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  • Twitter threatens to sue hate-speech watchdog group | CNN Business

    Twitter threatens to sue hate-speech watchdog group | CNN Business

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    Washington, DC
    CNN
     — 

    Elon Musk has called himself a free-speech absolutist and has praised “even my worst critics.” But now Twitter has threatened to sue a nonprofit known for sharply criticizing the platform for its handling of hate speech and misinformation.

    In a July 20 letter shared publicly Monday, Twitter threatened to sue the Center for Countering Digital Hate, accusing the group of a campaign to hurt Twitter by driving away its advertisers. The CCDH has published numerous reports about various social media companies’ approach to everything from vaccine misinformation to online racism and antisemitism.

    The letter by Alex Spiro, an outside attorney representing Twitter owner Musk, alleges that CCDH has made “inflammatory, outrageous, and false or misleading assertions about Twitter and its operations” through its reports, which he argued lack scientific rigor.

    To back up his claim, Spiro cited one report in which CCDH staff flagged tweets from 100 Twitter Blue subscribers to the platform as being harmful and found that after several days, the company had not taken action on the vast majority of it. The resulting CCDH report said Twitter had failed to act on “99% of Twitter Blue accounts tweeting hate.”

    “This article leaves no doubt that CCDH intends to harm Twitter’s business by driving advertisers away from the platform with incendiary claims,” Spiro wrote to CCDH CEO Imran Ahmed, adding that Twitter is investigating whether it can sue the nonprofit for making false descriptions of the company.

    CCDH tweeted Spiro’s July 20 letter along with the organization’s reply to Twitter — which Musk has since rebranded as X — that called the legal threat “ridiculous.”

    “These allegations not only have no basis in fact (your letter states none), but they represent a disturbing effort to intimidate those who have the courage to advocate against incitement, hate speech and harmful content online, to conduct research and analysis regarding the drivers of such disinformation, and to publicly release the findings of that research, even when the findings may be critical of certain platforms,” wrote CCDH’s attorneys in a response dated Monday.

    Spiro didn’t immediately respond to a request for comment.

    Since taking over Twitter, Musk has slashed roughly 80% of the company’s staff, including many working on the platform’s content moderation teams.

    In December, Twitter shuttered its Trust and Safety Council comprised of outside experts on online safety, human rights, mental health, suicide prevention and child sexual exploitation.

    Reports from multiple groups, including CCDH but also the Anti-Defamation League as well as researchers from Tufts University and the University of Southern California, have pointed to observed increases in hate speech.

    Musk claimed that impressions of hate speech — which he described as based on a list of “bad words” — declined in the month following his takeover.

    But concerns about the platform’s handling of hateful content under Musk last year have persisted, prompting many brands to pause their advertising on Twitter and contributing to sharp financial losses at the company.

    Despite claiming in April that most of Twitter’s advertisers had returned, Musk acknowledged this month that Twitter’s ad revenue remains down by 50% and that the company is still cash-flow negative.

    In addition, Twitter has made changes to its platform restricting how third parties can access its data, a move that has drawn widespread criticism from academic researchers who study extremism and other online harms. The changes, which require researchers to pay hefty fees, could inhibit studies on how misinformation, harassment and spam spread on Twitter, experts have said.

    Threatening lawsuits has become a favored tactic for Musk as Twitter faces continued pressure. Earlier this month, Twitter threatened to sue Facebook-parent Meta over the launch of its competing app, Threads, accusing the company of copying Twitter’s product through trade secret theft. In May, Spiro sent a letter to Microsoft accusing it of over-using its ability to download tweets from the platform as Musk stepped up his criticism of the Redmond, Wash.-based tech giant as a perceived rival in artificial intelligence technology.

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  • Opinion: Utah’s startling new rules for kids and social media | CNN

    Opinion: Utah’s startling new rules for kids and social media | CNN

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    Editor’s Note: Kara Alaimo, an associate professor of communication at Fairleigh Dickinson University, writes about issues affecting women and social media. Her book, “Over the Influence: Why Social Media Is Toxic for Women and Girls — And How We Can Reclaim It,” will be published by Alcove Press in 2024. The opinions expressed in this commentary are her own. Read more opinion on CNN.



    CNN
     — 

    Utah’s Republican governor, Spencer Cox, recently signed two bills into law that sharply restrict children’s use of social media platforms. Under the legislation, which takes effect next year, social media companies have to verify the ages of all users in the state, and children under age 18 have to get permission from their parents to have accounts.

    Parents will also be able to access their kids’ accounts, apps won’t be allowed to show children ads, and accounts for kids won’t be able to be used between 10:30 p.m. and 6:30 a.m. without parental permission.

    It’s about time. Social networks in the United States have become potentially incredibly dangerous for children, and parents can no longer protect our kids without the tools and safeguards this law provides. While Cox is correct that these measures won’t be “foolproof,” and what implementing them actually looks like remains an open question, one thing is clear: Congress should follow Utah’s lead and enact a similar law to protect every child in this country.

    One of the most important parts of Utah’s law is the requirement for social networks to verify the ages of users. Right now, most apps ask users their ages without requiring proof. Children can lie and say they’re older to avoid some of the features social media companies have created to protect kids — like TikTok’s new setting that asks 13- to 17-year-olds to enter their passwords after they’ve been online for an hour, as a prompt for them to consider whether they want to spend so much time on the app.

    While critics argue that age verification allows tech companies to collect even more data about users, let’s be real: These companies already have a terrifying amount of intimate information about us. To solve this problem, we need a separate (and comprehensive) data privacy law. But until that happens, this concern shouldn’t stop us from protecting kids.

    One of the key components of this legislation is allowing parents access to their kids’ accounts. By doing this, the law begins to help address one of the biggest dangers kids face online: toxic content. I’m talking about things like the 2,100 pieces of content about suicide, self-harm and depression that 14-year-old Molly Russell in the UK saved, shared or liked in the six months before she killed herself last year.

    I’m also talking about things like the blackout challenge — also called the pass-out or choking challenge — that has gone around social networks. In 2021, four children 12 or younger in four different states all died after trying it.

    “Check out their phones,” urged the father of one of these young victims. “It’s not about privacy — this is their lives.”

    Of course, there are legitimate privacy concerns to worry about here, and just as kids’ use of social media can be deadly, social apps can also be used in healthy ways. LGBTQ children who aren’t accepted in their families or communities, for example, can turn online for support that is good for their mental health. Now, their parents will potentially be able to see this content on their accounts.

    I hope groups that serve children who are questioning their gender and sexual identities and those that work with other vulnerable youth will adapt their online presences to try to serve as resources for educating parents about inclusivity and tolerance, too. This is also a reminder that vulnerable children need better access to mental health services like therapy — they’re way too young to be left to their own devices to seek out the support they need online.

    But, despite these very real privacy concerns, it’s simply too dangerous for parents not to know what our kids are seeing on social media. Just as parents and caregivers supervise our children offline and don’t allow them to go to bars or strip clubs, we have to ensure they don’t end up in unsafe spaces on social media.

    The other huge challenge the Utah law helps parents overcome is the amount of time kids are spending on social media. A 2022 survey by Common Sense Media found that the average 8- to 12-year-old is on social media for 5 hours and 33 minutes per day, while the average 13- to 18 year-old spends 8 hours and 39 minutes every day. That’s more time than a full time-job.

    The American Academy of Pediatrics warns that lack of sleep is associated with serious harms in children — everything from injuries to depression, obesity and diabetes. So parents in the US need to have a way to make sure their kids aren’t up on TikTok all night (parents in China don’t have to worry about this because the Chinese version of TikTok doesn’t allow kids to stay on for more than 40 minutes and isn’t useable overnight).

    Of course, Utah isn’t an authoritarian state like China, so it can’t just turn off kids’ phones. That’s where this new law comes in requiring social networks to implement these settings. The tougher part of Utah’s law for tech companies to implement will be a provision requiring social apps to ensure they’re not designed to addict kids.

    Social networks are arguably addictive by nature, since they feed on our desires for connection and validation. But hopefully the threat of being sued by children who say they’ve been addicted or otherwise harmed by social networks — an outcome for which this law provides an avenue — will force tech companies to think carefully about how they build their algorithms and features like bottomless feeds that seem practically designed to keep users glued to their screens.

    TikTok and Snap didn’t respond to requests for comment from CNN about Utah’s law, while a representative for Meta, Facebook’s parent company, said the company shares the goal to keep Facebook safe for kids but also wants it to be accessible.

    Of course, if social networks had been more responsible, it probably wouldn’t have come to this. But in the US, tech companies have taken advantage of a lack of rules to build platforms that can be dangerous for our kids.

    States are finally saying no more. In addition to Utah’s measures, California passed a sweeping online safety law last year. Connecticut, Ohio and Arkansas are also considering laws to protect kids by regulating social media. A bill introduced in Texas wouldn’t allow kids to use social media at all.

    There’s nothing innocent about the experiences many kids are having on social media. This law will help Utah’s parents protect their kids. Parents in other states need the same support. Now, it’s time for the federal government to step up and ensure children throughout the country have the same protections as Utah kids.

    Suicide & Crisis Lifeline: Call or text 988. The Lifeline provides 24/7, free and confidential support for people in distress, prevention and crisis resources for you and your loved ones, and best practices for professionals in the United States. En Español: Linea de Prevencion del Suidio y Crisis: 1-888-628-9454.

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  • Samsung to cut chip production after posting lowest profit in 14 years | CNN Business

    Samsung to cut chip production after posting lowest profit in 14 years | CNN Business

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    Seoul
    Reuters
     — 

    Samsung Electronics said on Friday it would make a “meaningful” cut to chip production after flagging a worse-than-expected 96% plunge in quarterly operating profit, as a sharp downturn in the global semiconductor market worsens.

    Shares in the world’s largest memory chip and TV maker rose 3% in early trading, while rival SK Hynix shares surged 5% as investors welcomed plans to cut production to help preserve pricing power.

