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OpenAI logo displayed on a phone screen and ChatGPT website displayed on a laptop screen are seen in this illustration photo taken in Krakow, Poland on December 5, 2022.
OpenAI’s little new model
OpenAI is going mini. On July 18, the company behind ChatGPT announced GPT-4o mini, its latest model. It’s meant to be a cheaper, faster, and less energy intensive version of the technology. The smaller model is marketed to developers who rely on OpenAI’s language models and want to save money.
The move also comes as AI companies are trying to cut their own costs, reduce their energy dependence, and answer calls from critics and regulators to lower their energy burden. Training and running AI often requires access to electricity-guzzling data centers, which in turn require copious amounts of water to keep them from overheating.
Moving forward, look for AI companies to offer a multitude of options to cost-conscious and energy-conscious users.
To see where data centers have cropped up in North America, check out our latest Graphic Truth here.EncroChat and Europol logos are seen in this illustration taken, June 27, 2023.
Europol’s CSAM problem
Europol, Europe’s policing agency, said it’s seen a marked increase in AI-generated child sexual abuse material, aka CSAM. And they predicted it’ll get worse: “The use of AI which allows child sex offenders to generate or alter child sex abuse material is set to further proliferate in the near future," the agency said in a statement. The technology also makes it easier for perpetrators to cyberbully and sexually extort victims for financial gain.
In a new report, Europol warns of the dangers of deepfake child abuse material. But it also says that the advent of AI makes it difficult to detect what’s real and what’s fake. And AI-generated images could be trained on real CSAM. Massive AI training datasets have been found to include numerous instances of CSAM.A kamikaze drone with a warhead is performing a demonstration flight during the 2nd Drone Racing Tournament by the Federation of Military Technological Sports of Ukraine in Bilohorodka, Kyiv region, north-central Ukraine, on July 21, 2024.
Ukraine aims to produce game-changing drones
Ukrainian startups are rushing to manufacture AI-enabled drones that could give them an edge in the ongoing war with Russia. Swarmer is one such company that’s working on the technology, which allows for automated drone swarms in which humans only intervene to sign off on aerial strikes.
AI-enabled drones could also prevent Russian signal-jamming because they’re not dependent on maintaining connections with human pilots, a problem that increasingly undermines existing drones. By one estimate, Ukrainian drones are only achieving a 30-50% target hit rate currently, but that could improve to 80% with AI, Max Makarchuk of Ukrainian accelerator Brave1 told Reuters.
Ukraine has become a testing ground for AI warfare. While much of that technology comes from US companies, the need for defense technology has also spurred innovation in the domestic Ukrainian market.VP pick United States Senator JD Vance Republican of Ohio and Usha Vance after Former US President Donald J Trumps speech at the Republican National Convention in Milwaukee, Wisconsin at the Fiserv Forum on Thursday, July 18, 2024. Monday night was Trumps first appearance since a rally in Pennsylvania, where he sustained injuries from an alleged bullet grazing his ear. Trump recounted the story in his speech, and also talked about Biden, immigration, and other topics.
Vance offers AI contradictions
On July 15, Donald Trump announced that he has selected JD Vance as his running mate. Vance, the junior senator from Ohio, rose to prominence after publishing his memoir “Hillbilly Elegy,” but his humble roots took him first to Yale Law School and then to the world of venture capital. He’s hailed as a politician with strong ties to Silicon Valley, and also as a politician fiercely critical of Big Tech. “What do you get when you cross a tech bro with a luddite?” Eurasia Group's Jon Lieber responded when we asked him to summarize Vance’s views.
This apparent contradiction is further highlighted by Vance’s recent statements on artificial intelligence. He has advocated for reduced regulation of the AI sector, and has claimed that tech companies’ focus on existential risks of AI are a lobbying tactic to elicit friendlier regulations.
He also shows a surprising regard for FTC chair Lina Khan’s leadership on antitrust enforcement under Joe Biden, saying that Khan has been “doing a pretty good job” especially in bringing suits against bloated tech companies. Khan notably supports AI regulation.
