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Can tech ‘fix’ San Francisco?

Image: Eduardo Santos
San Francisco

Good morning! This Thursday, tech's trying to reshape California's politics, Alibaba and Baidu have a sexism problem and GameStop's stock is now a moderation challenge.

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The Big Story

Tech's plan to 'fix' SF

Anna Kramer writes: First there was the Gov. Gavin Newsom recall, gaining steam because of donations from prominent tech execs. Then there was the Clubhouse conversation, led by Michelle Tandler and Mike Solana, which began as a discussion about the future of SF and quickly devolved into an argument about how to fix the city's crime problem. And then on Tuesday, The Intercept reported that Jason Calacanis wants to fund a journalist to investigate the criminal justice reforms of SF District Attorney Chesa Boudin.

There's something weird going on in the state of California. For some members of the tech community who remain committed to San Francisco, staying seems to require taking matters into their own hands.

  • Boudin's office is not thrilled about the latest round of "tech tries to solve social problems." Why not? Because it thinks there's a disconnect between the people with enough money to fund a campaign to oust Boudin and the people actually dealing with the full weight of the legal system.
  • "We are deeply concerned about conversations driving changes in the criminal legal system excluding folks directly impacted by them," Rachel Marshall, a spokesperson for his office, told me.
  • One tech donor offered to host a conversation with Boudin about his views last week, I'm told. But after Boudin agreed on the condition that someone affected by the criminal justice system be part of the discussion, the donor never replied.

Then, on Monday, Chamath Palihapitiya got involved, announcing that he would be running for governor to replace Newsom as part of the statewide recall effort.

  • Palihapitiya's campaign site calls for cutting taxes to zero, giving $2,000 to every child born in the state and handing out free school vouchers, among other pledges. (You can check out the full site here, and no, it isn't a joke.)

The Newsom recall campaign needs 1.5 million signatures by mid-March to make it on to the ballot. That was once thought nearly impossible, but the campaign may have more than 1.2 million signatures already. And if we've learned anything this week, it's that a bunch of motivated, tech-savvy people can do just about anything they want.

China

Meet Protocol | China

Protocol | China launched yesterday, and with it we published a bunch of stories from our new team of China-focused reporters, who are here to explain the ins and outs of the most important companies in the Chinese tech industry. Here's a quick breakdown of the first batch of stories:

  • Bilibili, China's third-largest game-streaming company, is beloved by just about every member of China's Gen Z. And it's on the cusp of a massive conflict with one of its investors, Tencent, because it's about to become a real competitor.
  • Women are being driven out of the industry by the misogynistic culture at Chinese tech companies. Lewd, marginalizing conversations and long, strict working hours are exhausting women, and even companies with staff numbers close to gender parity are selling products with advertisements that openly objectify women.
  • Alibaba and Huawei are the major players shaping the decisions made by China's cybersecurity regulator, as the country scrambles to put together a regulatory framework for tech. This could help them grow and maintain a competitive advantage over time.
  • And David Wertime, the team's leader, kicked off the first edition of our China newsletter with a breakdown of how much people will pay to get a job at a Chinese tech company, from the cost of referrals to fake internships.

You can follow all of Protocol | China's future reporting by signing up for the weekly newsletter, which will land in your inbox every Wednesday.

GameStop

The investor overthrow continues

What, like we weren't going to talk about GameStop today? The short version of Wednesday: The stock spiked again, trading platforms either went down or stopped allowing GameStop trades or both and r/WallStreetBets continued to go wild.

Public co-CEO Leif Abraham told me on this week's Source Code podcast that there's something both wonderful and harrowing about what's happening on the market:

  • "There's obviously an aspect of David versus Goliath," he said, "and the sense that the crowd can suddenly take down a hedge fund, which is a power dynamics shift. It's pretty insane, if you think about it. But at the end of the day, I still believe that it's also driven by the general desire of finding ways for quick gains."
  • At the same time, "there will be collateral damage in the end," Abraham said, "and likely that collateral damage will not be the people who are more sophisticated, who are likely the ones who started it." He worries that many investors are being pulled in by Elon Musk tweets and joyful Redditors, and eventually they're the ones who will be left holding the bag.
  • On Public's investment platform, GameStop has had a "safety label" for the last few days. People can — and do — still buy it, but Public wants them to at least take a second to think it through.

