No place is safe from failing US infrastructure

In the face of rising homelessness, increasing crime and inadequate public transit in San Francisco, many tech influencers are pulling up stakes to geographies that offer a seemingly more welcome climate to conduct business and make investments. But the ongoing disaster in Texas makes one cold truth very clear: No place is safe from America’s failure to invest in infrastructure or take climate change seriously.

The shock of seeing the cradle of America’s energy industry crippled by its inability to prepare its own power grid for the “once in a century storms” that increasingly look to be coming every 10 years (a phenomenon that Texas Tech climate scientist Katherine Hayhoe calls “global weirding”) underscores a point that should have been plain years ago: By refusing to invest in adequate public infrastructure, the country’s leadership has failed to perform the basic duty of protecting the health and safety of its citizens.

And the shocks that result from these investment failures will affect anyone without the means or desire to leave the country entirely.

Decline

This failure reaches from the woefully inept response to the COVID-19 pandemic which is on track to kill half a million people in the U.S., to the millions across the country who faced a week without adequate heat, water and sometimes even food or shelter from the bitter cold bearing down on the nation.

The catastrophe also crystallizes the inanity of many of the issues currently consuming the technology community that holds itself in such high esteem as a pillar of rational discourse and as the architects of America’s future.

The investors, who decried California’s broken, over-regulated dystopia, are now trying to change their ZIP codes for broken, under-regulated dystopias.

The problem is that they’re moving without confronting the substantive issues that make these regions unlivable for large portions of the population. And that’s caused by a historic failure to engage in any politics that isn’t directly tied to the bottom line of the corporations these entrepreneurs have created or their investors have financed.

As Michael Solana, a vice president at Founders Fund, noted in a great piece on his Pirate Wires Substack:

The truth is, had tech workers actually assumed a significant measure of political influence, and led in local politics, San Francisco would today be one of the greatest cities in the world. But not only was such political influence not achieved, it was never attempted. Throughout the most recent technology boom of the last fifteen years, there has been almost no meaningful engagement in local politics from the industry.

Not that the deregulatory streak prized by many in the tech community would have solved Texas’s problem or Florida’s (California is a different kind of disaster).

In Texas, lack of regulations around construction and the state’s independent energy grid have made it more vulnerable to catastrophic climactic events — whether that’s 2017’s Hurricane Harvey or this year’s deadly winter storms, which killed Texans in their homes, vehicles and backyards.

California can claim that it’s grid failed by fewer megawatts than Texas’s — but the overall result from the natural disasters, blackouts, billions of dollars lost and scores of deaths are much the same.

Surveying this broken world, many in the tech community have decided that the best result is to try the same thing somewhere else. But they’re going to face many of the same problems in Florida or Texas.

Homeowners concerned about construction lowering the value of their properties? Check. Rampant income inequality? Check. Reluctance to put in effective oversight that could ensure failures don’t occur? Check.

The difference those states offer is lower taxes for the wealthy, which means more of an ability to pay privately for the services to ensure that the burdens of climate change don’t fall on these billionaires in their new waterfront homes.

The through-line in all of this is a cynicism and abdication of responsibility papered over by the thinnest lips paying the smallest amount of service to solving climate problems.

One step forward, eleventy-seven back

Don’t think that I’m merely being cynical about what some tech companies are doing when confronted with the rising catastrophe of climate change and decrepit American infrastructure.

Why else would Elon Musk commit $100 million to a carbon capture prize while his publicly traded energy company invests $1.5 billion in Bitcoin? Some analysts estimate that the deal and the resulting skyrocketing price of the cryptocurrency will erase all of the gains in emissions offsets from the use of every Tesla ever made.

“The immediate impact of Tesla’s buy is that the Bitcoin price went up by more than $5,000. We can estimate this will lead to the network consuming an additional 34 TWh of electrical energy per year. That’s about the size of a country like Denmark’s total annual electrical energy requirement. We can also estimate this will result in an additional 17 million metric tons of CO2 being put out by the network every year,” wrote Alex de Vries, the founder of the cryptocurrency analysis site, Digiconomist. “According to Tesla, the amount of CO2 saved by Tesla vehicles adds up to 3.7 million tons. The amount of additional CO2 produced by the Bitcoin network, as a result of Tesla’s buy, would thus amount to more than four times the amount of CO2 saved by all their vehicles to date.”

