Tech Brew Ride Home - Tue. 07/06 – New Nintendo Switch (Finally/Kinda)

Episode Date: July 6, 2021

Nintendo finally announces the new Switch, but how new is it really? What the heck is happening with Didi and China? REvil strikes again, and what that might mean for the hacking situation going forward. And on a day of big geopolitical news, might big tech platforms be chased out of India and Hong Kong because their employees are in danger of being sent to jail? Sponsors: Tovala.com/ride  Cybereason.com  Links: Nintendo Switch OLED model will go on sale October 8th for $350 (The Verge) Chinese Regulators Suggested Didi Delay Its U.S. IPO (Wall Street Journal) Didi Shows China’s Tech Giants Must First Answer to Beijing (Bloomberg) China’s Big Tech Crackdown Puts Dozens of U.S. IPOs at Risk (Bloomberg) Hundreds of Businesses, From Sweden to U.S., Affected by Cyberattack (New York Times) REvil gang asks for $70 million to decrypt systems locked in Kaseya attack (The Record) Twitter has lost liability protection in India, government says (Tech Crunch) American Internet Giants Hit Back at Hong Kong Doxxing Law (New York Times) 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 Tuesday, July 6th, 2021. I'm Brian McCullough today. Nintendo finally announces the new switch, but how new is it really? What the heck happened with Didi and China? Reville strikes again and what that might mean for the hacking situation going forward. And on a day of big geopolitical news, might big tech platforms be chased out of India and Hong Kong because their employees are in danger of being sent to jail? Here's what you missed today in the world of tech. Well, who knows why they're doing this now instead of at E3, as was the rumor, but Nintendo this morning announced an updated switch with a larger 7-inch 720-P OLED display, which can output

4K to a TV. It's going to go on sale on October 8 for $350, quoting The Verge. While rumors had suggested this new switch would ship with a new Nvidia chip inside, it's not immediately clear if Nintendo has upgraded the internal processors. Other than the new screen, this revised model includes an adjustable stand for tabletop play, 64 gigabytes of built-in storage, up from 32 gigabytes, a new dock with a weird Ethernet port built in and improved audio for handheld or tabletop play. The new switch arrives nearly two years after Nintendo's Switch Light, a smaller and cheaper version of the Switch that you can't hook up to a TV. The Switch debuted at $199 in September 2019.

Nintendo's Switch has sold incredibly well with the console dominating U.S. sales charge for nearly two years straight. Switch Lifetime sales are at 84.59 million units ships since its launch in 2017, a figure that is getting closer to the Wii consoles 101.63 million lifetime sales mark, end quote. So it's really a bit of a weird announcement,

aside from the timing, aside from the new screen, screen, this really isn't new hardware at all. Quoting Nick Statt on Twitter. So the new switch isn't the next-gen upgrade, some we're expecting. No new chipset or improved battery life. Also, giving it the name Nintendo Switch OLED model is pretty telling. No Switch Pro or Switch 2. Good thing about the new Switch OLED and why I'm buying it is it's compatible with current

controllers and it does have better battery life than my 4-year-old base model switch. so it's a no-brainer, end quote. As I write these words, shares of Chinese ride-hailing startup DD are down as much as 30% in pre-market trading after a Chinese regulator ordered DD to be removed from app stores. The news wiped out $22 billion worth of market value. If you'll recall, we spoke about this briefly last week when the story was first getting rolling, but as often happens, this has evolved into something more. At first, the Chinese regulators just said the app couldn't sign up new users.

Then they ordered DEDY's app taken down from app stores completely. The equivalent would be if the U.S. government ordered Uber taken down from app stores. D.D. is essentially the Uber of China with around 380 million users in China. The Chinese government is claiming national security concerns for these moves, but you got to figure there is way more going on here behind the scenes. sources are telling the Wall Street Journal that weeks before DEDY's recent US IPO, remember again that IPO happened less than two weeks ago, the Chinese regulator that eventually ordered DED's app banned had suggested to the company that it delay its foreign listing. The company facing investor pressure to list after raising billions of dollars from prominent venture capitalists wrapped up its pre-offering roadshow in a matter of days in June, much short. than typical investor pitches made by Chinese firms. The listing on the New York Stock Exchange

raised about $4.4 billion, making it the biggest stock sale for a Chinese company since Alibaba in 2014. Back in Beijing, officials, especially those at the Cyberspace Administration of China, remained wary of the ride-hailing company's troves of data potentially falling into foreign hands as a result of greater public disclosure associated with a U.S. listing, the people said. DEDD's American Depository shares began trading in New York on Wednesday, just a day before the ruling Communist Party celebrated its centenary. The cyberspace administration waited a day after that major political event to deliver a one-two punch to the company. On Friday, it started its own cybersecurity review into D.D. and blocked the company's app from accepting new users, and on Sunday, it ordered mobile app stores to pull D.D. from circulation.

