Big Tech's AI Acquisitions Spark Antitrust Concerns Amid Market Shifts and Labor Impacts

Big AI's 'reverse acqui-hire' deals get more scrutiny in the U.K. and U.S.

The U.K.'s antitrust regulator, the Competition and Markets Authority, yesterday gave notice that it's in the early stages of probing Microsoft's March hiring of key staff from AI startup Inflection, which came with $650 million in licensing fees for Inflection. The hired crew included Inflection cofounder Mustafa Suleyman, who now runs Microsoft's in-house AI efforts. This seemed to be a case of Microsoft trying to avoid becoming over-reliant on OpenAI, into which it has invested $13 billion for a profit share. But authorities also want to check that the nature of the deal (a so-called reverse acqui-hire, as a more traditional acqui-hire would involve buying the company) wasn't also a tactic to sidestep antitrust rules that might be more clearly triggered by a straightforward acquisition. The CMA's initial probe formally begins today, and the watchdog will decide by Sept. 11 whether to press on with a proper merger investigation. Meanwhile, Reuters reports that the U.S. Federal Trade Commission -- which has already been nosing around the Microsoft-Inflection deal since early June -- is also asking questions about Amazon's deal with AI startup Adept late last month. This was a very similar arrangement, with CEO David Luan and other key Adept players joining Amazon and Amazon paying Adept to license its technology. One might also see a parallel between Microsoft's earlier OpenAI investment and Amazon's earlier investment of $4 billion into OpenAI rival Anthropic. Apart from the difference in dynamics stemming from the fact that OpenAI is so far a much bigger name than Anthropic, there does seem to be a playbook here, and it's no surprise that U.S. and U.K. (and EU) regulators would like to know if rules are being skirted. U.S. lawmakers are certainly upset about the trend. "A few companies control a major portion of the market, and just concentrate -- rather than on innovation -- trying to buy out everybody else's talent," complained Sen. Ron Wyden (D-Or.) last week. Incidentally, there are also a couple more interesting news tidbits out there about AI regulation. First, King Charles III announced today that the U.K.'s new Labour government will "seek to establish the appropriate legislation to place requirements on those working to develop the most powerful artificial intelligence models" -- a big shift from the previous Conservative government's hands-off approach. Second, with the EU now having officially published its own AI Act -- its rules on model-makers will begin to apply from February next year -- European privacy regulators said yesterday that they would be the right ones to enforce the new law in many cases. "I strongly believe that [data protection authorities] are suitable for this role because of their full independence and deep understanding of the risks of AI for fundamental rights, based on their existing experience," said Irene Loizidou Nicolaidou, deputy chair of the watchdogs' umbrella body, the European Data Protection Board, in a statement. Of course, AI has been a big theme at Fortune's Brainstorm Tech conference in Park City, Utah, this week, as my colleague Jeremy Kahn wrote yesterday. I was particularly intrigued by Jeremy's chat with Google chief scientist Jeff Dean, who warned against people overplaying AI's role in his company's rising carbon emissions. "There's been a lot of focus on the increasing energy usage of AI, and from a very small base that usage is definitely increasing," Dean said. "But I think people often conflate that with overall data center usage -- of which AI is a very small portion right now but growing fast -- and then attribute the growth rate of AI-based computing to the overall data center usage." A fair point, for now. But I think the criticisms of AI's massive hunger for energy will remain valid until companies like Google and Microsoft can prove that rolling it out doesn't mean deviating from their emissions-reduction goals. A few more articles based on yesterday's Brainstorm Tech action: How trust and safety leaders at top tech companies are approaching the security threat of AI: 'Trust but verify' Why Grindr's CEO believes 'synthetic employees' are about to unleash a brutal talent war for tech startups Salesforce's AI chief says the company uses its Einstein products internally: 'We like to drink our own martinis' How VCs from Alphabet's CapitalG to Norwest are coping with a dead IPO landscape: 'We're not here to time the market' Sequoia's Roelof Botha says Silicon Valley's legendary VC firm will not take a political point of view on the election Rent the Runway cofounder Jennifer Fleiss on why cofounder relationships are critical for mental wellness in the startup game Tech talent and killer powder: The recipe that startups say is fueling the rise of Utah's Silicon Slopes Trump knocks TSMC. Former and possibly future President Donald Trump said in remarks published yesterday that Taiwan should pay the U.S., which is "no different than an insurance company," for defense. "They did take about 100% of our chip business," he complained to Bloomberg Businessweek, adding that Taiwan was far away from the U.S. and very close to China, which sees it as a renegade province. The report on his stance knocked the shares of TSMC, the Taiwanese contract chipmaker that is crucial to the tech industry, down 5%. TikTok antitrust trouble. TikTok operator ByteDance has lost a legal bid to be designated as a "gatekeeper" under the EU's new antitrust law, the Digital Markets Act, Reuters reports. ByteDance can