Silicon Valley could be next target for Trump-style nationalism - Axios
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Silicon Valley could be next target for Trump-style nationalism

Manuel Balce Ceneta / AP

As tech royalty converges on the White House today for an American Technology Council meeting, the darlings of Silicon Valley are in danger of becoming the devils of Trumpism's nationalist wing.

This won't happen overnight, but danger signs are everywhere.

Axios Tech Editor Kim Hart wrote last week that the giants, with their "enormous concentrations of wealth and data," are "drawing the attention of economists and academics who warn they're growing too powerful."

Turns out it's government, too. The Bannon wing of the White House would like to take on the lords of the Valley now over outsourcing, the concentration of wealth and their control over our data and lives. But this fight is on hold for a later date, officials tell us.


The bigger problem for tech is that many Americans are rethinking their romantic views of the hottest and biggest companies of the new economy. As people look for villains to blame, tech might get its turn:

  • Some shine has come off Facebook (though not in user data, Dan Primack points out: People still love the service), as executives fend off grievances about fake news, live violence and the filter bubble.
  • Silicon Valley makes itself a juicy target with its male dominance, concentration of wealth (in both people and places), and reliance on foreign workers.
  • Robots will soon be eating lots of jobs, with working-class, blue collar workers — an engine of the Trump coalition — at the most immediate risk. Many think this will be the story of the next 10 years.
  • Anyone familiar with military intelligence will tell you cyber-risk is much greater than most people realize. Russians used cyber tools to try to throw the 2016, and electronic attack is perhaps the greatest U.S vulnerability to an international power.

People increasingly distrust technology, and the companies will increasingly be in the crosshairs. Richard Edelman — president and CEO of the global communications firm — wrote in introducing Edelman's 2017 Trust Barometer: "[O]ngoing globalization and technological change are now further weakening people's trust in global institutions, which they believe have failed to protect them from the negative effects of these forces.

Be smart: Tech executives are very aware of the public's unsettled mood and fearful that if they completely disengage with Trump the White House will turn on their companies. That's why many are here today!

Dive deeper: "What Apple's Tim Cook will tell Trump" (CEOs come with their own agendas: He'll raise topics the White House hadn't planned)

Off embargo at 6 a.m.: "Silicon Valley's elite comes to Trump's Washington."

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Trump goes after Republicans who won't support health bill

Trump's latest health care tweet is yet another example of the president's penchant for tweet-shaming those who disagree with him. Axios reported this morning on the 8 Republican Senators who could make or break the Senate health bill, and Trump's tweet is not-so-subtly targeting them:

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Charity orgs don't want to host banquets at Mar-a-Lago anymore

Andrew Harnik / AP

A new analysis by the Washington Post found that Trump's Mar-a-Lago club has consistently booked fewer charity banquets and events since his campaign announcement than in the seven years before. In 2014-15, just before he ran for office, Mar-a-Lago hosted 52 events — this year they've booked 25.

It's not like they're boycotting President Trump; one charity organizer said, "The decision was based on the disruption on getting into Mar-a-Lago, because of all the security and hassle."

Why it matters: WashPost found these charity banquets accounted for nearly half of the resort's $21 million annual revenue last year. They predict this could be the club's lowest season for charity rentals in nine years, meaning a key part of the Trump Organization could take a significant financial hit ("hundreds of thousands in lost revenue") — not a financial gain, as some might have predicted more guests would book now that he's president.

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Binary Capital delays fund close in wake of Justin Caldbeck situation

Binary Capital website

Binary Capital yesterday delayed its plans to close on upwards of $75 million in new capital for its second fund. This comes after co-founding partner Justin Caldbeck took an indefinite leave of absence in the wake of sexual harassment allegations by women entrepreneurs, Axios has learned.

Below is the note to investors, which was then followed by Caldbeck's longer statement about his leave of absence:

"I wanted everyone to be aware of two things: First we are not closing today given the recent press and secondly, I am issuing this statement immediately about the situation and my sorrow around it. I couldn't be more sorry for putting you in a bad position and will do everything I my power to rectify it."

