National ArchivesOn August 6, 1945, the US dropped atomic bombs on the Japanese city of Hiroshima, following up three days later with another bomb on Nagasaki.

The bombs, known as "Little Boy" and "Fat Man," were loaded onto bombers at the North Field airbase on Tinian Island in the Northern Mariana Islands, which are south of Japan.

Until recently, few photographs of the run up to the attacks were available.

But declassified pictures shed light on the preparations for the bombings — the first and only wartime nuclear bombings in history.

While seemingly mundane, these photos show us what it was like to prepare for one of the most important moments in modern history.

First seen on AlternativeWars.com. An earlier version of this post was composed by Christian Storm.

Policy progress from Trump could derail the tech trade, which has benefited from the lack of successful legislation. AP/Kathy Willens

Investors in red-hot tech companies are heavily exposed to political risk, and they may not even realize it.

After all, one of the main selling points for tech stocks last year was how disconnected they were from macro drivers. Traders shied away from energy because they were puzzled by oil, and stayed away from financials and utility stocks because of uncertainty around interest rates. This led to investment funds crowding into tech stocks, for lack of better options.

But now, in an ironic twist of fate, tech-heavy investment funds have become beholden to the macro risk that they sought to avoid, says Wells Fargo. The surging popularity of tech stocks — which are up 23% this year, more than double the S&P 500 — have made them a proxy for market risk.

And that's been fine so far this year as traders have chased returns in the industry, which is growing earnings hand over fist. But what's been underappreciated is how much of a boost the sector has gotten from the macro picture — most notably the slow implementation of President Donald Trump's economic agenda and a series of dovish comments from Fed Chair Janet Yellen.

Wells Fargo warns that as soon as these dynamics shift, tech bulls could be in for a rude awakening. They recommend cutting exposure to the industry.

"There seems to be an implicit belief that Yellen and Trump are the gifts that keep giving and it’ll only continue," said Christopher Harvey, a senior analyst at the firm. "Fundamental investors are being lulled into a false sense of security. They are failing to appreciate the correlation between ‘the macro’ and the relative performance of tech. Our recommendation is to reduce portfolio risk by taking some tech profits."

Tech stocks have closely tracked an investment strategy built around macro drivers. Wells Fargo

For evidence of this, consider the close correlation between tech performance and a strategy built to bet on a dovish Fed and the ongoing futility of Trump policies. They've traded in close lockstep in 2017, especially in the last few months.

While Wells Fargo thinks the possible downside risk in tech is being ignored to a degree, Bank of America Merrill Lynch has already started to notice flagging enthusiasm around the tech trade.

After reaching a bull market high earlier this year, flows into tech funds have slowed sharply, on a 16-week rolling basis, according to the firm's data.

However, it's important to note that neither Wells Fargo nor BAML are calling for the end of the scorching-hot tech trade — they're simply stressing caution. More than anything, it's hard to argue with the profit expansion being seen in the sector.

Tech stocks are expected to grow earnings by 18% this year, a full six percentage points more than the benchmark S&P 500, according to estimates compiled by Bloomberg.

So even if investors become more aware of the macro risks in the market, it may be difficult for them to turn their back on the wildly successful tech trade, which looks so good on a fundamental basis. And therein lies the critical tug-of-war over what actually drives the market — one that is far from being settled at this point.

Inflows to tech funds have taken a dip recently. Bank of America Merrill Lynch

Nothing makes me feel more connected to the rest of the human race than seeing images of Earth from space, especially those taken at night.

National borders vanish, and rivers of light unite our towns and cities into a single glowing tapestry. It makes the planet resemble a giant, glowing, orb-shaped spaceship drifting through the void of space.

Just look at this incredible view of Europe, sparkling with artificial light:

Anton Balazh/Shutterstock

Er, wait a minute.

If you've seen enough images of Earth from space at night, or you care to look closely enough, this image looks funny — and yet it has been shared all over the internet as a legitimate NASA photograph.

Seeing is believing, though. Compare it to this photograph of the Iberian Peninsula, taken by an astronaut aboard the International Space Station in July 2014:

NASA

As it turns out, the first — and arguably more breathtaking — image is actually a computer rendering created by Russian graphic artist Anton Balazh (Антон Балаж).

Scroll to see more of Balazh's mind-boggling views of Earth and learn how he pulled them off.

Get the latest Snap stock price here.

Unless you're famous for doing something terrible, having your own Wikipedia page is probably a point of pride.

The question on Seth Stephens-Davidowitz's mind is: What does it take to actually attain that level of prominence?

The short answer, according to his analysis of thousands of Wikipedia pages: Grow up near a big college town that is diverse and somewhat urban.

Stephens-Davidowitz is a former Google data scientist and Harvard-trained economist. He's also the author of the new book "Everybody Lies: Big Data, New Data, and What the Internet Can Tell Us About Who We Really Are."

The book presents research on how Internet searches can get at people's innermost thoughts and desires. Instead of calling people into a lab, Stephens-Davidowitz prefers to look at what the masses are confessing to Google at 8:36 p.m. on a Wednesday.

This data can also be harnessed to learn a few things about what makes people successful. To do that, Stephens-Davidowitz downloaded all of Wikipedia — something one can do, apparently — and plucked more than 150,000 editor-approved entries about individuals  to comprise his initial dataset. His metric for success was simply that the included individuals had their own Wikipedia page. (Stephens-Davidowitz acknowledged the metric for notability wasn't perfect, but he said he was able to remove illegitimate data points without affecting results too much.)

That dataset included each person's county of birth, date of birth, occupation, and gender. He limited the sample to baby boomers, "because they have had nearly a full lifetime to become notable," he wrote.

His analysis showed roughly 30% of people found success through arts and entertainment, 29% through sports, 9% through politics, and 3% through science or academia. That breakdown was interesting on its own, but as Stephens-Davidowitz explained, the reasons for people's success stood out the most.

For one, geography played an enormous role in producing a Wikipedia success story. Out of the total boomer population born in California, for example, one in 1,209 had a Wikipedia page. Meanwhile, only one in 4,496 West Virginia-natives did. If you zoom in to the county level, he said, "the results become more telling." Boston's Suffolk County showed one in 748 boomers becoming successful; in other counties, the success rate was 20 times lower.

