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AI

Microsoft Debates What To Do With AI Lab In China 43

An anonymous reader quotes a report from the New York Times: When Microsoft opened an advanced research lab in Beijing in 1998, it was a time of optimism about technology and China. The company hired hundreds of researchers for the lab, which pioneered Microsoft's work in speech, image and facial recognition and the kind of artificial intelligence that later gave rise to online chatbots likeChatGPT. The Beijing operation eventually became one of the most important A.I. labs in the world. Bill Gates, Microsoft's co-founder, called it an opportunity to tap China's "deep pool of intellectual talent." But as tensions between the United States and China have mounted over which nation will lead the world's technological future, Microsoft's top leaders -- including Satya Nadella, its chief executive, and Brad Smith, its president -- have debated what to do with the prized lab for at least the past year, four current and former Microsoft employees said.

The company has faced questions from U.S. officials over whether maintaining a 200-person advanced technologies lab in China is tenable, the people said. Microsoft said it had instituted guardrails at the lab, restricting researchers from politically sensitive work. The company, which is based in Redmond, Wash., said it had also opened an outpost of the lab in Vancouver, British Columbia, and would move some researchers from China to the location. The outpost is a backup if more researchers need to relocate, two people said. The idea of shutting down or moving the lab has come up, but Microsoft's leaders support continuing it in China, four people said.
"We are as committed as ever to the lab and the world-class research of this team," Peter Lee, who leads Microsoft Research, a network of eight labs across the world, said in a statement. Using the lab's formal name, he added, "There has been no discussion or advocacy to close Microsoft Research Asia, and we look forward to continuing our research agenda."
United States

The Next Front in the US-China Battle Over Chips (nytimes.com) 87

A U.S.-born chip technology called RISC-V has become critical to China's ambitions. Washington is debating whether and how to limit the technology. From a report: It evolved from a university computer lab in California to a foundation for myriad chips that handle computing chores. RISC-V essentially provides a kind of common language for designing processors that are found in devices like smartphones, disk drives, Wi-Fi routers and tablets. RISC-V has ignited a new debate in Washington in recent months about how far the United States can or should go as it steadily expands restrictions on exporting technology to China that could help advance its military. That's because RISC-V, which can be downloaded from the internet for free, has become a central tool for Chinese companies and government institutions hoping to match U.S. prowess in designing semiconductors.

Last month, the House Select Committee on the Chinese Communist Party -- in an effort spearheaded by Representative Mike Gallagher, Republican of Wisconsin -- recommended that an interagency government committee study potential risks of RISC-V. Congressional aides have met with members of the Biden administration about the technology, and lawmakers and their aides have discussed extending restrictions to stop U.S. citizens from aiding China on RISC-V, according to congressional staff members. The Chinese Communist Party is "already attempting to use RISC-V's design architecture to undermine our export controls," Representative Raja Krishnamoorthi of Illinois, the ranking Democrat on the House select committee, said in a statement. He added that RISC-V's participants should be focused on advancing technology and "not the geopolitical interests of the Chinese Communist Party."

Arm Holdings, a British company that sells competing chip technology, has also lobbied officials to consider restrictions on RISC-V, three people with knowledge of the situation said. Biden administration officials have concerns about China's use of RISC-V but are wary about potential complications with trying to regulate the technology, according to a person familiar with the discussions. The debate over RISC-V is complicated because the technology was patterned after open-source software, the free programs like Linux that allow any developer to view and modify the original code used to make them. Such programs have prompted multiple competitors to innovate and reduce the market power of any single vendor.

Bitcoin

SEC Claims Account Was 'Compromised' After Announcing False Bitcoin ETF Approval (cnbc.com) 48

With the approval of new rule change applications, the SEC is now allowing bitcoin ETFs to be traded in the United States.



UPDATE: The SEC said that the announcement about bitcoin ETFs on social media was incorrect, and that its X account was compromised. "The SEC's @SECGov X/Twitter account has been compromised. The unauthorized tweet regarding bitcoin ETFs was not made by the SEC or its staff," an SEC spokesperson told CNBC.