still appeal the decision by the EU's General Court, but it seems it will have to abide by rules around things like providing interoperability with other services, and not processing users' data for targeted advertising without their express consent. Anthropic + Menlo Ventures. Menlo Ventures has a new $100 million fund for AI startups that use Anthropic's Claude AI models, Bloomberg reports. Anthropic, which counts Menlo among its investors, will provide model-use credits as well as networking opportunities. While it won't get any stakes in the startups, it will of course promote use of its models. Side note: Android users finally have their own Claude app now. -- The injury rate suffered by Amazon's warehouse workers during Prime Day 2019, according to a Sen. Bernie Sanders-penned Senate committee report. "Prime Day and the holiday season are characterized by extremely high volume and intense pressure to work long hours and ignore safety guidelines," the report states. Amazon responded to the allegations by saying "the safety and health of our employees is and always will be our top priority." Exclusive: Google is backing a Danish startup 'brewing' CO2 that can clean up one of the most polluting industries in the world, by Prarthana Prakash Andreessen Horowitz founders the latest to stake Trump, as tech money piles into his coffers, by Bloomberg, by Bloomberg Elon Musk's potential $180 million donation to Trump -- who hates EVs -- is a stunning risk to Tesla, by Eva Roytburg Musk is moving SpaceX and X to Texas, by Bloomberg Nvidia's market cap will soar to $50 trillion -- yes, trillion -- says early investor in Amazon and Tesla, by Sasha Rogelberg Cybersecurity giant Kaspersky to shutter all US operations after the government banned its software nationwide, by the Associated Press To get a discount from this mattress company, you have to negotiate with its AI, by Marco Quiroz-Gutierrez Bitcoin's not-inventor could face charges. Craig Wright tried to convince the world he was Bitcoin's pseudonymous inventor Satoshi Nakamoto, but crypto firms took him to court in the U.K. and he lost resoundingly earlier this year. Now, the judge who ruled that Wright "extensively and repeatedly" lied to his court, by producing bogus documents and testimony, said he's asking the Crown Prosecution Service to figure out if the Australian computer scientist should face criminal perjury and forgery charges. "In advancing his false claim to be Satoshi through multiple legal actions, Dr Wright committed 'a most serious abuse' of the process of the courts of the U.K., Norway and the USA," wrote James Mellor in a ruling yesterday, according to the Guardian.

Forbes Daily: Big Tech Stocks Flail In Evidence Of Market Repositioning

This is a published version of the Forbes Daily newsletter, you can sign-up to get Forbes Daily in your inbox here. Martine Rothblatt started United Therapeutics nearly three decades ago after her young daughter was diagnosed with a rare disease that affects the arteries in the heart and lungs. Now, the biotech firm has made Rothblatt the world's newest billionaire. United Therapeutics generated $2.1 billion in sales last year, largely from selling five FDA-approved drugs to help people like Rothblatt's daughter. And a subsidiary of the company is making pig hearts and kidneys to transplant into humans. "It's a big moonshot," one analyst says, but if the firm can succeed, it'll be another milestone for Rothblatt, also the cofounder of Sirius Satellite Radio and perhaps America's most well-known transgender CEO. Let's get into the headlines, Large technology stocks flailed Wednesday as the tech-heavy Nasdaq Composite sank to its lowest level since July 1, with the "Magnificent Seven" shedding more than $500 billion in market value. It's a sign of market repositioning in the wake of last week's positive inflation data, signifying investors' belief that lower interest rates can help stimulate earnings growth across corporate America, rather than just in the handful of artificial intelligence leaders. Chipmaker AMD spent $665 million to acquire Finnish startup Silo AI, which builds AI-powered software for large corporations, in the largest takeover of an AI startup in Europe since Google bought Deepmind in 2014. Scooping up Silo AI could help the company close the gap with Nvidia, its biggest competitor -- particularly when it comes to software. Several luxury fashion brands, including Burberry and Hugo Boss, kicked off the first week of second-quarter earnings with disappointing news for investors, as the brands struggle with declining sales in Asia. The luxury sector has largely relied on China -- which was responsible for almost 16% of global luxury spending last year -- but the world's second-largest economy fell short of economic growth estimates Monday. Billionaire Donald Trump critic Mark Cuban claimed in a post on X that Trump's growing support among prominent technology figures is a "bitcoin play," rather than a push for less regulation. Trump's broader economic vision for lower taxes and higher tariffs, especially on Chinese imports, will make inflation worse, Cuban predicted, and higher inflation typically causes investors to move their money into assets considered more likely to store value. President Joe Biden has reportedly been more willing to hear arguments from voices urging him to drop out of the presidential race, with the New York Times reporting that the president has been "more receptive" and is willing to listen to unflattering polling data. The news of Biden's stance comes after reports that Senate Majority Leader Chuck Schumer (D-N.Y.) and House Minority Leader Hakeem Jeffries (D-N.Y.) met