Hey Congress, parties are for closers.
Intel delivered that memo loud and clear Thursday, as the chipmaker announced that it will indefinitely delay a much-ballyhooed groundbreaking ceremony for its $20 billion-plus manufacturing plant in Ohio. The decision stemmed, in part, from frustration that Congress has yet to approve $52 billion in proposed government subsidies for the semiconductor industry, an allocation designed to keep the U.S. competitive with Asian and European rivals in the vital sector.
While the move certainly carries an air of political theater—Intel said its initial construction plans and timeline haven’t changed in light of Thursday’s decision—it’s hard to blame the company for baring its teeth.
As Congress’ all-important August recess quickly approaches—a de facto deadline for getting any legislation passed before November’s midterm elections—federal policymakers remain frustratingly mired in the legislative muck on multiple tech-related issues.
The 117th Congress appeared poised to tackle long-standing issues roiling the industry: chip shortages, data privacy, the enormous power of Big Tech giants, and digital censorship, to name a few. But while several bills are going through the legislative grinder, none are guaranteed to pass in the next five weeks.
The Intel example well encapsulates the current political environment for tech reform.
Politicians on both sides of the aisle generally support the $52 billion in funding to boost American semiconductor production. While the governments of China, Taiwan, South Korea, and other Asian nations have helped domestic chip companies steal market share—and helped U.S. outfits set up shop on their soil—American lawmakers have been reluctant to lavish cash on the industry.
But as the U.S. struggled to import chips during the pandemic, some members of Congress argued that the lack of American chipmaking capacity represented an immediate economic and national security threat.
The current proposal, however, is bogged down in Congress. As Bloomberg reported earlier this month, conservatives are now reluctant to deliver a bipartisan victory to President Joe Biden ahead of the midterm elections, when Republicans hope to retake both chambers of Congress. Democratic leadership, meanwhile, has prioritized other legislation with the August recess approaching.
“Anyone who’s been around here for a while knows that politics can screw up prospects of good legislation passing, especially in a political year,” Sen. Todd Young, an Indiana Republican and sponsor of the bill containing semiconductor subsidies, told Bloomberg. “It just needs to remain a priority.”
Similar squabbling threatens to derail other tech-related bills.
The American Innovation and Choice Online Act, which would limit the ability of tech giants to promote their own services and products on proprietary platforms, still isn’t a shoo-in to get a full vote in the Senate. The nation’s largest tech companies continue to aggressively lobby against the bill, while questions remain about the Democratic leadership’s appetite for taking on the issue.
The American Data Privacy and Protection Act, which would limit corporate data collection and enshrine individual rights related to personal information, looks even less likely to reach the president’s desk. As Gizmodo detailed Friday, Republicans still want to see major changes to the proposed legislation before passage. The Washington Post, meanwhile, reported Wednesday that Senate Commerce Chair Maria Cantwell, D-Wash., fears the bill has “major enforcement holes” and would undercut stronger state privacy laws.
There’s also been little buzz around the Open App Markets Act, which would force Apple and Google to further open up their respective app stores to third-party developers, among other provisions. Ditto for any kind of legislation addressing online content regulation.
As the August recess approaches, tech industry reformers and subsidy-seeking chipmakers alike retain hope that policymakers will be prodded into action. Until then, there’s no time to party.
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Pegasus 2.0? Google said Thursday that an Italian company’s hacking technology enabled spying of private messages and contact information on iPhones and Android-powered devices, Reuters reported. The Alphabet unit issued a report detailing the impact of hacking tools developed and sold by RCS Lab, a Milan-based company that counted law enforcement agencies among its clients. Google officials said they have confirmed hacks that occurred in Italy and Kazakhstan.
Another step closer. Twitter provided its prospective buyer, Elon Musk, with additional data this week that could help him evaluate his concerns about bot prevalence on the platform, Insider reported Friday. The latest data dump followed a request last week by Musk, who has threatened to hold up his planned $44 billion purchase of Twitter amid concerns that bots are more common on the platform than company officials have said. The new information included real-time API data, which could help clear the path to a sale or speed up a renegotiation process.
Death by delay? European Union officials are expected to conduct a lengthy antitrust investigation into Broadcom’s planned $69 billion acquisition of cloud software company VMware, an inquiry that could prolong or derail the deal, The Financial Times reported Thursday. Sources close to the investigation said EU regulators plan to begin a “phase two” review of the merger, which could last more than a year. Critics of the deal argue the acquisition could hurt global competition in the technology industry, as Broadcom continues to branch into multiple sectors.
Jobs cuts, take two. Netflix has made a second round of layoffs in two months, shedding 300 more employees as part of its plan to trim costs amid stagnant subscriber growth, Bloomberg reported Thursday. The layoffs, which are spread across the company, represents about 2% of the streaming giant’s workforce. Netflix previously laid off about 150 staffers in May, shortly after the company reported its first net quarterly subscriber loss in a decade.
FOOD FOR THOUGHT
Breaking the bank. TikTok’s massive audience is increasingly translating into troves of cash for Chinese owner ByteDance. Bloomberg reported Thursday that the social media app is on track to triple its revenue this year, reaching about $12 billion, as it ramps up advertising on the hugely popular platform. While TikTok’s monthly user count of more than 1 billion still trails well behind Facebook and Instagram, its short-form video format and potent algorithms drive significantly more per-user engagement time on the app. That popularity is giving TikTok room to expand its revenue streams, including e-commerce and gaming.
From the article:
TikTok is starting to show the profit potential in countries like the US. The company is now charging as much as $2.6 million for a one-day run of a TopView ad—the first thing that pops up on users’ feed when they open the app—roughly four times what it charged a year ago, according to a document reviewed by Bloomberg News.
A 30-second Super Bowl ad runs about $6.5 million—but TikTok can charge that rate every day.
IN CASE YOU MISSED IT
YouTube CEO Susan Wojcicki speaks out on Roe v Wade: ‘Reproductive rights are human rights, this will be a big setback for women’, by Chloe Taylor
Toyota is recalling its first battery EV because its wheels can literally come off, by Christiaan Hetzner
Coinbase downgraded as Moody’s sees profitability challenged even despite 1,100 layoffs, by Nelson Wang and CoinDesk
Google’s suspended AI engineer corrects the record: He didn’t hire an attorney for the ‘sentient’ chatbot, he just made introductions — the bot hired the lawyer, by Colin Lodewick
Ethereum founder Vitalik Buterin bashes ultrawealthy for buying ‘wasteful zero sum crap’ like $50 million superyachts instead of bettering the world, by Taylor Locke
A Web3 startup hired an impersonator to play NFT kingpin Snoop Dogg at a New York NFT conference. People were fooled, by Chloe Taylor
DTC brands were already struggling. Supply chain issues will force them to adapt, by Kate Ryan
BEFORE YOU GO
Howling about hybrid. There’s at least one tech executive already dismayed by the immediate embrace of hybrid work. In an interview with The Washington Post, Yelp co-founder and CEO Jeremy Stoppelman described employees splitting time between corporate and home offices as “the worst of both worlds.” As a result, the company behind the eponymous merchant rating app is shuttering its offices in New York, Chicago, and Washington, D.C. Stoppelman likened the hybrid arrangement to “the hell of half measures,” noting that Yelp employees still must live in expensive regions and the company still faces high office space costs, among other drawbacks.
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