Trending: Just when the trade war was cooling, tech has a new China problem

Trending: Just when the trade war was cooling, tech has a new China problem
Travelers wear face masks as they walk outside of the Beijing Railway Station in Beijing, Monday, Jan. 20, 2020. China reported Monday a sharp rise in the number of people infected with a new coronavirus, including the first cases in the capital. The outbreak coincides with the country's busiest travel period, as millions board trains and planes for the Lunar New Year holidays. (AP Photo/Mark Schiefelbein)

Welcome to this week's edition of Trending, the newsletter where we highlight BI Prime's biggest tech stories. I'm Alexei Oreskovic, Business Insider's West Coast bureau chief and global tech editor.


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This week: Just when the trade war cools off, tech companies have a new China problem

Tech company earnings season is now in full swing, with Apple's quarterly report card on Tuesday showing that consumers can't stop splurging on iPhones and Airpods. But China has once again cast a cloud over Apple's future prospects. Just when the Sino-American trade war was starting to cool off, the coronavirus outbreak is now causing "uncertainty," to use Apple CFO Luca Maestri's word.

Apple noted that it has suppliers in Wuhan, China, the region where the outbreak is believed to have started, as well as a retail store there, which has been shuttered. And CEO Tim Cook said that traffic to Apple retail stores throughout China has slowed because of the disease.

Tim Cook

Apple blamed the uncertainty created by the outbreak for a "wider-than-usual" variance in its sales forecast. As Troy Wolverton notes though, the $4 billion delta between the high and low end of Apple's revenue forecast is exactly as wide as it's been in three of the company's last five quarterly forecasts. Perhaps uncertainty is the natural order of things in these days of volatile political and economic conditions.


In any case, as we saw with the trade war, what happens to Apple in China is likely to spread to other tech companies with operations there. And these days, who isn't in China? Tesla which reports its quarterly earnings on Wednesday, just opened a factory in Shanghai a few weeks ago. Microsoft, which also reports on Wednesday, operates its largest R&D center outside of the US in China.

At first blush, the virus outbreak might seem like more impetus to tech companies' on-and-off again efforts to diversify production and supply chains outside of China. That was the strategy embraced by companies like GoPro in order to escape the trade war tariffs - a chess move in a contest between protectionism and globalization.

But the coronavirus is spreading quickly and well beyond China, with cases confirmed in more than a dozen other countries. While the merits of a free trade and a globalized economy are under scrutiny, there are some aspects of globalization that we can't escape as easily as tariffs.

Read the full story here:

Apple blamed China's coronavirus for a 'wider-than-usual' $4 billion range in its revenue forecast. But the weird thing is, a $4 billion range is not actually unusual for Apple.

The two faces of AI

facial recognition

The rapid proliferation of artificial intelligence and facial recognition has raised a lot of privacy concerns that policy-makers and business leaders are only now starting to wrap their heads around.

Those arguing for aggressive use of surveillance and AI have a tendency to turn to scare tactics as justification, citing the tech's potential to stop terrorists and other evildoers. Opponents point to the many negative impacts of unfettered AI, including the technology's ability to exacerbate inequality and harm vulnerable populations like immigrants.


One insightful case study, for those looking to better understand the debate, is Ben Pimentel's story on a partnership between a non-profit and a Russian tech startup. The Dallas-based non-profit is using AI technology created by a company called XIX to fight human trafficking.

As Pimentel write: "The partnership underscores how AI, now known mainly either as a powerful business tool or an Orwellian weapon against dissidents, is also being deployed by startups and advocacy groups against crime and exploitation."

Read the full story here:

Here's how an ex-CIA officer and a tech entrepreneur are using AI to hunt sex traffickers on Super Bowl Sunday

Jeff Bezos and the case of the missing shadow

There's a lot of different ways to rise through the ranks at Amazon. But one of the most reliable is to become CEO Jeff Bezos' "shadow." As Eugene Kim reports, the shadow is a highly coveted job, formally called a technical adviser to the CEO, that involves following the billionaire around every day and learning every aspect of the business. Take a look at Amazon's senior leadership team and you'll see a lot of former shadows, including Amazon Web Services CEO Andy Jassy.

But, as Eugene notes, Bezos appears to have lost his shadow - at least for the time being. According to an internal org chart, the shadow role has been unfilled since the start of the year. That's an unusual situation for Bezos. But then again, Bezos has had an unusual few weeks.

Jeff Bezos

Read the full story here:

Jeff Bezos' 'shadow' adviser position is empty for the first time in years as Amazon and his personal life face unprecedented scrutiny - here are the 7 most successful executives who once filled that role

Here are some of the latest tech highlights:

Kobe Bryant left a business legacy of millions in startup investments. From Alibaba to Juicero to the maker of 'Fortnite,' these are the companies the NBA legend funded.


Here are the top 10 best performing venture funds that launched at the turn of the decade, which posted returns as high as 50%

Insiders say a Palantir exec claimed profitability and compared Project Maven to the nuclear bomb in January all-hands

This Stanford-educated startup founder stands by his choice to leave Silicon Valley to start his company in Brazil: 'There was more impact to be made here.'

And more good reads from across the BI newsroom:

SpaceX investors say the rocket company uses a 'very smart' internal stock market to keep workers happy despite long hours and 'mediocre' salaries

Bill Miller's mutual fund crushed the market for a record 15 straight years, and he's still beating his peers. He outlined for us the top 4 contrarian bets he's making right now.


We got an exclusive look at the 2020 plans for Aledade, a venture-backed startup that wants to transform the way primary care doctors are paid. It offers a key glimpse at the industry's attempts to go national.

Thanks for reading, and remember, if you like this newsletter, tell your friends and colleagues they can sign up here to receive it.

- Alexei

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