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The subtle rise of a China, U.S. tech cold war

Yehia El Amine

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tech cold war

Stakes have been mounting between two of the world’s major superpowers; however, the matter has shied away from ideologies and nuclear weapons and has moved matters into a realm etched into the very fabric of our everyday life: technology.

Noticeably everything sharply ignited by former U.S. president Donald Trump’s blacklisting of Chinese tech titan Huawei back in 2019, tensions have trickled down to other facets in the tech sphere.

But while many have titled these tensions as an uneasy peace between both superpowers, tensions can be felt throughout the entirety of the global tech ecosystem.

The U.S. has made moves to curb the reach of China’s technological power among its allies, by merely pressuring them to block Chinese tech companies from being included within the rollout and deployment of the fifth generation of mobile networks citing data security and cybersecurity at the helm. 

But now, matters have escalated forward, going from a trade war to tech war; and China is starting to fight back.

Taming the tech dragon

The first escalation was seen when the eastern country began taming its very own tech sector, especially those that deal with large private user data, its security, as well as overseas listings.

On the surface, this move seems as though China is shooting itself in the foot, by curbing the scale of which its tech sector could innovate, while scaring off investors; but a closer look would show that the eastern superpower is aligning its most dangerous weapons with its political agenda.

But while China’s Premier Li Keqianq declared during the country’s annual legislative session in March that “the state supports the innovation and development of platform companies,” Beijing had subtly pushed another message for its tech giants: No matter how big or innovative they may be, commercial success is secondary to the mission of bolstering Chinese technological security.

An example was made from e-commerce behemoth Alibaba and its FinTech subsidiary Ant Group; the former was slapped with a whopping $2.8 billion fine by regulators citing anti-competitive tactics earlier in April, while the latter was suspended from debuting its ballooning IPO in November of last year.

And now the pressure has intensified.

Injured giants

According to report by Bloomberg, due to continuous pressure from China’s regulators, the country’s tech giants have lost a combined $823 billion in market share since their peak in February.

This was followed by the issuance of a sweeping warning on Tuesday to the country’s Big Tech companies, that the government intends to buckle down on its oversight of data security and oversees listing; a timely move, as local ride hailing Didi had concluded its initial public offering in the U.S.

Prior to that, the country’s internet watchdog pushed matters further by opening a security review into Didi last week, while demanding that the app be removed from local app stores; a move which stunned everyone, including the company’s biggest backer Tencent.

Bloomberg highlighted that these moves have increased pressure not only on the companies themselves, but on their investors who are indirectly being forced to sell their stocks within some of the country’s biggest tech names including Tencent, Alibaba, JD, Baidu, and Meituan.

“The Hang Seng Tech Index, whose members include many of China’s biggest tech companies, fell as much as 1.9 percent before paring losses to 0.6 percent Wednesday, marking its sixth consecutive day of declines. Tencent slid 1.9 percent, among the biggest decliner on the Hang Seng Index. Alibaba dropped 1.7 percent, while Meituan fell 1.3 percent,” Bloomberg’s report explained.

This has rendered any Chinese tech investments in the near future as caveat emptor.

Hong Kong’s collateral damage

With these actions and steps to crack down on its tech sector, the move will likely reflect Beijing’s political belief and strategy of weeding off those who doesn’t succumb to its agenda.

Meanwhile on the side of the camp, U.S.-based tech firms are making threats to pull out of the Hong Kong market due a new security law which aims at curbing doxing.

Doxing is the act of searching and publishing private or identifiable information found online for malicious reasons; this tactic was used during the 2019 mass-democracy protests in Hong Kong. During the events, everyone bore witness to personal details being released by all sides of the spectrum targeting law enforcement, journalists, activists, and their families.

In a letter penned by a coalition representing tech giants such as Facebook, Google, Apple, Twitter, and LinkedIn, the Asia Internet Coalition (AIC) warned the city’s Privacy Commissioner that the laws in the bill could unleash “severe sanctions” on individuals and organizations for what it deems as doxing.

The AIC described the law to be “not aligned with global norms and trends.”

“The only way to avoid these sanctions for technology companies would be to refrain from investing and offering their services in Hong Kong, thereby depriving Hong Kong businesses and consumers, whilst also creating new barriers to trade,” the letter said.

But while Hong Kong’s chief executive, Carrie Lam, refuted those claims and stressed that the proposed law only targets “illegal doxing,” it was still internationally condemned, especially with regards to its vagueness.

Lam argued that the law, which was introduced last year, has been successful in maintaining order and stability in the city.

