The Week in Business: Crypto’s Crashes

Good morning and happy Sunday. Here’s what you need to know in business and tech news for the week ahead. — Charlotte Cowles

had a rough week. Digital currencies saw several ugly crashes, with Bitcoin ending Friday nearly 30 percent below its price a week before. The plunge followed an announcement from China that effectively banned its financial institutions from providing services related to cryptocurrency transactions. (Elon Musk’s sudden about-face on Bitcoin probably didn’t help, either.) The volatility shook some investors’ confidence in crypto, which has ridden a seemingly unstoppable wave of popularity — and gained traction with mainstream investors — over the past year.

Texas, Oklahoma and Indiana joined more than a dozen other states that are ending federal pandemic unemployment benefits early, citing the need to incentivize people to get back to work. The decision will get rid of the $300-a-week supplement that unemployment recipients have been getting since March and were scheduled to receive through September. It will also end all benefits for freelancers, part-timers and those who have been out of work for more than six months. Some lawmakers believe that cutting off benefits will encourage more people to apply for jobs, but that’s not always the case — a persistent lack of child care has also prevented many parents from returning to work.

can cause premature death, according to a new study by the World Health Organization. Long hours — also known as overwork — are on the rise and are associated with an estimated 35 percent higher risk of stroke and 17 percent higher risk of heart disease compared with working 35 to 40 hours per week, researchers said.

give the Internal Revenue Service more money to chase down wealthy individuals and companies who cheat on their taxes. As part of the same effort to close tax loopholes, the U.S. Treasury Department is trying to convince other countries to back a 15 percent global minimum tax rate on big companies. The policy is meant to deter corporations from sheltering their operations in tax havens such as Bermuda and the British Virgin Islands. But a number of governments have been hesitant to sign on for fear that they’ll scare off businesses.

Congress wants to bolster the United States’ ability to compete with China and is willing to throw money at the problem. The senate is working on a bill that would invest $120 billion in the nation’s development of cutting-edge technology and manufacturing. Known as the Endless Frontier Act, the legislation would fund new research on a scale that its proponents say has not been seen since the Cold War. In related news, the European Union blocked an investment deal with China on Thursday, citing concerns with the country’s abysmal human rights record.

Executives from the largest U.S. banks, including JPMorgan, Bank of America and Goldman Sachs, will testify before lawmakers this week about their actions (or lack thereof) to help struggling Americans and small businesses during the pandemic. Democrats on the Senate Banking and House Financial Services committees organized the hearings to scrutinize the banks’ role in lending money to alleviate the financial pressures of the past 15 months. The testimony could affect how lawmakers seek to regulate Wall Street in the coming years.

soared 30 percent in its initial public offering on Wednesday. Amazon indefinitely extended its ban on police usage of its facial recognition software, which has faced ethical criticism. And New York City lifted nearly all of its pandemic restrictions, allowing businesses to welcome customers back at full capacity.

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Amazon Indefinitely Extends Moratorium on Facial Recognition Software by Police

Amazon said Tuesday that it would indefinitely prohibit police departments from using its facial recognition tool, extending a moratorium the company announced last year during nationwide protests over racism and biased policing.

The tool has faced scrutiny from lawmakers and some employees inside Amazon who said they were worried that it led to unfair treatment of African-Americans. Amazon has repeatedly defended the accuracy of its algorithms.

When Amazon announced the pause in June, it did not cite a specific reason for the change. The company said it hoped a year was enough time for Congress to create legislation regulating the ethical use of facial recognition technology. Congress has not banned the technology, or issued any significant regulations on it, but some cities have.

The primary suppliers of facial recognition tools to police departments have not been tech giants like Amazon, but smaller outfits that are not household names.

said in a statement posted on Twitter.

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Europe Proposes Strict Rules for Artificial Intelligence

The European Union unveiled strict regulations on Wednesday to govern the use of artificial intelligence, a first-of-its-kind policy that outlines how companies and governments can use a technology seen as one of the most significant, but ethically fraught, scientific breakthroughs in recent memory.

The draft rules would set limits around the use of artificial intelligence in a range of activities, from self-driving cars to hiring decisions, bank lending, school enrollment selections and the scoring of exams. It would also cover the use of artificial intelligence by law enforcement and court systems — areas considered “high risk” because they could threaten people’s safety or fundamental rights.

Some uses would be banned altogether, including live facial recognition in public spaces, though there would be several exemptions for national security and other purposes.

The 108-page policy is an attempt to regulate an emerging technology before it becomes mainstream. The rules have far-reaching implications for major technology companies including Amazon, Google, Facebook and Microsoft that have poured resources into developing artificial intelligence, but also scores of other companies that use the software to develop medicine, underwrite insurance policies, and judge credit worthiness. Governments have used versions of the technology in criminal justice and allocating public services like income support.