"The SEC has not approved the listing and trading of spot bitcoin exchange-traded products," said SEC Chair Gary Gensler in a post on X. From the original CNBC article: The decision will likely lead to the conversion of the Grayscale Bitcoin Trust, which holds about $29 billion of the cryptocurrency, into an ETF, as well as the launch of competing funds from mainstream issuers like BlackRock's iShares. The approval could prove to be a landmark event in the adoption of cryptocurrency by mainstream finance, as the ETF structure gives institutions and financial advisors a familiar and regulated way to buy exposure to bitcoin.

The SEC has for years opposed a so-called spot bitcoin fund, with several firms filing and then withdrawing applications for ETFs in the past. SEC Chair Gary Gensler has been an outspoken critic of crypto during his tenure. However, the regulator appeared to change course on the ETF question in 2023, possibly due in part to an August loss to Grayscale in court which criticized the SEC for blocking bitcoin ETFs while allowing funds that track bitcoin futures.

United States

FTC Bans X-Mode From Selling Phone Location Data (techcrunch.com) 10

The U.S. Federal Trade Commission has banned the data broker X-Mode Social from sharing or selling users' sensitive location data, the federal regulator said Tuesday. From a report: The first of its kind settlement prohibits X-Mode, now known as Outlogic, from sharing and selling users' sensitive information to others. The settlement will also require the data broker to delete or destroy all the location data it previously collected, along with any products produced from this data, unless the company obtains consumer consent or ensures the data has been de-identified. X-Mode buys and sells access to the location data collected from ordinary phone apps. While just one of many organizations in the multibillion-dollar data broker industry, X-Mode faced scrutiny for selling access to the commercial location data of Americans' past movements to the U.S. government and military contractors. Soon after, Apple and Google told developers to remove X-Mode from their apps or face a ban from the app stores.
AI

'Only 700 New IT Jobs' Were Created In US Last Year (theregister.com) 95

According to an analysis of U.S. Bureau of Labor Statistics data, the U.S. added a mere 700 IT jobs compared to 267,000 the year prior. The Register reports: Yet while layoffs have generally kept IT job growth flat for the past year (2023's net 700 comes despite more than 21,000 IT jobs being created in Q4), there's still a surplus of vacant roles, with [tech consultancy Janco Associates] finding some 88,000 remain open. "Based on our analysis, the IT job market and opportunities for IT professionals are poor at best," said Janco CEO M Victor Janulaitis. "Currently, there are almost 100K unfilled jobs with over 101K unemployed IT Pros -- a skills mismatch."

In other words, while we're definitely dealing with correction from pandemic overhiring, we're also wading into a new paradigm where a lot of tech talent is going to have to retrain because AI is being crammed wherever C-level employees can stick it. Much of the layoff debt to hit IT jobs have come to entry-level positions, especially those in the customer service telecommunications and hosting automation areas. In turn, some of the responsibilities of those jobs are being reassigned to the latest and greatest AIs, says Janco.

According to the tech consultancy, entry-level IT demand is shrinking, though demand for those with AI, security, development, and blockchain skills remain desired. "Artificial Intelligence and Machine Learning IT Professionals remain in high demand," said Janulaitis. Still, plans to further replace humans with AI workers at the entry level are hardly far-fetched, with multiple reports finding much the same. [...] Those caught up by this year's tech layoffs seem to have a simple solution on their hands, as far as Janco's data suggests: Retrain for AI. Problem solved ... until the next big thing comes along.

Education

US News Makes Money From Some of Its Biggest Critics: Colleges 29

Jonathan Henry, a vice president at the University of Maine at Augusta, is hoping that an email will arrive this month. He is also sort of dreading it. The message, if it comes, will tell him that U.S. News & World Report has again ranked his university's online programs among the nation's best. History suggests the email will also prod the university toward paying U.S. News, through a licensing agent, thousands of dollars for the right to advertise its rankings. The New York Times: For more than a year, U.S. News has been embroiled in another caustic dispute about the worthiness of college rankings -- this time with dozens of law and medical schools vowing not to supply data to the publisher, saying that rankings sometimes unduly influence the priorities of universities. But school records and interviews show that colleges nevertheless feed the rankings industry, collectively pouring millions of dollars into it.

