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  • TikTok is owned by a Chinese company. So why doesn’t it exist there? | CNN Business

    TikTok is owned by a Chinese company. So why doesn’t it exist there? | CNN Business

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    Beijing
    CNN
     — 

    TikTok is fighting to stay alive in the United States as pressure builds in Washington to ban the app if its Chinese owners don’t sell the company.

    But the wildly popular platform, developed with homegrown Chinese technology, isn’t accessible in China. In fact, it’s never existed there. Instead, there’s a different version of TikTok — a sister app called Douyin.

    Both are owned by Beijing-based parent company ByteDance, but Douyin launched before TikTok and became a viral sensation in China. Its powerful algorithm became the foundation for TikTok and is key to its global success.

    But the two platforms, similar on the surface, play by starkly different rules.

    Here’s what you need to know about Douyin and ByteDance:

    Douyin has a whopping 600 million users a day. Like TikTok, it’s a short-form video app.

    Launched in 2016, Douyin was the major money spinner for ByteDance years before TikTok, raking in revenue through in-app tipping and livestreaming.

    ByteDance was founded by Zhang Yiming, a former Microsoft employee, and first became known for its news app Jinri Toutiao or “Today’s Headlines,” which debuted in 2012 soon after the company was founded.

    Toutiao created customized news feeds for each user. People quickly got hooked, with users averaging more than 70 minutes a day on the platform.

    ByteDance applied a similar formula to Douyin.

    Then in 2017, the privately-owned tech company bought a US-based video startup and released TikTok as the overseas version of Douyin. It also bought popular lip syncing app musical.ly, and moved those users onto TikTok in 2018.

    The app’s popularity has since gone global. In 2021, TikTok reached more than 1 billion monthly active users around the world.

    The TikTok and Douyin interfaces look similar, but when users turn on their cameras, one difference becomes clear: Douyin has an automatic beauty filter, which smooths out skin and often changes the shape of a person’s face.

    CNN's Selina Wang takes a photo using TikTok (left) and Douyin (right). Douyin applies an automatic beauty filter.

    Women in China have long faced huge pressure to conform to beauty standards that emphasize a slim figure, large eyes, dewy skin and high cheekbones.

    There is surging demand for plastic surgery. Between 2014 and 2017, the number of people getting plastic surgery in China more than doubled. Meanwhile, beauty apps compete to create filters that show users more beautiful versions of themselves.

    While TikTok also has beauty filters, users can select them when filming. They do not launch automatically.

    A Douyin livestreamer with product details displayed on screen.

    Another major difference between TikTok and Douyin is China’s massive online shopping market.

    Livestreaming sales of products is a multibillion-dollar industry in mainland China, and was given a major boost during the pandemic.

    As of June last year, there were more than 460 million livestreaming e-commerce users in mainland China, according to the Academy of China Council for the Promotion of International Trade, a body affiliated with Beijing’s commerce ministry.

    Douyin is a major platform for livestreamers, along with Taobao, Alibaba’s

    (BABA)     eBay-like online marketplace.

    A fitness livestreamer on Douyin with products displayed on-screen.

    I
    n-app shopping is made easy: Products and discounts are displayed on-screen during livestreams, with purchases just a swipe or a click away.

    China has one of the world’s strictest censorship regimes, and Douyin must follow the rules.

    Internet watchdogs crack down regularly on online dissent and block politically sensitive information.

    When CNN searched “Tiananmen 1989” in Douyin, nothing came up.

    The Tiananmen massacre, in which Chinese troops cracked down brutally on pro-democracy protesters in Beijing, has been wiped from China’s history books. Any discussion of the event is strictly censored and controlled.

    When CNN searched the same phrase in TikTok, it yielded many results including videos of users talking about what happened and a brief Wikipedia blurb summarizing the event.

    Results are shown when

    “It’s so interesting to see this contradiction in this one company [ByteDance] with these two faces,” said Duncan Clark, chairman and founder of investment advisory BDA China.

    Another key difference: Douyin takes a much stricter line on younger users.

    Users under 14 can access only child-safe content and use the app for just 40 minutes a day and. They can’t use the app from 10 p.m. to 6 a.m.

    Douyin has restrictions in place for users under 14 years old.

    For years, China has tried to curb video game addiction and other unhealthy online habits. It announced a curfew for online gaming for minors in 2019, before outright banning online gaming during weekdays for minors.

    Even on most weekends, users under 18 are only allowed to play for three hours.

    “There’s been very much a laissez-faire attitude in the US towards content, even content targeting teenagers and vulnerable people,” said Clark. “The Chinese government has been much more leaning into regulation at early stages in the growth of Douyin, particularly protecting younger people.”

    TikTok took some similar steps earlier this month, announcing that every user under 18 will soon have their accounts default to a one-hour daily screen time limit, though teenage users will be able to turn off this new default setting.

    The download page for the TikTok app displayed on an Apple iPhone.

    TikTok is not the only Chinese-owned platform finding viral success in the United States.

    Of the top 10 most popular free apps on Apple’s

    (AAPL)    US app store, four were developed with Chinese technology.

    Besides TikTok, there’s also shopping app Temu, fast fashion retailer Shein and video editing app CapCut, which is also owned by ByteDance.

    TikTok remains hugely popular in the United States, with more than 150 million monthly users — almost half of the country’s population.

    It remains to be seen whether TikTok can convince US lawmakers that it poses no threat — but the showdown in Washington has highlighted larger questions about security and data privacy that could see other apps come under fire.

    These apps could be next, said Clark. He said the US needs a “more sophisticated framework for regulating the big tech companies,” given the number of US investors and users on foreign platforms.

    “They need to also think about how high they’re gonna raise the bar for Chinese investment in the US, and the consequences of completely excluding four of the top ten apps,” said Clark.

    “What’s gonna replace them? And how is that going to play out? And how is that equitable to the investors in those apps versus US players?” he added. “It’s a mess.”

    — CNN’s Riley Zhang contributed reporting.

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  • Suspect in murder of Cash App founder appears in court | CNN Business

    Suspect in murder of Cash App founder appears in court | CNN Business

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    CNN
     — 

    Nima Momeni, the suspect in the stabbing death of Cash App founder Bob Lee, appeared in a San Francisco court Friday morning for an arraignment, one day after police announced his arrest.

    When Momeni entered the courtroom, members of his family sitting in the front row held up heart signs with their hands. Momeni, who was not cuffed, acknowledged them and smiled back.

    Momeni’s arraignment is set to continue on April 25. He will be held without bail in the meantime.

    Lee was stabbed to death in the Rincon Hill neighborhood of San Francisco early in the morning of April 4th. The moments following the stabbing attack were captured on surveillance video and in a 911 call to authorities, according to a local Bay Area news portal.

    The surveillance footage, reviewed by the online news site The San Francisco Standard, shows Lee walking alone on Main Street, “gripping his side with one hand and his cellphone in the other, leaving a trail of blood behind him.”

    In announcing his arrest Thursday, law enforcement described Momeni as a 38-year-old man from Emeryville, California and said Momeni and Lee knew one another, but didn’t provide further details about their connection.

    California Secretary of State Records indicate that Momeni has been the owner of an IT business, which, according to its website, provides services like technical support.

    Lee’s family issued a statement Thursday thanking the San Francisco Police Department “for bringing his killer to Justice” after Momeni’s arrest.

    “Our next steps will be to work with the District Attorney’s office to ensure that this person is not allowed to hurt anyone else or walk free,” the statement said.

    In the statement, the family described Lee’s upbringing, his career, and the impact of the technology he helped create.

    “Every day around the world, people interact with technology that Bob helped create. Bob will live on through these interactions and his dreams of improving all of our lives,” the statement reads.

