Here's Who Wins When Blockchain Meets the Food Chain

Margins are razor-thin in the food industry. So when a bacteria outbreak like E. coli hits, it can really wreak havoc throughout the entire supply chain.

Now, 10 leading food companies plan to build a digital tracking system that’s “the equivalent of FedEx tracking for food.”

That’s how Frank Yiannas, vice president of food safety at Walmart, described it to The Wall Street Journal.

Senior Vice President, IBM Global Industries, Platforms and Blockchain Bridget van Kralingen speaks during the forum Digitalization and the New Gilded Age at the World Bank/IMF spring meetings on Wednesday, April 18, 2018, in Washington. ( AP Photo/Jose Luis Magana)

He’s being coy. It’s a revolution. And investors should take note.

Meet the New ‘Food Trust’

Under Walmart’s leadership, Nestlé SA, Dole Food Co., Driscoll’s, Golden State Foods, Kroger Co., McCormick,  McLane Co., Tyson Foods,  and Unilever, are attempting to do something that has never been done before.

These food industry giants want to create a food trust. They want track food from the farm to the grocery aisle.

If something goes wrong, they will know exactly where it began, and why.

That type of transparency would forever change the food supply chain. It would keep suppliers on their toes.

One wrong move could kill years of goodwill. It would also give distributors and processors unprecedented control.

o make this possible, the food companies will use blockchain. The distributed digital ledger, best known for its role in keeping cryptocurrencies in check, will do the same for the food supply chain.

It will create an electronic verification network in real-time for every single food product in the trust.

Blockchain: The Missing Link in the Food Chain

Blockchain is uniquely suited for this task. That’s because its ledger system is permanent and can’t be altered.

Every time a verified event occurs, a block is created on the chain. And it is viewable by all. That makes the system inherently “trustless,” which in this context means it does not require trust.

Blockchains are popping up everywhere …

In 2017, the Financial Times reported six of the world’s largest banks — Barclays, Credit Suisse, CIBC, HSBC, MUFG and State Street — announced support for the Utility Settlement Coin (USC). That’s a blockchain created by UBS, the Swiss banking giant.

This USC system is supposed to let banks conduct transactions without waiting for traditional money transfers.

In January 2018, Maersk, the container ship conglomerate, announced a blockchain for transoceanic logistics. The Danish company hopes this open-source, digital platform will become the standard for a $4 trillion shipping industry that’s currently drowning in bureaucratic red tape and piracy.

International Business Machines is winning the public relations war. It’s behind the Maersk and food trust blockchains.

However, investors should look elsewhere for blockchain winners …

My research suggests they should focus on Microsoft.

Unlike IBM, the Redmond, Wash., software giant has the cloud computing scale to be a dominant player in blockchain. It also has a history of solving big, real world problems with the technology.

In 2015, the company shifted its business model from selling software licenses to digital subscriptions. The distinction created a flood of partners looking to sell cloud services on Azure, its cloud network.

Microsoft needed a system to quickly assess creditworthiness. The traditional process involved working with individual banks to issue standby letters of credit for the new sellers.

But the process was antiquated, and involved several levels of manual verification. So Microsoft worked with Bank of America to digitize and automate the entire process with blockchain.

Ethereum Enters the Picture

Since 2015, the company has expanded its work with blockchain …

It partnered with ConsenSys, a New York blockchain software company, to bring the Ethereum blockchain to Azure, as a Software-as-a Service layer.

Microsoft leveraged this modularity to win over R3, a consortium of 200 financial institutions. Together, they are developing Corda, a blockchain specifically built to reduce transaction friction in financial services.

In 2017, Bain & Co., a research and analytics firm, estimated $35 billion in operating and capital cost savings for a blockchain of this scale.

For Microsoft, Corda is the gateway. The prize is untold billions in sales of cloud computing services.

It is a big business for Microsoft. In the first quarter of fiscal 2018, Azure commercial cloud revenue jumped 58% to $6 billion.

As businesses move to the cloud, having a blockchain software module is a huge advantage.

The prospects are being reflected in the price. Since 2015, shares have risen an average of 31% annually. And the real growth lies ahead as more companies embrace the cloud and SaaS applications.

FedEx-like tracking for everything is coming. Buy Microsoft shares into any pullback.

China Startups Brace For 'Capital Winter' As VC Funding Slows

Workers use computers at their desks inside a co-working space for start-up companies in Beijing, China. (Photo by Tomohiro Ohsumi/Bloomberg)

After a record amount of money gushed into China’s technology sector and fueled eye-popping valuations for many private companies in recent years, venture capital is said to be drying up and startups should brace themselves for what some industry insiders describe as a “capital winter.”

That’s the view held by several China-based venture capitalists and research firms. Speaking on the sidelines of Forbes Asia’s Under 30 Summit in Hong Kong, a number of young investors and honorees from this year’s list say valuations for private companies in China will return to “more reasonable” levels in the second half of this year. They said “bubble-like” valuation levels had become prevalent in China’s private investment space, as investors poured a staggering 1.2 trillion yuan ($180 billion)— or 1.5% of the country’s gross domestic product— to fund private firms in 2017, according to Beijing-based research firm Zero2IPO.

“There is too much money in China. The not qualified startups are getting funding, and the qualified startups are getting even more funding,” says William Zhao, vice president of Bertelsmann Asia Investments, a fund with more than $1.5 billion under management. “They are good companies, but are they worth that much? I think there is a bubble in it.”

More On ForbesChina To Account For A Quarter Of World’s Top 100 Venture Investors In Five Year

But those days appear to be coming to an end. As Beijing seeks to contain financial risks in the world’s second-largest economy, venture capitalists are having a much more difficult time raising money. This is mainly because authorities are clamping down on riskier investments made by Chinese banks, announcing in April a set of far-reaching rules on their wealth-management businesses. Proceeds raised through such channels have historically accounted for a sizable part of venture capital funding in China, as they were often later used to invest in private companies for higher returns. This can also lead to significant risks as the success of early stage firms is by no means guaranteed.

According to Zero2IPO, in the first three months of this year, venture capital and private equity firms in China raised 206 billion yuan ($31 billion), a 30% decrease from the same period last year. In a recent website post, Wang Ran, chief executive of Beijing-based investment firm CEC Capital, predicted that venture capital funding in China could fall by as much as 80% by year end. For private startups, this means valuation levels would be reduced by 30%, as there would be less money to support their growth, according to the post.

“It is indeed getting very hard for a lot of funds to raise money,” says Patrick Song, chief executive of CEC Data Capital, a fund affiliated with a subsidiary of the state-run China Electronics Corp. “Now, investors are much more cautious in their investment strategy, and valuation levels for many companies are sure to come down.”

Yellow Ofo bikes sit outside of the Park-n-Ride Alameda RTD Station on April 3, 2018 in Denver, Colorado. (Photo by Helen H. Richardson/The Denver Post via Getty Images)

One area that has been singled out for criticism is the so-called sharing economy. In a recent editorial, the state-run Xinhua News Agency said there is a “bubble” in this sector, with companies rushing to launch various product-sharing schemes that don’t have a viable path to profitability. It cited the example of home-sharing startup Zhubaijia, which is similar to Airbnb, but has been suffering from mounting losses that totaled 87 million yuan ($13 million) in 2016 due to fierce competition and high operating costs. In early July, regulators de-listed Zhubaijia from China’s third stock exchange because it failed to file its 2017 annual report on time.