with the president and urged him to end his re-election bid. MORE: Biden tested positive for Covid-19 on Wednesday, but confirmed in a tweet that he is "feeling good" and "will continue to work to get the job done for the American people" as he recovers. House Republicans on Wednesday called for Secret Service Director Kimberly Cheatle to resign after she defended the agency's response to the shooting at former President Donald Trump's rally on Saturday. House Speaker Mike Johnson told Fox News that he will set up a bipartisan House task force to investigate the attempted assassination, and the House Oversight Committee issued a subpoena for Cheatle to testify at a hearing next week. Meanwhile, two prominent senators angrily confronted Cheatle at the Republican National Convention on Wednesday night. Disney CEO Bob Iger and his wife, Willow Bay, took a controlling stake in the Angel City Football Club, making the Los Angeles women's soccer team the highest-valued women's professional sports team, with a valuation of $250 million. Iger and Bay's investment comes as more eyes than ever are on women's sports. The WNBA will reportedly earn an estimated $2.2 billion as part of the NBA's multi-year deals with NBC, Amazon and Disney for broadcasting rights, more than tripling the value of the league's media rights amid increased demand for women's basketball. In recent months, the WNBA has broken several viewership records, including a game between the Indiana Fever and Chicago Sky that peaked at 2.3 million viewers, the most for the WNBA since 2001. Shares of Swiss pharma giant Roche climbed Wednesday after it reported promising results for an experimental weight loss pill, one of many competitors clamoring for a slice of the lucrative weight loss market. It's one of several companies pushing ahead with oral weight loss drugs, which are more convenient and cheaper than the current injections, but also raise challenges for delivering the drug at a dose that is both effective and without unbearable side effects. TOPLINE As Ted Townsend tells it, Elon Musk took roughly a week to decide to build the new supercomputer for his AI startup, xAI, in Memphis. Musk and his team opted for the Tennessee city because it offered ample access to power and the ability to build quickly, said Townsend, president of the Greater Memphis Chamber, an economic growth nonprofit that worked on the deal. The multibillion dollar investment, according to Townsend's estimate, was officially announced last month. But several members of the Memphis City Council are now urging the city to pump the brakes on the effort amid an upwelling of community concern about the secretive nature of the deal and the data center's requirements for electricity and water use. Councilmember Pearl Walker told Forbes that the development has caused "hysteria" among her constituents. "Memphis has had a history of bad deals ... and it is very important that this is a good deal for Memphis," she said. "We have to do our due diligence and insist on things that are in our interests and good for us." The supercomputer will be used to train xAI's chatbot Grok, a ChatGPT competitor that has increasingly occupied the multi-companied billionaire's attention. xAI has made verbal pledges to improve Memphis' public infrastructure in support of the datacenter's development -- a new power substation and a greywater processing facility. xAI has proposed building both facilities itself, though the city's utility has said no contracts exist for these commitments. But Musk has a long history of promising public infrastructure to the places that host his companies -- and then underdelivering. WHY IT MATTERS "The billionaire founder's newest project, xAI, marked his entry into the artificial intelligence race, which has competitors like OpenAI and Microsoft scrambling to compile gigantic GPU clusters for training their models," say Forbes senior writers Emily Baker-White and Sarah Emerson. "Musk has claimed his supercomputer will be among the world's largest -- meaning enormous demands for power and water. Now, the City of Memphis is learning what it's like to have one of these facilities in its backyard. Lawmakers say the deal was negotiated without them, and residents want to know how their community will be impacted." MORE Elon Musk's Laughable Solution To Tesla's Child Labor Worries Dozens of bridges across the U.S. will get upgrades, thanks to a $5 billion grant from the Federal Highway Administration. The recipients of the grant were announced Wednesday, though they make up a fraction of the nation's bridges in need of repair: $1.4 billion: Amount the Pacific Northwest's Interstate 5 bridge will receive, the most of any grant 42: The number of bridges that that will be repaired and reconstructed 'The biggest investment in our bridges since the Eisenhower era': U.S. Transportation Secretary Pete Buttigieg said in the announcement Return-to-work mandates have been heavily debated as the business world has emerged from Covid-19, and at least one drawback for employers is clear: A recent survey found eight in 10 employers lost talent to return-to-office mandates. Top performers can afford to job hunt for flexible work if it's important to them, and they'll likely find it: 82% of Fortune 500 companies still offered flexible work as of September 2023. OpenAI CEO Sam Altman has been tied to a lawsuit filed last week alleging fraud related to a multimillion purchase he made four years ago, which the suit now describes as a "lemon." What did Altman buy? Thanks for reading! This edition of Forbes Daily was edited by Sarah Whitmire and Chris Dobstaff, with writing contributions by Tavon Thomasson.

