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A careful read of the editorial for The Economist’s fine current cover, “Big Tech’s $2-trillion Bull Run,” reveals its appropriate caution. As the comprehensive writeup attempts to make sense of the “tear” that the Big 5—Amazon, Apple, Microsoft, Alphabet and Facebook—have been on, it does a good job of hypothesizing why the run may not be sustainable.
Monday that caution proved prescient. Global markets were slammed on the realization that the coronavirus outbreak is anything but contained. China’s leaders can quarantine tens of millions. But word of significant outbreaks in South Korea and Italy, two medium-sized rich countries that are thoroughly integrated with the global economy, sent investors fleeing.
Big Tech, which has withstood public outcry, regulatory scrutiny, and tariff-induced supply-chain mayhem, couldn’t sidestep a global slowdown. The five behemoths fell in lock step Monday, each seeing their market values decline by 4% to 5%.
Everyone from the noted stock market expert Donald Trump to Warren Buffett, who has actually made a career investing in stocks, suggested the downturn is a buying opportunity. Apple announced it is ramping up its retail store operation in China.
And yet, until the world has a sense of when the outbreak will be contained, investors can only assume the worse. For a good example of how things can deteriorate, look to Malaysia, whose 12-year bull run ended Monday when its nonagenarian prime minister resigned.
Here’s hoping Tuesday is a better day.
This edition of Data Sheet was curated by Aaron Pressman.
The window is open. While some financial tech startups got gobbled up recently, others are powering ahead on their own. London's upstart banking firm Revolut raised $550 million of venture capital in a deal valuing the company at $5.5 billion. In other fundraising news, A.I. processor designer Graphcore raised $150 million at a valuation just shy of $2 billion.
You always have to have your own voice. The last time Apple swapped processor platforms in its Mac line, the transition was quite smooth. Hopefully history will repeat as it looks like Apple will drop Intel processors from some computers next year and move to a homegrown chip, according to analyst Ming-Chi Kuo. In other Apple news, the company may finally have to pay military contracting spinoff VirnetX $440 million in damages. The Supreme Court rejected Apple's appeal of the finding that its FaceTime app violated VirnetX patents.
Hell no. Enrique Lores, CEO of HP Inc., is pulling out all the stops to fend off an unwanted takeover from Xerox and its grumpy billionaire investor Carl Icahn. Lores said on Monday that HP will triple the size of its stock buyback program to $15 billion. Shares of HP, up almost 8% so far this year, gained another 4% in pre-market trading on Tuesday.
Hasta la vista, baby. I'm so reassured that the Pentagon has taken a solid stance against the use of A.I. in warfare. Oh, wait. The military on Monday released a set of ethical principles on artificial intelligence without firm limits. "DOD personnel will exercise appropriate levels of judgment and care," according to the five-point list. Under other rules, the military is already barred from allowing A.I. to control weapons and fire on its own.
Off course. Travel tech has been struggling for a while now. The latest to suffer is Expedia. The company on Monday said it was cutting 3,000 jobs, or about 12% of its workforce, as a part of chairman Barry Diller's plan to "streamline and focus" the company. CEO Mark Okerstrom and CFO Alan Pickerill resigned in December and have yet to be replaced.
FOOD FOR THOUGHT
After revolutionizing online shopping, Amazon has turned its sights on innovating in bricks and mortar for the past few years. This week, the company is opening its first checkout-free supermarket, called Amazon Go Grocery. Geekwire editor Kurt Schlosser got a sneak peek and spoke to Dilip Kumar, vice president of physical retail and technology for Amazon.
After entering the new store through the kiosks which scan a smartphone QR code, a familiar sight greets traditional grocery store shoppers: a line of shopping carts at the ready. Free, green shopping bags are also offered. Hundreds of cameras in the ceiling overhead make up the key technological component of the just-walk-out concept, and they’re put to the biggest test in the produce section, where a variety of individually priced fruits and vegetables are available.
“Most of the things at Amazon Go are packaged, or they’re single items like a can of Coke,” Kumar said. “But here, people are shopping for potatoes or they’re shopping for onions — there’s a lot more browsing and rummaging that tends to happen. That’s what makes this problem a lot more complicated.”
ON THE MOVE
Mike Bell, the chief technology officer at electric vehicle startup Rivian, has departed after just nine months. Bell, a former exec at Intel and Palm, made his name at Apple helping design the original iPhone...Starbucks named Brady Brewer, who had overseen the company's successful digital efforts, as its new chief marketing officer...struggling real estate start up WeWork hired former Ernst & Young partner Shyam Gidumal as its new chief operating officer...former South Korean finance minister Bahk Jae-wan is the new chairman of the board at Samsung. He had been a board member since 2016...T-Mobile executive VP David Carey is leaving the telecom carrier in the next few months.
IN CASE YOU MISSED IT
Industrial robotics giant teams up with a rising A.I. startup By Jonathan Vanian
Facebook takes issue with Michael Bloomberg’s stealthy campaign posts By Danielle Abril
Coronavirus has video game giants rethinking their trade show plans By Chris Morris
Is the coronavirus a ‘pandemic’? The World Health Organization can’t seem to make up its mind By Eamon Barrett
Germany, the engine of Europe, plans to ditch nuclear and coal—regardless of whether renewables can fill the void By Christiaan Hetzner
Steps companies can take to make the workplace better for black employees By Trudy Bourgeois and Julia Taylor Kennedy
BEFORE YOU GO
Her key role in the NASA space program was largely unknown before the book and movie Hidden Figures, but Katherine Johnson's equations helped send astronauts to the moon and bring them safely back to Earth. Johnson died at 101 on Monday. Among her many achievements, she was the first women to be named on a NASA technical report. “You could work your teeth out, but you didn’t get your name on the report,” she recalled some years later.