    Samsung

    (SSNLF)     estimated its operating profit fell to 600 billion won ($455.5 million) in January-March, from 14.12 trillion won a year earlier, in a short preliminary earnings statement. It was the lowest profit for any quarter in 14 years.

    “Memory demand dropped sharply … due to the macroeconomic situation and slowing customer purchasing sentiment, as many customers continue to adjust their inventories for financial purposes,” it said in the statement.

    “We are lowering the production of memory chips by a meaningful level, especially that of products with supply secured,” it added, in a reference to those with sufficient inventories.

    The production cut signal is unusually strong for Samsung, which previously said it would make small adjustments like pauses for refurbishing production lines but not a full-blown cut.

    It did not disclose the size of the planned cut.

    The first-quarter profit fell short of a 873 billion won Refinitiv SmartEstimate, weighted toward analysts who are more consistently accurate. Multiple estimates were revised down earlier this week.

    It was the lowest since a 590 billion won profit in the first quarter of 2009, according to company data.

    With consumer demand for tech devices sluggish due to rising inflation, semiconductor buyers including data center operators and smartphone and personal computer makers are refraining from new chip purchases and using up inventories.

    Analysts estimated the chip division sustained quarterly losses of more than 4 trillion won ($3.03 billion) as memory chip prices fell and its inventory values were slashed.

    This would be the chip business’ first quarterly loss since the first quarter of 2009, a major divergence for what is normally a cash cow that generates about half of Samsung’s profits in better years.

    Revenue likely fell 19% from the same period a year earlier to 63 trillion won, Samsung said.

    The company is due to release detailed earnings, including divisional breakdowns, later this month.

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  • UK blocks Microsoft takeover of Activision Blizzard | CNN Business

    UK blocks Microsoft takeover of Activision Blizzard | CNN Business

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    London
    CNN
     — 

    The UK antitrust regulator has blocked Microsoft’s $69 billion purchase of Activision Blizzard, thwarting one of the tech industry’s biggest deals over concerns it will stifle competition in cloud gaming.

    The Competition and Markets Authority said in a statement Wednesday that it was worried the deal would lead to “reduced innovation and less choice for UK gamers over the years to come.”

    The acquisition would make Microsoft

    (MSFT)     “even stronger” in cloud gaming, a market in which it already holds a 60%-70% share globally, the regulator added.

    Activision Blizzard is one of the world’s biggest video game developers, producing games such as “Call of Duty,” “World of Warcraft,” “Diablo” and “Overwatch.” Microsoft, which sells the Xbox gaming console, offers a video game subscription service called Xbox Game Pass, as well as a cloud-based video game streaming service.

    The deal to combine the businesses has been met with growing opposition by antitrust regulators worldwide. In December, the US Federal Trade Commission sued to block the takeover over similar competition concerns. A hearing is scheduled for August. The European Union is also evaluating the transaction

    Microsoft could seek to make Activision’s games exclusive to its own platforms and then increase the cost of a Game Pass subscription, the Competition and Markets Authority said.

    “The cloud allows UK gamers to avoid buying expensive gaming consoles and PCs and gives them much more flexibility and choice as to how they play. Allowing Microsoft to take such a strong position in the cloud gaming market just as it begins to grow rapidly would risk undermining the innovation that is crucial to the development of these opportunities,” it added.

    “The evidence available… indicates that, absent the merger, Activision would start providing games via cloud platforms in the foreseeable future.”

    Both companies plan to appeal the decision. “Alongside Microsoft, we can and will contest this decision, and we’ve already begun the work to appeal to the UK Competition Appeals Tribunal,” Activision Blizzard CEO Bobby Kotick said in a statement.

    Microsoft President Brad Smith added: “This decision appears to reflect a flawed understanding of the market and the way the relevant cloud technology actually works.”

    The Competition and Markets Authority, which launched an in-depth review of the blockbuster deal in September, said Microsoft’s proposed remedies to its concerns had “significant shortcomings.”

    “Their proposals… would have replaced competition with ineffective regulation in a new and dynamic market,” explained Martin Coleman, chair of the independent panel of experts conducting the investigation.

    “Microsoft already enjoys a powerful position and head start over other competitors in cloud gaming, and this deal would strengthen that advantage, giving it the ability to undermine new and innovative competitors,” Coleman continued. “Cloud gaming needs a free, competitive market to drive innovation and choice.”

    The UK cloud gaming market is expected to be worth up to £1 billion ($1.2 billion) by 2026, around 9% of the global market, according to the Competition and Markets Authority.

    -— Josh du Lac and Brian Fung contributed reporting.

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  • Federal appeals court tosses state antitrust suit seeking to break up Meta | CNN Business

    Federal appeals court tosses state antitrust suit seeking to break up Meta | CNN Business

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    CNN
     — 

    A group of states that sued to break up Facebook-parent Meta in 2020 were years too late to file their challenge and failed to make a persuasive case that the company’s data policies harmed competition, a federal appeals court ruled Thursday in a sweeping victory for the tech giant.

    In siding with Meta, the decision by a three-judge panel of the US Court of Appeals for the DC Circuit upheld a lower-court decision tossing out the suit initially filed by New York and dozens of other states.

    The decision is a blow to regulators who have cited Meta as a prime example of the way tech giants have allegedly abused their dominance. And it casts a shadow over a parallel antitrust case against Meta that was brought by the Federal Trade Commission at around the same time.

    The states’ original complaint had sought to unwind Meta’s past acquisitions of Instagram and WhatsApp, accusing the company of a “buy-or-bury” approach that violated antitrust laws.

    In 2021, a federal judge dismissed the complaint, saying that the lawsuit came long after the acquisitions had been completed in 2012 and 2014. Thursday’s appellate decision agreed.

    “An injunction breaking up Facebook, ordering it to divest itself of Instagram and WhatsApp under court supervision, would have severe consequences, consequences that would not have existed if the States had timely brought their suit and prevailed,” wrote Senior Circuit Judge Raymond Randolph.

    In addition, Randolph wrote, state allegations claiming that Meta’s — then Facebook’s — policies placing restrictions on app developers were anticompetitive didn’t hold up.

    The policies in question, Randolph wrote, simply told app developers they could not use Facebook’s platform “to duplicate Facebook’s core products,” and did not rise to the level of an antitrust violation under federal law.

    Although the states argued that Facebook’s policies at the time — which have since been removed — discouraged innovation by the company’s rivals, the complaint failed to establish how widely the policies affected Facebook’s third-party developers.

    “The States thus have not adequately alleged that this policy substantially foreclosed Facebook’s competitors, giving us an additional reason to reject their exclusive dealing theory,” the court held.

    A spokesperson for New York Attorney General Letitia James didn’t immediately respond to a request for comment.

    In a statement, Meta said the state’s case reflected a mischaracterization of “the vibrant competitive ecosystem in which we operate.”

    “In affirming the dismissal of this case, the court noted that this enforcement action was ‘odd’ because we compete in an industry that is experiencing ‘rapid growth and innovation with no end in sight,’ Meta said. “Moving forward, Meta will defend itself vigorously against the FTC’s distortion of antitrust laws and attacks on an American success story that are contrary to the interests of people and businesses who value our services.”

    In spite of Thursday’s decision, Meta must still face a similar lawsuit by the FTC, which also seeks to break up the company in connection with its Instagram and WhatsApp acquisitions.

    Last year, the same federal judge who dismissed the state suit, James Boasberg, allowed the federal suit to proceed. Boasberg had tossed out the FTC suit as well in 2021, saying the agency had failed to make an initial showing that Meta holds a monopoly in personal social networking. But he permitted the FTC to re-file its complaint with changes.

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  • Top moments from the White House Correspondents’ dinner | CNN Politics

    Top moments from the White House Correspondents’ dinner | CNN Politics

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    Washington
    CNN
     — 

    President Joe Biden joked about a range of topics at the White House Correspondents’ dinner on Saturday but struck a serious tone as he called for the release of wrongfully detained Americans abroad.

    The annual dinner, hosted inside the Washington Hilton, drew thousands of guests in support of freedom of the press, something Biden called “the pillar of a free society, not the enemy.”

    Here are the top moments from this year’s dinner.

    Biden used the opportunity to address a crowd gathered to support freedom of the press to send a clear message: “Journalism is not a crime.”

    He began his remarks on a serious note and immediately addressed the wrongful detentions of American journalists Evan Gershkovich in Russia and Austin Tice in Syria, reassuring the room full of journalists and the families of the detainees that his administration is committed to bringing them home.

    “I promise you, I’m working like hell to get them home,” Biden said.

    In attendance Saturday evening was Brittney Griner, the WNBA star who was freed from Russia late last year after being wrongfully detained. Biden and First Lady Jill Biden held a pull-aside meeting with Griner and her wife at the event, per the White House pool.

    The president and First Lady also met privately with the family of Gershkovich, a Wall Street Journal reporter that the US State Department has deemed “wrongfully detained” in Russia. Several journalists in attendance wore pins to urge his release.

    The daughter of jailed Russian opposition figure Alexey Navanly, Dasha Navalnaya, told CNN earlier Saturday the White House Correspondents’ dinner represents an especially important event for those who are wrongfully detained because “America as a country represents freedom of speech, freedom of political expression.”

    Comedian Roy Wood Jr., known for his role on Comedy Central’s “The Daily Show,” did not hold back in his roast of Washington politics Saturday evening, saving jabs for both parties.

    He immediately addressed the classified documents found in Biden’s Delaware home, telling the president as he stepped aside from the podium, “Real quick, Mr. President. I think you left some of your classified documents up here.”

    Wood also pointed to protests in France in response to the government raising the retirement age. “Meanwhile in America, we have an 80-year-old man begging us for four more years of work,” he quipped, alluding to Biden’s reelection bid.

    But the comedian went on to dub former President Donald Trump the “king of scandals.”

    “Keeping up with Trump scandals is like watching Star Wars movies,” he said. “You got to watch the third one to understand the first one, then you got – you can’t miss the second one because it’s got Easter eggs for the fifth one.”

