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The DOJ Takes on Tech
the industry #4 // DOJ weaponized, media blames tech for future trump victory, get in loser we're building a new city, IPOs are so back, tons of industry links, and your favorite video game is racist
As the Biden Administration’s Department of Justice attempts to jail the opposition party’s frontrunner presidential candidate, Americans have naturally been distracted by the largeness of these questions: did Trump “do it” (whatever “it” is (there’s a new thing every month or so)), will justice be delivered equally among the rest of our crooked politicians, and what will actually happen — just technically speaking — if Trump is both convicted of some crime or other and triumphant in the next election? The subject is important, if nebulous, and I’ll be covering it in greater detail as the election season heats up. But today, with federal norms so fundamentally altered in the name of ‘preserving norms,’ I find myself much more captured by a question for the Industry. What will happen to private citizens of political utility under this overtly politicized DOJ regime? The prosecution of a major presidential candidate is a huge, easy target, and for good reason. Trump will have many defenders, whether he deserves them or not. But what about the rest of us?
Last week, to broad industry shock, Biden’s DOJ filed a lawsuit against SpaceX for “discriminating” in favor of U.S. citizens and permanent residents. Only hiring Americans? Not in this country, asshole (this country is America). As Alex Tabarrok reported for Marginal Revolution, the SpaceX story was a strange case for many reasons, the government’s own policy ostensibly in conflict with the lawsuit most importantly among them. On Twitter/X, Elon argued the decision to hire American citizens wasn’t his choice. It was the law, which by the way our government was also following.
At its most basic, the conflict between SpaceX and the DOJ appears to be rooted in confusion over terminology. Space companies are ITAR-controlled, which means they can only hire “US Persons.” The phrase “US Person” apparently includes refugees and asylum seekers waiting for their day in court, while the phrase “US Citizen” does not. The government has itself used the phrases interchangeably, I guess by mistake, for years. Nonetheless, the DOJ is taking Elon Musk to court, and the reason is obvious: the Democratic Party considers him an enemy.
Elon is a proponent of “free speech,” and regardless of how perfectly the value has manifested on his platform, it’s undeniable the spectrum of acceptable politics on Twitter/X has broadened. This, for a certain kind of radical political creature, is intolerable. Kristen Clarke, head of the DOJ Civil Rights Division leading the lawsuit, not only appears to be quite racist (all “satire,” she has since alleged), but is a committed proponent of limiting speech online. Her repugnant view is held in the name of combating “hate speech,” a purposely ambiguous term that can, by design, be applied to ‘politically incorrect’ opinions on almost any polarizing topic from immigration to welfare. “Misinformation,” another concern of hers, has similarly been weaponized by the state.
For the DOJ, none of this is about SpaceX. This is all, obviously, about Elon’s stated intention for Twitter/X to remain politically neutral, which is to say this is all about the next election. Obviously. Elon is being warned: fall in line, or we will make your life a living hell. He will have to choose, as will the rest of the industry over the coming year.
THE FIFTH ESTATE
NOTABLE INDUSTRY TRENDS
The most dangerous aspect of our last election was the broad alliance between political power (including unelected political power), media, and the technology industry — the early shape of an indomitable One Party State. But that alliance, while still loosely intact, has slightly eroded over the last year. In tech, specifically, it is less socially acceptable to be so openly authoritarian. The Washington Post is therefore now preparing readers to blame Twitter/X, Meta, and YouTube for a Trump victory following a general (if very slight) relaxing of draconian, pro-DNC speech restrictions. One such horrifying liberalization: Meta now allows users to opt out of seeing fact checks on Facebook posts. This story will carry on for many months to come, likely reaching its zenith sometime around the next “stolen” election. (Washington Post)
For the last six months or so I’ve written about the cultural vibe shift, and that perspective informed a bit of my recent interview with Peter. Anyway, maybe it hasn’t entirely shifted: turns out three quarters of the companies on the S&P tie ESG to executive bonus pay, and more than half maintain DEI incentives associated with compensation, the Financial Times reports. In other words: an actual example of systemic racism. In one case, Southwest Airline CEO Robert Jordan saw his pay go up 76% last year despite the fact that his airline canceled 16,700 flights in December. Nonetheless, “with respect to ESG initiatives, including DEI and sustainability, the [board] determined that the company performed above target-level expectations.”
