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  • A flying car prototype just got an airworthiness certificate from the FAA | CNN Business

    A flying car prototype just got an airworthiness certificate from the FAA | CNN Business

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    New York
    CNN
     — 

    The Federal Aviation Administration has certified for testing a vehicle that a California startup describes as a flying car — the first fully electric vehicle that can both fly and travel on roads to receive US government approval.

    Alef Automotive said that its vehicle/aircraft, dubbed the “Model A,” is the first flying vehicle that is drivable on public roads and able to park like a normal car. It also has vertical takeoff and landing capabilities. It apparently will be able to carry one or two occupants and will have a road-range of 200 miles and a flying range of 110 miles.

    The company expects to sell the vehicle for $300,000 each with the first delivery by projected for the end of 2025.

    The FAA confirmed that it has issued the company a special airworthiness certificate, allowing for limited purposes that include exhibition, research and development.

    Numerous companies are working on all-electric VTOLs, which stands for vehicle takeoff and landing aircraft. The FAA said that Alef is “not the first aircraft of its kind” to get a special airworthiness certificate. However, Alef noted that its vehicle is different because of its ability to function both on roads and in the air, to appear like a normal car and to park in a normal parking space.

    “We’re excited to receive this certification from the FAA. It allows us to move closer to bringing people an environmentally friendly and faster commute, saving individuals and companies hours each week. This is a one small step for planes, one giant step for cars,” said Jim Dukhovny, the CEO of Alef.

    The company’s website said the flying car will be a certified as a “low speed vehicle,” which means it won’t be able to go faster than about 25 miles per hour on a paved road. “The assumption is that, if a driver needs a faster route, a driver will use Alef’s flight capabilities,” the company posted on the site.

    Regardless, It also still needs approval from the National Highway Traffic Safety Administration to go on roads.

    Development has been underway on the vehicle since 2015. Four friends, Constantine Kisly, Pavel Markin, Oleg Petrov and Dukhovny, inspired by the “Back to the Future” movies (which foresaw flying cars being available in that year), decided to form a company to try to develop them.

    According to the company, an initial automated test flight of a skeleton version of the car was successfully conducted in 2018, and a full-size prototype was flown the following year. But Alef said that it needed the FAA’s special airworthiness certificate to continue conducting the necessary research and development.

    The company also said that earlier this year that it had taken refundable pre-orders for more than 400 of the vehicles, with the cost of $150 for to be in the general queue or $1,500 for the priority queue.

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  • Nikola to pause truck production after posting bigger quarterly loss | CNN Business

    Nikola to pause truck production after posting bigger quarterly loss | CNN Business

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    CNN
     — 

    Nikola Corp on Tuesday reported a bigger quarterly loss and said it would pause production to streamline the assembly line at its Coolidge, Arizona factory amid sluggish demand for its battery-powered trucks.

    Investors have focused at cash reserves at Nikola and other EV makers amid fears that slowing sales could push the companies to pursue more share sales to raise funds.

    “At the end of May, we plan to pause truck production as we convert the line to accommodate both hydrogen fuel cell and battery electric trucks on the same line and will resume production in July with the first saleable hydrogen fuel cell trucks,” Nikola said.

    Earlier in the day, Fisker Inc cut its full-year production target as the electric-vehicle startup seeks to keep a leash on expenses and reported a smaller first-quarter loss.

    Nikola’s net loss widened to $169.09 million in the quarter, from $152.94 million a year earlier.

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

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

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    CNN
     — 

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

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

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

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

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

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

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

    Here’s a closer look at what to expect:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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  • Why there won’t be a backlash against the Supreme Court this time | CNN Politics

    Why there won’t be a backlash against the Supreme Court this time | CNN Politics

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    CNN
     — 

    The Supreme Court handed down several key rulings this past week that dismayed liberals. Chief among them was the court’s decision to disallow colleges and universities from using race or ethnicity as a specific factor in admissions. The court also found that President Joe Biden’s student debt forgiveness plan was unconstitutional and that a Colorado web designer could refuse to create websites that celebrate same-sex weddings over religious objections.

    Unlike last year, when the Supreme Court greatly upset liberals by overturning Roe v. Wade, this year’s big rulings by the justices are unlikely to spark a major backlash from the public at large.

