Discord is turning its chat service into a game platform and app store – Protocol
The company is launching a new subscription tier, in-app gaming, and an app directory.
Key to Discord’s business model is its Nitro subscription. Starting Oct. 20, the company will sell a new $2.99 Basic plan.
Discord announced a suite of new features and an additional, cheaper subscription tier to its Nitro service on Monday designed to position its chat platform as not just a place to talk with your friends while you play video games, but also a place to play those games with friends and find new software.
Discord, started in 2015, has grown to more than 150 million monthly active users predominantly by being a free-to-use multiplatform chat application not unlike Slack. But where Discord thrives is less in work contexts and more for seamless voice communication and in allowing large communities to organize around their interests, with a large focus on gaming.
To make money, Discord has begun to rely on its Nitro subscription platform, which costs $10 a month or $100 a year and offers basic feature upgrades like more-customizable profiles and server upgrades like higher-quality uploads. (Nitro Classic, a cheaper $4.99 option, offers fewer perks; Discord says customers on Classic can keep the plan but it will no longer be allowing new sign ups.)
Beginning Oct. 20, Discord will start offering a new, $2.99 per month plan called Nitro Basic designed to make the service much more attractive to the scores of users who so far pay nothing to use Discord. The Basic offering allows for largely cosmetic upgrades, including animated emoji and special profile badges.
But to lure customers who might be considering a full Nitro subscription, Discord is now planning to sweeten the deal with the launch of a key new feature: in-app gaming. The hope that more players will come to think of Discord as a place to do stuff with friends instead of just chat. Discord is calling its new gaming initiative Activities, and these will start with a series of nine minigames that work well within the context of Discord’s voice chat capabilities.
Discord’s new Activities tab will let users play minigames with one another inside of the app, starting with more obvious use cases like poker and chess. Image: Discord
For example, Discord will now offer a Watch Together app for watching YouTube together with your friends, a poker app for organizing group card games, and chess. Only one user will need a standard Nitro plan to invite their friends to play these games. (Nitro Basic users do not get access to activities save Watch Together and Putt Party, which are also available to free Discord users.)
Discord is also launching a new app directory, which will serve to make the more than 500,000 apps on the platform more accessible. Apps on Discord function less like standard desktop applications and more like server bots you might be used to on Slack or elsewhere. Discord says it plans to start offering premium app subscriptions to developers who want to monetize this software in the future, and it’s launching a $5 million fund for new projects built for the Discord platform.
Discord is hoping its appeal to communities and app makers will help it generate enough subscription revenue to sustain the platform as a free-to-use service, while also turning Discord into a place developers might one day consider a potential revenue stream.
“I love that Discord is built in a way where communities get to customize it and make it their own,” said Justin Beckwith, the company’s director of engineering, in an interview with Protocol last week. “We’ve had this huge developer ecosystem that’s been thriving for years, and it’s exciting to give it a little bit more shape.”
Correction: A previous version of this post incorrectly implied Discord’s new Activities minigames are available to Discord Nitro Basic subscribers. That is untrue; only standard Nitro subscribers can access minigames.
Nick Statt is Protocol’s video game reporter. Prior to joining Protocol, he was news editor at The Verge covering the gaming industry, mobile apps and antitrust out of San Francisco, in addition to managing coverage of Silicon Valley tech giants and startups. He now resides in Rochester, New York, home of the garbage plate and, completely coincidentally, the World Video Game Hall of Fame. He can be reached at [email protected]
Mastercard said Monday that it will help banks offer a way for customers to buy and sell crypto, highlighting the push for infrastructure to enable traditional financial institutions to jump into the growing market.
Mastercard said its new Crypto Source program will make it possible for bank partners to offer crypto services to customers through a partnership with Paxos, the crypto investment services company. Mastercard will serve as the bridge between banks while Paxos, a regulated crypto bank, will provide “crypto-asset trading and custody services on behalf of the banks,” the company said.
The move creates a path for banks that are eager to enter the crypto market but face regulatory constraints related to holding digital assets for customers.
The move shows Mastercard’s focus on services “that will help bring users safely and securely into the crypto ecosystem,” Ajay Bhalla, Mastercard’s president of cyber and intelligence, said in a statement.
The Mastercard-Paxos partnership “will give financial institutions the fastest and most trusted way to offer safe, reliable crypto access for their consumers globally,” Walter Hessert, Paxos’ head of strategy, said in a statement.
The partnership is part of a growing trend in the financial services industry of big institutions turning to companies that offer tools and services for crypto trading for their clients.
One example is EDX Markets, a new exchange being developed by major Wall Street companies including Citadel Securities, Charles Schwab, and Fidelity Digital Assets. EDXM will also use Paxos’ infrastructure to run the exchange.
Climate tech is an investment bright spot, even as venture capital deals decline.
Startups in the climate and energy space raked in a significant share of venture capital funding in the third quarter, according to an analysis by CB Insights. Climate tech companies claimed five of the 10 biggest deals done in the third quarter, including the top two spots.
Swedish battery manufacturer Northvolt raised $1.1 billion in convertible notes from a collection of European investors, putting it at the top of the equity deal list. That influx of cash will be used to expand the company’s European factories as it scales its operations. The company’s largest shareholder so far is the automaker Volkswagen, which is one of a growing number of automakers investing in battery companies as electric vehicle sales pick up steam.
