Penny stocks are back
Of all the trading manias in recent months — Bitcoin, SPACs, meme stocks, nonfungible tokens — the latest has a long history of fraud and scandal. That’s right, penny stocks are booming, according to The Times’s Matt Phillips, who visited the “low-rent district of Wall Street.”
There were 1.9 trillion transactions last month on the over-the-counter markets, where such stocks trade, according to the industry regulator Finra. That’s up more than 2,000 percent from a year earlier, driven in large part by the surge in retail trading — enabled by commission-free trading from online brokerages — that has also stoked the frenzy for shares in GameStop and other speculative assets.
left interest rates at rock-bottom levels, despite improving economic growth forecasts. But the Upshot’s Neil Irwin notes that it may become harder for Jay Powell, the Fed chair, to wave away criticism of those who think monetary policy is too loose.
The I.R.S. delays the tax filing deadline. Americans have until May 17 to file their federal income taxes, a delay meant to help people cope with the pandemic’s economic upheaval and account for changes from the rescue plan.
separate its asset-management division, replace its chief and suspend bonuses over the unit’s role in financing Greensill Capital, the supply-chain financing lender that collapsed this month.
Gasoline may have hit its peak. Global demand may never return to pre-pandemic levels, the International Energy Agency said, as more electric vehicles hit the roads and transportation habits change. Use may rise for a bit in places like China and India, but overall consumption in industrialized economies will fall by 2023.
Senate confirms President Biden’s top trade official. Katherine Tai will become the U.S. trade representative. She is a prominent critic of China’s trade practices, signaling that the White House won’t completely walk back the Trump administration’s tough stance. Top U.S. officials are to meet their Chinese counterparts for the first time today, at a summit meeting in Alaska.
Google is doubling down on office space
Google said today that it planned to invest $7 billion in offices and data centers in 19 U.S. states, making it the latest tech giant to expand its footprint while other companies retrench in a commercial real estate market roiled by the pandemic. Google’s C.E.O., Sundar Pichai, shared the plans in a blog post, saying that the move would create 10,000 jobs at the company this year. (Alphabet, Google’s parent company, employed around 135,000 people at the end of 2020.)
Google is expanding across the country. The plan includes investments in data centers in places like Nebraska, South Carolina and Texas. The company recently opened its first office in Minnesota and an operations center in Mississippi. It will open its first office in Houston this year.
“Coming together in person to collaborate and build community is core to Google’s culture,” Mr. Pichai wrote. Google was one of the first companies to tell employees to work from home, and it expects workers to begin returning to offices in September. When that happens, it will test a “flexible workweek,” with employees spending at least three days a week in the office.
Congressional hearing which focused on the relationship between brokers like Robinhood and market makers like Citadel Securities.
Charting the blank-check boom
SPACs have already raised more money this year than in all of 2020, setting a record for blank-check deal volume. More than $84 billion has been raised by 264 SPACs to date, according to Dealogic, compared with $83 billion raised by 256 acquisition vehicles last year.
cooperating with an S.E.C. inquiry, after a short seller accused it of misleading investors about its business prospects.
Crypto Mom,” she’s been raising the profile of cryptocurrencies and blockchain technology since being appointed an S.E.C. commissioner in 2018. On “Blockchain Policy Matters,” an online show by the Blockchain Association, a trade group, Ms. Peirce described her hopes for innovation and regulation of the crypto world. DealBook got a preview of the show, which posts today.
bitcoin E.T.F.s have begun trading in Canada.
She welcomes Gary Gensler, the blockchain professor, as the agency’s next chief. President Biden’s pick to lead the S.E.C. has lectured on cryptocurrency and blockchain at M.I.T. since 2018. Ms. Peirce said she was “hopeful” that he will help the agency think “in a more sophisticated way.” She added that Mr. Gensler has “more inclination to regulate” than she does, but that she believes he’ can provide the regulatory clarity on crypto she has sought.
Blockchain technology could address the issues raised by meme-stock mania. That includes “concerns around settlement times, tracking where shares are, and who owns what shares when,” Ms. Pierce said. Distributed ledger technology like blockchain could eliminate common failure points in the financial system, rather than centralizing them, Ms. Peirce said, adding: “I hope that a lot of that innovation happens in the private sector as opposed to us taking it over as a securities regulator.”