CEOs have much less 'FUD' -- fear, uncertainty and doubt -- around AI

Good morning. Andrew Nusca here, editorial director of Brainstorm, Fortune's innovation-obsessed community and event series. We just wrapped up our annual Brainstorm Tech summit in Park City, Utah, and Diane asked me to share what's on the minds of the CEOs we met there. Here were some of the common threads: Artificial intelligence, for one. Though the threats of AI have been long discussed, there was less pessimistic FUD -- fear, uncertainty, doubt -- and more optimistic food for thought about the ways AI's capabilities could be put to use. Could it save us time from drudgery at work? Yes. Could it generate trillions of dollars in value? Certainly. Could it create unimaginable new products? Definitely. Could it displace knowledge workers? It's complicated. Regulation. The topic came up quite a bit on the stage for companies subject to that sort of thing, including finance firms and health organizations. Behind the scenes, though, there were fewer complaints about the regulation itself and more about how it slowed down innovation and clouded visibility. (And maybe a tinge of feeling like the whole thing has become a partisan issue.) The perils of progress. Politics. Rare indeed were conversations about the recent attempted assassination of Republican presidential candidate Donald Trump, a topic perhaps too complex for even AI to fully digest. The exception? The naming of Donald Trump's running mate, J.D. Vance. While investor Ben Harburg and policy advisor Jacob Helberg debated the finer points of U.S.-China policy onstage, attendees offstage discussed onetime venture capitalist Vance, whose time in San Francisco endeared him to some libertarian techies -- principally those who weren't women or LGBTQIA+. The economy. There were plenty of investors interspersed with the technologists and Fortune 500 executives at Brainstorm, and most of them seemed relieved that the turmoil of our recent economy separated the smart money from the dumb. A difficult economic environment? Bad. Losing out to lemmings? Worse. Brainstorm Tech features discussion about an array of topics and this year's retreat featured dozens of CEOs from companies like Agility Robotics, Astrolab, Betterment, Biolinq, Entrata, Grindr, Interpublic Group, Lucid Motors, Pattern, Ripple, Robinhood, Runway, Somnee, Wiz, and Zoom. Catch up on what happened here. VF Corp will sell Supreme to EssilorLuxottica for $1.5 billion, three years after buying the streetwear brand for $2 billion. Then-VF CEO Steve Rendle hoped that Supreme's fast pace of releases might jump-start the company's other brands. Instead, Supreme distracted VF's management, causing sales at VF's other brands like Vans and Timberland to drop. VF shares are down around 85% from their all-time high in 2019. Fortune Is Elon Musk distracted? Peter Rawlinson, CEO of EV maker Lucid Motors, thinks his competitor Elon Musk isn't focused enough on Tesla, citing the billionaire's support of former President Donald Trump as a "salient example of his level of distraction." At Fortune's Brainstorm Tech conference, Rawlinson said that "Tesla used to have the lead in electric vehicle technology," but now competitors are catching up. Rawlinson used to work for Musk, helping make Tesla's popular Model S vehicle. Fortune Tech tumbles Semiconductor shares continued a two-day drop as the White House reportedly considers new export controls on China's chip sector. The Biden administration is discussing using the foreign product rule, which allows it to regulate sales of any product that uses even a small amount of U.S. technology. Shares in Tokyo Electron, a major Japanese producer of chipmaking equipment, are down over 15% this week so far. Fortune Anti-tourist backlash in Europe causes cruise ships to change course by Ryan Hogg Former American Express CEO says business leaders are too scared to tell Trump what they really think of him: 'They greatly fear there will be retribution' by Paolo Confino U.S. real estate is so expensive it's even keeping out wealthy foreign homebuyers by Sydney Lake A Chinese bottled water giant founded by the country's richest person is picking a fight with Hong Kong's consumer watchdog by Lionel Lim Sephora North America's CEO has a leadership style informed by growing up an outsider by Fortune Editors Andreessen Horowitz founders endorse Trump -- 'the future of our business...is literally at stake' by Christiaan Hetzner This edition of CEO Daily was curated by Nicholas Gordon.

