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Google’s Sundar Pichai doesn’t want you to be clear-eyed about AI’s dangers

Alphabet and Google CEO, Sundar Pichai, is the latest tech giant kingpin to make a public call for AI to be regulated while simultaneously encouraging lawmakers towards a dilute enabling framework that does not put any hard limits on what can be done with AI technologies.

In an op-ed published in today’s Financial Times, Pichai makes a headline-grabbing call for artificial intelligence to be regulated. But his pitch injects a suggestive undercurrent that puffs up the risk for humanity of not letting technologists get on with business as usual and apply AI at population-scale — with the Google chief claiming: “AI has the potential to improve billions of lives, and the biggest risk may be failing to do so” — thereby seeking to frame ‘no hard limits’ as actually the safest option for humanity.

Simultaneously the pitch downplays any negatives that might cloud the greater good that Pichai implies AI will unlock — presenting “potential negative consequences” as simply the inevitable and necessary price of technological progress.

It’s all about managing the level of risk, is the leading suggestion, rather than questioning outright whether the use of a hugely risk-laden technology such as facial recognition should actually be viable in a democratic society.

“Internal combustion engines allowed people to travel beyond their own areas but also caused more accidents,” Pichai writes, raiding history for a self-serving example while ignoring the vast climate costs of combustion engines (and the resulting threat now posed to the survival of countless species on Earth).

“The internet made it possible to connect with anyone and get information from anywhere, but also easier for misinformation to spread,” he goes on. “These lessons teach us that we need to be clear-eyed about what could go wrong.”

For “clear-eyed” read: Accepting of the technology-industry’s interpretation of ‘collateral damage’. (Which, in the case of misinformation and Facebook, appears to run to feeding democracy itself into the ad-targeting meat-grinder.)

Meanwhile, not at all mentioned in Pichai’s discussion of AI risks: The concentration of monopoly power that artificial intelligence appears to be very good at supercharging.

Funny that.

Of course it’s hardly surprising a tech giant that, in recent years, rebranded an entire research division to ‘Google AI’ — and has previously been called out by some of its own workforce over a project involving applying AI to military weapons technology — should be lobbying lawmakers to set AI ‘limits’ that are as dilute and abstract as possible.

The only thing that’s better than zero regulation are laws made by useful idiots who’ve fallen hook, line and sinker for industry-expounded false dichotomies — such as those claiming it’s ‘innovation or privacy’.

Pichai’s intervention also comes at a strategic moment, with US lawmakers eyeing AI regulation and the White House seemingly throwing itself into alignment with tech giants’ desires for ‘innovation-friendly’ rules which make their business easier. (To wit: This month White House CTO Michael Kratsios warned in a Bloomberg op-ed against “preemptive, burdensome or duplicative rules that would needlessly hamper AI innovation and growth”.)

The new European Commission, meanwhile, has been sounding a firmer line on both AI and big tech.

It has made tech-driven change a key policy priority, with president Ursula von der Leyen making public noises about reining in tech giants. She has also committed to publish “a coordinated European approach on the human and ethical implications of Artificial Intelligence” within her first 100 days in office. (She took up the post on December 1, 2019 so the clock is ticking.)

Last week a leaked draft of the Commission proposals for pan-EU AI regulation suggest it’s leaning towards a relatively light touch approach (albeit, the European version of light touch is considerably more involved and interventionist than anything born in a Trump White House, clearly) — although the paper does float the idea of a temporary ban on the use of facial recognition technology in public places.

The paper notes that such a ban would “safeguard the rights of individuals, in particular against any possible abuse of the technology” — before arguing against such a “far-reaching measure that might hamper the development and uptake of this technology”, in favor of relying on provisions in existing EU law (such as the EU data protection framework, GDPR), in addition to relevant tweaks to current product safety and liability laws.

While it’s not yet clear which way the Commission will jump on regulating AI, even the lightish-touch version its considering would likely be a lot more onerous than Pichai would like.

In the op-ed he calls for what he couches as “sensible regulation” — aka taking a “proportionate approach, balancing potential harms, especially in high-risk areas, with social opportunities”.

For “social opportunities” read: The plentiful ‘business opportunities’ Google is spying — assuming the hoped for vast additional revenue scale it can get by supercharging expansion of AI-powered services into all sorts of industries and sectors (from health to transportation to everywhere else in between) isn’t derailed by hard legal limits on where AI can actually be applied.