    This is well reflected in the public polling. Roe v. Wade, the 1973 decision that legalized abortion nationwide, had become massively popular.

    Right before the decision to overturn Roe leaked in May 2022, a Fox News poll found that 63% of registered voters were opposed to such a move while 27% supported it. An ABC News/Washington Post poll put the split at 54% wanting the court to uphold Roe and 28% wanting the decision overturned.

    This majority of Americans who wanted abortion to be legal nationally have maintained their stance since the Supreme Court officially struck down Roe in June 2022. Since that time, abortion supporters have won every related measure placed on the ballot across the country – from deep-blue states like California to ruby-red ones like Kentucky.

    California is an important state to note because voters there faced a 2020 ballot measure to consider the use of race, sex or ethnicity in government institutions (such as education). A clear majority, 57%, voted against allowing state and local entities to consider such factors in public education, employment and contracting decisions.

    When a state that voted for Biden by nearly 30 points is against affirmative action, it shouldn’t be surprising that the nation as a whole is.

    A Pew Research Center poll released last month found that 50% of Americans disapproved of certain colleges and universities taking race and ethnicity into account in admissions decisions to increase diversity. Only 33% approved of the practice.

    This Pew poll is no outlier. An ABC News/Ipsos poll conducted after the court decided its case showed that 52% of Americans approved of the decision, while 32% were opposed.

    Some polling before the ruling had shown even more opposition: 70% of Americans in a recent CBS News/YouGov survey indicated that the Supreme Court should not allow colleges to consider race and ethnicity in admissions.

    But perhaps what’s most interesting isn’t how many people are for or against considering race in college admissions. Rather, it’s how many people simply didn’t care enough to pay close attention to the affirmative action case before the Supreme Court.

    When explicitly given the option, a majority (55%) said in a May Marquette University Law School poll that they hadn’t heard enough to form an opinion about the case. (Those who had heard enough were against allowing colleges to use race in admissions.)

    This is quite different from March 2022, when just 30% of Americans hadn’t heard enough to form an opinion about the court potentially overturning Roe v. Wade, when asked the same question by Marquette but about the abortion case. (A plurality of those who had heard enough didn’t want the court to overturn Roe.)

    It’s hard for an issue to galvanize voters when they aren’t paying attention to it.

    The same holds true for Biden’s student loan forgiveness plan that the court blocked. A USA Today/Ipsos poll from April indicated that 52% of Americans were familiar with the case and a mere 16% were very familiar with it. (Those who had student loans were more familiar at 71%, though that’s a fairly low percentage for something that could affect them directly.)

    Possibly because of that low familiarity, the percentage of Americans who favor or oppose canceling certain student debt differs greatly depending on how the question is worded. When Marquette didn’t mention Biden or the government specifically in its May poll, a majority (63%) said they favored forgiveness of up to $20,000. It was a much lower 47% in the Ipsos poll.

    Surveys that did identify the proposal as Biden’s plan tend to be in the same ballpark, with a split public and a sizable percentage unsure.

    The ABC News/Ipsos poll showed that 45% approved of the court striking down Biden’s student debt plan, with 40% disapproving. About a sixth (16%) of the public was undecided.

    This jibes with polling before the court’s decision was announced. An NBC News poll from last year showed that 43% said Biden’s plan was a good idea compared with 44%, who said it was a bad idea. Just over 10% had no opinion.

    The USA Today/Ipsos survey found that 43% of Americans wanted the Supreme Court to allow the government’s student loan forgiveness plan to move forward, while 40% did not. Another 17% had no opinion.

    (I should point out that those with student debt were more likely to want government forgiveness in all these surveys, though about 80% of Americans don’t have student loan debt.)

    The public was similarly split about the court ruling in favor of the Colorado web designer who refuses to make wedding websites for same-sex couples over religious objections. According to the ABC News/Ipsos poll, 43% of Americans agreed with the court’s decision, 42% disagreed and 14% were undecided.

    There was limited polling on this case before the ruling, though none of it indicated massive opposition. A majority (60%) in a Pew poll that specifically mentioned “wedding websites” and “same-sex marriages” indicated they believed business owners should be allowed to refuse services if it violated their religious or personal beliefs.