Many lower-profile colleges are straining to curb enrollment declines and counter shrinking budgets. And any endorsement that might attract students, administrators say, is enticing. Maine at Augusta spent $15,225 last year for the right to market U.S. News "badges" -- handsome seals with U.S. News's logo -- commemorating three honors: the 61st-ranked online bachelor's program for veterans, the 79th-ranked online bachelor's in business and the 104th-ranked online bachelor's. Mr. Henry, who oversees the school's enrollment management and marketing, said there was just too much of a risk of being outshined and out-marketed by competing schools that pay to flash their shiny badges. "If we could ignore them, wouldn't that be grand?" Mr. Henry said of U.S. News. "But you can't ignore the leviathan that they are."

Nor can colleges ignore how families evaluate schools. "The Amazonification of how we judge a product's quality," he said, has infiltrated higher education, as consumers and prospective students alike seek order from chaos. The money flows from schools large and small. The University of Nebraska at Kearney, which has about 6,000 students, bought a U.S. News "digital marketing license" for $8,500 in September. The Citadel, South Carolina's military college, moved in August to spend $50,000 for the right to use its rankings online, in print and on television, among other places. In 2022, the University of Alabama shelled out $32,525 to promote its rankings in programs like engineering and nursing. Critics believe that the payments, from schools of any size and wealth, enable and incentivize a ranking system they see as harmful.
United States

IRS To Begin Trial of Its Own Free Tax-Filing System (nytimes.com) 96

The Internal Revenue Service is rolling out a free option for filing federal tax returns this year to some residents of a dozen states. From a report: Last month, the agency published details of its plan to test an in-house filing system, in which taxpayers submit their federal tax returns directly to the agency online at no cost. Residents of 12 states are eligible to participate if they meet certain criteria. "This is a critical step forward for this innovative effort that will test the feasibility of providing taxpayers a new option to file their returns for free directly with the I.R.S.," Danny Werfel, the agency's commissioner, said in a recent statement.

While the direct filing system is starting on a limited basis, it has already faced some resistance, particularly from commercial tax-preparation companies. A spokeswoman for Intuit, Tania Mercado, criticized the direct file project as a "half-baked solution" and a waste of taxpayer money. "The direct file scheme is a solution in search of a problem," she said. Intuit makes the TurboTax tax preparation software. Democrats in Congress generally support the idea of free, direct filing, while Republicans contend that the idea, part of President Biden's plan to overhaul the I.R.S., would give the agency even more power over ordinary taxpayers.
US lawmakers said earlier this month that federal tax credits that Intuit received could have been better spent to build a free government alternative to Intuit's popular online tax preparation software TurboTax. The IRS estimates it would cost $64 million to $249 million annually for the agency to run a free-filing program. In the fiscal year ending in July 2023, Mountain View, California-based Intuit received $106 million in federal research and experimentation credits, which amounted to about 4% of its total R&D expenses, according to a regulatory filing.
Transportation

Hundreds of US Car Dealerships Abandon Buicks. Are EVs to Blame? (msn.com) 210

As General Motors prepares to roll out electric versions of its Buicks, "hundreds of Buick dealerships nationwide" are "turning their backs on the storied brand," reports the Boston Globe.

"The move to electric Buicks is one reason so many dealers are giving up their Buick franchises, according to auto industry watchers." They say that smaller, low-volume Buick dealers either can't or won't make the big investments needed to begin selling EVs, especially as sales growth in the sector has cooled and unsold electrics are piling up on dealer lots. "I think there are dealers who are just not confident in the electric vehicle transition and they don't want to have to commit to the investment," said Karl Brauer, executive analyst at online car retailer iSeeCars.com...