“Regulation can provide broad guidance while allowing for tailored implementation in different sectors,” Pichai urges, setting out a preference for enabling “principles” and post-application “reviews”, to keep the AI spice flowing.

The op-ed only touches very briefly on facial recognition — despite the FT editors choosing to illustrate it with an image of the tech. Here Pichai again seeks to reframe the debate around what is, by nature, an extremely rights-hostile technology — talking only in passing of “nefarious uses” of facial recognition.

Of course this wilfully obfuscates the inherent risks of letting blackbox machines make algorithmic guesses at identity every time a face happens to pass through a public space.

You can’t hope to protect people’s privacy in such a scenario. Many other rights are also at risk, depending on what else the technology is being used for. So, really, any use of facial recognition is laden with individual and societal risk.

But Pichai is seeking to put blinkers on lawmakers. He doesn’t want them to see inherent risks baked into such a potent and powerful technology — pushing them towards only a narrow, ill-intended subset of “nefarious” and “negative” AI uses and “consequences” as being worthy of “real concerns”. 

And so he returns to banging the drum for “a principled and regulated approach to applying AI” [emphasis ours] — putting the emphasis on regulation that, above all, gives the green light for AI to be applied.

What technologists fear most here is rules that tell them when artificial intelligence absolutely cannot apply.

Ethics and principles are, to a degree, mutable concepts — and ones which the tech giants have become very practiced at claiming as their own, for PR purposes, including by attaching self-styled ‘guard-rails’ to their own AI operations. (But of course there’s no actual legal binds there.)

At the same time data-mining giants like Google are very smooth operators when it comes to gaming existing EU rules around data protection, such as by infesting their user-interfaces with confusing dark patterns that push people to click or swipe their rights away.

But a ban on applying certain types of AI would change the rules of the game. Because it would put society in the driving seat.

Laws that contained at least a moratorium on certain “dangerous” applications of AI — such as facial recognition technology, or autonomous weapons like the drone-based system Google was previously working on — have been called for by some far-sighted regulators.

And a ban would be far harder for platform giants to simply bend to their will.

Source: TechCrunch
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As Alphabet crests the $1T mark, SaaS stocks reach all-time highs of their own

Continuing our irregular surveys of the public markets, two things happened this week that are worth our time. First, a third domestic technology company — Alphabet — passed the $1 trillion market capitalization threshold. And, second, software as a service (SaaS) stocks reached record highs on the public markets after retreating over last summer.

The two milestones, only modestly related events, indicate how temperate the public waters are for technology companies today, a fact that should extend warmth into the private market where startups, and their venture capital backers, work.

The happenings are good news for technology startups for a number of reasons, including that major tech players have never had as much wealth in hand with which to buy smaller companies, and strong SaaS valuations help both smaller startups fundraise, and their larger brethren possibly exit.

Indeed, the stridently good valuations that major tech companies and their smaller siblings enjoy today should be just the sort of market conditions under which unicorns want to debut. We’ll continue to make this point so long as the public markets continue to rise, pricing tech companies that have already floated higher like the cliche’s own tide.

But while Alphabet, Microsoft and Apple are worth $3.68 trillion as a trio, and SaaS stocks are now worth 12.3x times their revenue (using enterprise value instead of market cap, for those keeping score at home), not every private, venture-backed company will necessarily benefit from public investor largesse.

What about tech-ish startups?

How much the current public-market tech valuation expansion will help companies that are increasingly sorted into the tech-enabled bucket isn’t clear; some companies that went public in 2019 were quickly spit up by investors unwilling to support valuations that matched or rose above their final private valuations. SmileDirectClub was one such offering.

The dividing line between what counts as tech — often fuzzy — appears to be slicing along gross margin lines, and the repeatability of business. The higher margin, and more recurring a company is, the more it’s worth. This market reality is why SaaS stocks’ recent return to form is not a surprise.

For Casper and One Medical, the first two venture-backed IPO hopefuls of the year, the more tech-ish they can appear between now and pricing the better. Because technology companies today are valued so highly, perhaps even a faint dusting of tech will save their valuations as they cross the chasm between private and adult.