    The polling on Roe v. Wade didn’t look anything like this last year. There were no close splits in opinion. People were consistently against overturning Roe, and they cared a lot about it. This led to a historically strong performance for the party in the White House during the 2022 midterm elections and a major backlash against the Supreme Court.

    The current polling on affirmative action in college admissions, Biden’s student loan forgiveness plan and allowing people to opt out of certain services to married LGBTQ couples if they believe it goes against their religion suggests that court’s opinions on those issues aren’t likely to have a similar impact.

    This story has been updated with additional information.

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  • Threads now has ‘tens of millions’ of daily users. But its honeymoon phase may be over | CNN Business

    Threads now has ‘tens of millions’ of daily users. But its honeymoon phase may be over | CNN Business

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    New York
    CNN
     — 

    Two weeks after Meta launched its Twitter competitor Threads and received an unprecedented amount of user signups, the frenzy around the app appears to have come back to Earth.

    After surpassing 100 million user sign-ups in less than a week, user engagement on Threads has slowed. Threads daily active users fell from 49 million on July 7, two days after its launch, to 23.6 million users last Friday, according to a report published this week by web traffic analysis firm Similarweb. The app’s average usage time also fell from 21 minutes to 6 minutes over the same timeframe.

    The slowdown hints at the challenges ahead for Meta as it looks to not only draw users away from Twitter but build a service that reaches a far larger audience. Threads is already facing some of the common issues that often plague social media platforms, including user retention, spam and some early regulatory scrutiny around its approach to content moderation. It’s also not clear yet how much Meta’s investments in building Threads will actually amount to financial returns for the company.

    “I’m very optimistic about how the Threads community is coming together,” Meta CEO Mark Zuckerberg said in a post on the platform Monday. “Early growth was off the charts, but more importantly 10s of millions of people now come back daily … The focus for the rest of the year is improving the basics and retention.”

    Meta executives acknowledged in the early days after Threads’ launch that getting users to sign up for a buzzy new app is much easier than convincing them to continue engaging there long-term. That’s likely even more true for Threads, which launched as a relatively bare-bones app in an effort to capitalize on a moment of weakness at Twitter and also tapped into Instagram’s network to ease the sign-in process.

    Threads on Tuesday rolled out its first batch of updates to the iOS version of the app, including a translation button, a tab on users’ activity feed dedicated to showing who’s followed them and the option to subscribe and receive notifications from accounts a user doesn’t follow.

    Instagram head Adam Mosseri, who is overseeing the Threads launch, has also hinted at plans to add features such as a desktop version of the app, a feed of only accounts a user follows and an edit button. “We’re clearly way out over our skis on this,” Mosseri said in a Threads post the week of the app’s launch.

    In the meantime, Threads is grappling with a common social media issue — spam. Users have complained of replies to posts filling up with spammy links and offering “giveaways” in exchange for new followers. And on Monday, Mosseri said in a Threads post that the platform was “going to have to get tighter on things like rate limits” because “spam attacks have picked up.”

    This “is going to mean more unintentionally limiting active people (false positives),” Mosseri warned. “If you get caught up [in] those protections let us know.”

    Meta declined to clarify whether Mosseri’s post refers to limits on users’ ability to post or read content, or to provide any additional details. But the comment did prompt some snark from Twitter owner Elon Musk, after backlash to Twitter’s own rate limits — restrictions on how many tweets users can read — helped propel Threads’ early growth.

    Meta shares have jumped more than 6% since the Threads launch, but some analysts who follow the company are skeptical that Threads will quickly contribute to the company’s bottom line, if at all.

    Threads could be a way for Meta to eke additional engagement time out of its massive existing user base. The app could also ultimately supplement Meta’s core advertising business, which could use a boost after facing challenges from a broad decline in the online ad market and changes to Apple’s app privacy practices.

    Meta executives have said they will likely incorporate advertising into the platform, once its user base has reached critical mass. But even if Threads continues to add users, “advertisers could be hesitant and possibly wait before allocating ad dollars to Threads because of their uncertainty about long-run user retention and engagement,” Morningstar senior equity analyst Ali Mogharabi said in a recent investor note.

