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Tag: domestic-business

  • China is huge for chip designer Arm. That’s a risk for its new investors | CNN Business

    China is huge for chip designer Arm. That’s a risk for its new investors | CNN Business

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    Hong Kong
    CNN
     — 

    As British chip designer Arm prepares to raise about $5 billion in an initial public offering (IPO) on Thursday, its China business has become a serious point of concern.

    The SoftBank-owned firm used many pages of its IPO prospectus to warn investors of risks related to its exposure to China at a time of rising tension between Washington and Beijing over chip technology.

    Its regulatory filing last month revealed that a quarter of its sales come from China, through an unusual relationship with an entity it does not control and with which it has a complex history.

    Arm China is “an entity that operates independently of us and is our single largest customer,” the company said in its prospectus. “Neither we nor SoftBank Group control the operations of Arm China.”

    Arm, which is based in Cambridge, added that the scale of its business in China made it “particularly susceptible to economic and political risks,” which could be worsened by tensions between the country and the United States or the United Kingdom.

    The company has long been vulnerable in this area, which may have already contributed to a lower market valuation than SoftBank was expecting.

    Arm blamed an economic slowdown in China as well as “factors related to export control and national security matters” for slower growth in royalty revenues from China in its fiscal year to March. Total revenue from China did increase in that period, however.

    Royalties are hugely significant for Arm, which gets a fee from each chip developed using its products. The company relies on royalties and licensing for most of its income.

    Arm said Wednesday it priced its shares at $51 each, raising as much as $4.9 billion. The tally could rise to $5.2 billion if banks exercise an option to buy additional shares, valuing the chip designer at as much as $54.5 billion.

    That’s less than the $64 billion valuation implied when SoftBank bought a remaining 25% stake in the company from its Vision Fund unit just last month.

    Arm has declined to comment.

    Concerns about China are likely to have been “built into IPO pricing expectations already, although a worst-case scenario of increased US sanctions [or] trade restrictions probably is not,” Kirk Boodry, an investment advisor at Astris Advisory, a Japanese investment research firm, told CNN.

    Arm was publicly listed until 2016, when Japan’s SoftBank bought it for $32 billion.

    Four years later, SoftBank tried to sell Arm to Nvidia for $40 billion, in what would have been the biggest chip deal of all time. But it didn’t pass muster with global antitrust regulators, and was called off in February 2022.

    Now, Arm’s return to the stock market is being closely watched as it promises to be the biggest US IPO since 2021.

    SoftBank CEO Masayoshi Son has touted it as an AI company that could have “exponential growth,” and promised that ChatGPT-like services will eventually be offered on Arm-designed machines.

    “The value of chips, and Arm’s technology, has maybe never been more in demand from the global economy,” said Kyle Stanford, lead venture capital analyst at PitchBook.

    But Arm is a middleman in the semiconductor industry, which is a key source of tension in US-China relations. Both countries are racing to boost their prowess in the sector, and each side has recently enacted export controls aimed at limiting the other’s capacity.

    “Chip tensions will never go away,” Stanford argued. “Political and regulatory pressure is likely to increase.”

    On Tuesday, former US Securities and Exchange Commission Chairman Jay Clayton told US lawmakers that large public companies with major exposure to China should be prompted to disclose specific risks associated with the country, “and what type of scenario planning they have done in the event of abrupt decoupling.”

    Although US officials have insisted that America is not seeking to decouple from China, they have pointed to the importance of reducing its reliance on the world’s second largest economy.

    In its filing, Arm said it held just a “4.8% indirect ownership interest in Arm China,” through a 10% non-voting stake in a SoftBank-controlled entity that owns less than half of the Chinese company.

    While such convoluted corporate structures aren’t unique in China, “in my view, it is very problematic,” said Ivana Delevska, founder and chief investment officer of asset manager Spear Invest.

    “Investors of other companies are just waking up to this fact in light of increased tensions,” she added.

    Arm has had trouble with Arm China before. In its filing, it said the business has a record of late payments.

    “Although these historical issues did not have a material impact on our operations, any future failure to pay us the amounts we are owed … could have a material adverse effect on our business,” Arm said.

    Arm China has also been subject to a legal battle with its former CEO, Allen Wu.

    Since April 2022, Wu and entities effectively controlled by him have lodged several lawsuits in Chinese courts against Arm China, “seeking to challenge certain aspects of Arm China’s corporate governance and the actions of Arm China’s board of directors,” Arm said in its filing.

    As of August, the cases had been resolved in favor of Arm China, it said, but the outcome could still be appealed. potentially hurting the British firm in the future.

    That hasn’t stopped many of the biggest names in global tech from jumping on board.

    Companies including Apple (AAPL), Google (GOOGL), Nvidia (NVDA), AMD (AMD), Samsung and TSMC (TSM) have indicated interest in acting as cornerstone investors in the offering, according to a filing last week.

    Delevska said the interest reflected Arm’s strong position in the industry and had helped to prop up its overall valuation.

    “I believe it is good timing for the IPO,” she added. “Investors will just have to price in the China risk.”

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  • Google is laying off hundreds in its recruitment division | CNN Business

    Google is laying off hundreds in its recruitment division | CNN Business

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    New York
    CNN
     — 

    Google confirmed it will lay off hundreds of staff members who helped recruit and hire employees, as Silicon Valley continues its cost-cutting efforts.

    The latest cuts come after Google parent Alphabet in January eliminated 12,000 jobs, or about 6% of its workforce, across the company as it grappled with economic uncertainty that hit the company’s bottom line last year, especially its core advertising business.

    During Google’s July earnings call, CEO Sundar Pichai said the company was continuing to slow its “expense growth and pace of hiring.”

    “We continue to invest in top engineering and technical talent while also meaningfully slowing the pace of our overall hiring,” Google spokesperson Courtenay Mencini said in a statement Wednesday, adding that the workload for recruiters has declined as hiring slows. “To ensure we operate efficiently, we’ve made the hard decision to reduce the size of our recruiting team.”

    The layoffs were earlier reported by Semafor and CNBC.

    The cuts will affect a few hundred members of Google’s recruiting organization globally; most of the team will remain and continue hiring for critical roles such as top engineering talent, according to Google. The company did not specify the exact number of layoffs in the department.

    Google also said the recruiting cuts are not part of any wider layoffs, and that affected employees will be supported with severance offers and other benefits.

    Some Google recruiters for the company’s cloud, user experience, software engineering and other teams posted on LinkedIn, noting they had been affected by the layoffs.

    “My heart is heavy for everyone that was impacted alongside me, and I know better days are ahead for all of us as much as today doesn’t feel like it,” one affected Google recruiter wrote.

    Alphabet grew its workforce by more than 50,000 employees starting in 2021 as booming demand for its services during the pandemic boosted profits. But last year, the company’s core digital ad business slowed as fears of an economic downturn or a recession caused advertisers to pull back their spending.

    This year, the company has emphasized its efforts to cut costs as it works to stabilize its business. Google in July said its profits had grown nearly 15% year-over-year in the quarter ended in June, as the company’s Search and YouTube ads businesses continued to recover.

    As of the end of 2022, Alphabet had 190,234 employees, according to a filing with the Securities and Exchange Commission. By the end of June, its headcount had fallen to 181,798, according to its most recent filing.

    A wide range of other tech companies also made major layoffs this year as they attempt to cut costs amid economic challenges, including Meta, Microsoft and, more recently, T-Mobile.

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  • How companies are embracing generative AI for employees…or not | CNN Business

    How companies are embracing generative AI for employees…or not | CNN Business

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    New York
    CNN
     — 

    Companies are struggling to deal with the rapid rise of generative AI, with some rushing to embrace the technology as workflow tools for employees while others shun it – at least for now.

    As generative artificial intelligence – the technology that underpins ChatGPT and similar tools – seeps into seemingly every corner of the internet, large corporations are grappling with whether the increased efficiency it offers outweighs possible copyright and security risks. Some companies are enacting internal bans on generative AI tools as they work to better understand the technology, and others have already begun to introduce the trendy tech to employees in their own ways.

    Many prominent companies have entirely blocked internal ChatGPT use, including JPMorgan Chase, Northrup Grumman, Apple, Verizon, Spotify and Accenture, according to AI content detector Originality.AI, with several citing privacy and security concerns. Business leaders have also expressed worries about employees dropping proprietary information into ChatGPT and having that sensitive information potentially emerge as an output by the tool elsewhere.

    When users input information into these tools, “[y]ou don’t know how it’s then going to be used,” Mark McCreary, the co-chair of the privacy and data security practice at law firm Fox Rothschild LLP, told CNN in March. “That raises particularly high concerns for companies. As more and more employees casually adopt these tools to help with work emails or meeting notes, McCreary said, “I think the opportunity for company trade secrets to get dropped into these different various AI’s is just going to increase.”

    But the corporate hesitancy to welcome generative AI could be temporary.

    “Companies that are on the list of banning generative AI also have working groups internally that are exploring the usage of AI,” Jonathan Gillham, CEO of Originality.AI, told CNN, highlighting how companies in more risk-averse industries have been quicker to take action against the tech while figuring out the best approach for responsible usage. “Giving all of their staff access to ChatGPT and saying ‘have fun’ is too much of an uncontrolled risk for them to take, but it doesn’t mean that they’re not saying, ‘holy crap, look at the 10x, 100x efficiency that we can lock when we find out how to do this in a way that makes all the stakeholders happy” in departments such as legal, finance and accounting.

    Among media companies that produce news, Insider editor-in-chief Nicholas Carlson has encouraged reporters to find ways to use AI in the newsroom. “A tsunami is coming,” he said in April. “We can either ride it or get wiped out by it. But it’s going to be really fun to ride it, and it’s going to make us faster and better.” The organization discouraged staff from putting source details and other sensitive information into ChatGPT. Newspaper chain Gannett paused the use of an artificial intelligence tool to write high school sports stories after the technology called LedeAI made several mistakes in sports stories published in The Columbus Dispatch newspaper in August.

