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Silicon Valley Reconsiders Its Decision to Invest in Saudi Arabia

In the case of Google, it meant discontinuing a U.S. Defense Department contract involving artificial intelligence.

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Saudi Crown Prince, Mohammed bin Salman, center, and Jordan's King Abdullah II second left, attend the Future Investment Initiative conference, in Riyadh, Saudi Arabia, Tuesday. VOA

The controversy over the death of Saudi Arabian journalist Jamal Khashoggi has shined a harsh light on the growing financial ties between Silicon Valley and the world’s largest oil exporter.

As Saudi Arabia’s annual investment forum in Riyadh — dubbed “Davos in the Desert” — continues, representatives from many of the kingdom’s highest-profile overseas tech investments are not attending, joining other international business leaders in shunning a conference amid lingering questions over what role the Saudi government played in the killing of a journalist inside their consulate in Turkey.

Tech leaders such as Steve Case, the co-founder of AOL, and Dara Khosrowshahi, the chief executive of Uber, declined to attend this week’s annual investment forum in Riyadh. Even the CEO of Softbank, which has received billions of dollars from Saudi Arabia to back technology companies, reportedly has canceled his planned speech at the event.

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A demonstrator dressed as Saudi Arabian Crown Prince Mohammed bin Salman, center, with blood on his hands protests with others outside the Saudi Embassy in Washington. VOA

But the Saudi controversy is focusing more scrutiny on the ethics of taking money from an investor who is accused of wrongdoing or whose track record is questionable.

Fueling the tech race

In the tech startup world, Saudi investment has played a key role in allowing firms to delay going public for years while they pursue a high-growth strategy without worrying about profitability. Those ties have only grown with the ascendancy of Crown Prince Mohammed bin Salman, the son of the Saudi king.

The kingdom’s Public Investment Fund has put $3.5 billion into Uber and has a seat on Uber’s 12-member board. Saudi Arabia also has invested more than $1 billion into Lucid Motors, a California electric car startup, and $400 million in Magic Leap, an augmented reality startup based in Florida.

Almost half of the Japanese Softbank’s $93 billion Vision Fund came from the Saudi government. The Vision Fund has invested in a Who’s Who list of tech startups, including WeWork, Wag, DoorDash and Slack.

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Aurore Chiquot of SoftBank Robotics Europe extends her hand to a robot during the Future Investment Initiative conference in Riyadh, Saudi Arabia. VOA

Now there are reports that as the cloud hangs over the crown prince, Softbank’s plan for a second Vision fund may be on hold. And Saudi money might have trouble finding a home in the future in Silicon Valley, where companies are competing for talented workers, as well as customers.

The tech industry is not alone in questioning its relationship with the Saudi government in the wake of Khashoggi’s death or appearing to rethink its Saudi investments. Museums, universities and other business sectors that have benefited financially from their connections to the Saudis also are taking a harder look at those relationships.

Who are my investors?

Saudi money plays a large role in Silicon Valley, touching everything from ride-hailing firms to business-messaging startups, but it is not the only foreign investment in the region.

More than 20 Silicon Valley venture companies have ties to Chinese government funding, according to Reuters, with the cash fueling tech startups. The Beijing-backed funds have raised concerns that strategically important technology, such as artificial intelligence, is being transferred to China.

And Kremlin money has backed a prominent Russian venture capitalist in the Valley who has invested in Twitter and Facebook.

 

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Tech startup WeWork offers shared space at more than 200 locations in 50 cities worldwide. Pictured is a co-working facility in downtown Los Angeles. The space caters to digital nomads and others who need flexible work space. VOA

 

The Saudi controversy has prompted some in the Valley to question their investors about where those investors are getting their funding. Fred Wilson, a prominent tech venture capitalist, received just such an inquiry.

“I expect to get more emails like this in the coming weeks as the start-up and venture community comes to grip with the flood of money from bad actors that has found its way into the start-up/tech sector over the last decade,” he wrote in a blog post titled “Who Are My Investors?”

“Bad actors’ doesn’t simply mean money from rulers in the gulf who turn out to be cold blooded killers,” Wilson wrote. “It also means money from regions where dictators rule viciously and restrict freedom.”

