Morning Consult Tech: What's Ahead & Week in Review

Morning Consult Tech: What’s Ahead & Week in Review

Tech

Essential tech industry news & intel to start your day.

April 23, 2023

By AJ Dellinger

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Happy Sunday, Morning Consult Tech readers.

It’s going to be a big week for finding out just how successful the tech industry has been at adapting to an economy where the numbers don’t only go up. Tech got hammered last year as the money-for-nothing era of low interest rates came to an end and inflation kept climbing.

In response, many of the big names around the industry started pivoting. More often than not, that meant layoffs: More than 300,000 people in tech lost their job since the start of 2022, when belts began to tighten. We’ll get our first sense of just how effective those cuts have been as two of the leaders in workforce reduction — Meta Platforms Inc. and Amazon.com Inc. — will provide their first-quarter earnings reports this week.

We’ll also get a better feel for how well the artificial intelligence adapters are doing. In the past few months, Microsoft Corp. and Alphabet Inc. have locked themselves into an AI showdown, introducing generative AI-powered chatbots and promising to re-imagine search engines as we know them. It’s still early, but we’ll get a first report on how these developments are affecting the bottom line when both companies report their respective earnings on Tuesday.

Chipmakers will get a spotlight this week, too: Intel Corp. and Samsung Electronics Co. Ltd. both have earnings calls scheduled that will give an early glimpse into how the industry is adjusting as more and more countries seek to shift away from a reliance on China for chip manufacturing.

One last interesting company to watch this week: suddenly somewhat spry Snap Inc., which just announced it hit 3 million paying users for its Snapchat+ subscription and is positioning itself as a possible winner in case of a TikTok ban.

What’s Ahead

Beyond earnings, this week will also bring the ninth annual Berkeley Spring Forum, set to be held Wednesday on the campus of the University of California, Berkeley. This year’s event will feature conversations with Federal Trade Commission Chair Lina Khan; Erik Gerding, director of the division of corporation finance at the Securities and Exchange Commission; and Andrew Fair, staff chair and director of the Committee on Foreign Investment in the United States.

Project Voice 2023: The World of Conversational AI is set to kick off Monday in Chattanooga, Tenn. The multiday event will feature conversations on how artificial intelligence will affect different industries and will include a keynote event that will reunite Apple Inc.’s Siri co-founders Robert Scoble, Adam Cheyer (currently a partner at Project Voice Capital Partners), Dag Kittlaus (now CEO of Riva Health Inc.) and Tom Gruber (chief technology officer of LifeScore Music).

Running Remote, the world’s largest remote work conference, will kick off Tuesday in Lisbon, Portugal. Speakers include Slack Technologies LLC Senior Vice President Brian Elliott; Annie Dean, vice president of Team Anywhere at Atlassian Corp.; and Niamh McGarty, senior director of human resources at Zendesk Inc.

RSA Conference, one of the largest IT security conferences, starts Monday in San Francisco, Calif., and runs through Thursday. The event will feature keynote addresses by Sumit Dhawan, president of VMware Inc.; Lisa Monaco, deputy attorney general of the United States; and Vijay Bolina, chief information security officer of Google’s DeepMind.

Week in Review

Alphabet’s AI efforts

In an appearance on 60 Minutes, Alphabet Chief Executive Sundar Pichai called for regulations on artificial intelligence technology to ensure it is being deployed in a beneficial way and to limit any potentially harmful effects. Pichai said there should be “consequences for creating deepfake videos which cause harm to society” as an example, and said the rapid development of AI “absolutely” keeps him up at night.
Google is building an all-new search engine powered by AI technology codenamed “Magi” that would offer a more personalized experience and conversational-style results, as well as upgrading its existing service with AI-powered features, according to internal documents reviewed by The New York Times. The rush to adopt AI has come after the company learned Samsung was considering dropping Google in favor of Microsoft’s AI-powered Bing as the default search engine on its devices, according to the documents.
Google employees who were asked to test the company’s AI chatbot Bard prior to its public launch in March warned that the tool was “cringe-worthy” and a “pathological liar” that presented incorrect answers and low-quality information, according to 18 current and former workers at the company and internal documentation reviewed by Bloomberg. Despite this, Google launched the service to keep up with its competition while reportedly deprioritizing its ethical commitments.
Alphabet announced it will combine its artificial intelligence research units, Google Brain and DeepMind, in order to better work together toward what Pichai described as the “bold and responsible development of general AI.” The new division, which will be led by DeepMind CEO Demis Hassabis, will focus on “multimodal” AI that can create content in response to written and visual inputs.

