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Tag: company activities and management

  • Meta stock jumps after company reports first revenue growth in nearly a year | CNN Business

    Meta stock jumps after company reports first revenue growth in nearly a year | CNN Business

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    New York
    CNN
     — 

    Facebook-parent Meta on Wednesday reported that it grew sales by 3% during the first three months of the year, reversing a trend of three consecutive quarters of revenue declines and far exceeding Wall Street analysts’ expectations.

    Meta shares jumped as much as 12% in after-hours trading following the report, continuing the company’s strong trajectory since Zuckerberg announced that 2023 would be a “year of efficiency.”

    Another bright spot: user growth was relatively strong compared to recent quarters. The number of monthly active people on Meta’s family of apps grew 5% from the prior year to more than 3.8 billion and Facebook daily active users increased 4% to more than 2 billion.

    “We had a good quarter and our community continues to grow,” Zuckerberg said in a statement Wednesday. “We’re also becoming more efficient so we can build better products faster and put ourselves in a stronger position to deliver our long term vision.”

    But Meta has a long hill to climb.

    The company also reported that profits declined by nearly a quarter compared to the same period in the prior year to $5.7 billion. Price per advertisement — an indicator of the health of the company’s core digital ad business — also decreased by 17% from the year prior.

    Meta has been in the midst of a massive restructuring, as it attempts to recover from a perfect storm of heightened competition, lingering recession fears resulting in fewer ad dollars and a multibillion dollar effort to build a future version of the internet it calls the metaverse. Meta said in November it would eliminate 11,000 jobs, the single largest round of cuts in its history. And in March, Zuckerberg announced Meta would lay off another 10,000 employees. All told, the cuts will shrink Meta’s workforce by a quarter.

    Meta took a hit of more than $1 billion related to the restructuring in the March quarter, and said it will realize additional charges of around $500 million related to 2023 layoffs by the end of the year.

    Zuckerberg said on a call with analysts Wednesday that when Meta started its “efficiency work” late last year, “our business wasn’t performing as well as I wanted, but now we’re increasingly doing this work from a position of strength.”

    The company said it expects revenue to grow again in the current quarter compared to the prior year. And it slightly lowered its expectations for full-year expenses, potentially buoying investor optimism.

    “The year of efficiency is off to a stronger than expected start for Meta,” Insider Intelligence principal analyst Debra Aho Williamson said in a statement. But she added that the company “can’t afford to sit still in this environment.”

    Like other tech companies, Meta has recently read investor cues and taken to playing up its focus on artificial intelligence rather than the metaverse. The shift comes as Meta contends with the popularity of AI tools from tech firms like Microsoft and OpenAI.

    In his statement with the results Wednesday, Zuckerberg said: “Our AI work is driving good results across our apps and business.” He added in the call that the company’s AI work includes efforts to build AI chat experiences in WhatsApp and Messenger, as well as visual creation tools for posts on Facebook and Instagram and advertisements.

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  • How the CEO behind ChatGPT won over Congress | CNN Business

    How the CEO behind ChatGPT won over Congress | CNN Business

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    Washington
    CNN
     — 

    OpenAI CEO Sam Altman seems to have achieved in a matter of hours what other tech execs have been struggling to do for years: He charmed the socks off Congress.

    Despite wide-ranging concerns that artificial intelligence tools like OpenAI’s ChatGPT could disrupt democracy, national security, and the economy, Altman’s appearance Tuesday before a Senate subcommittee went so smoothly that viewers could have been forgiven for thinking the year was closer to 2013 than 2023.

    It was a pivotal moment for the AI industry. Altman’s testimony on Tuesday alongside Christina Montgomery, IBM’s chief privacy officer, promised to set the tone for how Washington regulates a technology that many fear could eliminate jobs or destabilize elections.

    But where lawmakers could have followed a familiar pattern, blasting the tech industry with hostile questioning and leveling withering allegations of reckless innovation, members of the Senate Judiciary Committee instead heaped praise on the companies — and often, on Altman in particular.

    The difference seemed to come down to OpenAI calling for proactive government regulation — and persuading lawmakers it was serious. Unlike the long list of social media hearings in recent years, this AI hearing came earlier in OpenAI’s lifecycle and, crucially, before the company or its technology had suffered any high-profile mishaps.

    Altman, more than any other figure in tech, has emerged as the face of a new crop of powerful and disruptive AI tools that can generate compelling written work and images in response to user prompts. Much of the federal government is now racing to figure out how to regulate the cutting-edge technology.

    But after his performance on Tuesday, the CEO whose company helped spark the new AI arms race may have maneuvered himself into a privileged position of influence over the rules that may soon govern the tools he’s developing.

    Altman’s easy-going, plain-spoken demeanor helped disarm skeptical lawmakers and appeared to win over Democrats and Republicans alike. His approach contrasted with the wooden, lawyerly performances that have afflicted some other tech CEOs in the past during their time in the hotseat.

    “I sense there is a willingness to participate here that is genuine and authentic,” said Connecticut Democratic Sen. Richard Blumenthal, who chairs the committee’s technology panel.

    New Jersey Democratic Sen. Cory Booker, adopting an unusual level of familiarity with a witness, found himself repeatedly addressing Altman as “Sam,” even as he referred to other panelists by their last names.

    Even Altman’s fellow witnesses couldn’t resist gushing about his style.