Fleet-focused EV charging company TeraWatt Infrastructure raked in $1 billion, putting it second on CB Insights’ list. Advanced nuclear startup TerraPower came in fourth, securing $750 million in funding in the third quarter. Investments in Black Sesame Technologies ($500 million) and EnergyX ($450 million) rounded out the quarter’s top climate tech deals. The Chinese chipmaker Black Sesame’s offerings include vehicle-to-everything charging technology, and EnergyX is a lithium extraction company that is angling to go public by 2024.
This boon for climate tech came as overall investments slump. The quarter saw $74.5 billion in venture capital funding, a total that’s down by 34% compared with the year’s second quarter. Silicon Valley tech startups specifically received 36% less funding. A separate report from Pitchbook found that venture-backed exits are set to hit a five-year low in 2022, which could further slow investments.
But climate startups continue to attract capital, particularly certain types of technology. Companies that could speed up the EV transition were big winners in the third quarter, but a Pitchbook analysis also shows that carbon capture and removal is going strong this year. The sector saw $882.2 million in investments across 11 deals in the second quarter of 2022.
Policies and government funding that could help these sectors grow, notably provisions in the Inflation Reduction Act, make EVs and carbon removal more of a sure bet. Tech companies have also committed nearly $1 billion to purchasing carbon removal services in an attempt to stimulate the nascent market.
A number of smaller VC firms are also popping up to make niche climate investments, whether into decarbonizing everyday goods or fighting wildfires. The surge in interest comes as the urgency to address the climate crisis grows.
Netflix is making it easier for people to disentangle their personal viewing data: The streaming service is rolling out a new feature worldwide this week that will let users transfer all of their personalized viewing data to a new account.
Netflix is billing the feature as a way for people to keep their viewing data and personalized viewing recommendations even if they leave the original account holder’s household. “People move. Families grow. Relationships end. But throughout these life changes, your Netflix experience should stay the same,” wrote Netflix product manager Timi Kosztin in a blog post Monday.
The feature is being introduced at a time when Netflix would very much like some of its members to spin out their profiles into new accounts. The streaming service has seen its growth stall and even decline amid strong competition from services like HBO Max and Disney+.
Netflix is blaming some of its woes on subscribers who share accounts with friends and relatives; the company estimates that around 100 million households participate in account sharing. Netflix plans to crack down on this in 2023 and began testing a few ways of doing so in Latin America earlier this year.
As part of those trials, Netflix tried giving people in Chile, Costa Rica, and Peru a way to take their profile data and transfer it to a new account. That was a hit with audiences, according to a spokesperson, resulting in Netflix now making it available globally. Until now, creators of new accounts have lost all access to their personalized data from previously shared accounts, including viewing history and suggestions.
Beyond Netflix’s challenges with account sharing, the new feature points to a growing importance of profiles and identity across the streaming landscape. Netflix was the first streaming service to launch individual profiles for family members almost a decade ago. Since then, most streaming services have adopted profile-based personalization.
Smart TV platforms like Google TV and Amazon’s Fire TV have gotten into the game as well, offering their users systemwide profiles. Netflix’s launch of profile portability is another first for the industry, and could lead to others building out their own profile-based streaming personalization.
Note: Protocol is owned by Axel Springer, whose CEO, Mathias Döpfner, is on the board of Netflix.
Tech recruiting is a tough business right now. Layoffs in the industry have hit recruiting and HR teams harder than any other, and laid-off recruiters say they’re struggling to find full-time work in tech.
Tech companies that have conducted layoffs this year eliminated around half of their HR and recruiting staffers, according to a new analysis from mock-interview site interviewing.io.
Some recruiters held onto their jobs for months — even after hiring slowed to a trickle. Tim Nelson, who was laid off after six months at DocuSign along with the rest of the company’s sourcing team, said he was “twiddling [his] thumbs for four months” before ultimately being let go.
Many laid-off recruiters are now struggling to find full-time work in the industry. For some, the best option may be to take a sizable pay cut to go to non-tech companies.
Most startups aren’t ready for the pay transparency laws going into effect in the coming months, according to compensation experts. The first step for many will be setting up internal pay bands — a task that isn’t at the top of most startup leaders’ to-do lists.
A big part of standardizing pay: employee communication. Heather Sullivan, who took over as Astranis Space Technologies’ first permanent chief people officer in July, is only now setting up pay ranges at the company, which has around 270 employees.
Standardizing pay as early as possible can help companies know how they measure up to competitors and prevent pay inequity from forming, Knopp said. Pay disparities result from inconsistent practices.
Major social media services played a crucial role in the spread of falsehoods and disinformation about the 2020 election. Now a coalition of civil rights groups, good-government advocates, and liberal watchdogs say that Instagram, YouTube, TikTok, and others have more they can do in the next few weeks to avoid a repeat.
Even as the platforms try to stop new electoral disinformation and misinformation, they should also ensure they’re enforcing policies prohibiting lies claiming the 2020 election was stolen, 11 groups led by the Leadership Conference on Civil and Human Rights said in a letter to the companies.
With less than a month to go before the midterm election on Nov. 8, the letter also urges companies to clamp down on false statements targeted to non-English speakers, an area where platforms have typically fared poorly due to low investment. The coalition also says the firms should implement “friction to reduce the distribution of content containing electoral disinformation.” That friction could come from changes to “user interfaces, algorithms, and product design to proactively reduce mis/disinformation,” and it might “include modifications to demote or downrank this content and limit users’ ability to engage with it.”
The groups behind the letter — including Common Cause and the NAACP Legal Defense and Educational Fund — also say the platforms should be enforcing their policies on disinformation about political races and voting full-time, not just near elections.
