Verizon stealthily launched a startup offering $40-per-month unlimited data, messaging and minutes

DAVOS — Tech will never be the same again after 2018. That's the view of Brad Smith, Microsoft's president and chief legal officer, after a "watershed" year of controversy and regulation for the sector.

Referring to the so-called "tech lash," which was in part sparked by Facebook's giant Cambridge Analytica data breach in March 2018, Smith said the incident "captivated people's attention in a way that data breaches or issues in the past had not."

The European Union significantly strengthened privacy laws with the introduction of GDPR, while California broke ground with its own privacy legislation last year. The former is already showing its teeth, with Google being hit with a $57 million fine by French authorities for its "massive and intrusive" data collection.

"It was one of these watershed years where I doubt that we'll ever go back to what was there before. People now recognise that the impact of technology is so pervasive that it requires that new steps be taken to address what's on people's minds," Smith told Business Insider at the World Economic Forum in Davos, Switzerland.

Some of these steps should come from within the industry, Smith said, others will involve government input. The likes of Apple, Facebook, and Google all support the introduction of federal privacy laws in the US, and Smith thinks they could be put in place as early as this year.

"It is possible we will see a law passed in 2019," he said, pointing out that Microsoft has lobbied for new legislation since 2005. "It's more likely that we'll see a law passed in 2020 or 21. It is now a historical inevitability that a law will be passed by Congress."

Read more: The president of Microsoft says top leaders at the world's biggest tech companies meet regularly to talk about the major issues facing Silicon Valley and the world

On how regulation will shake out, he said GDPR will be a useful starting point — not least because tech firms won't want to grapple with two substantially different sets of rules on managing user data.

It means US tech giants, and others guilty of abusing data, could face big financial penalties on home turf. In the EU, GDPR now dictates that firms must pay a fine of up to 4% of their annual global turnover if a data protection authority rules that they mishandled user information.

"We will see some of the principles that the Europeans have adopted but we'll see them implemented in a way that's more consistent with American political and legal traditions," he explained.

"But I think the tech sector itself ironically will find itself more supportive of rules that are similar to what we have in Europe. It would be so expensive and difficult to operate if we have to create a technical architecture that's fundamentally different from one we've created already."

This was supported by a senior source in the privacy world, who told BI that GDPR seemed radical in the US a year ago, but could now form the backbone of US legislation. The source added that privacy had been one of the major themes of Davos 2019.

Smith said: "In a world where we're all working with data I think we all have opportunities to ask how we can manage it better and in a way that sustains the public's confidence."

Juniper Networks invests $2.5M in enterprise tech accelerator Alchemist

The next tech divide could be between those who have access to artificial intelligence and those who do not, Salesforce CEO Marc Benioff warned on Wednesday.

Artificial intelligence is becoming a "new human right," and everybody will need access to it, Benioff said in a speech at the World Economic Forum in Davos, Switzerland.

"Today, only a few countries and only a few companies have the very best artificial intelligence in the world," Benioff said. "Those who have the artificial intelligence will be smarter, will be healthier, will be richer, and of course, you've seen their warfare will be significantly more advanced."

By contrast, those who do not have access to AI will be "weaker and poorer, less educated and sicker," he said.

"We must ask ourselves, is this the kind of world we want to live in?" Benioff said. "This can be seen right where I live in San Francisco, where we truly have a crisis of inequality."

Debate has already emerged about the ethics of AI and the possibility that it can be used for harm, for example, in warfare. To tackle these questions and to guide its use of the technology, Salesforce in December hired its first chief ethical and humane use officer.

Read this: Salesforce is hiring its first chief ethical and humane use officer to make sure its artificial intelligence isn't used for evil

"AI is technology like none of us have ever seen, and none of us can truly say where it's going," Benioff said. "But we do know this: Technology is never good or bad. It's what we do with the technology that matters."

AI isn't the only divide the tech industry is grappling with. Companies in the industry are facing a crisis of trust in the wake of privacy breaches and the mishandling of data, Benioff said.

Benioff has becoming increasingly vocal about economic and other inequalities. Last fall, he was a major proponent of a measure in San Francisco that would tax large companies to help the city deal with its growing homelessness problem.

Some other tech figures followed his lead in making pledges to benefit the homeless, while other CEO's disagreed with the approach.

BuzzFeed is planning to cut 15% of its staff, according to a Wall Street Journal report on Wednesday.

The decision could cost 250 employees their jobs with the digital publisher, people familiar with the matter told The Journal.

Sources also said BuzzFeed's choice to trim its workforce could be an effort by the company to get closer to profitability ahead of a potential merger with another digital media outlet.

This story is still developing.

