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Tag: News Corp

  • The New Patronage: A.I., Algorithms and the Economics of Creativity

    Generative A.I. is cheapening media production while platforms recode payouts, power and provenance. Unsplash+

    The cost of making high-quality media is collapsing. The cost of getting anyone to care about it is not. As generative A.I. turns production into a near-commodity, cultural power is shifting from studios and galleries to the platforms that allocate attention and the algorithms that determine who gets paid. The new patrons are not moguls with checkbooks; they are recommendation systems tuned for engagement and brand safety.

    Production is cheap; distribution is scarce

    Video models now draft storyboards, generate shots and remix audio at consumer scale. Yet the money still follows distribution, not tools. On YouTube, the rules of the YouTube Partner Program, set and revised unilaterally, determine whether a creator receives 55 percent of watch-page ad revenue for long-form content and 45 percent for Shorts. Those headline rates are stable, but the platform’s enforcement posture has shifted: as of July 15, YouTube began tightening monetization against “inauthentic” or mass-produced A.I. content, a clarification aimed at the surge of spammy, low-effort videos. The message is clear: use A.I. to enhance originality, not to flood the feed. 

    The enforcement problem is real. “Cheapfake” celebrity clips—static images, synthetic narration and rage-bait scripts—have racked up views while confusing audiences. YouTube has removed channels and now requires disclosure labels for realistic synthetic media, but detection and policing remain uneven at scale. 

    Platforms are recoding payouts and power

    Spotify’s 2024 royalty overhaul illustrates how platform rule-sets become policy for the creative middle class. Tracks now require at least 1,000 streams in 12 months to pay out; functional “noise” content is throttled; and labels face fees for detected artificial streaming. The goal is to redirect the pool away from bot farms and sub-cent trickles. The effect is a re-concentration of earnings at the head of the curve and a higher bar for the long tail. When platforms change the taps, whole genres feel the drought or the deluge. 

    TikTok’s détente with Universal Music in May 2024 underscored the same power dynamic in short-form video. After months of public sparring over royalties and A.I. clones, a new licensing deal restored UMG’s catalogue to the app, alongside language about improved remuneration and protections against generative knock-offs. When distribution is the choke point, even the largest rights-holders must negotiate on platform terms.

    Data deals: the new studio lots

    If attention is one axis of the new patronage, training data is the other. The most lucrative cultural contracts of the past year were not output commissions but input licences. OpenAI’s run of publisher agreements, including the Associated Press (archives), Axel Springer, the Financial Times and a multi-year global deal with News Corp, reportedly worth more than $250 million, signals a market price for premium corpora. A.I. labs are paying for access, and the beneficiaries are large, well-structured repositories of rights, not individual creators. 

    The legal battles surrounding image training demonstrate the unsettled state of the rules. Getty Images narrowed its U.K. lawsuit against Stability A.I. in June, dropping core copyright claims while pressing trademark-style arguments about reproduced watermarks. The pivot reflects the complexity of proving training-stage infringement across borders, as well as the industry’s search for more predictable routes to compensation.

    Regulation is standardizing transparency and shifting risk

    Rules are arriving, and they read like operating manuals for platformized culture. The E.U.’s A.I. Act phases in obligations for general-purpose models, with guidance for “systemic-risk” providers by 2025 and a Code of Practice outlining requirements for transparency, copyright diligence and safety. In effect, document training, assessing model risks, publishing technical summaries and preparing for audits are all tasks that privilege firms and partners with a strong compliance presence

    In the U.S., the Copyright Office’s multipart A.I. study is moving from theory to guidance. Part 2 (January 2025) addresses whether and when A.I.-assisted outputs can be copyrighted, while the pre-publication of Part 3 (May 2025) examines training and how to reconcile text-and-data mining with compensation. The studio system, once established, created creative norms through collective bargaining; now, regulators and A.I. vendors are co-authoring the manual.

    Unions are also imposing guardrails. The WGA’s 2023 deal barred studios from treating A.I.-generated material as “source material” and protected writers from being required to use A.I.; SAG-AFTRA’s agreements introduced consent and compensation for digital replicas, with similar provisions in music. These are not abstractions; they are hard-coded constraints on how platforms and producers can deploy synthetic labour.

    Provenance becomes product

    As synthetic media scales, provenance is turning into both a feature and a bargaining chip. TikTok has begun automatically labelling A.I. assets imported from tools that support C2PA Content Credentials. YouTube now requires creators to disclose realistic synthetic edits. Meanwhile, device makers are integrating C2PA into the capture pipeline, with Google’s Pixel 10 embedding credentials in its camera output. OpenAI, for its part, adds C2PA metadata to DALL-E images. Attribution is becoming clickable. 

    The provenance layer will not solve misinformation alone. Metadata can be stripped, and enforcement lags, but it rewires incentives. Platforms can boost authentic, labelled media in feeds, penalize evasions and share “credibility signals” with advertisers. That is algorithmic patronage by another name.

    What shifts next

    Studios and galleries will increasingly resemble platforms. Owning release windows is no longer enough. Expect investments in first-party audiences, data clean rooms and rights bundles that can be licensed to model providers. The historic advantage, taste and talent pipelines must be coupled with distribution levers and data assets. Deals will include not just streaming residuals but “model-weight” royalties and retraining rights, mirroring the structure of today’s publisher licences.

    Creators will face algorithmic wage setting. Eligibility thresholds (1,000 Spotify streams), demonetization triggers (unoriginal Shorts), disclosure requirements (synthetic media labels) and fraud detection fees are becoming the effective tax code of digital culture. The prudent strategy is to diversify revenue streams, ads, direct fan funding and commerce, and to instrument provenance by default to stay on the right side of both algorithms and regulators.

    Policy, too, will reward those who can comply. The E.U. framework, the U.S. copyright study, and union clauses collectively nudge the market toward licensed inputs, documented outputs and consent-based replication. Those advantages include larger catalogues and well-capitalized intermediaries. For independent creators, collective licensing pools and guild-run registries may offfer the path to negotiating power.

    The arts has seen patronage shift before, from courts to salons to art galleries and museums. This time, the median patron is a ranking function. Where culture is made matters less than where it is surfaced, metered and paid. Those who understand the incentives embedded in platform policy, and can prove provenance at the speed of the feed, will capture the surplus. Everyone else will be producing to spec for someone else’s algorithm.

    The New Patronage: A.I., Algorithms and the Economics of Creativity

    Gonçalo Perdigão

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  • Perplexity’s Clash with New Publishers Continues Despite Revenue-Sharing Efforts

    Perplexity CEO Aravind Srinivas previously worked at OpenAI. Saul Loeb/AFP via Getty Images

    Perplexity AI, a startup that has previously come under fire from online publishers, is attempting to rebuild trust with media players through revenue-sharing agreements. But that effort hasn’t stopped complaints about how the company surfaces content. Its latest challenge comes from Japanese media groups Nikkei and Asahi Shumbun, which today (Aug. 26) filed a joint lawsuit accusing Perplexity of copyright infringement.

    Co-founded in 2022 by CEO Aravind Srinivas, Perplexity has quickly become a leader in A.I.-powered search and is currently valued at $18 billion. Unlike traditional search engines that return links, Perplexity responds to queries by summarizing information found online, accompanies by citations.

    Perplexity did not respond to Observer requests for comment on the lawsuit.

    Nikkei, which owns the eponymous Japanese newspaper and the Financial Times, and Asahi Shumbun claim that Perplexity has been storing and resurfacing their articles since at least June 2024, a practice the publishers describe as “free riding” on journalists’ work. The lawsuit, filed in a Tokyo District Court, demands that the A.I. company delete stored articles, stop reproducing publisher content, and pay each media company 2.2 billion Japanese yen ($15 million) in damages.

    The suit also alleges that Perplexity ignored robot.txt safeguards implemented by the news publishers to block unauthorized crawling and sometimes presented articles alongside incorrect information, a move the publishers argue “severely damages the credibility” of their newspapers.

    This is not Perplexity’s first clash with news publishers. Earlier this month, Yomiuri Shimbun, another major Japanese newspaper, filed its own lawsuit against the company. U.S. outlets have also raised challenges.

    Last year, Condé Nast, Forbes and The New York Times all threatened legal action over alleged copyright infringement. Perplexity is currently battling a 2024 lawsuit from Dow Jones and The New York Post—both owned by Rupert Murdoch’s News Corp—claiming that the startup misused content to train A.I. models. A court recently rejected Perplexity’s bid to dismiss that case.

    Perplexity has since tried to ease tensions by launching revenue-sharing programs that give outlets a portion of the ad revenue generated from their material. The program has attracted partners such as Time Magazine, Fortune and the German news site Der Spiegel. Perplexity also recently unveiled plans to give publishers around 80 percent of the sales from Comet Plus, a news service expected to launch later this year.

