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Economy
Hard Numbers: Russia shoots down space resolution, US economy sputters, Nigerian prisoners make slippery escape, Ecuador gets lifeline
A Russian Soyuz rocket is carried to the launching pad at Russia's Baikonur cosmodrome on the territory of the former Soviet Kazakhstan on December 18.
13: A UN Security Council resolution reaffirming a long-standing prohibition on arms races in outer space got 13 votes in favor this week, but it was shot down by a single veto from UNSC permanent member Russia. Moscow says it wasn’t necessary to support a resolution that merely reaffirmed a 1967 treaty that Russia is already part of, but the US ambassador to the UN asked, “What could you possibly be hiding?” In recent months, the US has said it believes Russia is developing a new space-based, anti-satellite weapon.
1.6: The US economy expanded by just 1.6% in the first quarter of the year, lagging analyst forecasts by nearly a full percentage point, as consumer spending slowed. Normally that would create momentum for the Fed to cut interest rates to spur growth, but there’s no joy there either: Core inflation (which excludes food and energy) rose 3.7%, higher than economists expectations, limiting the scope for any near-term rate cuts.
118: Authorities in the Nigerian capital of Abuja are on high alert after a rainstorm destroyed a fence at a nearby penitentiary, allowing as many as 118 inmates to escape. A prison service spokesperson blamed “colonial era” facilities. Weak security and run-down buildings contribute to frequent prison-breaks in the West African nation.
4 billion: After months of talks, Ecuador and the IMF agreed to a $4 billion loan agreement meant to help stabilize the small Andean country’s finances as it grapples with a vicious cycle of economic hardship, rising poverty, and skyrocketing homicides. Just days earlier, Ecuadorians had voted yes in a referendum to boost the government’s ability to crack down on drug violence.Officials attend the opening ceremony for the North Korean Embassy in Tehran, Iran in this undated photo released on August 5, 2017 by North Korea's Korean Central News Agency (KCNA) in Pyongyang.
Pyongyang’s Minister of External Economic Relations Yun Jong Ho became the first North Korean official to visit Iran in half a decade on Tuesday. The trip is officially about economic ties, but the US State Department said it was “incredibly concerned” about possible missile and nuclear technology cooperation.
There’s precedent: Tehran has borrowed Pyongyang’s missile designs for its own weapons and admitted to using North Korean missiles during its 1980-1988 war with Iraq. Today, North Korea has intercontinental ballistic missiles that Tehran can’t yet field.
“Given Iran's preoccupation with its strategic position, searching for increased deterrence against both Israel and the United States, the fact that it would welcome a North Korean delegation right now is significant,” said Eurasia Group Iran analyst Greg Brew. “It's also significant that this visit is taking place while Iran's national security advisor is in Moscow,” he added, noting that Russia has been the glue in ties between all three countries.
Both Iran and North Korea have shipped Moscow weapons to use in Ukraine, which Eurasia Group labeled one of its Top Risks for 2024. There’s a political benefit for North Korea on top of the aid Moscow reciprocates: attention from China. Wary of losing influence over Pyongyang, China responded to the closer Russo-Korean ties by launching its own diplomatic press, including a visit to Pyongyang from politburo member Zhao Leji this month. Pyongyang may be trying to run the same play with Tehran.
“From North Korea’s perspective, if all they have to do is bat their eyelashes at another suitor for China to roll out the diplomatic red carpet, that seems like a well they can go back to with Iran,” says Eurasia Group North Korea expert Jeremy Chan.The Federal Trade Commission building is seen in Washington on March 4, 2012.
Looking for another job at a firm that does something similar to what you do now? Now could be your chance to jump ship.
The US Federal Trade Commission, the country’s top competition regulator, voted Tuesday to ban noncompete clauses.
What are those? They’re small-print stipulations in employment contracts that forbid you from working for a competitor or starting your own business, typically for a certain period of time after you leave your current job.
Supporters of noncompete clauses say they prevent intellectual property theft and bolster employers’ incentives to invest in their workforces.
But opponents say they stifle new business formation and suppress innovation, trapping employees in jobs regulated by clauses that they are rarely given a chance to negotiate directly.
Several US states, including California (AKA the world’s fifth-largest economy), have all-but-banned noncompetes for years. The FTC ruling brings that nationwide.
Competition could bring benefits. The FTC says banning noncompetes will create more than 8,000 new businesses annually, boost average wages by more than $500 per year, and lower health care costs by nearly $200 billion over the next decade. It’s hard to compete with that!