“I would assume someone who puts the concerns of working people and families first and foremost in his policy orientation would be relatively hostile to specific policies that accelerated the adoption of disruptive technologies,” Lieber notes. “But on the other hand, I would also think this will result in only a limited number of policies that actually attempted to curtail them.”
Lieber suggests that Vance's policy focus might include “restrictions on minors’ access to social media, data privacy rules, and investigations into tech companies for monopolistic practices.” He sees Vance as fundamentally opposed to centralized power, which could have mixed implications for AI innovation.
“This could be either good for AI innovation if you think it will happen in a decentralized way, or bad for AI innovation if you think it can only come from large incumbents with massive resources to spend on energy, compute, etc.,” Lieber said.
Some of Vance’s contradictions may become clearer over time, but they could easily be dwarfed by the whims and policy goals of Trump.
From Sunak to Starmer: What’s next for AI in the UK?
The guard has changed in Britain. For the first time in 14 years, the Labour Party is back in power, led by Prime Minister Keir Starmer, who took office on July 5.
Starmer was set to introduce a long-awaited artificial intelligence bill last Wednesday as part of the King’s Speech, in which Charles III read out the new government’s agenda. But the AI bill was pulled at last minute from the address for undisclosed reasons.
We’ll take a look at Labour’s agenda for potential AI legislation — what they’re planning, when it could come, and how their focus will differ from their Tory predecessors. But first, let’s examine Rishi Sunak’s legacy and whether he accomplished his goal of being a global leader on AI.
What did Sunak accomplish?
Sunak’s crowning moment was the AI Safety Summit in Bletchley Park on Nov. 1-2, 2023. The summit, held at the famed World War II codebreaking facility, was a global gathering on artificial intelligence safety aimed at international cooperation to deter AI’s worst-case scenarios from occurring. The Bletchley Declaration, the resulting document, was signed by the UK, the United States, and the European Union, but also, notably, China, along with two dozen other signatories. (And Sunak got to pal around with tech CEOs such as OpenAI’s Sam Altman, xAI’s Elon Musk, and DeepMind cofounder Mustafa Suleyman — who has since joined Microsoft.)
Bletchley was an important international agreement, but it also signaled that the UK’s leadership — under Sunak, at least — would be light-touch. He didn’t call for AI legislation, preferring to deploy Bletchley as a voluntary global corporate and government agreement.
Nick Reiners, a senior geotechnology analyst at Eurasia Group, said the hyperfocus on “existential risk” of AI is somewhat of a niche Silicon Valley obsession, a crowd that Sunak was interested in appeasing. “He saw AI as a way to build a legacy in a short time and this issue was something that animated him personally.”
What’s on deck for Labour?
Scott Bade, also a senior geotechnology analyst at Eurasia Group, doubts Starmer will follow Sunak’s lead on AI, but said he won’t throw away the standing that Sunak won for the country either. “Starmer does not have a signature global issue yet, and is unlikely to see AI as that issue,” Bade said. “But I'd be surprised if the UK didn’t keep showing up at the table to build on what Sunak did since this is the niche Britain now has in AI global governance. It will just be dialed down a peg or two.”
Compared with Sunak’s existentialist concerns, Starmer should be more focused on the short-term harms of artificial intelligence, Reiners said, citing workers’ rights and bias as examples. And with that comes the promise of actual legislation.
The bill that Labour was set to introduce would have reined in the most powerful large language models — but actual regulation seems to have been pushed off. In his speech, King Charles read off bills about cybersecurity as well as digital information, which seem to have won out over the AI bill, at least for now. “My suspicion is that they opted not to present this [AI regulation] now as they didn’t want to upset their growth narrative,” one tech leader told the Financial Times. Reiners said that departmental limits on parliamentary bills per session could be a constraint as well, and that AI was a lower priority.
