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Tag: iab-technology industry

  • China-based hackers breached US government email accounts, Microsoft and White House say | CNN Politics

    China-based hackers breached US government email accounts, Microsoft and White House say | CNN Politics

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    CNN
     — 

    China-based hackers have breached email accounts at two-dozen organizations, including some United States government agencies, in an apparent spying campaign aimed at acquiring sensitive information, according to statements from Microsoft and the White House late Tuesday.

    The full scope of the hack is being investigated, but US officials and Microsoft have been quietly scrambling in recent weeks to assess the impact of the hack, which targeted unclassified email systems, and contain the fallout.

    The federal agency where the Chinese hackers were first detected was the State Department, a person familiar with the matter told CNN. The State Department then reported the suspicious activity to Microsoft, the person said.

    The Department of Commerce, which has sanctioned Chinese telecom firms, was also breached. The hackers accessed Commerce Secretary Gina Raimondo’s email account, one source familiar with the investigation told CNN. The Washington Post first reported on the access of the secretary’s account.

    The Chinese hackers were detected targeting a small number of federal agencies and just a handful of officials’ email accounts at each agency in a hack aimed at specific officials, multiple sources familiar with the investigation told CNN.

    “Microsoft notified the (Commerce) Department of a compromise to Microsoft’s Office 365 system, and the Department took immediate action to respond,” a department spokesperson said in a statement on Wednesday.

    The spokesperson did not immediately reply to a request for comment on the targeting of Raimondo’s email account.

    The hackers targeted email accounts at the House of Representatives, but it was unclear who was targeted and if the breach attempts were successful, two sources familiar with the matter told CNN.

    The breaches add to what is already one of the steepest cybersecurity challenges facing the Biden administration: limiting the ability of Beijing’s formidable hacking teams to access US government and corporate secrets.

    “Last month, US government safeguards identified an intrusion in Microsoft’s cloud security, which affected unclassified systems,” National Security Council spokesperson Adam Hodge said in a statement to CNN.

    “Officials immediately contacted Microsoft to find the source and vulnerability in their cloud service,” Hodge said. “We continue to hold the procurement providers of the US Government to a high security threshold.”

    The State Department “detected anomalous activity, took immediate steps to secure our systems, and will continue to closely monitor and quickly respond to any further activity,” a department spokesperson said on Wednesday.

    US Capitol Police declined to comment, referring CNN to the FBI.

    Hodge did not identify who was behind the hack, but Microsoft executives said in a blog post that the hackers were based in China and focused on espionage.

    In response to the Microsoft and White House statements, the Chinese foreign ministry on Wednesday accused Washington of conducting its own hacking operations.

    US officials have consistently labeled China as the most advanced of US adversaries in cyberspace, a domain that has repeatedly been a source of bilateral tension in recent years. The FBI has said Beijing has a larger hacking program than all other governments combined.

    China has routinely denied the allegations.

    The hacking began in mid-May, when the China-based hackers used a stolen sign-in key to burrow their way into email accounts, according to Microsoft. The tech giant has since blocked the hackers from accessing customer emails using that technique, Microsoft said late Tuesday.

    Secretary of State Antony Blinken visited China in mid-June, but it was not immediately clear if the cyber-espionage campaign was connected to that high-stakes visit.

    Some US officials credited the State Department with investing in more cyber-defense capabilities, allowing the agency to detect the suspicious activity earlier than in past advanced hacks.

    The number of US organizations, public or private, impacted by the hacking campaign is in the “single digits,” a senior US Cybersecurity and Infrastructure Security Agency official told reporters on Wednesday.

    “This appears to have been a very targeted, surgical campaign,” the official said.

    This story has been updated with additional information.

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  • Google is building an AI tool for journalists | CNN Business

    Google is building an AI tool for journalists | CNN Business

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    CNN
     — 

    Google is developing an artificial intelligence tool for news publishers that can generate article text and headlines, the company said, highlighting how the technology may soon transform the journalism industry.

    The tech giant said in a statement that it is looking to partner with news outlets on the AI tool’s use in newsrooms.

    “Our goal is to give journalists the choice of using these emerging technologies in a way that enhances their work and productivity,” a Google spokesperson said, “just like we’re making assistive tools available for people in Gmail and in Google Docs.”

    The effort was first reported by The New York Times, which said the project is referred to internally as “Genesis” and has been pitched to The Times, The Washington Post and News Corp, which owns The Wall Street Journal.

    Google’s statement did not name those media companies but said the company is particularly focusing on “smaller publishers.” It added that the project is not aimed at replacing journalists nor their “essential role … in reporting, creating, and fact-checking their articles.”

    The new tool comes as tech companies, including Google, race to develop and deploy a new crop of generative AI features into applications used in the workplace, with the promise of streamlining tasks and making employees more productive.

    But these tools, which are trained on information online, have also raised concerns because of their potential to get facts wrong or “hallucinate” responses.

    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. But both outlets have said they will still move forward with using the technology.

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  • Google-parent stock drops on fears it could lose search market share to AI-powered rivals | CNN Business

    Google-parent stock drops on fears it could lose search market share to AI-powered rivals | CNN Business

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    CNN
     — 

    Shares of Google-parent Alphabet fell more than 3% in early trading Monday after a report sparked concerns that its core search engine could lose market share to AI-powered rivals, including Microsoft’s Bing.

    Last month, Google employees learned that Samsung was weighing making Bing the default search engine on its devices instead of Google’s search engine, prompting a “panic” inside the company, according to a report from the New York Times, citing internal messages and documents. (CNN has not reviewed the material.)

    In an effort to address the heightened competition, Google is said to be developing a new AI-powered search engine called Project “Magi,” according to the Times. The company, which reportedly has about 160 people working on the project, aims to change the way results appear in Google Search and will include an AI chat tool available to answer questions. The project is expected to be unveiled to the public next month, according to the report.

    In a statement sent to CNN, Google spokesperson Lara Levin said the company has been using AI for years to “improve the quality of our results” and “offer entirely new ways to search,” including with a feature rolled out last year that lets users search by combining images and words.

    “We’ve done so in a responsible and helpful way that maintains the high bar we set for delivering quality information,” Levin said. “Not every brainstorm deck or product idea leads to a launch, but as we’ve said before, we’re excited about bringing new AI-powered features to Search, and will share more details soon.”

    Samsung did not immediately respond to a request for comment.

    Google’s search engine has dominated the market for two decades. But the viral success of ChatGPT, which can generate compelling written responses to user prompts, appeared to put Google on defense for the first time in years.

    In March, Google began opening up access to Bard, its new AI chatbot tool that directly competes with ChatGPT and promises to help users outline and write essay drafts, plan a friend’s baby shower, and get lunch ideas based on what’s in the fridge.

    At an event in February, a Google executive also said the company will bring “the magic of generative AI” directly into its core search product and use artificial intelligence to pave the way for the “next frontier of our information products.”

    Microsoft, meanwhile, has invested in and partnered with OpenAI, the company behind ChatGPT, to deploy similar technology in Bing and other productivity tools. Other tech companies, including Meta, Baidu and IBM, as well as a slew of startups, are racing to develop and deploy AI-powered tools.

