Terry Gou resigns as Foxconn’s chairman to run for president of Taiwan

Terry Gou said at Foxconn’s annual general meeting today that he is leaving the electronics manufacturing giant as he prepares to run for president of Taiwan. Gou, who founded Foxconn (also known as Hon Hai Precision Industry Co.) 45 years ago and is also its biggest shareholder, will remain on the company’s board. Young Liu, the head of Foxconn’s semiconductor business, will succeed him as chairman and the company will also transition to a committee-directed management structure.

Gou first officially announced in April that he plans to resign as chairman to focus on his campaign for the nomination of Taiwan’s opposition party, the Kuomintang. If he succeeds against other KMT candidates, including Kaohsiung mayor Han Kuo-Yu, Gou will be challenging President Tsai Ing-wen, a member of the Democratic Progressive Party, for the election next January.

Foxconn (one of Apple’s biggest suppliers) is China’s largest private employer and the Kuomintang supports a closer relationship with the Chinese government, despite its stance that Taiwan is a rogue province. Gou’s ties to the country will be scrutinized during the campaign as he opposes Tsai and the DPP, advocates of Taiwan’s sovereignty. The issue is especially fraught after the recent large-scale demonstrations in Hong Kong against a bill that would have allowed extradition to China.

Last month Gou, who has never held political office before, tried to assuage critics by saying he has no plans to meet with Chinese President Xi Jinping after the head of Taiwan’s Mainland Affairs Council of the Executive Yuan, Chen Ming-Tung, claimed Gou had said Taiwan was part of China. Gou also said that during a recent meeting with Donald Trump he had asked the president of the United States to work on improving the relationship between all three countries.

Gou’s campaign has also been marred by other controversies, such as when he said “the harem should not meddle in politics” after his wife, Delia Tseng, objected to his candidacy. Gou later apologized for the remark.

Foxconn halts production lines for Huawei phones, according to reports

Huawei, the Chinese technology giant whose devices are at the center of a far-reaching trade dispute between the U.S. and Chinese governments, is reducing orders for new phones, according to a report in The South China Morning Post.

According to unnamed sources, the Taiwanese technology manufacturer Foxconn has halted production lines for several Huawei phones after the Shenzhen-based company reduced orders. Foxconn also makes devices for most of the major smart phone vendors including Apple and Xiaomi (in addition to Huawei).

In the aftermath of President Donald Trump’s declaration of a “national emergency” to protect U.S. networks from foreign technologies, Huawei and several of its affiliates were barred from acquiring technologies from U.S. companies.

The blacklist has impacted multiple lines of Huawei’s business including it handset manufacturing capabilities given the company’s reliance on Google’s Android operating system for its smartphones.

In May, Google reportedly suspended business with Huawei, according to a Reuters report. Last year, Huawei shipped over 200 million handsets and the company had a stated goal to become the world’s largest vendor of smartphones by 2020.

These reports from The South China Morning Post are the clearest indication that the ramifications of the U.S. blacklisting are beginning to be felt across Huawei’s phone business outside of China.

Huawei was already under fire for security concerns, and will be forced to contend with more if it can no longer provide Android updates to global customers.

Contingency planning is already underway at Huawei. The company has built its own Android -based operating system, and can use the stripped down, open source version of Android that ships without Google Mobile Services. For now, its customers also still have access to Google’s app store. But if the company is forced to make developers sell their apps on a siloed Huawei-only store, it could face problems from users outside of China.

Huawei and the Chinese government are also retaliating against the U.S. efforts. The company has filed a legal motion to challenge the U.S. ban on its equipment, calling it “unconstitutional.”  And Huawei has sent home its American employees deployed at R&D functions at its Shenzhen headquarters.

It has also asked its Chinese employees to limit conversations with overseas visitors, and cease any technical meetings with their U.S. contacts.

Still, any reduction in orders would seem to indicate that the U.S. efforts to stymie Huawei’s expansion (at least in its smartphone business) are having an impact.