    Watch: Iconic moments from past White House Correspondents’ dinners

    Biden’s jokes, meanwhile included a number of quips aimed at his predecessor’s recent scandals.

    He joked that he was offered $10 to keep his remarks under ten minutes. “That’s a switch, a president being offered hush money,” he joked in reference to Trump’s indictment in an alleged hush money scheme.

    Biden also poked fun at Florida Gov. Ron DeSantis, who is likely to be top candidate for the GOP presidential nomination if he enters the 2024 race.

    “I had a lot of Ron DeSantis jokes ready, but Mickey Mouse beat the hell out of me, he got there first,” Biden said.

    Disney filed a lawsuit against the governor and his oversight board earlier this week, accusing him of punishing the company for exercising its free speech rights with his political influence.

    The White House Correspondents’ dinner honored several journalists for their impactful work last year, including CNN’s Phil Mattingly for his coverage of Ukrainian President Volodymyr Zelensky’s visit to Washington and Politico’s publishing of the Supreme Court draft opinion that would later overturn Roe v. Wade.

    While Biden also applauded the journalists for their work, he poked fun at their tough questioning.

    “I get that age is a completely reasonable issue, it’s on everybody’s mind,” he said, referring to his reelection bid. “By everyone I mean the New York Times.”

    Biden also joked about how he dodges the media’s questions. “In a lot of ways, this dinner sums up my first two years in office: I’ll talk for 10 minutes, take zero questions and cheerfully walk away.”

    In recent weeks, the media industry has taken several hits – from high-profile terminations to layoffs, something Wood addressed head on.

    “The untouchable Tucker Carlson is out of a job,” Wood said, referring to the anchor’s departure from Fox News, which prompted applause.

    “Okay, some people celebrate it,” he responded. “But to Tucker’s staff, I want you to note that I know what you’re feeling. I work at the Daily Show, so I too have been blindsided by the sudden departure of the host of a fake news program.”

    Saturday’s event saw a number of celebrities in attendance, including model and TV personality Chrissy Teigen and her husband, singer John Legend.

    Actress Julia Fox posed with Senate Majority Leader Chuck Schumer while actress Rosario Dawson and actors Liev Schreiber and Billy Eichner all took turns on the red carpet.

    During the event, identical twin brothers Drew and Jonathan Scott, who host “Property Brothers” on HGTV, drew big laughs as their sketch-style video showcased how they would renovate the White House.

    “We’ve been doing this a long time and we think we know how to turn the White House into the White Home,” the pair said in video.

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  • The man behind ChatGPT is about to have his moment on Capitol Hill | CNN Business

    The man behind ChatGPT is about to have his moment on Capitol Hill | CNN Business

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    New York
    CNN
     — 

    For a few months in 2017, there were rumors that Sam Altman was planning to run for governor of California. Instead, he kept his day job as one of Silicon Valley’s most influential investors and entrepreneurs.

    But now, Altman is about to make a different kind of political debut.

    Altman, the CEO and co-founder of OpenAI, the artificial intelligence company behind viral chatbot ChatGPT and image generator Dall-E, is set to testify before Congress on Tuesday. His appearance is part of a Senate subcommittee hearing on the risks artificial intelligence poses for society, and what safeguards are needed for the technology.

    House lawmakers on both sides of the aisle are also expected to hold a dinner with Altman on Monday night, according to multiple reports. Dozens of lawmakers are said to be planning to attend, with one Republican lawmaker describing it as part of the process for Congress to assess “the extraordinary potential and unprecedented threat that artificial intelligence presents to humanity.”

    Earlier this month, Altman was one of several tech CEOs to meet with Vice President Kamala Harris and, briefly, President Joe Biden as part of the White House’s efforts to emphasize the importance of ethical and responsible AI development.

    The hearing and meetings come as ChatGPT has sparked a new arms race over AI. A growing list of tech companies have deployed new AI tools in recent months, with the potential to change how we work, shop and interact with each other. But these same tools have also drawn criticism from some of tech’s biggest names for their potential to disrupt millions of jobs, spread misinformation and perpetuate biases.

    As the CEO of OpenAI, Altman, perhaps more than any other single figure, has come to serve as a face for a new crop of AI products that can generate images and texts in response to user prompts. This week’s hearing may only cement his stature as a central player in AI’s rapid growth – and also add to scrutiny of him and his company.

    Those who know Altman have described him as a brilliant thinker, someone who makes prescient bets and has even been called “a startup Yoda.” In interviews this year, Altman has presented himself as someone who is mindful of the risks posed by AI and even “a little bit scared” of the technology. He and his company have pledged to move forward responsibly.

    “If anyone knows where this is going, it’s Sam,” Brian Chesky, the CEO of Airbnb, wrote in a post about Altman for the latter’s inclusion this year on Time’s list of the 100 most influential people. “But Sam also knows that he doesn’t have all the answers. He often says, ‘What do you think? Maybe I’m wrong?’ Thank God someone with so much power has so much humility.”

    Others want Altman and OpenAI to move more cautiously. Elon Musk, who helped found OpenAI before breaking from the group, joined dozens of tech leaders, professors and researchers in signing a letter calling for artificial intelligence labs like OpenAI to stop the training of the most powerful AI systems for at least six months, citing “profound risks to society and humanity.”

    Altman has said he agreed with parts of the letter. “I think moving with caution and an increasing rigor for safety issues is really important,” Altman said at an event last month. “The letter I don’t think was the optimal way to address it.”

    OpenAI declined to make anyone available for an interview for this story.

    The success of ChatGPT may have brought Altman greater public attention, but he has been a well-known figure in Silicon Valley for years.

    Prior to cofounding OpenAI with Musk in 2015, Altman, a Missouri native, studied computer science at Stanford University, only to drop out to launch Loopt, an app that helped users share their locations with friends and get coupons for nearby businesses.

    In 2005, Loopt was part of the first batch of companies at Y Combinator, a prestigious tech accelerator. Paul Graham, who co-founded Y Combinator, later described Altman as “a very unusual guy.”

    “Within about three minutes of meeting him, I remember thinking ‘Ah, so this is what Bill Gates must have been like when he was 19,’” Graham wrote in a post in 2006.

    Loopt was acquired in 2012 for about $43 million. Two years later, Altman took over from Graham as president of Y Combinator. The position allowed Altman to connect him with numerous powerful figures in the tech industry. He remained at the helm of the accelerator until 2019.

    Margaret O’Mara, a tech historian and professor at the University of Washington, told CNN that Altman “has long been admired as a thoughtful, significant guy and in the remarkably small number of powerful people who are kind of at the top of tech and have a lot of sway.”

    During the Trump administration, Altman gained new attention as a vocal critic of the president. It was against that backdrop that he was rumored to be considering a run for California governor.

    Rather than running, however, Altman instead looked to back candidates who aligned with his values, which include lower cost of living, clean energy and taking 10% off the defense budget to give to research and development of future technology.

    Altman continues to push for some of these goals through his work in the private sector. He invested in Helion, a fusion research company that inked a deal with Microsoft last week to sell clean energy to the tech giant by 2028.

    Altman has also been a proponent of the idea of a universal basic income and has suggested that AI could one day help fulfill that goal by generating so much wealth it could be redistributed back to the public.

    As Graham told The New Yorker about Altman in 2016, “I think his goal is to make the whole future.”

    When launching OpenAI, Musk and Altman’s original mission was to get ahead of the fear that AI could harm people and society.

    “We discussed what is the best thing we can do to ensure the future is good?” Musk told the New York Times about a conversation with Altman and others before launching the company. “We could sit on the sidelines or we can encourage regulatory oversight, or we could participate with the right structure with people who care deeply about developing A.I. in a way that is safe and is beneficial to humanity.”

    In an interview at the launch of OpenAI, Altman explained the company as his way of trying to steer the path of AI technology. “I sleep better knowing I can have some influence now,” he said.

    If there’s one thing AI enthusiasts and critics can agree on right now, it may be that Altman clearly has succeeded in having some influence over the rapidly evolving technology.

    Less than six months after the release of ChatGPT, it has become a household name, almost synonymous with AI itself. CEOs are using it to draft emails. Realtors are using it to write iistings and draft legal documents. The tool has passed exams from law and business schools – and been used to help some students cheat. And OpenAI recently released a more powerful version of the technology underpinning ChatGPT.

    Tech giants like Google and Facebook are now racing to catch up. Similar generative AI technology is quickly finding its way into productivity and search tools used by billions of people.

    A future that once seemed very far off now feels right around the corner, whether society is ready for it or not. Altman himself has professed not to be sure about how it will turn out.

    O’Mara said she believes Altman fits into “the techno-optimist school of thought that has been dominant in the Valley for a very long time,” which she describes as “the idea that we can devise technology that can indeed make the world a better place.”

    While Altman’s cautious remarks about AI may sound at odds with that way of thinking, O’Mara argues it may be an “extension” of it. In essence, she said, it’s related to “the idea that technology is transformative and can be transformative in a positive way but also has so much capacity to do so much that it actually could be dangerous.”

    And if AI should somehow help bring about the end of society as we know it, Altman may be more prepared than most to adapt.

    “I prep for survival,” he said in a 2016 profile of him in the New Yorker, noting several possible disaster scenarios, including “A.I. that attacks us.”

    “I try not to think about it too much,” Altman said. “But I have guns, gold, potassium iodide, antibiotics, batteries, water, gas masks from the Israeli Defense Force, and a big patch of land in Big Sur I can fly to.”

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  • Montana governor bans TikTok | CNN Business

    Montana governor bans TikTok | CNN Business

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    New York
    CNN
     — 

    Montana Gov. Greg Gianforte signed a bill Wednesday banning TikTok in the state.

    Gianforte tweeted that he has banned TikTok in Montana “to protect Montanans’ personal and private data from the Chinese Communist Party,” officially making it the first state to ban the social media application.

    The controversial law marks the furthest step yet by a state government to restrict TikTok over perceived security concerns and comes as some federal lawmakers have called for a national ban of TikTok. But it is expected to be challenged in court.