    For now, the media industry remains divided on how to handle the rise of A.I. Some, like the Associated Press, Vox Media and The Atlantic, have signed licensing deals with OpenAI. Others remain wary. The New York Times is suing OpenAI and Microsoft over unauthorized use of its content, while Canadian startup Cohere was hit with a similar lawsuit this year from more than a dozen news publishers. Thompson Reuters has also accused A.I. platform Ross Intelligence of copyright infringement in a case that dates back to 2020.

    Perplexity’s Clash with New Publishers Continues Despite Revenue-Sharing Efforts

    Alexandra Tremayne-Pengelly

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  • (Media News) News Corp Sues AI Search Engine Perplexity Over Copyright Infringement

    (Media News) News Corp Sues AI Search Engine Perplexity Over Copyright Infringement

    News Corp subsidiaries Dow Jones and NYP Holdings have filed a lawsuit against AI-powered search engine Perplexity for copyright and trademark infringement. Filed in the Southern District of New York, the suit demands significant damages and the removal of News Corp content from Perplexity’s database. Damages sought include “three times actual damages” and $150,000 for every instance of unauthorized content reproduction.

    Dow Jones, publisher of The Wall Street Journal and Barron’sand NYP Holdings, publisher of the New York Post, accuse Perplexity of profiting from content created by their journalists without permission or compensation. They argue that Perplexity’s model of “retrieval augmented generation” (RAG) allows users to bypass original sources, depriving publishers of critical ad revenue.

    News Corp also claims Perplexity risks introducing false information, potentially damaging its trademarks. Although Perplexity provides small citations for sources, the lawsuit dismisses this as insufficient, emphasizing that News Corp’s professional journalists depend on the protection and monetization of their intellectual property. News Corp CEO Robert Thomson condemned Perplexity, calling the practice an “abuse of intellectual property.”

    Perplexity has partnered with a few publishers to share ad revenue but continues to use content from those without agreements. News Corp, however, has struck a $250 million deal with OpenAI to license its content.


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  • Rupert Murdoch’s property group considers bid for UK’s Rightmove, sending shares 21% higher

    Rupert Murdoch’s property group considers bid for UK’s Rightmove, sending shares 21% higher

    Rupert Murdoch, chairman emeritus of media empire News Corp.

    Axelle/bauer-griffin | Filmmagic | Getty Images

    LONDON — Rupert Murdoch-owned REA Group said Monday it is contemplating a takeover offer for U.K. property portal Rightmove in a bid to create a global digital real estate business.

    The Australian property listings company, which is controlled by Murdoch’s News Corp, said in a statement to the Australian stock market that it was considering a possible cash and share offer for Rightmove, but it has not yet had any discussions with the company.

    Shares of Rightmove jumped 25% in early deals following the announcement. The stock was 20.9% higher by 12:32 p.m. and was trading at the top of the FTSE 100. Shares of REA Group fell as much as 6%.

    Rightmove has not released a statement nor did it immediately respond to CNBC’s request for comment.

    REA Group’s announcement comes after reports emerged that it was working with Deutsche Bank on a large overseas acquisition, according to the Financial Times.

    Rightmove is the U.K.’s leading property portal, used by estate agents to advertise properties for sale and rent. Melbourne-headquartered REA Group did not say how much it was considering offering for Rightmove, but the U.K. platform was valued at £4.34 billion ($5.7 billion) as of market close Friday.

    In its statement, REA Group said it saw the potential acquisition as a “transformational opportunity” and cited “clear similarities” between the two firms, including strong brand awareness, market share and “highly aligned cultural values.”

    REA Group, in which News Corp owns a more than 61% interest, operates a number of property websites in Australia, as well as several brands in India and the U.S.

    However, REA Group’s previous venture into the U.K. faced stiff market pressure. The company sold its real estate site PropertyFinder Group to Rightmove rival Zoopla in 2009, during the Global Financial Crisis.

    The U.K. property market now appears more favorable, with lower interest rates expected to boost transactions. But Rightmove is set to confront headwinds following the acquisition of rival site OnTheMarket by U.S. property firm CoStar.

    Jefferies analysts said in a note Monday that REA Group appeared undeterred by the increased market competition., having previously faced rivalry from CoStar in the U.S., via its investment in realtor.com.

    Despite limited “cross-border synergies” between the two firms, the Jefferies analysts also noted that Rightmove could benefit from REA’s strong management and expertise within Rightmove’s “strategic growth areas,” namely mortgages, commercial and rental services.

    “It is worth crediting REA with being a strong operator in Australia, having taken revenue share from the #2 player DHG in the last six years,” the analysts said, referencing rival Australian property portal Domain Group.

    Under UK takeover laws, REA now has until the end of September to formally make an offer or walk away following its public expression of interest.

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  • Rupert Murdoch marries for 5th time in ceremony at his California vineyard

    Rupert Murdoch marries for 5th time in ceremony at his California vineyard

    Rupert Murdoch, 93, has married for the fifth time, his corporation, News Corp, confirmed Sunday.

    Murdoch, the media mogul who recently stepped down as chairman of Fox News and News Corp, married Elena Zhukova, a 67-year-old Russian-born retired molecular biologist, on Saturday in a ceremony at his vineyard estate in Bel Air, California. Photographs of the newly married couple were released by News Corp. The couple announced their engagement in March.

    Rupert Murdoch and Elena Zhukova pose for a photo, on Saturday, June 1, 2024 during their wedding ceremony at his vineyard estate in Bel Air, Calif.

    News Corp. via AP


    Zhukova studied at the University of California, Los Angeles, according to a New York Times report in March. In her career as a molecular biologist, she focused on diabetes. Zhukova is also the ex-wife of Alexander Zhukov, a billionaire energy investor and Russian politician. Their daughter, Dasha, was previously married to Russian billionaire Roman Abramovich, who used to own the Premier League soccer club Chelsea. Abramovich was an early target of Western sanctions after the Kremlin first invaded Ukraine in 2022. 

    After Murdoch stepped down as leader of both Fox News’ parent company and his News Corp media holdings, his son, Lachlan, took his place in a media empire that spans continents and helped to shape modern American politics.

    Murdoch, whose net worth is pegged at $9.77 billion, according to the Bloomberg Billionaires Index, has been married four times before. Most recently, he was engaged to retired dental hygienist Ann Lesley Smith, whom he never married. He was previously married to model Jerry Hall, whom he divorced in the summer of 2022. 

    His first three wives include Patricia Booker, Anna Murdoch Mann, and Wendi Murdoch. 

    In 1952, Murdoch inherited a newspaper in his native Australia from his father. Over decades, he built a news and entertainment enterprise that became prominent in the United States and Britain, including ownership of such notable newspapers as The Times of London and The Wall Street Journal.

    Fox News Channel, the 24-hour network founded in 1996, has profoundly influenced television, becoming a popular news source among many conservative U.S. audiences and politicians.

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  • Detained WSJ reporter Evan Gershkovich’s parents describe what it was like seeing him in Russia | CNN Business

    Detained WSJ reporter Evan Gershkovich’s parents describe what it was like seeing him in Russia | CNN Business


    New York
    CNN
     — 

    Wall Street Journal reporter Evan Gershkovich remains “defiant” six months after he was detained in Russia on spying charges, which he and the Journal strenuously deny, his mother told CNN’s Anderson Cooper Thursday night.

    “He’s smiling. He understands what’s going on,” Ella Milman said. “And I have to say, under all the circumstances, he’s doing really well.”

    Gershkovich’s parents have been able to go to Russia twice. They saw him in June and were able to talk to him, though Cooper noted he was essentially in a glass box.

    “Being there, it was like having him back,” his father, Mikhail Gershkovich, said. “Just the physical presence and his voice made you very happy.”

    Gershkovich was arrested in March during a reporting trip. The FSB, Russia’s main security service, accused him of trying to obtain state secrets — a charge Gershkovich and his employer have extensively denied.

    If convicted, he faces up to 20 years in prison.

    Gershkovich’s parents left the Soviet Union to come to the United States. Evan’s initial reporting trips in the country didn’t worry the two of them.

    “He came to Russia in 2017. Things were a lot different at the time,” Milman said.

    The family keeps in touch with Gershkovich through letters, which are up to 10 pages long and include printed pictures. His sister, Danielle Gershkovich, says they can hear his voice through his writing — fitting, Cooper noted, as he’s a print journalist.

    “It’s like sitting on the couch,” Milman said. “The only thing is that the answer comes the following week.”

    Those who want to help need to keep the focus on Evan, Danielle said, whether it’s people posting on social media or reading his reporting.

    From a young age, Gershkovich was curious and easily connected with people, Milman said.

    “He always would come home after his fancy trips and wanted to have a hamburger and buffalo wings and watch baseball and watch American football,” Milman said. “He’s an American boy who has roots in Russian culture.”

