Tech Brew Ride Home - Wed. 07/07 – Pentagon, RE: The JEDI Contract: Jkjkjkjkjk

Episode Date: July 7, 2021

The Pentagon wants a do-over for that JEDI contract. YC wants to do Tinder but for founder matchmaking. Amazon open sources its gaming engine. How about NFT’s but for the stock market? And if you think China is cracking down on tech companies, wait till you hear how they want to regulate when and how kids can play videogames. Sponsors: Tovala.com/ride Cybereason.com Links: Pentagon cancels $10 billion JEDI cloud contract that Amazon and Microsoft were fighting over (CNBC) Biden Sets Up Tech Showdown With ‘Right-to-Repair’ Rules for FTC (Bloomberg) Y Combinator launches a new way for co-founders to find each other (Protocol) Amazon shifts Lumberyard to open source 3D game engine supported by 20 companies (Venture Beat) Fake Tesla, Apple Stocks Have Started Trading on Blockchains (Bloomberg) China's Tencent Says It'll Use Face Recognition to Keep Minors From Gaming at Night (Gizmodo) 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 TechMeet. right home for Wednesday, July 7th, 2021. I'm Brian McCullough today. The Pentagon wants a do-over for that Jedi contract. Why Combinator wants to do Tinder, but for founder matchmaking. Amazon

Open Sources, it's gaming engine. How about NFTs, but for the stock market? And if you think China is cracking down on tech companies right now, wait until you hear how they want to regulate when and how kids can play video games. Here's what you missed today in the world of tech. So I'm glad we've gone through all of that Michigas that we've gone through these last few years, because at least the lawyers got paid. The Pentagon has announced that it is officially canceling the $10 billion Jedi cloud contract that was awarded to Microsoft but faced legal challenges from Amazon. The plan seems to be to scrap the whole process and just start again,

soliciting bids for a new contract that will explicitly be looking for multiple vendors, which, you know, why not do that in the first place? Not only would that avoid the acrimony of what we've seen these last few years, wouldn't the Pentagon being reliant on more than just one vendor be a good idea in the first place anyway? Quoting CNBC, the Jedi or Joint Enterprise Defense infrastructure deal has become one of the most tangled contracts for the Department of Defense. In a press release Tuesday, the Pentagon said that, quote, due to evolving requirements increased cloud conversancy and industry advances, the Jedi cloud contract no longer meets its needs, end quote. The fight over a cloud computing project does not appear to be completely over yet, however.

The Pentagon said in the press release that it still needs enterprise-scale cloud capability and announced a new multi-vender contract known as the Joint Warfighter cloud capability. The agency said it plans to solicit proposals from both Amazon and Microsoft. for the contract, adding that they are the only cloud service providers that can meet its needs. But it added it will continue to do market research to see if others could meet its specifications. The Illulgrative Jedi contract was intended to modernize the Pentagon's IT operations for services rendered over as many as 10 years. Microsoft was awarded the cloud computing contract in 2019, beating out market leader Amazon Web Services. A month later, Amazon's cloud computing unit, AWS filed a lawsuit in the U.S. Court of Federal Claims protesting the Jedi decision. The company argued that President Donald Trump's

bias against Amazon and its then-CEO Jeff Bezos influenced the Pentagon to give the contract to Microsoft. Last year, the Pentagon's Inspector General released a report saying that the award did not appear to be influenced by the White House. However, the Inspector General noted in the 313 page report published in April 2020 that it had limited cooperation from the White House officials throughout its review, and as a result, it could not complete its assessment of allegations of ethical misconduct, end quote. As David McCabe snarked on Twitter, the real Jedi contract was the lobbying retainers we signed along the way. But seriously, so much corporate time and money was spent fighting over this thing for years, and now it's just canceled, end quote. And as Alex Cantowitz tweeted, happy first day, Andy Jesse, end quote.

sources are telling Bloomberg that the Biden administration will direct the FTC to draft new right-to-repair rules, with an explicit mention of mobile phone manufacturers expected in the directive. This is obviously directed at one company in particular, quote, tech companies including Apple and Microsoft, have imposed limits on who can repair broken consumer electronics like game consoles and mobile phones, which consumer advocates say increases repair costs. The order is also expected to benefit farmers who face expensive repair costs from tractor manufacturers, who use proprietary repair tools, software, and diagnostics to prevent third parties from working on the equipment, according to the person who requested anonymity to discuss the action ahead of its official announcement.

