| | | | | October 6, 2016 | I'm in San Francisco this morning, where Salesforce CEO Marc Benioff is hosting his annual Dreamforce conference, a massive, circus-life affair that attracts 170,000 people with its unique blend of tech wizardry, sales puffery, and celebrity performance. The Black-Eyed Peas' Will.i.am shared the stage with Benioff during his keynote yesterday while a group of Buddhist monks advocating “mindfulness” sat quietly front and center. The band U2 gave the headline performance last night. This year, Benioff is touting the company's new artificial intelligence services – dubbed "Einstein" and represented here by a large puppet version of the famous scientist – which it plans to build into its various sales, marketing, e-commerce and customer service software products. Salesforce hopes AI will help it deliver on the promise of turning the massive amounts of data that clog most companies' computers into useful information – a challenge also occupying the likes of IBM, Microsoft , SAP and others. At his keynote address yesterday, Benioff said "intelligence" is one of five key concepts driving the company's products, along with "speed," "productivity," "mobility" and "connectivity." What makes Dreamforce so unusual is not just the tech geekery and celebrity performances, but Benioff's unique brand of social activism. He uses his business perch to address issues like gender equality and LGBT rights, and yesterday urged conference attendees to "adopt a school" and touted Salesforce's partnership with the Bill and Melinda Gates Foundation and the (Red) organization to eliminate AIDS. He pulled the tech and philanthropic themes together by quoting Einstein saying: "Only a life lived for others is a life worthwhile." In this respect, Benioff’s annual palooza is an attempt to capture the two great business movements of our times: the digital transformation of companies through data and artificial intelligence, and the struggle to restore public faith in the noble purpose of business. I'll be interviewing Benioff and GM CEO Mary Barra about both later today. In the meantime, talk on the sidelines of the conference yesterday was about Benioff's ambition to buy Twitter. He clearly sees the social messaging service as a source of data that can be combined with company data on his platforms to enhance business intelligence. His investors have their doubts, driving Salesforce stock down on rumors of the purchase. We should know by the end of the month who wins that battle. More news below. For those interested in more on how artificial intelligence is changing the world, I'd recommend Roger Parloff's fascinating piece on deep learning in the October issue of Fortune, which you can read here. | |  | | | | | • Theranos Ends Blood Testing Theranos said it would shut down its controversial blood-testing facilities and cut 40% of its staff. In a statement, CEO Elizabeth Holmes said that the company would focus its attention on MiniLab, the new blood-testing platform it launched in August but which is still awaiting approval from regulators. Holmes said she intended ultimately "to commercialize miniaturized, automated laboratories capable of small-volume sample testing, with an emphasis on vulnerable patient populations, including oncology, pediatrics, and intensive care." After the spectacular unraveling of the business over the last year, it seems a long shot that either regulators or, more importantly, customers will ever trust the company again to do that. WSJ, subscription required • NSA Contractor Accused of Stealing Hacking Tools It looks in many respects like a rerun of the Edward Snowden case. The Department of Justice confirmed that the FBI had arrested Thomas Martin, a subcontractor to the National Security Agency, on suspicion of having stolen key information related to intelligence gathering. Like Snowden, Martin worked for consulting firm Booz Allen Hamilton, which says it is cooperating fully with the investigation. Among the items stolen were classified 'source code' developed by the NSA to hack the systems of other countries such as Russia and China. It's not clear what motivated the theft. However, media have drawn connections between the arrest and an incident earlier this summer when NSA hacking tools were offered for sale on the Dark Web. Fortune • Elliott Shakes Samsung's Money Tree Shares in Samsung Electronics jumped to a record high on Thursday after activist investor Elliott Management submitted unsolicited proposals for a radical corporate makeover at the world's biggest smartphone maker. It's a fresh tilt for Elliott at a conglomerate whose governance has depressed its market value. Succession issues have vexed it since its patriarch Lee Kun-hee was incapacitated by a heart attack in 2014. Elliott proposed splitting the firm into an operating company and a holding vehicle for ownership purposes, as well as the payment of a $27 billion special dividend from its cash pile. Fortune • Delete Your Speculative Long Position Twitter shares are down 13% in pre-market trading Thursday after reports suggesting that a couple of Silicon Valley giants rumored to be stalking it won't submit bids after all. Recode said that neither Alphabet nor Google would likely bid for the company. That appears to leave the path free for Salesforce, if one assumes that rumors of a bid from Disney are indeed just rumors. Salesforce shares are up in pre-market as fears of a bidding war recede. There was a fresh reminder of one of the stiffest challenges facing the company yesterday when Germany's Justice Minister Heiko Maas raised the threat of holding social media companies criminally liable if they fail to delete hate speech on their networks. Maas said Twitter removed only 1% of racist posts reported by normal users. FT, metered access | | . | | |  | | | | | • An End to 'Black Friday Creep'? The U.S.'s biggest shopping mall, the Mall of America in Bloomington, Minnesota, is to stay closed on Thanksgiving for the first time since 2012, opening only on Friday at 5 a.m., as it did back then. The decision seems an implicit recognition of diminishing returns from trying to get a jump on the start of holiday season shopping, after a run of disappointing Thanksgiving weekends for retailers. Additional revenues seem not to have justified the extra costs and the bad PR that comes from taking workers away from their families. Fortune • Boeing Throws Down the Gauntlet to Musk and Bezos Boeing CEO Denis Muilenberg warned Elon Musk and Jeff Bezos that they're not the only games in town when it comes to the future of space travel. Muilenberg told a conference he expects Boeing, which helped to build NASA's Saturn V rockets in the 1960s and 70s, that the first human on Mars will get there on a Boeing rocket. Two years ago, NASA chose both Boeing and SpaceX to develop vessels that would bring four astronauts each into orbit aboard the agency's "space launch system," an unprecedentedly powerful rocket designed to travel the solar system and launch in 2018. Muilenberg also said Boeing is eyeing the low-earth orbit space tourism business, counting on a viable commercial market developing over the next two decades. Fortune • Trump Met With Ford to Discuss Mexico Ford Motor chairman Bill Ford said he had met with GOP nominee Donald Trump to clear the air in their row over investment in Mexico. Ford told a business audience in Washington that he found Trump's criticisms "infuriating" and "frustrating", but admitted that he "was very thoughtful (and) asked good questions." The meeting took place earlier in the summer. Trump's repeated outbursts against the company since then seem to indicate that Ford's arguments had failed to move him. Separately, it emerged that Trump's donation to Florida Attorney General Pam Bondi in 2014 was only one of numerous donations made to attorneys general who were considering investigations related to his business activities. The Wall Street Journal found evidence of $140,000 in donations to a dozen relevant people between 2011 and 2014. Fortune • Lawmakers Say Mylan Overcharged for EpiPen Mylan overcharged Medicaid by millions of dollars over five years for its EpiPen emergency allergic reaction treatment, according to estimates from the Centers for Medicare and Medicaid Services. In all, U.S. government health plans spent more than $1 billion on EpiPen between 2011 and 2015, and the CMS's Acting Administrator Andy Slavitt said it had wrongly classified the product as a generic, when it should have been listed as a brand-name product. That led to it paying a smaller rebate than it should have. Slavitt didn't specify exactly how much Mylan had overcharged by, but the letter is enough to keep up the intense political pressure on the company. Fortune | | | | | | | | | |
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