Oh, and is WallStreetBets a content moderation problem? You betcha. Discord banned the server, citing "hateful and discriminatory content," while the subreddit briefly went private last night. And regulators are circling: Both the SEC and the Biden administration said they're "monitoring" the situation,

Meanwhile, the GameStop Effect continues to spread to other stocks. AMC, Express and Bed Bath & Beyond — basically, all the stores you used to loiter in front of at the mall — have seen massive spikes out of nowhere. Even Tootsie Roll (which is exactly the company you think it is) and BB Liquidating Inc, the artist formerly known as Blockbuster, have blown up. This is all both clearly a joke and very, very real.

A MESSAGE FROM NASDAQ

Nasdaq

The technology trends that are driving the world of markets forward. Read more

Earnings Season

Apple makes approximately all the money in the known universe ($111.4 billion last quarter, the most ever for the company). Revenue was up across the board, and there are now more than 1 billion active iPhones.

Tesla reported its first profitable year ever and dropped a redesigned Model S, with a steering wheel that looks … truly awful to drive with. Revenue was up but earnings were down, and the company says it's making fast progress on its battery tech.

Facebook had a great quarter, but is truly petrified by what's coming from Apple's privacy changes (more on that below). The company's also planning to show less political content in users' News Feeds and stop recommending political groups. Also, Oculus sales are ticking up.

ServiceNow also had a big quarter, with 89 new million-dollar customers. It's also working on vaccine-distribution tech.

People Are Talking

So how worried is Facebook about Apple's privacy changes? Very worried, Mark Zuckerberg said:

  • "We increasingly see Apple as one of our biggest competitors … Apple has every incentive to use their dominant platform position to interfere with how our apps and other apps work, which they regularly do to preference their own."
  • Relatedly, Google said it would stop using IDFA to track users across its iPhone apps.

Cybersecurity is a big business for Microsoft, Satya Nadella said, and it's still growing:

  • "A lot of work ahead, but we are investing very heavily because guess what? You know 10 years from now we'll still be talking about it as technology becomes [an] even [deeper part] of our lives in our society in all critical industries."

In Other News

  • Ant plans to become a financial holding company, The Wall Street Journal reported. Regulators told it to make the change, which will require it to hold much more capital. Meanwhile, the Financial Times reported that Ant plans to sell U.S. biometric security company EyeVerify.
  • Old talent's coming back to Intel. Ahead of Pat Gelsinger's return next month, Sunil Shenoy is rejoining from SiFive as senior VP of design engineering, while Glenn Hinton is back as a senior engineer.
  • On Protocol | Enterprise: SAP unveiled a big sales promo. It's a bid to juice cloud customer numbers. By bundling a bunch of products together under one, flat-cost contract, the company is hoping to encourage customers to switch from on-premise services to the cloud.
  • Squarespace is going public, announcing that it's confidentially filed for an IPO.
  • Australia proposed letting users choose what data Google shares with advertisers. Competition and consumer commission chair Rod Sims said "there's a lot wrong with the [ad] market," which is "effectively dominated by one player."
  • Huawei's Richard Yu is now its head of cloud and AI. He's keeping his other job at the company, leading its struggling smartphone business.
  • Elon lost a battle to get a defamation lawsuit against him thrown out. Randeep Hothi is suing Musk for defamation over comments made to a journalist, and a judge dismissed Musk's argument that the suit was baseless.
  • Baidu was approved to test fully autonomous cars in Sunnyvale. Meanwhile, Didi raised $300 million for its self-driving unit.

One More Thing

The fastest computer in Big Sky Country

Wyoming's getting a new supercomputer! It will be built by HPE, live at the National Center for Atmospheric Research, and help study weather and climate change. It's nearly 3.5x faster than the current model, and apparently one of the 25 fastest computers in the world. But if the $35 million investment doesn't work out, I hear the new Mac Minis are pretty fast.

A MESSAGE FROM NASDAQ

Nasdaq

The technology trends that are driving the world of markets forward. Read more

Today's Source Code was written by David Pierce, with help from Anna Kramer and Shakeel Hashim. Thoughts, questions, tips? Send them to david@protocol.com, or our tips line, tips@protocol.com. Enjoy your day; see you tomorrow.

Correction: An earlier version of this article misspelled Gavin Newsom's name. This story was updated on Jan. 28, 2021.

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