Looking deeper, geography seemed to matter most when people grew up near large, semi-urban college towns. For example, the counties containing Madison, Wisconsin; Berkeley, California; Chapel Hill, North Carolina, and Ithaca, New York were all in the top 3% of page frequency. Those towns are home to the University of Madison, Wisconsin; University of California, Berkeley; UNC Chapel Hill; and Cornell.

Diversity also seemed to play an outsized role in shaping success stories.

"The greater the percentage of foreign-born residents in an area, the higher the proportion of children born there who go on to notable success," Stephens-Davidowitz wrote. The effect was so great, among two equal college towns, both of a decent size, "the one with more immigrants will produce more prominent Americans."

The picture that emerges from these factors is one where immigrant-rich college towns become hubs for creativity, curiosity, and determination. Kids born in proximity to universities gain access to resources that other kids don't, both in tangible terms, such as access to the arts and sciences, and in the thoughts and attitudes they develop.

"Perhaps this effort to zoom in on the places where hundreds of thousands of the most famous Americans were born can give us some initial strategies," Stephens-Davidowitz concluded of the research, "encouraging immigration, subsidizing universities, and supporting the arts, among them."

Behold: The small, cheap device that's disrupting the $7 billion legal cannabis business.

Ben Gilbert/Business Insider

This tiny combination of plastic, glass, and metal is a disposable cannabis oil cartridge. It costs anywhere from $30 to $70 (depending on the oil inside), is easily carried in your pocket, and produces little-to-no smell when consumed. You simply screw it into an inexpensive, rechargeable pen and inhale. That's it.

It's this tiny device that's quickly taking over cannabis consumption in America's largest cannabis market: California. Nearly a quarter of sales from 2016, tracked by marijuana delivery service Eaze, were for cartridges:

This data comes from Eaze, a marijuana delivery service that operates all over California. Eaze

Similar growth rates are showing up outside of California as well.

States like Colorado, Washington, and Oregon — where cannabis is legal — are showing massive percentage growth for "concentrates" (cannabis oil), according to BDS Analytics.

These are growth rates for 2016. BDS Analytics

Notably, this seems to be a growth trend connected to convenience. 

As "flower" (traditional marijuana buds) is messy, complicated, and requires preparation to be smoked, it's no surprise that easier forms of marijuana product are growing so quickly.

Learning how to roll a joint is a hassle, as is "breaking up" (crumbling) cannabis. Sonya Yruel/Drug Policy Alliance

Though cannabis oil ("concentrates") are making huge gains, the same can be said for pre-rolled and edibles. Edibles are simply eaten, and can be "dosed" out so you don't overdo it; pre-rolled joints are as simple as lighting a cigarette — no rolling skills required. Cannabis oil marries the convenience of both.

On top of those conveniences, oil cartridges are inexpensive and travel easily. Best of all, using a cannabis oil vape produces none of the characteristic smells or clouds of smoke associated with traditional cannabis consumption.

These are sales numbers from 2016. BDS Analytics

All that growth has led to tens of millions of dollars in sales thus far, with an even brighter future expected as the market expands — despite huge wins for recreational cannabis sales in November 2016, regulation and implementation doesn't kick in until January 2018 in many states. As commercial sales begin and more of the public tries these easy-to-use, disposable cartridges, expect even more explosive growth.

A mushroom cloud billows into the sky about an hour after an atomic bomb was dropped on Hiroshima, Japan. US Army via Hiroshima Peace Memorial Museum

On August 6, 1945, at 8:15 a.m local time, the world entered the atomic age.

The Enola Gay, a B-29 Superfortress bomber, deployed the most powerful weapon then known to man over Hiroshima.

The southern Japanese city was "an important army depot and port of embarkation," but its location and population also appealed to US officials who wanted to showcase their new weapon's destructive power.

Sunday marks the 72nd anniversary of the bombing of Hiroshima, ordered by President Harry Truman in the final days of the war.

In 2016, just a few months before the 71st anniversary, then-President Barack Obama became the first sitting president to visit the city — a trip to, in his words, "ponder a terrible force unleashed in a not-so-distant past."

President Donald Trump, then a candidate for the presidency, was critical of Obama's remarks.

Your browser does not support the video tag. YouTube/Amanda Macias/Business Insider Bird's-eye-view footage of the "Little Boy" attack.

The 5-ton nuclear bomb, named "Little Boy," emerged from the Einstein-inspired Manhattan Project. The Enola Gay released it some 30,000 feet above the city, and the bomb fell for 44.4 seconds before detonating in a blast that would ultimately kill 140,000 people and destroy 90% of the city.

Three days later, the US dropped another bomb farther south, on the Japanese city of Nagasaki. That blast killed about 40,000 people instantly — thousands more would die of radiation poisoning.

Japan announced its surrender to Allied forces on August 15. On September 2, Japanese leaders signed the formal instrument of surrender aboard the USS Missouri, anchored in Tokyo Bay, formally ending World War II.

A huge expanse of ruins left from the explosion of the atomic bomb on August 6, 1945, in Hiroshima. AP

Amanda Macias composed an earlier version of this post

This isn't me, but it's pretty much what I looked like all weekend. Shutterstock

With the help of an iPhone app, I took my first-ever staycation last week. 

My sister came to visit me in New York City and we decided to give the city's boutique hotels a shot rather than stay at my crowded apartment. 

There's only one problem with boutique hotels in New York: They're expensive. 

So we decided to look for a deal through Hotel Tonight, a free app for iPhone and Android. 

Hotel Tonight isn't new. The app has been around since 2010, and it has a pretty basic premise: to find you a hotel immediately (or anytime in the next seven days) by offering you rooms the hotel itself couldn't sell.

The app lets you narrow down your dates and location, then shows you available rooms in a list or map view. The app also shows you ratings and lets you browse through a gallery of photos. But if you like to choose your room type, you're out of luck: The hotel picks your room for you, and you'll only find out what room you're getting upon arrival.

