Tech Brew Ride Home - Mon. 12/23 - A New Competitor For Tesla?

Episode Date: December 23, 2019

The Government says ToTok is a full on spying app, TikTok wants to distance itself from allegations that it might be a spying app, out of nowhere, could Rivian be Tesla’s biggest competitor, and what does it mean if Travis Kalanick sells all of his Uber stock? Sponsors: GiveWell.org/ridehome Mealime Links: It Seemed Like a Popular Chat App. It’s Secretly a Spy Tool. (NYTimes) U.S. Navy bans TikTok from government-issued mobile devices (Reuters) DraftKings going public via reverse merger (Axios) Rivian adds $1.3 billion in funding for its electric utility and adventure vehicles (TechCrunch) Uber Co-Founder Travis Kalanick Cuts Stake in Company by More Than 90% (WSJ) Boeing Starliner Lands in New Mexico After Clock Error Prompts Early Return (NYTimes) Starliner makes a safe landing—now NASA faces some big decisions (Ars Technica) 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 Techmeme ride home for Monday, December 23rd, 2019. I'm Brian McCullough. Today, the government says Tootoc is a full-on spying app. TikTok wants to distance itself from allegations that it might be a spying app. Out of nowhere, could Rivian be Tesla's biggest competitor? And what does it mean if Travis Kalanick sells out all of his Uber stock? Here's what you miss today in the world of tech.

U.S. government officials claim that Tootok, a chat app, gaining popularity around the world is in actuality a spying tool designed by the government of the United Arab Emirates. In response to the government's assertions, both Google and Apple have removed the app from their respective app stores. Now, I need to be clear, this is Tootok, not TikTok, the popular video slash music app that has taken the world by Storm and which originated in China, quoting the New York Times. Tootoc introduced only months ago was downloaded millions of times from the Apple and Google App stores by users throughout the Middle East, Europe, Asia, Africa, and North America.

While the majority of its users are in the Emirates, Tutak surged to become one of the most downloaded social apps in the United States last week, according to app rankings from App Annie, a research firm. According to American officials familiar with a classified intelligence assessment and a New York Times investigation into the app and its developers, it is used by the government of the United Arab Emirates to try to track every conversation, movement, relationship, appointment, sound, and image of those who install it on their phones. A technical analysis and interviews with computer security experts showed that the firm behind

TikTok, Breach Holding, is most likely a front company affiliated with Dark Matter, an Abu Dhabi-based cyber intelligence and hacking firm, where Emirati intelligence officials, former National Security Agency employees, and former Israeli military intelligence. intelligence operatives work. Dark Matter is under FBI investigation, according to familiar employees and law enforcement officials for possible cyber crimes. The American intelligence assessment and the technical analysis also linked to TACS AI, an Abu Dhabi-based data mining firm that appears to be tied to dark matter, end quote. So this seems to be a new thing. We've seen governments engage the services of private companies or hacking collectives to do their

digital surveilling, but if true, this would be a government actually releasing their own consumer-facing app to achieve their surveilling ends. Since the government of the UAE blocks the functionality of apps like WhatsApp and Skype in its own country, one can certainly see why this app proved popular among UAE citizens. Quoting the Times again, Tootak appears to have been relatively easy to develop, according to a forensic analysis performed for the Times by Patrick Wardle, a former National Security Agency hacker who works as a private security researcher. It appears to be a copy of a Chinese messaging app offering free video calls, Yi call, slightly customized for English and Arabic audiences, end quote.

And this might sound familiar if you read that Times piece that we mentioned last week about how easy it is to track your location, if you've ever allowed an app to see your location, Tootoc introduces basic tracking once you opt in for a localized weather report, and it maps your personal connections by searching your address book for contacts, all in the name of making it easier to connect to friends. But then the app also has access to your microphone, video camera, messages sent in the app, and photo library. And one does have to wonder how many people might have downloaded this recently because they

were searching for TikTok, and instead downloaded. Tootoc. Yeah, well, speaking of TikTok, not only is Tootok biting its name, they're also essentially biting their style in the sense that people have been vaguely afraid for a while now that TikTok was basically a Trojan horse for spying on the world by the Chinese government. To that end, the United States Navy has banned TikTok from government-issued smartphones, citing a cybersecurity threat, and will block all devices that have the app installed from using the Navy Marine Corps intranet. Quoting Reuters.

