An advocacy group backed by Facebook received a $34 million donation from an anonymous donor as it waged a battle against antitrust legislation that would have more tightly regulated the tech industry.
A person who works with the group, American Edge Project, told CNBC that the $34 million was from Facebook. This person declined to be named in order to speak freely about the group’s finances.
The nonprofit raised the massive amount almost two years ago, according to the organization’s latest 990 tax forms. The documents reflect the nonprofit’s finances starting on Nov. 1, 2020, and carrying into Oct. 31, 2021. These disclosures are the most recent tax records available for public viewing and do not list names of the group’s donors.
A Meta spokesman declined to comment and referred CNBC to American Edge instead.
Doug Kelly, American Edge’s CEO, told CNBC in a statement that “the threats to America’s technological edge have a profound impact on our national security and economic well being and we’re leading the charge to make sure everyone is aware.”
The new documents show the tech advocacy group scored its biggest fundraising haul yet when bipartisan lawmakers on Capitol Hill were attempting to take on tech giants, including through antitrust legislation that didn’t pass Congress and a hearing in March 2021 featuring tech CEOs such as Facebook’s Mark Zuckerberg. Facebook changed its name to Meta in late 2021.
The American Edge Project launched its first pro-tech industry ad in 2020. The group’s previous 990 forms, from 2019 through late 2020, showed it raised all of its money from a single anonymous $4 million donation during that period. Facebook confirmed in 2020 to The Washington Post that it was contributing to the group. The person who works with American Edge told CNBC that the $4 million was also entirely from Facebook.
American Edge launched a wave of TV and digital ads from late 2020 through 2021, taking on antitrust proposals. A TV spot funded by the group suggested that small-business innovation could be affected if such legislation made its way through Congress.
In June 2021, the House Judiciary Committee passed a package of sweeping tech antitrust reforms. The measures proposed new rules on the largest online platforms, like requiring them to have capabilities for users to easily transfer their data to other services, shifting the burden of proof in merger cases onto dominant tech platforms, blocking platforms from operating businesses with conflicts of interest and from advantaging their own products on platforms they run.
The Senate later introduced a version of one of the bills, the American Innovation and Choice Online Act, in October 2021, which aimed to bar self-preferencing on dominant tech services. That bill advanced out of the Senate Judiciary Committee in January 2022.
Taken together, the bills were poised to create a much more uncertain legal environment for Facebook and its peers, including by making it harder to acquire firms that could help their businesses grow.
Almost all of these bills did not get a full House or Senate vote after Big Tech companies and their industry groups opposed the pieces of legislation, saying they would impose unfair restrictions and result in negative effects for consumers. For example, Chamber of Progress, backed by Apple, Amazon, Google and Meta, has warned that the Senate bill would significantly alter Amazon Prime’s offerings like two-day shipping and make it harder to offer low-cost basics from its first-party brand, for fear of being charged with illegal self-preferencing.
American Edge spent over $5 million between TV and digital ads in 2021, according to data from AdImpact. It spent over $10 million on TV ads last year, AdImpact says. The group went into 2022 with over $13 million in net assets, according to its 990 forms.
The $34 million donation also came as American Edge announced it was adding former Rep. Greg Walden, R-Ore., and former Sen. Heidi Heitkamp, D-N.D., as advisory board co-chairs to “lead the coalition’s efforts on internet openness, accessibility and free expression,” according to the press release. Walden is still listed on the group’s website as a leader of an advisory board, while Heitkamp is no longer listed.
A 2022 report by the watchdog Tech Transparency Project says Facebook isn’t just a “contributor” to American Edge, as the company confirmed to The Washington Post, but potentially its “sole funder.” The Tech Transparency Project receives funding from the George Soros-backed Open Society Foundations, Craig Newmark Philanthropies, Bohemian Foundation and Omidyar Network, according to its website.
American Edge’s website lists Facebook as a member of their supportive coalition. Other listed members include Bear Hill Advisors, the Center for Individual Freedom, NetChoice, the Connected Commerce Council, the National Black Chamber of Commerce and the National Small Business Association.
Facebook itself has spent over $58 million since the start of 2020 on federal lobbying, according to data compiled by the nonpartisan OpenSecrets.
Beyond the $34 million donation, the only other contribution listed on the tax disclosure was an another anonymous donation – of $25,000. The multimillion-dollar contribution allowed American Edge to spend just over $19 million on what the forms refer to as media placement and strategic services.
The 990 forms, which were signed and filed by the group in 2022, also show that powerful consulting firms that work for American Edge also received over $3 million combined from the organization. Cavalry LLC, a firm founded by former strategists of Senate Minority Leader Mitch McConnell, R-Ky., was paid $1.1 million by American Edge from November 2020 through October 2021. The Washington Post reported that John Ashbrook, a founding partner at Cavalry and a former McConnell advisor, is helping guide the group.
Global Strategy Group, a political and corporate consulting firm that was founded by three Democratic strategists, received $910,000 from American Edge over that same time period. GSG has a history of working with Big Tech. Amazon previously employed the group while the company fought unionization efforts. Amazon itself has donated to a similar group while that nonprofit took on tech-related legislation.
The Washington Post reported that Jim Papa, a partner at Global Strategy Group who was an aide to former President Barack Obama, was also helping the organization. Papa says on his GSG profile page that among his current and former clients is FWD.us, a fellow 501(c)(4) nonprofit that was co-founded by Zuckerberg and actively lobbies on immigration-related issues.
A GSG representative did not return requests for comment.
The two new features, announced Monday in a post during the Cannes Lions festival, will help brands better leverage discussions on the platform. The company said the tools are powered by an engine called Reddit Community Intelligence that turns “posts and comments into structured intelligence.”
