Category Archives: Big Tech

When the Big 3 cloud infrastructure vendors Amazon, Microsoft and Google reported their earnings this week, it was clear that the cloud is helping keep their overall numbers up. But perhaps what was most surprising was that after years of sitting at 33% market share, AWS was up a tick to 34% in the second quarter, according to numbers from Synergy Research.

Even more surprising is that after years of steady market share growth, Microsoft was down a notch from 22% last quarter to 21% this quarter. Google came in third, holding steady around 10%.

Synergy chief analyst John Dinsdale said the slight drop in Microsofts market share is probably due to the law of large numbers Microsoft couldnt sustain its recent growth.

The days of Azure growing by 50% to 80% year on year are over. Once you get to a certain scale, it is virtually impossible to organically grow at such high rates. So its growth rates have trended down, as they had to. AWS experienced the same phenomenon a long time before Azure got there. Despite the Q2 changes in market share that you saw in our article, Azures rolling annualized growth rate does remain quite a bit higher than AWS, Dinsdale told TechCrunch.

But he said that AWS ability to continue to grow at the rate it has is nothing short of remarkable.

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The biggest story from Big Tech earnings is the sheer growth power of public cloud - TechCrunch

After Snaps poorly received Q1 digest and ahead of this weeks string of earnings reports from the largest U.S. tech companies, we wondered whether the advertising market is in trouble. Not that most folks associate Microsoft or Apple with advertising the way they may with Alphabet or Meta, but the majors Amazon and Apple included have ads businesses of material size, meaning that the ad market impacts each of them.

(That ads are considered to be a lackluster business model for smaller companies and startups speaking loosely but are a huge revenue source for platform companies says something interesting about competition inside of the technology industry. But perhaps thats a topic for another day.)

Now, with three of the five majors having reported their Q2 results, how are their advertising results faring?

The Exchange explores startups, markets and money.

Read it every morning on TechCrunch+ or get The Exchange newsletter every Saturday.

The question ripples into other areas of the economy: Tech companies generate huge incomes from hosting advertisements, but with companies as far afield as Netflix working hard to bolster their subscription incomes through ads, the question of advertising performance is not idle and impacts trillions of dollars of corporate value.

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The advertising slowdown is dinging Big Tech - TechCrunch

Every Wednesday and Friday, The Verge publishes our flagship podcast, The Vergecast, where our editors make sense of the weeks most important technology news. On Fridays, Verge editor-in-chief Nilay Patel, editor-at-large David Pierce, and managing editor Alex Cranz discuss the week in tech news with the reporters and editors covering the biggest stories.

The show starts with the biggest news from the week Instagram and the controversy around the changes to its app. On our Wednesday show, we discussed Instagram head Adam Mosseris response to criticism of the changes and overall direction to make the app feel more like its competitor TikTok. The following day, Instagram walked back its changes, with Mosseri saying we definitely need to take a big step back and regroup. Todays episode walks through the whole story.

The rest of the show focuses on the quarterly earnings of some big tech companies Apple, Microsoft, Alphabet, Spotify, and Comcast and what that info may mean for their future products.

Listen here or in your preferred podcast player for the full discussion.

Stories discussed in this episode:

Continued here:

Vergecast: Instagram's risky week and Big Tech earnings - The Verge

What unites Meta, Amazon, Microsoft and the U.S. government? Advocating for the end of leap seconds blink-and-youll-miss-it adjustments to timekeeping that compensate for wobbles in the Earths rotation.

Scientists have added an extra second 27 times since 1972 to keep atomic clocks in sync with astronomical time. Tech companies hate the practice because it can wreak havoc on precise technological systems that are much better at telling time than humans are at least until we insert an extra second. Past additions of leap seconds have caused parts of the internet to go down for hours.

On Monday, Facebooks parent, Meta, kicked its opposition to the leap second into high gear with a blog post calling to abolish the practice, with Amazon and Microsoft also joining the cause. At best, Meta argues, it corrupts data and crashes websites. Every leap second is a major source of pain for people who manage hardware infrastructures, wrote Meta engineers Oleg Obleukhov and Ahmad Byagowi.

I wouldnt be sad to see leap seconds go away, said John Graham-Cumming, chief technology officer at Cloudflare, one of the companies that has experienced disruption from the addition of leap seconds.

Amazon and Microsoft did not respond to requests for comment.

Atomic clocks, which underlie international time standards, count time by measuring the natural vibration of cesium atoms, said Elizabeth Donley, chief of the Time and Frequency Division of the U.S. governments National Institute of Standards and Technology.

