
<h2 class="wp-block-heading" id="h-topline">TOPLINE</h2>



<p>Ugandan President Yoweri Museveni signed a&nbsp;<a href="https://www.jurist.org/news/wp-content/uploads/sites/4/2023/03/Anti-Homosexuality-Bill-2023.pdf" target="_blank" rel="noreferrer noopener">law</a>&nbsp;Monday that threatens life sentences or the death penalty for those engaging in same-sex activities, renewing international concerns over human rights that could cause Western powers to cut off millions of dollars of aid to the African nation.</p>



<h2 class="wp-block-heading" id="h-key-facts">KEY FACTS</h2>



<p>The Anti-Homosexuality Act—passed by Parliament in March—affirms an existing law that allows life sentences for people who engage in same-sex relations, and adds several more drastic measures, including allowing the death penalty for HIV-positive people who repeatedly have sex with someone of the same gender.</p>



<p>It also calls for prison sentences of up to 20 years for “promoting homosexuality” and up to five years for touching someone with the “intention of committing an act of homosexuality.”</p>



<p>Foreign aid providers like the United Nations and some Western nations have&nbsp;<a href="https://www.ohchr.org/en/press-releases/2023/03/uganda-un-experts-condemn-egregious-anti-lgbt-legislation" target="_blank" rel="noreferrer noopener">critiqued</a>&nbsp;the law, arguing it violates human rights and could make it increasingly difficult to educate about and treat HIV.</p>



<p>Activist groups aiming to educate Ugandans about safe same-sex relations have expressed concern the law will hinder the fight against HIV, which affects 1.4 million Ugandans,&nbsp;<a href="https://aidsinfo.unaids.org/" target="_blank" rel="noreferrer noopener">according</a>&nbsp;to the UN.</p>



<h2 class="wp-block-heading" id="h-key-background">KEY BACKGROUND</h2>



<p>The law builds on 2014 legislation that held similar stipulations and was signed by Museveni, but was ruled invalid on procedural grounds by Uganda’s Constitutional Court. Another similar law in 2019 was vetoed by Museveni, who&nbsp;<a href="https://www.monitor.co.ug/uganda/news/national/museveni-hints-at-plan-not-to-sign-sexual-offences-act-3396024" target="_blank" rel="noreferrer noopener">cited</a>&nbsp;adverse “foreign policy implications” for Uganda if it enacted drastic anti-LGBTQ legislation. Following its attempt to pass the Anti-Homosexuality Act in 2014, U.S. President Barack Obama’s administration&nbsp;<a href="https://obamawhitehouse.archives.gov/blog/2014/06/19/further-us-efforts-protect-human-rights-uganda" target="_blank" rel="noreferrer noopener">sanctioned</a>&nbsp;Uganda, redirecting and stopping some aid to the country’s government. President Joe Biden’s administration has said it will also&nbsp;<a href="https://www.reuters.com/article/us-usa-biden-lgbt/biden-calls-for-expanded-efforts-to-protect-lgbtq-rights-globally-idUSKBN2A42KF" target="_blank" rel="noreferrer noopener">consider sanctions</a>&nbsp;on countries with anti-LGBTQ legislation, including&nbsp;<a href="https://www.whitehouse.gov/briefing-room/press-briefings/2023/03/22/press-briefing-by-press-secretary-karine-jean-pierre-and-nsc-coordinator-for-strategic-communications-john-kirby-11/" target="_blank" rel="noreferrer noopener">Uganda</a>. The United States alone provides roughly $950 million per year to Uganda, much of which goes toward health assistance,&nbsp;<a href="https://www.state.gov/u-s-relations-with-uganda/" target="_blank" rel="noreferrer noopener">according</a>&nbsp;to the State Department.</p>



<h2 class="wp-block-heading" id="h-chief-critic">CHIEF CRITIC</h2>



<p>The Anti-Homosexuality Act violates “the rights to freedom of expression and association privacy, equality, and nondiscrimination,”&nbsp;<a href="https://www.hrw.org/news/2023/03/09/uganda-new-anti-gay-bill-further-threatens-rights" target="_blank" rel="noreferrer noopener">according</a>&nbsp;to Human Rights Watch, which promotes LGBTQ protections globally. HRW is at risk of not being able to operate in Uganda, as the country has identified at least 26 nongovernmental organizations it is considering banning for “promoting homosexuality,” HRW reported.</p>



<h2 class="wp-block-heading" id="h-crucial-quote">CRUCIAL QUOTE</h2>



<p>“The imposition of the death penalty for same-sex intimacy – including so-called ‘serial homosexuality’ – is an egregious violation of human rights,” the UN&nbsp;<a href="https://www.ohchr.org/en/press-releases/2023/03/uganda-un-experts-condemn-egregious-anti-lgbt-legislation" target="_blank" rel="noreferrer noopener">said</a>&nbsp;in a March statement about Uganda’s bill, arguing the implementation of the death penalty constituted “arbitrary killing” that breaches the International Covenant on Civil and Political Rights.</p>



<h2 class="wp-block-heading" id="h-further-reading">FURTHER READING</h2>



<p><a href="https://www.wsj.com/articles/ugandan-lawmakers-amend-anti-lgbt-bill-criticized-by-u-s-6ff67e37?mod=article_inline" target="_blank" rel="noreferrer noopener">Ugandan Lawmakers Amend Anti-LGBT Bill Criticized by U.S.</a>&nbsp;(Wall Street Journal)</p>



<p><a href="https://www.reuters.com/article/us-usa-biden-lgbt/biden-calls-for-expanded-efforts-to-protect-lgbtq-rights-globally-idUSKBN2A42KF" target="_blank" rel="noreferrer noopener">Biden calls for expanded efforts to protect LGBTQ rights globally</a>&nbsp;(Reuters)</p>



<p><a href="https://www.washingtonpost.com/business/energy/2023/05/29/explainer-what-s-uganda-s-anti-gay-law-and-how-does-it-impact-lgbtq-rights/ff815492-fe1d-11ed-9eb0-6c94dcb16fcf_story.html" target="_blank" rel="noreferrer noopener">Why Uganda’s LGBTQ Community is Under Renewed Fire</a> (Washington Post)</p>



<p></p>


President of Uganda Yoweri Museveni in Algeria

Uganda Passes Drastic Anti-LGBTQ Law—Including Death Penalty


<p><strong>As bank failures rattle investors and test regulators, it&#8217;s time to rethink America’s financial system. One old solution, despised by regulators, might be just what the doctor ordered.</strong></p>



<p><strong><abbr>N</abbr>estled on the&nbsp;</strong>second floor of a suburban office building in Fairfield, New Jersey, not far from Interstate 80 and just down the hall from an opthalmology center, are the offices of Financial Northeastern. Its chief executive, Jeff Zage, 60, could be one of the saviors of the troubled $23 trillion U.S. banking industry. Zage is a money broker, and for the past 38 years, his firm has specialized in underwriting certificates of deposits for needy banks. These deposits are generally bank-run-proof—they are not redeemable prior to maturity unless the deposit holder dies or becomes mentally incapacitated. Over the last 12 years, Zage’s small firm has quietly raised some $150 billion for banks small and large, connecting them with business owners, municipal treasurers and wealthy individuals eager to park sums of $250,000 or less in FDIC-insured accounts around the nation. Thanks to the Federal Reserve, interest rates on CDs maturing from three months to ten years are now above 5%. That means business is good for Financial Northeastern, which makes a small fee on each CD it brokers. But Zage repeatedly demurs when&nbsp;<em>Forbes</em>&nbsp;asks him for a photograph or even just a face-to-face meeting.</p>



<p>“I am a very unassuming individual,” he says. “I try to do my best to stay under the radar.”</p>



<p>Thirty-six years ago, it was a different story. Zage—then just 24 years old—his older brother Steven and their team of young cold-calling brokers were making millions providing funding to the nation’s ailing $1.2 trillion savings-and-loan industry in the form of high-rate CDs. A 1987&nbsp;<em>Forbes</em>&nbsp;article headlined “WE’RE THE LIFEBLOOD” pictured Zage popping out of the sunroof of his new car, his brother reclining on the hood. The story chronicled how regulators at regional Federal Home Loan Banks were calling brokers such as Financial Northeastern and Merrill Lynch to funnel billions to prop up zombie thrifts, mostly in Texas. Those S&amp;Ls had gotten into deep trouble after newly deregulated deposit rates soared by investing in commercial real estate, junk bonds and other risky assets.</p>



<p>When the dust settled, 747 savings-and-loans were shuttered and FSLIC, the insolvent government insurance fund backstopping the industry, was absorbed into the FDIC. The debacle cost U.S. taxpayers $124 billion, about $300 billion in current terms, or the equivalent of 2% of America’s 1989 GDP. Money brokers were blamed for worsening the S&amp;L crisis. Pundits called them a “cancer” afflicting the system because they peddled “hot money” that surged in and out of banks chasing the highest yield. In 1991, new regulations enacted by the FDIC made Zage’s bread-and-butter product, so-called brokered deposits, practically toxic to banks. Regulators warned against using them and increased FDIC insurance premiums for those who did. Today few of the nation’s 4,700 banks hold significant amounts of them.</p>



<p>But perhaps they should.</p>



<p>Silicon Valley Bank didn’t have a single brokered deposit on its books on March 9, the day depositors withdrew $42 billion in just 10 hours. Hot money? Sure—but it’s all hot these days. SVB’s $1 million-per-second deposit run was sparked by a handful of tweets. Dozens of fintechs, including Chime, Mercury and Robinhood, are more than happy to assist you with fast, frictionless money transfers. When Apple, backed by Goldman Sachs, announced in mid-April that it was offering an FDIC-insured savings account yielding 4.15%, it sucked in nearly $1 billion in four days. Non-banks, in the form of money market mutual funds like those offered by Vanguard and Fidelity, love hot money too. According to the Federal Reserve, over the last 13 months, $1 trillion in deposits has fled commercial banks for higher-yielding uninsured accounts.</p>



<p>Despite their pejorative “hot money” nickname, Zage’s FDIC-insured brokered CDs are far stickier than any of these bank savings accounts. Plus, there is strong evidence from a niche group of so-called industrial banks, which are in stellar financial condition while relying heavily on this funding, suggesting that this sort of heat is a stabilizing force. But brokered CDs alone won’t cure what’s ailing our nation’s banking system. The fact that after 40 years they continue to be stigmatized by regulators—and consequently shunned by banks—points to a larger problem. Bank regulation, with its multiple state regulators and three primary federal watchdogs—the Federal Reserve, the FDIC and the Office of Comptroller of the Currency—is stunningly inefficient, laden with political baggage and miles behind a quickly changing marketplace.</p>



<p>Part of the problem comes from clinging to old-fashioned banking ideals like “core” deposits, thought to be foundational to community banking and the soundness of our system. SVB and First Republic were far from the only banks caught flat-footed when the Fed hiked rates 10 times in the last year. According to FDIC call report data, 31 FDIC-insured banks with total assets of $30 billion are sitting on losses in their securities portfolios in excess of their tier 1 capital&nbsp;<em>(see “Underwater on Main Street,” below).</em>&nbsp;And that’s just the ugliest tip of the iceberg. Nearly 400 banks with combined assets of more than $3.7 trillion have losses amounting to more than half of their tier 1 capital. Virtually all these institutions are local community banks, most with assets of less than $300 million. Fortunately, few of these sick minnows are likely to have lots of uninsured deposits exceeding $250,000—or the external pressure of being publicly traded like Silicon Valley Bank and First Republic.</p>



<p>“In light of recent bank failures, the question is really not whether we need to rethink what a brokered deposit is or what hot money is, but what is a core deposit anymore?” says Jelena McWilliams, former chair of the FDIC and now a managing partner at Washington, D.C., law firm Cravath Swaine &amp; Moore. “Long-term, the community banking model will have to change. These small banks basically cannot survive unless they engage in fintech partnerships because it’s an easier and less costly business model to attract customers. But for whatever reason, the regulators in Washington are very averse to fintech.”</p>



<hr class="wp-block-separator has-alpha-channel-opacity"/>



<p><strong><abbr>S</abbr>upport for</strong>&nbsp;community or “Main Street” banking dates to the founding of the republic, when populist Thomas Jefferson squared off against federalist Treasury Secretary Alexander Hamilton, an elitist who wanted to create a national bank. Jefferson believed it was unconstitutional and a threat to the young democracy, in part because it would concentrate funding in the big cities and away from small, developing agrarian communities. Hamilton prevailed in 1791 with the establishment of the first central bank, but in 1811, Congress failed to renew its charter. It wasn’t until 1863, when the Union needed to finance the Civil War, that the national banking system was created.</p>



<p>This historic bias enabled small-town banks to proliferate, and by 1929 there were nearly 26,000 banks in the U.S., one for every 5,000 Americans. The stock market crash and Great Depression sparked a blizzard of bank runs on these often-undercapitalized institutions: In the four years before the FDIC was established in 1933, nearly 6,000 U.S. banks and savings institutions failed, costing depositors $1.3 billion, about $31 billion in today’s dollars.</p>



<p>Ever since, the number of community or “Main Street” banks has been shrinking. There are currently 4,676 FDIC-insured banks, but on average 200 of them are merged out of existence each year. Dwindling numbers have done little, though, to weaken the strength and resolve of small banks’ primary lobbying group, the Independent Community Bankers of America (ICBA), which spent nearly $4.8 million lobbying in 2022, according to Open Secrets, including about $1.3 million in donations spread around Congress, the largest chunk to the House Financial Services Committee. The ICBA’s stated goal is to “keep money local and invest in communities.”</p>



<p>“They’re politically powerful because they’re on every single corner,” says bank consultant Mayra Rodríguez Valladares. “There’s actually rare bipartisan support for community banking.”</p>



<p>Adds former FDIC chairwoman McWilliams, “There is a strong sense in Washington that these small banks matter. Large banks don’t understand local conditions where a loan may have originated in the past based on ‘I’ve known your grandfather. He was a man of his word, and I trust that you’re going be the man of your word.’ [The ideal] is Norman Rockwell–esque.”</p>



