BIG TECH

Antitrust the Process

“More money, more problems.” —Facebook on Wednesday, to a federal judge. 

Kidding, of course. But the company, plagued by antitrust allegations, did ask the judge to dismiss the lawsuits in a last-ditch effort to clear its name. 

Let’s break a deal

Facebook accused the government of attempting a “do-over” with its Instagram and WhatsApp acquisitions—and of sending a “dangerous message that no sale is ever final.”

Back up: Three months ago, while you were trying to get in on the hot chocolate bombs trend, the Federal Trade Commission and 46 states hit Facebook with antitrust lawsuits—alleging that the company made shady bets, dubious buys, and underhanded policies in freezing out competition. 

This week, Facebook’s clapback raised some eyebrows. Although the government’s case could be stronger, it’s also been years in the making. Facebook asking for the lawsuits to be thrown out is like Joe Exotic asking for a presidential pardon: pretty unlikely. Google declined to request dismissal of its own set of lawsuits last year. 

New faces

Some of President Biden’s latest appointments are poised to shake things up, too. 

He’s expected to nominate Lina Khan to the FTC, per Politico, and he’s already hired Tim Wu as an economic adviser inside the White House. Both are prominent antitrust scholars and law professors at Columbia University—and Big Tech critics. 

Where else you’ve seen them: Khan, as part of the House Antitrust Subcommittee, helped write the October report that concluded that Facebook, Amazon, Apple, and Google stifled competition. Wu coined the term “net neutrality” and, in 2018, published a book called The Curse of Bigness: Antitrust in the New Gilded Age. 

Plus...President Biden’s recently confirmed attorney general, Merrick Garland, has said antitrust is his “first love.” 

Add it all up: The Biden Administration has signaled it will aggressively pursue antitrust concerns around Big Tech. That doesn’t bode well for Facebook and the rest of the gang, but it could lead to more opportunities for emerging tech startups. 

AI

You’re Not Done Reading About Facebook

Above, we got into the ripple effects of Facebook’s outsized growth. Now, let's look at one of its key growth drivers: its recommendations algorithm. According to an MIT Tech Review feature out yesterday, these models have also helped spread rampant misinformation, hate speech, and controversy. 

Priorities, priorities 

Ultimately, it all comes down to one tension: Facebook’s desire for growth and engagement are directly at odds with its purported goals for content moderation. That’s because, “Models that maximize engagement increase polarization,” reports TR—no matter the topic. 

How it works: Regardless of their level of experience with ML models, engineers use the easy-access, internal FBLearner Flow platform to train models on content moderation, ad targeting, image recognition, and more. 

• In 2016, it had already been used to train 1+ million models. 

After training a new model, engineers then test it on a group of users, noting how it affects engagement. If the model reduces likes, comments, and shares by too much, it’s scrapped; otherwise, it’s cleared for use. 

The response: The company's chief AI scientist, Yann LeCun, denied parts of the article on Twitter, writing that Facebook changed its News Feed to minimize polarizing content in 2018 and that it's "ridiculous" to say the platform recommends  polarizing content to boost engagement. 

SPONSORED BY DOCSEND

The Funding Divide Needs Fixin’

It’s no secret that the pre-seed fundraising scene is pretty cutthroat. 

But it’s an even harder endeavor for female-founding teams looking to get the lift they need to make their startup dreams a reality.

DocSend’s 2020 research on the funding divide shows all-female teams on average raised 60% less than all-male teams at the pre-seed stage—a gap that had doubled since 2019.

Even the number of meetings all-female teams could get on the books was disproportionate. All-female teams contacted nearly 3x as many investors than the average team, only to raise far less than their all-male counterparts.

Pitch decks? Same story. Investors spent most of their time scrutinizing the business model sections from diverse teams, while all-male teams saw their fundraising ask get the most attention.

There are enough uphill battles when it comes to fundraising—as a startup community, we can do better.

Check out DocSend’s in-depth analysis here.

VC

Fundraising During Covid-19: Feb. ’21 Ed.

The past three months may have been tough on skinny jeans, but they’ve been great for VC funding. December, January, and February snagged the record for top $$ months in the past two years. Plus, 60 new unicorns have appeared in the first two months of 2021 alone. 

A few deals that caught our eye in February: 

Robotics: Locus Robotics, the Massachusetts-based warehouse robotics company, raised a $150 million Series E—earning it unicorn status. 

• Elsewhere in robotics process automation: UiPath raised a $750 million Series F, bringing its post-money valuation north of $35 billion. 

Space: Axiom Space, the Houston-based private spaceflight firm, raised a $130 million Series B. It’ll use the funds to keep ferrying private astronauts into space, like on SpaceX’s Crew Dragon, and continue toward its ultimate goal: private space stations. 

EVs: Svolt, the Chinese EV battery maker, raised a ~$500 million Series A. Some of the $$ is earmarked for product R&D and manufacturing, as the company recently signed an agreement with an Eastern Chinese province to build a $1+ billion battery manufacturing base. 

BITS & BYTES

Stat: Digital artist Beeple auctioned an NFT of his work for $69.3 million—making him “among the top three most valuable living artists,” according to Christie’s. 

Quote: “If you asked me, 'What keeps me up at night?' right now, [it] is this supply chain crisis we're having in the semiconductor industry.”—Cristiano Amon, Qualcomm’s next CEO, to CNET. 

Read: The second piece in our Explorations series, Demystifying Algorithms: “Amex’s Fraud Detection AI Was Ready to Go Live. Then Covid Hit.” 

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WHAT ELSE IS BREWING

• Alibaba could break a new record—and not in a good way: China is considering hitting it with an antitrust fine even higher than Qualcomm’s $975 million in 2015. 
• Roblox surpassed $45 billion on its first day of trading, up from a $4 billion valuation last year. 
• Taiwan, amidst drought, says it has enough water to sustain chipmakers until May. 
• Apple earmarked $1.2 billion to open a silicon design center in Germany, which will focus on 5G and future wireless tech.
• A Microsoft-led team withdrew buzzy quantum computing research it published in 2018.
• Hackers breached security startup Verkada and gained access to ~150,000 surveillance camera live feeds inside offices, hospitals, police departments, prisons, and schools. 

GOING PHISHING

Three of the following news stories are true, and one...we made up. Can you spot the odd one out?

• Drones are getting into bowling. 
• Robots are getting a sense of touch. 
• Tesla’s Cybertruck is getting a makeover.
• AI is getting into detecting raw sewage leaks. 

BLACK MIRROR IRL

Sometimes Black Mirror storylines seem like they're unfolding in real life. Something that caught our eye this week: 

Researchers in Japan created a robot that paints with watercolors and acrylics, and although we’ve seen artificially intelligent artists before, this bot is a bit different: It’s programmed to work from its own set of values and abstract concepts, rather than existing art and historical data. 

The robot’s brushstrokes will be on display next week, via the all-virtual SXSW. We don't expect that they will outsell Beeple.

ICYMI

Catch up on the top Emerging Tech Brew stories from the past few editions: 

• Amex’s fraud detection AI was ready to go live—then Covid hit 
• The EU wants to double its global chip market share by 2030
• Inside Arrival’s summer of EV testing ahead of its UPS deal 

GOING PHISHING ANSWER

The Cybertruck isn’t getting a makeover. If it did, would it really still be the Cybertruck?