    The journalist’s detention is a source of tension between Washington and Moscow.

    “The US position remains unwavering. The charges against Evan are baseless. The Russian government locked Evan up for simply doing his job. Journalism is not a crime,” US ambassador to Russia Lynne Tracy said to reporters earlier this month.

    In September, a Moscow court refused to hear an appeal against his pre-trial detention, leaving Gershkovich behind bars. His pre-trial detention has been extended twice since his arrest, once in May and again in August. An appeal against his first pre-trial detention was also denied.

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  • Rupert Murdoch stepping down as chairman of News Corp. and Fox

    Rupert Murdoch stepping down as chairman of News Corp. and Fox

    Rupert Murdoch, the longtime head of News Corp. and Fox, will step down as chairman and take on the role of chairman emeritus, capping a seven-decade career that built a media dynasty ranging from cable television to tabloid newspapers and turned him into one of the world’s most influential media executives.

    Lachlan Murdoch, Rupert Murdoch’s eldest son, will become the sole chair of News Corp. and continue as executive and CEO of Fox Corp, Fox announced Thursday. Rupert Murdoch will take on his new role at the companies’ next shareholder meetings, which are scheduled for mid-November. 

    Rupert Murdoch, 92, exits News Corp. and Fox at a time the media businesses are facing a number of challenges, including the fallout from a bruising trial, and nearly $800 million settlement, over a defamation lawsuit after Fox News aired unfounded claims that Dominion Voting Systems equipment was used to rig the 2020 presidential election. 

    Murdoch became one of the foremost media executives of the last half century by building an extensive network of tabloids, cable and broadcast TV, and entertainment assets, many known for espousing conservative ideas. He’s also one of the world’s wealthiest media executives, with a net worth of $8.3 billion, according to the Bloomberg Billionaires Index.

    Conservative power broker

    Murdoch’s perch as head of Fox and News Corp. gave him enormous sway in anglophone conservative circles, with outlets such as Fox News credited with boosting the careers and policies of numerous right-leaning politicians. 

    “He used the outlets in the U.K., Australia and the U.S. to achieve certain types of policy outcomes and particularly certain types of political results, earning favors from politicians whose able trade in for political advantage,” David Folkenflik, author of “Murdoch’s World: The Last of the Old Media Empires” and NPR’s media correspondent, told CBS News.

    He added, “Think of the invasion of Iraq in 2003, which he promoted through Fox News, through the New York Post and the Weekly Standard, which gave ballast to [then-President] George Bush.” 

    But Murdoch’s support of conservative viewpoints also fed into political outcomes now viewed as “disastrous,” such as Brexit in the U.K., Folkenflik added. And in the U.S., Murdoch privately disparaged former President Donald Trump even as some Fox News hosts were promoting his falsehoods about the 2020 presidential election, with the latter leading to Fox News’ massive settlement with Dominion

    Murdoch allowed Fox News hosts to promote election conspiracies “in order to try to hold on to Trump’s core voters who were many of Fox News’ core viewers,” Folkenflik said.

    “Time is right”

    In the statement, Lachlan Murdoch said his father would “continue to provide valued counsel to both companies.”

    “We thank him for his vision, his pioneering spirit, his steadfast determination, and the enduring legacy he leaves to the companies he founded and countless people he has impacted,” he said. 

    With Rupert Murdoch stepping back from a leadership role, Lachlan Murdoch’s role is solidified as his father’s successor, and he will oversee tabloids including the New York Post as well as Fox News and Fox Entertainment.

    In a memo shared with CBS News, Murdoch underscored that he is stepping back while he’s in good health, but added that the “time is right for me to take on different roles.”

    “Our companies are in robust health, as am I,” he said in the memo. 

    The media mogul added that Lachlan Murdoch is “absolutely committed to the cause of freedom,” while also aiming a potshot at “elites” who have “open contempt for those who are not members of their rarefied class.” 

    Start in newspapers

    Murdoch, a native Australian who later became a U.S. citizen, was born into the media business, as his father owned several Australian newspapers.

    When Murdoch was studying at Oxford University, his father died, putting his 21-year-old son in charge of The News and The Sunday Times. Murdoch soon boosted the papers’ circulation by reorienting their coverage to focus on scandal, sex and crime — a formula he would hone over his decades-long career. 

    In the 1960s, Murdoch began acquiring other Australian newspapers, eventually controlling two-thirds of that country’s newspaper circulation. In the 1970s, he expanded outside the country, taking over the News of the World and The Sun in the U.K. and The San Antonio Express-News, New York Post and Village Voice in the U.S. 

    In 1985, Murdoch united several TV stations under the umbrella of Fox Corp. and then Fox News, which soon overtook ABC, CBS and NBC in viewership. 

    Murdoch’s personal life was nearly as colorful as the stories in the tabloids he owned, with the family’s internal power struggles said to have inspired the hit HBO series “Succession.”

    Who is Lachlan Murdoch?

    The issue of succession at News Corp. and Fox has been a matter of speculation, given that three of Rupert Murdoch’s grown children have been involved in the media industry and the family businesses to various extents. 

    Lachlan Murdoch, 52, currently serves as the executive chair and CEO of Fox Corp., and in previous years served as the publisher of the New York Post and oversaw book publisher HarperCollins. In 2015, Lachlan and his brother James, 50, were appointed to leadership positions within the family’s media business, prompting speculation that the pair were competing to succeed their father. 

    The Allen & Co. Media And Technology Conference
    Lachlan Murdoch arrives during the Allen & Co. Media and Technology Conference in Sun Valley, Idaho, on July 11, 2019. 

    Patrick T. Fallon/Bloomberg via Getty Images


    James Murdoch had served as CEO of 21st Century Fox until its sale in 2019 to Disney. In 2020, James Murdoch resigned from the board of of News Corp, citing disagreements over the company’s editorial decisions. He and his wife had publicly rebuked News Corp.’s coverage of Australia’s wildfires, which downplayed the role of human-driven climate change.

    Meanwhile, their sister Elisabeth Murdoch, 55, struck out on her own to create a production company, Shine, in 2001, which she later sold to News Corp. 

    Lachlan is “a genial figure but much less ambitious than his father,” Folkenflik said. “It’s hard to see how the empire can survive in quite the same way.”

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  • Rupert Murdoch steps down as chairman of Fox, News Corp.

    Rupert Murdoch steps down as chairman of Fox, News Corp.

    Rupert Murdoch steps down as chairman of Fox, News Corp. – CBS News


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    Billionaire Rupert Murdoch is stepping down as chairman of his media empire. The 92-year-old mogul will hand over the reins of both Fox and News Corp. to his son, Lachlan Murdoch. Jo Ling Kent has more.

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  • Moscow court extends WSJ reporter Evan Gershkovich’s pre-trial detention | CNN

    Moscow court extends WSJ reporter Evan Gershkovich’s pre-trial detention | CNN



    CNN
     — 

    A Moscow court has extended the pre-trial detention of Wall Street Journal journalist Evan Gershkovich, who had been arrested on espionage charges, by three months.

    His pretrial detention has been extended until November 30, the press service of the Lefortovo Court said Thursday. It had been due to end on August 30.

    Gershkovich has been detained in Russia since March following his arrest on charges that he, the WSJ, and the US government vehemently deny.

    The US State Department has officially designated Gershkovich as wrongfully detained in Russia. US President Joe Biden has also been blunt about Gershkovich’s arrest, urging Russia to “let him go.”

    This is a breaking news story. More details to follow.

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  • Wall Street Journal: China bans use of iPhones for government officials | CNN Business

    Wall Street Journal: China bans use of iPhones for government officials | CNN Business


    Hong Kong/New York
    CNN
     — 

    China has banned the use of iPhones for central government officials, The Wall Street Journal reported, citing unnamed people familiar with the matter.

    The WSJ reports that managers have been notifying staff of the ban via chat groups or meetings.

    CNN has reached out to China’s Ministry of Foreign Affairs and Apple (AAPL), but has not received a response.

    A source who regularly deals with Chinese central government agencies told CNN that Chinese officials had already been following an unwritten rule of shunning iPhones for months despite the absence of a formal policy. The source asked not to be named due to the sensitivity of the subject.

    Last June, CNN reported that some Chinese government ministries had banned Teslas from entering their premises over security fears.

    Apple CEO Tim Cook made a high profile visit to the country in March. China is a significant market and manufacturing center for the company, accounting for around 19% of its overall revenue.

    The iPhone ban for government officials may be retaliation for similar moves made by the US against Chinese tech, and could have a chilling effect on Apple and other large foreign brands with an established China presence.

    China’s Huawei and ZTE have long been subject to US restrictions. And in November 2022, the Biden administration banned approvals of new telecommunications equipment from both companies because they pose “an unacceptable risk” to US national security.