Source: TechCrunch
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Investors like Sundar Pichai; they just pushed Alphabet into the trillion-dollar club for the first time

Alphabet this afternoon became the fourth tech giant to join the highly exclusive trillion-dollar club, one whose original member, Apple, saw its market cap soar past $1 trillion for the first time in August 2018 and which has since welcomed — and pushed back out — Amazon, which passed the $1 trillion mark in September 2018 but is now valued at $931 billion; and Microsoft, a charter member since August 2019 and now worth $1.27 trillion.

Saudi Aramco, the petroleum and natural gas company that went public last month, also now has a market value of $1.19 trillion.

That Alphabet would be the next tech giant to crack into the ranks is hardly surprising. The now 22-year-old company has grown like gangbusters since its second year in business and has exploded in value since going public in 2004. Still, it’s impossible not to draw a line between today’s development and the news in early December that the company’s founders, Larry Page and Sergey Brin, were handing over day-to-day control to Sundar Pichai, the CEO of Alphabet’s Google since 2015. (That’s when Alphabet itself was incorporated as a holding company.)

For one thing, investors seem to like that much of Pichai’s compensation is tied to the company’s performance. According to an SEC filing from last month, Pichai — now the CEO of both Google and Alphabet — will receive $2 million in salary per year, but he’s poised to earn much more — at least $150 million — if the company hits certain performance targets this year, next year and in 2022.

Analysts have also said they’re hopeful the leadership transition will see Alphabet become more transparent when it comes to reporting its financials to investors. Indeed, despite the company’s many holdings — from YouTube to Waymo, its self-driving car business — Alphabet has been famously vague when it comes to explaining how its various bets are panning out.

Not last, there’s a widespread expectation that Alphabet will become more amenable to larger share buybacks, or that it might institute a dividend payment for the first time because so much of Pichai’s bonus is tied to share performance.

Naturally there are broader trends that have led to this moment.

Alphabet has long been the biggest beneficiary of the ongoing shift online of global advertising and marketing spending, and it has only tightened its grip on the market over time. Just Tuesday, its Google unit announced plans to phase out support for third-party cookies in Chrome within the next two years, which could be the death knell for the rest of the long-suffering online ad industry.

Meanwhile, despite questions about some of its subsidiaries, including Waymo, whose progress has been slower than expected, its 2006 acquisition of YouTube has proven one of the smartest and most lucrative deals in internet history.

Either way, as the WSJ notes, citing Dow Jones Market Data, it took Alphabet nearly two years to rise from a company with an $800 billion market cap to one that enjoyed a $900 billion market cap. In contrast, it has jumped from $900 billion to $1 trillion in just the last several months.

Source: TechCrunch
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Alphabet-backed primary care startup One Medical files to go public

One Medical, a San Francisco-based primary care startup with tech-infused, concierge services filed for an IPO with the Securities and Exchange Commission today.

Internal medicine doctor Tom Lee founded the startup, now valued at well-over $1 billion dollars, in 2007. Lee exited his company in 2017, leaving it in the hands of former UnitedHealth group executive Amir Rubin.

The startup currently operates 72 health clinics in nine major cities throughout the U.S., with three more markets expected to open in 2020 and has raised just over $500 in venture capital from it’s biggest investor, the Carlyle Group (which owns just over a quarter of shares), Alphabet’s GV, J.P. Morgan and others. Google also incorporates One Medical into its campuses and accounts for about 10% of the company revenue, according to the SEC filing. The filing also mentions the company, which is officially incorporated as 1Life Healthcare Inc. ONEM, now plans to raise about $100 million.

Presumably, this money will help the company improve upon its technology and expand to more markets. We’ve reached out to One Medical for more and so far have only been referred to its wire statement.

According to that statement, One Medical has applied for a listing as ticker symbol, ONEM under its common stock on the Nasdaq Global Select Market. We’ll be sure to update you if and when we hear more.

Source: TechCrunch
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Tech’s biggest companies are worth ~$5T as 2019’s epic stock market run wraps

Look, this is the last post I’m writing in 2019 and I’m tired. But I can’t let the year close without taking stock of how well tech stocks did this year. It was bonkers.

So let’s mark the year’s conclusion with some notes for our future selves. Yes, we know that the Nasdaq has been setting new records and SaaS had a good year. But we need to dig in and get the numbers out so that we can look back and remember.

Let’s cap off this year the way it deserves to be remembered, as a kick-ass trip ’round the sun for your local, public technology company.