While many of us were making resolutions to bring in the New Year, Instagram influencer Caroline Calloway was paving the way for her redemption tour.

The 27-year-old Calloway has headlined the most recent news cycle after stories about her $165 "creativity workshop" gained traction in December. A viral Twitter thread accused Calloway of running a scam, and the Instagram star was forced to cancel her tour and refund attendees after she received heavy criticism.

Details emerged that Calloway, who has more than 800,000 Instagram followers, was wholly unprepared for the tour and even made people bring their own food to events. Supporters say Calloway was simply "in over her head," but that hasn't stopped her actions from drawing comparisons to the people behind the infamous Fyre Festival.

But last week, Calloway changed her mind: Along with the rest of the world — or at least Calloway's 800,000 followers — I found out that she had decided to un-cancel her creativity tour. The first rescheduled workshop would take place in New York this past Saturday — three days out from her announcement.

So I went.

Calloway's 'personal brand'

By many, Calloway is considered one of the first iterations of what we refer to as "influencers," the people behind those established social media brands who are able to make ripples across the Internet, just by posting content for their thousands of devoted followers.

Calloway first started to develop a following back in 2013, when she began documenting her picturesque life as an American expat studying at the "real-life Hogwarts" — also known as the University of Cambridge. Her posts were unique for their accompanying long, flowery captions describing romantic relationships and emotional break ups with Josh, then Oscar, then Conrad.

By spring 2015 she had amassed 300,000 followers, the Daily Mail reported.

"She is famous for something that didn't really exist until a few years ago: a personal brand," Man Repeller wrote about Calloway in June 2018. "Posting intimate personal details on social media is now commonplace, but when Caroline first started sharing stories about her life, her friends and her romantic relationships, it was different. Unique. A bit scandalous, even."

Her long captions read like excerpts from a young adult novel, and publishers agreed: Calloway nabbed a $500,000 deal with Flatiron Books in 2015 to write a memoir called "And We Were Like," based off the life she detailed on Instagram.

But that deal shuttered sometime later (her last post about the book is from April 2016). Calloway realized that the "the boy-obsessed version" of herself she painted on Instagram wasn't the one she felt comfortable conveying, she said during her workshop.

She backed out, and is still responsible for paying back the $165,000 advance she got for her book deal. (She joked during the workshop that she now takes Uber Pool instead of UberX because, "Hello, debt!")

Calloway's personal posts didn't end after she backed out of the book deal. But she leveled with her massive Instagram following in a post in November 2018, where she revealed she was feeling "broken and scared and still worthy of love," and archived two years worth of Instagram posts. She also shared on Facebook that she had struggled with an Adderall addiction during college.

The person that emerged, Calloway says, was her more authentic and true self. Instead of posts, Calloway informs followers about her day-to-day life through long Instagram Stories.

Her Stories contain lengthy blocks of text you might have to screenshot just to be able to read them in their entirety. She's used the Snapchat-like feature since it debuted in 2016 in a way much like she used her image captions: as a personal journal to share with the masses.

'Are you here for Caroline Calloway?'

So on Saturday morning, I found myself approaching a nondescript warehouse in Brooklyn's Bushwick neighborhood, double-checking Google Maps to ensure I had plugged in the correct address. There were no markings and no numbers on the building's exterior.

After messaging Calloway, I had secured myself an invitation to her un-canceled workshop. In a 1,500-word email I and other interested attendees received, Calloway shared the detailed itinerary for the five-hour workshop. She also shared what would change this time around: there would be no flower crowns, but there would be catered food.

"So can I guarantee you'll like this workshop? No," Calloway wrote in the email. "But I think there is a 95% chance you will, especially since you felt moved to buy this ticket in the first place."

The warehouse where Calloway's creative workshop was held. Paige Leskin

When I arrived at the warehouse, I had a fleeting thought that this was the scam itself: that all these people would show up to a building that didn't exist to attend a workshop that wasn't actually happening.

But as I approached the building, walking toward me with the same confused look were two 20-something women with blown-out hair, expensive-looking boots, and long, designer coats.

"Are you here for Caroline Calloway?" one of them asked me. The two women were lost, and had banded together to find the workshop.

I was definitely in the right place.

We were ushered into the warehouse by one of Calloway's assistants, and followed her up four flights of dark stairs. (Later, I learned that Calloway's assistants are two sisters in college, overwhelmed and overworked by how much time they've had to devote to helping Calloway put her un-canceled workshop together at the last minute.)

We followed the assistant into a gorgeous loft apartment filled with knick-knacks and plants, tailor-made for an Instagram photoshoot.