U.S. Representative Don Beyer (D-VA) attends a news conference in the United States Capitol about the COVID-19 Hate Crimes Act, in Washington, U.S., May 18, 2021.
Rep. Don Beyer, a 73-year-old car dealership owner-turned-politician, is not your typical grad student. A Democrat who served as Virginia’s lieutenant governor in the 1990s and an ambassador during the Obama administration before getting elected to Congress in 2015, Beyer decided to go back to school in 2022 to pursue a master’s degree in machine learning at George Mason University.
Since then, Beyer has served as vice chair of the Congressional Artificial Intelligence Caucus and introduced a bill to provide transparency into the development of so-called foundation models.
GZERO spoke with Beyer about his studies, his concerns and hopes for the technology, and whether the US will catch up to Europe in regulating AI.
GZERO: Was there a specific moment when you realized that you were unprepared for the challenge of artificial intelligence and wanted to learn more? Why did you feel you needed to take the step of actually enrolling in a master’s program to get the education you needed?
Beyer: I was interested in AI long before I knew what it was that I was interested in, and this goes back a long time, to the early 1980s. I had read and heard several compelling discussions of the topic and got interested in pattern recognition and using technology and deep learning to make sense of big data sets. Going back to school arose first from opportunity, having a good school nearby that offered the coursework to finally tackle something that had interested me for a long time. I wasn’t sure it would work, but I have no regrets at all. And then part way through my course of study, it suddenly became a much bigger topic for the country and the Congress.
How have your professors and classmates reacted to having a sitting congressman in class?
Many of my classmates are unaware, which is just fine with me. Those who know have been tolerant and kind. I am just another student.
What are you learning in your classes?
Mostly math and coding, so far.
Do you feel more prepared to legislate around AI because of this education?
Yes, much more so. Even though I’m not a fully trained computer scientist, I at least have more than a generalist’s understanding of neural networks, large databases, the predictive and generative uses of computer science, and so on.
What are you most concerned about with the rise of artificial intelligence? What are you most excited about?
The big concerns in the short run for me are deepfakes, misinformation, and economic disruptions from job displacement. But there are very exciting prospects in areas like health care, scientific research, management and workflow, productivity, and much more.
Europe just passed the AI Act. Are you optimistic that Congress can pass comprehensive AI regulations anytime soon?
Congress is more likely to take an incremental than a comprehensive approach, at least in the near term, to solve specific problems rather than attempting a large overarching regulation like what the EU did. But we are working on legislation right now with every intention to pass laws.
Anything else you want to leave us with?
Most people associate Congress with chaos, dysfunction, and partisanship, but those of us working on AI have a refreshingly cooperative and collaborative spirit. This is important to get right. Few things have greater potential to change all our lives and the lives of future generations.
Hard Numbers: Google’s spending spree, Going corporate, Let’s see a movie, Court-ordered AI ban, Energy demands
Demis Hassabis, CEO of DeepMind Technologies and developer of AlphaGO, attends the AI Safety Summit in Bletchley Park, near Milton Keynes, Britain, November 2, 2023.
100 billion: AI is a priority for many of Silicon Valley’s top companies — and it’s a costly one. Google DeepMind chief Demis Hassabis said that the tech giant plans to spend more than $100 billion developing artificial intelligence. That’s the same amount that rival Microsoft is expected to spend in building an AI-powered supercomputer, nicknamed Stargate.
72.5: The free market is dominating the AI game: Of the foundation models released between 2019 and 2023, 72.5% of them originated from private industry, according to a new Staford report. 108 models were released by companies, as opposed to 28 from academia, nine from an industry-academia collaboration, and four from government. None at all were released through a collaboration between government and industry.
5: The A24 film Civil War has garnered considerable controversy for its content, but its promotion is under scrutiny as well. Five posters for the film were created using artificial intelligence and depict scenes that never occur in the narrative. That’s kicked off a debate about the ethics of using AI in film marketing as well as questions of whether this is false advertising for the movie itself.
1,000: A sex offender in the UK who was found to have created 1,000 indecent images of children was banned from using any “AI creating tools” for five years by a British court. It’s not clear if he was actually using AI to create the illegal images in question, or if the order is peremptory, but it could serve as a model for future punishment in UK cases in the future. Meanwhile, on April 23, a group of AI companies including Google, Meta, and OpenAI, pledged to better prevent their tools from creating sexualized images of children and other exploitative material.
