Tech Brew Ride Home - Thu. 05/04 – The Regulators Come For AI

Episode Date: May 4, 2023

The regulators have not been sleeping on the AI revolution. Everybody wants to get in on the blue checkmark game. But this time, with actual utility. Airbnb now offers to rent out single rooms. Can ChatGPT out invest professional money managers? And the return of the flip phone. No, not a foldable phone. The flip phone from your youth. Sponsors: Bloomberg.com/careers The Traceroute Podcast Links: “We must regulate AI,” FTC Chair Khan says (ArsTechnica) UK competition watchdog launches review of AI market (Financial Times) Microsoft’s Bing chatbot gets smarter with restaurant bookings, image results, and more (The Verge) Gmail is adding a blue checkmark to better verify senders (9to5Google) Airbnb Revamps Site to Ease Tensions Between Guests, Hosts (Bloomberg) ChatGPT ‘portfolio’ outperforms leading UK funds (Financial Times) Gen Zers Are Snapping Up Flip Phones. They Might Be Onto Something. (WSJ) Learn more about your ad choices. Visit megaphone.fm/adchoices

Welcome to the Tech meme right home for Thursday, May 4th, 2023. I'm Brian McCullough today. The regulators have not been sleeping on the AI revolution. Everybody wants to get in on the blue checkmark game, but this time with actual utility, Airbnb now offers to rent out single rooms. Can chat GPT out invest professional money managers? And the return of the flip phone. No, not a foldable phone. The flip phone from your youth. Here's what you miss today in the world of tech. Ah, the regulators have been aware of. of the nascent AI revolution. All of what I'm about to tell you happened all at once. Almost seems like it was coordinated. First, in a piece in the New York Times, FTC Chair Lena Kahn called for regulating AI saying the tech could fuel market dominance and collusion by large firms. Also, increase fraud and discrimination, lots more. Quoting Ars Technica. In the op-ed, Khan cites the rise of the Web 2.0 era in the mid-2000s as a cautionary tale for AI's expansion, saying that the growth of tech companies led to invasive surveillance and loss of privacy. Khan feels that public officials must now ensure history doesn't repeat itself with AI,

but without unduly restricting innovation. As these technologies evolve, she wrote, we are committed to doing our part to uphold America's longstanding tradition of maintaining the open, fair, and competitive markets that have underpinned both breakthrough innovations and our nation's economic success without tolerating business models or practices involving the mass exploitation of their users, end quote. Among the points Khan proposed in her piece, number one, ensuring fair competition, preventing large tech firms from exploiting their market dominance and using collusion to stifle innovation and smaller competitors in the AI landscape.

Number two, strengthening consumer protection, safeguarding users from deception and fraudulent practices enabled by AI, such as fishing scams, deep fake videos. videos and voice cloning. Promoting data privacy, monitoring AI systems to ensure they adhere to data protection laws and prevent exploitative data collection or usage, protecting users' personal information. Finally, combating discriminatory practices, ensuring AI systems don't perpetuate or amplify biases and discrimination, which can lead to unfair treatment in areas like employment, housing, or access to essential services. Some of these elements have previously been laid out in the Biden administration's AI Bill of Rights guidelines published in October. Those

guidelines do not explicitly have the force of law behind them, but the FTC has the latitude to interpret existing laws to apply to AI. The FTC is well equipped with legal jurisdiction to handle the issues brought to the fore by the rapidly developing AI sector, Khan said, end quote. Meanwhile, the UK CMA, fresh off its decision to block the Microsoft Activision acquisition, launched a fact-finding review of the AI market, including large language models to assess opportunities, guardrails, and principles to protect competition. Quoting the F.T. Sarah Cardell, chief executive of the UK Competition and Markets Authority, said the watchdog would examine so-called foundation models, such as the software underlying chat GPT, and, quote,

how the markets around those models are developing, end quote. She told the financial times that the regulator would assess the real opportunities there, but also, quote, what kind of guardrails, what principles we should be developing in terms of ensuring that competition is working effectively and, consumers are being protected, end quote. Cardell, who was appointed in December, said the CMA's fact-finding mission into AI would engage, quote, a whole host of different interested stakeholders, including businesses, academics, and others to gather a rich and broad set of information, end quote. She said the review would not be targeting any particular companies, end quote.

