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High-profile venture capitalists, including Y Combinator’s Garry Tan and Sequoia Capital partner Ravi Gupta, are withdrawing from a major gathering of tech leaders after conference CEO Paddy Cosgrave made comments that appear to refer to Israel’s retaliatory strikes in Hamas-controlled Gaza as “war crimes.”

At least five speakers said they would no longer participate at the November Web Summit conference, which draws tens of thousands of founders and executives to Lisbon every year. Those announcing their withdrawal include Ori Goshen, co-founder of AI21, an Israel-based rival to OpenAI, and Keith Peiris, co-founder of AI startup Tome. The boycott exposes the widening fallout in the business world from terrorist group Hamas’ Oct. 7 attacks in southern Israel, which have forced hundreds of Israeli tech workers to the front lines and prompted Wall Street financiers to publicly criticize academic institutions they back for their positions on the war.

•Sequoia’s Gupta, YC’s Tan cancel speaking engagements

•Venture capitalists question Web Summit’s Qatar ties

•Web Summit’s Cosgrave had tweeted about Israel’s retaliation

Cosgrave on Friday expressed shock at the “rhetoric and actions of so many Western leaders & governments,” as Israel prepared to launch a ground invasion of Gaza. “War crimes are war crimes even when committed by allies, and should be called out for what they are,” he wrote on X. Cosgrave also liked posts on X, the app formerly known as Twitter, that referred to the terrorist group’s killing of Israelis a week ago as “self-defence” and that said Israel was committing genocide against Palestinians. Later Monday, Cosgrave removed the liked posts.

Backlash to his comments was swift. On Monday, Y Combinator CEO Tan said on X that he was canceling his appearance at the Web Summit. Gil Dibner, founder of Angular Ventures, a VC firm based in Tel Aviv and London, also canceled his speaking commitment.

Cosgrave also is facing questions about his company’s association with Qatar, a U.S. military ally. Counterterrorism experts say it has also financed Hamas and it has hosted the terror group’s leaders, who operate a bureau in Qatar’s capital of Doha. Qatari officials maintain it only provides humanitarian aid.

Josh Kopelman, a Philadelphia-based partner at First Round Capital, posted a screenshot of a Sept. 5 email from Cosgrave indicating Web Summit had partnered with Qatar for a conference titled “Web Summit Qatar,” planned for February 2024. Web Summit first announced the conference in April, according to a spokesperson for the conference, choosing Doha after receiving bids from several cities across the Middle East.

In the email, Cosgrave noted Qatar is interested in backing venture funds as a limited partner and offered to introduce the First Round partner to Qatari officials. Kopelman, who declined the offer in the published email, did not have further comment, according to a firm representative.

Founders Fund partner Keith Rabois said on X that he would refuse to work with anyone who speaks at the Web Summit event in Qatar. Flexport CEO and Founders Fund Partner Ryan Petersen, who was listed to speak at the Qatar event as of Monday morning, has withdrawn from the event to focus on customer relations at Flexport since returning as chief executive, according to a person familiar with the matter.

The backlash follows Hamas’ killing of 1,400 Israelis, including at a music festival and across numerous towns near Israel’s border with Gaza. Hamas also took nearly 200 Israelis and Americans hostage, including babies and young children. In response, Israel cut off electricity and water in Gaza and launched rocket attacks, leading to the deaths of more than 2,600 Palestinians, according to the Gazan Health Ministry.

The venture investors' responses reflect the intense reaction to views that blame Israel for its role in the conflict. Major Wall Street financiers, including Pershing Capital’s Bill Ackman and Citadel’s Ken Griffin, have criticized the elite universities they fund for not condemning student groups that blamed Israel for attacks carried out by Hamas.

Venture capitalists and startup founders in the U.S. with Palestinian ties privately expressed concern over the deepening humanitarian crisis in Gaza. But some said they were afraid to make those views public out of fear their comments would be misconstrued as supporting Hamas’ attacks, which they strongly condemned. “We feel terrified, in one of the most dangerously risky capital markets in history, to even risk speaking on a politically charged topic,” said a founder of a U.S. healthcare startup with family in Palestine.

A spokesperson for Web Summit said that the conference operator is talking to a number of companies about their attendance in November. In a statement, the spokesperson said that “we are saddened to hear that some Israelis in the tech community will no longer be attending Web Summit” and that they “regret any hurt caused and extend our deepest sympathies to everyone who has lost loved ones.” (The statement didn’t address the budding boycott against Web Summit among non-Israelis.)