    But tech companies face risks in embracing this technology, which is known to make mistakes and “hallucinate” responses. That’s particularly true when it comes to search engines, a product that many use to find accurate and reliable information.

    Google was called out after a demo of Bard provided an inaccurate response to a question about a telescope. Shares of Google’s parent company Alphabet fell 7.7% that day, wiping $100 billion off its market value.

    Microsoft’s Bing AI demo was also called out for several errors, including an apparent failure to differentiate between the types of vacuums and even made up information about certain products.

    In an interview with 60 Minutes that aired on Sunday, Google and Alphabet CEO Sundar Pichai stressed the need for companies to “be responsible in each step along the way” as they build and release AI tools.

    For Google, he said, that means allowing time for “user feedback” and making sure the company “can develop more robust safety layers before we build, before we deploy more capable models.”

    He also expressed his belief that these AI tools will ultimately have broad impacts on businesses, professions and society.

    “This is going to impact every product across every company and so that’s, that’s why I think it’s a very, very profound technology,” he said. “And so, we are just in early days.”

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

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

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    New York
    CNN
     — 

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

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

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

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

    But Meta has a long hill to climb.

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

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

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

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

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

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

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

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

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  • TV and film writers are fighting to save their jobs from AI. They won’t be the last | CNN Business

    TV and film writers are fighting to save their jobs from AI. They won’t be the last | CNN Business

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    CNN
     — 

    By any standard, John August is a successful screenwriter. He’s written such films as “Big Fish,” “Charlie’s Angels” and “Go.” But even he is concerned about the impact AI could have on his work.

    A powerful new crop of AI tools, trained on vast troves of data online, can now generate essays, song lyrics and other written work in response to user prompts. While there are clearly limits for how well AI tools can produce compelling creative stories, these tools are only getting more advanced, putting writers like August on guard.

    “Screenwriters are concerned about our scripts being the feeder material that is going into these systems to generate other scripts, treatments, and write story ideas,” August, a Writers Guild of America (WGA) committee member, told CNN. “The work that we do can’t be replaced by these systems.”

    August is one of the more than 11,000 members of the WGA who went on strike Tuesday morning, bringing an immediate halt to the production of some television shows and possibly delaying the start of new seasons of others later this year.

    WGA is demanding a host of changes from the Alliance of Motion Picture and Television Producers (AMPTP), from an increase in pay to receiving clear guidelines around working with streaming services. But as part of their demands, the WGA is also fighting to protect their livelihoods from AI.

    In a proposal published on WGA’s website this week, the labor union said AI should be regulated so it “can’t write or rewrite literary material, can’t be used as source material” and that writers’ work “can’t be used to train AI.”

    August said the AI demand “was one of the last things” added to the WGA list, but that it’s “clearly an issue writers are concerned about” and need to address now rather than when their contact is up again in three years. By then, he said, “it may be too late.”

    WGA said the proposal was rejected by AMPTP, which countered by offering annual meetings to discuss advancements in the technology. August said AMPTP’s response shows they want to keep their options open.

    In a document sent to CNN responding to some of WGA’s asks, AMPTP said it values the work of creatives and “the best stories are original, insightful and often come from people’s own experiences.”

    “AI raises hard, important creative and legal questions for everyone,” it wrote. “Writers want to be able to use this technology as part of their creative process, without changing how credits are determined, which is complicated given AI material can’t be copyrighted. So it’s something that requires a lot more discussion, which we’ve committed to doing.”

    It added that the current WGA agreement defines a “writer” as a “person,” and said “AI-generated material would not be eligible for writing credit.”

    The writers’ attempt at bargaining over AI is perhaps the most high-profile labor battle yet to address concerns about the cutting-edge technology that has captivated the world’s attention in the six months since the public release of ChatGPT.

    Goldman Sachs economists estimate that as many as 300 million full-job jobs globally could be automated in some way by the newest wave of AI. White-collar workers, including those in administrative and legal roles, are expected to be the most affected. And the impact may hit sooner than some think: IBM’s CEO recently suggested AI could eliminate the need for thousands of jobs at his company alone in the next five years.

    David Gunkel, a professor at the department of communications at Northern Illinois University who tracks AI in media and entertainment, said screenwriters want clear guidelines around AI because “they can see the writing on the wall.”

    “AI is already displacing human labor in many other areas of content creation—copywriting, journalism, SEO writing, and so on,” he said. “The WGA is simply trying to get out-in-front of and to protect their members against … ‘technological unemployment.’”

    While film and TV writers in Hollywood may currently be leading the charge, professionals in other industries will almost certainly be paying attention.

    “There’s certainly other industries that need to be paying close attention to this space,” said Rowan Curran, an analyst at Forrester Research who focuses on AI. He noted that digital artists, musicians, engineers, real estate professionals and customer service workers will all feel the impact of generative AI.

    “Watch this #WGA strike carefully,” Justine Bateman, a writer, director and former actress, wrote in a tweet shortly after the strike kicked off. “Understand that our fight is the same fight that is coming to your professional sector next: it’s the devaluing of human effort, skill, and talent in favor of automation and profits.”

    AI has had a place in Hollywood for years. In the 2018 “Marvel Avengers Infinity Wars” film, the face of Thanos – a character played by actor Josh Brolin – was created in part with the technology.

    Crowd and battle scenes in films including the “Lord of the Rings” and “Meg” have utilized AI, and the most recent Indiana Jones used it to make Harrison Ford’s character appear younger. It’s also been used for color correction, finding footage more quickly during post production and making improvements such as removing scratches and dust from footage.

    But AI in screenwriting is in its infancy. In March, a “South Park” episode called “Deep Learning,” was co-written by ChatGPT and the tool was highly focused on in the plot (the characters use ChatGPT to talk to girls and write school papers).

    August said writers are largely willing to play ball with tools, as long as they’re used as launching pads or for research and writers are still credited and utilized throughout the production process.

    “Screenwriters are not luddites, and we’ve been quick to use new technologies to help us tell our stories,” August said. “We went from typewriters to word processors happily and it increased productivity. …. But we don’t need a magical typewriter that types scripts all by itself.”

    Because large language models are trained on text that humans have written before, and find patterns in words and sentences to create responses to prompts, concerns around intellectual property exist, too. “It is entirely possible for a [chatbot] to generate a script in the style of a particular kind of filmmaker or scriptwriter without prior consent of the original artist or the Hollywood studio that holds the IP for that material,” Gunkel said.

    For example, one could prompt ChatGPT to generate a zombie apocalypse drama in the style of David Mamet. “Who should get credited for that?” August said. “What happens if we allow a producer or studio executive to come up with a treatment or pitch or something that looks like a screenplay that no writer has touched?”

    For now, the legal landscape remains very much unsettled on the matter, with regulations lagging behind the rapid pace of AI development. In early April, the Biden administration said it is seeking public comments on how to hold artificial intelligence systems like ChatGPT accountable.

    “We can’t protect studios from their own bad choices,” August said. “We can only protect writers from abuses.”

    The strike, and the demands around AI specifically, come at a time when both the writers and the studios are feeling financial pain.