The sudden regulatory actions which surprised investors in coming just days after the company's IPO suggested that protecting national security trumps Beijing's ambitions for Chinese corporations to go global. One upshot, Beijing is unlikely to hold fire even if its regulatory moves risk the ability of Chinese firms to court international investors. According to people familiar with the discussions, the company received mixed signals from different agencies. Some financial regulators have publicly expressed support for companies overseas listings, while also addressing the imperative of protecting sensitive data and networks, end quote. So with the huge, huge caveat that I am not a China expert by any means, from the reading I've been doing over the weekend about this, there are two huge things that are going on here behind the scenes, as I said.

China apparently wants big tech startups, but what they don't want is the success of those startups accruing too much power or autonomy to individual entrepreneurs. We've been seeing that signaling for months now. But what is new now is this angle, quoting Bloomberg. Beijing is not pleased to see its national champions cozing up to foreign stakeholders, said Zhao Meng Lu, a senior analyst at Eurasia Group, a political risk consultancy. It also wants tech companies to keep their core assets, data and algorithms in China, end quote. Some projections show China will hold a third.

of the world's data by 2025, giving it potentially a massive competitive advantage in areas like artificial intelligence that will drive the modern economy. And the geopolitical stakes are high. The Biden administration is reviewing what user data should be off limits to China, and Beijing is similarly concerned about handing over information that could be used by its adversaries, end quote. Sometimes people say that the phrase data is the new oil is too glib, but geez, man, government sure do seem to be acting as if it's not glib at all, but actually factually the truth, at least geopolitically speaking. But this is also a new wrinkle. Does China not want outside investors in their companies anymore? They certainly are doing things that would scare outside

investors away, quoting a different Bloomberg piece. The D.D. situation, reinforces the fact that China is annoyed by the flood of U.S. IPOs by Chinese tech companies and is attempting to slow the reception of these IPOs in the West, said Hans Albrecht's portfolio manager at Horizon's ETFs Management Canada, Inc. While Chinese names look like better value, they will suffer from this overhang for some time, end quote. Beijing's latest crackdown on the technology industry threatens to chill investor sentiment at a time when there are as many as 34 pending filings for U.S. listings by firms based in China or Hong Kong announced this year, according to data compiled by Bloomberg. Such deals have been running at a record pace

with more than $15 billion priced in New York IPOs so far this year. The Chinese government could have stopped the IPOs from happening, like how they did with Ant, said Sharif Farha, a Dubai-based portfolio manager at Safehouse Global Customer Fund. Instead, they allowed global investors to take pain and consequently have broken trust with a lot of foreign investors. While we did not participate in any of these listings, we would imagine that several funds would consider exiting, end quote. Well, it's happened again. CyberRansom Group Reval has allegedly pushed ransomware via an update for Kaseya's IT management software, thereby causing chaos that hit hundreds of managed service providers with thousands of customers. Kasea provides software and service

to more than 40,000 organizations, including, quoting the New York Times, in Sweden, the grocery retail co-op was forced to close at least 800 stores on Saturday, according to Sebastian Elfers, a cybersecurity researcher for the security company, Ubiko. Outside co-op stores, signs turned customers away, quote, we have been hit by a large IT disturbance, and our systems do not work, end quote. Mr. Elfors said, a Swedish railway and a major pharmacy chain had all also been affected by the Kasea attack. It's totally devastating, he said, end quote. Again, hitting grocery stores, railways, these are not non-essential sectors. The ransomware hackers are not in any way pulling their punches at this point, quoting from the Times again. Victims of the

breach were hit through a Kasea software update, Kevin Beaumont, a threat researcher said. Instead of getting Kasea's latest update, they received Reveal's ransomware instead. Kasea was was initially breached through a previously unknown vulnerability in its systems, known as a zero-day, because when such vulnerabilities are discovered, software makers have zero days to fix it. In the meantime, cybercriminals and spies can use the vulnerability to wreck havoc. Mr. Beaumont said the attack marked a serious escalation in the tactics of ransomware gangs. In previous attacks, Reval was known to break in through a combination of fishing, stolen passwords, or a lack of multi-factor authentication, end quote. That's the other thing. Even though governments are looking to

crack down on this, if anything, the hackers are getting more brazen, aren't they? Almost as if they are giving the middle finger to any possible crackdowns. And maybe I don't have to use the word allegedly, to be honest, because in a post on the Reval dark web blog, the gang has taken credit for the Kasea attack, claiming it infected more than one million systems and demanding $70 million in Bitcoin for the decryptor, quoting the record. If honored, the demand would become the highest ransomware payment ever made. A Kasea spokesperson was not on hand to comment if the company would be considering paying the Reville gang's ransomware demand at the time of writing the Kasea ransomware incident is believed to have impacted thousands of companies across the world. The attack took place on