Before the advent of atomic clocks in the 20th century, time was measured by the length of solar day, an approach that draws from astronomy. But given the slightly irregular axis tilt and rotation of the Earth, there can be variations between atomic time (Coordinated Universal Time or UTC) and astronomical time, known as Universal Time or UT1.

In short, time is weird and arbitrary.

Every once in awhile, those systems are reconciled with a leap second which only occurs on June 30 or Dec. 31, and is announced beforehand. What it looks like, practically, is the clock turning from 23:59:59 to 23:59:60 before hitting normal midnight, 00:00:00.

Metas blog post highlighted one potential twist that could be coming in the future: The negative leap second. It would help compensate for Earths faster-than-expected rotation in recent years. Essentially, the worlds clocks would jump from 24:59:58 on the appointed day to 00:00:00 skipping one second entirely.

The impact of a negative leap second has never been tested on a large scale; it could have a devastating effect on the software relying on timers or schedulers, the Meta post argues.

A leap second, whether positive or negative, that does not exist in the programming of computers can cause them to crash. Thats part of the reason people were so worried about Y2K as the year 2000 approached. At that time, many computer programs denominated years using only the last two digits, meaning that 2000 and 1900 would look like the same year. While that concern was overblown, the same issues around denominating time is what lies behind criticism of leap seconds.

Over time this became more and more of a problem with digital networks because technology just became so much more dominant in our society and so now over the past 10 years, when theyre added, theyve caused a lot of failures in various websites and computer systems, said Donley. Thats a big motivation to address them.

Its not hypothetical or hyperbole. A leap second change triggered outages at Reddit in 2012 and downtime at Foursquare, LinkedIn and Yelp over the years. The most recent leap second occurred in 2015.

The addition of leap seconds can cause glitches if its not accounted for properly in a software system, Donley said. You can have disagreement between the actual time of nodes of the network, for example, or different web pages, she added. That can cause failures. And given the updated second comes in at midnight UTC, which, that could be in the middle of the day on the West Coast of the U.S. or Hawaii.

For its part, Meta has started smearing leap seconds, either slowing down or speeding up the clock of its Time Appliance, which is the timekeeping infrastructure of the company over a 17-hour period, dividing the additional second across that span to make it more digestible for computers.

We had an outage in the middle of the night on the first day of the year because of leap seconds, said Graham-Cumming, whose employer, Cloudflare, helps provide security and accessibility to millions of websites. Leap seconds tend to get introduced at midnight on January the first and so we had an outage and saw systems failing.

He was not surprised to see Meta come out against leap seconds, given its large network and massive server farms. But David Finkleman, the former chief technical officer of the U.S. Space Command, said the recent post from Meta is incomplete and tendentious.

Every scheme to mitigate leap second corrections has its own anomalies in this case, installing unique software, he said. And killing the leap second could create big problems for scientists who study space, he said, because their precise measurements of stars, galaxies and other objects depend on aligning human time with astronomical time to point their telescopes at the right targets.

Correction for Earth rotation is very important, and smearing is also not synchronous with Earth rotation, Finkleman said. Those who despise the leap second have not learned to accommodate it correctly.

Donley said that while there is significant agreement among governments about eliminating leap seconds, with the notable exception of Russia, no change is imminent. Getting rid of the practice would require various internet and time standards bodies to reach an agreement on doing so and on what would come next.

Its pretty much almost everybody, said Donley. The way that it all works is by consensus. We make baby steps to try to stop the procedure. Its been under discussion over and over and over and over again for probably nearly as long as [leap seconds] have been in existence.

That takes, well, time.

The Consultative Committee for Time and Frequency, a global timekeeping standards body, is expected to vote in November on a resolution to halt the use of leap seconds by or before 2035.

Its not clear how many, if any, leap seconds will need to be inserted before then anyway hopefully none, said Donley. Because the rate of insertion of them has dropped and the difference between UTC and the new UT1 is heading toward zero right now.

Thanks to Alicia Benjamin for copy editing this article.

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What is a leap second? And why does Big Tech want to alter time? - Grid

The Centers for Disease Control and Prevention (CDC) wassued by America First Legal (AFL) to compel the release of records regarding correspondence between the federal public health agency and social media companies during the COVID-19 pandemic. AFL, a legal nonprofit run by former Trump administration officials, recently obtained documents showing that the CDC worked with big tech companies to flag and censor posts deemed as COVID-19 misinformation.

Gene Hamilton, vice president and general counsel of AFL, told The Epoch Times that seeing [then-press secretary] Jen Psaki at the White House podium last year, admitting that they were actively collaborating with social media companies to combat what the administration deemed as misinformation was great cause for alarm.

