I work for an American company in San Francisco that has Tencent (practically an arm of the Chinese government) as a major investor. The number of times our CEO came in and told me that we need to implement features that benefit our geopolitical competitor is exactly zero.
What precisely do all the commenters that are panicking here think happens at companies where the investors are people who became rich with the help of the governments of Russia and China?
There are Boards, today, realizing that suggestions that were made over the years may have been compromised. They sounded like they were for furthering the company's financial interests. In truth, they may have been about compromising the company, and through it, American geopolitical goals.
You're moving goalposts. Nobody is worried about someone being friendly with the Kremlin. Acting at their behest, however, is new and troubling.
(I agree that this should have been obvious. Unfortunately, when dollars start dancing people tend to rationalize.)
Again, you're moving the goalposts.
Others [1][2][3] have directly responded to you on this point. Arguing that there is no need for alarm until some undefined threshold of red-handed evidence is attained is silly.
If a state-backed investor invests in your company, and you don't know about it, that's cause for alarm in itself. It means you need to review, very carefully, what you told whom, when, and what actions you took at their behest. From a corporate level, it's similar to what e.g. SpaceX would be expected to do if it discovered Lockheed Martin invested in it through a front. At a national level, state involvement adds extra dimensions.
[1] https://news.ycombinator.com/item?id=15631661
> If a state-backed investor invests in your company, and you don't know about it, that's cause for alarm in itself.
Is the only difference between today and yesterday is that yesterday there was no direct evidence that rich people associated ("backed by", "working in" - I am not sure what terminology you prefer to suggest nefariousness) with the Kremlin gave Milner cash to invest? If that's the concern, then, once again - anyone who believed yesterday that Milner was not $funded (once again, insert preferred terminology) at least partially by the Kremlin is an idiot. All they had to do was ask someone who is an immigrant from the Soviet Union.
Then more of us are idiots than you give credit for :). At the very least, I was an idiot and pg was an idiot [1][2].
Self-restraint is required at such moments. We all need to contribute our share of this if we want HN to survive as a place for substantive discussion.
The best response to that would be this [1] from that same thread. It's not money laundering if it's just how post-Soviet laissez-faire capitalism does things.
One point is that it should be obvious where the money came from (etc); the other point is that that origin should not be cause for concern.
Is that accurate?
If so I would agree with you on the first point but not the second: the same logic that eg allows one to make the inferences in the first point would also lead one to infer certain things about Yandex (analogous to the situation with Kaspersky).
Do you honestly think that the funding under discussion—and the personal relationships that subsequently developed—had no impact on either Twitter or Facebook deciding to establish their respective partnerships with Yandex?
On the second point: the source of the money should not be cause of concern if it's "just money."
If it's money and a very strong suggestion that you partner with a (obvious, even if explicitly unstated) foreign, state-controlled entity, then it's a cause for concern. If it's just money, and then when you want to partner with a foreign, state-controlled entity, that same money gives you an introduction to the foreign, state-controlled entity, then it's not a cause for concern, because that's the point of business relationships and investments.
The question of Russian influence is really a separate question, in my mind, and I think that's what bugs me about this entire thing the most. The implication somewhere here is that the leaders of Facebook and Twitter, and other startups that take Milner money were somehow duped, and allowed Russia to walk free in their systems and influence the election. I will be very surprised if that's true; Zuckerberg and Dorsey are too smart for that.
What seems obvious to me is that the systems they created are giant, targeted megaphones, by design. They were successfully used by the Obama campaign, and everyone was very happy for democracy then. Then a foreign state decided that they were going to give Trump help on these megaphones, and now everyone is very unhappy for democracy. Would we have this much hand-wringing if we discovered that Saudi Arabia was helping Hilary?
In re: your broader point I don’t think they are “that smart” per se; or perhaps better put, I think they are smart enough to be aware their platforms are used by all kinds of agents for all sorts of purposes 24/7/365...but up until now also deemed it prudent to turn a rather universal blind eye towards those activities unless they were, say, so obviously fake that ordinary users could identify them as such.
Whether that universal blind eye was smart is tbd, but nothing in their response since then has seemed very clever.
The story seems to be something like this:
[1] Yandex builds an app to crawl Facebook without Facebook's permission [2] Facebook blocks Yandex [3] Yandex gets licensed access to Facebook's firehose
[1] https://techcrunch.com/2013/01/11/yandex-wonder/ [2] http://www.reuters.com/article/net-us-yandex-facebook/yandex... [3] https://techcrunch.com/2014/01/13/yandex-facebook/
There's certainly a plausible Kremlin long con here - fund Milner to invest in Facebook, ask Yandex to build a crawler for Facebook, expect that Facebook would shut it shut down, then suggest via Milner that there should be a partnership between Yandex and Facebook, thus gaining official access to Facebook's firehose, to be sent directly to Kremlin for analysis of message proliferation, and further influence of the American public.
