Davos: Interview with WHO Director of Data and Analytics | NFTs Make an Entrance with WISe.Art at WEF | Margrethe Vestager Visit to Silicon Valley to Speak Compliance and the EU AI Act
EU Commissioner for Competition Margrethe Vestager met with CEOs at Google, Apple, and Nvidia, and others, in a whirlwind two-day trip to Silicon Valley.
Week Ahead
Davos has started and I will be following some of the discussions online.
Monday the UN Agency for Refugees launches an appeal to fund Ukraine.
We have a few interviews coming up, including with Anu Bradford, Columbia University Law School on her book and her conversation with Vestager.
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European Commission
Friday 12 janvier 2024
EU Commissioner for Competition Margrethe Vestager met with tech CEOs including Google, Apple, and Nvidia in a whirlwind two-day trip to Silicon Valley. The US and European tech news media slight regulation from the EU, and the Commissioner is collateral damage. As if all tech companies were such good corporate citizens.
Sure, they all try to be good Bings, but much of the ethos in Silicon Valley is “kill the competition”. The Peter Thiel school of thought, a Trump supporter.
The rhetoric of tech disruption and revolution with each innovation, that tech will save us, that will create economic growth and inclusion, is something only the fanboys of Elon Musk and the hype cycle techbros believe, if they sniff that a quick profit can be made from their Ponzi-like schemes teaching the gullible how to become a prompt-engineer in 30 days for a recurring fee.
Today is generative AI, yesterday was crypto, and just the day before was…I forget. Oh, yes, startup mania.
The reality is a lot more nuanced, of course. Sure, growth and productivity, “make number go up”, the hockey-stick chart for all is what everyone wants, companies, workers, governments, and more evenly distributed. At least less of an economic chasm as we have now. As leaders gather in Davos the level of inequality in developed economies continues to rise and has not reversed. They will talk, board their jets, and then what?
Tech companies have been laying-off workers as a result of productivity increases. It does sound like there is too much emphasis in protecting these companies from paying their fair share of taxes, training workers on new tech, and of fairly sharing the bounties of said productivity with workers. Or complying with competition rules.
What will happen when droves of unemployed software developers hit the market? How are these Big Tech companies preparing to chip-in to retrain their workforce?
As we have seen, in the latest iteration of its globalization, consumer and enterprise tech has caused disruption alright. Just not in a good way. It was “disruptive” to democracies, with social media platforms pumping misinformation left and right with atrocious consequences for society and politicians, and for the health and well-being of women and girls. Not pretty.
That is not caused by people sharing trashy talk on social media, it is caused by the algorithms designed by these companies. Who, inside these companies, develops the algorithms?
Very few inside tech companies come from the humanities and social sciences. Still fewer are people of color. Or from underprivileged backgrounds. Or with good morals.
A caveat, there are many decent people working in tech, with good morals and intentions, and many who truly care. But not enough. We need all to care. I have many friends in the tech world. They try. But they have to try harder. I am a tech enthusiast. I love it and use it daily to do my work. I see its shortcomings too.
Women and more mature workers are also sidelined in these tech companies, and media reports show that they have been the hardest hit segment, in this latest rounds of lay-offs, as women are the ones in communications and HR positions. Two areas where the so-called productivity gain by generative AI is supposedly the largest.
Big Tech does not engage voluntarily in conversation about its risks and misuses, unless a regulator or civil society pushes for it. It is a pity. If they would preempt risks and have more social sciences academics embedded in their research and innovation teams. If only. Perhaps the policy landscape would not be so fraught with disinformation and misinformation, so fragmented, with such polarization on what constitutes good policies for data governance, social cohesion and economic opportunity.
But in this utopia Ms Vestager would be out of a job. She is due to step-out later this year, maybe. Who will come after her? Will it be a more draconian Commissioner? Draconian for who?
It is the push and pull of defending consumer interests and bringing the tech companies to the table, in good faith. “We need clarity”, said Vestager when asked by the probe and on-going consultation on Microsoft and OpenAI.
What was discussed?
The political agreement on the first EU AI Act, reached last December, “fits hand-in-glove with the G7 code of conduct, and with the executive order of the Biden presidency”, she said. The other reason for the visit was to pave the way for an understanding what will happen with the upcoming deadlines for compliance with the Digital Markets Act, that happens in early March.
Margrethe Vestager was also in San Francisco to deliver a keynote speech at the Tech Antitrust Conference, organised by the competition law journal Concurrences; she also held a fireside chat with Columbia University Law School Professor Anu Bradford, at Berkeley Law School.
