Tech

Across the Atlantic, Biden offers supply chain fixes

With help from Alexandra S. Levine, Steven Overly and Sam Sabin

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— Supply chain scramble: The Biden administration and Congress are working on ways to stop the shortages plaguing the U.S. supply chain, but there’s no quick fix on the horizon.

— Beltway drama: A protracted financial dispute has pitted a high-profile venture capitalist against a government tech accelerator.

— Stamp of approval: A government review of Clearview AI suggests the facial recognition startup’s software is very accurate. The way to interpret that depends on where you stand on surveillance issues.

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BIDEN’S LATEST SUPPLY CHAIN MOVES — House Democrats hope to pass two pillars of President Joe Biden’s domestic agenda this week. The bipartisan infrastructure framework and partisan social spending package, if passed, would mean billions for a slew of tech and telecom priorities, including $5 billion for Commerce Department efforts to bolster supply chains. (One caveat: Democrats plan to replace the latest version of the social spending bill with a manager’s amendment, so specific numbers could still be in flux.)

Biden highlighted the supply chain provision in Rome on Sunday, in remarks following a meeting with global leaders on supply chain resiliency. That sum, which was originally set at $10 billion, is meant to go toward the monitoring and identification of supply chain vulnerabilities for critical manufacturing and efforts to address those concerns. (Democrats also added language to the package for an investment tax credit to help boost domestic semiconductor manufacturing.)

— Growing crisis: The nation’s supply chain woes have become a political and economic crisis for Biden, who is trying with minimal success to bring it under control. The effects of these shortages have been far-reaching: Bookstores in Massachusetts can’t procure page turners, gym bros are being deprived of their post-workout burritos and in an earnings call last week, Apple CEO Tim Cook said the global semiconductor shortage cost his company $6 billion in revenue.

As part of his remarks, Biden also announced he had signed an executive order giving the Defense Department more leeway to release supplies and critical materials from the National Defense Stockpile. He pledged to send money to Mexico and Central America for technical assistance with their own supply chain snarls, and invited global trading partners to a future summit on supply chain resilience that the Commerce and State departments will host next year.

— Let’s be clear: None of those efforts address the most immediate problems, which are expected to get worse as the holiday season nears. Much of the U.S. supply chain is privately run, with little oversight from the federal government. That has left Biden with few options except pressuring industry to act and prodding state and local governments to loosen regulations.

Many of the administration’s efforts have thus focused on long-term fixes, such as funding infrastructure projects and investing in domestic manufacturing of the kinds of critical goods that have been caught up in global shortages. He told allies at this weekend’s G-20 gathering that they must also work together: “It isn’t a problem any one of our nations can solve through unilateral actions. Coordination is the key.”

In a statement, the countries that participated in Sunday’s summit committed to making their supply chains more transparent, diversified, sustainable and secure. To that end, they agreed to share more information about supply chain issues and look for opportunities to co-invest in raw materials, among other actions.

GOVERNMENT TECH ACCELERATOR VS. CYBER INVESTOR — A cybersecurity investor with deep ties to Washington-area cybersecurity firms has been in the midst of a yearlong legal dispute with PeaceTech, the U.S. Institute of Peace’s tech accelerator, according to court documents filed in the last couple of weeks.

— What’s going on: The legal dispute kicked off in April 2020 when PeaceTech filed a lawsuit against venture firm C5 Capital and investor André Pienaar for failing to provide promised funds tied to several business deals, such as an investment in a PeaceTech startup and a donation to the institute in exchange for naming rights. In July, the parties reached an agreement: Pienaar and his family trust would pay $450,000 to PeaceTech and $1.5 million to the U.S. Institute of Peace in two installments.

But enforcement of the settlement hasn’t been going well, according to filings from last month. On Oct. 12, PeaceTech filed another complaint alleging that Pienaar and the trust had fallen behind on their payments. The $450,000 payment was due within 48 hours of the settlement, but wasn’t completely paid until Aug. 12. And the first half of the $1.5 million, due on Sept. 19, has yet to be paid, PeaceTech claims.

On Tuesday, Pienaar’s legal team responded to the most recent complaint, arguing that the defendants have failed to prove the payments had been delayed in bad faith. “If every litigant brought a motion before the courts when a payment was 48-hours late, the courts would certainly be flooded,” the filing says. (Pienaar had sent just $100,000 of the initial $450,000 payment within a few days of the 48-hour deadline.)

A lawyer representing Pienaar said Sunday that “the parties have settled the overall dispute” and that they’ve reached a “full agreement with the U.S. Institute of Peace on the terms of this charitable pledge and its payment.” PeaceTech’s lawyers did not respond to a request for comment Sunday.