    “His sincerity in talking about those [AI] fears is very apparent, physically, in a way that just doesn’t communicate on the television screen,” Gary Marcus, a former New York University professor and a self-described critic of AI “hype,” told lawmakers.

    With a relaxed yet serious tone, Altman did not deflect or shy away from lawmakers’ concerns. He agreed that large-scale manipulation and deception using AI tools are among the technology’s biggest potential flaws. And he validated fears about AI’s impact on workers, acknowledging that it may “entirely automate away some jobs.”

    “If this technology goes wrong, it can go quite wrong, and we want to be vocal about that,” Altman said. “We want to work with the government to prevent that from happening.”

    Altman’s candor and openness has captivated many in Washington.

    On Monday evening, Altman spoke to a dinner audience of roughly 60 House lawmakers from both parties. One person in the room, speaking on condition of anonymity to discuss a closed-door meeting, described members of Congress as “riveted” by the conversation, which also saw Altman demonstrating ChatGPT’s capabilities “to much amusement” from the audience.

    Lawmakers have spent years railing against social media companies, attacking them for everything from their content moderation decisions to their economic dominance. On Tuesday, they seemed ready — or even relieved — to be dealing with another area of the technology industry.

    Whether this time is truly different remains unclear, though. The AI industry’s biggest players and aspirants include some of the same tech giants Congress has sharply criticized, including Google and Meta. OpenAI is receiving billions of dollars of investment from Microsoft in a multi-year partnership. And with his remarks on Tuesday, Altman appeared to draw from a familiar playbook for Silicon Valley: Referring to technology as merely a neutral tool, acknowledging his industry’s imperfections and inviting regulation.

    Some AI ethicists and experts questioned the value of asking a leading industry spokesperson how he would like to be regulated. Marcus, the New York University professor, cautioned that creating a new federal agency to police AI could lead to “regulatory capture” by the tech industry, but the warning could have applied just as easily to Congress itself.

    “It seems very very bad that ahead of a hearing meant to inform how this sector gets regulated, the CEO of one of the corporations that would be subject to that regulation gets to present a magic show to the regulators,” Emily Bender, a professor of computational linguistics at the University of Washington, said of Altman’s dinner with House lawmakers.

    She added: “Politicians, like journalists, must resist the urge to be impressed.”

    After years of fidgety evasiveness from other tech CEOs, however, lawmakers this week seemed easily wowed by Altman and his seemingly straight-shooting answers.

    Louisiana Republican Sen. John Kennedy, after expressing frustration with IBM’s Montgomery for providing a nuanced answer he couldn’t comprehend, visibly brightened when Altman quickly and smoothly outlined his regulatory proposals in a bulleted list. Kennedy began joking with Altman and even asked whether Altman might consider heading up a hypothetical federal agency charged with regulating the AI industry.

    “I love my current job,” Altman deadpanned, to audience laughter, before offering to send Kennedy’s office some potential candidates.

    Compounding lawmakers’ attraction to Altman is a belief on Capitol Hill that Congress erred in extending broad liability protections to online platforms at the dawn of the internet. That decision, which allowed for an explosion of blogs, e-commerce sites, streaming media and more, has become an object of regret for many lawmakers in the face of alleged mental health harms stemming from social media.

    “I don’t want to repeat that mistake again,” said Judiciary Committee Chairman Dick Durbin.

    Here too, Altman deftly seized an opportunity to curry favor with lawmakers by emphasizing distinctions between his industry and the social media industry.

    “We try to design systems that do not maximize for engagement,” Altman said, alluding to the common criticism that social media algorithms tend to prioritize outrage and negativity to boost usage. “We’re not an advertising-based model; we’re not trying to get people to use it more and more, and I think that’s a different shape than ad-supported social media.”

    In providing simple-sounding solutions with a smile, Altman is doing much more than shaping policy: He is offering members of Congress a shot at redemption, one they seem grateful to accept. Despite the many pitfalls of AI they identified on Tuesday, lawmakers appeared to thoroughly welcome Altman as a partner, not a potential adversary needing oversight and scrutiny.

    “We need to be mindful,” Blumenthal said, “of ways that rules can enable the big guys to get bigger and exclude innovation, and competition, and responsible good guys such as our representative in this industry right now.”

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  • Can Biden achieve his cornerstone climate goal? Why 100% clean power is still out of reach | CNN Politics

    Can Biden achieve his cornerstone climate goal? Why 100% clean power is still out of reach | CNN Politics

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    CNN
     — 

    Tucked into President Joe Biden’s ambitious, sweeping climate commitments is a crucially important goal that dates back to his campaign: Transforming the US electric grid to run entirely on clean energy by 2035.

    The goal could make or break Biden’s pledge to slash the country’s planet-warming emissions in half by 2030. And if successful, 100% clean electricity could energize vast sectors of the US economy: electric vehicles, home and office heating and cooling, and appliances. It could even power heavy industry and manufacturing, which is currently reliant on fossil fuels.

    “When you have a fully clean grid, versus a grid that either is a quarter or a half clean, that makes a significant difference in terms of the greenhouse gas performance of the things you’re plugging in to that grid,” White House national climate adviser Ali Zaidi told CNN. “That electric vehicle now is twice or three times cleaner when you shift to a fully clean grid.”

    Yet while renewable energy has exploded over the past decade, bringing Biden’s cornerstone climate goal to fruition by 2035 could be beyond his grasp.