When an AI bill is introduced, expect it to still be light-touch relative to the more expansive European AI Act. “I would say the UK is still generally respected as taking a thoughtful innovation-friendly approach to regulation in general,” Reiners noted.
The UK is home to successful AI startups such as Stability AI, maker of the image model Stable Diffusion, Google’s DeepMind lab, and the digital avatar company Synthesia, which we profiled in last week’s edition. And big AI-focused US tech companies, such as Microsoft and Salesforce have recently invested in the country. With the country’s economy on the ropes, Starmer’s challenge is to introduce legislative reforms that won’t totally scare off Big Tech.What Kamala Harris means for AI
Joe Biden exited the presidential contest on July 21, acceding to increasingly loud calls from his own party to step aside and pave the way for a new face at the top of the Democratic ticket. Enter Kamala Harris.
Harris, the current vice president, has secured the majority of DNC delegates already and is the presumptive Democratic nominee, but her campaign is merely two days old. We still don’t know what positions she’ll focus on or how she’ll govern if she’s able to triumph in November.
But, lucky for us at GZERO AI, there are clues about how she’ll tackle artificial intelligence.
Harris is a Bay Area native with deep ties to Silicon Valley. She’s also the former top prosecutor in San Francisco and the state of California, home to many of the world’s largest and most powerful tech companies. She’s gone after large tech companies on issues such as data privacy and nonconsensual sexual material, but she has also consistently cashed in on donations from many of Silicon Valley’s top donors.
As VP, Harris was dispatched to England for the AI Safety Summit at Bletchley Park last year. “Just as AI has the potential to do profound good, it also has the potential to cause profound harm,” Harris said in her remarks there. She spoke of not only the “existential risks” the summit focused on, but also algorithmic bias, deepfakes, and wrongful convictions that could be caused by AI.
“Vice President Harris has been a leader on the Biden-Harris administration’s work on AI, representing the United States as the UK’s AI summit in 2023, and has focused on critical safety and civil rights issues,” Adam Conner, vice president of tech policy at CAP Action, told GZERO. “Technology policy issues are not new to Vice President Harris, who has a long history addressing key technology issues from her time as Attorney General and Senator from California, and that expertise would be put to good use if she becomes the next president.”
Harris also sent a warning shot at Bletchley.
“As history has shown, in the absence of regulation and strong government oversight, some technology companies choose to prioritize profit over the wellbeing of their customers, the safety of our communities, and the stability of our democracies,” she said.
While a Donald Trump presidency promises to be hands-off when it comes to regulating AI, look for a Harris presidency to follow in Biden’s footsteps (see more below in the Watching on JD Vance). Biden strengthened export controls on chips, issued an extensive executive order on AI, and ramped up government adoption of the technology — including in the military.
Harris is no stranger to walking the fine line between being pro-innovation and tough-on-tech. She’s done it for decades. As she tries to win back Silicon Valley from the right and make a difference on important tech issues, expect her to draw on her experience from back home.
AI is turbocharging the stock market, but is it all hype?
In this episode of GZERO AI, Taylor Owen, host of the Machines Like Us podcast, explores how artificial intelligence is turbocharging the stock market and transforming our economy. With AI driving the S&P 500 to new heights and drastically boosting NVIDIA's stock, researchers predict a future where we could be 1,000 times wealthier. However, Owen raises critical questions about whether this rapid growth is sustainable or simply a bubble ready to burst.
So whatever your lingering skepticism of this current moment of AI hype might be, one thing is undeniable: AI is turbocharging the stock market and the economy more broadly.
The S&P 500 hit an all-time high this year, largely driven by AI. NVIDIA's stock jumped 700% since the launch of ChatGPT, at one point becoming the most valuable company in the world. And some researchers think this is going to get even crazier. They argue that we could see 30% per capita economic growth by 2100 because of AI. What this means is that in 25 years of 30% per capita growth, we would be 1,000 times richer than we are now.