The letter, signed by AIC managing director, Jeff Paine, highlighted that the language used in the draft law would subject intermediaries and local subsidiaries to criminal investigations and prosecution for doxing offences, including for not removing material from platforms.

“This is a completely disproportionate and unnecessary response to doxing, given that intermediaries are neutral platforms with no editorial control over the doxing posts, and are not the persons publishing personal data,” it said.

“In reality, most intermediaries already have notice and takedown regimes in place to deal with doxing content and such requests would be responded to without undue delay.”

This battle could be interpreted as a point of pressure for Beijing – who has started exerting its influence on the metropolitan city – since an exit of such vital tech resources would track back Hong Kong’s ability to remain as a tech innovator across the board.

The semiconductors Frontier

The rising economic and technological tensions between both superpowers have evolved drastically over the years, from a trade war to a tech war, and now stands at the heart of the world’s largest innovation and competition rivalry.

Escalations will continue to simmer over this slow burn, especially as U.S. president Joe Biden looks to bolster the western country’s position in the tech world, by banking on technology’s biggest resource: semi-conductors.

Earlier last month, The U.S. Senate overwhelmingly approved the Innovation and Competition Act – a rare show of unity between Democrats and Republicans – with Beijing responding to the bill and labelling it “filled with cold war zero-sum mentality.”

Yehia is an investigative journalist and editor with extensive experience in the news industry as well as digital content creation across the board. He strives to bring the human element to his writing.

Technology

What to expect from Facebook’s smart glasses

Rim Zrein

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Facebook

During Facebook’s recent earnings call, Mark Zuckerberg confirmed the company’s next hardware release will debut the tech giant’s collaboration with Ray-Ban eyewear on a pair of augmented reality glasses. 

The long-awaited Ray-Ban “smart glasses” were supposed to launch in 2021. However, as a steep plunge in COVID-19 cases forced most of the world into a lockdown, a lot of tech firm’s plans changed. 

“Looking ahead here, the next product release will be the launch of our first smart glasses from Ray-Ban in partnership with EssilorLuxottica,” Facebook head and CEO Mark Zuckerberg said. “The glasses have their iconic form factor, and they let you do some pretty neat things.”  

The “neat things” Zuckerberg is talking about remains a mystery. However, the smart glasses concept came up while Zuckerberg was describing his outlook on Facebook’s future, which includes a virtual reality unlike no other

“I’m excited to get these into people’s hands and to continue to make progress on the journey towards full augmented reality glasses in the future,” Zuckerberg expressed. 

Considering Zuckerberg’s comments on the release didn’t satisfy tech fan’s curiosity, CNET spoke with Andrew Bosworth, Facebook’s head of AR/VR hardware, who explained that they’re indeed smart glasses, but not AR glasses as Facebook has said so far. 

“We’re being careful not to call them augmented reality glasses. When you’re overlaying digital artifacts onto the world, that’s really augmented reality. These aren’t augmented reality glasses. However, they do a lot of the concepts we think will eventually be critical for augmented reality glasses,” Bosworth said. 

The features of the smart glasses aren’t all unique. However, as much as it’s ironic to state, Bosworth made it clear that one of the things Facebook is looking at for all their AR, starting with the smart glasses, is how can they help users be more present. 

This isn’t the first attempt a major tech company produces smart glasses, as Google did quite a stir back in 2014 following the release of “Google Glass,” which was a bold move, but failed nonetheless.  

The idea seemed exciting, but eventually transformed into an online meme. Besides, many weren’t keen with the idea of having a tech tool constantly emitting radiations at face level. 

The road to actual AR glasses could take more time than anticipated, while other tech giants hunt after similar goals.  

The Ray-Ban glasses coming this year will be a steppingstone into Zuckerberg’s “metaverse” vision for Facebook, but they likely won’t do as much as we’d like to believe. 

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Facebook profits top $10B as its CEO exalts the ‘metaverse’

Associated Press

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Facebook profits top $10B as its CEO exalts the 'metaverse'

Concerns about a revenue growth slowdown pushed Facebook’s shares lower in after-hours trading Wednesday, not long after the company reported that its second-quarter profits doubled thanks to a massive increase in advertising revenue.

But CEO Mark Zuckerberg set his sights far beyond the second half of 2021, exalting what he sees as the next phase of how people experience the internet. What the rest of the world might know as augmented and virtual reality with a dash of science fiction, Zuckerberg and others are calling “the metaverse,” a futuristic and somewhat vague notion that encompasses AR, VR and new, yet-to-be-imagined ways of connecting to one another via technology.

