Biden's AI Executive Order, 6 Months Later

0:01Today on the AI Breakdown, we're looking at the Biden executive order on AI six months later. Before that on The Brief, Amazon becomes the latest big tech AI cloud provider to beat Wall Street expectations. The AI Breakdown is a daily podcast and video about the most important news and discussions in AI. Go to Breakdown.network for more information about our YouTube, our Discord, and our newsletter. Welcome back to the AI Breakdown Brief, all the AI headline news you need in around five minutes. If you've been keeping track, whether it's via this show or just reading Bloomberg or what have you, you'll know that in general, the big tech companies that have wired up their cloud business with AI are doing really well right now.

0:41Microsoft and Google have recently announced quarterly results that beat analysts' expectations, driven by strong growth in their cloud business, which was itself driven by demand for AI. Analyst Dan Ives tweeted this morning, Amazon's star of the show was the AWS 17 % growth, well ahead of the whispered numbers. Microsoft, Google, and now Amazon's robust cloud results this quarter speaks to an accelerated shift by enterprises to move workloads to the cloud. AI is the golden goose, with cloud setting the stage. I've commented on this before, but one of the things that makes AI so different than other emerging tech areas that we've had is that because demand for AI is driving demand for cloud services, the companies that are in a position to offer that, specifically Amazon, Google, and Microsoft, have been able to see benefits from their AI investments really early.

1:25Wall Street has rewarded it because AI isn't just some far-out thing, it's something that's valuable right now. Contrast that with, for example, Wall Street's response to Mark Zuckerberg last week, adding an additional$5 billion to their estimated expenditures because of AI and saying that that was unlikely to result in revenue in the short term. There's just more of a gap between how Wall Street perceives meta is going to make its money from AI as opposed to those cloud services. Now, I think an advertising-based business has some pretty good reasons to be bullish on how AI can help that. But the point is that yesterday, Amazon reported really good numbers.

1:56Revenue overall last quarter rose 13 % to reach$143.3 billion. Profit was up to$10.4 billion. Most importantly, both of those numbers exceeded Wall Street expectations. CEO Andy Jassy has not been quiet about the company's AI ambitions. As the Wall Street Journal writes, Earlier this month in his annual letter to shareholders, Jassy laid out his vision for how generative AI could be a critical building block in establishing Amazon's next pillar of growth following its online retail marketplace, Amazon Prime, and its cloud computing unit. As mentioned in that Dan Ives tweet, AWS was up 17 % in the quarter to reach$25 billion in revenue.

2:31That division is running an operating profit of 84%. And emphasizing what a big deal AI is, Jassy said on a follow-up conference call with analysts, there's a very large opportunity in front of us. I don't know if any of us has seen a possibility like this in technology in a really long time. For sure since the cloud, perhaps since the internet. Alongside their quarterly reporting, Amazon also announced Q. This is an updated and expanded version of their AI assistant, which had been previously called Code Whisperer. The way they describe Amazon Q now is as the most capable generative AI-powered assistant for accelerating software development and leveraging companies' internal data.

3:06Amazon Q, they write, generates code, tests, debugs, and has multi-step planning and reasoning capabilities that can transform and implement new code generated from developer requests. Amazon Q also makes it easier for employees to get answers to questions across business data, such as company policies, product information, business results, codebase, employees, and many other topics, by connecting to enterprise data repositories to summarize the data logically, analyze trends, and engage in dialogue about the data. So basically what you have with Q is something similar to what Microsoft has done with the Copilot brand.

3:36Copilot started, of course, as just GitHub's AI-assisted developer tool, and then became the watchword for all Microsoft AI products and AI features within its other products. Similarly, Amazon Q has Amazon Q Business, Amazon Q Developer, which are aimed at different parts of the enterprise. I think one really interesting question that I'm certainly watching is the extent to which differentiation in these features will actually drive different decisions in the enterprise, or whether buyers will instead see these sort of AI services as commoditized. In other words, will Amazon Q be equivalent enough to Microsoft Copilot that the actual buying decision from an enterprise is going to be about other factors, such as their legacy relationships.

4:15It's too early to tell, but it's certainly an interesting thing to watch. Another story today, yet another group of newspapers have sued OpenAI and Microsoft around copyright infringement. This time, it's a group of eight newspapers, all of which are owned by Alden Global Capital. Those newspapers include the New York Daily News, the Chicago Tribune, the Orlando Sentinel, the Denver Post, and a handful more. Alden has more than 50 additional daily newspapers, so they could also join the suit at some point. The newspapers are accusing OpenAI and Microsoft of, quote, purloining millions of the publisher's copyrighted articles without permission and without payment.

