World Economic Forum Says Tech Firms Must Do More to Tackle Extremism

If tech firms don’t act, governments may impose regulations limiting free speech.

U.S. tech firms such as Facebook fb and Twitter twtr should be more aggressive in tackling extremism and political misinformation if they want to avoid government action, a report from the World Economic Forum said on Monday.

The study from the Swiss nonprofit organization adds to a chorus of calls for Silicon Valley to stem the spread of violent material from Islamic State militants and the use of their services by alleged Russian propagandists.

Facebook, Twitter and Alphabet’s Google goog will go under the microscope of U.S. lawmakers on Tuesday and Wednesday when their general counsels will testify before three U.S. congressional committees on alleged Russian interference in the 2016 U.S. presidential election.

For more on Facebook and the spread of fake news, watch Fortune’s video:

The report from the World Economic Forum‘s human rights council warns that tech companies risk government regulation that would limit freedom of speech unless they “assume a more active self-governance role.”

It recommends that the companies conduct more thorough internal reviews of how their services can be misused and that they put in place more human oversight of content.

The German parliament in June approved a plan to fine social media networks up to 50 million euros if they fail to remove hateful postings promptly, a law that Monday’s study said could potentially lead to the takedown of massive amounts of content.

Tech

The Race to Secure Voting Tech Gets an Urgent Jumpstart

Numerous electronic voting machines used in United States elections have critical exposures that could make them vulnerable to hacking. Security experts have known that for a decade. But it wasn’t until Russia meddled in the 2016 US presidential campaigns and began probing digital voting systems that the topic took on pressing urgency. Now hackers, researchers, diplomats, and national security experts are pushing to effect real change in Washington. The latest update? It’s working, but maybe not fast enough.

On Tuesday, representatives from the hacking conference DefCon and partners at the Atlantic Council think tank shared findings from a report about DefCon’s Voting Village, where hundreds of hackers got to physically interact with—and compromise—actual US voting machines for the first time ever at the conference in July. Work over three days at the Village underscored the fundamental vulnerability of the devices, and raised questions about important issues, like the trustworthiness of hardware parts manufactured in other countries, including China. But most importantly, the report highlights the dire urgency of securing US voting systems before the 2018 midterm elections.

“The technical community … has attempted to raise alarms about these threats for some years,” said Frederick Kempe, president and CEO of the Atlantic Council, in a panel discussion. “Recent revelations have made clear how vulnerable the very technologies we use to manage our records, cast our votes, and tally our results really are … These findings from the Voting Village are incredibly disconcerting.”

Fortunately, the past few months have seen signs of progress. The Department of Homeland Security is moving forward with its critical infrastructure designation for voting systems, which frees up resources for helping states secure their platforms. The Texas Supreme Court is currently considering a lawsuit challenging the state’s use of digital voting machines. And in Virginia, state officials are converting voting systems to use paper ballots and electronic scanners before the November 7 elections. They say the change was motivated by the findings at DefCon’s Voting Village.

Susan Greenhalgh, an elections specialist for the vote-security group Verified Voting, which worked with Virginia officials this fall, applauded the “transition into real-world change” that had transpired in just the last few months.

Virginia and Texas represent important progress, but plenty of work remains. Five states still rely solely on digital voting machines without paper backups, and at least 10 states have mixed voting infrastructure, with certain counties that use digital voting without paper. These systems are the most vulnerable to manipulation, because you can’t audit them afterward to confirm or dispute the digital vote count in the case of suspected tampering.

“The one core point that election security experts and others have been making about why our votes are safe was that the decentralized nature of our voting systems, the thousands and thousands of voting offices around the country that administer the election, is what kept us safe,” Jake Braun, a DefCon Voting Village organizer and University of Chicago researcher said. “Because Russians [or other attackers] would need to have tens of thousands of operatives go get physical access to machines to actually infiltrate the election. We now know that’s false.”

With only a handful of companies manufacturing electronic voting machines, a single compromised supply chain could impact elections across multiple states at once. The Voting Village report emphasizes that there is a huge amount of change required in the US to address security issues at every point in the election workflow, from developing more secure voting machines to sourcing trustworthy hardware, and then actually setting up voting system devices and software for use in a secure way. DefCon founder Jeff Moss says that the goal for next year’s Voting Village is to have a full election network set up so hackers can evaluate and find weaknesses in a complete system, not just individual machines.

The Department of Homeland Security recently confirmed that Russia infiltrated various election-related systems in 21 states during 2016, and access to a full voting-system setup would give security researchers additional real world insight into defending US voting infrastructure. But as was the case with acquiring real voting machines for last summer’s conference, Moss says it has been extremely difficult to gain access to the third-party proprietary systems that states use to coordinate voting.

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“I would love to be able to create any kind of a complete system, that’s what we’re aiming for,” he said during the panel. “The part that’s really hard to get our hands on is the backend software that ties the voting machines together to tabulate and accumulate votes, to provision voting ballots, to run the election, and to figure out a winner. And boy do we want to have a complete voting system for people to attack. There’s never been a test of a complete system—it’s just mind boggling.”