The executive order, which is expected to be released in coming days, is broadly designed to drive, quote, greater competition in the economy in service of lower prices for American families and higher wages for American workers, White House Economic Advisor Brian Dees said on Friday. The Biden administration's effort comes as the European Commission has also announced plans for new right to repair rules that would govern smartphones, tablets, and laptops. Environmental activists have said that restrictions on repairs encourage waste by making consumers more likely to throw out damaged items because of the high cost of repair. But tech companies and manufacturers have warned that opening access to underlying software,

and services would endanger Americans from improperly installed batteries on tech devices to modifications on tractors and other heavy equipment that could bypass environmental and safety systems, end quote. You know, it's funny. We as consumers were trusted to do what we wanted with the gadgets and devices that we owned, that we purchased for ourselves for, I don't know what, 150 years without the manufacturers looking over our shoulders. Early radio and computer kits were literally that. They were kits. You were expected to put them together yourself. And believe me, early cars were in no way safe to operate and broke down constantly. It wasn't like Henry Ford offered roadside assistance or anything. You had to go to a repair man. I think we can probably

go safely back to those days, no matter what big tech tells you. Y Combinator has launched a free co-founder matching service for those entering its program. Y Combinator says only four of the top 100 YC-backed companies came to the program without a co-founder, so they think teams are pretty important, quoting protocol. Its new co-founder matching service will allow founders to fill out profiles about what their interests are and what attributes they're looking for in a co-founder. We realize this is a problem a lot of founders face, particularly internationally, Corbett said. I think it's less of a problem if you've gone to Stanford or live in

San Francisco where there's a stronger established network that makes it easier to find people, but our community is all over the world. We have startup founders in 190 countries, end quote. A common match is a non-technical founder looking for technical founders, said Catherine Lee, an engineer at YC, who built the service. Founders also often narrow it down by geography, from entirely remote or same time zone to looking for people within a country or within 30 miles of their town. After Founders match, Y.C. sends them a survey and encourages them to work on a project together. It's even got a template of an agreement to help Dodge co-founder disputes. Already 4,500 people have used it, and over 9,000 matches have been made from people testing it within the startup school community.

Lee said the median number of profiles someone goes through is around 100. On Tuesday, anyone will be able to sign up to be added, end quote. Amazon is open sourcing its Lumberyard Game Engine. The project will now be overseen by the Linux Foundation and will now be called the Open 3D Engine, quoting Venture Beat. This shift could bode well for future projects like an open metiverse, the universe of virtual worlds that are all interconnected, such as in novels like Snowcrash and Ready Player 1.

prominent game developers such as Dennis Dyak and his Apocalypse Studios are participating in the project, which has more than 20 founding members including Amazon Web Services, Adobe, Huawei, Neantic, and Red Hat. The open source engine will enable developers to build royalty-free 3D games and simulations, giving the game and application companies some leverage against the commercial game engines from Unity Technologies and Epic Games. This is the evolution of where engines need to be going, as we're getting into the meta space and into the cloud space. Dyak said in an interview with Games Beat,

it is a completely open source engine, where your goal is to have many people contribute to it and be a resource for the entire industry to use. They want to use it completely open and completely free, and it's a watershed mark in the industry because nothing like this has ever happened before, at least in the video game industry, end quote. The Open 3D Foundation will support open source projects

that advance capabilities related to 3D graphics, rendering, authoring, and development. Amazon Web Services is contributing an updated version of the Amazon Lumberyard Game Engine as the Open 3D Engine under the permissive Apache 2.0 license, end quote. So, shots fired, Epic and Unity. If what I'm reading is to be believed, this is a AAA-worthy engine, and Amazon doesn't really much care if the underlying engine earns royalties so long as the gaming and development takes place on AWS, right? Talk about playing the long game. as I don't really know this space, note this from at McClure-1-1-1 on Twitter, quote. Okay, so if you haven't been following, Amazon licenses a 2015 version of Cry Engine and forks it.

They release it as quasi-open source where it's free to use, but you're required to use AWS for web hosting. Literally no one takes them up on the offer. Amazon gives up, releases it as Apache 2 OSS, but still not sure if it's worth it. We have an embarrassment of high-quality open-source 3D game engines by now, to the extent where if you look at adopting an engine, you worry about is it worth the onboarding costs, not is it worth the price, end quote. Hey, would you like to trade shares of companies like Apple, Amazon, or Tesla? But, you know, Robin Hood is too staid and old-school a platform for your tastes? how about trading them on the blockchain instead? One big catch, however, you're not trading real shares of stock. You're trading synthetic stocks. And in theory, these synthetic stocks just track the price of the real stocks. You actually own nothing. It's sort of like NFTs, but for stocks, which, depending on your point of view, is either amazing or the worst idea ever. Quoting Bloomberg. Fake versions of Tesla, Apple, Amazon, and other big stocks, as well as a few popular exchange

traded funds, have been created by the project's Mirror Protocol and Synthetics over the past year. The tokens and the programming that allows them to trade are engineered to reflect the prices of the securities they track without any actual purchases or sales of the real stocks and ETFs involved. So far, volumes are just a tiny fraction of those on regulated exchanges, but for crypto enthusiasts, the potential upside is huge. At the moment, it's a case of innovation that's way ahead of regulation, which is exactly how Doe Kwan likes it. The co-founder and CEO of Terraform Labs, the South Korean company that created the Mirror Protocol on its Terra blockchain, Kwan fancies himself as a sort of modern-day Robin Hood of finance in the mode of Vlad Tenev or