    As of this year, about 44% of America’s electricity was powered by zero-emissions sources like wind, solar, nuclear and hydropower, according to the Department of Energy. The rest comes from fossil fuels like methane gas and coal.

    After the Inflation Reduction Act passed last year – legislation that aimed to supercharge clean energy in the US – an analysis from the National Renewable Energy Laboratory predicts the US will get to around 80% clean electricity by 2030, a number that includes renewables, nuclear energy and carbon capture on fossil fuel plants.

    By 2035, the federal analysis shows clean and renewable sources will make up about 86% of US energy, spurred in large part by the IRA. (That analysis did not include the Biden administration’s proposed pollution rules for power plants, which could increase the adoption of clean energy.)

    “That’s a doubling from today, which is huge,” Ben King, an associate director at the nonpartisan think tank Rhodium Group, told CNN. But it’s also short of Biden’s goal of 100% clean electricity by that date.

    Decarbonizing the last portion of the power sector will be the most difficult, federal officials and experts told CNN. The closer you get to 100% percent clean electricity, the harder it is to go all the way.

    “We’ve known that the last 10% – maybe the last 20 to 25% – is going to be challenging,” Zaidi said. “And the reason is because you’re not just trying to deliver clean electrons onto the grid. You’re trying to deliver cleaner electrons when you want them, where you want them. That’s a hard thing to do.”

    Not only does the power need to come from clean sources, it also needs to be readily available to energize the US economy during peak demand.

    But wind and solar are still variable – especially without massive, costly battery storage. And newer technologies, like green hydrogen, carbon capture and small modular nuclear reactors haven’t yet been built to a large enough scale.

    That could mean some fossil fuels plants outfitted with carbon capture would need to remain connected to the grid to provide power that can brought online quickly, King said.

    There are also big infrastructure hurdles for renewables to take the lead. Even if massive amounts of wind and solar are developed by the end of this decade, the US may not have enough electrical transmission infrastructure to move all of that renewable energy around the grid.

    “The bottlenecks of a lack of transmission are very real,” Lena Moffitt, executive director of Evergreen Action, told CNN. There also needs to be significant investment in massive batteries to store the power generated by wind and solar to be used at all hours, she said.

    While companies and the federal government are racing to scale up new zero-carbon technologies, traditional wind and solar will largely power this clean electricity transition.

    They are the most reliable and trusted clean energy sources for utilities and developers, and they have quickly become cheaper than fossil fuels – so inexpensive that it is becoming more cost-effective for some utilities to build new wind and solar, rather than constructing new fossil plants or even running existing ones, experts told CNN.

    Wind and solar are also mature technologies that developers know they can finance and get huge tax breaks on through the Inflation Reduction Act.

    They are the “natural choice for developers who are looking for those low risk and very cost-effective projects to develop,” Sonia Aggarwal, a former White House senior advisor for climate policy and CEO of nonpartisan think tank Energy Innovation, told CNN. “We will see them play a large role because of how good they look from an economic perspective.”

    By the end of 2021, wind and solar together made up about 228 gigawatts of power. By 2034, NREL predicts that number – including offshore wind – will grow by more than four times to over 1 terawatt, or 1 trillion watts of power.

    “Where we are now is very different from even 5 or 10 years ago as far as the costs of clean energy, particularly renewables, being significantly lower than they’ve been in the past,” Carla Frisch, acting executive director of the US Energy Department’s Office of Policy, told CNN. “So just a really rapid acceleration that we’re already experiencing right now.”

    While getting new clean technologies to scale will be difficult, it’s work worth doing, Zaidi said.

    “Let’s deploy the stuff we have right now, right away,” he said. “And let’s work hard as we can to innovate on the stuff that we need in the future.”

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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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  • 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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  • Bill Gates says AI risks are real but nothing we can’t handle | CNN Business

    Bill Gates says AI risks are real but nothing we can’t handle | CNN Business

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    CNN
     — 

    Bill Gates sounds less worried than some other executives in Silicon Valley about the risks of artificial intelligence.

    In a blog post on Tuesday, the Microsoft co-founder outlined some of the biggest areas of concern with artificial intelligence, including the potential for spreading misinformation and displacing jobs. But he stressed that these risks are “manageable.”

    “This is not the first time a major innovation has introduced new threats that had to be controlled,” Gates wrote. “We’ve done it before.”

    Gates likened AI to previous “transformative” changes in society, such as the introduction of the car, which then required the public to adopt seat belts, speed limits, driver’s licenses and other safety standards. Innovation, he said, can create “a lot of turbulence” in the beginning, but society can “come out better off in the end.”

    Microsoft is one of the leaders in the race to develop and deploy a new crop of generative AI tools into popular products with the promise of helping people be more productive and creative. But a number of prominent figures in the industry have also publicly raised doomsday scenarios about the rapidly evolving technology.

    In late May, tech leaders including Microsoft’s CTO Kevin Scott joined dozens of AI researchers and some celebrities in signing a one-sentence letter stating: “Mitigating the risk of extinction from AI should be a global priority alongside other societal-scale risks such as pandemics and nuclear war.”

    Gates has previously said people should not “panic” about apocalyptic AI scenarios. In a blog post earlier this year, Gates wrote: “Could a machine decide that humans are a threat, conclude that its interests are different from ours, or simply stop caring about us? Possibly, but this problem is no more urgent today than it was before the AI developments of the past few months.”