The message comes as more than 100 Republican candidates on ballots this fall have declared their support for the “Big Lie” — a series of demonstrably false claims that President Joe Biden actually lost to former President Donald Trump — as well as unfounded conspiracy theories that U.S. elections are riddled with fraud to benefit Democrats. Despite the baseless attacks on the fundamentals of American democracy, most voters will have the option of an election denier on their ballots in November’s elections.
Many of those lies spread on the social media sites that are the target of Thursday’s letter, as well as through niche conservative services and traditional media. Election disinformation has also become an international concern.
Yet the bigger companies have announced election-protection measures that largely double down on their approach from 2020. Often the sites directed users to authoritative information even as the false claims continued to go viral, culminating in the violent attack on the Capitol.
Apple will team up with Goldman Sachs on a savings account for its cardholders, the latest expansion from the tech giant into financial services.
Apple said Thursday that holders of the Apple Card will soon be able to open a “high-yield” savings account through Goldman that will connect to Apple’s mobile wallet. The new savings account would include an option to automatically deposit Daily Cash rewards — Apple’s term for the cash back it offers on purchases.
The Apple Card is already offered through a partnership with Goldman Sachs. In June, Apple revealed a plan to offer a form of “buy now, pay later” financing through its wallet. Notably, the company reportedly intends to lend directly to Apple Pay Later users through a subsidiary rather than through a banking partner.
The Apple Pay Later product is still yet to launch. Bloomberg reported that technical challenges have held it up. But Apple’s growing push into financial services has also caught the eye of regulators. Consumer Financial Protection Bureau director Rohit Chopra promised a “close look” at the company’s plan in an interview with the Financial Times earlier this year.
Apple’s announcement did not say when the savings account will be available, and didn’t include an estimate for the interest rate it will offer. Goldman’s Marcus savings account offers 2.15% APY.
Correction: An earlier version of this story misstated Apple’s term for its cash back program. This story was updated on Oct. 13, 2022.
Netflix is launching its new ad-supported tier in 12 countries next month: The “basic with ads” plan will become available in Australia, Brazil, Canada, France, Germany, Italy, Japan, Korea, Mexico, the U.K., and the U.S. in the first week of November. U.S. customers will be able to sign up on Nov. 3; the rollout in Spain comes a week later.
Prices for the new plan will vary from country to country, and range from 4.99 euros ($4.88) in Germany to 5.99 euros ($5.86) in France. Subscribers in Mexico will have to pay 99 pesos ($4.95).
Subscribers of the new plan will have to endure four to five minutes of ads per hour of programming on average. Each ad will be 15 or 30 seconds long; Netflix executives said Thursday that the company would not accept any political advertising.
The new plan will include most but not all of Netflix’s catalog at launch. Some movies and TV shows will be unavailable due to licensing restrictions. Netflix COO Greg Peters told journalists Thursday that these holdouts were different from market to market, and that the missing titles accounted anywhere from 5% to 10% of viewing on ad-free plans. “We will continue to work on reducing that number over time,” Peters said.
In addition to its new “basic with ads” plan, Netflix will continue to offer three ad-free tiers, priced $9.99, $15.49, and $19.99. In conjunction with the new plan’s introduction, Netflix is also upping the resolution of both of its basic plans from 480p to 720p. However, anyone who wants to watch Netflix programming in 4K HDR still has to subscribe to the company’s most expensive plan.
Asked whether the new plan could lead to cannibalization, with existing customers downgrading from a more expensive plan, Peters said that the company wasn’t too concerned with the issue. “We want to offer consumers choice,” Peters said, adding that the company modeled the pricing to be “neutral to positive to the comparable [ad-free] plan.”
Note: Protocol is owned by Axel Springer, whose CEO, Mathias Döpfner, is on the board of Netflix.
Correction: A prior version of this article stated that Netflix’s ad-supported plan would be missing 5% to 10% of its catalog due to licensing restrictions. The story was updated on Oct. 14, 2022, to reflect that Netflix COO Greg Peters actually said that the missing titles would impact 5% to 10% of overall viewing.
Salesforce recently laid off a number of workers and implemented a new hiring freeze through January 2023, Protocol has learned.
The full extent of the head count reduction couldn’t be determined, though sources said it appeared to be at least 90 employees and seemed to largely impact contract workers as opposed to full-time employees. That’s a small fragment of Salesforce’s over 73,000 workers, but large tech companies have been loathe to undergo layoffs, most likely to avoid igniting fear among investors that their growth prospects have changed.
Salesforce declined to comment on how many employees were affected. While Salesforce implemented a hiring freeze in May, it was rescinded for roughly a month before the new freeze was put in place this week, according to sources.
“While limited hiring continues, most departments have reached their hiring goals for the fiscal year,” a company spokesperson said in an emailed statement. The company later added “as a result, we have ended contracts with some temporary recruiting contractors.”
Salesforce famously borrows its corporate culture from the Hawaiian tradition of the “Ohana,” which according to custom refers to an extended family not necessarily connected by blood, but by shared experience and community. A Salesforce representative declined to comment on the record whether the company still considers contractors part of its “Ohana.”
Salesforce last laid off employees in August 2020, right after announcing, at the time, record quarterly revenue. The latest round of layoffs comes as Salesforce faces questions over its future growth potential. The company also recently broadcasted to investors a goal of hitting 25% operating margin by 2026.
This story was updated with additional information from Salesforce.
Google and Coinbase announced a deal Tuesday to help each other out: Google wants to get into crypto, while Coinbase wants more large institutional customers.
As part of the deal, Google Cloud will start using Coinbase to accept crypto payments from some customers, while Coinbase will start using Google’s cloud services for its blockchain infrastructure.
