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Data Sheet—Some Massive Successes in Tech Outside of Silicon Valley

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I wrote a while ago that no matter what happens elsewhere in the tech world, Silicon Valley will remain dominant—if persistently obnoxious in the process.

I still believe that. Still, dominant doesn’t mean massive successes can’t happen elsewhere. Just look at the North Carolina videogame company Epic Games, maker of super hit Fortnite and also a successful plodder for years before becoming a red-hot sensation. The company revealed last week it has raised $1.25 billion from investors KKR, Kleiner Perkins, Lightspeed Partners and others. They’re all eager to take advantage of the popularity of the addictive Fortnite, which for their sake better not turn out to be a fad.

Fortnite is so successful it singlehandedly is lifting the games business of Microsoft, another non-Silicon Valley success story. The game is also a feather in the cap of Chinese gaming goliath Tencent, which bought a 40% stake in Epic several years ago. Tencent has been hoping to bring the “battle royale” game to China.

Speaking of China, check out Eamon Barrett’s interesting piece about how facial recognition technology, enhanced by artificial intelligence, is being applied for surveillance purposes there. He writes that “the government is both benefactor to and beneficiary of” the companies pursuing facial-recognition applications. It’s a different world.

It’s so different, in fact, that Fortune returns to China next month for the Fortune Global Tech Forum, to be held in the Pearl River Delta megacity of Guangzhou, November 29-30. My colleagues and I will host the two-day event that will focus on A.I. and other tech topics, including the ramifications of trade tensions between China and the U.S. Some of the participants will include Sequoia Capital’s Neil Shen; Hillhouse Capital head Zhang Lei, Dang Wenshuan, the chief technology officer of Huawei; China-focused retail analyst Deborah Weinswig; the chairman of Toyota Motor’s business in China, Kazuhiro Kobayashi; Cindy Mi, CEO of education upstart VIPKid; travel site Ctrip CEO Jane Sun; A.I. expert Richard Socher, chief scientist of Salesforce; Kim-Thu Posnett, global head of Internet investment banking for Goldman Sachs; and insurance giant Ping An’s chief technology officer, Jessica Tan.

The Guangzhou event is by invitation only, and there are a few remaining slots. Inquire here for an invitation or shoot me a note directly if you’d like to attend.

Adam Lashinsky
@adamlashinsky
adam_lashinsky@fortune.com

NEWSWORTHY

Swinging for the fences. Seeking faster growth, IBM is acquiring open-source software provider Red Hat for $34 billion, or $190 per share. It’s a play to help IBM customers move to cloud applications more quickly, CEO Ginni Rometty tells Fortune. “This is a huge day,” she says. “It absolutely resets the cloud landscape.” Shares of Red Hat, which closed at under $117 on Friday, jumped 50% to $175.50 in premarket trading on Monday. IBM shares, previously down 16% this year, slumped another 5%.

Whiffed. Internet service companies are cutting off Gab, the social network popular with the extreme right and used by Pittsburgh synagogue shooting suspect Robert Bowers. Payment processing platforms Stripe and PayPal, web host GoDaddy, and cloud hosting company Joyent suspended the network, which had already been barred from distributing its app by Apple and Google. In not unrelated news, Facebook and Twitter suspended accounts linked to alleged mail bomber Cesar Sayoc. Twitter also issued an apology, saying it should have taken down one of the accounts for threatening remarks as soon as the company received a complaint weeks ago from Democratic commentator Rochelle Ritchie.

In the on-deck circle. More leaks for the gadget happy. Samsung is working on new phones that will be able to run on Verizon’s super-fast 5G network and may have foldable screens and a fingerprint sensor under the screen, Bloomberg reports. And Apple‘s big unveil on Tuesday in New York is rumored to feature updated iPads and Mac computers, including a replacement for the positively ancient Mac mini (last refreshed in 2014).

No hitter. Countries around the world are looking at how the European Union has begun to tax tech giants like Google and Facebook that have been taking advantage of global tax loopholes to minimize their payments. South Korea, India, Mexico, and Chile are among those considering imposing new levies, the Wall Street Journal reports.

Stealing signals. There is more than a little controversy about the use of artificial intelligence and automated devices on the battlefield. But a new military exercise by NATO that began last week in Norway, called Trident Juncture 18, will test how some autonomous weapon systems perform under simulated battlefield conditions.

FOOD FOR THOUGHT

Today’s iteration of “food for thought” is pretty foody. Ride hailing giant Uber has its hands in a couple of different transportation markets, but Kate Krader at Bloomberg uncovered a less obvious business the mega-startup has stimulated with data: virtual restaurants. It seems the neighborhood-level info from Uber’s prepared food delivery service Uber Eats can be used to uncover gaps in the offerings of local establishments:

When the virtual restaurant team notices supply gaps in any given neighborhood—if, say, the data show that the number of brunch places is lower than could be served based on searches—they’ll begin contacting businesses in the area. “We’d say, ‘If you served brunch, that would be good for your delivery business,’ ” Droege says. For restaurateurs, it can be a chance to spread their fixed costs over a higher volume of orders.

The arrangement often results in restaurants with culinary ambitions serving basics for people at home. The menu at Rahi, an inventive Indian spot in New York’s Greenwich Village, contains more experimental dishes such as coconut-mango curry cod with crab butter. But the Uber Eats menu has classic dishes including butter chicken and vegetable samosas. “That’s what people want when they order Indian food,” says owner Roni Mazumdar. He also delivers via Caviar and Grubhub.

Even Michelin-starred cooks have gotten into it. At Pasta on Demand, the virtual restaurant from Marea chef Michael White, you can order his classic rigatoni from the comfort of your phone.

IN CASE YOU MISSED IT

Twitch CEO Emmett Shear Talks Live Streaming, Sarcasm, and Amazon Web Services By Jonathan Vanian

Bitcoin Exchange Bitstamp Acquired in Latest Cryptocurrency Deal By Jen Wieczner

McLaren’s New $2.25 Million Hypercar Sold Out Before It Was Even Announced By Jaclyn Trop

The Justice Department Had Sued California Over Its New Net Neutrality Law. Why the Lawsuit Is Suddenly on Hold By Hallie Detrick

Tesla Is Facing a ‘Deepening Criminal Probe’ About Misleading Investors on Its Model 3 Production, Report Says By Kevin Kelleher

China’s Private Attempt to Send a Satellite-Carrying Rocket Into Space Fails By Radhika Marya

How Walmart’s Sam’s Club Is Following Amazon Into Cashierless Stores By David Meyer

BEFORE YOU GO

As we waited for what turned out to be a great World Series game on Sunday night, my family and I flitted around on YouTube on our big screen TV and stumbled across this cool video from Architectural Digest about the key features of New York City’s Fifth Avenue main library building, which opened in 1911. And this morning, in a similar vein, I happened across some thoughts about how libraries need to evolve for the future from Tony Ageh, the chief digital officer of the New York’s library service. In the 100 years plus since the main branch opened, the library has become about a whole lot more than books.

This edition of Data Sheet was curated by Aaron Pressman. Find past issues, and sign up for other Fortune newsletters.