    The bill, which will take effect in January, specifically names TikTok as its target, prohibiting the app from operating within state lines. The law also outlines potential fines of $10,000 per day for violators, including app stores found to host the social media application.

    Last month, lawmakers in Montana’s House of Representatives voted 54-43 to pass the bill, known as SB419, sending it to Gianforte’s desk.

    In a statement to CNN, TikTok said it would push to defend the rights of users in Montana.

    “Governor Gianforte has signed a bill that infringes on the First Amendment rights of the people of Montana by unlawfully banning TikTok, a platform that empowers hundreds of thousands of people across the state. We want to reassure Montanans that they can continue using TikTok to express themselves, earn a living, and find community as we continue working to defend the rights of our users inside and outside of Montana.”

    The law comes as TikTok faces growing criticism for its ties to China. TikTok is owned by China-based ByteDance. Many US officials have expressed fears that the Chinese government could potentially access US data via TikTok for spying purposes, though there is so far no evidence that the Chinese government has ever accessed personal information of US-based TikTok users.

    NetChoice, a technology trade group that includes TikTok as a member, called the Montana bill unconstitutional.

    “The government may not block our ability to access constitutionally protected speech – whether it is in a newspaper, on a website or via an app. In implementing this law, Montana ignores the U.S. Constitution, due process and free speech by denying access to a website and apps their citizens want to use,” said Carl Szabo, NetChoice’s general counsel.

    The ACLU also pushed back on the bill, releasing a statement saying that “with this ban, Governor Gianforte and the Montana legislature have trampled on the free speech of hundreds of thousands of Montanans who use the app to express themselves, gather information, and run their small business in the name of anti-Chinese sentiment.”

    On Wednesday, Gianforte signed an additional bill that prohibits the use of any social media application “tied to foreign adversaries” on government devices, including ByteDance-owned CapCut and Lemon8, and Telegram Messenger, which was founded in Russia.

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  • Apple got rich in China. Other Asian markets offer the next ‘golden opportunity’ | CNN Business

    Apple got rich in China. Other Asian markets offer the next ‘golden opportunity’ | CNN Business

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    Hong Kong
    CNN
     — 

    Apple launched an online store in Vietnam this week, in another nod to the growing importance of emerging markets for the iPhone maker.

    The opening on Thursday, which followed the high-profile launch of its first physical shops in India, means consumers in the fast-growing Southeast Asian economy will be able to buy any Apple product directly for the first time.

    Markets like Vietnam, India and Indonesia are becoming more important for Apple as its growth in developed markets, including China, slows down, prompting the company to focus on places where it’s traditionally been less active.

    For decades, China was central to Apple’s extraordinary ascent to become the most valuable company on Earth, serving as a backbone for both its production and consumption. While the country remains key to Apple’s operations, the tech giant is now hedging its bets.

    Apple

    (AAPL)     CEO Tim Cook has pointed to the company’s prospects in emerging economies, calling them bright spots in the company’s financial results. On an earnings call this month, Cook said he was “particularly pleased” with the performance in these markets during the first three months of the year.

    Apple “achieved all-time records in Mexico, Indonesia, the Philippines, Saudi Arabia, Turkey and the UAE, as well as a number of March quarter records, including in Brazil, Malaysia and India,” he told analysts.

    That came as the California-based giant also reported its second straight drop in overall quarterly revenue, prompting concerns about a broader slowdown in demand amid economic uncertainty.

    “Clearly, growth has slowed globally and thus put more pressure [on Apple] to aggressively go after emerging markets,” said Daniel Ives, managing director of Wedbush Securities.

    Ives predicts that “over the coming years, Indonesia, Malaysia and India will comprise a bigger piece of the pie for Apple, given its efforts in these countries.”

    The start of online sales in a country usually precedes the launch of brick-and-mortar stores for Apple, he told CNN. This was true of India, for instance, which got its first physical outlets last month and a pledge from Cook to further invest in the country.

    Thursday’s launch showed how Apple was “further cementing” its presence in emerging markets, according to Chiew Le Xuan, a research analyst who covers smartphones in Southeast Asia for Canalys.

    He said the tech giant had been “actively increasing” its presence in the region in recent months, ramping up its distribution and network of authorized resellers, especially in Malaysia.

    Apple has ample room to run in these markets.

    Currently, the company only operates its own stores in more developed regional economies, such as Thailand and Singapore, according to Canalys.

    Even Indonesia, a vast archipelago that is the world’s sixth-biggest smartphone market, doesn’t have a physical Apple store yet, said Chiew. Apple’s market share there is tiny, at just 1% in 2022, according to Canalys data.

    “We’re putting efforts in a number of these markets and really see, particularly given our low share and the dynamics of the demographics … a great opportunity for us,” Cook said during Apple’s results call.

    Apple joins a growing list of global businesses that have become bullish on Southeast Asia, where more investment is being poured into manufacturing.

    The region’s consumer base also holds promise, with the number of middle-income and affluent households in economies such as Vietnam, Indonesia, and the Philippines projected to grow by around 5% annually through 2030, according to the Boston Consulting Group.

    The consultancy has called this group of consumers “the next mega-market.”

    The allure of Southeast Asia’s rising middle class “has changed the dynamic in these countries, which previously Apple stayed away from,” according to Ives.

    “This is a golden opportunity for Apple,” he said.

    For years, premium brands like Apple have have struggled to compete in emerging markets because of the price of their products, choosing instead to rely on local resellers.

    iPhones, which cost between $470 and $1,100, are expensive for consumers in less developed Southeast Asian economies, where the bulk of smartphone shipments are priced under $200, according to Chiew.

    He said Apple’s absence from places like Cambodia or Vietnam was typically more apparent around the launch of a new iPhone, as buyers from those countries often flew to Singapore or Malaysia to purchase devices and take them back for resale.

    A view of an Apple store at Marina Bay Sands in Singapore in 2020. Buyers from other Southeast Asian countries without their own Apple stores typically line up outside such outlets to buy devices for resale, according to an analyst.

    This could change in the coming years, particularly as Apple continues to increase its firepower in the region.

    Ives predicted that Apple could “further expand its ecosystem and tentacles to emerging markets using its China playbook,” meaning it could try to hook customers through “various pricing strategies and building out from there.”

    Once those users have converted to Apple’s operating system, iOS, they tend to stick around and become loyal customers, he added.

    This has “been the core part of its success in China that now can be replicated in India, Indonesia, and Vietnam, among others,” said Ives.

    But Apple may face hurdles in Southeast Asia, where several countries have placed stringent requirements on foreign businesses, according to Chiew.

    For example, at least 35% of the components of electronic goods sold in Indonesia must made locally, a threshold Apple has had to meet by working with partners, he added. Similar rules prevented Apple from setting up shop in India for years until the relaxation of regulations in 2019.

    And while consumers are becoming more affluent, the company’s price points are still considered high in many emerging markets, noted Ives. “Growth will be choppy we believe.”

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  • Chipmakers look to Japan as worries about China grow | CNN Business

    Chipmakers look to Japan as worries about China grow | CNN Business

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    Japanese Prime Minister Fumio Kishida said he welcomed and expected more investment from global chipmakers, after meeting top executives on Thursday before a Group of Seven summit.

    China is set to be high on the agenda of the annual G7 leaders meeting that begins on Friday, with the United States increasingly urging its allies to counter the Asian giant’s chip and advanced technology development.

    Growing Taiwan and US tensions with China have brought serious challenges to the semiconductor industry. Taiwan is a major producer of chips used in everything from cars and smartphones to fighter jets.

    Ensuring diversified, resilient supply chains is a key component of the economic security theme being emphasized by Japan at the talks, White House national security adviser Jake Sullivan told reporters on Air Force One.

    Kishida told the executives, including those from Micron Technology Inc

    (MU)    , Intel Corp

    (INTC)     and Taiwan Semiconductor Manufacturing Co

    (TSM)     (TSMC), that stabilizing supply chains would be a topic of discussion at the G7 talks in the western city of Hiroshima.

    “I am very pleased with your positive attitude towards investment in Japan, and would like the government as a whole to work on further expanding direct investment in Japan and support the semiconductor industry,” Kishida said.

    An industry ministry official later said Kishida wanted to foster cooperation to strengthen semiconductor supply chains, while Industry Minister Yasutoshi Nishimura said Japan would use 1.3 trillion yen ($9.63 billion) of the supplementary budget from the last fiscal year to support its chip business.

    In particular, Kumamoto prefecture in southwestern Japan is quickly becoming a hotbed for tech investment from companies including TSMC and Fujifilm Holdings Corp

    (FUJIF)    .

    Micron said in a statement that it would bring extreme ultraviolet (EUV) technology to Japan, becoming the first semiconductor company to do so, and expected to invest up to 500 billion yen ($3.6 billion) with support from the Japanese government.

    Bloomberg News reported the financial incentives would total about 200 billion yen.

    An industry ministry official said no decision had been made on whether Japan would give a subsidy to Micron, but that one would be made as soon as possible.

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  • One of Asia’s top female entrepreneurs is stepping down at Grab, the ride-hailing company she helped found | CNN Business

    One of Asia’s top female entrepreneurs is stepping down at Grab, the ride-hailing company she helped found | CNN Business

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    Hong Kong
    CNN
     — 

    One of Southeast Asia’s most well-known female entrepreneurs is to step down from her operational roles at Grab, the ride-hailing giant she helped found more than a decade ago.

    Tan Hooi Ling, a former chief operating officer who currently leads the firm’s technology and corporate strategy teams, will move to an advisory role by the end of the year, the company said Thursday. She will also give up her seat on the board.

    Her exit leaves Grab’s Chief Executive Officer Anthony Tan the tough task of reversing years of losses amid increasingly fierce competition in the ride-hailing and food delivery markets, all without the help of the woman who helped him co-found the company in 2012.

