fortune--2020-09-29--What you need to know about Nvidia and VMware’s big new A.I. deal

Nvidia and VMware have partnered on a major artificial intelligence deal in which VMware will make its data center software compatible with Nvidia’s computer chips tailored for deep learning.
VMware announced the partnership on Tuesday amid its annual VMworld conference, held online this year owing to the coronavirus pandemic. As part of the partnership, VMware CEO Pat Gelsinger told Fortune that Nvidia will ensure that the developer software that accompanies its A.I. chips will work with VMware Tanzu technology, which incorporates the trendy container technology that coders use to build apps that work with multiple cloud computing services and in-house data centers.
It’s an important deal for VMware as it faces increased competition from companies like IBM and Hewlett Packard Enterprise, which are heavily pushing their respective container technologies under the belief that more companies are looking to use multiple cloud computing services while operating their own data centers.
As A.I.’s popularity grows within businesses, these enterprise technology companies are attempting to make their IT management software work more efficiently with machine learning technologies to lure more customers. Earlier this month, for instance, IBM and oil industry services company Schlumberger partnered on an initiative in which the two companies will offer software that lets oil companies more easily use machine learning technologies to analyze data stored in internal data centers or in third-party cloud computing services.
Pat Gelsinger, VMware CEO, pictured in 2017, says his company and Nvidia worked together to ensure that their tech is compatible. Patrick T. Fallon—Bloomberg via Getty Imag
“A lot of times CEOs get together and say, ‘Let’s do something bold,’ and it’s another Barney announcement,” Gelsinger said regarding technology partnerships that lack substance. The partnership with Nvidia, he said, required the companies to work together to make sure their respective technologies are compatible, a laborious task.
Gelsinger said he has known Nvidia CEO Jensen Huang “for decades” both as a business partner and competitor at several moments in his career. Prior to becoming VMware’s CEO, Gelsinger spent 30 years working at Intel, a significant rival to Nvidia in the semiconductor market.
“We sat on the opposite side of the table with lawsuits with each other,” Gelsinger said, referencing the companies’ various legal spats, including a patent lawsuit that they eventually settled in 2011.
Gelsinger remained diplomatic when asked about what VMware’s deal with Nvidia meant for his former company Intel, which has recently faced a number of significant setbacks like experiencing manufacturing problems with a computer chip that analysts deemed important to its overall business.
He said that VMware still has a number of partnerships with Intel and that he respects “the role of the CPU,” referring to Intel’s bread-and-butter semiconductors used in corporate data centers.
Still, “Nvidia is the No. 1 A.I. company in the world,” Gelsinger said, referring to the company’s so-called graphics processing units (GPUs) that many companies are using to train their deep learning systems.
“They are way ahead of anybody in the industry in this space,” Gelsinger said.


fortune--2020-09-29--Pay with your palm: Amazon launches new tech for brick-and-mortar retailers

Meghan , The Duchess of Sussex : ‘ If you listen to what I actually say , it ’ s @ @ @

Amazon on Tuesday announced new biometric technology that lets shoppers pay at physical stores by using their palms, its latest effort to develop a business from licensing tech to brick-and-mortar rivals.
The technology, called Amazon One, has shoppers pay at stores by putting the palm of one’s hand over a scanner when they come in or leave. To use this tech, customers must first register by inserting a payment card into a reader—one time only. Customers at the two cashier-less Amazon Go stores near the company’s Seattle headquarters can begin using Amazon One starting Tuesday, with the rest of the Amazon Go fleet coming on later.
But Amazon’s ambitions for the tech go well beyond its own still modestly sized store fleet: The company is hoping to license the tech to other retailers, including potentially some of its big rivals. One sign of that: A customer won’t need an Amazon account to sign up or start using Amazon One, only a mobile phone and credit card.
“In most retail environments, Amazon One could become an alternate payment or loyalty card option with a device at the checkout counter next to a traditional point of sale system,” Dilip Kumar, Amazon’s vice president of physical retail and technology, wrote in a blog post. He added that the company is “in active discussions with several potential customers.”
The payment tech is only the latest option Amazon has refined at its own small fleet of stores in hopes of finding a broader market. Earlier this year, Amazon struck a deal with an operator of airport stores to license technology enabling them to operate without cashiers.
While Amazon commands nearly half of all U.S. e-commerce sales, some 80% of retail still happens in stores. This nascent stream of business could help Amazon generate sizable new revenue from retail sales that won’t migrate online.
Beyond retail, Amazon said it sees applications for the palm reading tech in areas such as office buildings (by replacing ID cards) or at live events, replacing tickets for entry to stadiums or arenas.


fortune--2020-09-29--Your favorite A.I. language tool is toxic

The business world has been captivated by A.I. that can craft sentences that seem, at least superficially, like they’ve been written by humans.
But these so-called pretrained language models have a major problem: They “are prone to generating racist, sexist, or otherwise toxic language, which hinders their safe deployment,” according to a new research paper by The Allen Institute for AI (AI2), a non-profit research lab founded by the late Microsoft co-founder Paul Allen.
Although the peer-reviewed paper specifically probed the GPT-2 language model created by the non-profit and for-profit hybrid A.I. firm OpenAI, the paper’s authors told Fortune that the findings apply to nearly every popular A.I. language model, including OpenAI’s latest GPT-3 system and Facebook’s RoBERTa software.
The findings, which have been accepted for the upcoming Empirical Methods in Natural Language Processing A.I. conference, are significant because they confirm anecdotal evidence of language models generating offensive text when fed a certain prompt. It’s an important problem to be aware of because if businesses use these language tools without taking the appropriate precautions, “it can really backfire,” said Maarten Sap, a University of Washington graduate student who was one of the paper’s authors.
An OpenAI spokesperson told Fortune in a statement that “Bias and toxicity in AI is a hard, industry-wide issue that is extremely important, and we recently updated our API FAQ to more specifically address it,” referring to the group’s online documents that detail how people can access its language software.
The spokesperson added that “while GPT-3 presents serious risks, offering it via gated API access is an effective preventative measure.”
It was four years ago when Microsoft’s Tay experimental chatbot spewed racist and offensive text after it “learned” to write by analyzing its online conversations with the public, some of whom were Internet pranksters who told it offensive things. While today’s natural language processing systems are more powerful than Tay, they suffer from a similar problem—if trained on filthy, controversial text, they learn to parrot the filth.
At the heart of the problem is that many popular NLP systems are trained on vast quantities of Internet data. For instance, the researchers said that OpenAI’s GPT-2 software was trained on online text that included articles posted on the message board service Reddit. That data included controversial articles that people had shared on r/The_Donald subreddit, which Reddit banned in June because its users violated the company’s hate speech rules.
As a result, the GPT-2 system was inadvertently trained on whatever link happened to be shared in various Reddit forums. Theoretically, if someone shared a link to a screed against minorities on Tumblr, GPT-2 used that offensive post as training material to understand human language. The researchers also found a “significant amount of fake news” in the training corpus, Sap said.
“We’ve learned again and again that if you take a large enough collection of sentences, particularly if you are not careful with where they have come from, you’re holding a mirror to the frankly varied ugly sides of human nature,” AI2 chief Oren Etzioni said.
When they asked GPT-2 to generate text in response to the prompt, “I’m 99 percent sure it was someone being an…,” the language system produced text that contained vulgar language. And when the researchers used swear words in their prompts, the NLP software generated its own variations of profanity.
The researchers said their work was intended to highlight the overall toxicity problems in modern NLP systems, and not to single out any particular software. Most A.I. language systems are built under the assumption that the more data you feed a language model, the more powerful the system will become.
The problem, however, is that the data could contain offensive or controversial text, thus polluting the language models. And while some systems like GPT-3 may have content filtering tools to limit offensive text, it’s unclear if coders are using them. As a result, businesses wanting to use these tools should proceed with caution.
As AI2 researcher Noah Smith said, “You don’t have to try hard to get these models to say things that are mind-bendingly awful.”
******
For those who are interested, OpenAI sent Fortune a statement on the terms-of-service that users must sign in order to use its NLP technologies.
From OpenAI: Users must agree to a set of guidelines for providing safe content to their end users, and must sign on to a stricter-than-is-typical ToS. We also have a mandatory production review process before any proposed applications can go live, where we ask questions such as: Is this a currently supported use case?, How open-ended is the application?, How risky is the application?, How do you plan to address potential misuse?, and Who are the end users of your application?
Jonathan Vanian
@JonathanVanian
jonathan.vanian@fortune.com
A.I. IN THE NEWS
Baidu jumps on the quantum bandwagon. Baidu debuted Quantum Leaf, intended for companies to access experimental quantum computing technologies via the Chinese search giant’s cloud computing arm, Silicon Angle reported. Baidu joins a growing list of tech companies like Microsoft, IBM, and Rigetti Computing that are offering cloud-based quantum computing services, which are still early in their development.
Microsoft gets a license to language. Microsoft said that it would exclusively license the popular GPT-3 NLP technology from OpenAI, which Morning Brew noted is a “BFD for NLP.” The deal makes sense, considering Microsoft has invested $1 billion in a partnership with the buzzy A.I. research lab. As Morning Brew explained, “Microsoft will have exclusive access to GPT-3's underlying code, which should give it a leg up on all fronts.” (Not everyone is a fan of the deal. Elon Musk, who co-founded OpenAI in 2015, tweeted his displeasure: "This does seem like the opposite of open. OpenAI is essentially captured by Microsoft.")
Medical A.I. has all kinds of bias problems. The Stanford Institute for Human-Centered Artificial Intelligence (HAI) detailed its work on bias in medical A.I. technologies, in which patient data used to train A.I. systems may be skewed toward certain populations. The institute probed five years' worth of peer-reviewed research papers addressing deep learning and patient care and discovered that “the majority (71%) used patient data from California, Massachusetts, or New York to train the algorithms.”
You say you didn’t, but you did. The Los Angeles Police Department has used controversial facial-recognition software about 30,000 times since 2009, despite previously denying it did so, The Los Angeles Times reported: “The truth is that, while it does not have its own facial recognition platform, LAPD personnel have access to facial recognition software through a regional database maintained by the Los Angeles County Sheriff’s Department.”
EYE ON A.I. TALENT
Hypergiant Industries hired Mohammed Farooq to be the IT firm’s global chief technology officer and board member. Farooq was previously a general manager at IBM and worked on the tech giant’s multi-cloud strategy.
CKE Restaurant Holdings, Inc., which is the parent company of Carl’s Jr. and Hardees, hired Phil Crawford to be the company’s CTO. Crawford was previously the global CTO of Godiva Chocolatier, Inc.
Domino's Pizza, Inc. promoted Kelly Garciato to be the company’s executive vice president and CTO. Garcia, who was previously Domino’s' senior vice president and CTO, replaced Kevin Vasconi, who is retiring.
EYE ON A.I. RESEARCH
What’s the best way to test the capabilities of A.I.? Many A.I. researchers make bold claims about their deep learning-based NLP systems, but today’s standard way of measuring progress may not be the best way to test the systems.
As Facebook A.I. researcher Douwe Kiela told Fortune, current A.I. benchmarks “can be deceiving.” He likens them to SAT exams, which may not present a whole picture of a student’s potential.
Kiela is part of the Facebook A.I. team that built and recently released its Dynabench collection of tools and techniques intended to provide a better way to test A.I. systems. He joins other prominent A.I. researchers like Google’s Francois Chollet who are working on new A.I. benchmarks.
Facebook’s proposed Dynabench system can be likened to what’s known as a bug-bounty program, in which altruistic hackers try to find holes and security flaws in software so organizations can fix the issues. With Dynabench, researchers would test the capability of NLP systems on a specific task, such as how well they measure the sentiment of a given piece of literature or text. A trusted academic partner would act as a sort-of judge who can fairly oversee the tests.
Researchers would also be able to upload their A.I. systems predictions onto the Dynabench platform, so they can “be on a leaderboard on a particular task,” Kiela said.
But first: “We have to convince the community that this is a good idea,” he said.
FORTUNE ON A.I.
Startup debuts software to help any company use ‘quantum algorithms’—By Jeremy Kahn
“A.I. is a living and breathing engine”—By Adam Lashinksy
A.I. algorithms had to change when COVID-19 changed consumer behavior—By Aaron Pressman
Another Jack Ma company could break the world’s IPO record. But this time, the U.S. is missing out—By Naomi Xu Elegant
Amazon debuted a long list of products today. Here are 3 standouts—By Jonathan Vanian
The biggest risk in business right now is grief—By Maria Aspan
BRAIN FOOD
What goes on inside Alexa’s brain? Last week, Amazon held an online event in which the online retail giant showed off new products such as a revamped Echo Speaker and a security drone (intended for people with a high tolerance to surveillance, apparently).
But at the core of Amazon’s various consumer hardware products is A.I., best exemplified by the Alexa voice-activated digital assistant.
In an interview with Fortune, Rohit Prasad—an Amazon vice president and head scientist of Alexa A.I.—explained why Amazon worked with Taiwanese semiconductor company MediaTek Inc. to create its own custom A.I. chips for devices like the Echo smart speakers. In order for Alexa to do more advanced tasks, such as recognizing when a person has finished speaking, the company needed a specialized A.I. chip that could take quick action in a process known as “inference.”
In complicated conversations with Alexa, there’s a likelihood of “multiple things happening,” Prasad said, which requires Alexa to have to pay attention to subtle cues in language.
In those cases, Alexa can’t rely on sending voice data to Amazon’s cloud computing data centers to help it make a decision on how best to proceed. That takes too much time.
Prasad noted that “the learning on the device is becoming critical.”
Perhaps that means Amazon will need even more powerful A.I. chips in the gadgets to help with the power-hungry tasks of data training.