<p>The ICBA asserts that big Wall Street banks are transactional, making decisions based on “predetermined credit boxes,” while community banking boils down to relationships. Of course, this is largely nonsense. Small banks use—or should use—precisely the same metrics in evaluating creditworthiness that larger ones do. There is no evidence of any bank of any size in the year 2023 making a loan because it “knew your grandfather.” On the flip side, in many ways, Silicon Valley Bank, with its $212 billion in assets, was practicing community banking.</p>



<p>“SVB was built exactly the way the regulators say a bank should be built: customer by customer, relationship by relationship. No hot money,” says bank regulatory expert Paul Clark of Seward &amp; Kissel. “Everything was ‘You want a line of credit from me, you keep your deposits here.’ Those are so-called core deposits.”</p>



<p>Moreover, because regulators were never especially precise in their definition of core deposits, except for the fact that brokered deposits should mostly be avoided, clever entrepreneurs and financial institutions over the years have figured out ways around the prohibitions and FDIC insurance limits.</p>



<p>In 2003 an Arlington, Virginia, company called IntraFi launched a deposit swapping service called CDAR (Certificate of Deposit Account Registry), which allowed banks to offer wealthy customers and businesses the ability to deposit up to $50 million. The big deposits are chopped up into $250,000 increments and placed at various FDIC-insured banks in IntraFi’s network. Banks that accept the deposits are then able to place their own over-the-limit deposits through the network.</p>



<p>“For me it’s being able to retain multigenerational customers that have accounts that will exceed the $250,000 limit,” says Jill Castilla, president of Citizens Bank of Edmond, Oklahoma, which has deposits of about $330 million, 18% of which are “reciprocal” thanks to IntraFi. “So now they don’t have to manually place those funds in different institutions to ensure they have coverage.”</p>



<p>Citizens’ $58 million in reciprocal deposits is not considered brokered by the FDIC but instead fall under the “core” deposit designation. Likewise, if you’re a bank that advertises your CD rates online using services like Bankrate, NerdWallet or Forbes Advisor, the high-rate deposits you bring in from across the nation typically qualify as “core.”</p>



<p>Then there are the multiple, and often confusing, brokered deposit “exemptions” granted by the FDIC to various banks, including those working exclusively with fintechs. FDIC-insured $1.8 billion (assets) Evolve Bank &amp; Trust of Memphis, Tennessee, provides banking services for large fintechs like Dave, Affirm and Mercury, but shows only 0.3% of its deposits are brokered.</p>



<p>Sourcing deposits outside your home market is apparently okay with regulators so long as you avoid broker-dealers like Zage, or UBS, Bank of America or Wells Fargo. Iowa’s Luana Savings Bank, a 115-year-old family-owned bank located in a town of 300 people amid thousands of acres of cornfields, found this out the hard way.</p>



<p>From 2016 to 2020, Luana’s assets more than doubled to $1.7 billion as its ambitious president, David Schultz, became one of Iowa’s biggest agricultural lenders. Luana and its six small branches were unable to attract enough local deposits to fuel its growing business, so Schultz connected with brokers that allowed him to fund his loans with out-of-market CDs with similar maturities. As assets climbed toward $2 billion, brokered deposits accounted for 60% of the total.</p>



<p>Luana’s operating stats have been exemplary, its return on equity averages 19% and it was a perennial winner of Des Moines–area “best bank” awards. Still, alarm bells sounded at the FDIC regional office, and in 2021, it and the Iowa Superintendent of Banks issued a cease-and-desist order claiming Luana was taking “excessive” risks and operating in an “unsafe and unsound” way. It also fined the bank $14.5 million and cut off its access to Federal Home Loan Bank loans. Schultz, who declined to speak to&nbsp;<em>Forbes,</em>&nbsp;told the&nbsp;<em>Des Moines Register</em>&nbsp;at the time that the charges were manufactured, and sued the FHLB.</p>



<p>Ultimately Schultz decided fighting regulators wasn’t worth it, so without admitting or denying the charges, Luana signed a consent order in 2022 and agreed to add independent directors to its board and reduce its reliance on non-core deposits.</p>



<p><strong><abbr>A</abbr>mong banks,</strong>&nbsp;the biggest users of brokered deposits are a small group of FDIC-insured institutions known as industrial banks. There are 24 of them, representing only $250 billion in total assets, but they are extremely well capitalized and profitable&nbsp;<em>(see “Industrial Strength,” below).</em>&nbsp;They are also despised by the ICBA and the Federal Reserve, and barely tolerated by their regulator, the FDIC.</p>



<p>Sometimes referred to as industrial loan companies (ILCs), these banks are FDIC-insured and -regulated, but their parent companies are typically commercial or financial institutions. The first ILC was formed in 1910 to make loans to industrial workers who couldn’t obtain credit elsewhere. Over the years companies like General Electric, Target and Goldman Sachs have owned ILCs. Today their owners include Harley-Davidson, Pitney Bowes, UnitedHealth Group, BMW, Square and USAA. Only a few states, including Utah, Nevada and California, can authorize their charters, and though they’re subject to the same rigorous FDIC application process and examinations as other banks, they’re exempt from Federal Reserve oversight because their parent companies, which are required to support their ILC with capital, aren’t bank holding companies.</p>



<p>Industrial banks can offer savings accounts, credit cards, loans and mortgages, but are prohibited from offering checking accounts or financing their parent company’s products. Pitney Bowes Bank, for example, doesn’t make loans to purchase its postage meter machines, but it can finance and manage shipping payments for its thousands of small-business customers. Industrial banks tend to be specialized and branchless, which is why many rely heavily on brokered certificates of deposit for funding, which they use to match asset maturities.</p>



<hr class="wp-block-separator has-alpha-channel-opacity"/>



<p>One of the most profitable and well-capitalized banks in the nation, Nevada-chartered Beal Bank USA, is an industrial bank owned by Texas billionaire Andy Beal. It has $32 billion in assets and, as of March 31, 93% of its deposits were brokered. It’s currently offering one-year CDs yielding 4.65%.</p>



<p>Toyota Financial Savings Bank is another well-capitalized Nevada ILC, set up to provide savings accounts, mortgages and commercial loans to the company’s 35,000 U.S.-based Toyota and Lexus employees. Under its new chief executive, Mara McNeill, a former JPMorgan Chase auto finance executive—she graduated from the Air Force Academy in 1993 but also has a JD from Georgetown and a master’s in public policy from Harvard—its assets have grown from $1 billion in 2020 to nearly $6 billion, funded to a great extent by broker deposits, which currently stand at 58% of the total.</p>



<p>“It can be economically advantageous to have core deposits. You don’t have as much in fees from the FDIC,” McNeill says. “But at the same time, you’ve gotta pay for the salespeople to go out there and get those accounts. And so, you know, there’s a fee here and a cost there.”</p>



<p>Other successful but little-known industrial banks, all based in Utah, include Comenity, an $12 billion credit card lender; Nelnet, a $1 billion specialist in student loans; and Wex, a $6.5 billion bank offering gasoline charge cards to small and midsize fleets with discounts from refiners like Chevron and Exxon. Until a few years ago, $2 billion Medallion Bank specialized in financing taxicab medallions. But Uber and Lyft forced a hard pivot to lending for recreational vehicles and boats, and financing home contractors. Virtually all its funding comes from brokered deposits. “Our Deposits Don’t Run,” reads a headline on its website.</p>



<p>Industrial banks currently represent about 1% of all bank assets, but the ICBA apparently views them as a dire threat to community banking. In July 2005, when Walmart applied for an industrial bank charter, the ICBA helped orchestrate a tidal wave of thousands of alarming letters to the FDIC and Congress. Their message: Just as Walmart killed mom-and-pop retailing, an industrial bank charter would help it eliminate Main Street banks. In fact, efficiency-minded Walmart merely wanted to streamline credit card processing, saving money on bank fees, and would have been precluded from offering banking services directly to its customers.</p>



<p>The FDIC, under chairman Martin Gruenberg, ignored Walmart’s application. Then, a full year after the retailing giant submitted its forms, the FDIC announced a six-month moratorium on approving all ILC applications, ostensibly to “determine if any emerging safety and soundness or policy issues exist.” Walmart withdrew its application in March 2007, and that six-month moratorium wound up lasting 14 years, until Jelena McWilliams took over as FDIC chairperson and approved Nelnet and Square’s application.</p>



<p>“Martin Gruenberg does not like nontraditional banks. And so they just slow-walked the applications when they hit Washington,” says George Sutton, general counsel for the National Association of Industrial Bankers and Utah’s former commissioner of financial institutions. “Eventually it just goes into a black hole.” (The FDIC declined&nbsp;<em>Forbes’</em>&nbsp;interview requests.)</p>



<p>Banking crises are always about trust and stability, something traditional banks no longer have a monopoly on. Most people now trust Apple and Toyota more than their community bank. The next generation of banking customers care little about charters or regulatory turf wars and are savvy enough to know that hot money offering higher returns, whether from their local bank, fintech or broker, is smart money.</p>


row of people to the bank teller cashier defocused background

Some Like It Hot: Can A Financial ‘Cancer’ From The 1980s Help Prevent Bank Runs?


<h2 class="wp-block-heading" id="h-topline">TOPLINE</h2>



<p>Although AI has become popular in recent months for its ability to perform advanced tasks and make life easier, there’s also increasing concern it can be used negatively, creating racial biases in the fields of healthcare, law enforcement and big tech.</p>



<h2 class="wp-block-heading" id="h-key-facts">KEY FACTS</h2>



<p>Joy Buolamwini, a researcher at MIT,&nbsp;<a href="https://time.com/5520558/artificial-intelligence-racial-gender-bias/" target="_blank" rel="noreferrer noopener">discovered</a>&nbsp;some facial analysis software was unable to detect her face until she covered her dark skin with a white mask, and chalked this up to AI systems’ lacking data as they’re largely trained on white faces.</p>



<p>A major U.S. technology company claimed its facial recognition accuracy rate was 97%, but through her research, Buolamwini&nbsp;<a href="https://news.mit.edu/2018/study-finds-gender-skin-type-bias-artificial-intelligence-systems-0212" target="_blank" rel="noreferrer noopener">found</a>&nbsp;the company’s training set was more than 77% male and 83% white.</p>



<p>A&nbsp;<a href="https://www.hilarispublisher.com/open-access/face-verification-subject-to-varying-age-ethnicity-and-genderdemographics-using-deep-learning-2155-6180-1000323.pdf" target="_blank" rel="noreferrer noopener">report</a>&nbsp;published in the&nbsp;<em>Journal of Biometrics and Biostatistics&nbsp;</em>found Black women between the ages of 18 and 30 are the demographic with the poorest facial recognition accuracy.</p>



<p>A 2022&nbsp;<a href="https://dl.acm.org/doi/pdf/10.1145/3531146.3533138" target="_blank" rel="noreferrer noopener">study</a>&nbsp;conducted by institutions including Johns Hopkins University and the Georgia Institute of Technology programmed AI-trained robots to scan blocks with people’s faces from different races.</p>



<p>After the robots scanned the faces, they were tasked with designating which blocks were criminals—they consistently labeled the blocks with Black faces as criminals.</p>



<h2 class="wp-block-heading" id="h-news-peg">NEWS PEG</h2>



<p>In 2015, Google Photos came under fire after its AI-based search tool pulled images of Black people when the term “gorilla” was searched. After this controversy was revealed, Google stopped its software from categorizing any image as a “gorilla” and&nbsp;<a href="https://www.bbc.com/news/technology-33347866" target="_blank" rel="noreferrer noopener">promised</a>&nbsp;to fix the problem. However, after saving pictures of gorillas and different primates, a recent&nbsp;<em>New York Times&nbsp;</em><a href="https://www.nytimes.com/2023/05/22/technology/ai-photo-labels-google-apple.html" target="_blank" rel="noreferrer noopener">report</a><em>&nbsp;</em>found that the issue hadn’t been fixed, and Google Photos’ software was still programmed to prohibit generating any images categorized as gorillas. It wouldn’t generate images for searches of any primates.</p>



<h2 class="wp-block-heading" id="h-crucial-quote">CRUCIAL QUOTE</h2>



<p>“AI is just software that learns by example,” Reid Blackman, who has advised companies and governments on digital ethics and wrote the book&nbsp;<em>Ethical Machines</em>,&nbsp;<a href="https://www.cnn.com/2023/03/18/politics/ai-chatgpt-racist-what-matters/index.html" target="_blank" rel="noreferrer noopener">told</a>&nbsp;CNN. “So, if you give it examples that contain or reflect certain kinds of biases or discriminatory attitudes . . . you’re going to get outputs that resemble that.”</p>



<h2 class="wp-block-heading" id="h-contra">CONTRA</h2>



<p>According to a Pew Research&nbsp;<a href="https://www.pewresearch.org/short-reads/2023/04/20/most-americans-say-racial-bias-is-a-problem-in-the-workplace-can-ai-help/" target="_blank" rel="noreferrer noopener">poll</a>, 53% of Americans who believe racial and ethnic bias in the workplace is a problem think it would get better if employers used AI more in the hiring process, asserting that AI might potentially be beneficial in fighting against racial bias.</p>



<h2 class="wp-block-heading" id="h-dermatology">DERMATOLOGY</h2>



<p>According to a&nbsp;<a href="https://www.science.org/doi/10.1126/sciadv.abq6147" target="_blank" rel="noreferrer noopener">study</a>&nbsp;published in&nbsp;<em>Science Advances,&nbsp;</em>diagnostic and decision support tools used in dermatology are AI models trained on a dataset of skin tones and skin conditions. However, the dataset the AI is trained on is limited, as it lacks images of uncommon diseases, as well as diverse skin tones. A&nbsp;<a href="https://pubmed.ncbi.nlm.nih.gov/33969523/" target="_blank" rel="noreferrer noopener">study</a>&nbsp;published in the&nbsp;<em>Archives of Dermatological Research&nbsp;</em>found that Covid disproportionately affects non-white ethnic groups. However, the dataset used to train dermatologists included 92% of pictures of Covid skin lesions on fairer skin tones, only 8% showed lesions on more olive skin tones, and none of them included dark skin tones. Because skin conditions show up differently in different skin colors, the need for diverse training is essential. For example, melanoma is rare in African Americans, according to a&nbsp;<em>Journal of the American Academy of Dermatology&nbsp;</em><a href="https://www.jaad.org/article/S0190-9622(03)02091-7/fulltext" target="_blank" rel="noreferrer noopener">report</a>, but because training and education on dark skin tones in the field of dermatology is poor, it’s more likely to go undiagnosed than in white Americans, leading to a drastically lower survival rate. A 2019&nbsp;<a href="https://pubmed.ncbi.nlm.nih.gov/31157429/" target="_blank" rel="noreferrer noopener">study</a>&nbsp;published in the&nbsp;<em>British Journal of Dermatology&nbsp;</em>found 47% of dermatologists felt they weren’t adequately trained to diagnose skin disease in people of color.</p>