Calloway, left, speaks to workshop attendees.Kathleen O'Neill

As we entered, we were told to explore the space and locate our "personalized notebooks" before sitting down to talk with other attendees and grab coffee. The cover of my notebook was adorned with cheap, sticky letters spelling out my name, and an envelope inside contained scrapbook-ready stickers you could use to decorate your notebook.

The first hour of the five-hour workshop was devoted to "new student orientation," which Calloway said she wouldn't attend because she didn't want to "steal focus."

During the orientation, I chatted with some of the women seated around the room. Besides the three journalists in the room, there was a woman in Yale University's nursing program who had traveled down from Connecticut for the day to attend. There was an aspiring actor studying psychology in the city, and two woman who had flown in from Seattle for the workshop and were making a weekend of it in New York. Another woman said she had just quit her job, and had bought a one-way ticket to Los Angeles for next week.

Four of the women there were given scholarships to cover the costs of the $165 workshop. Some of these scholarships were able to be offered by charging reporters to "cover a sensationalized news-storm of their own making," Calloway's assistant told me in a text.

Attendees were treated to coffee and oat milk from Rude Health, a London-based company. Rude Health said that although it doesn't have a "paid partnership" with Calloway, the company "sent Caroline off with lots of Rude Health stocks for her American adventure." Paige Leskin

After an hour of mingling, Calloway arrived, albeit a little late. She showed off her white t-shirt that read "SCAMMER," and pointed out the Fyre Festival banner she proudly says she made herself, without using stencils.

"It was not a part of my dream to be compared to a literal Caribbean island where people almost died," Calloway said.

Calloway made her way around the room, stopping for long introductions and intimate conversations with some of the groups. Her prep for the event was evident: she came in knowing each person's last name, and was ready with remarks about any mutual friends or interests. She smiled widely and cracked cheeky jokes, letting attendees in on secrets like they were her friends. She was bubbly and easy-to-like, if a bit calculated.

During the workshop, Calloway said her class would cover topics like resiliency, creativity, heartbreak, and authenticity. In reality, this translated to long narratives about her life — many of which her fans already knew, since she had told them in past Instagram captions.

She also shared philosophical one-liners like, "You cannot read that doubt like tea leaves," and, "Sometimes closure is picking up a pretty red leaf and putting it on a bench and walking away." At one point, she compared sex to Thai food: "If you go to a restaurant and order Thai food and don't like it, you shouldn't keep eating Thai food."

Calloway also talked about her past. She talked about her addiction to Adderall in school, which she hadn't revealed much about online. She said the book deal "suffocated" her. And she insisted she's not trying to scam anyone, despite what the media says about her.

"People make a lot of assumptions of young, fit, white girls on Instagram," Calloway says. "You know what, I don't even read the news. I haven't read about what people think I am."

'I just totally connected with you on another level'

Many of the women in attendance told Calloway they had been following her since 2015. Several referenced a Total Sorority Move article from March 2015 that called Calloway's Instagram a fairy tale — "if a fairy tale consisted of drinking wine, flirting with boys, and studying in Europe."

These women said they felt a connection with the raw emotion she described in her captions. (Calloway maintains she was one of the first people to post a "crying selfie" to the Internet.) Several of the woman said they were drawn in by Calloway's authenticity, and that she seemed to just "get it."

"I just totally connected with you on another level," one attendee told Calloway.

That connection does not seem lost on Calloway. She described her life as a "journey" she and her fans had shared, that her highs and lows were something everyone in the room experienced. She painted a picture of "us versus the world" — Calloway and her followers on one side, the "haters" on the other.

"We've been through some crazy f-----g s--t together," she said at one point during the workshop. "You guys are in your own category of people I'll never forget."

Her fans have stuck behind her loyally, even as stories have referred to her as the creator of "the next Fyre Festival," or have — as Calloway calls it — "hate-followed" her on Twitter. Multiple attendees told me they had enjoyed the workshop, and said it was worth the $165 fee.

"I think she is someone who is learning and growing like the rest of us," one attendee told me in an Instagram message after the workshop. "I didn't expect too much from it after the rescheduling, but she is very relatable and kind. She went out of her way to remember everyone's first and last names as well as their letters they've written."

"Caroline did a brave thing. She wanted to offer her time, her heart, and her experiences to a community that she has quite literally grown up with," one of Calloway's assistants told me after the event. "Even though there were details of the tour and workshop that weren't perfect, I think she did a good job of making something beautiful for the people that came."

Later, after attendees took their solo portraits with Calloway, each person was given a "care package" to remember the workshop by: another notebook, a mason jar, and small colorful drawstring pouches holding a small candle, a "crystal" rock Calloway swears by, a bunch of flower seeds, a matchbook with a "Calloway House" crest, a face mask, and a stick of incense.