    TikTok has also been banned from devices issued by multiple US institutions, including the House of Representatives, the City of New York, Montana, New Jersey, Ohio, Texas and Georgia, over concerns that the Chinese government could have access to users’ data through its Chinese parent company, Bytedance.

    — CNN’s Beijing bureau contributed to this article.

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  • Is an AI-Media Legal Fight Brewing?

    Is an AI-Media Legal Fight Brewing?

    AI was hardly on the media’s radar last year, but concerns around tools like ChatGPT have fast become top of mind. Last month, the Wall Street Journal reported that a group of companies including the New York Times, Journal parent News Corp, Axel Springer, and IAC were discussing forming a new coalition to address whether news content should be used to train the technology—and how publishers should be compensated for that content. And on Sunday, Semafor reported that the coalition, which may launch a lawsuit and “press for legislative action,” is close to being formalized.

    The publishers are being led by billionaire media mogul and IAC founder Barry Diller himself, according to Semafor. “The most immediate threat they see is a possible shift at Google from sending traffic to web pages to simply answering users’ questions with a chatbot,” Semafor’s Ben Smith reports. For example, IAC CEO Joey Levin said, the chatbot could turn a Food & Wine review into a text-only, attribution-less recommendation of a bottle of wine. “The machine doesn’t drink any wine or swirl any wine or smell any wine,” Levin said. “Search was designed to find the best of the internet. These large language models, or generative AI, are designed to steal the best of the internet.”

    The full make-up of the emerging media coalition, along with whether legal action results, remains to be seen. News Corp, for one, is not part of the coalition, a source familiar with the matter told Vanity Fair. Another source familiar with the matter confirmed that Axel Springer is part of the coalition. The New York Times declined to comment. 

    It’s not the first time that publishers have sought payment for tech platforms’ use of their content; between 2019 and 2022, Facebook doled out annual payments reportedly exceeding $20 million for the Times, $15 million for the Washington Post, and $10 million for the Journal. But this time, according to Semafor, publishers are looking for more. “If these breakthrough language models rely on their inputs, [publishers] argue, the share of the value they collect should be commensurate—and should run into the billions of dollars across the industry,” he wrote, noting that the publishers are “also threatening to try their luck in court, where complex questions about how copyright law applies to both the inputs to AI training and the outputs of AI models remain largely untested.” It’s also worth noting that tech executives still have yet to figure out a clear business model for AI, as that the technology is extremely costly to maintain. It is “very early days” for large language models, Google spokeswoman Jenn Crider told Semafor.

    Still, AI companies aren’t showing any signs of slowing down, with the Times reporting last week on how several top news executives were disturbed by a demonstration of Google’s new AI article-writing tool. As my colleague Joe Pompeo wrote last month, industry leaders have been sounding the alarm both in public and private, including at Jessica Lessin’s annual gathering in Jackson Hole earlier this summer. Among the slew of news leaders present at the off-the-record shindig were Smith, Insider’s Nicholas Carlson, Rolling Stone’s Noah Shachtman, and Times executive editor Joe Kahn. Kahn, for his part, “caused some of his fellow attendees to prick up their ears when he speculated about a group effort among publishers to ‘make sure they don’t get screwed again,’” Pompeo reported, with one attendee noting that Kahn “doesn’t talk a lot in these things, so when he does, you kind of listen.”

    Charlotte Klein

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  • Russia charges Wall Street Journal’s Evan Gershkovich with espionage | CNN

    Russia charges Wall Street Journal’s Evan Gershkovich with espionage | CNN



    CNN
     — 

    Russian investigators have formally charged Wall Street Journal reporter Evan Gershkovich with espionage, Russian state media reported Friday, adding he denied the accusations. 

    “The FSB investigation charged Gershkovich with espionage in the interests of his country. He categorically denied all accusations and stated that he was engaged in journalistic activities in Russia,” an agency representative said, according to state news agency TASS. 

    The representative declined to comment further, as the journalist’s case was marked “top secret,” according to TASS. 

    Gershkovich was detained by Russian authorities last week, who accused him of spying, signaling a significant ratcheting of both Moscow’s tensions with the United States and its campaign against foreign news media.

    A Moscow court on April 18 will hear an appeal filed by Gershkovich’s lawyers against his arrest, Russian state media said citing the court. The correspondent is currently held in the notorious Leftereovo pre-detention center until May 29.

    Gershkovich’s arrest marks the first time an American journalist has been detained on accusations by Moscow of spying since the Cold War.

    The arrest has been widely condemned by western officials and the Journal vehemently denied the espionage charge against Gershkovich, describing his arrest “a vicious affront to a free press” which “should spur outrage in all free people and governments throughout the world.”

    On Wednesday, Secretary of State Antony Blinken said he urged Russian Foreign Minister Sergey Lavrov to release Gershkovich immediately.

    “In my own mind, there’s no doubt that he’s being wrongfully detained by Russia, which is exactly what I said to Foreign Minister Lavrov when I spoke to him over the weekend,” Blinken said during a press conference in Brussels. “But I want to make sure that as always, because there is a formal process, that we go through it and we will, and I expect that to be to be completed soon.”

    CNN reported on Tuesday that the Biden administration is preparing to officially declare Gershkovich as wrongfully detained in Russia, two US officials told CNN, a move that will trigger new US government resources to work towards his release.

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  • Wall Street Journal: Elon Musk is planning to build his own town | CNN Business

    Wall Street Journal: Elon Musk is planning to build his own town | CNN Business


    New York
    CNN
     — 

    What do you get for the billionaire who has everything? Perhaps his own town.

    Entities connected to Elon Musk and his companies have reportedly been acquiring thousands of acres of land in Texas with the hope of starting a town where his employees could live and work, according to a report from the Wall Street Journal Thursday.

    These entities have purchased at least 3,500 acres near Austin and are in the process of working toward incorporating a town called Snailbrook, an apparent reference to the mascot of Musk’s tunneling firm, the Boring Company, according to the Journal.

    The report cites county deeds and other land records, as well as city and county emails, internal company communications, state licensing records and interviews with land owners and city and county officials. (CNN has not reviewed all of the land and other records cited in the Journal report.)

    Over the years, tech companies have offered numerous amenities on campus to recruit workers and sometimes incentivize them to put in longer hours. By building out a company town of his own, Musk could take that approach even further.

    According to the report, Musk wants employees at his companies Boring Co., Tesla and SpaceX — all of which have major production facilities near Austin — “to be able to live in new homes with below-market rents.” The Snailbrook effort also reportedly includes plans to build more than 100 homes, as well as neighborhood features such as a pool and outdoor sports area.

    Incorporating a town might also give Musk, who has been known to clash with state and federal regulators, more say over how things are run.

    Musk in 2020 announced he would move Tesla’s headquarters and his personal residence from California to Texas, blaming frustrations with California’s coronavirus-related restrictions. Last year, Tesla opened a new Gigafactory manufacturing facility in Austin. Musk’s SpaceX and Boring Co. also have facilities in Texas, and Boring Co. has reportedly been in talks with Austin about the possibility of building tunnels in the city, according to a February report from the Austin American Statesman.

    Property records for Bastrop County, which is adjacent to Austin, show that the Boring Co. owns 11 parcels of land on one address near the Colorado River where mobile homes were built over the past three years, according to records reviewed by CNN. The Texas Commission on Environmental Quality is set to hold a meeting on plans for a wastewater treatment plant on the same site, which were submitted by an LLC registered to a Boring Co. executive, according to a public announcement of the meeting.

    That same entity also owns a number of parcels of nearby property comprising commercial and residential building plots and pasture and farming land, public records show. The Journal reported that Musk’s team has discussed incorporating the town in Bastrop County. The county told the Journal that it had not received an application for incorporation, which requires a certain number of residents, from Musk or any of his entities.

    Tesla, SpaceX and Boring Co. did not immediately respond to a request for comment on the report.

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  • Biden urges Congress to pass bipartisan tech legislation in WSJ op-ed | CNN Business

    Biden urges Congress to pass bipartisan tech legislation in WSJ op-ed | CNN Business



    CNN
     — 

    President Joe Biden called on members of Congress Wednesday to set aside partisan differences and pass groundbreaking legislation to rein in Big Tech, focusing on digital privacy, antitrust and the industry’s liability shield, Section 230 of the Communications Decency Act.

    In a Wall Street Journal op-ed, Biden said that despite making some progress on increasing tech industry oversight, the US government has run up against the limits of its statutory authority.

    “We need bipartisan action from Congress to hold Big Tech accountable,” Biden wrote. “We’ve heard a lot of talk about creating committees. It’s time to walk the walk and get something done.”

    Biden urged lawmakers to “limit targeted advertising and ban it altogether for children,” a proposal linked to a key bipartisan privacy bill unveiled in the last Congress. He reiterated his longstanding calls to amend Section 230 in ways that would expose tech platforms to more lawsuits over content moderation, and advocated for rules forcing them to be more transparent about how their algorithms work.