<h2 class="wp-block-heading" id="h-big-tech-companies">BIG TECH COMPANIES</h2>



<p>In 2022, Apple was&nbsp;<a href="https://www.usatoday.com/story/tech/2022/12/27/apple-watch-blood-oxygen-oximeter-dark-skin-lawsuit/10955942002/" target="_blank" rel="noreferrer noopener">sued</a>&nbsp;over allegations that the Apple Watch’s blood oxygen sensor was racially biased against those with a darker skin tone. The Blood Oxygen app can measure oxygen levels in the blood by using sensors on the wrist, providing users with insights into their health, the app&nbsp;<a href="https://support.apple.com/en-us/HT211027" target="_blank" rel="noreferrer noopener">claims</a>. The lawsuit points to the Food and Drug Administration’s&nbsp;<a href="https://www.nejm.org/doi/10.1056/NEJMc2029240?url_ver=Z39.88-2003&amp;rfr_id=ori%3Arid%3Acrossref.org&amp;rfr_dat=cr_pub++0pubmed#article_citing_articles" target="_blank" rel="noreferrer noopener">review</a>&nbsp;of pulse oximeter technology created after the Covid pandemic increased its use in hospitals. The review found Black patients were almost three times more likely to have dangerously low blood oxygen levels go undetected by pulse oximetry compared to that of white patients. In an October 2022&nbsp;<a href="https://www.apple.com/healthcare/docs/site/Blood_Oxygen_app_on_Apple_Watch_October_2022.pdf" target="_blank" rel="noreferrer noopener">white paper</a>, Apple acknowledged the potential difficulties that come with pulse oximetry taking measurements on darker skin, but claimed its device “automatically adjusts . . . to ensure adequate signal resolution across the range of human skin tones.” In 2020, Twitter released its&nbsp;<a href="https://www.bbc.com/news/technology-57192898" target="_blank" rel="noreferrer noopener">photo cropping</a>&nbsp;feature, which crops and focuses on photos to allow for a better viewing experience, especially when scrolling through Twitter’s timeline. However, it was soon&nbsp;<a href="https://www.reuters.com/article/global-tech-race-twitter-idUKL5N2GI5R2" target="_blank" rel="noreferrer noopener">revealed</a>&nbsp;that the tool favored white faces, focusing on their faces in the photo preview and only revealing the Black faces when the users clicked to view the full photo. This led Twitter to&nbsp;<a href="https://blog.twitter.com/engineering/en_us/topics/insights/2021/sharing-learnings-about-our-image-cropping-algorithm" target="_blank" rel="noreferrer noopener">research</a>&nbsp;the algorithm, and it found in 2021 that it indeed had racial bias that favored white faces, leading to the company ditching the feature.</p>



<h2 class="wp-block-heading" id="h-law-enforcement">LAW ENFORCEMENT</h2>



<p>Facial recognition software is used in a number of different entities, including on smartphones, for police face recognition, airport passenger screening and employment decisions. However, the AI behind facial recognition has proven to be used to promote a racial bias.&nbsp;<a href="https://sitn.hms.harvard.edu/flash/2020/racial-discrimination-in-face-recognition-technology/" target="_blank" rel="noreferrer noopener">According</a>&nbsp;to Harvard’s Science in the News, police facial recognition software is trained on mugshot data, in which Black people are overrepresented. Racist policing strategies contribute to this, like the New York Police Department maintaining a&nbsp;<a href="https://www.stopspying.org/latest-news/2019/7/23/the-nypds-gang-database-a-new-age-of-stop-and-frisk" target="_blank" rel="noreferrer noopener">database</a>&nbsp;of “gang-affiliated” people made up of 99% Black and Latino people, though there are no requirements to prove these people are gang affiliated, thus incentivizing false reports.&nbsp;<a href="https://www.sciencedirect.com/science/article/abs/pii/S0740624X22000892?via%3Dihub" target="_blank" rel="noreferrer noopener">Research</a>&nbsp;published in&nbsp;<em>Science Direct&nbsp;</em>found law enforcement agencies that use AI-based facial recognition technology disproportionately arrest Black people due to their overwhelming presence in the training dataset.&nbsp;<a href="https://www.ajl.org/facial-recognition-technology" target="_blank" rel="noreferrer noopener">According</a>&nbsp;to the Algorithmic Justice League, “Face surveillance threatens rights including privacy, freedom of expression, freedom of association and due process.” Its controversial use in law enforcement has led to several cities across the country&nbsp;<a href="https://www.eff.org/deeplinks/2022/05/movement-ban-government-use-face-recognition" target="_blank" rel="noreferrer noopener">banning</a>&nbsp;police from using facial recognition.</p>



<h2 class="wp-block-heading" id="h-related-targeting-ethnic-groups">RELATED: TARGETING ETHNIC GROUPS</h2>



<p>Israeli authorities are relying on facial recognition to track Palestinians and restrict their passage through key checkpoints, according to a&nbsp;<a href="https://www.amnesty.org/en/documents/mde15/6701/2023/en/" target="_blank" rel="noreferrer noopener">report</a>&nbsp;by Amnesty International. The software, known as Red Wolf, is used at checkpoints, scanning Palestinians’ faces and using a color-coded system of either green, yellow or red to determine whether to allow them to pass, stop them for questioning or deny entry. This is just the latest example of Israel restricting Palestinians’ freedom of movement as the software heavily focuses on Palestinians, Amnesty argues, and the report calls it an “automated apartheid.” China has also used AI and facial recognition to identify minorities. The country came under fire for using the technology to racially profile the Uyghurs, a vastly Muslim minority group, the&nbsp;<em>New York Times&nbsp;</em><a href="https://www.nytimes.com/2019/04/14/technology/china-surveillance-artificial-intelligence-racial-profiling.html" target="_blank" rel="noreferrer noopener">reports</a>. The facial recognition technology is embedded into China’s widespread network of surveillance cameras and exclusively looks for Uyghurs based on how they look, keeping a record of where they’re coming from—and going to. The U.S. even&nbsp;<a href="https://www.theguardian.com/world/2022/jan/06/china-sensetime-facial-recognition-uyghur-surveillance-us-sanctions" target="_blank" rel="noreferrer noopener">sanctioned</a>&nbsp;SenseTime, China’s largest facial recognition firm, for its alleged role in the surveillance of the Uyghurs.</p>



<h2 class="wp-block-heading" id="h-further-reading">FURTHER READING</h2>



<p><a href="https://www.nytimes.com/2019/04/14/technology/china-surveillance-artificial-intelligence-racial-profiling.html" target="_blank" rel="noreferrer noopener">Google’s Photo App Still Can’t Find Gorillas. And Neither Can Apple’s</a>&nbsp;(New York Times)</p>



<p><a href="https://www.forbes.com/sites/ariannajohnson/2023/04/14/youre-already-using-ai-heres-where-its-at-in-everyday-life-from-facial-recognition-to-navigation-apps/?sh=37c1cfb127ac">You’re Already Using AI: Here’s Where It’s At In Everyday Life, From Facial Recognition To Navigation Apps</a>&nbsp;(Forbes)</p>



<p><a href="https://www.forbes.com/sites/ariannajohnson/2023/04/10/heres-how-to-use-ai-like-chatgpt-and-bard-for-everyday-tasks-like-creating-a-budget-finding-airfare-or-planning-meals/?sh=43627396190d">Here’s How To Use AI—Like ChatGPT And Bard—For Everyday Tasks Like Creating A Budget, Finding Airfare Or Planning Meals</a>&nbsp;(Forbes)</p>



<p><a href="https://www.forbes.com/sites/ariannajohnson/2023/04/25/republicans-share-an-apocalyptic-ai-powered-attack-ad-against-biden-heres-how-to-spot-a-deepfake/?sh=4ac38d717753">Republicans Share An Apocalyptic AI-Powered Attack Ad Against Biden: Here’s How To Spot A Deepfake</a> (Forbes)</p>


Students Working On Computer Assignment During Seminar Group

Racism And AI: Here’s How It’s Been Criticized For Amplifying Bias


<h2 class="wp-block-heading">TOPLINE</h2>



<p>Eric Schmidt, who served as Google’s CEO from 2001 to 2011, said Wednesday that artificial intelligence could cause people to be “harmed or killed” amid possible “existential risks,” adding to concerns from other tech executives over the development of AI.</p>



<h2 class="wp-block-heading">KEY FACTS</h2>



<p>Schmidt, who&nbsp;<a href="https://www.wsj.com/video/events/life-with-ai/F13F8BDE-2AB5-4BA1-9191-997FC338C1AF.html" target="_blank" rel="noreferrer noopener">spoke</a>&nbsp;during the&nbsp;<em>Wall Street Journal</em>’s CEO Council Summit Wednesday, warned AI poses risks that “is defined as many, many, many, many people harmed or killed.”</p>



<p>Schmidt—who also served as the executive chairman of Alphabet from 2015 to 2017—suggested regulations on AI is a “broader question for society,” adding he believes it is unlikely the U.S. will establish a regulatory agency.</p>



<p>Sundar Pichai, CEO of Google and Alphabet,&nbsp;<a href="https://www.ft.com/content/8be1a975-e5e0-417d-af51-78af17ef4b79" target="_blank" rel="noreferrer noopener">wrote</a>&nbsp;in the&nbsp;<em>Financial Times&nbsp;</em>that “AI is the most profound technology humanity is working on today,” adding it is important to “make sure as a society we get it right.”</p>



<p>Twitter CEO Elon Musk and Apple cofounder Steve Wozniak signed a&nbsp;<a href="https://futureoflife.org/open-letter/pause-giant-ai-experiments/" target="_blank" rel="noreferrer noopener">letter</a>&nbsp;in March alongside politician Andrew Yang, Skype cofounder Jaan Tallinn, Pinterest cofounder Evan Sharper and Ripple cofounder Chris Larson, which urged AI labs to “immediately pause” work to slow down an “out-of-control race” to develop the technology.</p>



<p>OpenAI CEO Sam Altman&nbsp;<a href="https://www.youtube.com/watch?v=mL5wI3tkXkw&amp;ab_channel=ABCNews" target="_blank" rel="noreferrer noopener">told</a>&nbsp;ABC News in March that his company was “a little bit scared” over AI’s potential, adding it “will be the greatest technology humanity has yet developed.”</p>



<h2 class="wp-block-heading">CRUCIAL QUOTE</h2>



<p>Schmidt warned, “There are scenarios—not today, but reasonably soon, where these systems will be able to find zero-day exploits in cyber issues, or discover new kinds of biology,” adding, “When that happens, we want to be ready to know how to make sure these things are misused by evil people.”</p>



<h2 class="wp-block-heading">CONTRA</h2>



<p>Billionaire philanthropist Bill Gates has applauded the possible impact AI could have on society, noting he has seen “stunning” advancements in recent months. Microsoft, which Gates founded in 1975, has&nbsp;<a href="https://www.forbes.com/sites/dereksaul/2023/01/23/chatgpt-parent-open-ai-gets-game-changing-multibillion-dollar-boost-from-microsoft/?sh=2f9a49cc3c0c">reportedly</a>&nbsp;invested $10 billion in OpenAI. Gates acknowledged the issues raised in the letter signed by Musk and others in a&nbsp;<a href="https://www.gatesnotes.com/The-Age-of-AI-Has-Begun" target="_blank" rel="noreferrer noopener">blog post</a>, though he noted any social concerns about the technology should be regulated by the government in an effort to ensure it was used for good. Gates also&nbsp;<a href="https://www.forbes.com/sites/anafaguy/2023/03/21/bill-gates-thinks-ai-will-revolutionize-healthcare-for-worlds-poorest/?sh=653e3470d192">suggested</a>&nbsp;AI could be used to improve productivity, reduce global preventable deaths among children and improve inequity in American education.</p>



<h2 class="wp-block-heading">FORBES VALUATION</h2>



<p>Schmidt, who also cofounded the venture capital firm Innovation Endeavors, is worth $20.1 billion, according to our&nbsp;<a href="https://www.forbes.com/profile/eric-schmidt/?sh=6e033446138e">estimates</a>.</p>



<h2 class="wp-block-heading">KEY BACKGROUND</h2>



<p>Schmidt’s warning follows his time on the National Security Commission on Artificial Intelligence, which released a&nbsp;<a href="https://www.nscai.gov/wp-content/uploads/2021/03/Full-Report-Digital-1.pdf" target="_blank" rel="noreferrer noopener">report</a>&nbsp;in 2021 that indicated the U.S. government was “not today prepared for this new technology.” Schmidt also called for increasing the nation’s budget for research and development to $2 billion in 2022, and then doubling contributions until it reached $32 billion in 2026. The White House&nbsp;<a href="https://www.whitehouse.gov/briefing-room/statements-releases/2023/05/04/fact-sheet-biden-harris-administration-announces-new-actions-to-promote-responsible-ai-innovation-that-protects-americans-rights-and-safety/" target="_blank" rel="noreferrer noopener">released</a>&nbsp;a plan earlier this month to tackle possible risks from AI, including $140 million in funding to establish research institutes to drive responsible innovation. Calls for regulating AI have accelerated in recent months following the launch of OpenAI’s ChatGPT late last year. Other companies—including Google—have since released their own iterations of AI chatbots.</p>



<h2 class="wp-block-heading">FURTHER READING</h2>



<p><a href="https://www.forbes.com/sites/roberthart/2023/03/29/elon-musk-and-tech-leaders-call-for-ai-pause-over-risks-to-humanity/?sh=5275dbea6dfc">Elon Musk And Tech Leaders Call For AI ‘Pause’ Over Risks To Humanity</a>&nbsp;(<em>Forbes</em>)</p>