Some argue that Bitcoin mining uses a disproportional amount of renewable energy to produce the cryptocurrency, but that argument is complicated by the seasonal sources of some renewables that miners (especially Chinese miners who produce the bulk of Bitcoin) rely on for power.

Tesla could potentially make more money from that investment than it has from the sale of cars and  has definitely boosted the emissions spewing mining processes that make Bitcoin’s digital printers go brrrrr.  All of which makes the company’s commitment to combating climate change look a bit specious.

Some hope?

The most frustrating thing about all of this is that entrepreneurs and investors are working on solutions to the climate crisis. Technologies exist that can help address some of the issues that confront these cities. And there’s billions to be made solving something that is very much an existential problem.

Unfortunately unlocking those billions in a timeframe that’s viable for society’s survival is going to require policy movement and the type of engagement that many tech investors would rather hand off to someone else as they move to more temperate, and tax advantaged, climates.

With the waters rising and the temperatures dropping, maybe those tax savings can buy a nice microgrid for power or a bigger boat. Given the projections that put the cost of climate change at nearly half a trillion dollars annually by the end of the century, it’d have to be a pretty big boat.

 

Will the Texas winter disaster deter further tech migration?

Austin is known for its usually mild winters. But on February 12, a winter storm hit the state — leading to over a week of freezing temperatures. This has resulted in a statewide disaster with millions of Texas residents losing power or water, or both.

It’s too early to tell the exact toll this has all taken in loss of life, property damage and economic activity. But it’s clear that this disaster is, and will continue to be, devastating on many levels. Austin-area hospitals even lost water this week, as an indication of how bad things have been.

Since last Thursday, my own household lost power and got it back multiple times. On February 17, we lost water, with no idea of when it will be restored. I realize there are many worse off than me, so I’ll spare you the pity party, but it’s definitely been a humbling experience. Boiling snow/ice for toilet water and rationing the little bottled water we had left with fear of frozen/bursting pipes. At least we have been warm the past couple of days, as many still don’t have power.

Meanwhile, over the past few months (and years, really), Austin has been making headlines for other news — namely the fact that so many tech companies, founders (ahem, Elon) and investors are either moving their headquarters here (Oracle), building significant factories (Tesla) or offices (Apple, Google, Facebook) here, or are thinking about relocating entirely.

The lack of state income taxes has been a big draw, as well as the housing/land/office prices that are affordable when compared to those in the Bay Area. This is nothing new, but only accelerated as the pandemic has encouraged/forced more remote work.

Ironically, some of the very things that have led to the state being more attractive to companies have also contributed to the crisis: Fewer taxes means less money for infrastructure, for one.

But it goes beyond that. Many other states have had freezing cold temperatures without the loss of power and water that Texas is currently experiencing. As The Washington Post reported earlier this week, the state’s choice to deregulate electricity led to “a financial structure for power generation that offers no incentives to power plant operators to prepare for winter. In the name of deregulation and free markets, critics say, Texas has created an electric grid that puts an emphasis on cheap prices over reliable service.”

Even Elon shared his disappointment on Twitter:

It’s fair to say Texas has attracted widespread criticism of its handling of this new crisis — both in terms of its lack of preparation and mismanagement (Sen. Cruz, we’re looking at you). But are the events of the past week going to take away some of the shine on Austin as a potential relocation destination for tech and investors? Will this deter people from wanting to move here? Isn’t it also ironic that some folks who didn’t want to move here due to the scorching summer temperatures are now also slamming the city/state for the impacts of a major winter storm?

So I did what many other enterprising tech reporters might do in this situation, and took to Twitter. The results were pretty much as expected — varied and passionate on either side.