Hotel Tonight let you how other people rated their stay, and provides descriptions of the hotels so you know what you're in for. Hotel Tonight

My sister found us two super-chic luxury hotels to try for the weekend, both at a discount: The Viceroy Central Park and the NoMad Hotel. 

Both hotels were beautiful, provided excellent customer service (one concierge even sent us a drink at dinner), and had all the amenities of a boutique hotel — at a discount. 

A room at the NoMad.

Of course, hotel prices fluctuate, and the rates depend on the time of year and demand. We got our room at the NoMad for $284, which was cheaper than anywhere else online at the time — for comparison, rooms are going for $350 for next Saturday night. Our room at the Viceroy was $225, and was again cheaper than any other price we could find, but you can book a room there next Friday for $223 right now.  

There was only one major downside of booking through Hotel Tonight: The prices listed when scrolling through the app don't include taxes and fees, which can be steep. The fees totaled $121 for the whole weekend, which was an expense we weren't expecting. When booking through Hotel Tonight, you're charged both standard hotel taxes, plus whatever fees Hotel Tonight owes to the hotels themselves.

The extra fees were a bad surprise, and they put us well over budget for the trip. 

But booking through the app didn't affect the level of service we received, and both our rooms were as gorgeous as they would' ve been if we'd paid full price. We probably wouldn't have discovered either hotel without browsing the app, and all in all, we had a fantastic time. Plus, by booking frequently through Hotel Tonight, you start to rack up something called HT Perks, which give you bigger discounts the more you book.

Even if you end up getting a better deal elsewhere, Hotel Tonight could end up being a helpful tool in finding anything from a last-minute work trip to a fabulous getaway.

Steve Mollenkopf, 48, is the first non-family member to lead Qualcomm. Ethan Miller/Getty; Skye Gould/Business Insider

This giant has had its moments in the spotlight. In 1999 Qualcomm was the top-performing US stock, up more than 2600%. Residents of its hometown of San Diego know well Qualcomm Stadium, once the home of the Chargers and the Padres.

Though not the household name of Apple or Samsung, Qualcomm has grown its dominance in the mobile market. Chances are good that the device you're reading this on wouldn't exist without Qualcomm. It invented many of the technologies that make our favorite devices work — modems, mobile processors, video-streaming formats, and more. Its technology touches practically every mobile device in the world.

That tech is also at the center of a major legal dispute, involving a lawsuit and countersuit, now being litigated between Qualcomm and one of its largest customers, Apple, over royalties and patents. That's on the heels of an antitrust battle Qualcomm settled with China. Meanwhile, Qualcomm is looking to close its planned $45 billion purchase of NXP, Europe's biggest chipmaker. Overseeing all this, and betting on what comes next, is Steve Mollenkopf, Qualcomm's CEO, an engineer's engineer who rose through the ranks and took the top job in 2014.

Business Insider recently spoke with Mollenkopf about the company's legal battle with Apple, the next wave of tech coming out of Qualcomm, and what it's like working with the Trump administration at a time when many of the president's policies are at odds with the tech industry's goals. This interview has been edited for clarity and length.

Skye Gould/Business Insider

Steve Kovach: You've said you like to think of Qualcomm as more than just a mobile-chip company. Define Qualcomm.

Steve Mollenkopf: At its core, we drive the mobile roadmap. We invent the core technologies and the tools that allow the mobile roadmap to move forward. One of those tools is the chip because it’s the physical embodiment of that. People tend to associate Qualcomm with the chip — and they should: We’re an excellent chip company — but I think we have a larger role in the ecosystem of cellular that I think people are not aware of. And our relevance to more consumer electronics — and I would say industries — is actually just increasing.

Kovach: So what does that look like beyond the smartphone?

Mollenkopf: First of all, you’re familiar with the smartphone because about 10 years ago, before the smartphone, people like Qualcomm worked on the technology that was required to even enable the smartphone, and of course we moved that forward. Today, those same discussions, that same innovation, is occurring upstream of, let’s say, connected autonomous cars or connected healthcare or massive Internet of Things in the industrial-internet space, for example. We work on those fundamental technologies that people will use five, 10 years later, that really are disrupting their businesses. Qualcomm is this big innovation house that tries to figure out how we can get as many people as possible using the cellular roadmap. The smartphone is just the first step along that journey.

Kovach: So you’re making bets 10 years in advance that something is going to be the next big mover. We know which of the best have taken off — phones, tablets. What about things like wearables?

Mollenkopf: If you look at our bets, I would say we bet at another level of abstraction than that. We bet at the kind of fundamental technology. So, for example, we bet that data connection was going to be very important everywhere in the world, so we invented all the technologies to enable that to occur. We bet that video compression was going to be very important worldwide because people were going to stream video and stream audio, so we worked on video- and audio-compression technologies. So we kind of bet at that level. And then what we don’t bet on is individual technology implementation — who’s going to win, even what’s going to happen.

Skye Gould/Business Insider

What we try to do is create the tools that are required, the fundamental technologies that enable industries. And then we want to have as many people as possible be able to use those technologies so they can experiment. Because what happens is, you’ll find that the industry, if properly equipped, can go into many more areas than what you would’ve thought. Today, we’re betting on massive amounts of data with low latency because we know that will change the way computing happens. Or we know that we need to have robust, very highly secure communication networks, because if we don’t, things like autonomous cars that are connected to the network won’t develop unless we do it. It’s the same thing with connected healthcare. If we don’t figure out a way to have secure, connected healthcare, or connectivity and computing, we won’t have that industry develop.

Kovach: You had a big artificial-intelligence announcement, letting developers tap into your processors. How do you see it playing a role in devices? Are you going to be making a dedicated AI chip?

Mollenkopf: We firmly believe that things get both connected and smarter. And there are probably two areas that people are working on. There are a lot of people working on the data-center version of that. So you can think of the context of a body, for example, that’s like I’m working on the brain. So I’m kind of working on the specialized machines in the brain that allow you to do things. And you have a lot of companies working on that. Qualcomm is actually working on it, starting kind of at the edge of the body, the edge of the internet, and looking back and saying, what type of technology is required in the edge device? The phone — whatever is the connected computing device at the edge of the internet that actually is seeing more of the actual data. And what decisions and what type of implementation needs to be done at that edge to enable things to just make decisions and take advantage of AI?