AI will automate tasks, not jobs and other AI insights from Fortune Brainstorm Tech

Hello. Today, I'm writing from Deer Valley, Utah, where Fortune is holding its Brainstorm Tech conference. AI has, unsurprisingly, been a major theme of the event. Here's a recap of some of the key AI tidbits so far: On Monday, my colleague Emma Hinchliffe interviewed San Francisco Federal Reserve President Mary Daly, who said generative AI's impact on the labor market will depend on what we do with the technology. Daly said we should expect generative AI to contribute to at least average productivity growth, which is currently 1.5% annually. But she also said that if AI helps us to invent new products and new processes, rather than simply automating existing ones, then its potential impact on productivity growth would be much greater. "If we say in a decade, [AI] was disappointing that is because of us," Daly said. She also noted that all previous new technologies have, in the long term, created more jobs than they've eliminated, and she suspects AI will be no different. Picking up these ideas, Stanford University economist Erik Brynjolfsson urged companies to view AI as complementary to human labor. Acknowledging that many companies have struggled to figure out how to derive a reasonable return on investment from generative AI, Brynjolfsson said the key was to stop thinking about jobs and start thinking about tasks. AI can automate some tasks within an organization, but it can't automate entire jobs (at least not yet). In fact, as automation helps lower the cost associated with some roles, demand for those roles could actually increase, leading to the hiring of more people for those jobs. (This is called Jevons Paradox.) Brynjolfsson has cofounded a company called Workhelix that helps companies do this kind of task-based analysis and come up with strategic plans for implementing AI in the most impactful way within their organization. Among the tasks best suited to AI automation today include many in software development and within customer contact centers, he said. Robinhood CEO Vladimir Tenev told Fortune editor-in-chief Alyson Shontell that he sees AI democratizing access to wealth management services. While very high net-worth individuals will continue to be served by human financial advisors, AI will be able to give many other people access to good financial advice who could never have afforded a financial advisor before. Agility Robotics CEO Peggy Johnson showed off the company's Digit humanoid robot, which is already working inside warehouses as part of a multi-year deal with GXO Logistics. Johnson said Agility is now integrating Digit with large language models (LLMs) so that people can give Digit instructions in natural language. Johnson says she sees Digit and humanoid robots like it as necessary for helping to meet a shortfall of some 1.1 million warehouse workers in the U.S. Clara Shih, Salesforce's AI chief, talked about how to build trust in AI within large organizations. She touted Salesforce's own Einstein AI trust layer, which includes features such as data security and guardrails to prevent toxic language from being generated and techniques to defend against prompt injection attacks. That's when an adversary crafts a prompt that is designed to trick an LLM into jumping its guardrails. She also said the company will begin rolling out AI software with more "agentic" qualities soon. These are AI models that will be able to perform tasks within workflows, not simply generate emails, letters, or customer service dialogues. More broadly, Shih said, one way organizations could develop more trust in AI was to make sure they were using the right AI model for the problem at hand. Just throwing a general-purpose large language model at every business dilemma was unlikely to result in the value companies are hoping to see from AI. This morning, I interviewed Google's chief scientist Jeff Dean, who said increasingly long context windows, such as those Google has pushed with Gemini, will help tame AI hallucinations. But he also agreed with recent comments from Microsoft's Bill Gates that LLMs only will not deliver AGI even if we continue to scale them up. Dean concurred that some other innovation would be necessary algorithmically. They'll be plenty of more discussion of AI over the next few days at Brainstorm Tech -- it ends Wednesday afternoon. You can tune in to the livestream here, watch archived sessions here, and catch up on coverage of many of the sessions on fortune.com. Before we get to the news...If you want a better understanding of how AI can transform your business and hear from some of Asia's top business leaders about AI's impact across industries, please join me at Fortune Brainstorm AI Singapore. The event takes place July 30-31 at the Ritz Carlton in Singapore. And today is your last chance to register to attend! We've got Alation CEO Satyen Sangani talking about AI's impact on the digital transformation of Singapore's GXS Bank, Grab CTO Sutten Thomas Pradatheth speaking on how quickly AI can be rolled out across the APAC region, Josephine Teo, Singapore's minister for communication and information talking about that island nation's quest to be an AI superpower, and much much more. You can apply to attend here. Just for Eye on AI readers, I've got a special code that will get you a 50% discount on the registration fee. It is BAI50JeremyK. Yandex cofounder launches