Bytes: Week in Review – Trump's mobile venture, online data brokers used to target MN victims, and an OpenAI-Microsoft breakup
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Is the honeymoon over for OpenAI and Microsoft? From American Public Media, this is Marketplace Tech. I'm Novosafo. The tech companies are reportedly caught up in protracted behind-the-scenes negotiations that are in danger of boiling over into public conflict. We'll get to that story in today's Tech Bytes Week in Review.

We're also tracking news out of Minnesota, where prosecutors say the man accused of assassinating a Democratic lawmaker used online data brokers to help target his victims.

But first, the Trump administration unveiled a new venture this week, a mobile service and a smartphone. And the device is what got a lot of attention, set to cost $500 and made in the United States. Well, it didn't take long for analysts and tech industry experts to challenge that claim. Natasha Mascarenas at The Information explains why.

As my colleagues at The Information pointed out, I mean, currently there's just one smartphone for sale that meets the FTC standards to label itself as a made-in-the-USA phone. And that's according to 404 Media. I mean, the device has less memory and a worse camera than the Trump phone, and that one retails for $2,000, the one that's certified to be made...

to be advertised as made in the USA. And so the idea that the Trump administration could produce a phone, a smartphone, has a lot of analysts, experts scratching their head. And of course, this really comes in the backdrop of the Trump administration. Trump

specifically really calling on Apple to move its manufacturing to the United States, you know, slapping it with tariffs if it does have iPhones that are not made in the U.S. And so Apple is trying to do it and Trump is trying to do it first. And it's very difficult to do because...

It's very difficult to do because a lot of the technology and manufacturing is really being outsourced to different parts of the world. I mean, Apple's attempt at diversifying some of its manufacturing has seen it creating plants in India, not the United States. And that comes from everywhere from labor costs to really like the chips that are powering these phones are still largely, you know, being produced overseas in China, India, Taiwan, all over the world.

And then there's this question of regulation, right? If you're running a mobile phone service, you are very heavily regulated by the United States government. Also, we have tariffs that apply for various products, potentially semiconductors coming down the line. Electronics are currently exempt, but they may not be for long with the China tariffs issue. So how does all of that play into the fact that the president may personally benefit from a mobile phone venture?

Yeah, I mean, there are already struggles towards signing up for this kind of service. And so I think the jury is out on how effective the product will be in actually getting mass scale. But yeah, I mean, I think a lot of people are bringing up the possible ethical concerns of, on one hand, one month ago, you know, telling...

Trump telling Tim Cook of Apple that they expect their iPhones to be sold in the United States, manufactured, you know, diversifying to India isn't good enough. Otherwise, if you don't, tariffs will be hit on Apple. One month later, or even, you know, less than a month later, announcing an effort like this, that sort of would be an alternative and one that is quite cheap to some of this. So yeah, there's a lot of questions around if this will be ethical and if this will be effective. We'll be right back.

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You're listening to Marketplace Tech. I'm Novosafo. We're back with Natasha Mascarenas, reporter at The Information.

All right, let's move on to our next topic, which is something that has really concerned and I think a lot of us in this last week. And that is the assassination of a Minnesota state representative. And that's Melissa Hortman and her husband, Mark. They were shot and killed in their home last weekend. Prosecutors said the alleged assassin, Vance Bolter, used online people search websites, data brokers, to find home addresses of numerous intended targets. Dozens of lawmakers were apparently on this list.

And that's renewing scrutiny over these online data brokers. And there's talks of potential legislation even. So I wanted to first get into what are these data brokers? How do they work? Yeah. So using AI and honestly, a lot of partnerships between the sellers that we all use and put our credit card information on are the websites where we click accept cookies online.

Data brokers sort of can rapidly scrape clean and standardized data around individuals and then sell access to that data. And so everything from a new startup that's looking to understand a better persona to sell to, to a bad actor, to someone who intends to

you know, use the information and then inflict harm can sort of pay up and get access to this information. There are dozens, if not hundreds of data brokers online that are aggregating data so much so that there's even startups that have popped up to help you get your information off as a full-time job. So, you know, these websites are all over the place and tracking everything from your address and phone number to even your political affiliation and what your salary could be like.

So they're aggregating data that's public and data that's not public? Yeah, definitely. I mean, a lot of it is from things like public records, social media. But, you know, there has been a lot of questions around that.

surveillance without permission. And I hear from AI researchers, from people in the AI world a lot that as AI gets better, it's looking to sort of infer missing tributes. Like, okay, can I track all of what Natasha Mascarenhas has said online and try to understand what her political leaning is and then use that information to sort of fill out the rest of her profile? I think that's a scary and newer way we're seeing data tracked.