<p><a href="https://www.forbes.com/sites/alexkonrad/2023/02/06/bill-gates-openai-microsoft-ai-hottest-topic-2023/?sh=6a484d444777">Exclusive: Bill Gates On Advising OpenAI, Microsoft And Why AI Is ‘The Hottest Topic Of 2023’</a>&nbsp;(<em>Forbes</em>)</p>



<p><a href="https://www.forbes.com/sites/anafaguy/2023/03/21/google-releases-bard-ai-chatbot-amid-competition-with-chatgpt/?sh=5c5f07bb32b7">Google Releases Bard AI Chatbot Amid Competition With ChatGPT</a> (<em>Forbes</em>)</p>



<p><a href="https://www.forbes.com/sites/tylerroush/"></a></p>



<p><a href="https://www.forbes.com/sites/antoniopequenoiv/2023/05/24/desaster-desantis-roasted-over-botched-twitter-campaign-launch-by-trump-biden-and-more/"></a></p>



<p><a href="https://www.forbes.com/sites/saradorn/2023/05/24/desantis-2024-announcement-blasts-corporate-journalists-and-elites-but-not-trump-in-talk-with-elon-musk/"></a></p>



<p><a href="https://www.forbes.com/sites/antoniopequenoiv/2023/05/24/microsoft-says-china-hackers-targeted-critical-us-infrastructure-in-guam-a-key-military-asset-in-the-pacific/"></a></p>



<p><a href="https://www.forbes.com/sites/saradorn/2023/05/24/desantis-2024-announcement-delayed-by-twitter-glitches/"></a></p>



<p><a href="https://www.forbes.com/sites/mollybohannon/2023/05/24/house-passes-bill-repealing-bidens-student-loan-forgiveness-plan/"></a></p>



<p><a href="https://www.forbes.com/sites/mollybohannon/2023/05/24/dhs-warns-of-potential-attacks-on-government-buildings-minority-groups-and-more-ahead-of-2024-election/"></a></p>



<p><a href="https://www.forbes.com/sites/brianbushard/2023/05/24/us-believes-ukraine-behind-kremlin-drone-attack-report-says/"></a></p>


National Security Commission Holds Conference On Artificial Intelligence

Former Google CEO Warns AI Could Cause People To Be ‘Harmed Or Killed’


<h2 class="wp-block-heading" id="h-topline">TOPLINE</h2>



<p>Netflix users in the U.S. will no longer be able to share accounts with others who don’t live with them, the company&nbsp;<a href="https://about.netflix.com/en/news/update-on-sharing-may-us" target="_blank" rel="noreferrer noopener">announced</a>&nbsp;Tuesday, after the same password crackdown was instituted in four other countries earlier this year.</p>



<h2 class="wp-block-heading" id="h-key-facts">KEY FACTS</h2>



<p>Netflix&nbsp;<a href="https://about.netflix.com/en/news/update-on-sharing-may-us" target="_blank" rel="noreferrer noopener">told</a>&nbsp;U.S. users an “account is for use by one household,” urging subscribers to sign out their accounts on devices that “shouldn’t” have access to the user’s account, and set a primary location for the account.</p>



<p>Netflix users who want to share their account with someone outside their household can either pay $7.99 for a “sub account” or they can transfer a profile to a new membership that someone else pays for—a move that would allow users to keep their watch history and saved list.</p>



<p>Users will still be able to watch Netflix from their personal devices or log into new TVs at hotels or other locations, the company&nbsp;<a href="https://about.netflix.com/en/news/update-on-sharing-may-us" target="_blank" rel="noreferrer noopener">said</a>.</p>



<h2 class="wp-block-heading" id="h-key-background">KEY BACKGROUND</h2>



<p>Earlier this year, Netflix&nbsp;<a href="https://about.netflix.com/en/news/an-update-on-sharing" target="_blank" rel="noreferrer noopener">announced</a>&nbsp;it was instituting password-sharing restrictions in Canada, New Zealand, Portugal and Spain. At the time, Netflix said similar measures would be coming to the U.S. in the coming months. Netflix began testing paid sharing, with the same restrictions U.S. users will now face, in its Latin America market last year. Netflix is one of the first major streaming services to start cracking down on password sharing, in a move likely prompted by&nbsp;<a href="https://www.forbes.com/sites/marisadellatto/2022/08/09/netflix-loses-subscribers-as-disney-catches-up-heres-how-the-major-streaming-services-are-faring-so-far-this-year/?sh=2f446c22a1c4">last year’s</a>&nbsp;loss of subscribers and the need for additional revenue.</p>



<h2 class="wp-block-heading" id="h-big-number">BIG NUMBER</h2>



<p><strong>100 million.</strong>&nbsp;As of February, that’s how many households share their passwords, Netflix&nbsp;<a href="https://about.netflix.com/en/news/an-update-on-sharing" target="_blank" rel="noreferrer noopener">said</a>.</p>



<p>Forbes Daily: Get our best stories, exclusive reporting and essential analysis of the day’s news in your inbox every weekday.Sign Up</p>



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<h2 class="wp-block-heading" id="h-further-reading">FURTHER READING</h2>



<p><a href="https://www.forbes.com/sites/anafaguy/2023/02/08/netflix-password-crack-down-begins-in-canada-new-zealand-portugal-spain/?sh=3ff300a22f34">Netflix Password Crack Down Begins In Canada, New Zealand, Portugal, Spain</a>&nbsp;(Forbes)</p>



<p><a href="https://www.forbes.com/sites/anthonytellez/2023/02/02/netflixs-password-sharing-crackdown-and-what-amazon-prime-hulu-others-are-doing-explained/?sh=61031c7d56ea">Netflix’s Password Sharing Crackdown—And What Amazon Prime, Hulu, Others Are Doing—Explained</a>&nbsp;(Forbes)</p>



<p><a href="https://www.forbes.com/sites/marisadellatto/2022/08/09/netflix-loses-subscribers-as-disney-catches-up-heres-how-the-major-streaming-services-are-faring-so-far-this-year/?sh=2f446c22a1c4">Netflix Loses Subscribers As Disney+ Catches Up: Here’s How The Major Streaming Services Are Faring So Far This Year</a>&nbsp;(Forbes)</p>



<p><em>CORRECTION (5/23): This story has been updated to clarify that Netflix users will not have to set a primary location and to clarify that users will not need one-time access codes to log into Netflix from other locations.</em></p>


In this photo illustration the Netflix logo seen displayed

Netflix Starts Long-Awaited Password-Sharing Crackdown—Here’s How


<h2 class="wp-block-heading" id="h-topline">TOPLINE</h2>



<p>Facebook’s parent Meta has been ordered to pay a record $1.3 billion (€1.2 billion) fine by the European Union, for failing to adhere to the bloc’s stringent privacy rules, in the latest severe financial penalty handed to an American tech giant by the EU.</p>



<h2 class="wp-block-heading" id="h-key-facts">KEY FACTS</h2>



<p>The ruling was&nbsp;<a href="https://www.dataprotection.ie/en/news-media/press-releases/Data-Protection-Commission-announces-conclusion-of-inquiry-into-Meta-Ireland" target="_blank" rel="noreferrer noopener">issued</a>&nbsp;by the Irish Data Protection Commission, Meta’s chief regulator in the EU, as the company’s regional headquarters are located in Dublin.</p>



<p>The amount is the largest fine issued under the European Union’s General Data Protection Regulation, which has previously snagged the likes of Amazon and Google.</p>



<p>The Irish DPC said its investigation into Meta found that the company failed to address the risks to “the fundamental rights and freedoms” of EU citizens whose data it was transferring to the U.S.</p>



<p>Aside from the record fine, the regulator has ordered Meta to suspend “any future transfer of personal data” to the U.S. within the next five months.</p>



<p>Meta also has been given six months to stop the “unlawful processing” and storage of personal data of EU residents in the U.S.</p>



<p>In a lengthy blog post, Meta’s chief legal officer Jennifer Newstead and top spokesperson Nick Clegg said the penalty is “flawed” and “unjustified,” setting a “dangerous precedent for the countless other companies transferring data between the EU and US.”</p>



<h2 class="wp-block-heading" id="h-key-background">KEY BACKGROUND</h2>



<p>The Irish DPC’s decision is part of a wider tussle between the European Union and American tech companies over cross-border data flows. Tech companies have long argued that the free flow of data across borders is essential for a global internet and attempts to prevent this will fragment the web and dramatically raise costs. In 2020, the European Court of Justice canceled a data flow agreement between the U.S. and the EU due to concerns over the surveillance practices of U.S. law enforcement and intelligence agencies. Since then, American and European officials have been working together to come up with a new data flow agreement, which is expected to be finalized later this year. U.S. tech giants, left in legal limbo in the meantime, have relied on alternate methods to transfer data, including something called standard contractual clauses (SCCs). The DPC’s investigation, however, found that Meta’s use of the SCCs failed to mitigate the risks identified by the European top court’s ruling.</p>



<h2 class="wp-block-heading" id="h-surprising-fact">SURPRISING FACT</h2>



<p>In its statement, the DPC said it disagreed with the fine imposed on Meta, but it was forced to go ahead with it due to a decision by the pan-EU European Data Protection Board (EDPB). The EDPB’s intervention came after the DPC’s original ruling in the case—which only suspended Facebook’s data flows—faced opposition from four other national regulators in the bloc, who demanded a monetary fine.</p>



<h2 class="wp-block-heading" id="h-tangent">TANGENT</h2>



<p>New York-listed shares of Meta actually rose 2.5% in early trading, hovering near a 15-month high.</p>



<h2 class="wp-block-heading" id="h-further-reading">FURTHER READING</h2>



<p><a href="https://www.bloomberg.com/news/articles/2023-05-22/meta-fined-record-1-3-billion-in-eu-over-us-data-transfers?leadSource=uverify+wall" target="_blank" rel="noreferrer noopener">Meta Fined Record €1.2 Billion in EU Over US Data Transfers</a>&nbsp;(Bloomberg)</p>



<p></p>


Facebook Covers Sign At Menlo Park Headquarters

Meta Fined Record $1.3 Billion For Violating EU Privacy Rules


<h2 class="wp-block-heading" id="h-topline">TOPLINE</h2>



<p>Instagram has been secretly testing a text-based app similar to Twitter for months with celebrities and influencers and is preparing to launch it as early as June, Bloomberg&nbsp;<a href="https://www.bloomberg.com/news/articles/2023-05-19/instagram-readies-twitter-competitor-for-summer-release?srnd=premium&amp;leadSource=uverify%20wall" target="_blank" rel="noreferrer noopener">reported</a>&nbsp;Friday, as some people look to leave Twitter due to changes made under CEO Elon Musk.</p>



<h2 class="wp-block-heading" id="h-key-facts">KEY FACTS</h2>



<p>The app will be separate from Instagram—which is owned by Meta—though users will be able to connect their accounts and follow all of the people they follow on Instagram on the new app with just one click, according to a&nbsp;<a href="https://twitter.com/liahaberman/status/1659553280891179010/photo/1" target="_blank" rel="noreferrer noopener">screenshot</a>&nbsp;posted by Lia Haberman, professor of social and influencer marketing at UCLA and author of the newsletter&nbsp;<a href="https://liahaberman.substack.com/" target="_blank" rel="noreferrer noopener">ICYMI</a>.</p>



<p>The app may eventually be compatible with others attempting to appeal to former Twitter users—including Mastodon—according to Haberman’s screenshot, which says users on Mastodon will “soon” be able to follow and interact with posts on Meta’s new platform without needing to create a new account.</p>



<p>Haberman said users will be able to post up to 500 characters of text, along with images and pictures.</p>



<p>Meta has been testing the new app secretly with celebrities and influencers for months, people familiar with the project told Bloomberg.</p>



<h2 class="wp-block-heading" id="h-key-background">KEY BACKGROUND</h2>



<p>In March, Money Control first&nbsp;<a href="https://www.platformer.news/p/meta-is-building-a-decentralized" target="_blank" rel="noreferrer noopener">reported</a>&nbsp;that Meta was exploring the creation of a social network for text updates to compete with Twitter. Shortly after that, Meta officials&nbsp;<a href="https://www.platformer.news/p/meta-is-building-a-decentralized" target="_blank" rel="noreferrer noopener">told</a>&nbsp;Platformer they “believe there’s an opportunity for a separate space where creators and public figures can share timely updates about their interests.” Many users have been looking for an alternative to Twitter since billionaire Elon Musk took over in October 2022 and began quickly making changes to the platform ranging from&nbsp;<a href="https://www.forbes.com/sites/mollybohannon/2023/05/12/heres-how-twitters-appearance-has-changed-under-elon-musk/?sh=75eb23385f68">adding</a>&nbsp;an algorithm-driven “For You” page to charging people to be verified and get access to features like an edit button. Mastodon launched shortly after Musk bought Twitter, offering a similar&nbsp;<a href="https://joinmastodon.org/" target="_blank" rel="noreferrer noopener">platform</a>&nbsp;but with “no algorithms or ads to waste your time.” But it doesn’t seem that platform is filling the need.&nbsp;<em>Wired</em>&nbsp;<a href="https://www.wired.com/story/the-mastodon-bump-is-now-a-slump/" target="_blank" rel="noreferrer noopener">reported</a>&nbsp;that Mastodon’s number of active users had fallen to 1.4 million at the end of January—dropping by more than one million—since people flocked to it in November 2022.</p>



<h2 class="wp-block-heading" id="h-tangent">TANGENT</h2>



<p>A recent&nbsp;<a href="https://www.pewresearch.org/short-reads/2023/05/17/how-us-adults-on-twitter-use-the-site-in-the-elon-musk-era/" target="_blank" rel="noreferrer noopener">study</a>&nbsp;by Pew Research Center found that while people are still logging on Twitter, the most active Twitter users are posting about 25% less after Musk’s acquisition. The study also found that six in 10 Americans who used Twitter in the past year&nbsp;<a href="https://www.pewresearch.org/short-reads/2023/05/17/majority-of-us-twitter-users-say-theyve-taken-a-break-from-the-platform-in-the-past-year/" target="_blank" rel="noreferrer noopener">reported</a>&nbsp;taking a break from the platform, and 25% of respondents said they aren’t likely to be on the platform one year from now.</p>