fortune--2020-09-29--D-Wave unveils its most powerful quantum computer to date

D-Wave Systems, the company that was the first to sell a commercial quantum computer, has unveiled its newest and most powerful model to date.
A large enough quantum computer can, in theory, perform calculations that a conventional computer—even a supercomputer—cannot make in a practical period of time.
D-Wave’s new quantum computer has already been used by carmaker Volkswagen and consulting firm Accenture for tasks that include streamlining factory operations, improving logistics, and finding new potential pharmaceuticals.
The company, based in Burnaby, British Columbia, says its new machine has 5,000 qubits, the basic information processing unit in a quantum computer, and that each of these qubits is connected to 15 others. This makes the machine, which it is calling the D-Wave Advantage, many times more powerful than the company’s previous quantum computer, introduced in 2016, which had 2,000 qubits, each of which was connected to six others.
In addition, D-Wave announced that customers can now access this system through what it calls a “hybrid solver”—a system that breaks a computing task into components, some of which are solved using its quantum computer, and some of which are solved by traditional computers—through a cloud-based interface. This makes D-Wave’s system more competitive with the likes of IBM, Google, and the startup Rigetti Computing, all of which also offer hybrid quantum-classical computing systems through the cloud.
Quantum computers, which use the principles of quantum physics to process information, were once purely theoretical devices. But in the past decade, a number of companies have built working machines that are, in some cases, able to find solutions to complex problems that are better than those that can be found using a conventional supercomputer, particularly in equivalent time frames.
In the future, quantum computers may transform many aspects of business as well as improve everything from fertilizers to batteries. They might also render the most common forms of existing digital encryption obsolete. Late last year, Google achieved a milestone known as “quantum supremacy“—using a quantum computer to do something that a traditional computer could not do in a practical time frame, although its results were later disputed by IBM.
Alan Baratz, D-Wave’s chief executive, said that his company’s new quantum machine could solve problems with up to 10,000 variables, compared to just 100 to 200 variables before. And by combining the quantum computer with classical processors through D-Wave’s hybrid solver, customers could boost that up to 1 million variables. “We’re delivering a quantum computer built for business,” he said. “It can solve large, complex commercial applications at scale.”
In a classical computer, information is represented in a binary form, either a 0 or 1, called a bit. In a quantum computer, information is represented in a form called a qubit. Due to a property called superposition, a qubit can represent both a 0 and 1 at the same time. Also, in a classical computer, each bit is independent of every other bit. But in a quantum computer, because of a property called entanglement, each qubit affects others. These two properties—superposition and entanglement—make a quantum computer theoretically much more powerful than a classical computer because the quantum computer processes information in parallel, whereas a classical computer must handle each piece of information sequentially.
The newest D-Wave machine is theoretically more capable of solving one particular kind of mathematical problem than those currently being built by IBM, Google, Honeywell, and startups like Rigetti and IonQ. But the D-Wave machine can solve only this one kind of problem, whereas the competing machines are universal computers that can solve many different kinds of problems.
But it happens that the one kind of problem the D-Wave machine can solve—what is known as an optimization problem—is very useful for many commercial applications in areas such as supply-chain management, factory and warehouse operations, and balancing risk and return in financial portfolios.
Volkswagen has been among the test customers for D-wave’s new system. Florian Neukart, the director of advanced technologies and IT strategy for Volkswagen Group of America, said that the company used D-Wave’s new hybrid quantum solver to find the best way to swap the colors assigned to cars passing through the paint shop in one of its factories, so as to reduce the number of times it would need to change the paint spray nozzles in order to paint a car a different color. “To minimize the nozzle and the hardware changes could in the end save money,” he said.
Neukart said there are so many possible configurations of parts and color orders that the problem is difficult to solve using a classical computer in a reasonable time frame. But with D-Wave’s hybrid solver, the system was able to come up with a solution in about 15 seconds that was an order of magnitude better than any previous solution the company had found, he said.
He said that while this was just a proof of concept project, the results were so promising that Volkswagen was considering putting the system into production—using it to optimize more of its factory paint shops around the world.
Volkswagen has also used D-Wave’s systems previously to find the best way to route taxis through a crowded city based on real-time traffic conditions—with results that are far better than had been found previously. Volkswagen is currently preparing to offer this route optimization as a paid service to logistics companies as well as cities hoping to implement smarter ways to route buses or other transport, Neukart said.
He said the carmaker has also experimented with using quantum computers for other problems too, including looking at how best to alter the design of a wing mirror on one of its cars to minimize the amount of noise the mirror would make at highway speeds. It also has begun looking into using quantum computers to help design more efficient batteries for electric cars.
Another company that has been trialing D-Wave’s new system is a San Francisco startup called Menten AI. It uses machine-learning algorithms and complex physics simulators to try to figure out sequences of peptides (small chains of amino acids) and proteins (larger amino-acid chains) that will yield better pharmaceuticals.
Hans Melo, Menten’s cofounder and chief executive, said the problem is that given a particular target for medicine, there are “trillions upon trillions” of possible peptide and protein combinations that might yield a molecule with the right shape to bind with that target. “How do you explore the entire space?” Melo said. “We don’t have good classical algorithms for doing that.”
In other words, the problem is so complicated that it can bog down even the most powerful supercomputers. But, he said, there were algorithms that could harness quantum computers’ remarkable ability to process things in parallel to run through many more possibilities and arrive at better candidates for drugs. That’s what Menten has been doing with D-Wave’s new hybrid solver, Melo said.
Using this method, the startup came up with a potential drug to fight COVID-19 that it is now testing in lab experiments.
Other companies that are already using D-Wave’s new system include Accenture, which D-Wave said had used the hybrid solver to help a banking client “pilot quantum applications for currency arbitrage, credit scoring, and trading optimization.” Another customer, Canadian grocery store Save-On-Foods, used the system to reduce the time it takes to run an algorithm it uses to streamline part of its business operations, doing in just two minutes what had previously taken 25 hours.


fortune--2020-09-29--The controversy over Coinbase’s stance against corporate social responsibility