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  • ‘Too good to be true?’ As Shein and Temu take off, so does the scrutiny | CNN Business

    ‘Too good to be true?’ As Shein and Temu take off, so does the scrutiny | CNN Business

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    Hong Kong/New York
    CNN
     — 

    Temu and Shein are taking off in the United States, topping app stores and creating a frenzy with consumers.

    But as the two online shopping platforms become hugely popular, they’re also facing questions over a litany of issues, including how they’re able to sell goods at such strikingly low prices, how transparent they are with the public and how much environmental waste their businesses generate.

    Some of those questions aren’t unique to the two companies: Longtime fast-fashion producers like Zara or H&M

    (HNNMY)     have faced similar concerns.

    But in recent weeks, Temu and Shein have also faced greater scrutiny over their ties to China, the country where their businesses originated and where they continue to rely on manufacturers.

    Shein was started in China, while Temu was launched by a Chinese company that now bills itself as a multinational firm. They are based in Singapore and Boston, respectively.

    That may matter little to policymakers. As US-China tensions remain high, American legislators have increased attempts to restrict technology linked in any way to foreign entities.

    Earlier this month, a US congressional commission called out Shein and Temu in a report that suggested the companies and others in China were potentially linked to the use of forced labor, exploitation of trade loopholes, product safety hazards or intellectual property theft.

    Both firms have enjoyed major success in the United States, noted Nicholas Kaufman, a policy analyst for the US-China Economic and Security Review Commission. This “has encouraged both established Chinese e-commerce platforms and startups to copy their model, posing risks and challenges to US regulations, laws, and principles of market access,” he wrote.

    Temu and Shein have racked up tens of millions of US users

    Shein: 24.5 millionTemu: 22.8 million

  • Note: US monthly active users, as of April 19
  • Source: Sensor Tower, a market intelligence firm

“Like Shein, Temu’s success raises flags about its business practices,” Kaufman added.

Asked about the report, Shein said in a statement that it “takes visibility across our supply chain seriously.”

“For over a decade, we have been providing customers with on-demand and affordable fashion, beauty, and lifestyle products, lawfully and with full respect for the communities we serve,” a spokesperson said.

Temu did not respond to a request for comment.

Temu and Shein have taken the world’s largest retail market — the United States — by storm.

Temu, which runs a marketplace for virtually everything from home goods to apparel to electronics, was launched by PDD Holdings

(PDD) last year. It has quickly become the most downloaded app in the United States, and continues to expand its user base.

PDD was founded in China but recently began billing itself as a Cayman Islands company, citing a new corporate registration there. As of a February regulatory filing, PDD’s head office was in Shanghai. Temu says it doesn’t operate in China.

PDD also owns Pinduoduo, a hugely popular Chinese e-commerce giant that was found in a recent CNN investigation to have the ability to spy on its users.

According to cybersecurity researchers, Pinduoduo can circumvent users’ mobile security to see what they’re doing on other apps, read their messages and even change settings.

While Temu has not been implicated, the allegations about its sister company have invited further scrutiny and were cited in the Congress report on Temu this month. PDD did not respond to CNN’s multiple requests for comment on the investigation.

Shein, which was founded by Chinese entrepreneur Chris Xu, has enjoyed similar success with its app over the last few years. The company initially created a cult following for its fast-fashion apparel and has since branched out into other offerings, such as home goods.

Both companies have gained traction stateside by offering extreme bargains to shoppers, many of whom continue to feel the squeeze from historically high inflation.

A shopper at a Shein pop-up store in New York last October. The company initially created a cult following for its fast-fashion apparel, and has since branched out into other offerings.

“The timing is very advantageous,” said Michael Felice, an associate partner in Kearney’s communications, media and technology practice. “You have extreme pressure on the consumer wallet right now.”

While Temu and Shein may appear similar, they have different business models.

Temu operates as an online store, carrying merchandise from independent sellers. Shein, on the other hand, commissions its own goods through manufacturers it teams up with in what is effectively seen as a supersonic version of fast fashion.

For some consumers, the companies’ low prices have raised eyebrows.

“I think transparency and traceability of product is becoming more important,” said Felice. “When you’re starting to see price points that almost could be too good to be true, you start to ask yourself, ‘Is that too good to be true?’”

Felice also said there was a risk of Temu facing resistance from US consumers as a cross-border business.

“There’s a rising sense of nationalism in markets,” he said. “It will be interesting to see which one wins as the dual pressures of inflation and nationalism take hold on American consumers.”

Lawmakers are also getting more hawkish. While both Temu and Shein have taken steps to separate their businesses from links to China, geopolitical tensions are proving hard to shake off.

Last month, a bipartisan group of US senators introduced legislation that would give the government new powers, including a ban on foreign-linked producers of software.

In a fact sheet distributed by lawmakers, Temu’s surge on US app stores was described as an example of how Chinese consumer technology was becoming more popular.

A screenshot from Temu's commercial unveiled during the Super Bowl in February, encouraging consumers to

“From the history of the companies to where their products come from, it’s very hard to say you’re not related to China,” said Sheng Lu, an associate professor of fashion and apparel studies at the University of Delaware.

Similar to TikTok, which faces the prospect of a US ban, Lu believes that Temu and Shein could face data privacy concerns from regulators.

“They’re large, influential and collect data,” he said. “This can make the companies a potential sensitive topic.”

The fashion industry is responsible for 10% of annual global carbon emissions, more than all international flights and maritime shipping combined, according to the United Nations Environment Programme. Around 85% of clothing ends up in landfills or is burned.

Experts say the problem is even worse with fast fashion, defined as the rapid design and production of cheap and low-quality goods that respond to fleeting trends.

These are “disposable fashion companies,” said Maxine Bédat, founder of the New Standard Institute.

“That’s the crux of what they are. This stuff is not meant to last in your wardrobe,” she added. “Their business wouldn’t function if it did.”

Shein argues that its business model enables it to reduce waste and overproduction by producing small batches and only responding with larger production if demand is shown. The company has set a goal of reducing emissions by 25% by 2030, based on 2021 figures.

A model trying on outfits in Temu's Super Bowl ad. The company runs a marketplace for virtually everything, from apparel to home goods to electronics.

Temu, which markets itself more as a general store than a fashion outlet, also said its model limits unsold inventory and waste by better matching demand with supply.

The company told CNN it offsets emissions for every order with “carbon credits which support wildlife conservation efforts” in the United States, though it did not provide details.

Researchers who study textile waste and sustainability in global supply chains say the companies need to go further.

Shein, for example, often uses low-cost fabrics that are hard to recycle. Compared with other fashion retailers, the company has a much lower percentage of products that mention using sustainable or recycled textile materials, said Lu.

There are also concerns about the conditions of workers who make some of the companies’ products.

In February, a bipartisan group of US senators wrote to Shein, pressing the company on its supply chain practices and calling for greater transparency in its supply chain.

“We are concerned that American consumers may be inadvertently purchasing apparel made in part with cotton grown, picked, and processed using forced labor,” the senators said.

The inquiry was made following a Bloomberg report showing lab testing on two occasions last year found that garments shipped to the United States by Shein were made with cotton from Xinjiang. Washington has banned all imports from the Chinese region over concerns of forced labor.

In a statement to CNN, Shein said it was committed to respecting human rights and adhering to laws and regulations in the countries where it operates. A spokesperson said the company had zero tolerance for forced labor, and worked with third parties to audit supplier factories.

To ensure compliance with US laws, Shein requires that suppliers purchase cotton from approved countries, and has built tracing systems to get visibility into the origins of cotton it uses, the spokesperson added.