<h2 class="wp-block-heading" id="h-further-reading">FURTHER READING</h2>



<p><a href="https://www.bloomberg.com/news/articles/2023-05-19/instagram-readies-twitter-competitor-for-summer-release?srnd=premium&amp;leadSource=uverify%20wall" target="_blank" rel="noreferrer noopener">Instagram Readies Twitter Competitor for Summer Release</a>&nbsp;(Bloomberg)</p>



<p><a href="https://www.forbes.com/sites/mollybohannon/2023/05/12/heres-how-twitters-appearance-has-changed-under-elon-musk/?sh=75eb23385f68">Here&#8217;s How Twitter&#8217;s Appearance Has Changed Under Elon Musk</a>&nbsp;(<em>Forbes</em>)</p>



<p><a href="https://www.forbes.com/sites/mollybohannon/"></a><strong><em>By Molly Bohannon, Forbes Staff</em></strong></p>


In this photo illustration the Instagram logo seen displayed

Instagram Is Preparing A Twitter-Like App To Be Launched This Summer, Report Says


<h2 class="wp-block-heading" id="h-topline">TOPLINE</h2>



<p>A panel of independent experts on Thursday <a href="https://www.pfizer.com/news/press-release/press-release-detail/fda-advisory-committee-votes-support-approval-pfizers" target="_blank" rel="noreferrer noopener">recommended</a> the Food and Drug Administration approve an RSV vaccine by Pfizer designed to protect babies by vaccinating pregnant parents, potentially paving the way for the first RSV shot for infants—weeks after the agency approved the country’s first shot for the common but potentially deadly infection.</p>



<h2 class="wp-block-heading" id="h-key-facts">KEY FACTS</h2>



<p>The FDA panel voted unanimously (14-0) on the drug’s effectiveness, and 10 of the advisory board’s 14 members voted that the vaccine—known as Abrysvo—is safe, with some members flagging a&nbsp;<a href="https://www.cnn.com/2023/05/18/health/rsv-vaccine-newborns-fda/index.html" target="_blank" rel="noreferrer noopener">slightly higher rate</a>&nbsp;of preterm births among vaccine recipients.</p>



<p>RSV, which stands for respiratory syncytial virus, is a common respiratory infection that typically causes mild illness in healthy adults but can trigger severe, possibly fatal, disease in younger children, older adults and those with underlying medical issues.</p>



<p>As protective antibodies can be passed from mother to developing fetus, the maternal shot, given to pregnant people between 24 and 36 weeks of pregnancy, also protects children in their first months of life.</p>



<p>Evidence from Pfizer’s late stage clinical trial, which included nearly 7,400 pregnant people, indicated the shot was 82% effective at preventing severe disease for the first three months after birth and 69% for the first six months.</p>



<p>The shot was also 51% effective at preventing doctor’s visits for RSV-related illness within the first six months of life, the trial found.</p>



<p>Safety data for the shot is also “generally favorable,” the FDA said in briefing&nbsp;<a href="https://www.fda.gov/advisory-committees/advisory-committee-calendar/vaccines-and-related-biological-products-advisory-committee-may-18-2023-meeting-announcement#event-materials" target="_blank" rel="noreferrer noopener">documents</a>&nbsp;released ahead of the meeting, with relatively standard side effects reported like injection site pain, muscle pain and headaches.</p>



<h2 class="wp-block-heading" id="h-what-to-watch-for">WHAT TO WATCH FOR</h2>



<p>The FDA still has to approve the vaccine and a decision is likely still months away. The agency does not have to follow its advisors’ recommendations but it almost always does and the panel’s decision will carry considerable weight. Further down the line, Pfizer is also seeking FDA approval for its RSV shot to be used in older adults. A number of other companies are also in the process of completing late-stage trials for shots of their own and the FDA is in the process of reviewing an antibody injection to protect infants from RSV that is being jointly developed by European pharma heavyweights Sanofi and AstraZeneca. The European Union’s regulator, the European Medicines Agency, has already signed off on the preventative shot.</p>



<h2 class="wp-block-heading" id="h-what-we-don-t-know">WHAT WE DON’T KNOW</h2>



<p>From the analysis in its briefing, the FDA was keen to hear its advisors’ thoughts on the number of premature births observed in Pfizer’s trials. While the agency’s analysts note the overall incidence of preterm births in the trial—both for vaccine and placebo recipients—was lower than the background rates in all countries where the study was conducted, there was a slightly higher rate among vaccine recipients. This difference, 5.7% in vaccinated pregnant people versus 4.7% in the placebo group (the overall U.S.&nbsp;<a href="https://www.cdc.gov/reproductivehealth/features/premature-birth/index.html" target="_blank" rel="noreferrer noopener">rate</a>&nbsp;is around 10%), was not statistically significant and it is not clear whether the vaccine played a role. The issue is salient, however, and the prospect of preterm births will have already loomed large in the minds of the FDA’s advisors and officials after Pfizer’s rival GlaxoSmithKline (GSK)&nbsp;<a href="https://www.fiercebiotech.com/biotech/advantage-pfizer-gsk-stops-phase-3-trials-maternal-rsv-vaccine-after-seeing-safety-signal" target="_blank" rel="noreferrer noopener">halted</a>&nbsp;its own trials of a maternal RSV vaccine after noticing concerning early data&nbsp;<a href="https://www.bmj.com/content/381/bmj.p1021" target="_blank" rel="noreferrer noopener">involving</a>&nbsp;preterm births and neonatal deaths.</p>



<h2 class="wp-block-heading" id="h-news-peg">NEWS PEG</h2>



<p>The FDA&nbsp;<a href="https://www.forbes.com/sites/mollybohannon/2023/05/03/fda-approves-first-ever-rsv-vaccine-after-brutal-2022-season/?sh=9bb0aca10b2b">approved</a>&nbsp;an RSV shot from GSK in early May. The agency’s green light marked the culmination of decades of hard work from scientists and followed numerous&nbsp;<a href="https://www.nature.com/articles/d41586-022-04434-5" target="_blank" rel="noreferrer noopener">setbacks</a>. It also marked a major coup for GSK, whose shot, Arexvy, beat out stiff competition from an increasingly crowded&nbsp;<a href="https://www.forbes.com/sites/ariannajohnson/2023/04/06/first-fda-approved-rsv-vaccines-expected-later-this-year-the-top-vaccines-and-their-effectiveness/?sh=3c1103815f81">field</a>&nbsp;that includes the likes of Pfizer, Moderna and Johnson &amp; Johnson. If approved, Pfizer’s shot will still mark an important milestone, however, as GSK&#8217;s vaccine is targeted towards older adults ages 60 and up.</p>



<h2 class="wp-block-heading" id="h-key-background">KEY BACKGROUND</h2>



<p>RSV is a very&nbsp;<a href="https://www.forbes.com/sites/roberthart/2022/10/28/rsv-infections-are-spiking-among-kids-and-swamping-childrens-hospitals---heres-what-parents-need-to-know/?sh=3b6d8f5c42f5">common respiratory virus</a>&nbsp;and it infects&nbsp;<a href="https://www.cdc.gov/rsv/high-risk/infants-young-children.html" target="_blank" rel="noreferrer noopener">almost all</a>&nbsp;people by the time they are two years old. Healthy adults will typically experience nothing more than mild, cold-like symptoms like a runny nose, coughing and fever,&nbsp;<a href="https://www.cdc.gov/rsv/about/symptoms.html" target="_blank" rel="noreferrer noopener">according</a>&nbsp;to the CDC, and barring any other health issues most will quickly and easily recover. Infection can be more deadly for other groups, however, most notably very young infants, older adults and people with conditions like weakened immune systems. In such people, RSV can be lethal. In young children in the U.S., complications from RSV&nbsp;<a href="https://www.cdc.gov/rsv/research/index.html?CDC_AA_refVal=https%3A%2F%2Fwww.cdc.gov%2Frsv%2Fresearch%2Fus-surveillance.html" target="_blank" rel="noreferrer noopener">kill</a>&nbsp;between 100 and 300 young children every year and hospitalizes many more. The danger is particularly acute for very young infants, particularly in the first months and years of life, as inflammation and mucus triggered by the infection can be enough to block already small airways. In the U.S., RSV is a much more serious concern among older adults and is&nbsp;<a href="https://www.cdc.gov/rsv/research/us-surveillance.html" target="_blank" rel="noreferrer noopener">responsible</a>&nbsp;for 14,000 deaths in people aged 65 years and over each year.</p>



<h2 class="wp-block-heading" id="h-surprising-fact">SURPRISING FACT</h2>



<p>After malaria, RSV is the&nbsp;<a href="https://academic.oup.com/cid/article/73/Supplement_3/S229/6362482" target="_blank" rel="noreferrer noopener">biggest</a>&nbsp;<a href="https://vk.ovg.ox.ac.uk/vk/rsv" target="_blank" rel="noreferrer noopener">killer</a>&nbsp;of young infants worldwide. In 2017 the World Health Organization estimated RSV results in more than 3 million hospitalisations and nearly 60,000 deaths in children under five years old annually. Children under six months accounted for nearly half of this figure.</p>



<h2 class="wp-block-heading" id="h-further-reading">FURTHER READING</h2>



<p><a href="https://www.forbes.com/sites/roberthart/2023/02/21/first-rsv-vaccine-for-kids-given-to-pregnant-moms-could-arrive-months-early-as-fda-fast-tracks-review/?sh=30e7adc1a281">First RSV Vaccine For Kids—Given To Pregnant Moms—Could Arrive Months Early As FDA Fast-Tracks Review</a>&nbsp;(Forbes)</p>



<p><a href="https://www.nature.com/articles/d41586-023-00212-z" target="_blank" rel="noreferrer noopener">Will a new wave of RSV vaccines stop the dangerous virus?</a>&nbsp;(Nature)</p>



<p><a href="https://www.forbes.com/sites/ariannajohnson/2023/02/17/first-fda-approved-rsv-vaccines-expected-later-this-year-the-top-vaccines-and-their-effectiveness/?sh=62990cd87fc1">First FDA-Approved RSV Vaccines Expected Later This Year: The Top Vaccines And Their Effectiveness</a> (Forbes)</p>



<p><strong><em>By Robert Hart, Forbes Staff</em></strong></p>


Human respiratory syncytial virus inoculation

RSV Vaccine: FDA Advisors Recommend Pfizer Shot To Protect Infants From Infection—Here’s What To Know


<p>After two months of testing its new natural language-based AI tool&nbsp;<a href="https://www.forbes.com/sites/rashishrivastava/2023/03/16/microsoft-announces-new-ai-powered-tools-for-its-office-apps/?sh=5edc5d075bce">Copilot</a>&nbsp;with 20 large companies, Microsoft announced an expanded preview of the feature on Tuesday for 600 customers, widening access to a tool embedded in its Office application that was initially met with&nbsp;<a href="https://www.theverge.com/2023/3/17/23644501/microsoft-copilot-ai-office-documents-microsoft-365-report" target="_blank" rel="noreferrer noopener">reviews as a game-changer</a>.</p>



<p>The “early access” program will be invitation only and a paid preview that requires an additional fee, said Jared Spataro, Microsoft’s corporate vice president for modern work, who would not share when the tech giant planned to roll out the program more widely to its full customer base, even though “the demand to me seems almost bottomless right now,” Spataro said in an interview with&nbsp;<em>Forbes</em>. “I don’t talk to a customer right now that isn’t interested in it.” The company said it is not disclosing pricing externally.</p>



<p>Spataro said early customers reported Copilot’s meeting tools—the ability to summarize what happened in a missed meeting and act as a real-time assistant while a meeting is going on—have been most frequently cited by early customers as particularly useful. In a blog post, he also identified early feedback Microsoft has gotten on the tool, such as the need for more conversational, multi-step interactions with Copilot.</p>



<p>Asked about concerns that generative AI tools might&nbsp;<a href="https://news.bloomberglaw.com/ip-law/chatgpt-poised-to-expose-corporate-secrets-cyber-firm-warns" target="_blank" rel="noreferrer noopener">expose</a>&nbsp;corporate secrets or customer information—with some employers even instituting&nbsp;<a href="https://www.bloomberg.com/news/articles/2023-05-02/samsung-bans-chatgpt-and-other-generative-ai-use-by-staff-after-leak" target="_blank" rel="noreferrer noopener">bans</a>&nbsp;of ChatGPT’s use following leaks of sensitive data—Spataro said Copilot does not use corporate users’ data to “train” the larger model.</p>



<p>“Everything that happens related to large language models and the use of AI happens within what we call a ‘tenant boundary’” in the Microsoft Cloud, Spataro says. “No data ever leaves your ‘tenant’ and no data is ever used to train the large language models. Even those statements give us a really good foundation with most customers.”</p>



<p>The company, which purchased an exclusive license to the underlying technology behind ChatGPT&nbsp;<a href="https://blogs.microsoft.com/blog/2020/09/22/microsoft-teams-up-with-openai-to-exclusively-license-gpt-3-language-model/" target="_blank" rel="noreferrer noopener">in 2020</a>, also announced a new “semantic index” capability that will require Microsoft 365 users to have its E3 and E5 versions to access Copilot’s capabilities. Rather than finding files by title names or keywords, Microsoft says the feature maps data and uses a conceptual understanding of the data to retrieve it.</p>



<p>Microsoft also announced new features on Copilot such as integrating DALL-E, OpenAI’s image generator, into PowerPoint and adding AI-powered coaching tips in Outlook to improve email writing, an enhancement that could help workers struggling with the “digital debt” phenomenon Microsoft identified in its<strong>&nbsp;</strong>annual&nbsp;<a href="https://www.microsoft.com/en-us/worklab/work-trend-index" target="_blank" rel="noreferrer noopener">Work Trend Index</a>, the results of which it also released Tuesday.</p>



<p>The report, which surveyed 31,000 people in 31 countries and analyzed data from Microsoft 365, found that 68% of respondents said they don’t have enough uninterrupted time during the workday to focus. It also found that nearly 60% of users’ time spent in Microsoft 365 is using communication tools like Outlook or Teams, with just over 40% being used for actually producing work with tools like Excel or Word. The heaviest email users, the analysis found, spend nearly nine hours a week on email, while the most prolific Teams users spend 7.5 hours a week in meetings.</p>