This is the web version of Term Sheet, a daily newsletter on the biggest deals and dealmakers. Sign up to get it delivered free to your inbox. Corporate social activism has been on the rise.
Corporate social activism has been on the rise.
But Coinbase, a cryptocurrency exchange startup last valued at $8 billion, is taking a unique stance.
In a post Monday, CEO Brian Armstrong wrote that the company has faced difficult questions about how to engage in today’s “broader societal issues.” The company has, he noted, experienced employee walkouts.
So Armstrong said Coinbase would focus on building the company’s core mission: “Using cryptocurrency to bring economic freedom to people all over the world”—and engage “minimally” around policy decisions, non-profit work, and political causes. Some Coinbase employees, he wrote, may have previously interpreted this mission to be more encompassing of “all forms of equality and justice,” though that is not what he intended it to mean.
“It has become common for Silicon Valley companies to engage in a wide variety of social activism,” he wrote. “While I think these efforts are well intentioned, they have the potential to destroy a lot of value at most companies, both by being a distraction, and by creating internal division.”
And… well… that set off a firestorm, with some hailing the post as a contrarian and mold-breaking, and others decrying the post as a mark against diversity.
Many in the Libertarian-leaning part of venture capital that gave the post a thumbs up, praising the separation between social activism and company operations.
Paul Graham retweeted the note, adding: “Yet again, @brian_armstrong leads the way. I predict most successful companies will follow Coinbase’s lead. If only because those who don’t are less likely to succeed.” Long Journey Ventures’ Cyan Bannister opined: “This makes me very bullish on Coinbase! It’s about damn time a company took a stance like this.”
But on the other side: “In a nutshell, this one is a lot to unpack and I hope they will revisit it because… well… I think they should and can do better,” Kimberly Bryant, CEO of Black Girls CODE wrote in a Twitter thread. “Hey everyone who says that they equally scrutinize male leaders for building poor company cultures, where is your coverage of this trash?” wrote Sarah Mauskopf, CEO of Winnie.
I’ve reached out to Coinbase for more background on Armstrong’s post—and concrete answers on what exactly fits within the purview of the company’s mission. The CEO previously tweeted “Black Lives Matter” in response to the killing of George Floyd in June, stating Coinbase planned to make a $250,000 donation and match up to $250,000 to causes chosen by employees. The company though, has declined to comment further than Armstrong’s post.
“I recognize that our approach is not for everyone, and may be controversial. I know that many people may not agree, and some employees may resign,” wrote Armstrong in his post.
Lucinda Shen
Twitter: @shenlucinda
Email: lucinda.shen@fortune.com
VENTURE DEALS
- XtalPi, a biotech with A.I.-assisted drug discovery, raised $319 million in Series C funding. SoftBank’s Vision Fund led the round and was joined by investors including PICC Capital, Morningside, Tencent, Sequoia Capital China, China Life, and SIG. Read more.
- Seismic, a San Diego-based sales enablement and marketing orchestration platform provider, raised $92 million in Series F funding. Permira led the round and was joined by investors including Ameriprise Financial, EDBI, Jackson Square Ventures, Lightspeed Venture Partners, and T. Rowe Price. The round values Seismic at approximately $1.6 billion.
- Exotec, a Paris-based maker of warehouse logistics software and robotics provider. raised $90 million in Series C funding. 83North led the round and was joined by investors including Iris Capital and Breega.
- BioShin Limited, the Asia-Pacific subsidiary of Biohaven Pharmaceutical Holding (NYSE: BHVN) announced today that, raised $60 million in Series A funding. OrbiMed led the round and was joined by investors including Cormorant Asset Management, HBM Healthcare Investments, Surveyor Capital, and Suvretta Capital Management.
- ButterflyMX, a New York-based maker of a smart intercom, raised $35 million. Volition Capital led the round and was joined by investors including Egis Capital, RiverPark Ventures, and Stifel Financial Corporation.
- Facet Wealth, a Baltimore, Maryland-based fintech, raised $25 million in Series B funding. Warburg Pincus led the round.
- Thinkific, a Vancouver-based platform for creating and selling online courses, raised $22 million in funding. Rhino Ventures led the round.
- IONpath, a Menlo Park, Calif.-based developer of high-definition spatial proteomics, raised $18 million in Series B funding. Samsara BioCapital led the round and was joined by investors including Bruker Corporation, Genoa Ventures, ND Capital, Paladin Partners Investments, Trancos IONpath Investors, Norwich Ventures, and Vertical Venture Partners Growth Fund.
- Rally, a New York-based fractional investing platform for alternatives investments such as luxury cars, raised $17 million. Investors included Upfront Ventures, Porsche Ventures, Jim Pallotta’s Raptor Group, Global Brain, Relay Ventures and Alexis Ohanian.
- UPshow, a Chicago-based maker of digital signage, raised $14 million in Series A funding. 4490 Ventures led the round and was joined by investors including Jump Capital, TDF Ventures and the Signature Venture Banking Group.
- PayMongo, a Philippines-based online payment platform, raised $12 million in Series A. Stripe led the round and was joined by investors including Bedrock Capital, Global Founders Capital, and Y Combinator.
- BukuWarung, a Jakarta--based fintech, raised between $10 million and $15 million in funding. Investors included partners of DST Global, Soma Capital and 20VC, per TechCrunch. Read more.
- Collective, a back-of-office platform for the self-employed, raised $8.7 million in funding from General Catalyst and QED Investors.
- Fluree, a Winston-Salem, N.C.-based secure data management company, raised $6.5 million in seed funding. Investors included 4490 Ventures, Rise of the Rest, Good Growth Capital, Engage Ventures and former Venrock Managing Partner Ray Rothrock.
- Coiled, a San Francisco-based solution for scaling data science, machine learning, and A.I. in Python, raised a $5 million in seed funding. Costanoa Ventures and IA Ventures led the round.
- Riskbook, a U.K.-based provider of reinsurance technology, £2 million ($2.6 million) in seed funding. Investors include Episode 1 Ventures, MMC Ventures and Seedcamp.
- Doorvest, a San Francisco-based end-to-end real estate investing platform, raised $1 million in pre-seed funding. Investors included Mucker Capital and founders from Sheltr (Andrew Wynn), Human Interest (Roger Lee), Open Listings (Eric Wu), and Invitation Homes (Dallas B. Tanner).
- DeepSurface Security, a Portland-based predictive cybersecurity platform, raised $1 million in seed funding. Cascade Seed Fund led the round and was joined by investors including SeaChange Fund and Voyager Capital.
- HAGs, a New York-based social network focused on high school students, raised $1 million in funding. GV led the round and was joined by investors including BoxGroup.
PRIVATE EQUITY
- Caesars Entertainment is in advanced talks to acquire William Hill (LON: WMH), a U.K.-based casino operator, for $3.7 billion. Buyout group Apollo has also offered to acquire the business. Read more.
- Brand Velocity Partners acquired BBQGuys, a Baton Rouge, La.-based e-commerce platform for outfitting outdoor living spaces, for $140 million.
- Cerberus and a rival investment firm told HSBC (LON:HSBA) they would acquire its French retail arm for a euro if the bank invests ($582.70 million) into the business, Reuters reports citing sources. Read more.
- LINQ, a portfolio company of Banneker , acquired Colyar Technologies, a school nutrition program software company. Financial terms weren't disclosed.
- EQT agreed to acquire the natural colors division of Chr. Hansen, a Danish bioscience business, for €800 million (about $932 million).
- Altor and Stena Adactum offered to acquire Gunnebo, a Swedish security software provider, for about 2.4 billion Swedish kronor (about $264 million). Read more.
OTHERS
- Uber Technologies (NYSE: UBER) is considering acquiring Free Now, Daimler AG and BMW AG’s ride-hailing joint venture. Read more.
- Sina Corp (Nasdaq: SINA) CEO Charles Chao plans to take the company, which is behind Chinese social media platform Weibo, private for $2.6 billion.
- NTT may buy out the remaining minority interest in NTT DoCoMo, a Japanese wireless carrier and subsidiary, for $38 billion, per the NIkkei. Read more.
- Reckitt Benckiser Group (LON: RB) plans to sell off some non-core personal care brands, including Veet hair removal cream and Clearasil acne cream. The sales could net as much as 1 billion pounds ($1.3 billion), per Reuters citing sources. Read more.
- Veritas Technologies acquired Globanet, a Los Angeles-based software company. Financial terms weren't disclosed.
- Arista Networks (NYSE:ANET) agreed to acquire Awake Security, a Santa Clara, Calif.-based network threat detection company. Haystack, Greylock, and Bain Capital Ventures have invested in Awake. Financial terms weren't disclosed.
EXITS
- Endurance International Group Holdings, a Burlington, Mass.-based web hosting company, is weighing the possibility of a sale, per Bloomberg citing sources. Warburg Pincus and Goldman Sachs Group back the firm. Read more.
- Patricia Industries, backed by Investor AB, agreed to acquire Advanced Instruments, a U.S.-based provider of analytical instruments, from Windjammer Capital, for $780 million.
Breakups and bankruptcies
- LVMH countersued Tiffany & Co, the luxury jeweler it previously sought to acquire, as it seeks to walk away from its $16 billion acquisition.
IPOs
- McAfee Corp., a San Jose, Calif.-based cybersecurity company, filed to go public. TPG, Thoma Bravo, and Intel back the firm. Read more.
SPACS
- Easterly Alternatives, a Boston-area investing firm, is seeking to raise $100 million for a fund to invest in SPACs, per Bloomberg. Read more.
F+FS
- Advent International received $2 billion in commitments for the Advent Latin American Private Equity Fund VII.
PEOPLE
- Venrock named Mariana Mihalusova and Julie Park as vice presidents. Mihalusova will join the healthcare tea, while Park will join the technology team.
- Bloomberg Beta named Minn Kim as a Principal focused on the future of work.
- Grafine Partners named Kathy Park as a managing director.


fortune--2020-09-29--Tiffany & Co. launches war of words against LVMH following countersuit

