Silicon Valley Bank’s collapse rattled the technology industry that had been the bank’s backbone, leaving shell-shocked entrepreneurs thankful for the government reprieve that saved their money while they mourned the loss of a place that served as a chummy club of innovation.

“They were the gold standard, it almost seemed weird if you were in tech and didn’t have a Silicon Valley Bank account,” Stefan Kalb, CEO of Seattle startup Shelf Engine, said during a Monday interview as he started the process of transferring millions of dollars to other banks.

The Biden administration’s move guaranteeing all Silicon Valley Bank’s deposits above the insured limit of $250,000 per account resulted in a “palpable sigh of relief” in Israel, where its booming tech sector is “connected with an umbilical cord to Silicon Valley,” said Jon Medved, founder of the Israeli venture capital crowdfunding platform OurCrowd.

But the gratitude for the deposit guarantees that will allow thousands of tech startups to continue to pay their workers and other bills was mixed with moments of reflection among entrepreneurs and venture capital partners rattled by Silicon Valley Bank’s downfall.

The crisis “has forced every company to reassess their banking arrangements and the companies that they work with,” said Rajeeb Dey, CEO of London-based startup Learnerbly, a platform for workplace learning.

Entrepreneurs who had deposited all their startups’ money in Silicon Valley Bank are now realizing it makes more sense to spread their funds across several institutions, with the biggest banks considered safer harbors.

Kalb started off Monday by opening an account at the largest in the U.S., JP Morgan Chase, which has about $2.4 trillion in deposits. That’s 13 times more than the deposits at Silicon Valley Bank, the 16th largest in the U.S.

Bank of America is getting some of the money that Electric Era had deposited at Silicon Valley Bank, and the Seattle startup’s CEO, Quincy Lee, expects having no difficulty finding other candidates to keep the rest of his company’s money as part of its diversification plan.

“Any bank is happy to take a startup’s money,” Lee said.

Even so, there are fears it will be more difficult to finance the inherently risky ideas underlying tech startups that became a specialty of Silicon Valley Bank since its founding over a poker game in 1983, just as the advent of the personal computer and faster microprocessors unleashed more innovation.

Silicon Valley quickly established itself as the “go-to” spot for venture capitalists looking for financial partners more open to unconventional business proposals than its bigger, more established peers who still didn’t have a good grasp of technology.

“They understood startups, they understood venture capital,” said Leah Ellis, CEO and co-founder of Sublime Systems, a company in Somerville, Massachusetts, commercializing a process to make low-carbon cement. “They were woven into the fabric of the startup community that I’m part of, so banking with SVB was a no brainer.”

Venture capitalists set up their accounts at Silicon Valley Bank just as the tech industry started its boom and then advised the entrepreneurs that they funded to do the same.

That cozy relationship came to an end when the bank disclosed a $1.8 billion loss on low-yielding bonds that were purchased before interest rates began to spike last year, raising alarms among its financially savvy customer base who used the fruits of technology to spread warnings that turned into a calamitous run on deposits.

Bob Ackerman, founder and managing director of venture funder AllegisCyber Capital, likened last week’s flood of withdrawal demands from Silicon Valley Bank to a self-inflicted wound by “a circular firing squad” intent on “shooting your best friend.”

Many of Silicon Valley Bank’s roughly 8,500 employees now find themselves hanging in limbo, too, even though government regulators now overseeing the operations have told them they will be offered jobs at 1.5 times their salaries for 45 days, said Rob McMillan, who had worked there for 32 years.

“We don’t know who’s going to pay us when,” McMillan said. “I think we all missed a paycheck. We don’t know if we have benefits.”

Even though all of Silicon Valley Bank’s depositors are being made whole, its demise is expected to leave a void in the technology sector that may be difficult to fill. In an essay that he posted on his LinkedIn page, prominent venture capitalist Michael Moritz compared Silicon Valley Bank to a “cherished local market where people behind the counters know the names of their customers, have a ready smile but still charge the going price when they sell a cut of meat.”