    “Grab has been one of the most fulfilling experiences of my life. The impact we create is a reflection of who we are as a team, and I am humbled to have been able to walk alongside Anthony and the many amazing Grabbers who share the same values and work ethic to build something that improves lives in Southeast Asia,” a statement from the company quoted Tan Hooi Ling as saying.

    After being founded as a ride-hailing company by the two Tans – who are both from Malaysia but are unrelated – Grab quickly soared to become Southeast Asia’s most valuable private company. It acquired Uber’s Southeast Asia business in 2018, and has since expanded into a variety of other services, including food delivery, digital payments and even financial services.

    But Grab has faced intensifying competition from Southeast Asia rivals, including Singapore’s Sea Ltd, Indonesia’s GoTo Group, and Berlin-based Delivery Hero’s Foodpanda.

    Grab, which unlike some of its competitors avoided mass layoffs during the coronavirus pandemic, posted an annual loss of $1.74 billion in 2022. That was a 51% improvement on the year before, according to its annual report.

    In 2021, the company merged with a special-purpose acquisition company, or SPAC, backed by Altimeter Capital in a deal that would pave the way for a New York listing and value Grab at nearly $40 billion.

    Before that, Grab had heavyweight backers including Japan’s SoftBank

    (SFTBF)     and China’s ride-hailing startup, Didi Chuxing.

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  • Koch network raises more than $70 million, launches new anti-Trump ads in early voting states | CNN Politics

    Koch network raises more than $70 million, launches new anti-Trump ads in early voting states | CNN Politics

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    CNN
     — 

    The influential network associated with conservative billionaire Charles Koch has collected more than $70 million for political races, the group announced Thursday, as it gears up to help shape the outcome of next year’s contests up and down the ballot and encourage Republican voters to bypass former President Donald Trump in the White House nomination fight.

    Americans for Prosperity Action has pledged to back a single contender in the GOP presidential primary for the first time in its history. It has not yet announced whom it will support, but the group could dramatically reshape the Republican field by deploying its vast resources and standing army of conservative activists on behalf of a single candidate.

    The sums raised by the group will help advance those efforts. The lion’s share of the total announced Thursday came from two organizations affiliated with Koch: $25 million from his Kansas-based industrial conglomerate Koch Industries, and another $25 million from Stand Together, a nonprofit he founded, AFP Action spokesman Bill Riggs confirmed.

    The New York Times first reported the fundraising total.

    The group is also launching new digital spots, shared first with CNN, that cast Trump as a candidate Republicans can’t risk supporting in 2024.

    “Instead of making (President Joe) Biden answer for his reckless progressive agenda, Trump makes the debate about indictments, personal grievances and the election he lost,” one 30-second spot, titled “The Choice,” says.

    The second, called “Unelectable,” describes Trump as a serial loser who caused Republicans to lose the House, Senate and the White House. “If Donald Trump is the GOP nominee, we could lose everything,” the narrator says.

    The ads will run in Iowa, New Hampshire, South Carolina and Nevada, officials said.

    “President Trump continues to fight against the swampy D.C. insiders who would love nothing more than to have an establishment puppet they can control in the White House,” Trump spokesman Steven Cheung said in an email. “No amount of dirty money from shady lobbyists and mysterious donors will ever stop the America First movement, and that’s why President Trump continues to dominate poll after poll — both nationally and statewide. We welcome this fight.”

    AFP Action on Thursday also announced its first US House endorsements of the cycle, saying it will back Republican Reps. Juan Ciscomani of Arizona, Young Kim of California, Zach Nunn of Iowa and John James of Michigan, along with former GOP Rep. Yvette Herrell of New Mexico.

    In addition to attempting to stir doubts about Trump among the GOP faithful, network officials have said part of their 2024 strategy is to bring more general election voters into the GOP primary process to alter the outcome of early contests.

    Americans for Prosperity already has reached out to 1.4 million potential new Republican and swing voters in nearly a dozen states, officials said.

    In a statement to CNN earlier this month, Americans for Prosperity CEO Emily Seidel said the group’s voter interactions have demonstrated to it that many Trump supporters are “receptive to arguments that he is a weak candidate, his focus on 2020 is a liability, and his lack of appeal with independent voters is a problem.”

    “That tells us that many Republicans are ready to move on, they just need to see another candidate step up and show they can lead and win,” she added.

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  • Nvidia says US curbs on AI chip sales to China would cause ‘permanent loss of opportunities’ | CNN Business

    Nvidia says US curbs on AI chip sales to China would cause ‘permanent loss of opportunities’ | CNN Business

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    Hong Kong
    CNN
     — 

    Nvidia warned Wednesday that if the United States imposes new restrictions on the export of AI chips to China, it would result in a “permanent loss of opportunities” for US industry.

    The company’s chief financial officer, Colette Kress, said she didn’t anticipate any “immediate material impact” but tighter curbs would impact earnings in the future.

    US officials plan to tighten export curbs announced in October to restrict the sale of some artificial-intelligence chips to China, according to multiple media reports, including the Wall Street Journal and Financial Times. Washington has ramped up efforts to cut China off from key technologies that can support its military.

    The US Department of Commerce has not replied to a CNN request for comment.

    The rules, as reported, could make it harder for companies like Nvidia

    (NVDA)     to sell advanced chips to China. Fueled by a boom in demand for its AI chips, the company briefly hit a market capitalization of $1 trillion in late May.

    “We are aware of reports that the US Department of Commerce is considering further controls that may restrict exports of our A800 and H800 products to China,” Kress told an investment conference.

    “Over the long-term, restrictions prohibiting the sale of our datacenter GPUs to China, if implemented, would result in a permanent loss of opportunities for US industry to compete and lead in one of the world’s largest markets and impact on our future business and financial results,” she said.

    GPUs refer to graphics processing units, which are chips or electronic circuits capable of rendering graphics for display on electronic devices.

    “Given the strength of demand for our products worldwide, we do not anticipate that such additional restrictions, if adopted, would have an immediate material impact on our financial results. We do not anticipate any immediate material impact on our financial results,” Kress added.

    Last October, the Biden administration unveiled a sweeping set of export controls that ban Chinese companies from buying advanced chips and chip-making equipment without a license.

    The new move is aimed in part at Nvidia’s A800 chip, which the US-based company created following the introduction of last year’s curbs in order to continue to sell to China, Bloomberg reported.

    China is a key market for Nvidia. Revenues from mainland China and Hong Kong accounted for 22% of the company’s revenue last year, according to its financial statements.

    On Wednesday, shares of Nvidia slumped as much as 3.2%, before recouping some of the losses. It ended down 1.8%. Chinese AI stocks suffered much heavier losses.

    Inspur Electronic Information Industry fell by 10%, the maximum allowed, on Wednesday in Shenzhen. It dropped again by 5.3% on Thursday. Chengdu Information Technology of Chinese Academy of Sciences slid 12% on Wednesday. Baidu

    (BIDU)    , which is developing a rival to ChatGPT, sank 4.4% on Thursday in Hong Kong.

    “The US could ruin China’s AI party,” Jefferies analyst said in a research note. Local chipsets do not have Nvidia’s GPU ecosystem, thus every update may require reworking, resulting in lower efficiency and higher costs.

    The Biden administration’s chip curbs would be “much more effective” in limiting China’s advances in military power driven by AI than rules restricting US investment in China’s tech sector, the analysts added.

    China has strongly criticized US restrictions on tech exports, saying earlier this year that it “firmly opposes” such measures.

    In May, Beijing banned Chinese operators of critical information infrastructure from buying products from Micron Technology

    (MU)    , in apparent retaliation against sanctions imposed by Washington and its allies on the country’s chip sector.

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  • Biden has already canceled $66 billion in student loans. Here’s how 3 people received debt relief | CNN Politics

    Biden has already canceled $66 billion in student loans. Here’s how 3 people received debt relief | CNN Politics

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    Washington
    CNN
     — 

    Even though the Supreme Court struck down President Joe Biden’s student loan forgiveness program, more debt will be canceled during his time in office than under any other president.

    The Biden administration has already canceled a record $66 billion in student loan debt for nearly 2.2 million borrowers.

    While his one-time student loan forgiveness program would have been far reaching, promising up to $20,000 of debt cancellation for eligible borrowers and wiping out roughly $400 billion overall, the Department of Education has made some lesser-known changes to existing student loan forgiveness programs.

    The administration has made it easier for people to qualify for the Public Service Loan Forgiveness program, which grants relief for public sector workers after they’ve made 10 years of qualifying payments.

    It has also made more people eligible for the borrower defense to repayment program that cancels student loan debt for borrowers who attended a school that may have misled them or violated certain state laws, as well as made loan discharges automatic for more borrowers who are permanently disabled.

    Here’s how three people received student loan forgiveness due to the changes the Biden administration has made to existing federal programs.

    Margo Myles, 52, got a letter from the Department of Education in late March saying that nearly $25,000 of her federal student loan debt had been canceled.

    Myles had borrowed the money in the early 2000s to earn an associate degree in paralegal studies, but the education didn’t pay off. She found work in the legal field a few years after finishing school but was earning just $9 an hour – not enough to pay her bills and her student loans.

    “I was trying to reorganize my life. For me, and for so many other students, this should have been a door,” Myles said of her degree program.

    Instead, she defaulted on her student loans. The default dinged her credit and resulted in the garnishment of her federal tax refunds. Myles said she wasn’t allowed to request her academic transcript while her loans were in default, preventing her from enrolling elsewhere.

    The Department of Education later found that schools owned by the now-defunct Corinthian Colleges – which include Myles’ alma mater, known at the time as Florida Metropolitan University – engaged in “widespread and pervasive misrepresentations” about students’ employment prospects, including guarantees they would find a job as well as the ability to transfer credits.

    Under the borrower defense program, borrowers can apply for debt relief if they were misled by their college. Last June, the Department of Education announced that any student who attended a Corinthian-owned college would automatically qualify for the benefit. The move made 560,000 more borrowers eligible.

    About nine months later, Myles learned that she was one of the qualifying borrowers and her debt was discharged. The Department of Education said it would request credit reporting agencies to repair her credit within 45 days, according to the letter she received.