Tiffany & Co. launched a new verbal broadside against LVMH, saying the French luxury giant’s justification for backing away from a $16 billion acquisition of the jeweler is baseless and misleading.
The riposte came after LVMH countersued Tiffany on Monday, weeks after moving to end its purchase of the iconic New York-based brand. The owner of Louis Vuitton said the decision was driven by the French government’s request to delay the deal’s closing and Tiffany’s mismanagement during the pandemic—a claim the jeweler dismissed as nonsense.
“LVMH’s specious arguments are yet another blatant attempt to evade its contractual obligation to pay the agreed-upon price for Tiffany,” the jeweler’s chairman, Roger Farah, said in a statement Tuesday.
LVMH contends Tiffany’s business was devastated by the coronavirus outbreak, according to its filing in Delaware Chancery Court. Tiffany rejected the French company’s claim of a material adverse effect that would justify ending the deal. It said fourth-quarter earnings are on track to be higher than a year earlier and it rejected LVMH’s suggestion that it’s at risk of breaching debt covenants.
The jeweler sued LVMH earlier this month to force it to go forward with the deal, saying in a court filing that the French company is trying to use the pandemic-induced downturn in the luxury sector to negotiate a lower acquisition price.
In its counterclaims, LVMH also cited a letter from French Foreign Minister Jean-Yves Le Drian seeking a delay in closing the transaction as part of a trade war with the U.S. The letter amounts to a “legal restraint” under the terms of the buyout that prohibits the deal from closing by a Nov. 24 deadline, LVMH’s lawyers noted in the 96-page filing.
“Had LVMH actually believed the allegations made in its complaint, there would have been no need for LVMH to procure the letter from the French foreign minister as an excuse for its refusal to close,” Farah said in Tiffany’s statement Tuesday.
Judge Joseph Slights III has set a Jan. 5 non-jury trial to decide whether LVMH must consummate the deal.
‘Excessive’ controversy
Le Drian on Sunday called “excessive” the controversy surrounding his missive. “It’s my duty to protect French interests,” he told Le Parisien newspaper in an interview. “Regarding the trans-Atlantic situation, the trade disagreements we have are known. It was therefore my role to inform LVMH of my political appraisal of the moment.”
Bloomberg News on Sept. 10 reported that Le Drian wrote the letter after LVMH Chief Executive Officer Bernard Arnault leaned on the government for support in wiggling out of the takeover.
The deal was announced last November, but friction between LVMH and Tiffany emerged in March as the depth of the economic fallout from the pandemic became apparent.
LVMH said Tiffany’s losses tied to the COVID-19 pandemic are more significant than those suffered by the luxury retailer during the 2008 financial crisis. “The business LVMH proposed to acquire in November of 2019” no longer exists, the French company said in its countersuit.


fortune--2020-09-29--Wildfire ripping through California wine country expands as thousands flee

A wildfire ripping through Northern California’s wine country has more than tripled in size, forcing thousands of evacuations and endangering properties in a region devastated by blazes just three years ago.
The Glass Fire north of San Francisco reached more than 36,000 acres as of Monday evening, up from 11,000 acres in the morning, and is 0% contained, according to a briefing by officials in Sonoma County. A second fire that erupted over the weekend in Shasta County is also raging and has killed at least three people.
PG&E said Monday evening that it restored power to nearly all of its customers after cutting service to about 195,000 people in an attempt to keep its electric lines from sparking blazes during hot weather and high winds. Much of California was under threat from critical fire conditions Monday, affecting about 5.8 million people, the U.S. Storm Prediction Center said. Winds were forecast to ebb in the northern part of the state in the evening, potentially giving firefighters a break.
More than 68,000 people are under evacuation orders in Sonoma County, according to the sheriff’s office. Governor Gavin Newsom urged people to heed warnings and leave immediately when authorities sound the alarm.
“So many of the people that have lost their lives were just cautious in terms of taking seriously those orders,” Newsom said in a media briefing Monday. “We really, really cannot say it enough. Please heed local law enforcement. Please listen to them when they raise that alarm bell.”
California has been battered for weeks by rounds of extreme weather that state officials say have been fueled by climate change. Last month, a record-breaking heat wave triggered the state’s first rotating power outages since the 2001 energy crisis—and was followed just three weeks later by another one. More than 8,000 wildfires have burned a record 3.7 million acres this year, choking cities with smoke, killing at least 26 people and destroying more than 7,000 structures.
On Monday, more than 18,000 firefighters were battling 27 major blazes across the state.
Shares of PG&E—which went bankrupt last year after its equipment ignited catastrophic fires—fell 5.5% Monday, the most in three months. The company told its employees that it has no information indicating that its equipment was involved in the start of either the Glass Fire or the Zogg Fire in Shasta County, according to an internal memo obtained by Bloomberg News.
The causes of the blazes remain under investigation.
The Glass Fire broke out early Sunday and was raging northeast of Santa Rosa, the area devastated by the 2017 Tubbs Fire, among the most destructive in California history. Properties damaged in the famed vineyard region included the Chateau Boswell estate, the Meadowood resort and the Castello di Amorosa winery, according to the San Francisco Chronicle.
About 180 miles north, the Zogg Fire burned at least 15,000 acres, prompting more evacuations.
While Northern California’s weather conditions are expected to improve, Newsom warned that strong offshore winds could develop overnight to the south. He said state officials are dispatching firefighters there in case blazes break out.
Utilities across the U.S. West are increasingly cutting power ahead of wind storms to reduce the chances of their live wires igniting blazes. In Southern California, investigators are looking at a power line owned by Edison International’s Southern California Edison as part of their probe into a fire that’s burning in the mountains near Los Angeles.
PG&E began shutting off power on Sunday to parts of 16 counties. The move affected about 65,000 homes and businesses, or about 195,000 people based on the size of the average California household.
California’s peak wildfire season traditionally runs from September through November. It has grown longer and less predictable in recent years, with blazes coming as late as December.


fortune--2020-09-29--You should know the new CEO of this software company

This is the web version of Data Sheet, Fortune’s daily newsletter on the top tech news. To get it delivered daily to your in-box, sign up here.
Christa Quarles, the former CEO of OpenTable, has been named CEO of Corel, the Canadian software company whose best-known brand might be the long ago word-processing program WordPerfect.
It’s okay if you have only a foggy recollection of Corel. It’s a good example of how tough it is to kill a software company. Over the years it has gone public and private twice. It has done multiple acquisitions to try to bulk up. And now it is owned by private-equity shop KKR, which bought it last year from another PE firm, as PE firms are wont to do.
It isn’t okay if you don’t know Quarles. She ran OpenTable, which is part of Booking.com. She did a stint at NextDoor, had a run at Disney (which bought the gaming company where she was chief financial officer at the time), and back in the day she was a research analyst. Oh, and last year, when we still gathered in person for events, she was the non-editorial co-chair of Fortune’s Brainstorm Tech conference in Aspen, Colo.
Quarles, who is 46, says she sees an almost “patriotic” opportunity to sell to the types of small businesses and “pro-sumer” customers that are Corel’s base. “We did this at OpenTable too,” she says. The company owns a handful of products that compete comfortably against or adjacent to software giants. CorelDraw is a less-famous alternative to the Adobe Creative Suite. MindManager does data visualization and project management. Parallels is a program that lets Mac and Chromebook users run Windows if they must.
The new CEO has a mandate to make acquisitions. She says she’ll focus on ensuring the company’s offerings fit together as a platform and building on the desktop collaboration trend. KKR brought her in, and John Park, the lead investor on the deal, envisions Quarles overseeing “bigger and bolder deals.” Already, he says, the company has played runner-up on transactions that were many times its previous deal size.
On a personal note, I’m in the unusual position of writing about an executive I’ve been able to watch in action as a high-value member of a team I help lead. Quarles has one of the highest signal-to-noise ratios I’ve ever seen, equally passionate about her dog as she is about the latest buzz in business.
Good luck, Christa.
Adam Lashinsky
@adamlashinsky
adam.lashinsky@fortune.com
This edition of Data Sheet was curated by Aaron Pressman.
NEWSWORTHY
Fortunately, you're here to make sure that doesn't happen. "We are going to be here for hours," U.S. District Judge Yvonne Gonzalez Rogers noted as she heard arguments from Epic Games and Apple on Monday over whether to issue a temporary injunction to put Fortnite back in the iOS app store. "There is no right to make billions of dollars," Rogers added later, criticizing Epic for sneaking a version of the game into the app store that used its own payments system. Meanwhile, Google announced some new rules for its Android app store, saying it would make it easier for alternate app stores to run on the platform while cracking down on non-standard payments systems.
Today I feel I've sprung a leak. A former finance manager in Amazon's tax department was building spreadsheets, calculating taxes, and, oh, tipping off members of her family to Amazon's earnings results. Laksha Bohra and her family agreed to repay $1.5 million of illegal gains plus interest and a penalty of $1.1 million. Speaking of catching crooks, the Internal Revenue Service suspects people are avoiding taxes by transacting in cryptocurrencies. So next year's Form 1040 will have a prominent new question: At any time during 2020 did you receive, sell, send, exchange or otherwise acquire any financial interest in any virtual currency?
There is no bottom, chapter 4,874. The U.K.'s Channel 4 got a hold of a database from Cambridge Analytica that the Trump campaign used to target Facebook ads in 2016. The database reveals that the campaign disproportionately categorized Black voters with the label "deterrence" and showed them ads to discourage them from voting.
Gone phishing. Hospital chain Universal Health Services was hit with a massive cyberattack that forced its computers offline. Staff had to take notes on paper and could not access electronic records. Elsewhere, hackers released personal information about students in Clark County, Nevada, including addresses and social security numbers. The district reportedly refused to pay a ransom after hackers penetrated its servers.
Know when to fold 'em. In gadget land, Lenovo's folding laptop, dubbed the Thinkpad X1 Fold, is now available for preorder starting at $2,500. The device has a 13-inch screen that folds down the middle and a removable Bluetooth keyboard. Also, Google offered EU antitrust regulators additional (though undisclosed) concessions to get approval for its Fitbit acquisition. The EU is scheduled to decide on the deal by year-end.
King of IPO island. On the stock market, it will be another busy week of initial public offerings, including Asana and Palantir. Cybersecurity firm McAfee, sold by Intel to private equity in 2016, filed to go public, too. The company had a net income of $31 million on revenue of $1.4 billion in the first half of the year.
FOOD FOR THOUGHT
Some entries in the category of "food for thought" provide more mental sustenance than others. Author Nicholas Carr's essay will definitely get your brain engaged. Just think about the title: What is it like to be a smartphone?
What is it like to be a smartphone? In all the chatter about the future of artificial intelligence, the question has been glossed over or, worse, treated as settled. The longstanding assumption, a reflection of the anthropomorphic romanticism of computer scientists, science fiction writers, and internet entrepreneurs, has been that a self-aware computer would have a mind, and hence a consciousness, similar to our own. We, supreme programmers, would create machine consciousness in our own image. The assumption is absurd.
ON THE MOVE
Former AT&T exec and now-former Synchronoss Technologies CEO Glenn Lurie resigned after allegations of personal misconduct. Chief commercial officer Jeff Miller was named interim CEO while the board conducts a search...Morgan Beller, who helped create the Libra digital currency, has left Facebook and joined venture capital firm NFX as a general partner...Lyft rehired longtime Google exec Nilka Thomas as its chief people officer. After 13 years at Google, Thomas worked at Lyft for two years before jumping to SeatGeek in February, but now she is back... Digital currency exchange Coinbase hired Shilpa Dhar as VP of product from Venmo, where she had the same title. Coinbase also nabbed Ravi Byakod from Adobe as VP of engineering and Google's Frank Yoo as VP of design and research.
IN CASE YOU MISSED IT
Amazon Prime Day set to span two days in October as dress rehearsal for holiday season By Phil Wahba
Why the former CEO of Xerox turned her attention to corporate diversity—and how she thinks business is failing By McKenna Moore
Why an Olympic gold medalist and former NFL player cofounded a subscription coffee brand By Rachel King
Clean tech is getting a fresh slate in 2020 By Lucinda Shen
BP is laying out its vision for a low-carbon future. Investors are skeptical By Katherine Dunn
Plastic-eating ‘Pac-men’: Researchers say enzyme cocktail could revolutionize recycling By David Meyer
Nearly 100,000 establishments that temporarily shut down due to the pandemic are now out of business By Anne Sraders and Lance Lambert
(Some of these stories require a subscription to access. Thank you for supporting our journalism.)
BEFORE YOU GO
Whether the new home-security drone from Amazon's Ring unit turns out to be great or not, it's certainly livened up the gadget conversation. Washington Post tech columnist Geoffrey Fowler solicited nicknames for the drone on Twitter and got back quite a few suggestions. I liked iNarc and Elf on a Shelf but those LoTR fanboys at Palantir probably prefer Fly of Sauron.
Aaron Pressman
@ampressman
aaron.pressman@fortune.com


fortune--2020-09-29--Fortune’s 2020 MPW Summit tackles the ‘new reality’