    Of the companies currently banning ChatGPT, some are discussing future usage once security concerns are addressed. UBS estimated that ChatGPT reached 100 million monthly active users in January, just two months after its launch.

    That rapid growth initially left large companies scrambling to find ways to integrate it responsibly. That process is slow for large companies. Meanwhile, website visits to ChatGPT dropped for the third month in a row in August, creating pressure for large tech companies to sustain popular interest in the tools and to find new enterprise applications and revenue models for generative AI products.

    “We at JPMorgan Chase will not roll out genAI until we can mitigate all of the risks,” Larry Feinsmith, JPM’s head of global tech strategy, innovation, and partnerships said at the Databricks Data + AI Summit in June. “We’re excited, we’re working through those risks as we speak, but we won’t roll it out until we can do this in an entirely responsible manner, and it’s going to take time.” Northrop Grumman said it doesn’t allow internal data on external platforms “until those tools are fully vetted,” according to a March report from the Wall Street Journal. Verizon also told employees in a public address in February that ChatGPT is banned “[a]s it currently stands” due to security risks but that the company wants to “safely embrace emerging technology.”

    “They’re not just waiting to sort things out. I think they’re actively working on integrating AI into their business processes separately, but they’re just doing so in a way that doesn’t compromise their information,” Vern Glaser, Associate Professor of Entrepreneurship and Family Enterprise at the University of Alberta, told CNN. “What you’ll see with a lot of the companies that will be using AI strategies, particularly those who have their own unique content, they’re going to end up creating their custom version of generative AI.”

    Several companies – and even ChatGPT itself – seem to have already found their own answers to the corporate world’s genAI security dilemma.

    Walmart introduced an internal “My Assistant” tool for 50,000 corporate employees that helps with repetitive tasks and creative ideas, according to an August LinkedIn post from Cheryl Ainoa, Walmart’s EVP of New Businesses and Emerging Technologies, and Donna Morris, Chief People Officer. The tool is intended to boost productivity and eventually help with new worker orientation, according to the post.

    Consulting giants McKinsey, PwC and EY are also welcoming genAI through internal, private methods. PwC announced a “Generative AI factory” and launched its own “ChatPwC” tool in August powered by OpenAI tech to help employees with tax questions and regulations as part of a $1 billion investment for AI capability scaling.

    McKinsey introduced “Lilli” in August, a genAI solution where employees can pose questions, with the system then aggregating all of the firm’s knowledge and scanning the data to identify relevant “With Lilli, we can use technology to access and leverage our entire body of knowledge and assets to drive new levels of productivity,” Jacky Wright, a McKinsey senior partner and chief technology and platform officer, wrote in the announcement. content, summarize the main points and offer experts.

    EY is investing $1.4 billion in the technology, including “EY.ai EYQ,” an in-house large language model, and AI training for employees, according to a September press release

    Tools like MyAssistant, ChatPwC and Lilli solve some of the corporate concerns surrounding genAI systems through custom adaptions of genAI tech, offering employees a private, closed alternative that both capitalizes its ability to increase efficiency and eliminates the risk of copyright or security leaks.

    The launch of ChatGPT Enterprise may also help quell some fears. The new version of OpenAI’s new tool, announced in August, is specifically for businesses, promising to provide “enterprise-grade security and privacy” combined with “the most powerful version of ChatGPT yet” for businesses looking to jump on the generative AI bandwagon, according to a company blog post.

    The highly-anticipated announcement from OpenAI comes as the company says employees from over 80% of Fortune 500 companies have already begun using ChatGPT since it launched publicly late last year, according to its analysis of accounts associated with corporate email domains.

    In response to the concerns raised by many companies over security, about employees dropping proprietary information into ChatGPT and having that sensitive information potentially emerge as an output by the tool elsewhere, OpenAI’s announcement blog post for ChatGPT Enterprise states that it does “not train on your business data or conversations, and our models don’t learn from your usage.”

    In July, Microsoft unveiled a business-specific version of its AI-powered Bing tool, dubbed Bing Chat Enterprise, and promised much of the same security assurances that ChatGPT Enterprise is now touting – namely, that users’ chat data will not be used to train AI models.

    It is still unclear whether the new tools will be enough to convince corporate America that it is time to fully embrace generative AI, though experts agree the tech’s inevitable entry into the workplace will take time and strategy.

    “I don’t think it’s that companies are against AI and against machine learning, per se. I think most companies are going to be trying to use this type of technology, but they have to be careful with it because of the impacts on intellectual property,” Glaser said.

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  • Atari 2600+ sees its future in retro gaming | CNN Business

    Atari 2600+ sees its future in retro gaming | CNN Business

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    CNN
     — 

    The Atari home video game system took the late1970s and early 1980s by storm, complete with faux wood paneling and a classic joystick with a big red button. Rival systems eventually surpassed the video-game pioneer but its iconic status, and fans, remained.

    Atari has been working to rebuild a lot of goodwill among those fans and within the broader video game industry ever since its new CEO Wade Rosen came on board in 2021.

    With Rosen at the helm, the company is taking a closer look at its own history to chart its future, releasing remastered or reimagined versions of its classics like “Missile Commandand “Centipede,” producing the critically acclaimed “Atari 50” interactive documentary, and introducing its soon-to-be released retro console the Atari 2600+.

    “I think the 2600+ has legs because there’ll be new content, new games coming out but also additional ways to play these games and to make them accessible to larger communities,” Rosen told CNN. “Do I think these things are going to replace modern consoles? Absolutely not. There’s like no way that would happen, nor would they need to. They’re radically different things.”

    The retro console arrives in November at a $130 price point and in a more compact version. While it comes packaged with 10 games in a single cartridge, the console will also play new titles and work with original Atari 2600 and 7800 game cartridges.

    Atari is reimagining the classic

    According to Rosen, retro games complement the times and reimagined Atari titles like “Haunted House,” arriving in October, or new, original games like “Days of Doom,” available now, reflect a speedy, pick-up-and-play style characteristic of the early days of the hobby.

    For instance, the remastered “Haunted House” is an elaborate stealth game where players evade colorful ghosts and monsters – but it retains the exploration mechanics of its namesake that simply featured floating eyes roaming a dark, 2D maze.

    What people want in video games has changed radically, Rosen noted, explaining that these experiences “are designed for an age of complexity,” he said. “Back when we had simplicity, I wanted 200-hour games with huge quests and branching narratives and all these things, and now I’m like: ‘I can do a couple of those a year, but life doesn’t allow for it very much.’ “

    In this photo taken on August 12, 2017, a visitor poses with a T-shirt depicting an Atari 2600 video game console from the early 1980s, during the Retro.HK gaming expo in Hong Kong.

    The company’s Atari Recharged line also takes classics like “Yar’s Revenge” and spruces them up for a modern audience. And its acquisition of Nightdive Studios earlier this year added new franchises to Atari’s stable of remasters like “Turok” and the upcoming “System Shock.”

    The recent “Atari 50” release actually did something different while mining nostalgia — it established the genre of the interactive video game documentary. The company looked at decades of its history, and invited viewers of the doc to become players.

    “As we come to view games as art, more and more, I think people want to understand all the pieces that went into that and all the history around it, but yet the medium is games so we probably should interact with it in a different way,” Rosen noted.

    While not in the company’s plans as yet, the Atari CEO also showed enthusiasm for a hypothetical handheld system that can play its retro games on the go like a Nintendo Switch.

    “I guess short answer, yeah, if there’d be an appetite for it. I’d worry the cartridges would be a little too big. That would be really fun,” he said.

    As the successor to Atari’s home console crown, Nintendo, pushes forward with its Switch system, and newer players like Microsoft’s Xbox and Sony’s PlayStation 5 traffic in blockbuster, Triple-A games this holiday season, the Atari 2600+ retro console (but not a handheld yet) will join the scrum. It’s set to launch November 17.

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  • Microsoft, Amazon facing UK antitrust probe over cloud services | CNN Business

    Microsoft, Amazon facing UK antitrust probe over cloud services | CNN Business

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    London
    CNN
     — 

    Microsoft and Amazon could be in hot water over apparently making it difficult for UK customers to use multiple suppliers of vital cloud services.

    The Competition and Markets Authority (CMA), the country’s antitrust regulator, said Thursday it was launching an investigation into the UK cloud infrastructure services market to determine whether players were engaged in anti-competitive practices.

    Cloud computing firms, such as Microsoft and Amazon Web Services (AWS), use data centers around the world to provide remote access to computing services and storage. This “cloud infrastructure” forms the foundation for how software applications, such as Gmail and Dropbox, are developed and run.

    The CMA probe has been initiated following a report from Britain’s media and communications regulator Ofcom, which found that the supply of cloud infrastructure in the United Kingdom is highly concentrated and competition limited.

    “We welcome Ofcom’s referral of public cloud infrastructure services to us for in-depth scrutiny,” CMA CEO Sarah Cardell said in a statement.

    “This is a £7.5 billion market that underpins a whole host of online services — from social media to [artificial intelligence] foundation models. Many businesses now completely rely on cloud services, making effective competition in this market essential.”

    The CMA said it would conclude its investigation by April 2025.

    The probe is the latest evidence of increased scrutiny of big tech companies by European regulators, which have tightened rules in recent years in areas such as data protection and targeted advertising.

    The European Digital Services Act, which came into force at the end of August, reflects one of the most comprehensive and ambitious efforts by policymakers anywhere to regulate tech giants. It applies to companies including Amazon (AMZN), Apple (AAPL), Google (GOOG), Microsoft (MSFT), Snapchat, TikTok and Meta (META), the owner of Facebook and Instagram.

    According to Ofcom, last year Microsoft and AWS had a combined market share of 70-80% in the UK cloud infrastructure services market. Google is their closest competitor with a share of 5-10%.