More news in AI

Since 2019, Microsoft has been developing an artificial intelligence chip — codenamed Athena — that can power large-language models like ChatGPT, according to two people with direct knowledge of the project. The goal of developing the chip, which one person said has been made available to a small number of Microsoft and OpenAI employees, is to cut down on the cost of operating AI systems and improve performance over chips from third-party vendors.
During a congressional hearing, FTC Chair Lina Khan and Commissioners Rebecca Slaughter and Alvaro Bedoya said their agency will pursue action against companies that use algorithms or artificial intelligence to violate civil rights laws or engage in unfair or deceptive practices. Bedoya said it is unacceptable for these systems to be operated as a “black box” that cannot be explained, and Khan warned that any AI system used for wrongdoing could put a company “on the hook for FTC action.”
Japanese Prime Minister Fumio Kishida said international rules need to be created to regulate advanced artificial intelligence systems and generative AI tools like ChatGPT, and members of the Group of Seven plan to discuss such measures when they come together for the G-7 summit set to be held in Hiroshima next month.
In an interview with Fox News host Tucker Carlson, Elon Musk said he plans to create an artificial intelligence system called “TruthGPT” that will be a “maximum truth-seeking AI that tries to understand the nature of the universe.” Musk described AI as being dangerous but argued it would be less likely to destroy humanity if the system understands it.

Tech layoffs

Meta started its latest round of layoffs last Wednesday, informing employees in technical roles such as user experience, software engineering and graphics programming that they lost their jobs, as part of what CEO Mark Zuckerberg declared would be a “year of efficiency” for the company. Workers in business-facing roles including finance, legal and human resources are expected to be subject to layoffs starting next month, according to one employee impacted by the cuts.
Lyft Inc. plans to undergo a new round of layoffs that will see 1,200 or more people lose their jobs as the company seeks to reduce costs, according to people familiar with its plans. The layoffs could affect 30% or more of the 4,000 person workforce at Lyft, which does not include drivers as employees, and could reduce the company’s costs by 50%, some of the people said.

Antitrust

Nine states — Arizona, Illinois, Michigan, Minnesota, Nebraska, New Hampshire, North Carolina, Washington and West Virginia — have joined the Department of Justice’s antitrust lawsuit against Google over the company’s digital advertising business. The states join eight others that are already part of the lawsuit that will seek to force Google to sell its ad manager suite because of alleged anticompetitive behavior.

U.S.-China relations

More than 40 Chinese security officers from the country’s Ministry of Public Security were involved in a scheme in which they created thousands of fake social media profiles used to discredit American policies and amplify pro-Beijing messages through what appeared to be American voices, according to three complaints unveiled by U.S. prosecutors. The operation allegedly targeted a number of critics of the Chinese government and developed campaigns to harass them.
Seagate Technology Holdings PLC reached a settlement with the Department of Commerce that will see the computer storage company pay a $300 million penalty, the largest ever imposed by Commerce’s Bureau of Industry and Security, for allegedly continuing to have a relationship with blacklisted Chinese technology firm Huawei Technologies Co. Ltd. Federal regulators said Seagate was accused of providing more than 7.4 million hard drive disks to Huawei as part of a $1.1 billion relationship between the firms.

Digital snooping

Employees and contractors of the Immigration and Customs Enforcement agency allegedly abused access to confidential law enforcement databases and agency computers to search through sensitive information including medical, biometric and location data and used it to carry out personal schemes and vendettas, according to details from an agency disciplinary database obtained through a public records request. The records, which document at least 414 cases of potential misuse since 2016, showed agents carrying out database searches on behalf of friends and neighbors, looking up details about ex-partners and coworkers and leveraging conditional information to commit fraud.
A U.S. appeals court ruled that Amazon must face a nationwide class-action lawsuit over allegations that the company illegally monitored the online activity of its delivery drivers in order to preempt strikes and unionization efforts. The court determined that driver Drickey Jackson’s legal challenge to Amazon is not subject to a clause in his contract that required all work-related disputes to be settled in arbitration rather than court.

Social Media

Lobbying groups representing Big Tech firms including Microsoft and Apple are seeking to narrow the scope of any legislation that could be used to ban TikTok in the United States, according to people familiar with those conversations, due to concerns that proposed legislation could expose other companies to national security reviews over the use of Chinese technology. The industry pushback could upend the current bipartisan legislation endorsed by the Biden administration that would grant the government the ability to potentially ban any technology owned or operated by an adversarial nation.
Twitter removed the verified badges that appeared on accounts of noteworthy people and will move to a new model under which individual users can pay $8 per month and organizations can pay $1,000 per month for the checkmark. Organizations including the White House and several major media companies have said they will not pay because the checkmark no longer signifies authority under the pay-to-play model.

Other news

Taiwan Semiconductor Manufacturing Co. Ltd. is seeking to convince the Biden administration to loosen some of the requirements it has attached to subsidies made available through the CHIPS and Science Act that seek to incentivize the domestic development of semiconductor chips, according to people familiar with the situation. TSMC, which reportedly expects to get up to $8 billion in tax credits and is considering asking for an additional $6 billion to $7 billion in grants, objects to profit-sharing requirements and providing detailed operational information, the people said.
The Biden administration met with corporate, government and academic experts to begin planning for the development and deployment of 6G wireless communications. The technology, which is considered years away from development, presents the opportunity to improve internet access across the country, as well as a chance to move away from Chinese-produced equipment that has been used in the buildout of 5G networks.