Silicon Valley Bank is fading away at a time when startups were already having a tougher go at raising money, with a downturn in technology stock values and a steady ride in interest rates caused venture capitalists to retrench. The bank often helped fill the financial gaps with one of its specialties — loans known as “venture debt” because it was woven into the funding provided by its venture capitalist customers.

“There’s going to be a lot of great ideas, a lot of great teams that don’t get funding because the barriers to entry are too high or because there are not enough people who are willing to invest,” said William Lin, co-founder of cybersecurity startup Symmetry Systems and a partner at the venture capital firm ForgePoint.

With Silicon Valley Bank gone and venture capitalists pulling in their reins, Lin expects there will be fewer startups getting money to pursue ideas in the same fields of technology. If that happens, he foresees a winnowing of competition that will eventually make the biggest tech companies even stronger than they already are.

“There’s a real day of reckoning coming in the startup world,” predicted Amit Yoran, CEO of the cybersecurity firm Tenable.

That may be true, but entrepreneurs like Lee and Kalb already feel like they had been through an emotional wringer after spending the weekend worrying that all their hard work would go down a drain if they couldn’t get their money out of Silicon Valley Bank.

“It was like being stuck inside a doomsday loop,” Lee said.

Even as he focuses on growing Shelf Engine’s business of helping grocers managing their food orders, he vowed not to forget “a very hard lesson.”

“I obviously now know banks aren’t as safe as I used to think they were,” he said.
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Boeing structural analysis engineer George Ndayizeye, who grew up in Burundi, has won a 2023 Black Engineer of the Year Legacy Award. He spoke with VOA’s Natasha Mozgovaya outside Seattle.
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A global shortage of semiconductor chips in the automotive industry starting in 2020 has motivated many countries to increase their domestic manufacturing. The United States has allocated more than $50 billion to promote semiconductor production and research stateside as the global need for the chips is expected to double over the next decade. Keith Kocinski has more from New York.
Camera: Keith Kocinski and Rendy Wicaksana
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China’s government on Thursday criticized the Netherlands for joining Washington in blocking Chinese access to technology to manufacture advanced processor chips on security and human rights grounds.

A Dutch minister told lawmakers Wednesday that exports of equipment that uses ultraviolet light to etch circuits on chips would be restricted on security grounds. ASML of the Netherlands is the only global supplier. Industry experts say a lack of access to ASML’s most advanced technology is a serious handicap for China’s efforts to develop its own chip industry.

Washington in October blocked Chinese access to U.S. tools to make advanced chips that it said might be used in weapons or in equipment for the ruling Communist Party’s surveillance apparatus. The Biden administration is lobbying European and Asian allies to tighten their own controls.

A Chinese foreign ministry spokeswoman complained that “an individual country,” a reference to the United States, was trying to “safeguard its own hegemony” by abusing national security as an excuse to “deprive China of its right to development.”

“We firmly oppose the Netherlands’s interference and restriction with administrative means of normal economic and trade exchanges between Chinese and Dutch enterprises,” said the spokeswoman, Mao Ning. “We have made complaints to the Dutch side.”

Mao appealed to the Netherlands to “safeguard the stability of the international industrial and supply chain.”

ASML’s extreme-ultraviolet, or EUV, equipment uses light to etch microscopically precise circuits into silicon, allowing them to be packed more closely together. That increases their speed and reduces power demand.

The Dutch government has prohibited ASML from exporting its most advanced machines to China since 2019, but the company is allowed to supply lower-quality systems.

Chinese manufacturers can produce low-end chips used in autos and most consumer electronics but not those used in smartphones, servers and other high-end products.

Dutch Prime Minister Mark Rutte and U.S. President Joe Biden held talks in January on ASML’s chip machines.
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The Netherlands’ government on Wednesday said it planned new restrictions on exports of semiconductor technology to protect national security, joining the United States’ effort to curb chip exports to China. 

The U.S. in October imposed sweeping export restrictions on shipments of American chipmaking tools to China, but for the restrictions to be effective, they need other key suppliers in the Netherlands and Japan, who also oversee key chipmaking technology, to agree. The allied countries have been in talks on the matter for months. 