    Many of the businesses represented by AMPTP have seen drops in their stock price, prompting deep cost cutting, including layoffs. The need to manage costs, combined with addressing the fallout from the strike, might only make the companies feel more pressure to turn to AI for scriptwriting.

    “In the short term, this could be an effective way to circumvent the WGA strike, mainly because [large language models], which are considered property and not personnel, can be employed for this task without violating the picket line,” Gunkel said. Such an “experiment” could also show production studios whether it’s possible “to get by with less humans involved,” he said.

    But Joshua Glick, a visiting professor of film and electronic arts at Bard University, believes such a move would be ill-advised.

    “It would be a pretty aggressive and antagonistic move for studios to move forward with AI-generated scripts in terms of getting writers to come to the negotiating table because AI is such a crucial sticking point in the negotiations,” said Glick, who also co-created Deepfake: Unstable Evidence on Screen, an exhibition at the Museum of the Moving Image in New York.

    “At the same time, I think the result of those scripts would be pretty mediocre at best,” he said.

    However the studios react, the issue is unlikely to go away in Hollywood. Film and TV actors’ contracts are up in June, and many are worried about how their faces, bodies and voices will be impacted by AI, August said.

    “As writers, we don’t want tools to replace us but actors have the same concerns with AI, as do directors, editors and everyone else who does creative work in this industry,” he added.

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

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

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

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

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

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

    Kishida told the executives, including those from Micron Technology Inc

    (MU)
    , Intel Corp

    (INTC)
    and Taiwan Semiconductor Manufacturing Co

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

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

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

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

    (FUJIF)
    .

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

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

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

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  • The US Senate is working to get up to speed on AI basics ahead of any legislation | CNN Business

    The US Senate is working to get up to speed on AI basics ahead of any legislation | CNN Business

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    Washington
    CNN
     — 

    The US Senate is inching forward on a plan to regulate artificial intelligence, after months of seeing how ChatGPT and similar tools stand to supercharge — or disrupt— wide swaths of society.

    But despite outlining broad contours of the plan, senators are still likely months away from introducing a comprehensive bill setting guardrails for the industry, let alone passing legislation and getting it signed into law. The deliberate pace of progress contrasts with the blistering speed with which companies and organizations have embraced generative AI, and the flood of investment into the industry.

    The Senate’s plan calls for briefing lawmakers on the basic facts of artificial intelligence over the summer, before beginning to consider legislation in the following months, even as some senators have begun to pitch proposals.

    The efforts reflect how, despite urgent calls by civil society groups and industry for guardrails on the technology, many lawmakers are still getting up to speed.

    To help educate members, Senate Majority Leader Chuck Schumer on Tuesday announced a series of three senators-only information sessions to take place in the coming weeks.

    The closed-door briefings will cover topics ranging from AI’s current capabilities and competition in AI development to how US national security and defense agencies are already putting the technology to use. The latter session, Schumer said, will be the first-ever classified senators’ briefing on AI.

    “The Senate must deepen our expertise in this pressing topic,” Schumer wrote in a letter to colleagues announcing the briefings. “AI is already changing our world, and experts have repeatedly told us that it will have a profound impact on everything from our national security to our classrooms to our workforce, including potentially significant job displacement.”

    Schumer had earlier kicked off a high-level push for AI legislation in April, when he proposed shaping any eventual bill around four principles promoting transparency and democratic values.

    The information sessions are expected to wrap up by the time Congress breaks for August recess, according to South Dakota Republican Sen. Mike Rounds, one of three other senators Schumer has tapped to lead on a comprehensive AI bill.

    By that point, Rounds told reporters Wednesday on the sidelines of a Washington conference, there may be “lots of different ideas floating” but not necessarily a bill to speak of.

    Schumer, Rounds and the other leading lawmakers on the AI working group — New Mexico Democratic Sen. Martin Heinrich and Indiana Republican Sen. Todd Young — haven’t settled on how to coordinate various legislative proposals yet.

    Options include forming a select committee to craft a comprehensive AI bill, or “splitting out and having lots of different committees come up with different pieces of legislation,” Rounds said.

    The AI hype has produced high-profile hearings and scattershot policy proposals. Last month, OpenAI CEO Sam Altman testified before a Senate Judiciary subcommittee, wowing lawmakers by asking for regulation and by giving a technical demonstration to enthralled members of the House the evening before.

    Sen. Michael Bennet has introduced legislation to create a new federal agency with authority to regulate AI, for example. And on Wednesday, Sen. Josh Hawley unveiled his own framework for AI legislation that called for letting Americans sue companies for harms created by AI models.

    Rounds told reporters Schumer has not set a timeframe for coming up with AI legislation, adding that the current goal is to allow ideas to “melt for a while.”

    But he predicted that with AI’s expected impact on many agencies and industries, it would be impossible not to foresee a wide-ranging and open legislative process reflecting input from many sources, akin to how the Senate crafts the annual spending package known as the National Defense Authorization Act.

    “You bring in all of these ideas, and then you very quietly start to meld this bill together, kind of behind the scenes in a way,” he said. “You go through a committee process in which you deliver a bill that says this could pass, and then you allow other members to come in and offer their amendments to it as well. That has worked well year-in and year-out for the NDAA.”

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  • Google is using AI to change how you shop | CNN Business

    Google is using AI to change how you shop | CNN Business

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    CNN
     — 

    Google wants to make it easier for online shoppers to know how clothing will look on them before making a purchase.

    The company on Wednesday announced a new virtual try-on feature that uses generative AI, the same technology underpinning a new crop of chatbots and image creation tools, to show clothes on a wide selection of body types.

    With the feature, shoppers can see how an item would drape, fold, cling, stretch or form wrinkles and shadows on a diverse set of models in various poses, according to the company.

    Google is also launching a feature that helps users find similar clothing pieces in different colors, patterns or styles, from merchants across the web, using a visual matching algorithm powered by AI.

    These efforts are part of Google’s bigger push to defend its search engine from the threat posed by a wave of new AI-powered tools in the wake of the viral success of ChatGPT. At the Google I/O developer conference last month, the company spent more than 90 minutes teasing a long list of AI announcements, including expanding access to its existing chatbot Bard and bringing new AI capabilities to Google Search.

    Google said it developed the virtual try-on option using many pairs of images of more than 80 models standing forward and sideways, from sizes XS to XL, and with varying skin tones, body shapes and ethnic backgrounds. The AI-powered tool then learned to match the shape of certain shirts in those positions to generate realistic images of the person from all angles.

    The feature will initially work with women’s tops from brands such as Anthropology, Loft, H&M and Everlane. Google said it will expand to men’s shirts in the future. Google also said the tool will get more precise over time.

    Google isn’t the only e-commerce company blending generative AI into the shopping experience. Some companies such as Shopify and Instacart are using the technology to help inform customers’ shopping decisions. Amazon is experimenting with using artificial intelligence to sum up customer feedback about products on the site, with the potential to cut down on the time shoppers spend sifting through reviews before making a purchase. And eBay recently rolled out an AI tool to help sellers generate product listing descriptions.