And some of China’s better-known sharing-economy companies are scaling down their operations. After expanding into a dozen global cities in the past two years, Beijing-based bike-sharing startup Ofo laid off the majority of its workforce in the U.S. to re-focus on China. Meanwhile, its biggest rival, Mobike, was acquired in April for $2.7 billion by China’s largest online services platform Meituan. And Guangzhou Yueqi, a smaller player that operates the Xiaoming Bike brand, went bankrupt last year amid fierce competition that has pushed prices down to less than 1 yuan ($0.16) per hour in China. The company has more than 55 million yuan ($8.2 million) in outstanding debt after deploying more than 400,000 bikes across the country since 2016, according to Xinhua.

Meanwhile, as it gets harder to raise money from private investors, a record number of Chinese tech firms are tapping public markets. So far, several dozen Chinese tech firms, including Meituan and the three-year-old e-commerce startup Pinduoduo, have opted for initial public offerings. But the hotly anticipated IPO of smartphone maker Xiaomi valued the company at only about half of its initially proposed target of $100 billion, signaling that the capital markets may not support the lofty valuations set during earlier fundraising rounds for these tech companies.

More On ForbesIPO Of Chinese E-Commerce Firm Pinduoduo Mints New Young Billionaire

But this is not to say that China’s startup boom is over. According to CB Insights, the country was home to 55 unicorns, or private companies with a valuation of $1 billion or more, as of September 2017— a number second only to the U.S. And Ant Financial, the payment affiliate of e-commerce giant Alibaba, took over ride-sharing firm Uber as the world’s highest valued private startup after completing a $14 billion mega-funding round in June.

Moreover, investors seem to be especially optimistic of blockchain technology, the digital ledgers that underpin digital coin transactions. Although Beijing banned initial coin offerings last year to curb illegal fundraising activities, this technology of secured and decentralized data storage still holds a great deal of promises in China. It can be used in industries such as finance and real estate to facilitate faster and more efficient tracking of data and contracts, thereby improving efficiency. Investors are already making early bets now, predicting that blockchain will give birth to China’s next tech behemoth.

“Blockchain will be the next disruptive technology in China,” says Li Yao, partner at China’s Tsing Ventures, a venture capital firm affiliated with the country’s prestigious Tsinghua University. “It will take some time to be ready, but it definitely has a lot of potential in many different markets.”

More On ForbesThe Next Frontier For Billionaire Investor Jim Breyer: China And Blockchain

10 Ways To Improve Cloud ERP With AI & Machine Learning

Capitalizing on new digital business models and the growth opportunities they provide are forcing companies to re-evaluate ERP’s role. Made inflexible by years of customization, legacy ERP systems aren’t delivering what digital business models need today to scale and grow. Legacy ERP systems were purpose-built to excel at production consistency first at the expense of flexibility and responsiveness to customers’ changing requirements. By taking a business case-based approach to integrating Artificial Intelligence (AI) and machine learning into their platforms, Cloud ERP providers can fill the gap legacy ERP systems can’t.

Closing Legacy ERP Gaps With Greater Intelligence And Insight

Companies need to be able to respond quickly to unexpected, unfamiliar and unforeseen dilemmas with smart decisions fast for new digital business models to succeed. That’s not possible today with legacy ERP systems. Legacy IT technology stacks and the ERP systems they are built on aren’t designed to deliver the data needed most.

That’s all changing fast. A clear, compelling business model and successful execution of its related strategies are what all successful Cloud ERP implementations share. Cloud ERP platforms and apps provide organizations the flexibility they need to prioritize growth plans over IT constraints. And many have taken an Application Programming Interface (API) approach to integrate with legacy ERP systems to gain the incremental data these systems provide. In today’s era of Cloud ERP, rip-and-replace isn’t as commonplace as reorganizing entire IT architectures for greater speed, scale, and customer transparency using cloud-first platforms.

New business models thrive when an ERP system is constantly learning. That’s one of the greatest gaps between what Cloud ERP platforms’ potential and where their legacy counterparts are today. Cloud platforms provide greater integration options and more flexibility to customize applications and improve usability which is one of the biggest drawbacks of legacy ERP systems. Designed to deliver results by providing AI- and machine learning insights, Cloud ERP platforms, and apps can rejuvenate ERP systems and their contributions to business growth.

The following are the 10 ways to improve Cloud ERP with AI and machine learning, bridging the information gap with legacy ERP systems:

  1. Cloud ERP platforms need to create and strengthen a self-learning knowledge system that orchestrates AI and machine learning from the shop floor to the top floor and across supplier networks. Having a cloud-based infrastructure that integrates core ERP Web Services, apps, and real-time monitoring to deliver a steady stream of data to AI and machine learning algorithms accelerates how quickly the entire system learns. The Cloud ERP platform integration roadmap needs to include APIs and Web Services to connect with the many suppliers and buyer systems outside the walls of a manufacturer while integrating with legacy ERP systems to aggregate and analyze the decades of data they have generated.

Boston Consulting Group, AI in The Factory of the Future, April 2018

  1. Virtual agents have the potential to redefine many areas of manufacturing operations, from pick-by-voice systems to advanced diagnostics. Apple’s Siri, Amazon’s Alexa, Google Voice, and Microsoft Cortana have the potential to be modified to streamline operations tasks and processes, bringing contextual guidance and direction to complex tasks. An example of one task virtual agents are being used for today is guiding production workers to select from the correct product bin as required by the Bill of Materials. Machinery manufacturers are piloting voice agents that can provide detailed work instructions that streamline configure-to-order and engineer-to-order production. Amazon has successfully partnered with automotive manufacturers and has the most design wins as of today. They could easily replicate this success with machinery manufacturers.

Company websites

  1. Design in the Internet of Things (IoT) support at the data structure level to realize quick wins as data collection pilots go live and scale. Cloud ERP platforms have the potential to capitalize on the massive data stream IoT devices are generating today by designing in support at the data structure level first. Providing IoT-based data to AI and machine learning apps continually will bridge the intelligence gap many companies face today as they pursue new business models. Capgemini has provided an analysis of IoT use cases shown below, highlighting how production asset maintenance and asset tracking are quick wins waiting to happen. Cloud ERP platforms can accelerate them by designing in IoT support.

Source: Capgemini Internet of Things (IoT) study, Unlocking the business value of IoT in operations

  1. AI and machine learning can provide insights into how Overall Equipment Effectiveness (OEE) can be improved that aren’t apparent today. Manufacturers will welcome the opportunity to have greater insights into how they can stabilize then normalize OEE performance across their shop floors. When a Cloud ERP platform serves as an always-learning knowledge system, real-time monitoring data from machinery and production assets provide much-needed insights into areas for improvement and what’s going well on the shop floor.

