Opinion: Occupy Silicon Valley Is Coming Faster Than Most People Think
Growing populism could call for wealth distribution of the tech sector, Bank of America Merrill Lynch analyst Michael Hartnett said in a recent report.
Hartnett said he believes there could be an Occupy Silicon Valley movement similar to Occupy Wall Street in 2011.
Looking beyond the obvious benefits from Silicon Valley such as lower prices and improved technology for consumers and businesses, I think this movement will develop and accelerate faster than most people think.
FANG stocks (Facebook, Apple, Netflix, and Google) could be considered a proxy for big tech and they keep going up in value, creating billions of dollars in wealth while populist sentiment is rapidly increasing at the same time.
More and more Americans are realizing that what is good for tech is not necessarily good for America in the long term.
Lower prices (Chinese-made iPhones) efficiency (the ongoing threat to jobs by automation) and funding unprofitable companies have social costs that Silicon Valley doesn’t want you to know about — or simply doesn’t care about.
Americans are realizing that Amazon is creating jobs, but many of those jobs are in shipment centers where humans organize and pack boxes. These are the jobs that are likely to be targeted for replacement by venture capital-backed robots.
Robots are expected to help unprofitable companies like Uber assert a dominant position once the market has been crushed with lower prices.
Where does all this lead, and for whose benefit? The foundation of the Occupy Silicon Valley movement will rest on that question.
There are four areas of focus that I see in the Occupy Silicon Valley movement:
1. Distribution of wealth
2. Robots versus wage increases and job creation
3. Diversity and inequality
Only 1 percent of venture capital goes to black Americans, and this relates to three of the above.
Lack of ethics in Silicon Valley is one area that I see rising in prominence. You see a definite pattern with recent headlines about Uber, Facebook, Zenefits, Palantir, and Theranos.
Some ethical issues involving Uber include an alleged theft from Google’s Waymo, sexual harassment, and misleading city regulators with a hack to impair regulatory tracking.
Alphabet Inc.’s Waymo claims in a lawsuit that a former employee stole its technology for a laser-scanning system to guide self-driving cars. The former employee started a new company, later acquired by Uber.
The complaint reflects an escalating talent war in the burgeoning autonomous-driving arena as tech and auto companies alike compete for skilled engineers, Bloomberg reported.
Uber became the brand that democratized power — or at least, the power to get a ride. But the allegations made by Fowler and others who came forward after her report make it clear that power and equality were not a part of the experience working as a woman for Uber. Uber may have been dedicated to treating customers fairly, but not its employees.
At a time when Uber is already under scrutiny for its boundary-pushing workplace culture, its use of the Greyball tool underscores the lengths to which the company will go to dominate its market, New York Times reported. Uber has long flouted laws and regulations to gain an edge against entrenched transportation providers, a modus operandi that has helped propel it into more than 70 countries and to a valuation close to $70 billion.
In search of profit and clicks, Facebook helped develop fake news and the clickbait ecosystem.
Facebook has been a massive profiteer and enabler of clickbait operations and now that it controls nine out of 10 new digital ad dollars with Google, it has room to clean up the damage it created and act like the good guy. I have been in this digital media industry for over 10 years and I don’t recall an actor that has drained so much value out of the industry while putting very little back in, said Jamarlin Martin, CEO and founder of Nubai Ventures, in a recent Moguldom report.
Facebook is the crack dealer who exploits the community (publishers) and then invests money in more and better policing in that same community.
Facebook was recently fined $122 million by the European Union for misleading antitrust regulators about the acquisition of Whatsapp. Facebook said in 2014 at the time of the acquisition that it could not automatically match Facebook and WhatsApp user accounts, according to the European Commission, competition watchdog for the E.U. Two years later, Facebook launched a service that did exactly that, CNN reported:
Facebook paid $19 billion for WhatsApp, by far its largest acquisition ever. Using the messaging app’s data allows Facebook to target its ads better, boosting profits.