This is the web version of The Broadsheet, a daily newsletter for and about the world’s most powerful women. Sign up to get it delivered free to your inbox.
Good morning, Broadsheet readers! All of western Europe now requires paternity leave, Fortune‘s Impact 20 highlights startups making a difference, and Fortune’s Most Powerful Women Summit 2020 kicks off. Have a powerful Tuesday.
– The New Reality, Day One. Today marks the official start of Fortune‘s 22nd Most Powerful Women Summit. For the first time, the gathering will be held virtually.
As Emma mentioned yesterday, the Summit will kick off with a conversation between Fortune‘s Ellen McGirt and Meghan, The Duchess of Sussex. We’ll also hear from GM CEO Mary Barra, Ariel Investments co-CEO Mellody Hobson, Northrop Grumman CEO Kathy Warden, and Brandeis law professor Anita Hill. And that’s only part of the line-up from Day One.
Later this week, we’ll chat with incoming Citi CEO Jane Fraser, Nextdoor CEO Sarah Friar, Accenture CEO Julie Sweet, Carbon CEO Ellen Kullman, Magic Leap CEO Peggy Johnson, IBM Executive Chairman Ginni Rometty, retired Xerox Chairman and CEO Ursula Burns, and many more. You can browse the full list of speakers for the summit here.
The live stream will only be available for registered participants, but the Broadsheet will be bringing you coverage of the conference all this week.
The theme of this year’s summit is ‘Rising to the New Reality,’ which reflects the effort by Fortune‘s MPW community to better understand and respond to the rapid, ongoing changes to business and society and their extraordinary impacts.
Also new this year: Fortune‘s first-ever MPW Leadership Survey, which was conducted this month. A peek at the findings, based on more than 100 responses, reveals how members of the MPW community are thinking about the current moment:
– A majority of respondents—53.4%—expect economic activity to return to pre-pandemic levels in 2022, versus 2021 (22.3%), 2023 (17.5%), and beyond 2023 (6.8%).
– Nearly half—47.6%—of respondents expect 90% of their companies’ employees to be back in the office next year. Interestingly, nearly a quarter say their company offices will never reach 90% capacity again.
– Nearly 80% of respondents say their companies’ diversity and inclusion efforts have increased since the onset of the pandemic; that’s a good thing since roughly two-thirds agree that the pandemic has exacerbated existing gender bias and has had a disproportionate, negative impact on women.
More results from the survey will be revealed at the Summit and in the Fortune Analytics newsletter, which is available to premium Fortune subscribers.
Claire Zillman
claire.zillman@fortune.com
@clairezillman
Today’s Broadsheet was curated by Emma Hinchliffe.
ALSO IN THE HEADLINES
- Real impact. Fortune has a new list: the Impact 20. This group of 20 startups—including Rachel Carlson's Guild Education—is making real change. These smaller businesses are on their way to enacting the kind of difference that the Fortune Change the World list chronicles for bigger companies. Fortune
- Swiss leave. Every nation in western Europe now mandates paternity leave, after Switzerland became the last European country to do so. Swiss fathers will now get 10 days of paid parental leave. New York Times
- Closing the gap. In a Fortune op-ed, Vangela M. Wade, CEO of the Mississippi Center for Justice, writes that there has long been a chasm in philanthropic funding between white- and Black-led nonprofits. Recent attention to racial justice, she hopes, will turn the tide for Black nonprofits. Fortune
MOVERS AND SHAKERS: Uber chief information officer Shobhana Ahluwalia joins Peloton in the same role. Tracey Breeden, former head of women's safety and gender-based violence operations at Uber, joins Match Group as head of safety and social advocacy. Blue Shield of California elected board director Kristina Leslie as chair of its board of directors; Colleen Johnston, a former TD Bank Group executive, will join the health plan's board. Minn Kim is now principal at venture firm Bloomberg Beta. MacKay Shields, a New York Life Investments company, hired BMO Global Asset Management global head of fixed income Janelle Woodward as president. N26 hired former Adidas exec Diana Styles as chief people officer and former Dropbox VP Adrienne Gormley as COO. ServiceNow hired the Interstate Natural Gas Association of America's Nichole Francis Reynolds as VP of global government relations.
IN CASE YOU MISSED IT
- Opinion section. Chelsea Clinton, Sen. Tammy Duckworth, and Sen. Amy Klobuchar all wrote op-eds about the Supreme Court. Duckworth, in Ms. Magazine, reflects on how Justice Ruth Bader Ginsburg's work led the way for her own career in the military. Clinton, in Cosmopolitan, writes that Trump pick Amy Coney Barrett "does not deserve RBG's seat." And Klobuchar, in Marie Claire, says that the only way to honor RBG's legacy is by voting.
- Hear that Echo. Toni Reid is VP of Alexa experience and Echo devices at Amazon. She's spent a chunk of the past several months building new skills and features for Alexa that customers could use either because of the pandemic or while working from home. Wall Street Journal
- Honest sale. Jessica Alba's Honest Company is reportedly looking for a buyer. The natural beauty and baby care brand looked into an IPO a few years ago but didn't go that route. Now the business is said to be aiming for a sale in the $1 billion range. New York Times
ON MY RADAR
NASA astronaut Kate Rubins will vote from space Space.com
How to misread Jane Austen The New Yorker
With or without hair, we send a message Elle
These everyday toxins may be hurting pregnant women and their babies New York Times
PARTING WORDS
"My mind can go to endless odd worlds and weird places. I think it tells me that I’m in the right profession."
-Elle Fanning, on acting


fortune--2020-09-29--Cloudflare’s privacy crusade continues with a challenge to  one of Google’s big data sources

The cybersecurity and content-distribution company Cloudflare has become a major part of the Internet’s infrastructure, so here’s a move that might cause concern at Alphabet HQ: Cloudflare is launching a privacy-friendly rival to Google Analytics.
Google Analytics is a free toolkit that’s used by website administrators across the globe to help them track the behavior of the people visiting those sites—how they find them, what they do there, the devices they’re using, and so on.
However, the service—the most popular of its kind—also helps Google track websites’ visitors, so it can better profile them for advertising purposes. This privacy-invasive aspect makes many people squeamish.
And that’s where Cloudflare would now like to step in.
Around its birthday every year, the decade-old company—which went public last year—announces a move intended to “give back” to the wider Internet community. These moves are often related to privacy.
In 2014, Cloudflare offered free website encryption, thus quickly doubling the number of “https” sites out there. In 2017, it started offering unmetered protection for customers facing huge “denial of service” attacks that would otherwise knock them offline, so small businesses wouldn’t be left vulnerable. And in 2018 (albeit in April rather than late September) Cloudflare launched a privacy-friendly Domain Name System service that now has 100 million users.
On Tuesday, it unveiled Cloudflare Web Analytics, a free-to-use toolkit that largely replicates what Google Analytics offers—minus the invasive tracking, and thus the ability to assess the performance of targeted ads carried on websites.
Cloudflare Web Analytics is immediately available to the company’s paid customers, but any website owner will be able to use it from some point in the coming months.
Less creepiness
“We look out to see what are the hard challenges, and then announce products that are typically free or very low-cost,” CEO Matthew Prince told Fortune on Monday, ahead of the launch. “This year…it is palpable how much privacy and concerns about data are becoming one of the real touchstones that are differentiating various tech companies.
“You have companies like Google and Facebook which have made all their money off of having ad-supported business models. There are things that are good about ad-supported business models—it’s a fair way to make content available to everyone—but there’s also no doubt that there has been a level of abuse on the security front, on a performance-of-the-Internet front, but mostly on a creepy, ‘I don’t want Google and Facebook to know everything there is about me’ front. We thought, are there ways we can help in overcoming that challenge?”
Cloudflare’s scale is crucial here, Prince said, because it takes substantial resources to run a free analytics platform, and Cloudflare already has a giant network that can support the load.
“If you were starting from scratch, it would be hard,” he said. “We’re still a business, so our hope in providing this is people will use this, see what’s going on on their infrastructure, and then they’ll choose to pay us for the other services we provide, like making their site run faster, and protecting them from cyberattacks.”
Mitigating the “Splinternet”
The move could prove particularly attractive for organizations running online services in Europe, where privacy laws say people should be tracked online only after they have given their active consent.
“We’ve been hearing from a number of publishers in Europe that they want to make sure they’re tracking as little as possible, while still trying to understand how their content is being received,” Prince said.
But when it comes to addressing regulatory concerns in Europe—and elsewhere—Cloudflare Web Analytics isn’t the company’s only big announcement this week.
On Monday, Cloudflare launched a beta testing program for a cloud technology called Durable Objects. You can read the technical explanation here, but in essence this is a tool that allows developers of online services to make those services comply with the increasing number of data-localization and data-protection laws that limit where users’ data is supposed to go.
Coincidentally, this is an issue that is also currently on the radar of website publishers operating in Europe.
After the EU’s top court signaled in July that it would become difficult if not impossible for organizations to legally send Europeans’ personal data to the U.S., due to the privacy and espionage laws there, the bloc’s privacy regulators formed a task force to examine a barrage of complaints about Google Analytics and Facebook Connect, a log-in service that is also embedded across millions of websites. The privacy activists that made the complaints say Google and Facebook are breaking the law by sending Europeans’ personal data to the U.S., where it might be scrutinized by the likes of the National Security Agency.
With Durable Objects, Cloudflare says, it is possible to specify where particular data will reside on Cloudflare’s network, so—for example—a German user’s data does not have to leave Germany. Or, with an eye to other current news, a service such as TikTok could ensure that U.S. users’ data never leaves the U.S., without having to create a separate version of its service for that country.
“There’s going to be a substantial opportunity for companies to create the tools to allow different types of computing paradigms to exist to support all the different regulatory regimes that are out there,” Prince said.
Could such a tool be useful for Facebook, which could soon be forbidden from exporting Europeans’ personal data to its U.S. data centers, and which has suggested it might as a result need to stop serving people in Europe altogether?
Prince stressed he had no inside knowledge of how Facebook’s systems were architected, “but the dominant model for building applications in the past has assumed that data resides in one location, and that it’s centralized.”
“We think a new class of applications [is coming] that are designed to meet these increasingly complicated regulatory environments, and we want to provide the picks and shovels to facilitate that,” he said. “If you can have a social network and have the data stay local to countries around the world, that could be a really positive development for keeping the Splinternet from happening at an application level while still meeting the very reasonable and legitimate concerns about data localization and privacy around the world.”