Chumath Palihabitia. Difi is, quote, so powerful in unlocking financial. financial services for disenfranchised people around the world, he said via email, that, quote, it's better to move fast and break things. Waiting for fragmented regulatory frameworks to crystallize before innovating is counterintuitive, end quote. For Kwan and other proponents of these new synthetic assets, avoiding the various rules and barriers of the financial world is a feature, not a bug. It opens up opportunities for wealth creation currently, only available to a fortunate few, he said. Users can trade the tokens anonymously, 24 hours a day, seven days a week, from anywhere, unhindered by capital controls, know-your-client rules imposed on broker-dealers, and other

frictions of the traditional financial system. Quan said Terraform Labs doesn't generate any revenue from fees charged on the Mirror Protocol. Those go to users as an incentive to provide liquidity. Rather, the firm profits via a cryptocurrency it created that tends to increase in value as projects like Mirror grow in popularity. So how exactly do these synthetic equities work? Well, it's complicated. But, To oversimplify, under the Mirror Protocol, the idea is to keep prices of the synthetic or mirrored equities in the ballpark of the real thing by offering incentives for traders to arbitrage price discrepancies and manage the actual supply of tokens. Users can create or mint new tokens

when prices are too high by posting collateral and destroy or burn tokens when prices are too low, driving the price up or down. Through these incentives, the synths, closely track the price of the real-world asset, Kwan said, but there's still only tokens on a blockchain providing explicit price exposure, end quote. So far, trading volumes likely aren't high enough to cause executives at NASDAQ or the New York Stock Exchange to lose much sleep. Mirrored Apple tokens, for example, have a market capitalization of about $34 million, according to coinmarketcap.com.

That compares with about $2.3 trillion for the real stock and is around 1-1-1,000th, the size of the novelty cryptocurrency Dogecoin. A comparison of prices between various mirrored equities and the real securities at various times over the past week shows that the difference between the two can range from a penny to several dollars. For example, in afternoon trading on June 30th, the price of mirrored Tesla on coinmarketcap.com was almost $6 higher than the $684 level the real shares were trading for on the stock market, end quote. Quoting Alex Willem on Twitter. Here's that thin line between, damn, that's actually super cool, and oh shit, people are going to get scammed that I run into constantly when observing nascent crypto products, end quote.

Finally today, more word that China intends not just to meddle in its tech industry, but to actively manage it going forward. They don't call it state planned and directed industry for nothing. Sources are telling Bloomberg that China plans rule changes that will require Chinese companies to seek approval to list their shares overseas, even if the unit selling shares is incorporated outside of China. To be honest, I'm kind of surprised that rule didn't already exist. But if you think China wants to stop there, then you don't know the CCP. In an effort to stay ahead of regulators, China's Tencent says it'll use facial recognition technology to keep children from gaming too long into the night.

That's right. No sneaking your Fortnite sessions under the covers. Quoting Gizmodo. Tenson is attempting to keep ahead of recent regulations designed to stamp out what the Chinese government defines as excessive and unhealthy gaming habits. In 2019, China passed a law ostensibly intended to prevent minors, quote, from indulging in online games, end quote. According to NPR, that includes a ban on minors playing video games from 10 p.m. to 8 a.m. as well as limiting their playtime to 90 minutes a day. The law also prohibited minors from spending more than $28 to $57 a month on microtransactions. New rules requiring all individuals regardless of age to register for games using their real identities and prohibiting citizens from playing games that include sexual explicitness, goryness, violence, and gambling were also implemented.

At the time, NPR reported the state administration of press and publication, and the Ministry of Public Security said they were collaborating to build, quote, a unified identification system for games. Tencent is one of the many Chinese tech companies involved in enforcing their government's draconian censorship laws, which prohibit a wide range of speech considered sensitive by authorities. But it's also been on the other end of the stick, as when it lost out on massive amounts of revenue due to a regulatory moratorium on licensing new games in 2018. Digital Trends reported that Tencent refers to the new system as Midnight Patrol and says it scans the faces of players and compares the result against a database of faces and names. Users flagged as miners will then be locked out of games whenever they have played for the maximum amount of time or attempt to play during prohibited hours. Tensen also said in a release that adults will be able to simply submit another face scan if they are mistakenly locked out. Chinese authorities could presumably choose to hoover up face recognition data from Tencent into the social credit system emerging around the country. Tencent will initially include some 60 games as part of the program, but according to digital trends, the list does not include one of its most popular e-sports offerings, Riot Games' League of Legends, end quote.

So Penny and Max, if you're listening, if you think the gaming rules in our house are tough, try moving to China. So we're not going to do a Twitter space tonight. I really am treating this week as a quasi-vacation. But if you check out the SpaceCast feed, you will see a new show with Chris Messina. That is an Ask Me Anything show where Chris was asked, among other things, how to nail your launch on Product Hunt. In case you're not aware, Chris is the number one hunter on Product Hunt. And yes, the England-Denmark game is mere hours away.

No, I'm not nervous. You're nervous. Talk to you tomorrow.