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Google Fine, Texas Instruments, Musk Apology: CEO Daily for July 18, 2018

July 18, 2018, 10:25 AM UTC

Good morning.

Does the technology industry face a trust crisis? That was a topic throughout the day at Fortune‘s Brainstorm Tech in Aspen yesterday. And the evidence seems to suggest the answer is yes. A SurveyMonkey study conducted for the conference found:

– 73% of Americans worry AI will be used to violate their privacy

– 72% of Americans believe AI will destroy more jobs than it will create

– 52% see AI as doing more to increase than decrease income inequality

The survey showed people have little trust in tech companies to use new technologies for the public good. “Building companies with a sense of responsibility is something we have to amp up the conversation around,” said Hemant Taneja, managing director of General Catalyst, during a town hall discussion. Tech companies need to stop “doing things that are good for business in the short term but not in the long-term interest of society.”

I interviewed Secretary of Transportation Elaine Chao on the Brainstorm stage, and she also emphasized the importance of trust in developing autonomous vehicles. “We want to set a template that will foster and cultivate” the autonomous vehicle industry, but “we also have to take care of issues that people care about…such as safety. Safety is number one.”

On a separate note, I asked Secretary Chao about serving under a President who has violated so many norms of national leadership: his loose relationship with the facts, his rejection of Republican orthodoxy on trade, his rejection of traditional U.S. allies and embrace of enemies, etc. Her response, after saying “every president is different and they have their own particular styles”: “I believe in public service, and I believe it is a privilege and an honor to serve our people and our country. I also think that the American people deserve a functioning government.” Amen to that. More from Secretary Chao here, and more from Brainstorm Tech here.

Separately, Fortune yesterday announced a new spinoff of the Aspen conference, Brainstorm Finance, focused on the revolution in financial technology, which will be held June 19-20 next year in Montauk, NY. Details here.

News below.

Alan Murray

Top News

Google Fine

Google was today whacked with a massive $5 billion fine over antitrust abuses related to its Android operating system. The European Commission says the company had abused its dominant position in the market—Android has about 80% of the European smartphone market—by forcing manufacturers to preinstall Google Search and the Chrome browser, and by stopping companies such as Amazon from being able to find manufacturers for devices using their alternative versions of Android. Fortune

Texas Instruments

Texas Instruments CEO Brian Crutcher has resigned, not even two months after taking the role, over unspecified code of conduct violations. "The violations are related to personal behavior that is not consistent with our ethics and core values, but not related to company strategy, operations or financial reporting," said TI. Remarkably, Crutcher is the third CEO of a computer-chip firm to resign over conduct violations in the last month, after Intel's Brian Krzanich and Rambus's Ron Black. Barron's

Musk Apology

After calling a British caver a "pedo" and consequently seeing Tesla's stock price call 4%, Elon Musk has apologized to the man. The CEO took to Twitter to maintain that Vern Unsworth had "said several untruths" about Musk's offer of a "kid-size submarine" to rescuers of Thai boys stuck in a cave, but "nonetheless, his actions against me do not justify my actions against him, and for that I apologize to Mr. Unsworth and to the companies I represent as leader. The fault is mine and mine alone." Fortune

Trump Reversal

President Donald Trump now claims that he misspoke when he said he believed President Vladimir Putin's denial of Russian interference in the 2016 election, over the word of U.S. intelligence agencies and justice officials. "My people came to me…They said they think it’s Russia. I have President Putin; he just said it’s not Russia. I will say this: I don’t see any reason why it would be," Trump said earlier, sparking massive condemnation at home. Now he says he meant to say: "I don’t see any reason why it wouldn’t be Russia." And then he immediately followed that explanation with: "Could be other people also. A lot of people out there." New York Times

Around the Water Cooler

Free Trade

The EU and Japan have signed the world's biggest bilateral free trade deal, and they aren't shy about putting this in the context of President Trump's attack on the globalized trade system. "There are rising concerns about protectionism, but I want Japan and the EU to lead the world by bearing the flag of free trade," said Japanese Prime Minister Shinzo Abe. "We are sending a clear message that we stand against protectionism. The EU and Japan remain open for cooperation," said European Council President Donald Tusk. France 24

Nasdaq High

The Nasdaq hit an all-time high yesterday (7,855.12) thanks to Netflix's partial rebound from a 14% drop that was caused by weak subscriber growth—the fall ended up being only 5.2%—and thanks to Amazon hitting a new record share price, due to strong sales growth. Alphabet and Facebook were dragged down early in the session, but ended up reaching record highs of their own. CNBC

Air Force One

Boeing has won a $3.9 billion deal to provide two new Air Force One planes. The planes will only be delivered by December 2024, at the end of President Donald Trump's second term—if indeed he wins a second term. Trump had publicly laid into Boeing for charging "more than $4 billion" for the jet, forcing CEO Dennis Muilenburg to promise that "we're going to get it done for less than that." Bloomberg

Air China

Air China has to reduce the flight hours on its Boeing 737 fleet by 10%, as part of its punishment for the incident in which a co-pilot caused an emergency descent when he tried to cover up the fact that he was vaping. The flight's two pilots, who have already been fired, have now also had their licenses revoked. Air China isn't just in trouble over the emergency itself, in which the pilot accidentally shut off the plane's external air supply and made it necessary to tap into the emergency oxygen supply—it also shouldn't have continued the flight with that emergency supply being depleted. South China Morning Post

This edition of CEO Daily was edited by David Meyer. Find previous editions here, and sign up for other Fortune newsletters here.