    In his blog post this week, Gates said he believes one of the biggest areas of concern for AI is the potential for deepfakes and AI-generated misinformation to undermine elections and democracy. Gates said he is “hopeful” that “AI can help identify deepfakes as well as create them.” He also said laws needs to be clear about deepfake usage and labeling “so everyone understands when something they’re seeing or hearing is not genuine.”

    Gates also expressed concern over how AI could make it easier for hackers and even countries to launch cyberattacks on people and governments. Gates urged the development of related cybersecurity measures and for governments to consider creating a global body for AI similar to the International Atomic Energy Agency.

    Gates ticked through other concerns, too, including how AI could take away people’s jobs,perpetuate biases baked into the data on which it’s trained, and even disrupt the way kids learn to write.

    “It reminds me of the time when electronic calculators became widespread in the 1970s and 1980s,” Gates wrote. “Some math teachers worried that students would stop learning how to do basic arithmetic, but others embraced the new technology and focused on the thinking skills behind the arithmetic.”

    Gates said “it’s natural to feel unsettled” during a transition period, but added he is optimistic about the future and how “history shows that it’s possible to solve the challenges created by new technologies.”

    “It’s the most transformative innovation any of us will see in our lifetimes,” he wrote, “and a healthy public debate will depend on everyone being knowledgeable about the technology, its benefits, and its risks.”

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  • AI pioneer quits Google to warn about the technology’s ‘dangers’ | CNN Business

    AI pioneer quits Google to warn about the technology’s ‘dangers’ | CNN Business

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    New York
    CNN
     — 

    Geoffrey Hinton, who has been called the ‘Godfather of AI,’ confirmed Monday that he left his role at Google last week to speak out about the “dangers” of the technology he helped to develop.

    Hinton’s pioneering work on neural networks shaped artificial intelligence systems powering many of today’s products. He worked part-time at Google for a decade on the tech giant’s AI development efforts, but he has since come to have concerns about the technology and his role in advancing it.

    “I console myself with the normal excuse: If I hadn’t done it, somebody else would have,” Hinton told the New York Times, which was first to report his decision.

    In a tweet Monday, Hinton said he left Google so he could speak freely about the risks of AI, rather than because of a desire to criticize Google specifically.

    “I left so that I could talk about the dangers of AI without considering how this impacts Google,” Hinton said in a tweet. “Google has acted very responsibly.”

    Jeff Dean, chief scientist at Google, said Hinton “has made foundational breakthroughs in AI” and expressed appreciation for Hinton’s “decade of contributions at Google.”

    “We remain committed to a responsible approach to AI,” Dean said in a statement provided to CNN. “We’re continually learning to understand emerging risks while also innovating boldly.”

    Hinton’s decision to step back from the company and speak out on the technology comes as a growing number of lawmakers, advocacy groups and tech insiders have raised alarms about the potential for a new crop of AI-powered chatbots to spread misinformation and displace jobs.

    The wave of attention around ChatGPT late last year helped renew an arms race among tech companies to develop and deploy similar AI tools in their products. OpenAI, Microsoft and Google are at the forefront of this trend, but IBM, Amazon, Baidu and Tencent are working on similar technologies.

    In March, some prominent figures in tech signed a 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.” The letter, published by the Future of Life Institute, a nonprofit backed by Elon Musk,came just two weeks after OpenAI announced GPT-4, an even more powerful version of the technology that powers ChatGPT. In early tests and a company demo, GPT-4 was used to draft lawsuits, pass standardized exams and build a working website from a hand-drawn sketch.

    In the interview with the Times, Hinton echoed concerns about AI’s potential to eliminate jobs and create a world where many will “not be able to know what is true anymore.” He also pointed to the stunning pace of advancement, far beyond what he and others had anticipated.

    “The idea that this stuff could actually get smarter than people — a few people believed that,” Hinton said in the interview. “But most people thought it was way off. And I thought it was way off. I thought it was 30 to 50 years or even longer away. Obviously, I no longer think that.”

    Even before stepping aside from Google, Hinton had spoken publicly about AI’s potential to do harm as well as good.

    “I believe that the rapid progress of AI is going to transform society in ways we do not fully understand and not all of the effects are going to be good,” Hinton said in a 2021 commencement address at the Indian Institute of Technology Bombay in Mumbai. He noted how AI will boost healthcare while also creating opportunities for lethal autonomous weapons. “I find this prospect much more immediate and much more terrifying than the prospect of robots taking over, which I think is a very long way off.”

    Hinton isn’t the first Google employee to raise a red flag on AI. In July, the company fired an engineer who claimed an unreleased AI system had become sentient, saying he violated employment and data security policies. Many in the AI community pushed back strongly on the engineer’s assertion.

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  • AI chip boom sends Nvidia’s stock surging after whopper of a quarter | CNN Business

    AI chip boom sends Nvidia’s stock surging after whopper of a quarter | CNN Business

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    New York
    CNN
     — 

    The AI boom is here, and Nvidia is reaping all the benefits.

    Shares of Nvidia

    (NVDA)
    exploded 28% higher Thursday after reporting earnings and sales that surged well above Wall Street’s already lofty expectations. That was enough to make investors temporarily forget about America’s dangerous debt ceiling standoff, sending the broader stock market higher — even after credit rating agency Fitch warned late Wednesday that America could soon lose its sterling AAA debt rating.