“deepfakes” would have to make clear to users that what they are seeing is computer generated.

For the past decade, the European Union has been the world’s most aggressive watchdog of the technology industry, with its policies often used as blueprints by other nations. The bloc has already enacted the world’s most far-reaching data-privacy regulations, and is debating additional antitrust and content-moderation laws.

governments around the world, each with their own political and policy motivations, to crimp the industry’s power.

In the United States, President Biden has filled his administration with industry critics. Britain is creating a tech regulator to police the industry. India is tightening oversight of social media. China has taken aim at domestic tech giants like Alibaba and Tencent.

The outcomes in the coming years could reshape how the global internet works and how new technologies are used, with people having access to different content, digital services or online freedoms based on where they are located.

Artificial intelligence — where machines are trained to perform jobs and make decisions on their own by studying huge volumes of data — is seen by technologists, business leaders and government officials as one of the world’s most transformative technologies, promising major gains in productivity.

But as the systems become more sophisticated it can be harder to understand why the software is making a decision, a problem that could get worse as computers become more powerful. Researchers have raised ethical questions about its use, suggesting that it could perpetuate existing biases in society, invade privacy, or result in more jobs being automated.

Release of the draft law by the European Commission, the bloc’s executive body, drew a mixed reaction. Many industry groups expressed relief the regulations were not more stringent, while civil society groups said they should have gone further.

“There has been a lot of discussion over the last few years about what it would mean to regulate A.I., and the fallback option to date has been to do nothing and wait and see what happens,” said Carly Kind, director of the Ada Lovelace Institute in London, which studies the ethical use of artificial intelligence. “This is the first time any country or regional bloc has tried.”

ethical uses of the software said she was fired for criticizing the company’s lack of diversity and the biases built into modern artificial intelligence software. Debates have raged inside Google and other companies about selling the cutting-edge software to governments for military use.

In the United States, the risks of artificial intelligence are also being considered by government authorities.

This week, the Federal Trade Commission warned against the sale of artificial intelligence systems that use racially biased algorithms, or ones that could “deny people employment, housing, credit, insurance, or other benefits.”

Elsewhere, in Massachusetts, and in cities like Oakland, Calif.; Portland, Ore.; and San Francisco, governments have taken steps to restrict police use of facial recognition.

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Biden Clashes With China and Russia in First 60 Days

Its pathway to power is building new networks rather than disrupting old ones. Economists debate when the Chinese will have the world’s largest gross domestic product — perhaps toward the end of this decade — and whether they can meet their other two big national goals: building the world’s most powerful military and dominating the race for key technologies by 2049, the 100th anniversary of Mao’s revolution.

Their power arises not from their relatively small nuclear arsenal or their expanding stockpile of conventional weapons. Instead, it arises from their expanding economic might and how they use their government-subsidized technology to wire nations be it Latin America or the Middle East, Africa or Eastern Europe, with 5G wireless networks intended to tie them ever closer to Beijing. It comes from the undersea cables they are spooling around the world so that those networks run on Chinese-owned circuits.

Ultimately, it will come from how they use those networks to make other nations dependent on Chinese technology. Once that happens, the Chinese could export some of their authoritarianism by, for example, selling other nations facial recognition software that has enabled them to clamp down on dissent at home.

Which is why Jake Sullivan, Mr. Biden’s national security adviser, who was with Secretary of State Antony J. Blinken for the meeting with their Chinese counterparts in Anchorage, warned in a series of writings in recent years that it could be a mistake to assume that China plans to prevail by directly taking on the United States military in the Pacific.

“The central premises of this alternative approach would be that economic and technological power is fundamentally more important than traditional military power in establishing global leadership,” he wrote, “and that a physical sphere of influence in East Asia is not a necessary precondition for sustaining such leadership.”

The Trump administration came to similar conclusions, though it did not publish a real strategy for dealing with China until weeks before it left office. Its attempts to strangle Huawei, China’s national champion in telecommunications, and wrest control of social media apps like TikTok, ended up as a disorganized effort that often involved threatening, and angering, allies who were thinking of buying Chinese technology.

Part of the goal of the Alaska meeting was to convince the Chinese that the Biden administration is determined to compete with Beijing across the board to offer competitive technology, like semiconductor manufacturing and artificial intelligence, even if that means spending billions on government-led research and development projects, and new industrial partnerships with Europe, India, Japan and Australia.

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Who Is Making Sure the A.I. Machines Aren’t Racist?

Hundreds of people gathered for the first lecture at what had become the world’s most important conference on artificial intelligence — row after row of faces. Some were East Asian, a few were Indian, and a few were women. But the vast majority were white men. More than 5,500 people attended the meeting, five years ago in Barcelona, Spain.

Timnit Gebru, then a graduate student at Stanford University, remembers counting only six Black people other than herself, all of whom she knew, all of whom were men.