Industry Analysis

  1. Designing machine learning algorithms into track-and-traceability to predict which lots from which suppliers are most likely to be of the highest or lowest quality. Machine learning algorithms excel at finding patterns in diverse data sets by continually applying constraint-based algorithms. Suppliers vary widely in their quality and delivery schedule performance levels. Using machine learning, it’s possible to create a track-and-trace application that could indicate which lot from which supplier is the riskiest and those that are of exceptional quality as well.
  2. Cloud ERP providers need to pay attention to how they can help close the configuration gap that exists between PLM, CAD, ERP and CRM systems by using AI and machine learning. The most successful product configuration strategies rely on a single, lifecycle-based view of product configurations. They’re able to alleviate the conflicts between how engineering designs a product with CAD and PLM, how sales & marketing sell it with CRM, and how manufacturing builds it with an ERP system. AI and machine learning can enable configuration lifecycle management and avert lost time and sales, streamlining CPQ and product configuration strategies in the process.
  3. Improving demand forecasting accuracy and enabling better collaboration with suppliers based on insights from machine learning-based predictive models is attainable with higher quality data. By creating a self-learning knowledge system, Cloud ERP providers can vastly improve data latency rates that lead to higher forecast accuracy. Factoring in sales, marketing, and promotional programs further fine-tunes forecast accuracy.
  4. Reducing equipment breakdowns and increasing asset utilization by analyzing machine-level data to determine when a given part needs to be replaced. It’s possible to capture a steady stream of data on each machine’s health level using sensors equipped with an IP address. Cloud ERP providers have a great opportunity to capture machine-level data and use machine learning techniques to find patterns in production performance by using a production floor’s entire data set. This is especially important in process industries where machinery breakdowns lead to lost sales. Oil refineries are using machine learning models comprise more than 1,000 variables related to material input, output and process perimeters including weather conditions to estimate equipment failures.
  5. Implementing self-learning algorithms that use production incident reports to predict production problems on assembly lines needs to happen in Cloud ERP platforms. A local aircraft manufacturer is doing this today by using predictive modeling and machine learning to compare past incident reports. With legacy ERP systems these problems would have gone undetected and turned into production slowdowns or worse, the line having to stop.
  6. Improving product quality by having machine learning algorithms aggregate, analyze and continually learn from supplier inspection, quality control, Return Material Authorization (RMA) and product failure data. Cloud ERP platforms are in a unique position of being able to scale across the entire lifecycle of a product and capture quality data from the supplier to the customer. With legacy ERP systems manufacturers most often rely on an analysis of scrap materials by type or caused followed by RMAs. It’s time to get to the truth about why products fail, and machine learning can deliver the insights to get there.

Louis Columbus is an enterprise software strategist with expertise in analytics, cloud computing, CPQ, Customer Relationship Management (CRM), e-commerce and Enterprise Resource Planning (ERP).

I am currently serving as Principal, IQMS. Previous positions include product management at Ingram Cloud, product marketing at iBASEt, Plex Systems, senior analyst at AMR Research (now Gartner), marketing and business development at Cincom Systems, Ingram Micro, a SaaS start…

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A Southwest Airlines Crew Member Just Asked Passengers to Mercilessly Mock United

Absurdly Driven looks at the world of business with a skeptical eye and a firmly rooted tongue in cheek.

At Southwest Airlines, employees are encouraged to express themselves.

To dance around in TV ads, for example.

Or to be funny. 

Here, then, was a Southwest flight that came upon a mysterious companion, flying parallel on its right.

This happens often on certain routes. 

Sometimes, it’s fascinating to see how long the planes will continue to travel side by side.

Sometimes, you might even wonder how close the other plane truly is.

In this case, a passenger was filming, as a Flight Attendant or pilot made an announcement:

Ladies and gentlemen on the right side of the aircraft, look over to your right. You’ll see United. Wave to them so they get to see what a full aircraft looks like.

Some passengers laughed, of course.

And it’s an excellent example of how Southwest can boast a strong brand while United’s is, well, in transition.

Some might think, though, that this wasn’t a gesture of solidarity toward the friendly skies.

I asked United what it thought of this barb. Stunningly, the airline declined to comment.

I also contacted Southwest to ask for its view.

“Our Employees like to have fun with our Customers. This sounds like some friendly banter with a competitor and friend of the skies,” a Southwest spokeswoman told me.

Friend of the skies. Ah, very good.

There’s largely little competition between the big four airlines.

Yes, they nibble at each other around the edges. They can even make barbs. 

Why, American Airlines CEO Doug Parker earlier this year referred to Southwest as “the cattle car.”

While I, of course, applaud Southwest for its readiness to be quippy, there’s one rational element that niggles here.

I’d much rather fly on an empty plane than a full one.

Indeed, research has regularly shown that the biggest difference between an enjoyable Economy Class experience and a less enjoyable one is whether the seat next to you is empty.

Then again, airlines have constructed things so cleverly these days that there seem very few empty seats anywhere.

Cyber Saturday—Tenable IPO, Facebook Crash, Google Security Keys

Facebook crashes. Facebook shares lost nearly 25% of their value, wiping $120 billion off its balance sheet, after the company reported slowed user growth and weaker-than-expected revenue projections. The market plunge followed a host of privacy issues affecting the company—most notably, the blowback from Cambridge Analytica’s alleged misuse of people’s data and the enactment of GDPR, a new regulatory regime, in Europe. Meanwhile, BuzzFeed got a hold of a March memo penned by Facebook’s outgoing security chief, Alex Stamos. In it, Stamos lays out what he believes Facebook must do to fix its problems, such as reeling in “creepy” data collection practices.

Google gets serious. Google had a number of security updates this week. The search giant said it will start selling hardware security keys, branded “titan,” to corporate customers in an effort to combat phishing attacks and and hacking attempts. (Google uses such fobs to protect its own systems.) Google’s cloud business said it is adding a feature to help G Suite administrators identify virus-infected computers and malware-laden files. Also, Google’s Chrome browser has started labelling sites that don’t encrypt Internet traffic with “HTTPS” as “Not Secure.”

Life-unlocked. The website for Lifelock, an identity theft protection service now owned by cybersecurity giant Symantec, had a bug that exposed subscribers’ email addresses. After journalist Brian Krebs contacted Symantec about the issue, the company took the site offline. The member portal is back up, and Symantec says the issue has been addressed.

V for Vendetta. Online disputes can lead to grudges, which can can lead to bizarre, horrible consequences. This piece by Kashmir Hill at Gizmodo tells the story of how an argument about the decorum one should exhibit on the site of a former concentration camp spiraled into a life-wrecking nightmare. The Internet is a weird place—be careful out there.

Hey, literal jailbreaking!

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Business Checkup: 4 Vital Signs To Watch

Given the depth of the customer/employee link, it’s important to consider how in touch you are with the systems that shape the experiences of both at your organization. Being intimately in tune with the people, processes and systems that run your organization are critical to the long-term performance and health of your company.

So, how do you know if you have a “healthy” company? Keep a constant watch on the vital signs. The following are diagnostics that will help you deduce what areas of your organization are compromised, and which are thriving.

Efficient collaboration is key

How efficiently different departments work together is a crucial indicator of your organization’s future performance. “Collaboration defines how your corporate mind collectively thinks ― a foundational component of its ability to innovate and compete,” said Matthew Leppanen, director of product and business productivity at Rogers Communications.

When analyzing the collaborative mindset at your organization, consider the following metrics:

  • Are misunderstandings causing slowdowns? Evaluate the time it takes to fulfill a product or service, then document communications protocols that will help teams reach productivity goals.
  • Are teams doubling down on work? Check for process redundancies between departments.
  • Are data silos muddying the waters? Inspect whether your talent is operating from a single source of data or is hampered by data silos, duplications, and outright errors. What you know about your customers can make the difference between success and failure. But only if you have good data, and only if your entire team is using the same sets.