Temu has not faced such questions, though its sister company received backlash in 2021 over allegations that it overworks its staff. Pinduoduo said at the time that it would provide counseling following the suicide of a worker.

Worker rights at Shein also made headlines in December, when a documentary by UK broadcaster Channel 4 alleged exploitation at two Chinese factories belonging to its suppliers.

The program claimed staff were working 18 hours a day, making the equivalent of pennies on each item. CNN has not independently verified the allegations.

Shein responded to the claims, saying independent audits had refuted most of the allegations. But it conceded that the investigation had showed workers at two of its suppliers were working longer hours than allowed.

The company has since reduced the size of its orders from those producers on an interim basis, and committed $15 million to upgrade hundreds of its partner factories.

Still, the “working conditions of workers making Shein’s products remain a black box,” said Lu, the University of Delaware professor.

“Shein should be more transparent about their factory conditions and workers’ well-being.”

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  • This is Google’s new folding phone | CNN Business

    This is Google’s new folding phone | CNN Business

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    CNN
     — 

    Just a few days ahead of its product launch, Google unveiled an early look at its first foldable smartphone.

    In a video posted to Twitter and YouTube, the company teased a Pixel phone with a vertical hinge that can be opened to reveal a tablet-like display.

    The company will host its annual developer conference at its Mountain View, California, headquarters next week, where it’s rumored to also introduce a Pixel 7a budget phone, its latest Android operating system and advancements to its AI-powered Bard chatbot.

    Although the company didn’t reveal specs for the Pixel Fold, it’s become increasingly common for companies to show off products leading up to their own events in an effort to drum up excitement and set expectations at a time when it’s difficult to surprise onlookers with something unexpected.

    Despite great interest in foldable phones — and a resurgence in 90s-style flip phones among celebrities and TikTok influencers — the foldable market is relatively small; with Samsung dominating the category, followed by others including Motorola/Lenovo, Oppo, and Huawei. According to ABI Research, foldable and flexible displays made up about 0.7% of the smartphone market in 2021, and in 2022 expected to fall just shy of 2%.

    High price points have limited consumer adoption, too. The Pixel Fold is rumored to start at $1,700.

    It’s not surprising Google is dipping its toes into the world of foldables but it’s possible it waited to launch its own version until the technology became more advanced. Early versions of the Samsung Galaxy Z Fold, for example, had issues with the screen and most apps were not well optimized for the design.

    “Google has been working on bringing better user experiences to foldable devices from a software perspective, so when coupled with improvements on the hardware side the market conditions are at a state now where it makes sense for a Pixel Fold,” said Michael Inouye, an analyst at ABI Research.

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

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

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    Hong Kong
    CNN
     — 

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

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

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

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

    Apple

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

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

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

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

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

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

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

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

    Apple has ample room to run in these markets.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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  • Reddit sparks outrage after a popular app developer said it wants him to pay $20 million a year for data access | CNN Business

    Reddit sparks outrage after a popular app developer said it wants him to pay $20 million a year for data access | CNN Business

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    Washington
    CNN
     — 

    Twitter has been widely criticized for trying to charge transit agencies, third-party app developers and academics for data access to its platform, a move opponents say has forced independent apps to shut down and threatened research on misinformation and hate speech.

    Now, a similar revolt against Reddit may be gaining steam after a popular app developer said Wednesday the social media company wants to charge him $20 million a year to continue offering software that lets Reddit users view and interact with the platform.

    The newly unveiled pricing of Reddit’s paywall “is close to Twitter pricing” and is not “anything based in reality or remotely reasonable,” said Christian Selig, developer of the Apollo app, in a Reddit post on Wednesday. “It goes without saying that I don’t have that kind of money or would even know how to charge it to a credit card.”

    Selig’s post highlights a plan Reddit announced in April to enact a Twitter-like pricing structure for its application programming interface (API) — the software that allows other programs to tap into the company’s data, including posts and comments. Reddit’s API is what allows Reddit content to be displayed to the Apollo app’s 900,000 daily active users.

    Reddit’s initial announcement had been light on pricing details, leaving many to speculate about the future of third-party access to Reddit. As details of its pricing plan trickled out on Wednesday, Reddit did not dispute Selig’s account of his conversations with the company, but said Reddit remains “committed to fostering a safe and responsible developer ecosystem.”

    “Expansive access to data has impact and costs involved, and in terms of safety and privacy we have an obligation to our communities to be responsible stewards of data,” said Tim Rathschmidt, a company spokesperson, in an email.

    Selig’s tweet on the issue has been viewed more than one million times and has led to an outpouring of criticism for Reddit. “Apollo is the only reason I use Reddit,” one fan of the app tweeted. Another said: “Reddit is going full Twitter and it’s a big mistake.” .

    Selig had initially expressed cautious optimism about the company’s plan, saying on the day of the announcement that he had spoken to the company and that if the new moves were implemented reasonably, “this could be a positive change.”

    But now, a month later, Selig’s optimism has deflated. According to Selig’s post Wednesday, Reddit intends to charge $12,000 for every 50 million attempts to access the company’s data.

    “Apollo made 7 billion requests last month,” Selig wrote Wednesdsay, meaning his additional costs simply for running his business as usual would add up to “1.7 million dollars per month, or 20 million US dollars per year.”

    “I’d be in the red every month,” he added. Selig didn’t immediately respond to questions from CNN about whether he expects to have to shut down the app.

    Selig isn’t the only app developer crying foul. Some developers have said Reddit’s API changes would also block ads in third-party apps, potentially depriving apps of ad revenue and forcing them to try to convert users to subscription business models.

    Part of the motivation for Reddit’s plan involves the surging popularity of artificial intelligence.

    Large language models such as ChatGPT are developed using training data, which in many cases is sourced from content found across the internet. Reddit should not be expected to provide that data to “some of the largest companies in the world for free,” CEO Steve Huffman told the New York Times in a recent interview.

    Meanwhile, Reddit is also widely expected to go public, potentially as soon as this year. The stock offering could add to pressure for Reddit to show revenue growth. Its paid API could help on that front.

    But that could come at the expense of independent apps and, as some pointed out, Reddit users who may experience a loss of choices in ways to access the platform. Some predicted that they might soon have to rely on Reddit’s proprietary app, which has been widely panned by users, if they wish to access the site at all.

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

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

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    Hong Kong
    CNN
     — 

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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  • Twitter threatens to sue Meta after rival app Threads gains traction | CNN Business

    Twitter threatens to sue Meta after rival app Threads gains traction | CNN Business

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    CNN
     — 

    Twitter is threatening Meta with a lawsuit after the blockbuster launch of Meta’s new Twitter rival, Threads — in perhaps the clearest sign yet that Twitter views the app as a competitive threat.

    On Wednesday, an attorney representing Twitter sent Meta CEO Mark Zuckerberg a letter that accused the company of trade secret theft through the hiring of former Twitter employees.

    The letter was first reported by Semafor. A person familiar with the matter confirmed the letter’s authenticity to CNN.

    The letter by Alex Spiro, an outside lawyer for Twitter owner Elon Musk, alleged that Meta had engaged in “systematic, willful, and unlawful misappropriation of Twitter’s trade secrets and other intellectual property.”

    In response to reports on the letter, Musk tweeted: “Competition is fine, cheating is not.”

    The letter goes on to say that Meta hired former Twitter employees who “have improperly retained Twitter documents and electronic devices” and that Meta “deliberately” involved these employees in developing Threads.

    “Twitter intends to strictly enforce its intellectual property rights,” Spiro continued, “and demands that Meta take immediate steps to stop using any Twitter trade secrets or other highly confidential information.”

    Meta spokesperson Andy Stone flatly dismissed the letter. “No one on the Threads engineering team is a former Twitter employee — that’s just not a thing,” he said on Threads.