    In its report, Ofcom identified features of the market that make it more difficult for customers to change providers or to use multiple providers, such as switching fees.

    “If customers have difficulty switching and using multiple providers, it could make it harder for competitors to gain scale and challenge AWS and Microsoft effectively for the business of new and existing customers,” Ofcom wrote.

    The report also raised concerns about the software licensing practices of some cloud providers, particularly Microsoft.

    Both Amazon and Microsoft said they would engage “constructively” with the CMA.

    But a spokesperson for AWS added that the company disagreed with Ofcom’s findings. “We… believe they are based on a fundamental misconception of how the IT sector functions, and the services and discounts on offer,” the spokesperson said, noting that “the cloud has made switching between providers easier than ever.”

    A spokesperson for Microsoft added: “We are committed to ensuring the UK cloud industry remains innovative, highly competitive and an accelerator for growth across the economy.”

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  • Adobe previews new AI editing tools | CNN Business

    Adobe previews new AI editing tools | CNN Business

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    New York
    CNN
     — 

    Photo-editing software maker Adobe unveiled a slew of new AI-powered tools and features last week at its annual Max event, including a dress that transforms into a wearable screen and streamlined ways to delete elements from photos.

    The company previewed a series of prototype tools that make use of both generative AI and 3D image technology in the Adobe MAX Sneaks showcase. Covering photo, audio, video, 3D, fashion and design, the new capabilities are meant to give the public a sneak peak into early-stage ideas that might one day become widely used components of Adobe products.

    A highlight of the event was Adobe’s Project Primrose, an interactive dress that shifts into different colors and patterns as it’s worn.

    Other previewed items include a tool that automatically detects each object in an image and lets users perform a variety of tasks, labeled Project Stardust. For example, it can spot a suitcase within a photo to then be moved or deleted or predict and prompt likely tasks, such as deleting people from the background of an image.

    A screenshot of Project Stardust, a tool unveiled as part Adobe's annual

    Also on display was Project Dub Dub Dub, technology that can automatically dub audio over a video into all supported languages while preserving the speaker’s voice, as was a new tool that shows Adobe users what the ability to apply text-to-image generative AI tool Firefly to videos might look like.

    Adobe first began adding Firefly into a Photoshop beta app in May, with the goal of “dramatically accelerating” how users edit their photos. It allows users to add or delete elements from images with just a text prompt. It can also match the lighting and style of the existing images automatically, the company said.

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  • US escalates tech battle by cutting China off from AI chips | CNN Business

    US escalates tech battle by cutting China off from AI chips | CNN Business

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    Editor’s Note: Sign up for CNN’s Meanwhile in China newsletter which explores what you need to know about the country’s rise and how it impacts the world.


    Hong Kong/Washington
    CNN
     — 

    The Biden administration is reducing the types of semiconductors that American companies will be able to sell to China, citing the desire to close loopholes in existing regulations announced last year.

    On Tuesday, the US Commerce Department unveiled new rules that further tighten a sweeping set of export controls first introduced in October 2022.

    The updated rules “will increase effectiveness of our controls and further shut off pathways to evade our restrictions,” US Commerce Secretary Gina Raimondo said in a statement. “We will keep working to protect our national security by restricting access to critical technologies, vigilantly enforcing our rules, while minimizing any unintended impact on trade flows.”

    Advanced artificial intelligence chips, such as Nvidia’s H800 and A800 products, will be affected, according to a regulatory filing from the US company.

    The regulations also expand export curbs beyond mainland China and Macao to 21 other countries with which the United States maintains an arms embargo, including Iran and Russia.

    The measures, which have affected the shares of major American chipmakers, are set to take effect in 30 days.

    The original rules had sought to hamper China’s ability to procure advanced computing chips and manufacture advanced weapons systems. Since then, senior administration officials have suggested they needed to be adjusted due to technological developments.

    Raimondo, who visited China in August, said the administration was “laser-focused” on slowing the advancement of China’s military. She emphasized that Washington had opted not to go further in restricting chips for other applications.

    Chips used in phones, video games and electric vehicles were purposefully carved out from the new rules, according to senior administration officials.

    But these assurances are unlikely to placate Beijing, which has vowed to “win the battle” in core technologies in order to bolster the country’s position as a tech superpower.

    China’s Foreign Ministry criticized the Biden administration’s new rules Monday, before they were officially unveiled.

    “The US needs to stop politicizing and weaponizing trade and tech issues and stop destabilizing global industrial and supply chains,” spokesperson Mao Ning told a press briefing. “We will closely follow the developments and firmly safeguard our rights and interests.”

    As part of ongoing dialogue established by Raimondo and other US officials with their Chinese counterparts, Beijing was informed of the impending updates, according to a senior administration official.

    “We let the Chinese know for clarity that these rules were coming, but there was no negotiation with them,” the official told reporters.

    The tech rivalry between the world’s two largest economies has been heating up. In recent months, the United States has enlisted its allies in Europe and Asia in restricting sales of advanced chipmaking equipment to China.

    In July, Beijing hit back by imposing its own curbs on exports of germanium and gallium, two elements essential for making semiconductors.

    Shares of US chipmakers fell Tuesday following the announcement of new export controls.

    Nvidia’s (NVDA) stock closed down 4.7%, while Intel (INTC) slipped 1.4%. AMD (AMD) shares ended 1.2% lower.

    In its filing, Nvidia said the rules imposed new licensing requirements for exports to China and other markets such as Saudi Arabia, the United Arab Emirates and Vietnam.

    The company said its A800 chip, which was reportedly created for Chinese customers in order to circumvent last year’s restrictions, would be among the components affected.

    However, “given the strength of demand for our products worldwide, we do not anticipate that the additional restrictions will have a near-term meaningful impact on our financial results,” Nvidia said.

    The broader US chipmaking industry is also examining the impact of the new rules.

    The Semiconductor Industry Association said in a statement Tuesday that while it recognized the need to protect national security, “overly broad, unilateral controls risk harming the US semiconductor ecosystem without advancing national security as they encourage overseas customers to look elsewhere.”

    “We urge the administration to strengthen coordination with allies to ensure a level playing field for all companies,” added the group, which represents 99% of the US chip sector.

    The measures are also being reviewed in Europe. On Tuesday, ASML, the Dutch chipmaking equipment manufacturer, said it was evaluating the implications of the rules, though it did not expect them “to have a material impact on our financial outlook for 2023.”

    During a call Wednesday about the company’s third-quarter results, ASML chief executive Peter Wennink said the updated export restrictions would affect between 10% and 15% of the firm’s sales to China.

    On Tuesday, the US Department of Commerce added 13 Chinese entities to a list of firms with which US companies may not do business for national security reasons.

    They include two Chinese startups, Biren Technology and Moore Thread Intelligent Technology, and their subsidiaries.

    The department alleges that these companies are “involved in the development of advanced computing chips that have been found to be engaged in activities contrary to US national security.”

    CNN has reached out to Biren and Moore Thread for comment.

    — Anna Cooban contributed reporting.

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  • Biden’s student loan policies continue to face legal challenges | CNN Politics

    Biden’s student loan policies continue to face legal challenges | CNN Politics

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    CNN
     — 

    Legal challenges are continuing to target some of President Joe Biden’s student loan policies.

    While the president’s major student loan forgiveness program was blocked by the Supreme Court in late June, the Biden administration is also facing lawsuits over some of its other policy changes aimed at making it easier for borrowers to pay back their loans.

    On Monday, the US 5th Circuit Court of Appeals temporarily blocked new provisions that were meant to be implemented in July, which would make it easier for borrowers to get their debts erased when they’re misled or defrauded by their college under a rule known as borrower defense to repayment.

    The rule has been in place for decades. But the lawsuit targets new provisions – including one allowing for automatic debt discharges a year after a college’s closure date and another that bans colleges from requiring borrowers to agree to mandatory arbitration – which are now blocked.

    The emergency injunction request was made by Career Colleges and Schools of Texas, a group of for-profit universities. The appeals court order did not explain the reasoning for the decision but said that the case will be heard on November 6.

    Student loan borrowers may still submit applications for debt relief under the borrower defense rule during this time, but the Department of Education “will not adjudicate or process affected applications under the new regulations while the court’s order is in place,” according to the agency’s website.

    Aaron Ament, president of the nonprofit National Student Legal Defense Network, warned that “countless students are at risk of being taken advantage of by higher ed profiteers” until the protections are restored.

    Meanwhile, in a separate lawsuit filed last week, two conservative groups sued to stop the Biden administration from carrying out a one-time adjustment to some borrowers’ accounts, which was aimed at more accurately counting certain payments made previously under an income-driven repayment plan.

    These plans calculate payments based on a borrower’s income and family size – regardless of the person’s total outstanding debt. Generally, they lower monthly payments to help borrowers avoid defaulting on their loans and wipe away remaining balances after qualifying payments are made for 20 to 25 years.

    What the administration has referred to as “fixes” are expected to result in the cancellation of $39 billion worth of federal student loan debt for 804,000 borrowers, according to the Department of Education.

    The lawsuit, which was filed by the New Civil Liberties Alliance on behalf of the conservative groups Cato Institute and the Mackinac Center for Public Policy, argues that one-time adjustment “is substantively and procedurally unlawful” – similar, it says, to the broader student loan forgiveness program struck down by the Supreme Court.

    The Department of Education announced in July – weeks after the other forgiveness program was blocked – that it would begin to notify the 804,000 borrowers of their forthcoming debt cancellation.

    But the one-time adjustment had been planned for more than a year. First announced in April 2022, the move was meant to help borrowers whose payments were miscounted and were already eligible for debt relief under an income-driven repayment plan.

    The changes followed a Government Accountability Office report that found that the Department of Education had trouble tracking borrowers’ payments and hadn’t done enough to ensure that all eligible borrowers receive the forgiveness to which they are entitled. In fact, 7,700 loans in repayment, or about 11% of loans analyzed, could have potentially already been eligible for forgiveness.