    Nvidia makes chips that power generative AI, a type of artificial intelligence that can create new content, such as text and images, in response to user prompts. That’s the kind of AI underlying ChatGPT, Google’s Bard, Dall-E and many of the other new AI technologies.

    “The computer industry is going through two simultaneous transitions — accelerated computing and generative AI,” said Jensen Huang, Nvidia’s CEO, in a statement. “A trillion dollars of installed global data center infrastructure will transition from general purpose to accelerated computing as companies race to apply generative AI into every product, service and business process.”

    Huang said Nvidia is increasing supply of its entire suite of data center products to meet “surging demand” for them.

    Last quarter, Nvidia’s profit surged 26% to $2 billion, and sales rose 19% to $7.2 billion, each easily surpassing Wall Street analysts’ forecasts. Nvidia’s outlook for the current quarter was also significantly — about 50% — higher than analysts’ predictions.

    Nvidia’s stock is up nearly 110% this year.

    “There is not one better indicator around underlying AI demand going on … than the foundational Nvidia story,” said Dan Ives, analyst at Wedbush. “We view Nvidia at the core hearts and lungs of the AI revolution.”

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  • Amazon is ‘investing heavily’ in the technology behind ChatGPT | CNN Business

    Amazon is ‘investing heavily’ in the technology behind ChatGPT | CNN Business

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    CNN
     — 

    Amazon wants investors to know it won’t be left behind in the latest Big Tech arms race over artificial intelligence.

    In a letter to shareholders Thursday, Amazon

    (AMZN)
    CEO Andy Jassy said the company is “investing heavily” in large language models (LLMs) and generative AI, the same technology that underpins ChatGPT and other similar AI chatbots.

    “We have been working on our own LLMs for a while now, believe it will transform and improve virtually every customer experience, and will continue to invest substantially in these models across all of our consumer, seller, brand, and creator experiences,” Jassy wrote in his letter to shareholders.

    The remarks, which were part of Jassy’s second annual letter to shareholder since taking over as CEO, hint at the pressure that many tech companies feel to explain how they can tap into the rapidly evolving marketplace for AI products. Since ChatGPT was released to the public in late November, Google

    (GOOG)
    , Facebook

    (FB)
    and Microsoft

    (MSFT)
    have all talked up their growing focus on generative AI technology, which can create compelling essays, stories and visuals in response to user prompts.

    Amazon’s goal, according to Jassy, is to offer less costly machine learning chips so that “small and large companies can afford to train and run their LLMs in production.” Large language models are trained on vast troves of data in order to generate responses to user prompts.

    “Most companies want to use these large language models, but the really good ones take billions of dollars to train and many years, most companies don’t want to go through that,” Jassy said in an interview with CNBC on Thursday morning.

    “What they want to do is they want to work off of a foundational model that’s big and great already, and then have the ability to customize it for their own purposes,” Jassy told CNBC.

    With that in mind, Amazon on Thursday unveiled a new service called Bedrock. It essentially makes foundation models (large models that are pre-trained on vast amounts of data) from AI21 Labs, Anthropic, Stability AI and Amazon accessible to clients via an API, Amazon said in a blog post.

    Jassy told CNBC he thinks Bedrock “will change the game for people.”

    In his letter to shareholders, Jassy also touted AWS’s CodeWhisperer, another AI-powered tool which he said “revolutionizes developer productivity by generating code suggestions in real time.”

    “I could write an entire letter on LLMs and Generative AI as I think they will be that transformative, but I’ll leave that for a future letter,” Jassy wrote. “Let’s just say that LLMs and Generative AI are going to be a big deal for customers, our shareholders, and Amazon.”

    In the letter, Jassy also reflected on leading Amazon through “one of the harder macroeconomic years in recent memory,” as the e-commerce giant cut some 27,000 jobs as part of a major bid to rein in costs in recent months.

    “There were an unusual number of simultaneous challenges this past year,” Jassy said in the letter, before outlining steps Amazon took to rethink certain free shipping options, abandon some of its physical store concepts and significantly reduce overall headcount.

    Amazon disclosed in a securities filing Thursday that Jassy’s pay package last year was valued at some $1.3 million, and that the CEO did not receive any new stock awards in 2022. (When Jassy took over as CEO in 2021, he was awarded a pay package mostly comprised of stock awards that valued his total compensation package at some $212 million.)

    Despite the challenges at Amazon, however, Jassy said in his letter that he finds himself “optimistic and energized by what lies ahead.” Jassy added: “I strongly believe that our best days are in front of us.”

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  • TSMC says skilled worker shortage delays start of Arizona chip production | CNN Business

    TSMC says skilled worker shortage delays start of Arizona chip production | CNN Business

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    Shares of Taiwan Semiconductor Manufacturing Co slumped more than 3% Friday after the world’s largest contract chipmaker flagged a 10% drop in 2023 sales and said production due to start next year at its first plant in Arizona would be delayed.

    On Thursday, TSMC

    (TSM)
    reported a 23% fall in second-quarter net profit — its first yearon-year drop in quarterly profit since 2019 — as global economic woes take a toll on demand for chips used in everything from cars to cellphones.

    “While the company’s declining revenue and profit were disappointing, its long-term growth prospects remain encouraging,” said Brady Wang, associate director at Counterpoint Research. “Despite facing macroeconomic headwinds, TSMC’s long-term outlook remains robust, supported by mega trends like 5G and high-performance computing.”