Facebook said it had made an honest mistake. The E.U. said Facebook knew exactly what it was doing and misled regulators.
Silicon Valley-based startup Zenefits allegedly used tech savvy to mislead regulators and commit fraud. Zenefits offered free software to small businesses and made money selling health insurance policies to those businesses. Valued at $4.5 billion in a 2015 funding round, the company started losing money after BuzzFeed reported that most of Zenefit’s insurance deals were made by salespeople who lacked proper credentials.
CEO and founder Parker Conrad resigned after it was discovered that he’d developed a secret software tool — the Macro — that enabled Zenefits’ sales brokers to skirt state licensing requirements, CNN reported in July 2016. The tech firm allowed salespeople to act as insurance brokers in at least seven states despite lacking insurance licenses.
Zenefits announced in February that it would lay off 45 percent of its employees to cut costs — about 430 people.
“Even in a town built on hype, Zenefits turned heads for its rapid ascent to elite ‘unicorn’ status,” CNBC reported.
Big data analyst Palantir Technologies recently settled a hiring discrimination lawsuit for almost $1.7 million. The U.S. Department of Labor charged the Palo Alto, Calif., company with systemic hiring discrimination against Asians applying for engineering jobs.
A billionaire venture capitalist and early Facebook investor, Peter Thiel is the co-founder and chairman of Palantir. He has strong ties to President Donald Trump.
Facebook co-founder Mark Zuckerberg defended Thiel in March after calls mounted on social media to kick Thiel off Facebook’s board of directors, Business Insider reported:
“We have a board member who is an adviser to the Trump administration, Peter Thiel,” Zuckerberg said during an hourlong Q&A in March with students at North Carolina A&T State University. “And I personally believe that if you want to have a company that is committed to diversity, you need to be committed to all kinds of diversity, including ideological diversity.
Thiel helped finance former pro wrestler Hulk Hogan, who in 2016 won a $140-million lawsuit against Gawker Media for publishing transcripts from a sex tape. The judgement bankrupted Gawker.
After receiving the $140 million judgment, Hogan filed another lawsuit against Gawker for leaking sealed court documents to the National Enquirer quoting him having a racist rant.
Hogan used racial slurs to describe his daughter’s boyfriend, who is black, during a filmed 2007 sexual encounter with Heather Clem. The new suit claimed a transcript of Hogan’s comments were “court protected, confidential, sealed.’”
Theranos, a Silicon Valley health tech firm, claimed to have an innovative blood testing device that would give fast results using just one drop of blood. The company ran into trouble after the Wall Street Journal published articles beginning in October 2016 suggesting the blood-testing devices were flawed and inaccurate.
The company, once valued at $9 billion, was founded by Elizabeth Holmes in 2003.
Hedge fund Partner Management Fund LP, a major Theranos investor, filed a lawsuit in October, alleging that Theranos “engaged in securities fraud and other violations by fraudulently inducing the fund to invest and maintain its investment in the company,” Vanity Fair reported.
Holmes was barred by a U.S. regulator from owning or operating a lab for at least two years, according to CNBC.
Theranos enjoyed a meteoric rise and an epic fall, Forbes reported in February. Much has been written about the $700 million investment in the company and its highest valuation of $9 billion. Today, most of the value of the company has evaporated and CEO Elizabeth Holmes’ wealth has been estimated at $0.
The bubbleheads in Silicon Valley were caught off guard by the Trump election and are now scrambling to get closer to the real America.
Zuckerberg announced in a January Facebook post that he would embark on a listening tour of the U.S. to “get out and talk to more people about how they’re living, working and thinking about the future.”
This, of course, doesn’t necessarily mean that Zuckerberg is imminently running for office, Molly Olmstead reported in Slate. Still, it’s worth noting the particularly politician-like moment Zuckerberg had on Friday, when he had dinner with a Trump-supporting family.
The coming Occupy Silicon Valley movement may help Silicon Valley see that they are not only part of the problem. They are funding the problem and creating a culture to reinforce and grow the existing problems in America.
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