new European AI infrastructure company. Arkady Volozh, a cofounder of Russian tech group Yandex, is launching a new AI infrastructure company called Nebius Group, mainly staffed by former Yandex employees, the Financial Times reports. This move follows the sale of Yandex's core Russian assets due to the war in Ukraine. Nebius, which will be based in Europe, aims to develop a cloud computing platform for AI model training and is collaborating with leading AI start-ups in Europe and has a data center in Finland. OpenAI is reportedly training a new reasoning AI model codenamed 'Strawberry.' That's according to a story from Reuters, which cites internal OpenAI documents it obtained. The model is supposed to be a reasoning engine that can help future AI agents to take actions across the internet. New AI safety and security company backed by X.ai advisor and top adversarial AI researchers emerges from stealth. The company, called Gray Swan, has been cofounded by Dan Hendrycks, the director of the Center for AI Safety and an advisor to Elon Musk's X.ai, as well as Matt Fredrikson, Zico Kolter, and Andy Zou, all of whom are well known AI researchers at Carnegie Mellon University who research ways to attack large language models. Gray Swan announced two products -- one an LLM that it says is much more robust to attacks than other AI models, and the other a product that will assess how any given LLM is likely to behave when subjected to various kinds of prompt injection attacks. Hendrycks has also been in the news lately as one of the major backers of California's State Senate Bill 1047, which would require companies building advanced AI models to take various steps to prevent potential "catastrophic harms." You can read more about Gray Swan's debut on the company blog here. Nvidia, Apple, Anthropic, and Salesforce used YouTube video transcripts without Google's permission to train AI models, investigation finds. Wired copublished findings of an investigation from news outlet Proof News that found companies, including Anthropic, Apple, Nvidia, and Salesforce had used subtitles from more than 173,000 YouTube videos, in violation of YouTube's rules against unauthorized data harvesting. Creators who had uploaded the videos to the Google-owned platform were unaware that their content was being used and many of them called for compensation and regulation in response. But many of the companies involved in using the YouTube transcripts claimed their actions should fall under a "fair use" exemption from any copyright claims. U.K. government expected to introduce a landmark AI bill on Wednesday. The new Labour government will use Wednesday's "King's Speech" (an annual address by the monarch to Parliament in which the government lays out its legislative agenda) to announce plans to pursue a new AI law, the Financial Times reported. The bill will be aimed at creating binding rules for the development of advanced AI models, according to the newspaper. The previous government of Prime Minister Rishi Sunak had focused on voluntary commitments from tech companies developing AI rather than legal requirements. Universities, unable to compete with Big Tech and startups, look to find niche AI research areas. For more than a decade, university computer science departments have bemoaned the brain drain of top AI researchers and recent PhD graduates to tech companies offering not only much higher salaries, but access to far larger clusters of expensive graphics processing units (the type of chips most commonly used for AI applications) and vast amounts of data on which to train AI models. That situation has only gotten worse in the LLM era we are in now. Some universities are now trying to see if they can successfully zig while the rest of the AI field zags, according to a story in the Wall Street Journal. Rather than encouraging AI researchers to work on LLMs, they are hiring academics to explore totally new algorithms, architectures, and in some cases, even hardware, that would require far fewer GPUs and less energy. In other cases, the paper says, universities are using partnerships with Big Tech to gain access to GPUs. And then there are a few universities that are spending big to try to develop GPU clusters that are sizable enough to at least have a shot at offering what individual researchers might have access to at places such as OpenAI, Microsoft, Google, and Meta. Bosses and employees have wildly different expectations about how much time they can save with AI -- by Ryan Hogg California AI bill SB-1047 sparks fierce debate, Senator likens it to 'Jets vs. Sharks' feud -- by Sharon Goldman OpenAI announced a new scale to track AI progress. But wait -- where is AGI? -- by Sharon Goldman Nvidia's market cap will soar to $50 trillion -- yes, trillion -- says early investor in Amazon and Tesla -- by Sasha Rogelberg July 21-27: International Conference on Machine Learning (ICML), Vienna, Austria Dec. 8-12: Neural Information Processing Systems (Neurips) 2024 in Vancouver, British Columbia. Dec. 9-10: Fortune Brainstorm AI San Francisco (register here) Donald Trump's running mate J.D. Vance is a leading proponent of open-source AI. Vance, who was a venture capitalist before becoming a U.S. senator from Ohio, has previously touted the benefits of open-source AI models, The Information reported. Vance said in March that open-source AI models -- which users can modify, potentially overcoming any