It is almost literally “this business is failing, but employees are increasingly of the correct race.” Who are the bigots again?
Our boys are building a city. With progress across the Bay Area largely hindered by powerful bureaucrats committed, generally, to a philosophy of chaos and decay, involvement in local politics has increasingly become a major aspect of tech industry identity. But opinion sharply divides among a few distinct strategies: 1) entrance into San Francisco’s Mad Max local politics, 2) exit to a new region (with entrance into local politics there), and now 3) Walt Disney World 2.0 — what if we just built a new city in the Bay Area, and ran it in a sane and reasonable manner? Investors in the project include industry titans Reid Hoffman, Michael Moritz, Marc Andreessen, Chris Dixon, Laurene Powell Jobs, John and Patrick Collison, and Nat Friedman. Naturally, the press has already attacked the project for imaginary slights against the “local farmers.” We’ll be following the story closely. (WSJ)
In this week’s Pirate Wires pod, we sit down with Augustus Doricko — who we recently profiled in the White Pill — to discuss (what the hell is going on in) Canada; working toward an ascendant, abundant America; cooling the oceans, plains-ing the Sahara, and terraforming Earth; and his cloud seeding company Rainmaker, which is literally making it rain.
Difficult to grasp today, on account of PDFs are now ubiquitous, but the act of sending ‘digital documents’ was once a kind of Holy Grail accomplishment in computer science. Sadly, John Warnock, inventor of the PDF, and a founder of Adobe, has passed away. (NYT)
The future of Apple remains hopelessly entangled with the future of China. (The Information)
Speaking of China, the world’s most popular spy app raked in $18B in profit last year, then lit $500M of it on fire as it built out TikTok Shop. The company is now off, of its own accord, to take on Amazon (The Information). For some reason, the app is still not banned.
From the atom factory:
Walmart will test Alphabet’s Wing drones to make deliveries up to six miles from two stores in the Dallas, TX area, marking the longest-distance tests to date. (Bloomberg)
SpaceX is partnering with Cloudflare to increase the number of terrestrial data centers around the globe, hopefully boosting Starlink speeds as a result. (The Information)
Tesla won its permit approval for a drive-in movie theater and diner EV charging station. (Teslarati)
Trump returned to Twitter/X to post his mugshot from Georgia’s Fulton County Jail. It quickly became the former president’s most popular tweet of all time. A day after the first Republican debate, which Trump did not attend, the election season has officially begun.
By the way, if Vivek wins he says he’d like to bring on Elon Musk as a White House advisor. Press loves this, of course (they do not love this). (Insider)
Instacart, the largest grocery-delivery company by sales, filed for IPO Friday. According to analysts: if the IPO sees its shadow, we will return to tech winter for at least a few more months. If it does not, the bull run will come early this cycle. (WSJ)
Arm and Klaviyo filing too (the Information)
Mortgage company Better.com lost 90% of its value after going public via a SPAC. (TechCrunch)
Nvidia Corp., the chipmaker at the forefront of an industry-wide artificial intelligence race, delivered a third-straight revenue forecast that surpassed Wall Street’s estimates. (Bloomberg)
A piece of the Nvidia puzzle: AI startup Hugging Face raised $235M from Google, Nvidia, Intel, Salesforce, and others on Thursday, and is now valued at $4.5B. (Bloomberg)
But the struggle for AI dominance rages on, with competitors in the space of AI tools now joined by a new crop of competitors in the chip space looking for a piece of Nvidia’s pie. (The Information)
Midas touch: In 2021 and 2022, OnlyFans’ Leo Radvinsky banked $284M and $338M respectively. Fairly certain he is now the most successful figure in the history of adult entertainment. (Bloomberg)
Elsewhere: the DEA accidentally sent a scammer $50,000 in Tether. Nice. (Forbes)
Litigation and regulation:
Elon’s looking forward to legal proceedings against the “George Soros-funded NGOs” who say “hate incidents” have increased on Twitter/X (@elonmusk). The trick, of course, is they define “hate incidents” as “political ideas we simply do not like,” which do appear — for now — to be legal on the platform.