A spokesperson for Huawei U.S. did not respond to a request for comment.

China’s Tesla wannabe Xpeng starts ride-hailing service

There’re a lot of synergies between electric vehicles and ride-hailing. Drivers are able to save more steering an EV compared to a gas vehicle. Environmentally conscious consumers will choose to hire an electric car. And EVs are designed with better compatibility with autonomous driving, which is expected to hit the public road in the coming decades.

Indeed, Tesla is eyeing to launch its first robotaxis in 2020 as part of a broader ride-sharing scheme. Over in China where Tesla has a few disciples, EV startup Xpeng Motors, also known as Xiaopeng, just started offering a ride-hailing app powered by its own electric fleets.

Screenshot of Xpeng’s ride-hailing app ‘Youpeng Chuxing’

The company is the latest in a clutch of carmakers flocking to introduce their own ride-hailing platforms. Didi Chuxing’s massive loss has not deterred their ambitious plans. Rather, this may be a prime time to crack a market long dominated by Didi, which is prioritizing safety over growth following two high-profile incidents and a series of new government regulations.

Xpeng’s ride-hailing app is currently only available in a limited area within Guangzhou where it’s headquartered, shows a test conducted by TechCrunch’s on Thursday.

The company’s coffer is probably large enough to fund its newly minted venture. It’s one of the most-backed EV upstarts alongside rival Nio, which raised $1 billion from a New York initial public offering last year.

Xpeng has to date banked $1.3 billion from Alibaba, IDG Capital, Foxconn, UCAR and other big-name investors, according to disclosed funding data collected by Crunchbase. Founder He Xiaopeng, a serial entrepreneur who made a fortune selling his mobile browser company UCWeb to Alibaba, told CNBC in March that Xpeng may also try an IPO down the road but wants to focus on building the business first.

When it comes to sources of inspiration for the business, Xpeng told local media that it sees Tesla as its “benchmark”. The company has never been shy about its admiration for its American peer. In an interview with Quartz in 2018, He said one of the reasons he founded Xpeng “was because Elon Musk made Tesla’s patents available. It was so exciting.”

But the affection might have gone a little far. In March, Tesla sued an ex-employee for allegedly stealing Autopilot’s proprietary technology before taking a job at Xpeng.

Xpeng started shipping to its first owners in March and was founded five years ago against the backdrop of Beijing’s aggressive electric push in the transportation sector. The sprawling city Shenzhen, just north to Hong Kong, has turned all its public buses and almost all of its taxis electric.

Sharp will resume selling its smart TVs in the US this year

Good news for U.S. consumers, the smart TV market is about to get more competitive after Sharp announced plans to resume selling TVs in America before the end of this year.

The Japanese firm quit the U.S. in 2015 when crumbling finances threatened its very existence. It was bailed out by Hon Hai Precision — the Taiwanese manufacturing firm better known as Foxconn — in a $3.5 billion deal that attracted controversy inside Japan, where a home-backed agreement had been preferred by many. Still, under new management, it is seeking expansion to continue its rebound.

Sharp sold its license to China’s Hisense when it exited, and this week it said that it has struck a deal to regain it, although the terms have not been disclosed.

That relationship is certainly frosty: Sharp sued the Chinese firm, which is state-owned, alleging that it had put Sharp’s badge on sub-quality products. The suit was dropped at the beginning of last year. Sharp said at the time that it intended to return to the North American market itself, and now it has the deal it required.

Sources told Reuters that the firm may also be considering other markets in the Americas beyond the U.S, Hisense also acquired its rights for that region, but the U.S. market is obviously the headline expansion.

For now, Sharp said it will bring TVs to market that combine 5G, AIoT — a buzzy acronym that stands for ‘artificial intelligence of things’ — and 8K/4K picture quality. We’ll have to wait for more on what the exact product line-up will look like.