The homogeneous crowd crystallized for her a glaring issue. The big thinkers of tech say A.I. is the future. It will underpin everything from search engines and email to the software that drives our cars, directs the policing of our streets and helps create our vaccines.

But it is being built in a way that replicates the biases of the almost entirely male, predominantly white work force making it.

especially with the current hype and demand for people in the field,” she wrote. “The people creating the technology are a big part of the system. If many are actively excluded from its creation, this technology will benefit a few while harming a great many.”

The A.I. community buzzed about the mini-manifesto. Soon after, Dr. Gebru helped create a new organization, Black in A.I. After finishing her Ph.D., she was hired by Google.

She teamed with Margaret Mitchell, who was building a group inside Google dedicated to “ethical A.I.” Dr. Mitchell had previously worked in the research lab at Microsoft. She had grabbed attention when she told Bloomberg News in 2016 that A.I. suffered from a “sea of dudes” problem. She estimated that she had worked with hundreds of men over the previous five years and about 10 women.

said she had been fired after criticizing Google’s approach to minority hiring and, with a research paper, highlighting the harmful biases in the A.I. systems that underpin Google’s search engine and other services.

“Your life starts getting worse when you start advocating for underrepresented people,” Dr. Gebru said in an email before her firing. “You start making the other leaders upset.”

As Dr. Mitchell defended Dr. Gebru, the company removed her, too. She had searched through her own Google email account for material that would support their position and forwarded emails to another account, which somehow got her into trouble. Google declined to comment for this article.

Their departure became a point of contention for A.I. researchers and other tech workers. Some saw a giant company no longer willing to listen, too eager to get technology out the door without considering its implications. I saw an old problem — part technological and part sociological — finally breaking into the open.

talking digital assistants and conversational “chatbots,” Google Photos relied on an A.I. system that learned its skills by analyzing enormous amounts of digital data.

Called a “neural network,” this mathematical system could learn tasks that engineers could never code into a machine on their own. By analyzing thousands of photos of gorillas, it could learn to recognize a gorilla. It was also capable of egregious mistakes. The onus was on engineers to choose the right data when training these mathematical systems. (In this case, the easiest fix was to eliminate “gorilla” as a photo category.)

As a software engineer, Mr. Alciné understood the problem. He compared it to making lasagna. “If you mess up the lasagna ingredients early, the whole thing is ruined,” he said. “It is the same thing with A.I. You have to be very intentional about what you put into it. Otherwise, it is very difficult to undo.”

the study drove a backlash against facial recognition technology and, particularly, its use in law enforcement. Microsoft’s chief legal officer said the company had turned down sales to law enforcement when there was concern the technology could unreasonably infringe on people’s rights, and he made a public call for government regulation.

Twelve months later, Microsoft backed a bill in Washington State that would require notices to be posted in public places using facial recognition and ensure that government agencies obtained a court order when looking for specific people. The bill passed, and it takes effect later this year. The company, which did not respond to a request for comment for this article, did not back other legislation that would have provided stronger protections.

Ms. Buolamwini began to collaborate with Ms. Raji, who moved to M.I.T. They started testing facial recognition technology from a third American tech giant: Amazon. The company had started to market its technology to police departments and government agencies under the name Amazon Rekognition.

Ms. Buolamwini and Ms. Raji published a study showing that an Amazon face service also had trouble identifying the sex of female and darker-​skinned faces. According to the study, the service mistook women for men 19 percent of the time and misidentified darker-​skinned women for men 31 percent of the time. For lighter-​skinned males, the error rate was zero.

New York Times article that described it.

In an open letter, Dr. Mitchell and Dr. Gebru rejected Amazon’s argument and called on it to stop selling to law enforcement. The letter was signed by 25 artificial intelligence researchers from Google, Microsoft and academia.

Last June, Amazon backed down. It announced that it would not let the police use its technology for at least a year, saying it wanted to give Congress time to create rules for the ethical use of the technology. Congress has yet to take up the issue. Amazon declined to comment for this article.

Dr. Gebru and Dr. Mitchell had less success fighting for change inside their own company. Corporate gatekeepers at Google were heading them off with a new review system that had lawyers and even communications staff vetting research papers.

Dr. Gebru’s dismissal in December stemmed, she said, from the company’s treatment of a research paper she wrote alongside six other researchers, including Dr. Mitchell and three others at Google. The paper discussed ways that a new type of language technology, including a system built by Google that underpins its search engine, can show bias against women and people of color.

After she submitted the paper to an academic conference, Dr. Gebru said, a Google manager demanded that she either retract the paper or remove the names of Google employees. She said she would resign if the company could not tell her why it wanted her to retract the paper and answer other concerns.

Cade Metz is a technology correspondent at The Times and the author of “Genius Makers: The Mavericks Who Brought A.I. to Google, Facebook, and the World,” from which this article is adapted.

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