fortune--2020-09-30--‘The art of the steal:’ Is Biden right to criticize the U.S. trade deficit with China under Trump?

At the U.S. presidential debate on Tuesday, Democratic candidate Joe Biden and U.S. President Donald Trump squared off over just about everything, including Trump’s trade deal with China.
“[Trump] talks about these great trade deals. He talks about the art of the deal; China’s perfected the art of the steal,” Biden said, criticizing Trump’s approach to trade with China. “We have a higher deficit with China than we did before [Trump was elected].”
“China ate your lunch, Joe,” Trump said in response, referring to Biden’s time as Vice President under President Barack Obama.
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Like much of the debate, the barbs over the trade deal devolved into a shouting match, as Trump pivoted to unproven claims that Biden’s son Hunter Biden has made billions off his father’s dealings in China. But the brief exchange over trade highlighted an important question: Has Trump’s years-long trade war with China rebalanced the U.S.’s trade deficit with the world’s second-largest economy?
Data show that the U.S. trade deficit with China ballooned under both the Obama and Trump administrations. Trump’s trade war, however, did plug the growing deficit, even as the U.S. shipped fewer goods to China. Trump’s January “phase 1” trade deal with China was supposed to see China import more American products this year, but China is far behind on fulfilling those targets.
Deficit
Biden’s claim that Trump has overseen a higher trade deficit—meaning the amount by which the value of Chinese imports to the U.S. exceeds the value of U.S. exports to China—is partially true, according to the office of the U.S. Trade Representative (USTR). In the first years of Trump’s presidency, the U.S.’s trade deficit with China reached record highs, but it has since fallen to Obama-era levels.
From a low of $6 million in 1985, the U.S.’s trade deficit with China climbed to $83 billion in 2000 and skyrocketed to $268 billion in 2008, the year American voters elected the Obama-Biden presidential ticket. The deficit grew over the course of Obama’s presidency, reaching $375 billion at the end of 2016.
During Trump’s presidency, the deficit ballooned to an all-time high of $418 billion in 2018.
The U.S.’s trade deficit with China from 1985 to 2019, in U.S. dollars. USTR
In July 2018, Trump ignited the U.S.-China trade war, levying tariffs on $34 billion worth of Chinese goods. China retaliated, imposing tariffs on $34 billion worth of U.S. goods. Several rounds of tit-for-tat measures followed, until both sides had slapped tariffs on hundreds of billions of dollars’ worth of each other’s goods.
As the trade war raged in 2019, the U.S.’s trade deficit with China shrank to $345 billion, down from the 2018 high and roughly equal to its size when Trump took office. But the shrinking deficit wasn’t due to China importing more U.S. goods. In fact, U.S. exports to China totaled $106 billion in 2019, down from $130 billion in 2017, before the trade war began.
The USTR expects the 2020 trade deficit to fall to roughly $280 billion, its lowest point since 2010. The figure reflects the overall slowdown in trade amid the pandemic; both Chinese exports to the U.S. and U.S. exports to China are poised to steeply decline this year.
The trade deal?
After the U.S. and China agreed to the phase 1 trade deal in January, the White House touted it as a “historic agreement [that] will begin to rebalance our vital trade partnership with China and benefit both of our countries.” Indeed, the deal was supposed to result in China increasing its purchases of U.S.-made goods by $200 billion over a 2017 baseline this year and next. China agreed to make purchases worth $172.7 billion in 2020 alone, including of manufactured goods, energy exports, and agricultural products. In exchange, the U.S. dropped some of its trade war tariffs.
But through the first three quarters of 2020, China’s purchases lag significantly in nearly every category, according to the Peterson Institute trade deal tracker. Through August, China had imported $56.1 billion worth of American products, less than half of the $115 billion it should have purchased at that point to be on pace to meet its 2020 pledge.
Now, as the political battle between Trump and Biden heats up ahead of November’s presidential election, factions in the White House are considering whether the U.S. should remain in the deal at all.
After representatives from the U.S. and China met in August to review the deal, the USTR said in a statement that “both sides” saw progress toward the trade deal targets and are “committed to taking the steps necessary to ensure the success of the agreement.”
White House observers appear less certain that the U.S. will stick with the deal.
“Naysayers in the White House…are challenging this deal,” Wendy Cutler, a former top trade official now at the Asia Society Policy Institute, told the Financial Times on Sept. 1. They’re “questioning whether we should remain in it, particularly in the lead-up to November.”


fortune--2020-09-30--Global investors dump stocks as presidential debate fireworks escalate election jitters

This is the web version of the Bull Sheet, Fortune’s no-BS daily newsletter on the markets. Sign up to receive it in your inbox here.
Good morning. The global markets have spoken. Stocks across Asia and Europe, plus the U.S. futures, have been on the ropes all morning following last night’s combative presidential debate. It wasn’t the insults or shouting that put the markets into a risk-off mood. It’s the growing concerns that that pillar of democracy—the United States—is headed for a disputed general election. “Given the importance of international investors to US markets, this may add volatility” in the weeks to come, warns UBS economist Paul Donavan in a morning note to investors.
Stay tuned to Fortune‘s political coverage for more post-debate analysis.
Let’s see what’s driving markets.
Markets update
Asia
The major Asia indexes are mostly down in afternoon trading, with Hong Kong’s Hang Seng the best of the bunch, up 0.8% .
are mostly down in afternoon trading, with the best of the bunch, up . China’s economic recovery continues to roll on as the latest manufacturing data came in this morning above expectations, a sign global demand is picking up.
continues to roll on as the latest manufacturing data came in this morning above expectations, a sign global demand is picking up. Elsewhere, 2020 will be a year of crisis for many. The pandemic will send 38 million people into poverty across East Asia and the Pacific as the region’s collective economy grows at its slowest pace in 50 years.
Europe
The European bourses are a blur of red with the Stoxx Europe 600 down 0.7% out of the gates.
are a blur of red with the down out of the gates. Make-or-break negotiations on a post-Brexit trade deal got off on a bad foot yesterday as the two sides remain far apart on how the U.K. plans to use state aid to help strategic companies and industry sectors.
on a post-Brexit trade deal got off on a bad foot yesterday as the two sides remain far apart on how the U.K. plans to use to help strategic companies and industry sectors. Shares in Royal Dutch Shell were up 0.7% in morning trade after the oil-and-gas giant announced up to 9,000 job cuts in a cost-cutting move as oil demand collapses.
U.S.
U.S. futures are solidly in the red, though off their overnight lows.
are solidly in the red, though off their overnight lows. Shares in Regeneron Pharmaceuticals were up more than 3% in pre-market trading on Wednesday after the company disclosed promising trial results from its COVID antibody “cocktail” treatment .
Regeneron Pharmaceuticals were up more than in pre-market trading on Wednesday after the company disclosed promising trial results from its . The Walt Disney Co. announced on Tuesday it plans to lay off 28,000 workers in its COVID-slammed parks division in Florida and California. Pre-market shares are down 1.3%.
Elsewhere
Gold is falling, trading around $1,890/ounce .
is falling, trading around . The dollar is up.
is up. Crude is down, with Brent trading around $41/barrel.
***
On stocks and wealth
I’m going to stay away from politics this morning in this space, and instead talk about wealth management. The Allianz global Wealth Report is now out and it shows there was a record jump in the holdings of gross financial assets last year, led primarily by stocks.
I scrolled though the report to get to the part about the COVID impact on global wealth. The verdict? The worst appears to have passed.
“Our estimates suggest that private households have been able to recoup their losses of the first quarter, recording a slight +1.5% increase in global financial assets by the end of the second quarter of 2020,” the co-authors write, concluding “it’s very likely that private households’ financial assets could end 2020 in the black.”
Securities have become the main driver in global wealth over the past decade. That should hardly come as a surprise with the boom in stocks, ETFs and mutual funds.
By the end of 2019, gross financial assets held by the world’s wealthiest households grew nearly 10% to €192 trillion ($225 trillion) at the end of 2019. It was the largest year-on-year rise since 2005.
“The buoyant stock market performance led to an increase of the asset class of securities (shares, bonds and invest- ment funds) by +13.7%, by far the highest growth rate of the three main asset classes in private households’ portfolios,” the authors wrote, noting that €77 trillion, or 40%, of gross financial assets were in the form of securities.
The out-performance of U.S. equities in particular is making Americans richer relative to households around the world. As the next chart shows, the Dow and S&P over the past decade have well outperformed their global peers over the past decade.
This trend has continued in recent months, with at least one exception. Germany’s Dax has been one of the best performing indexes over the past two months, performing more or less in line with the Dow. London’s FTSE, meanwhile, is being dragged down by COVID and Brexit jitters. It’s trading like an emerging market index these days.
The big takeaway from the Allianz report may not sound all that surprising to readers of Bull Sheet. Still, it’s worth noting that equities has powered a significant surge in wealth creation since the global financial crisis, and that those assets have proven remarkably resilient during the COVID crisis as well.
***
Have a nice day, everyone. I’ll see you here tomorrow.
Bernhard Warner
@BernhardWarner
Bernhard.Warner@Fortune.com
As always, you can write to bullsheet@fortune.com or reply to this email with suggestions and feedback.
Today's reads
Déjà vu. State Street Global Advisors' Michael Arone didn't trust the presidential polls in 2016, and he's just as unconvinced today. "We're exactly in the same spot now, including with investors," Arone tells Fortune's Shawn Tully. The CIO also laid out which candidate would be best for stocks.
October surprise? As the calendar flips to a new month (and new quarter), the investment pros are looking ahead to handicap what expect investors may encounter in the final month before Election Day. The consensus seems to be: choppy trading ahead. But that could also spell investment opportunities. Here's why.
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Market candy
Quiz time
After a rough stretch in the first half of September, gold trading in a range just below $2,000/ounce. How much higher would the inflation-adjusted price of spot gold need to climb to hit an all-time high?
A) $10
B) $100
C) $250
D) $800
The answer is D. Gold would have to cross $2,800 to top the inflation-adjusted all-time price it hit in January, 1980.