The San Francisco-based venture firm originally raised $175 million for its second fund last summer, but was seeking additional capital after Lowercase Capital's Matt Mazzeo agreed to join as its third general partner. It is unclear how close Binary had gotten to its $75 million goal, nor what it plans to do next. A firm spokesman declined comment, while an investor says there are "lots of conversations ongoing."

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Mike Pompeo: Trump admin plans on "punishing" leakers

Pablo Martinez Monsivais / AP

Mike Pompeo was the first guest on Hugh Hewitt's new MSNBC show. As CIA director, Pompeo was brought on the show to answer vital questions about intelligence and how the White House plans on handling their continued issue with leakers revealing info.

"We, and I would say all of President Trump's government, is incredibly focused on both stopping leaks of any kind from any agency, and when they happen pursuing them with incredible vigor," Pompeo said, adding, "and I think we'll have some successes both on the deterrence side, that is stopping them from happening, as well as on punishing those who we catch who have done it."

Pompeo argued there's an almost obsession with leakers:

"In some ways, I do think it's accelerated. I think there is a phenomenon, the worship of Edward Snowden, and those who steal American secrets for the purpose of self-aggrandizement or money or for whatever their motivation may be, does seem to be on the increase."

And he detailed who's trying to access classified info:

"It's tough. You now have not only nation states trying to steal our stuff, but non-state, hostile intelligence services, well-funded — folks like WikiLeaks, out there trying to steal American secrets for the sole purpose of undermining the United States and democracy."

Pompeo described how Trump and Obama differ in the way they communicated with the intelligence community:

"President Obama consumed his intelligence in a different way. President Trump is incredibly demanding of the intelligence community, asks us incredibly difficult questions, and then counts on myself and other leaders in the IC to deliver those answers for him."

And he responded to criticism that some say Trump is "uninterested in facts":

"I cannot imagine a statement that is any more false than the one that would attribute President Trump not being interested in intelligence and facts when it comes to national security. He is an avid consumer of the products we provide, thinks about them, and comes back and asks great questions. And then, perhaps most importantly, relies upon that information."
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New startup trend: sell one digital currency for another

Rick Bowmer / AP

Entrepreneurs have a new trick to raise money quickly, and it all takes place online, free from the constraints of banks and regulators. Since the beginning of 2017, 65 startups have raised $522 million using initial coin offerings — trading a digital coin (essentially an investment in their company) for a digital currency, like Bitcoin or Ether.

One recent example: Bay Area coders earned $35 million in less than 30 seconds during an online fund-raising event, NYT reports. They sold Basic Attention Tokens (BAT coin) which will grant buyers access to an innovative ad-free web browser the coders are intending to create, but have yet to launch.

And that's the catch: these investors are buying promises in the form of coins for a product or service that doesn't exist.

Similar to the Bay Area example, a group of entrepreneurs in Switzerland secured $100 million last week by selling a coin that will one day be used on Status, an online chat program that's still being developed.

Proponents argue that these initial coin offerings are "a financial innovation that empowers developers and gives early investors a chance to share in the profits of a successful new enterprise," NYT notes.

One big problem: Others say it potentially violates securities law and that this trading of digital currencies is ripe for hackers, from NYT: "Last year, the first blockbuster coin offering, the Decentralized Autonomous Organization, quickly raised more than $150 million. But the project blew up after a hacker manipulated the code and stole more than $50 million worth of digital currency."

Why it matters: While the innovative online fundraising strategy helps new ventures earn significant amounts of money in a record amount of time, the legal and ethical issues could challenge the perception of the company's intentions. By selling these coins for Bitcoin or Ether, "conventional banks and financial institutions are essentially shut out, allowing initial coin offerings to take place beyond the control of regulators," and that could lead to a whole host of issues for the entrepreneurs and investors alike.

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Trump’s tweets help foreign spies collect info on POTUS

Esther Vargas / Flickr cc

Lead story of tomorrow's WashPost Outlook section, "Raw intelligence, 140 characters at a time: President Trump's tweets are a gold mine for foreign spies, says former CIA analyst Nada Bakos":

"CIA operatives have risked their lives to learn about foreign leaders ... With Trump, ... secret operations are not necessary to understand what's on his mind."