The fundamental mistake there (the final move that allows you to be checkmated) is the firehose deal, not the investment.
In any case, thanks for making me think through the possible attack vector here. Your comment is the first one that was specific enough that made me think through why this could be a cause for concern.
Not very plausible if compared to other things Kremlin does. Too long, too complicated, too hollywood. The modus operandi is much simpler - you do not need complex cons if you control everything. If you can come to Yandex and demand any data you want, anytime. You just have to keep Yandex alive, they'll find a way to get data (because it's their lifeblood, they are a data organization company, like Google) and when they do, you get the data too. Simple.
Depending on how you qualify "where". The specific way the money got there can be very complicated. The answer to the question "is that connected to Putin's interests somehow" is not - it is always "yes" given the source is in Russia and the sum is large enough.
> the other point is that that origin should not be cause for concern.
That is very subjective question. Some are ok with foreigners with questionable records (Chinese, petro-monarchies, Russians, etc.) investing in US economy. Some are worried about it. It is a personal choice. But there's no law preventing such people from buying any stock offered to public or entering into any investment deal they'd like, so this is a normal thing to happen. And it happens literally all the time.
> Do you honestly think that the funding under discussion—and the personal relationships that subsequently developed—had no impact on either Twitter or Facebook deciding to establish their respective partnerships with Yandex?
I don't see how we could have any idea about whether it did. Certainly, common investors can influence decisions, but Twitter and Facebook have various investors, with varied interests, so why would you think this particular deal is only influenced by one of them?
I think you are being intentionally ignorant. Maybe you have rationalized that it doesn't matter if the money comes from authoritarian regimes because it pays your bills.
I believe that every American VC fund has objectionable limited partners even when they are not authoritarian regimes and no VC-funded company has clean money coming in. All those Monsanto and Goldman pension funds have to be parked somewhere. The obvious response is that I am deflecting or that "two wrongs don't make a right" or something like that.
The only implication would be that I rationalized away all ethics by working in the industry.
I suspect that this Red Scare is trying somehow to present doing any business with Russians as a crime, while a) avoiding to explain how it is different from doing business with Saudis, Chinese, Pakistanis, Qatarians or any other countries with centralized power structures and questionable records in freedom & human rights department; and b) trying to expose specific dealings as nefarious while neglecting to mention same dealings in other areas at all and explain why those are OK.
Since it is in fashion to bash SV now, here is an article how SV is basically owned by Putin. Do you want to look at other Russian investments, maybe? At all people getting investments linked to Russia or lobbying for Russians or having business linked to any part of Russian money? Nah, that probably would upset to many people. Let's concentrate on Silicon Valley now.
I think people with money want to invest in order to make more money. Unless people can point to Russian money somehow having an obvious pattern on startup investing, there just doesn't seem to be anything out of the ordinary (rich people trying to get richer).
Why would anyone told you that? Clearly, someone would told you to implement X because Y when the real reason is Z.
EDIT: to clarify, I used FB here as a generic example, I am not alleging that Milner got that sort of access at Facebook specifically - although it is possible, as others point out downthread. Corporate espionage certainly gets much easier when you have a seat on the board and/or you can do due diligence.
Have you conducted early-stage due diligence? I have. We signed an NDA and got to review source, plans, blueprints; spoke with engineers; jockeyed with management on what it should prioritize, what it should not; made introductions; et cetera. Board members get a lot of latitude at young companies.
https://techcrunch.com/2009/05/26/facebook-takes-that-200-mi...
Facebook was not a young company when it got the DST investment, and DST didn't get a board seat.
When did I claim this? Not every investment is troubling, though I expect Facebook's counsel will be reviewing what advice, requests, introductions, et cetera Milner and his team made over the years.
No wonder Facebook and Twitter didn’t stop Russia’s influence during the elections and offered RT ad space... It’s the same reason Fox News is always screaming about Islam and jihad but carefully tiptoes around Saudi’s Arabia because one of their biggest investors after the Murdoch’s is a Saudi Prince.
This is how democracy fails. It’s like hitting a boulder with a hammer. The first ten thousand times not much happens, but eventually it collapses all at once.
America has allowed itself to be manipulated through political divisions, politicization of facts and science, cultures wars, dividing us by race (encouraged by Trump’s actions), campaign finance reform failures, gerrymandering, voter suppression, and our Supreme Court selling us all out and allowing corporations (including foreign corporations) to spend unlimited amounts of money in our elections. We are destroying ourselves and allowing this to happen because big oil, the Christian Y’all Qaeda, and racists have formed an alliance on the right to refuse to acknowledge reality and have then the right into a cult ideology. I hope this is a cultural bottom, but it seems like things will just continue to get worse.