Journalists attending the event were also given an emergency thermal blanket — Calloway said she wanted the blankets to be a tongue-in-cheek nod to Fyre Fest.

The "care package" that workshop attendees were given at the end of the day, which included a notebook, incense, and a mason jar.Kathleen O'Neill

At one point during the workshop, Calloway interrupted her lesson to take a video for her Instagram Story.

In the video, she pans around the room of eager workshop attendants sitting in front of her. "What do you guys think?" she asks them.

"10 out of 10!" someone shouts.

She then turns the camera back on herself and deadpans: "Total f-----g scam, right?"

Tesla laid off 7% of its employees on Friday, seven months after cutting 9% of its workforce.

Tesla had expanded its workforce by 30% in 2018 as it ramped up production of its Model 3 sedan, CEO Elon Musk said in an email to employees on Friday. He suggested this round of layoffs was necessary for Tesla to become consistently profitable while introducing lower-priced vehicles, such as the long-awaited $35,000 version of the Model 3.

But Musk had framed the 2018 layoffs as a decision Tesla would not have to repeat.

"We are making this hard decision now so that we never have to do this again," he told employees at the time.

Read more: Everyone who's telling you that Tesla is influencing the rest of the auto industry is completely wrong

Five former Tesla employees who were let go on Friday spoke with Business Insider about their time at the time company and how they were told they were being laid off.

Each former employee requested anonymity because of fear of retribution from Tesla.

Were you affected by the Tesla layoffs? Have a story to share? Contact Business Insider's Linette Lopez at This email address is being protected from spambots. You need JavaScript enabled to view it. and Mark Matousek at This email address is being protected from spambots. You need JavaScript enabled to view it..

'Like sheep to the slaughter'

One former employee, who worked in Tesla's delivery division in California, woke up on Friday to Musk's email. He said he tried not to think about it but found that difficult once he arrived at his office, where his coworkers were discussing the email. He noticed one of his managers was being quiet and "kind of standoffish" as he arranged chairs in the corner of the office farthest from the employees.

The manager told the delivery employee and about 15 of his colleagues to meet him by the chairs. There, the manager read from a script, informing them they were being let go. The script sounded as if it had been written by Tesla's human-resources department, the delivery employee said.

"I sat there in silence like a sheep to the slaughter," he said.

One colleague asked if he could speak with the manager one-on-one after the speech, but the manager declined his request.

The manager told the employees their positions had become redundant, but not everyone on the delivery employee's team was let go, and the manager didn't provide specific details about why each employee was being laid off. The employees weren't given details about their severance packages, only a blank piece of paper on which to write their names and personal email addresses. The delivery employee then said his goodbyes, packed up his personal items, and left.

"I just want to know why we were the people who were picked," he said.

The delivery employee said being laid off wasn't devastating since he had planned to leave the company later in the year, but the abruptness of the announcement bothered him.

"It's a very crappy way to treat your employees who have worked their butts off," he said. "Now, I have no idea what to do."

Overall, the delivery employee said he enjoyed his time at Tesla, especially the camaraderie with his coworkers, but he didn't feel that same bond with his managers and sometimes felt pressure to work long hours with no advance notice.

'I was in shock'

An engineering employee who worked at the Tesla Gigafactory in Nevada said she was surprised by the layoffs, citing Musk's assertion that the 2018 layoffs would be Tesla's last.

About an hour after she arrived at work on Friday, management-level employees began pulling some of her colleagues into meeting rooms. An hour later, she was called into one of the rooms, told she was being let go, and asked to confirm her contact information. She was then accompanied to her desk, where her laptop was taken. She was directed to leave immediately.

The process took about five minutes, she said, and she was not given a reason for her termination.

"I was in shock," she said.

She was told she would receive two months' pay as severance, but hadn't seen the exact details of her severance as of Tuesday afternoon.

The engineer said she had liked her job at Tesla, particularly the ability to work with and learn from a variety of departments, but she wishes she had been given more information about why she was let go.

'It was actually a lot easier than I thought it was going to be'

A third former employee, who worked in Tesla's energy division in California, said that while she loved working at Tesla and was sad to see her time at the company end, she found it easier to be let go than to watch her colleagues be laid off and deal with the aftermath.

"Having seen everybody go through this before, being one of the people that remains, it is a lot harder than being one of the people that gets to go," she said.

After waking up on Friday morning, she read Musk's email and saw her manager had sent her a Google Calendar invite. Her meeting with her manager was brief, and she didn't ask why she had been let go since a conversation she had with another manager before the meeting suggested her manager hadn't been able to choose which members of his team would be laid off. She found the experience to be relatively painless because her team works remotely and wasn't in the office that morning.