Still, this could be awkward for one of Pienaar’s local investments: IronNet Cybersecurity, a well-known cybersecurity and defense vendor that has partnered with federal contractors in recent years as it establishes a footprint in the federal government. C5 Capital, Pienaar’s firm, invested $35 million in IronNet in 2018, and Pienaar still sits on the board of directors.

CLEARVIEW AI UP-TO-SNUFF FOR NIST — Clearview AI, which had long resisted having its technology audited by the National Institute of Standards and Technology, finally leaned in — and the results are striking, Alex, our privacy expert, reports.

NIST, part of the Commerce Department, has for years been testing the accuracy of facial surveillance products — but only those submitted voluntarily by the vendors themselves. Clearview, which scrapes billions of personal images from public social media accounts to aid law enforcement across the country, had until now been an outlier. Its reluctance to participate in NIST’s reviews had raised doubts about the near-perfect accuracy Clearview has been touting for years.

— The results: NIST’s latest facial recognition vendor test, which includes meticulous data on hundreds of algorithms, ranks Clearview’s software among the top five most accurate programs for matching visa, mugshot and border crossing images. The results are “an unmistakable validation” for Clearview that “bolsters our commitment to continue delivering a world class product to our customers,” CEO Hoan Ton-That said in a statement.

— Good news or bad news? Depends on who you ask. Clearview and other industry players will see this as proof that facial recognition technology is accurate enough to be used safely. But consumer advocates, who have pushed for a ban on law enforcement use of the technology, are sure to argue that higher accuracy means the tech will only become more pervasive, and the resulting threat to privacy and civil rights will become even more acute.

TODAY’S THE DAY — China’s Personal Information Protection Law takes effect today, as U.S. lawmakers remain stalled on passing comprehensive data privacy legislation. The Chinese law is modeled on Europe’s General Data Protection Regulation and similarly targets the ways tech companies use personal data. “Europe’s way ahead of us. China is about to go ahead of us,” Senate Commerce consumer protection Chair Richard Blumenthal (D-Conn.) told Alex in July. “The rest of the world is leaving us behind.”

Marc Nathanson has been nominated to be ambassador to Norway. The long-time cable executive founded Falcon Cable TV and is a former vice chair of Charter Communications. … David Shahoulian and Jordan Haas are joining Intel’s U.S. government affairs team. Shahoulian will be workforce policy and government relations director. He was previously assistant secretary for border and immigration policy at the Department of Homeland Security and Democratic chief counsel on the House Judiciary immigration panel. Haas will be trade policy and government relations director. He was most recently IA’s director of trade and international policy and is a Commerce Department, Small Business Administration and Hill alum.

Stacia Cardille is joining Google as director of global legislative oversight on the Alphabet regulatory response, investigations and strategy team. She was most recently at Twitter and is a House, Senate, Obama White House and Energy Department alum. … Riva Sciuto is now head of comms for Google Assistant. She most recently was manager for global comms and public affairs at Google. … Patrick Hillmann is now chief comms officer at cryptocurrency exchange company Binance. He most recently was global head of innovation for crisis and risk at Edelman. … Jenna Owens, who joined GameStop as COO in March, has left the company. She was previously an Amazon and Google executive.

First in MT: Stephen Replogle of Capitol Consulting DC and Cristina Antelo of Ferox Strategies are launching the Trusted AI Coalition, which “seeks to actively advance ethical and trustworthy AI standards.”

Airbnb is partnering with the Asian Pacific American Institute for Congressional Studies, the Congressional Black Caucus Foundation and the Congressional Hispanic Caucus Institute to launch a pilot program to help provide housing for congressional fellows.

Labor woes: “Uber and Lyft Thought Prices Would Normalize by Now. Here’s Why They Are Still High.” More from WSJ.

Youth base: “Facebook documents reveal company targeted children as young as 6,” via NBC.

Looking elsewhere: The relationships between journalists and tech executives have deteriorated over the years. Here’s why, via NYT.

No sunlight here: “Infrastructure Bill’s Broadband Plan Shrouded From Scrutiny,” WSJ reports.

Watch out: The Federal Aviation Administration is planning to warn pilots and airlines about an upcoming 5G rollout that could interfere with cockpit safety systems. WSJ has more.

Tech talk: Former Google CEO Eric Schmidt weighs in on the dangers of AI, via NYT Opinion.

Tips, comments, suggestions? Send them along via email to our team: Bob King ([email protected]), Heidi Vogt ([email protected]), John Hendel ([email protected]), Alexandra S. Levine ([email protected]), Leah Nylen ([email protected]), Emily Birnbaum ([email protected]), and Benjamin Din ([email protected]). Got an event for our calendar? Send details to [email protected]. And don’t forget: Add @MorningTech and @PoliticoPro on Twitter.

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