Tech Brew Ride Home - Mon. 08/22 – Elon Musk Raising Prices Just For Fun

Episode Date: August 22, 2022

Amazon continues to be serious about becoming your healthcare provider. Elon Musk is raising prices, I guess cause he can. Confirmation that Sam Bankman-Fried does indeed have a mountain of money. I continue to worry about stablecoins and contagion. And the kids are using FindMy as a new sort of social network. Sponsors: DraftKings Daily Fantasy App Promocode- Techmeme Links: Amazon Among Bidders for Signify Health (WSJ) Elon Musk says Tesla will hike the price of FSD driver assistance software by 25% in September (CNBC) FTX grew revenue 1,000% during the crypto craze, leaked financials show (CNBC) Stablecoin issuers hold $80bn of short-dated US government debt (Financial Times) How the Find My App Became an Accidental Friendship Fixture (NYTimes) A Dad Took Photos of His Naked Toddler for the Doctor. Google Flagged Him as a Criminal. (NYTimes) Learn more about your ad choices. Visit megaphone.fm/adchoices

On April 4th, 2023, around 2 in the morning, a man was found stabbed multiple times on a sidewalk in downtown San Francisco. Hey, who did this to you? What happened next turned the story into a political firestorm. Reports have identified the victim as Bob Lee, the founder of Cash App. From Bloomberg Podcasts, this is Foundering, the Killing of Bob Lee, beginning April 16. Welcome to the tech meme right home for Monday, August 22nd, 2022. I'm Brian McCullough today. Amazon continues to look like it's serious about becoming your health care provider. Elon Musk is raising prices, I guess because he can.

Confirmation that Sam Bankman-Fried does indeed have a mountain of money. I continue to worry about stable coins and contagion, and the kids are using FindMy as a new sort of social network. Here's what you miss today in the world of tech. More grist for this particular mill. sources say Amazon is among the bidders for Signify Health, which is for sale in an auction that could value the home health services provider at well over $8 billion, quoting the Wall Street Journal. Bids are due around Labor Day, according to the people, but it is always possible an eager bidder could strike a deal before then. CVS Health is also among the suitors. The Wall Street Journal

previously reported as the drugstore and insurance giant looks to expand in home health services. United Health Group and another corporate buyer are also circling the company according to the people. There is no guarantee any of them will reach a deal for Signify, which has been exploring strategic alternatives. The health care company has a market value of roughly $5 billion boosted since the journal first reported on the possibility of a deal early this month. Signify uses analytics and technology to help employers, health plans, physician groups, and health systems with in-home care. It offers in-home health evaluations for Medicare Advantage and other. government-run managed care plans. A deal would mark Amazon's latest foray into the healthcare sector, and the second time in recent months it faced off against CVS. The online commerce and media and

technology giant in July agreed to pay $3.9 billion for one-life health care, which operates a primary care practice under the name One Medical. The deal marks the first major acquisition announced during the tenure of Chief Executive Andy Jassy, for whom expansion into health care is a top priority. CVS also had eyed the one medical parent, according to people from familiar with the matter, end quote. Our friend, former health tech reporter and now health tech investor, Christina Farr tweeted, quote, fascinating and sort of unexpected move from Amazon, a very different demographic than the one medical member, although does overlap with Iora, end quote. Elon Musk says Tesla will raise the price of its full self-driving feature from $10,000 to $15,000

in September when Tesla rolls out a new beta that lets a driver's test features on public roads, quoting CNBC. Today, Tesla charges customers $12,000 up front for FSD or $199 per month on a subscription basis. Musk did not immediately mention an increase in the cost of FSD subscriptions, and Tesla did not respond to a request for further information. All new Tesla vehicles come with a standard driver assistance package called autopilot, which includes features like traffic-aware cruise control, and auto-steer. These rely on cameras, other sensors, hardware, and software to automatically keep a Tesla vehicle centered in its lane and traveling at the speed of surrounding traffic. Tesla's highest-priced driver assistance option,