    Myles, who now lives in Cheyenne, Wyoming, and works in insurance, plans to continue her education by pursuing a bachelor’s degree and then a law degree.

    “I’ve always wanted to go back to school. I don’t care if I’m 60 when I finish,” she said.

    Paige Vass recently qualified for the Public Service Loan Forgiveness program.

    Applying for the Public Service Loan Forgiveness program was a yearslong, frustrating process for Paige Vass, a special education teacher in Virginia.

    The PSLF program cancels remaining federal student loan debt for eligible government and nonprofit workers after they have made 120 qualifying monthly payments, which takes at least 10 years.

    But the program has been riddled with problems. Many people reached 10 years of repayment believing they qualified for cancellation of their remaining debt, but instead found out that they had the wrong kind of loan or were making payments in the wrong kind of repayment plan.

    Vass applied after teaching for more than 10 years, but her paperwork was returned several times, for things like having an incorrect date or a signature in the wrong place.

    She decided to try applying one more time last year after the Biden administration temporarily expanded eligibility for the program with a one-year waiver.

    “My fingers were crossed, but I also thought I might be chasing a unicorn,” Vass, 47, said.

    “But I was like, I’ve got to try. This is a huge debt and a huge weight on our family,” she added. She and her husband, who is also an educator, have two children.

    This spring, not only did Vass find out that she qualified for more than $30,000 in debt relief, but she is also set to receive a refund of about $5,000 because she had overpaid. Under the rules of the temporary waiver, she had made more payments than the 120 required for debt forgiveness.

    The debt relief means she may be able to spend more time with her kids. In the past, when she’s owed hundreds of dollars for her student debt each month, she’s worked summer school, taught skiing and worked for the on-demand delivery company DoorDash for some extra cash.

    “There’s been so many changes and so many hardships for teachers over the last three years. To me (the loan forgiveness) felt like a statement on behalf of our country’s administration that says, ‘You are valuable and we appreciate what you do, and you do make a difference,’” Vass said.

    Charles Goldenberg saw more than $340,000 of his debt canceled.

    Last year, Charles Goldenberg, a radiologist in New York City, got an email notifying him that his more than $340,000 in federal student loan debt had been canceled because he qualified for the PSLF program.

    While in training, and making little money, Goldenberg was paying off his loans through an income-driven repayment plan, which lowered his monthly payments. But those payments hardly covered the interest accumulation, and his balance ballooned before the pandemic pause went into effect in 2020.

    Now, at 42, Goldenberg said the student debt cancellation gives him the opportunity to move on with his life.

    “And I think that’s the whole point of the PSLF program. You spend years of training and schooling above and beyond college, making less money than you would when you’re out of training. It’s not without sacrifice. It’s because you work for eligible employers … where you’re not going to be making the kind of money that I make now,” he added.

    Goldenberg had been paying off some his loans for 19 years, but not every payment had counted toward the PSLF program until he consolidated his loans about two years ago.

    Thanks to the one-year waiver put in place by the Biden administration, some payments he made earlier became eligible.

    Applying for the relief had also been a long process for Goldenberg. His loan servicer had difficulty verifying that one of his employers, a nonprofit hospital in Miami, qualified for the program. He eventually found proof on the Department of Education’s website that the hospital did qualify.

    Now that Goldenberg is done with training and is earning more money, his student loan payments would be much higher when the pandemic-related pause ends later this year than they were three years ago. He expects they would be $2,500 or more a month if not for the debt relief.

    “Now I can use the money that I make for myself, for a mortgage, for family, for other expenses, for retirement. So it really opened up my financial future in a big way,” he said.

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  • Call of Duty to remain on Playstation following Activision Blizzard Microsoft merger | CNN Business

    Call of Duty to remain on Playstation following Activision Blizzard Microsoft merger | CNN Business

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    CNN
     — 

    Microsoft

    (MSFT)     has signed an agreement with Sony

    (SNE)     to ensure “Call of Duty” remains available on PlayStation after Microsoft

    (MSFT)     closes its $69 billion Activision Blizzard

    (ATVI)     merger, the tech giant said Sunday.

    The agreement could resolve long-standing complaints by Sony that the merger — which aims to make Microsoft the third-largest video game publisher in the world — threatens competition. Sony didn’t immediately respond to a request for comment.

    “We are pleased to announce that Microsoft and @PlayStation have signed a binding agreement to keep Call of Duty on PlayStation following the acquisition of Activision Blizzard,” said Phil Spencer, Microsoft’s Xbox head, in a tweet. “We look forward to a future where players globally have more choice to play their favorite games.”

    Sony had been among the loudest critics of the acquisition. Addressing the company’s concerns about the continued availability of “Call of Duty,” one of the industry’s most popular franchises, could help Microsoft overcome any remaining opposition to the deal and usher it to a conclusion.

    In response to competition concerns from regulators around the world, Microsoft had already signed multiyear licensing agreements with rival companies including Nintendo and Nvidia, among others, to ensure Microsoft would not be able to restrict Activision titles from users of those businesses’ platforms and consoles.

    On Sunday, Microsoft did not disclose the duration of the agreement with Sony.

    “From Day One of this acquisition, we’ve been committed to addressing the concerns of regulators, platform and game developers, and consumers,” said Microsoft President Brad Smith in a tweet. “Even after we cross the finish line for this deal’s approval, we will remain focused on ensuring that Call of Duty remains available on more platforms and for more consumers than ever before.”

    During a five-day hearing last month in federal court, Microsoft executives including CEO Satya Nadella testified properties such as “Call of Duty” would not be restricted from competitors following the deal’s close.

    Last week, US District Judge Jacqueline Scott Corley wrote in her opinion the US government had “not shown it is likely to succeed on its assertion the combined firm will probably pull Call of Duty from Sony PlayStation, or that its ownership of Activision content will substantially lessen competition in the video game library subscription and cloud gaming markets.”

    Microsoft faces a contractual deadline of July 18 to close the merger with Activision, though the companies could mutually seek to extend that time frame.

    Last week, Microsoft won two successive court victories when a federal district court and a US appeals court declined to temporarily block the merger from being consummated. The Federal Trade Commission had argued a preliminary injunction was necessary to prevent video game consumers from being immediately harmed by the deal, which regulators said would enable Microsoft to withhold “Call of Duty” and other popular titles from competing consoles and cloud gaming services.

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  • Welcome to the era of viral AI generated ‘news’ images | CNN Business

    Welcome to the era of viral AI generated ‘news’ images | CNN Business

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    New York
    CNN
     — 

    Pope Francis wearing a massive, white puffer coat. Elon Musk walking hand-in-hand with rival GM CEO Mary Barra. Former President Donald Trump being detained by police in dramatic fashion.

    None of these things actually happened, but AI-generated images depicting them did go viral online over the past week.

    The images ranged from obviously fake to, in some cases, compellingly real, and they fooled some social media users. Model and TV personality Chrissy Teigen, for example, tweeted that she thought the pope’s puffer coat was real, saying, “didn’t give it a second thought. no way am I surviving the future of technology.” The images also sparked a slew of headlines, as news organizations rushed to debunk the false images, especially those of Trump, who was ultimately indicted by a Manhattan grand jury on Thursday but has not been arrested.

    The situation demonstrates a new online reality: the rise of a new crop of buzzy artificial intelligence tools has made it cheaper and easier than ever to create realistic images, as well as audio and videos. And these images are likely to pop up with increasing frequency on social media.

    While these AI tools may enable new means of expressing creativity, the spread of computer-generated media also threatens to further pollute the information ecosystem. That risks adding to the challenges for users, news organizations and social media platforms to vet what’s real, after years of grappling with online misinformation featuring far less sophisticated visuals. There are also concerns that AI-generated images could be used for harassment, or to further drive divided internet users apart.

    “I worry that it will sort of get to a point where there will be so much fake, highly realistic content online that most people will just go with their tribal instincts as a guide to what they think is real, more than actually informed opinions based on verified evidence,” said Henry Ajder, a synthethic media expert who works as an advisor to companies and government agencies, including Meta Reality Labs’ European Advisory Council.

    Images, compared to the AI-generated text that has also recently proliferated thanks to tools like ChatGPT, can be especially powerful in provoking emotions when people view them, said Claire Leibowicz, head of AI and media integrity at the Partnership on AI, a nonprofit industry group. That can make it harder for people to slow down and evaluate whether what they’re looking at is real or fake.

    What’s more, coordinated bad actors could eventually attempt to create fake content in bulk — or suggest that real content is computer-generated — in order to confuse internet users and provoke certain behaviors.

    “The paranoia of an impending Trump … potential arrest created a really useful case study in understanding what the potential implications are, and I think we’re very lucky that things did not go south,” said Ben Decker, CEO of threat intelligence group Memetica. “Because if more people had had that idea en masse, in a coordinated fashion, I think there’s a universe where we could start to see the online to offline effects.”

    Computer-generated image technology has improved rapidly in recent years, from the photoshopped image of a shark swimming through a flooded highway that has been repeatedly shared during natural disasters to the websites that four years ago began churning out mostly unconvincing fake photos of non-existent people.

    Many of the recent viral AI-generated images were created by a tool called Midjourney, a less than year-old platform that allows users to create images based on short text prompts. On its website, Midjourney describes itself as “a small self-funded team,” with just 11 full-time staff members.

    A cursory glance at a Facebook page popular among Midjourney users reveals AI-generated images of a seemingly inebriated Pope Francis, elderly versions of Elvis and Kurt Cobain, Musk in a robotic Tesla bodysuit and many creepy animal creations. And that’s just from the past few days.

    Midjourney has emerged as a popular tool for users to create AI-generated images.

    The latest version of Midjourney is only available to a select number of paid users, Midjourney CEO David Holz told CNN in an email Friday. Midjourney this week paused access to the free trial of its earlier versions due to “extraordinary demand and trial abuse,” according to a Discord post from Holz, but he told CNN it was unrelated to the viral images. The creator of the Trump arrest images also claimed he was banned from the site.