    In the months since Musk acquired Twitter for $44 billion, the social network has been challenged by a growing number of smaller microblogging platforms, such as the decentralized social network Mastodon and Bluesky, an alternative backed by former Twitter CEO Jack Dorsey. But Twitter has not threatened either with litigation.

    Unlike some Twitter rivals, Threads has experienced rapid growth, with Zuckerberg reporting 30 million user sign-ups in the app’s first day. As of Thursday afternoon, Threads was the number-one free app on the iOS App Store.

    The legal threat may not necessarily lead to litigation but it could be part of a strategy to slow down Meta, said Carl Tobias, a law professor at the University of Richmond.

    “Sometimes lawyers, they threaten but don’t follow through. Or they see how far they can go. That may be the case, but I don’t know that for sure,” Tobias told CNN. He added: “There may be some value to tying it up in litigation and complicating life for Meta.”

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  • ‘It almost doubled our workload’: AI is supposed to make jobs easier. These workers disagree | CNN Business

    ‘It almost doubled our workload’: AI is supposed to make jobs easier. These workers disagree | CNN Business

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    CNN
     — 

    A new crop of artificial intelligence tools carries the promise of streamlining tasks, improving efficiency and boosting productivity in the workplace. But that hasn’t been Neil Clarke’s experience so far.

    Clarke, an editor and publisher, said he recently had to temporarily shutter the online submission form for his science fiction and fantasy magazine, Clarkesworld, after his team was inundated with a deluge of “consistently bad” AI-generated submissions.

    “They’re some of the worst stories we’ve seen, actually,” Clarke said of the hundreds of pieces of AI-produced content he and his team of humans now must manually parse through. “But it’s more of the problem of volume, not quality. The quantity is burying us.”

    “It almost doubled our workload,” he added, describing the latest AI tools as “a thorn in our side for the last few months.” Clarke said that he anticipates his team is going to have to close submissions again. “It’s going to reach a point where we can’t handle it.”

    Since ChatGPT launched late last year, many of the tech world’s most prominent figures have waxed poetic about how AI has the potential to boost productivity, help us all work less and create new and better jobs in the future. “In the next few years, the main impact of AI on work will be to help people do their jobs more efficiently,” Microsoft co-founder Bill Gates said in a blog post recently.

    But as is often the case with tech, the long-term impact isn’t always clear or the same across industries and markets. Moreover, the road to a techno-utopia is often bumpy and plagued with unintended consequences, whether it’s lawyers fined for submitting fake court citations from ChatGPT or a small publication buried under an avalanche of computer-generated submissions.

    Big Tech companies are now rushing to jump on the AI bandwagon, pledging significant investments into new AI-powered tools that promise to streamline work. These tools can help people quickly draft emails, make presentations and summarize large datasets or texts.

    In a recent study, researchers at the Massachusetts Institute of Technology found that access to ChatGPT increased productivity for workers who were assigned tasks like writing cover letters, “delicate” emails and cost-benefit analyses. “I think what our study shows is that this kind of technology has important applications in white collar work. It’s a useful technology. But it’s still too early to tell if it will be good or bad, or how exactly it’s going to cause society to adjust,” Shakked Noy, a PhD student in MIT’s Department of Economics, who co-authored the paper, said in a statement.

    Mathias Cormann, the secretary-general of the Organization for Economic Co-operation and Development recently said the intergovernmental organization has found that AI can improve some aspects of job quality, but there are tradeoffs.

    “Workers do report, though, that the intensity of their work has increased after the adoption of AI in their workplaces,” Cormann said in public remarks, pointing to the findings of a report released by the organization. The report also found that for non-AI specialists and non-managers, the use of AI had only a “minimal impact on wages so far” – meaning that for the average employee, the work is scaling up, but the pay isn’t.

    Ivana Saula, the research director for the International Association of Machinists and Aerospace Workers, said that workers in her union have said they feel like “guinea pigs” as employers rush to roll out AI-powered tools on the job.

    And it hasn’t always gone smoothly, Saula said. The implementation of these new tech tools has often led to more “residual tasks that a human still needs to do.” This can include picking up additional logistics tasks that a machine simply can’t do, Saula said, adding more time and pressure to a daily work flow.

    The union represents a broad range of workers, including in air transportation, health care, public service, manufacturing and the nuclear industry, Saula said.

    “It’s never just clean cut, where the machine can entirely replace the human,” Saula told CNN. “It can replace certain aspects of what a worker does, but there’s some tasks that are outstanding that get placed on whoever remains.”

    Workers are also “saying that my workload is heavier” after the implementation of new AI tools, Saula said, and “the intensity at which I work is much faster because now it’s being set by the machine.” She added that the feedback they are getting from workers shows how important it is to “actually involve workers in the process of implementation.”

    “Because there’s knowledge on the ground, on the frontlines, that employers need to be aware of,” she said. “And oftentimes, I think there’s disconnects between frontline workers and what happens on shop floors, and upper management, and not to mention CEOs.”

    Perhaps nowhere are the pros and cons of AI for businesses as apparent as in the media industry. These tools offer the promise of accelerating if not automating copywriting, advertising and certain editorial work, but there have already been some notable blunders.

    News outlet CNET had to issue “substantial” corrections earlier this year after experimenting with using an AI tool to write stories. And what was supposed to be a simple AI-written story on Star Wars published by Gizmodo earlier this month similarly required a correction and resulted in employee turmoil. But both outlets have signaled they will still move forward with using the technology to assist in newsrooms.

    Others like Clarke, the publisher, have tried to combat the fallout from the rise of AI by relying on more AI. Clarke said he and his team turned to AI-powered detectors of AI-generated work to deal with the deluge of submissions but found these tools weren’t helpful because of how unreliably they flag “false positives and false negatives,” especially for writers whose second language is English.

    “You listen to these AI experts, they go on about how these things are going to do amazing breakthroughs in different fields,” Clarke said. “But those aren’t the fields they’re currently working in.”

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  • Republican lawmaker calls TikTok ‘an immediate threat’ and calls for app to be banned | CNN Politics

    Republican lawmaker calls TikTok ‘an immediate threat’ and calls for app to be banned | CNN Politics

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    Washington
    CNN
     — 

    Republican Rep. Cathy McMorris Rodgers of Washington said Sunday that TikTok represents “an immediate threat” from China and called for the short-form video app to be banned in the US.

    The chairwoman of the House Energy and Commerce Committee said on CNN’s “State of the Union” that Congress should pass a data privacy law and ban TikTok in the US after the company’s CEO Shou Chew testified in front of her committee on Thursday.

    McMorris Rodgers said Chew’s testimony “made clear” that TikTok is a threat to the US.

    “What the hearing made clear to me was that TikTok should be banned in the United States of America to address the immediate threat and we also need a national data privacy law,” McMorris Rodgers told CNN’s Jake Tapper.

    The Republican lawmaker cited TikTok and its parent company, ByteDance, being connected to China as evidence of the national security risk.

    While many nations have imposed bans on official government devices out of national security concerns, there is currently no public evidence the Chinese government has spied on people through TikTok.

    The company told CNN in a statement, “The best way to address concerns about national security is with the transparent US-based protection of US user data and systems with robust third-party monitoring, vetting and verification, which we are already implementing.”

    On Sunday, McMorris Rodgers responded to criticism from TikTok users, many of whom mocked lawmakers for their lack of familiarity with the app and questioned why Congress would spend time regulating social media. She noted the rare bipartisan agreement on the national security risks the app presents.