<p>Respondents cited ineffective meetings—not too many meetings—as their biggest obstacle to productivity in the survey. Microsoft, of course, hopes its customers will add on AI features that will help change that. “What many people are feeling now is it takes work to do work,” Spataro says.</p>



<p><a href="https://www.forbes.com/sites/jenamcgregor/"></a><em><strong>By Jena McGregor, Forbes Staff</strong></em></p>


Logo Photo Illustration

Microsoft Expands Copilot AI Tool To 600 Customers In Paid Preview As ‘Digital Debt’ Weighs On Workers


<h2 class="wp-block-heading" id="h-topline">TOPLINE</h2>



<p>Stocks gained Wednesday thanks in part to another artificial intelligence-powered lift, as optimism emanating from the nascent technology keeps driving equities higher against a suboptimal macroeconomic backdrop.</p>



<h2 class="wp-block-heading" id="h-key-facts">KEY FACTS</h2>



<p>The Dow Jones Industrial Average, S&amp;P 500 and tech-heavy Nasdaq each rose 1.2% or more Wednesday, just the third time that happened since the beginning of April.</p>



<p>Yet again driving the gains were tech heavyweights, as Tesla (up 4.4%), Nvidia (3.4%), Amazon 1.8%), Meta (1.5%), Alphabet (1.3%), Microsoft (0.9%) and Apple (0.3%) spiked, tacking on a combined $123 billion in market capitalization Wednesday.</p>



<p>Those giants, which have rallied more than $1 trillion year-to-date collectively thanks in large part to the AI boom, offered more fuel for optimistic investors Wednesday, with Amazon&nbsp;<a href="https://www.bloomberg.com/news/articles/2023-05-17/amazon-unveils-new-alexa-gadgets-as-chatgpt-rivalry-heats-up" target="_blank" rel="noreferrer noopener">announcing</a>&nbsp;AI enhancements to its Alexa devices and Nvidia&nbsp;<a href="https://nvidianews.nvidia.com/news/servicenow-and-nvidia-announce-partnership-to-build-generative-ai-across-enterprise-it" target="_blank" rel="noreferrer noopener">unveiling</a>&nbsp;a new partnership with ServiceNow to expand generative AI in cloud computing.</p>



<p>Hedge fund billionaire Steve Cohen declared Tuesday he has a “pretty bullish” outlook on the market as a whole thanks to streamlined corporate efficiency from AI,&nbsp;<a href="https://www.bloomberg.com/news/articles/2023-05-17/steve-cohen-says-he-s-pretty-bullish-on-markets-thanks-to-ai?srnd=premium" target="_blank" rel="noreferrer noopener">according</a>&nbsp;to Bloomberg.</p>



<p>“I’m making a prognostication: We’re going up,” Cohen said about broad equity prices, explaining increased automation should widen corporate profits in coming quarters.</p>



<h2 class="wp-block-heading" id="h-contra">CONTRA</h2>



<p>The S&amp;P is up 9% year-to-date and excitement about what AI could mean for investors is at a&nbsp;<a href="https://www.forbes.com/sites/dereksaul/2023/03/01/ai-is-the-new-electricity-bank-of-america-picks-20-stocks-to-cash-in-on-chatgpt-hype/?sh=55bfdf2a77ac">fever pitch</a>, but stocks will encounter a “rocky road” later this year, Wells Fargo strategist Scott Wren wrote in a Wednesday note to clients. Wren explained the strong likelihood of the U.S.&nbsp;<a href="https://www.forbes.com/sites/dereksaul/2023/04/12/fed-officials-now-expect-us-will-enter-mild-recession-this-year-after-banking-crisis-rattles-markets/?sh=5433b921107c">slipping into</a>&nbsp;a recession and his expectation that companies will fail to deliver on profit expectations thanks to thinner margins as interest rates remain high. Earnings for S&amp;P companies declined by 6.8% year-over-year in the most recent quarter, according to recent Morgan Stanley research.</p>



<h2 class="wp-block-heading" id="h-tangent">TANGENT</h2>



<p>Tesla, which hosted its annual meeting with shareholders after Tuesday’s market close, posted its second-largest daily stock gain since March, tacking on $25 billion in market value after it said it will advertise its vehicle for the first time and its CEO Elon Musk vowed to remain in charge for the foreseeable future. Musk, who&nbsp;<a href="https://www.forbes.com/sites/dereksaul/2023/05/16/elon-musks-attack-on-george-soros-distressing-and-dangerous-jewish-group-says/?sh=7ad31cc130ba">drew the ire</a>&nbsp;of several Jewish civil rights groups this week for touting conspiracies mirroring antisemitic tropes about billionaire George Soros, added the most to his net worth of anybody on earth Wednesday with a $5 billion bump.</p>



<h2 class="wp-block-heading" id="h-forbes-valuations">FORBES VALUATIONS</h2>



<p>Musk holds the second-largest fortune in the world at $181 billion, while Cohen is owner of the planet’s 93rd-largest wealth pile at $17.5 billion. Cohen chairs Point72 Asset Management and owns the New York Mets MLB team.</p>



<h2 class="wp-block-heading" id="h-key-background">KEY BACKGROUND</h2>



<p>Since the late 2022 launch of the Microsoft-subsidized ChatGPT generative AI product, AI fever has infected Wall Street; Bank of America strategists dubbed AI the “new electricity” in a March note, projecting it to create massive gains for stocks. A slew of technology companies have revealed their own AI services, but&nbsp;<a href="https://www.forbes.com/sites/jonathanponciano/2023/04/29/this-stock-market-indicator-is-the-weakest-its-ever-been-and-other-warning-signs-are-flaring/?sh=162f37947b4c">benefitting the most</a>&nbsp;are mega-cap tech stocks like Nvidia, Meta, Alphabet and Amazon, four of the 20 best-performing stocks on the S&amp;P year-to-date.</p>



<h2 class="wp-block-heading" id="h-further-reading">FURTHER READING</h2>



<p><a href="https://www.forbes.com/sites/dereksaul/2023/03/01/ai-is-the-new-electricity-bank-of-america-picks-20-stocks-to-cash-in-on-chatgpt-hype/?sh=55bfdf2a77ac">‘AI Is The New Electricity’: Bank Of America Picks 20 Stocks To Cash In On ChatGPT Hype</a> (<em>Forbes</em>)</p>



<p><a href="https://www.forbes.com/sites/dereksaul/"></a><strong><em>By Derek Saul, Forbes Staff</em></strong></p>


Markets Open After Falling More 800 Points On Tuesday

Dow Jumps 400 Points As This Billionaire Investor Says Stock Market Has Room To Grow


<h2 class="wp-block-heading" id="h-topline">TOPLINE</h2>



<p>The sister of a Saudi activist who was imprisoned in 2018 sued Twitter on Tuesday for allowing its employees to give private information identifying anonymous users to the Saudi government, which allegedly used the data to target and arrest dissidents—the latest allegation of Saudi government operatives using Twitter to spy.</p>



<h2 class="wp-block-heading" id="h-key-facts">KEY FACTS</h2>



<p>Areej Al-Sadhan, an American citizen, filed the case against Twitter and several Saudi officials in federal court in San Francisco on behalf of her brother, Abdulrahman Al-Sadhan, who was arrested in 2018 and is serving a 20 year sentence in Saudi Arabia for dissent against the current regime.</p>



<p>Al-Sadhan alleges Twitter gave identifying information about her brother to the Saudi government, which she said “blatantly violates” the social media company’s terms and conditions and “puts every Twitter user at risk.”</p>



<p>Her brother worked for the Red Crescent, a Red Cross-like aid group that operates in most Muslim countries, and allegedly&nbsp;<a href="https://www.uscirf.gov/religious-prisoners-conscience/forb-victims-database/abdulrahman-al-sadhan" target="_blank" rel="noreferrer noopener">ran anonymous Twitter accounts</a>&nbsp;mocking government officials and religious clerics before he was sentenced to prison in 2021, according to the U.S. Commission on International Religious Freedom.</p>



<p>In addition to sharing information about her brother, Al-Sadhan claims Twitter allowed Saudi officials to access information on “thousands” of anonymous users, most of whom posted “critical or embarrassing information” about the Saudi regime, over a seven-month period in 2014 to 2015.</p>



<p><em>Forbes</em>&nbsp;reached out to the Saudi embassy in Washington, D.C., for comment.</p>



<h2 class="wp-block-heading" id="h-key-background">KEY BACKGROUND</h2>



<p>Tuesday’s lawsuit builds on the August 2022&nbsp;<a href="https://www.forbes.com/sites/joewalsh/2022/08/09/ex-twitter-employee-convicted-of-sending-private-data-to-saudi-government/?sh=42db68ed0626">conviction</a>&nbsp;of former Twitter manager Ahmad Abouamm, who was allegedly recruited by the Saudi government to use his insider knowledge to share personal information of dissidents. Social networks like Twitter and Facebook played a major role during the Arab Spring, a youth uprising against governments in the Middle East and North Africa between 2010 and 2012. Its main purpose was facilitating communication among participants of the mass protests during that time. “Once the chosen platform for Arab youth revolutionizing to liberate their countries from despotic leadership during the Arab Spring, [Twitter]enabled its co-conspirators in the Saudi Criminal Enterprise to crush that very dissent,” Al-Sadhan’s lawsuit says.</p>



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<h2 class="wp-block-heading" id="h-surprising-fact">SURPRISING FACT</h2>



<p>Billionaire Saudi Prince Alwaleed bin Talal is the&nbsp;<a href="https://fortune.com/2022/10/28/elon-musk-twitter-shareholder-alwaleed-bin-talal-binance-morgan-stanley/" target="_blank" rel="noreferrer noopener">second-largest shareholder</a>&nbsp;in Twitter after principal owner Elon Musk, holding almost 6% of shares. He is the first cousin of Mohammed bin Salman Al Saud, who has been the crown prince of Saudi Arabia since 2017.</p>



<h2 class="wp-block-heading" id="h-tangent">TANGENT</h2>



<p>When he took over the company last year, Musk provided internal communications to various journalists in a&nbsp;<a href="https://www.forbes.com/sites/roberthart/2022/12/09/twitter-files-2-elon-musks-hyped-up-expos-unveils-secret-blacklists-and-shadow-banning--which-seem-very-similar-to-his-own-policies/?sh=49f5b4b56b38">series</a>&nbsp;called the Twitter Files, which was meant to bring to light some of the communications between Twitter executives and political campaigns or government officials. Although Musk has been critical of Twitter’s former CEO, Jack Dorsey, a report in April found Twitter has fully&nbsp;<a href="https://www.forbes.com/sites/katherinehamilton/2023/04/27/twitter-has-complied-with-almost-every-government-request-for-censorship-since-musk-took-over-report-finds/?sh=7890378724ea">complied</a>&nbsp;with more than 80% of government requests to remove or alter content since Musk acquired the company—an increase from 50% before his ownership. The majority of those requests came from foreign countries such as Turkey, India and Russia, but Saudi Arabia was not included.</p>



<h2 class="wp-block-heading" id="h-further-reading">FURTHER READING</h2>



<p><a href="https://www.washingtonpost.com/technology/2023/05/16/twitter-rico-saudi-arabia/" target="_blank" rel="noreferrer noopener">Jailed Saudi dissident, sister sue Twitter under RICO act in spy case</a>&nbsp;(Washington Post)</p>



<p><a href="https://www.forbes.com/sites/rachelsandler/2019/11/06/former-twitter-employees-charged-with-spying-for-saudi-arabia/?sh=3ba77bc01a3f">Former Twitter Employees Charged With Spying For Saudi Arabia</a>&nbsp;(Forbes)</p>



<p><a href="https://www.forbes.com/sites/joewalsh/2022/08/09/ex-twitter-employee-convicted-of-sending-private-data-to-saudi-government/?sh=42db68ed0626">Ex-Twitter Employee Convicted Of Sending Private Data To Saudi Government</a>&nbsp;(Forbes)</p>



<p><a href="https://www.forbes.com/sites/katherinehamilton/"></a><strong><em>By Katherine Hamilton, Forbes Staff</em></strong></p>


Twitter tests several new features for its mobile app

Twitter Sued For Allegedly Helping Saudi Government Arrest Dissident


<p><strong>The party is over for struggling retailers that enjoyed a pandemic-era boost of cheap loans and stimulus-driven spending.</strong></p>



<hr class="wp-block-separator has-alpha-channel-opacity"/>



<p><strong>Retailers that have no business still being in business are starting to go out of business.</strong></p>



<p>Unfortunately, it’s about time.</p>



<p>This year is on track to be the worst year for retail bankruptcies since 2020, with strip-mall mainstays like Bed Bath &amp; Beyond, Tuesday Morning, Party City and David’s Bridal all filing for Chapter 11 in the last several months.</p>



<p>“These are companies that have been in trouble for a while,” said Neil Saunders, managing director at research firm GlobalData. “It was almost a matter of when, rather than if, they went under.”</p>



<p>The spate of bankruptcies comes at a time when Americans have pulled back on discretionary spending and begun socking away more in savings as the cost of gas, groceries and other staples becomes more expensive, talk of a potential recession continues and major companies conduct layoffs. Consumer spending is watched closely since it accounts for more than two-thirds of the nation’s gross domestic product. Shoppers have shifted spending sharply in different directions over the pandemic, including pivoting away from categories like home goods after an early-pandemic buying spree.</p>



<p>However, while the economy isn’t helping and may be acting as a catalyst, the retailers who are teetering now have long had major problems. Retail spending remains “surprisingly robust” in some ways, said Saunders. More often a retailer’s downfall can be traced to shabby stores or an uninspiring online presence.</p>



<p>Plenty more retailers could go bankrupt before the year is over. The ones that look the most vulnerable to default include Rite Aid, Jo-Ann, Belk, At Home and 99 Cents Only, according to ratings companies Moody’s and S&amp;P Global. This watchlist skews toward specialty stores with exposure to the pressured home goods sector.</p>