More traditional companies are moving into crypto, which is fueling competition among a number of crypto infrastructure providers seeking to land clients.
Google’s crypto moves. While Alphabet hasn’t been as active as others, it now looks to be jumping in. As part of its new partnership, Google Cloud is piloting crypto payments using Coinbase with select customers and plans to open up to more customers in 2023.
Coinbase, meanwhile, will use Google Cloud to store and manage blockchain data. Coinbase — and crypto more generally — is not yet a massive client base for Google Cloud, but the move to accepting crypto payments is meant to make Google Cloud more attractive to Web3 and crypto companies. Google clearly believes it represents a growth opportunity.
Last month, Richard Widmann, Google’s head of strategy, Web3, and cloud, called Google’s cloud offering a foundational piece of crypto: “The Cloud provision — we’re a layer zero,” he told Decrypt.
Coinbase is also moving some data applications from AWS to Google Cloud — though it’s not clear how much is being switched over.
In addition, Google’s BigQuery crypto public data sets will be powered by Coinbase’s Node product for developers to build crypto applications.
This is a big step for Coinbase, as it seeks to diversify its business.
Signing up Google fits into Coinbase’s goal of working with more institutional customers and dropping its reliance on crypto trading for revenue — an aspiration that’s taken on more urgency since crypto markets crashed earlier this year, denting Coinbase’s revenue and stock price. Coinbase in August announced a deal with BlackRock to give access to crypto trading, custody, and prime broker services for institutional investors.
The competition to sign up large clients for crypto products is intense, from a range of crypto custody and technology providers. Coinbase’s answer to the competition is to offer a broad range of services, including custody, payments, staking, and prime brokerage services. This along with its existing crypto exchange is meant to be a one-stop shop for large customers.
At the same time, Coinbase has been building out developer-friendly tools to make building crypto products easier, such as its Node product for self-service API connections to the Ethereum blockchain. In fact, like Google Cloud, Coinbase has its own software-as-a-service offering called Coinbase Cloud, though it targets crypto developers and isn’t meant to compete with Google.
A version of this story appeared in Protocol’s Fintech newsletter. Sign up here to get it in your inbox each morning.
Roku has teamed up with Wyze Labs to sell its own line of smart home products, including security cameras, smart plugs, and smart lights. The company’s smart home products will be available at Walmart stores starting next week; it’ll also be available on Roku’s and Walmart’s websites.
Roku’s smart home devices include a floodlight camera, indoor and outdoor cameras, a video doorbell, smart bulbs, smart light strips, and indoor and outdoor smart plugs. People will be able to access their camera feeds on Roku TVs and streaming devices, the company said.
Much like in the streaming space, Roku aims to compete with other smart home devices on price, with some of the cameras selling for around $27. The company apparently plans to make up for some of those low margins by selling related services, including a cloud storage service for its security cameras.
The impending launch of Roku’s smart home devices was first reported by Zatznotfunny.com this weekend. Protocol was first to report last year that Roku was looking to expand into the home. At the time, the company was looking both at making its own devices, as well as partnering with third-party manufacturers.
Roku’s spokesperson declined to comment on the financial relationship between Wyze Labs and Roku.
Microsoft’s latest platform for pushing Xbox gaming is an unconventional one: Meta’s Quest 2 VR headset.
Using its cloud gaming technology, Microsoft says it will let VR users stream Xbox games to a virtual screen inside of a virtual environment rendered by the Quest, similar to how you might watch a livestream, Netflix, or other 2D content in VR. The integration doesn’t have a planned release date yet, but it will be available to subscribers of Microsoft’s Xbox Game Pass Ultimate subscription, which costs $15 a month and includes access to Xbox Cloud Gaming.
The partnership between the two tech giants was announced Tuesday at the Meta Connect developer conference keynote, where CEO Mark Zuckerberg detailed the company’s new $1,500 Quest Pro headset and scores of other product updates, new features, and far-out plans related to its metaverse ambitions. It extends beyond Game Pass and cloud gaming, too, and also includes integrations for Microsoft Teams, Windows 365, and Office apps on the Quest platform.
Additionally, Microsoft and Meta are making some of their software platforms and products interoperable. For instance, the two companies say you’ll be able to launch Teams meetings from inside the enterprise-focused platform Horizon Workrooms, Meta’s in-beta platform for conducting work meetings in VR. You’ll also be able to use your Meta avatars within Teams on Quest devices.
“We think that this cross-device, cross-screen experience will be the foundation of the virtual office of the future,” Zuckerberg said during the keynote.
Meta has taken the wraps off its next VR headset. The Quest Pro, which was previously known as Project Cambria, promises higher fidelity, mixed reality, and face and eye tracking for $1,500, a significant premium over its past consumer-focused headsets. The device will be available in the U.S. and 21 other countries later this month, company executives announced at the Meta Connect developer conference Tuesday.
The headset is equipped with RGB cameras for mixed-reality experiences that combine VR elements with a color video pass-through view of the real world. The Quest Pro also uses more advanced optics, including pancake lenses, which offer higher visual fidelity than the company’s Quest 2 device.
Face- and eye-tracking sensors make it possible to more realistically animate the facial expressions of people wearing the headset, and a new set of controllers with built-in sensors and more advanced tactile feedback should make for a better gameplay experience. The Quest Pro also features a more open design meant to allow people to multitask and glance at their desk. Optional add-ons to block out external light will be sold both by Meta as well as third-party vendors, according to company spokespeople.