    “I would say there is an immediate threat via TikTok from the Chinese Communist Party. That is the reason that I believe we need to ban TikTok immediately. It is a national security threat,” McMorris Rodgers said. “It united Republicans and Democrats on the committee as to the urgent need for us to take action.”

    Democratic Sen. Mark Warner, who chairs the Senate Intelligence Committee, also shared concerns over the app’s connection to China on Sunday.

    “At the end of the day, TikTok is owned by a Chinese company, ByteDance, and by Chinese law, that company has to be willing to turn over data to the Communist Party or, one of my bigger fears, we have 150 million Americans on TikTok, average of about 90 minutes a day, and how that channel could be used for propaganda purposes or disinformation by the Communist Party,” Warner said in an interview with CBS News.

    McMorris Rodgers also emphasized the need to pass a national data privacy law to restrict all social media platforms from collecting user data, including those based in the US.

    “We need to take action whether it’s TikTok, big tech or other data brokers to restrict the amount of data that they’re collecting to begin with,” she said.

    This story has been updated with additional information.

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  • Italy blocks ChatGPT over privacy concerns | CNN Business

    Italy blocks ChatGPT over privacy concerns | CNN Business

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    London
    CNN
     — 

    Regulators in Italy issued a temporary ban on ChatGPT Friday, effective immediately, due to privacy concerns and said they had opened an investigation into how OpenAI, the US company behind the popular chatbot, uses data.

    Italy’s data protection agency said users lacked information about the collection of their data and that a breach at ChatGPT had been reported on March 20.

    “There appears to be no legal basis underpinning the massive collection and processing of personal data in order to ‘train’ the algorithms on which the platform relies,” the agency said.

    The Italian regulator also expressed concerns over the lack of age verification for ChatGPT users. It argued that this “exposes children to receiving responses that are absolutely inappropriate to their age and awareness.” The platform is supposed to be for users older than 13, it noted.

    The data protection agency said OpenAI would be barred from processing the data of Italian users until it “respects the privacy regulation.”

    OpenAI has been given 20 days to communicate the measures it will take to comply with Italy’s data rules. Otherwise, it could face a penalty of up to €20 million ($21.8 million), or up to 4% of its annual global turnover.

    Since its public release four months ago, ChatGPT has become a global phenomenon, amassing millions of users impressed with its ability to craft convincing written content, including academic essays, business plans and short stories.

    But concerns have also emerged about its rapid spread and what large-scale uptake of such tools could mean for society, putting pressure on regulators around the world to act.

    The European Union is finalizing rules on the use of artificial intelligence in the bloc. In the meantime, EU companies must comply with the General Data Protection Regulation, or GDPR, as well as the Digital Services Act and Digital Markets Act, which apply to tech platforms.

    Meanwhile, so-called “generative AI” tools available to the public are proliferating.

    Earlier this month, OpenAI released GPT-4, a new version of the technology underpinning ChatGPT that is even more powerful. The company said the updated technology passed a simulated law school bar exam with a score around the top 10% of test takers; by contrast, the prior version, GPT-3.5, scored around the bottom 10%.

    This week, some of the biggest names in tech, including Elon Musk, called for AI labs to stop the training of the most powerful AI systems for at least six months, citing “profound risks to society and humanity.”

    — Julia Horowitz contributed reporting.

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  • Who says romance is dead? Couples are using ChatGPT to write their wedding vows | CNN Business

    Who says romance is dead? Couples are using ChatGPT to write their wedding vows | CNN Business

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    CNN
     — 

    When Elyse Nguyen was nearing her wedding date in February and still hadn’t started writing her vows, a friend suggested she try a new source of inspiration: ChatGPT.

    The AI chatbot, which was released publicly in late November, can generate compelling written responses to user prompts and offers the promise of helping people get over writer’s block, whether it be for an essay, an email, or an emotional speech.

    “At first we inputted the prompt as a joke and the output was pretty cheesy with personal references to me and my husband,” said Nguyen, a financial analyst at Qualcomm. “But the essence of what vows should incorporate was there – our promises to each other and structure.”

    She made edits, changed the prompts to add humor and details about her partner’s interests, and added some personal touches. Nguyen ultimately ended up using a good portion of ChatGPT’s suggestions and said her husband was on board with it.

    “It helped alleviate some stress because I had no prior experience with wedding vows nor did I know what should be included,” Nguyen said. “Plus, ChatGPT is a genius with alliteration, analogies and metaphors. Having something like, ‘I promise to be your partner in life with the enthusiasm of a golfer’s first hole in one’ in my back pocket was comical.”

    Nearly five months after ChatGPT went viral and ignited a new AI arms race in Silicon Valley, more couples are looking to it for help with wedding planning, including writing vows and speeches, drafting religious marriage contracts, and setting up websites for the special day.

    Ellen Le recently created some of her wedding website through a new Writer’s Block Assistant tool on online wedding planning service Joy, which was one of the first third-party platforms to incorporate ChatGPT’s technology. (Last month, OpenAI, the company behind ChatGPT, opened up access to the chatbot, paving the way for it to be integrated into numerous apps and services.)

    Le, a product manager at a startup, said she used the feature to draft an “about us” page and write directions from San Francisco to her Napa Valley wedding. The Writer’s Block Assistant tool helps users write vows, best man and maid of honor speeches, thank you cards and wedding website “about us” pages. It also lets users highlight personal stories and select the style or tone before pulling it into a speech.

    “I started drafting my vows and when I typed in how we met, it produced this very delightful story,” Le said. “Some of it was inaccurate, making up certain details, but it gave me a helping hand and something to react to, rather than just spending 10 hours thinking about how to get started.”

    Le said her fiance, who often uses ChatGPT for work, is considering using AI to help with his vows too.

    Joy co-founder and CEO Vishal Joshi, who studied artificial intelligence and electrical engineering at NIT Rourkela in India, said the company launched Writer’s Block Assistant in March after it conducted an internal study that found most of its users were somewhat overwhelmed with getting started on writing vows and speeches, and wished they had help. He said the company has already seen thousands of submissions since launching the tool.

    “Almost two decades ago, AI enthusiasts like myself and my research peers had only dreamt of mass market adoption we are seeing today, and we know this is just the true beginning,” Joshi said. “Just like smartphones, if applied well, the positive impact of AI on our lives can far outshine the negatives. We’re working on responsibly innovating using AI to advance the wedding and event industry as a whole.”

    Michael Grinn and Kate Gardiner used viral AI tool ChatGPT to write the Ketubah, a Jewish wedding contract, for their June wedding.

    ChatGPT has sparked concerns in recent months about its potential to perpetuate biases, spread misinformation and upend certain livelihoods. Now, as it finds its way into marriage ceremonies, it could raise more nuanced questions about whether people risk losing something by injecting technology into what is supposed to be a deeply personal and, for many, spiritual moment in life.

    Michael Grinn, an anesthesiologist with practices in Miami and New York, was experimenting with ChatGPT when he asked it to produce a traditional Ketubah – a Jewish marriage contract – for his upcoming June wedding.

    Grinn and his fiance Kate Gardiner, the founder and CEO of a public relations firm, then requested it make some language changes around gender equality and intimacy. “At the end, we both looked at each other and were like, we can’t disagree with the result,” he said.

    Editing took about an hour, but it still shaved hours off what otherwise could have been a lengthy process, he said. Still, Grinn plans to write his own vows. “I want them to be less refined and something no one else helped me with.”

    He does, however, plan to use ChatGPT for inspiration for officiating his best man’s wedding. “It mostly comes down to time because I’ve been working so much,” he said, “and this is so efficient.”

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  • Snapchat rolls out chatbot powered by ChatGPT to all users | CNN Business

    Snapchat rolls out chatbot powered by ChatGPT to all users | CNN Business

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    CNN
     — 

    Snapchat is about to give new meaning to the “chat” part of its name.