    In a statement sent to CNN, the Department of Education said the lawsuit “is nothing but a desperate attempt from right wing special interests to keep hundreds of thousands of borrowers in debt, even though these borrowers have earned the forgiveness that is promised through income-driven repayment plans.”

    This latest legal challenge does not appear to immediately impact the Biden administration’s new income-driven repayment plan known as SAVE (Saving on a Valuable Education), which launched last week.

    Once the SAVE plan is fully phased in, which is expected to happen next year, some borrowers could see their monthly bills cut in half and remaining debt canceled after making at least 10 years of payments.

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  • An author says AI is ‘writing’ unauthorized books being sold under her name on Amazon | CNN Business

    An author says AI is ‘writing’ unauthorized books being sold under her name on Amazon | CNN Business

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    New York
    CNN
     — 

    An author is raising alarms this week after she found new books being sold on Amazon under her name — only she didn’t write them; they appear to have been generated by artificial intelligence.

    Jane Friedman, who has authored multiple books and consulted about working in the writing and publishing industry, told CNN that an eagle-eyed reader looking for more of her work bought one of the fake titles on Amazon. The books had titles similar to the subjects she typically writes about, but the text read as if someone had used a generative AI model to imitate her style.

    “When I started looking at these books, looking at the opening pages, looking at the bio, it was just obvious to me that it had been mostly, if not entirely, AI-generated … I have so much content available online for free, because I’ve been blogging forever, so it wouldn’t be hard to get an AI to mimic me” Friedman said.

    With AI tools like ChatGPT now able to rapidly and cheaply pump out huge volumes of convincing text, some writers and authors have raised alarms about losing work to the new technology. Others have said they don’t want their work being used to train AI models, which could then be used to imitate them.

    “Generative AI is being used to replace writers — taking their work without permission, incorporating those works into the fabric of those AI models and then offering those AI models to the public, to other companies, to use to replace writers,” Mary Rasenberger, CEO of the nonprofit authors advocacy group the Authors Guild, told CNN. “So you can imagine writers are a little upset about that.”

    Last month, US lawmakers met with members of creative industries, including the Authors Guild, to discuss the implications of artificial intelligence. In a Senate subcommittee hearing, Rasenberger called for the creation of legislation to protect writers from AI, including rules that would require AI companies to be transparent about how they train their models. More than 10,000 authors — including James Patterson, Roxane Gay and Margaret Atwood — also signed an open letter calling on AI industry leaders like Microsoft and ChatGPT-maker OpenAI to obtain consent from authors when using their work to train AI models, and to compensate them fairly when they do.

    Friedman on Monday posted a well-read thread on X, formerly known as Twitter, and a blog post about the issue. Several authors responded saying they’d had similar experiences.

    “People keep telling me they bought my newest book — that has my name on it but I didn’t write,” one author said in response.

    Amazon removed the fake books being sold under Friedman’s name and said its policies prohibit such imitation.

    “We have clear content guidelines governing which books can be listed for sale and promptly investigate any book when a concern is raised,” Amazon spokesperson Ashley Vanicek said in a statement, adding that the company accepts author feedback about potential issues. “We invest heavily to provide a trustworthy shopping experience and protect customers and authors from misuse of our service.”

    Amazon also told Friedman that it is “investigating what happened with the handling of your claims to drive improvements to our processes,” according to an email viewed by CNN.

    The fake books using Friedman’s name were also added to her profile on the literary social network Goodreads, and removed only after she publicized the issue.

    “We have clear guidelines on which books are included on Goodreads and will quickly investigate when a concern is raised, removing books when we need to,” Goodreads spokesperson Suzanne Skyvara said in a statement to CNN.

    Friedman said she worries that authors will be stuck playing whack-a-mole to identify AI generated fakes.

    “What’s frightening is that this can happen to anyone with a name that has reputation, status, demand that someone sees a way to profit off of,” she said.

    The Authors Guild has been working with Amazon since this past winter to address the issue of books written by AI, Rasenberger said.

    She said the company has been responsive when the Authors Guild flags fake books on behalf of authors, but it can be a tricky issue to spot given that it’s possible for two legitimate authors to have the same name.

    The group is also hoping AI companies will agree to allow authors to opt out of having their work used to train AI models — so it’s harder to create copycats — and to find ways to transparently label artificially generated text. And, she said, companies and publishers should continue investing in creative work made by humans, even if AI appears more convenient.

    “Using AI to generate content is so easy, it’s so cheap, that I do worry there’s going to be this kind of downward competition to use AI to replace human creators,” she said. “And you will never get the same quality with AI as human creators.”

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  • Microsoft gives ground on streaming in bid to remove UK block on Activision deal | CNN Business

    Microsoft gives ground on streaming in bid to remove UK block on Activision deal | CNN Business

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    London
    CNN
     — 

    Microsoft has made a major concession to UK authorities in a bid to remove the last remaining regulatory obstacle to its huge takeover of Activision Blizzard.

    The companies have submitted a new proposal to the UK antitrust watchdog — the only regulator worldwide standing in the way of the $69 billion deal — that would see Activision’s (ATVI) cloud streaming rights outside the European Union and three other European countries sold to a rival, Ubisoft Entertainment. Microsoft President Brad Smith said in a blog post Tuesday that the companies believe the new proposal “presents a substantially different transaction” for the CMA to consider than its previous merger agreement.

    “We believe that this development is positive for players, the progression of the cloud game streaming market, and for the growth of our industry,” Smith said.

    The restructured deal, announced by the UK Competition and Markets Authority Tuesday, follows a decision by the CMA to block the acquisition on its original terms. That move put it at odds with EU regulators, which approved the plan in May. A US federal court also said in July that it would not block the deal from closing.

    CMA chief executive Sarah Cardell said the regulator would now consider the new proposal.

    “Our goal has not changed — any future decision on this new deal will ensure that the growing cloud gaming market continues to benefit from open and effective competition driving innovation and choice.”

    Under the restructured deal, Ubisoft — a French video game developer — will be able to license out Activision’s content to any cloud gaming provider outside the European Economic Area, including in the United Kingdom. Shares in Ubisoft jumped 7% in Paris Tuesday.

    “This will allow gamers to access Activision’s games in different ways, including through cloud-based multigame subscription services,” Cardell said.

    Microsoft and Activision agreed last month to extend their merger deadline by three months to October 18, to allow more time to come to an agreement with the CMA. October 18 is now also the statutory deadline for a CMA decision on the new merger proposal, and Microsoft said it expects the agency’s review process to be completed ahead of that date.

    Microsoft (MSFT) announced the planned acquisition of Activision early last year. The transaction was valued at $69 billion at the time, making it one of the tech industry’s largest deals.

    Activision Blizzard is one of the world’s biggest video game developers, producing games such as “Candy Crush,” “Call of Duty,” “World of Warcraft” and “Overwatch.”

    –CNN’s Clare Duffy contributed to this report.

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  • What to expect from Apple’s iPhone 15 reveal | CNN Business

    What to expect from Apple’s iPhone 15 reveal | CNN Business

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    CNN
     — 

    Apple is expected to debut its iPhone 15 lineup Tuesday at the company’s annual September keynote event, and it could introduce the biggest change to the phone’s design in 11 years.

    The press event, which Apple teased with a “wonderlust” tagline, will take place at the company’s headquarters in Cupertino, California, and will be livestreamed on its website, starting at 10 a.m. local time.

    Although the annual iPhone event has become formulaic over the years, announcing incremental changes to battery life, camera system and displays, this year Apple is expected to introduce USB-C charging to its smartphones for the first time. The change could ultimately streamline the charging process across various devices and brands.

    But the company will have to show off more than just a new charging system to get users to upgrade. Last month, Apple’s sales fell for the third consecutive quarter. iPhone revenue came in at $39.7 billion for the quarter, marking an approximately 2% year-over-year decline.

    Here’s more of what to expect:

    Apple has previously switched its iPads and MacBooks to USB-C charging, but now may be the time for the company to finally make the change on iPhones. The move would come less than a year after the European Union voted to approve legislation to require smartphones, tablets, digital cameras, portable speakers and other small devices to support USB-C charging by 2024. The first-of-its-kind law aims to pare down the number of chargers and cables consumers must contend with when they purchase a new device and to allow users to mix and match devices and chargers even if they were produced by different manufacturers.

    “This is arguably the biggest disruption to iPhone design for several years, but in reality, it is hardly a dramatic move,” said Ben Wood, an analyst at CCS Insight.

    Last year, Apple’s senior vice president of worldwide marketing, Greg Joswiak, publicly stressed the value and ubiquity of the Lightning charger, which is designed for faster device charging, but noted “obviously we will have to comply” with the EU mandate. The Lightning charger was introduced in 2012.

    The change to USB-C would also likely usher in a wave of charging accessories, potentially in various colors. It’s possible iPhone users will also pay up for a USB-C wall adapter because it will be a different size connector.

    The entire iPhone 15 lineup is rumored to get the “Dynamic Island” feature — an interactive home for alerts, notifications and various controls — that replaces the notch on top of the screen. The tool launched on the higher-end iPhone 14 Pro models last year.

    Although there are few other rumors circulating about its entry-level iPhone models, the iPhone 15 Pro and 15 Pro Max models are expected to get a handful of new features, according to a Bloomberg report. This may include a rear-facing periscope lens, which allows for more optical zoom, and a titanium casing to make the device up to 15% lighter and thinner. The Pro models are also expected to get Apple’s latest A17 chip – the first with 3 nanometer technology, which could deliver faster processing and a longer-lasting battery.

    The lineup is also expected to come in various new colors, as hinted at in the Apple logo featured in the event’s invitation, including navy and updated shades of gray, white and silver.

