Daily Archives: April 8, 2021

News: Facebook ran ads for a fake ‘Clubhouse for PC’ app planted with malware

Cybercriminals have taken out a number of Facebook ads masquerading as a Clubhouse app for PC users in order to target unsuspecting victims with malware, TechCrunch has learned. TechCrunch was alerted Wednesday to Facebook ads tied to several Facebook pages impersonating Clubhouse, the drop-in audio chat app only available on iPhones. Clicking on the ad would

Cybercriminals have taken out a number of Facebook ads masquerading as a Clubhouse app for PC users in order to target unsuspecting victims with malware, TechCrunch has learned.

TechCrunch was alerted Wednesday to Facebook ads tied to several Facebook pages impersonating Clubhouse, the drop-in audio chat app only available on iPhones. Clicking on the ad would open a fake Clubhouse website, including a mocked-up screenshot of what the non-existent PC app looks like, with a download link to the malicious app.

When opened, the malicious app tries to communicate with a command and control server to obtain instructions on what to do next. One sandbox analysis of the malware showed the malicious app tried to infect the isolated machine with ransomware.

But overnight, the fake Clubhouse websites — which were hosted in Russia — went offline. In doing so, the malware also stopped working. Guardicore’s Amit Serper, who tested the malware in a sandbox on Thursday, said the malware received an error from the server and did nothing more.

The fake website was set up to look like Clubhouse’s real website, but featuring a malicious PC app. (Image: TechCrunch)

It’s not uncommon for cybercriminals to tailor their malware campaigns to piggyback off the successes of wildly popular apps. Clubhouse reportedly topped more than 8 million global downloads to date despite an invite-only launch. That high demand prompted a scramble to reverse-engineer the app to build bootleg versions of it to evade Clubhouse’s gated walls, but also government censors where the app is blocked.

Each of the Facebook pages impersonating Clubhouse only had a handful of likes, but were still active at the time of publication. When reached, Facebook wouldn’t say how many account owners had clicked on the ads pointing to the fake Clubhouse websites.

At least nine ads were placed this week between Tuesday and Thursday. Several of the ads said Clubhouse “is now available for PC,” while another featured a photo of co-founders Paul Davidson and Rohan Seth. Clubhouse did not return a request for comment.

The ads have been removed from Facebook’s Ad Library, but we have published a copy. It’s also not clear how the ads made it through Facebook’s processes in the first place.

 

News: Daily Crunch: KKR invests $500M into Box

Box gets some financial ammunition against an activist investor, Samsung launches the Galaxy SmartTag+ and we look at the history of CryptoPunks. This is your Daily Crunch for April 8, 2021. The big story: KKR invests $500M into Box Private equity firm KKR is making an investment into Box that should help the cloud content

Box gets some financial ammunition against an activist investor, Samsung launches the Galaxy SmartTag+ and we look at the history of CryptoPunks. This is your Daily Crunch for April 8, 2021.

The big story: KKR invests $500M into Box

Private equity firm KKR is making an investment into Box that should help the cloud content management company buy back shares from activist investor Starboard Value, which might otherwise have claimed a majority of board seats and forced a sale.

After the investment, Aaron Levie will remain with Box as its CEO, but independent board member Bethany Mayer will become the chair, while KKR’s John Park is joining the board as well.

“The KKR move is probably the most important strategic move Box has made since it IPO’d,” said Alan Pelz-Sharpe of Deep Analysis. “KKR doesn’t just bring a lot of money to the deal, it gives Box the ability to shake off some naysayers and invest in further acquisitions.”

The tech giants

Samsung’s AirTags rival, the Galaxy SmartTag+, arrives to help you find lost items via AR — This is a version of Samsung’s lost-item finder that supports Bluetooth Low Energy and ultra-wideband technology.

Spotify stays quiet about launch of its voice command ‘Hey Spotify’ on mobile — Access to the “Hey Spotify” voice feature is rolling out more broadly, but Spotify isn’t saying anything officially.