    Snap, the company behind Snapchat, announced on Wednesday that its customizable My AI chatbot, is now accessible to all users within the app. The feature, which is powered by the viral AI chatbot ChatGPT, was previously only available to paying Snapchat+ subscribers.

    The tool offers recommendations, answers questions, helps users make plans and can write a haiku in seconds, according to the company. It can be brought into conversation with friends when it’s mentioned with “@MyAI.” Users can also give it a name and design a custom Bitmoji avatar for it to personalize it more.

    The move comes more than a month after ChatGPT creator OpenAI opened up access to its chatbot to third-party businesses. Snap, Instacart and tutor app Quizlet were among the early partners experimenting with adding ChatGPT.

    Since its public release in November 2022, ChatGPT has stunned many users with its impressive ability to generate original essays, stories and song lyrics in response to user prompts. The initial wave of attention on the tool helped renew an arms race among tech companies to develop and deploy similar AI tools in their products.

    The initial batch of companies tapping into ChatGPT’s functionality each have slightly different visions for how to incorporate it. Taken together, however, these services may test just how useful AI chatbots can really be in our everyday life and how much people want to interact with them for customer service and other uses across their favorite apps.

    Adding ChatGPT features also may come with some risks. The tool, which is trained on vast troves of data online, can spread inaccurate information and has the potential to respond to users in ways they might find inappropriate.

    In a blog post on Wednesday, Snap acknowledged “My AI is far from perfect but we’ve made a lot of progress.”

    It said, for example, about 99.5% of My AI responses conform to its community guidelines. Snap said it has made changes to “help protect against responses that could be inappropriate or harmful.” The company also said it has added moderation technology and included the new feature to its in-app parental tools.

    “We will continue to use these early learnings to make AI a more safe, fun, and useful experience, and we’re eager to hear your thoughts,” the company said.

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  • A key safety executive at TikTok is leaving as lawmakers keep pressure on the app | CNN Business

    A key safety executive at TikTok is leaving as lawmakers keep pressure on the app | CNN Business

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    New York
    CNN
     — 

    TikTok is about to lose a key safety executive as the app faces growing pressure from lawmakers and threats of a ban in the United States.

    TikTok’s Head of US Data Security Trust and Safety Eric Han is set to leave the company next week. His departure was confirmed to CNN by TikTok spokesperson Maureen Shanahan. The news was first reported Tuesday by The Verge.

    In the role, which he has held since 2019, Han led policy decisions such as those aimed at reducing the spread of dangerous challenges and cracking down on paid political posts by influencers. The position will be temporarily filled by Andy Bonillo, TikTok’s interim general manager of US data security, until a permanent replacement is found, Shanahan said.

    With the move, TikTok will lose a key safety leader at a difficult moment for the platform. US lawmakers in recent months have ramped up calls for a nationwide ban of the app over concerns that its parent company ByteDance’s connections to China could pose a national security risk to the United States.

    TikTok confirmed in March that federal officials have demanded that the app’s Chinese owners sell their stake in the social media platform, or risk facing a US ban of the app. And last month, Montana lawmakers approved legislation to ban TikTok on personal devices, which would make it the first state to do so, assuming the bill is signed by the state’s governor.

    TikTok CEO Shou Chew testified before Congress in March and attempted to reassure lawmakers about the safety of the app and the security of US users’ data.

    TikTok did not respond to a question about the reason for Han’s departure.

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  • Europe is leading the race to regulate AI. Here’s what you need to know | CNN Business

    Europe is leading the race to regulate AI. Here’s what you need to know | CNN Business

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    London
    CNN
     — 

    The European Union took a major step Wednesday toward setting rules — the first in the world — on how companies can use artificial intelligence.

    It’s a bold move that Brussels hopes will pave the way for global standards for a technology used in everything from chatbots such as OpenAI’s ChatGPT to surgical procedures and fraud detection at banks.

    “We have made history today,” Brando Benifei, a member of the European Parliament working on the EU AI Act, told journalists.

    Lawmakers have agreed a draft version of the Act, which will now be negotiated with the Council of the European Union and EU member states before becoming law.

    “While Big Tech companies are sounding the alarm over their own creations, Europe has gone ahead and proposed a concrete response to the risks AI is starting to pose,” Benifei added.

    Hundreds of top AI scientists and researchers warned last month that the technology posed an extinction risk to humanity, and several prominent figures — including Microsoft President Brad Smith and OpenAI CEO Sam Altman — have called for greater regulation of the technology.

    At the Yale CEO Summit this week, more than 40% of business leaders — including Walmart chief Doug McMillion and Coca-Cola

    (KO)     CEO James Quincy — said AI had the potential to destroy humanity five to 10 years from now.

    Against that backdrop, the EU AI Act seeks to “promote the uptake of human-centric and trustworthy artificial intelligence and to ensure a high level of protection of health, safety, fundamental rights, democracy and rule of law and the environment from harmful effects.”

    Here are the key takeaways.

    Once approved, the Act will apply to anyone who develops and deploys AI systems in the EU, including companies located outside the bloc.

    The extent of regulation depends on the risks created by a particular application, from minimal to “unacceptable.”

    Systems that fall into the latter category are banned outright. These include real-time facial recognition systems in public spaces, predictive policing tools and social scoring systems, such as those in China, which assign people a “health score” based on their behavior.

    The legislation also sets tight restrictions on “high-risk” AI applications, which are those that threaten “significant harm to people’s health, safety, fundamental rights or the environment.”

    These include systems used to influence voters in an election, as well as social media platforms with more than 45 million users that recommend content to their users — a list that would include Facebook, Twitter and Instagram.

    The Act also outlines transparency requirements for AI systems.

    For instance, systems such as ChatGPT would have to disclose that their content was AI-generated, distinguish deep-fake images from real ones and provide safeguards against the generation of illegal content.

    Detailed summaries of the copyrighted data used to train these AI systems would also have to be published.

    AI systems with minimal or no risk, such as spam filters, fall largely outside of the rules.

    Most AI systems will likely fall into the high-risk or prohibited categories, leaving their owners exposed to potentially enormous fines if they fall foul of the regulations, according to Racheal Muldoon, a barrister (litigator) at London law firm Maitland Chambers.

    Engaging in prohibited AI practices could lead to a fine of up to €40 million ($43 million) or an amount equal to up to 7% of a company’s worldwide annual turnover, whichever is higher.

    That goes much further than Europe’s signature data privacy law, the General Data Protection Regulation, under which Meta was hit with a €1.2 billion ($1.3 billion) fine last month. GDPR sets fines of up to €10 million ($10.8 million), or up to 2% of a firm’s global turnover.

    Fines under the AI Act serve as a “war cry from the legislators to say, ‘take this seriously’,” Muldoon said.

    At the same time, penalties would be “proportionate” and consider the market position of small-scale providers, suggesting there could be some leniency for start-ups.

    The Act also requires EU member states to establish at least one regulatory “sandbox” to test AI systems before they are deployed.

    “The one thing that we wanted to achieve with this text is balance,” Dragoș Tudorache, a member of the European Parliament, told journalists. The Act protects citizens while also “promoting innovation, not hindering creativity, and deployment and development of AI in Europe,” he added.

    The Act gives citizens the right to file complaints against providers of AI systems and makes a provision for an EU AI Office to monitor enforcement of the legislation. It also requires member states to designate national supervisory authorities for AI.

    Microsoft

    (MSFT)     — which, together with Google, is at the forefront of AI development globally — welcomed progress on the Act but said it looked forward to “further refinement.”

