One result of the pandemic: The death of distance
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Were it not for the pandemic, I would be in Aspen today, for Fortune’s annual Brainstorm Tech confab. Instead, it’s been postponed to December 1-2, when it will be held virtually. But Fortune did assemble a distinguished group of tech leaders yesterday for a virtual discussion of how the pandemic is changing business.
One prediction they chewed on was the death of distance–that with the rise of remote work, location won’t matter. “I feel like there is more opportunity now for people to get out of the bubble,” said Jewel Burks Solomon, head of Google for Startups, U.S. “I’ve experienced what it was like to have investors say, ‘Oh, you’re in Atlanta, you’re not in Silicon Valley, so sorry, companies we invest in have to be close to us.’ Now that is no longer valid.”
Maybe. But not everyone on the call agreed. Some, like former GoDaddy CEO Blake Irving, concurred that where you live “just doesn’t matter anymore. There is no plan to go back to the way we were before.” But others, like Joe Marchese, CEO of Attention Capital, suggested “these are such extraordinary times, and it is hard to trust current trends.” Entrepreneur Mark Johnson questioned whether the lockdown would give the edge to people who had existing relationships, and disadvantage newcomers who lacked “the opportunity to break bread, have a coffee, see someone in person.” And Electronic Arts CEO Andrew Wilson, while citing a surge in virtual sports, also acknowledged that “there is a certain kinetic energy that comes from putting creative people in a building together.”
Who’s right? Time will decide. But interestingly, many companies are having to make bets now on the future, deciding whether to allow employees to work remotely or ditch costly city real estate.
More news below.
JPMorgan Chase, Citigroup and Wells Fargo stockpiled a collective $28 billion in Q2 in order to prepare for a wave of consumer and business loan defaults. The preparations hit all the banks' profits in the quarter. JPMorgan expects unemployment rates to remain at double digits into 2021. Fortune
Joe Biden is working with former primary rival Bernie Sanders to come up with economic proposals that will turn the centrist's campaign platform more progressive (others involved in the project include John Kerry and Alexandria Ocasio-Cortez). One plank of that platform is a rollback of President Trump's big tax cuts. "A lot of you may not like that, but I’m going to close loopholes like capital gains and stepped-up basis," Biden told donors at a digital fundraiser. Fortune
The White House has backed down on much-criticized rules it unveiled only last week, that would have barred foreign students from entering or staying in the U.S. if they were only studying online at an American university. Harvard and MIT had sued the government over the policy, calling it "arbitrary and capricious." Wall Street Journal
President Trump has approved legislation that will strip Hong Kong of its special economic status in American eyes, meaning the U.S. will now treat Hong Kong as it does mainland China. The Hang Seng appeared to shrug off the move, rising slightly at open, before ending slightly down. Fortune
AROUND THE WATER COOLER
Tesla's value keeps shooting up, prompting CEO Elon Musk to simply tweet: "Wow." Piper Sandler, which previously estimated the value of a Tesla share at $939, now pegs it at $2,332. The actual share price for the electric-car firm hit $1,790 yesterday—or four times the price back during March's selloff. Financial Times
American billionaires need to step up their giving, writes WhyNot Initiative director Alan Davis for Fortune. Davis says Bill Gates' $300 million donation for COVID-19 relief is "a big number, but it's pocket change for him." He continues: "Food shortages and unemployment are at record highs, yet billionaires managed to add over $400 billion to their collective holdings just since this crisis began. Yet so far this year, the ultra-rich have barely increased their giving at all." Fortune
ByteDance's hugely popular and controversial TikTok social media app (check out this video explainer by Fortune's Devin Hance) has been hit with a fine in South Korea for collecting the personal data of children under the age of 14 without consent from their legal guardians. The fine, levied by the Korea Communications Commission, came to around $155,000. ZDNet
Sony has reportedly boosted its order for the upcoming PlayStation 5 console by half, probably because it expects a huge sales lift from people staying at home for their entertainment rather than heading out. The PlayStation 4 sold 4.2 million units at launch, but Sony apparently hopes to sell 9-10 million. Facebook is also reportedly boosting production of its Oculus VR headsets. The Verge
This edition of CEO Daily was edited by David Meyer.