Dutch Trade Minister Liesje Schreinemacher announced the decision in a letter to parliament, saying the restrictions would be introduced before the summer. 

Her letter did not name China, a key Dutch trading partner, nor did it name ASML Holding NV, Europe’s largest tech firm and a major supplier to semiconductor manufacturers, but both will be affected. It specified one technology that would be affected: “DUV” lithography, the second-most advanced machines that ASML sells to computer chip manufacturers. 

“Because the Netherlands considers it necessary on national security grounds to get this technology into oversight with the greatest of speed, the Cabinet will introduce a national control list,” the letter said. 

ASML said in a response it expected to have to apply for licenses to export the most advanced segment among its DUV machines, but that would not affect its 2023 financial guidance. 

ASML dominates the market for lithography systems, multimillion-dollar machines that use powerful lasers to create the minute circuitry of computer chips. The company expects sales in China to remain about flat at $2.3 billion in 2023 – implying relative shrinkage as the company expects overall sales to grow by 25%. Major ASML customers such as Taiwan Semiconductor Manufacturing Co. and Intel are engaged in capacity expansion. 

ASML has never sold its most advanced “EUV” machines to customers in China, and the bulk of its DUV sales in China go to relatively less advanced chipmakers. Its biggest South Korean customers, Samsung and SK Hynix, both have significant manufacturing capacity in China. 

The Dutch announcement leaves major questions unanswered, including whether ASML will be able to service the more than $8 billion worth of DUV machines it has sold to customers in China since 2014. 

Schreinemacher said the Dutch government had decided on measures “as carefully and precisely as possible … to avoid unnecessary disruption of value chains.” 

“It is for companies of importance to know what they are facing and to have time to adjust to new rules,” she wrote.  

Japan is expected to issue an update on its chip equipment export policies as soon as this week.
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Drones are routinely used in warfare, law enforcement and agriculture. Now more and more U.S. businesses are using them to deliver cookies and coffee right to your front door. VOA’s Julie Taboh has more. Camera: Adam Greenbaum, Chad Baugh 
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Add a top U.S. intelligence official to the list of Americans expressing concern about Chinese-made technology and Chinese social media platforms like TikTok. 

General Paul Nakasone, who heads both the U.S. Cyber Command and the National Security Agency, told lawmakers Tuesday there are multiple reasons to be wary of China’s rapid expansion in cyberspace, calling Beijing “a very formidable foe.”

“TikTok concerns me for a number of different reasons,” Nakasone said during a Senate Armed Services Committee hearing. “One is that the data that they have. Secondly is the algorithm and the control. Who has the algorithm?”  

Third, he said, “is the broad platform” both for unleashing potential influence operations but also for the ability to give China a way to “turn off the message.” 

Last month, the United States moved forward with plans to ban TikTok — a social media app used by more than 100 million Americans — from government devices. Some U.S. lawmakers have called for giving U.S. President Joe Biden the ability to ban use of the social media app nationwide. 

Others, however, object to giving Biden the ability to issue a blanket nationwide ban, arguing TikTok is only a small part of a larger issue.  

“The threat that everyone is talking about is TikTok, and how it could enable surveillance by the Chinese Communist Party or facilitate the spread of malign influence campaigns in the U.S,” Democratic Senator Mark Warner told reporters.”Before TikTok, however, it was Huawei and ZTE, which threatened our nation’s telecommunications networks. And before that, it was Russia’s Kaspersky Lab.”

“We need a comprehensive, risk-based approach that proactively tackles sources of potentially dangerous technology before they gain a foothold in America,” he said.

The Restrict Act, being pushed by Warner and others, would establish a rule-based process — informed by the U.S. intelligence community and directed by the Department of Commerce — to identify and address foreign technological threats. 

For its part, TikTok’s parent company, ByteDance, has dismissed concerns it would improperly use user data as “political theater.” 

But concerns about Chinese companies and Chinese technology keep growing. 