Terry Gou will resign as Foxconn’s chairman to run for president of Taiwan

Foxconn chairman Terry Gou officially announced on Wednesday that he will run for president of Taiwan. Gou will step down from leading the company (also known as Hon Hai Precision Industry Co. Ltd.), one of Apple’s most important manufacturers, in order to campaign for the nomination of the Kuomintang, the pro-China opposition party.

Taiwan’s economy and complicated relationship with China will be at the heart of the 2020 presidential campaign, as incumbent Tsai Ing-wen defends her position against not only candidates from the Kuomintang and other parties, but also a challenger from her own party, the Democratic Progressive Party, William Lai, who entered the race last month.

Gou earlier said that his presidential aspirations had been blessed by Mazu, the sea goddess who is one of the most important Taoist and Buddhist deities. Gou founded Foxconn in 1974 and has held no political office, but his campaign will be helped by his business reputation and reported $7 billion net worth.

Gou’s lack of government experience may be balanced in the mind of voters by his relationships with Donald Trump and China’s government. Foxconn has committed to building a $10 billion factory in Wisconsin. Even though Taiwan’s sovereignty is not recognized by China, which views the country as a rogue province, Foxconn has more plants there than in any other country.

Hackers publish personal data on thousands of US police officers and federal agents

A hacker group has breached several FBI-affiliated websites and uploaded their contents to the web, including dozens of files containing the personal information of thousands of federal agents and law enforcement officers, TechCrunch has learned.

The hackers breached three sites associated with the FBI National Academy Association, a coalition of different chapters across the U.S. promoting federal and law enforcement leadership and training located at the FBI training academy in Quantico, VA. The hackers exploited flaws on at least three of the organization’s chapter websites — which we’re not naming — and downloaded the contents of each web server.

The hackers then put the data up for download on their own website, which we’re also not naming nor linking to given the sensitivity of the data.

The spreadsheets contained about 4,000 unique records after duplicates were removed, including member names, a mix of personal and government email addresses, job titles, phone numbers and their postal addresses. The FBINAA could not be reached for comment outside of business hours. If we hear back, we’ll update.

TechCrunch spoke to one of the hackers, who didn’t identify his or her name, through an encrypted chat late Friday.

“We hacked more than 1,000 sites,” said the hacker. “Now we are structuring all the data, and soon they will be sold. I think something else will publish from the list of hacked government sites.” We asked if the hacker was worried that the files they put up for download would put federal agents and law enforcement at risk. “Probably, yes,” the hacker said.

The hacker claimed to have “over a million data” [sic] on employees across several U.S. federal agencies and public service organizations.

It’s not uncommon for data to be stolen and sold in hacker forums and in marketplaces on the dark web, but the hackers said they would offer the data for free to show that they had something “interesting.”

Unprompted, the hacker sent a link to another FBINAA chapter website they claimed to have hacked. When we opened the page in a Tor browser session, the website had been defaced — prominently displaying a screenshot of the encrypted chat moments earlier.

The hacker — one of more than ten, they said — used public exploits, indicating that many of the websites they hit weren’t up-to-date and had outdated plugins.

In the encrypted chat, the hacker also provided evidence of other breached websites, including a subdomain belonging to manufacturing giant Foxconn. One of the links provided did not need a username or a password but revealed the back-end to a Lotus-based webmail system containing thousands of employee records, including email addresses and phone numbers.

Their end goal: “Experience and money,” the hacker said.

Bike sharing pioneer Mobike is retreating to China

In a telling sign of the state of bike sharing, Mobike, a once red-hot startup that attracted billions in investment capital, is closing down all international operations and putting its sole focus on China.

On Friday, Mobike laid off its operations teams in APAC, which entailed more than 15 full-time employees and many more contractors and third-party agency staff across Singapore, Malaysia, Thailand, India and Australia. Those affected were told the company will “ramp down” the regional business without being provided specific reasons for the rollback, five people familiar with the matter told TechCrunch.