Buick has announced its intention to migrate to an all-electric line of cars by the end of the decade. The brand's first EV is set to go on sale this year. But getting ready to sell EVs is a costly proposition. Dealers must purchase new equipment to service the cars and must pay for worker retraining. GM estimates that the upfront cost to dealers will range between $200,000 and $400,000. "If you're in a market where you're not selling a lot of Buicks, investing a lot to sell electric Buicks may not make a good business case," said Mark Schirmer, spokesperson for Cox Automotive, an Atlanta-based automotive marketing company.

While 854,000 Buicks were sold in 1980, just 103,000 were sold in 2022 — down from 207,000 in 2019, according to the article. So in 2022 GM bought out 44 percent of its dealerships (which they say accounted for just 20% of all U.S. Buick sales), with the majority of them still selling other GM brands like Chevrolet and GMC.

But the article also includes some perspective from Robert O'Koniewski, executive vice president of the Massachusetts State Automobile Dealers Association. "The only reason GM has kept the Buick alive is that it's popular in China." That's Buick's biggest market by far, thanks to a 50-50 joint venture it launched in 1997 with government-owned SAIC Motor, China's biggest carmaker. The partnership sold 653,000 Chinese Buicks in 2022.

But that's a big decline from the 926,000 sold in 2020. Brauer said that Chinese consumers are pulling away from the US brand in favor of Chinese companies like BYD, which passed Tesla in the fourth quarter of 2023 to become the world's largest maker of electric vehicles.

Power

America's First Large-Scale Offshore Wind Project Finally Begins Generating Electricity (wbur.org) 43

A year ago the Washington Post reported "there are only seven working offshore wind turbines in the entire United States," adding that a massive wind project south of Martha's Vineyard, Massachusetts "is years behind schedule amid regulatory delays and litigation from opponents."

But this week a local public radio station reported that electricity from America's first large-scale offshore wind project "is officially flowing into Massachusetts and helping to power the New England grid." The Vineyard Wind project achieved "first power" late Tuesday when one operating turbine near Martha's Vineyard delivered approximately five megawatts of electricity to the grid. The company said it expects to have five turbines operating at full capacity in early 2024... Once it's finished sometime in 2024, it will consist of 62 turbines spaced about a mile apart and rising more than 800 feet out of the water. The project will generate up to 800 megawatts of power, or about enough electricity for 400,000 homes in Massachusetts.

Another smaller project near Long Island, South Fork Wind, also began producing electricity in early December. When that project is complete, its 12 turbines will generate about 132 megawatts of power...

Massachusetts, in partnership with Rhode Island and Connecticut, is currently seeking bids for another 3,600 megawatts of offshore wind power... "This is a historic moment for the American offshore wind industry," wrote Gov. Maura Healey. "This is clean, affordable energy made possible by the many advocates, public servants, union workers, and business leaders who worked for decades to accomplish this achievement.

Last year America's seven offshore wind turbines generated "a paltry 42 megawatts," according to the article, "far less than the average natural gas power plant."

The CEO of one of the company's behind the project hailed the last 12 months as "a historic year defined by steel in the water and people at work."
United States

America's FAA Temporarily Grounds All Boeing 737 Max 9s - After a Window Blows Off In-Flight (cnn.com) 148

Today America's Federal Aviation Administration "ordered the temporary grounding of Boeing 737 Max 9 aircraft," reports CNN, identifying the aircraft as "the model involved in an Alaska Airlines emergency landing in Oregon on Friday after a section of the plane apparently blew out in midflight." A passenger's video posted to social media shows a side section of the fuselage, where a window would have been, missing — exposing passengers to the outside air. The video, which appears to have been taken from several rows behind the incident, shows oxygen masks deployed throughout the airplane, and least two people sitting near and just behind the missing section...

The plane "landed safely back at Portland International Airport with 171 guests and six crew members," the airline said... According to FlightAware, the flight was airborne for about 20 minutes.