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  • Sarah Silverman sues OpenAI and Meta alleging copyright infringement | CNN Business

    Sarah Silverman sues OpenAI and Meta alleging copyright infringement | CNN Business

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    CNN
     — 

    Comedian Sarah Silverman and two authors are suing Meta and ChatGPT-maker OpenAI, alleging the companies’ AI language models were trained on copyrighted materials from their books without their knowledge or consent.

    The pair of lawsuits against OpenAI and Facebook-parent Meta were filed in a San Francisco federal court on Friday, and are both seeking class action status. Silverman, the author of “The Bedwetter,” is joined in filing the lawsuits by fellow authors Christopher Golden and Richard Kadrey.

    A new crop of AI tools has gained tremendous attention in recent months for their ability to generate written work and images in response to user prompts. The large language models underpinning these tools are trained on vast troves of online data. But this practice has raised some concerns that these models may be sweeping up copyrighted works without permission – and that these works could ultimately be served to train tools that upend the livelihoods of creatives.

    The complaint against OpenAI claims that “when ChatGPT is prompted, ChatGPT generates summaries of Plaintiffs’ copyrighted works—something only possible if ChatGPT was trained on Plaintiffs’ copyrighted works.” The authors “did not consent to the use of their copyrighted books as training material for ChatGPT,” according to the complaint.

    The complaint against Meta similarly claims that the company used the authors’ copyrighted books to train LLaMA, the set of large language models released by Meta in February. The suit claims that much of the material used to train Meta’s language models “comes from copyrighted works—including books written by Plaintiffs—that were copied by Meta without consent, without credit, and without compensation.”

    The suit against Meta also alleges that the company accessed the copyrighted books via an online “shadow library” website that includes a large quantity of copyrighted material.

    Meta declined to comment on the lawsuit. OpenAI did not immediately respond to a request for comment.

    The legal action from Silverman isn’t the first to focus on how large language models are trained. A separate lawsuit filed against OpenAI last month alleged the company misappropriated vast swaths of peoples’ personal data from the internet to train its AI tools. (OpenAI did not respond to a request for comment on the suit.)

    In May, OpenAI CEO Sam Altman appeared to acknowledge more needed to be done to address concerns from creators about how AI systems use their works.

    “We’re trying to work on new models where if an AI system is using your content, or if it’s using your style, you get paid for that,” he said at an event.

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  • Taiwan’s TSMC to invest $2.9 billion in new plant as demand for AI chips soars | CNN Business

    Taiwan’s TSMC to invest $2.9 billion in new plant as demand for AI chips soars | CNN Business

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    Hong Kong
    CNN
     — 

    TSMC, the world’s largest chipmaker, says it plans to invest nearly 90 billion New Taiwan dollars ($2.9 billion) to build an advanced chip plant in Taiwan, as it expands production to meet booming demand for artificial intelligence (AI) products.

    Last week, CEO C.C. Wei told analysts the company plans to roughly double its capacity for advanced packaging in 2024 compared to 2023, in order to meet “strong demand” for AI chips from its customers, which include Nvidia

    (NVDA)
    and AMD.

    Advanced packaging in the semiconductor industry involves using high-tech methods to aggregate components from various wafers in order to create a more powerful computer chip.

    TSMC

    (TSM)
    said the new plant is expected to create 1,500 jobs.

    “To meet market needs, TSMC is planning to establish an advanced packaging fab in the Tongluo Science Park,” the company told CNN in a statement, referring to fabrication plants — the technical term for semiconductor factories.

    The science park is located in Miaoli County, south of the firm’s main facilities in Hsinchu, near Taipei.

    TSMC on Thursday reported a 23% fall in net profit for the second quarter, compared to the same period last year, as a global economic downturn took a toll on overall demand — even as customers clamored for more of its AI chips.

    Chips manufactured by TSMC for customers like Nvidia are the muscle behind generative AI, a type of artificial intelligence that can create new content, such as text and images, in response to user prompts.

    That’s the kind of AI underlying ChatGPT, Google

    (GOOGL)
    ’s Bard, Dall-E and many of the other new AI technologies.

    TSMC is considered a national treasure in Taiwan, supplying semiconductors to global tech giants including Apple

    (AAPL)
    and Qualcomm

    (QCOM)
    .

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  • Where TikTok users may go if the app gets banned | CNN Business

    Where TikTok users may go if the app gets banned | CNN Business

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    CNN
     — 

    On the eve of a high-profile TikTok hearing this week, the company shared that it now has more than 150 million US monthly active users. But after the heated, hours-long hearing, filled with lawmakers telling TikTok’s CEO the app should be banned, some may now be wondering where all those users will go next if the social network disappears.

    The answer: probably other big American tech platforms.

    Many of the largest US social media companies have spent years copying TikTok’s features, which would make a shift away from the platform easier for its creators and users. Instagram, for example, introduced its own short-form video tool in 2020 called Reels. Snapchat has Spotlight, YouTube has Shorts and even Spotify has a TikTok-like video feed with recommended music and other content.

    “Obviously, if a ban is approved and enforced, the content, user count and engagement, and likely ad dollars for Snap, Instagram, and YouTube will increase,” said Ali Mogharabi, an analyst at financial services firm Morningstar, in a recent investor’s note.

    In other words, Washington’s efforts to crack down on TikTok over national security concerns could ultimately benefit some of the same American tech companies that Washington has scrutinized for other reasons, including their market dominance and impact on teens.

    Even if a ban does not happen, it could still benefit these companies. “This uncertainty could push some TikTok content creators to focus more on, and possibly begin, pushing their audiences to other social network platforms,” Mogharabi said.

    At least one company is already seeing a boost. Snap’s stock rose in the days leading up to TikTok’s appearance before Congress amid renewed talks among federal officials of a TikTok ban.

    At the hearing on Thursday, TikTok CEO Shou Chew was grilled by lawmakers who expressed deep skepticism about his company’s attempts to protect US user data and ease concerns about its ties to China. TikTok’s parent company, ByteDance, is based in Beijing and subject to Chinese data request laws that could require it to hand over user data to the government.

    Washington Republican Rep. Cathy McMorris Rodgers, the chair of the House Energy and Commerce Committee, opened Thursday’s hearing by telling Shou: “Your platform should be banned.” As the hearing was taking place, House Speaker Kevin McCarthy said he supports legislation that would effectively ban TikTok and Secretary of State Antony Blinken said TikTok should be “ended one way or another.”

    If that happens, Lian Jye Su, an analyst with ABI Search, believes users will follow their favorite TikTok influencers and content creators wherever they go.

    “Most users will flock to where the content creators go next,” Su said. “Instagram, Snapchat, and Youtube Shorts stand to benefit the most as content creators will still prefer places where they can monetize their content.”

    Smaller platforms have the opportunity to gain ground, too, Su said. Short-form video platform Triller, which reportedly has over 450 million users, is actively courting popular content creators from TikTok with cash bonuses, partnerships and other incentives to switch platforms. Meanwhile, Dubsmach – a Reddit-owned short video platform – and Clash, which allows people to create 21-second looping videos, are other platforms that could be increasingly appealing to creators.