late Friday afternoon just before the extended July 4th U.S. weekend when the Reval gang or one of its collaborators is believed to have used an exploit in the Kasea VSA server to gain access to VSA appliances installed on customer premises. VSA appliances are web-based platforms typically used by large corporations or manage service providers, MSPs, to manage remote computer fleets. The Revo gang pivoted from the compromised VSA servers to all connected workstations and corporate networks to install their payload and encrypt customer files in one of the largest ransomware outbreaks in recent years, end quote. Given that, I thought this was an interesting Twitter thread from Catalan Simpeneu, who I've quoted from before and who wrote the piece that I was just quoting from, quote,

was the timing of the attack on the July 4th weekend a decision made for political reasons, or was it Reville's typical modus operandi to hit over big Western holiday breaks, which they have done many times before? Why are they asking for payment for a universal decryptor? Why would Reval pull such a brash attack right after the colonel? and JBS attacks and the political mess slash fallouts from those incidents. Wouldn't this attack confirm that Reville had some sort of approval from a Russian agency before doing something this destructive? Why are they requesting payment in Bitcoin when they know it can be traced by U.S. authorities and they've been primarily requesting Manero from victims for the past few months? Are they anticipating that they won't get paid and the whole $70 million demand is just for show?

end quote. This has been a weird day where there have been three big stories with geopolitical implications to catch you up on. And here's the final one. I don't know to what degree we've spoken about it, but big tech companies have been in a months-long running battle with the government of India over censoring what people post on their platforms. The Indian government has even gone so far as to threaten the employees of these tech companies with jail time if they don't comply. Now in a court filing, the Indian government says one of those platforms, Twitter, has lost its liability protection in India since it's failed to comply with IT rules introduced in February. Quoting TechCrunch. Internet services enjoy what is broadly referred to as safe harbor protection that say the tech platforms won't be held liable for the things their users post or share online. If you insult someone on Twitter, for example, the company may be asked to take down your post, if the person you have in the person you have in the company,

consulted has approached the court and a takedown order has been issued, but it likely won't be held legally responsible for what you said or did. Without the protection, Twitter, which according to Mobile Insight firm App Annie, has over 100 million users in India, is on paper responsible for everything those users say on its platform. With the liability protection stripped off, Twitter executives in India could face several criminal charges over content deemed objectionable on the platform. Indian police have already filed at least five cases. against the company or its officials in the country over a range of issues. A special squad of Delhi police made a surprise visit to two of Twitter's offices in late May in what many perceived

as an intimidation tactic. Google, Facebook, and several other firms have partially or fully complied with the IT rules, which among other things requires any significant social media firm, or any firm over 5 million users in India, to appoint a chief compliant officer, a resident grievance officer and a so-called notal contact person to address on the ground concerns. Twitter has not complied with any of these requirements, the court filing said.

Twitter had no comment on Monday's filing, but said in the past that it intends to comply with the IT rules, end quote. But again, this would all seem to be part of a broader trend, right? For example, a trade group representing Apple, Google, and Facebook, as well as others, is warning

that those companies could stop their services in Hong Kong if a planned anti-doxing rule goes ahead in that region, quoting the New York Times. The June 25th letter, which took issue with broad new rules created to curtail doxing, the targeted disclosure of individuals' private information, was the latest sign of the dilemma faced by tech companies in Hong Kong, where the government has created harsh new rules to control what is said online. Once a haven of internet freedom on the doorstep of China's tightly controlled internet, Hong Kong is home to offices and servers for many major internet companies. Yet under a recent national security law, the city faces a new digital reality in which the

authorities have broad surveillance and censorship powers. That has increasingly called into question the viability of continuing operations for major internet companies. The Singapore-based Asia Internet Coalition, which represents Apple, Amazon, Google, Facebook, and other tech companies warned in the letter that the new rules would, quote, result in grave impact on due process and risks for freedom of expression and communication, end quote. Of particular concern, according to the letter, was general wording that could give the police the power to impose fines and arrest local employees if the tech companies are not responsive to the new doxing rules, end quote.

Obviously, the trend here to take note of is the targeting of these companies' actual employees. Like, that is all of these companies' main weak points. if Twitter, Facebook, Google, and others start seeing employees put in jail, what happens then? They will either be forced to comply with objectionable rules or else stop doing business in those countries entirely. The question is becoming, which outcome do some countries want more at this point? Maybe they want both, either or would be good. Heads, the companies fold and comply with the new censorship or surveillance rules.

Tails, the companies leave the field to perhaps domestic competitors to swoop in and take over the power vacuum. Depending on the country, certain governments might see either scenario as a win at this point. So if you notice the change in sound quality, it is because I'm not in my usual studio. We're up in Northern Michigan this week, so I've got a travel microphone. Among other things, also, this Airbnb that we're staying at, of course, wouldn't you know that while it's been completely quiet here since we've been here. Right when I was set to record today, they decided to do bush trimming and leaf blowing with loud machines right under my window. That's not something I encounter often in Brooklyn. Murphy's Law and Action, right? Talk to you

tomorrow.