During a July 2021 press conference, Psaki said: Were regularly making sure social media platforms are aware of the latest narratives, dangerous to public health that we and many other Americans are seeing across all of social and traditional media. And we work to engage with them to better understand the enforcement of social media platform policies.

AFL immediately submitted requests under the Freedom of Information Act (FOIA) for all records related to the collaboration, according to Hamilton. He wasnt surprised to have received no records from the goodwill of the Biden administration, despite the legal obligation to do so.

So, we sued them, he said.

More than a year later, Hamilton said that we finally have some of the very first records that establish precisely what Jen Psaki was talking about at the White House podium. He described the records received thus far to be incredibly illuminating because they actually show what the White House said was happening. Prior to this, no one had direct evidence of the collaboration, he said.

For example, Facebook provided the CDC with $15 million dollars worth of ad credits to be used to support the agencys COVID-19 messaging on the social media platform. According to AFL, the non-monetary gift could be in violation of the Antideficiency Acts limitation on voluntary services (31 U.S.C. Section 1342).

AFL suspects many, many more records to come, according to Hamilton.

And as time goes on, we are anticipating massive implications for the federal government and for the social media companies, he said.

According to Hamilton,there are many examples in the 286-page productionof the CDC flagging explicit posts on Twitter and Facebook that they viewed as being misinformation.

There are also examples of the federal government engaging in regular BOLO [Be on the Lookout] calls where they would coordinate, collaborate, and talk about things that they deemed as misinformation, he said.

Following a May 28 BOLO meeting, an email from CDC Digital Media Branch Chief Carol Crawford requested that those in attendance of the meeting please do not share outside your trust and safety teams.

The documents also show that the CDC was working with the Census Bureau in this effort, Hamilton noted. The CDC was collaborating with the bureau to leverage their infrastructure to identify and monitor social media for vaccine misinformation, according to one email.

Hamilton said that its absolutely shocking that federal government agencies engaged in this kind of conduct.

We have a First Amendment for a reasonthe federal government cannot get around requirements of the First Amendment by merely directing a private entity to violate it, he said.

Hamilton issued a warning to the U.S. public: We are at a point in our society where we have evidence of the federal government dictating what is truth and what is not truth to private companies.

The Biden administration fully expected the private companies involved to enforce the governments standard of truth upon the American society, he said.

And this is a level of power thats inconsistent with the Constitution and our founders vision for the limited role of the federal government in the United States, Hamilton said. Not only is it appalling, but its anti-American.

The general counsel said, The average American sitting at home needs to understand that this is just one example of this happening.

Hamilton said it has been made clear that the governments ability to deem what constitutes misinformation and disinformation is a substantial threat to the American people. And as a result, Americans should have every reason to suspect that this is occurring in other areas, too.

The federal government and these social media companies are acting complicit with one another in determining what is and is not truth; its the kind of thing that you would see in a totalitarian society.

CDC and White House officials didnt respond to requests for comment by press time.

Follow

J.M. Phelps is a writer and researcher of both Islamist and Chinese threats.

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CDC Collaboration With Big Tech on COVID-19 Misinformation a Threat to 1st Amendment Rights: Legal Advocacy Group - The Epoch Times

In 2018, conspiracy theorist Alex Jones and his website, Infowars, were banned by YouTube, Facebook, Twitter, and Apple for violating these platforms' hate speech policies.Four years later, the largest social media platforms have prevented the promotion of a documentary about him as well.

Private companies are well within their rights to make the content moderation decisions they deem appropriate. Jones' belief system, which his millions of listeners must find compelling on some level, is predicated on the idea that there's some kind of totalitarian world government lurking in the shadows, either attempting to seize control or already in control of us. It's from this logic that Jones' skepticism of major tragedies and events stems. He has suggested, for instance, that 9/11 and the Sandy Hook school shooting might have been pre-orchestrated, designed by those in charge, and he subsequently faced defamation lawsuits from the parents of some of the shooting victims. Big Tech, the media, and each presidential administrationexcept Trump'sare all frequent targets of Jones' unrestrained ire and boundless grievances.

But when Big Tech firms uniformly decline to platform anything Jones-related, they may be fueling the flames of his paranoia. As the old saw has it, just because you're paranoid, doesn't mean they're not out to get you.

I went to the movie premiere ofAlex's War last Saturday ahead of its release date, which is today, and walked away with a heightened appreciation for Jones' charisma but stronger disdain for his shoddily substantiated theories. Though he's forcefully asserted that the 2020 election was stolen from former President Donald Trump, Jones has provided meager evidence to back such claims up, and even admitted in the Q&A afterward that his stolen-election beliefs were somewhat pre-formed. But that didn't stop him from assembling with his acolytes at the Georgia Capitol where results were being certified, and at the January 6 rally in Washington which turned violent. (Jones left prior to the breach of the Capitol building.)

