Good morning. David here, filling in for Alan once more from Berlin, where forest fires come with an added complication: World War II munitions that were buried in the woods, and that nobody knew about until they started exploding around firefighters!
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Speaking of munitions, there’s a big argument underway about guns that can be made by anyone with a high-end 3D printer. And even those who aren’t invested in the gun-control debate should be paying attention to this.
Five years ago, a man named Cody Wilson started distributing the 3D-printing files for a weapon called the Liberator, only to have the State Department shut him down for violating arms export controls. Wilson fought back with a suit that ended last week with a settlement that essentially allows his Defense Distributed group to distribute the files freely.
It’s a fascinating case that includes both Second Amendment and First Amendment issues—the schematics are information, so free speech is involved—and those in favor of gun control are naturally deeply concerned about the outcome.
Military veterans who favor more gun control have urged Secretary of State Mike Pompeo to “stop these deadly blueprints from being released.” But the State Department says the Trump administration had to settle because the rule banning Wilson’s distribution of the files recently expired—the government has eased regulations on firearms that don’t “offer a critical military or intelligence advantage to the United States.”
While this debate is clearly worth having, there’s a certain futility to it. When Wilson was forced to stop distributing his 3D-printed gun files, that didn’t stop them spreading online—this is the Internet, after all, and once information is out there, it’s out there. So the current argument is more about trying to discourage others from following in his footsteps, and good luck with that.
This isn’t just about guns, either. While the 3D-printing manufacturing revolution has passed its hype phase and currently remains a niche for hobbyists and product designers, it’s still very likely to take off again at some point. And it will be difficult if not impossible to stop people from making what they want to make, and copying what they want to copy.
On that note, have a great weekend! News below.
Top News
Amazon Profits
Remember when Amazon barely made a profit, opting for massive reinvestment instead? Those days are long gone—the company posted a record Q2 profit of $2.53 billion yesterday, more than twice as much as analysts expected. That's thanks to growth in the Amazon Web Services cloud computing division and in ad sales. Q2 sales came in slightly below analyst estimates, at $52.9 billion rather than $53.4 billion, but investors liked what they saw, sending Amazon's shares up over 3% at the time of writing. Amazon is also now worth almost as much as Apple, the world's most valuable firm. Fortune
Economic Data
President Donald Trump said yesterday that today's GDP report will show that the economy is in "terrific" shape. Forecasts suggest growth of just over 4%—some economists say over 5%, but Trump said at an Illinois appearance that "if it has a four in front of it, we're happy." The tax reform is expected to be a major contributor, aided by temporary factors such as a boost in soybean exports before retaliatory tariffs kicked in. (Side note: With this and the EU deal on Wednesday, who thought soybeans would be as newsworthy as they're proving to be?) Bloomberg
Iran Threat
Remember Trump's all-caps threat to the Iranians earlier this week? The Iranians do. The head of the Revolutionary Guards' special forces unit has struck back saying: "Talk to me, not to the president (Rouhani). It is not in our president's dignity to respond to you." Qassim Soleimani continued: "We are near you, where you can't even imagine. Come. We are ready… If you begin the war, we will end the war. You know that this war will destroy all that you possess." CNBC
BP Shale
The rise in oil prices has made shale extraction attractive again, so BP is spending $10.5 billion to buy shale assets in the U.S. from Australia's BHP Billiton, which bought the assets for $20 billion in 2011. BP's American subsidiary will take over Petrohawk Energy, which holds the assets in Texas and Louisiana. This is BP's biggest acquisition since the Deepwater Horizon disaster. BBC
Around the Water Cooler
More Than Words
My colleague Jeff John Roberts makes a solid case for Facebook's woes (the company just suffered the largest one-day drop in Wall Street history) being largely down to "the failure of its executives, particularly co-founder Zuckerberg, to speak in plain, candid language during earnings calls and other appearances." He writes: "Begin with Zuckerberg’s bizarre insistence that he doesn’t run a media company... Such prevarications are akin to the CEO of a large energy company declaring, when confronted with a massive spill: 'We’re not an oil company.'" Facebook
Virgin Galactic
Virgin Galactic's VSS Unity made a test flight yesterday that entered the mesosphere for the first time, while setting a new speed record (for Virgin Galactic flights) of Mach 2.47. "The view from 170,000 feet was just totally amazing,” said Mike Masucci, one of the two test pilots. "The flight was exciting and frankly beautiful." Fortune
Saudi Aramco
Now that Saudi Aramco's IPO ambitions have withered—too much regulatory scrutiny—Crown Prince Mohammed bin Salman's advisors are reportedly pushing the state oil giant to raise tens of billions of dollars in debt, in order to buy a controlling stake in Saudi Basic Industries Co. (Sabic), the country's largest publicly listed company. Wall Street Journal
Facial Recognition
In order to demonstrate how dodgy facial recognition technology still is, and how worthy of regulation it is (a point also recently made by Microsoft,) the American Civil Liberties Union used Amazon's controversial Rekognition software to analyze the faces of members of Congress. The software incorrectly matched 28 of them with the mugshots of other people who had been arrested for crimes. Unsurprisingly, given known flaws in the technology, the politicians were disproportionately people of color. ACLU
This edition of CEO Daily was edited by David Meyer. Find previous editions here, and sign up for other Fortune newsletters here.