NPS and eNPS: Golden insights

Your NPS (net promoter score) and eNPS (employee net promoter score) are critical insights into the well-being of your company, and they are usually directly linked to one another. As I mentioned earlier, unhappy employees often produce unhappy customers.

As Nick Mehta, Gainsight’s CEO, said in a presentation earlier this year, “Some people don’t realize the strong connection between making our teammates successful and our customers successful.” And it’s not just a matter of employee satisfaction, but also one of employee loyalty. Gainsight found employees who would strongly recommend their employers to others worked for organizations with:

  • 10% higher customer ratings
  • 21% higher productivity ratings, and
  • 22% higher profitability ratings

Keep a close eye on these two scores, and you’ll have a better handle on the pulse of both the customer journey and your viability in today’s talent war.

Can your organization deliver?

Another facet of business stamina directly impacted by your employees’ morale is the ability to fulfill products and services to customers on time. “Productivity and efficiency can be achieved only step-by-step with sustained hard work, relentless attention to details, and insistence on the highest standards of quality and performance,” said J.R.D. Tata, who oversaw India’s largest industrial empire.

In assessing the full scale of your operational productivity, map your company’s entire process from customer inquiry through fulfillment. Is your turnaround time consistent, or does it tend to take longer based on demand? Your NPS, customer surveys, and customer service requests and reports are excellent sources for this data.

Of course, production speed is not the only measurement when it comes to delivery of your products and services. The quality of what you distribute to your client base is just as important ― if not more so ― and is once again dependent on a harmonious workforce. Is your organization able to maintain quality standards as you grow?

Innovation: Survival of the fittest

When it comes to beating, or even keeping up with, the competition in a marketplace disrupted by digital transformation, staying ahead of the game is an imperative. If you don’t have plans today for what your company’s tech will look like in five years, you’re already behind the eight ball.

This is where a service blueprint ― a lean method for identifying the mechanics of your business and service experience ― can come into play. The process gives you a detailed look under the hood at the countless actors (customers, suppliers, partners, employees, etc.), touchpoints, and current systems and processes upholding your company’s infrastructure. From this invaluable insight, you can identify opportunities for innovation and where digital tools can be leveraged to streamline systems and processes, among other ways to improve the business.

Remember, in assessing your organization’s vital signs, the goal is to dig into the specific measurements — people, processes and systems — that indicate the state of the company’s essential functions. In many cases, a service blueprint can be just what the doctor ordered as it provides a 360 view of not just the customer journey and experience, but also the internal infrastructure needed to fulfill that experience.

Amazon's face ID tool mismatched 28 members of Congress to mug shots: ACLU

SAN FRANCISCO (Reuters) – A facial recognition tool that Amazon.com Inc (AMZN.O) sells to web developers wrongly identified 28 members of the U.S. Congress as police suspects, in a test conducted by the American Civil Liberties Union (ACLU), the organization said on Thursday.

FILE PHOTO: Amazon.com’s logo is seen at Amazon Japan’s office building in Tokyo, Japan, August 8, 2016. REUTERS/Kim Kyung-Hoon/File Photo

Amazon, in a response, said it took issue with the settings of its face ID tool during the test. The findings nonetheless highlight the risks that individuals could face if police use the technology in certain ways to catch criminals.

Since May, the ACLU and other civil rights groups have pressured Amazon to stop selling governments access to Rekognition, a powerful image ID software unveiled in 2016 by the company’s cloud-computing division.

The groups cited use of Rekognition by law enforcement in Oregon and Florida and warned that the tool could be used to target immigrants and people of color unfairly.

Their activism has kicked off a public debate. The president of Microsoft Corp (MSFT.O), Amazon’s rival which also uses facial recognition technology, called on Congress earlier this month to study possible regulations.

On Thursday, three Democrats who were identified in the ACLU test – Senator Edward Markey, Representative Luis Gutiérrez and Representative Mark DeSaulnier – sent a letter to Jeff Bezos, Amazon’s chief executive, expressing concern and inquiring about the tool’s accuracy and use by law enforcement.

Facial recognition is already widely used in China for police purposes, and a number of start-up companies there – some valued at billions of dollars – are aggressively pursuing the technology.

Amazon has touted a range of uses for Rekognition, from detecting offensive content online to identifying celebrities.

“We remain excited about how image and video analysis can be a driver for good in the world,” a spokeswoman for Amazon Web Services said in a statement, citing its help finding lost children and preventing crimes. She said Rekognition was normally used to narrow the field for human review, not to make final decisions.

The ACLU said it paid just $12.33 to have Amazon Rekognition compare official photos of every member of the U.S. House and Senate against a database of 25,000 public arrest photos.

The technology found “matches” for 28 members of Congress with at least 80 percent confidence, Amazon’s default setting, the ACLU said.

These matches were disproportionately people of color, according to the ACLU. Some 39 percent were African-American and Latino lawmakers, versus 20 percent who identify as a person of color in Congress, the ACLU said. It added that Rekognition could exacerbate harm because people of color are already targeted at an above-average rate by the police.

“Face surveillance is flawed, and it’s biased, and it’s dangerous,” Jacob Snow, an attorney at the ACLU of Northern California, told Reuters.

Amazon’s spokeswoman said the 80 percent confidence setting was appropriate for identifying objects, not individuals. The company guides customers to set a threshold of 95 percent or higher for law enforcement activities, she said.

Reporting by Jeffrey Dastin in San Francisco; Editing by Adrian Croft and Lisa Shumaker

A.I. Will Paint Your House: An Interview With Tanuja Singeetham

Tanuja SIngeetham is Vice President, Digital Marketing at Behr Corporation.Tanuja Singeetham

We interviewed Tanuja Singeetham, Vice President of Digital Marketing for Behr Corporation, and discussed how she leverages consumer insights and advanced technology, including artificial intelligence, to connect emotionally with Behr paint consumers and help them find their perfect color.  

Rosenthal: Tell us a little bit about yourself, work history, and your current focus at Behr.

Singeetham: I am currently the Vice president of Digital Marketing at Behr, and I’ve been here for the past four years. My areas of responsibility include our website, social media, mobile applications and I lead our e-commerce business on HomeDepot.com. When it comes to digital advertising, I run all the search engine marketing efforts and work with our advertising team all of the display ads and campaigns.

Prior to coming to Behr, I spent 21 years at Nestle USA in Glendale, California. I actually started back in the day when, believe it or not, there was no email at Nestle! 21 years ago, when I got into digital, I launched one of the first websites for Nestle ever back in 1998; it was called FriskyPet.com and was one of the first content-focused portals for CPG, at a time when most brands were creating brand-focused websites. It was very early for its time and is something more common today in the CPG category.

Rosenthal: What is one digital initiative you’re proud of that you’ve worked on at Behr, and/or what about your job are you passionate about?

Singeetham: Coming to Behr was a huge opportunity! The organization had good foundational pieces: it had a website, an app and both have large audiences. Part of my decision to come here, was that there was an opportunity to advance the organization in digital. At the time, we had very little social media presence, and we weren’t really investing money in it.  We also had very little search or digital advertising, since we were mainly focused on traditional advertising, such as TV and print. A very small percent of the budget went to digital channels. Part of my goal when I started was to increase the knowledge and expertise internally and provide more guidance on how we could accelerate in the digital space.