4.5: Salesforce is calling on AI companies to disclose the energy efficiency and carbon footprint of their models, and asking legislators to pass new laws aimed at demanding transparency and reducing the total energy consumption of AI. Salesforce’s best estimates put the total power generation demands of global data centers at 1.5% but warn that that figure could increase to 4.5% in the coming years absent intervention.SUQIAN, CHINA - FEBRUARY 2, 2024 - Illustration Meta plans to increase AI investment in Suqian, Jiangsu Province, China, February 2, 2024.
If you use any Meta product — Facebook, Instagram, WhatsApp, or Messenger — buck up for an onslaught of AI. The social media giant is rolling out AI-powered assistants across its apps in unavoidable ways.
Meta’s AI, quite simply, will be everywhere: in your searches, conversations with friends, and chiming to conversations on Facebook groups. It’s powered by the company’s LLaMA 3 model, and is meant to help you answer questions or complete tasks — whatever you want, really. GZERO searched for Thai food on Instagram and instantly initiated a conversation with the Meta AI chatbot. (It gave five good options nearby.)
Meta has taken an open-source approach to developing artificial intelligence, releasing its powerful model for the world to use. That’s different from rivals like OpenAI, which charge consumers and companies to use their closed-source tech.
Now, it’s putting its models to use in a bid to ensure you spend as much time on its platforms as possible. Meta’s bread and butter, as an advertising giant, is attention. If you don’t need to leave Instagram to Google something, or write something with ChatGPT, that’ll quickly mean more money for Meta.
If users aren’t so horribly annoyed or creeped out that they disengage completely, that is. 404 Media reported that Meta’s AI told a parents group on Facebook that it has a disabled-yet-gifted child before the company received complaints and removed the comments. And, for people who want to opt out entirely, it doesn’t help that currently there’s no real way to turn the AI off either.Microsoft has quickly become the most important investor in artificial intelligence technology, holding a $13 billion stake in ChatGPT-maker OpenAI. It’s a peculiar deal with a revenue-sharing agreement that’s raised eyebrows from global regulators. But its latest billion-dollar investment is perhaps even more of an eyebrow-raiser.
The US tech giant announced last week that it would invest $1.5 billion in G42, a leading artificial intelligence holding company based in Abu Dhabi. The deal was “largely orchestrated” by the Biden administration, according to the New York Times, an effort to beat back China and gain influence in the Persian Gulf.
“There’s no question the investment was made to try and box out Chinese investment” in artificial intelligence in the Middle East, said Alexis Serfaty, a director in Eurasia Group’s geo-technology practice.
Under the terms of the new deal, Microsoft will let G42 sell its generative AI services and, in exchange, G42 will use Microsoft’s Azure cloud services. It also agreed to stricter assurances with the US government to further cut off China and remove their products and technology from use.
It’s not every day that the White House plays corporate dealmaker, but the administration hasn’t been shy about making AI — and the chips needed to power it — an economic and national security priority. Serfaty said the closest parallel he could think of was the proposed Trump administration deal to hand a stake of TikTok to the US software and cloud giant Oracle. (TikTok’s Chinese parent company ByteDance never sold a stake of its social media app to Oracle, but it did strike a deal to host its US user data on Oracle servers). Plus, the US has recently given massive grants and favorable loans to global chip manufacturers—like TSMC and Samsung—for moving production to the US.
The Biden administration has imposed strict export controls on US-made chips going to China, especially powerful ones used to run artificial intelligence models. The goal: cut off China and hamper their ability to build powerful AI. Tech investments in the Persian Gulf have been something of a casualty of this Cold War over AI. G42 announced in December 2023 that it would cut ties with China in order to keep working with US industry.
“For better or worse, as a commercial company, we are in a position where we have to make a choice,” G42 CEO Peng Xiao told the Financial Times. “We cannot work with both sides. We can’t.”
Serfaty said that the deal signals that the US government is going to increasingly treat artificial intelligence like defense technology, and play a more hands-on role in its commercial affairs and investment.
“When it comes to emerging technology, you cannot be both in China’s camp and our camp,” Commerce Secretary Gina Raimondo told the Times.
Latest
If North Korea and Iran hook up, will China be jealous?
Big change to small print: US bans noncompete clauses
Rep. Don Beyer goes back to school
Meta’s AI full-court press
Biden, Microsoft, and the United Arab Emirates