“We want to reiterate our devastation for the loss of innocent life in Israel and Gaza. We strongly condemn the horrific attacks by Hamas on Israelis,” the statement said.

Since Cosgrave co-founded Web Summit in 2009 in Dublin, it has become a draw for global startup leaders to hobnob for a week of conference sessions and parties. Last year, it drew 71,000 attendees and featured speakers such as Binance founder and CEO Changpeng Zhao and Queen Rania Al Abdullah of Jordan.

The organization moved its annual flagship event to Lisbon a few years ago, and is planning a conference in Hong Kong. Cosgrave is a majority owner of Web Summit, but the conference has a board of directors, according to a spokesperson.

‘The workings of the economy cannot be rushed,’ says Philadelphia Fed President Patrick Harker

The Federal Reserve should extend its pause on interest-rate increases because of growing evidence that higher borrowing costs will slow the economy despite recent signs of hiring and spending strength, a top central bank official said.

Philadelphia Fed President Patrick Harker in a Tuesday interview said he thinks the central bank can likely wait until early next year to decide whether rapid rate increases over the past 20 months have done enough to keep inflation heading lower.

“This is a time where we just sit for a little bit. It may be for an extended period; it may not. But let’s see how things evolve over the next few months,” said Harker, who has a vote on interest-rate policy this year.

While recent economic data have been surprisingly brisk, Harker said anecdotal, on-the-ground reports from business “contact after contact after contact is that things seem to be slowing down.”

For example, bankers have reported more business loans are coming due and will need to be renewed at much higher rates. “They’re concerned that some of those businesses and their business models will not be able to survive those higher rates,” said Harker, a former university president.

The Fed most recently raised rates in July to a range between 5.25% and 5.5%, a 22-year high. Several officials have signaled over the past week that they are comfortable holding rates steady at their Oct. 31-Nov. 1 meeting. That would extend a pause in rate rises from their September meeting.

The Fed has also pared its $8 trillion asset portfolio by $1 trillion over the past year as it allows holdings of Treasury and mortgage-backed securities to mature without replacing them. Shrinking those holdings provides an additional form of tightening policy because, when the U.S. Treasury rolls over its debt, it must find a new buyer of the securities.

‘We are doing quite a lot’

Harker highlighted the lagged effects of tighter monetary policy while addressing a national mortgage bankers convention in Philadelphia on Monday. “We did a lot, and we did it very fast…The workings of the economy cannot be rushed,” he said. “By doing nothing, we are doing something. And I think we are doing quite a lot.”

Harker has never dissented at a rate-setting meeting during turns as a voter in 2017, 2020 and this year. On Tuesday, he said the decision to support the July rate increase was a “close call.” He would need to see a “stark turn” in economic data—and in particular, signs that inflation was reaccelerating—to pivot back to favoring rate increases, he said.

A blowout September employment report from the Labor Department earlier this month and a strong retail-sales report from the Commerce Department on Tuesday have extended a run of firmer-than-expected economic figures.

At the same time, measures of underlying inflation have slowed markedly since June. Core prices, which exclude volatile food and energy items, rose at a 3% six-month annualized rate in August, down from 4.8% over the previous six-month period, according to the Commerce Department.

“If inflation were moving up in a sustained way, then I would behave very differently than if I saw just continuing strength in, say, retail sales for another month or so,” Harker said.

Tighter financial conditions

Harker said he took added comfort that the Fed had done enough to slow the economy and bring down inflation because of a recent run-up in long-term bond yields. The 10-year Treasury yield closed Tuesday at a new 16-year high of 4.846%.

Higher borrowing costs traditionally weaken investment and spending, a dynamic that is reinforced when higher rates also weigh on stocks and other asset prices. “Anything that would reduce financial accommodation will, in essence, be doing some of the work of monetary policy, for sure,” Harker said.

Harker said it would be appropriate for the Fed to consider lowering interest rates once inflation is “within a reasonable distance” of the central bank’s 2% target.

“We’re not there yet, but we believe in lags,” he said. “So if we get into the range of, I don’t know, let’s call it 2.5%, [and] we’re continuing to move down, then something like that would at least have me considering whether or not it’s time for rates to start coming down.”

Harker also said he would favor beginning conversations around how and whether the central bank might eventually slow the pace of runoff of its asset portfolio. The central bank is allowing up to $60 billion in Treasury securities to mature every month, which is twice as fast as occurred in late 2018 and early 2019, the last time the central bank was paring its holdings.