    And he said Congress should implement “fairer rules of the road” to prevent new businesses from being “smothered by the dominant incumbents before they have a chance to get off the ground.”

    Tech policy analysts have said that with Congress entering a new phase of divided partisan control, the prospect of bipartisan tech legislation may have dimmed, particularly on antitrust issues.

    Calls to revise Section 230 are bipartisan, but Republicans and Democrats have not been able to agree on why the law needs changing, much less on how. Democrats have said tech companies should face more liability for failing to remove enough problematic content; Republicans argue tech platforms should face more liability for removing too much.

    Some policy experts have said that efforts to craft bipartisan privacy legislation have the strongest odds of passage in the new Congress, but it remains a long way from becoming law.

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  • A Wall Street Journal reporter was handcuffed by police while standing outside a Chase Bank. The newspaper is demanding answers | CNN Business

    A Wall Street Journal reporter was handcuffed by police while standing outside a Chase Bank. The newspaper is demanding answers | CNN Business


    New York
    CNN
     — 

    The Wall Street Journal is demanding answers from the Phoenix Police Department after an officer detained and handcuffed one of its reporters outside a Chase Bank — an incident that press freedom advocates say raises First Amendment concerns and mirrors a larger, growing hostility from local law enforcement toward journalists across the country.

    The incident between The Journal reporter Dion Rabouin and the Phoenix officer occurred in late November, but just became public his week after ABC affiliate KNXV reported on the matter. In a statement, The Journal said that it is “deeply concerned” with how its reporter was treated and has asked the Phoenix Police Department to conduct an investigation.

    “No journalist should ever be detained simply for exercising their First Amendment rights,” The Journal said.

    A version of this article first appeared in the “Reliable Sources” newsletter. Sign up here for the daily digest chronicling the evolving media landscape

    In response, the Phoenix Police Department — which is being probed by the Department of Justice to determine whether its officers retaliate against people “for conduct protected by the First Amendment” — stressed to me that the incident occurred on private property, but that the department had nonetheless shared concerns raised by the paper with the Professional Standards Bureau andthat an investigation is underway.

    At the crux of this particular matter is a rather innocent act of journalism. While visiting family in Arizona for the Thanksgiving holiday, Rabouin attempted to interview passersby on a sidewalk outside a Chase branch for an ongoing story about savings accounts, he told the Phoenix affiliate.

    Representatives from the bank approached him and asked what he was doing and Rabouin said he identified himself as a journalist. Rabouin said he was never asked to leave, but an officer soon arrived on the scene.

    Rabouin said he volunteered to simply stop reporting from the scene, but video captured by a bystander shows the responding officer handcuff him, put him in the back of a police vehicle, and even threaten to shove him in if he did not comply. The video shows Rabouin repeatedly identified himself as a reporter for The Journal, but the officer did not appear to care. The bystander who began recording the incident was also threatened with arrest.

    Ultimately, after about 15 minutes, when other officers showed up, Rabouin was allowed to walk free. A representative for Chase told me Thursday that the bank did apologize to Rabouin over the incident. But the local police department has thus far refrained from doing so.

    In a letter dated December 7 from Journal Editor-In-Chief Matt Murray to Phoenix Police Department Interim Chief Michael Sullivan, the editor described the officer’s conduct as “offensive to civil liberties,” and demanded to know what steps the department will take to “ensure that neither Mr. Rabouin nor any other journalist is again subjected to such conduct.” The Journal told me Thursday that Murray has not received a response from Sullivan.

    For press freedom advocates, the incident is representative of countless others that take place around the US each year. According to the US Press Freedom Tracker, at least 218 journalists have been arrested in the country since 2020.

    Bruce Brown, the executive director of the Reporters Committee for Freedom of the Press, told me in a statement that “the alarming number of incidents we’ve seen over the last several years where police have detained, arrested, or assaulted journalists who were doing their jobs threatens to chill this kind of essential newsgathering.”

    Brown added, “It’s time for the law enforcement community to hold itself accountable for its actions. The Phoenix Police Department can start now.”

    The Committee to Protect Journalists has also sounded the alarm over the incident. Katherine Jacobsen, the organization’s US and Canada program director, told me the detention of Rabouin “highlights a very real threat faced by reporters – especially local reporters – across the country.” Jacobsen went on to say that it is “disheartening to see acts of hostility toward journalists working in the United States.”

    Through a spokesperson, Rabouin declined to comment to me on Thursday. But he did post one tweet about the matter.

    “Thanks to everyone who has reached out to offer support,” Rabouin wrote. “We’re hoping to hear back from the chief or someone at the department soon.”

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  • No directive: FBI agents, tech executives deny government ordered Twitter to suppress Hunter Biden story | CNN Politics

    No directive: FBI agents, tech executives deny government ordered Twitter to suppress Hunter Biden story | CNN Politics



    CNN
     — 

    Internal Twitter communications released by the company’s new owner and CEO, Elon Musk, are fueling intense scrutiny of the FBI’s efforts alongside social media companies to thwart foreign disinformation in the run-up to the 2020 election.

    At the heart of the controversy is Twitter’s decision in October 2020 to block users from sharing a New York Post story containing material from a laptop belonging to Hunter Biden. Conservative critics have accused Twitter of suppressing the story at the behest of the FBI, something they claim the released communications, dubbed the “Twitter Files,” demonstrate.

    Musk himself has alleged the communications show government censorship, suggesting Twitter acted “under orders from the government” when it suppressed the Hunter Biden laptop story.

    But so far, none of the released messages explicitly show the FBI telling Twitter to suppress the story. In fact, the opposite view emerges from sworn testimony by an FBI agent at the center of the controversy. And in interviews with CNN, half a dozen tech executives and senior staff, along with multiple federal officials familiar with the matter, all deny any such directive was given.

    “We would never go to a company to say you need to squelch this story,” said one former FBI official who helped oversee the government’s cooperation with companies including Twitter, Google and Facebook.

    Musk and his conservative allies have insinuated the released messages provide evidence of illicit behavior by the FBI, suggesting the exchange of secret files pertaining to Hunter Biden, and improper payments made to Twitter. But CNN’s interviews with people directly involved with the interactions and with those who have reviewed the documents disprove those claims.

    Matt Taibbi, one of the journalists Musk tapped this month to comb through Twitter internal messages for evidence of free speech violations, said himself on December 2 that “there is no evidence – that I’ve seen – of any government involvement in the laptop story.”

    What is clear, however, is that following Russia’s meddling campaign in 2016, plus after years of interactions with federal agents about how to spot foreign disinformation efforts, Twitter executives were hyper suspicious of anything that looked like foreign influence and were primed to act, even without direction from the government.

    By the time the New York Post published its laptop story on October 14, 2020, Yoel Roth, Twitter’s then head of site integrity, had spent two years meeting with the FBI and other government officials. He was prepared for some kind of hack and leak operation.

    “There were lots of reasons why the entire industry was on alert,” Roth said at a conference in November, not long after he resigned from Twitter. Roth insists he was not in favor of blocking the story and thought the company’s decision was a mistake.

    As the released communications show, Twitter initially acted to suppress the story for a few days in part out of concerns that Hunter Biden, the son of the then-Democratic presidential candidate, was being targeted as part of a foreign election interference operation similar to the one Russia carried out in 2016.

    What Twitter did not know at the time was that Hunter Biden was the subject of a federal criminal investigation. Since as early as 2018, the Justice Department has been investigating Hunter Biden for his business activities in foreign countries. In late 2019, nearly a year before the story first emerged in the New York Post, the FBI had used a subpoena to obtain a laptop that Biden allegedly left behind at a Delaware computer repair store.

    According to sources at the FBI and at Twitter who spoke to CNN, none of that information was disclosed to Twitter executives trying to decide how to treat the laptop story, nor to anyone else for that matter.

    “It was an ongoing investigation, so I would never approve of talking about it,” said the former FBI official.

    While the released Twitter messages have yet to reveal a smoking gun showing the government ordered a social media company to suppress a story, Republicans on Capitol Hill say there are enough questions raised by the internal communications to merit calling tech executives to testify.

    Scrutiny is building around the role of Twitter’s recently-fired deputy general counsel James Baker, a former top FBI official who joined Twitter in the summer of 2020. The released documents show Baker was in regular contact with his former colleagues at the FBI, giving rise to rampant accusations from conservatives that he was the conduit for the government to pressure Twitter.

    In some of the material released by Twitter, an email shows Baker setting up a meeting – in the midst of Twitter’s internal deliberations about how to handle the New York Post story – with Matthew Perry, an attorney in the FBI’s Office of General Counsel. It is not clear what the two discussed.

    The FBI declined to discuss any communications Baker had with FBI officials once he arrived at Twitter.