"Intelligence agencies try to answer these main questions when looking at a rival head of state: Who is he as a person? What type of leader is he? How does that compare to what he strives to be or presents himself as? What can we expect from him? And how can we use this insight to our advantage?"

"In building a profile of Trump, an analyst would offer suggestions on how foreign nations could instigate stress or deescalate situations, depending on what type of influence they may want to have over the president."

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Volkswagen quickens job cuts with an eye on electrics, self-driving

VW's e-Golf [AP/Jens Meyer

Volkswagen is moving faster to cut up to 23,000 jobs and shift the savings to electric and self-driving car technology, Reuters reports. The company plans to create 9,000 new positions in advanced batteries and mobility services.

Volkswagen isn't alone among carmakers cutting jobs — GM and Ford have both announced significant layoffs, also with an eye toward increasing their focus on electric-car and self-driving technologies. Last month, Ford abruptly fired CEO Mark Fields and replaced him with Jim Hackett, head of its automated-vehicle division.

Why it matters: The U.S. car market peaked last year, but these cuts are about more than the ebb and flow of auto sales. The globe's top auto executives see an existential threat in the form of upstart electric and self-driving car technologies. They know that winning the next five or ten years won't be about building a better internal combustion engine or creating the best marketing campaign, but the next-generation of automotive technologies.

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Melania Trump hires family business employee for WH chief usher

Alex Brandon / AP

Melania Trump selected a Trump International Hotel employee for the White House chief usher position, per NYT. Her decision to hire an employee of the family business is in line with President Trump's penchant for keeping a close network of family and friends as advisers, confidants, and even WH aides.

Timothy Harleth, manager of rooms at the Trump Hotel in Washington, will replace Angella Reid, the former WH chief usher who was the first woman and only the second African American to hold that position. Reid was unexpectedly fired by Trump in May, but the reason for her termination remains unclear.

Harleth will now be in charge of managing the budget, planning family dinners, acting as a confidant to the Trumps, and essentially ensuring things run smoothly in the WH residence. He shares a hospitality background with Reid: she worked at the Ritz-Carlton Hotel before becoming chief usher under Obama.

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Airbnb touts economic impact for middle class to local legislators

Airbnb

Ahead of its participation in the U.S. Conference of Mayors' Summer Meeting in Florida, Airbnb emphasized once more its big sell to local governments in a new report: positive economic impact for the middle class.

According to Airbnb, 60% of U.S. hosts say it has helped them afford to stay in their homes, 51% say they rely on Airbnb income to make ends meet, and 44% of U.S. hosts earn $75,000 a year or less.

Between the lines: Airbnb faces a lot of criticism for contributing to housing crises in cities like San Francisco, and for increasing housing prices, so the home-sharing company is constantly touting such data as a counterpoint, especially to local legislators.

More from this year's report (2016 data):

  • Airbnb supported 730,000 jobs worldwide, including 130,000 in the U.S.
  • $61 billion in estimated economic output from Airbnb worldwide, including $14 billion in U.S. cities.
  • Airbnb has tax agreements with 310 jurisdictions globally, including more than 250 in the U.S. $300 million in hotel and tourist taxes remitted, including more than $270 million in the U.S.
  • 57% of U.S. hosts are in cities with tax agreements.

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DOJ asks Supreme Court to hear Microsoft email case

Swayne B. Hall / AP

The Justice Department is trying to take its drawn-out fight with Microsoft over law enforcement's access to emails stored on overseas servers to the Supreme Court.

Why it matters: Major tech companies are watching this case closely. If the Supreme Court takes the case, the outcome would have far-reaching effects on how tech firms store user data on foreign servers — and how law enforcement can access it. As more and more of our data is stored in the cloud by companies with data centers around the world, the question of how governments (both U.S. and abroad) can access the data is becoming increasingly complicated.

At issue is whether the U.S. government can use a warrant to access messages from one of Microsoft's data centers overseas. An appeals court sided with Microsoft, saying a U.S. warrant wasn't sufficient to obtain those messages and that the DOJ would instead need to request the data through an international process.

What's next: Tech companies including Microsoft are pushing for Congress to update the laws regarding law enforcement access to data centers to create a clear process for accessing data while also protecting privacy. Congress has held hearings on the topic but has not yet acted on legislation.