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

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."

Featured

WeWork wants to take its brand beyond its own real estate

Courtesy of WeWork

WeWork is best known for its dozens of hip office buildings around the world where startups and freelancers can rent out desks by the month and mingle with each other. But the company is also working to extend its brand beyond the walls of its own buildings.

Companies "are now starting to ask if we can bring in the experience and environment to them," WeWork product chief Dave Fano told Axios of the startup's new office management services in an interview.

Why it matters: WeWork's business model has faced skepticism, especially from the real estate industry. Its potential over-reliance on the current startup boom has raised questions around its future, should there be a downturn. Showing that it's not limited to its current real estate holdings could help the company, currently valued at more than $17 billion, counter some of that skepticism.

Bringing WeWork to the office: WeWork plans to help manage and design companies' existing offices and corporate campuses on a subscription basis. The most basic service will be WeWork's own suite of office management tech tools. For companies that want more, it will deploy "community managers" who will run and manage their office space, helping it adopt the "startup" feel WeWork says many are seeking. And lastly, for those that want the full WeWork experience, it will provide design and renovation consulting services. WeWork, which first discussed its plans in April, says it can help these customers more efficiently use and manage their office space this way.

Origin: The idea came from WeWork's existing "enterprise" customers—large companies with 1,000 or more employees that have inked deals to house some of them at WeWork's buildings. Last month, these customers accounted for 30% of WeWork's sales and about 20% of its occupied office inventory, according to the company. As their co-working rentals became increasingly coveted among employees, some of these companies told WeWork that they'd like their own offices to operate in a similar way.

Two of WeWork's existing enterprise customers are currently in the process of rolling out this new service into their own offices, though the company decline to name them. IBM and Microsoft are among the big companies that have inked deals with WeWork.


Featured

How Medicaid funding would change under the Senate health bill

The Senate health care bill would substantially reduce federal funding for all Medicaid beneficiary groups over the next two decades compared to current law, according to an analysis by Avalere, a health care consulting firm.

Why this matters: The funding cuts could encourage states to cut benefits for enrollees, payments to providers or eligibility for the program. It also saves the federal government $772 billion over 10 years, and likely much more over 20 years.


Data: Avalere Health analysis; Note: Adult age cutoff defined by state, ranging from 19-21. Seniors are 65+; Chart: Andrew Witherspoon / Axios

What the bill does:

  • Phases out enhanced federal funding for the Affordable Care Act's Medicaid expansion.
  • Caps the amount of federal funding per Medicaid enrollee. This cap grows with medical inflation beginning in 2020, but in 2025 the growth rate slows to inflation, which is tighter and causes most of the steep reductions.
Featured

Axios Review: New Eero delivers even better Wi-Fi, albeit at a price

Eero

When it debuted a couple years ago, Eero was the first company to aggressively promote the concept of placing multiple networking boxes around the home for better Wi-Fi. Now, as Eero's second-generation product hits the market, the company is far from alone, facing competition from other startups as well as traditional networking companies like Belkin and Netgear.

Who it's good for: Anyone that has pockets of slow wi-fi in their home and doesn't already have a multi-unit system

Who it's not good for: Those whose homes are reasonably well covered, those who already have a mesh network or are particularly cost conscious, since others offer a more affordable alternative.

Our take: I eagerly bought the first Eero system due to poor in-home Wi-Fi coverage in an old San Francisco building. While it improved a bad situation, the Wi-Fi in the back of the house (where our bedroom is located) still left much to be desired. Eero's original system consisted of three identical units, while the new standard $399 system is one main system and two smaller "Eero Beacon" devices.

In testing the second-generation system, I initially tried a mix of three new devices and one older Eero and it actually made things slower. But when I went with just the new Eero-and-two-beacon system I found it delivered a significant speed bump, as measured by the Speedtest app, on the order of about 25% faster downloads.

Featured

Waymo: Uber knew about the stolen files

Jeff Chiu / AP

Waymo is pushing back on Uber's defense, arguing in new court documents that the ride-hailing company not only knew that a former Waymo employee had downloaded proprietary files, but that it also set up legal mechanisms to cover that up.

