Discover more from The Industry
Deep State Trojan Horse
the industry #13 // wild GOP report on america's wide-reaching censorship apparatus, sam altman's ai-wrapper extinction event, sbf is guilty, wework is bankrupt, tech links
In yet another alarming chapter of the horror story that is our nation’s sprawling, unofficial censorship apparatus, Congressman Jim Jordan released a major GOP report on the government’s relationship with the Election Integrity Partnership (EIP), a cabal of “disinformation researchers” led by the Stanford Internet Observatory (SIO). The report’s focus on non-government organizations (NGOs) is crucially important. Given it is extremely unconstitutional for a government agency to inform Mark Zuckerberg what he needs to censor on his platform, the government’s censorship attempts have to be decentralized, with government opinions laundered through a middleman. This is where the EIP comes in, which filled the ‘neutral’ middle role throughout our 2020 election.
But the crux of the GOP’s argument: unelected bureaucrats working for the Department of Homeland Security (specifically, CISA) actually requested the establishment of an NGO (the EIP) to flag “disinformation” for our social media giants. The NGO, in regular communication with the bureaucrats at both the DHS and (importantly, as this is their cover) the State Department, filed reports to platforms like Twitter, Facebook, and TikTok on “disinformation,” including a mix of both actual disinformation and what we now know to be true information (but flavored Republican). Then, the EIP gave advice on how specifically to censor ‘malicious’ material, and, in many cases, the posters responsible. Online, various lists of Americans targeted by the Deep State have been produced. Alas, I have only been able to find abridged examples, and I regret to inform you I was not — to the best of my present knowledge — deemed worthy of targeting.
I’ve argued for years the relationship between academics, the government, and tech was decentralized, unofficial, and probably coincidental. My thinking has been, well, all the people who run these institutions simply believe the same things. With fewer people holding more power over speech than ever before, a kind of de facto state censorship was maybe just inevitable. But I never believed there was actual collusion between, for example, the government and tech. However, with more details on the relationship of these groups, and the role of the EIP in general, I’ve begun to question that initial sense.
There probably should be some relationship between the government and tech on speech. Narrowly, for example, we face the very real and constant problem of actual disinformation from foreign governments — ops run by China or Russia’s equivalent of the CIA. This is why the State Department was included in the EIP’s nebulous maze of channels, and constitutes the kind of work disinformation researchers often hide behind. Americans should be protected from foreign governments, but the GOP’s report argues monitoring of this kind of speech ultimately constituted a fraction of the speech censored throughout 2020.
Academics and “Never Trump” radicals with desk jobs in Washington created a firewall for every kind of speech they found ‘dangerous,’ which they defined as ‘things we don’t believe in personally.’ The important question now, in advance of our next election, is how much of that firewall remains intact?
THE FIFTH ESTATE
NOTABLE INDUSTRY TRENDS
Babe wake up, it’s OpenAI Dev Day. Monday, Sam Altman took the stage with a slew of announcements surrounding his faster, cheaper baby supergod, and introduced, among other things, customized “GPTs” that anyone can build. The internet’s big takeaway, however, was his new plug-in store amounted to an extinction event for AI wrapper companies, given OpenAI’s apparent ambition to build many of the popular tools other devs have been building on top of OpenAI. Still, others welcomed a wave of startups focused on novel data ingestion. For more, check out Ben Thompson’s great recap over at Stratechery.
SBF. It took approximately 30 seconds (okay 4.5 hours but still that’s WILD) for a jury to find Sam Bankman-Fried guilty on all counts, including: two counts of wire fraud, two counts of wire fraud conspiracy, one count of securities fraud, one count of commodities fraud conspiracy, and one count of money laundering conspiracy. Sentencing comes next, and it’s looking like the DNC superdonor and former savior of the human race is going to be spending a lot of time in prison.
Is this a major industry trend, however? A tough call for me this week, but I’m keeping the story up in Fifth Estate because of this crazy ass side-by-side that’s been making the rounds on social:
First, the fall of SBF, as with Holmes, is also an indictment of the fawning press that covered these people — neither of them standard tech bros, but the kind of billionaire founder journalists have always wanted to exist. Then, the final piece here worth keeping mind, there is an enormous public hunger to see all of you in jail, by the way, so please be careful out there, and don’t do crime. <3
Ok but is WeWork actually vanishing now or? It’s official folks, WeWork has filed for bankruptcy with $19 billion in liabilities and only $15 billion in assets. But the really important thing here is just: what’s about to happen to your dank coworking space?