The great thing about this category is that if you raise the conversation to something higher than what’s in the can, to instead focus on color and design, you have a very rich territory. Remember when you were a kid and you met another kid, one of the first questions you would ask was “what’s your favorite color?”. Also, many people’s first big decision about a space is when they’re a kid and their parent says, “What color do you want paint your room?” So coming into this category, I understood there are real emotional connections for consumers, and I wanted to bring that to Behr’s digital ecosystem.

With all the efforts we’ve made over the past four years, I am proud to say we have become leaders in social media for our category, grown our website traffic and engagement significantly, experienced triple-digit growth in ecommerce and have created a culture of data-driven decision making across all our online efforts.

Rosenthal: Can you share something about your upcoming digital initiatives at Behr? and/or what are the technologies that you’re most excited about over the next 2-3 years?

Singeetham: We conducted a research project to better understand paint in relationship to category adjacencies and overall home improvement projects.Through that research we learned the importance of feelings and emotions in the decision to take on a paint project.  Additionally we know through data that it takes consumers, in general, over a hundred days to narrow down to a color choice. Most of the time when people don’t buy the paint or move forward with the project, it is because they can’t make a decision on the color. It can be an overwhelming analysis process because there are just too many choices.

To help consumers on their color-decision journey, we launched a few things that have really been about applying technology to an insight based on real human behavior and individual consumer inputs. The first initiative, “Color Discovery” is a tool that allows consumers to go in and start with their project, and then pick what feeling they’re trying to achieve for their space. So now instead of “here’s a whole catalog of over 3000 colors and pick one” instead we say, “here’s a curated, personalized recommendation based on what they’re trying to do.” In fact we found that people who use this tool are much more likely to take a sample, than the average site visitor. It’s the best of what individual consumer data combined with advanced technology can do to deliver personalized recommendations.

Second, we launched a tool on our site called “Pins to Palettes,” which leverages a key touchpoint along the inspiration part of the consumer journey, Pinterest. Consumers go to our site and log in to their Pinterest account, and then select up to six pins across multiple boards related to their project.  Using our patented technology, we scan the images and are able to give them a coordinating color palette across the various items personalized for them.

In both cases we make it easy for consumers to try on the recommended colors virtually with our Paint Your Place tool, share colors and photos via email or social network, and make it easy to buy a sample at Home Depot so they can get started on their project.

Rosenthal: Messaging delivers on the promise of personalization. How does personalization change the way you think about the lifecycle of the consumer? In the near future, what does messaging look like between a customer and a brand?

Singeetham: As we move forward, we’re thinking about some of the other big things that have shifted in the world. One major one is the “concierge movement”. It’s only continuing to grow. First, we launched live chat color recommendations. People can go onto our site and actually talk to customer care reps and get advice and links back. We’ve seen very positive scores on our consumer satisfaction. It’s up there with the highest of the industry.

So, then we took it into the whole idea of giving recommendations in our color clinics. We work with influencers and our internal color experts and we launch events where we go inside of the social world and allow consumers to ask their questions right on the on Facebook, Twitter or Instagram, and then we’re able to give them immediate assistance. We have a command center of people to provide specific color recommendations based on whatever the consumer is looking for.

Rosenthal: Unlike social media, which is one to many, messaging is one-to-one marketing at scale. When you think about the promise of the messaging space, why are you excited about this space?

Singeetham: Trying to move personalization beyond live chat can be challenging to scale, as consumers are online 24/7/365 days a year. That’s why our chatbot exploration is an amazing opportunity!

We have so many learnings on the types of questions consumers are asking and know they are looking for answers. We’re doing significant exploration on natural language processing and have a great opportunity to find ways that we can leverage that and provide 24 hour service in this recommendations area. That is one of the things that we are exploring with Snaps, and we are working also with a couple of other AI providers in other areas of artificial intelligence.

Rosenthal: Is Behr looking at Artificial Intelligence or machine learning elsewhere in their business?  

Singeetham: We currently working with IBM Watson, as well as Google and their cloud team, on various projects where they are analyzing data. We use this data to identify clusters and gain insights to be smarter and more effective with our marketing communications. For example, we may see that people in the Northeast tend to go for grays or neutral living rooms. So instead of just doing generic display ads and banners, we could customize images to be more relevant to an audience and be more meaningful with our outgoing messages. It allows us to deliver personalization at scale, which is what this category and the marketing industry as a whole, is headed toward.   

Samsung's Galaxy Note 9 Is Extremely Expensive

This could be the end for the Galaxy Note. Following the revelation, Samsung plans to cancel the range if Galaxy Note 9 sales disappoint, new information from a rock-solid source suggests the (at times controversial) model now has little chance of succeeding… 

WinFuture’s Roland Quandt, who has a near-flawless track record and most recently exposed Google’s Pixel 3XL, has confirmed Samsung will jack up the asking price for the Galaxy Note 9 to potentially unrealistic levels.

Galaxy Note 9 concept proved too ambitiousyoutube.com/DBSDESIGNING

Quandt says Samsung will start Galaxy Note 9 pricing in Europe at €1050 ($1230) for a 128GB model with a flagship 512GB option costing €1250 ($1460). By comparison, last year the Galaxy Note 8 launched at under €900. If you’re looking a consolation, the Note 8 only had 64GB of storage.

Furthermore, were Quandt’s track record were not enough, this data also ties in with a leak from Samsung sources last week.

It is worth noting at this point, smartphones are more expensive in Europe but mostly because their prices always sales tax. As such, the Galaxy Note 9 looks primed to launch Stateside with prices of $999 and $1199, excluding tax. That won’t hack it in a year when Apple will actually cut iPhone prices substantially.

Galaxy S10 is where Samsung’s ambition lies (concept)Concept Creator

In defence of the Galaxy Note 9, it does have subtle but sizeable upgrades for which Samsung deserves credit. But when its biggest feature was pulled, that proved Samsung’s focus instead lay with its upcoming 10th anniversary Galaxy S10.

Consequently, laying the future of the Note range at the feet of the Galaxy Note 9 in its most incremental of years seems grossly unfair. It reeks of a company merely looking to rubber-stamp a decision that was apparently made long ago.

Unlike the vast majority of smartphones, the Galaxy Note series is unique with its focus on practicality and productivity. With Samsung’s next big phone innovation set to cost $2,000, it’s sad to see the Galaxy Note 9 (almost inevitably) end the range with a whimper, not a roar…

___

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Alphabet Inches Closer to $1 Trillion Market Cap After Strong Earnings at Google

Shares in Google’s parent Alphabet rose as much as 5% in after-hours trading Monday as the company reported earnings that were well ahead of Wall Street expectations, thanks in part to growth in Google’s cloud business.

Investors welcomed the news enough to push Alphabet’s stock up to an all-time high of $1,265 a share late Monday, valuing the stock at around $875 million. Alphabet is one of three companies that could become the first in the world with a $1 trillion market cap. The others: Apple (valued at $940 billion) and Amazon ($880 billion).

Alphabet said its total revenue rose 26% to $32.7 billion in the second quarter. Factoring out traffic-acquisition costs, revenue totaled $26.2 billion, above the $25.6 billion analysts had expected.

As expected, the company’s net income was hurt by a record $5 billion antitrust fine imposed by the European Commission. Alphabet reported earnings of $4.54 a share in the quarter. Without the fine, net income would have been $11.75 a share.