FSD, includes what the company calls traffic and stop signal control and navigate on autopilot among its features. These more advanced features are intended to let Tesla cars automatically detect and slow down for traffic signals and signs, navigate from highway, on-ramp to off-ramp while engaging turn signals, make lane changes, and take exits. Tesla tells drivers to remain attentive and be prepared to take over their car's steering and braking at any time while using autopilot or FSD. Its technology does not make Tesla vehicles autonomous. One Tesla feature called SmartSummon allows drivers to use a smartphone and Tesla mobile app,

like a remote control to call their car from across a parking lot and slowly drive, without anyone behind the wheel to where they are standing. while some FSD features are also included in a lower priced option called Enhanced Autopilot or EAP. Only Tesla customers who buy or subscribe to the premium option can request access to FSD beta, an experimental version of Tesla's system, end quote. I find it interesting that Tesla believes they have the pricing power for jacking up the prices on this feature, which you have to imagine has just completely fat margins for them. But haven't I heard that the percentage of Tesla folks,

who already paid up for this was in the single digits that would probably go down with a price increase. Also, so there are basically no new features now along with this price increase. We're still talking level two autonomy, right? Which other car brands give you for free, or at least part of the MSRP, as John Cotsier tweeted, quote, way to drive people to other car brands, Elon, too expensive, not worth it, and I speak as a Tesla owner, end quote. If you want to know how Sam Bankman-Freed has the money to be running around playing J.P. Morgan trying to prop up the crypto markets, here's why. According to leaked financials seen by CNBC, Bankman-Freed's company F.T.X had $1.02 billion in revenue in 2021, up from $89 million in revenue in 2020.

Operating income grew from $14 million to $272 million, and the U.S. market accounted for less than 5% of revenue. Quote, the crypto exchange's revenue soared more than a thousand percent from $89 million to $1.02 billion in 2021. Its profitability, like many startups, depends on how you measure it. Operating income was $272 million, up from $14 million a year earlier. FTX saw net income of $388 million last year, up from just $17 million a year earlier. FTX declined to comment on the leaked financial documents.

The company brought in $270 million. in revenue in the first quarter of 2022 and was on track to do roughly $1.1 billion in revenue in 2022, according to an investor deck shared with CNBC. But it's unclear how FTCs held up in the second quarter as crypto prices plunged during the recent so-called crypto winter. By way of comparison, publicly traded Coinbase also experienced a cash boom during crypto's bull market with $7.4 billion in revenue and $3.6 billion of net income last year. But in the second quarter of this year, it reported $808.3 million in revenue, a decline of 64% from the year ago quarter, and a surprise net loss of $1.1 billion, compared with $1.59 billion in net income a year earlier as retail trading volumes cratered. FDX was founded three years ago by former Wall Street quant trader Sam Bankman-Fried. The 30-year-old CEO has recently stepped in as the industry's lender of last resort, looking to backstop companies as liquidity dried up, on top of multiple loans of hundreds of millions of of dollars, Bankman Freed's companies also looked to acquire distressed assets. In July, FTCS signed a deal that

gives it the option to buy lender BlockFi and was in discussions to acquire South Korean BitThum. FDX also offered to buy Voyager in August but was turned down for what the company claimed was a low-ball bid. FDX had roughly $2.5 billion in cash at the end of last year and 27% profit margins, according to the documents. Margins were closer to 50% if advertising and related party expenses are stripped out. It last raised money in January, collecting $400 million from investors like SoftBanks Vision Fund 2 and Tiger Global at a $32 billion valuation, end quote. Again, when things are going well and you're running things well, being a marketplace is a hell of a business. Now, along these lines, you'll recall my assumption that even if crypto were to blow up entirely, if everything went to