There were many tweets from Austinites who defended their city and praised how its residents have come together during crises:

Then there were some tweets from people who lived here but are disgusted and disappointed:

There were also some tweets from others who said they were so turned off they’d never contemplate moving to Texas or that they were dismayed by the lack of preparation:

And there were those who don’t live here but scoffed at the notion that this was enough to keep people away, while others pointed out that natural disasters happen all over:

Then there were those who joked that the disaster was engineered as a ploy to “keep California people away,” or at least might have that effect:

I have lived on all three coasts — East, West and Gulf. There are pluses and minuses to each. This likely is enough of a deterrent to keep people away. But I will say that the state could — and should — have been more prepared when it decided to deregulate electricity. I am heartbroken at all the suffering people in the city and state are dealing with and for now, just want to see things get back to “normal” as soon as possible so the only crisis we’re dealing with is the COVID-19 pandemic. Never thought we’d look back fondly on those days.

Here’s to hoping that migration of techies can build solutions that could maybe help prevent similar disasters in the future.

For the first time the US DOT is carving out budget for climate and environmental justice projects

As part of the grant-making associated with the U.S. Department of Transportation’s Infrastructure for Rebuilding America program, the agency will for the first time carve out some of that program’s $889 million budget for projects addressing climate change and environmental justice.

The projects will be evaluated on whether they were planned as part of a comprehensive strategy to address climate change, or whether they support strategies to reduce greenhouse gas emissions such as deploying zero-emission-vehicle infrastructure or encouraging shifts in modes of transportation or vehicle miles traveled, the agency said in an announcement.

“As we work to recover and emerge from this devastating pandemic stronger than before, now is the time to make lasting investments in our nation’s infrastructure,” said Secretary Pete Buttigieg, in a statement. “We are committed to not just rebuilding our crumbling infrastructure, but building back in a way that positions American communities for success in the future—creating good paying jobs, boosting the economy, ensuring equity, and tackling our climate crisis. The INFRA grant program is a tremendous opportunity to help achieve these goals.

Racial equity will also be considered, according to the agency’s announcement. With requirements including equity-focused community outreach and projects designed to benefit underserved communities privileged, along with projects that are located in opportunity, empowerment, or promise zones or choice neighborhoods.

The new programs show just how quickly federal dollars could be made available to startups that are looking at electrification and provide more strength to the tailwinds already propelling the electric vehicle industry — and its attendant charging networks forward.

Large infrastructure projects could receive grants of $25 million or more while small projects must have grant requirements that meet a minimum threshold of at least $5 million, according to the DOT.

Eligible project costs could include: reconstruction, rehabilitation, acquisition of property (including land related to the project and improvements to the land), environmental mitigation, construction contingencies, equipment acquisition, and operational improvements directly related to system performance.

Opportunities for applications are going to be open through Friday, March 19.

Big data VC OpenOcean hits $111.5M for third fund, appoints Ekaterina Almasque to GP

OpenOcean, a European VC which has tended to specialise in big data-oriented startups and deep tech, has reach the €92 million ($111.5 million) mark for its third main venture fund, and is aiming for a final close of €130 million by mid-way this year. LPs in the new fund include the European Investment Fund (EIF), Tesi, pension funds, major family offices and Oxford University’s Corpus Christi College.

Ekaterina Almasque — who has already led investments in IQM (superconducting quantum machines) and Sunrise.io (multi-cloud hyper-converged infrastructure) and is leading the London team and operations for the firm — has been appointed as general partner. Before joining, Almasque was a managing director at Samsung Catalyst Fund in Europe, led investments in Graphcore’s processor for Artificial Intelligence, Mapillary’s layer for rapid mapping and AIMotive’s autonomous driving stack.

The enormous wealth of data in the modern world means the next generation of software is being built at the infrastructure. Thus, the fund said it would invest primarily at the Series A level with initial investments of €3 million to €5 million, across OpenOcean’s principle areas of artificial intelligence, application-driven data infrastructure, intelligent automation and open source.

OpenOcean’s team includes Michael “Monty” Widenius, the “spiritual father” of MariaDB, and one of the original developers of MySQL, the predecessor to MariaDB; Tom Henriksson, who invested in MySQL and MariaDB; as well as Ralf Wahlsten and Patrik Backman.

Tom Henriksson, general partner at OpenOcean, commented: “Ekaterina… brings an immense amount of expertise to the team and exemplifies the way we want to support our founders. Fund 2020 is an important step for OpenOcean, with prestigious LPs trusting our approach and our knowledge, and believing in our ability to identify the very best data solutions and infrastructure technologies in Europe.”