    Baker is among a number of former Twitter executives called to testify this month by Republican Rep. James Comer, the incoming chair of the House Oversight Committee. Baker declined to comment for this story.

    Rep. James Comer (R-KY) attends a House Oversight Committee hearing on July 27, 2022

    Comer also wants to hear from several former US intelligence officials who, days after the laptop story broke, wrote an open letter saying it had “all the classic earmarks of a Russian information operation.” The group of former officials who signed the letter included former Director of National Intelligence James Clapper, who, as a CNN contributor, appeared on the network to express his view.

    Though the former officials admitted, “we do not have evidence of Russian involvement,” their letter set the tone for much of the early discussion and coverage of the laptop.

    In a statement to CNN, the FBI said, “The correspondence between the FBI and Twitter show nothing more than examples of our traditional, longstanding and ongoing federal government and private sector engagements, which involve numerous companies over multiple sectors and industries. As evidenced in the correspondence, the FBI provides critical information to the private sector in an effort to allow them to protect themselves and their customers.

    “The men and women of the FBI work every day to protect the American public. It is unfortunate that conspiracy theorists and others are feeding the American public misinformation with the sole purpose of attempting to discredit the agency.”

    Among the messages given the most attention from Musk and other critics are a series of emails between Roth and Elvis Chan, an FBI special agent based in San Francisco, where he focuses on cybersecurity and foreign influence on social media. On October 13, the day before New York Post story published, Chan instructed Roth to download ten documents on a secure portal.

    Roth responded, “received and downloaded – thanks!”

    Michael Shellenberger, who is among those Musk has entrusted with access to the internal messages, wrote about the Chan communication with Roth. Shellenberger does not describe the contents of the files, but he does insinuate that the timing of the message suggests Chan was secretly providing Roth information about the Hunter laptop.

    At the FBI’s headquarters in Washington, a team reviewing the internal communications released by Musk says it has identified the 10 documents Chan sent to Roth. “I reviewed all 10 of these documents personally and I can say explicitly there is nothing in these 10 documents about Hunter Biden’s laptop or about any related story to that,” an FBI official involved in the review told CNN.

    The official said eight of the documents pertained to “malign foreign influence actors and activities,” the FBI’s terminology for foreign government election meddling. The official said the other two documents were posts on Twitter the FBI flagged as potential evidence of election-related crimes, such as voter suppression activities.

    Another interaction that has drawn suspicion is an internal message from early 2021 that Shellenberger cites showing that the FBI paid Twitter $3.4 million beginning October 2019. In the message, an unnamed associate emails Baker saying, “I am happy to report we have collected $3,415,323 since October 2019!”

    The FBI says the bureau is obligated under federal law to reimburse companies for the cost they incur to satisfy subpoenas and other legal requests as part of the FBI’s investigative work.

    The FBI describes its discussions with Twitter as the type of information-sharing that Congress and both the Trump and Biden administrations encouraged to help tech companies and social media platforms protect themselves and their users. The released messages appear to show that FBI officials repeatedly noted that it was up to the content moderators at the company to take action if a post violated their rules.

    “All the information exchanged is about the actors and their activity,” a second FBI official who reviewed the communications told CNN. “What we are not providing is specifics about the content and the narrative. We are also not directing the platforms to do anything. We are just providing it for them to do as they see fit under their own terms of service to protect their platforms and customers.”

    After the 2016 election, social media executives knew they had a problem. Russian operatives had used their platforms to run a massive covert influence campaign to help elect Donald Trump, using bots to spread disinformation and sow division among Americans.

    To prepare for the next election, the executives set about bolstering their internal controls, including hiring former law enforcement and intelligence officials. But they also knew they had to forge a closer relationship with the US government to help root out foreign trolls and sources of disinformation.

    President Donald Trump chats with Russia's President Vladimir Putin at a summit in 2017.

    What followed were a series of regular meetings with federal agents that began in May 2018.

    The released communications as well as interviews with people involved in the meetings portray routine, friendly and sometimes tense contacts between company executives and the government officials with whom they regularly interacted. Among the released communications are lively exchanges between Twitter and the FBI, revealing some of the sensitivities — and tensions — at play as the government and Silicon Valley slowly figured out how to work together.

    One former FBI official who spoke to CNN recalls that tech executives would insist on meetings away from their campuses, in part because government agents weren’t welcome. Feelings in Silicon Valley toward the intelligence community were still raw since the Edward Snowden leaks detailed a vast data collection apparatus that targeted the tech companies.

    “Early on, who hosted the meeting was also a political football,” said a person familiar with the meetings between the government and Silicon Valley. “Each company wanted someone else to. There were worries about employees seeing a bunch of feds and leaking it in an inaccurate way.”

    One tech source, however, dismissed this and said companies offered their offices for the meetings out of a shared sense of responsibility.

    Nevertheless, the meetings went ahead. The first one took place at Facebook’s headquarters in Menlo Park. Later meetings were held at Twitter and LinkedIn’s offices, a person familiar with the meetings told CNN.

    Some of the early interactions were terse. Reports published by CNN and other news organizations described complaints from some tech executives that the FBI was sharing only limited information, useless to help the companies protect their platforms.

    A telling moment came early on when a government lawyer lectured tech executives about the limits on what the government can do to help, multiple people who attended the meeting told CNN. One Silicon Valley executive described how the lawyer gave a 20-minute speech about the First Amendment and insisted that “government representatives can’t tell the companies to take any content down.”

    Former Twitter employees and FBI officials involved say that by 2020, their discussions had become better coordinated and useful to both sides. One indicator of how advantageous the relationship had become: By 2020, Facebook was issuing press releases about some of the discussions.

    Musk and other critics of the interactions point to released messages that they claim show a cozy relationship between the government and Twitter. But the messages also show Roth, Twitter’s then head of site integrity, repeatedly pushing back against asks from the FBI.

    At various points, the Twitter communications show Roth resisting pressure to reveal certain information about users absent a formal legal request, such as which third-party VPN services were used by some account-holders to access Twitter.

    Yoel Roth

    Roth also shut down a request that the company share more of its data with intelligence officials.

    Others within Twitter noted the US government’s interest in Twitter’s data and urged colleagues to “stay connected and keep a solid front against these efforts.”

    Conservative critics continue to blame Roth for Twitter’s suppression of the laptop story, but he insists he didn’t make the final call and says he thought it was a mistake. “It is widely reported that I personally directed the suppression of the Hunter Biden laptop story,” Roth said last month. “It is absolutely, unequivocally untrue.”

    Exactly who in Twitter’s leadership ultimately made the call to block the story remains unclear.

    In December 2020, Roth gave a sworn declaration to the Federal Election Commission saying the government had warned of expected hack-and-leak incidents targeting people associated with political campaigns. Roth said that he learned in the meetings with government agencies there were “rumors that a hack-and-leak operation would involve Hunter Biden.”

    Roth did not point to the government as the source of the rumor, but his claim that law enforcement agencies gave general warnings about disinformation campaigns dovetails with recent testimony from Chan, the FBI agent who played a key role in the meetings.

    Chan was deposed this year as part of a lawsuit brought by the Missouri attorney general alleging government censorship of social media. Chan disputed that the government told social media companies to “expect” hack-and-leak campaigns, saying that it would have only warned companies it was a possibility.

    That Hunter Biden might be the target of a hack-and-leak operation was being publicly discussed at the time, after it emerged that Burisma Holdings, a company he worked with in Ukraine had reportedly been hacked by Russian military intelligence early in 2020.

    Chan also testified that government agents never raised Hunter Biden specifically, and that his name came up only when a Facebook analyst asked specifically for relevant information. An FBI agent in the meeting declined to answer, Chan recalled, adding that she was likely not authorized to address the question because at the time the FBI had not publicly confirmed its Hunter Biden investigation.

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  • Exxon Mobil, Newmont rise; Mission Produce, Nutanix fall

    Exxon Mobil, Newmont rise; Mission Produce, Nutanix fall

    Stocks that traded heavily or had substantial price changes Friday: Exxon Mobil, Newmont rise; Mission Produce, Nutanix fall

    NEW YORK — Stocks that traded heavily or had substantial price changes Friday:

    News Corp., up 49 cents to $18.56.

    Michael Bloomberg is reportedly interested in buying Dow Jones from the media company.

    Mission Produce Inc., down $2.22 to $12.39.

    The avocado producer reported weak fiscal fourth-quarter financial results.

    Nutanix Inc., down $2.23 to $25.69.

    Hewlett Packard Enterprise has reportedly ended buyout talks with the enterprise cloud platform services provider.

    Exxon Mobil Corp., up $2.80 to $108.68.

    Energy companies gained ground along with rising crude oil prices.

    Newmont Corp., up 35 cents to $47.85.

    The gold producer rose along with prices for the precious metal.

    United Airlines Holdings Inc., up 11 cents to $38.39.

    Airline stocks were unsettled as a winter storm forces flight cancellations throughout the U.S.