After the Covid-19 pandemic spread in March 2020, the Fed purchased trillions of dollars of securities to stabilize financial markets and, later, to provide extra stimulus once interest rates had been lowered to near zero. Officials want to shrink those holdings, which will eventually drain bank deposits known as reserves from financial markets. But they aren’t sure when reserves might fall to levels low enough that banks will compete for them, which could drive up overnight lending rates, something that occurred in 2019.

Company to use new AI systems at its fulfillment facilities that will work alongside employees

Amazon AMZN -0.81%decrease; red down pointing triangle.com is introducing an array of new artificial intelligence and robotics capabilities into its warehouse operations that will reduce delivery times and help identify inventory more quickly.

The revamp will change the way Amazon moves products through its fulfillment centers with new AI-equipped sortation machines and robotic arms. It is also set to alter how many of the company’s vast army of workers do their jobs.

Amazon says its new robotics system, named Sequoia after the giant trees native to California’s Sierra Nevada region, is designed for both speed and safety. Humans are meant to work alongside new machines in a way that should reduce injuries, the company says.

It is unclear how the new system will affect Amazon’s head count, and the company declined to provide details about its expectations except to note that it doesn’t see automation and robotics as vehicles for eliminating jobs.

Sequoia enables the company to put up items for sale on its website faster and be able to more easily predict delivery estimates, said David Guerin, the company’s director of robotic storage technology. The new program reduces the time it takes to fulfill an order by up to 25%, the company said, and it can identify and store inventory up to 75% faster. Amazon launched the system this week at one of its warehouses in Houston.

“The faster we can process inventory, the greater the probability that we’re going to be able to deliver when we said we could,” Guerin said. He said Amazon expects the new system to make up a significant portion of the company’s operations in the next three to five years.

Faced with fresh competition in the U.S., Amazon has worked to become faster at delivering its products. The company transformed its operations to a regionally focused model meant to store items closer to customers, The Wall Street Journal previously reported. Executives see a connection between delivery speeds and growth.

In the new structure, vehicles transport products inside tote containers to a new sortation machine equipped with small robotic arms and computer vision. From the sortation machine, the bins are routed to an employee who picks items for delivery. Remaining inventory is consolidated by Sparrow, a robotic arm Amazon unveiled last year.

In the previous system, vehicles moved around Amazon products, but the new sortation machine, tote containers and Sparrow weren’t involved. Previously, employees might have to reach high up on a shelf to pick a heavy item, but now the new system delivers containers around the waist level, with a goal to reduce injuries.

Amazon is among several companies that have chased what is known as the “holy grail” of robotics, or machines as dexterous, quick and adaptable as a human arm and hand. Rivals such as Walmart are changing jobs of moving boxes into roles managing robotic arms.

What Amazon and others have realized is that in order to integrate more robotics, the workflow of warehouses has to be transformed, said Rueben Scriven, research manager at market research firm Interact Analysis. Amazon’s new system, for example, makes sense for its robotic arms because such robots have an easier time identifying objects inside of bins than shelves, which have been a part of previous Amazon systems.

“The key thing Amazon is trying to do is integrate,” Scriven said. “They have the different pieces, and now it’s about, ‘How do we bring them together in a harmonious system?’”

Labor researchers and activists have said Amazon’s desire for faster speeds can put its workers at risk, and some have warned that the introduction of robotics could also heighten employee injuries. The company has long struggled with high turnover among its warehouse employees and repetitive stress injuries.

With new systems such as Sequoia, Amazon says it is trying to improve safety. Tye Brady, chief technologist at Amazon Robotics, said the company’s robotics are meant to eliminate mundane tasks and work alongside its human staff, with both needing each other to work efficiently. Amazon has introduced various robotics into its warehouses over the past decade but maintained large hiring sprees for human workers.

Amazon’s delivery strategy has also centered on opening facilities focused on delivering popular products to customers in less than a day. The company has launched dozens of the “same-day” sites, with plans for more expansion. Guerin, the robotics storage director, said Amazon’s plans for Sequoia include the same-day sites.

Aside from trying to get faster, Amazon also restarted a shipping business that competes with United Parcel Service and FedEx by handling external deliveries, and it has also worked to eliminate packaging throughout its network.

Amazon said it would also start to test a bipedal robot named Digit in its operations. Digit, which is designed by Agility Robotics, can move, grasp and handle items, and will initially be used by the company to pick up and move empty tote containers.

The retailer has one of the nation’s largest workforces, employing hundreds of thousands of employees across its warehouses. It has also increasingly introduced robotics into its operations. The company bought Kiva Systems in 2012 for $775 million, bringing in mobile robots into its facilities that became a staple of its operations.