The Quest Pro is being positioned by Meta as a first in a line of new high-end devices that will be released alongside the consumer Quest VR headsets. Over time, some of the features that debuted in the Quest Pro may find their way to the consumer line, while others will likely be exclusive to more expensive devices for some time.
Mark Zuckerberg told Protocol earlier this year that the Quest Pro was built for work use cases, and the company announced partnerships with Adobe, Autodesk, and Microsoft to bring support for work-related tools to the headset.
However, Meta CTO Andrew Bosworth told Protocol last week that the Quest Pro is more geared toward prosumers than the enterprise; Meta is only selling the device through retail channels for the time being, but the company announced plans to launch new business subscription plans next year to target.
Meta executives also used Tuesday’s event to highlight some of the success the company has seen in VR thus far. This included the fact that one in three apps distributed via Quest’s official app store now generates at least seven-figure revenues, while 33 apps and games have grossed over $10 million in revenue.
In a sign that Meta wants to keep investing in content itself as well, the company announced Tuesday that it had acquired three additional VR development studios. The company is currently in a legal battle with the FTC, which wants to prevent Meta’s proposed acquisition of VR fitness startup Within Unlimited.
Meta is adding three new virtual reality game developers to its growing Oculus Studios division, the in-house creative team responsible for courting developers to build new software for VR devices. The acquisitions were announced as part of the company’s keynote during the Meta Connect conference.
Joining Meta’s internal development roster is Iron Man VR developer Camouflaj, Wilson’s Heart developer Twisted Pixel, and Armature Studio, the team behind the successful port of Capcom’s Resident Evil 4 for the Meta Quest 2. (According to UploadVR, an FTC complaint earlier this year disclosed the Twisted Pixel acquisition, but Meta had not formally announced it until Tuesday.)
While Meta spent the early years after acquiring Oculus paying outside developers to develop games for its headsets, the company has over the last few years begun acquiring more of these studios and giving the teams resources to build new games. The spending spree started in 2019 when Meta acquired Beat Saber developer Beat Games.
Meta followed up that acquisition with Asgard’s Wrath developer Sanzaru Games in 2020, Lone Echo developer Ready at Dawn that same year, Onward developer Downpour Interactive in 2021, Population: One developer BigBox VR in 2021, and Supernatural developer Within Unlimited last fall. The aggressive acquisition strategy over the course of just two years led critics to question whether Meta was having an anticompetitive effect on the VR software market given that it also enjoys a roughly 90% market share of the VR headset market.
In July, the FTC sued Meta to stop its acquisition of Within, alleging the deal would limit competition and give Meta a monopoly on VR fitness apps. (Supernatural is marketed as a gamified VR fitness app, while many fans of Beat Saber also use the game as a cardio exercise.) The FTC last week slimmed down its complaint by removing some of its allegations, but the case is ongoing.
In addition to its new studio acquisitions, Meta also announced that Camouflaj’s Iron Man VR, which was originally released for Sony’s competing VR platform in 2020, would be arriving on the Quest 2 on Nov. 3. Popular indie game Among Us is also getting a VR variant releasing on the Quest 2 on Nov. 10. According to Meta, consumers have spent more than $1.5 billion on the Quest store to date.
The Department of Labor on Tuesday proposed a rule that would classify more gig workers as employees, not independent contractors. The rule offers hope for labor activists seeking employee status, and would be a blow to the gig-work model companies such as Uber and Lyft have relied on.
“The Department believes this proposal will help protect workers from misclassification while at the same time recognizing that independent contractors serve an important role in our economy and providing a consistent approach for those businesses that engage (or wish to engage) independent contractors,” the document reads.
The proposed rule offers a test to check whether workers are employees or contractors, lowering the bar for employee classification. It would check factors such as how much control the employer has over the worker, whether the worker has opportunities to increase their earnings, and whether the work is an integral part of the employer’s business. Companies are often required to provide benefits such as overtime pay or health insurance to employees but not independent contractors.
“While there is a lot of uncertainty around how federal and States will handle this latest proposal, its a clear blow to the gig economy and a near-term concern for the likes of Uber and Lyft,” Wedbush analyst Daniel Ives wrote in a note to investors.
Uber, Lyft, DoorDash, Instacart, and other gig economy companies have spent millions in the political fight to continue classifying gig workers as contractors. They spent more than $200 million campaigning to pass Proposition 22, which let the companies retain contractor status for their workers in California.
As the U.S. government scrambles to pull the semiconductor rug out from under China’s AI ecosystem, some AI researchers in the country are shrugging it off.
One reason: AI accelerators.
“Nvidia will lose a lot of [market share] in their high-end GPU graphic cards, but a lot of the startups in China making those AI acceleration cards will get orders,” according to an AI researcher and professor at a prestigious scientific university in Beijing who I spoke with via video chat this week. (The researcher asked not to be named for fear of political retribution.)
In China, where AI engineers and other developers are accustomed to technical workarounds to circumvent censors and other blockades, there may be some wiggle room to counteract U.S. export controls by building AI accelerator cards intended for more specific tasks, the researcher said.
Nvidia’s strengths have been in “very general-purpose GPUs that can handle [many] types of computations, like for gaming and computing.”
But building accelerators is not so difficult, the researcher said. “Just making accelerating cards is a lot easier because you just need to handle very few specific types of computations. So when the U.S. government shut Nvidia out of China, it actually [benefited] those startups in China.”
And as giants in China like Huawei open new chip fabs there, people familiar with the nuts and bolts of hardware for AI say there’s still lots of room for innovation in AI accelerators.