These layoffs are a key step towards the eventual goal of closing Mobike’s international footprint since the Asia Pacific region accounts for the majority of its non-China business. More staff cuts are impending outside Asia that can include Europe and the Americans, according to two sources. Eventually, Mobike will only be operational in its native China, which accounts for the majority of its overall global business.

The change of strategy encapsulates the struggle that Chinese bike sharing companies have experienced over the past year. Mobike was arguably the most successful from the camp. Before it was ultimately bought by Chinese delivery giant Meituan for $2.7 billion 11 months ago, it had raised over $900 million from investors such as Tencent, Foxconn, Hillhouse Capital and Warburg Pincus as bike-sharing became the hot topic in 2017. Ultimately, though, Mobike wasn’t able to find a sustainable business model amid tough competition and tight financials.

mobike

Photo source: Mobike

Employees were taken aback by Friday’s announcement as they had been under the impression that Mobike’s prospects were bright and there had not been issues with salaries or other financial concerns. In Singapore, specifically, the bike app claims to be the top player and is working closely with the government to make the city-state greener.

“I was shocked. The business is doing well from my perspective,” one source told TechCrunch. “But just because one country does well doesn’t mean the whole region will survive. Mobike ran a lot of analysis on profits and losses in the [overseas] region and came to the conclusion that there is no way it would turn profitable.”

Things were rosier just a year ago. When Meituan, the one-stop app for neighborhood services in China, acquired Mobike, the buyout was widely seen as a triumph for the young startup as its Chinese peer Ofo suffered mounting financial pressures standing as an independent company. Ofo started to phase out its international operations last year and was reportedly preparing for bankruptcy recently.

Before long, Meituan also started to show its restraint over the mobility segment. In an effort to cut costs, the Hong Kong-listed firm focusing on food delivery and hotel booking announced it would pause expansions on dockless bikes and car-hailing. Its bike unit is also facing growing competition from Hellobike, which is Alibaba’s latest attempt to crack China’s two-wheel transport industry.

Despite the hurdles, Mobike’s APAC employees told TechCrunch that they had believed the overseas business would stick it out as they had generated “a lot of cost-saving and progresses” in recent months after being assigned to boost the company’s operational efficiency.

mobike 3

Photo source: Mobike

Those affected won’t have much time to ponder but feel “unbalanced” and “upset” about the company’s “one-sided” decision. TechCrunch understands that staff weren’t given a chance to negotiate and most will leave by mid-April with a limited number of “key” employees asked to stay until the “ramping down” is completed. Severance packages vary on people’s termination dates, while some employees received no compensation altogether as the notice had arrived before the 30-day period required by the contract.

Meituan’s decision to close down the regional business has also come as a risky move for the company. In Singapore, Mobike’s largest market outside China, bike-sharing companies are required to file an exit plan with the government before they pull the trigger. Mobike has not informed the Singapore Land Transport Authority of its layoff as of Friday, according to two sources, although it has been in talks with the transportation regulator regarding a potential shutdown. Mobike told employees to keep news of the job cuts private before it announces them officially to the LTA.

Meituan declined to comment for this story. The company is scheduled to report earnings on Monday which may shed more light on the situation.

Urban unicorn renewal

Three cities, three dead urban unicorn renewal projects.

In just the past few days, we’ve had Foxconn renege on Wisconsin, Amazon renege on NYC and GE renege on Boston. Each followed the Anna Karenina principle that every unhappy economic development deal is unhappy in its own way: for Foxconn, it was trade tariffs and slowing iPhone sales; for Amazon, it was populist protests plus the usual NYC corruption; for GE, it was the reality of looking at a mirror and finding that you’re staring at a dumpster fire.

Yet, there are eerie similarities, other than the fact that I have practically lived next door to every single one of these projects (if you call Wisconsin next door to the better-looking state of Minnesota).

In each case, there was the perfect alchemy of the modern urban unicorn renewal plan. A well-known but sordid tech company paints a picture of revolutionizing a city’s economic base. They splash huge numbers on the board, or at least a coveted status symbol. Seeing their legacies secured, politicians latch on to these projects, negotiating with alacrity and without due process because — wow — the company with suicide nets or the company where employees pee in bottles (undercover!) is coming to town.