I would say we’re probably looking further ahead than just the specialized [AI] chip. We’re looking at the broader portfolio of different types of machines that you would want to have, depending on the workload. But I do think that the same way the human body works, a lot the really interesting work will actually be done without contacting the brain. So, for example, your hand, when you touch something hot, your muscles move away from that hot thing before your central nervous system even knows it. Because that information is so important to take an action on that the processing has to occur locally. More and more of the interesting things that happen in the connected Internet of Things will happen in that way.

Kovach: So you need to have the special processor.

Mollenkopf: You need to have the processor. And now, it’s fundamentally a low-power processor and it has to be connected, it has to have all these specialized machines to make it work. And I think we’re going to intercept AI there for sure. And so you’re seeing the first step of that. And I think you probably saw we had some early partners in AR and VR sign up.

Kovach: That seems to be the first-use case — a lot of people are excited for AR and VR. Is there anything else beyond that?

Mollenkopf: Even today, people use AI to do work on the camera [with our processors]. So, for example, selecting the right scene and selecting all of these things, you can use AI to do that. as opposed to saying it’s this type of setting. And there’s just a lot of things where the algorithm improvements can implement the concepts of AI in order to improve it. We’re in early days, but we think it’s going to be yet another component of the connected device.

Mike Nudelman/Business Insider/Reuters

Kovach: Recently, a debate sprang up between Elon Musk and Mark Zuckerberg about the potential evilness of AI and the potential goodness of AI. How do you view it?

Mollenkopf: We’re kind of at a different place in the ecosystem. We see different things, so I couldn’t comment directly on their debate. But for us, I think we’re pretty far away from the point people are really concerned about. There’s a tremendous amount of benefit to having more intelligent computing with you all the time. And I think we’ve got a lot of work to do to even make that happen. And so I think that that’s what we’re working on. We’re driving that. I think people are going to be surprised how helpful it will be to have things in their pocket that can anticipate what they need and react to that. So that’s what we’re working on.

Kovach: So you’re optimistic?

Mollenkopf: I am, but I also tend to believe technology has a very positive impact on people and economies. I don’t see this transition as being any different than that.

Kovach: Let's talk about 5G. Why do people keep telling me it's going to change everything? What will 5G allow me to do besides download data faster?

Mollenkopf delivering a keynote address at the Consumer Electronic Show in Las Vegas. Reuters/Rick Wilking

Mollenkopf: There are probably two different areas of bets that you’re hearing. One is — I’ll call it the classic "More G." In cellular, you’re going to have more capacity, more data rates, lower latency. From an operator’s point of view, it really helps them grow the capability and the network. That in and of itself is enough.

But the other aspect is that there are a lot of new industries that are intercepting the cellular roadmap at the time that 5G is coming. And 5G is being designed to enable those industries to take advantage of it more readily. If we have a much more secure network and a much more robust network, then you can put mission-critical services on there — remote delivery of healthcare, control of physical plant items in some kind of industrial Internet of Things that actively make decisions. You can have autonomous cars. I think what you’re hearing is, there are industries that really don’t use cellular in their daily operations. That will be because of some of the things that are happening in 5G, so there’s a lot of excitement about that.

There’s another element, and it’s that there’s a lot of excitement because if you can get the bandwidth up and the latency down, and the delay across the network is smaller. It enables you to essentially take the data center and move it closer to where the data is actually used. There are a lot of people who realize that that will change — it’ll really make distributed computing happen. And there will be a lot of new business models that pop up as a result.

If I look at the first wave of connected computing as being in your pocket — really, all we did was put a low-power computer in your pocket that’s connected to the internet all the time — and the ramifications of that were terribly significant when you look at business models. The internet business model changed dramatically. You would never have an Uber, you would never had an Instagram, if you didn’t have a connected computer in your pocket that didn’t also have a camera or a GPS. We’re going to go another step.

When everything gets connected and the computing power is resident at the spot that the data exists, and there are a lot of companies saying, hey, how can I change my business model? Industrial companies, you know, the normal players. That’s where the excitement is. Everyone knows that’s important. Now, it’s also being reflected in the actions of governments. So if you look, unlike some of the other transitions — 3G, 4G transitions — people realized the societal impact of this big change. And they want to make sure that their government, their industry players are positioned well for that transition.

Mike Nudelman/Business Insider

Kovach: What do governments want to do with this?

Mollenkopf: They know that the same way it was important to enable the internet, and the people who enabled it made it easy for internet companies to form, it was a great way to develop jobs and develop economic interest in countries. Same today: People are looking and saying this is going to be so significant to economies, the growth of jobs, growth of economy.

The impact of 5G is tremendous. We have the numbers — it’s just huge. They don’t want to be left behind. They know that the transition is going to be very significant in the evolution of their economy. They want to make sure that they are strong. And so what you see is governments really trying to make it very easy for this technology to take hold in their area. They really try to encourage people to innovate in these areas. And we like that. It’s a great thing for Qualcomm.

Kovach: You’ve said 5G deployment is going to start in 2019. How long will it take to fully grow out to the scale we’re seeing 4G LTE at now?

Mollenkopf: My guess is it’ll go probably a little faster than LTE.

Kovach: Why?

Mollenkopf: There’s a tremendous desire on the part of people. One is, look at how much data is being used by a phone today. It’s tremendous, and it’s not going to stop.

Kovach: I want to move on to Apple. The future of mobile is being debated right here. Tell me about your position on this, where Qualcomm stands, and what you’re arguing versus what they’re arguing.

Mollenkopf: I probably wouldn’t view it in such huge terms. In the end, what this is, is really a contract dispute over the price of IP between two players. The rest of the industry is actually organized, and has been organized for decades, in the way that Qualcomm is. You’re probably seeing attempts to make this into something other than that because the contract and the legal path is probably, at least in my opinion, very clear cut in Qualcomm’s favor. So there are a lot of attempts to bring other things into it that are really not related to the debate.

