Category: Incentives

Biden’s Tax and Regulation Plans Shift “Demonized” Silicon Valley Toward Trump

(p. B1) In 2021, David Sacks, a prominent venture capital investor and podcast host, said former President Donald J. Trump’s behavior around the Jan. 6 [2021] riot at the U.S. Capitol had disqualified him from being a future political candidate.

At a tech conference last week, Mr. Sacks said his view had changed.

“I have bigger disagreements with Biden than with Trump,” the investor said. Mr. Sacks said he and his podcast co-hosts were working on hosting a fund-raiser for Mr. Trump, which could include an interview for their “All In” show.  . . .

Such public support for Mr. Trump used to be taboo in Silicon Valley, which has long been seen as a liberal bastion. But frustration with Mr. Biden, Democrats and the state of the world has increasingly driven some of tech’s most prominent venture capitalists to the right.

. . .

(p. B5) Delian Asparouhov, an investor at Founders Fund, the investment firm founded by Mr. Thiel, recently marveled at how much the political winds had shifted. This month, Mr. Trump made a virtual appearance at a venture capital conference in Washington. There, he thanked attendees for “keeping your chin up” and said he looked forward to meeting them.

“Four years ago you had to issue an apology if you voted for him,” Mr. Asparouhov wrote on X.

Mr. Sacks, Mr. Palihapitiya and Founders Fund did not respond to a request for comment. Sequoia Capital declined to comment.

The comments and activity by the group of tech investors are particularly noticeable given Silicon Valley’s blue background.

. . .

The . . . “techlash” against Facebook and others caused some industry leaders to reassess their political views, a trend that continued through the social and political turmoil of the pandemic.

During that time, Democrats moved further to the left and demonized successful people who made a lot of money, further alienating some tech leaders, said Bradley Tusk, a venture capital investor and political strategist who supports Mr. Biden.

“If you keep telling someone over and over that they’re evil, they’re eventually not going to like that,” he said. “I see that in venture capital.”

That feeling has hardened under President Biden. Some investors said they were frustrated that his pick for chair of the Federal Trade Commission, Lina Khan, has aggressively moved to block acquisitions, one of the main ways venture capitalists make money. They said they were also unhappy that Mr. Biden’s pick for head of the Securities and Exchange Commission, Gary Gensler, had been hostile to cryptocurrency companies.

The start-up industry has also been in a downturn since 2022, with higher interest rates sending capital fleeing from risky bets and a dismal market for initial public offerings crimping opportunities for investors to cash in on their valuable investments.

Some also said they disliked Mr. Biden’s proposal in March [2024] to raise taxes, including a 25 percent “billionaire tax” on certain holdings that could include start-up stock, as well as a higher tax rate on profits from successful investments.

Mr. Sacks said at the tech conference last week that he thought such taxes could kill the start-up industry’s system of offering stock options to founders and employees. “It’s a good reason for Silicon Valley to think really hard about who it wants to vote for,” he said.

. . .

Mr. Andreessen, a founder of Andreessen Horowitz, a prominent Silicon Valley venture firm, said in a recent podcast that “there are real issues with the Biden administration.” Under Mr. Trump, he said, the S.E.C. and F.T.C. would be headed by “very different kinds of people.” But a Trump presidency would not necessarily be a “clean win” either, he added.

Last month, Mr. Sacks, Mr. Thiel, Elon Musk and other prominent investors attended an “anti-Biden” dinner in Hollywood, where attendees discussed fund-raising and ways to oppose Democrats, a person familiar with the situation said. The dinner was earlier reported by Puck.

For the full story see:

Erin Griffith. “Silicon Valley Notables Are Shifting to the Right.” The New York Times (Friday, May 24, 2024): B1 & B5.

(Note: ellipses, and bracketed years, added.)

(Note: the online version of the story has the date May 22, 2024, and has the title “Some of Silicon Valley’s Most Prominent Investors Are Turning Against Biden.”)