4:47They claim that OpenAI and Microsoft removed copyright management information, such as journalist names and titles. And they claim that OpenAI engaged in unauthorized use of the newspaper's trademarks in branding answers from ChatGPT and Copilot. An interesting one is that they're claiming reputational harm from AI hallucination, basically saying that ChatGPT hallucinated an answer to a question and ascribed it to the Denver Post. On the one hand, there's not really anything new here, so much so that it's notable that this suit was filed in the same district as the New York Times lawsuit, which creates the opportunity at some point to roll those suits together.

5:21At the same time, even as OpenAI and Microsoft fight these battles in courts, they're also going out and courting deals directly with publishers, the latest of which was a deal between OpenAI and the Financial Times. Ultimately, of course, this will come down to court decisions, and I would be very surprised if ultimately these cases don't end up in front of the Supreme Court. One more Microsoft story before we get out of here. The company has announced that they are expanding their responsible AI team from 350 to 400 people. Of those, about half of the group is focused on AI safety full-time.

5:50What's interesting to me about this is less any particular substantive initiative that they announced or approach that they've taken, but the fact that the company is working to get press around this announcement. It certainly shows an assessment, I think, of where some of the regulatory and governmental winds are blowing, which consequently is the focus of our main AI breakdown. So that's going to do it for the AI breakdown brief. Next up, well, you just heard what's coming. Today's episode is brought to you by Notion. Notion is one of a very small handful of tools that is at the very center of every new project I begin.

6:23That includes the AI breakdown, super intelligent, previous things that are long gone in the past, Notion is always a big piece of it, and that's because Notion combines your notes, docs, and projects into one space that's simple and beautifully designed. They have now put AI directly at the center of that platform in ways that are integrated to make it actually really useful. You can use it to help you brainstorm, use it to help you draft things, or use it for intelligent search across all of the documents your team has produced, which can be an incredibly time-saving feature. Notion is used by over half of Fortune 500 companies, and teams that use Notion send less email, cancel more meetings, save time searching for their work, and reduce spending on tools.

7:02Right now for AI Breakdown listeners, you can try Notion for free when you go to notion.com slash AI Breakdown. That's all lowercase letters, notion.com slash AI Breakdown. When you use our link, you're supporting the show. Once again, that's notion.com slash AI Breakdown. Attention AI Breakdown listeners. Consensus 2024 marks the 10th gathering for all things crypto, blockchain, and Web3. However, importantly, this year's agenda will also dive deep into AI-driven transformation. And the speaker lineup includes the leading minds and innovators at the forefront of this digital renaissance. Don't miss the Consensus AI Summit to cut through the hype to find where true transformation and opportunity lie.

7:40Listeners to this show can get 15 % off registration with the code AIBreakdown. Visit consensus2024.coindesk.com to learn more. Some of the folks who will be at Consensus this year include Guillaume Verdun, aka A. Beth Jezos, founder and CEO of Xtropic, as well as spiritual leader of the accelerationist movement, Neil Stephenson, co-founder of Lamina One, and Brendan Eich, the CEO of Brave Software. Again, go to consensus2024.coindesk.com to learn more and get 15 % off registration with the code AIBreakdown. Welcome back to the AI Breakdown. Six months in AI time is about 100 years in any other industry.

8:16In the past six months, from a technology standpoint, we've seen so much. We've seen GPT-4 class models become normalized, with everything from Cloud 3 Opus to Google Gemini, to now even Llama 3 kicking up in that direction from an open source perspective. We've seen the rise of the AI hardware trend, and consequently the rise of the Marques Brownlee destroying the AI hardware trend with his reviews. AI agents remain the next big thing coming down the pipeline as they have now for over a year, and adoption has continued to advance. What hasn't changed much in that time is any sort of official U.S.

8:48policy towards the industry. Well, a couple days ago, on April 29th, the White House followed up from its executive order to discuss which actions had been completed that were assigned to be completed within the first 180 days. Basically, the way that this executive order worked was that it instructed various agencies across the government to do stuff, and it gave them deadlines to do that stuff. Most of it was the preparing of research, reports, proposals. It wasn't necessarily policy action. It was all of the initial stuff that you would need to eventually take smarter action. Today we're going to look at some of the key highlights that the administration has called out.

