The dog days of August have turned into a challenging time for the tech industry. President Donald Trump began the month by delivering a kick to the collective gut: a tweet promising to extend tariffs to all Chinese imports to the US. This week brought a second blow, with signs that the trade war with China is finally weighing on the global economy — and denting the prospects of many parts of the tech sector.
The latest twist in the 18-month trade war was at least tempered by a presidential concession, with the White House saying that smartphones and laptops would be among the consumer products temporarily exempted from the new levy. But the FT’s Lex column concluded that there was little to cheer in the news, either for Apple or supplier Hon Hai.
Many tech companies are entering the final weeks of summer beset by uncertainty. That includes suppliers to Huawei, who are in the dark this weekend over whether concessions that have allowed them to keep selling to the Chinese telecoms equipment company will run beyond Monday.
Uncertainty may also be starting to eat into business confidence. Some of the tech industry’s biggest customers have been hesitating before closing new orders, to judge by the latest results from Cisco Systems — the kind of intimation of waning confidence that can quickly become a self-fulfilling prophecy. September can’t come soon enough.
Internet of (Five) Things
1. In London, you need never feel forgotten again
London was one of the first big cities to see a proliferation of CCTV cameras on the streets. How many of those can now put names to the faces they record? Madhumita Murgia reported this week that King’s Cross — a 67-acre zone whose tenants include Google — is now using facial recognition technology to track people on the area’s streets and public spaces. Canary Wharf, the docklands financial centre, is considering following suit. The news was a shock to many, and by the end of the week the UK’s data regulator had promised to investigate.
2. We Hope
In need of some light reading for the beach? The IPO prospectus of The We Company — parent of office company WeWork — may not be fiction, but it certainly stretches the boundaries of its genre. There’s the unusual tax dodge that will benefit the founders, for instance. And there’s the opportunity for founder Adam Neumann and his wife to retain their powerful supervoting rights provided they give $1bn to good causes. Since when did a charitable nature confer the right to lord it over other shareholders? Uber, whose stock just fell to a new low, is probably enjoying being upstaged in the battle for the title of Year’s Most Controversial IPO.
3. Fintech at an inflection point
Despite all the fintech hype, incumbent banks have not been rocked by the rise of financial apps over the past decade. But as Tom Braithwaite writes, some of the upstarts are on a tear, racing to expand their services across the banking waterfront. Apple has also started rolling out its credit card (this is the verdict of the FT’s Patrick McGee). And venture capital has been pouring into “challenger banks”, reports Miles Kruppa in San Francisco. The risk is that much of that money will be wasted on an unprofitable grab for customers, and that this sudden escalation in competition for the traditional banks is coming just as the credit cycle turns.
4. Hear no evil
Yes, Amazon (and Facebook, Google and Microsoft) is listening to you — just not in the way you probably thought. A series of reports this month has revealed that the automated language-processing services run by all these companies rely on a certain degree of human intervention: people who listen to snippets of recorded speech and annotate it, helping train the machine learning systems. Sounds creepy? The tech companies scrambled to limit the damage, either promising not to listen, like Facebook, or updating their privacy policies, like Microsoft. And what of the people forced to listen to your domestic ramblings? Cade Metz of The New York Times went to India to watch them at work.
5. Faking your way to a fortune
Deepfakes don’t just pose a risk to the integrity of a country’s political discourse. Digitally-rendered video and audio impersonations are also being used by financial fraudsters, reports Hannah Murphy. One recent success for the bad guys: issuing a fake instruction in the boss’s voice to trick a worker into paying out $10m.
. . . and a weekend bonus
Listen to John Thornhill’s podcast with Hanson Robotics founder Ben Goetzle, who thinks we’re a lot closer to superhuman AI than most people think.
Forwarded from Sifted — the week in European start-ups
It’s been a busy few weeks for Europe’s food delivery companies. Just Eat and Takeaway.com, the two veterans of the market, agreed a merger. Uber Eats announced that it plans to start delivering groceries. Deliveroo told customers it was pulling out of Germany, acquired a Scottish start-up and took journalists out on a costly helicopter jaunt that raised questions about whether the company simply has too much VC cash to burn.
Clearly the battle for Europe’s stomachs is heating up, so Sifted has laid out the state of play in the food delivery market here.
Meanwhile, Empirical Spirits, the Copenhagen-based drinks company started by veterans of the world-famous Noma restaurant, are proving that running a booze business like a tech company is a pretty good model. Just don’t call them a food tech company. They hate that.
Tech tools — OnePlus 5G handset
If Pete Lau, head of Chinese handset maker OnePlus, is to be believed inexpensive 5G smartphones will be available more quickly — and in more places — than many people expect. OnePlus’ next 5G handset, due later this year, will be launched globally, he tells Tim Bradshaw. The current one costs upwards of €700 — much less than a rival Samsung model. Whether there will be high-speed networks and applications ready to take advantage of the new handsets is another matter.