A version of this story first appeared in the Protocol Enterprise newsletter: sign up here.
Ready to party like it’s 2019? Tech industry holiday parties are back like they haven’t been since before the pandemic, with some companies bringing in ice skating rinks, juggling lessons, and big-name entertainers.
As companies tighten their belts, this year’s parties won’t be exactly what they were in the Before Times — even Sundar Pichai warned Googlers to “try not to go over the top” this year — but some teams are still going all out.
This year’s biggest tech company holiday parties will be half the size that they were before the pandemic, according to Non Plus Ultra, the venue and events company that hosted Meta’s lavish 2019 Game of Thrones-themed year-end bash. (This year, Meta’s holiday parties will “likely happen on a team by team basis depending on office/site/location,” spokesperson Tracy Clayton told me.)
Salesloft, a 915-person sales software maker, is spending “well over seven figures” on its three holiday parties, which will be the company’s first IRL year-end celebrations since before the pandemic, according to VP of people Katie Cox Branham.
Companies this year are split between in-person bashes and taking a more virtual approach with mailed gifts, according to Phoenix Anna Porcelli, VP of sales at Convene.
Then there are the companies that won’t be doing much at all. Deque Systems, a digital accessibility company, hasn’t had a virtual or IRL holiday party in a decade, according to Glenda Sims, Deque’s chief information accessibility officer.
Affirm is testing a bonus rewards program for its “buy now, pay later” product, Fast Company confirmed, addressing a major gap between the short-term payment plans and conventional credit cards. CEO Max Levchin first teased the idea in the company’s fourth-quarter earnings call in August.
“One of the key preferences driving features of modern consumer payments is rewards,” Levchin said, according to a Seeking Alpha transcript. “It is one of the most common theoretical objections to BNPL versus credit cards. We can stop the debate.”
Though “buy now, pay later” companies are hesitant to liken themselves directly to credit cards, they are ostensibly the sector’s most significant emerging competitor. Companies in the space began launching card products in an attempt to be customers’ first choice at checkout, whether that’s online or in person. Affirm’s card, Debit+, launched in 2021 and allows customers to split purchases over $100 into installment payments. Affirm also allows customers to use it similarly to a debit card and pay for products with one lump sum deducted from a checking account.
Now the company is justifying the “+” in “Debit+” by adding more bonus features. The company’s beta rewards structure will give customers one point for every dollar paid, though the company told Fast Company that may change as they continue to test the feature. Customers will be able to cash in on points the next time they take out one of Affirm’s loans and receive a discount.
“Buy now, pay later” companies’ success in 2021 was built largely on their traction with younger consumers, who are less likely to have a credit card than older cohorts. Surveys have shown Gen Z and younger Millennials to be distinctly wary of accumulating credit card debt, in some cases leading to sparser credit histories than generations prior. This means they’re not only behaviorally averse to credit, but also often struggle to qualify for credit products when they apply.
Yet surveys have also shown that this generation of users still want the perks that come with credit. Because of this, Fitch Ratings analysts suggested that a segment of the demographic actually use the cards to pay off their “buy now, pay later” loans. Rolling out bonus features is a play at solidifying their loyalty and warding off competition with other credit products.
While Affirm’s bonus structure is unique among major pay-later companies, Afterpay has a program that rewards users for on-time payments. Klarna also has a similar program that also rewards users for spending with BNPL, but applies to any purchase tracked through the app rather than only purchases made with the company’s card. Several smaller BNPL companies like Perpay also have rewards programs that provide incentives for spending with their products.
Correction: This story was updated on Oct. 7, 2022, to clarify the launch date for Debit+.
President Joe Biden on Friday will sign an order to implement the details of an agreement with the EU, including new privacy protections for the bloc’s citizens that authorities hope will finally regularize data flows between the two continents.
The new measures, which include a set of two binding appeals for Europeans who believe their data has been improperly collected by the U.S. intelligence community, could be the crucial step necessary to replace Privacy Shield — a prior attempt to protect the legal status of information that companies move across the Atlantic. The new program is bound to face judicial scrutiny, however.
European courts struck down the Privacy Shield framework in 2020, causing a scramble as firms tried to keep trillions of dollars in digital commerce flowing while having fewer clear legal foundations for the data flows. EU lawmakers have often wanted to protect those huge volumes of business, and many in the bloc look skeptically both at mass U.S. government surveillance and the lack of national data protection laws.
Those concerns prompted the downfall of Privacy Shield as well as an earlier approach in 2015 that Privacy Shield was designed to replace. Max Schrems, the Austrian privacy campaigner behind both cases, scoffed at the new approach the U.S. and EU announced in March they had agreed to, and indicated he would again challenge any EU move that blesses data flows under the new terms.
Friday’s order will give Europeans the ability to appeal to a civil liberties official within the Office of the Director of National Intelligence, and then to a new “court” set up by the attorney general and staffed by outside experts who have protections against removal.
While Privacy Shield also allowed appeals to an official within the State Department, administration officials who briefed the media on condition of anonymity said they hope the new approach would be seen as providing both more independence and more authority over the intelligence community.
The order also purports to require new safeguards in the U.S. intelligence community’s vast surveillance apparatus, which has often pushed the boundaries of the law with help from tech companies while facing little accountability.
David Hatfield has stepped down as co-CEO of cloud security vendor Lacework but will remain on the company’s board of directors, Protocol has learned.
The change is effective immediately, said Jay Parikh, who had been Lacework’s second co-CEO and was previously Facebook’s vice president of engineering. With the change, Parikh is now the sole chief executive of the privately held company, a prominent up-and-coming player in cloud security that last year achieved a valuation of $8.3 billion.