9:20Right at the top of the list we have managing risks to safety and security. Now you may have heard that we were talking about the Department of Homeland Security earlier this week because of their new AI Safety and Security Board, the membership of which has caused much consternation, and they were one of the agencies that was part of this whole 180-day process. One of the call-outs from the White House is the establishment of a framework for nucleic acid synthesis screening to help prevent the misuse of AI for engineering dangerous biological materials. Basically, chemical and biological threats are a big concern, specifically that AI will make them easier for nefarious actors to get access to or fabricate.

9:54The DHS released a report on this, parts of which were unsealed. When it comes to what specifically they're worried about, Javed Ali, the former senior counterterrorism coordinator on the National Security Council, said, the degree to which nation-states or groups interested in pursuing these unconventional weapons capabilities will harness such AI tools remains unclear. However, since there are various technical and logistical hurdles that have to be met to develop fully functioning weapon systems that can be used, it is more likely that AI tools will be more helpful on the research and theoretical design end of the spectrum than the actual manufacture and deployment of such weapons.

10:25Speaking of the Department of Homeland Security, the White House also called out the launch of that AI Safety and Security Board as one of the accomplishments. Keeping in the safety and security theme, the White House discusses the public comment draft on documents for managing AI risks, as well as international standards development in AI, with an eye to expanding upon the National Institute for Standards and Technology's AI risk management framework. I don't think it's any surprise that safety and security comes right at the top. I think it reflects both the reality of how the White House and the D.C.

10:53establishment in general views the hierarchy of concerns, but it also reflects the politics of the situation. The second category of actions for the last 180 days that the White House talks about, they call standing up for workers, consumers, and civil rights. Some of the actions there included developing bedrock principles and practices for employers and developers to build and deploy AI safely in ways that empower workers, releasing guidance to assist federal contractors and employers comply with worker protection laws as they deploy AI, releasing resources for job seekers, workers, and tech vendors and creators on how AI could violate employment discrimination laws, issuing guidance for AI's non-discriminatory use in the housing sector, and the beginnings of a strategy for ensuring safety and effectiveness in AI deployed in the healthcare sector.

11:33The third category that the White House discusses is less about risk mitigation and more about seizing AI opportunity, particularly in the realm of scientific research. The White House calls this collection of actions harnessing AI for good. That includes Department of Energy funding opportunities to support the application of AI for science, launching pilots, partnerships, and new AI tools to address energy challenges and advance clean energy, and authoring a report on AI's role in advancing scientific research to help tackle major societal challenges. Now, you might also remember that when the White House laid out all of these ambitious plans around AI, it recognized that it didn't necessarily have the talent in-house to really do what it needed to do.

12:09And so the government set out to hire a bunch of experts and even gave a name to the effort, which they called the AI Talent Surge. The new update document from the White House says that federal agencies have subsequently hired over 150 AI and AI-enabling professionals. Now, if you are interested in the status of the full set of activities that were articulated in the executive order, they also have a handy cheat sheet organized by the required timeline. Overall, there were more than 35 actions that were on this 180-day timeline. So where does this leave us? Well, it's clear that government agencies have a much deeper understanding now of the AI space and what the implications for their particular area might be than they did six months ago.

12:48And that alone is encouraging. However, what this doesn't represent is any sort of actual legislative policy when it comes to the overall regulation of AI in the United States. In other words, this is an agency-centric process, a remaking of the D.C. bureaucratic establishment in the context of AI, which is on the one hand very necessary, but also, of course, insufficient as well. In the meantime, comprehensive AI legislation continues to be introduced. The latest is something called the Future of AI Innovation Act, which was sponsored by Republicans Todd Young and Marsha Blackburn and Democrats Maria Cantwell and John Hickenlooper.

13:23It would authorize the NIST AI Safety Institute to develop AI standards. It would create new AI testbeds with national laboratories to evaluate AI models. It would create challenge prize competitions to spur private sector innovation. It would make available public data sets. And it would attempt to create international alliances around AI standards. Said Senator Cantwell, our bill ensures the United States will lead on AI for decades to come. It promotes public-private collaboration to drive innovation and competitiveness. It will lay a strong foundation for America's evolving AI tech economy for years to come.

13:53Of course, we are in an election year that makes it a very difficult time to get anything done. Is AI the rare thing that's so important to either leaders or their constituents that it may buck the trend and actually see action taken even in an election year? Jury's still out. But whether it happens now or on the other side of November, I expect to see a much more aggressive push from the U.S. when it comes to AI rules and regulations in the not-too-distant future. For now, though, that is going to do it for the AI Breakdown. Until next time, peace. Thank you.