Almasque said: “The next five years will be critical for digital infrastructure, as breakthrough technologies are currently being constrained by the capabilities of the stack. Enabling this next level of infrastructure innovation is crucial to realising digitisation projects across the economy and will determine what the internet of the future looks like. We’re excited by the potential of world-leading businesses being built across Europe and are looking forward to supporting the next generation of software leaders.”

Speaking to TechCrunch she added: “It’s very rare to find such a VC so deep in the stack which also invested in one of the first unicorns in Europe and really built the open source ecosystem globally. So for me, this was absolutely an interesting team to join. And what OpenOcean was doing since inception in 2011 was very unique among pioneering ecosystems, such as big data analytics… and it remains very pioneering, pushing the frontiers in artificial intelligence and now quantum computing. This is what really attracts me, and I think there is a very, very big future.”

In an interview Henriksson told me: “What we are seeing is that our economy is shifting more and more towards the digital, data-driven economy. It started with few industries, but now we see a larger shift, including new industries like healthcare, like manufacturing.”

Asked about the effects of the pandemic on the sector, he said: “Obviously we see a lot of startups who are plugging into things like the UiPath platform. This is very relevant for the pandemic. Because the companies that had started automating strongly before the pandemic hit… they’ve actually accelerated and they find benefits for their teams and organisations and actually the people are happier because they have better automation technologies in place. The ones that didn’t start before [the pandemic hit] they’re a little behind now.”

Google’s new subsea cable between the U.S. and Europe is now online

Google, together with its partner SubCom, today announced that the company’s privately owned Dunant subsea cable between Virginia Beach, Virginia and Saint-Hilaire-de-Riez on the French Atlantic coast is now operational.

Google first announced this project, which was named after the first Noble Peach Price winner and founder of the Red Cross, Henry Dunant, back in the middle of 2018. At the time it expected the project to go live in 2020, but besides dealing with the complications of spanning a long cable between continents, the project leaders probably didn’t budget for a global pandemic at the time.

The almost 4,000-mile cable has a total capacity of 250 terabits per second — or enough to transmit the “entire digitized Library of Congress three times every second” (though maybe using Library of Congress data size references is starting to feel a bit antiquated at this point?). Unlike some older cables, Dunant uses 12 fiber pairs, coupled with a number of technical innovations around maximizing its bandwidth, to achieve these numbers.

“Google is dedicated to meeting the exploding demand for cloud services and online content that continues unabated,” said Mark Sokol, senior director of Infrastructure, Google Cloud. “With record-breaking capacity and transmission speeds, Dunant will help users access content wherever they may be and supplement one of the busiest routes on the internet to support the growth of Google Cloud. Dunant is a remarkable achievement that would not have been possible without the dedication of both SubCom and Google’s employees, partners, and suppliers, who overcame multiple challenges this year to make this system a reality.”

 

Image Credits: Google

With Dunant now being operational, the next Google cable to go live will be the Grace Hopper cable between New York and Europe, with landing sites in Bilbao, Spain and Bude, UK. Google first announced this new cable, which it is also building in partnership with SubCom, last July. It’s expected to go online in 2022 and will feature a total of 16 fiber pairs.

In addition, Google is also building the Equiano cable from South Africa to Portugal. This cable is supposed to go online later this year.

In addition to its privately-owned cables, Google is also a partner in a number of consortiums that band together to build cable systems.

Decrypted: Google finds a devastating iPhone security flaw, FireEye hack sends alarm bells ringing

In case you missed it: A ransomware attack saw patient data stolen from one of the largest U.S. fertility networks; the Supreme Court began hearing a case that may change how millions of Americans use computers and the internet; and lawmakers in Massachusetts have voted to ban police from using facial recognition across the state.

In this week’s Decrypted, we’re deep-diving into two stories beyond the headlines, including why the breach at cybersecurity giant FireEye has the cybersecurity industry in shock.


THE BIG PICTURE

Google researcher finds a major iPhone security bug, now fixed

What happens when you leave one of the best security researchers alone for six months? You get one of the most devastating vulnerabilities ever found in an iPhone — a bug so damaging that it can be exploited over-the-air and requires no interaction on the user’s part.