Still, when Big Tech platforms suppress Jones, and the work of those interested in Jones, like Alex's Wardirector Alex Lee Moyerwho made the Sundance and SXSW rounds via her first documentary, which explored the world of incelsthey lend credibility to his conspiracy theories and increase the illicit appeal of his views to the audiences who continue to seek him out, who may in fact be enchanted by the heightened allure.

For example, Instagram blocked Moyer and team from doing paid promotions for the documentary; TikTok removed theAlex's Wartrailer because it contained or promoted "hateful behavior"; Google Ads said the trailer was in violation of its policies, too, and warned Moyer not to try again; Meta said the trailer could not be promoted due to "inauthentic behavior or violations of our Advertising Policies and Community Guidelines," but failed to specify what those violations entailed.

These tech platforms are well within their rights to deplatform or suppress whoever they want; they deliberately set community standards, which are consented to by users, and sometimes, in content moderators' eyes, transgressed by conspiracy-mongers like Jones. But by deplatforming both Jones and those who critically engage with his ideas, they're unintentionally hyping his beliefs. By making them illicit, platforms are implying that they're dangerous, rather than laughable or uninteresting. Jones' whole point is that there are shadowy figures in power that are subjugating and manipulating us; he, like Trump, fixates on media malfeasance and double standards, which is a compelling message to his roughly 5 million followers (as of 2016, though such numbers are hard to pin down, especially as his feeds have been whack-a-moled out of existence). That message is plausibly made more compelling if Jones can lodge a fresh grievance against Big Tech.

There's no reason to believe such censorship will snuff Jones out. It may, in fact, do the opposite. He's a shrewd businessman, successfully hawking supplements ("Super Male Vitality" drops!), bulletproof vests, and other doomsday-prep materials; he maintains a huge audience; he's been on Joe Rogan's show repeatedly (which has outraged some Spotify employees); he's the subject of a new documentary. He knows how to parlay controversy into earned media for his kooky theories, and the result may be the very opposite of what those who would deplatform him are trying to achieve.

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Big Tech's Ban on Alex Jones Fans the Flames of His Conspiracy Theories - Reason

Big tech companies are facing increased scrutiny in South Africa for dominance abuse and anti-competitive behavior, just months after the countrys competition regulator, the Competition Commission (CompCom), started an inquiry into the conduct of online intermediation (b2c) platforms.

In its initial findings, the regulator has established that Apple, Google, UberEats, Airbnb, Booking.com, and South Africas Mr Delivery; a food ordering and delivery platform, Takealot; an e-commerce site, Private Property and Property24; both real estate classifieds, and car classifieds Autotrader and Cars.co.za; have an unfair advantage as market leaders, and are operating in ways that impede competition.

The inquiry team is seeking further evidence, if any, from parties affected by the competitionconduct or market feature of these platforms. It is also seeking comments regarding findings in the report, as it moves into the final phase of the inquiry, which will include remedial action.

Google and Apple

Noting Googles monopoly, the regulator stated the default positioning of its search engine on android and iOS mobile devices was problematic. The study also took issue with the prominence of paid search results (those that appear at the top of the page), indicating a lack of clear distinction from organic search findings.

The report recommended that the top search results be organically generated, adverts distinctly shaded or labeled, and paid results positioned at the bottom of the results page.

Illustration of the proposed Google search remedy on mobile device. Image Credits: South Africa Competition Commission

It further called for an end to Googles preference for its own specialist (shopping, travel and local) search tools, saying that they bar competition from aggregators, comparator sites and online travel agencies.

Google must afford competing metasearch or specialist search (including travel, local and other), comparator sites (shopping or other) and online travel agents the same opportunity to provide content and visual rich impressions or units that it affords its own specialist shopping, travel and local search units. Google may no longer impose minimum bid thresholds for paid results, CompCom said in its provisional remedies.

It also recommended an end to default arrangements for Google Search on iOS and Android devices sold in South Africa.

In-app stores, it noted, complete exclusion of competing software app stores and side-loading by Apple which impedes effective competition for commission fees. The default arrangements of Google Play on android devices, the Commission said, has affected competition from other android software app stores.

The regulator also fingered the Google Play Points loyalty scheme, which it says, is funded by extracting discounts from app developers, a strategy it found to hinder competition from smaller players.

A lack of competition has resulted in excessive commission fees to the detriment of South African app developers, publishers and consumers of apps acquired through the SA storefront requiring in-app payments,

given that Apple will not allow competition and refuses to compromise on security, and Google Play has become entrenched, there needs to be a remedy that either regulates these platforms or successfully takes transactions off the stores altogether so they cannot be monitored and taxed. For this reason, the Inquiry is of the view that either there is price regulation or a complete end to anti-steering provisions which were recommended by the court in the Epic-Apple case, said CompCom in the report.