    As TSMC steps up its global expansion, the company said production at its first plant in Arizona will be delayed until 2025 due to a shortage of specialist workers.

    “While we are working to improve the situation, including sending experienced technicians from Taiwan to train the local skilled workers for a short period of time, we expect the production schedule of N4 process technology to be pushed out to 2025,” TSMC chairman Mark Liu said Thursday.

    TSMC’s total investment in the US project amounts to $40 billion.

    The company said its position as the largest manufacturer of artificial intelligence chips and high demand for AI have not offset broader end-market weakness as the global economy recovers more slowly than it had expected.

    “The short-term frenzy about the AI demand definitely cannot extrapolate for the long term. Neither can we predict the near future — meaning next year — how the sudden demand will continue or flatten out,” Liu said.

    Still, the company’s earnings of 181.8 billion Taiwan dollars ($5.85 billion) for the quarter ending in June beat forecasts.

    “We see TSMC well-positioned for a strong growth outlook in 2024,” Goldman Sachs said in a research note. “We believe the US expansion delay is also well-expected by investors.”

    Other analysts, too, were upbeat on TSMC, thanks in part to strong demand for AI, which currently accounts for around 6% of the company’s revenue.

    “We expect a solid 2024-onward outlook on the back of its leading position in AI chip manufacturing,” Citi Research analysts said in a note.

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  • NY judge to hear arguments over DA’s bid to limit Trump’s ability to publicize information in criminal case | CNN Politics

    NY judge to hear arguments over DA’s bid to limit Trump’s ability to publicize information in criminal case | CNN Politics

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    CNN
     — 

    A New York judge will hear arguments Thursday over a proposed protective order in Donald Trump’s criminal case that would limit the former president’s ability to publicize information about the investigation.

    The Manhattan district attorney’s office is seeking to restrain Trump’s access to the evidence it turns over to his attorneys, in part, it says, because of his social media posts about the District Attorney Alvin Bragg and witnesses in the case.

    Trump will not be in attendance at Thursday’s hearing with Judge Juan Merchan.

    The former president’s attorneys oppose the DA’s proposal, arguing that the state should be just as restrained as Trump from what information it can discuss publicly and says that Trump, as a presidential candidate, should have the ability to defend himself against the charges while campaigning.

    “To state the obvious, there will continue to be significant public commentary about this case and his candidacy, to which he has a right and a need to respond, both for his own sake and for the benefit of the voting public,” Trump’s attorneys wrote.

    The proposed protective order submitted by prosecutors, Trump’s attorneys wrote, “would severely hamper President Trump’s ability to publicly defend himself and prepare for trial.”

    Trump’s attorneys are asking that any limitations to disclosing evidence in the case be placed on both Trump and the district attorney’s office. They criticized a press conference held by Bragg last month as revealing information that they say would be violated by the district attorney’s own proposed order.

    “Surprisingly, the People apparently believe that New York law allows the District Attorney’s Office and its witnesses to freely speak and quote from grand jury evidence, but not President Trump or his counsel,” they wrote.

    Prosecutors have cited Trump’s public attacks on Bragg and prosecution witness Michael Cohen, Trump’s former lawyer, as one reason to restrict what he could say. Trump’s attorneys contend that Bragg and former prosecutor Mark Pomerantz made “disparaging and obnoxious” comments about their client.

    Manhattan prosecutors have accused Trump of falsifying business records with the intent to conceal illegal conduct connected to his 2016 presidential campaign. The criminal charges stem from Bragg’s investigation into hush money payments, made during the 2016 campaign, to women who claimed they had extramarital affairs with Trump, which he denies. Trump has pleaded not guilty to all of the charges.

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  • This could be Apple’s biggest product launch since the Apple Watch | CNN Business

    This could be Apple’s biggest product launch since the Apple Watch | CNN Business

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    CNN
     — 

    Apple may be just one day away from unveiling its most ambitious new hardware product in years.

    At its Worldwide Developers Conference, which kicks off Monday at its Cupertino, California, campus, Apple

    (AAPL)
    is widely expected to introduce a “mixed reality” headset that offers both virtual reality and augmented reality, a technology that overlays virtual images on live video of the real world.

    The highly anticipated release of an AR/VR headset would be Apple’s biggest hardware product launch since the debut of the Apple Watch in 2015. It could signal a new era for the company and potentially revolutionize how millions interact with computers and the world around them.

    But the headset is just one of many announcements expected at the developers event. Apple will also show off a long list of software updates that will shape how people use its most popular devices, including the iPhone and Apple Watch.

    Apple may also tease how it plans to incorporate AI into more of its products and services, and keep pace with a renewed arms race over the technology in Silicon Valley.

    The event will be livestreamed on Apple’s website and YouTube. It is set to start at 10:00 a.m. PT/1:00 p.m. ET.

    Here’s a closer look at what to expect:

    For years, Apple CEO Tim Cook has expressed interest in augmented reality. Now Apple finally appears ready to show off what it’s been working on.

    According to Bloomberg, the new headset, which could be called Reality One or Reality Pro, will have an iOS-like interface, display immersive video and include cameras and sensors to allow users to control it via their hands, eye movements and with Siri. The device is also rumored to have an outward-facing display that will show eye movements and facial expressions, allowing onlookers to interact with the person wearing the headset without feeling as though they’re talking to a robot.