First of all, this is America, which means the rich go out different (a good thing btw, but we’ll save it for another day). “Bankrupt” doesn’t mean “gone,” exactly, but there is a hierarchy in terms of who gets screwed the most. The likeliest case is equity shareholders and stockholders get nothing, and debt holders get whatever is left. Someone could buy the company, shed the worst leases, renegiotiate the rest, and operate a leaner WeWork that benefits from stunning spaces built out using ZIRP-era VC dollars. So your nearest WeWork may shut down, but a lot of them, in some form or another, will likely stick around.
Now, the real question. Is Adam Neumann about to buy his company back? Because Adam Neumann seems to be signaling he wants to buy his company back.
The United States Space Force awarded SpaceX $1.23 billion in rocket contracts for 10 launches. The other 11 contracts were awarded to ULA, the joint Boeing and Lockheed Martin venture which has lost some ground since dominating 60% of the contracts in 2020. (Media Release)
Jeff Bezos is moving to Miami. (A latina girlfriend will change a man.) (Jeff Bezos)
Attendees of the Hong Kong Apefest for Bored Ape holders got sunburns, eye pain, and even vision problems after organizers accidentally used UV lights on stage. (Verge)
Project Forever, California’s new city (“tech bro dystopia,” if you ask the hysterical press) has amassed more than 53,000 acres. Manifest destiny appears to have reached its conclusion, however, as the company has no plans to continue its buying spree. (Insider)
Beta Technologies’ CX300, a battery powered electric plane, just flew from Vermont to Florida, making around two dozen stops along the way, and offering a glimpse of carbon-free flight. (NYT)
Twitter/X is launching a username marketplace for inactive handles, and is looking for buyers willing to pay up to $50k. I guess I’m into this conceptually, but is it kind of feeling like your parents just went bankrupt and the repo guys have come for the family cat? (Insider)
Epirus, which uses high-power microwaves to fry enemy drones, has delivered its first unit to the military. Drone wars lfg (Epirus)
College kids have left the dating apps. Is this because they’d rather do things the old fashioned way (meeting in a packed fraternity basement), or are they just not having sex anymore due to plummeting levels of testosterone? Who knows. Who cares! (I am personally getting laid quite often.) (Axios)
Today in unhinged Apple workforce drama: the company’s internal slack channels for Jewish and Muslim employees were paused by management after Muslim employees attempted to organize a protest, and published “posts that included verses from the Islamic holy book as well as ‘certain words that are said by international organizations.’” In other words a holy war in a Cupertino-based cafeteria. Serious question, do these people not have jobs? (NY Post)
At Bumble, Whitney Wolfe Herd is out, and former Slack CEO Lidiane Jones is in. Wolfe Herd will be moving to an executive chair role, and Jones will be bringing her experience at Salesforce and Microsoft to the task of, apparently, applying AI to matchmaking. (TechCrunch)
Jack is back. After substantial quarterly losses amidst an overall decline of fintech stocks, Jack Dorsey is back at the helm at Square. Return of the King, LFG (WSJ)
WaPo committed to laying off 10% of its staff by the end of the year. (CNBC)
$100 million loss projected
FLASHBACK: a dedicated piling into batshit crazy activist reporting (Pirate Wires)
Wholesale marketplace Faire laid off 250 employees across multiple departments. (Insider)
NFT marketplace OpenSea laid off 50% of staff after falling behind Blur, which has won 70% of NFT trading volume. We’d ask an NFT trader about this, but we personally haven’t seen one in a year. (Decrypt)
German AI startup Aleph Alpha raises a $500M Series B. (TechCrunch)
Speaking of Europe: Vice Chancellor and Minister for Economic Affairs Robert Habeck stated, “If Europe has the best regulation but no European companies, we haven’t won much.” (Bloomberg)
Siemens is coming to Fort Worth, Texas with a $510 million investment in a new plant to make equipment for data centers and industrial power plants. The move will add 1,700 new jobs. (Bloomberg)
Carta reported a slowing funding environment for late-stage startups. This has left highly-valued companies searching for capital in a dire exit market, resulting in shutdowns including OliveAI and Convoy. (Insider)
Sheryl Sandberg and husband Tom Bernthal have started a fund. (The Information)
Starlink is at cash-flow breakeven according to Musk. With 5,000 satellites it’s the largest satellite operator. Musk remarked he would be interested in a public listing once cash flow is more predictable. (Reuters)
Palo Alto Networks is set to acquire Israeli startup Talon Cyber Security for a valuation speculated to be between $600M to $700M. (The Information)
Replit created a tender offer for current and former employees in its first liquidity event. Craft Ventures will be investing $20M. (Replit)
Big news for the Bay Area-based citizens of Pirate Nation: Yesterday we launched Dolores Park, a newsletter entirely dedicated to San Francisco. Beats include every important piece of news from the city’s executive and legislative branch, all the latest from its noble class of unhinged activists and unelected city bureaucrats, and whatever else my team finds interesting. Henceforth, Pirate Wires staffer Sanjana Friedman will be sending out the weekly news roundup, and coming soon: more news coverage, and in-depth, SF-related pieces.
