Copy Paste Experiment: PACIFIC • China's Spy Game

June 8, 2018 | Los Angeles

What's Next: China's Spies: The Washington Post is reporting that China hacked a US Navy contractor earlier this year and secured a trove of highly sensitive data on submarine warfare:

• "Chinese government hackers have compromised the computers of a Navy contractor, stealing massive amounts of highly sensitive data related to undersea warfare."

• "The hackers targeted a contractor who works for the Naval Undersea Warfare Center, a military organization headquartered in Newport, R.I., that conducts research and development for submarines and underwater weaponry."

• The hackers took "material relating to a closely held project known as Sea Dragon, as well as signals and sensor data, submarine radio room information relating to cryptographic systems, and the Navy submarine development unit's electronic warfare library."

The Big Picture: "The breach is part of China's long-running effort to blunt the US advantage in military technology and become the preeminent power in east Asia."

What's Next: "US officials prepare to thwart Chinese spying at Singapore summit," by NBC News' Courtney Kube, Carol E. Lee, Ken Dilanian and Andrea Mitchell:

• "US officials are concerned China has recruited informants among the waiters and other staff in Singapore's restaurants and bars, who are paid to eavesdrop on American customers and report back to their Chinese handlers."

• "Officials also expect electronic surveillance of the summit meeting sites."

• "Chinese intelligence agencies have shown the ability to penetrate mobile phones even when they are off, and U.S. officials are now told to take their batteries out when they are concerned about eavesdropping."

PACIFIC
The Agenda

Welcome to PACIFIC.

Raise a glass tonight for Anthony Bourdain, and please see our note on him below. He was one of the most genuine, and generous, people we've ever had the privilege of working with.

Future City
Uber eyes bike-share

Axios' Kia Kokalitcheva scoops: "Uber is considering a takeover offer for Motivate, the bike-share company behind such programs as CitiBike in New York and Ford GoBike in San Francisco .... This comes on the heels of a report that Lyft has made its own bid for Motivate, valued at $250 million of more."

The Big Picture:

• The companies that are changing the way we get around cities are making major investments not just in driverless technology and flying machines but in a very basic transportation technology that dates back to the early 19th century.

• Uber, Lyft and the new crop of bike share companies are preparing for a future in which people do not own and drive their own cars, and they clearly believe bicycles could be a key part of that future.

Rise of China
Jack Ma passes Goldman

Jack Ma's online payments company Ant Financial says it has brought in $14 billion from Chinese and foreign investors, my colleagues Daniel Shane and Sherisse Pham report:

• "The fundraising implies a valuation of at least $150 billion ... more than the market capitalization of Goldman Sachs."

• "Ma's online shopping giant Alibaba ... was valued at $168 billion when it listed on the New York Stock exchange in 2014."

• "In the year through March 31, Alipay and its partners had 870 million annual active users globally."

The Big Picture: Ant has been expanding its payments services around the world and is poised to become the dominant player in fintech.

ZTE WATCH

"China's ZTE has been given a reprieve -- but the company faces a long road to recovery." My colleague Sherisse Pham explains some of the challenges that still lie ahead.

The Trust Crisis
Sheryl Sandberg on tour

Facebook COO Sheryl Sandberg addressed Facebook's trust crisis during her commencement speech at the Massachusetts Institute of Technology today:

• "It's painful when you miss something -- when you make the mistake of believing so much in the good you are seeing that you don't see the bad."

• "It's not enough to be technologists -- we have to make sure that technology serves people. We are not indifferent creators -- we have a duty of care. And even when with the best of intentions you go astray -- as many of us have -- you have the responsibility to course correct."

• "The fight to ensure tech is used for good is never over."

What's Next: Sandberg is also addressing the United States Conference of Mayors today in Boston on "how communities can use technology to grow and thrive."

Bonus: Facebook says it will cut down on those annoying "now connected on Messenger" alerts, per TechCrunch's Josh Constine.

VALINSKY'S LINKS

Verizon shuffles its ranks (NYT)

Airbnb cancels Japan listings (Fortune)

Tencent partners with J.J. Abrams (TC)

Yahoo Messenger says goodbye (TC)

Jack Dorsey gets a nose ring (GQ)

Talk of Tinseltown
Next week's M&A frenzy

Comcast is likely to announce its rival bid for 21st Century Fox next week if Judge Leon rules in favor of AT&T's Time-Warner acquisition, Hollywood sources confirm.

What you need to know:

• The conventional wisdom is that Comcast will announce its offer on June 13, one day after Judge Leon's decision.

• Our best sources predict Comcast's offer will be north of $60 billion, because all things being equal Rupert Murdoch would rather sell to Disney.

• Our best sources also believe Disney will raise its $52.4-billion offer to counter-counter Comcast's offer.

Should be a helluva week.

In Memorium
Anthony Bourdain

"It seems that the more places I see and experience, the bigger I realize the world to be," Bourdain once said. "The more I become aware of, the more I realize how relatively little I know of it, how many places I have still to go, how much more there is to learn. Maybe that's enlightenment enough -- to know that there is no final resting place of the mind, no moment of smug clarity. Perhaps wisdom, at least for me, means realizing how small I am, and unwise, and how far I have yet to go."

Bourdain was the genuine article. He gave you the sense -- rare in writing, rarer still in person, and rarest of all in television -- that he was totally himself. No affectation, no bullshit. And that self was so cool, so charismatic, so sincere that it was impossible, at least for me, not to envy and admire him for his ability to build a career on being himself and doing what he loved. He was a north star.

What Next: "Remembering Anthony Bourdain," a special report on the life and legacy of the chef, storyteller and writer, tonight at 7pm PT on CNN.

See you Monday.