Silicon Valley Tech News Roundup – April 30th

The Fed report on the collapse of SVB published – 4/28

On Friday, the Federal Reserve published a report on the collapse of the Silicon Valley Bank. The report reveals SVB collapsed because it was poorly run and admits the federal regulators should have paid better attention to the bank and reacted faster to correct the situation.

Michael S. Barr (the Vice Chair for Supervision at Federal Reserve) said about the report: “Following Silicon Valley Bank’s failure, we must strengthen the Federal Reserve’s supervision and regulation based on what we have learned… This review represents a first step in that process – a self-assessment that takes an unflinching look at the conditions that led to the bank’s failure, including the role of Federal Reserve supervision and regulation.”

The report suggests the bank’s board of directors and managers were not good at communicating or negotiating the bank’s weaknesses in its business strategy, nor did they have a contingency plan if things went south. The report reads: “Silicon Valley Bank was a highly vulnerable firm in ways that both its board of directors and senior management did not fully appreciate. These vulnerabilities – foundational and widespread managerial weaknesses, a highly concentrated business model, and a reliance on uninsured deposits – left Silicon Valley Bank acutely exposed to the specific combination of rising interest rates and slowing activity in the technology sector that materialized in 2022 and early 2023.”

Likewise, the report admits the Federal Reserve did not pay close enough attention to the bank, and when the red flags started to appear, it was slow to react. Per the report: “The Federal Reserve did not appreciate the seriousness of critical deficiencies in the firm’s governance, liquidity, and interest rate risk management. These judgments meant that Silicon Valley Bank remained wellrated, even as conditions deteriorated and significant risk to the firm’s safety and soundness emerged… Overall, the supervisory approach at Silicon Valley Bank was too deliberative and focused on the continued accumulation of supporting evidence in a consensus-driven environment.”

FBI asks for more money to fight Chinese hackers – 4/28

On Thursday, Christopher Wray (the Director of the FBI) participated in a budget hearing before a House Appropriations subcommittee and asked for more money for the FBI’s cyber intelligence unit. The agency is asking for an additional $63 million to hire 192 new employees. That would enable the FBI to allocate more staff to field offices where their expertise is needed.

Wray stated in his remarks: “To give you a sense of what we’re up against, if each one of the FBI’s cyber agents and intel analysts focused exclusively on the China threat, Chinese hackers would still outnumber FBI Cyber personnel by at least 50 to 1.” Furthermore, he added the United States has “a bigger hacking program than every other major nation combined and have stolen more of our personal and corporate data than all other nations – big or small – combined.”

But Chinese hackers are not the only threat. Countries like Russia, North Korea, and Iran also pose significant threats, according to Wray.

Tech companies allegedly found a loophole in the H1-B lottery system – 4/28

According to a report published by the Wall Street Journal, tech companies found a loophole in the H1-B lottery system. Sources from the Biden administration claim they have evidence several tech companies conspired to game the system by submitting the same people seeking visas numerous times to increase their chances of getting selected. The authorities are investigating several companies. Since the investigation is ongoing, the authorities have not named the companies under investigation.

U.S. Citizenship and Immigration Services award 85,000 H1-B visas to foreigners each year. H1-B is a short-term visa that enables the recipients to work for U. S. based companies.

A report from the U.S. Citizenship and Immigration Services reveals the number of visa applications went from 483,927 to 780,884 in 2022. The practice of submitting several visa applications for the same person significantly contributed to the rise in visa requests. The report states: “The large number of eligible registrations for beneficiaries with multiple eligible registrations – much larger than in previous years – has raised serious concerns that some may have tried to gain an unfair advantage by working together to submit multiple registrations on behalf of the same beneficiary… This may have unfairly increased their chances of selection.”

It is not illegal for companies to submit a visa request for the same person. But each company has to confirm it has a job for the applicant.

Meta reports the results for the first quarter of 2023 – 4/27

This week Meta published its financial results for the first quarter of 2023 and surpassed expectations. The company reported a profit of $5.7 billion, the total revenue was $28.6 billion, and the number of people using Facebook daily rose to under three billion monthly.

Mark Zuckerberg stated: “We had a good quarter and our community continues to grow… Our AI work is driving good results across our apps and business. We’re also becoming more efficient so we can build better products faster and put ourselves in a stronger position to deliver our long term vision.” Meta also plans to commercialize its privately-run generative AI and find practical applications for the technology, in the same way Google did.

Meta announced three rounds of layoffs in March that will slash its workforce by 10,000 people. The company reduced its global workforce by almost a quarter in a few months.