    The rules page on the company’s Discord site asks users: “Don’t use our tools to make images that could inflame, upset, or cause drama. That includes gore and adult content.”

    “Moderation is hard and we’ll be shipping improved systems soon,” Holz told CNN. “We’re taking lots of feedback and ideas from experts and the community and are trying to be really thoughtful.”

    In most cases, the creators of the recent viral images don’t appear to have been acting malevolently. The Trump arrest images were created by the founder of the online investigative journalism outlet Bellingcat, who clearly labeled them as his fabrications, even if other social media users weren’t as discerning.

    There are efforts by platforms, AI technology companies and industry groups to improve the transparency around when a piece of content is generated by a computer.

    Platforms including Meta’s Facebook and Instagram, Twitter and YouTube have policies restricting or prohibiting the sharing of manipulated media that could mislead users. But as use of AI-generated technologies grows, even such policies could threaten to undermine user trust. If, for example, a fake image accidentally slipped through a platform’s detection system, “it could give people false confidence,” Ajder said. “They’ll say, ‘there’s a detection system that says it’s real, so it must be real.’”

    Work is also underway on technical solutions that would, for example, watermark an AI-generated image or include a transparent label in an image’s metadata, so anyone viewing it across the internet would know it was created by a computer. The Partnership on AI has developed a set of standard, responsible practices for synthetic media along with partners like ChatGPT-creator OpenAI, TikTok, Adobe, Bumble and the BBC, which includes recommendations such as how to disclose an image was AI-generated and how companies can share data around such images.

    “The idea is that these institutions are all committed to disclosure, consent and transparency,” Leibowicz said.

    A group of tech leaders, including Musk and Apple co-founder Steve Wozniak, this week wrote an open letter calling for artificial intelligence labs to stop the training of the most powerful AI systems for at least six months, citing “profound risks to society and humanity.” Still, it’s not clear whether any labs will take such a step. And as the technology rapidly improves and becomes accessible beyond a relatively small group of corporations committed to responsible practices, lawmakers may need to get involved, Ajder said.

    “This new age of AI can’t be held in the hands of a few massive companies getting rich off of these tools, we need to democratize this technology,” he said. “At the same time, there are also very real and legitimate concerns of having a radical open approach where you just open source a tool or have very minimal restrictions on its use is going to lead to a massive scaling of harm … and I think legislation will probably play a role in reigning in some of the more radically open models.”

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  • The city without TikTok offers a window to America’s potential future | CNN Business

    The city without TikTok offers a window to America’s potential future | CNN Business

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    Hong Kong
    CNN
     — 

    Across the United States, more than 150 million people are being faced with the possibility of a new reality: life without TikTok.

    The wildly popular short-form video app has been at the center of an ongoing battle, with lawmakers calling for an outright ban, and the company portraying itself as a critical community space, educational platform and just plain fun.

    In Hong Kong, there’s no need to imagine that reality: TikTok discontinued its services there in 2020.

    Its abrupt departure was met with mixed reactions: disappointment from some users and content creators, but also relief from others who say life is better without the app’s infinite scroll.

    At the time of its exit, TikTok had a relatively modest presence in the city and was not ubiquitous like it is in the US today.

    But the varied reactions to its departure, and the way users have pivoted to other platforms or even real-life offline communities, offer Americans a glimpse into their potential TikTok-less future.

    TikTok announced its exit from Hong Kong in July 2020, a week after China imposed a controversial national security law in the city. The decision came as the app tried to distance itself from China and its Beijing-based parent company ByteDance, in the face of growing pressure in the US under the Trump administration.

    But it meant a jarring halt for creators like Shivani Dukhande, who had roughly 45,000 followers at the time the app left Hong Kong.

    Dukhande, 25, saw her account take off in early 2020 during the pandemic, with lifestyle content such as cooking and wellness videos flourishing on the platform.

    “There were a lot of new creators emerging,” she said. “We used to all collaborate together, we had a chat where we would all speak and share ideas and it created a community.”

    Momentum began to build. Companies started reaching out to Dukhande, paying for sponsored content and collaborating on ad campaigns. Brands began partnering with creators on trending “challenges” in a bid to attract young new consumers.

    “More people were joining and it was becoming such a fun thing to do,” she said. “Then, it just kind of went away one morning.”

    “If it continued, then I probably could have made enough to have quit my 9 to 5,” she said. “If I had the chance to grow, it could have been a potential career path.”

    This is one of the main arguments TikTok has made in recent weeks in the US. In March, as the company’s CEO prepared to testify before Congress, TikTok produced a docuseries highlighting American small business owners who rely on the platform for their livelihoods.

    The platform is used by nearly five million businesses in the US, TikTok said in March. And it’s set to surpass rivals: London-based research firm Omdia projected in November that TikTok’s advertising revenues will exceed the combined video ad revenues of Meta – home of Facebook and Instagram – and YouTube by 2027.

    This is partly because people are spending more time on TikTok. In the second quarter of 2022, TikTok users globally spent an average of 95 minutes per day on the app, according to data analytics firm SensorTower – nearly twice as much time as users spent on Facebook and Instagram.

    Shivani Dukhande had created videos about wellness, lifestyle, food and Hong Kong on her TikTok account.

    But in Hong Kong, other platforms have jumped in to fill the gap. Reels, Instagram’s short-form video product, with similar features as TikTok such as an endless scroll, is growing quickly – and Dukhande has gotten on board.

    She had to rebuild her audience from scratch, and now has 12,500 Instagram followers, but she feels optimistic about its growth. Still, the loss of TikTok was a “missed opportunity,” she said, and the burgeoning community of creators has largely faded from sight.

    “The amount of jobs, the amount of content creation, the amount of marketing opportunities that were there with TikTok – we sort of missed out on that whole chunk of it.”

    But for some people, TikTok’s departure was a welcome change.

    Poppy Anderson, 16, has been using TikTok since its launch in 2018. And, like many others in her generation, she would spend hours “scrolling and scrolling” – even when feeling unfulfilled.

    “It was very easy to kind of find exactly what you like on there, because the [algorithm-run] For You page kept you there,” she said. “And it’s entertaining, but you don’t really get anything from it.”

    She described TikTok as often being a toxic environment that breeds narrow thinking, herd mentality, a misguided “cancel culture” and inappropriate online behavior such as critiquing the bodies of girls and women. Even people she knew in real life began acting differently after joining the app, which strained friendships, she said.

    Martin Poon, 15, also grew weary of TikTok, but it was hard to quit.

    “Everyone was using it, so I feel like there was a sense that you have to use it, you have to be on top of things, you have to know what’s going on. And I think that was stressful to me,” he said.

    Misinformation and misogyny ran rampant on TikTok, with accounts like those of Andrew Tate, the self-styled “alpha male” recently detained in Romania on allegations of human trafficking and rape, gaining popularity among boys at Poon’s school.

    “It’s just concerning how [these accounts] have so much impact on the youth, and it has so much grip on what we think and how it affects our behavior,” said Poon – though he added that misinformation is a major problem on all social media platforms, not just TikTok.

    Experts have long worried about the impact of TikTok on young people’s mental health, with one study claiming the app may surface potentially harmful content related to suicide and eating disorders to teenagers within minutes of them creating an account.

    In response to growing pressure, TikTok recently announced a one-hour daily screentime limit for users under 18, though users will be able to turn off this default setting.

    Anderson acknowledged some positives about TikTok, like open conversations about mental health. Still, she was glad when the app became inaccessible. Falling asleep became easier without the lure of TikTok. “I didn’t have the self control to get off it on my own,” she said.

    For Poon and his friend Ava Chan, also 15, TikTok’s disappearance sparked new beginnings.

    When the app left in 2020, they were doing online classes, isolated from friends and bored at home. At the time, Instagram Reels and YouTube Shorts had yet to arrive in Hong Kong.

    “We had to figure out how to use our time other than being on TikTok,” said Chan. “For us, that was exploring our passions more.”

    For both, that came in advocating for the neurodiverse community. They launched a club at school that spreads education and awareness about neurodiversity, as well as participating in volunteer activities with neurodiverse people.

    Both said it lent them a sense of purpose, and as time went on, they saw other benefits.

    Their friends, who would previously spend time filming and watching TikToks together, began having more face-to-face conversations. They noticed peers begin exercising outdoors more, which was made easier as Covid restrictions lifted. Their mental health improved.

    Of course, being teenagers, they’re not off social media entirely and use it as a tool to promote their club – but it’s far from the previous hours of scrolling. And while they occasionally wonder what’s happening on TikTok outside Hong Kong, the allure of it is lost when nobody else around them uses it either.

    “A lot of people, they’ve just kind of forgotten about it,” said Anderson. “People move to different platforms – or just move on.”

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  • US designates Wall Street Journal reporter Evan Gershkovich as wrongfully detained by Russia | CNN Politics

    US designates Wall Street Journal reporter Evan Gershkovich as wrongfully detained by Russia | CNN Politics

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    Washington
    CNN
     — 

    The US State Department on Monday officially designated Wall Street Journal reporter Evan Gershkovich as wrongfully detained by Russia.

    “Today, Secretary Blinken made a determination that Evan Gershkovich is wrongfully detained by Russia,” State Department principal deputy spokesperson Vedant Patel said in a statement.

    The designation gives further backing to the assertions by the US government and the Wall Street Journal that the espionage charges against the reporter are baseless. It will empower the Biden administration to explore avenues such as a prisoner swap to try to secure Gershkovich’s release.

    His case will now be handled at the State Department through the Office of the Special Presidential Envoy for Hostage Affairs, which has played a key role in the release of US citizens held hostage and wrongfully detained around the world.

    Both of the Americans who have been recently brought home from Russia – Trevor Reed and Brittney Griner – had been designated as wrongfully detained and were freed in prisoner swaps.

    Paul Whelan, who has been imprisoned in Russia for more than four years on espionage charges that he and the US government deny, has also been declared wrongfully detained.