Keeping score

We’ll start with the indices that we care about:

  • The tech-heavy Nasdaq Composite rose 35% in 2019
  • The SaaS-heavy Bessemer Cloud Index rose 41% this year

Next, the highest-value U.S.-based technology companies:

  • Microsoft was up around 55% in 2019
  • Apple managed an 86% gain in the year
  • Not be left out, Facebook rose 57%
  • Amazon posted its own gain of 23% in 2019
  • Alphabet managed to grow by 29%, as well

Now let’s turn to some companies that we care about, even if they are smaller than the Big Five:

  • Salesforce? Up 19% this year
  • Adobe was up 46% in 2019, which was astounding
  • Intel picked up 28% in the year, making it no slouch
  • Even Oracle managed to gain 17% in 2019

And so on.

The technology industry’s epic run has been so strong that The Wall Street Journal noted this morning that, powered by tech companies, U.S. stocks “are poised for their best annual performance in six years.” The Journal highlighted the performance of Apple and Microsoft in particular for helping drive the boom. I wonder why.

How long will we live in the neighborhood of Nasdaq 9,000? How long can two tech companies be worth more than $1 trillion at the same time? How long can the biggest tech companies be worth a combined $4.93 trillion (I remember when $3 trillion for the Big Five was news, and I recall when the group reach a collective value of $4 trillion).1

But the worst trade in recent years has been the pessimists’ gambit. No matter what, stocks have kept going up, short-term hiccoughs and other missteps aside.

For nearly everyone, that is. While tech stocks in general did very well, some names that we all know did not. Let’s close on those reminders that a rising tide lifts only most boats.

2019 naughty list

Several of the most lackluster public tech companies were 2019 technology IPOs, interestingly enough. Who didn’t do well? Uber earns a spot on the naughty list for not only being underwater from its IPO price, but also from its final private valuations. And as you guessed, Lyft is down from its IPO price as well, which is not good.

Some 2019 IPOs did well in the middle of the year, but fell a little flat as the year came to a close. Pinterest, Beyond Meat and Zoom meet that criteria, for example. And some SaaS companies struggled, even if we think they will reach $1 billion in revenue in time.

But it was mostly a party. The public markets were good, and tech stocks were great. This helped create another 100+ unicorns in the year.

Such was 2019. On to 2020!

  1. In time, those numbers will look small. But sitting here on December 31, 2019, they appear huge and towering and, it must be said, somewhat perilously stacked.

Source: TechCrunch
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Waymo buys Latent Logic, drives deeper into simulation and Europe

Waymo has acquired Latent Logic, a UK company that spun out of Oxford University’s computer science department, as the autonomous vehicle company seeks to beef up its simulation technology.

The acquisition also marks the launch of Waymo’s first European engineering hub will be in Oxford, UK. This likely won’t be the end of Waymo’s expansion and investment in Europe and the UK. The former Google self-driving project that is now an Alphabet business said it will continue to look for opportunities to grow the team in the UK and Europe.

Earlier this year, Waymo locked in an exclusive partnership with Renault and Nissan to research how commercial autonomous vehicles might work for passengers and packages in France and Japan. In October, Waymo said that its working with Renault to study the possibility of establishing an autonomous transportation route in Paris.

Waymo has made simulation a one of the pillars of its autonomous vehicle development program. But Latent Logic could help Waymo make its simulation more realistic by using a form of machine learning called imitation learning.

Imitation learning models human behavior of motorists, cyclists and pedestrians. The idea is that by modeling the mistakes and imperfect driving of humans, the simulation will become more realistic and theoretically improve Waymo’s behavior prediction and planning.

Waymo isn’t sharing financial details of the acquistion. But it appears that the two founders Shimon Whiteson and João Messia, CEO Kirsty Lloyd-Jukes and key members of the engineering and technical team will join Waymo. The Latent Logic team will remain in Oxford.

“By joining Waymo, we are taking a big leap towards realizing our ambition of safe, self-driving vehicles,” said Latent Logic co-founder and chief scientist Shimon Whiteson. “In just two years, we have made significant progress in using imitation learning to simulate real human behaviors on the road. I’m excited by what we can now achieve in combining this expertise with the talent, resources and progress Waymo have already made in self-driving technology.”

Source: TechCrunch
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