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Facebook's head of experimental hardware is leaving

Regina Dugan is leaving Facebook. Photo: Photo by Brad Barket/Getty Images

The head of Facebook's skunkworks division Building 8 will leave the company. Regina Dugan said in a statement given to Recode that there's "is a tidal shift going on in Silicon Valley, and those of us in this industry have greater responsibilities than ever before" and that the "time feels right" to be "thoughtful about new ways to contribute in times of disruption." She said in a different post that she will be in charge of a "new endeavour."

Why it matters: Dugan arrived at Facebook last year to lead a division tasked with projects like building a way to type with your mind. Her departure comes as the company faces enormous pressure over its role in an increasingly unequal and divided society.

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Magic Leap confirms $502 million fundraise

Magic Leap CEO Rony Abovitz
Photo by Brian Ach/Getty Images for Wired

Magic Leap, the secretive "mixed reality" startup, announced on Tuesday that it has raised $502 million in new venture capital funding led by Singapore sovereign wealth fund Temasek. This is the same round that Axios discussed last week, based on a Delaware regulatory filing (which authorized up to $1 billion in new shares at an increased valuation). The post-money valuation appears to be around $5 billion.

Bottom line: Investors clearly keep seeing something they like in Magic Leap, but consumers are still waiting for the Florida-based company's first product to debut.

Cap table: In addition to Temasek, other new Magic Leap investors include EDBI (Singapore), Grupo Globo (Brazil) and Janus Henderson Investors. Return backers include Alibaba Group, Fidelity Management and Research Company, Google, J.P. Morgan Investment Management, and T. Rowe Price.

Related: A pair of former Magic Leap engineers today announced that their new startup, which helps streamline the design process of 3D concepts for VR/AR apps, has raised $3.5 million in seed funding.

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GM will test self-driving cars in New York City

A Cruise Chevy Bolt car. Photo: Cruise

Cruise, General Motors' self-driving car unit, says it plans to test a fleet of autonomous Bolt vehicles in a section of Manhattan in early 2018. The company will be the first to test fully autonomous cars in the state. Cruise has already been testing its vehicles in its hometown, San Francisco, as well as in Arizona and Michigan.

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FCC chairman pushes back on Trump's NBC tweets

Pai at an open meeting earlier this year. Photo: Robin Groulx / Axios

FCC chairman Ajit Pai offered a measured response Tuesday to President Trump's tweets last week arguing for a challenge to broadcast licenses for NBC stations. Pai, speaking at an event hosted by the right-leaning Mercatus Center, said the Federal Communications Commission would not revoke a license based on content.

"I believe in the First Amendment, the FCC under my leadership will stand for the First Amendment, and under the law the FCC does not have the authority to revoke the license of a broadcast station based on the content of a particular newscast."

The bigger picture: Pai's been under pressure to respond as the nation's top media regulator, appointed by a president who regularly attacks the media.

Go deeper: Why Trump can't revoke the licenses. One reason: NBC the network doesn't have a license from the government.

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Cryptocurrency investing gets more formal

Illustration: Rebecca Zisser / Axios

Serial tech entrepreneur and investor Rick Marini has launched the first-ever fund-of-funds for cryptocurrencies, called Protocol Ventures.

Why it matters: An increasing number of investors are interested in cryptocurrencies as values skyrocket, but they aren't yet comfortable parsing through white papers or picking from the dozens of nascent crypto hedge funds. This is where Marini says his fund-of-funds can help.

The fund: Starting with $1 million of his own money, Marini hopes to eventually grow the fund to at least $100 million.

  • He expects his fund's investors to be a mix of high net worth individuals, family offices, a few institutions, and potentially venture capital funds.
  • Marini plans to invest in about ten cryptocurrency hedge funds with diverse profiles, strategies, and sizes.
  • He already plans to to invest from Protocol Ventures into two funds he's personally backed—MetaStable Capital and Neural Capital. The former was co-founded by AngelList co-founder Naval Ravikant, who introduced Marini to cryptocurrencies three years ago.

Pros and cons: "Family offices, institutions, and [high net worth] individuals want exposure to this space, but are unsure of how to pick the right fund managers to back," Neural Capital managing partner Christopher Keshian told Axios. MetaStable Capital's Josh Seims, on the other hand, is more cautious and says that it's too early to have an opinion on funds like Protocol Ventures. "In general, we prefer direct relationships with principals, but fund of funds allow better scaling," he adds.

On ICOs: "Probably 97% of them are garbage and that's a problem the industry needs to clean up," said Marini, adding that regulations should help.

Go deeper: Finance pros want in on the crypto boom

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Young people flock to Snap, flee Facebook

Teens overwhelming prefer Snapchat to any other social media platform, according to Piper Jaffray's 34th semi-annual Teens research survey. 47% of teens indicated that Snapchat is their favorite social platform, while only 24% of teens indicated Instagram was their favorite platform.

Data: Piper Jaffray, The Taking Stock With Teens survey; Note: Survey of 6,100 teens with an average age of 16 years; Chart: Andrew Witherspoon / Axios

Why it matters: Investors were initially bearish on Snapchat after Instagram launched a rival "Stories" feature, which put a dent in Snap's user growth. But now Snapchat is proving that its focus on engagement over scale can lead to more opportunities for advertisers. A recent analysis by MarketingLand shows that advertisers have more opportunities to reach 13- to 17-year-olds with ads on Snapchat than they do on rival properties, like Facebook or Instagram.