In its provisional recommendations, the Commission called for an end to anti-steering provisions for all apps and fronted the end of exclusionary loyalty schemes, as well as the default arrangement of the Google Play store on android devices.

In terms of an end to anti-steering provisions, the inquiry expects that this would involve the ability for apps to communicate an alternative external payment mechanism and provide a clickable link to make a payment.

Food delivery platforms

CompCom also recommended an end to the restrictions imposed on franchisees by international restaurant chains, especially in the selection of food delivery partners. Other suggestions included the removal of price parity clauses (which require suppliers not to offer better or lower prices in other or their own platforms) from contracts, end of predatory pricing, and for transparency with consumers especially on the surcharges for each restaurant.

Additionally, it proposed the removal and prohibition of price parity clauses used by travel and accommodation platforms, Booking.com and Airbnb, which were found to impede competition through lower commissions and prices that in turn increase consumer dependency.

These platforms were also found to leverage important visibility on their platform to get discounts from accommodation and travel providers to fund their own loyalty schemes. CompCom found the practice unfair to small players that cannot leverage the same. It went on to recommend the removal of exclusionary loyalty schemes, saying such programs should be fully-funded by the companies.

E-commerce and classifieds

E-commerce platforms were found to stifle competition as they disincentivized sellers from price differentiation across platforms and distorted pricing in the market through subsidization. CompCom suggested that Takealot, a market leader, removes price parity clauses and end predatory conduct, or alternatively the Commission to consider investigation and prosecution of predatory conduct as a suitable deterrent.

For listing platforms, the inquiry faulted the lack of interoperability of the listing engine software used by South Africas top classifieds platforms (Property24, Private Property, Autotrader and Cars.co.za) impeded competition. Interoperability and the scrapping of fees, to include third-party listing platforms were recommended.

Continue reading here:

Big tech companies in the spotlight as South Africa investigates dominance abuse - TechCrunch

This week, more than 124,000 documents disclosed by the whistleblower Mark MacGann, Ubers former chief lobbyist for Europe, detailed how Uber flouted laws, duped police, exploited violence against drivers and secretly lobbied governments in order to aggressively build its global empire.

Last year, I disclosed thousands of documents to the US government revealing Facebooks negligence about the harm its products were doing. As with the documents supplied by MacGann, the public would have never known this information even existed had a whistleblower not tipped them off.

The Uber files clearly illustrate the critical importance of whistleblowers. They also present choices for governments and the citizens they represent. Technology has always outpaced its regulators. It takes time for a culture of accountability to grow around any nascent technology or industry, and for governments to understand how they work and what costs are being passed on to the public.

The most critical technologies that will drive and define our economy in years to come are radically less transparent than those that drove our economy a hundred years ago. As the motor industry became more complicated and prominent in society, the public were able to walk alongside it. People could buy a car and crash it, buy a car, and take it apart, buy a car and put sensors on to verify that the claims of its manufacturers were true. Accountability grew alongside the industry.

For most digital technologies, this cannot occur. Critical design choices are hidden behind our screens, where the public cannot access them. The functioning of a system such as Facebook is impossible to inspect from the outside. Academics and journalists spend millions of dollars building third-party tools to harvest glimmers of data from Facebooks systems.

That investment is critical for exposing Facebooks failures. For instance, the companys Widely Viewed Content report in the Transparency Center manipulates data to hide the fact that inflammatory content keeps getting bumped back up your newsfeed when people debate in the comments section. As a former insider, I happen to know that, but Facebook refuses to share this information with any external researcher. This kind of access to data is essential for investigating Facebooks distorted representations and for gaining democratic oversight of these platforms.

If we can only ever extract threads of knowledge from outside the curtain that shields bad behaviour and only then at an extreme cost we will never have effective accountability. Thats why big-tech whistleblowers play an ever more important role as our line of defence. They pierce the corporate veil in the name of public safety. We must act to ensure future whistleblowers are afforded the same, if not more robust, protections.

People often ask me how my whistleblowing journey has unfolded: whether Im OK with all the public attention and scrutiny Ive received. The truth is, I am OK. I chose to follow my conscience, and now I can sleep at night. I am fortunate that the worst corners of the internet have not come for me, as they do for many women and minorities who speak their minds in public.

