Are Current Big Tech Firms About to Become Obsolete?
March 2, 2022
The aging behemoths are almost ready for an elder care facility, according to the CNBC article, “Are Tech Giants ‘Sunsetting’? Strategists Warn of Big Tech Under Pressure.” Journalist Weizhen Tan cites strategists from investment firms Macquarie and Baillie Gifford. She writes:
“Investment bank Macquarie said large consumer tech companies like Facebook and Amazon are in the ‘sunsetting’ phase. ‘You have to be very careful when you approach companies like [Facebook-parent] Meta or Alphabet because as I said, in my view, they are sunsetting. They’re suffering from a number of issues,’ Viktor Shvets, head of global and Asian strategy at Macquarie Capital. He also named other companies like i-Phone maker Apple and Chinese e-commerce platform Alibaba. Headwinds may include ‘major economies of scale,’ as well as significant political and social pressure, Shvets told CNBC’s ‘Street Signs Asia’ on Thursday. ‘So be very careful about these large digital platforms, but there are a lot of opportunities and profitable opportunities in the rest of [the] tech universe,’ he said. Both American and Chinese tech giants have come under regulatory scrutiny in recent years. In the past year, Chinese authorities cracked down on its tech companies, introducing legislation targeting areas from anti-monopoly to data protection. … In the U.S., President Joe Biden last year signed a new executive order aimed at cracking down on anti-competitive practices in Big Tech, among other sectors.”
For Chinese companies, the regulatory crackdown has meant a drop of over 40% in the Hang Seng Tech index in the past year. However, according to Baillie Gifford strategist Roderick Snell, increased competition is an even bigger threat to large Chinese tech firms. But both these factors may pale in comparison to another pressure Shvets describes: the transition from “second-generation” to “third-generation” (largely metaverse) technologies. If the previous transition is any indication, only one or two large companies will survive the shift. Microsoft was the lone survivor then, but which firms will see the other side of this passage? Sadly for investors, that answer remains unclear.
Cynthia Murrell, March 2, 2022
Elbakyan: A Slippery Online Service
March 2, 2022
Paywalls stink. The justification for paywalls is that they keep organizations and publications funded and this makes sense. However, most independent researchers cannot afford the often high fees that educational institutes and corporations have no choice but pay. Other than expensive fees, paywalls prevent important research from being shared.
Alexandra Elbakyan decided to circumvent paywalls as she pursued knowledge and became an expert programmer at a young age. The reason she became an expert programmer was her desire to create her own Tamagotchi program. She failed creating a digital pet, but she did succeed in gathering lots of information and the desire to share it.
Elbakyan designed Sci-Hub, a scientific database that:
“Sci-Hub collected a database of 88,343,822 research documents, freely available for download. Around 80% of the collection are research articles published in journals, 6% are papers from conference proceedings, 5% are book chapters, the rest are other types of documents. 77% of the documents available through Sci-Hub were published between 1980 and 2020, and 36% between 2010 and 2020. The coverage is > 95% for all major scientific publishers. The total size of Sci-Hub database is about 100 TB.”
Elbakyan’s Sci-Hub is an excellent tool for researchers who do not have the privilege of a bypassing paywalls through an educational institute or corporations. Knowledge does need to be shared, especially if it can assist in benefiting humanity.
The only problem is Elbakyan’s questionable celebration of communism and Josef Stalin. She also believes in astrology. It is a stereotype that programmers are oddballs, but applauding the dictator who is second only to Mao in murdering the most people in history and a market system theory that has been proven not to work is not good. Also astrology is junk science.
Whitney Grace, March 2, 2022
NSO Group: Dominoes, Anyone? Anyone?
March 1, 2022
In December 2021, the Zuckbook outfit released a report called “Threat Report on the
Surveillance-for-Hire Industry.” If you want to read this 17-page document, navigate to this url. If the document is disappeared, well, that’s life.
I wasn’t going to write about the banning of these intelware vendors’ firms:
- BellTroX
- Black Cube
- Bluehawk CI
- Cobwebs Technologies
- Cognyte
- Cytrox
And, according to the Zuck’s experts, a couple of Chinese outfits were in the list. I don’t want to hazard a guess, so let me say there are more than two of these types of firms chugging away in the Middle Kingdom.
A flurry of reports surfaced last week, including a report from My QtoA. You can read the summary at this link.
My take on this Zucking of specialized software and services firm is that I really want to ignore the impact NSO Group has had on a much needed and necessary market sector. What is unfortunate is that the Wild West, cowboy, and Silicon Valley “let’s get rich” mentality has diffused into what once was a secret carefully husbanded by government agencies.
Well, obviously, quite a few people, including bad actors, know about Pegasus and something about how it functions. The zero click compromising of a mobile device popped up in a recent phone call with a fellow who operated a trash hauling service. There you go. That’s diffusing if yo8u ask me.
Has the craziness caused by digital Marshal Dillons and their sidekick Chesters stopped? Probably not.
Another knock on that has not exhausted its momentum is the chatter at certain conferences about waiting for the storm to blow over. Yeah, hopeful and optimistic as the dominoes continue to topple. Perhaps the cowboys will hit the bunk house and think about something other than becoming rich and buying discounted yachts once owned by Russian oligarchs.
Stephen E Arnold, March 1, 2022
Blue Chip Outfits: Clumsy Cheaters?
March 1, 2022
I read that one of the big blue chip accounting / consulting firms revealed the jib of its ethical sails. The information appears in “PwC Fined Over Exam Cheating Involving 1,100 of Its Auditors.” [You will have to pay to read this interesting “real” news report.] I learned from the odd orange newspaper:
PwC Canada has been fined more than $900,000 by Canadian and US accounting regulators over exam cheating involving 1,100 of its auditors. The watchdogs found that the Big Four firm failed to spot that staff were sharing answers in exams between 2016 and 2020 because of shortcomings in its internal standards and test supervision.
