| Here’s a look at today's tech briefing: - Biden signs bill that could ban TikTok.
- U.S. Chamber sues FTC over noncompete clause ban.
- Tesla vows more affordable EVs after sales slump.
- TikTok pauses app rewards amid EU scrutiny.
- DOJ seeks 3-year prison term for Binance founder.
Beth
p/beth-duckett | |
| 1 | U.S. President Biden signed a bill that would force TikTok's Chinese owner ByteDance to divest from its U.S. operations or face a national ban. TikTok CEO Shou Zi Chew said he expects the company to successfully challenge and block the law in court. More: - The "divest-or-ban" TikTok is part of a larger $95B package that includes aid to Ukraine, Israel, Gaza, and Taiwan.
- After bipartisan support from the House and Senate, Biden signed the package into law today.
- It gives ByteDance nine months, plus a possible three-month extension by Biden, to find a U.S. buyer for TikTok.
- Failure means TikTok would be banned from U.S. app stores.
- Chew said TikTok will fight the law on First Amendment grounds. The app will continue to operate as the case goes through court.
Zoom out: - Potential TikTok buyers include Steve Mnuchin, Kevin O'Leary, Bobby Kotick, Rumble, Oracle/Walmart, and Microsoft, according to Forbes.
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| 2 | | Tesla plans to speed up the release of new more affordable vehicles. The news coincides with Tesla's Q1 earnings, where it reported a 9% drop in revenue and a 55% drop in net income. New vehicles: - Production of the new vehicles, including "more affordable models," could begin later this year or early 2025, ahead of previous estimates, CEO Elon Musk said in the earnings call.
- Tesla will use aspects of both its current and next-gen platforms.
- Musk has talked about a $25,000 EV as far back as 2018.
- The CEO was still vague about the affordable models, focusing instead on Tesla's AI efforts, robotaxis, and humanoid robots.
Other endeavors: - Tesla could start selling its Optimus robot by year's end, he said.
- The company said it will launch its long-awaited robotaxi, the CyberCab, in August, and previewed its ride-hailing app.
- Tesla's driverless network, a mix of Airbnb and Uber, would allow people to summon cars.
- Tesla would operate the fleet using both company-owned and customer vehicles, Musk said.
Sales slump: - Tesla's deliveries fell 8.5% in Q1 from the year prior.
- To tackle the slump, the company said it's expanding financing options and cutting costs, including laying off 10% of its workforce.
- The EV maker expects growth this year to be "notably lower" than 2023.
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| 3 | | Business groups led by the U.S. Chamber of Commerce sued the Federal Trade Commission over its new rule banning most noncompete agreements. The FTC voted 3-2 Tuesday to ban the agreements restricting employees from joining competitors. More: - An estimated 30 million U.S. workers are bound by noncompete clauses, which are common in the tech industry.
- The FTC argues that the clauses hurt labor market efficiency and competition and block access to better-paying jobs.
- In its lawsuit, the chamber argues that the FTC overstepped its legal bounds, and has asked a court to overturn the ban.
- The chamber contends that noncompete agreements protect company secrets, while the FTC advises using nondisclosure agreements instead.
- The ban will take effect 120 days after publication in the Federal Register
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| 4 | | TikTok voluntarily paused rewards on its TikTok Lite app amid EU concerns that it is addictive for children. The app's "Task and Rewards" program lets users over 18 earn points by watching videos, liking posts, and inviting friends. The points can be exchanged for vouchers and gift cards. More: - The EU is investigating if TikTok Lite, a smaller version of the app, broke its new digital rules aimed at combating harmful content online.
- Its executive commission gave TikTok until today to address addiction concerns with the program or face suspension.
- The company said it has voluntarily paused the rewards while it addresses the EU concerns.
- TikTok also provided the bloc with a risk assessment report on TikTok Lite.
Zoom out: - TikTok is targeted under the EU's Digital Services Act (DSA), a 2023 law designed to improve online safety in the bloc.
- It applies to major digital platforms and search engines like Google, Facebook, and Amazon.
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| 5 | | The U.S. Justice Department recommended a three-year prison term for Binance founder Changpeng Zhao after he pleaded guilty to money laundering. Prior federal guidelines had recommended a maximum sentence of 18 months. More: - Zhao, Binance's former CEO, stepped down in November and pleaded guilty to anti-money laundering violations.
- He is accused of neglecting measures required by law, which allowed Binance to process transactions involving illegal funds.
- Binance, the world's biggest crypto exchange, agreed to pay a $4.3B fine.
- Zhao apologized and agreed to a $50M fine. He is set to be sentenced on April 30.
Zoom out: - Last year, the SEC sued Binance and Zhao, alleging commingling of customer funds, misleading investors, and manipulative trading, leading to a November settlement.
- U.S. prosecutors argued a longer sentence for Zhao sends a message that "the right choice, every time, is to comply with the law."
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| 6 | | Adobe Photoshop users will soon be able to generate images using text prompts. The AI-powered "Generate Image" tool launched in beta this week, with a wider rollout planned later this year. More: - Generate Image lets users produce new images on a blank canvas within the Photoshop app.
- The tool will be available alongside the option to import images.
- Photoshop's other new AI features include background replacement, style copying from reference images, and automatic removal of people from photos.
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 | AI and technology writer | | Beth is a contributing editor and writer of Inside's AI and Tech newsletters. She has written for publications including USA Today, the Arizona Business Gazette, and The Arizona Republic, where she received recognition with a Pulitzer Prize nomination and a First Amendment Award for collaborative reporting on state pension cost increases. You can reach her at Beth.Duckett@yahoo.com. | | This newsletter was edited by Beth Duckett | |
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