I know I am fortunate. Not all whistleblowers have fared as well. Daniel Motaung was a Facebook moderator working in Kenya. He was paid just $2.20 an hour and forced to watch graphic footage of suicide and murder in a content moderation factory day after day a fate, he says, that drove him and many of his co-workers to suffer from PTSD and worse. He was later fired by Facebooks outsourcing partner Sama in 2019 after he bravely led more than 100 of his colleagues in a unionisation effort for better pay and working conditions. He is now suing Sama and Meta, alleging that he and his former colleagues are victims of forced labour, human trafficking and union-busting. Facebook is attempting to silence him; the company has asked a judge to crack the whip on Motaung to prevent him from speaking to the media. The double standards applied to him for following his conscience are unjust. His persecution must stop.

Technology has always outpaced regulations that help pull it back towards the common good. Good governance takes time, but that gap grows larger with an acceleration in technological development. Big techs ability to operate in the darkness, and its complete asymmetry of information, put the public and entire democracies at grave risk.

Governments can never keep the public safe in isolation. We need academics and vetted researchers who can independently ask questions and create frameworks for us to think about problems. We need litigators who hold companies accountable when they cut corners to make profits. We need investors who understand what good governance looks like to ensure companies dont focus on short-term profits at the expense of long-term success. We need technologists who care deeply about designing technology for individual and democratic wellbeing.

We also need whistleblowers.

Our only safe path forward is to work for strong laws that protect whistleblowers worldwide. When the US passed major whistleblower protections in 2002 in the wake of corporate scandals, it was cutting-edge in affording the employees of publicly traded companies whistleblower rights. Its now time to expand protections to all employees of privately held companies as well. We cant afford to let the future operate in the dark any longer. Democracy depends on it.

Frances Haugen is a former Facebook product manager and an advocate for accountability and transparency in social media

Do you have an opinion on the issues raised in this article? If you would like to submit a letter of up to 300 words to be considered for publication, email it to us at guardian.letters@theguardian.com

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The Uber files lit up the darkness of big tech, and showed why we need whistleblowers - The Guardian

After Palmer Luckey sold his Oculus virtual reality company to Facebook for $2 billion in 2014, he could have easily used the proceeds to start a new AI company that sold chatbots or made movie recommendations. Instead he did something harder: He founded Anduril, which sells AI-powered drone defense systems to the U.S. and its allies.

He says part of his reason for starting Anduril is because the Pentagon was not getting the strategic benefits of having the worlds biggest braintrust of tech innovation within its bordersSilicon Valley.

Luckey spoke at Fortunes Brainstorm Tech conference in Aspen, Colorado, on Wednesday, and, as usual, he was a fountain of soundbites.

Big Tech companies like Meta, Luckey says, are using their vast wealth, and the worlds top talent, mainly to build tech toys and social apps while ignoring more serious applications like protecting democracies from aggressors.

Were deployed in partner nations fighting active aggressors who are trying to destroy their countries, Luckey said. And you realize, like if you move fast and break things, then people are going to die . . . he added, referencing Facebooks one-time rallying cry for building new tech quickly.

He also seemed almost proud that he was terminated by Facebook.

[W]hen you say my exit from Facebook . . . my employment was terminated, he told FortunesMichal Lev-Ram. I always note that just because its so common for people to hide behind the niceties.

Luckey said that while the defense market is huge (the U.S. now routinely budgets more than $700 billion for defense), the U.S. tech industry has largely shied away from it, ostensibly because of the red tape involved in selling to the governmentand because of the perception that many Silicon Valley workers have idealogical objections to working on defense tech. A group of Google employees famously protested, and some resigned, over the companys contract to work on the Pentagons Project Maven in 2018.

I think thats mostly a smokescreen for the real reason companies stay out of defense, he said, which is, nobody wants to lose access to Chinese markets, Chinese capital, and Chinese manufacturingespecially companies like Apple that have invested literally hundreds of billions of dollars and will continue to invest hundreds of billions more.

Luckey had more to say about Apples dealings with China. Apple, which began selling into the greater China market in 2010, has taken as much as a quarter of its total revenue there in years past (China accounted for $68 billion in 2021). Most of Apples supply chain is in Asia, and nearly all of its manufacturing happens on mainland China.

Youd think that if anyone could do what they want to do, then [its] Apple, the largest company in the country, one of the most powerful entities in the world, more powerful than most nations. . . . Luckey said. [But] they could never do anything that would upset the Chinese Communist Party because, if that happens, [with] 95% of our manufacturing is in China, they are a $2 trillion company that could be wiped out with the stroke of a pen.

Luckey has long made the case that Silicon Valley isnt supplying the technology needed to help the U.S. counter forces like the Russians and the Chinese, which are relying on high-tech weapons such as hypersonic missiles and autonomous vehicles to achieve dominance on the battlefields of the future. (He readily acknowledges there are exceptions to the rule, such as Microsoft, which has been a steady partner to the DoD.)