    Carnival Corp. down 7 cents to $7.81.

    Consumers are tempering spending, which could hurt travel companies and other non-essential services and goods.

    Tesla Inc., down $2.20 to $123.15.

    CEO Elon Musk said he will not sell shares of the electric vehicle maker next year.

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  • Released Twitter emails show how employees debated how to handle 2020 New York Post Hunter Biden story | CNN Business

    Released Twitter emails show how employees debated how to handle 2020 New York Post Hunter Biden story | CNN Business



    CNN
     — 

    For days, Twitter owner Elon Musk had teased a massive bombshell disclosure based on internal company documents that he claimed would reveal “what really happened” inside Twitter when it decided to temporarily suppress a 2020 New York Post story about Hunter Biden and his laptop.

    But on Friday, instead of releasing a trove of documents to the public, Musk’s big reveal pointed to a series of tweets by the journalist Matt Taibbi, who had been provided with emails that largely corroborated what was already known about the incident.

    Attracting thousands of retweets, Taibbi’s winding tweet thread reaffirmed how, in the initial hours after the Post story went live, Twitter employees grappled with fears that it could have been the result of a Russian hacking operation.

    It showed employees on Twitter’s legal, policy and communications teams debating – and at times disagreeing – over whether to restrict the article under the company’s hacked materials policy, weeks before the 2020 election, where Joe Biden, Hunter Biden’s father, ran against then-President Donald Trump.

    While some questioned the basis for the decision and warned that Twitter would be inviting allegations of anti-conservative bias, others within the company, including senior officials, said the circumstances surrounding the Post story were unclear and recommended caution, according to screenshots of internal communications shared by Taibbi.

    (Then-CEO Jack Dorsey – whom Taibbi said was not involved in the decision – has told US lawmakers that in hindsight, suppressing the story was a mistake.)

    The emails Taibbi obtained are consistent with what former Twitter site integrity head Yoel Roth told journalist Kara Swisher in an onstage interview earlier this week. During that interview, Roth said he felt at the time that the Post reporting bore the hallmarks of a Russian hack-and-leak operation, an assessment that was shared at the time by dozens of former US intelligence officials. Roth did not respond to CNN’s request for comment.

    The Taibbi posts undercut a top claim by Musk and Republicans, who have accused the FBI of leaning on social media companies to suppress the Hunter Biden laptop stories.

    Musk tweeted Friday night, amid the Taibbi posts, that Twitter had acted “under orders from the government.”

    Taibbi said in his series of tweets that “there is no evidence – that I’ve seen – of any government involvement in the laptop story.”

    Lawyers for Facebook parent company Meta have made similar comments in recent weeks, disputing claims from Republicans that the FBI coerced Facebook to suppress the laptop stories.

    Taibbi said the material he reviewed referenced general FBI warnings about potential attempted Russian interference in the elections, which also dovetails with Meta CEO Mark Zuckerberg’s public account of Facebook’s handling of the New York Post story and affirms how Twitter was on high alert for possible foreign meddling.

    In the wake of the article’s suppression, Taibbi said one Democratic congressman, California Rep. Ro Khanna, wrote to Twitter’s chief legal officer suggesting it was a bad look and a departure from First Amendment ideals to suppress a news report containing details that affect a presidential candidate. Khanna noted in the email he was saying this even though he was a “total Biden partisan.” Khanna did not respond to a request for comment.

    The tweet thread also highlighted how officials from both political parties routinely wrote to Twitter asking for specific tweets to be removed. Taibbi included a screenshot of an email from the “Biden team” asking to delete tweets. A CNN review of those tweets on an archive site showed some purported photos of Hunter Biden, including nudity, that may have violated Twitter policy.

    Taibbi said the contact from political parties happened more frequently from Democrats, but provided no internal documents to back up his assertion. He also did not say that Democrats requested that Twitter suppress the Post story, and his account did not suggest that the US government had ever pressured Twitter to suppress the story.

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  • The rise and fall of Elizabeth Holmes: A timeline | CNN Business

    The rise and fall of Elizabeth Holmes: A timeline | CNN Business



    CNN
     — 

    More than three years after Elizabeth Holmes was first indicted and nearly four months after her trial kicked off, the founder and former CEO of failed blood testing startup Theranos was found guilty on four out of 11 federal fraud and conspiracy charges.

    The verdict comes after a stunning downfall that saw Holmes, once hailed as the next Steve Jobs, go from being a tech industry icon to being a rare Silicon Valley entrepreneur on trial for fraud.

    A Stanford University dropout, Holmes – inspired by her own fear of needles – started the company at the age of 19, with a mission of creating a cheaper, more efficient alternative to a traditional blood test. Theranos promised patients the ability to test for conditions like cancer and diabetes with just a few drops of blood. She attracted hundreds of millions of dollars in funding, a board of well-known political figures, and key retail partners.

    But a Wall Street Journal investigation poked holes into Theranos’ testing and technology, and the dominoes fell from there. Holmes and her former business partner, Ramesh “Sunny” Balwani, were charged in 2018 by the US government with multiple counts of wire fraud and conspiracy to commit wire fraud. (Both pleaded not guilty.)

    Here are the highlights of the rise and fall of Elizabeth Holmes and Theranos.

    Holmes, a Stanford University sophomore studying chemical engineering, drops out of school to pursue her startup, Theranos, which she founded in 2003 at age 19. The name is a combination of the words “therapy” and “diagnosis.”

    Balwani joins as chief operating officer and president of the startup. Balwani, nearly 20 years her senior, met Holmes in 2002 on a trip to Beijing through Stanford University. The two are later revealed to be romantically involved.

    A decade after first starting the company, Holmes takes the lid off Theranos and courts media attention the same month that Theranos and Walgreens announce they’ve struck up a long-term partnership. The first Theranos Wellness Center location opens in a Walgreens in Palo Alto where consumers can access Theranos’ blood test.

    The original plan had been to make Theranos’ testing available at Walgreens locations nationwide.

    Holmes is named to the magazine’s American billionaire list with the outlet reporting she owns a 50% stake in the startup, pinning her personal wealth at $4.5 billion.

    Theranos has raised more than $400 million, according to a profile of the company and Holmes by The New Yorker. It counts Oracle’s Larry Ellison among its investors.

    The FDA clears Theranos to use of its proprietary tiny blood-collection vials to finger stick blood test for herpes simplex 1 virus – its first and only approval for a diagnostic test.

    The Wall Street Journal reports Theranos is using its proprietary technique on only a small number of the 240 tests it performs, and that the vast majority of its tests are done with traditional vials of blood drawn from the arm, not the “few drops” taken by a finger prick. In response, Theranos defends its testing practices, calling the Journal’s reporting “factually and scientifically erroneous.”

    A day later, Theranos halts the use of its blood-collection vials for all but the herpes test due to pressures from the FDA. (Later that month, the FDA released two heavily redacted reports citing 14 concerns, including calling the company’s proprietary vial an “uncleared medical device.”)

    One week after the Journal report, Holmes is interviewed on-stage at the outlet’s conference in Laguna Beach. “We know what we’re doing and we’re very proud of it,” she says.

    Holmes speaking at a Wall Street Journal technology conference in Laguna Beach, California on October 21, 2015.

    Amid the criticism, Theranos reportedly shakes up its board of directors, eliminating Henry Kissinger and George Shultz as directors while moving them to a new board of counselors; the company also forms a separate medical board.

    Safeway, which invested $350 million into building out clinics in hundreds of its supermarkets to eventually offer Theranos blood tests, reportedly looks to dissolve its relationship with the company before it ever offered its services.

    Centers for Medicare and Medicaid Services (CMS) sends Theranos a letter saying its California lab has failed to comply with federal standards and that patients are in “immediate jeopardy.” It gives the company 10 days to address the issues.

    In response, Walgreens says it will not send any lab tests to Theranos’ California lab for analysis and suspends Theranos services at its Palo Alto Walgreens location.

    CMS threatens to ban Holmes and Balwani from the laboratory business for two years after the company allegedly failed to fix problems at its California lab. Theranos says that’s a “worst case scenario.

    Balwani departs. The company also adds three new board members as part of the restructuring: Fabrizio Bonanni, a former executive vice president of biotech firm Amgen, former CDC director William Foege, and former Wells Fargo CEO Richard Kovacevich.

    Theranos voids two years of blood test results from its proprietary testing devices, correcting tens of thousands of blood-test reports, the Journal reports.

    Forbes revises its estimate of Holmes’ net worth from $4.5 billion to $0. The magazine also lowers its valuation for the company from $9 billion to $800 million.

    Walgreens, once Theranos’ largest retail partner, ends its partnership with the company and says it will close all 40 Theranos Wellness Centers.

    CMS revokes Theranos’ license to operate its California lab and bans Holmes from running a blood-testing lab for two years.

