Tech group urges Biden administration to keep child care requirement for chips funding
Gina Raimondo, US secretary of commerce, speaks at Georgetown University’s School of Foreign Service in Washington, DC, on Thursday, Feb. 23, 2023.
Al Drago | Bloomberg | Getty Images
Standing against conservative critiques of the Biden administration’s conditions on computer chip-manufacturing funding, the tech industry group Chamber of Progress urged the government to maintain its requirements, which include providing child care for workers.
The group counts Apple, Amazon, Google and Meta among its corporate backers. Though they are not the target audience to receive the funding created by the CHIPS and Science Act, Chamber of Progress spokesperson Chris MacKenzie said it’s important to the group that the program run both effectively and on time, since chip manufacturing is important to the entire tech economy in the U.S.
In the letter to Commerce Secretary Gina Raimondo shared exclusively with CNBC, Chamber of Progress and the National Asian/Pacific Islander American Chamber of Commerce and Entrepreneurship wrote that competitive benefits and fair labor practices are necessary to achieve the CHIPS Act’s “grand scope” both on time and on budget.
MacKenzie said the group aimed to push back on GOP attacks on so-called wokeness in business. In the letter, they argue that incentivizing child care is good business. It will encourage more women and people from underrepresented racial backgrounds to enter or remain in the chip manufacturing field, they wrote, an essential step for the industry to maintain a robust workforce.
Firms like Intel and Taiwan Semiconductor Manufacturing Co. (TSMC) are among those hoping to take advantage of the funding for their plans to build major chipmaking facilities in the U.S. Both companies have already announced massive projects to build up U.S. chip-manufacturing capacity. But the strings attached to the government money have raised concerns among the industry and conservatives.
Earlier this month, The Wall Street Journal reported that TSMC was worried about rules involving profit-sharing of surplus gains and providing details about operations. Chairman Mark Liu called some of the conditions “unacceptable” at an industry event in Taiwan last month, according to the Journal, adding they “aim to mitigate any negative impact from these and will continue discussions with the U.S. government.”
Some Republicans have also railed against the rules.
“What President Biden is doing by jamming woke and green agenda items into legislation we pass is making it harder for him to ever get legislation passed again,” said Sen. Mitt Romney, R-Utah, who supported the law’s passage, according to The Associated Press.
But the Commerce Department has maintained that the rules are necessary to protect taxpayer dollars and ensure a stable workforce.
“We simply will not be successful in achieving the national security goals of the CHIPS initiative unless we invest in our workforce, period. Full stop,” Raimondo told CNN in an interview published in late February. “For decades, we’ve taken our eye off the ball with manufacturing, which means the worker supply of people with the skills to do super technical manufacturing has withered. And so, we need to be honest about that, but also embrace it as an opportunity to come up with creative solutions.”
The $52 billion law was designed to strengthen the chip-manufacturing industry in the U.S., limiting dependence on other countries and shoring up the supply chain for an important component used in computers, cars and medical equipment.
In their letter Monday, the chambers also argued that wage and labor contract requirements serve an important business purpose for controlling costs and timeline. They applauded stipulations that would bar companies that accept government money from pursuing stock buybacks for five years. And they supported a policy to require those companies to share a portion of the surplus returns they receive after accepting CHIPS Act funding with the U.S. government, beyond what they projected in their proposals.
“To ensure continued political and public support for the program, implementing strong transparency measures and safeguards now is the best path forward,” the groups wrote.
WATCH: Commerce Department sees more than 200 companies interested in CHIPS Act funds
Microsoft CEO Satya Nadella watches from the audience during a press briefing at Microsoft’s campus in Redmond, Washington, on May 20, 2024.
Jason Redmond | Afp | Getty Images
Microsoft is previewing a new PC that’s designed to connect corporate workers to their programs and files in the cloud.
The Windows 365 Cloud Link is available in limited use in the U.S., Canada and a handful of other countries. It will be for sale in a few markets at $349 in April.
After years spent failing to crack the list of top PC manufacturers with its Surface product line, Microsoft is trying something new in an established category of hardware. In the second quarter, Microsoft said its $1.2 billion in devices revenue was down about 11%, while total PC shipments increased about 2%, according to one estimate.
Early testers have used the devices in call centers and for hot-desking, the practice of temporarily placing workers in available work areas rather than having them stick to the same assigned spots, Jalleen Ringer, product leader for Windows cloud endpoints, told CNBC in an interview.
The device is meant to be simple and secure. It runs a stripped-down operating system called Windows CPC, with no local applications or local users, and has a strict application control policy that can’t be disabled. It automatically downloads updates in the background and installs them at night.