THE SPEED READ
Coinbase, the cryptocurrency exchange, said it had been valued at $68 billion in private markets before its direct listing next week. (Reuters)
Talks to merge three companies owned by Vista Equity Partners and a SPAC backed by Apollo Global Management in a $15 billion deal have reportedly stalled over market volatility. (Bloomberg)
HSBC is in talks to sell its French retail banking arm to an affiliate of Cerberus as it focuses on Asia. (FT)
Politics and policy
The Commodity Futures Trading Commission has created a team to assess the risks of climate change to futures and options markets. (WSJ)
Democrats are betting on a corporate tax increase to pay for their infrastructure improvement bill. (Axios)
British companies may face more restrictions on dividends and bonuses in a proposed overhaul of accounting rules. (FT)
Morgan Stanley is offering top wealth-management clients access to three investment funds linked to Bitcoin, a first by a U.S. bank. (CNBC)
Amazon’s wage scale in Alabama may have left it vulnerable to a union. (NYT)
On the “Sway” podcast, Brian Chesky of Airbnb speaks about trust, safety and being “completely speechless” on the day of the company’s I.P.O. (NYT Opinion)
Best of the rest
The pandemic has helped a 162-year-old German company that makes model trains discover a new audience. (NYT)
An ancient mathematical pattern could predict the price of Bitcoin. (Fortune)
This news article is a nonfungible token. (Quartz)
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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.
The End at Google
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.
WASHINGTON — Former President Donald J. Trump called multiple times for repealing the law that shields tech companies from legal responsibility over what people post. President Biden, as a candidate, said the law should be “revoked.”
But the lawmakers aiming to weaken the law have started to agree on a different approach. They are increasingly focused on eliminating protections for specific kinds of content rather than making wholesale changes to the law or eliminating it entirely.
That has still left them a question with potentially wide-ranging outcomes: What, exactly, should lawmakers cut?
One bill introduced last month would strip the protections from content the companies are paid to distribute, like ads, among other categories. A different proposal, expected to be reintroduced from the last congressional session, would allow people to sue when a platform amplified content linked to terrorism. And another that is likely to return would exempt content from the law only when a platform failed to follow a court’s order to take it down.
open to trimming the law, an effort to shape changes they see as increasingly likely to happen. Facebook and Google, the owner of YouTube, have signaled that they are willing to work with lawmakers changing the law, and some smaller companies recently formed a lobbying group to shape any changes.
December op-ed that was co-written by Bruce Reed, Mr. Biden’s deputy chief of staff, said that “platforms should be held accountable for any content that generates revenue.” The op-ed also said that while carving out specific types of content was a start, lawmakers would do well to consider giving platforms the entire liability shield only on the condition that they properly moderate content.
Supporters of Section 230 say even small changes could hurt vulnerable people. They point to the 2018 anti-trafficking bill, which sex workers say made it harder to vet potential clients online after some of the services they used closed, fearing new legal liability. Instead, sex workers have said they must now risk meeting with clients in person without using the internet to ascertain their intentions at a safe distance.
Senator Ron Wyden, the Oregon Democrat who co-wrote Section 230 while in the House, said measures meant to address disinformation on the right could be used against other political groups in the future.
“If you remember 9/11, and you had all these knee-jerk reactions to those horrible tragedies,” he said. “I think it would be a huge mistake to use the disgusting, nauseating attacks on the Capitol as a vehicle to suppress free speech.”
Industry officials say carve-outs to the law could nonetheless be extremely difficult to carry out.
“I appreciate that some policymakers are trying to be more specific about what they don’t like online,” said Kate Tummarello, the executive director of Engine, an advocacy group for small companies. “But there’s no universe in which platforms, especially small platforms, will automatically know when and where illegal speech is happening on their site.”
The issue may take center stage when the chief executives of Google, Facebook and Twitter testify late this month before the House Energy and Commerce Committee, which has been examining the future of the law.
“I think it’s going to be a huge issue,” said Representative Cathy McMorris Rodgers of Washington, the committee’s top Republican. “Section 230 is really driving it.”