    Like Twitter, Threads could also struggle to attract advertisers because the nature of a real-time news and public conversations app means the content is sometimes negative or controversial. Even before Musk took over Twitter and alienated advertisers, the platform represented a tiny piece of the ad sales market compared to Meta’s properties.

    Threads, however, likely has a leg up on Twitter because Meta is known as a company that provides clear value for advertisers, said Scott Kessler, global tech sector lead at research firm Third Bridge. If anything, he said, the risk may be that some advertisers may think twice about spending on yet another Meta platform versus diversifying their ad strategy.

    For now, analysts will be awaiting Meta executives’ commentary about Threads during its quarterly earnings call next week, including to see if they offer any hints about whether ads may be rolled out on the app ahead of the crucial holiday shopping season.

    “They launched this in July,” Kessler said. “That should give them enough time to build out sufficient tools for holiday shopping season advertising.”

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  • Manchin rails against Biden’s clean energy plans as he faces tough political headwinds in West Virginia | CNN Politics

    Manchin rails against Biden’s clean energy plans as he faces tough political headwinds in West Virginia | CNN Politics

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    CNN
     — 

    West Virginia political observers were not surprised when Sen. Joe Manchin appeared on Fox News on Monday to make a stunning threat: He could be persuaded to vote to repeal his own bill, the Inflation Reduction Act, if the Biden administration pushed him far enough.

    The conservative Democratic senator reiterated this to CNN, saying he would “look for every opportunity to repeal my own bill” if the administration continued to use the IRA to steer the US quickly towards the clean energy transition and away from fossil fuels.

    The IRA, passed and signed into law last year, was a sweeping $750 billion bill that lowered prescription drug costs, raised taxes on large corporations, and invested $370 billion into new tax credits for cleaner energy. Even though Manchin carved out space for fossil fuels, the bill represents by far the biggest climate investment in US history.

    From the start, Manchin has insisted the IRA was an “energy security bill,” rather than a clean-energy bill. Still, experts said he must be sensitive to the idea that he ushered in what ended up being the nation’s largest climate law, given he represents West Virginia – a state where coal and natural gas reign supreme.

    Manchin’s repeal threat “was probably good politics,” West Virginia University political science professor Sam Workman told CNN. If he decides to seek reelection in 2024, the 75-year-old senator will face his toughest political fight yet, as popular West Virginia Republican Gov. Jim Justice jumped into the race this week.

    Justice’s bid for the seat “doesn’t change anything at all,” Manchin told CNN. But political experts from his home state see a man who is gearing up for a fight.

    Since delivering President Joe Biden one of his biggest legislative wins with the IRA last summer, Manchin has spent the last few months on a rampage against the administration, homing in on what he calls its “radical climate agenda.” Manchin has voted against Biden’s nominees for high-ranking administration positions, bashed new rules from the Environmental Protection Agency and Treasury Department and clashed with members of the president’s cabinet at Senate hearings.

    Manchin’s appearance on Fox to slam Biden and threaten to repeal the law he had an outsized role in writing “is a pretty good indicator to me that he’s running,” said John Kilwein, chair of West Virginia University’s political science department.

    Manchin has been silent on whether he’ll run for reelection, but as Justice announced his candidacy, Manchin expressed confidence. “Make no mistake, I will win any race I enter,” he said in a statement.

    The Democrat beat his Republican challenger by just three percentage points in 2018. And though Justice still must get through a primary against Republican Rep. Alex Mooney, the governor is already backed by Senate Republicans’ electoral arm and many in the state think he will present a serious challenge to Manchin.

    “Justice is a likable candidate – he takes that ‘aw shucks’ thing to the next level,” Kilwein said. “This is going to be [Manchin’s] toughest fight, but I think anyone who thinks this is going to be a piece of cake is wrong. I don’t think he’s going to be easy to beat.”

    Manchin is “in danger” politically, his Democratic colleague Sen. Richard Blumenthal of Connecticut told CNN.

    “Joe Manchin is the last remaining statewide elected Democrat [in West Virginia], and we want [him] back in the United States Senate,” Blumenthal said, adding Manchin was a “pillar of strength to Democrats in the last session.”