One philosophical thing: Snapchat executives tells Axios they are focused on connecting people with their closest personal contacts. Facebook COO Sheryl Sandberg told Axios' Mike Allen last week that their strategy is the exact opposite. Facebook connects people to their "weak ties," or people they aren't close to, Sandberg said.

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Game change: Half of America subscribes to Netflix

A person displays Netflix on a tablet in North Andover, Mass. Photo: Elise Amendola / AP

Netflix blew past user growth expectations, reporting Monday that it added 5.3 million new subscribers last quarter, upwards of 1 million more than expected.

  • In total, it added 850,000 new U.S. subscribers and 4.45 million new international subscribers.
  • Netflix predicts that it will add 6.3 million new subscribers next quarter, which would bring its total to 111.2 million paid subscribers globally.
  • The company also continued to beat expectations on revenue, although profit came in slightly lower than anticipated.

Investors are thrilled: Netflix stock reached an all-time high in after-hours trading Monday after the network proved it could continue strong user growth internationally. Its U.S. subscription growth has been slowing, but that's because its user base is pretty saturated in North America.

Why it matters: Hitting revenue estimates is a big win for Netflix, given that it poured a ton of money into programming investments (more below), as opposed to focusing on profit. It's also another reminder for Pay-TV providers and TV networks that the traditional cable bundle can't compete with the power of on-demand.

  • "It's increasingly clear that the price/value of the legacy video bundle is unsustainable," says BTIG media analyst Rich Greenfield. "Netflix is growing subscriptions at higher prices, driving more money to spend on content — a virtuous circle."

What's next? Netflix's chief content officer Ted Sarandos on Monday'searnings said the tech giant is inching closer towards producing dailynew, original content and will invest a lot more in original films: "We plan on (releasing) about 80 (original films) coming up next year and they range anywhere from the million-dollar Sundance hit, all the way up to something on a much larger scale."

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Axios Review: Google's unassuming Pixel 2 impresses

The Pixel 2 and Pixel 2 XL. Photo: Google

From the leaked images and rumored specifications, I fully expected Google's Pixel 2 to underwhelm. To be sure, it doesn't have the sexy curves or edge-to-edge screen of the Samsung Galaxy S8, LG V30 or Apple's iPhone X.

But in using the phone, I found it to be one of the most comfortable, powerful and no-hassle Android phones I've used.

Our Take: Google's second Pixel improves on the strengths of the first model by replacing a great camera with an even better one, making the device waterproof and adding several improvements on the software side. It offers a comfortable, if not dazzling design at a price that won't break the bank.

Aimed at switchers: Google has also made it an incredibly easy move for iPhone switchers. An included dongle lets one easily move a range of data from the iPhone, including iMessages. Plus, Google will automatically match as many of your apps as it can and install those.

The camera: Google puts a ton of emphasis on the camera and it shows. The camera on the original Pixel performed well and the new one scored best-ever ratings on a leading industry benchmark. What's more, Google manages to get a pleasant portrait effect with just a single rear camera. (see below for a comparison with Apple's iPhone 8 Plus)

The software: Some of the Pixel 2's key advances aren't visible until you turn it on, including the Google Lens smart camera software and the ability to squeeze the phone's exterior to summon the Google Assistant. The Pixel 2 will also support Pixel Buds, a $159 pair of wireless headphones that can do real-time language translation. As with other Pixel devices, it also guarantees prompt access to the latest Android updates.

Who it's good for: Most people looking for a solid, powerful Android phone.

Who it's not: If you are on a budget or want the flashiest hardware, the Pixel may not be for you.

The practicalities: The Pixel 2 starts at $649, while the XL version starts at $849. Verizon is the only carrier selling it directly, but it is available unlocked from Google and works with all the major carriers.

Since the camera is a key selling point, here is a comparison image of the portrait mode on the Pixel 2 and Apple's iPhone 8 Plus.

Pixel 2:

Ina Fried / Axios

iPhone 8 Plus:

Ina Fried / Axios

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Verizon Fios pulls signal from Univision

Elise Amendola / AP

Univision announced last night that Verizon pulled its signal from its FiOS and mobile platforms "entirely without warning," leaving mostly East Coast consumers without access to programming. Univision says it's "deeply concerned," especially "in light of recent natural disasters and current events impacting the Hispanic community." Verizon says Univision is charging too much for its waning viewership.

Why it matters: It's the latest example of what happens when a Pay-TV provider and a cable network can't agree on a new contract. With new competitors in tech, the big Pay-TV distributors are incentivized to drop cable networks that are underperforming or too expensive, possibly to create their own skinny bundles. (We saw these dynamics play out two weeks ago when Altice threatened to drop Disney and Sunday when Charter struck a last-minute deal with Viacom.)

Go deeper: TV networks have been charging cable and satellite providers fees to carry their content for years, spurring more and more carriage fights. But pay TV providers are continuing to boycott the fees being demanded of them, causing TV blackouts all over the country. With more consumers cutting the cord, the atmosphere has gotten tense. By 2022, SNL Kagan predicts that retransmission fees being charged by TV networks will increase by roughly 50%, reaching $11.6 billion.

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Self-driving future: less traffic, more urban sprawl

An autonomous vehicle is driven by an engineer on a street in an industrial park in Boston in January. Photo: Steven Senne / AP

Self-driving cars could ease traffic but increase urban sprawl because commutes are less painful, AP reports. Computer simulations, released today by the Boston Consulting Group and the World Economic Forum, find the technology "would likely add vehicles to roads while simultaneously reducing traffic time."

But the view that autonomous vehicles will create "super-commutes" and "a new class of exurbs" is disputed, in part because younger generations prefer walkability and urban accessibility, and therefore might not choose to endure longer commutes.