But what are these wild predictions based on? Really comes down till human labor being replaced by AI. These economists argue that AI could replace humans and that machines could do all sorts of things that humans can't or things that we can already do much better. Perhaps more importantly though, humans aren't constrained by the number of humans we have in the workforce. We can scale labor in a way unconstrained by human capacity. This fundamentally changes, they argue, the core dynamics of the economy.
But these are still predictions, and they're wild speculations, and they're often being promoted by the very same people who will benefit the most from the hype around AI. There's just no good evidence at this point that these things are necessarily going to come to fruition. And even if this wealth is generated, this 1,000 times richer than we are now wealth, there's no guarantee how it's going to be distributed, who will get it, who will benefit and who won't. It's pretty clear that wealth is likely to trickle up to those that own and control these technologies, as they have in the past. It's also clear that those that are most precarious in the workforce will be the most vulnerable and likely the most harmed. This is almost certainly, if we're talking about machines replacing humans, going to be women and minorities who are overrepresented in the service workforce.
Some argue that UBI could be a solution to this, that we should simply take this excess wealth and distribute it to all of us so that we don't have to work. But there's a real problem here. People find meaning in their work. I recently spoke to Rana Foroohar, a global economic reporter for the Financial Times, and she made this case really powerfully to me that we derive meaning from work, and if you take that away, there are going to be serious political repercussions. We've already started to see these. Because of all of this, Rana thinks we're in a bubble. She thinks the economy simply can't run this hot for this long. It would be historically unprecedented, she argues, for this to go on for very much longer. But also the narratives she argues about why this economic growth is going to happen simply are too tenuous to support the economic growth that's being built on it. And this for her is a clear sign that we're in a bubble. When you have a single narrative that doesn't allow for any contradictions, this clear narrative of a certainty of a path that is supporting a huge amount of economic activity, that is the sign of a bubble.
Finally, she argues that economic growth is simply too concentrated. Too few people are seeing the benefits of this at the moment. These are the six or seven tech companies who are responsible for the bulk of the value being generated around AI. This concentration is not broadly good for society. If a tech bubble collapses though, we are all on the hook for it. Like any bubble, we as a society, our pension funds, our investments, our retirements, the rest of the economy are being floated by this bubble, so we need to think really carefully about how and when this deflates.
Intuit logo displayed on a phone screen and a laptop keyboard are seen in this illustration photo taken in Krakow, Poland on October 30, 2021.
Hard Numbers: Intuit’s mass layoff, Very expensive flip phone, AMD’s Finnish acquisition, Taiwan’s millionaire class
1,800: Intuit, the company behind popular financial software Quickbooks and Turbotax, announced a mass layoff of 1,800 employees — about 10% of the company — with plans to rehire the same number with a renewed focus on AI. The firm has an AI-powered financial advice tool, called Intuit Assist, in which it plans to invest heavily. That new investment might be necessary: A recent Washington Post review of Intuit’s AI assistant called it “awful” — not only “unhelpful” but also “wrong” much of the time.
1,899: Samsung has a new line of AI-powered foldable phones — and they’re extremely expensive. The Galaxy Z Fold starts at $1,899.99, a $100 increase from last year’s model. This nouveau flip phone boasts AI tools such as voice recording transcription, translation, and summarizing and text suggestions across email and social media apps. AI isn’t exactly a new thing on mobile phones, of course — so hopefully for this price, these new features make Siri look like a bot of the past.
665 million: The chip designer AMD is buying a Finnish startup called Silo AI for $665 million. Silo bills itself as “Europe’s largest private AI lab.” This deal will get AMD into the AI development business — an expansion from its hardware focus — as it tries to compete with industry leader Nvidia.
1.16 million: There are plenty of new millionaires in Taiwan, thanks to AI. Taiwan is a global hub for the semiconductor industry, which has boomed in recent years due to demand for AI. TSMC, its leading firm, is a key global fabricator for computer chips of all kinds. Taiwan’s total number of US dollar millionaires was 790,000 last year and could grow to 1.16 million by 2028, according to a new estimate by UBS.