Verizon and Honda want to use 5G and edge computing to make driving safer — The two companies are piloting different safety scenarios at the University of Michigan’s Mcity, a test bed for connected and autonomous vehicles.

Startups, funding and venture capital

Norway’s Kolonial rebrands as Oda, bags $265M on a $900M valuation to grow its online grocery delivery business in Europe — Oda’s aim is to provide “a weekly shop” for prices that compete against those of traditional supermarkets.

Tines raises $26M Series B for its no-code security automation platform — Tines co-founders Eoin Hinchy and Thomas Kinsella were both in senior security roles at DocuSign before they left to start their own company in 2018.

Yext co-founder unveils Dynascore, which dynamically synchronizes music and video — This is the first product from Howard Lerman’s new startup Wonder Inventions.

Advice and analysis from Extra Crunch

Four strategies for getting attention from investors — MaC Venture Capital founder Marlon Nichols joined us at TechCrunch Early Stage to discuss his strategies for early-stage investing, and how those lessons can translate into a successful launch for budding entrepreneurs.

How to get into a startup accelerator —  Neal Sáles-Griffin, managing director of Techstars Chicago, explains when and how to apply to a startup accelerator.

Understanding how fundraising terms can affect early-stage startups — Fenwick & West partner Dawn Belt breaks down some of the terms that trip up first-time entrepreneurs.

(Extra Crunch is our membership program, which helps founders and startup teams get ahead. You can sign up here.)

Everything else

The Cult of CryptoPunks — Ethereum’s “oldest NFT project” may not actually be the first, but it’s the wildest.

Biden proposes gun control reforms to go after ‘ghost guns’ and close loopholes — President Joe Biden has announced a new set of initiatives by which he hopes to curb the gun violence he described as “an epidemic” and “an international embarrassment.”

Apply to Startup Battlefield at TechCrunch Disrupt 2021 — All you need is a killer pitch, an MVP, nerves of steel and the drive and determination to take on all comers to claim the coveted Disrupt Cup.

The Daily Crunch is TechCrunch’s roundup of our biggest and most important stories. If you’d like to get this delivered to your inbox every day at around 3pm Pacific, you can subscribe here.

News: Facebook, Instagram, and WhatsApp are super broken right now (Update: but starting to work again)

Are Facebook, Instagram, and WhatsApp down for you right now? Us too! And lots and lots of other people too, it seems. We’re getting reports left and right of outages across the three Facebook properties, with no indication so far as to the cause. It’s all down so hard that Facebook’s own server status page

Are Facebook, Instagram, and WhatsApp down for you right now? Us too! And lots and lots of other people too, it seems.

We’re getting reports left and right of outages across the three Facebook properties, with no indication so far as to the cause. It’s all down so hard that Facebook’s own server status page won’t even load to explain what’s up. Some of the respective mobile apps appear to load, but are just loading cached data; refresh or try to pull in a new page, and things probably won’t load correctly.

When Facebook on the web does load, it’s largely throwing the following error message:

 

This outage comes just a few weeks after one that took out Instagram and WhatsApp in March.

(Update, 3:19 PM: It appears things are coming back online, about an hour after the outage first began.)

 

News: Crypto trading on Robinhood spiked to 9.5M customers in first quarter

It’s been a big year for crypto, and Robinhood shared some stats today providing more evidence that the crypto boom is more than just hype — at least for now. In a blog, Christine Brown, Robinhood’s head of crypto operations, revealed that in the first quarter of 2021, 9.5 million of its customers traded crypto

It’s been a big year for crypto, and Robinhood shared some stats today providing more evidence that the crypto boom is more than just hype — at least for now.

In a blog, Christine Brown, Robinhood’s head of crypto operations, revealed that in the first quarter of 2021, 9.5 million of its customers traded crypto via the company’s platform. That’s up big time from the 1.7 million customers who traded crypto in the 2020 fourth quarter. The company first launched its Crypto unit in January of 2018 but hasn’t provided numbers in previous quarters.