    In June, Apple introduced the Vision Pro, a mixed reality headset that the company says will usher in a new era of “spatial computing.” Yoram Wurmser, an analyst at Insider Intelligence, believes the company will tease “some new features and deeper collaborations” to drum up excitement ahead of its 2024 launch. (It’s also possible Apple could announce a launch date). The headset blends both virtual reality and augmented reality, a technology that overlays virtual images on live video of the real world. The headset is Apple’s biggest, and riskiest, product launch in years.

    New AirPods, Apple Watches and software release dates

    The company typically unveils its latest Apple Watches alongside the iPhone each year, so it’s likely we’ll see the debut of the Apple Watch Series 9 and possibly its next-generation Ultra 2 smartwatch, its more rugged wearable for serious sports enthusiasts. According to Bloomberg, Apple is working on a full revamp of its smartwatch for next year’s Apple Watch Series 10, so this year’s updates will be relatively minor.

    In addition, Apple is expected to show off its next-generation AirPods with a new charging case that will work with USB-C cables. It’s also likely to announce launch dates for its next-generation operating systems for the iPhone, iPads, Mac computers and Apple Watch.

    In May, for example, Apple showed off a slew of new tools coming to iOS 17, such as a more accurate autocorrect, a new feature called Live Voicemail that will transcribe a caller’s message in real time, and a NameDrop tool that lets users share their contact information by holding two iPhones close together. The iPhone’s phone app will also reposition the hang up button to the bottom right of the screen, next to other functions.

    With the new iPhone expected to take center stage, many analysts don’t anticipate Apple will release new iPads or Mac computers until October. And despite rivals Samsung and Google doubling down on foldable devices, Apple is still not expected to unveil a similar version this fall.

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  • Bill Gates, Elon Musk and Mark Zuckerberg meeting in Washington to discuss future AI regulations | CNN Business

    Bill Gates, Elon Musk and Mark Zuckerberg meeting in Washington to discuss future AI regulations | CNN Business

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    Washington
    CNN
     — 

    Coming out of a three-hour Senate hearing on artificial intelligence, Elon Musk, the head of a handful of tech companies, summarized the grave risks of AI.

    “There’s some chance – above zero – that AI will kill us all. I think it’s low but there’s some chance,” Musk told reporters. “The consequences of getting AI wrong are severe.”

    But he also said the meeting “may go down in history as being very important for the future of civilization.”

    The session organized by Senate Majority Leader Chuck Schumer brought high-profile tech CEOs, civil society leaders and more than 60 senators together. The first of nine sessions aims to develop consensus as the Senate prepares to draft legislation to regulate the fast-moving artificial intelligence industry. The group included CEOs of Meta, Google, OpenAI, Nvidia and IBM.

    All the attendees raised their hands — indicating “yes” — when asked whether the federal government should oversee AI, Schumer told reporters Wednesday afternoon. But consensus on what that role should be and specifics on legislation remained elusive, according to attendees. 

    Benefits and risks

    Bill Gates spoke of AI’s potential to feed the hungry and one unnamed attendee called for spending tens of billions on “transformational innovation” that could unlock AI’s benefits, Schumer said.

    The challenge for Congress is to promote those benefits while mitigating the societal risks of AI, which include the potential for technology-based discrimination, threats to national security and even, as X owner Musk said, “civilizational risk.”

    “You want to be able to maximize the benefits and minimize the harm,” said Schumer, who organized the first of nine sessions. “And that will be our difficult job.”

    Senators emerging from the meeting said they heard a broad range of perspectives, with representatives from labor unions raising the issue of job displacement and civil rights leaders highlighting the need for an inclusive legislative process that provides the least powerful in society a voice.

    Most agreed that AI could not be left to its own devices, said Washington Democratic Sen. Maria Cantwell.

    “I thought Satya Nadella from Microsoft said it best: ‘When it comes to AI, we shouldn’t be thinking about autopilot. You need to have copilots.’ So who’s going to be watching this activity and making sure that it’s done correctly?”

    Other areas of agreement reflected traditional tech industry priorities, such as increasing federal investment in research and development as well as promoting skilled immigration and education, Cantwell added.

    But there was a noticeable lack of engagement on some of the harder questions, she said, particularly on whether a new federal agency is needed to regulate AI.

    “There was no discussion of that,” she said, though several in the meeting raised the possibility of assigning some greater oversight responsibilities to the National Institute of Standards and Technology, a Commerce Department agency.

    Musk told journalists after the event that he thinks a standalone agency to regulate AI is likely at some point.

    “With AI we can’t be like ostriches sticking our heads in the sand,” Schumer said, according to prepared remarks acquired by CNN. He also noted this is “a conversation never before seen in Congress.”

    The push reflects policymakers’ growing awareness of how artificial intelligence, and particularly the type of generative AI popularized by tools such as ChatGPT, could potentially disrupt business and everyday life in numerous ways — ranging from increasing commercial productivity to threatening jobs, national security and intellectual property.

    The high-profile guests trickled in shortly before 10 a.m., with Meta CEO Mark Zuckerberg pausing to chat with Nvidia CEO Jensen Huang outside the Senate Russell office building’s Kennedy Caucus Room. Google CEO Sundar Pichai was seen huddling with Delaware Democratic Sen. Chris Coons, while X owner Musk quickly swept by a mass of cameras with a quick wave to the crowd. Inside, Musk was seated at the opposite end of the room from Zuckerberg, in what is likely the first time that the two men have shared a room since they began challenging each other to a cage fight months ago.

    Elon Musk, CEO of X, the company formerly known as Twitter, left, and Alex Karp, CEO of the software firm Palantir Technologies, take their seats as Senate Majority Leader Chuck Schumer, D, N.Y., convenes a closed-door gathering of leading tech CEOs to discuss the priorities and risks surrounding artificial intelligence and how it should be regulated, at the Capitol in Washington, Wednesday, Sept. 13, 2023.

    The session at the US Capitol in Washington also gave the tech industry its most significant opportunity yet to influence how lawmakers design the rules that could govern AI.

    Some companies, including Google, IBM, Microsoft and OpenAI, have already offered their own in-depth proposals in white papers and blog posts that describe layers of oversight, testing and transparency.

    IBM’s CEO, Arvind Krishna, argued in the meeting that US policy should regulate risky uses of AI, as opposed to just the algorithms themselves.

    “Regulation must account for the context in which AI is deployed,” he said, according to his prepared remarks.

    Executives such as OpenAI CEO Sam Altman previously wowed some senators by publicly calling for new rules early in the industry’s lifecycle, which some lawmakers see as a welcome contrast to the social media industry that has resisted regulation.

    Clement Delangue, co-founder and CEO of the AI company Hugging Face, tweeted last month that Schumer’s guest list “might not be the most representative and inclusive,” but that he would try “to share insights from a broad range of community members, especially on topics of openness, transparency, inclusiveness and distribution of power.”

    Civil society groups have voiced concerns about AI’s possible dangers, such as the risk that poorly trained algorithms may inadvertently discriminate against minorities, or that they could ingest the copyrighted works of writers and artists without compensation or permission. Some authors have sued OpenAI over those claims, while others have asked in an open letter to be paid by AI companies.

    News publishers such as CNN, The New York Times and Disney are some of the content producers who have blocked ChatGPT from using their content. (OpenAI has said exemptions such as fair use apply to its training of large language models.)

    “We will push hard to make sure it’s a truly democratic process with full voice and transparency and accountability and balance,” said Maya Wiley, president and CEO of the Leadership Conference on Civil and Human Rights, “and that we get to something that actually supports democracy; supports economic mobility; supports education; and innovates in all the best ways and ensures that this protects consumers and people at the front end — and just not try to fix it after they’ve been harmed.”

    The concerns reflect what Wiley described as “a fundamental disagreement” with tech companies over how social media platforms handle misinformation, disinformation and speech that is either hateful or incites violence.

    American Federation of Teachers President Randi Weingarten said America can’t make the same mistake with AI that it did with social media. “We failed to act after social media’s damaging impact on kids’ mental health became clear,” she said in a statement. “AI needs to supplement, not supplant, educators, and special care must be taken to prevent harm to students.”

    Navigating those diverse interests will be Schumer, who along with three other senators — South Dakota Republican Sen. Mike Rounds, New Mexico Democratic Sen. Martin Heinrich and Indiana Republican Sen. Todd Young — is leading the Senate’s approach to AI. Earlier this summer, Schumer held three informational sessions for senators to get up to speed on the technology, including one classified briefing featuring presentations by US national security officials.

    Wednesday’s meeting with tech executives and nonprofits marked the next stage of lawmakers’ education on the issue before they get to work developing policy proposals. In announcing the series in June, Schumer emphasized the need for a careful, deliberate approach and acknowledged that “in many ways, we’re starting from scratch.”

    “AI is unlike anything Congress has dealt with before,” he said, noting the topic is different from labor, healthcare or defense. “Experts aren’t even sure which questions policymakers should be asking.”

    Rounds said hammering out the specific scope of regulations will fall to Senate committees. Schumer added that the goal — after hosting more sessions — is to craft legislation over “months, not years.”

    “We’re not ready to write the regs today. We’re not there,” Rounds said. “That’s what this is all about.”

    A smattering of AI bills have already emerged on Capitol Hill and seek to rein in the industry in various ways, but Schumer’s push represents a higher-level effort to coordinate Congress’s legislative agenda on the issue.

    New AI legislation could also serve as a potential backstop to voluntary commitments that some AI companies made to the Biden administration earlier this year to ensure their AI models undergo outside testing before they are released to the public.

    But even as US lawmakers prepare to legislate by meeting with industry and civil society groups, they are already months if not years behind the European Union, which is expected to finalize a sweeping AI law by year’s end that could ban the use of AI for predictive policing and restrict how it can be used in other contexts.

    A bipartisan pair of US senators sharply criticized the meeting, saying the process is unlikely to produce results and does not do enough to address the societal risks of AI.

    Connecticut Democratic Sen. Richard Blumenthal and Missouri Republican Sen. Josh Hawley each spoke to reporters on the sidelines of the meeting. The two lawmakers recently introduced a legislative framework for artificial intelligence that they said represents a concrete effort to regulate AI — in contrast to what was happening steps away behind closed doors.