"It was actually a lot easier than I thought it was going to be," she said.

She described Tesla as a demanding but rewarding work environment, and she said she felt pride in Tesla's mission and a close bond with her coworkers.

She doesn't mind having a few months of paid time off, she said, and the flood of messages she has received about professional opportunities has removed any anxiety she might have about her next step.

"People seem pretty eager to help me find a new job," she said.

It was another 'big purge'

A delivery-experience specialist who was let go told Business Insider that this round of layoffs was just another one of Tesla's big "purges." They happened every six months or so at the company, she said. Employees would trickle out monthly too. Then every three months or so, there would be a jolt of new hires.

The logic of who was let go, the woman said, "was random," and the turnaround was the fastest she'd ever seen at any company.

"The managers who were at my store a year ago are not the same managers today. My store operates as a sales, service, and delivery hub, and each role of management has been changed from January 2018 to January 2019. That's just management," she told Business Insider.

So, ultimately another purge was expected.

She described her seven months working at Tesla as exhausting and chaotic. Her job was to prepare the paperwork for customers coming in to buy their cars. She would then go to a document signing that could take five minutes or an hour, depending on the customer or how well the paperwork was done.

Then the customer would get a brief orientation of their car. According to her training, this was all supposed to take about 15 minutes, but it usually took much longer, and the result was a backlog of customers waiting. Sometimes she and her colleagues would have to get help from nearby vehicle centers.

Sometimes customers refused delivery of their cars because of damage, complicating matters even further, she said.

Going forward, she sees fewer cars being delivered because of a reduction in the tax credit offered to Tesla customers. She said she also worries about competition from new entrants in the electric-vehicle market, such as Porsche. But that doesn't mean she's lost faith in the company.

"I do have confidence that it's a great product. They have a good following still. They just need to hang on."

'So this is my walk of shame'

One supervisor at Tesla's Fremont, California, factory said his dismissal came as a total shock. He loved working at Tesla and found his colleagues to be incredibly supportive.

"I loved it, I loved what I did. It was fast-paced, exciting, very demanding. Challenging at best, but I loved it."

He was also good at it, he said. He said he received an outstanding review in December with an extremely generous performance reward. So, he said he had reason to believe he would make it through this round of layoffs untouched.

Plus, on the day of the layoffs, he was informed that his team would be saved, so he assumed he was included in that. But at the end of shift on Friday, his immediate manager asked him to gather his things and go with him to human resources.

"So this is my walk of shame?" he asked his manager.

He was asked to turn in his laptop and expect paperwork from the company on Saturday.

As for his 2018 performance bonus, he said he was disappointed. Because of Tesla's bonus structure, he will receive only a portion of his 2018 bonus.

A Tesla representative said the company offers cash options that vest quarterly over a four-year period.

"I worked hard, I got a great bonus, and they just took it away from me," the supervisor said.

The 2019 World Economic Forum kicked off in Davos, Switzerland, this week. As the world's business and political leaders descend upon the Alpine town, their armada of private jets fills the tarmac at nearby airports.

The Air Charter Service expects that roughly 1,500 private jets will shuttle attendees to and from the conference this week. According to the private-jet leasing company, that's up from the 1,300 private jets that serviced the WEF in 2018.

"The global interest in the event led us to analyze the private jet activity over the past five years of WEF," Andy Christie, private jet director at ACS, said in a statement. "Davos doesn't have its own airfield and, whilst we have several clients who fly into the town by helicopter, the four main airfields that private jet users attending the forum use are Zürich, Dübendorf, St. Gallen-Altenrhein, and St. Moritz."

Read more:The next CEO of Airbus explains the major hurdle that stands in the way of electric planes.

Oliver Cann, the head of strategic communications at the WEF, pushed back against the ACS's projections. Instead, Cann argued in a post on the organization's website that it expects private jet traffic to drop by 14% from 2018.

While the ACS's figures used data from four airports, the WEF projection is based only on traffic data from Zürich and St. Gallen-Altenrhein airports.

According to Christie, the most popular aircraft are Gulfstream GV and Bombardier Global Express planes. These are large, ultra-long-range private jets that typically cost more than $60 million per aircraft. With the ability to make discreet transoceanic flights at high speed, these aircraft are common among business leaders:

IBM's stock got a nice lift on Wednesday, rising nearly 9%, a day after the company announced its first annual revenue growth since 2011.

But analysts are divided over whether the software and services giant's 2018 report card is a sign of even better things to come, or a mere blip masking IBM's ongoing challenges.

While IBM's full year revenue growth increased 1% in 2018, revenue in the fourth quarter declined 3.5% year-over-year.