I get it. And look, if these projects panned out, they would indeed be great for their home cities. As I wrote about Amazon HQ2 a few weeks ago:

These spillover effects are at the heart of agglomeration economies. With Amazon’s arrival, more software engineers will locate to NYC. They will start companies, join other tech firms and expand the vitality of the community. As Edward Glaeser argues convincingly in his book The Triumph of the City, density of talent matters enormously for the success of the city. Amazon thickens the market for tech talent, and that is a huge win for both NYC and DC.

Yet, these projects rarely work out, and behind this all is the plague of Silicon Everywhere. As I wrote four years ago:

There are many commentators who argue that there is a bubble in Silicon Valley today. They may or may not be right, but there is certainly a bubble in places named after the preeminent global tech ecosystem.

Silicon Border. Silicon Hills. Silicon Steppe. Silicon Prairie. Silicon Roundabout. Silicon Gulf. Silicon Avenue. Silicon Canal. Silicon Alley. Silicon Beach. Silicon Forest. Philadelphia has a groaner of a region with Philicon Valley (whoever invented this should be banished from marketing for five years or forced to market Path).

And so we got “Wisconn Valley,” which actually is a brilliant fusion of Foxconn, Silicon and Wisconsin that now has its very own government homepage. GE was going to restart Boston’s tech scene, except the 800 jobs in its headquarters office were predominantly accountants and lawyers, which of course is where the real innovation of any company takes place.

These silicon dreams need to be crushed, beaten, stamped out and destroyed. So should these mega-project economic development deals, which always seem to go through a cycle from euphoria to lassitude.

In their wake, tech leaders should be encouraging a culture of bottoms-up economic development. Mayors should partner with local startups to encourage the growth of small companies and then coordinate pathways to help them succeed. Economic development money should turn into seed capital, boot camp credits, university research transfer grants and a whole lot more options for small-scale — human-scale — interventions. The unicorn urban renewal project is dead, but it always has been.

Welcome to the Extra Crunch Daily

Image via Flickr by Prayitno used under Creative Commons

Assuming you haven’t unsubscribed yet, welcome to the new Extra Crunch Daily newsletter, which is stochastically delivered to you “daily” depending on the misery index of my morning commute courtesy of NY Governor Andrew Cuomo.

We have been A/B-ing this format a bit over the past few months, and have talked about the future of geoengineering, power politics of GPS, societal resilience startups, the disappearing Form D filing, Softbank’s debt obsession, the internet’s transformation into a nation state and why TechCrunch’s parent company is … well, I shouldn’t say that, lest I kick that damn hornet’s nest again.

This newsletter is about context, big ideas and arguments. It’s also about touching on any of the 35-odd spaces that I seem to cover in a given day, so it’s basically professional ADHD in written format. I write when I am in that liminal space between curiosity and anger, that “Why??” which follows “What!!!”

I’m joined on this project by Arman Tabatabai, our intrepid research consultant from New York. He’s always willing to learn a completely new subject because I had a dream last night (Monday morning at 8am: “so what do you know about geoengineering?”), and for that he’s amazing and this newsletter couldn’t go on without him.

Patreon EC-1 and the challenge of private companies

We debuted Extra Crunch this week with the launch of Patreon’s EC-1. I was inspired by the S-1 that companies file with the SEC when going public and thought: “why don’t we do that, but for private companies.”

A couple of hundred hours later, and that’s basically what we got with this first edition. With Patreon, TechCrunch’s media columnist Eric Peckham wrote a bonanza of analysis on the company’s founding story, product, business, thesis and competition, and he even threw in a reading guide so you can read everyone else’s coverage of the company. There are pretty generous pours of these articles in front of the paywall too, so do share them with colleagues.

