The Furious Five (June 27):Adobe/Meta AI Moves, Netflix's Anti-Sharing Economy, and the Titan Tragedy

Adobe Dominates (link)

Adobe's Financial Triumph Fueled by AI Innovation

Adobe's focus on AI has been credited for the company's recent financial successes. For example, the company is leveraging AI innovations across its product suite, notably Firefly, an AI tool for generating images. This focus on AI has contributed to Adobe's robust financial performance, with the company surpassing Wall Street expectations for the quarter ended June 2, posting revenues of $4.82 billion and adjusted profits of $3.91 per share. Adobe's shares rose over 5% in aftermarket trading following the announcement. This bullish outlook extends to future performance, with Adobe forecasting its current-quarter revenue to be in the range of $4.83 to $4.87 billion, and raising its FY 2023 revenue forecast to between $19.25 billion and $19.35 billion. The company's stock has seen a significant 40% increase since May, driven in part by investor optimism around Adobe's AI strategy. However, some analysts warn of potential overvaluation due to the hype around AI. Despite this, Adobe's management remains optimistic about the future of AI in enhancing their product accessibility and customer productivity. (Source: Reuters, Seeking Alpha)

Outmaneuvering the Competition: Meta’s Open-Source AI Gambit

Tech giant Meta is reportedly planning to offer a commercial license for its forthcoming open-source large language model (LLM), according to an exclusive from The Information. If true, this marks a major shift in approach, as most currently commercially used language models, such as Google's Bard and OpenAI's ChatGPT, are closed-source. This innovative move could potentially lead to broader adoption by companies seeking a more flexible and cost-effective AI solution. However, it's worth noting that this development hasn't been widely reported or confirmed by Meta, so caution is advised until further information is available. (Source: Artisana)

Trustworthy AI: NAIAC's Strategy for Harnessing AI Benefits and Mitigating Risks + NIST AI Risk Framework

The National Artificial Intelligence Advisory Committee (NAIAC) has submitted its inaugural report to the President, outlining strategies for the U.S. government to harness the benefits of AI technology while mitigating its potential risks. The report emphasizes the need for trustworthy AI, new R&D initiatives, international collaboration, and workforce support. Future focus areas for NAIAC include rapidly evolving AI sectors like generative AI. The committee is also set to reassess its working groups to more effectively study the influence of AI on various societal facets such as workforce, equity, and societal norms. Deputy Secretary of Commerce Don Graves highlighted the critical juncture the country is at regarding AI development and the necessity of balancing innovation with risk management. The Biden-Harris administration has emphasized responsible American innovation in AI to safeguard people's rights and safety. The committee's future endeavors will consider mechanisms to keep pace with the swift development and deployment of AI technology. The report also references this AI-Risk framework published by NIST. (Source: NIST)

Netflix Gains On its Anti-Sharing Strategy

Netflix's is benefitting remarkably from the shift towards an 'anti-sharing' economy. During a recent period, the streaming giant experienced a significant surge in new sign-ups, averaging 73,000 daily—a 102 percent increase compared to their previous 60-day average. Remarkably, Netflix added 100,000 subscribers each on May 26th and May 27th. At the same time, Netflix's recent policy change limiting password sharing outside individual households is significantly altering dynamics among families and friends who previously relied on shared subscriptions. While this strategy has boosted the company's sign-ups and revenues, it raises questions about the social and relationship impacts of such business decisions. This shift towards an 'anti-sharing' economy is causing what some users describe as 'breakup talks', disrupting established patterns of digital sharing and challenging relational norms. Although this move is aligned with Netflix's commercial goals, it sparks a discussion about the role companies should play in shaping societal behaviors and norms, highlighting the need for an ESG (Environmental, Social, and Governance) perspective in policy decisions. As we see companies making choices that prioritize economic gain over social dynamics, it's essential to consider the broader implications and the role business should play in fostering or disrupting social connections. (Source: TheVerge, WSJ)