What does this suggest about the notion of “quality,” “oversight,” and “integrity” when these words are applied to a blue chip outfit like PwC? PwC says on its About Us page:
Our values define the expectations we have for working with each other and our clients. Although we come from different backgrounds and cultures across the firm, our values are what we have in common. They capture our shared aspirations and expectations, and guide how we make decisions and treat others—they’re what makes us, us.
Does this mean this is the logic used at PwC: We cheat and obviously are likely to perform just about any action because of “shortcomings” in standards? Is the logic, “Well, McKinsey did the opioid work, so we help 1,100 whiz kids ace an examination.” Is this the lesser of two possible inappropriate blue chip thought processes?
Keep in mind that when PwC “discovered” the cheating, the company “immediately opened an internal investigation.” So it is now 2022 and the question, “How long has PwC been cheating?” remains unanswered.
Stephen E Arnold, March 1, 2022
Stephen E Arnold,
Switzerland: Clean Cows and Clean Money Mostly
March 1, 2022
Here is yet another inventory of the rich and infamous. The Irish Times reports, “Vast Leak Exposes How Credit Suisse Served Strongmen and Spies.” This latest financial data leak lists 18,000 Credit Suisse accounts from the 1940s into the 2010s, though contains no data on current accounts. In keeping with the alliterative tradition established with 2016’s Panama Papers and continuing through 2017’s Paradise Papers and last year’s Pandora Papers, this roster has been dubbed Suisse Secrets. We learn:
“Among the people listed as holding amounts worth millions of dollars in Credit Suisse accounts were King Abdullah II of Jordan and the two sons of former Egyptian strongman Hosni Mubarak. Other account holders included sons of a Pakistani intelligence chief who helped funnel billions of dollars from the United States and other countries to the mujahedeen in Afghanistan in the 1980s and Venezuelan officials ensnared in a long-running corruption scandal. The leak shows that Credit Suisse opened accounts for and continued to serve not only the ultra-wealthy but also people whose problematic backgrounds would have been obvious to anyone who ran their names through a search engine. Swiss banks have long faced legal prohibitions on taking money linked to criminal activity, said Daniel Thelesklaf, the former head of Switzerland’s anti-money laundering agency. But, he said, the law generally hasn’t been enforced.”
You don’t say. Of course, Swiss banks are famous for their high security, so this leak was quite the feat. A whistleblower sent the data to German newspaper Süddeutsche Zeitung over a year ago. That paper has since then shared the list with the Organized Crime and Corruption Reporting Project and 46 other news organizations around the world. None of those outlets were based in Switzerland, however, since a 2015 Swiss law prohibits the publication of articles based on internal bank data. The article also notes:
“Among the biggest revelations is that Credit Suisse continued to do business with customers even after bank officials flagged suspicious activity involving their finances. One account holder was Venezuela’s former vice minister of energy, Nervis Villalobos. Employees in Credit Suisse’s compliance department had reason to be wary of doing business with him.”
See the write-up for more on Villalobos and other noteworthy examples, including several Middle East officials.
A Credit Suisse spokesperson notes many of the accounts date back to “a time where laws, practices and expectations of financial institutions were very different from where they are now.” Indeed. Since its founding in 1856 until fairly recently, the institution was largely untouchable. As the public’s tolerance for shady dealings has waned, however, the bank has faced more scrutiny. We are reminded that, in 2014, it pled guilty to helping Americans file false tax returns; in 2016, it forked over $5.3 billion to settle allegations about its mortgage-backed securities marketing; and last year it agreed to pay $475 million to authorities in the US and the UK over a Mozambique kickback and bribery scheme. Of course, those are small prices to pay compared to managing more than $100 billion in questionable funds. Currently, an ongoing trial in Switzerland sees Credit Suisse accused of helping drug traffickers launder millions of euros and the US Justice Department and Senate finance committee are investigating whether US citizens are still hiding millions within its hallowed vaults. What are the odds of that?
Cynthia Murrell, March 1, 2022
Alphabet Google YouTube and Its Data Moats
March 1, 2022
Owning a monopoly on data or information is not a new concept. Owning secret knowledge is as old as humanity. Think about humans learning the secret of fire, gunpowder, medicine, and nuclear bombs. The concept seems more modern, because of computer technology. This technology only means there is more data to control in a monopoly. Seeking Alpha discusses data monopolies in: “Google Stock Is A Buy On Future Growth, Alphabet Data Moat.”
Alphabet a.k.a. Google started as a search engine that sold advertising space, but now the company is a leader in augmented reality, blockchain, and AI. Alphabet continues to grow and its endeavors yield more data moats for then to control:
“The reason why Alphabet has built several powerful data moats is that the company has become very proficient in identifying high value data, collecting that data, analyzing that data for insights and producing high value products based upon the insights gleaned from the data. The very first high value data that the founders of the company, Sergey Brin and Larry Page discovered was search data. Google established a first mover advantage in search data that grew into such a powerful data moat that even Microsoft (NASDAQ:MSFT) is unable to catch up to Google in search. Google still maintains 92.47 percent market share in search as of June 2021. Over time, Alphabet has discovered and built up other high value data sets with some of the most well-known products built upon those data sets being Maps, YouTube, Google Assistant and self-driving cars (Waymo).”
Alphabet continues to grow its data moat through constant research and development, especially in the realms of AI. The company will continue to expand and it could grow a data moat monopoly. If Alphabet does get a data moat the government is supposed to step in and break it up. That might not happen given the world’s current dilemma and how corporations have politicians in their back pockets.
Whitney Grace, March 1, 2022
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