    “We believe that AI requires legislative guardrails, alignment efforts at an international level, and meaningful voluntary actions by companies that develop and deploy AI,” a Microsoft spokesperson said in a statement.

    IBM

    (IBM)    , meanwhile, called on EU policymakers to take a “risk-based approach” and suggested four “key improvements” to the draft Act, including further clarity around high-risk AI “so that only truly high-risk use cases are captured.”

    The Act may not come into force until 2026, according to Muldoon, who said revisions were likely, given how rapidly AI was advancing. The legislation has already gone through several updates since drafting began in 2021.

    “The law will expand in scope as the technology develops,” Muldoon said.

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  • Twitter’s future is in doubt as Threads tops 100 million users | CNN Business

    Twitter’s future is in doubt as Threads tops 100 million users | CNN Business

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    Washington
    CNN
     — 

    Twitter has weathered months, if not years, of mismanagement as well as mass layoffs, frequent service disruptions and an exodus of top advertisers, but the launch of a rival app from Meta could prove to be the final straw.

    Threads surpassed 100 million users this weekend, less than a week after it launched, Meta CEO Mark Zuckerberg announced Monday, marking a staggering feat for any social network and one that puts it on pace to rapidly pass Twitter’s audience size.

    Meanwhile, multiple internet traffic analysts reported noticeable declines in Twitter usage in just the past few days. The results underscore the risk Meta poses to Twitter’s business and raise questions about how, or if, Twitter can stem its losses.

    Twitter traffic had already been trending downward for months, according to data from the internet infrastructure company Cloudflare and the web analytics firm Similarweb. But the pace of decline appears to have accelerated in recent days, both companies said, likely reflecting strong interest in Threads and a mass migration from the platform owned by Elon Musk to the one run by Zuckerberg.

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

    On Sunday, Cloudflare CEO Matthew Prince shared a chart showing Twitter’s popularity relative to other websites it tracks. “Twitter traffic tanking,” Prince said as he posted the chart.

    The chart showed that in January, Twitter was ranked 32nd on the list; the next month, it had fallen to 34th. For much of the spring, Twitter fluctuated between 35th place and 37th. But the beginning of July showed a rapid falloff in popularity, as Twitter plunged to 40th place. (Cloudflare defines popularity as the “size of a population of users that look up a domain per unit of time.”)

    Similarweb told CNN Monday it has witnessed comparable trends in Twitter traffic.

    “In the first two full days that Threads was generally available, [last] Thursday and Friday, web traffic to twitter.com was down 5% compared with the same days of the previous week and down 11% compared with July 6 and 7, 2022,” said David Carr, a senior insights manager at Similarweb. “We’ve been reporting for a while that Twitter is down compared with last year – June traffic was down 4% – but Threads seems to be taking a bigger bite out of it.”

    Bolstering the traffic reports were the anecdotal experiences of some Threads users. Alex Stamos, director of the Stanford Internet Observatory, said Saturday he ran an “unscientific test” of how the same post he shared on Twitter, Threads and Mastodon, another rival, performed with his audience over a 23-hour period.

    The identical content Stamos created on each platform saw significantly more engagement on Threads than on Twitter as measured by likes and replies — despite having a fraction of his usual reach on the newer platform, he said.

    Stamos, who has more than 100,000 followers on Twitter but only a tenth of that number on Threads, added that strong Threads engagement with his posts describing the “research” also supported the original findings. The quality of the replies to his posts were also much higher on non-Twitter platforms, he observed.

    “From my perspective, Twitter is done as a platform for serious tech conversations,” Stamos said, who previously was the chief security officer at Facebook.

    Fueling Threads’ rapid growth has been Meta’s use of Instagram as a springboard to sign up new users, along with what many Threads users have identified as a dissatisfaction with Twitter.

    Threads started out with a number of celebrity accounts prepopulating its platform but has since gained additional high-profile users including Kim Kardashian and Jeff Bezos. An account that had been banned from Twitter that tracks the movements of Musk’s private jet has also joined the new platform.

    More than 100 US lawmakers have signed up as well, Axios reported last week, though few world leaders appear to be on Threads at the moment.

    Zuckerberg and Instagram head Adam Mosseri have emphasized that Threads is about more than replacing Twitter and that the app seeks to tap audiences outside of Twitter’s traditional user base. That means Threads will not actively elevate news or political content, Mosseri said, describing those topics as “not at all worth the scrutiny, negativity (let’s be honest), or integrity risks that come along with them.”

    Over the weekend, Mosseri’s stance on news and politics triggered a debate over Threads’ approach to those topics. Some users praised it as a way to make the platform more accessible to average users, who may never have embraced Twitter before. Others argued that many of the topics Mosseri characterized as non-political, including music, fashion and entertainment, are their own source of news and can be inherently political.

    Even as Meta’s executives look to put some daylight between Threads and Twitter, the rapid rise of Threads only appears to have deepened Musk’s longtime feud with Zuckerberg. The app’s launch prompted threats of litigation as Twitter has accused Meta of trade secret theft, not to mention talk of a physical cage fight between Musk and Zuckerberg.

    On Sunday, Musk, who is known for erratic behavior and incendiary remarks, made it even more personal as he lobbed a sexual insult at Zuckerberg and proposed comparing the size of their respective genitalia.

    Zuckerberg has not directly responded to the insult. But after a Threads user pointed out that the new app was not featured in Twitter’s trending topics tab, Zuckerberg replied “Concerning” with a crying-laughter emoji. And he used the same emoji to reply to a post by the fast-food brand Wendy’s, which had suggested Zuckerberg should “go to space just to really make him mad lol.”

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  • Meta’s Threads app rolls out first big batch of updates | CNN Business

    Meta’s Threads app rolls out first big batch of updates | CNN Business

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    New York
    CNN
     — 

    Meta’s Twitter rival app Threads on Tuesday rolled out its first major batch of updates since its launch two weeks ago as it works to maintain momentum.

    The new features include a translation button and a tab on users’ activity feed dedicated to showing who’s followed them, according to a post from Cameron Roth, a software engineer working on Threads.

    All new features should be available to iOS Threads users by the end of Tuesday, Roth said.

    Threads users have been clamoring for updates since its launch. The new app attracted over 100 million user sign-ups in less than a week, but it still lacks many of the features popular on Twitter and other platforms, including direct messaging and a robust search function.

    User engagement on Threads has dipped since its first week, according to web traffic analysis firm Similarweb. And Meta executives have teased plans to improve the app in hopes of getting users to keep coming back.

    “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 CEO Mark Zuckerberg said in a Threads post Monday.

    Tuesday’s updates also include the ability to subscribe and receive notifications from accounts a user doesn’t follow and a “+” button that lets users follow new accounts from the replies on a post, as well as bug fixes and other improvements.

    Instagram head Adam Mosseri, who is overseeing Threads, has also hinted at plans to introduce a desktop version of the app as well as a feed of only accounts a user follows and an edit button.

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  • Twitter says portions of source code leaked online | CNN Business

    Twitter says portions of source code leaked online | CNN Business

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    CNN
     — 

    Twitter said parts of its proprietary code were posted online and had been exposed until Friday, when the company had the material removed from the web and filed for a court order to hunt down the source of the leak.

    The leak saw excerpts of Twitter’s source code — the programming that powers the Twitter platform and its internal tools — posted to the online software repository GitHub, according to a court filing Friday by a Twitter attorney. The files were posted by a pseudonymous GitHub user, identified only by the handle FreeSpeechEnthusiast. The account was created on Jan. 3 and does not appear to have posted any other material besides the Twitter code.

    The code leak represents the latest mishap for Twitter as CEO Elon Musk has sought to reverse a sharp decline in revenues through substantial layoffs and other cost cutting measures that some experts had already said risked making the platform less safe. Leaked source code can not only provide insight into how a company designs its product but can also give criminals the chance to find or exploit security flaws and vulnerabilities.