Microsoft’s Windows 365 Link supports dual 4K monitors.
Microsoft
An Intel chip runs inside the computer, which comes with 8GB of RAM and 64GB of storage. Weighing less than a pound, the puck-like package can be kept on a desk or even mounted behind a PC monitor.
The release comes three years after Microsoft introduced Windows 365, which gives employees access to their custom virtual desktops on any device. Desktop virtualization, including an earlier Microsoft product called Azure Virtual Desktop, took off after the start of the Covid pandemic in 2020, with workers stuck at home.
In July 2023, Microsoft CEO Satya Nadella said Azure Virtual Desktop and Windows 365 together generated $1 billion in revenue for the first time in the 2024 fiscal year.
Dell and HP both sell thin client PCs that connect to virtual desktop infrastructure. Organizations can configure them with Windows or proprietary operating systems.
The Windows 365 Cloud Link is a “nice alternative” to thin clients, said Melissa Grant, a senior director of product marketing at Microsoft.
WATCH: ‘In many ways China is close to or is even catching up,’ Microsoft’s Brad Smith says
Technology
European tech funding declines for third consecutive year — but the sector is finally stabilizing
On Monday, British tech lobby group Startup Coalition warned in a blog post that there was a risk Reeves’ tax plans could result in a tech “brain drain.”. (Photo by Oli Scarff/Getty Images)
Oli Scarff | Getty Images
Venture capital investment in European technology startups is projected to decline for a third straight year, according to VC firm Atomico — but there are signs that things are finally stabilizing as valuations improve and interest rates fall.
Europe’s venture-backed startups are expected to secure $45 billion of investment by the end of 2024 — slightly lower than the $47 billion they raised last year, Atomico said Tuesday in its “State of European Tech” report.
Still, Atomico said this shows that European tech funding levels have finally “stabilized” despite worsening global macroeconomic conditions leading to three consecutive years of declines.
The firm stressed that the continent’s tech ecosystem is in a much better place than it was a decade ago, with funding this year still set to eclipse the $43 billion startups raised between 2005 and 2014.
In the period spanning 2015 to 2024, European startups have bagged $426 billion, dwarfing the sum of investment deployed into tech firms the decade prior.
Tom Wehmeier, head of insights at Atomico, told CNBC that Europe still has a few key areas of improvement to address before it can produce companies of similar scale to the largest tech firms in the U.S. and China.
“There’s frustrations about the continued challenges faced when it comes to regulation, bureaucracy, access to capital and this idea of scaling across the fragmented European marketplace,” Wehmeier said in an interview.
For example, pension funds in Europe face barriers to investing in venture capital funds and therefore aren’t gaining much exposure to the continent’s fast-growing startup ecosystem, Wehmeier said.
European pension funds allocate just 0.01% of the $9 trillion worth of assets they manage into venture capital funds based in the continent, according to Atomico’s report.
The 2024 publication marks the 10th anniversary since Atomico began compiling its annual report, which is produced in partnership with data firm Dealroom.
Europe’s first $1 trillion tech firm?
According to Atomico there are signs that the sector is improving. In the U.K., for example, Finance Minister Rachel Reeves last week laid out plans to consolidate 86 separate local government pension pots into eight “megafunds” to boost investment in domestic assets.
British tech advocacy group techUK said the reforms “should address barriers to greater availability of pension fund capital and encourage a vision that sees more investment into UK tech science start-ups and scale-ups.”
Reforms to pension schemes are either underway or being discussed in several other countries across Europe.
“These changes could result in billions more being made available to European scale-ups — and that’s something that could be the difference between the best and brightest companies scaling from here in Europe, versus being forced to relocate,” Wehmeier told CNBC.
Atomico said it’s optimistic about the next decade in European tech. The VC firm, which was established by Skype co-founder Niklas Zennström, is predicting the entire European tech ecosystem combined could be valued at $8 trillion by 2034, up from around $3 trillion currently.
Atomico also predicts that Europe will mint its first-ever trillion-dollar tech company in a decade’s time.
While Europe is home to several so-called “decacorns” valued at $10 billion and above, including Arm, Adyen, Spotify and Revolut, it has so far failed to produce a company valued at $1 trillion.
That’s unlike the United States, where several of the so-called “Magnificent Seven” technology companies are now worth over $1 trillion. They include Google parent company Alphabet, Amazon, Apple, Facebook-owner Meta, Microsoft, Nvidia and Tesla.
“If we can unlock capital at scale, keep the brightest minds in Europe, maintain that focus on solving really hard problems for society and the economy, that’s how we go and unlock the first trillion-dollar company,” Wehmeier said.
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