Now, Qualcomm, as we talked about before, has had a very significant role in creating industry, and the tools by which it’s very easy for people to come into that industry. And Apple would be a great example of a company that benefited dramatically from, really, the industry structure that you have in cellular. So people can come into there from another industry, afresh, and they don’t need to have this big long history to be a player. We have something like 300 contracts that were freely negotiated that set the price of that and set that structure. And the contract that we have with the contract manufacturers that supply Apple’s products are completely consistent with those contracts. We’re just trying to get paid on it now. From my perspective, it’s really a lot simpler than what people make it out to be.

Kovach: Apple's argument, and the FTC’s argument, and other governments' arguments, is that you guys have dominance in the industry and use that to your advantage. Why don’t you think that’s true?

Mollenkopf: I don’t think we have dominance in the industry, first of all. Also, if you look at all of these agreements, they were freely negotiated over, in some cases, many, many years ago. They continue to become more valuable to the people who negotiate them. It sure doesn’t feel like we’re dominant in the industry when I look at our position relative to the people who are making the claims. The facts are pretty much on our side on that actually.

Kovach: But who else could manufacturers go to if they don’t use Qualcomm?

Mollenkopf: Let’s break it into two parts. We have two business models. One business model is that we sell chips into people’s phones. That chip industry, I would argue, is the most competitive chip industry in the world. If you just look at the history of it, it’s the who’s who of tech companies. And we have done very well on that because we’re a good chip company, and because we’re good at innovation. We’re good at worldwide scale, and we’re good partners with the ecosystem.

The second model is that we license our patents — and these are patents that define the entire ecosystem of innovation that come out of outside of Qualcomm. That business model is independent of this chip engagement. In many cases, we have people who use our chips, people who don’t use our chips, and in all cases they negotiated these contracts independent of the chip agreement. The facts are different than what people make it out to be. We’re also going to take the thing to court, and I think we’re going to feel pretty confident in how this plays out.

Mike Nudelman/Business Insider

Kovach: Would you have sued Apple if they didn’t start this earlier in the year?

Mollenkopf: We are not a very litigious company. We rarely file offensive actions. Every time I can think of them, it’s happened in response to an attack incoming on Qualcomm. If you look at our action, we actually waited. We didn’t know what the view was from Apple. And once it became clear they instructed the contract manufacturers not to pay, then we had to, unfortunately, go through some of the actions that we had to go through. That’s not our traditional approach to resolving disputes.

Kovach: Typically, the kind of lawsuit you’re going after with them — stopping imports — if those do work out, it’s very narrow in scope. It might be a ban on imports for an older model of a device. Samsung and Apple went through this years ago. Do you feel more confident than in other cases similar to this?

Mollenkopf: It’s really important to remember it’s two things going on. The primary thing that Qualcomm is trying to do is trying to get Apple and the contract manufacturers to deliver on the existing contract that exists. That actually happens well upstream of any of the patent actions. And the second part is we have some patent actions in jurisdictions, like the United States and Germany. But primarily, we’re just trying to get paid under the contract that I think people are enjoying, and have enjoyed for almost 10 years.

And so that, I think, is something that moves faster through the court system. For example, we’re going to have a preliminary injunction hearing over the next month, and potentially a trial after that, depending on how that goes. And so it’s very important to remember that, at the end, we’re just trying to defend a contract. And on top of that, we think it’s in the best interest of our shareholders to defend our IP rights, and we have. But it’s important to remember where this is right now.

Kovach: Anything else you want to tell me related to the Apple case and Intel and all these people involved in it?

Mollenkopf: The only thing I would say is that we feel like we’re the little guy in this whole thing.

Kovach: You’re not a little guy. [Qualcomm's market cap is nearly $78 billion.]

Mollenkopf: Well, if you look, compared to the other folks, we’re pretty small. If you look at scope and scale, we feel like this is an important business for our shareholders, and it’s worth us defending it, and hopefully it’ll work out in our favor.

Kovach: In a worst-case scenario, Apple goes on their own. They’re working more and more on their own chips. They’re working on their own AI chips. Their vision is to do a lot of this in-house, or at least as much as they can in-house. What does that look like for you?

Mollenkopf: Again, we have a licensing engagement. That’s independent of anything we do with people on the products side. And then we have a products side. The products side, and the way in which we have historically worked with Apple, has been over our modem chips, and the technology we do that with, we feel very confident in the strength of our roadmap there, and the relative positioning of that roadmap to the competition. And I think that’s something that’s probably a little bit harder today to get the advantage of the strength of the roadmap. But these things get resolved, and the product business is going to continue to be a strong business. But this second licensing business, it’s important that it gets resolved in and of itself.

Kovach: Let's shift gears to politics. You personally have been to the White House to meet with President Trump. Can you talk about why you take those meetings?

Mollenkopf: We’re a big company. We have international scale. We work on things that I think are important to the United States. We need the United States to work on things that are important to Qualcomm worldwide. That involves an engagement with the administration, and it involves an engagement with other countries around the world. And we do that. And that’s kind of what you’re seeing. And I think that’s not unlike any other big company. These are very important technologies. They’re important to the debate about a lot of things internationally. It makes sense that we’re asked our opinion of things. And we go.

Kovach: Do you feel like they’re listening?

Mollenkopf: I do actually. I think, worldwide, governments are pretty responsive.

Kovach: I’m talking about the Trump administration specifically. Do you feel like they listen to what you have to say and took it into account?

Mollenkopf: Yeah. I feel like there’s a real discussion that occurs when people go talk there. And I would assume my peers feel the same way.

Matthew Weinberger/Mike Nudelman/Business Insider

Kovach: There’s been a lot of blowback in Silicon Valley when tech executives take meetings with Trump. I know the Tesla employees revolted. Uber employees revolted. Google employees literally walked out in protest. How do your employees react?

Mollenkopf: We probably don’t have reactions like that. I think people understand that our business is — we’re probably in a different spot down in southern California. I think that people understand the importance of having a dialogue with policymakers worldwide.