In February, Robinhood revealed it had seen six million new customers on Robinhood Crypto in the first two months of this year alone. That compares to  a peak of 401,000 in a single month in 2020, with a monthly average of about 200,000 customers.

Brown says the company’s intent behind launching Robinhood Crypto in the first place was to give its customers the opportunity to buy and sell cryptocurrency in addition to the range of assets offered through its brokerage, Robinhood Financial.

Robinhood Crypto currently offers seven tradeable coins: Bitcoin, Bitcoin Cash, Bitcoin SV, Dogecoin, Ethereum, Ethereum Classic and Litecoin. 

Brown also noted that Robinhood’s crypto team has already more than tripled since the beginning of the year, although it’s not entirely clear how many staffers it currently has on that team. There are a number of crypto-related openings on its careers site, including an open “Crypto CFO” role.

The company is making clear that crypto is an important part of its overall business and part of its mission to democratize access to the masses.

“All it takes to spend, trade, and store cryptocurrency, theoretically, is an internet connection — you don’t need access to a big line of credit, or startup capital,” Brown wrote. “You don’t even have to be awake at a certain time of day to trade. The crypto market doesn’t close. Crypto was born out of a mission to take power away from institutions and return it to the people.”

Last August, Robinhood raised $200 million more at a new, higher $11.2 billion valuation in its third raise of the year before filing to go public in March. The company has had a tumultuous past year or so that was filled with time in front of Congress, bad PR from a user’s suicide and settlements with the SEC.

Meanwhile, TechCrunch also reported earlier this week that in the first quarter of 2021, American consumer cryptocurrency trading giant Coinbase grew sharply, generating strong profits at the same time. Specifically, the company notched revenue of $1.8 billion in Q1 2021, up from $585.1 million in Q4 2020. Net income totaled “approximately $730 million to $800 million,” up from $178.8 million in Q4 2020.

This article was updated post-publication with some additional numbers

News: Nigeria’s SEC warns investment platforms to stop trading ‘unregistered’ foreign securities

In a circular released by Nigeria’s capital market regulator SEC today, investment platforms providing access to foreign securities might be treading on dangerous grounds. According to the SEC regulations that have just been brought to light, these platforms are trading foreign securities not registered in the country and have been warned to stop doing so.

In a circular released by Nigeria’s capital market regulator SEC today, investment platforms providing access to foreign securities might be treading on dangerous grounds.

According to the SEC regulations that have just been brought to light, these platforms are trading foreign securities not registered in the country and have been warned to stop doing so. Capital market operators in partnership with them have also been warned to renege on providing brokerage services for foreign securities.

Over the past three years, Robinhood-esque platforms like Bamboo, Trove, Chaka and Rise have sprung forth in the Nigerian fintech space. They offer Nigerians access to stocks, bonds and other securities in both local and international markets. These platforms have grown in popularity among the middle class and provide a haven to protect earnings from naira devaluations.

That said, there’s a vast difference in how they operate when compared to Robinhood. In addition to being a trading app, Robinhood offers online brokerages (introducing and clearing) and also zero commission trading. Nigerian investment platforms do not, and while any trading platform can get a brokerage license in the U.S., it can be a Herculean task to obtain one in Nigeria. This is where capital market operators (local and foreign brokerage firms in this case) come into play, forming strategic partnerships with these companies so Nigerians can access both local and foreign fractional securities.

After a series of regulatory onslaught from different government bodies on tech startups last year, the SEC followed suit in December. It singled out Chaka, one of the platforms and accused it of selling and advertising stocks. The regulator’s definition of the alleged offence was that Chaka “engaged in investment activities, including providing a platform for purchasing shares in foreign companies such as Google, Amazon, and Alibaba, outside the Commission’s regulatory purview and without requisite registration.”