<hr class="wp-block-separator has-alpha-channel-opacity"/>



<p>The pandemic bought many retailers more time. Consumers spent freely, flush with cash from stimulus checks and unable to put it toward vacation or dinner and a movie. Retailers were also able to borrow money on the cheap.</p>



<p>“Covid masked some of the weak players,” said Steve Dennis, founder of SageBerry Consulting. “It staved off the reckoning.”</p>



<p>Now that the pandemic is over, at least officially, it’s back to reality and retailers are confronting the sins of the past: too many stores, too much debt and too few customers.</p>



<p>Retailers who loaded up on debt are having a harder time making payments as they watch sales and profits deteriorate. For instance, discount home goods retailer Tuesday Morning referenced its “exceedingly burdensome debt” in February when filing for bankruptcy for the second time in two years. Its net debt has increased tenfold, jumping from $23 million in 2019 to some $250 million last year. Sales during that time fell by 25%.</p>



<p>Christmas Tree Shops also cited its “burdensome liabilities” when filing for bankruptcy earlier this month. Its owner, Handil Holdings, listed liabilities of as much as $100 million in court documents.</p>



<p>Twelve percent of retailers now have a Triple-C rating from S&amp;P Global, meaning there’s a 50-50 chance that things get so bad they’ll default on their loans. That’s double the figure from last year and triple the year before.</p>



<p>“A lot of these companies were essentially zombie companies pre-Covid,” said Craig Ganz, an attorney at Ballard Spahr who has handled retail bankruptcies for several decades. “They were primarily surviving on debt, and now debt has become simply too expensive for them to afford.”</p>



<p>The Federal Reserve’s rapid rate hikes have made it much costlier for retailers to take on new debt, whether it’s to finance investments in growth areas or give themselves some breathing room, said Sarah Wyeth, who leads the retail and consumer sectors for S&amp;P Global Ratings.</p>



<p>“Any issuer that’s very stressed and needs to go to the market in the next year or so is going to be very challenged,” said Wyeth.</p>



<p>Meanwhile, the bills must be paid. Overhead is especially vexing for retailers stuck with large, lumbering brick-and-mortar fleets from an earlier era who aren’t drawing enough shoppers to cover the costs of paying workers, stocking shelves and keeping the lights on. The home furnishing sector is notorious for having too many stores, said Craig Johnson, founder of Customer Growth Partners, a retail research firm.</p>



<p>“The seeds of these companies’ demise was planted not just years ago, but decades ago,” he said.</p>



<p><em><strong>By Lauren Debter, Forbes Staff</strong></em></p>


Netherlands Reimposes Partial Lockdown Amid Latest Covid-19 Wave

Plenty More Retailers Will Go Bankrupt This Year. The Only Surprise Is It Didn’t Happen Sooner.


<p><strong>After the MtGox hack, Tokyo put in place tough rules that later protected FTX customers. Now, from that secure base, it’s moving to allow blockchain technologies to flourish.</strong></p>



<p>More than a million investors around the world were left stranded when FTX suddenly collapsed in November with an astonishing hole, estimated at $8.7 billion, in its balance sheet. The cryptocurrency exchange and its 130-plus affiliates have been operating in bankruptcy for five months, and a new management team claims to have recovered $7.3 billion of the missing cash and tokens. Yet only one component of the company has returned money to clients.</p>



<p>FTX’s Japanese unit allowed all verified accounts to resume withdrawals on February 21. As of April 25, nearly 10,000 individual and corporate clients had withdrawn crypto and cash worth approximately 23.4 billion yen ($175.4 million),&nbsp;<a href="https://blog.liquid.com/ja/%E5%87%BA%E9%87%91-%E5%87%BA%E5%BA%AB%E3%82%B5%E3%83%BC%E3%83%93%E3%82%B9%E3%81%AE%E9%80%B2%E6%8D%97%E7%8A%B6%E6%B3%81%E3%81%AB%E3%81%A4%E3%81%84%E3%81%A6-1682390331847?_ga=2.70873552.1915823815.1682596738-1460639900.1681400607&amp;_gl=1*1be4ztb*_ga*MTQ2MDYzOTkwMC4xNjgxNDAwNjA3*_ga_KM66WLZ8WM*MTY4MjU5NjczOC4yLjEuMTY4MjU5Njc4Mi4xNi4wLjA." target="_blank" rel="noreferrer noopener">according to</a>&nbsp;the company.</p>



<p>Count this as a victory for Japan’s financial regulators and the strict rules they’ve put in place to protect consumers in the wild and wooly world of crypto.</p>



<p>Japan cracked down with safety and soundness rules from a unified regulator after two big exchange hacks. But now, from that stable (and some in the industry would say overly restrictive) base, it’s seeking to come up with a strategy to become a leader in the collection of mostly decentralized, blockchain-based technologies known as web 3. The U.S., by contrast, has arguably been open to more innovation, but its dueling oversight agencies and lack of rules have created gaps in oversight and a culture of regulation by enforcement that makes strategic planning perilous.</p>



<p>Japan, an early adopter of digital assets, learned the value of regulation early and the hard way, through what remains arguably the most notorious crypto hack ever–the 2014 plunder of 800,000 bitcoins from MtGox, which had been the world’s largest bitcoin exchange. Four years later, Coincheck, another cryptocurrency exchange based in Tokyo, was robbed of $500 million worth of NEM blockchain’s xem coins.</p>



<p>“The drama and shakeup that the U.S. is experiencing around Sam Bankman-Fried, FTX, the Bahamas situation is not relevant in Japan,” says Sheila Warren, CEO of the Crypto Council for Innovation, a Washington, D.C.-based group that advocates for the industry worldwide. That’s because Japan has already been there and done that.</p>



<p>After the MtGox and Coincheck shocks, Japan’s primary financial regulator, the Financial Services Agency (FSA), tightened rules on crypto exchanges, notes Ananya Kumar, associate director of digital currencies at the Atlantic Council’s GeoEconomics Center, the think tank’s unit addressing foreign policy, finance, and economics.</p>



<p>The FSA’s rules include:</p>



<ul>
<li>Customer and company assets must be held separately, with holdings verified in annual audits.</li>



<li>Investors can&#8217;t borrow more than twice their investments for leveraged trades on exchanges. (Many cryptocurrency exchanges, including Binance, allow trading at 100x leverage.)</li>



<li>Exchanges must hold at least 95% of customer funds in cold wallets, which are not connected to the internet.</li>
</ul>



<p>The measures proved instrumental in enabling clients of the Japanese subsidiary of FTX to withdraw their assets after its parent filed for bankruptcy in November. It remains unclear when other FTX clients will be able to get their money back, and how much of it they’ll get.</p>



<p>Japan has thus become a customer-friendly crypto haven but at the expense of stringent supervision of the freewheeling digital assets industry.</p>



<p>Now, Japan is building on that secure base, with a national economic strategy and a bid to lead its allies in creating rules that will effectively govern the industry.</p>



<p>“The FSA contributes to international policy discussion, including the one at the Financial Stability Board—an international organization that monitors and makes recommendations about the global financial system—on crypto-assets by leveraging its experience as a global forerunner in the regulation and monitoring of crypto-asset activities and markets,” the agency told&nbsp;<em>Forbes</em>&nbsp;in written comments.</p>



<p>On April 6, the ruling Liberal Democratic Party’s web3 project team, tasked with drafting crypto-focused policy proposals, released a&nbsp;<a href="https://note.com/akihisa_shiozaki/n/n669dee962b15" target="_blank" rel="noreferrer noopener">white paper</a>&nbsp;outlining several recommendations, including a call for Tokyo to take the lead.</p>



<p>“After crypto winter, Japan may be the first to welcome spring,” the 35-page document predicts. “As a country that has overcome many hardships in the cryptocurrency industry, we are in a position to persuade the world about the immeasurable potential of web3.”</p>



<p>Suggestions in the paper cover tax reform, improved accounting standards, and regulation of blockchain-based finance. There’s even a recommendation for the government to drive the conversation about digital assets at the next Group of Seven (G7) summit, scheduled to be held in Hiroshima later this month.</p>



<p>“While Western financial regulators appear to be single-mindedly focused on tightening regulations in the midst of what is being called a crypto winter, I assess that Japanese financial regulators correctly understand the potential of blockchain and other technologies and are working to design regulations in a forward-looking manner,” Masaaki Taira, the team’s leader and a member of the House of Representatives, said in written comments to&nbsp;<em>Forbes</em>.</p>



<p>In February, Prime Minister Fumio Kishida told&nbsp;<a href="https://www.youtube.com/watch?v=okslrifMl4M" target="_blank" rel="noreferrer noopener">the Budget Committee of Japan’s House of Representatives</a>&nbsp;that there are “various possibilities for using web3” in Japan. He said that the Japanese government could employ blockchain-based mechanisms like&nbsp;<a href="https://www.forbes.com/sites/digital-assets/article/what-are-nfts/?sh=609abead296f">non-fungible tokens</a>&nbsp;and&nbsp;<a href="https://www.forbes.com/sites/jeffkauflin/2022/02/03/daos-arent-a-fad-theyre-a-platform/?sh=210b8c1719d0">decentralized autonomous organizations</a>&nbsp;to revitalize regions and promote “Cool Japan” — a national strategy aimed at promoting the country’s innovations and culture to the rest of the world that dates back to the early 2000s and echoes the U.K.’s “Cool Britannia” policies of the 1990s.</p>



<p>According to Taira, his team–including about 10 members of the Diet (Japan’s national legislature), six lawyers from the private sector with expertise in web3 and 10 leading Japanese digital influencers acting as advisors–works directly with Kishida and several government bodies. “The policy proposals compiled by the project team are adopted almost directly by the LDP, and a significant portion is adopted into government policy. It is an extremely powerful team,” he says.</p>



<p>“The way they talk about crypto is very crypto-native in terms of what the technology enables and what aspects of current regulation are just not workable,” says the Crypto Council’s Warren. “They are saying analogue regulation doesn&#8217;t work in digital environments.”</p>



<p>Japan does not have a long history of being hospitable to blockchain entrepreneurs. In addition to its heavy-handed regulation, Japan&#8217;s tax code is particularly hostile to the industry. It&#8217;s also hard to get new cryptocurrencies approved. After founding their gaming company Murasaki on home shores last year, Shinnosuke Murata and Shunsuke Sasaki recently decided to move their business to the Netherlands. “Why would two Japanese entrepreneurs with considerable experience starting companies in their own country go halfway around the world to set up a new business? wrote Murata in a&nbsp;<a href="https://asia.nikkei.com/Opinion/Why-I-had-to-leave-Japan-to-launch-my-gaming-company" target="_blank" rel="noreferrer noopener">Nikkei op-ed</a>&nbsp;in October. “Simply because it just was not feasible to do so in Japan.”</p>



<p>With a corporate tax rate set around 30% on unrealized gains from cryptocurrency holdings, it is a real struggle to get a new blockchain-based business off the ground, Murata tells&nbsp;<em>Forbes</em>. “Suppose you issue 100 tokens each worth $1 million. Even if you don’t realize gains, you will need to pay $30 million next year. Practically no startup founders can issue a token,” Murata explains.</p>



<p>Major U.S. crypto exchanges like Kraken and Coinbase have recently shut their subsidiaries in Japan,&nbsp;<a href="https://www.coinbase.com/blog/halting-operations-in-japan" target="_blank" rel="noreferrer noopener">citing</a>&nbsp;“market conditions”. Overall, there are&nbsp;<a href="https://www.fsa.go.jp/en/regulated/licensed/en_kasoutuka.xlsx" target="_blank" rel="noreferrer noopener">37</a>&nbsp;crypto exchanges registered in the country, according to the FSA.</p>



<p>Additionally, the agency can take months to review proposals to list new tokens, which results in Japan&#8217;s trading market growing much slower at lower levels of liquidity than those of other countries, says Murata.</p>



<p>“Japan loses entrepreneurs that could build $100 million businesses because of those barriers,” he laments.</p>



<p>The existing framework makes it difficult for local entrepreneurs, agrees Roi Hirata, head of a new Japanese subsidiary of the Avalanche blockchain’s main developer company, New York-based Ava Labs. Avalanche’s brand recognition in Japan is exploding, Hirata says, which has prompted Ava Labs to start building a presence in the island nation. As a first step, his team has partnered with Japanese media giant GREE on a new blockchain game.</p>



<p>“I see a huge opportunity for both intellectual property providers and traditional businesses in Japan to adopt a blockchain like Avalanche, providing both decentralization and compliant service,” Hirata noted in an email to&nbsp;<em>Forbes</em>.</p>



<p>For now, its deep-pocketed tech giants that are leading the blockchain push in Japan.&nbsp;<a href="https://www.forbes.com/sites/ninabambysheva/2023/02/07/forbes-blockchain-50-2023/?sh=577ea334319d">This year’s&nbsp;<em>Forbes&nbsp;</em>Blockchain 50</a>, an annual list highlighting the best enterprise applications of the distributed-database technology, features three Japanese companies, Fujitsu, LINE and NTT.</p>



<p>Social media giant LINE helps create NFTs for 26 big customers including SoftBank, South Korea’s Naver search engine and Visa. According to the company, more than two million wallets have registered on its DOSI NFT platform since September. NTT Docomo, the country’s dominant mobile-phone service provider,<strong>&nbsp;</strong>has&nbsp;<a href="https://asia.nikkei.com/Business/Technology/NTT-Docomo-to-invest-4bn-in-Web3-using-mobile-infrastructure" target="_blank" rel="noreferrer noopener">pledged&nbsp;</a>to invest up to $4 billion in web3 infrastructure.</p>



<p>Electronics powerhouse Fujitsu teamed up with financial-services giants including Mitsubishi UFJ Mizuho and Sumitomo Mitsui to build the “Ryugukoku,” or the “Japanese Metaverse Economic Zone.” The initiative,&nbsp;<a href="https://www.fujitsu.com/global/about/resources/news/press-releases/2023/0227-02.html" target="_blank" rel="noreferrer noopener">announced</a>&nbsp;in February, seeks to build a shared metaverse infrastructure for large enterprises.</p>



<p>Meanwhile, the FSA is planning to lift its ban on the domestic distribution of stablecoins later this year. The exact date and the coins that will be allowed have not been determined, but decisions are scheduled for June.</p>



<p>“This does not mean that all foreign issued stablecoins will be allowed without any restriction,” the agency told&nbsp;<em>Forbes</em>&nbsp;via written comments. “We will allow stablecoins to be handled after individual examination, if there are no problems from the viewpoint of user protection, etc. Examples include: foreign issuers in their countries being subject to the equivalent regulations as in Japan, and underlying assets being preserved appropriately.”</p>



<p>Late last year, the ruling party’s tax committee approved a proposal to exempt crypto startups that issue their own tokens from paying corporate taxes on unrealized gains. New proposals introduced in the white paper include tax exclusions for companies holding tokens issued by other companies that aren&#8217;t going to be traded short term and to limit taxable events only to instances when the assets are exchanged for traditional currencies.</p>



<p>“I think it is not only really exciting, but it&#8217;s actually paving the way to demonstrate to the rest of the world here is how you create forward-thinking flexible regulation that can navigate this tricky balance of preserving a wide space for innovation while also protecting consumers,” says Warren.</p>



<p>The overarching <a href="https://note.com/akihisa_shiozaki/n/n669dee962b15" target="_blank" rel="noreferrer noopener">message</a> is “Japan is back, Again.”\<a href="https://www.forbes.com/sites/ninabambysheva/"></a></p>



<p><strong><em>By Nina Bambysheva, Forbes staff</em></strong></p>


financial technology flowchart and basic income mining cryptocurrency with blockchain startup unicorn crypto money virtual diagram.businessman hand working with new modern computer.