"There was a really loud bang toward the rear of the plane and a whoosh noise," one passenger told a local news station — and then "all of the masks dropped."

Long-time Slashdot reader ArchieBunker shares more details from the BBC: Diego Murillo said the gap was "as wide as a refrigerator".

Fellow passenger Elizabeth Lee added: "Part of the plane was missing and the wind was just extremely loud. but everyone was in their seats and had their belt on."

Jessica Montoia described the flight as a "trip from hell" adding a phone was taken out of a man's hand by the wind.

CNN covers the federal response: The FAA said the planes must be parked until emergency inspections are performed, which will "take around four to eight hours per aircraft."

"The FAA is requiring immediate inspections of certain Boeing 737 MAX 9 planes before they can return to flight," FAA Administrator Mike Whitaker said Saturday in a statement. "Safety will continue to drive our decision-making as we assist the (National Transportation Safety Board's) investigation into Alaska Airlines Flight 1282." The order impacts 171 Boeing 737 Max 9 jets, the agency approximates....

Boeing said the company supported the FAA's grounding decision. "Safety is our top priority and we deeply regret the impact this event has had on our customers and their passengers," Boeing said in a statement

Thanks to long-time Slashdot reader lsllll for sharing the news.
Government

US Moves Closer To Filing Sweeping Antitrust Case Against Apple (nytimes.com) 119

An anonymous reader quotes a report from the New York Times: The Justice Department is in the late stages of an investigation into Apple and could file a sweeping antitrust case taking aim at the company's strategies to protect the dominance of the iPhone as soon as the first half of this year, said three people with knowledge of the matter. The agency is focused on how Apple has used its control over its hardware and software to make it more difficult for consumers to ditch the company's devices, as well as for rivals to compete, said the people, who spoke anonymously because the investigation was active. Specifically, investigators have examined how the Apple Watch works better with the iPhone than with other brands, as well as how Apple locks competitors out of its iMessage service. They have also scrutinized Apple's payments system for the iPhone, which blocks other financial firms from offering similar services, these people said.

The Justice Department is closing in on what would be the most consequential federal antitrust lawsuit challenging Apple, which is the most valuable tech company in the world. If the lawsuit is filed, American regulators will have sued four of the biggest tech companies for monopolistic business practices in less than five years. The Justice Department is currently facing off against Google in two antitrust cases, focused on its search and ad tech businesses, while the Federal Trade Commission has sued Amazon and Meta for stifling competition. The Apple suit would likely be even more expansive than previous challenges to the company, attacking its powerful business model that draws together the iPhone with devices like the Apple Watch and services like Apple Pay to attract and keep consumers loyal to its products. Rivals have said that they have been denied access to key Apple features, like the Siri virtual assistant, prompting them to argue the practices are anticompetitive.

China

Huawei Teardown Shows 5nm Chip Made in Taiwan, Not China (bloomberg.com) 29

Huawei's newest laptop runs on a chip made by Taiwan Semiconductor Manufacturing Co., a teardown of the device showed, quashing talk of another Chinese technological breakthrough. From a report: The Qingyun L540 notebook contains a 5-nanometer chip made by the Taiwanese company in 2020, around the time US sanctions cut off Huawei's access to the chipmaker, research firm TechInsights found after dismantling the device for Bloomberg News. That counters speculation that Huawei's mainland Chinese chipmaking partner, Semiconductor Manufacturing International Corp., may have achieved a major leap in fabrication technique.

Huawei caused a stir in the US and China last August when it released a smartphone with a 7nm processor made by Shanghai-based SMIC. A teardown by the Canada-based research outfit for Bloomberg News showed the Mate 60 Pro's chip was only a few years behind the cutting edge, a feat that US trade curbs were meant to prevent. That revelation spurred celebration across the Chinese tech scene, and a debate in the US about the effectiveness of sanctions.