The company’s CEO, Tosin Osibodu, denied any wrongdoing, and since the turn of the year, not much has been heard from the SEC and Chaka regarding this matter until the release of today’s circular. Unsurprisingly, the regulator continued from where it left off, only this time, all investment platforms including brokerage firms — not just Chaka — are involved. SEC’s subtle directive is to stop selling, issuing or offering for sale any foreign securities not listed on any exchange registered in Nigeria.

What this inherently means from now on is that investment platforms will have their work cut out and might only offer individuals access to only local stocks and securities. This affects the business models of these startups. And the core value they provide, which is to help Nigerians store monetary value and hedge against naira devaluation is at the threat of being wiped out.

Here’s the information released by the regulator as seen on its website:

The attention of the Securities and Exchange Commission (the Commission) has been drawn to the existence of several providers of online investment and trading platforms which purportedly facilitate direct access of the investing public in the Federal Republic of Nigeria to securities of foreign companies listed on Securities Exchanges registered in other jurisdictions. These platforms also claim to be operating in partnership with Capital Market operators (CMOs) registered with the Commission.

The Commission categorically states that by the provisions of Sections 67-70 of the Investments and Securities Act (ISA), 2007 and Rules 414 & 415 of the SEC Rules and Regulations, only foreign securities listed on any Exchange registered in Nigeria may be issued, sold or offered for sale or subscription to the Nigerian public. Accordingly, CMOs who work in concert with the referenced online platforms are hereby notified of the Commission’s position and advised to desist henceforth.

The Commission enjoins the investing public to seek clarification as may be required via its established channels of communication on investment products advertised through conventional or online mediums.

This is a developing story. More to follow…

News: Epic cries monopoly as Apple details secret ‘Project Liberty’ effort to provoke ‘Fortnite’ ban

The Epic v. Apple lawsuit alleging monopolistic practices by the latter will begin next month, and today the main arguments of each company were published, having been trimmed down somewhat at the court’s discretion. With the basic facts agreed upon, the two companies will go to battle over what they mean, and their CEOs will

The Epic v. Apple lawsuit alleging monopolistic practices by the latter will begin next month, and today the main arguments of each company were published, having been trimmed down somewhat at the court’s discretion. With the basic facts agreed upon, the two companies will go to battle over what they mean, and their CEOs will likely take the (virtual) stand to do so.

As we’ve covered in previous months, the thrust of Epic’s argument is that Apple’s hold over the app market and 30 percent standard fee amount to anti-competitive behavior that must be regulated by antitrust law. It rebelled against what it describes as an unlawful practice by slipping its own in-game currency store into the popular game Fortnite, circumventing Apple payment methods. (CEO Tim Sweeney would later, and unadvisedly, compare this to resisting unjust laws in the civil rights movement.)

Apple denies the charge of monopoly, pointing out it faces enormous competition all over the market, just not within its own App Store. And as for the size of the fees — well, perhaps it’s a matter that could stand some adjustment (the company dropped its take to 15% for any developer’s first million following criticism throughout 2020), but it hardly amounts to unlawfulness.

For its part, Apple contends that the whole antitrust allegation and associated dust-kicking is little more than a PR stunt, and it has something in the way of receipts.

Epic did, after all, have a whole PR strategy ready to go when it filed the lawsuit, and the filings describe “Project Liberty,” a long-term program within the company to, in Apple’s opinion, shore up sagging revenues from Fortnite. Epic does seem to have paid a PR firm some $300K to advise on the “two-phase communications plan,” involving a multi-company complaint campaign against Apple and google via the “Coalition for App Fairness.”

Project Liberty makes up a whole section in Apple’s filing, detailing how the company and Sweeney planned to “draw Google into a legal battle over anti-trust,” (and presumably Apple) according to internal emails, by getting banned by the companies’ app stores for circumventing their payment systems. Epic only mentions Project Liberty in one paragraph, explaining that it kept the program secret because “Epic could not have disclosed it without causing Apple to reject Version 13.40 of Fortnite,” viz. the one with the offending payment system built in. It’s not much of a defense.

