virus gets accelerated by the crisis, tech is bound to get caught in the middle.

Manufacturing: Apple and many other hardware companies have most of their devices manufactured in China.

  • Changing that could be costly, complicated, and tough to scale.
  • Such a transition could prove a competitive boon for multinational companies, such as South Korea's Samsung, that have already moved their supply chains out of China in recent years.
  • Some part makers that work with U.S. tech giants, such as iPhone manufacturer Foxconn, have also been exploring expansions in countries like India and Vietnam in recent years.

Commercial exports: The U.S. remains the global powerhouse in semiconductors, home to giants including Intel and Qualcomm.

  • Losing China as a market would hobble these companies' businesses and could push China to further ramp up its own nascent chip industry.
  • Chipmakers already warned that they'd suffer from the Trump administration's actions against Huawei last year and were instrumental in getting carveouts that let some of them continue doing business with the Chinese telecom giant.

Exploring Chinese consumer markets: China has been a key growth region for some U.S. companies, particularly Apple.

  • But many others, including Facebook, Google and Amazon, have been largely cut out of the market — or have chosen to not accept the government's rules there.
  • Yet most U.S. firms still dream of access to China's massive middle class market, and a definitive cut-off would put a big cap on their global growth prospects.

Political favor: If the war of words between China and the U.S. keeps escalating, tech firms may find that their commercial relationships with China or Chinese companies makes them targets.

  • Google got a taste of that last year, as President Trump flirted with investigating the company after billionaire tech investor Peter Thiel accused it of treason for exploring work in China and thereby, he argued, aiding the Chinese military.

Yes, but: The rift with China remains more a matter of bluster than hard measures, and decoupling is still mostly a possible outcome, not a reality.

  • Trump himself frequently touts his friendly relationship with President Xi Jinping and has flip-flopped on moves against Chinese firms, as when he reversed a ban on Chinese phone maker ZTE.

"The basic question for the U.S. in dealing with the China relationship is whether the American state can govern," said Matt Stoller, a China critic and research director at the American Economic Liberties Project. "That's really the only question, because right now Wall Street and multinationals don't want that break with China."

What's next: The willingness of a Trump or Biden administration to take strong action on decoupling may ultimately rest on how long the coronavirus crisis lasts, said Derek Scissors, Asia economist at the American Enterprise Institute.

  • Public sentiment in the U.S. will likely continue to darken on China and favor "less contact" and "less dependence" on the country if the U.S. still faces localized virus outbreaks in 2021, he said.
  • "We're in a political period, obviously, where it's a strategy for everyone to say, 'I'm the toughest on China,'" Scissors said. "The real test is next year."
2. Jibe founder builds coronavirus testing database

Photo: AllClear

A nonprofit organized by the founder of recruiting software firm Jibe has launched AllClear, a new website where people across the U.S. can find information about nearby coronavirus testing.

The big picture: AllClear is one of many tech industry responses to the pandemic. Others have designed services to deliver food to healthcare workers and apps to support small businesses.

  • AllClear is a 30-person volunteer effort, led by Joe Essenfeld, Matt Geffken and Boris Kozak. The trio are veterans of Jibe, which was acquired last June by iCIMS, where the three still work.
  • AllClear allows people to locate testing sites near them, as well as review their eligibility.
  • It's a website for now, with iOS and Android apps coming, and covers all 50 states, as well as U.S. territories.

What they're saying: "AllClear is necessary because it is challenging to aggregate and validate the test center data across the country," Essenfield told Axios, noting that its data comes from a number of different sites and has been validated by at least two people. "Our unique algorithm-assisted data gathering combined with our deduplication and enrichment technology is something no one else is doing."

3. How social media feels about the coronavirus
Map of emotions on social media in the U.S. and U.K. on April 24. Credit: Expert System and Sociometrica, April 24, 2020

Sadness, fear and anxiety are the words people are using most on social media to describe their emotions in response to the coronavirus. That's according to a new analysis from an Italian-based artificial intelligence company, Axios' Bryan Walsh reports.

Why it matters: Classifying tens of thousands of posts by their emotional tone provides a snapshot of how people feel about the pandemic.

How it works: Expert System specializes in semantics and natural language reading, a branch of AI involving computer systems that attempt to make sense of written language.

  • In doing so, a computer can rapidly analyze vast amounts of writing — like, for example, a day's worth of social media posts about the COVID-19 pandemic.

For the past few weeks, Expert System has been collecting English-language social media posts each day that feature frequently used hashtags like #coronalockdown and #covid19. Its AI can extract the emotional content of those posts, which is then analyzed and interpreted by analytics firm Sociometrica.

  • On April 24, "fear" had become the single most widespread emotion, displacing "sadness."

But, but, but: Such negative feelings have been declining over the past 10 days, from 62.4% to 45.5%. At the same time, neutral and positive feelings are on the rise, with particular growth around posts showing "hope."

  • Also increasing in intensity is "health fanaticism," which Expert System defines as "a feeling of fear and anxiety around certain aspects of health and an emphasis on defending the health of one’s own body."

The bottom line: A natural language AI can tell you what you probably already know: the pandemic is terrible, but if you squint hard enough, there's light at the end of the tunnel.

Go deeper: Isolation can be bad for mental health

4. "SNL" skewers Airbnb in a fake commercial

A "Saturday Night Live" parody ad over the weekend poked fun at Airbnb during the coronavirus, showing someone who rented out a room for a night or two getting a semi-permanent roommate instead, thanks to shelter-in-place rules.

Why it matters: Though lighthearted, it highlights a very real challenge facing Airbnb. Even once the pandemic ebbs and people start traveling again, it may be a long time before would-be hosts shake their discomfort with opening their homes to strangers.

The big picture: Airbnb has already been forced to hand out refunds, seek additional funding and likely delay a planned IPO. On Monday, the company announced new guidance for how hosts can clean their properties in a way that minimizes the risk of coronavirus spread.

You can watch the sketch here.

5. Take Note

On Tap

  • As mentioned earlier, this is a big week for tech company earnings. Tuesday reports include Google parent Alphabet, Samsung and AMD. Facebook, Microsoft, Tesla, Qualcomm, eBay and Spotify report on Wednesday. Apple, Amazon and Twitter are slated to release earnings on Thursday.

Trading Places

ICYMI

  • Germany is adjusting its digital contact tracing plans to use the exposure notification technology jointly developed by Apple and Google. (Reuters)
  • DraftKings shares rose 10% as the sports betting site went public on Friday. (Bloomberg)
  • Apple is reportedly pushing back the production timeline for its next generation of iPhones by about a month. (Wall Street Journal)
  • AT&T CEO Randall Stephenson is retiring and will be replaced by COO John Stankey. (Axios)
  • The FCC says the digital divide is shrinking, though Democratic commissioners are skeptical. (Axios)
  • Amazon is testing video calls to confirm the identity of third-party sellers as it tries to crack down on fraud and counterfeit goods. (The Verge)
6. After you Login

As Login readers know, I traveled a lot before the whole COVID-19 thing started. And I know many of you did as well. If you are missing it, here's one way to recapture a portion of the experience.

Ina Fried