On Sunday, The Wall Street Journal reported U.S. defense officials are worried that  Chinese-made ship-to-shore cranes used at many of America’s ports could be used to spy on materials being shipped in and out of the U.S. 

“Communist China has monopolized the port crane industry, and I will continue to spearhead efforts to decouple from the regime in Beijing and incentivize the near-shoring and reshoring of our strategic manufacturing capabilities,” Republican Congressman Carlos Gimenez told VOA when asked about the potential for Chinese espionage at U.S. ports. “I will fight to protect our critical infrastructure from the CCP’s espionage tactics.”

Tensions also have been rising since the U.S. shot down what it identified as a Chinese spy balloon last month after it had traveled across much of the continental United States.

And Biden is expected to issue an executive order in the coming days that would tighten rules on the ability of U.S. companies to invest in China. 

China’s Foreign Minister Qin Gang chastised the U.S. Tuesday, telling reporters in Beijing that Washington’s China policy has “entirely deviated from the rational.” 

But Nakasone told lawmakers that politicians and businesses alike would be smart to be careful about how they make use of Chinese-made platforms and technology. 

“What I would do is ensure that the areas that are most sensitive to our operations are well-sensored, and I have the confidence that’s what’s being utilized there. I understand where that information may be going,” the CYBERCOM commander said.  

“I would take a very, very hard look at anything that would come from an adversarial nation,” Nakasone said, though he acknowledged it would be “very difficult” to proceed with an all-out ban of Chinese products. 

“So much of what we do is based upon international trade,” he said, “and China has the corner on some things.”
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U.S. National Security Agency director Paul Nakasone on Tuesday expressed concern about Chinese-owned video app TikTok’s data collection and potential to facilitate broad influence operations.

In response to a lawmaker’s question about any concerns he has on the influence of TikTok on American children, Nakasone told a Senate hearing, “TikTok concerns me for a number of different reasons.”

Nakasone said his concerns include “the data that they have.”

“Secondly is the algorithm and the control of who has the algorithm,” Nakasone added.

Nakasone ended his comments by asserting that the TikTok platform could enable sweeping influence operations. Nakasone said his concern is not only the fact that TikTok can proactively influence users, but also its ability to “turn off the message,” and noted its large number of users.

The app is used by more than 100 million Americans.

The NSA, part of the Defense Department, is the agency responsible for U.S. cryptographic and communications intelligence and security.

A TikTok representative did not immediately respond to a request for comment.

TikTok, a unit of China’s ByteDance, has come under increasing fire over fears that user data could end up in the hands of the Chinese government, undermining Western security interests. TikTok Chief Executive Shou Zi Chew is due to appear before the U.S. Congress on March 23.

A bipartisan group of 12 U.S. senators is set to introduce legislation on Tuesday that would give Commerce Secretary Gina Raimondo new powers to ban TikTok and other foreign-based technologies if they are found to pose national security threats.

The U.S. government’s Committee on Foreign Investment in the United States (CFIUS), a powerful national security body, in 2020 unanimously recommended ByteDance divest TikTok because of fears that user data could be passed on to China’s government.
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Japan’s new medium-lift rocket failed on its debut flight in space on Tuesday after the launcher’s second-stage engine did not ignite as planned, in a blow to its efforts to cut the cost of accessing space and compete against Elon Musk’s SpaceX. 

The 57-metre tall H3 rocket lifted off without a hitch from the Tanegashima space port, a live-streamed broadcast by the Japan Aerospace Exploration Agency (JAXA) showed. 

But upon reaching space, the rocket’s second-stage engine failed to ignite, forcing mission officials to manually destroy the vehicle. 

“It was decided the rocket could not complete its mission, so the destruct command was sent,” a launch broadcast commentator from JAXA said. “So what happened? It’s something we will have to investigate looking at all the data.” 

The failed attempt followed an aborted launch last month. 

“Unlike the previous cancellation and postponement, this time it was a complete failure,” said Hirotaka Watanabe, a professor at Osaka University with expertise in space policy. 