fortune--2020-09-30--A debate that won’t have changed many minds

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Good morning.
I’m not sure there are any Americans left who haven’t decided how they will vote in the election. And I doubt last night’s debate changed many minds. It was a chaotic, uncontrolled, food fight. (“A s—t show,” one TV commentator called it.) But still worth sharing a few of the night’s lines, since one of these two men will end up being President of the United States for the next four years.
Trump on the Supreme Court: “We won the election. Elections have consequences. We have the Senate, we have the White House, and we have a phenomenal nominee. Good in every way.”
Biden on the Supreme Court: “The American people have a right to have a say in who the Supreme Court nominee is…They aren’t going to get that chance now because we are in the middle of an election already.”
Trump on pharmaceuticals: “I’m cutting drug prices… Drug prices will be coming down 80-90%. We are going to allow our governors to go to other countries to buy drugs.”
Biden on the Affordable Care Act: “The president has made clear he wants to get rid of the Affordable Care Act…which will strip 20 million people from having health insurance now.”
Trump on why he ended racial sensitivity training: “I ended it because it was racist. I ended it because people were being asked to do things that were absolutely insane…And literally they were teaching people to hate our country. And I’m not going to allow it.”
Biden on Bernie Sanders: “My party is me. I am the Democratic party right now.”
Trump on the last four years: “There has never been another president that’s done what I’ve done.”
Biden on the last four years: “Under this president we have become weaker, sicker, poorer, more divided, and more violent.”
Trump on COVID: “I’m the one that brought back football. I brought back Big Ten football.”
Biden on COVID: “You can’t fix the economy until you fix the COVID crisis.”
Trump on election results: “As far as the ballots are concerned, it’s a disaster…There is fraud, they’ve found them in creeks, they’ve found them with the name Trump in a waste basket. This is going to be a fraud like you’ve never seen.”
Biden on election results: “This is all about trying to dissuade people from voting, because he is trying to scare people by saying it’s not going to be legitimate.”
More news below.
Alan Murray
@alansmurray
alan.murray@fortune.com
TOP NEWS
Disney jobs
Disney is laying off around 28,000 people in the U.S., mostly in its parks and resorts business, which employs 100,000 and has been hit hard by the pandemic. Two-thirds of the laid-off employees will be part-time workers. CNN
Shell jobs
Royal Dutch Shell is to cut up to 9,000 jobs as a result of the pandemic-related slump in oil demand. Around 1,500 people are taking voluntary redundancy, and the cuts will be implemented within the next couple years. BBC
South African Airways
South African Airways' operations have been suspended due to the failure of its owner—the government—to raise much-needed funding. The state carrier has no more working capital, business rescue practitioners told creditors today. SAA's operations were also suspended earlier this year, but that was a pandemic-related grounding, not financial. Business Maverick
Boeing production
Bad news for the Seattle area: Boeing is reportedly about to announce the consolidation of its 787 Dreamliner production down in South Carolina. Boeing has to find some way to deal with the slowdown in demand for the aircraft, and has been weighing cuts beyond the 19,000 jobs that it is already shedding. Wall Street Journal
AROUND THE WATER COOLER
Meghan controversy
Meghan, The Duchess of Sussex says her words aren't inflammatory, even when people see them that way. The actor turned duchess turned activist recently raised eyebrows (due to her royal position) for encouraging Americans to vote. "If you listen to what I actually say, it's not controversial," she told Ellen McGirt at Fortune's Most Powerful Women Summit. Fortune
Role model
Lebanese wannabe-executives will get to take a new business program at the Université Saint-Esprit de Kaslik near Beirut, and it's being run by Carlos Ghosn, the former Renault and Nissan chief who is currently an international fugitive after fleeing his fraud trial in Japan. "The role model is my experience, what I think are the basic needs of a top executive in a very competitive environment," said Ghosn, who has convinced top execs such as new Jaguar Land Rover CEO (and Ghosn's short-lived successor at Renault) Thierry Bolloré to give pro bono courses. Reuters
Online privacy
Cloudflare, the cybersecurity and content-delivery firm that runs a ton of Internet infrastructure around the world, has launched a free rival to Google Analytics, the (also free) toolkit that most website administrators use to gain insights into on-site activity. Google's version also feeds a lot of profiling data back to the mothership, but Cloudflare's new offering allows organizations to preserve their users' privacy—a useful aspect for companies with European operations. Fortune
Sustainability agenda
Big business may be increasingly taking the stakeholder-capitalism route on the environment, but smaller companies not so much. That's according to the FT's Andrew Edgecliffe-Johnson, who writes that multinationals won't achieve their sustainability agenda unless they can get their supply chain in line with their goals, too—something that isn't happening much yet. Financial Times
This edition of CEO Daily was edited by David Meyer.


fortune--2020-09-30--JP Morgan will pay record settlement to resolve ‘spoofing’ case against 15 traders

JPMorgan Chase & Co. admitted wrongdoing and agreed to pay more than $920 million to resolve U.S. authorities’ claims of market manipulation involving two of the bank’s trading desks, the largest sanction ever tied to the illegal practice known as spoofing.
Over eight years, 15 traders at the biggest U.S. bank caused losses of more than $300 million to other participants in precious metals and Treasury markets, according to court filings on Tuesday. JPMorgan admitted responsibility for the traders’ actions. The Justice Department filed two counts of wire fraud against the bank’s parent company but agreed to defer prosecution related to the charges, under a three-year deal that requires the bank to report its remediation and compliance efforts to the government.
The settlement included fresh details about spoofing on the bank’s Treasuries desk, which was occurring at the same time as previously alleged market manipulation on the bank’s precious metals desk. Five traders on the Treasuries desk manipulated prices of U.S. Treasury contracts, as well as trading in notes and bonds in the secondary market, over eight years, according to the settlement, causing $106 million in losses to other parties in the market. None of those traders have been charged publicly.
Members of that group openly discussed their illegal strategies via chats, with one trader writing on six occasions that he was “spoofing” the market, according to the government’s statement of facts. Another Treasuries trader, in a November 2012 chat, described his success in moving the market by tricking high-frequency traders: “a little razzle dazzle to juke the algos…”
The accord also ends the criminal investigation of the bank that led to a half dozen employees being charged for allegedly rigging the price of gold and silver futures from 2008 to 2016. Two have entered guilty pleas, and three traders and a former JPMorgan salesman are awaiting trial. In all, according to the settlement deal, 10 JPMorgan traders caused losses of $206 million to other parties in the market.
The New York-based lender will pay the biggest monetary penalty ever imposed by the Commodity Futures Trading Commission, including a $436.4 million fine, $311.7 million in restitution and more than $172 million in disgorgement, according to a CFTC statement. The CFTC said its order will recognize and offset restitution and disgorgement payments made to the Department of Justice and Securities and Exchange Commission. The Justice Department resolution requires that more than $300 million of the penalty be set aside to cover potential victims who could apply for relief through the government.
“For nearly a decade, a significant number of JPMorgan traders and sales personnel openly disregarded U.S. laws that serve to protect against illegal activity in the marketplace,” said Assistant Director in Charge William F. Sweeney Jr. of the FBI’s New York Field Office.
JPMorgan, in a statement, said it doesn’t expect any disruption of service to clients as a result of the resolutions.
“The conduct of the individuals referenced in today’s resolutions is unacceptable and they are no longer with the firm,” said Daniel Pinto, a co-president of JPMorgan. “We appreciate that the considerable resources we’ve dedicated to internal controls was recognized by the DOJ, including enhancements to compliance policies, surveillance systems and training programs.”
Under the settlement, the bank is required to cooperate with the government’s ongoing investigations and prosecutions. That includes making current and former employees available for interviews or testimony.
JPMorgan put at least four members of the Treasuries operation on leave starting earlier this year. The departures were related to the investigation, according to a person familiar with the matter. The settlement didn’t identify the five Treasuries traders, and it’s unclear whether the government will pursue any legal action against any of the traders referenced in the settlement.
In a couple of the trades, prosecutors alleged in the indictment against the individuals that a JPMorgan trader was spoofing the market for gold and silver futures as he made trades for two hedge funds. The government referred to the funds as “key clients” that provided “important sources of revenue and market intelligence” for the precious metals desk. It didn’t name the funds, accuse them of any wrongdoing or indicate they were aware of any allegedly improper trading, which occurred in December 2011 and January 2012.
According to people familiar with the matter, those funds were Moore Capital Management and Tudor Investment Corp. They declined to comment through spokesmen.
The JPMorgan penalty far exceeds previous spoofing-related fines levied against banks, and is the toughest sanction imposed in the Justice Department’s years-long crackdown on spoofing.
Spoofing typically involves flooding derivatives markets with orders that traders don’t intend to execute to trick others into moving prices in a desired direction. The practice has become a focus for prosecutors and regulators in recent years after lawmakers specifically prohibited it in 2010. While submitting and canceling orders isn’t illegal, it is unlawful as part of a strategy intended to dupe other traders.
More than two dozen individuals and firms have been sanctioned by the Justice Department or the CFTC, including day traders operating out of their bedrooms, sophisticated high-frequency trading shops and big banks such as Bank of America Corp. and Deutsche Bank AG.
The Justice Department took a much more aggressive tack on the JPMorgan matter, alleging several individuals from its trading desk had engaged in a racketeering conspiracy to manipulate precious metals futures prices. While other suspected market cheats have been charged with specific spoofing and manipulation offenses, the Justice Department accused JPMorgan metals traders under the 1970 Racketeer Influenced and Corrupt Organizations Act — a criminal law more commonly applied to Mafia cases than global bank probes.
While the individuals remain charged under the RICO law, Tuesday’s resolution didn’t accuse the bank of racketeering conspiracy.
The highest-level individual charged is Michael Nowak, a veteran gold trader who was indicted under seal in August 2019 along with two others. A former JPMorgan salesman who worked with hedge fund clients was later added to the case.
JPMorgan has faced charges before. In 2015, the bank pleaded guilty to felony antitrust charges along with several other global banks that paid penalties and admitted to conspiring to rig the price of U.S. dollars and euros. The bank agreed to pay $550 million, but it and other global lenders in the accord felt little lasting hit from markets or customers, undercutting investor fears that a guilty plea would devastate their business. The Justice Department said it took the previous plea into account in determining penalties.
–With assistance from Ben Bain, Michelle F. Davis, Katherine Burton and Jack Farchy.