The Biden administration proposed new crypto tax requirements on Friday, infuriating everyone from fiat warlord Elizabeth Warren, who simply wants it all banned, to crypto industry groups, who believe the rules are too broad. (The Hill)
A group of Tesla investors are set to get $12,000 each — $40M plus interest total — after Musk settled with the SEC regarding his 2018 tweet that said “Am considering taking Tesla private at $420. Funding secured.” (Bloomberg)
New York City will begin enforcing a requirement that Airbnb and other short term rental owners register with the Mayor’s Office of Special Enforcement, which will likely reduce the number of short term rentals on the market, as the city is allegedly processing these applications very slowly. Honestly hard to tell if this is on purpose, or if the local bureaucracy is simply broken beyond repair. (USA Today)
Flashback: one thing the city manages incredibly well, however, is housing migrants, which it does to the tune of $4.3 billion a year. (Bloomberg)
Following the Biden Administration’s ban on selling advanced semiconductor tech to Huawei, the company has begun building secret semiconductor factories across China, under the banner of separate corporate entities, in an attempt to work around the American ban. The company has received around $30B of investment from the CCP, according to the Semiconductor Industry Association (Bloomberg).
The Writers Guild of America (WGA) balked at Hollywood studios’ recent concessions regarding AI as “they refuse to craft rules regarding how the writers’ work could be used to teach AI programs to write scripts.” (Bloomberg)
A recent New York Times piece details a philosophical evolution among educators in Washington, New York, and Los Angeles. They have all reversed, or are in the process of reversing, bans on ChatGPT. Increasingly, the technology is seen as a tool that should be taught to kids. “I do want students to learn to use it,” one teacher notes. “They are going to grow up in a world where this is the norm.”
This season, Amazon is deploying a suite of new AI features for Thursday Night Football. Now, AI could be used to “automatically suss out whether a defender is likely to blitz on any given play” via body language, “highlight the most open receivers down the field,” “[show] not only a kicker’s field goal range but the exact spot from which he’s more than 50 percent likely to nail the game-winner,” and more. All of this data may be displayed to viewers in real-time visualizations (The Verge)
Notes from the capital:
Just half of Americans believe San Francisco is a safe city, down 20% from 2006, according to a recently released Gallup poll. A San Francisco mayoral spokesman told the SF Chronicle the poll has less to do with rampant violent crime and de facto legalized fentanyl dealing than the “pervasive impact of right-wing attacks” on the city. In other words, there have been some bad tweets.
A handful of mysterious internet people organized a ‘Doom Loop’ tour, which promised what I am imagining to be a kind of bar crawl through the most blight-affected neighborhoods of San Francisco. Along with media and spectators, “dozens” of attendees showed up outside of City Hall on the day of the event — along with a ‘counter group’ who had gathered there to celebrate the Tenderloin’s history and culture — but the tour failed to materialize after its organizers never showed up. Then, yesterday, Breed-installed city commissioner Alex Ludlum came forward as one of the event’s organizers, and tendered his resignation from the Commission on Community Investment and Infrastructure. “I regret that my attempt to bring attention to the deplorable street conditions & rampant criminality in my neighborhood has been misconstrued as a mockery of suffering individuals. Satire is a poor way to address the grave issues we face as a city,” he wrote in a letter to Breed. Frankly sad to lose a real one. (The San Francisco Standard)
In terms of cleaning shit up (often literally), Mayor London Breed says she’s hamstrung by a federal injunction preventing the city from clearing “homeless camps,” the local euphemism for drug encampments. She organized a protest on Wednesday, which predictably generated a counter protest, organized by the “Harvey Milk LGBTQ Democratic Club,” and the “San Francisco Latinx Democratic Club.”