Revenue growth has accelerated from the 21% rate of a year ago, thanks in part to an increase in the number of paid clicks, which rose 58% from the year-ago quarter. The amount paid per click, meanwhile, fell 22%.

Areas outside of Google’s core ad business saw the strongest growth. So-called “other revenue”—which includes revenue from Google’s cloud as well as devices like the Pixel phone and the Home speaker—rose 37% to $4.4 billion, or about 14% of its total revenue. “Other bets,” such as Waymo and Fiber, saw revenue rise 49% but only totaled $145 million in the quarter.

Areas such as cloud computing and “other bets” have also added to Google’s spending. Google’s capital expenditures doubled to $5.48 billion from the year-ago quarter, while the operating loss at its “other bets” segment grew to $732 million from $633 million.

Rocket League's Anniversary Event Ends Tomorrow- Here's What's Next

Rocket League‘s latest event ends July 23rd at 8 PM (EDT), and unlike with other events there’s no grace period for your in-game event currency. Yes, that means your balloons will pop when Rocket League‘s birthday party ends.

So, if you’ve got your eye on another event reward or two, now’s the time to grind to get the last of the balloons you need.

Unfortunately, this means that the Anniversary playlist is also ending. Though the playlist is ending, Throwback will soon be playable in Private Matches, Tournaments, and Local Matches, but I’m disappointed that the playlist is wrapping up with the event. I’m a huge fan of the Throwback map, and I even think the arena deserves a permanent playlist.

The Battle-Cars Anniversary topper is one of many event rewardsPsyonix/Rocket League

Anyways, with Rocket League‘s third birthday party winding down, let’s look ahead at what Psyonix has in store for the rest of the summer.

Cross Platform Parties are a long-requested feature that are finally making their way to Rocket League. According to the Summer Roadmap, players will soon be able to register for a unique id that will allow them to party up and play with players on any platform.

Of course Cross Platform games are already a part of the game, but there’s sadly no way to link up with your friend on a different system. Psyonix has set this deadline for this and the remaining Summer updates for July-August, meaning we might have to wait until near the end of August to play with our cross-platform friends.

Level Progression will also see quite a few big changes. Profile levels will no longer be capped at 75 and players will automatically be assigned a new level once this update takes effect. Levels will also be set at a fixed amount of XP apart, making level progression much more rewarding than the current system. According to the (unofficial) Rocket League wiki, the 10 levels between Master and Legend level tiers take about 15 times longer to progress through than the 10 levels between Semi-pro and Pro. That’s hundreds of hours of gameplay where players won’t see a change in their title, essentially wasting what could be a fun system.

Rocket Pass is the newest way for players to earn items in Rocket LeaguePsyonix

The level progression system will be much more rewarding once your level is tied to the Rocket Pass. Psyonix is introducing Fortnite-style Rocket Passes that will unlock cosmetic items as players progress through the levels. Each Rocket Pass will only be available for a few months, and there will be both a free and paid version. The paid Rocket Pass will cost $9.99 (or 10 keys), giving players access to exclusive cosmetic items and will about 100 hours of gameplay to unlock everything. Players in the Rocket League trading community are especially excited for Rocket Passes, since they have no qualms about spending money on cosmetics and will soon have even more to collect. However, average players might not be as thrilled since they likely won’t want to spend $10+ on items they may or not actually get. More info on Rocket Passes can be found here.

With Rocket Pass and Cross Platform Parties on the way, the rest of the summer might be just as exciting as the events we’ve had so far.

Beware Of Crypto Risks – 10 Risks To Watch

HONG KONG, HONG KONG – JUNE 15: As a visual representation of the digital Cryptocurrency, Litecoin (LTC), Monero (XMR), Bitcoin (BTC), Ethereum (ETH), Ripple (XRP) and Dash on June 15, 2018 in Hong Kong, Hong Kong. (Photo by S3studio/Getty Images)

You know we are at the top of the hype cycle on blockchain and cryptocurrencies when examples of peak crypto include glistening fleets of Lamborghinis as a reflection of price spikes and talk of crypto-utopia with no central governments. Nonetheless, there are a number of key risks that plague this asset class and stand in the way of broader market adoption and stability. While there is no doubt cryptocurrencies, digital tokens and blockchain-based business models are here to stay, understanding how risk interplays with this emerging market and their underlying technologies will not only help protect investors, it will also give regulators a steady hand and, hopefully, guide how entrepreneurs are approaching risk management in their projects, which is not easily done after the fact. One unique facet that blockchain-based projects bring to the market is that unlike the analog economy, which hopes to code good conduct in people who have the care, custody and control of our savings and assets, is that “good conduct” can be coded at the technology layer and in an unalterable and transparent manner. In short, a machine is not naturally greedy or prone to moral hazard (risk taking without bearing the consequences).

What follows are 10 examples of key risks that imperil cryptocurrencies and stand in the way of market progress.

Wide Entrance, Narrow Exit – It is true that the advent of bitcoin and its ilk of cryptocurrencies, of which there are more than 1,600 and counting that have been digitally minted, has democratized many aspects of finance. This lowered barrier to entry creates a wide entrance and a very narrow exit, which as is prone to happen in the real world during Black Friday shopping frenzies for example, can lead to collateral damage as people rush to get out. The exit can be barred due to technological constraints, currency inconvertibility and few counterparties with whom to trade. While the asset class is generally uncorrelated to the traditional economy, it is all correlated to itself, which can create market panics and runs.

Intangible, Illiquid, Uninsured – The true miracle of blockchain-based cryptocurrencies, such as bitcoin, is that the issue of double counting is resolved without any intermediary, such as a bank or banker. This feature captured by the notion of digital singularity, where there can only be one instance of an asset is powerful and one of the primary reasons this asset class has blossomed. However, the intangible and illiquid nature of cryptocurrencies (combined with the point above about narrow exits) hampers their convertibility and insurability. Indeed, despite reports of growing insurer interest in the segment, the majority of crypto-assets and crypto companies are either under-insured or uninsurable by today’s standards. There is no deposit insurance “floor” for this asset class, which can help broaden appeal and investor security.

Mark To Market – As crypto holders seek to exit the intangible asset class returning to fiat currencies or other assets, which are often loathed by many crypto purists, their flight to safety or liquidity most often takes them to the greenback or U.S. While the price pegs work well on the way in to cryptocurrencies as investors informed by their “animal spirits” who want in on a speculative wave have a willingness to pay at a stated value or peg. On the way out, however, this mark to market feature sees many investors subjected to downward price pressure, which highlights the adverse effects of illiquidity, narrow exits and narrow participation in the asset class. These types of issues are being remedied as more institutional investors enter the space and more markets and trading platforms open. In the meantime, market participants would be wise in minding currency inconvertibility and the implied volatility of cryptocurrencies, which would make high-frequency traders flinch. To truly understanding blockchain’s potential requires the suspension of disbelief. To truly capture the investment thesis of cryptocurrencies requires the suspension of the traditional economy yardstick.

From Extortion To Manipulation – While no investor should part ways with money they are not prepared to lose, no matter how nominal the amount, cryptocurrencies are particularly prone to social engineering and misinformation risks. The naïve, as with the analog economy, can become easy prey to cyber extortion, market manipulation, fraud and other investor risks. The U.S. Securities and Exchange Commission, SEC, has gone as far as creating a fake initial coin offering (ICO) website as a way of alerting would-be crypto investors to “shinny object” threats. Indeed, emerging regulatory clarity on what constitutes a truly decentralized asset, such as bitcoin or ethereum, which is beyond the control of any one party, versus company-issued cryptocurrencies or tokens is a growing area of securities attention.