    Holmes tries to move past recent setbacks by unveiling a mini testing laboratory, called miniLab, at a conference for the American Association for Clinical Chemistry. In selling the device, versus operating its own clinics, Theranos seeks to effectively side-step CMS sanctions, which don’t prohibit research and development.

    Theranos investor Partner Fund Management sues the company for $96.1 million, the amount it sunk into the company in February 2014, plus damages. It accuses the company of securities fraud. Theranos and Partner Fund Management settled in May, 2017, for an undisclosed amount.

    The company also lays off 340 employees as it closes clinical labs and wellness centers as it attempts to pivot and focus on the miniLab.

    Walgreens sues the blood testing startup for breach of contract. Walgreens sought to recover the $140 million it poured into the company. The lawsuit was settled August, 2017.

    Theranos downsizes its workforce yet again following the increased scrutiny into its operations, laying off approximately 155 employees or about 41% of staffers.

    The Wall Street Journal reports that Theranos failed a second regulatory lab inspection in September, and that the company was closing its last blood testing location as a result.

    Theranos settles with the CMS, agreeing to pay $30,000 and to not to own or operate any clinical labs for two years.

    Theranos also settles with the Arizona Attorney General Mark Brnovich over allegations that its advertisements misrepresented the method, accuracy, and reliability of its blood testing and that the company was out of compliance with federal regulations governing clinical lab testing. Theranos agrees to pay $4.65 million back to its Arizona customers as part of a settlement deal.

    The SEC charges Holmes and Balwani with a “massive fraud” involving more than $700 million from investors through an “elaborate, years-long fraud in which they exaggerated or made false statements about the company’s technology, business, and financial performance.”

    The SEC alleges Holmes and Balwani knew that Theranos’ proprietary analyzer could perform only 12 of the 200 tests it published on its patient testing menu.

    Theranos and Holmes agree to resolve the claims against them, and Holmes gives up control of the company and much of her stake in it. Balwani, however, is fighting the charges, with his attorney saying he “accurately represented Theranos to investors to the best of his ability.”

    Reporter John Carreyrou, who first broke open the story of Theranos for the Wall Street Journal, publishes “Bad Blood,” a definitive look at what happened inside the disgraced company. Director Adam McKay (who directed “The Big Short”) secures the rights to make the film, starring Jennifer Lawrence as Holmes, by the same name.

    Holmes and Balwani are indicted on federal wire fraud charges over allegedly engaging in a multi-million dollar scheme to defraud investors, as well as a scheme to defraud doctors and patients. Both have pleaded not guilty.

    Minutes before the charges were made public, Theranos announced that Holmes has stepped down as CEO. The company’s general counsel, David Taylor, takes over as CEO. Holmes remains chair of the company’s board.

    Former Theranos COO Ramesh

    Taylor emails shareholders that Theranos will dissolve, according to a report from The Wall Street Journal. Taylor said more than 80 potential buyers were not interested in a sale. “We are now out of time,” Taylor wrote.

    Alex Gibney, the prolific documentary filmmaker behind “Dirty Money,” “Enron: The Smartest Guys in the Room,” and “The Armstrong Lie,” debuts “The Inventor” on HBO, following the rise and fall of Theranos.

    A new court document reveals Holmes may seek a “mental disease” defense in her criminal fraud trial. Later, in August 2021, unsealed court documents reveal Holmes is likely to claim she was the victim of a decade-long abusive relationship with Balwani. The allegations led to the severing of their trials. His trial is slated to begin in 2022.

    Initially set to begin in July 2020, Holmes’ criminal trial is further delayed til July 2021 due to the coronavirus pandemic.

    News surfaces that Holmes’ is expecting her first child, once more further delaying her criminal trial. Holmes’ counsel advised the US government that Holmes is due in July 2021, a court document revealed. She gave birth in July.

    Holmes collects her belongings after going through security at the Robert F. Peckham Federal Building with her defense team on August 31, 2021 in San Jose, California.

    More than 80 potential jurors are brought into a San Jose courtroom for questioning over the course of two days to determine if they are fit to serve as impartial, fair jurors for the criminal trial of Holmes. A jury of seven men and five women is selected, with five alternatives.

    After three months of testimony from 32 witnesses, the criminal fraud case of Theranos founder Elizabeth Holmes makes its way to the jury of eight men and four women who will decide her fate. The jury would go on to deliberate for more than 50 hours before returning a verdict.

    Holmes is found guilty of one count of conspiracy to defraud investors as well as three wire fraud counts tied to specific investors. She is found not guilty on three additional charges concerning defrauding patients and one charge of conspiracy to defraud patients. The jury returns no verdict on three of the charges concerning defrauding investors. Holmes faces up to 20 years in prison as well as a fine of $250,000 plus restitution for each count.

    “The Dropout,” a scripted miniseries about Theranos produced by ABC, debuts on Hulu. Amanda Seyfried stars as Holmes and Naveen Andrews plays Balwani. Their romantic and professional relationship features prominently in the show.

    Following delays due to Holmes’ prolonged trial then a surge of Covid-19, jury selection for Balwani’s trial gets underway. On March 22, opening arguments are held and the government’s first witness, a former Theranos employee turned whistleblower, is called to the stand.

    After four full days of deliberations, a jury finds Balwani guilty of ten counts of federal wire fraud and two counts of conspiracy to commit wire fraud. Like Holmes, Balwani faces up to 20 years in prison as well as a fine of $250,000 plus restitution for each count of wire fraud and each conspiracy count.

    Holmes asks for a new trial after claiming that a key witness visited her house unannounced and allegedly said he “feels guilty” about his testimony.

    In a court filing with the United States District Court for the Northern District of California, Holmes’ attorneys said Adam Rosendorff, a former Theranos lab director who was one of the government’s main witnesses, arrived at her home on August 8 asking to speak with her. According to the filing, Rosendorff did not interact with Holmes but did speak to her partner Billy Evans, who recounted the exchange in an email to Holmes’ lawyers shortly after.

    “His shirt was untucked, his hair was messy, his voice slightly trembled,” Evans wrote about Rosendorff. According to Evans’ email, Rosendorff “said when he was called as a witness he tried to answer the questions honestly but that the prosecutors tried to make everybody look bad.”

    The former Theranos lab director also “said he felt like he had done something wrong,” Evans wrote.

    Rosendorff takes the stand again to address concerns from Holmes’ defense team and their claims he had shown up at her home after the trial concluded asking to speak with her and expressed regrets about his testimony.

    At the hearing, Rosendorff reaffirmed the truthfulness of his testimony at Holmes’ trial and said that the government did not influence what he said.

    A federal judge denies Elizabeth Holmes’ request for a new trial, according to court filings, paving the way for the founder of failed blood testing startup Theranos to be sentenced later in the month.

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  • Wall Street Journal: Mark Zuckerberg tells employees layoffs coming Wednesday | CNN Business

    Wall Street Journal: Mark Zuckerberg tells employees layoffs coming Wednesday | CNN Business



    CNN Business
     — 

    Meta CEO Mark Zuckerberg told company executives that major layoffs at the tech giant will begin on Wednesday morning, the Wall Street Journal reported Tuesday afternoon.

    Meta declined to comment to CNN on the report, which said Zuckerberg told the executives at Facebook

    (FB)
    ’s parent company that he is accountable for the job cuts, after his over-optimism about growth had led to excessive hiring.

    Citing unnamed sources familiar with the matter, the Journal reported that the upcoming job cuts will likely impact many thousands of employees and mark the first broad headcount reductions in the company’s history.

    Meta had more than 87,000 employees as of September, per a Securities and Exchange Commission filing, representing a year-over-year increase of 28%, as it staffed-up during the pandemic while business boomed.

    More recently the company’s core business has been hit hard by fast-growing competition from rivals such as TikTok, as well as recent changes from Apple

    (AAPL)
    related to ad-targeting. Fears of a looming recession have also led to advertisers tightening their belts. Once boasting a market capitalization of more than $1 trillion last year, Meta is now valued at about $250 billion.

    Meanwhile, the company has also been spending billions on a future version of the internet dubbed the metaverse, which likely remains years away. Late last month, Meta posted its second quarterly revenue decline since going public and reported that its profit was less than half the amount it made during the same period in the prior year.

    Amid a broader market downturn that has particularly pummeled the tech sector, shares for Meta have fallen more than 70% in 2022 alone.

    The reports of significant layoffs at Meta come as other tech companies have announced major job cuts. Last week, rideshare company Lyft said it was axing 13% of employees, and payment-processing firm Stripe said it was cutting 14% of its staff. The same day, e-commerce giant Amazon

    (AMZN)
    said it was implementing a pause on corporate hiring.

    Also last week, Twitter announced sweeping job cuts across the company after Elon Musk took the helm following his acquisition of the company for $44 billion, which required taking on significant debt.

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