zero, it shouldn't have too much of an impact on the broader economy. But then I learned more about stablecoins. One more data point for worry about potential contagion beyond just the crypto markets. According to J.P. Morgan, Tether, Circle, and other stable coin issuers now hold $80 billion of short-term U.S. government debt accounting for 2% of the Treasury bill's market as of May, quoting Financial Times. Tether and its peers accounted for 2% of the market for Treasury. bills, debt instruments that are commonly used as a cash equivalent on corporate balance sheets, as of May, according to research from J.P. Morgan, more than the proportion owned by Warren Buffett's

investment behemoth, Berkshire Hathaway. J.P. Morgan said the newer issuers had, quote, considerable room to grow should stable coins become a form of digital payment, end quote. The rising prominence of stable coin issuers in a market historically dominated by lower risk investors is one of the factors driving global financial regulators to step up their scrutiny of the broader crypto industry. Stable coins are cryptocurrencies designed to act as a bridge between the crypto and traditional markets, making it faster and easier for traders to buy and sell digital tokens. They are normally pegged to the world's biggest and most stable currencies. Top three stable coins by market cap tether, circles USDA, and Binance's BUSD,

have a combined market cap of roughly $140 billion, according to price tracking site, Coin Gecko. These are typically supposed to be backed at all times by reserves of highly liquid mainstream financial assets. But in May, that backstop was called into question when Tether's U.S. dollar peg briefly snapped under punishing selling pressure, a slip-up that came hot on the heels of the failure of a smaller stable coin, TerraUSD. Janet Yellen, U.S. Treasury Secretary said the collapse of TerraUSD was an event that, quote, simply illustrates that this is a rapidly growing product and there are rapidly growing risks, end quote. Regulators have particular concern over the quality of the assets that stablecoin operators say they hold in reserve.

Terra was an algorithmic stablecoin that had no portfolio of reserves relying on computers and financial incentives to track the value of a dollar. The proposed Responsible Financial Innovation Act co-sponsored by Senators Cynthia Loomis and Kristen Gillibrand has also called for reserve disclosure requirements for stablecoin issuers. Tether, the biggest stablecoin operator, has pledged to reduce its reliance on a type of corporate short-term debt known as commercial paper and buy U.S. Treasury bills, which are considered to be ultra-low-risk assets. Circle, the industry's second biggest participant, has already cut its reliance on commercial paper for its stable coin USDC. Tether's market dominance has shrunk from more than $80 billion in May to below $70 billion, but Circles U.S.DC has been steadier

with about $50 billion in issue, end quote. The New York Times looks at how Apple's Find My app has accidentally become something of a social network. Quote, in July, Shea Pierre opened Apple's location sharing app Find My and noticed a friend at an unfamiliar apartment building in Fort Lauderdale, Florida. Ms. Pierre, 23, zoomed in to inspect the building, then texted her friend its address, along with a joking, Where Are You? Her friend came clean. He had started dating somebody, and he was at her apartment. If Find My had not given it away, Ms. Pierre would not have known about the relationship until months later. Her friend later relabeled the apartment building in the app,

none of your business. As location sharing through apps like Fine Mai has proliferated in recent years, they've become a staple in some friendships, ostensibly for safety, but with the side effect of complicating dynamics between friends. The impact is particularly noticeable among Generation Z and Millennials, the first generations to come of age with the possibility of knowing where their peers are at all times. It has changed how friends communicate with one another and blurred lines of privacy. Friends now, sometimes unwittingly, yet obsessively check one another's locations and bypass whole conversations about where somebody is, what they're doing, or how their days are going when socializing. All of that information can be gleaned

from FindMai. Although FindMai is not marketed as a social experience, sharing locations has become a test of sorts, much like being included on a close friends list on Instagram or on a private story on Snapchat can signal closer friendships. Location sharing isn't new. In 2011, Apple released Find My Friends. In 2013, 7% of U.S. adults said they checked into locations social media or shared their locations with friends, according to the Pew Research Center. This year, 69% of Gen Z and 77% of millennials said they activated location sharing features at least sometimes compared with 62% of U.S. adults in general, according to the Harris Poll. But what can be startling and harder to quantify is how widely younger people share their

location information. Some say that they track a dozen or more friends on the app and that those friends track them back. With Find My, quote, you aren't actively choosing to do something as you reach a certain location because you're constantly sharing your location, said Michael Saker, a senior lecturer in digital sociology at City University of London. As a result, quote, there's an intimacy that's intertwined with the act, he added, there's a verification of being friends, end quote. Finally today, a story you might have seen discussed over the weekend quite heavily, but to fill you in behind the headlines, a father who used his Android phone to send photos of his baby's groin to the baby's doctor, says Google disabled his account after flagging