    Justice made little mention of Manchin during his official campaign launch but came out swinging against Biden and his agenda. On Friday, Justice told Fox News that Manchin “would be a formidable opponent” if he runs for reelection, but added that he’s “done some things that have really alienated an awful lot of West Virginians.”

    There is no denying that West Virginia is incredibly conservative; the state went nearly 40 percentage points for Trump in the 2020 election. But even with those fundamentals, political experts said Manchin has had tremendous staying power through retail politics and argue he can deliver for the state while standing up to Biden.

    “His whole appeal is a retail appeal; every blueberry festival, huckleberry festival, Joe Manchin’s there,” former West Virginia political science professor Patrick Hickey told CNN. “He’s a really smart and talented politician. He gets all the benefits that come from supporting (the IRA), but the next time he’s in West Virginia, he’ll be in a diner telling voters how terrible Biden is.”

    Behind the political rhetoric, the Inflation Reduction Act’s energy provisions could be a windfall for West Virginia, and Manchin is walking a tightrope in his messaging around the law.

    Despite blasting the Biden administration, Manchin has spent the past few months at home touting the benefits of the IRA and jobs it is already bringing to the state.

    Several major clean energy companies have invested hundreds of millions of dollars to build new manufacturing plants in the state: a battery factory, a new industrial facility totally powered by renewable energy, and a plant to make electric school buses.

    “The way Manchin talked about those, he’s crediting the IRA and saying, ‘see, these are the good things that have happened,’” said Angie Rosser, executive director of environmental group West Virginia Rivers. “Those are hundreds of jobs reaching into the thousands, which for our small state is a big, big deal.”

    The John E. Amos coal-fired power plant in Poca, West Virginia. Fossil fuel energy is still a mainstay in state.

    Rosser and others pointed out that Manchin designed the IRA specifically to deliver money to West Virginia, designing tax credits to incentivize more manufacturing in coal country and funding to help these communities during the transition to clean energy.

    Morgan King, a staff member of West Virginia Rivers, has been traveling across the state recently to talk to local officials about how they can apply for federal IRA funding. The response has been overwhelmingly positive, King told CNN.

    “We’ve spoken with people of all parties,” she said. “People don’t care [about] the politics of how this bill was created so long as this funding can make it into their communities. West Virginia is set to disproportionately benefit from this bill more than any other state.”

    Manchin has been at odds with the Biden administration on several fronts, but the administration’s climate policies and implementation of the Inflation Reduction Act seem to have struck a particular nerve – and Republicans have continued to heavily criticize the law.

    A political ad from Republican dark money group One Nation is already circulating in the state, claiming that the IRA would kill 100,000 jobs in West Virginia.

    “The notion that this is just a climate bill … it is damaging here in the state because we’re pretty far to the right on these issues, especially energy issues,” Workman said. “When you sell something as a climate bill, given the economic context here and our history, it’s somewhat harder for people to see indirect benefits like jobs.”

    Manchin recently voted alongside Republicans on Congressional Review Act bills to undo EPA emissions rules for heavy-duty trucks as well as a climate-focused Labor Department rule (Biden has already vetoed one and promised to veto the other). In March, Manchin tanked top Interior Department nominee Laura Daniel-Davis, claiming she wasn’t upholding a part of the IRA that mandates offshore oil drilling in certain federal waters.

    The dynamic has put Senate Democrats in a tough spot. Democrats have a slightly expanded Senate majority after the midterms, but the continued absence of California Sen. Dianne Feinstein, who has been away from Washington as she recovers from shingles, has made for nailbiter votes.

    “He’s one of the most independent US senators out there,” Democratic Sen. Brian Schatz of Hawaii told CNN. “When he is frustrated, he’s not going to be shy about it. And right now, he’s obviously extremely frustrated with the administration, and that has to get sorted.”

    Manchin has also spent the last few months lobbing a steady stream of blistering statements aimed at Biden’s agencies. When the Environmental Protection Agency proposed strong new vehicle emissions regulations intended to push the US auto market towards electric vehicles in the next decade, Manchin said the agency was “lying to Americans” and called the regulations “radical” and “dangerous.”