In 2022 it announced a $1 billion fund for innovation in logistics and supply chain, with Agility Robotics being among the fund’s first recipients. And the same year, it unveiled Sparrow, which can pick up a variety of objects as easily as humans can.

Insurers and policymakers are increasingly worried about the threat to infrastructure from cyber attacks

Lloyd’s of London has warned that a major cyber attack on a global payments system could cost the world economy $3.5tn, as insurers and companies worry about the systemic threat from hackers and whether the risks are insurable.

The Lloyd’s market, which is a hub for cyber insurance alongside traditional sectors such as shipping, said a “hypothetical but plausible cyber attack” would create “widespread disruption” to global business. 

Under the scenario, attacks put malicious code in transactions software that then spreads through tens of thousands of partner networks, allowing hackers to breach defences and siphon funds, and bringing customer payments and bank clearing to a halt.

The five-year economic impact would be felt mostly strongly in the US, with $1.1tn of the loss, followed by China with $470bn and Japan with $200bn according to the scenario, modelled by Lloyd’s in partnership with the Cambridge Centre for Risk Studies.

Lloyd’s chair Bruce Carnegie-Brown said the “global interconnectedness of cyber means it is too substantial a risk for one sector to face alone”. He called for the sharing of “knowledge, expertise and innovative ideas across government, industry and the insurance market to ensure we build society’s resilience against the potential scale of this risk”.

Concern has risen among insurers and policymakers about the threat to economic and national infrastructure from cyber attacks. In December, insurance group Zurich’s chief executive warned that cyber attacks were on their way to becoming “uninsurable”. 

Lloyd’s itself caused controversy when it insisted on an exclusion in standard cyber insurance policies for big state-backed attacks. Banks and other providers of essential services feared this meant that they would not be covered in the event of such an attack, with the identity of hackers and the question of state sponsorship difficult to establish.

Some executives have pushed for a state backstop in the event of a wide-ranging attack or one that affects core infrastructure. Insurers have held discussions with the UK government about whether Pool Re, the UK’s terrorism reinsurance scheme, could be extended to cover major state-backed cyber attacks.

The $3.5tn figure is a weighted average of three scenarios of varying severity. The most extreme of these envisages $16tn of losses over the period, Lloyd’s said.

Cyber insurance is one of the fastest-growing markets as companies look for coverage following a surge in ransomware attacks

Cyber premiums amounted to just over $9bn in premiums last year, according to Lloyd’s, and are predicted to reach as much as $25bn by 2025.

Lloyd’s said that this “still represents a small portion of the potential economic losses that businesses and society face”.

Venture capitalist Marc Andreessen posted a manifesto on the a16z website, calling for “techno-optimism” in a frenzied, 5,000-word blog post that somehow manages to re-invent Reaganomics, propose the colonization of outer space and unironically answer a question with the phrase “QED.”

Andreessen’s vision of techno-optimism could seem inspiring: He imagines a Libertarian-esque world where technology solves all of our problems, poverty and climate change are eradicated, and an honest meritocracy reigns supreme. Though Andreessen may call us “Communists and Luddites” for saying so, his dreams are unrealistic, and founded upon a flawed premise that tech exclusively makes the world better.

First, we need to remember the biases that Andreessen brings to the table, mainly that he is absurdly wealthy (worth an estimated $1.35 billion as of September 2022) and that his absurd wealth is largely tied to the investments of his namesake tech venture fund. So, he inherently is going to push for his techno-optimist vision, because the success of tech companies means he gets even more rich. When you have a financial stake in something, you become biased: This is why, as reporters, we can’t buy Netflix stock, then turn around and write an article about why Netflix is going to have a great Q4.

But money can be blinding. Early on in his essay, Andreessen writes, “We believe that there is no material problem – whether created by nature or by technology – that cannot be solved with more technology.” A16z is increasingly investing in defense companies, including Palmer Luckey’s controversial startup Anduril, which manufactures autonomous weapons. Is war the problem these companies are solving? What does “solve” even mean in the context of conflicts like the ongoing war in Israel and Gaza — isn’t the true solution an end to conflict?

Another inconsistency lies in Andreessen’s assertion that “technological innovation in a market system is inherently philanthropic, by a 50:1 ratio.” He references economist William Nordhaus’ claim that those who create technology only retain 2% of its economic value, so the other 98% “flows through to society.”

“Who gets more value from a new technology, the single company that makes it, or the millions or billions of people who use it to improve their lives?” asks Andreessen.