And finally, the White House announced plans to combat AI's risks, including $140 million for new research and draft guidelines for agencies to ensure the safe use of AI. Meanwhile, Microsoft has opened its Bing chatbot to everybody, removing the waitlist, and announcing new features including image and video results, chat history, and plugin support. Quoting the verge. Perhaps the biggest addition is a new actions feature in Bing chat and Edge. You'll now be able to use Microsoft's Bing AI to complete tasks without having to navigate back and forth between sites. So if a search result recommends a restaurant, it can then find a reservation time that works for you to help you book it all in the chat interface. This also works

through Edge, so if you're searching for movies, you can just ask Bing AI to play it for you, and it will automatically select the correct service and open the site to start playing the movie. Microsoft hasn't listed all the partners that it's working with for Bing and Edge actions, but the company has demonstrated Open Table for Restaurant Bookings and Apple TV for movie searches, so it's safe to say those will be supported at launch in a few weeks. Next up is image and video search results right inside Bing Chat. We're introducing richer, more visual answers, including charts and graphs and updated formatting of answers, helping you find the information you seek more easily, said Yusef Medi, Microsoft's head of consumer marketing. You'll soon be able to

search in Bing Chat and ask for photos or videos of objects, animals, places, and much more. Microsoft is also expanding its Bing Image Creator to more than 100 languages, so you can easily use Bing Chat to create images. The new chat history will allow you to pick up chat. chatbot conversations across devices and even use BingChat as a research tool. Microsoft is also planning to add export and share features into BingChat, so you can share the contents of a conversation on Twitter or even bring it into a Word document. Where chat history gets really interesting is inside Microsoft Edge. If you open a link from a Bing Chat answer in Edge, it will automatically move that

chat into a sidebar so you can keep asking questions while you browse the site. Microsoft is also experimenting with personalizing these chat sessions by bringing in context from previous chat history into new conversations. To top off a round of features, Microsoft is also opening up Bing Chat to third parties with plug-in support. Much like most of these new features, it's not clear exactly when plug-in support will be available, but Microsoft says it's working with OpenTable for its Bing Actions Reservations feature will from Alpha for Visualizations and OpenAI to let developers plug into Bing Chat,

end quote. Who knew how important checkmarks would be to tech in 2023? Google has added blue checkmarks to Gmail for senders from verified brands that adopted the company's BIMI or BIMI email specification, quoting 9 to 5 Google. The existing system is based on the brand indicators for message identification BIMI standard, where brand logos appear in the avatar slot next to the sender's name and address. For example, instead of a generic B against a plain background, Bank of America can show off its official flag logo. It's based on strong authentication with DMARC, domain-based message authentication reporting and conformance, and logo verification with a VMC issued by a certification authority such as Entrust or DigiCert. Google is now making the feature much more explicit by adding a checkmark icon for senders that have adopted BIMI

to more clearly help users identify messages from legitimate senders versus impersonators. The company has shared what this will look like on desktop web. The timing of this launch is somewhat amusing, given the rest of the tech landscape. The icon is a blue seal with a white checkmark in the middle, with users able to hover over it on the web. For example, Google's will say this sender of this email has verified that they own Google.com and the logo in the profile image. Learn more. Strong email authentication helps users and email security systems identify and stop spam and also enables senders to leverage their brand trust. This increases confidence in email sources and gives readers an immersive

of experience creating a better email ecosystem for everyone. This is rolling out starting today and will be available over the coming days slash weeks, available to all Google workspace customers, as well as legacy G Suite, Basic, and business customers, and to users with personal Google accounts, end quote. Airbnb has announced rooms, single rooms, averaging $67 per night, and 50 plus new features and upgrades to improve price transparency, checkout affordability, and more quoting Bloomberg. The San Francisco-based company is rolling out more than 50 new features and upgrades designed to improve price transparency, check-out procedures, affordability, the changes address feedback called from millions of customer service tickets,

tens of thousands of social media posts, and listening sessions with hundreds of thousands of hosts and guests. We were definitely noticing we were losing people, Chief Executive Officer Brian Chesky said in an interview, the co-founder spent six months living in Airbnbs and another six months hosting people so he could see both sides of the issues. Last summer was a bit of a wake-up call, Chesky said, as he started noticing more complaints on social media. Airbnb has more than four million hosts who have welcomed 1.4 billion guests in dwellings from tree houses to mansions around the globe. It has long struggled with how to balance these two sometimes opposing pillars of its business.

Part of the problem stemmed from the app's design. People were complaining about the host, but the host had bad tools, Chesky said. Hosts were charging excessively high cleaning fees because they didn't realize what the guest was really paying, end quote. To fix pricing, Airbnb called on its design department and 20 different teams. The result is a system that allows guests to view the total cost, including all fees before taxes across the entire app. Hosts will also have new tools to set competitive prices, add discounts, and compare their

listing to similar ones in their area. Hosts can also view their total nightly price across the app to always know what guests will pay. Keeping prices in check on Airbnb is a core mission of the company as it speaks to one of the main reasons Chesky started it with two friends in 2007. I wanted to save money, he said, and I wanted to meet people and have an authentic travel experience, end quote. To that end, Airbnb is going back to its soul with Airbnb rooms, an effort to attract the young travelers that Chesky said the platform hasn't invested enough in over recent years. The rooms category will have more than one million listings with an average rate of $67 per night,

where guests will stay together with hosts sharing common spaces such as the kitchen, living room, bathroom, or backyard. A host passport will give guests details about the person they're staying with, including their photo, social interaction, preferences, and fun facts about themselves. Chesky described the unique complications of managing a two-way platform as being ripe for disruption by artificial intelligence. He said Airbnb is exploring ways to use the technology to augment customer service and provide better matching between hosts and guests. I think every business will be transformed by AI, but ours will be transformed more than most, he said. There's so much pricing data and location data, so many things we can do. We want to be in the vanguard. But before launching new