“This will have a serious impact on Japan’s future space policy, space business and technological competitiveness,” he added. 

Japan’s first new rocket in three decades was carrying the ALOS-3, a disaster management land observation satellite, which was also equipped with an experimental infrared sensor designed to detect North Korean ballistic missile launches. 

H3 builder Mitsubishi Heavy Industries Ltd (MHI) said it was confirming the situation surrounding the rocket with JAXA and did not have an immediate comment. 

MHI has estimated that the H3’s cost per launch will be half that of its predecessor, the H-II, helping it win business in a global launch market increasingly dominated by SpaceX’s reusable Falcon 9 rocket. 

A company spokesperson said earlier that it was also relying on the reliability of Japan’s previous rockets to gain business. 

In a report published in September, the Center for Strategic and International Studies put the cost of a Falcon 9 launch to low Earth orbit at $2,600 per kilogram. The equivalent price tag for the H-II is $10,500. 

A successful launch on Tuesday would have put the Japanese rocket into space ahead of the planned launch later this year of the European Space Agency’s new lower-cost Ariane 6 vehicle. 

Powered by a new simpler, lower-cost engine that includes 3D-printed parts, the H3 is designed to lift government and commercial satellites into Earth orbit and will ferry supplies to the International Space Station. 

As part of Japan’s deepening cooperation with the United States in space, it will also eventually carry cargo to the Gateway lunar space station that U.S. space agency NASA plans to build as part of its program to return people to the moon, including Japanese astronauts. 

Shares of MHI fell 1.8% in morning trade, while the broader Japanese benchmark index was up 0.4%.  
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A group of attorneys general from 45 U.S. states and Washington, D.C., demanded Monday that social media app TikTok produce materials as part of an investigation into its effect on young users’ mental health.   

“We know that social media is taking a devastating toll on young people’s mental health and well-being, and through our investigation we are getting a clearer sense of TikTok’s role,” California Attorney General Rob Bonta said in a statement.   

The investigation began last year when eight states, including California, Massachusetts and Tennessee, launched a bipartisan probe of TikTok, focusing on whether the popular video-sharing app is endangering young people and violating state consumer protection laws.    

On Monday, Tennessee Attorney General Jonathan Skrmetti asked a Tennessee court to order TikTok to produce subpoenaed materials sought by the investigation. Attorneys general from across the United States filed a brief in support of the motion to compel TikTok to hand over the information.    

The Tennessee court petition alleges that TikTok has failed to preserve potentially relevant evidence in the investigation, including internal employee chat messages.   

It says TikTok has shared some internal messages in response to its request but said the company has rendered them “unrecognizable and nearly incomprehensible.”   

TikTok has not commented on the case.   

“We need to know more about the company’s business practices so we can keep our kids safe,” North Carolina Attorney General Josh Stein said in a statement Monday.   

California’s Department of Justice said in a statement that heavy use of social media is “strongly associated with self-harm, depression, and low self-esteem in teens — and every additional hour young people spend on social media is associated with an increased severity of the symptoms of depression.”   

The latest court challenge comes as TikTok, owned by Chinese tech company ByteDance, faces security concerns. The United States, Canada and the European Union have all banned the use of the app on government-issued devices.    

Like other social media apps, TikTok has also received criticism that it is not doing enough to protect younger users from inappropriate content.   

Last week, TikTok said it was developing a tool that would allow parents to block certain content on the app. The company also said parents will now be able to set time limits on the app for their teens, depending on the day of the week.   

Some information in this report came from Reuters. 
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Twitter users reported a string of problems with the social media site on Monday, including broken links and images not loading.

The company’s tech support account said in a tweet, “Some parts of Twitter may not be working as expected right now. We made an internal change that had some unintended consequences. We’re working on this now and will share an update when it’s fixed.”

Twitter’s billionaire owner, Elon Musk, tweeted Monday: “This platform is so brittle (sigh). Will be fixed shortly.” 

The problems appeared to be resolved about an hour after they began.

“Things should now be working as normal,” the company tweeted around 1 p.m. Eastern time.