Zuckerberg expects the metaverse to be the next big thing after the mobile internet, although he’s had a spotty track record when it comes to predicting major trends of the near future. At Facebook’s f8 conference four years ago, for instance, Zuckerberg predicted a future where you will sit in your bedroom wearing a headset and take a virtual vacation with faraway friends and family, or use your smartphone’s camera to virtually spruce up your dinky apartment.

So far, this has not materialized. Then there’s Libra — now known as Diem — a cryptocurrency project Facebook launched in 2019 amid great fanfare. At the time, Facebook envisioned Libra as an emerging global digital currency; its ambitions have since been scaled back considerably amid regulatory and commercial backlash.

In a conference call with analysts, Zuckerberg called the metaverse the “next generation of the internet and next chapter for us as a company,” one that he said will create “entirely new experiences and economic opportunities.”

For now, though, Facebook still has to contend with more mundane matters such as antitrust crackdowns in the U.S. and elsewhere as well as concerns about how it handles vaccine-related and political misinformation on its platform. The company said, as it has before, that it expects challenges in its ability to target ads this year — including regulatory pressure and Apple’s privacy changes that make it harder for companies like Facebook to track people who can opt out of that form of surveillance.

Although the social network doubled its profit in the second quarter, in part because of higher average prices it charged for the ads it delivers to its nearly 3 billion users. But the company said it doesn’t expect revenue to continue to grow at such a breakneck pace in the second half of the year.

“This quarter’s results are extremely strong and show little sign of impact from Apple’s iOS update as of yet,” said eMarketer analyst Debra Aho Williamson, noting that in the year-ago quarter Facebook saw its slowest revenue growth since going public, so it was an easy comparison. “But it’s also due to the fact that there is enormous demand for Facebook and Instagram advertising, and more competition leads to higher ad prices.”

Separately, Facebook said on Wednesday that it will make vaccines mandatory for employees in the U.S. who work in offices. Exceptions will be made for medical and other reasons. Google announced a similar policy earlier in the day.

The Menlo Park, California-based company earned $10.39 billion, or $3.61 per share, in the April-June period. That’s up from $5.18 billion, or $1.80 per share, a year earlier. Revenue jumped 56% to $28.58 billion from $18.32 billion. Analysts, on average, were expecting earnings of $3.04 per share and revenue of $24.85 billion, according to a poll by FactSet.

Advertising revenue growth was driven by a 47% year-over-year increase in the average price per ad and a 6% increase in the number of ads shown to people. Facebook said it expects ad prices, not the amount of ads it delivers, to continue to drive growth.

The company predicted uncertainty for 2021 back in January, saying its revenue in the latter half of the year could face significant pressure. Because revenue grew so quickly in the second half of 2020, Facebook said at the time that it could have trouble keeping up that pace.

Williamson said the third quarter will be an important one for the company, “as the full effects of the Apple update take hold.”

“We will have a much better sense of how well Facebook has been able to adjust its core ad targeting products to manage the reduced amount of information it can tap into,” she said.

Facebook had 2.9 billion monthly users as of June, up 7% from a year earlier.

Shares fell $11.77, or 3.2%, to $373.28 in after-hours trading. Earlier in the day, the stock hit an all-time high of $377. 55 in anticipation of the results, so the decline wasn’t unexpected.

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Google requests privacy policy for Play store apps

Hala Turk

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Google announced on Wednesday that Android developers will be required to include a privacy policy with their apps starting April 2022.

This request is not new, as the Big Tech revealed earlier in May that developers must declare their safety information within a deadline between October and April.

However, Google decided this week to provide more details on the kind of data developers need to provide for the new mandatory policy.

The app policies will allow users to view safety and privacy guidelines before downloading the app, which will let them understand how their data is collected, protected, and used in advance.

The mandatory privacy policy covers all apps, including those that don’t collect personal or sensitive user data. Which is a new feature since previously only apps that collected personal information had to disclose their policies on the Play store.

The safety section on the Play Store will require app developers to disclose their security practices, including information on data encryption, whether an app follows Google’s families policy, and whether users will have a choice to share data.

The safety section is currently due to start appearing in app descriptions in the first quarter of 2022.

Google in a blog post disclosed screenshots of what the safety section might look like. Yet, the company said that the design is subject to change.

There’s also a “see details” option to get more specifics on what collected data is used for, and whether the collection is essential for using the app.

The company highlighted that all apps including Google’s own will be required to provide a privacy policy.

It’s worth mentioning that Apple has required a privacy policy for apps in the App Store since 2018.

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