United States

FDA Issues First Approval for Mass Drug Imports To States From Canada (nytimes.com) 83

The Food and Drug Administration has allowed Florida to import millions of dollars worth of medications from Canada at far lower prices than in the United States, overriding fierce decades-long objections from the pharmaceutical industry. From a report: The approval, issued in a letter to Florida Friday, is a major policy shift for the United States, and supporters hope it will be a significant step forward in the long and largely unsuccessful effort to rein in drug prices. Individuals in the United States are allowed to buy directly from Canadian pharmacies, but states have long wanted to be able to purchase medicines in bulk for their Medicaid programs, government clinics and prisons from Canadian wholesalers.

Florida has estimated that it could save up to $150 million in its first year of the program, importing medicines that treat H.I.V., AIDS, diabetes, hepatitis C and psychiatric conditions. Other states have applied to the F.D.A. to set up similar programs. But significant hurdles remain. The pharmaceutical industry's major lobbying organization, the Pharmaceutical Research and Manufacturers of America, or PhRMA, which has sued over previous importation efforts, is expected to file suit to prevent the Florida plan from going into effect. Some drug manufacturers have agreements with Canadian wholesalers not to export their medicines, and the Canadian government has already taken steps to block the export of prescription drugs that are in short supply.

United States

Boeing Wants FAA To Exempt MAX 7 From Safety Rules To Get It in the Air (seattletimes.com) 83

Little noticed, days before the holiday break, Boeing petitioned the Federal Aviation Administration for an exemption from key safety standards for the 737 MAX 7 -- the still-uncertified smallest member of its newest jet family. Seattle Times: Since August, earlier models of the MAX currently flying passengers in the U.S. have had to limit use of the jet's engine anti-ice system after Boeing discovered a defect in the system with potentially catastrophic consequences. The flaw could cause the inlet at the front end of the pod surrounding the engine -- known as a nacelle -- to break and fall off.

In an August Airworthiness Directive, the FAA stated that debris from such a breakup could penetrate the fuselage, putting passengers seated at windows behind the wings in danger, and could damage the wing or tail of the plane, "which could result in loss of control of the airplane." Dennis Tajer, a spokesperson for the Allied Pilots Association, the union representing 15,000 American Airlines pilots, said the flaw in the engine anti-ice system has "given us great concern." He said the pilot procedure the FAA approved as an interim solution -- urging pilots to make sure to turn off the system when icing conditions dissipate to avoid overheating that within five minutes could seriously damage the structure of the nacelle -- is inadequate given the serious potential danger.

"You get our attention when you say people might get killed," Tajer said. "We're not interested in seeing exemptions and accommodations that depend on human memory. ... There's just got to be a better way." In its petition to the FAA, Boeing argues the breakup of the engine nacelle is "extremely improbable" and that an exemption will not reduce safety. "The 737 MAX has been in service since 2017 and has accumulated over 6.5 million flight hours. In that time, there have been no reported cases of parts departing aircraft due to overheating of the engine nacelle inlet structure," the filing states.

United States

Top China Diplomat Warns of Decoupling Risk (bloomberg.com) 63

China's top diplomat warned the US that decoupling would be "self defeating" as the country set out to implement a recent agreement made between their leaders. From a report: Foreign Minister Wang Yi, speaking on Friday at an event to mark the 45th anniversary of US-China diplomatic relations, cited a slew of initiatives that reflect improved ties including streamlined visas for US travelers, a counternarcotics working group to battle the flow of the synthetic fentanyl to the US, and the sending of pandas to the US by the end of the year. "Any decoupling attempt to stem the tide will only be counterproductive and self defeating," Wang said.

David Meale, deputy chief of mission at the U.S. Embassy in Beijing, joined Friday's event as charge d'affaires with Ambassador Nicholas Burns out of town. Tensions between China and the US started to ease after President Joe Biden and Chinese leader Xi Jinping met in November. The talks resulted in a resumption of high-level military-to-military ties, a promise to collaborate on the fentanyl problem and a commitment to boost interactions between people in the two countries.