This may be a defining ethical moment in Silicon Valley, as it moves away from its libertarian roots to seeing the world in its complexity, said Ann Skeet, senior director of leadership ethics at the Markkula Center for Applied Ethics at Santa Clara University.

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(FILE)- Saudi journalist Jamal Khashoggi at the World Economic Forum in Davos, Switzerland. VOA

“Corporate leaders are moving more quickly and decisively than the administration, and they realize they have a couple of hats here — one, they are the chief strategist of their organization, and they also play the role of the responsible person who creates space for the right conversations to happen,” she said.

Tech’s evolving ethics

Responding to demands from their employees and customers, Silicon Valley firms are looking more seriously at business ethics and taking moral stands.

Also Read: The Truth About The Killing Of Khashoggi Will Be Revealed By The Turkish President

In the case of Google, it meant discontinuing a U.S. Defense Department contract involving artificial intelligence. In the case of WeWork, the firm now forbids the consumption of meat at the office or purchased with company expenses, on environmental grounds.

The Vision Fund will “undoubtedly find itself in a more challenging environment in convincing startups to take its money,” Amir Anvarzadeh, a senior strategist at Asymmetric Advisors in Singapore, recently told Bloomberg. (VOA)

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Americans Tend to Rely on Social Media for News which is often Unreliable: Report

Those who rely on social media and peers for news, on the other hand, don't see those platforms as reliable yet still choose to get their news from these sources

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Social Media
The findings of a research suggest that perceived reliability is not the only factor that drives what Americans choose as their go-to News sources on Social Media. Pixabay

Owing to lack of time and competing demands, one-third of Americans rely on news platforms they acknowledge are less reliable, mainly social media and peers, says a new report.

The other two-thirds of the public consider their primary news sources trustworthy, mainly print news and broadcast television, according to the report from California-based non-profit RAND Corporation.

“A lack of time and competing demands may explain why a third of Americans turn to news sources they deem less reliable, which suggests improving the quality of news content or teaching people how to ‘better consume’ news isn’t enough to address ‘Truth Decay,'” said Jennifer Kavanagh, senior political scientist and co-author of the report.

“Media companies and other news providers may need to provide more easily accessible and digestible ways for individuals to consume high quality investigative journalism”.

“Truth Decay” is a phenomenon defined as diminishing reliance on facts, data and analysis in public life.

The report draws from a national survey of 2,543 Americans to examine how reliability, demographics and political partisanship factor into news choices and how often people seek out differing viewpoints in the news.

About 44 per cent of respondents reported that news is as reliable now as in the past, while 41 per cent said it has become less reliable and 15 per cent – mostly women, racial and ethnic minorities and those without college degrees – said it is more reliable.

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Owing to lack of time and competing demands, one-third of Americans rely on News platforms they acknowledge are less reliable, mainly Social Media and peers, says a new report. Pixabay

Respondents who lean on print and broadcast platforms were more likely to deem them reliable.

Those who rely on social media and peers for news, on the other hand, don’t see those platforms as reliable yet still choose to get their news from these sources.

“The findings suggest that perceived reliability is not the only factor that drives what Americans choose as their go-to news sources,” said Michael Pollard, a sociologist and lead author of the report.
“Despite acknowledging that there are more reliable sources for news, people with demands on their time may be limited to using less reliable platforms.”

Asked whether they ever seek out alternate viewpoints when catching up on the news, 54 per cent said they “sometimes” do, 20 percent said, “always or almost always,” 17 per cent said “infrequently,” and 9 percent said, “never or almost never.”

The report also identified the four most common combinations of news media types consumed by Americans: print publications and broadcast television, online, radio, and social media and peers.

Those who are college-educated were less likely to get their news from social media and peers, instead opting for radio and online sources.

Social Media
Media companies and other News providers may need to provide more easily accessible and digestible ways for individuals to consume high quality investigative journalism, especially on Social Media. Pixabay

Those with less than a college education were more likely to report “never or almost never” seeking out news with alternate viewpoints.

“Those who are married were three times more likely than singles to rate their peers as the most reliable source for news,” said the report.

ALSO READ: Here’s how you can Appear More Competent Through your Clothing

Unmarried people were more likely than married people to report they “always or almost always” seek out sources with differing views. (IANS)