The hope is that these projects can spark the imagination, give ideas around strategies and tactics that might work in a startup context and, of course, help evaluate the future of the company we are holding under the microscope.

We have three other companies in the hopper right now coming up in this series. Have ones you want to see covered? Think there could be an interesting deep dive we are missing? Hit reply and tell me — right now — or send me an email at [email protected].

Obsessions

This is an open agenda that I use to track what the hell I am writing about on a regular basis.

  • We are going to be talking India here, focused around the book “Billionaire Raj” by James Crabtree.
  • We have a lot to catch up on in the China world when the EC launch craziness dies down. Plus, we are covering The Next Factory of the World by Irene Yuan Sun.
  • Societal resilience and geoengineering are still top-of-mind.
  • Some more on metrics design and quantification.

Thanks

To every member of Extra Crunch: thank you. You allow us to get off the ad-laden media churn conveyor belt and spend quality time on amazing ideas, people and companies. If I can ever be of assistance, hit reply, or send an email to [email protected].

This newsletter is written with the assistance of Arman Tabatabai from New York.

Foxconn says Wisconsin factory plans are back on after talk with Trump

It seems Foxconn’s plans for a $10 billion Wisconsin plant are back on. After a couple of years of back and forths, the manufacturing giant says it’s recommitting to plans for a plant in the upper Midwest. A statement today cited a phone call between chairman/founder Terry Gou and Donald Trump.

“After productive discussions between the White House and the company, and after a personal conversation between President Donald J. Trump and Chairman Terry Gou, Foxconn is moving forward with our planned construction of a Gen 6 fab facility, which will be at the heart of the Wisconsin Valley Science and Technology Park,” the statement reads. “This campus will serve both as an advanced manufacturing facility as well as a hub of high technology innovation for the region.”

Earlier this week, the company noted that it was reconsidering its plans for the TV plant, noting that it was more interested in hiring researchers and engineers than the manufacturing jobs that were initially noted. “In terms of TV, we have no place in the U.S.,” Gou said at the time. “We can’t compete.”

An influx of manufacturing jobs would be a win for Trump at a vital time, as support has eroded over the country’s longest government shutdown and tariffs have made for icy relations with China. As CNBC notes, state government has sweetened the deal considerably with $4 billion in tax breaks.

Initial plans for the 20 million-square-foot campus, unveiled at a White House event in 2017, noted that it would bring 13,000 jobs — a nice bump as the U.S. has struggled to maintain manufacturing facilities.

Details, however, are still pretty thin.

“Our decision is also based on a recent comprehensive and systematic evaluation to help determine the best fit for our Wisconsin project among TFT technologies,” the statement continues. “We have undertaken the evaluation while simultaneously seeking to broaden our investment across Wisconsin far beyond our original plans to ensure the company, our workforce, the local community, and the state of Wisconsin will be positioned for long-term success.”

Nvidia’s limited China connections

Another round of followups on Nvidia, and then some short news analysis.

TechCrunch is experimenting with new content forms. This is a rough draft of something new – provide your feedback directly to the author (Danny at [email protected]) if you like or hate something here.

Nvidia / TSMC questions

Following up on my analyses this week on Nvidia (Part 1, Part 2) , a reader asked in regards to Nvidia’s risk with China tariffs:

but the TSMC impact w.r.t. tariffs doesn’t make sense to me. TSMC is largely not impacted by tariffs and so the supply chain with NVIDIA is also not impacted w.r.t. to TSMC as a supplier. There are many alternate wafer suppliers in Taiwan.