The Commissioner met with Tim Cook, CEO of Apple, to speak about the upcoming deadline to comply with the Digital Markets Act and Sundar Pichai, CEO of Google, and with Kent Walker, General Counsel of Google, where conversations are cordial, she says, to find technical solutions for compliance. She also met with Cristiano Amon, CEO of Qualcomm, to speak semiconductors.
Apple is challenging the Digital Market Act in one aspect of the definition of “gatekeeper” in court, meaning that it does not allow other apps to be sold in the App Store, saying that will be detrimental to customers and security. But Vestager rebuted that argument, when she spoke in our press briefing on Friday, saying that while Apple had the right to challenge bits of the gatekeeper allegation, security issues can be addressed, according to the Commission’s analysis. She was positive that they would be reaching compliance by the 7th of March.
Vestager also went to Santa Clara and San Jose where she met with Hock Tan, CEO of Broadcom and Jensen Huang, CEO of NVIDIA. At the time of the press conference, Friday 12 January, 3 PM PST, she had not yet met with Mira Murati, Chief Technology Officer of OpenAI, and with Jason Kwon, Chief Strategy Officer of OpenAI. The Commissioner is opening a probe on the $11 billion investment on OpenAi by Microsoft, and how GenAI is impacting markets.
Semiconductors
How the CHIPS ACT creates challenges for the semiconductors sector in Europe? She mentioned that funding for the semiconductors industry is much larger in the US, government spending in the sector in the US has increased, since national security concerns came to the fore.
Semiconductor manufacturing was at the heart of the discussion at the last meetings of the Transatlantic Trade and Technology Council between her office and the US, represented by Secretary of State Antony J. Blinken, U.S. Trade Representative Katherine Tai, and Commerce Secretary Gina Raimondo, where they addressed shortages in the supply chains and analyzed what caused the production disruptions during the pandemic. There is little concern at this time that there will be overproduction with both countries increasing production. She sees demand going up, as AI becomes pervasive in all sectors of the economy.
She also quantified the increase in production at the EU and the US sides. From 10% of global output to 20%, and the same for the US. So both Europe and the US will have a larger share of the global output. This will not make Europe independent of the global supply chain, but will give it more weight in the global ecosystem of semiconductors production.
Microsoft and OpenAI
The Commissioner also said that a consultation with EU industry leaders, legal academics, and lawyers started this week to discuss Microsoft and OpeanAI impact on the markets. How OpenAI will influence market dynamics, how it will abide to European copyright law, and licensing issues.
Vestager said that they are at a preliminary stage, gathering views and it is too early to know what will unfold. Pace of innovation with generative AI has changed, with many open questions on its impact in the market place. How will market dynamics and competition be affected by OpenAI? The EC needs clarity, she said.
China and FDI
On China: She said, repeating EU president Ursula von der Leyen words, “Our ambition is not to decouple but to derisk.” The new regulation on foreign subsidies that the EU can leverage, both tenders and acquisitions, to see how the Chinese are faring in the EU market. Also they will look at how EU companies can go about doing business in China. In the EU trade policy tool box there is an instrument for screening Foreign Direct Investments, already adopted in Sweden, Vestager said.
On X, the bird formerly know as Twitter
She also spoke about the disinformation case on X/Twitter, and the evidence of distribution of posts that incited violence, islamophobia, and anti-semitism, and showed the atrocious unfolding of the Hamas attacks on Israeli civilians on the 7th of October, and the subsequent gruesome tactics employed by Israel towards Palestinian civilians. Vestager stressed that violence and harassment online must treated the same way as off-line, as they are violations of international human rights law.
Your Quick Shorthand to Know it All
*great Davos cocktail party conversation starters :-)
EU regulations and Apple's compliance.
Apple will have to comply even if there is a court case pending.
Semiconductor shortages in 2024.
EU and US to coordinate efforts to address semiconductor shortages and prevent oversupply.
European semiconductor industry, China relations, and trade defense mechanisms.
European Union aims to increase share of semiconductor production global output, with a focus on de-risking supply chains and ensuring fair competition.
European Union has a nuanced view of its relationship with China, with tools in place to protect against non-competitive behavior, while seeking reciprocity and fair competition.
Tech companies' compliance with Digital Markets Act.
Tech companies take digital markets act seriously, with serious efforts to make necessary changes to comply, said Vestager.
Limited resources for enforcement, so building a community for compliance is important.
Copyright and generative AI regulation in the US.
Seeking clarity on Microsoft's relationship with OpenAI, and its investment on the maker of the popular ChatGPT platform, in light of the recent lawsuit from New York Times.
US regulatory toolbox has limited options for addressing copyright issues in generative AI, as market dynamics continue to change at an unprecedented pace.