And this information is readily available for anyone to purchase? Like you could literally go to a site, take out your credit card and get it? You know, it definitely varies on the person. But yeah, you can definitely go to a website, put out your credit card and get information. And what kind of restrictions are in place, if any, on this kind of business? That's, you know, it's a good question. And it's one that I think has come up every time we see a news story where people

there was someone hurt due to the ability to access their information online. You know, even a few months ago, I was reading about police looking for more safeguards around it. I truly know that there's been a lot of attempts for tighter oversight over how people's information is shared online. But the best I've seen is really, you know, websites that are looking and sort of ways that you can opt out as an individual from these websites. So technically, yeah,

you see your information online, they have to offer you some level of opting out. And that can help in some ways. But I mean, it's imperfect. And that's why we're seeing legislation show up. And speaking of legislation, Minnesota Senator Amy Klobuchar had a bill to kind of reduce the amount of access to elected officials data, at least to protect elected officials. And that didn't pass, actually. Do we know why or what what the arguments would be for preventing that kind of legislation from passing?

I don't know exactly why it didn't pass. But I mean, like I said, it's been something that there's been a lot of legislation and attempts to address the threat. You know, like I said, it's been an ongoing concern for a long time. And I think one version of this that we've seen is, okay, can we restrict specific entities from selling specific information? So one version of the law, and this might be because

just speculating here, one idea could be, okay, is that too broad? One law that was passed in 2022 was sort of passing information for law enforcement officials to be exactly personally identifiable information be sold from companies. But again, I mean, it's a sort of imperfect game and it's one of the biggest debates that happens on the internet and sort of online privacy.

And it seems like an example of the law and regulators not having caught up to the speed of the internet. And speaking of which, AI. Let's talk about it. Yeah, the final topic here is something that's got tongues wagging in Silicon Valley, and that is the honeymoon that may be over between OpenAI and Microsoft. The Wall Street Journal says the two sides are caught up in difficult negotiations that are in danger of boiling over into open conflict. So, Natasha, what are these negotiations and what's the conflict about?

Yeah, definitely. So one thing to really understand is that these two companies used to be partners before they became rivals. Over time, though, they've started to sort of compete in areas such as selling AI to enterprises. You know, they're competing with coding products. The latest debate is really that OpenAI wants to convert its structure. As a result, it wants to, you know, ask Microsoft, which currently has a 49%

stake in the business to change that stake to 33%. This would give OpenAI more flexibility to work with other cloud providers. It would completely change the ability for OpenAI to take in more of its revenue cut. And it's telling investors that it really intends to pocket more of that investment. But Microsoft and OpenAI have been in negotiations for

nearly eight months trying to figure out a version of this that feels right. The stock that Microsoft currently holds in OpenAI's for-profit entitles it to around like $120 billion in future profits. So the money on the table is huge, but for OpenAI to really, what it says, you know, get the power it needs, be able to sort of restructure efficiently, it's looking to break things up. And so the Wall Street Journal reports that in these negotiations, some

OpenAI officials have been saying that they might take the, quote, nuclear option and complain to antitrust regulators to look over that contractual obligation that they made when the first two companies got in business together and see if there's a way to sort of navigate the breakup that's not breaking up. Hmm.

And what was that initial deal? Yeah, I mean, so right now, OpenAI has agreed to share 20% of its revenue with Microsoft through 2030. You know, in return, OpenAI got a lot of money and sort of Microsoft is what a lot of people see as the reason that OpenAI has been able to hit such magnificent scale since launching, you know, its product.

less than 10 years ago. So the deal really started with a very classic investment deal in some ways. We will give you a lot of money in return, we will get a percent of your revenue and own a percent of your stake.

It's interesting to see how that evolves, because what we're talking about here is OpenAI's belief in artificial general intelligence and the future of how much they think they can make and the dominance they think they can have, right, in this industry and how they're going from partners to rivals and competing for the same customers.

Totally. I mean, at the heart of it is a very somewhat philosophical debate, right? The current agreement that you asked about, it says Microsoft will relinquish its rights to OpenAI revenue and IP when OpenAI achieves AGI. One of the biggest debates that's happening now is the definition of AGI. Microsoft sees AGI as years away. OpenAI leaders see AGI as much closer. And

If the moment they reach AGI is when the contract sort of clears up and the rights sort of are completely relinquished, you see why the debate happens. And so I think that's going to be another conversation that they're having. A little different than the antitrust conversation, but all in the same negotiation. That was Natasha Mascarenhas at The Information. You can find the full video of this episode on our YouTube channel, Marketplace APM. And subscribe if you haven't already to watch us every Friday.

Jesus Alvarado produced this episode. Daniel Shin also produces our show. Gary O'Keefe is our engineer. Daisy Palacios is the supervising producer. Nancy Fregali is the executive producer. I'm Novosafo, and that's Marketplace Tech. This is APM.

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