Among Hoofed Mammals Outsiders Are More Likely to Innovate

(p. D2) Fair or not, goats have not earned a reputation for their problem-solving abilities.  . . .  But if you hide food in a strange cup and put a lid on it, a goat may find a way, a new study finds. And not just any goat, a team of researchers says. Animals that functioned like outsiders in their social group were best at tackling and solving a problem.

. . .

Mr. Caicoya and his colleagues looked at 13 species of hoofed mammals, with their study totaling 111 individuals living in zoos in Spain and Germany.

In a study published on Wednesday [April 12, 2023] in the Proceedings of the Royal Society B, Mr. Caicoya and his colleagues reported that around 38 percent of the animals avoided the cups entirely.

. . .

They found that animals that were outcasts or low in the pecking order had less fear of new objects, more willingness to explore them and a greater chance of getting the prize.

. . .

“The ones that are on the margins of the groups are the ones that are eating less and have more problems surviving in nature,” Mr. Caicoya said speculatively, “so those are the ones that normally take more risks to get food.”

Necessity, perhaps, is the mother of innovation.

For the full story see:

Veronique Greenwood. “Mammalian MacGyvers; Revenge of the Outsiders: Shunned Goats Solve Problems.” The New York Times (Tuesday, April 11, 2023 [sic]): D2.

(Note: ellipses, and bracketed date, added.)

(Note: the online version of the story has the date April 4, 2023 [sic], and has the title “Outsiders Solve Problems. Just Ask Goats.” The passages quoted above follow the wording in the lengthier online version.)

The study co-authored by Caicoya and mentioned above is:

Caicoya, Alvaro L., Alina Schaffer, Ruben Holland, Lorenzo von Fersen, Montserrat Colell, and Federica Amici. “Innovation across 13 Ungulate Species: Problem Solvers Are Less Integrated in the Social Group and Less Neophobic.” Proceedings of the Royal Society B: Biological Sciences 290, no. 1996 (2023): 20222384.

Surgeons Often Excise Useful Appendix Even When Antibiotics Would Have Cured–“Surgeons Who Don’t Operate Miss Out on a Hefty Fee”

(p. D7) The appendix is a finger-shaped pouch attached to the large intestine (colon), usually on the lower right side of the abdomen. Long considered a vestigial organ with no known function, many people, young and old, have theirs removed in the course of another operation.

However, there are now indications that the appendix serves as a repository of healthy bacteria that can replenish the gut after an extreme attack of diarrhea. People who have had appendectomies, for example, are more likely to experience recurrent infections with the bacterium Clostridium difficile, a debilitating intestinal infection that causes severe, difficult-to-treat diarrhea.

. . .

Acute appendicitis is the nation’s most common surgical emergency.  . . .  Some 300,000 people in the United States undergo an appendectomy each year, but sometimes, the appendix turns out not to have been inflamed, meaning the operation was not necessary.

The results of several recent studies suggest that patients with uncomplicated appendicitis should not be rushed into surgery and instead should be offered the option of a trial of antibiotics.

In a controlled study among 540 adult patients, 72.7 percent of 257 patients randomly assigned to take antibiotics in lieu of an operation did not require subsequent surgery a year later, and those who did need surgery had no bad effects from the delay.

In another nonrandomized study of 3,236 patients who were not operated on initially, the nonsurgical treatment failed to cure the appendicitis in 5.9 percent of cases, and the inflammation recurred in 4.4 percent.

Some patients may choose an operation so they won’t have to worry about developing another attack of appendicitis, but if they aren’t told they have a choice, they can hardly make one.

Writing in JAMA [in February 2016] . . ., Dr. Dana A. Telem, a surgeon at Stony Brook University Medical Center, noted that “the notion of nonoperative treatment of appendicitis has not been well-received by the majority of the surgical community.” This is hardly surprising, because doctors, like many of us, are creatures of habit, and surgeons who don’t operate miss out on a hefty fee.

For the full story see:

JANE E. BRODY. “PERSONAL HEALTH; A Choice for Treating Appendicitis.” The New York Times (Tuesday, March 22, 2016 [sic]): D7.

(Note: ellipses, and bracketed words, added.)