Copyright issues in AI technology in the EU.
EU copyright regulations may impact US corporations' use of copyrighted material in Europe.
EU legislation and competition policy.
Business interests of gatekeepers in Europe not negligible and they see importance of compliance with European legislation.
AI competition and coordination among regulators.
Rebecca Slaughter of the Federal Trade Commission has similar concerns to the competition issues around AI. EU-US coordinate on a case by case.
EU's Digital Services Act and X.
Digital Services Act, concerns about X/Twitter's ability to take down illegal content and secure freedom of speech.
Treating illegal content online the same as it is offline, and ensuring innovation can take place in a responsible manner.
AI regulation and mitigating risk.
Proposal for AI act aims to mitigate risk of discrimination where it may occur.
EU-US semiconductors industry collaboration.
Vestager emphasized individual member states' role in chip production in the EU, compared with a centralized approach like the US.
Subsidies for chip production and compliance with EU regulations.
Intel CEO met with German government on subsidies, slow negotiation process hinders review.
Regulating tech industry's market power.
Confidence in enforcing the Digital Markets Act (DMA) and EU's regulatory role.
Vestager emphasizes the importance of open markets and the need for the DMA to ensure contestability and prevent entrenched market power.
The DMA's enforcement is a top priority for the EU commission in its remaining mandate, with the goal of curbing dominant market power.
AI regulation and ethical considerations.
The recent push for AI regulation in the EU is due to the realization that AI is here to stay and has the potential to be highly intrusive in people's lives.
Vestager said that Microsoft's evasiveness regarding its relationship with OpenAI may be due to a desire to avoid antitrust concerns, rather than any nefarious motives.
Sunday 14 January
Josep Borrell was in Guatemala where he attended the official swearing in ceremony of President Bernardo Arevalo of Guatemala and Deputy President Karin Herrera Aguilar; he is to meet with Geraldo Alckmin, Vice-President of Brazil; and with Alicia Bárcena Ibarra, Secretary of Foreign Affairs of Mexico, among other dignitaries.
WHO at Davos
Interview with Steve MacFeely, Director of Data and Analytics
We spoke about the upcoming UN Statistics Commission meeting that begins on the 23rd of February, in New York. The heads of all international organizations and national statistical offices will discuss a wide range of issues, and this year health is at the top of the agenda, with a full-day dedicated to it.
We also talked about the right fora to discuss data governance, trade in services, and the necessary institutional framework.
Then there is the Summit of the Future in September where the UN Statistics Commission will have a role as data governance is central to the current conversation.
He will be in Davos this week to speak on data governance, how it is impacting AI.
Related content:
Interview with Francesca Perucci, Director, UN Statistics Office, 2023
World Economic Forum
Interview with Sixtine Crutchfield, Director WISe.Art
WISe.Art is a NFT marketplace that connects the arts and technology industries. The WISe.Art NFT platform is fully secured by WISe.Key, the security technology company, to enable the authentication of digital assets, in a safe end-to-end process.
They were sponsoring ONUArt Foundation, during their yearly celebration of Human Rights Day, at the Palais des Nations. At the occasion they presented artists that donated to the UN arts collection two of their limited edition pieces.
Sixtine Crutchfield, WISe.Art director, will be in Davos this week to speak about the collections and artists she manages and the NFT market, alongside Carlos Moreira, WISE.Key founder and CEO.
We spoke about her career in arts management, creating the first arts advisory department at the private Swiss bank Eduard Constant, and how she helped develop the curriculum of the Art Management M.B.A. program, at the Geneva Business School.
Innovation Funding in Semiconductors
CHIPS for America
Small-Scale Supplier Concept Plans
CHIPS for America is currently accepting concept plans for the Small-Scale Supplier funding opportunity projects with less than $300 million in capital investments.
Concept plans are a required part of the applications for this funding opportunity.
The submission period closes on February 1, 2024. Apply here.
Catching-up with the EIB
Nadia Calvino, President of the European Investment Bank
Calvino makes a weekly video on the main meetings and visits, like she did when she was minister of finance of Spain. A good example of public information outreach. She made one this week on her first two-weeks in office. Watch.
What else? The European Commission and the European Investment Fund (EIF) have launched a the Defence Equity Facility. They will invest 175 million euros in private equity and venture capital funds that support defense innovation.
What they expect? The goal is to stimulate the development of an ecosystem of private funds investing in defense innovation and to mobilize around 500 million euros in additional investment for European companies. The Defence Equity Facility will focus on technologies with dual-use potential, meaning that they can be used for both civilian and defense applications.