guardrails initially built into the models by the companies developing them -- were the best defense against "woke AI." He posted these comments on X in response to the controversy over Google's Gemini chatbot and its text-to-video generation guardrails, which were originally so strict about preventing potentially racist imagery that the model couldn't produce images of groups of white people even in cases when such groupings would be historically accurate (Nazi rallies, Viking feasts, etc.). Beyond Vance's support for open AI models, the Republican Party's election manifesto has endorsed the idea of repealing President Joe Biden's executive order on AI and says the party will seek a "pro innovation" and anti-regulation stance towards the technology. Trump's election campaign is also attracting campaign donations from some of Silicon Valley's best-known "effective accelerationists," (or e/accs) who believe in unbridled AI development because they see the technology's promise far outweighing any potential harms. This includes a16z's Marc Andreessen and Ben Horowitz. But Trump has also attracted support from billionaires Elon Musk and Peter Thiel, both of whom have more ambiguous ideas about AI development and the potential existential risks of the technology, but have generally endorsed libertarian approaches to technology regulation.

In the age of AI, how much is Silicon Valley prepared to give back?

Silicon Valley's efforts to give to those in need has propelled the idea of a guaranteed income -- also known as cash transfers, unconditional cash and, in its most utopian form, universal basic income -- into the mainstream. But a bipartisan political consensus around the movement is fracturing even though the data seems to show that the programs are effective.For the last couple of years, the tech community has tested no-strings-attached payments of $500 or $1,000 a month to those in dire need. Some of these experiments have happened in the heart of Silicon Valley, where a one-bedroom apartment rents for $3,000 a month and a modest house is often an unaffordable luxury. Silicon Valley's backing of these efforts has propelled the idea of a guaranteed income -- also known as cash transfers, unconditional cash and, in its most utopian form, universal basic income -- into the mainstream. But a bipartisan political consensus around the movement is fracturing even though the data seems to show that the programs are effective. In recent months, the Texas attorney general went to court to prevent public funds from being used in a basic income program in Houston. Republicans in Iowa, Idaho and South Dakota banned similar programs. A ban in Arizona was vetoed by the governor. The movement has scored a few victories, too. A proposal for a statewide basic income program is likely to be on the ballot in Oregon this fall. The measure would give $750 to each state resident annually, funded by a 3% tax on corporations with revenue over $25 million. It is a critical moment for guaranteed income, which has been touted by OpenAI CEO Sam Altman, Tesla CEO Elon Musk, Twitter co-founder Jack Dorsey, Salesforce CEO Marc Benioff and others. On Monday, the results from the biggest direct income program to date, the Unconditional Income Study, will be released. The study was the idea of Altman, who has emerged as the chief cheerleader of a boom in artificial intelligence that, he says, will sweep away all that came before it. Anyone whose job can be done by AI software might need a guaranteed income by and by. "It's impossible to truly have equality of opportunity without some version of guaranteed income," Altman said in 2016 when he announced the effort to gather data about a policy that had not been rigorously tested. Critics wondered if recipients would blow the funds on lottery tickets and booze. Dozens of pilot programs that took fewer years than the Unconditional Income Study have since answered that question. Basic income is not a panacea, and it does not solve the problem of unaffordable housing, proponents said, but the payments have helped to stabilize families who live on the edge, preventing them from tumbling off. While they welcomed Altman's study, the issue for members of the basic income community has shifted to establishing the programs on a wider scale. The time for research, they say, is over. "This country is on fire, Altman," said Jennifer Loving, who runs Destination: Home, a nonprofit that administers basic-income pilot programs in Silicon Valley. "Some people in America are becoming rich, and many, many more are becoming poor. What is your responsibility in bridging that divide rather than making it worse?" Altman, who is one of those becoming rich, declined to be interviewed before his report is released. Loving has a few ideas for what he and other tech leaders should do then. "I'd like to see Silicon Valley use its access to power to lobby for guaranteed income so the federal government will do it at scale," she said. "The government is ultimately responsible, but tech must be a partner." Others think Silicon Valley has a more forceful role to play. Technology companies have created trillions of dollars of wealth over the last quarter-century. If AI fulfills its hype, it will make trillions more while pushing down wages or eliminating many jobs altogether. "Although all wealthy people and corporations should support a universal basic income, the tech industry has special