Check out River’s dive into the Chinese scammers who are stealing the identity of small town mom and pop businessmen across the country, and selling fake stamps at a cost to our government likely in the hundreds of millions of dollars — if not more.
Timnit Gebru, my favorite “AI ethicist,” asserted she was “unequivocally” and “definitely” fired by Google in a recent podcast (in fact, she submitted a letter of resignation, which Google wisely accepted). Read the transcript if you like, but not before checking out our coverage of Timnit’s work, in which she seriously posits Bay Area tech nerds are building AI for the purpose of genocide. Media absolutely loves this woman.
In yesterday’s heartwarming tale of grace under fire, a heroic battalion of Nevada rangers cleared an activist group’s highway blockade. “We’re non-violent,” one woman cried as her fellow terrorists were arrested one by one, “we’re environmental protestors.” The blockade may or may not have had something to do with Burning Man, though we will not, on principle, be exploring the issue further, for fear of inadvertently ‘giving them what they want.’ Enjoy the soothing video. Nature is healing, etc.
Finally, the cherry on top of this week’s Clown World Sundae. Behold, the dumbest controversy over race and video games from the craziest people alive since the last controversy over race and video games from the craziest people alive. River Page, who is very much on the ‘dumb controversies over race and video games from the craziest people alive’ beat, I am realizing, concludes this week’s letter with the following, vital report:
Is Baldur’s Gate 3 racist? Yes.
Baldur’s Gate 3 is a new RPG video game set in the world of Dungeons and Dragons. Since its release on August 3rd, the game has already sold 5.2 million copies on Steam alone, making it one of the biggest games of the year. It’s also racist, apparently. On X, in a now-deleted-tweet (or whatever we are calling them now) one user complained “The racism in Baldur’s gate is genuinely so fucking hard on me. Playing as a Tiefling as a black person is brutal, the game antagonizes you, and the plot positions you as the bad guy if you don’t help the druids calling you slurs.”
Like that tweet, playing as a Tiefling — a horned demon-like race — is completely optional, so the least resilient could simply play as another race. Right? Apparently not. For some, just witnessing anti-Tiefling racism against NPCs is too much. “The Fantasy Racism in Baldur’s Gate 3 Affected Me More Than I Thought It Would,” reads a headline from The Gamer. The author says she was triggered by hearing an NPC call one of the Tieflings — again, a horned demon species — a “foulblood.”
This is just the latest in a years-long campaign to get D&D to “Grapple with the Racism in Fantasy,” as a 2021 Wired article put it. In the article, the author scolds D&D’s “genetic determinism,” the sort of thing which says elves enjoy poetry and dwarves are good at mining, or whatever. In the game, certain races have skill bonuses, which lead to “stereotypes” about intelligent gnome wizards, for example. Of course, if you work hard enough, you can be anything you want in the game — a half-orc scholar, say. However, the author believes this is exceptionalism is “another trap.” By the time the Wired article was written, Wizards of the Coast, the company which owns the license to the D&D Franchise, had already promised to hire sensitivity readers for their guidebooks, and to make changes to deal with the “racial reckoning” sweeping the country.
In Baldur’s Gate, it appears that some of this “reform” has already been implemented. In Dual Shockers, one writer cites a scene where you can tell off an NPC for insulting a Gur, members of a gypsy-like race of nomads. I suppose that wasn’t enough. So far as I can tell, what the very vocal minority here wants is a completely different game, in which “races” are just skins that have no bearing on the story, skills or anything else. They want to completely upend the basic mechanics and lore of D&D. That, or they just want something to complain about. Considering they’ve paid $60 for the game, and continue to play it, I suspect the latter is true.