(Note: the online version of the story has the date March 21, 2016 [sic], and has the title “PERSONAL HEALTH; A New View of Appendicitis.”)

The controlled randomized study mentioned above is:

Salminen, Paulina, Hannu Paajanen, Tero Rautio, Pia Nordström, Markku Aarnio, Tuomo Rantanen, Risto Tuominen, Saija Hurme, Johanna Virtanen, Jukka-Pekka Mecklin, Juhani Sand, Airi Jartti, Irina Rinta-Kiikka, and Juha M. Grönroos. “Antibiotic Therapy Vs Appendectomy for Treatment of Uncomplicated Acute Appendicitis: The Appac Randomized Clinical Trial.” JAMA 313, no. 23 (2015): 2340-48.

The nonrandomized study mentioned above is:

McCutcheon, Brandom A., David C. Chang, Logan P. Marcus, Tazo Inui, Abraham Noorbakhsh, Craig Schallhorn, Ralitza Parina, Francesca R. Salazar, and Mark A. Talamini. “Long-Term Outcomes of Patients with Nonsurgically Managed Uncomplicated Appendicitis.” Journal of the American College of Surgeons 218, no. 5 (May 2014): 905-13.

Planners of Megaprojects Almost Always Over-Promise and Under-Deliver

(p. B5) Bent Flyvbjerg is an expert in the planning and management of “megaprojects,” his name for huge efforts that require at least $1 billion of investment: bridges, tunnels, office towers, airports, telescopes and even the Olympics. He’s spent decades wrapping his mind around the many ways megaprojects go wrong and the few ways to get them right, and he summarizes what he’s learned from his research and real-world experience in a new book called “How Big Things Get Done.”

Spoiler alert! Big things get done very badly.

They cost too much. They take too long. They fall too short of expectations too often. This is what Dr. Flyvbjerg calls the Iron Law of Megaprojects: “over budget, over time, under benefits, over and over again.”

The Iron Law of Megaprojects might sound familiar to anyone who has survived a home renovation. But when Dr. Flyvbjerg dug into the numbers, the financial overruns and time delays were more common than he expected. And worse. Much worse.

His seminal work on big projects can be distilled into three pitiful numbers:

• 47.9% are delivered on budget.

• 8.5% are delivered on budget and on time.

• 0.5% are delivered on budget, on time and with the projected benefits.

. . .

Humans are optimistic by nature and underestimate how long it takes to complete future tasks. It doesn’t seem to matter how many times we fall prey to this cognitive bias known as the planning fallacy. We can always ignore our previous mishaps and delude ourselves into believing this time will be different. We’re also subject to the power dynamics and competitive forces that complicate reality, since megaprojects don’t take place in controlled environments, and they are plagued by politics as much as psychology. Take funding, for example. “How do you get funding?” he said. “By making it look good on paper. You underestimate the cost so it looks cheaper, and you underestimate the schedule so it looks like you can do it faster.”

For the full review, see:

Ben Cohen. “SCIENCE OF SUCCESS; 99% of Big Projects Fail. Lego Is the Fix.” The Wall Street Journal (Saturday, February 4, 2023): B5.

(Note: ellipsis added.)

(Note: the online version of the review has the date February 2, 2023, and has the title “SCIENCE OF SUCCESS; 99% of Big Projects Fail. His Fix Starts With Legos.”)

The book under review is:

Flyvbjerg, Bent, and Dan Gardner. How Big Things Get Done: The Surprising Factors That Determine the Fate of Every Project, from Home Renovations to Space Exploration and Everything in Between. New York: Currency, 2023.

Zoliflodacin Is First New Antibiotic in Decades

(p. A12) A new antibiotic, the first to be developed in decades, can cure gonorrhea infections at least as effectively as the most powerful current treatment, a large clinical trial has found. The drug, zoliflodacin, is taken as a single dose, and it has not yet been approved for use in any country.

. . .