    In his statement, Patel said the “U.S. government will provide all appropriate support to Mr. Gershkovich and his family.”

    “We call for the Russian Federation to immediately release Mr. Gershkovich,” he said. “We also call on Russia to release wrongfully detained U.S. citizen Paul Whelan.”

    The editor in chief and publisher of the Wall Street Journal on Monday said they “are doing everything in our power to support Evan and his family and will continue working with the State Department and other relevant U.S. officials to push for his release.”

    “He is a distinguished journalist and his arrest is an attack on a free press and it should spur outrage in all free people and governments around the world,” the statement from Emma Tucker and Almar Latour said.

    Gershkovich was detained in late March and formally charged with espionage last Friday. As of Monday, officials at the US Embassy in Moscow had not been granted consular access to Gershkovich.

    “It is a violation of Russia’s obligations under our consular convention and a violation against international law,” Patel said at a State Department briefing Monday. “We have stressed the need for the Russian government to provide this access as soon as possible.”

    The official determination that Gershkovich is wrongfully detained comes after a bureaucratic process played out within the US government.

    US Secretary of State Antony Blinken said last week they were “very deliberately but expeditiously” carrying out that process, but “in (his) own mind, there’s no doubt that he’s being wrongfully detained by Russia.”

    The arrest of the journalist – the first of its kind in Russia since the Cold War – prompted the top US diplomat to make a rare call to his Russian counterpart.

    “Secretary Blinken conveyed the United States’ grave concern over Russia’s unacceptable detention of a U.S. citizen journalist,” a State Department readout of the April 2 call said.

    That call was only the third time that Blinken has spoken with Russian Foreign Minister Sergey Lavrov since the war in Ukraine began, and all of those conversations have discussed detained US citizens. The two spoke in person for the first time since the war broke out on the sidelines of the G20 foreign ministers meeting in India last month, and Blinken said he raised the issues of the war, Russia’s suspension of its participation in the New START nuclear agreement, and Whelan’s ongoing detention.

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  • Debt default could occur in early June, forecasters say, backing Yellen | CNN Politics

    Debt default could occur in early June, forecasters say, backing Yellen | CNN Politics

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    CNN
     — 

    Two new analyses are backing Treasury Secretary Janet Yellen’s forecast that the nation could default on its debt – and unleash economic chaos – as soon as early June if Congress doesn’t act.

    The projections, which are roughly in line with those issued last week by Yellen and the Congressional Budget Office, add to the pressure on House Republicans and President Joe Biden, who may have only a few weeks to hammer out their vast differences over addressing the debt ceiling. Biden is meeting with congressional leaders Tuesday to work on a deal, the first movement in months.

    A weaker-than-expected tax season, spurred in part by disaster-related filing extensions for much of California and parts of Alabama and Georgia, has increased the odds that Treasury won’t have enough funds to pay the federal government’s bills in early June, according to an updated estimate released Tuesday by the Bipartisan Policy Center.

    “The coming weeks are critical for assessing the strength of government cash flows,” said Shai Akabas, the center’s director of economic policy. “If a solution is not reached before June, policymakers may be playing daily Russian roulette with the full faith and credit of the United States, risking financial disaster for their constituents and the country.”

    The so-called X-date, when the US could default, could arrive between early June and early August, according to the center. In February, it projected the default could take place during the summer or early fall.

    Meanwhile, Moody’s Analytics last week pegged the default date at June 8, significantly earlier than its prior projection of August 18. But the X-date could hit as soon as June 1 or as late as early August, according to that analysis.

    Cumulative income tax receipts are tracking more than 30% below collections a year ago, in part because of weaker capital gains revenue as a result of last year’s stock market declines, Moody’s said.

    Tax receipts are running $150 billion below government projections for fiscal year 2023, which began in October, according to a report issued Monday by the Penn Wharton Budget Model, an independent research organization. This is due mainly to a drop in capital gains income and weakening corporate profit margins.

    In Yellen’s letter to House Speaker Kevin McCarthy last week, she said the exact date of default is impossible to pinpoint since the amount of revenue the federal government collects and the amount it spends is variable. She noted it could come as early as June 1 but could be a number of weeks later.

    Even if the Treasury Department doesn’t completely run out of funds, it could be difficult for the agency to manage its payments and stay below the debt ceiling when it only has a tiny cash balance, Akabas said. How much revenue the agency collects in the next three weeks is critical to whether the nation will default next month.

    “Treasury is skating on very thin ice in the month of June. If it’s $10, $20, $30, $40 billion below what we anticipate, that means that they’re really going to be in a crunch situation,” he said of revenue.

    Unable to keep borrowing to pay the nation’s obligations, the Treasury Department has been using cash and “extraordinary measures” to avoid default since the US hit its $31.4 trillion debt ceiling in January.

    If government collections wind up being enough to keep Treasury’s coffers flush through early June, then it’s likely the government won’t default until later in the summer. The agency will get another injection of funds from second quarter estimated tax payments, which are due June 15, and from an extraordinary measure that becomes available at the end of that month.

    Investors are growing skittish about the debt ceiling impasse and a potential default.

    Last week, the Treasury Department sold $50 billion of four-week securities scheduled to mature on June 6 at a record 5.84%, the highest yield for any Treasury Department bill auction since 2000, Akabas noted.

    “Even now, the looming deadline is raising costs to the government and therefore, to all taxpayers,” he said.

    If the government was to default for the first time, it would trigger an economic meltdown in the US and send shock waves through the global financial system.

    If the default lasts for about a week, then close to 1 million jobs would be lost, including in the financial sector, which would be hard hit by the stock market declines, according to Moody’s. Also, the unemployment rate would jump to about 5% and the economy would contract by nearly half a percent.

    But if the impasse dragged on for six weeks, then more than 7 million jobs would be lost, the unemployment rate would soar above 8% and the economy would decline by more than 4%, according to Moody’s. The effects would still be felt a decade from now.

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  • Biden’s second debt limit meeting with congressional leaders postponed | CNN Politics

    Biden’s second debt limit meeting with congressional leaders postponed | CNN Politics

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    CNN
     — 

    President Joe Biden’s anticipated meeting originally scheduled for Friday with congressional leaders aimed at discussing a deal to avert a default on the national debt has been postponed, a White House spokesperson said.

    Friday’s meeting would have been the second time in less than a week that congressional leaders met with Biden at the White House in an effort to reach a solution to avoid default. Instead, the spokesperson told CNN on Thursday, staff will continue to meet and the leaders will come together again next week.

    “I don’t think there’s enough progress for the leaders to get back together,” McCarthy said on Thursday, adding that he expects a meeting on debt limit next week with the four congressional leaders and the White House.

    “The White House didn’t cancel the meeting – all of the leaders decided it’s probably in the best of our interest to let the staff meet again before we get back together,” McCarthy said.

    A source familiar with the meetings insisted the delay was a “positive development” and that “meetings are progressing.”

    White House officials and aides to McCarthy and House Minority Leader Hakeem Jeffries all thought postponing the meeting was a good idea, according to another source familiar with the negotiations. The general consensus, they said, is that allowing more time for staff-level talks will ensure the leaders’ meeting would be “more productive.”

    In a sign of contention, however, McCarthy slammed the “seriousness” of the White House in debt negotiations on Thursday, saying, “it seems like they want a default.”

    The ongoing conversations between the two federal branches come at a critical moment.

    Treasury Secretary Janet Yellen recently warned that the United States could default on its obligations as soon as June 1 if Congress doesn’t find a solution addressing the debt limit. And McCarthy has said Congress will need to reach a deal in principle by next week in order to move the deal through the gears of Congress ahead of that potential default deadline.

    After an initial meeting on Tuesday in the Oval Office, those involved acknowledged that a concrete path forward to avoid default had not been secured.

    Staff for each of the offices involved have met daily since Tuesday’s meeting, relaying areas they see as red lines for each of their parties.

    House Republicans have wanted to attach spending reductions to a debt ceiling increase and have passed a debt limit plan that does just that. But Biden and congressional Democrats have insisted on passing a clean increase on the debt limit before addressing a framework for spending.

    But even as the president continues to insist he will not negotiate over raising the debt ceiling, he has said he is willing to negotiate spending levels and his staff is now racing to reach a spending agreement with Republicans before the US faces default as early as June 1.

    The White House has conveyed to congressional negotiators that Biden’s most recent legislative accomplishment, the Inflation Reduction Act, is off the table as the two sides begin to eye potential spending cuts, two sources familiar with the matter told CNN. The law, which makes historic investments in combating climate change, was targeted as part of House Republicans’ bill to cut spending alongside a debt ceiling increase.

    Among the White House’s other non-starter items: rolling back student debt forgiveness – a key campaign promise that remains tied up in litigation that was also targeted in House Republicans’ bill last month – and Medicaid and SNAP benefits.

    Inside the West Wing, there is a growing acknowledgment that the White House will have to accept spending cuts, even as the president argues the spending negotiations are not linked to raising the debt ceiling.

    And negotiators are also beginning to discuss permitting reform, which could be a part of an eventual deal, two sources said.

    Sources familiar with the matter said the White House is willing to entertain a cap on future spending, but for a far shorter period of time than the 10-year spending cuts agreed to as part of the 2011 debt ceiling standoff.

    And in early conversations, White House officials have also indicated a debt ceiling increase will need to last more than the one year, to avoid this scenario playing out again next year.

    Louisiana Rep. Garret Graves, who is helping lead GOP negotiations on the debt ceiling, on Thursday outlined four areas where he thinks there could be agreement: permitting reform, clawing back unspent Covid relief funds, work requirements and spending caps.

    Graves acknowledged that the White House indicated they “don’t like” repealing any portions of the IRA. On the length of the debt ceiling hike, Graves signaled that Republicans would be open to a two-year hike but said that would require the White House to put “more savings on the table.”

    While Biden had suggested earlier this week that he’d be open to a short-term extension, Graves ruled out the idea, saying, “As far as we’re concerned right now, it’s absolutely off the table.”

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