Reddit announced a “listening tool” called Reddit Insights, which shares real-time insights with marketers to help them identify trends and launch campaigns. The other tool, called Conversation Summary Add-ons, allows brands to show “positive” user content under their ads.
“These are tools for a new era of community marketing, one where brands can tap into Reddit’s authenticity and connect meaningfully with high-intent communities around the world,” the company wrote.
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The company said Publicis served as the exclusive alpha tester for Reddit Insights, while Lucid and Jackbox Games were among the early testers for Conversation Summary Add-Ons.
Companies across industries are betting on new ways to harness AI to improve advertising campaigns and better engage with users. These new tools are transforming the industry while also putting pressure on some advertising stalwarts.
The industry is also currently navigating a bumpy environment spurred by the trade war with China.
During the recent earnings season, many companies warned of sluggish advertising sales in certain regions due to a rocky macroeconomic environment. Recent developments, however, have suggested a cooling of tensions between the U.S. and China.
Last month, Reddit posted strong sales and upbeat guidance. The company has benefited from recent changes to Google search and internal site improvements, which include convincing logged-out users to open accounts. Logged-in accounts are more beneficial to advertisers.
European defense technology startup Helsing on Tuesday said that it’s raised 600 million euros ($693.6 million) in a bumper new round of funding.
The investment was led by Prima Materia, the venture capital firm founded by Spotify CEO Daniel Ek and by Shakil Khan, an early investor in the popular music streaming app. Ek is also chairman of Helsing.
Existing investors Lightspeed Venture Partners, Accel, Plural, General Catalyst and Saab also put money in, alongside new investors BDT & MSD Partners.
Defense and the technology behind it have become a hot area for investors lately, amid major global conflicts, including the Ukraine war to Israel-Gaza. Last week saw a further escalation of war in the Middle East as Israel launched a series of airstrikes against Iran.
In 2024, venture funding in Europe’s defense, security and resilience sector reached an all-time high of $5.2 billion, according to a recent report from the NATO Innovation Fund. The sector grew 30% in the past two years, outperforming the broader VC market, which saw a 45% decline over the same period.
Founded in 2021, Helsing sells software that uses artificial intelligence technology to analyze large amounts of sensor and weapons system data from the battlefield to inform military decisions in real time. Last year, the startup also began manufacturing its own line of military drones, called HX-2.
Helsing, which operates in the U.K., Germany and France, said it would use the fresh cash to invest in Europe’s “technological sovereignty” — which refers to attempts to onshore the development and production of critical technologies, such as AI.
“As Europe rapidly strengthens its defence capabilities in response to evolving geopolitical challenges, there is an urgent need for investments in advanced technologies that ensure its strategic autonomy and security readiness,” Ek said in a statement out Tuesday.
Helsing did not disclose its new valuation following the latest financing round, which is subject to “certain approvals,” according to a statement. The firm was previously valued at around 5 billion euros in a 450 million euro funding round led by General Catalyst last year.
Sword Health, a startup focused on helping people deal with pain through digital services, is expanding into mental health and has raised additional capital to fuel its growth.
The 10-year-old company is introducing Mind, which uses a combination of artificial intelligence, hardware and human mental health professionals to treat patients with mild depression and anxiety. Sword said Mind will help users access care whenever they need it, rather than during sporadic, hourlong appointments.
“It’s really a breakthrough in terms of how we address mental health, and this is only possible because we have AI,” Sword CEO Virgílio Bento told CNBC in an interview.
Also on Tuesday, Sword announced a $40 million funding round, led by General Catalyst, in a deal that values the company at $4 billion. The fresh cash will support Sword’s efforts to grow through acquisitions, as well as its global expansion and AI model development, the company said.
The round included participation from Khosla Ventures, Comcast Ventures and other firms. Sword had raised a total of more than $450 million as of September, according to PitchBook.
The financing lands as the digital health market shows signs of recovery following a difficult post-Covid stretch, when rising inflation, higher interest rates and a return to in-person activities led to a dramatic retreat in the industry.
Earlier this month, Omada Health, which offers virtual care programs to supports patients with chronic conditions such as diabetes and hypertension, held its Nasdaq debut, though the stock is trading below its initial public offering price. Weeks before that, digital physical therapy provider Hinge Healthhit the New York Stock Exchange. The shares are trading a few dollars above their offer price.
Sword, which was founded in Portugal and is now based in New York, offers tools for digital physical therapy, pelvic health and movement health to help patients manage pain from home and avoid other treatments such as opioids and surgery. Patients can sign up for Sword if it’s supported by their employer or their health plan.
Mind users will receive a wrist wearable called the “M-band” that can measure environmental and physiological signals such as heart rate, sleep and the lighting in a user’s environment. Mind also includes access to an AI Care agent and human mental health professionals, who can deliver services such as traditional talk therapy.
Bento said a human is always involved with a patient’s care, and that AI is not making clinical decisions.
For example, if a patient has an anxiety attack, Sword’s AI will recognize that and could ask a clinician to approve some physical activity for later that day to help with recovery. The clinician would either approve the physical activity that the AI suggested, or override it and propose something else.
“You have an anxiety issue today, and the way you’re going to manage is to talk about it one week from now? That just doesn’t work,” Bento said. “Mental health should be always on, where you have a problem now, and you can have immediate help in the moment.”
Bento said Sword has some clients that have been on a waiting list for Mind, and the startup has been testing the offering with some of its design partners. He said early users have approved of Mind’s personalized approach and convenience.
“We believe that it is really the future of how mental health is going to be delivered in the future, by us and by other companies,” Bento said. “AI plays a very important role, but the use of AI — and I think this is very important — needs to be used in a very smart way.”
Disclosure: Comcast, the parent of Comcast Ventures, is the owner of NBCUniversal, parent company of CNBC.