    Apple’s new headset is expected to pack apps for gaming, fitness and meditation, and offer access to iOS apps such as Messages, FaceTime and Safari, according to Bloomberg. With the FaceTime option, for example, the headset will “render a user’s face and full body in virtual reality,” to create the feeling that both are “in the same room.”

    The decision to unveil it at WWDC suggests Apple wants to encourage developers to build apps and experiences for the product in order to make it more compelling for customers and worth the hefty price tag.

    The company is reportedly considering a $3,000 price tag for the device, far more than most of its products and testing potential buyers at a time of lingering uncertainty in the global economy. Other tech companies have struggled to find mainstream traction for headsets. And in the years that Apple has been rumored to be working on the product, the tech community has shifted its focus from VR to another buzzy technology: artificial intelligence.

    But if any company can prove skeptics wrong, it’s Apple. The company’s entry into the market combined with its vast customer base has the potential to breathe new life into the world of headsets.

    A mixed reality headset may not be the only piece of hardware to get stage time this year.

    Apple is expected to launch a new 15-inch MacBook Air packing the company’s M2 processor. The current size of the MacBook Air is 13 inches.

    Previously, users who wanted a larger-sized Apple laptop would need to buy a higher-end MacBook Pro.

    Considering WWDC is traditionally a software event, Apple executives will likely spend much of the time highlighting the changes and upgrades coming to its next-generation mobile operating systems, iOS 17 and iPadOS 17.

    While last year’s updates included a major design overhaul of the lock screen and iMessage, only minor changes are expected this year.

    With iOS 17, Apple is expected to double down on its efforts around health tracking by adding the ability to monitor everything from a user’s mood to keeping tabs on how their vision may change over time. According to the Wall Street Journal, Apple will also launch a journaling app not only as a way for users to log their thoughts but also activity levels, which can then be analyzed to reveal how much time someone spends at home or out of the house.

    The new iOS 17 is also said to get a lock screen refresh: When positioned in horizontal mode, the display will highlight widgets tied to the calendar, weather and other apps, serving as a digital hub. (iPadOS 17 is also expected to get some of the same lock screen capabilities and health features.)

    Other anticipated upgrades include an Apple Watch OS update that would focus on quick glances at widgets, and more details about its next-generation CarPlay platform, which it initially teased last year.

    While much of the focus of the event may be on VR, Apple may also attempt to show how it’s keeping pace with Silicon Valley’s current obsession: artificial intelligence.

    Apple reportedly plans to preview an AI-powered digital coaching service, which will encourage people to exercise and improve their sleeping and eating habits. It’s unclear how it could work, but the effort comes at a time when Big Tech companies are racing to introduce AI-powered technologies in the wake of ChatGPT’s viral success.

    Apple may also demo and expand on some of its recently teased accessibility tools for the iPhone and iPad, including a feature that promises to replicate a user’s voice for phone calls after only 15 minutes of training.

    Most of the other Big Tech companies have recently outlined their AI strategies. This event may be Apple’s chance to do the same.

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  • 5 ways a debt default could affect you | CNN Politics

    5 ways a debt default could affect you | CNN Politics

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    CNN
     — 

    President Joe Biden and House Republicans may have as little as a month to prevent the US from defaulting on its debt, which would impact millions of Americans and unleash economic and fiscal chaos here and around the world.

    Treasury Secretary Janet Yellen warned Monday that the government may not be able to pay all of its bills in full and on time as soon as June 1. However, the forecast was uncertain, and the default date might come several weeks later, she said. The US hit its $31.4 trillion debt ceiling in January, and Treasury has been using cash and “extraordinary measures” to satisfy obligations since then.

    Just what would happen if the nation defaults on its debt is unknown since it’s never actually happened before. A close call in 2011 roiled the financial markets and prompted Standard & Poor’s to downgrade the US’ credit rating to AA+ from AAA.

    Yellen gave a sense of the turmoil it would cause in her letter to House Speaker Kevin McCarthy on Monday.

    “If Congress fails to increase the debt limit, it would cause severe hardship to American families, harm our global leadership position, and raise questions about our ability to defend our national security interests,” she wrote.

    To be clear, a debt default doesn’t mean all payments would stop and people would permanently lose out on money they are owed. Treasury would have the funds to satisfy some obligations, but it’s not certain how the agency would handle the disbursements. Much would also depend on how long it takes Congress to address the borrowing cap.

    “Tens of millions of people across the country who expect payments from the federal government may not get them on time,” said Shai Akabas, director of economic policy at the Bipartisan Policy Center.

    Here are five ways that Americans could be affected by debt default:

    About 66 million retirees, disabled workers and others receive monthly Social Security benefits. The average payment for retired workers is $1,827 a month in 2023.

    Almost two-thirds of beneficiaries rely on Social Security for half of their income, and for 40% of recipients, the payments constitute at least 90% of their income, according to the National Committee to Preserve Social Security and Medicare.

    These payments could be delayed in a debt default scenario, though it’s possible Treasury could continue making on-time payments because of the entitlement program’s trust fund, Akabas said.

    The benefits are disbursed four times a month, on the third day of the month and on three Wednesdays. Roughly $25 billion a week is sent out, according to the Congressional Budget Office.

    “Even a short delay in the payment of Social Security benefits would be a burden for the millions of Americans who rely on their earned benefits to pay for out-of-pocket health care expenses, food, rent and utilities,” Max Richtman, the committee’s CEO, said in a statement.