    For now, talk of a TikTok ban may still be premature. The Biden administration has threatened to ban TikTok from the United States unless the app’s Chinese owners agree to spin off their share of the social media platform.

    “I strongly doubt this app will go dark,” Rep. Raja Krishnamoorthi told CNN during a primetime special about TikTok on Thursday. He said a sale is most likely.

    If the app is sold, that could complicate matters for some US tech platforms.

    “For Snap, which has a weaker network effect than Meta, a possibly more trusted US TikTok may make it more difficult to attract users away from or keep them from migrating to TikTok,” Moghaharbi wrote in the investor’s note.

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

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

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    Seoul
    Reuters
     — 

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

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

    Samsung

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

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

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

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

    It did not disclose the size of the planned cut.

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

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

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

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

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

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

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

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  • Universal Music Group calls AI music a ‘fraud,’ wants it banned from streaming platforms. Experts say it’s not that easy | CNN Business

    Universal Music Group calls AI music a ‘fraud,’ wants it banned from streaming platforms. Experts say it’s not that easy | CNN Business

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    New York
    CNN
     — 

    Universal Music Group — the music company representing superstars including Sting, The Weeknd, Nicki Minaj and Ariana Grande — has a new Goliath to contend with: artificial intelligence.

    The music group sent urgent letters in April to streaming platforms, including Spotify

    (SPOT)
    and Apple Music, asking them to block artificial intelligence platforms from training on the melodies and lyrics of their copywritten songs.

    The company has “a moral and commercial responsibility to our artists to work to prevent the unauthorized use of their music and to stop platforms from ingesting content that violates the rights of artists and other creators,” a spokesperson from Universal Music Group, or UMG, told CNN. “We expect our platform partners will want to prevent their services from being used in ways that harm artists.”

    The move by UMG, first reported by the Financial Times, aims to stop artificial intelligence from creating an existential threat to the industry.

    Artificial intelligence, and specifically AI music, learns by either training on existing works on the internet or through a library of music given to the AI by humans.

    UMG says it is not against the technology itself, but rather AI that is so advanced it can recreate melodies and even musicians’ voices in seconds. That could possibly threaten UMG’s deep library of music and artists that generate billions of dollars in revenue.

    “UMG’s success has been, in part, due to embracing new technology and putting it to work for our artists — as we have been doing with our own innovation around AI for some time already,” UMG said in a statement Monday. “However, the training of generative AI using our artists’ music … begs the question as to which side of history all stakeholders in the music ecosystem want to be on.”

    The company said AI that uses artists’ music violates UMG’s agreements and copyright law. UMG has been sending requests to streamers asking them to take down AI-generated songs.

    “I understand the intent behind the move, but I’m not sure how effective this will be as AI services will likely still be able to access the copyrighted material one way or another,” said Karl Fowlkes, an entertainment and business attorney at The Fowlkes Firm.

    No regulations exist that dictate on what AI can and cannot train. But last month, in response to individuals looking to seek copyright for AI-generated works, the US Copyright Office released new guidance around how to register literary, musical, and artistic works made with AI.

    “In the case of works containing AI-generated material, the Office will consider whether the AI contributions are the result of ‘mechanical reproduction’ or instead of an author’s ‘own original mental conception, to which [the author] gave visible form,’” the new guidance says.

    The copyright will be determined on a case-by-case basis, the guidance continued, based on how the AI tool operates and how it was used to create the final piece or work.

    The US Copyright Office announced it will also be seeking public input on how the law should apply to copywritten works the AI trains on, and how the office should treat those works.

    “AI companies using copyrighted works to train their models to create similar works is exactly the type of behavior the copyright office and courts should explicitly ban. Original art is meant to be protected by law, not works created by machines that used the original art to create new work,” said Fowlkes.

    But according to AI experts, it’s not that simple.

    “You can flag your site not to be searched. But that’s a request — you can’t prevent it. You can just request that someone not do it,” said Shelly Palmer, Professor of Advanced Media at Syracuse University.

    For example, a website can apply a robots.txt file that works like a guardrail to control which URL’s “search engine crawlers” can access a given site, according to Google. But it is not a full stop, keep-out option.

    Grammy-winning DJ and producer David Guetta proved in February just how easy it is to create new music using AI. Using ChatGPT for lyrics and Uberduck for vocals, Guetta was able to create a new song in an hour.

    The result was a rap with a voice that sounded exactly like Eminem. He played the song at one of his shows in February, but said he would never release it commercially.

    “What I think is very interesting about AI is that it’s raising a question of what is it to be an artist,” Guetta told CNN last month.

    Guetta believes AI is going to have a significant impact on the music industry, so he’s embracing it instead of fighting it. But he admits there are still questions about copyright.

    “That is an ethical problem that needs to be addressed because it sounds crazy to me that today I can type lyrics and it’s going to sound like Drake is rapping it, or Eminem,” he said.

    And that is exactly what UMG wants to avoid. The music group likens AI music to “deep fakes, fraud, and denying artists their due compensation.”

    “These instances demonstrate why platforms have a fundamental legal and ethical responsibility to prevent the use of their services in ways that harm artists,” the UMG statement said.

    Music streamers Spotify, Apple Music and Pandora did not return request for comment.

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  • Samsung profits plunge 95% | CNN Business

    Samsung profits plunge 95% | CNN Business

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    Samsung Electronics flagged a gradual recovery for chips in the second half of the year after its semiconductor business reported a record loss on Thursday, driven by weak demand for tech devices.

    A global downturn in semiconductor purchases amid an economic slowdown and weak customer spending sent chip prices plummeting in the first quarter, triggering production cuts across the sector.

    Samsung

    (SSNLF)
    said its chip business would focus on high-capacity server and mobile products “based on expectations of a gradual market recovery and a rebound in global demand” in the second half.

    For the current quarter, Samsung said it expected limited recovery for memory chips as major data center firms invested more conservatively in servers.

    The world’s biggest memory chipmaker said operating profit fell to 640 billion won ($478.6 million) for the January-March quarter, down 95% from 14.12 trillion won a year earlier and the lowest profit for any quarter in 14 years.

    Revenue fell 18% to 63.7 trillion won.

    The South Korean tech giant’s chip division — normally its most reliable cash cow — reported a 4.58 trillion won loss compared to an 8.45 trillion won profit a year earlier.

    Shoppers around the world have cut back on purchases due to rising inflation. As a result, smartphone, personal computer and server companies have run down inventories, causing chip prices to plunge by about 70% over the previous nine months.

    Samsung made a rare announcement of a chip production cut earlier this month, joining smaller rivals.

    Although this could help chip prices recover slightly, analysts said Samsung’s profit in the current quarter may be similar to Q1 without a fundamental recovery in demand for devices that use chips.

    By the second half of the year, customers will have run down inventory and gradually start buying chips again, Samsung said.

    Despite the record loss in chips, Samsung said it spent 10.7 trillion won in capital expenditures during Q1, the highest for the first quarter of any year.

    Out of that, 9.8 trillion won was spent on chips as Samsung sets up production in its Taylor, Texas and Pyeongtaek, South Korea factories.

