Tech Brew Ride Home - Wed. 11/06 – The Tech Angle To Election Day

Episode Date: November 6, 2024

The tech angle to the election news yesterday, and interestingly a lot of it is crypto related. The EU Commission looks like it will fine Apple and has opened a case against Corning? Perplexity is raising another massive new round. And a pretty definitive piece about how drone tech has changed warfare. Sponsors: Head to Lumen.me/RIDE for 15% off your purchase. WashingtonPost.com/ride Links: Polymarket, Prediction Betting Markets Vindicated by Trump's Strong Showing (Coindesk) Apple to Face First EU Fine Under Bloc’s Digital Markets Act (Bloomberg) Corning Faces EU Probe Into Smartphone ‘Gorilla Glass’ (Bloomberg) How Lina Khan Became an Election Hot Topic (NYTimes) Mozilla Foundation lays off 30% staff, drops advocacy division (TechCrunch) AI Startup Perplexity to Triple Valuation to $9 Billion in New Funding Round (WSJ) Battles of Precise Mass (Foreign Affairs) 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 Wednesday, November 6th, 2024. I'm Brian McCullough today. The tech angle to the election news yesterday. And interestingly, a lot of it is crypto-related. The EU Commission looks like it will fine Apple and has opened a case against Corning. Perplexity is raising another massive new round and a pretty definitive piece about how drone tech has changed warfare. Here's what you miss today in the world of tech. Well, here's the tech angle on the election for you from yesterday a bunch of things. So I'm just going to do a grab bag. Trump Media and Technology Group's stock jumped more than 35% in pre-market trading, hitting a greater than $7 billion market cap. Tesla is up more than 10% in pre-market.

Looks like Elon Musk's gamble on Donald Trump paid off. Trump gave Musk a lengthy shout-out in his victory speech, calling him a super genius. Bitcoin has passed $74,000 hitting an all-time high, and other coins have also jumped. Bitcoin is up nearly 70% year to date. Republican blockchain entrepreneur Bernie Moreno defeated Senate banking chair Sherrod Brown in the Ohio Senate race. Crypto PACs gave more than $40 million to defeat Brown. And actually, a lot of the winning angles here are about crypto. For example, the prediction markets, they're largely built on blockchain-related technologies, right? Polymarket, Kalshi predicted, which heavily favored Trump for months.

Does this vindicate them? Quoting Coin Desk. To those who'd been watching the odds on polymarket Kalshi predicted and similar betting sites over the course of the year, the results were long within the realm of possibility. The markets were far and away the best forecast of the 2024 election, said Coleman Strump, a professor of economics at Wake Forest University in North Carolina. While pollster said too close to call or Democratic nominee Kamala Harris is favored, markets identified Trump as the favorite, end quote. The vindication comes after several weeks in which the mainstream media harped on the theory, that Polly Market, which runs on crypto rails and has seen billions of dollars in trading volume this year, was being manipulated by pro-Trump forces to inflate his odds. None of the hysterical claims

about how markets would damage democracy or other woes came to pass, Strumpf said. Although the Associated Press, traditionally the gold standard, had not called the race in the wee small hours of the morning Wednesday, Polly Market was giving Republican candidate Donald Trump a 98.8% chance of retaking the White House up from about 60% 24 hours earlier. For most of the late summer and fall, polls were giving the edge, albeit small and sometimes within the margin of error, to Democrats. But by 1.25 a.m. Eastern Time Wednesday, even the New York Times, hardly in the tank for Trump, was giving him a greater than 95% chance of victory. The newspaper's online needle was forecasting he would win 306 electoral votes, well more than the 270 needed to win. None of this is to say that polls and other forecasting methods still don't have their place, as even proponents of prediction markets were quick to point out.

The lesson is that markets are great and forecasts are an input to those markets, said Haseeb Quicherry, a managing partner at Dragonfly, an investor in Polly Market, both are valuable, and in this case they didn't disagree by much, but markets were probably adding in some alpha into the raw forecast that was missing. Aaron Brogan, a lawyer who has studied prediction markets cautioned against making sweeping conclusions from the fresh data. This outcome is consistent with both the prediction market accuracy and an unremarkable polling error, modestly biasing traditional polling aggregates. Brogan said, polling aggregators felt this race could swing either way, so this correct prediction market outcome

could easily be the result of pure chance. While this result is vindicating for prediction markets of the hypothesis that highly liquid markets produce reliable election signals is best demonstrated over time across a number of races, end quote. The sources are telling Bloomberg that EU regulators are planning to fine Apple under the DMA after it failed to let developers steer users to cheaper deals and offers outside the App Store. Quote, the penalty under the Tough New Digital Markets Act is set to come just months after Cupertino-California-based Apple was hit with a $1.8 billion fine for similar abuses under the block's traditional competition rules involving music streaming service Spotify. The European Commission could still unleash the fine before current EU Competition Commissioner Margus Vestager is due to leave office later this month, according to the people, but there was a chance it could be pushed back to later this year, they said.