    And when the Treasury Department issued guidance on IRA’s new EV tax credits – which were written by Manchin – the senator called it “horrific” and said it “completely ignores the intent” of his law.

    Some of his Democratic colleagues have panned his comments about repealing the IRA.

    “Maybe he should run for president,” Democratic Sen. Martin Heinrich of New Mexico told CNN. “He’s got one job; the president’s got another. The IRA is working.”

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

    How the CEO behind ChatGPT won over Congress | CNN Business

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    Washington
    CNN
     — 

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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  • Job site ZipRecruiter cutting 20% of its staff | CNN Business

    Job site ZipRecruiter cutting 20% of its staff | CNN Business

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    New York
    CNN
     — 

    Fewer employers looking for workers means 270 employees at job search site ZipRecruiter will soon be out of a job.

    The company is cutting 20% of its staff by the end of this month, the company disclosed in a filing late Wednesday.

    “This action was taken in response to current market conditions and after reducing other discretionary expenses, with a view toward driving long-term efficiency,” according to the filing.

    The company had previously said it is experiencing a “typical softness in jobs posting” in January, but sounded other alarms about a slowing in the labor market. Its first quarter revenue fell 19% from a year earlier and it forecast that its revenue in the current quarter would be down nearly 30% from the second quarter of 2022.

    The job search site still projects adjusted earnings that are roughly the same for this year as last year, although it said to do so it would “respond to our environment quickly” by “increasing our focus on profitability during times of decreased demand from employers.”

    About half of the 270 employees losing their job are in the sales and customer support teams. The company will take a charge of between $7 million to $9 million to cover severance costs. It expects to still make the same level of profits, excluding special items such as severance, as in its earlier guidance.

    It also announced that CEO Ian Siegel agreed to a 30% cut in base salary, as of June 1. He has a base salary of $550,000, according to an earlier filing, but had total compensation last year of about twice that amount.

    Layoffs across the tech sector have become widespread in recent months. Amazon, one of the nation’s largest private-sector employers, has announced two rounds of job cuts this year totaling 27,000 positions, and Facebook holding company Meta has announced 21,000 job cuts since last fall. Alphabet, Microsoft and Salesforce — and especially Twitter — have all announced large job cuts.

    Outplacement firm Challenger, Gray & Christmas said Thursday there have been 137,000 layoffs in the sector in the first five months of the year, the most job cuts in the sector since there were 168,000 in all of 2001, the year after the dot.com bubble burst.

    Despite all the job cuts in technology and also in media, US employers overall are still hiring more people than they’re cutting.

    Private sector employment increased by 278,000 jobs in May, according to ADP’s monthly National Employment Report released Thursday, much stronger than the 170,000 forecast by economists. Economists are also forecasting a gain of 190,000 jobs for May when the Labor Department issues its monthly jobs report Friday. The April jobs report also came in much stronger than expected, as employers added 253,000 jobs.

    Still, hiring is at a slower pace than a year ago, when employers added 445,000 jobs a month, on average, in the first half of 2022. The Labor Department’s count of job openings, while up 3% in April compared to March, is down 14% from a year earlier — though that still means there are 1.8 jobs available for every job seeker.

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  • Microsoft faces off against US government over Activision deal, with top execs set to testify | CNN Business

    Microsoft faces off against US government over Activision deal, with top execs set to testify | CNN Business

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    CNN
     — 

    Microsoft

    (MSFT)
    and the video game giant Activision Blizzard

    (ATVI)
    will face off Thursday against the US government in a high-stakes battle over one of the largest technology acquisitions in history.

    The showdown in federal court will have the CEOs of both companies taking the stand to defend their $69 billion merger against claims that the combination could violate US antitrust law and harm millions of consumers.

    The outcome of the fight will shape the future of the multibillion-dollar games industry. It will also impact enormously popular gaming franchises such as “Call of Duty” and “World of Warcraft,” which Activision owns and would be transferred to Microsoft under the deal.

    Also testifying will be the top financial executives from both companies; senior leaders from Microsoft’s Xbox division; the CEO of Microsoft Gaming, Phil Spencer; and a vocal critic of the deal, Sony gaming CEO Jim Ryan.

    The days-long affair begins Thursday and is scheduled to run through next week.