We won’t be signing you all up for this one as we did with the White Pill, as we know you all aren’t interested in something so locally focussed. So if you want the local focus (and if you’re living in the city you really really do) check out the first newsletter, and subscribe to get it every Wednesday:
Litigation and regulation:
Uber will pay $290 million, and Lyft will pay $38 million, in two funds meant to compensate 100,000 New York drivers for alleged wage theft. Lyft’s chief policy officer strangely signaled celebration, stating the settlement is “a win for drivers, and one we are proud to have achieved with the New York Attorney General’s Office.” No idea what they’re smoking over there but go off. (TechCrunch)
War machines at war: Anduril’s Palmer Luckey is suing Salient, a startup founded by former Anduril employees. Luckey is accusing founder Kai Yin of purposefully writing “substandard” code for Anduril while saving better code for his startup, taking a patent application to Salient, soliciting Anduril investors while falsely conveying Anduril endorsement, and claiming Anduril used Salient software rather than their own. (The Information)
The SEC has decided to subpoena Paypal amid concerns of ‘crypto financing terrorism’ (*sigh*). The suit has many critics, but the standout question has been whether crypto being pushed offshore might actually legitimize some of the terrorist or criminal financing allegations Warren keeps inventing out of thin air. (TechCrunch)
Epic Games is headed back to court in a fresh suit against Google. Epic has battled Apple since 2020 claiming they are a monopoly because the game maker isn’t happy about the 30% commission they take on in-app purchases. The court sided with Apple. Now Epic is gong after Google, but they no longer have another plaintiff to support them. Match Group dropped out after Google allowed them to make in-app purchases through other channels. (WaPo)
Elon’s drumming up excitement over his AI company, xAI, with the release of Grok. In one typical example of what the bot can do, Grok — an AI ‘with attitude’ — deploys sarcasm while instructing a user how to make cocaine. It can also access data from X, which Elon believes a distinct advantage. A limited group of users currently has access, but a waitlist is available for enthusiastic adopters. (@elonmusk)
Rishi Sunak’s AI Summit was full of discussion. Elon said AI will replace jobs so no one will have to work. Chinese and American officials stood together on stage and agreed AI would need to be controlled. OpenAI, Google DeepMind, Meta, and others agreed to government tests to address security risks. They also asked the big questions such as “open-sourced models or closed?” addressing trade-offs such as granting access to malicious actors or supporting AI efforts of countries who feel they are falling behind (lol why on earth would we do this). (FT)
Activists at the Washington Post are upset that some AI image generators are capable of making images they don’t like, such as Muslims with head coverings and attractive people who are young. We are waiting for Stable Diffusion to fire the tiny ageist, racist, fatphobic white men they have rapidly drawing all these images in the back rooms they refer to as “GPUs.” (WaPo)
Biden’s AI Chief Bruce Reed is most worried about voice deepfakes as scammers rely on the technology more and more. All it takes is a 3-4 second sample to convince parents their daughter is being kidnapped. Alternatively, NYC mayor Eric Adams has found the technology useful in connecting with non-English speaking residents. (Insider)
Pornfakes are back in the headlines. High school boys in Westfield, NY have been generating nude images of their classmates. The school principal is worried about “new technologies falsifying images,” disregarding decades-old ‘Photoshop technology’ high school boys have long since overlooked as such pursuits take nominally more effort, and high school boys are lazy as shit. (WSJ)
The U.K. government is investing $273 million into AI in order to ‘catch up with the US and China.’ They plan to call their supercomputer Isambard-AI, which will be built at University of Bristol. (CNBC)
Scarlett Johansson sues app Lisa AI: 90’s Yearbook & Avatar. The company created a 22-second ad, which was posted to X, and used real footage of Johansson to generate fake images and dialogue without her permission. (Guardian)
Thanks to AI, the Beatles have a new song. It’s called “Now and Then,” a demo Lennon created. (Verge)
Most Americans think AI will increase 2024 election misinformation. No word yet on what’s to be done with the decades-long scourge of people typing lies out on their personal computers, without the assistance of AI-generated fantasy. (The Hill)
Following US sanctions, Chinese state-backed investors piled $5.4 billion into semiconductor startup Changxin Xinqiao Memory Technologies Inc. Their targets: Micron and Samsung. (Bloomberg)
Is Lidar manufacturer Hesai being used by Chinese spies? The company insists no such security threat exists. It has had rather less to say about the accusations of patent theft from multiple American lidar companies. The stock is now down 50%, as many American and some European auto makers no longer want to use it. (WSJ)
This letter was put together with a great deal of help from Eade Bengard.