    “This forum is not designed to produce legislation,” Blumenthal said. “Our subcommittee will produce legislation.”

    Blumenthal added that the proposed framework — which calls for setting up a new independent AI oversight body, as well as a licensing regime for AI development and the ability for people to sue companies over AI-driven harms — could lead to a draft bill by the end of the year.

    “We need to do what has been done for airline safety, car safety, drug safety, medical device safety,” Blumenthal said. “AI safety is no different — in fact, potentially even more dangerous.”

    Hawley called Wednesday’s sessions “a giant cocktail party” for the tech industry and slammed the fact that it was private.

    “I don’t know why we would invite all the biggest monopolists in the world to come and give Congress tips on how to help them make more money, and then close it to the public,” Hawley said. “I mean, that’s a terrible idea. These are the same people who have ruined social media.”

    Despite talking tough on tech, Schumer has moved extremely slowly on tech legislation, Hawley said, pointing to several major tech bills from the last Congress that never made it to a Senate floor vote.

    “It’s a little bit like antitrust the last two years,” Hawley said. “He talks about it constantly and does nothing about it. My sense is … this is a lot of song and dance that covers the fact that actually nothing is advancing. I hope I’m wrong about that.”

    Hawley is also a co-sponsor of a bill introduced Tuesday led by Minnesota Democratic Sen. Amy Klobuchar that would prohibit generative AI from being used to create deceptive political ads. Klobuchar and Hawley, along with fellow co-sponsors Coons and Maine Republican Sen. Susan Collins, said the measure is needed to keep AI from manipulating voters.

    Massachusetts Democratic Sen. Elizabeth Warren said the broad nature of the summit limited its potential.

    “They’re sitting at a big, round table all by themselves,” Warren said of the executives and civil society leaders, while all the senators sat, listened and didn’t ask questions. “Let’s put something real on the table instead of everybody agree[ing] that we need safety and innovation.”

    Schumer said that making the meeting confidential was intended to give lawmakers the chance to hear from the outside in an “unvarnished way.”

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  • Donald Trump Jr.’s X account was hacked, his spokesman says | CNN Business

    Donald Trump Jr.’s X account was hacked, his spokesman says | CNN Business

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    Washington
    CNN
     — 

    A spokesman for former President Donald Trump said Wednesday that Donald Trump Jr.’s account on X – the platform formerly known as Twitter – had been compromised after the account began sharing a series of unusual and erratic posts.

    “Don’s account has been hacked,” Andrew Surabian posted on X, adding that a post claiming the former president had died was “obviously not true.”

    In addition to falsely pronouncing the death of the senior Trump, the compromised account also claimed that Trump Jr. would be running for president himself. Within minutes, the post had been reshared more than 1,000 times on X and viewed hundreds of thousands of times.

    Another post appeared to threaten the country of North Korea, while a pinned post on the account’s profile insulted President Joe Biden with the use of a racist epithet.

    Roughly a half-hour after the posts surfaced, they had been removed. X did not respond to CNN’s request for comment.

    The incident raises fresh questions about X’s role in securing user accounts, particularly those belonging to high-profile political figures as the platform prepares for the 2024 elections. In August, X said it is staffing up on its safety and election teams following mass layoffs last year that according to owner Elon Musk ultimately eliminated more than 80% of the company’s headcount.

    It is also unclear whether the compromise may have resulted in unauthorized access of Trump Jr.’s private direct messages, or whether Trump Jr. may have had two-factor authentication enabled on his account.

    X is still under investigation by the Federal Trade Commission over the company’s ability to sufficiently protect user privacy and whether it may have violated binding commitments it made in 2011 to securing the platform. The investigation began after the company’s former security chief, Peiter “Mudge” Zatko, filed a whistleblower disclosure first reported by CNN and The Washington Post last year that alleged widespread and unaddressed security vulnerabilities.

    This is not the first time high-profile accounts on the platform have been taken over. In 2020, for example, hackers gained control of accounts belonging to former President Barack Obama, Amazon founder Jeff Bezos and others including Biden and Musk themselves by posing as Twitter’s IT support. At the time, Twitter admitted that the hackers had downloaded account data that potentially included private messages.

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  • Another top Silicon Valley investor is splitting off its China business as pressure mounts | CNN Business

    Another top Silicon Valley investor is splitting off its China business as pressure mounts | CNN Business

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    Editor’s Note: Sign up for CNN’s Meanwhile in China newsletter which explores what you need to know about the country’s rise and how it impacts the world.


    Hong Kong
    CNN
     — 

    GGV Capital, a prominent Silicon Valley venture capital firm, has become the latest big investor to break up its US and China operations into separate companies as tensions between the two countries over tech and geopolitics continue to rise.

    The firm announced Thursday that it would divide its business into two “completely independent” firms with separate new brands, which have not been revealed.

    According to the company, one side will concentrate on North America, Latin America, Europe, Israel and cross-border US-India deals, led by teams in California and New York by managing partners Glenn Solomon, Hans Tung, Jeff Richards and Oren Yunger.

    The other side will focus on China, Southeast Asia and South Asia, run from its headquarters in Singapore, by managing partners Jenny Lee and Jixun Foo.

    GGV’s existing Chinese yuan-denominated funds “will continue to be managed independently” under its Chinese brand, Jiyuan Capital, it said.

    In a statement, the firm attributed the decision to the fact that “over the last decade, the investment landscape has shifted significantly, and the operating environment has become highly complex.”

    “Against these new realities, GGV is also evolving,” it added, without elaborating further.

    The transition is expected to be completed by the end of the first quarter of next year.

    GGV Capital has approximately $9.2 billion in assets under management. The firm is known for backing tech companies around the world, such as Alibaba (BABA), Airbnb (ABNB), Slack, TikTok owner ByteDance and Chinese ride-hailing provider Didi.

    The move comes as US-China tensions continue to affect how businesses operate across the world’s top two economies.

    Last month, the Biden administration announced it would restrict investments by US venture capital and private equity firms, as well as joint ventures, in Chinese artificial intelligence, quantum computing and semiconductors.

    The executive order will exacerbate a slump in deals between the United States and China, and deliver a “major blow” to Chinese startups, analysts and investors previously told CNN.

    Asked whether the US order or wider geopolitical tensions had factored into its decision, GGV Capital declined to comment.

    The firm has recently come under greater scrutiny from US lawmakers.

    In July, a US House committee said it had sent letters to four investment firms, including GGV, “expressing serious concern and demanding information about the firms’ investments” in artificial intelligence, chips and quantum computing companies in China.

    One investment named was a GGV deal with Megvii, an AI developer. The company is best known for its facial recognition software, and has long been accused of human rights violations against Uyghurs and other members of Muslim minority groups in China’s Xinjiang region.

    Megvii was added to a US trade blacklist in 2019 over the issue and previously told CNN that there were “no grounds” for that decision.

    The ongoing pressure has already led other firms to separate their US and Chinese businesses this year.

    In June, top global venture capital firm Sequoia announced a similar decision to cordon off its operations into three entities that cover Europe and the United States; China; and India and Southeast Asia. Its China business will be run independently under its Chinese name, Hongshan.

    Leaders of the Silicon Valley firm said at the time that it had “become increasingly complex to run a decentralized global investment business.”

    In August, Dentons, a leading law firm, also said its China unit would become a standalone legal entity, in response to new Chinese regulations related to data privacy, cybersecurity and capital control.

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  • Going to food banks. Canceling after-school activities. How federal workers will manage a government shutdown | CNN Politics

    Going to food banks. Canceling after-school activities. How federal workers will manage a government shutdown | CNN Politics

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    CNN
     — 

    The last time the federal government shut down five years ago, Jesse Santiago found himself standing in line at his local food bank, rationing medication and falling behind on his mortgage payments, which ultimately cost him his home.

    Santiago, who has worked as a Transportation Security Administration officer at Houston’s airport since 2002, likes his job and takes pride in keeping Americans safe when they fly. But he’s outraged that Congress once again is on the brink of letting the federal government shut down, throwing him and his fellow federal workers into financial and emotional chaos.

    “Imagine serving the American people only to have to beg for food,” said Santiago, who lives with his husband in Cleveland, Texas, and has started stocking up on canned beans and other nonperishable food in case this impasse drags out. “I refuse to stand in food lines again while working for the federal government.”

    Santiago is among several million federal employees who will stop being paid if lawmakers cannot agree on funding the federal agencies by the start of the coming fiscal year on October 1. Some, like Santiago, are considered essential workers and have to go to work regardless. Others will be furloughed until Congress passes a spending package, which took more than a month during the 2018-19 shutdown.

    Hundreds of people wrote to CNN to express their views about the looming shutdown. Several said they were concerned about taking trips to national parks, including a bride-to-be who is holding her wedding at one in mid-October, while many senior citizens said they were terrified they wouldn’t get their monthly Social Security checks. (In fact, Social Security payments continue during shutdowns.)

    Some charitable organizations are already offering to help federal workers get through their payless period. Earlier this week, chef Jose Andres said his World Central Kitchen restaurants in Washington, DC, would provide food to federal employees during a shutdown, as they did during the previous impasse.

    Among the hardest hit by government shutdowns are federal employees, who won’t get paid until Congress funds their agencies, and federal contractors, who don’t receive back pay. Many wrote of the toll the last shutdown – the longest on record – took on them and their concerns that they and their families will likely have to go through this again.

    For Carrie Martin, who works in the finance department of the National Institutes of Health, potentially losing her paycheck comes at a tough time. Not only is she shelling out more for groceries, rent and other essentials because of inflation, but she’ll have to start making student loan payments of a little more than $700 a month in October.

    “Not knowing when I will get my next paycheck is very stressful considering I am living paycheck to paycheck,” said Martin, who earned a master’s in health administration degree from George Washington University this spring. “Adding student loans back into my bills is making it 10 times worse.”