Cover up: Waymo argues that Uber struck a deal with Anthony Levandowski, a former Waymo employee whose startup it was acquiring, that he submit to a due diligence investigation in exchange for indemnification. Uber either knew or suspected that he had stolen files in his possession and set up a legal agreement to protect both parties, says Waymo.

More: Waymo also points to other suspicious events, such as Levandowski's downloading of proprietary files onto a personal device on two occasions, and both on days that he was meeting with Uber executives. It also says it can't find text messages from Uber CEO Travis Kalanick to Levandowski, suggesting they may have been deleted. Uber has not produced all text messages between Levandowski and every witness yet.

Read here Uber's legal defense, also filed on Wednesday.

Featured

Senior official contradicts Trump's South Korea stance

Evan Vucci / AP

On the eve of South Korean President Moon Jae-in's meeting with President Trump, a senior White House official told reporters in a background briefing that South Korea is not, in fact, a "laggard" on military burden sharing:

"South Korea in many respects is the model ally because they are spending somewhere in the order of 2.7% of their GDP on their defense. Burden sharing is always going to be part of the conversation with our allies. President Trump has made that clear, but we shouldn't view South Korea as somehow laggard on that front."

Why this matters: The senior White House official is directly contradicting Trump's long-running public statements — where he has frequently condemned South Korea for being a freeloader. This could preface a strategic shift for the administration. During the presidential campaign, Trump told CNN's Wolf Blitzer: "South Korea is a money machine but they pay us peanuts...South Korea should pay us very substantially for protecting them."

  • During Wednesday's briefing — a prelude to Moon's visit to the White House on Thursday, where he'll have cocktails and dinner with Trump — the senior White House official praised South Korea for paying an "enormous amount of money to help host U.S. troops in their country including through things like...the new base, south of Seoul, which 92% of that cost was shouldered by South Korea."

Since taking office, Trump has used far more bellicose rhetoric than his senior advisors — with the prominent exception of Steve Bannon — when it comes to South Korea:

  • Trump upset the South Koreans when he told Reuters in April he expected them to pay for the "billion dollar system," THAAD, to defend against North Korean missiles. Trump's national security adviser, H.R. McMaster, had to clean-up Trump's statement, assuring the South Koreans that "until any re-negotiation that the deal is in place, we will adhere to our word" to pay for the missile defense system.
  • Trump also told Reuters the Korean trade agreement was "a horrible deal, and we are going to renegotiate that deal or terminate it." In Wednesday's briefing the senior White House official used more diplomatic language — saying "I think they will have a friendly and frank discussion about the trade relationship."
  • The official did, however, specify the areas of tension on trade: "He will be, I think, forthright in terms of talking about things like U.S. autos and the fact that there are still some barriers to U.S. auto sales in Korea, certainly the enormous amount of steel that sometimes ends up surplus, Chinese steel that comes to the United States via South Korea."
Featured

Mattis, Haley claim White House warning to Syria prevented attack

Jacquelyn Martin and Andrew Harnik / AP

Both Defense Secretary Mattis and U.N. Ambassador Nikki Haley are claiming President Trump's warning to Syria over chemical weapons prevented an attack.

Mattis, while on his way to a NATO meeting in Brussels Wednesday told reporters: "It appears that they took the warning seriously." When asked repeatedly how he knows Syria heeded the warning he said simply, "they didn't do it," three times.

Haley on Capitol Hill Wednesday, via The Guardian: "Due to the president's actions, we did not see an incident…I would like to think that the president saved many innocent men, women and children."

Our thought bubble: Reports on what prompted the White House statement Monday night that Syria was preparing for a possible chemical attack have been vague and at times conflicting. With so little known about the would-be attack, it's hard to assess whether the warning changed the regime's calculus.

Featured

The story behind Trump's Medicaid argument

President Trump's rallying behind the Senate GOP's health care bill continued this afternoon as he tweeted that the bill actually increases Medicaid spending rather than cutting it:

Our thought bubble: The Senate bill would cut Medicaid spending by $772 billion over a decade from its levels under the Affordable Care Act. Some Republicans argue, as the the New York Times summed up yesterday, that health care spending under the ACA is dangerously out of control, so the Senate bill doesn't include "cuts," it simply increases Medicaid funding at a more reasonable rate.