The glitches started around midday Monday, with users around the world saying they were unable to read links to articles from outside websites.

Internet observation group NetBlocks said the issue was also affecting image and video content.

Musk tweeted later Monday in response to another user, “A small API change had massive ramifications. The code stack is extremely brittle for no good reason. Will ultimately need a complete rewrite.”

API, or Application Programming Interface, refers to software that is made available to outside developers and defines how two software components — in this case, those of Twitter and those belonging to outside platforms — can communicate with each other.

Musk has held several rounds of layoffs at Twitter, letting go more than half of the company’s staff. Some former employees have raised concerns that the mass layoffs could lead to technical problems for the platform.

Musk took over Twitter in October 2022, following a deal to buy the company for $44 billion.

Some information in this report came from The Associated Press, Reuters and Agence-France Presse. 
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Only a third of people in the world’s poorest countries can connect to the internet, the U.N. telecoms agency said Sunday, but low-flying satellites could bring hope to millions, especially in remote corners of Africa.

Tech giants including Microsoft have pledged to help populations hobbled by poor internet services to “leapfrog” into an era of online connectivity, with satellites set to play a key role as rival firms send thousands of new generation transmitters into low level orbit.

At the moment just 36% of the 1.25 billion people in the world’s 46 poorest countries can plug into the internet, the International Telecommunication Union said. By comparison, more than 90 percent have access in the European Union.

The ITU condemned the “staggering international connectivity gap” that it said had widened over the past decade.

The divide has been a key complaint at a U.N. summit of Least Developed Countries in Doha, where UN Secretary-General Antonio Guterres told their leaders that “you are being left behind in the digital revolution.”

The digital dearth is particularly acute in some African countries, including the Democratic Republic of Congo, where barely a quarter of the population of nearly 100 million can connect.

While internet access is easy in major DRC cities such as Kinshasa, huge rural zones and swathes of territory battled over by rival rebel groups for more than two decades are digital deserts.

The launch of thousands of Low-Earth Orbit satellites could bring speedy change and boost African hopes, tech experts promised at the Doha summit.

‘Leapfrog other nations’

Satellite coverage will play a key role in Microsoft’s vow to bring internet access to 100 million Africans by 2025, which was outlined ahead of the summit.

Microsoft announced a first phase for five million Africans in December and last week added a commitment to cover another 20 million people.

The initial five million will be served by Viasat, one of the companies sending constellations of satellites into space to compete with land-based fibre broadband.

Elon Musk’s Space X and Starlink are also putting thousands of satellites into an orbit between 400 and 700 kilometers (250 to 430 miles) above Earth.

Microsoft president Brad Smith told AFP that when he first saw the 20 million figure proposed by his team last year, he asked “is this real?”, but that he was now convinced it is possible.

“The technology costs have come down substantially and will continue to drop,” he said. “That is part of what makes it possible to move this fast to reach this size of population.

“Countries in Africa have the opportunity to leapfrog other nations when it comes to the regulatory structure for something like wireless communications,” he added.

“We can reach many more people than we could with fixed line technologies five or 10 or 15 years ago.”

Bandwidth bonanza

Richer countries have already largely allocated the available bandwidth for telecoms and television.

“In Africa the spectrum isn’t being used and so it is available and the governments are moving faster to bring this connectivity to more people,” Smith said.

Microsoft is working with Africa telecoms specialist Liquid Intelligent Technologies to provide internet for the second segment of 20 million people.

Providing internet and digital skills training for thousands of Africans was part of an effort to provide a private-sector alternative to “foreign aid”, Smith said, declaring that “we are bullish on what we believe digital technology can do for development.”

But the Microsoft president acknowledged that the private sector is “woefully under-developed and under-invested” in many LDC economies.

Liquid Intelligent says it has 100,000 kilometers (62,000 miles) of land fibre across Africa but is building a major satellite footprint.

“In hard-to-reach areas,” said Nic Rudnick, its deputy chief executive, “satellite is often the only technology or the most reliable technology for fast broadband that always works.”

 
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