    In bringing the case, the Federal Trade Commission is asking a US district court judge for an injunction that would temporarily halt the deal. That would keep the companies from closing their merger, at least until the FTC’s in-house court rules in a separate proceeding on whether the acquisition is anticompetitive.

    But this week’s fight over a preliminary injunction may prove decisive for the deal as a whole. Microsoft has said that a victory for the FTC at this stage “will effectively block the transaction” overall.

    In this hearing, the FTC does not need to prove that the deal is anticompetitive. It just needs to show that the agency would be likely to succeed in doing so if the case moves ahead, and that otherwise its ability to enforce US antitrust law would be harmed.

    The clash comes as Microsoft and Activision face down a contractual July 18 deadline to consummate the deal. Failure to close, or any permanent court order to block the merger, could force Microsoft to pay a $3 billion breakup fee to Activision, according to the deal’s terms.

    The FTC lawsuit has put Microsoft under the harshest antitrust scrutiny in the US in more than two decades. It also could be a crucial test for the FTC at a time when it’s trying to rein in the tech industry broadly, with mixed success.

    In its initial challenge to the merger in its in-house court last year, the FTC alleged the deal would harm competition by turning Microsoft into the world’s third-largest video game publisher — allowing it to raise video game prices with impunity, restrict Activision titles from rival platforms and harm game quality and player experiences on consoles and gaming services.

    Some of those concerns have also been raised internationally. The UK government has challenged the acquisition, and the New Zealand government on Tuesday warned that the deal could be anticompetitive.

    Microsoft has sought to address the concerns by hammering out multi-year licensing agreements with competitors such as Nintendo and Nvidia to ensure that their platforms will continue to receive popular titles if the deal goes through.

    The company has also put forth an 11-point pledge to keep its platforms open, a commitment that applies not only to the Activision Blizzard deal but to virtually all of Microsoft’s gaming business going forward.

    Last month, Microsoft said the European Union would require it to license Activision games “automatically” to competing cloud gaming services as a condition of allowing the merger to proceed in the EU. That commitment, Microsoft said, “will apply globally and will empower millions of consumers worldwide to play these games on any device they choose.”

    Although EU regulators have said the concession addresses their concerns, officials in the US and the UK are continuing with their legal opposition to the deal.

    The standoff particularly focuses attention on FTC Chair Lina Khan, a tech industry critic who has argued for litigating difficult cases and for introducing novel legal theories to help adapt US antitrust law to the digital age.

    Khan won a significant victory last year when the FTC forced Nvidia to abandon its attempted acquisition of the chipmaker Arm. The deal would have combined two companies in adjacent industries in what is known as a vertical merger, a type of deal that is rarely blocked in the United States.

    But Khan also suffered a setback when the FTC unsuccessfully tried to block Facebook-parent Meta from acquiring Within Unlimited, a virtual reality startup. The FTC had argued that the acquisition was an attempt by Meta to quash competition in the nascent VR industry, but earlier this year, a federal judge declined to issue a preliminary injunction of the kind the FTC now seeks against Microsoft. The FTC dropped its case against Meta soon after.

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  • AI is already linked to layoffs in the industry that created it | CNN Business

    AI is already linked to layoffs in the industry that created it | CNN Business

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    CNN
     — 

    Many have raised alarms about the potential for artificial intelligence to displace jobs in the years ahead, but it’s already causing upheaval in one industry where workers once seemed invincible: tech.

    A small but growing number of tech firms have cited AI as a reason for laying off workers and rethinking new hires in recent months, as Silicon Valley races to adapt to rapid advances in the technology being developed in its own backyard.

    Chegg, an education technology company, disclosed in a regulatory filing last month that it was cutting 4% of its workforce, or about 80 employees, “to better position the Company to execute against its AI strategy and to create long-term, sustainable value for its students and investors.”

    IBM CEO Arvind Krishna said in an interview with Bloomberg in May that the company expects to pause hiring for roles it thinks could be replaced with AI in the coming years. (In a subsequent interview with Barrons, however, Krishna said that he felt his earlier comments were taken out of context and stressed that “AI is going to create more jobs than it takes away.”)