Kovach: You don’t feel the need to come out against some of Trump's controversial policies like your peers do?

Mollenkopf: I think our role in the ecosystem is really technology. That’s what speaks for the company.

Kovach: But those policies do affect you. For example, immigration — I’m sure you rely a lot on that. How do you view potential changes in immigration policy? What do you think should be the policy there?

Mollenkopf: I think we’ve been pretty clear. The avenue through which we make these arguments is sort of directly to the policymakers, as opposed to through other methods. And it kind of makes sense. We don’t have a consumer brand. I don’t think people know much about Qualcomm. The employees know how we interact with things. It seems more natural for us not to do those things versus do them. It doesn’t mean we don’t care about issues or we don’t have our point of view. We just tend to articulate it directly. You can just tell. The company’s posture on a lot of things is sort of we don’t run out in front of things. We’re not a huge marketing company. We tend to innovate, let the innovation stand on its own. And then we talk to the ecosystem through partners. We do the same thing politically.

Kovach: The administration had a big win with the Foxconn announcement. They're opening a factory in Wisconsin. Do you think it's a realistic goal to have high-end manufacturing to start producing something like Qualcomm products here in the US, or is this a one-off?

Mollenkopf: I don’t know a lot about the Foxconn thing. I don’t know enough about it. I hope it’s successful. It would be great for the US.

Kovach: Based on what you know about your own manufacturing business, do you see those kinds of businesses coming back to the US?

Mollenkopf: We already manufacture in the US. There are plants in upstate New York; there are plants in Austin, Texas. And we actually manufacture chips in both of those plants. So I feel like we’re already doing that. And then when we close the acquisition on NXP, we’ll have a very significant manufacturing footprint in Austin and in Arizona. I think we’re living proof that you can do that.

David Becker/Getty Images

The internet of things is a massive security nightmare. US lawmakers are finally starting to try and fix that.

A bipartisan group of U.S. senators is introducing legislation that seeks to address vulnerabilities in computing devices embedded in everyday objects — known in the tech industry as the "internet of things" — which experts have long warned poses a significant threat to global cyber security.

The new bill would require vendors that provide internet-connected equipment to the U.S. government to ensure their products are patchable, and conform to industry security standards. It would also prohibit vendors from supplying devices that have unchangeable passwords or possess known security vulnerabilities.

Republicans Cory Gardner and Steve Daines and Democrats Mark Warner and Ron Wyden are sponsoring the legislation, which was drafted with input from technology experts at the Atlantic Council and Harvard University. A Senate aide who helped write the bill said that companion legislation in the House was expected soon.

"We're trying to take the lightest touch possible," Warner told Reuters in an interview. He added that the legislation was intended to remedy an "obvious market failure" that has left device manufacturers with little incentive to build with security in mind.

The legislation would allow federal agencies to ask the U.S. Office of Management and Budget for permission to buy some non-compliant devices if other controls, such as network segmentation, are in place. It would also expand legal protections for cyber researchers working in "good faith" to hack equipment to find vulnerabilities so manufacturers can patch previously unknown flaws.

As such, it's limited: It only applies to vendors supplying the US federal government. But it's a start.

The internet of things revolution is coming — and we need to be ready

Security researchers have long said that the ballooning array of online devices including cars, household appliances, speakers and medical equipment are not adequately protected from hackers who might attempt to steal personal information or launch sophisticated cyber attacks.

Between 20 billion and 30 billion devices are expected to be connected to the internet by 2020, researchers estimate, with a large percentage of them insecure.

As F-Secure's Mikko Hypponen previously told Business Insider, in the future it will be near-impossible to avoid the internet of things. He said:

"In five years time you go and buy a toaster, it — regardless of the toaster you buy, even if there’s no IoT features — it’s still gonna be an IoT toaster. It's still gonna call home to the manufacturer. And the reason this is gonna happen is it's gonna be so goddamn cheap to put in one chip to have it call home, that they're all going to do it, even if the benefits are very small.

"And the benefits will be analytics like 'ok, how many toasters do we have in use, how quickly do people take them into use when they buy them, how much do they toast, what kind of bread do they toast, how often do our toasters catch fire, where in London do we have our customers, do we have more on the East or West or South side? We have less customers on the South side, lets advertise more on the South side.' Things like that."

In other words, you won't even know that you're buying internet-connected products — so you won't be able to avoid it. And this is what makes the security debate so important.

But even though security for the internet of things has been a known problem for years, some manufacturers say they are not well equipped to produce cyber secure devices.

Hundreds of thousands of insecure webcams, digital records and other everyday devices were hijacked by hackers last October to support a major attack on internet infrastructure that temporarily knocked some web services offline, including Twitter, PayPal and Spotify.

The new legislation includes "reasonable security recommendations" that would be important to improve protection of federal government networks, said Ray O'Farrell, chief technology officer at cloud computing firm VMware. 

Get the latest Microsoft stock price here.

Venture capitalists across Europe are "baffled" and "bewildered" by the size and frequency of the tech investments being made by Japanese tech giant SoftBank.

SoftBank shocked VCs worldwide last October when it announced plans to raise a $100 billion (£75 billion) "SoftBank Vision Fund" — a tech fund larger than any other on the planet.

Mark Tluszcz, the CEO of Mangrove Capital Partners, who made $200 million (£140 million) from a $2 million (£1.4 million) early investment into Skype, told Business Insider: "Most investors are thinking this is insane. This is crazy."

So far, SoftBank has raised $93 billion (£70 billion) from an eclectic mix of investors — including Apple, Qualcomm, Larry Ellison (the billionaire founder of Oracle), and the Public Investment Fund of the Kingdom of Saudi Arabia — and it appears to be investing the money at a phenomenal pace.

The investment thesis behind the fund was explained by Masayoshi Son, chairman and CEO of SoftBank Group, when it was announced.

"With the establishment of the SoftBank Vision Fund, we will be able to step up investments in technology companies globally," said Son, who is Japan's richest man. "Over the next decade, the SoftBank Vision Fund will be the biggest investor in the technology sector. We will further accelerate the information revolution by contributing to its development."