Last month, U.S. Army cadets were instructed not to use TikTok after Senator Chuck Schumer raised security concerns about the army using TikTok and their recruiting. A Navy spokesman said naval and marine personnel who use government-issued smart devices are generally allowed to use popular commercial apps, including common social media apps. But from time to time, specific programs

that present security threats are banned. He would not give examples of apps that are allowed or those considered unsafe, end quote. And so, noting that, in order to allay fears like that, the Wall Street Journal is reporting that TikTok owner BiteDance is considering setting up a global headquarters for TikTok outside of China in order to shed its image of being a Chinese-based and originated service. Quote, Singapore is one city being considered, the people said.

Other possible locations include London and Dublin, with no American cities on the shortlist, one person said. TikTok currently doesn't have a headquarters, although its most senior executive is based in Shanghai, and its main office, which runs U.S. operations, is in Los Angeles. Senior executives at Beijing-based Bite Dance, a startup valued at $75 billion, which owns numerous apps, including TikTok, have been brainstorming ideas to rebrand TikTok as it comes under mounting scrutiny

from U.S. lawmakers over national security concerns. a headquarters outside of China would also bring TikTok closer to growing markets, either in Southeast Asia or Europe. The move to establish a global headquarters outside of China has been discussed internally for months, one person said. However, the effort is, quote, only accelerating because of the things happening in the U.S., the person added, referencing the recent scrutiny of TikTok there, end quote. So as we enter the 2020s, it's basically pick your poison. and download an app and fear that a government somewhere is surveilling what you do in order to surveil and repress you, I guess. Frankly, if all of these allegations prove out, I'm kind of surprised it took governments this long to get into this game.

Or download an app and fear that some creepy ad company somewhere is using it to surveil and profit off of you. Welcome to the future, I guess, or the present, as someone said on Twitter, we're definitely in a cyber. Superpunk Reality Now. Fantasy Sports and betting company Draft Kings is going to go public via a reverse merger with a special purpose acquisition company called Diamond Edge.

A sports betting tech platform called SB Tech is also being rolled into this new entity to seek what it is hoping will be a $3.3 billion valuation once it hits public markets. Quoting Axios. Draft Kings was a trailblazer in the fantasy sports market, regularly competing with Fandul. The two companies sought to merge in 2016, but were

ultimately blocked by U.S. antitrust regulators. Fandul was later acquired by a publicly traded Irish company, and now Draft Kings has its own backdoor listing. Diamond Eagle, led by veteran media executive Jeff Saganzky, and advised by former MGM CEO Harry Sloan, went public earlier this year and says it has around $400 million in its trust account. SB Tech is a global provider of sports betting and online gaming infrastructure to online bookmakers. Draft King's CEO Jason Robbins will run the combined company while his two fellow co-founders and SB Tech management will remain involved, end quote. This Frankenstein creation is also being aided by $300 million in new investment by

Capital Research and Management, Wellington Management, and Franklin Templeton. Interesting raise from a company that is new to me, at least. Rivian plans to make electric trucks. By that I mean all-terrain vehicles and sports utility vehicles, and they've raised $1.3 billion with a B in funding to do so. Quoting TechCrunch, the new investment is the fourth round of capital announced by the company in 2019 alone. Following prior announcements of $700 million, led by Amazon, $500 million from Ford, which includes a collaboration on electric vehicle technology, and $350 million from Cox Automotive. That's a lot of money. But Rivian's not your typical startup since it's aiming to bring fully electric vehicles to market,

including the R1T pickup truck and the R1S Sport Utility Vehicle. Both of these are consumer cars, which the company aims to bring to market starting at the end of next year. And Rivian is also working with Amazon on all electric delivery vans, of which the Commerce Giant has ordered 100,000, with a target of starting deliveries of the first of those in 2021. The company founded in 2009 has R&D facilities in a number of cities globally and also has a 2.6 million square foot manufacturing facility in Normal, Illinois. It debuted its pickup and SUV at the LA Auto Show last November, and the vehicles will launch with higher-end trim levels first, including up to 410 miles of range, a single charge. Base prices for the R1T pickup start at $69,000 before any tax credits are applied,

while the R1S SUV starts at 72,500, and Rivian has been taking pre-order reservations available with a $1,000 deposit, end quote. So like I said, Rivian is entirely new to me, but from what I've been able to learn from my quick Googling around this morning, a lot of people seem to think that Rivian is the best positioned to take on Tesla, at least as a non-legacy automaker, especially in the truck segment. So look out cyber truck, I guess. We know that Travis Kalanick has not been involved in the day-to-day of Uber for some time now. He has still been on Uber's board of directors, though. But for how much longer even that state of affairs lasts is kind of up in the air, because it turns out.