DefCon’s voting village and interdisciplinary partnerships are certainly raising awareness about election security and motivating change, but with some elections just a few weeks away and the midterms rapidly approaching, experts agree that change may not be coming quickly enough.

“We’ve got a lot to do in a short period of time,” said Douglas Lute, a former national security advisor to President George W. Bush and former US ambassador to NATO under President Barack Obama. “In my over 40 years of working on national security issues I don’t believe I’ve seen a more severe threat to American national security than the election hacking experience of 2016. Russia is not going away. This wasn’t a one shot deal.”

Tech

Venture fundraising in yuan soars as investors target Chinese tech firms

HONG KONG (Reuters) – China-focused venture capital funds are increasing their bets on local technology companies and a further opening of Chinese domestic capital markets, raising money in the yuan at the fastest pace in five years.

Fund managers have raised 95.8 billion yuan ($ 14.54 billion) this year through late September in funds denominated in the Chinese currency, which is also known as the renminbi, compared with 56.7 billion yuan in all of 2016. That puts 2017 on pace to be the biggest year since 2012, when 145.8 billion yuan was raised, according to data provider Preqin.

There are currently 78 funds looking to raise as much as another 1.15 trillion yuan over the next couple of years, Preqin said, most of it coming from mammoth-sized state-owned entities and so-called government guidance funds, which seek to foster domestic innovation in different industries from advanced engineering and robotics to biotechnology and clean energy.

    Those include the 350 billion yuan sought by the China Structural Reform Fund, 200 billion yuan targeted by the China State-Owned Capital Venture Investment Fund and a proposed 150 billion yuan for the state-owned Enterprise National Innovation Fund.

The enormous size of the fundraising ambitions of the Chinese state-backed funds means it may take some time before they reach their final goals. The China Structural Reform Fund, which was launched in 2016, has raised 20 percent of its registered capital and its president said in an interview with Caixin Global that funding will be completed by the end of 2018.

“We’re at the all-time highest of capital-raising high water marks, with a tsunami of government-backed entities seeding incubators, VC funds, locally, provincially, nationally,” said Peter Fuhrman, CEO of China-focused investment bank China First Capital. “China has a lot of money in its government apparatus. It wants to seed innovation and entrepreneurship and this is how it’s doing it.”

The surge contrasts with the slowdown in seed financing for start ups in the United States, which is down for the past two years. It also compares with flat growth expected for U.S. venture capital fundraising in 2017, according to estimates from the National Venture Capital Association (NVCA).

CATCHING ENTREPRENEURS

Firms such as Lightspeed China Partners, Morningside Venture Capital, GGV Capital and investment and merchant bank Ion Pacific that previously only had U.S. dollar funds are launching their first funds in yuan. Others like Hillhouse Capital, Sequoia Capital China and China Renaissance that have raised funds in both currencies are adding to their yuan cash pile with new funds.

Key to those firms is to not lose potential investment opportunities in sectors closed to foreign investors or miss out on investing with the Chinese entrepreneurs who now want to list their companies locally instead of in the United States.

“Catching the right entrepreneurs in the ecosystem is our number one priority, so currencies to us are just tools, those are the tools that I need to catch these entrepreneurs,” said Harry Man, partner at Matrix Partners China, which has funds in both currencies. “That’s why if you don’t have RMB in your hand, ultimately you’ll be missing 50 percent of the deals. Then you’ll be forced to raise an RMB fund and that’s why everybody is doing it.”

Sequoia Capital China, which backed top Chinese technology firms such as Alibaba Group, is looking to raise at least 10 billion yuan for a new fund, while Hillhouse Capital, an early investor in companies including Tencent Holdings Ltd, Baidu Inc and JD.com Inc, is targeting about 8 billion yuan for its fund, sources told Reuters. 

The investment management arm of securities firm China Renaissance is also adding to its yuan reserves with a new fund worth about 6 billion yuan, according to a person familiar with the plans who couldn’t be named because details of the fundraising aren’t yet public. Ion Pacific is raising 1 billion yuan for its debut fund in the Chinese currency, while GGV Capital is about to close fundraising for its first yuan-denominated fund.

“Some sectors don’t allow foreign investors, so for example, in the culture and media industry you need to apply for certain licenses like video licenses and you need to be a local investor,” said Helen Wong, a partner at Qiming Venture Partners.

“Now the IPO window is open for the local stock market, so that encourages a lot of companies to go for a local listing,” she added, in reference to the increase in IPO approvals by regulators in 2017 that is prompting more companies to start preparations to go public. Previously, a slow approval process and long line of companies waiting for clearance dissuaded many from those plans.

The shift would give an added boost to the Shenzhen and Shanghai bourses. China has had 322 new listings this year, raising a combined $ 22.9 billion, Thomson Reuters data showed. This already surpasses the 252 for all of 2016, even after the country’s securities regulator slowed the number of weekly IPO approvals in May.