Lacework planned to inform employees of the change on Tuesday. Hatfield, who previously served as president at Pure Storage, leaves Lacework’s executive leadership a few months shy of his second year with the company.
As part of the co-CEO model, Hatfield, who goes by the nickname “Hat,” focused on business operations and expansion at Lacework, which has raised $1.85 billion in funding. Hatfield joined Lacework as CEO and chairman in early 2021. He could not immediately be reached Tuesday.
Parikh joined as co-CEO in mid-2021, and has focused on product and engineering for the company. The two have known each other for two decades, having previously worked at the same time at Akamai Technologies.
In an interview with Protocol, Parikh characterized the move as planned and amicable, prompted by conversations between “Hat, myself, and the board” that led to the conclusion that the co-CEO model was no longer the best fit for the company. Lacework’s executive leadership and board have been “looking at where the business is and what it needs to get to the next level,” and have determined that “unifying the company” under a single CEO made the most sense right now, Parikh said.
When it comes to Lacework’s product and sales strategy and its relationships with customers, partners, and the big public cloud platforms, the move should help with “making sure that’s all unified [around] one set of priorities with one focus,” he said.
Parikh said he doesn’t believe Hatfield has “any immediate plan to go jump into anything full-time anytime soon.” Hatfield is “still going to be spending a good amount of time” on Lacework, Parikh told Protocol.
Lacework CEO Jay Parikh Image: Lacework
Founded in 2014, Lacework offers a “data-driven” service that aims to stand out in the fast-growing cloud security market by collecting and analyzing data from across a customer’s cloud environments. The goal is to to provide customers with crucial security insights, such as which threats to prioritize for action, the company has said.
The company raised a $525 million funding round in January 2021, followed by an additional $1.3 billion in funding in November 2021 that brought with it the $8.3 billion valuation. Lacework touted that round as “the largest funding round in security industry history,” and the company ranks at No. 3 in terms of the biggest valuations for privately held security companies, according to CB Insights.
Lacework is also notable for having been just the third company to be incubated out of Sutter Hill Ventures, following a model that was used to launch Pure Storage and Snowflake. The Lacework platform supports AWS, Google Cloud, and Microsoft Azure, as well as Kubernetes environments.
In May, Lacework disclosed that it had laid off 20% of its staff, in response to what the co-CEOs then described as a “seismic shift” in “both the public and private markets.” The company had previously reported having more than 1,000 employees as of March, and did not immediately have a figure available for its current employee count on Tuesday.
Prior to Lacework, Hatfield had previously spent nearly seven years as president at Pure Storage followed by 16 months as its vice chair, according to his LinkedIn. He joined the company as president in 2013, a few years into its founding, and stayed on through its initial public offering and its first several years as a public company.
While there are no plans to directly replace Hatfield at Lacework, given the unification of the CEO duties under Parikh’s leadership, the company does plan to hire a chief revenue officer in the near future, Parikh said.
Ultimately, Lacework’s leadership is focusing on making moves that will set it up “to be successful over 10, 20 years — we’re not building this to be a transaction,” Parikh said.
California’s new pay transparency law, SB 1162, promises to shake up compensation in the tech industry by requiring employers in the state to list pay scales in job ads and reveal pay information to both the state and to current employees. We spoke with Susan Alban, operating partner and chief people officer at Renegade Partners, and compensation consultant Ashish Raina to learn how.
Startups will adopt pay bands earlier. Five or 10 years ago, it wasn’t unusual for 50-person companies to be operating without a “career ladder” or “career architecture” with compensation bands for different job functions and levels, Alban said.
Companies may find other ways to differentiate pay in order to compete for the best talent. The law only requires companies to disclose base pay, not stock, bonuses, or benefits.
The law might provide a little more incentive for companies to hire outside of California, but not much. The law on its own is unlikely to have a major effect on where companies hire, but it adds more administrative headache to California employers.
Big companies are likely to comply more readily than startups. An online job search shows companies like Google, Salesforce, and Twitter listing pay ranges in ads. Some listings cite the Colorado law explicitly.
Pour one out for the Lightning cable.
The European Parliament voted in favor of new charging standards that will require all phones, tablets, and cameras sold in the European Union to be USB-C-ready by 2024. The mandate will extend to laptops in 2026.
The rule — which was introduced in June — passed 602-13, while eight members abstaining from voting. That reflects an overwhelming desire to make the average person’s life easier (goodbye, cluttered junk drawer) as well as cut down on pernicious e-waste. While the decision means that ports such as micro-USB will fall by the wayside, Apple’s Lightning port is also slated to go the way of the dinosaur.
The company’s iPad and various MacBooks rely on USB-C charging. But Apple has held steadfastly to the technology for the iPhone, rolling out its most recent iteration of the phone with a Lightning rather than a USB-C port. The iPhone was the bestselling phone in the EU last year, with Apple capturing 34% of the smartphone market.
The European Council needs to sign off on the legislation before it officially goes into law. But that prospect looks likely. After that, the clock to USB-C hegemony begins counting down. The timing could work out well for Apple at least; the company releases a new iPhone every year in September. With the mandate likely to take effect in fall 2024, it means next year’s iPhone could well be the last one to feature a Lightning port — unless Apple decides to just get the switch over with, something the company is reportedly considering.
The company could also make a USB-C version of the iPhone for the EU and a Lightning version for everyone else, of course, but that seems unlikely given the logistical hurdles. The iPhone could also go totally portless for charging, though that would be a much more radical leap.