Care, Custody And Control – Despite the intangible and unseen nature of cryptocurrencies and digital assets more generally, one of the single biggest issues plaguing the market is care, custody and control. Not unlike the perennial challenges of cyber and physical security of the traditional banking sector, there is a veritable standards war taking place among crypto custodians on who is providing the highest standards of investor protection and asset security. The number of high profile and high value crypto heists suggests that this playbook of best security practices is still being written. The wealthiest crypto investors are going to great lengths to protect their intangible hoard by using cold storage devices placed in physical (offline / airtight) vaults and bunkers. Not every crypto investor can afford this level of security no more than every crypto investor is a target, but all are subject to the emerging nature of care, custody and control standards. Here too, the absence of a basic “floor” in terms of security and capital guarantees, like a cyber Federal Deposit Insurance Corporate, FDIC, means that investors are exposed on a first-loss basis.

Cyber Risks On All Sides – As is true with cyber threats, which evolve according to Moore’s law, the space between the keyboard and the chair (or the smart phone and the digital wallet) is as important as the cyber hygiene and defenses of the crypto custodian. While in principle the bitcoin blockchain has proven to be among the most cyber resilient innovations thus far, the firms that plug into it, like other cryptocurrencies, are often new entrants with lax cybersecurity standards and wherewithal. By this measure, not all cryptocurrencies are created equal in term of their traceability, transaction ledgering and levels of trust or fiduciary responsibility. For this, risks as simple as “mysterious disappearance” and as complex as ransomware attacks and AI-powered bots scouring the Internet for weak links and easy prey are complex and fast-moving perils.

Human Error (And Forgetfulness) – Given the intangible nature of the asset class, human error and something as confounding as password amnesia can spell total loss of a crypto fortune. Not everyone is as lucky as 50 Cent, who forgot he accepted bitcoin for an album release and discovered an $8 million bitcoin bounty. The prospect of being locked out, losing hardware or facing “geophysical risks,” such as spilled coffee is often enough to create losses – not to mention the ever present risk of buyer’s remorse given cryptocurrency price volatility. At the crypto whale end of the market, the high-profile nature and public quality of large asset holders may expose people to direct physical security threats, such as kidnaping, ransom and extortion. A fleet of lambos will not add to the needed discretion of not becoming a potential target.

(Un)Safe Havens – Another key risk with cryptocurrencies and this asset class more generally is the lack of coordination and clarity on regulatory, financial, tax and legal treatment. This is unsurprising given the relatively new nature of this market and the often slow moving and lagging quality of “regulatory catch up.” Indeed, most regulators around the world did not begin to form an opinion about cryptocurrencies until their rise to prominence with bitcoin’s meteoric appreciation in 2017. Suddenly, countries and jurisdictions around the world have entered a crypto land grab by seeking to become destinations of choice for prospective investors and projects. Like the global financial system, coordination and coherence can go a long way in eschewing risks of the systemic and mundane variety while improving overall market stability.

Technological Risks – There have been many reports about the computational complexity and energy consumption of bitcoin mining, as one example of some of the technological limitations of cryptocurrencies. This computational complexity may also work in the inverse and pose potential risks to the asset class under the premise that complex systems fail in complex ways. It is true that the decentralized feature of true blockchain structures gives then an inherent disaster and risk-proofing that is not enjoyed by centralized databases (which are veritable honey pots as evidenced by Equifax’s massive breach). Yet not all cryptocurrencies or tokens are riding on similar rails. For this, investors should beware of the technological risks and false promises of decentralization that are being made in many projects, for not all blockchains are created equal.

Civil Wars With Forks – Last, but certainly not least, while much crypto wealth is concentrated in the hands of people who are thinking long term about the positive change this asset class can have on the world, there is nevertheless the constant specter of civil wars and forks, which can bifurcate the consensus on cryptocurrencies, thus eroding market share, valuation and adoption. This standards war continues to flare up, including most recently with the advent of Bitcoin Cash. It is also notable that despite the talk amongst crypto-utopians of a world ruled by blind scalable trust and no centralized authorities, that councils of large crypto holders, much like a papal conclave or the Bank for International Settlements (BIS), can set a course on the market influencing outcomes and price fluctuations. As with the real movement of whales, smaller fry can either get gobbled up or caught in the wake.

Precisely because there are risks in the cryptocurrency market there are rewards. Countless new entrants, from large traditional enterprises who have awoken to blockchain’s promise, or startup teams bent on creating a new democratized future challenging status quo, all realize that a new technology driven wave of value creation is upon us.  Understanding the potential perils of diving into this wave can help improve the long-term prospects of cryptocurrencies and broaden their adoption beyond risk-seeking first movers.

Turns Out Cities Can't Sue Oil Companies for Climate Change

You can’t sue your way to a solution for global warming. So says the judge.

On Thursday, Judge John Keenan of New York’s Southern District dismissed the City of New York’s lawsuit against the international oil and gas companies BP, Chevron, ConocoPhillips, ExxonMobil, and Royal Dutch Shell. Facing billions of dollars in climate change-related damage in the coming years, New York was hoping to extract some money from the transnational companies that extract the oil that people burn for energy—raising the planet’s temperature, exacerbating storms, melting polar ice and elevating sea levels, worsening wildfires, extending droughts, and allowing diseases to spread farther and faster.

But no. The problem isn’t the science; it’s settled. The problem is the law. Even though attorneys for the city tried to argue that their complaint was covered by federal common law and the courts, Judge Keenan found otherwise—that in the end they were suing over emissions, and so the Clean Air Act took over. Which is to say, what New York wanted to do in a lawsuit is covered by the regulatory powers of the president and Congress. “Climate change is a fact of life, as is not contested by Defendants,” Keenan writes. “But the serious problems caused thereby are not for the judiciary to ameliorate. Global warming and solutions thereto must be addressed by the two other branches of government.”

Cities around the country have been filing lawsuits, hoping to get money from oil companies to pay for things like seawalls and infrastructure improvements—part of a strategy that’s been developing for decades. Oil companies have continued to market and lobby for lighter regulation on a product that made life harder on the only planet anyone knows about with life on it, while the US government moved slowly, if at all, toward remaking the country’s energy production and carbon emissions. If regulation and the law won’t help, the theory goes, you turn to the courts.

That’s not going well. Keenan’s decision comes not even a month after a similar defeat 3,000 miles away in June to a lawsuit filed by San Francisco and Oakland against the same oil companies. That case had the same outcome, this time from Judge William Alsup of the 9th Circuit: “Although the scope of plaintiffs’ claims is determined by federal law, there are sound reasons why regulation of the worldwide problem of global warming should be determined by our political branches, not by our judiciary,” he writes. “The problem deserves a solution on a more vast scale than can be supplied by a district judge or jury in a public nuisance case.”