    Plus, she said it’s difficult to work under such uncertain conditions. She and her colleagues have been putting in extra hours preparing for the end of the current fiscal year and the start of the next one.

    “Preparing for something that may not happen takes a lot of energy out of you,” said Martin, who is also still adjusting to living on one income after her wife passed away last year.

    Other federal workers are already planning to cut back their spending.

    Nicole, a federal law enforcement officer in southern Missouri, said she won’t be able to throw a party for her 6-year-old son whose birthday is in early October. She had hoped to invite a dozen or so children since he just entered kindergarten and is starting to make friends. Instead, her son will just have cake and presents at home with his parents, grandparents and younger brother.

    “I’ll probably feel more sad than he will,” said Nicole, who did not want her last name used because of the nature of her job. “I don’t want to tap into my savings and not pay my bills.”

    Even though her husband will continue to be paid since he works in the restaurant industry, Nicole said the family will have to make sacrifices, including not signing up her older son for after-school activities, such as basketball and painting. And they’ll skip going to fall festivals in their area.

    During the last shutdown, they bought fewer groceries, reduced their cable plan and paid a decent amount of late fees on bills. Plus, they had to take out a loan from their local credit union, though at least they didn’t have to pay interest on it.

    “That was probably one of the worst things we’ve been through,” said Nicole, who still has to report to work during a shutdown.

    The stress from the 2013 impasse prompted Rob, who was a federal police officer in Washington, DC, at the time, to leave federal service. He had to work long shifts without knowing when he’d see his next paycheck.

    A decade later, Rob decided to return to the federal workforce so he could get a better-paying job than the one he has working security at a local retailer. He is currently behind on his rent and car payments and depends on food stamps to feed his family, including his 4-year-old daughter.

    Just last week, he accepted a position as a police officer at a Veterans Health Administration hospital with a tentative start date of November 5. But if the government shuts down, he fears his paperwork and medical reviews will be delayed so he’ll have to wait longer to begin the job he desperately needs.

    “This was a light at the end of the tunnel for us,” said Rob, who now lives outside of Boston and did not want his last name used for fear of losing his job offer. “I just want to work. I just want to serve my country, do my job.”

    Many federal contractors, meanwhile, are gearing up to give up their paychecks completely until Congress resolves the impasse.

    Theresa Springer of Pittsburgh is a senior consultant for a small management consulting firm that works with various federal agencies. During the last shutdown, she and her coworkers were able to take paid time off, so her income didn’t suffer even though it cost her employer hundreds of thousands of dollars. The company is making the same offer again this year, giving her around two weeks of breathing room before she stops being paid.

    Though Springer said she has the savings to get her through, she will have to watch her spending and may have to delay some purchases if there is a shutdown. Regardless, she’s irritated at lawmakers’ inability to govern and thinks they should forgo their paychecks.

    “My emergency fund is for emergencies, not for the federal government not being able to get their act together,” she said.

    The situation is also tough for small businesses that depend on federal employees, like Sue Doyle’s Home Sweet Home Cleaning Services in Columbia, Maryland. Between 10% and 20% of her clients work for the government, and many cancel their appointments during shutdowns.

    During shutdowns, Sue Doyle temporarily loses many of her clients who work for the federal government.

    Not only does that hurt her income, it cuts into the earnings of her seven employees. Doyle tries not to lay anyone off, opting instead to reduce all of their schedules. While most understand, they are frustrated because they also have bills to pay, she said.

    “A shutdown has a trickle-down consequence,” said Doyle, who is already talking to a bank about a business loan so she can cover her expenses during the impasse. “Hopefully, my employees won’t have more than one day off a week.”

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  • US regulator seeks court order to compel Elon Musk to testify about his Twitter acquisition | CNN Business

    US regulator seeks court order to compel Elon Musk to testify about his Twitter acquisition | CNN Business

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    New York
    CNN
     — 

    The US Securities and Exchange Commission on Thursday applied for a court order to force Elon Musk to testify in an ongoing probe related to his acquisition of Twitter and public disclosures he made in connection with the deal, according to court filings.

    The filing Thursday in San Francisco federal court seeks a judge’s order requiring Musk to testify, alleging “blatant refusal to comply” with an earlier SEC subpoena.

    X, the company formerly known as Twitter, did not immediately respond to a request for comment.

    The SEC action is the latest turn in a long-running inquiry into whether Musk fully complied with his disclosure obligations when he began acquiring large amounts of Twitter stock, prior to his deal to buy the company. And it underscores years of friction between Musk and the agency over his public comments on numerous matters involving his companies.

    Musk began buying up large amounts of Twitter stock in early 2022, and he revealed on April 4 of that year that he had become the company’s largest shareholder. Later that month, Musk inked a deal to buy the platform for $44 billion and — after a monthslong legal battle attempting to exit the deal — officially closed the acquisition in October of last year. Musk has faced a number of legal challenges related to his Twitter acquisition in the months since his takeover.

    Musk testified twice as part of the SEC’s investigation in July 2022, according to the agency.

    Starting that same month, Musk produced “hundreds of documents” to federal investigators working on the probe, “including documents Musk authored,” according to a declaration by an SEC attorney filed alongside the agency’s court request.

    The SEC served Musk with a subpoena to testify again in the matter in May 2023, according to the court filing. The current subpoena at issue seeks evidence and testimony from Musk that the SEC does not yet possess, the agency said.

    Despite previously agreeing to testify on September 15 and rescheduling the testimony once, Musk “abruptly notified the SEC” two days before his scheduled appearance to say he would not be showing up, the filing states.

    The SEC attempted to negotiate with Musk to find alternative dates later this fall, according to court documents.

    “These good faith efforts were met with Musk’s blanket refusal to appear for testimony,” it adds.

    “The subpoena with which Musk failed to comply relates to an ongoing nonpublic investigation by the SEC,” the filing continued, “regarding whether, among other things, Musk violated various provisions of the federal securities laws in connection with (1) his 2022 purchases of Twitter, Inc (“Twitter”) stock, and (2) his 2022 statements and SEC filings relating to Twitter.”

    When Musk informed the SEC he would not be appearing to testify, his lawyer, Alex Spiro, wrote to the agency on September 13, saying Musk had “already sat for testimony twice in this matter” and that “enough is enough.”

    Spiro’s letter, which was included as an exhibit in the SEC’s court filings, accused regulators of seeking Musk’s testimony in bad faith and attempting to waste Musk’s time.

    In addition, Spiro claimed that the recent release of Walter Isaacson’s biography of Musk would interfere because it contained “new information potentially relevant to this matter” that would take time for both sides to digest.

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  • The world will pay a high price if China cuts off supplies of chipmaking materials | CNN Business

    The world will pay a high price if China cuts off supplies of chipmaking materials | CNN Business

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    Editor’s Note: Sign up for CNN’s Meanwhile in China newsletter which explores what you need to know about the country’s rise and how it impacts the world.


    Hong Kong
    CNN
     — 

    Just one month after China announced it would curb exports of germanium and gallium, both essential for making semiconductors, its overseas shipments of the materials fell to zero.

    Beijing says it has since approved some export licenses but the restrictions are a stark warning that China has a powerful weapon it can deploy in the escalating trade war over the future of tech. The curbs came after the United States, Europe and Japan restricted sales of chips and chipmaking equipment to China to cut off its access to key technology that can be used by the military.

    “It is still early to tell how tight the restrictions would be. [But] if China ends up blocking a large amount of exports, it will cause a disruption in the supply chain for the immediate consumers,” said Xiaomeng Lu, director for geotechnology at Eurasia Group.

    China enjoys a near monopoly on the production of the two elements. Last year, it accounted for 98% of the global production of gallium and 68% of refined germanium production, according to the US Geological Survey (USGS).

    While there are alternatives for the United States and its allies, constructing an independent supply chain for gallium and germanium processing could require a “staggering” investment of over $20 billion, according to Marina Zhang, an associate professor at University of Technology Sydney. And it could take years to develop.

    “Refining technologies and facilities for processing gallium and germanium cannot be built overnight, particularly considering the environmental implications of their extraction and mining,” she wrote in July.

    But there may be no other option but to do so.

    Although the minerals account for only “several hundred million dollars” in global trade, according to Zhang, they are critical to the supply chains of the international semiconductor, defense, electrical vehicle and communications industries, which are each worth hundreds of billions of dollars.

    China has dominated the production of both elements for at least a decade.

    Gallium is a soft, silvery metal and is easy to cut with a knife. It’s commonly used to produce compounds that can make radio frequency chips for mobile phones and satellite communication.

    Germanium is a hard, grayish-white and brittle metalloid that is used in the production of optical fibers that can transmit light and electronic data.

    Neither is found on their own in nature. They are usually formed as a byproduct of mining more common metals: primarily aluminum, zinc and copper.

    The processing of the elements can be “costly, technically challenging, energy-intensive and polluting,” according to Ewa Manthey, a commodities strategist at ING Group.

    “China dominates production of these two metals not because they are rare, but because it has been able to keep their production costs fairly low and manufacturers elsewhere haven’t been able to match the country’s competitive costs,” he said.

    From 2005 to 2015, China’s production of low-purity gallium exploded from 22 metric tons to 444 metric tons, according to data compiled by the Center for Strategic and International Studies in Washington.

    Analysts from the think tank said China’s leading position in the aluminum industry has allowed it to establish a dominant share of global gallium production.

    Moreover, China’s government has implemented strategic policies to boost production, including a requirement for the country’s aluminum producers to create the capacity to extract gallium.

    This is why, over the past 10 years, manufacturing gallium has become essentially economically nonviable outside China.

    Between 2013 and 2016, Kazakhstan, Hungary, and Germany all ceased primary production of gallium. (Germany announced in 2021 it would restart production because of rising prices.)

    There are alternative suppliers, though.