Featured

McMaster lays out North Korea strategy

Susan Walsh / AP

Trump's National Security Advisor H.R. McMaster laid out the way the U.S. is thinking about the North Korea problem Wednesday in three main points:

  1. "The North Korea problem is not a problem between North Korea and the United States. It's a problem between North Korea and China — and the world."
  2. A positive gain in the last few months has been "Chinese leadership's recognition that China does have a great deal of control over that situation mainly through the powers of the economic…relationship" with North Korea. This seems to diverge from Trump's stance that China has tried to exert influence but fallen short.
  3. "Denuclearization of the peninsula is the only appropriate and acceptable" solution.

Read more from Axios' Expert Voices on what the U.S. can do about North Korea, here.

On NATO: McMaster affirmed Trump is "absolutely committed to" the mutual defense protocol, known as Article Five.

On Afghanistan: McMaster said the Taliban is taking advantage of the disconnect between military action and political action in Afghanistan. He noted the previous approach of saying "let's talk to you about a political solution…but we're leaving" made little sense to him. "How does that work?"

On Russia: McMaster said the U.S. needs more tools to confront Russia's destabilizing behavior towards the U.S., including in cyberspace.

On budget: McMaster dodged a question about USAID and State Department budget cuts.

Featured

New laptop inspections coming for U.S.-bound flights

Ted S. Warren / AP

Additional screening will soon be required before personal electronic devices (PEDs) larger than cell phones can be carried on to U.S.-bound flights, senior Department of Homeland Security officials announced Wednesday. The TSA and the State Department will also be involved in implementation.

The need for more security comes from the fact that terrorists continue to look at attacking commercial airlines as the "crown jewel," and are exploring new ways to conceal devices, DHS Secretary John Kelly said at the CNAS conference.

Why it matters: This move could have major commercial implications, but Kelly is pressing ahead because he places aviation in general, and the ability of terrorists to turn laptops into explosive devices in particular, at the top of his list of security concerns.

What to expect: As one senior DHS official put it, "if the PEDs [larger than a cellphone] are screened, they can fly. If they are not screened, they cannot fly." The officials would not discuss what the enhanced screenings will look like exactly, but added that DHS is calling for the use of next generation screening methods as well as K-9 assets. DHS is encouraging more airports to become pre-screening locations, which allows passengers to go through Customs and border security before boarding flights to the U.S., Kelly said.

If airline carriers choose to not implement these changes, the U.S. could suspend their flights to the U.S. and could not allow PEDs larger than cell phones on board at all. One DHS official said he believes every airport in the world would be able to implement these changes, however. The changes will affect 238 airports, 105 countries, and, on average, 2,000 flights per day.

Timeline: The DHS officials briefing reporters were vague about the implementation due to security reasons, noting the changes "could roll out this summer, absolutely." They ultimately claimed it was up to the airline carriers to get the changes implemented and that TSA and DHS officials stand ready to inspect the changes to approve the airlines' protocols.

The existing ban: The 10 airports in the Middle East that are already subject to a laptop ban can have those restrictions lifted if they comply with these new security measures. One DHS official clarified, "we're not rolling back those measures," but this gives those airports the opportunity to increase their security. (Those airports affected: Amman, Kuwait City, Cairo, Istanbul, Jeddah, Riyadh, Casablanca, Doha, Dubai, and Abu Dhabi.)

Featured

Trump's latest social media salvo against "fake news"

Alex Brandon / AP

President Trump has shared videos on his official Instagram account from Project Veritas, the controversial right-wing outlet known for its deceptively-edited videos, that purport to show CNN figures — including contributor Van Jones — dismissing the federal government's Russia investigation. Trump captioned the videos, "CNN is fake news."

Sarah Huckabee Sanders yesterday: "There's a video out there circulating right now — whether it's accurate or not, I don't know — but I would encourage everybody in this room, and frankly, everybody across the country to take a look at it."

Note of caution: Per the Washington Post, Project Veritas is known for utilizing practices considered unethical in mainstream journalism, including using false identities and deceptive editing. For example, one video features a CNN producer saying there is "no smoking gun" in the Russia investigation but fails to note that he produces health and medical stories for the network — and is based in Atlanta, away from the epicenters of CNN's politics coverage in Washington and New York.