We won’t lie and say that tech startups have not made our lives easier. If we’re out too late and the subway isn’t running, we can take an Uber or Lyft. If we want to buy a book and get it delivered to our doors by the end of the day, we can order it on Amazon. But to deny the negative impacts of these companies is to move through the world with blinders up.

Furthermore, it’s implicit — but not stated in Andreessen’s argument — that these platforms have effectively made large swatches of society renters, and the platforms, the landlords. Perhaps he needs a refresher on the ills of the “rentier economy” and how antithetical it is to innovators and entrepreneurship?

When was the last time Marc Andreessen walked through the streets of San Francisco, where wealthy tech workers pretend that they don’t see the homeless encampments outside of their companies’ HQ?

When was the last time Marc Andreessen talked to a poor person — or an Instacart shopper struggling to make ends meet, for that matter?

Andreessen’s argument is a contemporary rehashing of trickle-down economics, the notorious Reagan-era idea that as rich people get richer, some of that wealth will “trickle down” to the poor. But this theory has been repeatedly debunked. Again: Do Amazon warehouse workers really get their fair share?

At one point, Andreessen makes the case that free markets “prevent monopolies” because the “market naturally disciplines.” As any third-party Amazon seller will tell you — or anyone who’s tried to get Eras Tour tickets — this is a point easily disproved. Andreessen may argue that the U.S. market isn’t truly “free” in the sense that it’s regulated by agencies and the lawmakers who empower those agencies to enforce policy. But the U.S. has had its fair share of stretches of laissez-faire tech oversight, and each has spawned — not stifled — tech giants strongly inclined to crush competition.

Andreessen’s motivations are further crystalized when he makes a list of whom he considers to be his enemies.

In that section, he lists off what he feels has subjugated society to “mass demoralization.” On this list is a mention of the United Nations’ Sustainable Development Goals (SDGs), the 17 objectives that were created to inspire nations to strive toward peace. According to Andreessen, these are the so-called enemies “against technology and life:” environmental sustainability, reduced gender inequalities, the elimination of poverty or hunger, and more good jobs.

How are these 17 goals against technology and life, when technology is already being used to achieve more life — already being used to make clean water, alleviate mass production and generate clean energy? He has a vague, empty way of writing that leaves more questions than answers; it brings forth the idea that he has probably never read the 17 Sustainable Goals, and that instead he is using it as a code word for something else. Then, Andreessen decries ESG stakeholder capitalism, tech ethics, trust and safety, and risk management as enemies to his cause.

What are you really trying to say, Marc? That regulation and accountability are bad? That we should pursue the development of technology at the expense of all else, in hopes that the world will be better if Amazon stock breaks $200 per share?

Andreessen has a coded way of speaking in general, so it’s no wonder that he takes such umbrage with the UN’s goals of supporting those most at risk. He talks about the planet being “dramatically underpopulated” and specifically calls out the way “developed societies” are dwindling in population, a seeming endorsement of one of the core tenets of pronatalism. He wants 50 billion people to be on earth (and then for some of us to colonize outer space), and says the “markets” can generate the money needed to fund social welfare programs. (We must repeat the question: Has this man been to San Francisco lately?) He also mentions that Universal Basic Income “would turn people into zoo animals to be farmed by the state.” (Sam Altman would no doubt disagree.) He wants us to work, to be productive, “to be proud.”

The missing link here is how we can use tech to actually take care of people; how to feed them, clothe them, how to make sure the planet doesn’t reach such high temperatures that we all just melt away. What is missing here is that San Francisco is already the tech hub of the world and is one of the most unequal places in the universe, both socially and economically. What is missing here is that the technological revolution made it easier to hail an Uber or order food delivery, but did nothing about how those drivers and delivery people are being exploited, and how some live in their cars to sustain a decent wage.

There are lines and lines to analyze in his manifesto, but it all goes back to the point that what’s missing here is life: the element of living and all its nuances. He takes an either “you are for technology” or “against it” approach to actually utilizing productivity to help make lives better. He talks about the economic frameworks that life is spun around, without mentioning the intricate ways it actually impacts people.

Plenty of tech giants speak of creating a world they have no grasp on. We watch as Meta founder Mark Zuckerberg “moves fast and breaks things” and then ends up testifying before Congress about election interference. We watch as OpenAI founder Sam Altman draws parallels between himself and Robert Oppenheimer, not stopping to think so much about whether or not it’s a good thing to push the limits of technological innovation at any cost.

Andreessen is a product — and an engineer — of a tech bubble that doesn’t understand the people whom it purports to serve.