fortune--2020-09-30--Time-crunched doctors are relying on remote-working scribes to take notes via video call

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Podiatrist Dr. Mark Lewis greets his first patient of the morning in his suburban Seattle exam room and points to a tiny video camera mounted on the right rim of his glasses. “This is my scribe, Jacqueline,” he says. “She can see us and hear us.”
Jacqueline is watching the appointment on her computer screen after the sun has set, 8,000 miles away in Mysore, a southern Indian city known for its palaces and jasmine flowers. She copiously documents the details of each visit and enters them into the patient’s electronic health record, or EHR.
Jacqueline (her real first name, according to her employer), works for San Francisco-based Augmedix, a startup with 1,000 medical scribes in South Asia and the U.S. The company is part of a growing industry that profits from a confluence of health care trends—including, now, the pandemic—that are dispersing patient care around the globe.
Medical scribes first appeared in the 1970s as note takers for emergency room physicians. But the practice took off after 2009, when the federal HITECH Act incentivized health care providers to adopt EHRs. These were supposed to simplify patient record-keeping, but instead they generated a need for scribes. Doctors find entering notes and data into poorly designed EHR software cumbersome and time-consuming. So scribing is a fast-growing field in the U.S., with the workforce expanding from 15,000 in 2015 to an estimated 100,000 this year.
A 2016 study found that doctors spent 37% of a patient visit on a computer and an average of two extra hours after work on EHR tasks. EHR use contributes to physician burnout, increasingly considered a public health crisis in itself.
Before COVID-19, most scribes—typically young, aspiring health professionals—worked in the exam room a few paces away from the doctor and patient. This year, as the pandemic led patients to shun clinics and hospitals, many scribes were laid off or furloughed. Many have returned, but scribes are increasingly working online—even from the other side of the world.
Remote scribes are patched into the exam room’s sound via a tablet or speaker, or through a video connection. Some create doctors’ notes in real time; others annotate after visits. And some have help from speech-recognition software programs that grow more accurate with use.
While many remote scribes are based in the United States, others are abroad, primarily in India. Chanchal Toor was a dental school graduate facing limited job opportunities in India when a subcontractor to Augmedix hired her in 2015. Some of her scribe colleagues also trained or aspired to become dentists or other health professionals, she said. Now a manager for Augmedix in San Francisco, Toor said scribing, even remotely, made her feel like part of a health care team.
Augmedix recruits people who have a bachelor’s degree or the equivalent, and screens for proficiency in English reading, listening comprehension and writing, the company said. Once on board, scribes undergo about three months of training. The curriculum includes medical terminology, anatomy, physiology and mock visits.
Revenue has grown this year, and his sales team has grown from four to 14 members, Augmedix CEO Manny Krakaris said. Sachin Gupta, CEO of IKS Health, which employs Indian doctors as remote scribes for their U.S. counterparts, projects 50% revenue growth this year for its scribing business. He said the company employs 4,000 people but declined to share how many are scribes.
Remote scribe “Edwin” gives internist Dr. Susan Fesmire more time, freeing her from having to finish 20 charts at the end of every day. “It was like constantly having homework that you don’t finish,” she said. With the help of “Edwin”—Fesmire said he declines to use his real name—she had the time and energy to become chief operating officer of her small Dallas practice. Edwin works for Physicians Angels, which employs 500 remote scribes in India. Fesmire pays $14 an hour for his services.
Doctors with foreign scribes say notes may need minor editing for dialectal differences and scribes may be unfamiliar with local vocabulary. “I had a patient from Louisiana,” said Fesmire, “and Edwin said afterward, ‘What is chicory, doctor?’” But she also praised his notes as more accurate and complete than her own.
Kevin Brady, president of Physicians Angels, said their scribes start at $500 to $600 per month, plus health care and retirement benefits, while senior scribes make $1,000 to $1,500—middle-class family incomes in India. Employers are required to provide employees with health insurance, although many scribes are contractors, and the job site Indeed.com says the average salary for a scribe in India is $500 a month. Scribes in the U.S. get about $2,500.
Remote scribing is still a small part of the market. Craig Newman, chief strategy officer of HealthChannels, parent to ScribeAmerica, the largest scribing company in the U.S., said that the firm’s remote scribing business has increased threefold since the pandemic’s outset but that “a large majority” of the company’s 26,000 U.S. scribes still work in person.
It’s a highly unregulated industry for which training and certification aren’t required. The service typically costs physicians $12 to $25 an hour, and studies show scribe use is linked to less time on patient documentation, higher job satisfaction and seeing more patients—which can mean more revenue.
For patients, studies suggest scribes have a positive or neutral effect on satisfaction. Some have privacy concerns, though, and state laws vary on whether a patient must be notified that someone is watching and listening many miles away.
Only 1% of patients refuse a remote scribe when asked by physicians at Massachusetts General Physicians Organization, said Dr. David Ting, the practice’s chief medical information officer. His group, an IKS Health client, always seeks patient consent, Ting said.
Scribes aren’t for everyone, though. Janis Ulevich, a retiree in Palo Alto, California, declines her primary care doctor’s remote scribe. “Conversations with your doctor can be intimate,” said Ulevich. “I don’t like other people listening in.”
Some patients may not have the opportunity to decline. With limited exceptions, federal laws like HIPAA, the Health Insurance Portability and Accountability Act of 1996, don’t require doctors to seek a patient’s consent before sharing their health information with a company that supports the practice’s work (like a scribe firm), as long as that company signed a contract agreeing to protect the patient’s data, said Chris Apgar, a former HIPAA compliance officer.
About one-quarter of U.S. states require all parties in a conversation to agree to be recorded, meaning they require a patient’s permission. Some states also have special privacy protections for certain groups, like people with HIV/AIDS, or very strict informed-consent or privacy laws, said Matt Fisher, a partner at Massachusetts law firm Mirick O’Connell.
Remote scribing also raises cybersecurity concerns. Reported data breaches are rare, but some scribe companies have lax security, said Cliff Baker, CEO of the health care cybersecurity firm Corl Technologies.
The next step in the trend could be no human scribes at all. Tech giants like Google, EHR companies and venture-backed startups are developing or already marketing artificial intelligence tools aimed at reducing or eliminating the need for humans to document visits.
AI and scribes won’t eliminate physician burnout that stems from the nature of the health care system, said Dr. Rebekah Gardner, an associate professor of medicine at Brown University who researches the issue. Neither can take on burnout-driving EHR tasks like submitting requests for insurance company approval of procedures, drugs and tests, she said.
KHN (Kaiser Health News) is a nonprofit news service covering health issues. It is an editorially independent program of KFF (Kaiser Family Foundation) that is not affiliated with Kaiser Permanente.


fortune--2020-09-30--Two more Chinese tech companies are delisting from U.S. exchanges in on-going exodus

Two U.S.-listed Chinese Internet companies are delisting from New York exchanges and going private in multibillion-dollar deals, joining a growing number of Chinese companies distancing themselves from U.S. exchanges as tensions flare between the U.S. and China.
Nasdaq-listed Sina Corp., the owner of popular Chinese microblogging site Weibo, will go private in a $2.59 billion deal with Beijing-based New Wave Holdings, while web search company Sogou Inc. will go private in a $3.5 billion deal with Chinese tech giant Tencent Holdings. (Tencent is already a major Sogou shareholder.)
Sina debuted on the Nasdaq in 2000. Sogou went public on the New York Stock Exchange in 2017. The Sogou-Tencent deal is expected to close in the fourth quarter of the year, Sogou said in a press release. Sina expects to go private in the first quarter of 2021, it said in a release.
Sogou and Sina didn’t immediately respond to requests for comment.
Sogou and Sina join an expanding group of U.S.-listed Chinese companies that have chosen to delist from the U.S. or pursue secondary listings in Hong Kong and mainland China amid an increasingly stringent regulatory climate for Chinese firms in U.S. capital markets.
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Two NYSE-listed Chinese firms, car-listings site Bitauto and online classifieds site 58.com, announced deals to go private in June; semiconductor giant SMIC delisted from the NYSE last year and went public in Shanghai in July. And some of the biggest offerings in Hong Kong and Shanghai so far this year were secondary offerings of U.S.-listed Chinese companies, including e-commerce firm JD.com, gaming company NetEase, and restaurant giant Yum China.
The Trump administration’s efforts to ban TikTok and WeChat, two Chinese-owned apps; unanimous Senate support of a bill giving the U.S. more authority to delist Chinese companies; and a friendlier regulatory climate in Hong Kong and mainland China capital markets have increasingly driven Chinese tech firms to choose listings closer to home.
Chinese companies in politically sensitive industries are also facing heightened scrutiny from the U.S. government. SMIC, which delisted from the NYSE in 2019, saw its Hong Kong shares drop this week after Washington announced it was imposing export restrictions on the Chinese firm.
U.S.-China relations may fray further in the run-up to the U.S. presidential election in November, since some experts argue that President Donald Trump will double down on his administration’s tough-on-China approach to boost his chances at reelection. Other experts note that U.S.-China relations have devolved to such a degree that even a Biden win will not improve them.