SoftBank has recently been declaring huge, multimillion pound tech investments and acquisitions almost every day.

 It paid £24 billion for UK chip designer ARM last July, then invested $502 million (£379 million) into London startup Improbable in May. Improbable creates virtual worlds that can run highly complex simulations. Elsewhere SoftBank reportedly took a $4 billion (£3 billion) stake in chip maker Nvidia the same month, and backed an indoor farming company called Plenty in a $200 million (£151 million) funding round in July.

Only two investments (Plenty and AI startup Brain Corp) have officially come out of the SoftBank Vision Fund but a SoftBank spokesperson said many others are expected to "draw on" the Vision Fund after they've passed certain internal approvals.

SoftBank's investments have taken many VCs by surprise

Improbable COO Peter Lipka, CEO Herman Narula, and CTO Rob Whithead. (left-right) Improbable

Tluszcz, who is based in Luxembourg and welcomes the fund himself as an early stage investor, said that some of the world's best known VC funds are concerned they'll be priced out of new startup funding rounds, adding that they won't have the same levels of capital to back the best startups over a sustained period of time. That essentially means they'll be left with a less valuable stake in the company when it exits.

"Now they're no longer the big boys on the block and they're going to have to adjust themselves," said Tluszcz. "It's going to drive up prices and they're moaning about it."

Two other London-based VCs, who spoke to Business Insider on the condition that we kept them anonymous, said they were "bewildered" and "baffled" by the SoftBank fund respectively. "I don't think it is a venture fund as much as a buyout fund for tech, but then they did Improbable," one said.

For fast-growing startups, SoftBank is offering them a new way to grow far faster than would have been previously possible. They can now jump from doing a Series A round to effectively raising a Series D or E round, Tluszcz said.

Deliveroo and Slack are rumoured to be SoftBank's next targets

There are a number of other large SoftBank investments in the pipeline, with reports suggesting food delivery service Deliveroo and enterprise messaging platform Slack are next.

GV general partner Tom Hulme. Flickr/PICNIC Network

Tom Hulme, a general partner at GV, formerly Google Ventures, added: "To their credit, they seem to be placing some very specific large bets and investing in public companies as well, which is very interesting."

"I think strategically ARM is a very interesting investment. We've tracked Improbable for a long time and think the idea of simulation-as-a-service is a really interesting investment. So it's going to be fun to watch it because the approach is so different to what the market is used to. I'm optimistic and excited to see how it plays out. I think net-net it will be a good thing for the ecosystem."

Matt Clifford, the CEO of company builder Entrepreneur First, also welcomed SoftBank's efforts. "I think it's positive and exciting to have investors with conviction in frontier technology and with very deep pockets," he said. "It's never been cheaper to start a company — but it's not got any less expensive to scale one. So ambitious startups do need access to large amounts of capital if they're to become independent tech giants rather than be bought by one.

"In that sense, I hope the Vision Fund's presence in the global tech ecosystem helps remove any artificial limits on how ambitious founders can be."

SoftBank declined to comment. 

Oxford. Oxford

LONDON — Oxford University, the centuries-old British education institution, is branching out into fintech.

The university's Saïd Business School announced on Wednesday that it will launch an online short course in fintech — financial technology for the uninitiated — that is designed to help prepare business executives for a future where more and more financial services functions are based around tech.

"Oxford Saïd has a commitment to preparing global executives for the challenges of both today and tomorrow," Peter Tufano, the Peter Moores Dean and Professor of Finance at the school, told Business Insider over email.

"Our faculty have been active in fintech research and teaching, up to and including starting fintech companies, so have a significant expertise to draw upon to help students in their journey."

Oxford has launched the programme in conjunction with educational technology firm GetSmarter, which was recently acquired by fellow ed-tech business 2U for $103 million (£78 million).

The course will run for 10 weeks, costing £2,500, and aims to teach people a broad range of skills relevant to fintech. The university's business school has run an in-person fintech programme in London in the past, Tufano noted.

The course will take "a systems approach to understanding fintech disruption across an array of dimensions:
money, markets, marketplaces, and infrastructure," Tufano told BI.

"While we touch on current topics such as bitcoin or AI, we also delve into the structure of financial systems themselves to put the current wave of technology-driven disruption in a broader, rigorous, and fundamentally grounded context.

"You can’t really understand the future directions that robo-advising or quantum computing will take the global financial system without appreciating the current state, the array of regulatory, business and technology architectures in place, and what’s motivating the changes we are starting to see play out."

Over 60 different leaders in the fintech space are included in the course in some capacity, with major names like US US online lender Prosper Marketplace, currency exchange platform Ripple, and UK clearing bank, ClearBank, featuring.

The course — which launches on October 9 — will be online-only initially but Tufano said that it could be integrated into traditional courses at the Saïd Business School in future.

"Programme content is always changing and we are certainly reviewing the possibility of integrating this content into other programmes," Tufano said, noting that Oxford's current MBA students will have the option to take part in the course.

UBS

LONDON – Of all the challenges faced by leaders of large investment banks, the growth of the financial technology industry, or fintech, is unique.

Since the 2008 financial crisis, fintech startups have boomed, making quick ground on a banking industry struggling to cope with new financial rules and legacy tech systems.

Unlike challenges such as Brexit, low global growth, and interest rates, fintech's impact is hard to predict and quantify for banks.

It has the potential to totally disrupt established business models or boost productivity and profitability. Or perhaps do both at the same time.

While no lender wants to become the next Nokia or Kodak, crushed by an innovation they failed to properly understand, it's not always clear how an organization with 100,000 employees should deal with the threats and opportunities posed by fintech.

Business Insider chatted with Axel Lehmann, chief operating officer of Swiss bank UBS, to ask how the organisation is coming to terms with fast-changing world of fintech.

Ben Moshinsky: Where are the main threats and opportunities to UBS from the fintech boom?

Axel Lehmann: True change is really coming from outside the industry. That is the key challenge we face as of today. The whole fintech discussion has changed, we have moved on from discussing whether a revolution is taking place, and how the banks will become redundant, to a place where most banks are looking at collaborative efforts with other firms. This is why most of what we do in terms of technological development we do in partnership with fintech companies.