The hell of it is, the lawyers who’ve been working on these cases saw this flavor of defeat as a possibility all along. Back at an unprecedented “climate science tutorial” Judge Alsup mounted in March, he expressed some of those same concerns. So did attorneys for the defense. “You hear them saying, ‘this is a matter for the president and the executive, it strikes at the heart of our national economy, if you do this we’re going to be exposed to billions and billions of dollars in lawsuits,’” Steve Berman, managing partner at Hagens Berman Sobol Shapiro, the firm representing both the California cities and New York, told me in June. “The fear is that some judge will buy into that and say, who am I, in a lawsuit, here, to start the ball rolling on holding the companies liable for all this stuff? That’s an argument they may win on.”

Indeed. And beyond that, two previous cases offered precedents unfavorable to the plaintiffs. The cities argued that global warming was damaging them, specifically and locally (and in fact in California they tried to file in state court but got bumped to federal). But the courts disagreed, framing carbon emissions as a “transboundary” global issue, of international scope. And American Electric Power v. Connecticut (usually referred to as “AEP”) and Native Village of Kivalina v. ExxonMobil both found that the Clean Air Act “displaced” federal common law when it comes to emissions.

Lawyers hoped that things had changed since then. New attribution science helped put blame more squarely on specific emitters, cities were seeing new costs due to global warming, and the legal theory had evolved away from suing over emissions to suing for sales and marketing while knowing about potential climate damages—a template taken from lawsuits against tobacco and lead paint companies.

“Both Judge Alsup and Judge Keenan adopted the core arguments that we were advancing, and that is that the Supreme Court’s decision in AEP and other federal court decisions had already addressed these very issues and rejected these sorts of claims,” says Theodore Boutrous, a partner at Gibson, Dunn & Crutcher and attorney for Chevron. “This, I think, does sound the death knell for these sorts of lawsuits.”

That doesn’t mean cities won’t keep going. They may well appeal the dismissals in New York and California. Other cases continue in Washington state and Colorado. And on Friday, the city of Baltimore filed suit against 26 oil and gas companies in Maryland state court.

That battle was always uphill. Now the grade’s even steeper. Oil companies don’t deny global warming is a problem, but so far they don’t have to pay to fix it. It’s doable, but by one estimate it’ll cost $53 trillion. And the bill is coming due.


More Great WIRED Stories

Would You Take The First Mission To Mars? Watch This Exclusive 'Mars' Trailer

Comic-Con 2018 kicked off today, July 19, 2018, in San Diego with the first of hundreds of panels on science fiction and geek culture.

In between the cosplay, diehard fans and studio screenings of new TV programming, living on Mars was the topic of a panel of big thinkers and actors on the possibility of how humans would live on the Red Planet as part of National Geographic Channel’s hybrid TV series, ‘Mars’ season 2. The panel included Leland Melvin, former NASA Astronaut Shuttle Atlantis; Dee Johnson, Showrunner, ‘Mars’ seasons 2 and Executive Producer; Stephen Petranek, author, How We Will Live On Mars; Andy Weir, author, The Martian and Artemis; Susan Wise Bauer; author, Story Of The World Series; Jeff Hephner, actor, ‘Mars’ season 2 and JiHae, actor, Season 2. The series is part drama and part unscripted documentary produced by Ron Howard and Brian Grazer of Imagine Entertainment.

Melvin, who was a mission specialist who spent 23 days in space says that science is critical to space exploration because it lets us decipher and inform the data and analysis that use on earth. 

“It’s so important that we have more science, education, and knowledge, not just for scientists, exploring and going to Mars, but for making decisions in our everyday communities,” said Melvin. “Whether its something around climate change how to stop beavers making a dam that causes rivers to flood in your community, science a community thing, a humanity thing so we can have more information that can help save us all.”

Jennifer Kite-Powell is a writer who covers innovation in technology and science as it intersects with industry, culture, health, environment and mobility. You can follow her on Twitter @jennalee.

Earnings Preview: Microsoft Is Next Up In String Of Tech Results

Stephen Brashear/Getty Images

Over the next few weeks, the biggest companies in the tech sector are slated to report earnings. One of the first ones up is Microsoft, which is scheduled to release results after market close on Thursday, July 19.

The stock has steadily climbed higher over the past several months and is up about 22% year to date, slightly below its recent all-time high of $106.50 on July 17.

Expectations are on the high end for tomorrow’s report, evidenced by the run-up in the stock and a number of analysts upping their price targets over the past few months.

For the quarter, Microsoft is expected to report adjusted EPS of $1.07 on revenue of $29.2 billion, according to third-party consensus analyst estimates. In the prior-year quarter, the company earned $0.98 on revenue of $24.7 billion. Microsoft has beat earnings estimates in each of the past 8 quarters.

As has been the case for some time, the company’s cloud products and services are the primary focus among analysts since they’ve been delivering Microsoft’s fastest growth. When Microsoft last reported, revenue in Office 365 Commercial was up 42% year over year, Dynamics 365 was up 65% and Azure was up 93%.

Microsoft also just announced it would acquire software development GitHub for $7.5 billion, with the deal expected to close later this year. On tomorrow’s earnings call, management might provide some commentary about how they envision GitHub folding into the rest of their cloud businesses.

Positive PC trends are a factor that some analysts think could have helped boost sales across a variety of Microsoft products and services this quarter. Research firm IDC estimates that traditional PC shipments totaled 62.3 million units in the second quarter, up 2.7% year over year and the fastest growth since 2012.

One thing that analysts have said they are expecting to weigh on this quarter’s results is a stronger U.S. dollar during the second quarter compared to the first. Several multinational tech companies have warned in the last few weeks that this will negatively impact their Q2 results, after it helped provide a boost in Q1.

MICROSOFT IN 2018. Heading into its earnings report, Microsoft is trading pretty close to its all-time high of $106.50 it hit intraday on July 17. So far this year, the stock is up 22.17%, outperforming both the S&P 500’s 4.36% return and the Nasdaq 100’s 13.53% increase. Chart source: thinkorswim® by TD Ameritrade. Not a recommendation. For illustrative purposes only. Past performance does not guarantee future results.thinkorswim

Microsoft Trading Activity

Around the upcoming earning release, options traders have priced in about a 3.2% stock move in either direction, according to the Market Maker Move indicator on the thinkorswim® platform. Implied volatility was at the 55th percentile as of this morning.

In short-term trading at the July 20 expiration, calls have been active at the 105 and 106 strike prices, while puts have been active at the 103 and 105 strikes.

Looking at next month’s August 17 expiration, volume has been much higher on the call side and mostly at the 105 and 110 strikes. There hasn’t been much trading on the put side that stands out, with a smattering of activity spread out between the 95 and 105 strikes.

So far today, call volume has been outpacing puts by more than 4 to 1. At noon, there were about 92,000 calls traded versus 22,000 puts overall during Wednesday’s session.

Note: Call options represent the right, but not the obligation, to buy the underlying security at a predetermined price over a set period of time. Put options represent the right, but not the obligation to sell the underlying security at a predetermined price over a set period of time.

Next up in Earnings

General Electric wraps up the week and reports before market open on Friday, July 20.

The next two weeks also includes a stretch of reports from some of the biggest companies in the tech sector. Alphabet reports after market close Monday, July 23; Facebook reports after market close Wednesday, July 25; Amazon reports after the close Thursday, July 26; and Apple reports after the close Tuesday, July 31.

TD Ameritrade® commentary for educational purposes only. Member SIPC. Options involve risks and are not suitable for all investors. Please read Characteristics and Risks of Standardized Options.