    Many other government payments could also be affected, including funding for food stamps; federal grants to states and municipalities for Medicaid, highways, education and other programs; and Medicare payments to hospitals, doctors and health insurance plans.

    More than 2 million federal civilian workers and around 1.4 million active-duty military members could see their paychecks delayed. Federal government contractors could also see a lag in payments, which could affect their ability to compensate their workers.

    Also, certain veterans benefits, including disability payments and pensions for some low-income veterans and their surviving families, could be affected.

    “Such calamity would place further stress on our servicemembers, retirees, and veterans, as well as their families, caregivers, and survivors,” Rene Campos, senior director of government relations for the Military Officers Association of America, said in a blog post. “Though life in uniform is not always predictable, those who serve or have served their country expect their country to honor their commitment to service.”

    About $25 billion in pay or benefits for active-duty members of the military, civil service and military retirees, veterans and recipients of Supplemental Security Income is sent out on the first day of the month, according to the CBO.

    Americans’ investments would take a direct hit. Case in point: Markets had what was then their worst week since the financial crisis during the 2011 debt ceiling standoff after the Standard & Poor’s downgrade.

    Even if the debt ceiling impasse is resolved soon after a default, stocks could shed as much as a third of their value. That would wipe out around $12 trillion in household wealth, according to Moody’s Analytics.

    If a default occurs, yields on US Treasuries will inevitably rise to compensate for the increased risk that bondholders won’t receive the money they’re owed from the government.

    Since interest rates on loans, credit cards and mortgages are often based on Treasury yields, the cost of borrowing money and paying off debt would rise. That’s on top of the increased costs Americans are already facing from the Federal Reserve rate hikes.

    Families and businesses would also have a tougher time getting approved for lines of credit since banks would have to be more selective about to whom they loan money. That’s because their costs of borrowing money will also rise, which limits the amount of money they can lend out.

    A debt default could trigger an economic downturn, which would prompt a spike in unemployment. It would come at a particularly fragile time – when the nation is already dealing with rising interest rates and stubbornly high inflation.

    How much damage would be done would depend on how long the crisis continues. 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. Also, the unemployment rate would jump to about 5% and the economy would contract by nearly half a percent, according to Moody’s.

    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.

    “It would be a body blow to the economy, and it would be a manufactured crisis,” said Bernard Yaros, an economist at Moody’s.

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  • Microsoft and Activision extend their deal deadline | CNN Business

    Microsoft and Activision extend their deal deadline | CNN Business

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    Washington
    CNN
     — 

    Microsoft and Activision have mutually agreed to extend their merger deadline by three months in the face of ongoing negotiations with the UK government that could allow the $69 billion acquisition to close, the two companies announced on Wednesday.

    The announcement highlights the commitment by both companies to complete the deal after back-to-back court defeats for US regulators who had challenged the merger.

    The new contractual deadline for consummating the deal will be October 18, the companies said. The previous deadline was July 18.

    “Together with @Activision, we are announcing the extension of our merger agreement to 10/18 to provide ample time to work through the final regulatory issues,” Brad Smith, Microsoft’s vice chair and president, said in a Twitter post on Wednesday.

    If the companies fail to close by Aug. 29, Microsoft could be asked to pay a breakup fee of $3.5 billion, an increase of $500 million over the previously agreed-upon sum, according to a filing from Activision with the Securities and Exchange Commission. If the deal fails to close by Sept. 15, the breakup fee could increase to $4.5 billion, the filing said.

    In addition, according to the filing, if the companies fail to complete their merger and Microsoft is forced to pay the breakup fee, the companies also agreed that beginning on Oct. 18 Microsoft would have to pay Activision “100% of all proceeds or other payments for games” that belong to Activision.

    Following a federal judge’s decision last week in the US not to block the acquisition from closing, Microsoft announced a deal with the UK’s Competition and Markets Authority (CMA) to suspend litigation over the merger. The move is intended to give both sides time to reach agreement on how the acquisition might be altered to address competition concerns in that country.

    “The recent decision in the U.S. and approvals in 40 countries all validate that the deal is good for competition, players, and the future of gaming,” a company spokesperson said. “Given global regulatory approvals and the companies’ confidence that CMA now recognizes there are remedies available to meet their concerns in the UK, the Activision Blizzard and Microsoft boards of directors have authorized the companies not to terminate the deal until after October 18. We’re confident in our next steps and that our deal will quickly close.”

    In a memo to employees, Activision CEO Bobby Kotick thanked staff for their patience.

    “I know many of you have questions about our merger with Microsoft,” Kotick wrote. “I am happy to share that based on our continued confidence in closing our deal, the Activision Blizzard and Microsoft boards have mutually agreed not to terminate the deal until after October 18.”

    Kotick added: “This merger is great for players, workers, and our business, and it will create opportunities to compete against companies with large talent pools, strong IP and complete control of their markets. Our merger is cleared to close in over 40 countries already, and we remain confident in resolving any remaining regulatory concerns in the UK.”

    In a memo to employees, Microsoft’s Xbox head Phil Spencer reiterated his hopes of bringing “more games to more players everywhere.”

    “While we can technically close in the United States due to recent legal developments, this extension gives us additional time to resolve the remaining regulatory concerns in the UK,” Spencer wrote in his email.

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