CSAM, child sexual abuse material, and informing the police, quoting the New York Times. With help from the photos, the doctor diagnosed the issue and prescribed antibiotics, which quickly cleared the issue up. But the episode left Mark with a much larger problem, one that would cost him more than a decade of contacts, emails, and photos, and make him the target of a police investigation. Mark, who asked to be identified only by his first name for fear of potential reputational harm, had been caught in an algorithmic net designed to snare people exchanging child sexual abuse material. Because technology companies routinely capture so much data, they have been pressured to act as sentinels examining what passes through their service

to detect and prevent criminal behavior. Child advocates say the company's cooperation is essential to combat the rampant online spread of sexual abuse imagery. But it can entail peering into private archives such as digital photo albums and intrusion users may not expect, that has cast innocent behavior in a sinister light in at least two cases the Times has unearthed. John Callis, a technologist at the Electronic Frontier Foundation, a digital civil liberties organization, called the cases Canaries in this particular coal mine. There could be tens, hundreds, thousands more of these, he said. Given the toxic nature of the accusations, Mr. Callis, speculated that most people wrongfully flagged would not publicize what had happened.

I knew that these companies were watching and that privacy is not what we would hope it to be, Mark said, but I haven't done anything wrong, end quote. The police agreed. Google did not. Two days after taking the photos of his son, Mark's phone made a blooping notification noise. His account had been disabled because of harmful content that was, quote, a severe violation of Google's policies and might be illegal, end quote. A learn more link led to a list of possible reasons, including child sexual abuse and exploitation. In an unusual twist, Mark had worked as a software engineer on a large technology company's automated tool for taking down video content flagged by users as problematic. He knew such systems often have a human in the loop to ensure that computers don't make a mistake, and he assumed his case would be cleared up as soon as it reached that person.

He filled out a form requesting a review of Google's decision explaining his son's infection. At the same time, he discovered the domino effect of Google's rejection. Not only did he lose emails, contact information for friends and former colleagues, and documentation of his son's first years of life, his Google Fi account shut down, meaning he had to get a new phone number with another carrier. Without access to his old phone number and email addresses, he couldn't get the security codes he needed to sign into other internet accounts locking him out of much of his digital life. The more eggs you have in one basket, the more likely the basket is to break, he said. In a statement, Google said, quote,

child sexual abuse material is abhorrent and were committed to preventing the spread of it on our platforms, end quote. A few days after Mark filed the appointment, appeal, Google responded that it would not reinstate the account with no further explanation. Mark didn't know it, but Google's review team had also flagged a video he made, and the San Francisco Police Department had already started to investigate him, end quote. TLDR, in the end, no crime occurred, but Google still has not reinstated his accounts. I think I've said before on this show that sometimes I fantasize about rewriting Franz Kafka's The Trial about a guy who wakes up, and instead of being turned into a cockroach just finds out that he's locked out of his online accounts.

Also, this would take place in the future, so he'd also be locked out of his bank, his car, his house, etc., with no real process for appeal. Maybe I'll write it someday, but if you beat me to it, just credit me with the idea. By the way, I told y'all to get on the Arsenal bandwagon. Top of the league, top of the table, only one team left. Arsenal, taking the maximum points thus far in the season, scoring for fun and again, full of young, likable, exciting kids like William Saliba, the defender who scored that wonder goal this weekend. Not too late. Bandwagon's still wide open and comfy. Talk to you tomorrow.