"It's looking like another mediocre IBM earnings release," Andrew Bartels, VP and principal analyst at Forrester Research, told Business Insider. "The report of strong cloud growth should be taken with a grain of salt. It's another quarter of IBM basically moving sideways."

Under the leadership of CEO Ginny Rometty, IBM has moved to transform its business, shedding older products and units and focusing on higher-growth areas such as cloud computing, AI and blockchain.

Although IBM's strength in the fourth quarter lay in consulting, its growth in Cognitive Solutions — the segment that includes its AI platforms, including IBM Watson, as well as certain database products — is what investors care most about.

This past quarter, the revenue of Cognitive Solutions was flat as compared to last year, but it did grow 2% at constant currency. This was the key growth analysts were looking for, and IBM was able to hit that target.

"We do think the software turn is going to be something that's repeatable," John Roy, lead analyst at UBS, told Business Insider. "They are going to see growth in software. That's pretty much a key element of the story for us. We'll see how sustainable that is."

While businesses like cloud computing and AI offer a lot of growth potential, they also put IBM in competition with fierce competitors.

IBM "barely poses a major challenge to today's tech giants, tough competitors in the new economy who have grabbed and continue to seize the major share of new growth areas that are so crucial for IBM's success," Investing.com senior analyst Haris Anwar said in a statement.

Read more:IBM soars as high as 7% after blowing away Wall Street expectations and showing annual revenue growth for the first time since 2011

A big theme this year will be IBM's upcoming acquisition of Red Hat, which is expected to close in the second half of 2019. Analysts say a big question will be whether IBM can successfully sell Red Hat's services and if Red Hat can help IBM create a working hybrid cloud — one that processes information across both public cloud offerings and private, on-premise servers.

Right now, IBM lags behind Amazon, Microsoft and Google in its cloud offering, but Red Hat could help IBM in tapping into customers who want to move to the cloud but are not ready to go all in — hence, helping it forge a stronger hybrid cloud.

"My aim isn't to downplay Red Hat's strong position in the cloud computing arena, but rather my problem remains squarely with the IBM's leadership which failed to foresee the changing tech landscape quickly enough," Anwar said.

Anwar warns that investors should avoid IBM and look elsewhere, but Roy disagrees. Roy said he's seen plenty of negativity in IBM stock, but he believes it's overdone. Instead, analysts' expectations are more flat, and there's room for marginal growth.

"All in all, we think that '19 could be good, and obviously the Red Hat acquisition is something that's sitting out there in the second half," Roy said. "Between now and when that closes, it looks like the rest of the businesses are doing OK and improving."

For all the hoopla around Netflix and Hulu, there's a big untapped market for free, ad-supported video, and that's why Viacom bought Pluto TV, Wade Davis, CFO of Viacom, told Business Insider.

Viacom paid $340 million for Pluto TV, which is a leading ad-supported streaming service. Five-year-old Pluto TV claims 12 million monthly active users, up from 5 million in 2016, and two-thirds of them are on connected TVs. It licenses programming from 130 film and TV partners, including Viacom. Viacom sees Pluto TV as a way to make money off its archives by selling advanced TV advertising against its audience, half of which Pluto says is 18-34.

Even with the buzz around Netflix and Amazon originals, people are hitting their limit for paid TV and often just want someone else to make the viewing decision for them, Davis said. That's what makes it a "perfect complement to Netflix," he said.

Read more: Big brands like Verizon and Toyota are backing Amazon's Freedive as the e-commerce giant pushes deeper into OTT advertising

"People are developing a little bit of subscription fatigue," Davis said. "A lot of what people historically want to do is they have 30, 40 minutes to kill and they just want to be entertained. Pluto, because it's this very familiar, friendly interface, is the perfect complement. There is a segment of the market that doesn't want to pay for anything, and we can be their video and entertainment choice."

Pluto TV took in under $100 million in revenue in 2018 as it just began selling its ad inventory. Still, Davis thinks the business has the potential to be much more as it ramps up its sales efforts with the help of Viacom's 600-person sales force and takes aim at YouTube and other ad-supported video services.

"We think it's more than a billion-dollar business," Davis said.

Viacom also plans to roll Pluto TV out globally, starting with Spanish-language content in the US and Latin America.

The free streaming space is getting more crowded with other services coming from Amazon, Sinclair, and Comcast. But Viacom doesn't seem bothered by the competition as Pluto already is a leader in users and ad inventory that's brand-safe. Davis said he even sees Viacom working with AT&T on mobile distribution for Pluto.

Some have sniffed at Pluto TV for its content, which boasts channels with names like FunnyAF, Monstercat TV, and Horror 24/7.

