August 23, 2022
Photo: David Paul Morris/Bloomberg via Getty Images
Hello, and welcome to Protocol Enterprise! Today: why revelations about Twitter’s internal security infrastructure from a respected source are so damaging, why DigitalOcean just parted with $350 million and why Intel is choosing an unconventional path to finance its Arizona expansion.
After the disclosure today that Twitter's former security head, Peiter "Mudge" Zatko, had filed a whistleblower complaint with numerous major accusations against his former employer, the social media company attempted to paint the action as that of a disgruntled ex-employee.
But that's not Mudge, numerous members of the cybersecurity community quickly sought to make clear — where else — on Twitter.
With his return to the spotlight today, Zatko is once again looking to sound the alarm bell — this time about the security and resiliency of a social media platform that has become a key center of public communications.
The complaint suggests that Twitter misled its own board about the security vulnerabilities and raised a number of other issues, including around data privacy, bots and a potential violation of Twitter's consent decree with the FTC.
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Cloud infrastructure provider DigitalOcean plans to amp up its support for small and mid-size businesses with its proposed $350 million acquisition of Cloudways, a managed cloud hosting and SaaS provider catering to SMBs.
DigitalOcean, which targets developers, startups and SMBs looking for a simpler, narrower and more affordable set of cloud computing services in lieu of AWS, Microsoft Azure or Google Cloud, said the purchase would simplify workflows for SMBs that want easier ways to build and scale their digital businesses.
Cloudways serves more than 72,000 customers on 570,000-plus websites and has worked closely with DigitalOcean since 2014. Customers including ecommerce stores, design agencies, developers and bloggers use Cloudways to host their websites on top of cloud infrastructure providers, including DigitalOcean — which is used by about half of Cloudways’ customers — AWS, Google Cloud, Vultr and Linode. The platform’s web app management function is designed to make it easier to launch cloud servers for the deployment of WordPress, Magento and PHP-based applications.
DigitalOcean went public in March 2021, raising $775 million. It reported $133.9 million in revenue, a 29% year-over-year increase, for the three months ending in June 30, and a net loss of $6.2 million. Its acquisition of Cloudways, which expects its revenue to exceed $52 million in the current fiscal year, is slated to close in September.— Donna Goodison (email | twitter)
To help pay for the hundreds of billions of dollars that Intel’s potential chip factory expansion plans will cost, the company said Tuesday that it has reached an agreement with Brookfield Asset Management for up to $30 billion in funding. The cash is for two new fabs at the Ocotillo campus in Chandler, Arizona that will be operated and built by Intel.
It’s part of the company’s “Smart Capital” approach to paying for its expansion plans in the U.S. and abroad. That plan combines government incentives and the use of third-party contract chipmakers, among other things, and is part of the company’s overall strategy to regain some of the ground it has lost to TSMC and Samsung. Brookfield, a Canadian asset management company, will own 49% of the new factories, while Intel will retain a 51% ownership stake.
For Wall Street, the deal was met with mild positivity. The additional cash from Brookfield will ease the burden of the ambitious capacity expansion plan set in motion under CEO Pat Gelsinger. After a brutal quarterly report card — which included the company’s first net loss in decades — the deal appears to preserve Intel’s ability to pay its dividend to shareholders, and potentially generate more cash in the future.
But the maneuver is an unusual one for the chip industry, which typically funds expansion plans with the enormous amount of cash generated by the high-margin business. Intel has fought hard to convince the U.S. government to pay for some of its expansion plans, and the company intends to use mechanisms such as the deal with Brookfield to ultimately offset as much as 30% of its capital spending.— Max A. Cherney (email | twitter)
Cloudflare is once again taking fire for serving a controversial customer, this time after an anti-transgender rights harassment campaign coordinated by users of Kiwi Farms, a notorious platform for violent, right-wing causes.Hackers built a hologram of Binance’s chief communications officer in order to trick leaders of cryptocurrency projects into thinking Binance supported their efforts, as concerns about deepfake attacks continue to grow.
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Thanks for reading — see you tomorrow!