    “Samsung Electronics will continue to invest in memory semiconductors at a similar level to the previous year … to secure mid- to long-term competitiveness,” it said.

    Samsung’s mobile business was a brighter spot, reporting 3.94 trillion won profit in Q1, up from 3.82 trillion won a year earlier.

    “Samsung is focusing on profit rather than shipments” as it meets more resilient demand for premium smartphones rather than volume, said Jene Park, senior analyst at Counterpoint.

    In the second half, Samsung forecast the smartphone market would increase in both shipments and revenue as the global economy recovers.

    Shares in Samsung fell 0.5% in morning trade, in line with the wider market.

    Samsung shares have risen about 16% year-to-date as investors anticipate a memory chip recovery in the second half of this year.

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  • A foldable phone, new tablet and lots of AI: What Google unveiled at its big developer event | CNN Business

    A foldable phone, new tablet and lots of AI: What Google unveiled at its big developer event | CNN Business

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    CNN
     — 

    Google on Wednesday unveiled its latest lineup of hardware products, including its first foldable phone and a new tablet, as well as plans to roll out new AI features to its search engine and productivity tools.

    The updates, announced at its annual Google I/O developer conference, come as the company is simultaneously trying to push beyond its core advertising business with new devices while also racing to defend its search engine from the threat posed by a wave of new AI-powered tools.

    In a sign of where Google’s focus currently lies, the company spent more than 90 minutes teasing a long list of new AI features before mentioning hardware updates.

    Here’s what Google announced at the event.

    Google became the latest tech company to unveil a foldable smartphone. Like other foldables, the $1799 Pixel Fold features a vertical hinge that can be opened to reveal a tablet-like display. But Google calls the Fold the thinnest foldable on the market.

    “It took some clever engineering work redesigning components like our speakers, our battery and haptics,” said George Hwang, a product manager at Google, on a call ahead of the announcement. The company packed a Pixel phone into a less than 6 mm body – about two thirds of the thickness of its other Pixel phones.

    The Pixel Fold is very much a phone first: when it’s unfolded, it opens up into a 7.6-inch screen, and moves on Google’s custom-built 180-degree hinge. That hinge mechanism is moved out entirely from under the display to improve its dust resistance and decrease the device’s overall thickness, according to the company.

    The Google Fold includes features you’d find on a Pixel, such as long exposure, unblur, magic eraser, which lets users remove unwanted or distracting object. It also has Pixel Fold-specific tools such as dual-screen live translate, which lets a user communicate in another language with the help of fast audio and text translations on the outer screen.

    Google said it optimized its top apps to take advantage of the larger screen but “there’s still work to be done” because “optimizing for a new foldable form factor takes time,” Hwang said. “It’s a process that we’re committed to and it requires steep investment with our developer partners across Android,” Hwang added.

    Google is far from the first to embrace 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.

    But even now, the future for foldables remains uncertain. Most apps are still not optimized for foldable devices; prices remain very high; and Google’s chief rival, Apple, has yet to embrace the option.

    Despite great consumer 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%.

    The Pixel Fold will be available in the US, UK, Germany and Japan. The company said the device will start shipping next month.

    A look at the Google's Pixel 7a lineup

    On the surface, the 7a looks similar to the Pixel 7 and 7 Pro, with the same pixel camera bar along the back. It comes with the typical advancements you’d expect to find with any smartphone upgrade – better display, advanced camera and longer-lasting battery. But the 7a now boasts a Tensor G2 processor and a TItan M2 security chip, which brings advanced processing and new artificial intelligence features. It also offers wireless charging for the first time on an A model.

    The Pixel lineup has long been known for its cameras, and the 7a is no exception. It’s packed with upgrades, including a 64-megapixel main camera – the largest sensor on a Pixel A series to date, which will help with improved image quality, low light performance and other features. It also offers a new 13-megapixel ultra-wide camera for capturing even wider shots and a new 13-megapixel front camera. For the first time, each camera enables 4K video.

    The 7a also supports many significant Pixel features, including unblur, magic eraser and an improved Night Sight that’s two times faster and sharper than its predecessor. It also allows users to capture long exposure and enhanced zoom.

    The Pixel comes in several colors, including charcoal, snow, sea and coral, and starts at $499 via the Google Store on May 10.

    The Pixel Series A line has long been aimed at the cost conscious who want good features at a reasonable price, but its reach is limited. Google sells between eight to 10 million of the Pixel devices each year, according to ABI Research.

    “Generally, the smartphones were really meant for Google to showcase how software, and now AI capabilities, could be effectively optimized on hardware and improve the Android user experience,” said David McQueen, an analyst at ABI Research. “Google has purposely kept volume sales limited as it also has to be mindful of its relationship with other smartphone manufacturers that use the Android OS.”

    The Google Pixel tablet

    While phones were a key focus at the event, Google also refreshed other parts of its hardware lineup.

    Google introduced the Pixel Tablet, which is intended for use around the house, from turning off the lights off in the house to setting the thermostat without getting off the couch.

    The tablet, which has rounded edges and corners, comes in three colors: porcelain, hazel and rose, and starts at $499. It will be available on June 20.

    Under the hood, the 11-inch tablet is powered by Google’s Tensor G2 chips, which bring long-lasting battery life and AI features to the device. It also offers a front-facing camera, an 8-megapixel rear camera, and a charging dock.

    Google is also moving forward with plans to bring AI chat features to its core search engine amid a renewed arms race over the technology in Silicon Valley.

    The company said it is introducing the next evolution of Google Search, which will use an AI-powered chatbot to answer questions “you never thought Search could answer” and to help get users the information they want quicker than ever.

    With the update, the look and feel of Google Search results will be noticeably different. When users type a query into the main search bar, they will automatically see a pop-up an AI-generated response in addition to displaying traditional results.

    Users can now sign up for the new Google Search, which will first launch in the United States, via the Google app or Chrome’s desktop browser. A limited number of users will have access to it in the weeks ahead, according to the company, before it scales upward.

    Google is expanding access to its existing chatbot Bard, which operates outside the search engine and can help users do tasks such as outline and write essay drafts, plan a friend’s baby shower, and get lunch ideas based on what’s in the fridge.

    The tool, which was previously available to early users via a waitlist only in the US, will soon be available for all users in 120 countries and 40 languages.

    Google is also launching extensions for Bard from its own services, such as Gmail, Sheets and Docs, allowing users to ask questions and collaborate with the chatbot within the apps they’re using.

    Google also announced PaLM 2, its latest large language model to rival ChatGPT-creator OpenAI’s GPT-4.

    The move marks a big step forward for the technology that powers the company’s AI products and promises to be better at logic, common sense reasoning and mathematics. It can also generate specialized code in different programming languages.

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  • TikTok sues Montana over new law banning the app | CNN Business

    TikTok sues Montana over new law banning the app | CNN Business

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    New York
    CNN
     — 

    TikTok on Monday filed a suit against Montana over a bill that would ban the popular short-form video app in the state starting early next year.

    TikTok alleges that the ban violates the US Constitution, including the First Amendment, as well as other federal laws, according to a complaint filed in Montana District Court. The company also claims concerns that the Chinese government could access the data of US TikTok users – which are a key motivation behind the ban – are “unfounded.”