"It's unlikely you will ever find 'Game of Thrones' on Pluto TV," said Bernard Gershon of GershonMedia. "Pluto, you're not competing with Disney, Amazon, Netflix; you're competing with the Tubis, Fubos — ad supported, lower-than-premium-quality content."

"The content is a bunch of movies like 'Legally Blonde' and 'Caddyshack' that were hits in the 80s or sitcoms that aren't 'Friends,'" said Alan Wolk, cofounder and lead analyst at TVREV. "Pluto's magic is, it's a linear stream and you can also watch stuff on demand. While they are ad-supported, it's still half of what you get on linear TV."

Davis said "there's always room for improvement" in Pluto TV's offerings. "Adding our entire library is going to be significant." But, he said, as a free service, Pluto doesn't charge a subscription fee that it needs to justify by spending Netflix-like billions on original shows and movies.

"We're not going to enter the fray and spend billions of additional dollars a year to create original premium content," Davis said.

It makes sense for Pluto TV to take a different tack from the subscription services, said Peter Csathy, founder of media advisory firm Creatv Media.

"Pluto's the Rodney Dangerfield of the AVOD space," Csathy said. "It is kind of a potpourri of content, but Viacom hopes to bring it new life with some of its programming. Consumers have a breaking point. [Viacom] feels can compete and still be a winner in a sea of SVODs. If they tried to be another Netflix, it'd be much more challenging."

The airline's average fleet age is about 4 years old.

Source: Air Fleets

MISSION, TX – JUNE 12: A Central American immigrant stands at the U.S.-Mexico border fence after crossing into Texas on June 12, 2018 near Mission, Texas. U.S. Customs and Border Protection (CBP) is executing the Trump administration’s zero tolerance policy towards undocumented immigrants. U.S. Attorney General Jeff Sessions also said that domestic and gang violence in immigrants’ country of origin would no longer qualify them for political-asylum status. (Photo by John Moore/Getty Images)

MCALLEN, TX – JUNE 12: Central American asylum seekers wait for transport while being detained by U.S. Border Patrol agents near the U.S.-Mexico border on June 12, 2018 in McAllen, Texas. The group of women and children had rafted across the Rio Grande from Mexico and were detained before being sent to a processing center for possible separation. Customs and Border Protection (CBP) is executing the Trump administration’s “zero tolerance” policy towards undocumented immigrants. U.S. Attorney General Jeff Sessions also said that domestic and gang violence in immigrants’ country of origin would no longer qualify them for political asylum status. (Photo by John Moore/Getty Images)

When we talk about algorithms and automation, we can't assume that handing responsibilities over to a machine will eliminate human biases. Artificial intelligence, after all, is constructed and taught by humans.

MIT Media Lab researcher and Algorithmic Justice League founder Joy Buolamwini has made it her mission not only to raise awareness of bias in facial recognition software, but also to compel companies around the world to make their software more accurate and to use its capabilities ethically.

Buolamwini coined the term "the coded gaze." She says the coded gaze is a "reflection of the priorities, the preferences, and also sometimes the prejudices of those who have the power to shape technology," she told an audience at the World Economic Forum's 2019 annual meeting in Davos, Switzerland.

There are real stakes here. As she noted in a viral TED Talk and a New York Times editorial, it's one thing to have Facebook confuse people when analyzing a photo, but another when law enforcement or a potential employer is utilizing such software.

Buolamwini has Ghanian heritage, and as a graduate student, she found that facial recognition software she was researching could detect the faces of light-skinned classmates but not her own, darker skin. She showed the Davos crowd a shot from her TED talk, in which she demonstrated the way that same software recognized her face when she wore a plain white mask over it.

Different companies use different software for facial recognition, but the AI involved learns through images fed to it during its development. If it's shown primarily white, male faces, it will become an expert at identifying white, male faces and can pick up subtle details; meanwhile, it will struggle to identify or differentiate faces with different skin hues, and will have a more difficult time assessing female features.

Buolamwini and MIT colleagues embarked on a thorough assessment of leading facial recognition programs — those from Microsoft, Face++, and IBM — to see how they fared. There were differences in exactly how accurate each program was, but all three generally had the same order of best to worst accuracy: lighter male, lighter female, darker male, darker female (Face++ had a .1% increase in accuracy for darker male than lighter male).

Before making her research public, Buolamwini sent the results to each company. IBM responded the same day, she said, and said developers would address discrepancies. She assessed IBM's updated software last year and found a notable improvement. The accuracy for correctly assessing darker males went from 88.0% to 99.4%, for darker females from 65.3% to 83.5%, and for lighter females from 92.9% to 97.6%, and lighter males stayed the same at 97.0%.