This is a challenging question to definitively answer, since obviously Nvidia doesn’t publicly disclose its supply chain, or more granularly, which factories those supply chain partners utilize for its production. It does, however, list a number of companies in its 10-K form as manufacturing, testing, and packaging partners, including:

To understand how this all fits together, there are essentially three phases for bringing a semiconductor to market:

  1. Design – this is Nvidia’s core specialty
  2. Manufacturing – actually making the chip from silicon and other materials at the precision required for it to be reliable
  3. Testing, packaging and distribution – once chips are made, they need to be tested to prove that manufacturing worked, then packaged properly to protect them and shipped worldwide to wherever they are going to be assembled/integrated

For the highest precision manufacturing required for chips like Nvidia’s, Taiwan, South Korea and the U.S. are the world leaders, with China trying to catch up through programs like Made in China 2025 (which, after caustic pushback from countries around the world, it looks like Beijing is potentially scrapping this week). China is still considered to be one-to-two generations behind in chip manufacturing, though it increasingly owns the low-end of the market.

Where the semiconductor supply chain traditionally gets more entwined with China is around testing and packaging, which are generally considered lower value (albeit critical) tasks that have been increasingly outsourced to the mainland over the years. Taiwan remains the dominant player here as well, with roughly 50% of the global market, but China has been rapidly expanding.

U.S. tariffs on Chinese goods do not apply to Taiwan, and so for the most part, Nvidia’s supply chain should be adept at avoiding most of the brunt of the trade conflict. And while assembly is heavily based in China, electronics assemblers are rapidly adapting their supply chains to mitigate the damage of tariffs by moving factories to Vietnam, India, and elsewhere.

Where it gets tricky is the Chinese market itself, which imports a huge number of semiconductor chips, and represents roughly 20% of Nvidia’s revenues. Even here, many analysts believe that the Chinese will have no choice but to buy Nvidia’s chips, since they are market-leading and substitutes are not easily available.

So the conclusion is that Nvidia likely has maneuvering room in the short-term to weather exogenous trade tariff shocks and mitigate their damage. Medium to long-term though, the company will have to strategically position itself very carefully, since China is quickly becoming a dominant player in exactly the verticals it wants to own (automotive, ML workflows, etc.). In other words, Nvidia needs the Chinese market for growth at the exact moment that door is slamming shut. How it navigates this challenge in the years ahead will determine much of its growth profile in the years ahead.

Rapid fire analysis

Short summaries and analysis of important news stories

Saudi Arabia’s Crown Prince Mohammed bin Salman. FETHI BELAID/AFP/Getty Images

US intelligence community says quantum computing and AI pose an ’emerging threat’ to national security – Our very own Zack Whittaker talks about future challenges to U.S. national security. These technologies are “dual-use,” which means that they can be used for good purposes (autonomous driving, faster processing) and also for nefarious purposes (breaking encryption, autonomous warfare). Expect huge debates and challenges in the next decade about how to keep these technologies on the safe side.

Saudi Arabia Pumps Up Stock Market After Bad News, Including Khashoggi Murder – A WSJ trio of reporters investigates the Saudi government’s aggressive attempts to shore up the value of its stock exchange. Exchange manipulation is hardly novel, either in traditional markets or in blockchain markets. China has been aggressively doing this in its stock exchanges for years. But it is a reminder that in emerging and new exchanges, much of the price signaling is artificial.

A law firm in the trenches against media unions – Andrew McCormick writes in the Columbia Journalism Review how law firm Jones Day has taken a leading role in fighting against the unionization of newsrooms. The challenge of course is that the media business remains mired in cutbacks and weak earnings, and so trying to better divide a rapidly shrinking pie doesn’t make a lot of sense to me. The future — in my view — is entrepreneurial journalists backed up by platforms like Substack where they set their own voice, tone, publishing calendar, and benefits. Having a close relationship with readers is the only way forward for job security.

At least 15 central banks are serious about getting into digital currency – Mike Orcutt at MIT Technology Review notes that there are a bunch of central banks, including China and Canada. What’s interesting is that the trends backing this up including financial inclusion and “diminishing cash usage.” Even though blockchain is in a nuclear winter following the collapse of crypto prices this year, it is exactly these sorts of projects that could be the way forward for the industry.

What’s next

More semiconductors probably. And Arman and I are side glancing at Yelp these days. Any thoughts? Email me at [email protected].

This newsletter is written with the assistance of Arman Tabatabai from New York