responsibilities," said Karl Widerquist, a philosophy professor at Georgetown University in Qatar who has been a co-author and an editor of books on the topic. "They're using our data to create their products and haven't paid us back. And they're the ones saying they'll disrupt the economy and put people out of work." A handful of tech people have played outsize roles in bringing basic income this far. Dorsey made a $15 million commitment to fund programs at the height of the pandemic. Chris Hughes, a Facebook co-founder, has also been a prominent promoter. He helped to start the Basic Income Lab at Stanford University in 2017 and has funded several pilot programs. "I talk to people about philanthropy and how to make change in the world, but not many are tech people," Hughes said, adding that he hasn't been in Silicon Valley in years, and the people there don't seek him out. Michael Tubbs is a former mayor of Stockton, California, which started a guaranteed income pilot in 2019, and the founder of a group called Mayors for a Guaranteed Income. "I've approached dozens of folks in Silicon Valley," he said. "I get polite interest and no movement." In Santa Clara County, California, which includes the communities of Palo Alto, Mountain View and Cupertino -- the heart of Silicon Valley -- a public-private partnership of local governments and nonprofits such as Destination: Home have nine pilot programs either running or being developed, with 950 people getting around $1,000 a month. About a third of the $26 million budget comes from the tech community, including Google.org, the David and Lucile Packard Foundation and, indirectly, Cisco and Apple. The budget for Altman's study was $60 million. He hired Elizabeth Rhodes, a scholar with a joint doctorate in social work and political science, to run the effort, set up an affiliate called OpenResearch to house it and spent $14 million of his own money to fund it. Another $10 million came from OpenAI, $15 million from Dorsey's public fund for global COVID-19 relief and $6.5 million from Sid Sijbrandij, a founder of the GitLab open source software platform. The rest came from foundations, federal grants and personal and anonymous donations. (The New York Times has sued OpenAI and Microsoft for copyright infringement.) In 2019, after some preliminary work, OpenResearch began enrolling 3,000 people in Texas and Illinois who had annual incomes of less than $28,000. One-third received $1,000 a month; the others, who functioned as a control group, got $50. The program lasted three years. Among the topics the experiment aimed to investigate was how unconditional cash shapes behavior, including its ability to affect stress levels and raise hopes for a better future. With increased financial security, some people might take a lower-paying job they like better or increase their participation in society by, say, volunteering. Others could go back to school or sign up for additional training. Benioff, who co-founded the software company Salesforce in 1999, has long been critical of the tech community's philanthropic efforts. "Silicon Valley is good at building products and building companies and hiring lots of people, but it has a long way to go on social responsibility," he said in a text message. In 2019, Benioff and his wife, Lynne, gave $30 million to fund the Benioff Homelessness and Housing Initiative at the University of California, San Francisco, which is studying basic income programs. He said basic income programs should be led by the government, although he also said any new programs would be "in direct conflict with the huge deficits and entitlements our government is already supporting." Told that he was simultaneously arguing that Silicon Valley should do more and that it was really the government's job but that the government was overburdened, Benioff responded by texting a link to the Wikipedia page for capitalism. Silicon Valley's zeal for all things AI, just like its enthusiasm a few years ago for all things related to crypto and the blockchain, is capitalism unleashed. A few years ago, none of the top tech companies had market capitalizations of more than $1 trillion. Now, on the strength of AI, Microsoft is worth $3.4 trillion; Google $2.3 trillion; and chipmaker Nvidia $3.1 trillion. Some people in the basic income movement are worried that it might become "a Trojan horse" for AI, as Juliana Bidadanure, the former director of the Stanford Basic Income Lab, puts it. "Is Silicon Valley pushing basic income as a way to make the state smaller? To replace all the other safety nets? A way to accelerate AI?" Bidadanure asked. "Personally, I think that unemployment due to AI is one important reason to build a robust floor through a universal basic income. But it is one reason among many." Another reason basic income backers may not be able to rely on Silicon Valley is that the tech industry's support may prove fickle. Musk said in 2018 that "universal income will be necessary over time if AI takes over most human jobs." But in November he said: "We won't have universal basic income. We'll have universal high income." He didn't explain the difference. In a podcast interview in May, Altman said he wondered "if the future looks more like universal basic compute than universal basic income." In other words, people will get computing time rather than cash, and Silicon Valley -- or perhaps just OpenAI -- would take dominion everywhere.