"So for everybody who watched my TED Talk and said, 'Isn't the reason you weren't detected because of, you know, physics? Your skin reflectance, contrast, et cetera,' — the laws of physics did not change between Dec. 2017, when I did the study, and 2018, when they launched the new results," Buolamwini said. "What did change is they made it a priority."

Buolamwini then recognized that while software primed for lighter males presented its own problems, even perfect software was at the whim of its handlers.

She noted an Intercept investigation published last summer that found IBM had worked with the New York City Police Department for years on a surveillance project utilizing facial recognition, which was never made public while in use. (The NYPD told the Intercept it never used the software's ability to distinguish skin color, IBM declined to comment on the project, and the NYPD ended its partnership with IBM in 2016.)

She then pointed out how hiring software like HireVue, a company that makes a program that allows large employers like Unilever and Hilton Worldwide to rapidly assess many job applicants' video interviews, also utilize facial recognition software. Boulamwini argued that if used without sufficient care, AI hiring programs could reinforce existing traits in a role rather than correct for them. (HireVue told Business Insider that testing for bias with the intention of eliminating it is an integral aspect of the way its software is used.)

"So it's not just the question of having accurate systems," she said. "How these systems are used is also important." It's why she launched the Safe Face Pledge, with four commitments: show value for human life, dignity, and rights; address harmful bias; facilitate transparency; and embed commitments into business practices. It launched with three signatories, but has yet to land a major corporation.

Facial recognition software is here to stay, and has potential for useful applications like protecting users from identity theft. As Buolamwini's research suggests, it poses less of a threat to citizens' rights the more accurate it is, and as its use becomes more widespread, companies must take the ethics around its use very seriously.

You can see Buolamwini's full presentation at WEF's website »

In November, Amazon Web Services announced a new service, based on the popular open source Apache Kafka software — a move taken by many industry insiders as a slap in the face to Confluent, a startup that's synonymous with Kafka, given that its founders literally created it.

For its part, though Confluent didn't back down. It introduced a new license to prevent cloud providers — like Amazon — from taking its open source software and reselling it for a profit. The move has proved controversial, with skeptics wondering if Confluent is doing more harm to the open source community than good.

Still, all of this hasn't scared off investors, it seems, as Confluent announced on Wednesday a $125 million funding round led by legendary venture firm Sequoia Capital. The deal values the startup at $2.5 billion.

It's a promising sign that investors still see upside in open source startups like Confluent, in an age when some in the industry view cloud titans as a threat.

What is Confluent?

Confluent is known for its namesake event streaming software, based on the open source Kafka, which processes events like orders, sales and customer experiences in real time, meaning that systems can make faster decisions. Kafka was started when Confluent's founders were still working at LinkedIn, and left to start the company after seeing lots of enthusiasm around it from the open source community.

"With Confluent, companies can connect all of their applications and data sources, enabling them to react and engage their customers in a faster, more personalized and more efficient manner," Jay Kreps, co-founder and CEO at Confluent, said in a statement around the funding.

In November, Amazon Web Services announced it would start offering Kafka on its cloud. It's completely legal to sell open source software — by its nature, open source software is free for just about anybody to use, for any purpose. Cloud companies like Amazon and Alibaba have taken advantage of this fact to use open source software as the foundation of their paid services for customers.

In turn, some companies, Confluent included, have responded by changing their licensing to prevent those cloud providers from using their software for commercial purposes.

"We think this is a positive change and one that can help ensure small open source communities aren't acting as free and unsustainable R&D for tech giants that put sustaining resources only into their own differentiated proprietary offerings," Kreps wrote in a blog post at the time of the licensing change.

It's proven to be a controversial move that's split the community: The companies say that it's a necessary move to protect their businesses and make sure that the cloud providers play fairly, but skeptics worry that placing limitations on open source software undermines the community's core principles.

Read more:After Amazon's cloud encroaches on its turf, a startup is taking a stand: Open source can't be 'free and unsustainable R&D' for tech giants

Open source is big business

Still, despite the risk that the big cloud providers will eat their lunch, open source software companies like Confluent have thrived in recent times. Companies like Elastic and MongoDB that built their businesses around open source software have gone public in successful recent IPOs.

For its part, Confluent, which has been used by companies like AUDI and Capital One, has now raised $206 million in total, and says that in the past year, its subscription bookings grew by a factor of 3.5. Kreps says in a blog post that Confluent is still dedicated to Kafka, and that the rising interest in the software is only benefetting the company in the long run.

"Apache Kafka has a massive community of contributors of which we're just one part," Kreps wrote in a blog post about the funding. "And the larger idea of building around events is a topic with interest and participation from hundreds of thousands of developers. We're proud to be a part of this growing movement and to do our part to make it a reality."