It could also reduce the influence of the Nasdaq and New York stock exchanges, where many Chinese technology companies previously flocked when they went public.

“For the RMB side, you see more companies in restricted sectors like healthcare and media and certain parts of cleantech that needs government support to get started,” said Hans Tung, managing partner at GGV Capital. “You also see companies in the fintech space and a lot of them need a license to operate a business in the financial services industry, so they tend to want to list in China.”

Reporting by Elzio Barreto; Editing by Martin Howell

Our Standards:The Thomson Reuters Trust Principles.

Tech

Enterprises Can’t Solve Tech Support for the Cloud

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Your storage-as-a-service cloud goes down one afternoon. Who do your users call? The internal support desk? The cloud provider? Outsourced support? Their nerdy cousin?

These are the questions facing enterprise IT these days. They are brokering cloud services for users, often passing the cost on to them as well. However, when it comes to support, the cloud is still a hot potato. Enterprises are struggling to create support strategies that make sense for the cloud.

There are four issues at stake:

To read this article in full or to leave a comment, please click here

InfoWorld Cloud Computing

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Funding Daily: Today’s tech funding news, in one place

Money

[Get all the tech funding news of the day delivered straight to your mailbox! Sign up for Funding Daily and never miss a deal.]

Here’s a list of today’s tech funding stories, updated as the day unfolds. Tip us here if you have a deal to share.

European VC firm Lakestar launches new $ 400M fund for local and U.S. startups

Europe’s Lakestar has announced a fresh €350 million ($ 400 million) fund, as the Guernsey-based venture capital (VC) firm looks to plow more cash into European and U.S. startups.

Founded and chaired by European VC Klaus Hommels, who was an early investor in Skype, Spotify, Facebook, and other well-known tech companies, Lakestar II is a follow-up to the €135 million ($ 154 million) fund launched in 2013, which is still active.

Read more

OpenStack company Mirantis takes on $ 100M round led by Intel Capital

Mirantis, a company that sells a distribution of the OpenStack open-source cloud software, announced today a $ 100 million funding round. Intel Capital led the round, and now Mirantis will be collaborating with Intel to increase enterprise adoption of OpenStack.

From VentureBeat

Your customers are hitting your platform from several different devices — are you prepared? Free webinar on the omnichannel marketing strategy.

To date, Mirantis has raised at least $ 220 million, including the $ 100 million round announced last October.

In addition to Intel Capital, Goldman Sachs, August Capital, Insight Venture Partners, Ericsson, Sapphire Ventures, and WestSummit Capital also participated.

Read more

Cavendish Kinetics raises $ 36M to improve smartphone reception

Cavendish Kinetics, a Silicon Valley radio chip design company, has raised $ 36 million to make chips that it says could transform the performance of smartphones.

The funding is a rare event in the semiconductor industry, a $ 335 billion business that is dominated by gigantic chip companies such as Intel and Qualcomm. Triquent Semiconductor, a division of Qorvo, participated in the round as a strategic investor.

Cavendish said that a new strategic investor in the round isn’t being identified. But a filing by Qorvo acknowledges that its Triquent division invested $ 25 million in Cavendish. Existing investors are Tallwood Venture Capital, Wellington Partners, Celtic House Venture Partners, Qualcomm Ventures, and Quadia.

To date, Cavendish has raised $ 105 million.

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Japan’s cloud accounting startup Freee raises $ 30M at $ 250M valuation ahead of IPO

Freee, a Tokyo-based cloud accounting and payroll service that launched in March 2013, today announced a $ 30 million Series C round that takes its total raised funding to date to $ 43 million. Existing investors in the round include DCM and Recruit Holdings, with Japan Co-Invest Limited Partnership coming on board for the first time.

Freee’s CEO and cofounder, Daisuke Sasaki, told VentureBeat in an interview that this latest round leaves Freee valued at around $ 250 million. He also said that while the company would be unlikely to raise further funding in the next 12 months, it is gunning for a $ 1 billion IPO on the Tokyo Stock Exchange in the next two to three years.

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Cannabis startup Tradiv is raising $ 1M to connect growers and sellers

Boulder, Colorado-based Tradiv is raising a $ 1 million round as it gears up to launch its B2B marketplace for cannabis cultivators, marijuana infused product companies, and dispensaries.

Backed by Cannabis accelerator CanopyBoulder and accelerator partner Micah Tapman, Tradiv revealed the raise in a public filing with the U.S. Securities and Exchange Commission. The weed startup has so far raised $ 650,000, according to the filing — at least $ 20,000 of which likely came from CanopyBoulder, in exchange for a whopping 9.5 percent equity stake. The filing also lists Emily Paxhia, partner of Cannabis-only fund Poseidon Asset Management; and former Microsoft Surface manager, Nick Hofmeister.

 

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This list will be updated with breaking funding news all day. Check back for more.

VB’s research team is studying web-personalization… Chime in here, and we’ll share the results.


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