Whether Apple’s fees are too high, and whether Epic is doing this to extend Fortnite’s profitable days, the case itself will be determined on the basis of antitrust law and doctrine, and on this front things do not look particularly dire for Apple.

Although the legal arguments and summaries of fact run to hundreds of pages from both sides, the whole thing is summed up pretty well in the very first sentence of Epic’s filing: “This case is about Apple’s conduct to monopolize two markets within its iOS ecosystem.”

To be specific, it is about whether Apple can be said to be a monopolist over an ecosystem it created and administrated from the very beginning, and one that is provably assailed on all sides by competitors in the digital distribution and gaming space. This is a novel application of antitrust law and one that would carry a heavy burden of proof for Epic — and that an (admittedly amateur) review of the arguments doesn’t suggest there’s much chance of success.

But the opinion of a random reporter is not much in the accounting of things; there will have to be a trial, and one is scheduled to occur next month. There’s a lot of ground to cover, as Epic’s presentation of its arguments will need to be as meticulous as Apple’s dismantling of them. To that end we can expect live testimony from Apple CEO Tim Cook, Epic CEO Tim Sweeney, Apple’s former head of marketing and familiar face Phil Schiller, among others.

The timing and nature of that testimony or questioning will not be known until later, but it’s likely there will be some interesting interactions worth hearing about. The trial is scheduled to begin May 3 and last for about 3 weeks.

Notably there are a handful of other lawsuits hovering about relating to this, such as Apple’s countersuit against Epic alleging breach of contract. Many of these will depend entirely on the outcome of the main case — e.g. if Apple’s terms were found to be unlawful, there was no contract to break, or if not, Epic pretty much admitted to breaking the rules so the case is practically over already.

You can read the full “proposed findings of fact” documents from each party on the invaluable RECAP; the case number is 4:20-cv-05640.

News: Bootstrapping, managing product-led growth and knowing when to fundraise

Calendly CEO Tope Awotona and Blake Bartlett, partner at OpenView, talk about expanding internationally, when to bootstrap and when to fundraise, and how VCs approach a profitable company.

Product-led growth is all the rage in the Valley these days, and we had two leading thinkers discuss how to incorporate it into a startup at TechCrunch Early Stage 2021. Tope Awotona is the CEO and founder of Calendly, which bootstrapped for much of its existence before raising $350 million at a $3 billion valuation from OpenView and Iconiq. And on the other side of that table and this interview sat Blake Bartlett, a partner at OpenView who has been leading enterprise deals based around the principles of efficient growth.

In this interview, the two talk about bootstrapping and product-led growth, expanding internationally, when to bootstrap and when to fundraise, and how VCs approach a profitable company (carefully, and with a big stick). Oh, and how to spend $350 million.

Quotes have been edited and condensed for quality.


Bootstrapping is directly tied to product-led growth

Product-led growth is all about efficiency — spending all of a startup’s capital and time on perfecting its product to capture new users and help the most fervent customers advocate for the product with others or perhaps the managers approving their expenses. That’s directly related to bootstrapping, since by evading VC investment, a startup has to be much more tied to customers in the first place.

Tope Awotona:

With no marketing at all, Calendly began to take off. So the initial users were in higher education, and very quickly we moved to the commercial sector. And all of that was because of the virality of the product. Seeing that, we just began to invest more into virality. So the combination of self-serve, which is incredibly capital efficient, because you don’t need all of these sales people, and also the virality, instead of spending a bunch of dollars on advertising, you can really rely on the virality of the product and rely on the network of the users to really propagate and to enable distribution, just those are the two things that really allowed us to be successful. (Timestamp: 7:49)

We later discussed how the extreme focus on users can drive efficiency through product-led growth.