    The bill was signed by Montana Gov. Greg Gianforte last week, and would impose a fine of $10,000 per day on TikTok or app stores for making the app available to personal devices in the state starting on January 1, 2024.

    “We are challenging Montana’s unconstitutional TikTok ban to protect our business and the hundreds of thousands of TikTok users in Montana,” TikTok spokesperson Brooke Oberwetter said in a statement. “We believe our legal challenge will prevail based on an exceedingly strong set of precedents and facts.”

    Emily Flower, a spokesperson for Montana’s Attorney General, told CNN: “We expected a legal challenge and are fully prepared to defend the law.”

    The Montana law stems from growing criticism of TikTok over its ties to China through its parent company, ByteDance. Many US officials have expressed fears that the Chinese government could potentially access US data via TikTok for spying purposes, though there is no evidence that the Chinese government has ever done so. Some federal lawmakers have also called for a ban.

    Montana’s ban went a step beyond other states that have restricted TikTok from government devices. But legal and technology experts say there are challenges for Montana, or any state, to enforce such a ban. Even if the law is allowed to stand, the practicalities of the internet may make it impossible to keep TikTok out of the hands of users.

    TikTok said in the complaint that the app is used by “hundreds of thousands” of people in Montana to “communicate with each other and others around the world on an endless variety of topics, from business to politics to the arts.”

    “This unprecedented and extreme step of banning a major platform for First Amendment speech, based on unfounded speculation about potential foreign government access to user data and the content of the speech, is flatly inconsistent with the constitution,” TikTok said in the complaint.

    TikTok is seeking for the court to invalidate and permanently enjoin Montana from enforcing the ban.

    The legal challenge by TikTok is an indicator of the hurdles that Montana and other lawmakers could face in attempting to restrict the platform in the United States. A group of TikTok creators also sued Montana last week over the state’s ban, saying it violates their First Amendment rights.

    CNN’s Brian Fung contributed to this report.

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  • Microsoft to pay $20 million to settle Xbox Live privacy allegations | CNN Business

    Microsoft to pay $20 million to settle Xbox Live privacy allegations | CNN Business

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    Washington
    CNN
     — 

    Microsoft will pay $20 million to settle US government allegations that the tech giant violated children’s privacy by illegally collecting their personal information through its Xbox Live gaming service.

    According to the Federal Trade Commission, Microsoft broke the law by failing to tell parents about the full breadth of information it gathered from kids under the age of 13.

    That information, the FTC said in a lawsuit filed Monday, included the fact that children may share images of themselves in their account profiles, as well as video and audio recordings of themselves, their real names and logs of their activity on the platform.

    Microsoft also allegedly kept for years the personal information of millions of people, including children, who started creating accounts with Xbox Live but who never completed the sign-up process.

    “Even when a user indicated that they were under 13, they were also asked, until late 2021, to provide additional personal information including a phone number and to agree to Microsoft’s service agreement and advertising policy, which until 2019 included a pre-checked box allowing Microsoft to send promotional messages and to share user data with advertisers,” the FTC said in a release.

    In a statement, Microsoft said: “We recently entered into a settlement with the U.S. Federal Trade Commission (FTC) to update our account creation process and resolve a data retention glitch found in our system. We are committed to complying with the order.”

    Parental settings give adults some control over what their children’s accounts show to other users. For example, Xbox Live’s default settings restrict who children can interact with on the service, the FTC said. But other default settings, the agency alleged, allow kids to access third-party games and apps with minimal friction.

    Microsoft failed to sufficiently disclose to parents what information the company was collecting from kids and how it was being used, the FTC said, alleging violations of the Children’s Online Privacy Protection Act (COPPA).

    In agreeing to settle the claims, Microsoft committed to several additional measures beyond the financial penalty.

    Microsoft agreed to delete any personal information it collects from kids if they don’t complete the account registration process. It also agreed to tell third-party game publishers when a user may be a child, effectively putting the third-party publishers on notice to comply with COPPA in handling the user’s information.

    The settlement comes as the FTC has challenged Microsoft’s $69 billion acquisition of video game giant Activision-Blizzard, a proposed deal that would turn Microsoft into the world’s third-largest game publisher and give it control over popular franchises such as “Call of Duty” and “World of Warcraft.”

    US and UK officials have alleged that Microsoft’s acquisition could give it anti-competitive control over the games industry by being able to withhold titles from rival platforms, particularly in the nascent cloud gaming sector. To address the concerns, Microsoft has struck licensing deals with other companies to ensure their customers continue to have access to Activision games following the deal’s close.

    Those concessions have convinced the European Union to approve the deal, but litigation to block the deal involving US and UK regulators remains ongoing.

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  • Italy ties China’s hands at Pirelli over fears about chip technology | CNN Business

    Italy ties China’s hands at Pirelli over fears about chip technology | CNN Business

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    London
    CNN
     — 

    Italy has imposed several curbs on Pirelli’s biggest shareholder, Sinochem, in a move aimed at blocking the Chinese government’s access to sensitive chip technology.

    The Italian government decided last week to make use of its so-called “Golden Power” regulations, designed to protect assets of strategic importance to the country, Pirelli said in a statement Sunday.

    The government order risks inflaming tensions between Europe and Beijing, and follows similar intervention by Germany and the United Kingdom to protect their semiconductor technology.

    Earlier this year, Europe joined a US-led effort to restrict China’s access to the most advanced chipmaking technology when the Netherlands — home to ASML Holding, a key supplier to the global semiconductor industry — said it would introduce export controls.

    Italy’s move comes as US Secretary of State Antony Blinken wraps up a high-stakes visit to China aimed at repairing strained relations between the world’s two biggest economies.

    Sinochem, owned by the Chinese government, is Pirelli’s biggest single shareholder, with a 37% stake, and has 60% of seats on the board of the Italian tire maker. CNN has contacted Sinochem for comment.

    In a statement Friday, the Italian government said Pirelli’s Cyber Tyre, which uses chip technology to collect vehicle data, is “configured as a critical technology of national strategic importance.”

    “Improper use of this technology can pose significant risks not only to the confidentiality of user data, but also to the possible transfer of information relevant to security,” the statement added.

    The order sets a host of limitations on Sinochem’s involvement in Pirelli, including a bar on it devising the company’s strategy and financial plans, or appointing a CEO.

    The government said these curbs would protect the “autonomy” of Pirelli and its management, as well as “information of strategic importance.”

    Europe is heavily reliant on China for trade and investment, but relations have come under strain from ideological differences, including over Russia’s war in Ukraine, and recent moves by European Union regulators and governments to limit China’s access to sensitive technology.

    The order takes a page out of this playbook. It requires that Pirelli refuse any requests from Sinochem’s owner — China’s State-owned Assets Supervision and Administration Commission of the State Council — for information sharing, including any information connected to the “know-how” of proprietary technologies.

    The government said “some” strategic decisions would require approval from at least 80% of board directors, a further limitation on Sinochem’s influence.