innovations with AI, the company needs to fix existing problems first, he said. I think AI will have profound impacts on Airbnb, he said, but I wanted to make sure before we do new things that people love the core thing that we do, end quote. One of the things that some people are anticipating AI will soon disrupt is investing. I mean, it kind of already has. See the quant revolution of the last 20 years and companies like Renaissance Technologies and its famed medallion fund. Well, a finder.com experiment using chat GBT to pick 38 stocks found that its portfolio rose 4.9% compared to an average 0.8% loss for 10 popular funds over 8 weeks. Small sample size I know, but somewhere right now, some folks are hard at work on a medallion fund for the GPT era, or maybe that's not the point.

Maybe we can all run our own medallion funds. Quoting the Financial Times, in the eight weeks since its creation, the portfolio of 38 stocks has risen 4.9 percent compared with an average loss of 0.8% for the 10 most popular funds on UK platform interactive investor, a list including Terry Smith's FundSmith Equity, as well as a range of UK-US and global funds from Vanguard Fidelity and HSBC, according to finder.com. John Osler, chief executive of finder.com, said, it's not taken the public long to find creative ways of getting chat GPD to help them in areas where it shouldn't technically do so. And quote, some 19% of UK adults surveyed by

finder.com said they would consider getting financial advice from chat Gpt, while another 8% say they had already taken financial advice from the chatbot. The big question is, how bad of an idea using chat GBT for investing research currently would be, Osler said. Big funds have increasingly been using AI for years, but the public using a rudimentary AI platform that openly says its data is patchy since September 2021 and lacks the intricacies of market psychology doesn't sound like a good idea, end quote. However, he said research in 2021 indicated that half of UK investors used social media for investment advice. Would you rather get your advice from an unqualified TikTok star or AI that is capable of

processing millions of data points from around the web and giving tailored advice. He asked, adding, of course, the ideal answer at the moment would be neither. Spending time researching via known primary sources or a qualified advisor would be the safer and recommended approach, but this may not be the case forever, end quote. Osler said the democratization of AI seemed set to disrupt and revolutionize financial industries, but argued it was too early for consumers to trust it when it came to their own finances. However, fund managers may be starting to look nervously over their shoulders, he said, end quote. And finally today, I feel like we knew this would happen. According to the Wall Street Journal, some Gen Z Americans are buying flip phones like the $75

TCL Classic or the $90 Nokia 2780, seeking a break from endless social media and email notifications. Quote, while some Gen Zers might be buying smartphones that flip and fold like the $1,000 Samsung Galaxy Z flip 4, the chatter online setters on Dumbom. models with few capabilities. These devices are experiencing a renaissance as budget second phones, allowing you to detach from constant notifications and the lore of Infinite Scroll without losing the ability to send texts and make calls in an emergency. Young people aren't the only fans. Nokia sells tens of thousands of its flip phones each month in the U.S., according to Lars Silber Bauer, chief marketing officer of HMD Global, the Finnish manufacturer of Nokia phones.

Sales are growing across demographics, he said. It's not a small trend. Modern models improve on the ones you might remember. Most come with features like Bluetooth, 4G, and contemporary cameras, even if they retain the design and brawny batteries of early relics. Some have an internet browser, but employ an operating system that doesn't support apps like Instagram and TikTok. What are you going to scroll now? Osama Katanadi, a 23-year-old content strategist in New York City, carries both an iPhone and a basic flip phone and estimates his usage is split 50-50. He views his dumb phone, purely as a means for his closest context to reach him. Other than that, he says there's no work emails, no Instagram updates, nothing from Facebook,

nothing from TikTok, nothing from anyone except the people who are important to you, end quote. You can buy a basic flip phone and a prepaid plan for under $100 at most big box stores. Mr. Katanani, who already had an AT&T account for his iPhone, visited an AT&T store to add a $60 dollar Alcatel smart flip phone and its new line to his existing plan. He pays $30 a month for unlimited calls and text plus a dollar towards the cost of the phone. For some, the trend is vindicating. Melissa Range, 49, an associate professor of English at Lawrence University in Appleton, Wisconsin, never made the switch to a smartphone. Sometimes she said her flip phones limitations make things tough. If I get lost, I have to use my wits or ask someone for directions, she said. But for the

most part, Professor Range values its simplicity. I have a really busy job and I'm pulled in a lot of directions, she said, adding that she doesn't want to give her remaining attention to a phone. Like Ms. Palazzo, Professor Range, gets constant comments on her flip phone. People almost sound wistful, she said, when they tell her, I wish I could get rid of my smartphone, end quote. I had a Motorola razor back in the day, but in the end, I think my favorite ever phone remains the Nokia 8210. I wonder if I still have that in a drawer around here somewhere. Maybe I'll give it to Penny for her first phone. Talk to you tomorrow.