Blake Bartlett:

It’s the product and the distribution model, and they need to be tightly aligned. Tope spoke to some of this, but I think first and foremost, even outside of metrics, it’s just how is the business built? And on the product front, the product is built, the jobs to be done, so to speak, are oriented towards the actual user of the product, not their boss. SaaS historically was built for the boss because the boss owns the the budget for that department. So if you’re building a sales tool, build for the VP of Sales, and then hopefully the AEs will, you know, go along with it. But now with product-led growth, you’re actually building for that user. … Eventually, you can build the things on top that the boss cares about like the admin panel, and the KPIs and all that kind of stuff. (Timestamp: 29:35)


Product-led growth and international expansion

News: Consumers now average 4.2 hours per day in apps, up 30% from 2019

The coronavirus pandemic has increased our collective screen time, and that’s particularly true on mobile devices. According to a new report from mobile data and analytics firm App Annie, global consumers are now spending an average of 4.2 hours per day using apps on our smartphones, an increase of 30% from just two years prior.

The coronavirus pandemic has increased our collective screen time, and that’s particularly true on mobile devices. According to a new report from mobile data and analytics firm App Annie, global consumers are now spending an average of 4.2 hours per day using apps on our smartphones, an increase of 30% from just two years prior. In some markets, the average is even higher — more than five hours.

In the first quarter of 2021, the daily time spent in apps surpassed four hours in the U.S., Turkey, Mexico and India for the first time, the report notes. Of those, India saw the biggest jump as consumers there spent 80% more time in smartphone apps in the Q1 2021 versus the first quarter of 2019.

To put this in perspective in the American market, Nielsen had last year reported consumers were spending around 4 and half hours watching live or time-shifted TV, but only 3 hours, 46 minutes using smartphone apps.

Image Credits: App Annie

However, we should point out that Nielsen and App Annie’s analysis can’t necessarily be compared directly, because App Annie only measured time spent on Android devices — and many Americans use iPhones. Nielsen, meanwhile, relies on panels to achieve a representative sampling. Nevertheless, the broad strokes here are that mobile apps seem to be a more popular means of entertainment than the good ol’ American pastime of watching TV.

The new report also notes that three markets — Brazil, South Korea, and Indonesia — saw the average daily time spent in apps jump to over five hours this past quarter.

It can be difficult to determine which apps are driving these changes as the most downloaded apps tend to remain the same quarter after quarter. The top charts are dominated by the usual names like TikTok, YouTube and Facebook, for example. That’s why App Annie now tracks what it calls “breakout apps,” which are those that saw spikes in quarter-over-quarter downloads across both iOS and Android.

Image Credits: App Annie

In Q1 2021, Western markets saw a sharp rise in secure messaging apps, Signal and Telegram. Signal, for instance, placed first in the U.K., Germany, and France, and fourth in the U.S. as a “breakout app” for the quarter. Telegram was No. 9 in the U.K. No. 5 in France, and No. 7 in the U.S.

Investment and trading apps were also popular in the quarter, with Coinbase’s crypto app at No. 6 in the U.S. and U.K. on this list, while Binance was No. 7 in France. Crypto trading app Upbit, meanwhile, was No. 1 in South Korea. The payment app, PayPay was the No. 1 breakout app in Japan. And Robinhood was No. 2 in the U.S.

Clubhouse also made a showing on the “breakout” charts, as it gained ground in non-U.S. markets like Germany and Japan, where it ranked No. 4 and No. 3, respectively.

China’s breakout chart was different, with a focus on video apps like TikTok, Kwai, CapCut and iQIYI.

Image Credits: App Annie

TikTok’s influence on games was also apparent in the quarter. The game High Heels from Istanbul-based Rollic (now owned by Zynga), was heavily advertised on TikTok, sending the title to No. 1 in the U.S. and U.K.’s “breakout” games charts, as well as No. 3 in China, No. 7 in Germany, and No. 6 in Russia.

Other hyper-casual games did well, too, including Project Makeover, DOP 2: Delete One Part, and Phone Case DIY.

Crash Bandicoot: On the Run also broke out in the quarter. Despite launching on March 25, the game saw 21 million downloads in four days, becoming the top breakout app in Germany, No. 2 in the U.S., No. 3 in the U.K, and No. 9 in France.