The AWDL bug under attack using a proof-of-concept exploit developed by a Google researcher. Image Credits: Ian Beer/Google Project Zero

The vulnerability was found in Apple Wireless Direct Link (AWDL), an important part of the iPhone’s software that among other things allows users to share files and photos over Wi-Fi through Apple’s AirDrop feature.

“AWDL is enabled by default, exposing a large and complex attack surface to everyone in radio proximity,” wrote Google’s Ian Beer in a tweet, who found the vulnerability in November and disclosed it to Apple, which pushed out a fix for iPhones and Macs in January.

But exploiting the bug allowed Beer to gain access to the underlying iPhone software using Wi-Fi to gain control of a vulnerable device — including the messages, emails and photos — as well as the camera and microphone — without alerting the user. Beer said that the bug could be exploited over “hundreds of meters or more,” depending on the hardware used to carry out the attack. But the good news is that there’s no evidence that malicious hackers have actively tried to exploit the bug.

News of the bug drew immediate attention, though Apple didn’t comment. NSA’s Rob Joyce said the bug find is “quite an accomplishment,” given that most iOS bugs require chaining multiple vulnerabilities together in order to get access to the underlying software.

FireEye hacked by a nation-state, but the aftermath is unclear

Water quality and distribution monitoring software Ketos raises $18 million

Water quality and logistics monitoring software Ketos has raised $15 million from a group of investors to take advantage of the growing demand for better water management tools and technologies.

The potential for more stringent regulatory oversight of industrial water use and wastewater management from local, state and federal government coupled with increasing consumer and investor demands for better corporate environmental stewardship is driving an unprecedented adoption of technology and services aimed at increasing conservation and reducing waste across industries.

Water monitoring can also provide relevant information to public officials about the potential for disease outbreaks and other health related issues in a population.

Recently, monitoring wastewater streams have been used to detect outbreaks of the virus that causes COVID-19.

The renewed attention on water is one reason why an investment arm of the banking giant Citi joined lead investor Motley Fool Ventures and Illuminated Funds Group to come as new investors into Ketos. They joined existing backers like Ajax Strategies, Better Ventures, Broadway Angels, Plum Valley Ventures, and Rethink Impact.

Silicon Valley Bank provided the company with $3 million in debt financing.

The company said it would use the funding to develop new capabilities for its combined hardware and software service that provides information into water quality and the existence of potential damage to water pipes for distribution and disposal of water.

“Creating one of the largest centralized data lakes of water quality insights — with information on heavy-metal toxins, coupled with location-based mapping and potential contamination sources — the potential for what machine learning and artificial intelligence can achieve is limitless,” said Meena Sankaran, the company’s founder and chief executive.

One other selling point is the company’s use of machine learning to predict where problems with water systems might arise — avoiding the need for more costly investments into infrastructure.

“KETOS is truly disrupting the water intelligence industry with the data it captures autonomously (remotely controlled) and makes available to its customers for forecasting water management issues, which is even more top of mind as the world battles COVID,” said Ollen Douglass, Managing Director of Motley Fool Ventures, in a statement. “For the first time, it is possible to use predictive modeling and much needed mission-critical insights with $0 capital infrastructure investments, to build, take action and make informed decisions about a water network.”

How Roblox completely transformed its tech stack

Picture yourself in the role of CIO at Roblox in 2017.

At that point, the gaming platform and publishing system that launched in 2005 was growing fast, but its underlying technology was aging, consisting of a single data center in Chicago and a bunch of third-party partners, including AWS, all running bare metal (nonvirtualized) servers. At a time when users have precious little patience for outages, your uptime was just two nines, or less than 99% (five nines is considered optimal).

Unbelievably, Roblox was popular in spite of this, but the company’s leadership knew it couldn’t continue with performance like that, especially as it was rapidly gaining in popularity. The company needed to call in the technology cavalry, which is essentially what it did when it hired Dan Williams in 2017.