I don’t want to get blindsided. It’s less the technology, as such, providing a transformative element in the banking industry. It’s really alternative business models that have the potential to shake up everything and eat into our cake.

It is also full of opportunities. We, the banks, are operating from a position of strength from a customer perspective especially in terms of the amount of customer interaction, the know-how we can provide, and the services we can offer. You can’t create any of this overnight.

And secondly, we have a legacy infrastructure which can be regarded as a liability, but it’s also an asset. When the Trump election got through, for example, volatility was high. We have an infrastructure that can scale up in line with volatility, and that’s something you need to have.

So, in this regard, I’m personally optimistic. It’s easier, when you look to consumer industries, for example, Uber or WhatsApp, to disrupt a lightly regulated sector. But when you look at where we as banks are, you get into the highly regulated space immediately, when you talk about balance sheet and liquidity, and this makes this industry less easy to disrupt.

But no doubt, we still do have to be mindful that we’re not losing out on some of that less regulated space, particularly at the point of customer interaction.

BM: What's the most exciting technology on your radar?

AL: I truly believe that whole question of robotics and artificial intelligence over a time horizon of four to eight years will fundamentally change the banking business. As banks, we understand that our business is all about data. These technologies have the potential to really fundamentally change the way we operate in terms of getting smarter with the customer, understanding what kind of products we should offer and so on. That is definitely exciting.

BM: How will that affect headcount in big banks? Will bankers need new skills?

AL: I think it’s always that question, that people understandably want to ask, about possible headcount reductions. We were here 50 years ago when UBS was the first to roll out an ATM in Europe. The press was then speculating about how that would eliminate all the tellers and the branch network. Now history shows that this hasn’t really happened. In reality branch staff started to have different forms of customer service opportunities and I think the same will happen now more broadly in banking.

The jobs and the job profiles will completely change. Technology, and it’s my deep conviction, will support and complement the human capabilities. Of course, if I’m a retail customer with $10,000 to invest I might decide to do it all via a machine, but if I have seven figures I will need somebody to help me, to provide expert advice, and so the vital role of the relationship advisor definitely won’t disappear. Banking will stay a people's business.

So I don’t want to speculate if we have more or less people. We’ll have different jobs and the skill levels of those people will be different. Of course, there will likely be eliminations of some process functions. The more you implement robotics and automation, that will in part substitute processes that humans are doing today. However, I do think that probably what will happen is we will then see a significant increase in productivity and efficiency.

BM: How big a profitability driver will that be?

AL: This productivity will help drive profitability or absorb any additional costs that you have, in terms of further technological development or regulatory developments. It will be reinvested in other ways, either to enhance the franchise or deal with further regulation.

BM: How does a bank, like UBS with tens of thousands of employees, interact with a fintech startup of just a few people? What kind of cultural changes need to happen

AL: Dealing with fintechs is a cultural shift that needs to take place and you want to have the local people to innovate. At UBS we have a systematic process on how we expose ourselves to fintech companies. For example, we have a series of initiatives that we’re driving, such as our Future of Finance Challenge. This competition, which is happening at the moment, provides a forum for start-ups and growing companies to come and present their ideas to compete for support from UBS to accelerate their ideas. That’s the type of work we’re doing. We really want to take advantage of some of those fast-moving and smaller boats with great ideas and great software that we can scale up and use in our organisation.

BM: Is competition for those boats fierce? How do you make sure you invest enough time and money?

AL: UBS has a CHF2.1 billion net saving target, but nevertheless our IT spend is at a record level of more than 10% of revenues. We do not sacrifice mid-term and longer term development to make numbers for a quarter. Secondly, if you look to our overall positioning it is quite unique, and that gives me confidence. We’re the global leader in wealth management, which is one of the key areas to invest in digital. Every dollar we invest there, hopefully wisely, is helping us strengthen that franchise.

And then you look to the investment bank, where the key strength is advisory, FX, and in cash equities. In these businesses the electronic trading platforms are market leading and we’re making sure we focus on those segments where we have real competitive advantage. We are in Switzerland the number one universal bank, and here too we want to solidify our position as the number one digital bank.

BM: What do you think about the use of blockchain in finance

AL: Personally I would argue that other industries are probably better suited to a faster deployment of blockchain than finance, which is highly complicated. The devil is really in the detail. In our industry, you might see some private applications of blockchain technology, but I think the benefits are still to be proven. All the regulatory and legal contract certainty you need to have is still a while out, which will have a five to 10-year path. So a lot needs to happen in this regard.

BM: What do you make of the cryptocurrency boom, particularly in ICOs? Is it a bubble?

AL: I think cryptocurrency is a phenomenon but the jury is still out. Is it cash or is it an asset class? And the same goes for ICOs too.

You know you always look closely at these things, like P2P lending for example, that occur in this space. But you always need to go through a credit cycle to really fully understand what something like this is. Even in banking, when the banks were struggling to get through the crisis, there were thousands of other very smart people that tried to manage credit risk and got it wrong. I’m not sure other alternative forms would’ve come through the crisis in much better shape.

We see these new forms of market interactions, and the sun is shining. But when a storm breaks out there will be a cleansing and a cleaning, so I’m somewhat relaxed about that. Of course, we always have to monitor what’s ongoing, but I would not give too dramatic economic opportunities to those ventures at this point in time.

BM: Fintech is moving fast, can the regulators keep up? Where are the risks?

AL: We have to be mindful going forward. Regulation shouldn’t stifle innovation. The banks should welcome when regulators like the PRA in the UK or the MAS in Singapore open up to fin tech and allow companies to better explore potential changes in the business model. The one request we would have is a level playing field.

Increasingly regulation will have to shift to a more functional regulatory approach. At the moment, if I’m a bank I’m regulated like a bank. If I’m an insurance company, I’m regulated like an insurance company. However some of these lending platforms are partially unregulated although to the customer it looks the same as a regulated offering. To avoid regulatory arbitrage regulators will have to move to a more functional perspective.