The fine could also be accompanied by a periodic penalty payment system levied on Apple until it complies with the law, said the people, adding that the decision was still being drafted. The move follows a warning to Apple in June that it must give developers effective means to steer users away from its app store or face future penalties. In contrast to traditional antitrust law, the DMA is designed to head off anti-competitive behavior before it is too late and wrecks markets for good. Under the law, EU regulators have powers to find the world's most powerful tech firms 10% of their global annual sales, 20% in the event of repeated infringements, or periodic fines of as much as 5% of the average daily revenue. Earlier this year, EU antitrust regulators also managed

to force Apple to allow third parties to use the iPhone's payment chip to handle transactions, a move that allows banks and other services to compete with the Apple Pay platform, end quote. And I don't know how much this is tech, but it's certainly tech adjacent. And it's just interesting. The EU Commission has also opened an antitrust investigation into smartphone glassmaker Corning over allegedly abusing its market dominance to squeeze out rivals. Quoting Bloomberg, the European Commission said Wednesday it had concerns the company may have distorted competition by forging exclusive agreements with mobile phone manufacturers. The Brussels-based EU executives said the agreements may have also blocked

competing glass manufacturers from making deals with smartphone makers. We are investigating if Corning, a major producer of this special glass, may have tried to exclude rival glass producers, thereby depriving consumers of cheaper and more break-resistant glass. EU competition chief Margath Vessiger said in a statement, while Corning still has the opportunity to offset the Commission's concerns, it could eventually face hefty penalties of up to 10% of global annual revenue. According to markets, alkali, aluminum-silicate glass used as cover for displays of portable electronic devices such as mobile phones, tablets, or smartwatches, under the Gorilla Glass brand, among others, end quote. Back to the election, but through a regulatory lens, if the Republicans

have all three pillars of government now, what does that do to the regulatory environment for tech? You'd think it would change, right? Starting with perhaps Lena Kahn, quoting the times. In the run-up to the election, Lena Kahn, chair of the Federal Trade Commission was called a dope, partisan, and unhelpful by Democrats and Republicans. Democratic donors, including the billionaires, Reid Hoffman, Barry Diller, and Mark Cuban called for her ouster from the agency. Last week, a report from the Republican-led House Judiciary Committee accused her of having a far-left agenda and weaponizing the agency. Khan, quote, will be fired soon, Elon Musk, the owner of X and a supporter of former President Donald J. Trump wrote on his platform on Thursday,

few government officials elicited such intense bipartisan attention ahead of the election, making speculation regarding the future of Ms. Khan, nominated in 2021 by President Biden, one of the most avid parlor games in Washington. The fixation on Ms. Khan 35 is uncommon for a leader at the long under-the-radar FTC, which regulates companies that subvert competition and deceive consumers. It reflects the high stakes of the Biden administration's wide-ranging program to dampen the power of America's biggest corporations, which either presidential candidate could reverse, if victorious. Scrutiny from the FTC and the Justice Department has led to the collapse of billions of dollars in recent corporate deals. Lawsuits filed by the agencies could break up big American brands

like Google, Amazon, and the parent company of Ticketmaster. Ms. Khan has argued to regulate artificial intelligence, ordered companies to make it easier to cancel online subscriptions and banned non-compete agreements, which stop workers from taking a job with a rival employee. The backlash from the business world and its Washington allies has been fierce, and it ramped up before the vote. It's now clear that Chair Khan will stop at nothing to accomplish the radical left's desired end, said Representative James R. Comer, Republican of Kentucky, in a statement announcing a House Oversight Committee's report critical of her leadership last week. In a September interview with the New York Times, Ms. Khan acknowledged that

she had been under fire but dismissed much of the criticism. When you say something like, well, there's a lot of visceral dislike of what our agency is doing, I think you have to, first of all, figure out which are the voices that you're privileging and focusing on, she said. We try to open our doors and make sure we are keeping the full country in mind rather than people who have access to power, end quote. She could not, quote, predict what's going to happen in November or after that, end quote. One more, because I wonder if this is regulation related as well. The Mozilla Foundation is laying off 30% of its employees and told staff in an email that it is eliminating its advocacy and Global Programs Division. The reason I wonder about regulation is, let's imagine Google is forced

to stop cutting exclusivity deals with folks like web browsers to be the default search option. Is Mozilla maybe getting ahead of that possibility? Or maybe after yesterday, they don't have to. But quoting TechCrunch, when reached by TechCrunch, Mozilla Foundation's communications chief Brandon Borman confirmed the layoffs in an email. The Mozilla Foundation is reorganizing teams to increase agility and impact as we accelerate our work to ensure a more open and equitable technical future for us all. That unfortunately means ending some of the work we have historically pursued and eliminating associated roles to bring more focus going forward, read the statement shared with TechCrunch. According to its annual tax filings, the Mozilla Foundation reported

having 60 employees during the 2022 tax year. The number of employees at the time of the layoffs was closer to 120 people according to a person with knowledge. When asked by TechCrunch, Mozilla's spokesperson did not dispute the figure. This is the second layoff at Mozilla this year, the first affecting dozens of employees who work on the side of the organization that builds the popular Firefox browser, end quote. Sources say perplexity is finalizing a $500 million round led by IVP that would value the AI startup at $9 billion triple its reported valuation from just a few months ago.