What Japan Could Teach The U.S.—And The World—About Regulating Crypto


<h2 class="wp-block-heading" id="h-topline">TOPLINE</h2>



<p>The already stuffed wallets of several billionaire insiders at Alphabet grew even fatter Thursday as shares of Google’s parent company rallied, after the company’s Wednesday&nbsp;<a href="https://www.forbes.com/sites/richardnieva/2023/05/10/google-io-2023-ai/?sh=448f91e95704">announcement</a>&nbsp;of various new artificial intelligence features—capped by integrating AI into Google’s search engine——largely cooled investors’ fears about a wide gap in the AI space between Google and rival Microsoft.</p>



<h2 class="wp-block-heading" id="h-key-facts">KEY FACTS</h2>



<p>Alphabet’s stock surged more than 4% Thursday, bringing its two-day gain to 9% following CEO Sundar Pichai’s&nbsp;<a href="https://www.forbes.com/sites/mollybohannon/2023/05/10/google-adding-ai-to-search-engine-for-some-users-closing-in-on-microsofts-ai-push/?sh=73fba5123502">presentation</a>&nbsp;introducing a variety of ways the company plans to utilize AI in its search engine and beyond.</p>



<p>Shares of the Silicon Valley stalwart are now at their highest level since August.</p>



<p>Google demonstrated “AI powered search can still be the gateway” to online activity and drive advertising revenue growth, according to Bank of America analysts Justin Post and Joanna Zhao, deeming Wednesday’s presentation “a positive step in changing the AI narrative” that Microsoft and its ChatGPT-powered Bing search engine are&nbsp;<a href="https://www.forbes.com/sites/dereksaul/2023/04/17/google-stock-loses-57-billion-amid-microsofts-ai-lead-and-reports-it-could-be-replaced-by-bing-on-some-smartphones/?sh=7943e0145b07">better-positioned</a>&nbsp;to cash in on the AI craze.</p>



<p>Alphabet’s market capitalization swelled by nearly $120 billion over the last two trading sessions, solidifying its place as the fourth-most valuable public company in the world.</p>



<p>Largely reaping the benefits of the stock surge are Google’s billionaire current and former executives who added a total of more than $9 billion, including cofounders and board members Larry Page and Sergey Brin, who added $4.1 billion and $3.9 billion to their fortunes Thursday, respectively.</p>



<p>Fellow Alphabet board members Ravitark Ram Shriram and John Doerr added about $330 million to their combined fortunes Thursday, while early Google investor David Cheriton and former Google CEO Eric Schmidt grew more than $900 million richer.</p>



<h2 class="wp-block-heading" id="h-forbes-valuations">FORBES VALUATIONS</h2>



<p>Page (worth $99.6 billion) and Brin ($95.3 billion) are the seventh- and 10th-richest people in the world, according to&nbsp;<em>Forbes</em>’ real-time billionaire&nbsp;<a href="https://www.forbes.com/real-time-billionaires/#5ce0a38e3d78">tracker</a>. Page’s fortune surpassed that of Microsoft mogul Steve Ballmer and Mexican media magnate Carlos Slim Helu on Thursday, while Brin’s wealth pile surged past those of L’Oreal heiress Francoise Bettencourt Meyers and financial data king Michael Bloomberg.</p>



<p>Forbes Daily: Get our best stories, exclusive reporting and essential analysis of the day’s news in your inbox every weekday.Sign Up</p>



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<h2 class="wp-block-heading" id="h-crucial-quote">CRUCIAL QUOTE</h2>



<p>Alphabet has the “leading collection of AI/machine learning-driven businesses” of any technology company, Goldman Sachs analysts led by Eric Sheridan wrote in a Wednesday note to clients, adding the latest rollout caused the bank to become “increasingly constructive” on Alphabet’s long-term business strategy.</p>



<h2 class="wp-block-heading" id="h-chief-critic">CHIEF CRITIC</h2>



<p>The freshly announced generative AI improvements are a “positive [step] in the AI battle” against Microsoft, but Alphabet continues to operate in “major catchup mode,” according to Wedbush analyst Dan Ives. Microsoft’s early investment in ChatGPT parent OpenAI gave it a “key head start” in the field that could prove challenging for Alphabet to overcome in the struggle for market share, Ives added.</p>



<h2 class="wp-block-heading" id="h-key-background">KEY BACKGROUND</h2>



<p>OpenAI’s ChatGPT launched in November to significant fanfare and was integrated into Bing in February, shortly after Microsoft&nbsp;<a href="https://www.forbes.com/sites/dereksaul/2023/01/23/chatgpt-parent-open-ai-gets-game-changing-multibillion-dollar-boost-from-microsoft/">announced</a>&nbsp;it made a multibillion-dollar equity investment in OpenAI. Many&nbsp;<a href="https://www.forbes.com/sites/richardnieva/2023/03/10/google-peacetime-ceo-sundar-pichai/?sh=359f71584ab1">considered</a>&nbsp;Google’s early response to the AI-fueled stiffer search competition to be subpar, with Alphabet shares&nbsp;<a href="https://www.forbes.com/sites/dereksaul/2023/04/17/google-stock-loses-57-billion-amid-microsofts-ai-lead-and-reports-it-could-be-replaced-by-bing-on-some-smartphones/?sh=7943e0145b07">sliding</a>&nbsp;as much as 10% in the months following ChatGPT’s rollout.</p>



<h2 class="wp-block-heading" id="h-further-reading">FURTHER READING</h2>



<p><a href="https://www.forbes.com/sites/richardnieva/2023/05/10/google-io-2023-ai/?sh=448f91e95704">Google Tries To Straddle Being &#8216;Bold&#8217; And &#8216;Responsible&#8217; In AI Product Blitz</a>&nbsp;(<em>Forbes</em>)</p>



<p><a href="https://www.forbes.com/sites/mollybohannon/2023/05/10/google-adding-ai-to-search-engine-for-some-users-closing-in-on-microsofts-ai-push/?sh=73fba5123502">Google Adding AI To Search Engine For Some Users—Closing In On Microsoft&#8217;s AI Push</a>&nbsp;(<em>Forbes</em>)</p>



<p><a href="https://www.forbes.com/sites/richardnieva/2023/03/10/google-peacetime-ceo-sundar-pichai/?sh=359f71584ab1">Google’s ‘Peacetime’ CEO Sundar Pichai Faces Criticism As The AI War Heats Up</a>&nbsp;(<em>Forbes</em>)</p>



<p><a href="https://www.forbes.com/sites/dereksaul/2023/04/17/google-stock-loses-57-billion-amid-microsofts-ai-lead-and-reports-it-could-be-replaced-by-bing-on-some-smartphones/?sh=7943e0145b07">Google Stock Loses $57 Billion Amid Microsoft’s AI ‘Lead’—And Reports It Could Be Replaced By Bing On Some Smartphones</a> (<em>Forbes</em>)</p>



<p><a href="https://www.forbes.com/sites/dereksaul/"></a><strong><em>By Derek Saul, Forbes Staff</em></strong></p>


FRANCE-ECONOMY-TECHNOLOGY-VIVATECH

Google Insiders Are $9 Billion Richer After AI-Fueled Stock Rally


<h2 class="wp-block-heading" id="h-topline">TOPLINE</h2>



<p>Google&nbsp;<a href="https://blog.google/products/search/generative-ai-search/" target="_blank" rel="noreferrer noopener">announced</a>&nbsp;Wednesday that it’s giving its signature product, the search engine, an AI makeover—potentially transforming the way users view search results after Microsoft announced a similar plan.</p>



<h2 class="wp-block-heading" id="h-key-facts">KEY FACTS</h2>



<p>Google results with AI will be available to select people in the U.S. who apply for a waitlist to be part of Search Lab, where they’ll be able to test out how the product is working and give Google feedback, the company announced Wednesday at its annual developer conference, Google I/O.</p>



<p>Search with AI will be labeled as an experiment for users—though it won’t be available for at least a few weeks—and Google said the AI-generated information will be more factual than conversational, unlike other AI tools like ChatGPT, AP&nbsp;<a href="https://apnews.com/article/google-artificial-intelligence-search-engine-chatgpt-microsoft-fd0538018df958388991772ced6e693d?utm_source=homepage&amp;utm_medium=TopNews&amp;utm_campaign=position_06" target="_blank" rel="noreferrer noopener">reported</a>; however, Google also announced Wednesday that&nbsp;<a href="https://bard.google.com/" target="_blank" rel="noreferrer noopener">Bard</a>, its chatbot-like experiment, is now widely available for people to try.</p>



<p>PROMOTED</p>



<p>Combining AI with Google Search will let users type a question into the search bar and receive one main result that synthesizes the information gathered—but there will still be normal search links provided below the generated answer.</p>



<p>The company did not provide a timeline for when AI-based results will roll out to the general public.</p>



<h2 class="wp-block-heading" id="h-contra">CONTRA</h2>



<p>The service will not be able to respond to certain questions about health and finance matters. People searching for those will continue to be directed to normal search results for their answers.</p>



<h2 class="wp-block-heading" id="h-key-background">KEY BACKGROUND</h2>



<p>The AI-based updates and changes to Google products come as Microsoft, one of its main competitors, is also working to incorporate AI into its search engine, Bing, and as ChatGPT continues to grow in popularity. Google has maintained its status as the go-to search engine for most of the world for at least two decades, but the stock of Google’s parent company, Alphabet,&nbsp;<a href="https://www.cnn.com/2023/04/17/tech/google-ai-search-engine-stock-drop/index.html#:~:text=Shares%20of%20Google%2Dparent%20Alphabet,powered%20rivals%2C%20including%20Microsoft's%20Bing." target="_blank" rel="noreferrer noopener">dropped</a>&nbsp;significantly when Bing incorporated AI. The share price has since recovered—even as rumors swirl of Samsung dropping Google, according to the&nbsp;<a href="https://www.nytimes.com/2023/04/16/technology/google-search-engine-ai.html" target="_blank" rel="noreferrer noopener"><em>New York Times</em></a>&nbsp;and&nbsp;<a href="https://www.cnn.com/2023/04/17/tech/google-ai-search-engine-stock-drop/index.html#:~:text=Shares%20of%20Google%2Dparent%20Alphabet,powered%20rivals%2C%20including%20Microsoft's%20Bing." target="_blank" rel="noreferrer noopener">CNN</a>. Microsoft also has an early advantage in the AI chatbot race, investing billions of dollars into ChatGPT creator OpenAI and unveiling plans to integrate ChatGPT technology into its suite of products.</p>



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<h2 class="wp-block-heading" id="h-crucial-quote">CRUCIAL QUOTE</h2>



<p>“We are at an exciting inflection point,” said Alphabet CEO Sundar Pichai. at the conference. “We are reimagining all our products, including search.”</p>



<h2 class="wp-block-heading" id="h-tangent">TANGENT</h2>



<p>AI search tools weren’t the only update from Google on Wednesday, as the company announced plans to infuse more AI technology into its products. Soon, Gmail will have a “Help Me Write” option that people can use to write long responses to emails in seconds, and the company announced “Magic Editor,” a tool for Google Photos that will automatically edit pictures.</p>



<h2 class="wp-block-heading" id="h-big-number">BIG NUMBER</h2>



<p>5%. That’s how much Alphabet’s shares increased after the series of Google and AI announcements, rising to $112.65. The increase brough Alphabet to its highest level since Bing remodeled its search engine using AI in February, AP&nbsp;<a href="https://apnews.com/article/google-artificial-intelligence-search-engine-chatgpt-microsoft-fd0538018df958388991772ced6e693d?utm_source=homepage&amp;utm_medium=TopNews&amp;utm_campaign=position_06" target="_blank" rel="noreferrer noopener">reported</a>.</p>



<h2 class="wp-block-heading" id="h-further-reading">FURTHER READING</h2>



<p><a href="https://apnews.com/article/google-artificial-intelligence-search-engine-chatgpt-microsoft-fd0538018df958388991772ced6e693d?utm_source=homepage&amp;utm_medium=TopNews&amp;utm_campaign=position_06" target="_blank" rel="noreferrer noopener">Google is giving its dominant search engine an artificial-intelligence makeover</a>&nbsp;(AP)</p>



<p><a href="https://www.washingtonpost.com/technology/2023/05/10/google-search-ai-io-2023/" target="_blank" rel="noreferrer noopener">AI is changing Google search: What the IO announcement means for you</a>&nbsp;(<em>Washington Post</em>)</p>



<p><a href="https://www.cnn.com/2023/05/10/tech/ai-search-google-io/index.html" target="_blank" rel="noreferrer noopener">The most popular search engine in the world is about to look different</a> (CNN)</p>



<p><a href="https://www.forbes.com/sites/mollybohannon/"></a><strong><em>By Molly Bohannon, Forbes Staff</em></strong></p>


Author: Forbes

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