Pharmaceutical companies have largely abandoned antibiotic development as unprofitable. The development of zoliflodacin represents a new model: G.A.R.D.P., which is funded by many Group of 20 countries and the European Union, developed the drug in collaboration with an American pharmaceutical company called Innoviva Specialty Therapeutics.

The nonprofit sponsored the Phase 3 trial of the drug. In exchange, it holds the license to sell the antibiotic in about 160 countries while Innoviva retains marketing rights for high-income countries.

“I’ll go out on a limb and say that’s probably the only way in which we develop antibiotics going forward, because the old model is simply not going to work,” said Ramanan Laxminarayan, a senior research scholar at Princeton University who chairs the G.A.R.D.P. board.

. . .

“Nobody’s making a boatload of money off treatment of gonorrhea, especially when you’re using a single dose of an oral antibiotic,” said Dr. Jeanne Marrazzo, director of the National Institute of Allergy and Infectious Diseases.

“This is a path forward to solve the dilemma of getting pathways for products that don’t guarantee profits,” Dr. Marrazzo said.

For the full story, see:

Apoorva Mandavilli. “A New Drug Is Developed To Combat Gonorrhea.” The New York Times (Friday, November 11, 2023): A12.

(Note: ellipses added.)

(Note: the online version of the story has the date Nov. 10, 2023, and has the title “Gonorrhea Is Becoming Drug Resistant. Scientists Just Found a Solution.”)

Experienced Nurses Can Be Disciplined If They Use Hunches from Clinical Observations to Override AI Protocols

(p. A1) Melissa Beebe, an oncology nurse, relies on her observation skills to make life-or-death decisions. A sleepy patient with dilated pupils could have had a hemorrhagic stroke. An elderly patient with foul-smelling breath could have an abdominal obstruction.

So when an alert said her patient in the oncology unit of UC Davis Medical Center had sepsis, she was sure it was wrong. “I’ve been working with cancer patients for 15 years so I know a septic patient when I see one,” she said. “I knew this patient wasn’t septic.”

The alert correlates elevated white blood cell count with septic infection. It wouldn’t take into account that this particular patient had leukemia, which can cause similar blood counts. The algorithm, which was based on artificial intelligence, triggers the alert when it detects patterns that match previous patients with sepsis. The algorithm didn’t explain (p. A9) its decision.

Hospital rules require nurses to follow protocols when a patient is flagged for sepsis. While Beebe can override the AI model if she gets doctor approval, she said she faces disciplinary action if she’s wrong. So she followed orders and drew blood from the patient, even though that could expose him to infection and run up his bill. “When an algorithm says, ‘Your patient looks septic,’ I can’t know why. I just have to do it,” said Beebe, who is a representative of the California Nurses Association union at the hospital.

As she suspected, the algorithm was wrong. “I’m not demonizing technology,” she said. “But I feel moral distress when I know the right thing to do and I can’t do it.”

. . .

In a survey of 1,042 registered nurses published this month by National Nurses United, a union, 24% of respondents said they had been prompted by a clinical algorithm to make choices they believed “were not in the best interest of patients based on their clinical judgment and scope of practice” about issues such as patient care and staffing.” Of those, 17% said they were permitted to override the decision, while 31% weren’t allowed and 34% said they needed doctor or supervisor’s permission.

. . .

Jeff Breslin, a registered nurse at Sparrow Hospital in Lansing, Mich., has been working at the Level 1 trauma center since 1995. He helps train new nurses and students on what signs to look for to assess and treat a critically ill or severely injured patient quickly.

“You get to a point in the profession where you can walk into a patient’s room, look at them and know this patient is in trouble,” he said. While their vital signs might be normal, “there are thousands of things we need to take into account,” he said. “Does he exhibit signs of confusion, difficulty breathing, a feeling of impending doom, or that something isn’t right?”

. . .

Nurses often describe their ability to sense a patient’s deterioration in emotional terms. “Nurses call it a ‘hunch,’ ” said Cato, the University of Pennsylvania professor who is also a data scientist and former nurse. “It’s something that causes them to increase surveillance of the patient.”

. . .

At UC Davis earlier this spring, Beebe, the oncology nurse, was treating a patient suffering from a bone cancer called myeloid leukemia. The condition fills the bones with cancer cells, “they’re almost swelling with cancer,” she said, causing excruciating pain. Seeing the patient wince, Beebe called his doctor to lobby for a stronger, longer-lasting pain killer. He agreed and prescribed one, which was scheduled to begin five hours later.

To bridge the gap, Beebe wanted to give the patient oxycodone. “I tell them, ‘Anytime you’re in pain, don’t keep quiet. I want to know.’ There’s a trust that builds,” she said.

When she started in oncology, nurses could give patients pain medication at their discretion, based on patient symptoms, within a doctor’s parameters. They gave up authority when the hospital changed its policies and adopted a tool that automated medication administration with bar-code scanners a few years ago.

In its statement, UC Davis said the medication tool exists as a second-check to help prevent human error. “Any nurse who doesn’t believe they are acting in the patient’s best interests…has an ethical and professional obligation to escalate those concerns immediately,” the hospital said.

Before giving the oxycodone, Beebe scanned the bar code. The system denied permission, adhering to the doctor’s earlier instructions to begin the longer-acting pain meds five hours later. “The computer doesn’t know the patient is in out-of-control pain,” she said.

Still, she didn’t act. “I know if I give the medication, I’m technically giving medication without an order and I can be disciplined,” she said. She watched her patient grimace in pain while she held the pain pill in her hand.

For the full story, see:

Lisa Bannon. “Nurses Clash With AI Over Patient Care.” The Wall Street Journal (Friday, June 16, 2023): A1 & A9.

(Note: ellipses added.)

(Note: the online version of the story has the date June 15, 2023, and has the title “When AI Overrules the Nurses Caring for You.”)

Increasing Patient Administrative Burdens Reduce Health Care Benefits and Efficiency

If we want a health system that is effective, efficient, and innovative, we need to have prices that transparently and accurately reflect the real costs of providing care. This would include all costs, including what the physician Chavi Karkowsky (quoted below) calls “administrative costs.” If we do not take account of the patient’s administrative costs, we will have a system that is ineffective, inefficient, and stagnant. And we will have set up perverse incentives that block entrepreneurs from improving the system. A true accounting will reveal higher costs, and that will raise concerns about too limited access to health care. But true prices also will provide information and incentives for medical entrepreneurs to find lower-cost ways to make health care more effective and more efficient. In the short-term, concerns about access could be addressed by a health care voucher system, analogous to what Milton Friedman proposed for education, or by a health insurance system like that proposed by Susan Feigenbaum.

Several years ago, I was called urgently to our small obstetric triage unit because a pregnant patient was very sick.

. . .

Within minutes, a team was swarming the triage bay — providing oxygen, applying the fetal heart rate and contraction monitor, placing IVs. I called the neonatal intensive care unit, in case labor progressed, to prepare for a very preterm baby. In under an hour, we had over a dozen people, part of a powerful medical system, working to get her everything she might need.

Breathing quickly behind her oxygen mask, my patient explained that she had noticed symptoms of a urinary tract infection about four days ago; she had gone to her doctor the next day and had gotten an antibiotics prescription. But the pharmacy wouldn’t fill it — something about her insurance, or a mistake with her record. She tried calling her doctor’s office, but it was the weekend, and she couldn’t get through. She read on the internet to drink water and cranberry juice, so she kept trying that. She called 9-1-1 in the middle of the night when she woke up and felt as if she couldn’t breathe.

This is the story of our medical system — quick, massive, powerful, able to assemble a team in under an hour and willing to spend thousands of dollars when a patient is sick.

This is also the story of a medical system that didn’t think my patient was worth a $12 medication to prevent any of this from happening.

This patient’s story is a result of the space between the care that providers want to give and the care that the patient actually receives. That space is full of barriers — tasks, paperwork, bureaucracy. Each is a point where someone can say no. This can be called the administrative burden of health care. It’s composed of work that is almost always boring but sometimes causes tremendous and unnecessary human suffering.

The administrative burden includes many of the chores we all hate: calling doctor’s offices, lining up referrals, waiting in the emergency room, sorting out bills from a recent surgery, checking on prescription refills.

. . .

There’s a general sense that all that unpaid labor required to get medical care is increasing.

. . .

At the same time, creating administrative burden is a time-honored tactic for insurance companies. “When you’re trying to incentivize things, and you don’t want to push up the dollar cost, you can push up the time cost,” said Andrew Friedson, the director of health economics at the Milken Institute.

Administrative burden can work as a technique to keep costs down. However, part of the problem, Dr. Friedson said, is that we don’t count the burden to patients, and so it doesn’t factor into policy decisions. There’s nobody measuring the time spent on the phone plus lost wages plus complications from delayed care for every single patient in the United States. A recent study co-written by Michael Anne Kyle, a research fellow at Harvard Medical School, found that about a quarter of insured adults reported their care was delayed or missed entirely because of administrative tasks.

. . .

One of the first steps to any comprehensive solution would be a true accounting of the costs of administrative burden. Maybe we in the medical system do have to start counting up the hours patients and providers spend on the phone, in waiting rooms and filling out forms. That would be difficult: It’s not a metric the health care industry is used to evaluating. But it’s not harder than doing the work itself, as patients do.

For the full commentary, see:

Karkowsky, Chavi. “The Overlooked Reason Our Health Care System Crushes Patients.” nytimes.com, Posted July 20, 2023 [Accessed Sept. 26, 2023]. Available from https://www.nytimes.com/2023/07/20/opinion/healthcare-bureaucracy-medical-delays.html.

(Note: ellipses, and italics, added.)

(Note: published in the online version, but not the print version, of The New York Times.)

The recent study co-authored by Michael Anne Kyle and mentioned above is:

Kyle, Michael Anne, and Austin B. Frakt. “Patient Administrative Burden in the US Health Care System.” Health Services Research 56, no. 5 (Oct. 2021): 755-65.

Susan Feigenbaum discusses her proposed health insurance system in:

Feigenbaum, Susan. “Body Shop’ Economics: What’s Good for Our Cars May Be Good for Our Health.” Regulation 15, no. 4 (Fall 1992): 25-31.

Medical Research Focuses More on Antibiotics Than on Phages Partly Because Antibiotics Are Easier to Patent

(p. 13) While recent events have provided a painful reminder of the very bad viruses that prey on us, Tom Ireland’s “The Good Virus” is a colorful redemption story for the oft-neglected yet incredibly abundant phage, and its potential for quelling the existential threat of antibiotic resistance, which scientists estimate might cause up to 10 million deaths per year by 2050. Ireland, an award-winning science journalist, approaches the subject of his first book with curiosity and passion, delivering a deft narrative that is rich and approachable.

In the hands of d’Herelle and others, the phage became a potent tool in the fight against cholera. But, in the 1940s, when the discovery of the methods to produce penicillin at an industrial scale led to the “antibiotic era,” phage therapy came to be seen as quackery in Europe and America, in part, Ireland suggests, because antibiotics, unlike phages, fit the mold of capitalist society.

Capitalists love patents. A funny quirk of the patent system is that you cannot patent entire natural things, but you can sometimes patent the way you extract their byproducts. The first antibiotics, being the secretions of fungi, were easier to patent in the United States than phages, which were whole viruses.

For the full review, see:

Alex Johnson. “Going Viral.” The New York Times Book Review (Sunday, September 17, 2023): 13.

(Note: the online version of the review has the date Aug. 15, 2023, and has the title “A Reason to Cheer for Cells and the Viruses That Feed on Them.”)

The book under review is:

Ireland, Tom. The Good Virus: The Amazing Story and Forgotten Promise of the Phage. New York: W. W. Norton & Company, 2023.

United Airlines CEO Gave Up on Flying United Airlines

United Airlines had major flight cancellations on Sun., June 25, 2023, on the day we were to fly United through O’Hare airport on our way to a European trip. Stress, exhaustion, chaos. United Airlines chaos continued for days. My brain has not yet totally processed the story quoted below. My gut, on the other hand, wants the CEO of United Airlines to be fired.

(p. B11) United Airlines Chief Executive Scott Kirby apologized for taking a private jet from Teterboro Airport in New Jersey to Denver this week as his airline grappled with widespread weather disruptions.

“Taking a private jet was the wrong decision because it was insensitive to our customers who were waiting to get home,” Kirby said in a statement Friday. “I sincerely apologize to our customers and our team members who have been working around-the-clock for several days—often through severe weather—to take care of our customers.”

A United spokeswoman said Kirby took the flight Wednesday because he was unable to secure a seat on a commercial flight. The company didn’t pay for the private flight, she said.

Wednesday was a hectic day for United: The carrier canceled over 750 mainline flights, according to FlightAware, over a quarter of what it had scheduled. The night before, a long stretch of bad storms in New York led to logjams at the area’s airports, including United’s Newark hub.

Some travelers over the past week have been stranded for days while waiting for space on flights home, in some cases sleeping in the airport. Travelers said they spent hours waiting in line for assistance or to be reunited with checked bags.

For the full story, see:

Alison Sider. “United CEO Apologizes for Flying on Private Jet Amid Airline’s Cancellations.” The Wall Street Journal (Saturday, July 1, 2023): B11.

(Note: the online version of the story was updated June 30, 2023, and has the title “United Airlines CEO Apologizes for Taking Private Jet During Flight Disruptions.”)

Dem Celebrities and Politicians Cultivated Crony Ties to FTX Fraudster Bankman-Fried

(p. B1) About 10 months before he was arrested on fraud charges, the cryptocurrency mogul Sam Bankman-Fried posed for a photograph at the 2022 Super Bowl in Inglewood, Calif.

On one side of him were Orlando Bloom and Katy Perry, the celebrity couple. On the other was the actress Kate Hudson. Standing in the center, with his arm slung over Mr. Bankman-Fried’s shoulder, was a lesser-known figure: Michael Kives.

Mr. Kives, a Hollywood agent turned investor, played an unusual role in Mr. Bankman-Fried’s business empire: super connector. He and his business partner, Bryan Baum, helped the young founder cultivate relationships with Mr. Bloom, Ms. Perry and former President Bill Clinton, and offered introductions to a who’s who of celebrities and business leaders, from Leonardo DiCaprio to the governor of Saudi Arabia’s Public Investment Fund.

The relationship was mutually beneficial. Mr. Bankman-Fried invested $700 million in Mr. Kives’s venture-capital firm, court records show, an extraordinary level of support for a fund with a short track record of start-up investments. Mr. Kives, the founder and face of the firm, and Mr. Baum each received $125 million as part of the deal.

For the full story, see:

David Yaffe-Bellany and Erin Griffith. “The Celebrity Super Connector Who Brought Big Names to FTX.” The New York Times (Saturday, June 24, 2023): B1 & B4.

(Note: the online version of the story has the date June 23, 2023, and has the title “The Super Connector Who Built Sam Bankman-Fried’s Celebrity World.”)

“They Just Invest in How to Navigate This Bureaucracy”

(p. A1) Capella Space, a San Francisco-based start-up, is building a fleet of small, inexpensive satellites that can track enemy troops as they move at night, or under cloud cover that traditional optical satellites cannot see through.

Fortem Technologies, a small aerospace company in Utah, wants to supply the Pentagon with a new type of unmanned aircraft that can disable enemy drones.

HawkEye 360, a Virginia-based firm, has used private equity funds to launch its own satellites that use radio waves emitted by communications equipment and other electronic devices to detect the presence of enemy troop concentrations.

Each of these systems is getting real-world testing in the war in Ukraine, earning praise from top government officials there and validating investors who have been pouring money into the field.

But they are facing a stiff challenge on another field of battle: the Pentagon’s slow-moving, risk-averse military procurement bureaucracy.

When it comes to drones, satellites, artificial intelligence and other fields, start-up companies frequently offer the Pentagon cheaper, faster and more flexible options than the weapons systems produced by the handful of giant contractors the Pentagon normally relies on.

But while the military has provided small grants and short-term contracts to many start-ups, those agreements often expire too quickly and are not large enough for young companies to meet their payrolls — or grow as rapidly as their venture capital investors expect. Several have been forced to lay people off, delaying progress on new technologies and war-fighting tools.

. . .

(p. A8) From the early months of the war, SpaceX’s Starlink, the Elon Musk-founded satellite internet service, had played a critical role for frontline Ukrainian troops. But small drones and a denser collection of satellites are also helping to provide the capacity for pervasive surveillance, allowing Ukraine to identify and track threats and targets constantly.

A new generation of cheaper and more precise attack drones carrying bombs can loiter in the air autonomously until they find their targets. Artificial intelligence-backed computer systems can fuse this collected data and other feeds to make targeting decisions, faster than any human.

The Ukrainians have also innovated a great deal themselves, impressing Pentagon officials as they have converted commercial drones, for example, into mini bombers.

Taken together, said Thomas X. Hammes, who studies war-fighting history at the Pentagon-backed National Defense University, the developments represent a “genuine military revolution,” and one that is happening much more quickly than the shift from infantry that traveled by foot in World War I to the motorized and mechanized armies of World War II.

. . .

(p. A9) Perhaps the most revolutionary use of American technology in Ukraine has been the application of software that uses artificial intelligence, made by Palantir, to help with targeting efforts. The company’s chief executive, Alex Karp, traveled to Ukraine last year to meet with President Volodymyr Zelensky.

“If you go into battle with old school technology,” Mr. Karp said this year at an event to discuss artificial intelligence tools in warfare, “and you have an adversary that knows how to install and implement digitalized targeting in A.I., you obviously are at a massive disadvantage.”

Some experts say that artificial intelligence, which has been used in Ukraine to help sift through the massive loads of data being accumulated from surveillance, will ultimately prove as disruptive to the nature of war-fighting as nuclear weapons.

. . .

For Primer, the small artificial-intelligence firm based in downtown San Francisco, it was a breakthrough moment.

Not long after the war in Ukraine started, its engineers, working with Western allies, tapped into a tidal wave of intercepted Russian radio communications. It used advanced software to clean up the crackly sound, automatically translated the conversations, and most importantly, isolated moments when Russian soldiers in Ukraine were discussing weapons systems, locations and other tactically important information.

This same work would have taken hundreds of intelligence analysts to identify the few relevant clues in the mass of radio traffic. Now it was happening in a matter of minutes.

The findings were quickly matched up with other so-called open source intelligence streams, like geolocation data pulled from social media accounts, giving updates on the location of troops or equipment, that could be matched with surveillance video from drones or images from satellites.

“It’s getting situational awareness,” said Sean Gourley, the founder of Primer.

Yet at the same time, the Pentagon was still deciding when to move ahead with major purchases of its technology. The company was burning through its cash reserves too quickly, so Mr. Gourley laid off engineers and other staff members.

“These engineers are great at creating solutions to solve these problems, which is what matters,” Mr. Gourley said. “But there is the uncertainty: When is this contract going to close? It’s very, very hard to justify that spend.”

Mr. Gourley said he decided instead to invest more money in a government relations push, hiring a former top aide to the Senate Armed Services Committee to help the company promote its business in Washington.

“The big defense companies, they don’t really kind of invest in the tech,” he said. “They just invest in how to navigate this bureaucracy. That kind of sucks, but that’s how you’ve got to play this game.”

In interviews, nearly a dozen top executives of technology-oriented companies shared stories of stalled efforts or frustration.

For the full story, see:

Eric Lipton. “Pentagon Is Slow At Signing Deals With Innovators.” The New York Times (Monday, May 22, 2023): A1 & A8-A9.

(Note: ellipses, and bracketed date, added.)

(Note: the online version of the story has the date May 21, 2023, and has the title “Start-Ups Bring Silicon Valley Ethos to a Lumbering Military-Industrial Complex.”)