The U.S. cripples China’s chips

Biden’s chip block

The Biden administration is taking a much more adversarial approach to warding off China’s access to advanced chips.

The U.S. introduced sweeping new restrictions on chip exports to China and the semiconductor equipment U.S. companies are able to sell to the country, Protocol’s Max Cherney writes. Those rules include everything from preventing the servicing and maintenance of chip tools to a block on “advanced computing and artificial intelligence applications.”

The new rules are a shift in the government’s approach to stifling China’s access to chips.

• In the past, the U.S. aimed to keep foreign adversaries about two generations behind in their chip-making abilities. “But now the administration has decided to actively attempt to cripple China's current capabilities of making certain kinds of chips,” Max told Sarah.

• The U.S. probably isn’t done yet; Max called these restrictions the “opening salvo,” where officials will assess the effects of the rules before possibly applying more pressure.
• And already China’s commerce ministry is asking the U.S. to stop imposing restrictions, saying it hurts the interests of U.S. exporters.

But other countries need to get on board for it to work, at least in the long run, Max pointed out.

• “It will impact China for sure. But it’ll be less effective if other countries don't help,” Max said, adding that other markets could merely replace whatever the U.S. is blocking.
• In a similar vein, big competitors to the U.S. — like Japanese chipmaking equipment producer Tokyo Electron — could gain an edge over U.S. chipmakers by selling its products and services to China.
• So far, Taiwan has said it will follow the U.S. in implementing similar restrictions.

So what’s next? The chip industry has about 60 days to submit written comments about the rules. Officials said they’ll adjust the measures depending on the feedback.

Deal-centralizing

When VC firm Bessemer first unveiled its BessemerDAO six months ago, it was purposefully a little vague on how it was going to decentralize venture capital. This week, it launched its first project: a decentralized scouting network that turns DAO members into potential scouts for the firm, Protocol’s Biz Carson writes.

Bessemer’s goal is to decentralize scouting so that the group looking for deals is increasingly not under the firm’s stewardship, Bessemer partner Ethan Kurzweil said. That’s also why the project was rebranded as Steel DAO.

• Any member can scout a deal and bring it to the governance committee, which will debate and vote on it. The pitch and the votes will then be recorded on the Ethereum chain, which are brought to Bessemer to invest.
• “To be a scout for a traditional venture firm, you have to know somebody,” Kurzweil said. “This is a way to allow for an open, honest, transparent process around letting anybody have that potential access.” So far, Bessemer has allocated $500,000 for deals brought by the Steel DAO scout network.

Will putting deals on the blockchain make a difference? Adding a governance committee vote in between a scout and Bessemer actually adds a step to the traditional scout process.

• But Kurzweil argues that adding the committee vote won’t “create any friction” because deals will be better vetted. Plus, there’s the potential in the future that the DAO will have its own funds as well and could invest directly on its own.
• The other advantage is transparency, he said. “Having full visibility into every investment that they're considering and how the votes went is not something that's been done before,” he said.

We’ll probably have to wait many years before we’re able to tell whether the Steel DAO sourced better deals and whether the added transparency was helpful in the DAO members’ reputations and careers. At least if it became a widespread practice, it could put an end to some of the deal-credit disputes and investors claiming they saw a deal if there’s proof of who actually did.

The EV investment boom

Following the passage of the Inflation Reduction Act, automakers are moving fast to bring large-scale operations to the U.S. in anticipation of car-buyers looking to take advantage of the $7,500 EV tax credit.

The scale of investment right now is huge,Protocol’s Michelle Ma writes. Just in 2022, automakers have announced they’re investing over $13 billion in domestic EV manufacturing and $24 billion in batteries. The IRA is helping the country play catchup for its long-negligible role in the making of EVs and the mining, processing, and production of their components.

• “This is just the beginning of a long-term shift that’s going to take place,” Rachel Patterson, a policy lead at climate advocacy group Evergreen Action, told Michelle.

It’s not just EV specialists investing in the domestic market. Though Tesla is obviously shelling out for plants all over the county, traditional automakers are also ponying up.

• For example, Honda is planning a plant in Ohio, and Toyota is investing billions more in its North Carolina battery manufacturing plant. Meanwhile, GM is investing around $1.2 billion in two new EV hubs.

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People are talking

Boston Dynamics and other robotics firms don’t want their products used as weapons:

• "We believe that adding weapons to robots that are remotely or autonomously operated … raises new risks of harm and serious ethical issues.”

Tony Fadell isn’t worried about the EU’s new universal charger mandate:

• “The world has converged on USB-C. The physical and user limits have been hit. Next up is wireless.”

Jamie Dimon shares concerns with Elon Musk over spam on Twitter:

• "I hope Musk cleans up Twitter."

Coming this week

Meta Connect starts today. It’s expected to introduce its VR headset, codenamed Project Cambria.

Lesbians Who Tech starts tomorrow in San Francisco and runs through Friday.

Microsoft’s Surface event is tomorrow. Microsoft hasn’t offered too many details, but we can expect some product announcements.

Amazon workers are holding a union election tomorrow at a facility near Albany, New York.

Amazon’s holding a Prime Early Access Sale today and tomorrow. It’s like Prime Day for the fall.

Making moves

Getir might buy Gorillas, sources told Bloomberg. The two companies are in advanced talks to reach a deal as the fast-delivery sector consolidates.

Richard Whitt joined Twilio as senior VP of government relations and public policy. Whitt founded digital fiduciary startup Deeper Edge and Google’s policy solutions team.

Rowan Trollope is resigning as Five9's CEO. Shares of the company fell 25% on the news.

In other news

Coinbase got regulatory approval in Singapore. The crypto exchange has been trying to expand internationally and hire across markets in Europe, too.

Google is opening its first data center in Japan next year as part of a bigger infrastructure push in the region.

The FTC filed a shorter complaint against Meta for its purchase of Within, saying it would “tend to create a monopoly” for VR fitness apps.

Are GIFs on the decline? Some are starting to call them “cringe” and outdated, and TikTok clips with text and super-short Twitter videos appear to be replacing them.

Some Meta works have a jokey codename for important metaverse projects: MMH, or “Makes Mark Happy,” according to a deep dive by The New York Times.

Binance will stop trading with Helium Network Tokens and told advisers to close out their positions. Helium Foundation’s COO said there’s “no basis” for the move.

Instagram and Twitter took down Kanye West's antisemitic posts, but experts told The Washington Post that it would be harder for them to do so under Texas's new social media censorship law.

It’s beginning to look a lot like holiday parties

In-person holiday office parties are back, but they’re much more toned down compared to 2019. Some companies are doing smaller gatherings hosted by individual teams, while others are still thinking about virtual parties or mailed holiday gifts. How is your company celebrating the holidays this year? Respond to this email and let us know!

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