    According to the USGS, Russia, Japan, and Korea produced a combined 1.8% of global gallium in 2022. For germanium, Canada’s Teck Resources is one of the world’s largest producers. American company Indium Corporation is also a top global manufacturer of germanium compounds and alloys.

    And Canada’s 5NPlus and Belgium’s Umicore produce both elements.

    But “it would take time to bring online alternative sources of supply,” Chris Miller, author of “Chip War” and an economic historian, told CNN.

    It could also be expensive.

    Global mining companies can get into the business of selling germanium and gallium if China seeks to choke off supply, said Gregory Allen, director of Wadhwani Center for AI & Advanced Technologies at CSIS.

    “This would not be instantaneous, but some global mining and refining firms have signaled their intent to do so.”

    In July, Russian state owned conglomerate Rostec told Reuters that it’s ready to boost output of germanium for domestic use after China announced curbs on exports.

    Netherlands-based Nyrstar also said it was looking at potential germanium and gallium projects in Australia, Europe and the United States.

    “Even if users run out of supplies of these minerals, gallium can be swapped for silicon or indium in the wafer making process,” Lu from Eurasia Group said.

    Zinc selenide is a lesser but functional substitute for germanium in certain applications, she added.

    Recycling is another option.

    Last year, the US Defense logistics Agency introduced a program to recycle optical-grade germanium used in weapon systems.

    “Factory floor scrap has already accounted for a source of supply. Germanium scrap is also recovered from decommissioned tanks and other military vehicles,” Lu said.

    In August, China didn’t sell any germanium or gallium outside its borders. The numbers could bounce back in September, as the Commerce Ministry said it had approved some export licenses for Chinese companies.

    Initially, prices for the two elements are likely to rise, Manthey said.

    Prices of gallium stood at 1,965 yuan ($269) per metric ton on Tuesday, up more than 17% from June 1, according to ebaiyin.com, a Chinese metal trading service website.

    Prices for germanium increased about 3% during the same period.

    “Higher prices will in turn increase competition by making production more cost-competitive again in countries like Japan, Canada and the US, which will in turn reduce China’s dominance in both markets,” Manthey said.

    “It will take time to build processing plants, but over time, the markets and supply chains will adjust,” he added.

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  • Neuralink, Elon Musk’s brain implant startup, raises $280 million from Peter Thiel’s VC fund | CNN Business

    Neuralink, Elon Musk’s brain implant startup, raises $280 million from Peter Thiel’s VC fund | CNN Business

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    New York
    CNN
     — 

    Elon Musk’s biotechnology startup Neuralink raised $280 million in a fundraising round, the company announced Monday via X, the Musk-owned social media platform formerly known as Twitter.

    The Series D round was led by Founders Fund, a San Francisco-based VC firm established by Peter Thiel, the controversial billionaire who was also a cofounder at PayPal.

    “We’re extremely excited about this next chapter at Neuralink,” the company wrote.

    The brain chip startup wants to use implants to connect your brain to a computer, a goal Musk has been working on for five years. The company so far has only tested on animals and faced scrutiny after a monkey died in project testing in 2022 as part of efforts to get the animal to play Pong, a computer game.

    Macaque monkeys have been used in testing by Neuralink as the company has been developing Bluetooth-enabled implantable chips — inserted into the monkey’s brains — that ​the company says can communicate with computers via a small receiver.

    The funding news comes months after Musk announced the company was moving towards human trials. The billionaire said at a December recruiting event that Neuralink has submitted “most” of its paperwork to the US Food and Drug Administration and could begin testing on humans within six months.

    But employees have said the company is rushing to market, resulting in careless animal deaths and a federal investigation, according to a December report by Reuters.

    Before Neuralink’s brain implants are mass-produced and hit the broader market, they’ll need regulatory approval. The FDA put out a paper in 2021 mapping out the agency’s initial thoughts on brain-computer interface devices, noting the field is “progressing rapidly.”

    A tweet by Neuralink Monday announced they were hiring and invited those interested to “join in on engineering challenges to restore vision and mobility.”

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  • Illinois passes a law that requires parents to compensate child influencers | CNN Business

    Illinois passes a law that requires parents to compensate child influencers | CNN Business

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    CNN
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    When 16-year-old Shreya Nallamothu from Normal, Illinois, scrolled through social media platforms to pass time during the pandemic, she became increasingly frustrated with the number of children she saw featured in family vlogs.

    She recalled the many home videos her parents filmed of herself and her sister over the years: taking their first steps, going to school and other “embarrassing stuff.”

    “I’m so glad those videos stayed in the family,” she said. “It made me realize family vlogging is putting very private and intimate moments onto the internet.”

    She said reminders and lectures from her parents about how everything is permanent online intensified her reaction to the videos she saw of kid influencers. “The fact that these kids are either too young to grasp that or weren’t given the chance to grasp that is really sad.”

    Nallamothu wrote a letter last year to her state senator, Democrat Dave Koehler, urging him to consider legislation to protect young influencers. Last week, her home state became the first to pass a law that establishes safeguards for minors who are featured in online videos – and how they’re compensated.

    Illinois Gov. J. B. Pritzker on Friday signed a bill, inspired by Nallamothu’s letter, amending the state’s Child Labor Law that will allow teenagers over the age of 18 to take legal action against their parents if they were featured in monetized social media videos and not properly compensated, similar to the rights held by child actors.

    Starting July 1 2024, parents in Illinois will be required to put aside 50% of earnings for a piece of content into a blocked trust fund for the child, based on the percentage of time they’re featured in the video. For example, if a child is in 50% of a video, they should receive 25% of the funds; if they’re in 100%, they are required to get 50% of the earnings. However, this only applies in scenarios during which the child appears on the screen for more than 30% of the vlogs in a 12-month period.

    “We understand that parents should receive compensation too because they have equity in this, but we don’t want to forget about the child,” Koehler told CNN.

    Many YouTube parent vloggers or social media influencers post multiple videos each month or weekly, sharing intimate details about their lives, ranging from family financial troubles and the birth of a new baby to opening new toys or going through a child’s phone or report card. Although children are predominantly featured in these monetized videos, parents have had no legal obligation to give them any portion of the earnings.

    Meanwhile, kid influencer accounts, which can at times earn $20,000 or more for sponsored posts, are typically run by parents and not often set up in the child’s name due to age restrictions on social media platforms.

    “We often see with emerging technology and trends that legislation is always a reaction to that,” Koehler said. “But we know with the explosion of social media that parents are using it to monetize kids being on videos. If money is being made and nothing is set up for the children, it’s the same thing as a child actor.”

    The new law is modeled off of the 1936 Jackie Coogan’s Law, the Hollywood silent actor discovered by Charlie Chaplin whose parents swindled him out of his earnings. That California law required parents to set aside a portion of 15% of child earnings in a blocked trust account that the child actor could access after the age of 18.

    Although similar bills have been proposed in California and Washington, Jessica Maddox — an assistant professor at The University of Alabama who studies the social media influencer community — said she’s hopeful other states will follow in Illinois’ footsteps.

    “Even though Illinois is the first state to pass such a law, this legislation is a long time coming,” Maddox said. “Social media labor and careers are becoming increasingly common and viable forms of income, and it’s important that the law catches up with technology to ensure minors aren’t being exploited.”

    Maddox said it also breathes new life into the long-simmering debate over what is appropriate for parents to document online and whether a child can really consent to participating.

    “I’ve seen organic conversations start to emerge between individuals who had been featured heavily in their parents’ social media content but are now of age to tell their stories and admit that had they really understood what was going on, they would have never consented for their lives to be broadcast for everyone.”

    Chris McCarty — the 19-year-old founder of Quit Clicking Kids, an advocacy and education site to combat the monetization of children on social media, who is helping to develop child influencer legislation in Washington State — believes that as the kids featured in family vlogs grow up and share their stories, there will be an increase in public pressure to provide more privacy protections.

    “When children are slightly older, often the narratives get increasingly personal; for example. detailing trouble with bullies, first periods, doctor’s visits, and mental health issues,” McCarty said. “A lot of consumers assume that children working in a family vlog and child actors have the same experiences. This is not the case. As difficult as it is to be a child actor, child actors are still playing a part rather than having their intimate personal details shared for entertainment and monetary purposes.”

    Nallamothu agrees that the next step is for legislation to evolve over time to include more regulations around consent.

    “I know this bill isn’t going to be perfect off the bat but I don’t want perfection to get in the way of progress because regulations have only started coming up,” she said. “I’m glad it’s getting there.”

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  • US judge set to decertify Google Play class action | CNN Business

    US judge set to decertify Google Play class action | CNN Business

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    A US judge plans to free Google from having to defend against a class action by 21 million consumers who claimed it violated federal antitrust law by overcharging them in its Google Play app store.

    Monday’s decision by US District Judge James Donato in San Francisco could significantly reduce damages that Google, a unit of Alphabet, might owe over the distribution of Android mobile applications.

    Consumers claimed they would have paid less for apps and enjoyed expanded choice but for Google’s alleged monopoly. Google has denied wrongdoing.

    Donato said his Nov. 2022 class certification order should be thrown out because his decision, also announced Monday, not to let an economist testify as an expert witness for the consumers eliminated an “essential element” of their argument for certification.

    The judge said he couldn’t decertify the class immediately because Google had been appealing his November order. He directed lawyers for Google and the consumers to try resolving that issue before a Sept. 7 hearing.

    The class action included consumers from 12 US states and five territories, who were not part of a similar case against Google brought by various state attorneys general.

    Class actions let plaintiffs sue as a group, and potentially obtain larger recoveries at lower cost than if they were forced to sue individually.

    Lawyers for the consumers did not immediately respond to requests for comment. Google and its lawyers did not immediately respond to similar requests.

    The case is part of wide-ranging antitrust litigation that includes 38 states and the District of Columbia, and companies including Epic Games and Match Group.

    The case is In re Google Play Store Antitrust Litigation, US District Court, Northern District of California, No. 21-md-02981.

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