    Twitter has launched an effort to identify the person or group behind the FreeSpeechEnthusiast GitHub account, as well as anyone who may have interacted with the leaked code. On Friday, Twitter filed for a subpoena at the US District Court for the Northern District of California, which Twitter hopes will compel GitHub to hand over IP addresses, contact information, and access logs associated with the incident.

    “The purpose for which Twitter’s DMCA Subpoena is sought is to obtain the identity of an alleged infringer or infringers, and such information will only be used for the purpose of protecting Twitter’s rights,” Twitter wrote in its filing to the court.

    GitHub removed the content on Friday after Twitter submitted a copyright claim to the company. GitHub declined to comment on the matter but said it publicly posts all copyright takedown requests and referred CNN to Twitter’s request. Twitter, which has cut much of its public relations team under Musk, automatically responded to a request for comment with an email containing a poop emoji.

    The leak was first reported by The New York Times.

    The leak comes as Musk has sought to place more of his own imprint on the social media platform he purchased last year. The acquisition prompted a wave of advertisers to flee the platform over fears the deal would lead to a rise in hate speech and an increase in reputational risks for brands. Musk has blamed the advertiser revolt for steep losses at the company, and has aggressively pushed the company’s subscription service, Twitter Blue, as an alternative revenue stream. He has also said Twitter will charge fees for other software applications to access Twitter’s platform.

    On Saturday, reports on an internal memo by Musk outlining employee stock awards suggested that Twitter was valued at about $20 billion, or less than half of the $44 billion Musk paid for the company. (CNN has not independently confirmed the memo’s existence or its contents.) In the memo, Musk reportedly defended the changes he has made at the company and claimed that Twitter’s valuation could someday exceed $250 billion.

    The same day, Musk tweeted that prior to the changes he made, Twitter only had $1 billion in cash, which he said represented about four months’ worth of expenses and an “extremely dire situation.” But, he added, things are looking up.

    “Now that advertisers are returning, it looks like we will break even in Q2,” he said.

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  • How your phone learned to see in the dark | CNN Business

    How your phone learned to see in the dark | CNN Business

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    New York
    CNN
     — 

    Open up Instagram at any given moment and it probably won’t take long to find crisp pictures of the night sky, a skyline after dark or a dimly lit restaurant. While shots like these used to require advanced cameras, they’re now often possible from the phone you already carry around in your pocket.

    Tech companies such as Apple, Samsung and Google are investing resources to improve their night photography options at a time when camera features have increasingly become a key selling point for smartphones that otherwise largely all look and feel the same from one year to the next.

    Earlier this month, Google brought a faster version of its Night Sight mode, which uses AI algorithms to lighten or brighten images in dark environments, to more of its Pixel models. Apple’s Night mode, which is available on models as far back as the iPhone 11, was touted as a premier feature on its iPhone 14 lineup last year thanks to its improved camera system.

    These tools have come a long way in just the past few years, thanks to significant advancements in artificial intelligence technology as well as image processing that has become sharper, quicker, and more resilient to challenging photography situations. And smartphone makers aren’t done yet.

    “People increasingly rely on their smartphones to take photos, record videos, and create content,” said Lian Jye Su, an artificial intelligence analyst at ABI Research. “[This] will only fuel the smartphone companies to up their games in AI-enhanced image and video processing.”

    While there has been much focus lately on Silicon Valley’s renewed AI arms race over chatbots, the push to develop more sophisticated AI tools could also help further improve night photography and bring our smartphones closer to being able to see in the dark.

    Samsung’s Night mode feature, which is available on various Galaxy models but optimized for its premium S23 Ultra smartphone, promises to do what would have seemed unthinkable just five to 10 years ago: enable phones to take clearer pictures with little light.

    The feature is designed to minimize what’s called “noise,” a term in photography that typically refers to poor lighting conditions, long exposure times, and other elements that can take away from the quality of an image.

    The secret to reducing noise, according to the company, is a combination of the S23 Ultra’s adaptive 200M pixel sensor. After the shutter button is pressed, Samsung uses advanced multi-frame processing to combine multiple images into a single picture and AI to automatically adjust the photo as necessary.

    “When a user takes a photo in low or dark lighting conditions, the processor helps remove noise through multi-frame processing,” said Joshua Cho, executive vice president of Samsung’s Visual Solution Team. “Instantaneously, the Galaxy S23 Ultra detects the detail that should be kept, and the noise that should be removed.”

    For Samsung and other tech companies, AI algorithms are crucial to delivering photos taken in the dark. “The AI training process is based on a large number of images tuned and annotated by experts, and AI learns the parameters to adjust for every photo taken in low-light situations,” Su explained.

    For example, algorithms identify the right level of exposure, determine the correct color pallet and gradient under certain lighting conditions, sharpen blurred faces or objects artificially, and then makes those changes. The final result, however, can look quite different from what the person taking the picture saw in real time, in what some might argue is a technical sleight-of-hand trick.

    Lights illuminate the Atlanta Botanical Gardens, in this photo taken using Google Pixel 5 Night Sight setting.

    Google is also focused on reducing noise in photography. Its AI-powered Night Sight feature captures a burst of longer-exposure frames. It then uses something called HDR+ Bracketing, which creates several photos with different settings. After a picture is taken, the images are combined together to create “sharper photos” even in dark environments “that are still incredibly bright and detailed,” said Alex Schiffhauer, a group product manager at Google.

    While effective, there can be a slight but noticeable delay before the image is ready. But Schiffhauer said Google intends to speed up this process more on future Pixel iterations. “We’d love a world in which customers can get the quality of Night Sight without needing to hold still for a few seconds,” Schiffhauer said.

    Google also has an astrophotography feature which allows people to take shots of the night sky without needing to tweak the exposure or other settings. The algorithms detect details in the sky and enhances them to stand out, according to the company.

    Apple has long been rumored to be working on an astrophotography feature, but some iPhone 14 Pro Max users have successfully been able to capture pictures of the sky through its existing Night Mode tool. When a device detects a low-light environment, Night mode turns on to capture details and brighten shots. (The company did not respond to a request to elaborate on how the algorithms work.)

    AI can make a difference in the image, but the end results for each of these features also depend on the phone’s lenses, said Gartner analyst Bill Ray. A traditional camera will have the lens several centimeters from the sensor, but the limited space on a phone often requires squeezing things together, which can result in a more shallow depth of field and reduced image quality, especially in darker environments.

    “The quality of the lens is still a big deal, and how the phone addresses the lack of depth,” Ray said.

    While night photography on phones has come a long way, a buzzy new technology could push it ahead even more.

    Generative AI, the technology that powers the viral chatbot ChatGPT, has earned plenty of attention for its ability to create compelling essays and images in response to user prompts. But these AI systems, which are trained on vast troves of online data, also have potential to edit and process images.

    “In recent years, generative AI models have also been used in photo-editing functions like background removal or replacement,” Su said. If this technology is added to smartphone photo systems, it could eventually make night modes even more powerful, Su said.

    Big Tech companies, including Google, are already fully embracing this technology in other parts of their business. Meanwhile, smartphone chipset vendors like Qualcomm and MediaTek are looking to support more generative AI applications natively on consumer devices, Su said. These include image and video augmentation.

    “But this is still about two to three years away from limited versions of this showing up on smartphones,” he said.

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

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

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    CNN
     — 

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

    In a letter to shareholders Thursday, Amazon

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

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

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

    (GOOG)    , Facebook

    (FB)     and Microsoft

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

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

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

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

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

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

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

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

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

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

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

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

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