News: Immersion cooling to offset data centers’ massive power demands gains a big booster in Microsoft

LiquidStack does it. So does Submer. They’re both dropping servers carrying sensitive data into goop in an effort to save the planet. Now they’re joined by one of the biggest tech companies in the world in their efforts to improve the energy efficiency of data centers, because Microsoft is getting into the liquid-immersion cooling market.

LiquidStack does it. So does Submer. They’re both dropping servers carrying sensitive data into goop in an effort to save the planet. Now they’re joined by one of the biggest tech companies in the world in their efforts to improve the energy efficiency of data centers, because Microsoft is getting into the liquid-immersion cooling market.

Microsoft is using a liquid it developed in-house that’s engineered to boil at 122 degrees Fahrenheit (lower than the boiling point of water) to act as a heat sink, reducing the temperature inside the servers so they can operate at full power without any risks from overheating.

The vapor from the boiling fluid is converted back into a liquid through contact with a cooled condenser in the lid of the tank that stores the servers.

“We are the first cloud provider that is running two-phase immersion cooling in a production environment,” said Husam Alissa, a principal hardware engineer on Microsoft’s team for datacenter advanced development in Redmond, Washington, in a statement on the company’s internal blog. 

While that claim may be true, liquid cooling is a well-known approach to dealing with moving heat around to keep systems working. Cars use liquid cooling to keep their motors humming as they head out on the highway.

As technology companies confront the physical limits of Moore’s Law, the demand for faster, higher performance processors mean designing new architectures that can handle more power, the company wrote in a blog post. Power flowing through central processing units has increased from 150 watts to more than 300 watts per chip and the GPUs responsible for much of Bitcoin mining, artificial intelligence applications and high end graphics each consume more than 700 watts per chip.

It’s worth noting that Microsoft isn’t the first tech company to apply liquid cooling to data centers and the distinction that the company uses of being the first “cloud provider” is doing a lot of work. That’s because bitcoin mining operations have been using the tech for years. Indeed, LiquidStack was spun out from a bitcoin miner to commercialize its liquid immersion cooling tech and bring it to the masses.

“Air cooling is not enough”

More power flowing through the processors means hotter chips, which means the need for better cooling or the chips will malfunction.

“Air cooling is not enough,” said Christian Belady, vice president of Microsoft’s datacenter advanced development group in Redmond, in an interview for the company’s internal blog. “That’s what’s driving us to immersion cooling, where we can directly boil off the surfaces of the chip.”

For Belady, the use of liquid cooling technology brings the density and compression of Moore’s Law up to the datacenter level

The results, from an energy consumption perspective, are impressive. The company found that using two-phase immersion cooling reduced power consumption for a server by anywhere from 5 percent to 15 percent (every little bit helps).

Microsoft investigated liquid immersion as a cooling solution for high performance computing applications such as AI. Among other things, the investigation revealed that two-phase immersion cooling reduced power consumption for any given server by 5% to 15%. 

Meanwhile, companies like Submer claim they reduce energy consumption by 50%, water use by 99%, and take up 85% less space.

For cloud computing companies, the ability to keep these servers up and running even during spikes in demand, when they’d consume even more power, adds flexibility and ensures uptime even when servers are overtaxed, according to Microsoft.

“[We] know that with Teams when you get to 1 o’clock or 2 o’clock, there is a huge spike because people are joining meetings at the same time,” Marcus Fontoura, a vice president on Microsoft’s Azure team, said on the company’s internal blog. “Immersion cooling gives us more flexibility to deal with these burst-y workloads.”

At this point, data centers are a critical component of the internet infrastructure that much of the world relies on for… well… pretty much every tech-enabled service. That reliance however has come at a significant environmental cost.

“Data centers power human advancement. Their role as a core infrastructure has become more apparent than ever and emerging technologies such as AI and IoT will continue to drive computing needs. However, the environmental footprint of the industry is growing at an alarming rate,” Alexander Danielsson, an investment manager at Norrsken VC noted last year when discussing that firm’s investment in Submer.