Television

US Pay-TV Subscriber Base Eroding At Record Pace (lightreading.com) 104

According to MoffettNathanson, the U.S. pay-TV industry had its worst-ever third quarter after losing about 900,000 subscribers. "That poor result, the research firm added, left the total pay-TV industry shrinking at a record pace of -7.3%, widened from a year-ago decline of -5.9%," reports Light Reading. "It also left pay-TV penetration of occupied households (including vMVPDs) at just 54.8% -- a level last seen in 1989, five years before the debut of DirecTV." From the report: Drilling down on Q3 results, traditional pay-TV providers (cable, telco and satellite) shed 1.97 million subscribers, widened from a loss of 1.94 million in the year-ago quarter. Within that category, US cable lost 1.10 million video subs in Q3, versus a loss of -1.09 million in the year-ago period. Satellite operators (Dish Network and DirecTV) lost 667,000 subs in Q3, versus -567,000 in the year-ago quarter. Telco TV providers lost 198,000 video subs in the period, an improvement when compared to a year-ago loss of -250,000 subs.

vMVPDs, meanwhile, added 1.08 million in Q3, down from a year-ago gain of about 1.34 million. Despite those gains, vMVPDs recaptured only 21.7% of traditional pay-TV's subscriber losses in the period, according to MoffettNathanson. Meanwhile, YouTube TV continues to dominate the vMVPD category. MoffettNathanson estimates that YouTube TV added about 350,000 subs in Q3, extending its total to 7 million -- representing 40% of the vMVPD sector's 18 million subscriber total. "Based on our Q3 estimate, YouTube TV has now surpassed Dish Network [6.72 million satellite TV subs at the end of Q3] to become the country's fourth largest MVPD of any kind," Moffett noted. "At the current trajectory, YouTube TV should pass DirecTV for third place in less than a year."

Government

New Jersey Used COVID Relief Funds To Buy Banned Chinese Surveillance Cameras (404media.co) 25

A federal criminal complaint has revealed that state and local agencies in New Jersey bought millions of dollars worth of banned Chinese surveillance cameras. The cameras were purchased from a local company that rebranded the banned equipment made by Dahua Technology, a company that has been implicated in the surveillance of the Uyghur people in Xinjiang. According to 404 Media, "At least $15 million of the equipment was bought using federal COVID relief funds." From the report: The feds charged Tamer Zakhary, the CEO of the New Jersey-based surveillance company Packetalk, with three counts of wire fraud and a separate count of false statements for repeatedly lying to state and local agencies about the provenance of his company's surveillance cameras. Some of the cameras Packetalk sold to local agencies were Dahua cameras that had the Dahua logo removed and the colors of the camera changed, according to the criminal complaint.

Dahua Technology is the second largest surveillance camera company in the world. In 2019, the U.S. government banned the purchase of Dahua cameras using federal funds because their cameras have "been implicated in human rights violations and abuses in the implementation of China's campaign of repression, mass arbitrary detention, and high-technology surveillance against Uyghurs, Kazakhs, and other members of Muslim minority groups in Xingjiang." The FCC later said that Dahua cameras "pose an unacceptable risk to U.S. national security." Dahua is not named in the federal complaint, but [404 Media's Jason Koebler] was able to cross-reference details in the complaint with Dahua and was able to identify specific cameras sold by Packetalk to Dahua's product.

According to the FBI, Zakhary sold millions of dollars of surveillance equipment, including rebranded Dahua cameras, to agencies all over New Jersey despite knowing that the cameras were illegal to sell to public agencies. Zakhary also specifically helped two specific agencies in New Jersey (called "Victim Agency-1" and "Victim Agency-2" in the complaint) justify their purchases using federal COVID relief money from the CARES Act, according to the criminal complaint. The feds allege, essentially, that Zakhary tricked local agencies into buying banned cameras using COVID funds: "Zakhary fraudulently misrepresented to the Public Safety Customers that [Packetalk's] products were compliant with Section 889 of the John S. McCain National Defense Authorization Act for 2019 [which banned Dahua cameras], when, in fact, they were not," the complaint reads. "As a result of Zakhary's fraudulent misrepresentations, the Public Safety Customers purchased at least $35 million in surveillance cameras and equipment from [Packetalk], over $15 million of which was federal funds and grants."