out that over the last few weeks, Kalanick has cut his own ownership stake in Uber by more than 90 percent, quoting the Wall Street Journal. The co-founder of the Ride Hailing Giant has sold more than $2.5 billion of stock in the past seven weeks, more than 90 percent of his stake, a pace that if continued could see him sold out entirely in the coming days. Mr. Kalanick, the former chief executive, was pushed out of that role by investors in 2017. The sales started in early November. Shortly after Mr. Kalanick and other early investors were first allowed to sell on the open market and have continued every day the stock market has been open through December 18 public filing show. The early investors, along with Uber's employees, were prevented from selling for the first six months following the company's initial public offering in May, end quote. Now, I first started seeing stories about Kalinick unloading his holdings last month, but I was unclear if this really was a story or not.

because, you know, founders and insiders doing some selling is common. Like, if you're a billionaire on paper, it only makes sense to make some of that paper wealth real when you have the chance to do so. And if almost all of your net worth is tied up in one stock, it makes tons of sense to sell some to diversify your wealth, even if you still have confidence in your one big holding. But while I wasn't looking, Kalanick just continued to sell and sell to the point that by the time you hear this, he might not have any U. Uber holdings left, or else maybe he'll hold on to some nominal symbolic amount. By the time of the Uber IPO, Kalinick held an 8.6% stake in the company or around 117 million shares. As recently as last week, that was down to 8.2 million shares. I can't express how rare that is to see a founder just basically sell his bag and walk away. But then we already know how

rare the Calanic cases as well. Founders get pushed aside for what is euphemistically called adult supervision all the time, but more often than not, in those cases, the founders still hold on to most of their shares, even when they head off into the sunset. It's rare for founders to be actively pushed out in a hostile way, as in the Calenic case, but even as Uber is a special case in this sense, it is worth noting that Uber's true founder, Garrett Camp, stepped aside of his own volition to allow Kalinick to be Uber's CEO in the first place, and there's no indication that Camp is selling everything, or even the majority of his holdings. I struggle to think of any analogy to this in recent tech history. Founders just don't cut bait entirely very often.

In fact, the only major historical precedent that I can think of from the modern tech era is when Steve Jobs was pushed out of Apple in the early 1980s. Jobs sold all of his holdings, save one symbolic share, so that he could still continue to receive the Apple annual report in the mail. Finally, today, in case you weren't aware, Boeing is a company that has been having a rough time of it lately, to say the least. Well, in areas we cover, things haven't been going any better for them in space. Boeing's Starliner spacecraft has returned safely back to Earth after it failed in a planned docking mission with the International Space Station. The reason for the failure is sort of odd. Essentially, the clock on board the Starliner capsule was

mistimed, causing it to prematurely deplete its propellant, quoting the New York Times. Flight controllers were eventually able to send Starliner the correct time, They then performed a couple of thruster filings to raise its orbit to a circular one, 155 miles above the surface, but that was lower than the International Space Station, which is at an altitude of 250 miles. During its abbreviated time in orbit, the spacecraft's propulsion, navigation, and life support systems appeared to work well, even though the Starliner did not go to the space station. Flight controllers were able to test some of the systems needed to the rendezvous.

This included establishing a communications link between the spacecraft and the station, and extending, then retracting a ring that would have attached to the docking port, end quote. So there is some good news there. The Starliner is how NASA hopes to get astronauts back into space eventually, and the two most dangerous parts of any manned mission went well. The Starliner got into space, and it landed back on Earth flawlessly. But NASA also wanted to test the docking procedures before okaying any man flights, and since Starliner was unable to actually get to the space station to prove any of that out, now what? Quoting Ars Technica. NASA's commercial crew contract with Boeing stipulates several requirements that must be completed

by the orbital flight test. Quote, the contractor's flight test program shall include an uncrewed orbital test flight to the ISS, the document states, and this test should include, quote, automated rendezvous and proximity operations, and docking with the ISS, assuming ISS approval, end quote. After a news briefing on Sunday morning at Johnson Space Center, the deputy director of the commercial crew program, Steve Stitch, said NASA will review the contract, quote, we'll have to look at that afterwards and try to understand it, he said. We'll have to go take a look at what we achieved with what's in the contract, end quote. Boing, which presumably would have to pay for a second test flight as part of its fixed-price contract with NASA, certainly would like to be able to convince NASA that it does not need to make a second uncrewed test flight.

On the day Starliner landed, it sure sounded like some key NASA officials would like to talk themselves into that as well, end quote. That is all for today, coming to you from the basement of my in-law's house in northern Michigan. No show until Thursday. So happy holidays to all of those celebrating. And I will talk to you then.