In the absence of Big Tech, youd expect smaller startup companies to rush in to fill the gap. But, Luckey explained, startups find it difficult to seize the opportunity.

[I]ts very hard to raise money; Its very unpopular with a lot of investors, especially the ESG type investors, which represents $30 trillion in global capital, he said. You were in this situation where anyone working on defense was seen as just kind of inherently wrong by enough people that nobody would follow.

Luckey points out that even though the defense market is huge compared to commercial or consumer tech markets, only two defense startupsPalantir and SpaceXbecame unicorns in the 35 years after the end of the Cold War.

Instead, the Pentagon continues to rely on big defense contractors, such as Raytheon and McDonnell Douglaswhich are better at building fighter planes and bombs than softwareto supply the majority of its technology. The old relationships, and slow pace, are habits that die hard.

We dont have the structure and certainly not the incentives from the government to build autonomous systems, robotics, artificial intelligence, artificially intelligent sensors, high-end joint all-domain command and control systems, Palmer said. It became clear that that was going to be an important part of the future that we were not building at our major defense primes. By contrast, China, with its authoritarian system of government, has little trouble sourcing cutting-edge tech from Chinese companies.

Luckey is among the most visible in a group of startup founders, ex-tech CEOs (such as Eric Schmidt), VCs, and government officials trying to find ways of helping the Valley and the Pentagon work together. But in tech circles Luckey has been perceived as a voice in the wildernessor worse, a proponent of robotic war. That perception, he says, has changed.

. . . Ive been invited to way more conferences since Ukraine got invadedit was like overnight, Luckey said. People were shitting on me for like five years, and then all of a sudden, Ukraine got invaded and people who had been shitting on me were like Palmer, you are such an incredible mind on defense; please come and speak.'

Luckey stressed that he hopes the Ukraine conflict will end soon but said he fears that Americans will forget its lessonthat the U.S. and its allies are falling behind authoritarian regimes when it comes to high-tech war.

Why did Russia feel like they could get away with thisand why were they right? he asked.

Luckey believes both the Pentagon and Silicon Valley should face up to the problem of the U.S.s vulnerability to high-tech, autonomous weaponry.

[H]opefully after the conflict you could say, Okay, those underlying problems are still there, and I need to work on this before the next invasion, he said.

Im gonna lose my mind if people stop caring about this, and then Taiwan gets invaded and then everyone has I stand with Taiwan Twitter profile pictures.'

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Palmer Luckey: The U.S. is falling behind in defense because Big Tech is scared of China - Fast Company

In November 2019, the Committee on Small Business at the House of Representatives held a hearing titled, A Fair Playing Field? Investigating Big Techs Impact on Small Business where the stakeholders deliberated on how Big Tech companies have greatly impacted the small firms who are now essentially relying on their business models.

The then-chairwoman, Nydia Velazquez, pointed out the market dominance held by the big tech companies. In his testimony, Dharmesh Mehta, Vice President of Amazon explained how Amazon lowers barriers to entry for entrepreneurs, helps make retail even more vibrantly competitive, and continues to delight customers with new innovations.

Many tech giants often claim that they give startups and small and medium enterprises (SMEs) what they essentially need, like instant access to vast markets, cheap and reliable infrastructure, efficient ads and more. Notwithstanding these benefits, they also get in the way of SMEs success in many ways. At times, the big firms acquire the small ones to root out competition. For instance, shortly after Instacart (an online grocery delivery business) partnered with Whole Foods (a supermarket chain), Amazon launched its own grocery delivery service and acquired Whole Foods. Similarly, Google acquired the satellite navigation app Waze which was once a potential competitor of Google Maps.

In other instances, these tech giants seem to neglect the small businesses in favour of large enterprise customers who have adequate resources to afford the services offered by big techs. Consequently, small businesses lose out on the innovative digital products and latest technologies the big tech players extend.

Does that mean small businesses can never realise their potential for success? Or that they are doomed to be perpetual losers in want of resources? Not necessarily.

Large tech companies can indeed help small businesses thrive significantly in a resource-efficient manner.

Product-led growth strategy

For the past few years, tech leaders have been routinely discussing Product-led growth, a go-to-market strategy where the end-user product experience is the primary driver of growth. Product-led growth (PLG) strategies help founders build their brand, allow them to set prices based on market demand and attain better customer satisfaction by demonstrating more customer input into product development.