Solutions under the sea

If submerging servers in experimental liquids offers one potential solution to the problem — then sinking them in the ocean is another way that companies are trying to cool data centers without expending too much power.

Microsoft has already been operating an undersea data center for the past two years. The company actually trotted out the tech as part of a push from the tech company to aid in the search for a COVID-19 vaccine last year.

These pre-packed, shipping container-sized data centers can be spun up on demand and run deep under the ocean’s surface for sustainable, high-efficiency and powerful compute operations, the company said.

The liquid cooling project shares most similarity with Microsoft’s Project Natick, which is exploring the potential of underwater datacenters that are quick to deploy and can operate for years on the seabed sealed inside submarine-like tubes without any onsite maintenance by people. 

In those data centers nitrogen air replaces an engineered fluid and the servers are cooled with fans and a heat exchanger that pumps seawater through a sealed tube.

Startups are also staking claims to cool data centers out on the ocean (the seaweed is always greener in somebody else’s lake).

Nautilus Data Technologies, for instance, has raised over $100 million (according to Crunchbase) to develop data centers dotting the surface of Davey Jones’ Locker. The company is currently developing a data center project co-located with a sustainable energy project off the coast of Stockton, Calif.

With the double-immersion cooling tech Microsoft is hoping to bring the benefits of ocean-cooling tech onto the shore. “We brought the sea to the servers rather than put the datacenter under the sea,” Microsoft’s Alissa said in a company statement.

Ioannis Manousakis, a principal software engineer with Azure (left), and Husam Alissa, a principal hardware engineer on Microsoft’s team for datacenter advanced development (right), walk past a container at a Microsoft datacenter where computer servers in a two-phase immersion cooling tank are processing workloads. Photo by Gene Twedt for Microsoft.

News: Introducing Found, a new podcast from TechCrunch

Here at TechCrunch, we spend most of our time talking to founders. Investors probably come a close second, but it’s definitely founders at the top of the list. That comes through in our articles and our events, but even with all we do there, it only begins to scratch the surface on the many, many

Here at TechCrunch, we spend most of our time talking to founders. Investors probably come a close second, but it’s definitely founders at the top of the list. That comes through in our articles and our events, but even with all we do there, it only begins to scratch the surface on the many, many interesting stories that are out there to tell.

That’s why we’re excited to bring you Found, a new weekly podcast from TechCrunch that’s all about founders, and the stories behind the startups. Each episode features an interview with a different early stage founder, with myself and TechCrunch Managing Editor Jordan Crook as hosts.

These aren’t your typical startup founder conversations or pitches — they’re open, honest talks about what it’s really like to found a company, and why you’d want to do that to begin with. We hear from founders about what motivated them to try to tackle big problems and put their financial success at risk, and about what they’ve had to overcome along the way to make their startup dreams a reality.

In our first batch of episodes, you’ll hear about an epiphany at the top of a literal mountain; going from teenage homelessness to running an artificial intelligence company; capping a medical degree with a world-class business education to assemble a unique toolkit for entrepreneurship; and finding inspiration for a world-changing business essentially gathering dust in NASA’s laboratories.

Found is about all of the above, but it’s also about hearing real stories from real founders all around the world about how they managed to pull off things like raising venture capital, pivoting their businesses, and building a team from nothing.

Our first episode debuts tomorrow — Friday, April 9 — but you can subscribe in Apple Podcasts or Spotify (or wherever you find your podcasts) right now to listen to the trailer, and get the premiere when it’s available. New episodes will be released weekly after that on Friday afternoons.

We’re love the conversations we’ve had so far on Found, and we think you will, too.

Apple Podcasts: https:/apple.co/found

Spotify: https://open.spotify.com/show/0Dqmcq2aDrZkS9v1fITOKV?si=qmQcT5ysR9eDnNl4yd97Ww

On Twitter: https://twitter.com/found

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