Quoting the Wall Street Journal. The venture firm Institutional Venture Partners, which also holds a board seat in the startup, will lead what would be Perplexity's fourth funding round this year. The funding round would turn perplexity into one of the most valuable young AI startups to emerge out of the generative AI boom. It was valued at just $520 million at the start of this year. Perplexity, which provides answers to questions based on information it gathers from searching the web, has been widely criticized by news companies for using their reporting without fair compensation.

Wall Street Journal parent company Dal Jones recently sued Perplexity and the New York Times sent it a C-Sycindicist notice. Perplexity chief executive Aravind Shrinivas said at the Wall Street Journal's Tech Live conference last month, that he wants to reach revenue-sharing partnerships with news publishers. The company also said it would defend itself against the lawsuit. The new funding comes as Perplexity is facing increased competition from OpenAI, which recently added a search engine to chat GPT. Google also introduced an AI-powered feature in its search engine called AI overviews in May. Perplexity has grown quickly since it was founded in 2022. Last month, it was on pace to generate around $50 million in annual revenue. The Wall Street Journal reported up more than four times,

from earlier this year. Its prior investors include Jeff Bezos, NVIDIA, and the venture firm New Enterprise Associates, end quote. Finally today, a bit of a long read, although actually it's entirely a long read, but I stumbled across this and found it fascinating because it's so detailed. From Foreign Affairs, which I'm pretty sure is a venue we've never quoted from, how advances in AI and autonomous systems like drones and lower costs are shifting global wars towards precise mass. or the mass deployment of uncrewed systems. In other words, recent wars and conflicts around the world

have shown that the future of warfare might be, well, swarms. Quote, for millennia, commanders considered mass, that is, having numerically superior forces and more material than the other side, critical to victory in battle. An army stood a greater chance of vanquishing its foes if it could deploy a greater number of troops, whether armed with spears, bows, and rifles, or sitting in tanks. This principle dictated how militaries, especially those of great powers, pursued and achieved victory from Roman legions in Gaul to the Soviet army on the eastern front of World War II. Having the biggest navy allowed the British Empire to rule the seas and having more planes empowered the Allies to bomb the Axis powers to smithereens. Mass has never been everything. Better prepared, smaller militaries can thwart bigger and ostensibly more powerful ones, but it has traditionally established the odds in wars.

countries long believed that they could achieve success on the battlefield by having more troops, equipment, and provisions than their opponents. The weight of numbers would deliver victory, the thinking went, but in the late 1960s, that theory started to change. The U.S. military began seeing virtue and precision over sheer quantity. U.S. forces sought to identify track and hit targets with ever greater accuracy. That emphasis reduced the number of platforms and weapons necessary for military operations, while also helping the United States comply with international humanitarian law by limiting the likely collateral damage of strikes. The wheel has turned. The United States no longer enjoys the vast lead in precision strike capabilities that it once did. The technology underlying those

capacities, conventional munitions, sensors, and guidance systems have become cheaper over time and accessible to many countries and militant groups beyond the United States. From Azerbaijan to North Korea, other forces can strike some targets with the precision power and range that were once the preserve of the U.S. military. They have benefited from advances made in the private sector, in artificial intelligence and the widening availability of sensing and communications platforms, such as global positioning systems. With this proliferation of know-how, technology and weaponry, warfare is changing. Crucially, advances in manufacturing and software have lowered the price of key equipment. A cheap commercial drone equipped with weapons guided by another cheap drone

packed with sensors can hit specific faraway targets or conduct surveillance operations. And because they are relatively inexpensive, such aircraft can be deployed at scale. militaries are beginning to realize that they don't have to choose between precision and mass. They can have both. Systems of this kind are in military parlance atritable. That is, their relatively low cost makes the loss of any one system relatively insignificant. They are inferior in comparison with the most advanced weapons deployed by the U.S. or Chinese militaries and F-35 stealth fighter, for example, or a long-range anti-ship missile. But these systems can be deployed at a much greater scale than their most expensive counterparts. Their unit costs are low enough that their

aggregate capabilities are more affordable. It's also much more expensive at present to defend against such attacks than it is to launch them. In April, Iran flung more than 300 weapons, including one-way attack drones, cruise missiles, and ballistic missiles at Israel. With support from the United States and a handful of Middle Eastern countries, Israel repulsed almost all of the weapons. But at what cost? One report suggests that the strike cost about $80 million to launch, but $1 billion, to defend against. A wealthy country and its allies could afford that sort of expense a few times, but maybe not 20 times, 30 times, or 100 times. Fending off this form of attack is not only expensive, but also difficult. An assailant can strike at an adversary with a variety of systems. That

adversary may be able to repel one specific system but struggle to deal with others. Commanders and analysts are only beginning to figure out how to counter precise mass at scale, end quote. Hey, if you want to break from election headlines over on the rad history feed, this week's episode is about the answering machine, not just what it was like to use and have one in the 80s and 90s, but also the actual history of the technology itself. And my guest for this one is the television actress, Tony Trucks. She's wonderful. We get really nostalgic.

So old era tech history, check it out. Talk to you tomorrow. tomorrow.