Williams has a history of solving these kinds of intractable infrastructure issues, with a background that includes a gig at Facebook between 2007 and 2011, where he worked on the technology to help the young social network scale to millions of users. Later, he worked at Dropbox, where he helped build a new internal network, leading the company’s move away from AWS, a major undertaking involving moving more than 500 petabytes of data.

When Roblox approached him in mid-2017, he jumped at the chance to take on another major infrastructure challenge. While they are still in the midst of the transition to a new modern tech stack today, we sat down with Williams to learn how he put the company on the road to a cloud-native, microservices-focused system with its own network of worldwide edge data centers.

Scoping the problem

Space sector investment shows signs of strength in Q2 despite COVID-19 pandemic

The most recent quarterly report from specialist investor Space Capital shows that despite obvious impacts stemming from the current coronavirus pandemic, investment in general in space startups didn’t suffer as much as some predicted – and interest surged specifically in the ‘Applications’ category they track, which monitors companies building software on the data layer enabled by in-space observation and communication assets.

Space Capital’s Q2 report did report an 85% decline quarter-over-quarter vs. Q1 in terms of infrastructure investment, which is a clear sign that investors have been wary of spending on big, expensive new companies actually building and launching space hardware. We saw the result of some of that retraction with mergers and bankruptcies, including the high-profile bankruptcy and subsequent sale of satellite constellation operator OneWb.

The good news on the software layer is that the quarter saw $5.3 billion invested in these companies, including $4.5 billion in the U.S., according to the report. And VC funding overall is actually up 4% year-over-year for H1 2020 vs. H1 2019, the firm notes – though Q2 investment taken on its own is down 23% year-over-year relative to Q2 2019.

On the whole, the space sector saw $12.1 billion in equity-based investments to date in 2020, across 112 rounds, with early stage investments totalling $303 million of that, across 67 rounds. The bulk of those were either Seed or Series A investments.

It’s worth noting that the Applications layer as tracked by Space Capital includes essentially any company that relies heavily on GPS - and PNT-based navigation for their software, including large companies like Waymo that need that data to make their self-driving technology work.

GPS is unquestionably one of the largest and most successful space-based infrastructure investments that continues to bear considerable fruit, in terms of new businesses being built, and legacy industries continuing to be updated and disrupted. Many in space investment are seeking a successor to GPS – not necessarily in terms of its specific function, but definitely in terms of a space-based technology that has as broad and lasting an impact.

You can read the full report from Space Capital below:

Space sector investment shows signs of strength in Q2 despite COVID-19 pandemic

The most recent quarterly report from specialist investor Space Capital shows that despite obvious impacts stemming from the current coronavirus pandemic, investment in general in space startups didn’t suffer as much as some predicted – and interest surged specifically in the ‘Applications’ category they track, which monitors companies building software on the data layer enabled by in-space observation and communication assets.

Space Capital’s Q2 report did report an 85% decline quarter-over-quarter vs. Q1 in terms of infrastructure investment, which is a clear sign that investors have been wary of spending on big, expensive new companies actually building and launching space hardware. We saw the result of some of that retraction with mergers and bankruptcies, including the high-profile bankruptcy and subsequent sale of satellite constellation operator OneWb.

The good news on the software layer is that the quarter saw $5.3 billion invested in these companies, including $4.5 billion in the U.S., according to the report. And VC funding overall is actually up 4% year-over-year for H1 2020 vs. H1 2019, the firm notes – though Q2 investment taken on its own is down 23% year-over-year relative to Q2 2019.

On the whole, the space sector saw $12.1 billion in equity-based investments to date in 2020, across 112 rounds, with early stage investments totalling $303 million of that, across 67 rounds. The bulk of those were either Seed or Series A investments.

It’s worth noting that the Applications layer as tracked by Space Capital includes essentially any company that relies heavily on GPS - and PNT-based navigation for their software, including large companies like Waymo that need that data to make their self-driving technology work.

GPS is unquestionably one of the largest and most successful space-based infrastructure investments that continues to bear considerable fruit, in terms of new businesses being built, and legacy industries continuing to be updated and disrupted. Many in space investment are seeking a successor to GPS – not necessarily in terms of its specific function, but definitely in terms of a space-based technology that has as broad and lasting an impact.

You can read the full report from Space Capital below: