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Uber settles its self-driving car suit with Google. The price: a chunk of Uber

February 10, 2018 by  
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Alphabet’s self-driving car unit settled its trade secrets dispute with the ride-hailing firm, Uber. As Fred Katayama reports, Uber promised not to use Waymo’s technology in its autonomous vehicles.
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SAN FRANCISCO – In a sudden end to an increasingly bitter public skirmish over self-driving car trade secrets, Uber settled a lawsuit Friday brought by Waymo, Google’s self-driving car company, giving up a stake to its rival.

As the fifth day of a trial was set to begin, Waymo announced the news in court. According to the terms of the settlement, it will receive 0.34% of Uber’s equity at an earlier valuation high of $72 billion, which comes to about $245 million.

Japanese investment firm SoftBank and other partners recently took a large stake in Uber but at a new valuation closer to $50 billion. Google had been an early investor in Uber with a seat on its board. It brought the lawsuit a year ago.

The deal follows a week of testimony that often shined a spotlight on the competitive tactics of former Uber CEO Travis Kalanick, who led the company since its founding in 2009 until June.

In Uber’s Friday statement, new CEO Dara Khosrowshahi — hired in August after Kalanick was ousted by investors because of mounting scandals — apologized to its competitor Waymo, agreed to pay the fine and promised Uber would clean up its act. Neither he nor Uber admitted to obtaining trade secrets.

“While I cannot erase the past, I can commit, on behalf of every Uber employee, that we will learn from it, and it will inform our actions going forward,” Khosrowshahi wrote. “As we change the way we operate and put integrity at the core of every decision we make, we look forward to the great race to build the future.”

The sentiment contrasted with the one from Uber co-founder Kalanick, who had testified about his recruitment of an ex-Google engineer whose alleged actions were at the heart of the dispute.

“As Uber’s statement indicates, no trade secrets ever came to Uber,” Kalanick said. “The evidence at trial overwhelmingly proved that, and had the trial proceeded to its conclusion, it is clear Uber would have prevailed.”

“The settlement represents the desire of both companies to move past this issue and get on with the goal of developing self-driving tech,” said Karl Bauer, executive publisher of Cox Automotive. Taking a slice of a rival’s stock simply typifies the ” ‘frenemy’ relationship pervading the modern tech industry,” he said.

Making ride-hailing cars autonomous is critical to companies such as Uber and its rival Lyft, because paying the driver creates a business model with little room for profit. 

Automotive manufacters have teamed up with tech start-ups over the past year, including Ford with Argo.ai, General Motors with Cruise and VW Group and Hyundai with Aurora, a new self-driving company started by former Google car tech lead Chris Urmson.

The turn of events followed four days during which Waymo, at least in open sessions, didn’t appear to make much progress proving its accusation that Uber had stolen trade secrets for its own self-driving car program.

Waymo lawyers painted former and current Uber employees as shady at best and conspiratorial at worst. They never highlighted what unique LiDAR technology was developed by Waymo engineers or showed evidence that Uber used that information to create its LiDAR.

LiDAR uses lasers atop a self-driving car to help the vehicle “see” its environment. Though the technology is sophisticated, it is available for purchase from suppliers such as Velodyne. 

Judge William Alsup made it clear the trial wasn’t about Uber’s business actions but whether Uber’s LiDAR was based on stolen information.

The price of the settlement may have been the clincher. Waymo had wanted at least $1 billion in damages and a public apology from Uber, Reuters reported in October. Uber had rejected those terms, it said.

More: Uber ex-CEO Kalanick: self-driving car beef linked to Google CEO Page’s ire over talent loss

More: Uber ex-CEO Kalanick defends deal at heart of lawsuit with Google

More: Self-driving car trial shows Silicon Valley’s sharp elbows; ‘second place is first loser’

Settlement caps a dark Uber year

Khosrowshahi has been largely in course-correction mode after a brutal last year. The company’s executives, pushing full throttle on making Uber the most popular and dominant ride-hailing service, had cultivated a hyper aggressive culture that took little notice of regulations and standard business protocol.

Former Uber engineer Susan Fowler accused Uber in a blog post of being a toxic place for women to work, a post that was bracketed by reports of a range of questionable business tactics under Kalanick, including spying on rivals, intentionally fooling regulators, lying to business partners, sharing a customer’s private medical history, and later, hiding massive data breaches. 

Waymo’s lawsuit said Uber was developing light detection and ranging systems based on information stolen by former Waymo employee Anthony Levandowski, who started a self-driving truck company in early 2016 that Uber bought for about $680 million in August of that year.  

The trial rehashed how Kalanick, who has called Levandowski a “brother from another mother,” wooed the engineer while he was at Google. Levandowski was frustrated by the pace of Google’s program and wanted to start his own company. Kalanick encouraged his venture, and eight months after Otto was founded, Uber bought it. 

The lawsuit alleged that Levandowski downloaded about 14,000 files from Google’s servers before leaving the company. These files allegedly contained the secret LiDAR information that Waymo accused Uber of using to speed the progress of its self-driving car team. Google has worked on autonomous cars since 2009 and Uber since 2015.

Khosrowshashi said he didn’t think Uber stole trade secrets from Waymo, but some employees may have inappropriately taken files from Google before they left. 

Waymo said in its statement Friday that it was “committed to working with Uber (Google is an early investor in the ride-sharing company) to make sure that each company develops its own technology.”

What remains unclear is whether the lawsuit or the verdict affects Uber’s self-driving car strategy.

Khosrowshahi’s statement says his company will be “taking steps with Waymo that ensure that our LiDAR and software represents just our good work,” suggesting some kind of tech monitoring arrangement. 

If Uber’s LiDAR never had any Waymo trade secrets, the company should be able to proceed as planned with its various self-driving car tests. If that’s not the case, then it would have to rebuild its LiDAR or retrofit its cars with LiDAR purchased on the open market, a potentially costly and time consuming move.

Waymo filed its lawsuit after it mistakenly received an email meant for Uber executives that included images of a LiDAR-related computer chip that Waymo said was identical to its own design.

Bro culture spotlight

Court testimony put a spotlight back on not just Kalanick, who has been largely out of public view in recent months, but also on the “bro culture” atmosphere that permeates many tech companies.

Among the many emails and text messages that were part of the trial was one message Levandowski sent Kalanick containing a link to a short video of Michael Douglas’ “Greed is Good” speech from Wall Street

Waymo lawyers convinced Alsup to allow them to play the clip, implying that Kalanick, like Douglas’ character, Gordon Gekko, was willing to do anything in the pursuit of riches. 

Notes from a meeting Kalanick had in 2015 included a list of things the CEO wanted such as a “pound of flesh.”

The Shakespearean term has aggressive overtones. When asked on the witness stand why he used it, Kalanick shrugged: “I don’t know specifically. It’s a term I use from time to time. I don’t know.”

Khosrowshahi has tried to distance the company from the culture of his predecessor. He’s looking to improve Uber’s relationship with drivers, negotiate with cities such as London that threaten to boot the service, and generally present a public face that contrasts with the take-no-prisoners approach of his predecessor. 

Follow USA TODAY tech writers Marco della Cava and Elizabeth Weise on Twitter.

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Breaking with tradition, Trump skips president’s written intelligence report and relies on oral briefings

February 10, 2018 by  
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For much of the past year, President Trump has declined to participate in a practice followed by the past seven of his predecessors: He rarely if ever reads the President’s Daily Brief, a document that lays out the most pressing information collected by U.S. intelligence agencies from hot spots around the world.

Trump has opted to rely on an oral briefing of select intelligence issues in the Oval Office rather than getting the full written document delivered to review separately each day, according to three people familiar with his briefings. 

Reading the traditionally dense intelligence book is not Trump’s preferred “style of learning,” according to a person with knowledge of the situation.

The arrangement underscores Trump’s impatience with exhaustive classified documents that go to the commander in chief — material that he has said he prefers condensed as much as possible. But by not reading the daily briefing, the president could hamper his ability to respond to crises in the most effective manner, intelligence experts warned.

Soon after Trump took office, analysts sought to tailor their intelligence sessions for a president with a famously short attention span, who is known for taking in much of his information from conservative Fox News Channel hosts. The oral briefings were augmented with photos, videos and graphics.

After several months, Trump made clear he was not interested in reviewing a personal copy of the written intelligence report known as the PDB, a highly classified summary prepared before dawn to provide the president with the best update on the world’s events, according to people with knowledge of the situation.  

Administration officials defended Trump’s reliance on oral sessions and said he gets full intelligence briefings, noting that presidents have historically sought to receive the information in different ways.

Michael Anton, a spokesman for the National Security Council, said Trump “is an avid consumer of intelligence, appreciates the hard work of his briefers and of the entire intelligence community and looks forward every day to the give and take of his intelligence briefings.”

Daniel Coats, the director of national intelligence, said in a statement that “any notion that President Trump is not fully engaged in the PDB or does not read the briefing materials is pure fiction and is clearly not based on firsthand knowledge of the process.”

He added that Trump’s routine sessions with senior intelligence advisers “demonstrate his interest in and appreciation for the value of the intelligence provided. In fact, President Trump engages for significantly longer periods than I understand many previous presidents have done.”

The PDB, which has been described as a newspaper with the smallest circulation in the world, is drawn from material provided by U.S. spies, satellites and surveillance technology, as well as news sources and foreign intelligence agencies.

Several intelligence experts said that the president’s aversion to diving deeper into written intelligence details — the “homework” that past presidents have done to familiarize themselves with foreign policy and national security — makes both him and the country more vulnerable.

Leon Panetta, a former CIA director and defense secretary for President Barack Obama, said Trump could miss important context and nuance if he is relying solely on an oral briefing. The arrangement also increases pressure on the president’s national security team, which cannot entirely replace a well-informed commander in chief, he said.

“Something will be missed,” Panetta said. “If for some reason his instincts on what should be done are not backed up by the intelligence because he hasn’t taken the time to read that intel, it increases the risk that he will make a mistake.”

“You can have the smartest people around you — in the end it still comes down to his decision,” he added.

The top-secret intelligence report, which dates in its current form to the Johnson administration, is made up of individual “articles” written by career analysts, mostly from the CIA. The PDB is so tightly controlled that intelligence officials maintain a log to record when the briefers provide a copy of the document to a principal and when they retrieve it, several officials said.

Mark Lowenthal, a career intelligence officer who served as a CIA assistant director from 2002 to 2005, said Trump does not have to read the PDB if he is getting an extensive oral briefing. He warned, however, that a short briefing on a few select items would leave the president ill-equipped for major decisions over the long term.

“Then he’s really not getting a full intelligence briefing,” Lowenthal said. “You need to get immersed in a story over its entire course. You can’t just jump into an issue and come up to speed on the actors and the implications. The odds are pretty good that something will arise later on for which he has no intelligence basis for helping him work through it.” 

The document, while traditionally lengthy and dense, contains key insights that can create a cumulative body of knowledge — and foreshadow looming threats, intelligence professionals said. 

President George W. Bush faced a political firestorm over how closely his administration was paying attention to the PDB after it was discovered that a month before the 9/11 attacks, his briefing book had included a warning that Osama bin Laden was “determined” to attack U.S. targets using airplanes.

In the current administration, versions of the president’s written intelligence briefing are provided to at least a dozen top officials, including national security adviser H.R. McMaster, Defense Secretary Jim Mattis and Secretary of State Rex Tillerson, according to people familiar with the dissemination.

Aides say Trump receives his in-person intelligence briefing nearly every day, although his publicly released schedules indicate that the sessions have been taking place about every two to three days on average in recent months, typically around 11 a.m.

One senior White House official described the Oval Office briefing as a distilled version of the sessions that senior administration officials receive earlier in the day. CIA Director Mike Pompeo usually attends the session, as does Coats.

During Trump’s briefing, a veteran intelligence official typically describes intelligence highlights contained in a shortened, written version of the PDB. Trump has rarely, if ever, requested that the document be left behind for him to read, according to people familiar with the meetings. 

Pompeo has said the president is briefed on current developments, as well as upcoming events — such as visits by foreign leaders — and longer-term strategic issues.

“The president asks hard questions,” he said in public remarks last month. “He’s deeply engaged. We’ll have a rambunctious back-and-forth, all aimed at making sure we’re delivering him the truth as best we understand it.” 

Trump’s admirers say he has a unique ability to cut through conventional foreign policy wisdom and ask questions that others have long taken for granted. “Why are we even in Somalia?” or “Why can’t I just pull out of Afghanistan?” he will ask, according to officials. 

The president asks “edge” questions, said one senior administration official, meaning that he pushes his staff to question long-held assumptions about U.S. interests in the world.

Another person familiar with the briefing process said that, at times, Trump has been dismissive of his briefers. He has shaken his head, frowned and complained that the briefers were “talking down to him,” this person said.

Trump has at times demonstrated a deep distrust of the intelligence community. He has accused Obama-era intelligence chiefs of rooting against his election and exaggerating Russian interference in the 2016 presidential election in an effort to delegitimize his presidency.

The Washington Post reported last year that intelligence officials in some cases have included Russia-related intelligence only in the president’s daily written assessment, steering clear of it in the oral briefing in order not to upset Trump.

The last U.S. president who is believed not to have regularly reviewed the PDB was Richard Nixon. The historical record contains no references to him having read the document, although Nixon and his national security adviser, Henry Kissinger, received a copy each day, according to David Priess, a former CIA briefer and author of “The President’s Book of Secrets.” 

“It is not unprecedented for someone to get only an oral briefing of the PDB,” Priess said. “But it is the exception rather than the rule. And a rare exception.” 

The intelligence community prides itself on tailoring the briefing document and the oral briefing to each president’s style. Obama preferred to received the PDB on a secure iPad to review before asking questions of his briefers.  

President George W. Bush typically read the PDB first thing in the morning, with his briefer present to review the highlights and answer questions, according to former officials who briefed him.

Neither Obama nor Bush reviewed the briefing book every day, and at times they skipped a session, especially when traveling

President Ronald Reagan read the PDB every day but chose not to have a briefing from a CIA officer, said John Poindexter, who served as Reagan’s national security adviser. Reagan often discussed the briefing document in morning Oval Office meetings with his top advisers, Poindexter said. 

Trump indicated early on that he had little interest in immersing himself in detailed intelligence documents. 

“I like bullets or I like as little as possible. I don’t need, you know, 200-page reports on something that can be handled on a page,” he told Axios shortly before taking office.

During the transition, the CIA offered to give Trump the same daily intelligence briefing that Obama received, a tradition for presidents-elect. But Trump declined a daily update, opting for less frequent briefings.

“You know, I’m, like, a smart person,” Trump said in a “Fox News Sunday” interview in December 2016. “I don’t have to be told the same thing and the same words every single day for the next eight years. It could be eight years — but eight years. I don’t need that.”

At the time, Obama warned it was never wise to skip insights from intelligence professionals. 

“If you’re not getting their perspective — their detailed perspective — then you are flying blind,” he said in an interview on Comedy Central’s “The Daily Show.”

During the first year of Trump’s presidency, the format of his intelligence briefings changed.

In the early days, he received the traditional briefing sometime between 9 and 10:30 a.m., according to his publicly released schedules. Within a few months, his intelligence advisers began augmenting the sessions with maps, charts, pictures and videos, as well as “killer graphics,” as Pompeo put it at the time. 

“That’s our task, right? To deliver the material in a way that he can best understand the information we’re trying to communicate,” Pompeo told The Post in May.

The early briefing sessions had a more freewheeling quality, according to current and former administration officials. Five or more White House aides might join Trump for the briefing, in addition to his briefer and intelligence officials.

The meetings were often dominated by whatever topic most interested the president that day. Trump would discuss the news of the day or a tweet he sent about North Korea or the border wall — or anything else on his mind, two people familiar with the briefings said. 

On such days, there would only be a few minutes left — and the briefers would have barely broached the topics they came to discuss, one senior U.S. official said.

“He often goes off on tangents during the briefing and you’d have to rein him back in,” one official said.

After he joined the administration in July, Chief of Staff John F. Kelly slashed the number of people who could attend the intelligence briefings in an effort to exert more discipline over how the president consumes information, current and former officials said. 

Josh Dawsey and Julie Tate contributed to this report.

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