    Separately, Rome is also assessing whether to renew its partnership with Beijing on the Belt and Road Initiative — China’s global infrastructure and investment megaproject. Italy is the only Group of Seven nation to have joined the initiative.

    In a further sign of the steps multinational companies are beginning to consider to protect their operations from growing geopolitical friction, drugmaker AstraZeneca

    (AZN)
    has drawn up plans to spin off its China business and list it separately in Hong Kong, according to the Financial Times. AstraZeneca

    (AZN)
    declined to comment.

    Earlier this month, Sequoia Capital, the Silicon Valley venture capital group, said it would separate its China investments into an independent unit.

    On Tuesday, the European Commission will unveil measures — possibly including screening of outbound investments and export controls — to keep prized EU technology from countries such as China, Reuters reported.

    — Laura He in Hong Kong contributed to this article.

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  • China just played a trump card in the chip war. Are more export curbs coming? | CNN Business

    China just played a trump card in the chip war. Are more export curbs coming? | CNN Business

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    Hong Kong
    CNN
     — 

    A trade war between China and the United States over the future of semiconductors is escalating.

    Beijing hit back Monday by playing a trump card: It imposed export controls on two strategic raw materials, gallium and germanium, that are critical to the global chipmaking industry.

    “We see this as China’s second, and much bigger, counter measure to the tech war, and likely a response to the potential US tightening of [its] AI chip ban,” said Jefferies analysts. Sanctioning one of America’s biggest memory chipmakers, Micron Technology

    (MU)
    , in May was the first, they said.

    Here’s what you need to know about gallium and germanium, how they could play into the chip war and whether more countermeasures could be coming.

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

    Chips are vital for everything from smartphones and self-driving cars to advanced computing and weapons manufacturing. US officials have talked about the move as a measure to protect national security interests.

    But it didn’t stop there. For the curbs to be effective, Washington needed other key suppliers, located in the Netherlands and Japan, to join. They did.

    China eventually retaliated. In April, it launched a cybersecurity probe into Micron before banning the company from selling to Chinese companies working on key infrastructure projects. On Monday, Beijing announced the restrictions on gallium and germanium.

    Gallium is a soft, silvery metal and is easy to cut with a knife. It’s commonly used to produce compounds that are key materials in semiconductors and light-emitting diodes.

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

    The export controls have drawn comparisons with China’s reported attempts in early 2021 to restrict exports of rare earths, a group of 17 elements for which China controls more than half of the global supply.

    Gallium and germanium do not belong to this group of minerals. Like rare earths, they can be expensive to mine or produce.

    This is because they are usually formed as a byproduct of mining more common metals, primarily aluminum, zinc and copper, and processed in countries that produce them.

    China is the world’s leading producer of both gallium and germanium, according to the US Geological Survey. The country accounted for 98% of the global production of gallium, and 68% of the refinery production of germanium.

    “The economies of scale in China’s extensive and increasingly integrated mining and processing operations, along with state subsidies, have allowed it to export processed minerals at a cost that operators elsewhere can’t match, perpetuating the country’s market dominance for many critical commodities,” analysts from Eurasia Group said on Tuesday.

    Shares of Chinese producers of the two raw materials surged by 10% on Tuesday.

    Beyond China, Australian rare earths producers also advanced, as investors expected Beijing might extend export curbs to that group of strategically important minerals. Lynas Rare Earths

    (LYSCF)
    rose 1.5%.

    The United States is dependent on China for these the two critical elements. It imported more than 50% of the gallium and germanium it used in 2021 from the country, the US Geological Survey showed.

    Eurasia Group analysts described China’s export controls as a “warning shot.”

    “It is a shot across the bow intended to remind countries including the United States, Japan, and the Netherlands that China has retaliatory options and to thereby deter them from imposing further restrictions on Chinese access to high-end chips and tools,” Eurasia Group said in a research note.

    Chinese authorities may also intend to use its control over these niche metals as a possible bargaining chip in discussions with US Treasury Secretary Janet Yellen, who is scheduled to visit Beijing later this week.

    Jefferies analysts said the timing of the announcement was unlikely to be a casual decision.

    “It gives the US at least two days to digest and come up with a well-considered response,” they said.

    However, the move is not considered “a death blow” to the United States and its allies.

    China may be the industry leader, but there are alternative producers, as well as available substitutes for both minerals, the Eurasia Group analysts pointed out.

    The United States also imports a fifth of its gallium from the United Kingdom and Germany and buys more than 30% of its germanium from Belgium and Germany.

    That’s definitely possible, a former senior Chinese official has warned.

    The curbs announced this week are “just the start,” Wei Jianguo, a former deputy commerce minister, told the official China Daily on Wednesday, adding China has more tools in its arsenal with which to retaliate.

    “If the high-tech restrictions on China become tougher in the future, China’s countermeasures will also escalate,” he was quoted as saying.

    Analysts believe this too. Rare earths, which are not difficult to find but are complicated to process, are also critical in making semiconductors, and could be the next target.

    “If this action doesn’t change the US-China dynamics, more rare earth export controls should be expected,” Jefferies analysts said.

    However, analysts from Eurasia Group warned that restricting exports is a “double-edged sword.”

    Past attempts by China to leverage its dominance in rare earths have reduced availability and raised prices. Higher prices have spurred greater competition by making mining and processing ventures outside of China more cost-competitive, they said.

    China cut its rare earths export quota in 2010 amid tensions with the United States.

    That resulted in greater efforts by companies outside of the country to produce the metals. US data showed that China’s global market share dropped from 97% in 2010 to about 60% in 2019.

    “Imposing export restrictions risks reducing market dominance,” the Eurasia Group analysts said.

    CNN’s Hanna Ziady and Xiaofei Xu contributed to reporting.

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  • Indian tech giant Wipro will invest $1 billion in AI, including training all staff | CNN Business

    Indian tech giant Wipro will invest $1 billion in AI, including training all staff | CNN Business

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    Hong Kong
    CNN
     — 

    Wipro, one of India’s top providers of software services, wants everyone on staff to know how to use artificial intelligence.

    The IT giant announced Wednesday it would spend $1 billion on improving its artificial intelligence capabilities over the next three years, including training its entire staff of 250,000 people across 66 countries in the fast-moving technology.

    Wipro

    (WIT)
    said it plans to run workshops “on AI fundamentals and responsible use of AI over the course of the next 12 months, and will continue to provide more customized, ongoing training for employees in AI-specialized roles.”

    Wipro is one of India’s biggest outsourcing firms, specializing in IT and consulting services. Its move comes as generative AI, the technology that underpins popular platforms such as ChatGPT, has taken the world by storm.

    “With the emergence of generative AI, we expect a fundamental shift up ahead, for all industries,” Wipro CEO Thierry Delaporte said in the statement.

    The company added it was launching a software system to integrate AI into every platform and tool used internally and offered to clients, as it capitalizes on its existing efforts in the space that started about a decade ago.

    Businesses are increasingly using AI to either bolster or replace tasks usually carried out by humans.

    This week, the CEO of an Indian startup made headlines for laying off about 90% of his support staff, saying the company had built an AI-powered chatbot that could process customer service requests faster than employees.

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