It is the PLG approach that led to the success of Zoom and Dropbox, applications widely used during the pandemic. At the time of its foundation, Zoom was anticipating competition with Microsoft, Cisco, Adobe and other well-known firms. Success in competition with such established leaders comes rarely to SMEs. However, a well-executed PLG strategy directed Zooms massive success. The first version was released in January, 2013. By the end of the month since their launch, Zoom had 400,000 users which then rose to 1 million users by end of May, 2013. By 2015, Zooms customer base touched 100 million users. Founder and CEO Eric Yuan invested heavily on customer centric features, like one-on-one meetings, group video conferences, screen sharing, the ability to record meetings and have them automatically transcribed and integrated with Slack and other softwares.

The story of Dropbox, a file hosting service, is similar in some measure. Officially launched in 2008, a product-driven approach led the brand to its early success. By April 2009, it had reached a registered user base of 1 million. In 2021, Dropbox crossed 700 million registered users. Dropboxs product-led approach led the founders to design a product that made file sharing easy and accessible for end-users. Additionally, the founders incorporated certain features that enhanced the appeal of the product among prospective users. For instance, the moment a user sends another user a Dropbox link, the user in receipt of the link is able to open it to access shared documents hassle-free.

When tech companies prioritise product-led growth and deliver swift and easy-to-use products, small businesses are able to access the technology they need through self-service. Heightened focus on smaller businesses benefits the bottom line by expanding a companys addressable market and incentivising better products.

Dedicated hand-holding

Tech giants have come up with dedicated programmes for startups in an effort to handhold them in their initial growth years. This practice is of utmost importance considering the failure rate of small businesses in their formative years. According to the Bureau of Labor Statistics Business Employment Dynamics, approximately 20 per cent of small businesses fail within the first year and 50 per cent eventually face failure within five years.

An example of such a programme is NVIDIA Inception, a free programme designed with a focus on startups. The programme provides startups with access to cutting-edge technology, NVIDIA experts, connections with venture capitalists and co-marketing support that increase their visibility and help them evolve faster. The programme supports all stages of a startups life cycle. Under NVIDIA Inception, members are provided with the best technical tools, latest resources, and opportunities to connect with investors. The success of this programme is reflected in its vast memberships. Earlier this year, Inception surpassed 10,000 members across 110 countries.

Another such sought-after programme is the Google for Startups, a Google initiative to support thriving, diverse and inclusive startup communities around the world. Under this programme, Google helps startups connect with the right people, the right products and relevant best practices that consequently help startups thrive and grow.

The statistics reflect the success of Googles initiatives.

Startups have created more than 100,000 jobs in the Google for Startups campuses and raised USD 6.7 billion in 2020. The Google for Startups programme has aided numerous startups in their ventures. For instance, the Google for Startups Accelerator programme helped the co-founders of Hypd, an India-based creator-driven marketplace, in perfecting the business idea and form of their product. Hypd enables content creators to set up online stores that match with their content.

We understand from the Google Analytics team how to understand the content creators journey, the key features they need from the product and which priorities to build on. That has shaped our product, says Akshay Bhatnagar, co-founder, Hypd.

The tools that big tech giants provide as a part of their dedicated handholding programmes impact SMEs performance in a noteworthy manner. The following infographic demonstrates the scope of their impact on SME performance.

(Infographic source: Deloitte)

Innovative financing

SMEs usually have less access to capital and cash reserves which renders it difficult for them to access cutting edge technologies. Big techs have come up with innovative ways to help small businesses access funds. For instance, in the wake of the pandemic, Google came up with an initiative called Ad credits for Google Ads Small and Medium-sized Businesses. These ad credits could be used by SMEs to offset payments for advertisements on the Google Ads platform to attract online customers to their businesses or make new digital offerings.

The Information Technology Industry (ITI) Council, a global advocate for technology that includes some of the most prominent tech companies across the globe like Amazon, Apple, Adobe, Google, Meta, IBM and others, introduced the Paycheck Protection Program for startups and small businesses. Through this programme, small businesses were able to obtain the required funding. Additionally, ITI members have developed tools to provide small businesses with software and online tutorials to apply for and obtain funding with more ease.

Power of the small

In the report, The Power of Small: Unlocking the Potential of SMEs, the International Labour Organisation (ILO) deliberates on the global prevalence of SMEs and their relevance in socio-economic and environmental developments. SMEs might appear too small for big tech firms to collaborate with and aid in the development of their capabilities as they would with larger enterprise customers. However, understanding their level of maturity and their specific needs in every country and across market segments while providing solutions is pivotal.

A deeper focus on small businesses empowers underserved and underrepresented groups, ensuring their ideas and their innovation can become a part of our socioeconomic fabric too, notes Gabe Monroy, Chief Product Officer at DigitalOcean.

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The Misguided Perception of Big Tech Bulldozing SMBs - Analytics India Magazine