As written, the rule would allow electronics without a USB-C port to continue being sold as long as they are “placed on the market before the date of application,” according to a press release announcing the vote. Regardless, if you’re a Lightning stan, uh, you should consider snapping up an iPhone 14 sooner than later.
Cutting down on e-waste is a sneaky climate policy. The Global E-Waste Monitor put out by the United Nations showed that nearly 54 million tons of e-waste piled up in 2020, a number that could rise to almost 75 million tons by the end of this decade. That’s a local environmental concern given the toxic chemicals and components. But it’s also a huge waste of emissions. More than two-thirds of the carbon pollution tied to electronics is emitted in the manufacturing process.
Cutting down on the number of charging cables produced (and trashed) is a relatively modest way to cut down on e-waste. Stronger policies that favor right-to-repair as well as companies working harder to stave off forced obsolescence could also offer a pathway to reduce the amount of electronic churn. Improving e-waste recycling is yet another avenue to cut down on trash; the Global E-Waste Monitor found only 17.4% of electronic trash is currently recycled. Apple and other tech companies have touted moving toward a circular economy as central to their sustainability goals. While the EU’s USB-C mandate alone won’t make that transition magically happen, it could spur further innovation and serve as a reminder of all the work that remains to be done.
Carbon dioxide removal service buyers and sellers are focused on one metric: $100 per ton. It’s one of Frontier’s stated criteria that the fund uses to evaluate its advance purchases. In a survey of the long-duration carbon removal community, CarbonPlan found that stakeholders are focused on the $100 benchmark. The Department of Energy even announced that it would be investing in carbon removal research to bring the cost of the technology down to $100 per ton.
Where did that number come from? In short, it’s the cost per ton of removal services that it would take for the CDR industry to reach commercial viability. It’s based on a handful of factors.
So far, no one has come anywhere close to reaching that target. Currently, most carbon removal services cost well above $100 per ton, although the Inflation Reduction Act’s updated 45Q tax credit of up to $180 per ton for direct air capture could help some startups get closer to achieving that target.
“$100 per ton is an extremely ambitious 10-year target, likely probably more of a 15- to 20-year target,” Talati said. But she thinks it’s “important to be ambitious,” and “there’s a lot of momentum around CDR and getting these technologies to scale.”
The world could have to remove billions of tons of carbon pollution per year from the atmosphere by midcentury depending on how fast emissions fall in the interim. That makes the momentum behind scaling CDR all the more important.
A version of this story appeared in Protocol’s Climate newsletter. Sign up here to get it in your inbox twice a week.
When Google announced the closure of its Stadia cloud gaming platform last week, the news was delivered at roughly the same time to employees, partners, and players on Thursday morning. Within hours, it had become clear that Stadia’s shutdown, planned for next January, would involve more than just refunding consumer purchases and quietly bowing out.
Now developers are scrambling to salvage planned projects, migrate players to other platforms, and figure out whether they’re still owed money from Google before the search giant puts Stadia out to pasture for good.
Stadia’s shutdown came as a surprise. Scores of indie game makers, not typically bound by the conservative norms of corporate PR, took to Twitter to explain their frustrations upon learning of the shutdown from news articles and a terse five-paragraph blog post from Stadia chief Phil Harrison.
It wasn’t just indies caught off guard. Google’s Stadia announcement kicked off a wave of uncertain responses from major third-party partners, including Bungie, CD Projekt Red, and Ubisoft. The consensus: We’re looking into it.
It’s not clear why Google axed Stadia now, and why it did so with little to no warning for any of the various parties that invested time, money, and other resources into the platform over the last three years.
It’s perhaps too early to draw broader conclusions about Stadia’s closure, what it could mean for cloud gaming as a whole, and whether the platform’s demise is the nail in the coffin for Google’s gaming ambitions. But Google’s sloppy handling of the announcement and Stadia’s stunning failure is evidence that even the largest, most experienced companies can find themselves lost in the woods when trying to crack such a notoriously difficult set of problems.
Cloud gaming is still available on platforms operated by Microsoft, Nvidia, and — for the time being — Amazon, too. But developing games is costly, difficult, and multidisciplinary work that takes years, and streaming those games over the cloud has yet to be accomplished in a sustainable fashion with an attractive business model. Google found this out the hard way, and let’s hope Stadia’s shutdown provides the road map that helps keep its competitors alive.
A version of this story appeared in Protocol’s Entertainment newsletter. Sign up here to get it in your inbox three times a week.
Trading of Twitter shares was briefly halted midday as CNBC and Bloomberg reported that Elon Musk now plans to go through with his deal to buy Twitter for $54.20 a share. The news was later confirmed.
Musk sent a letter to Twitter with his proposal to buy the company, according to an SEC filing. Twitter said it has received the letter and intends to close the deal at the originally agreed-upon price of $54.20 a share.
Musk and Twitter have been in a legal battle to push the Tesla CEO to buy Twitter since July, when Musk filed to back out of his proposed $44 billion acquisition. Musk tried to walk out of the deal based on allegations that Twitter was misstating the number of bots and spam accounts on the platform, which Twitter rejected. A trial in the case is scheduled to begin on Oct. 17.
The news coincidentally broke just as Twitter employees were near the start of a three-hour meeting to plan its 2023 strategy, according to reporter Casey Newton. “I am sitting on 2023 company wide strategy readouts and I guess we are going to collectively ignore what’s going on,” Twitter employee Rumman Chowdhury tweeted.
Twitter shares jumped 15% on the news before being halted.