Businesses

Tax Credits To Intuit Better Spent To Fund a Free Alternative To TurboTax, Lawmakers Say (bloomberg.com) 112

Intuit is being questioned by US lawmakers who say federal tax credits the company received could have been better spent to build a free government alternative to Intuit's popular online tax preparation software, TurboTax. From a report: "For years, Intuit's corporate lobbyists have argued that the federal government should not set up a program for Americans to file their taxes online and for free because it would be too costly for taxpayers," the lawmakers, including Senators Elizabeth Warren and Bernie Sanders, wrote in a letter to the company. "Your company's disclosure reveals that Intuit's research tax break from 2022 alone could have been enough to fund a year of a free e-File program for millions of Americans."

The lawmakers asked Intuit to provide details on its research expenses dating to 2018. Warren, a Massachusetts Democrat, and Sanders, an Independent from Vermont, were joined on the letter by Senator Richard Blumenthal, a Connecticut Democrat, and Representative Katie Porter, a Democrat from California. The Internal Revenue Service, in a report to Congress last year, estimated it would cost $64 million to $249 million annually for the agency to run a free-filing program. In the fiscal year ending in July 2023, Mountain View, California-based Intuit received $106 million in federal research and experimentation credits, which amounted to about 4% of its total R&D expenses, according to a regulatory filing.

United States

North Carolina and Montana Just Lost Access To Pornhub (404media.co) 302

Montana and North Carolina have joined a growing list of states that now require identification to view porn, or are blocked from viewing it altogether, as new age verification laws went into effect on January 1. From a report: A year ago, Louisiana paved the way for a wave of age verification laws that target porn sites; eight states have since passed copycat age verification laws of their own. Montana's SB 544 and North Carolina's HB 8 are nearly identical to Louisiana's and other states' laws. The laws' text make unsubstantiated claims about the addictive potential of pornography and its apparent harms to viewers' health. North Carolina's law was passed as part of unrelated legislation that adds a computer science course to high school graduation requirements. Rather than try to make its users jump through hoops to view its content, Pornhub's parent company has blocked viewers in Montana and North Carolina altogether, as it has in other states with similar legislation.
United States

New Spin on a Revolving Door: Pentagon Officials Turned Venture Capitalists (nytimes.com) 25

Retired officers and departing defense officials are flocking to investment firms that are pushing the government to provide more money to defense-technology startups. The New York Times: When Defense Secretary Lloyd J. Austin III and other top officials assembled for an event this month at the Ronald Reagan Presidential Library, they walked into a lesson in how the high-stakes world of Pentagon lobbying is being altered by the rise of defense technology startups. Inside, at this elite gathering near Los Angeles of senior leaders from government and the arms industry, was a rapidly growing group of participants: former Pentagon officials and military officers who have joined venture capital firms and are trying to use their connections in Washington to cash in on the potential to sell a new generation of weapons.

They represent a new path through the revolving door that has always connected the Defense Department and the military contracting business. Retiring generals and departing top Pentagon officials once migrated regularly to the big established weapons makers like Lockheed Martin and Boeing. Now they are increasingly flocking to venture capital firms that have collectively pumped billions of dollars into Silicon Valley-style startups offering the Pentagon new war-fighting tools like autonomous killer drones, hypersonic jets and space surveillance equipment.

This new route to the private sector is one indicator of the ways in which the United States is trying to become more agile in harnessing technological advances to maintain military superiority over China and other rivals. But the close ties between venture capital firms and Defense Department decision makers have also put a new twist on long-running questions about industry access and influence at a time when the Pentagon is under pressure to rethink how it allocates its huge procurement budget.

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