    And in late April, file-storage service Dropbox said that it was cutting about 16% of its workforce, or about 500 people, also citing AI.

    In its most-recent layoffs report, outplacement firm Challenger, Gray & Christmas said 3,900 people were laid off in May due to AI, marking its first time breaking out job cuts based on that factor. All of those cuts occurred in the tech sector, according to the firm.

    With these moves, Silicon Valley may not only be leading the charge in developing AI but also offering an early glimpse into how businesses may adapt to those tools. Rather than render entire skill sets obsolete overnight, as some might fear, the more immediate impact of a new crop of AI tools appears to be forcing companies to shift resources to better take advantage of the technology — and placing a premium on workers with AI expertise.

    “Over the last few months, AI has captured the world’s collective imagination, expanding the potential market for our next generation of AI-powered products more rapidly than any of us could have anticipated,” Dropbox CEO Drew Houston wrote in a note to staff announcing the job cuts. “Our next stage of growth requires a different mix of skill sets, particularly in AI and early-stage product development.”

    In response to a request for comment on how its realignment around AI is playing out, Dropbox directed CNN to its careers page, where it is currently hiring for multiple roles focused on “New AI Initiatives.”

    Dan Wang, a professor at Columbia Business School, told CNN that AI “will cause organizations to restructure,” but also doesn’t see it playing out as machines replacing humans just yet.

    “AI, as far as I see it, doesn’t necessarily replace humans, but rather enhances the work of humans,” Wang said. “I think that the kind of competition that we all should be thinking more about is that human specialists will be replaced by human specialists who can take advantage of AI tools.”

    The AI-driven tech layoffs come amid broader cuts in the industry. Many tech companies have been readjusting to an uncertain economic environment and waning levels of demand for digital services more than three years into the pandemic.

    Some 212,294 workers in the tech industry have been laid off in 2023 alone, according to data tracked by Layoffs.fyi, already surpassing the 164,709 recorded in 2022.

    But in the shadow of those mass layoffs, the tech industry has also been gripped by an AI fervor and invested heavily in AI talent and tech.

    In January, just days after Microsoft announced plans to lay off 10,000 employees as part of broader cost-cutting measures, the company also confirmed it was making a “multibillion dollar” investment into OpenAI, the company behind ChatGPT. And in March, in the same letter to staff Mark Zuckerberg used to announce plans to lay off another 10,000 workers (after cutting 11,000 positions last November), the Meta CEO also outlined plans for investing heavily in AI.

    Even software engineers in Silicon Valley who once seemed uniquely in demand now appear to be at risk of losing their jobs, or losing out on salary gains to those with more AI expertise.

    Roger Lee, a startup founder who has been tracking tech industry layoffs via his website Layoffs.fyi, also runs Comprehensive.io, which examines job listings and compensation data across some 3,000 tech companies.

    Lee told CNN that a recent analysis of data from Comprehensive.io shows the average salary for a senior software engineer specializing in artificial intelligence or machine learning is 12% higher than for those who don’t specialize in that area, a data point he dubs “the AI premium.” The average salary for a senior software engineer specializing in AI or machine learning has also increased by some 4% since the beginning of the year, whereas the average salary for senior software engineers as a whole has stayed flat, he said.

    Lee noted Dropbox as an example of a company offering notably high pay for AI roles, citing a base salary listing of $276,300 to $373,800 for a Principal Machine Learning Engineer role. (By comparison, Comprehensive.io’s data puts the current average salary for a senior software engineer at $171,895.)

    Those looking to thrive in the tech industry and beyond may need to brush up on their AI skills.

    Wang, the professor at Columbia Business School, told CNN that starting this past spring semester, he began requiring his students to familiarize themselves with the new crop of generative AI tools on the market. “That type of exposure I think is absolutely critical for setting themselves up for success and once they graduate,” Wang said.

    It’s not that everyone needs to become AI specialists, Wang added, but rather that workers should know how to use AI tools to become more efficient at whatever they’re doing.

    “That’s where the kind of a battleground for talent is really shifting,” Wang said, “as differentiation in terms of talent comes from creative and effective ways to integrate AI into daily tasks.”

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

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

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

    On Thursday, TSMC

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

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

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

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

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

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

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

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

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

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

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

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