Titan Disaster: A Governance, Risk, Compliance Tragedy

OceanGate's Titan submersible incident has starkly underscored the importance of rigorous internal controls, adherence to governance risk, and compliance for businesses. Despite the repeated warnings about Titan's safety by a prominent deep sea exploration expert, the company's CEO, Stockton Rush, overlooked these critical insights in his pursuit of innovation and market dominance. The tragic consequences were not only fatal to him and four other passengers but also posed severe risks to the broader industry. Critics argue that these calamities were preventable had OceanGate prioritized safety certification and independent validation before operating commercially. Rush's dismissal of such safety precautions—viewing them as barriers to innovation—reflects a dangerous misapprehension that can jeopardize both human life and the reputation of an industry. In the wake of this tragedy, the importance of sound internal controls, risk management, and compliance with accepted standards is clearer than ever. (source: BBC)

Author: Malik Datardina, CPA, CA, CISA. Malik works at Auvenir as a GRC Strategist that is working to transform the engagement experience for accounting firms and their clients. The opinions expressed here do not necessarily represent UWCISA, UW, Auvenir (or its affiliates), CPA Canada or anyone else. This post was written with the assistance of an AI language model. The model provided suggestions and completions to help me write, but the final content and opinions are my own. 

The Furious Five for June 20: AI, Tech, and Business Stories You May Have Missed

Redditor Robots Rioting

McKinsey's Take on the Trillion-Dollar Potential of Generative AI

Generative AI's potential to significantly boost global economic value could add between $2.6 trillion and $4.4 trillion annually across diverse use cases, enhancing AI's overall impact by 15-40%. This technology can automate up to 70% of current work activities and may advance the timeline for automation of half of today's tasks to between 2030 and 2060. Further, it could stimulate labour productivity growth between 0.1% to 0.6% per annum through 2040. However, fully leveraging generative AI's benefits necessitates managing inherent risks and supporting workforce transitions with new skills development. Despite its potential, the journey toward full realization is nascent, and substantial challenges remain. (Source: McKinsey)

Revolt at Reddit: Reddit's API Pricing Protest

The "Reddit Revolt" is a significant user and developer backlash against Reddit due to changes in its API pricing, which are predicted to lead to the shutdown of many third-party apps like Apollo and "rif is fun for Reddit". The discontent has been fuelled by perceived miscommunications and alleged dishonesty from Reddit's CEO, Steve Huffman, regarding these changes, including incoming restrictions on third-party apps displaying NSFW content. In response, over 100 subreddits have "gone dark" in protest, and nearly 4,500 communities are pledged to do so. Some speculate that these changes are due to Reddit's plans to go public. (Source: TheVerge)

Mistral AI Sets Sights on OpenAI with $113 Million Seed Funding

Mistral AI, a month-old startup based in Paris, has raised a staggering $113 million in a seed funding round to develop large language models and generative AI, aiming to compete with OpenAI. The funding round was led by Lightspeed Venture Partners and involved significant contributors from across Europe, including Bpifrance and former Google CEO Eric Schmidt. Mistral AI, co-founded by former Google DeepMind and Meta professionals, plans to focus on open-source solutions and target enterprises. The company's first models for text-based generative AI are expected to be launched in 2024. It aims to provide businesses with tools that simplify the integration and use of AI, with a particular focus on open-source models that use publicly available data. This strategy is designed to avoid legal issues related to training data. (Source: TechCrunch)

First-of-its-kind AI Legislation Advances in EU Parliament

The European Union's parliament is advancing draft legislation known as the AI Act, potentially the first comprehensive set of regulations governing Artificial Intelligence (AI) in the West. This act includes prohibitions on real-time remote biometric surveillance in public spaces and restrictions on developing facial-recognition databases from surveillance footage or internet scraping. The legislation also aims to control predictive policing systems and regulate how companies train AI models with large datasets. In certain scenarios, companies would have to disclose when content is AI-generated and ensure their AI models don't produce illegal content. Businesses would also need to summarize the copyrighted data used to train their models, giving content creators a potential claim to a share of profits. The proposed act could impose fines of up to 6-7% of a company’s global revenue for certain non-compliance cases. Negotiations to finalize the legislation are to begin immediately, with the aim of reaching a deal before year-end. Some tech researchers support these rules, arguing they could help establish safety standards and slow down the rush to release advanced AI tools. However, tech companies and lobbyists argue that overly prescriptive rules could hinder innovation. (Source: WSJ)

AMD's Chase for Trillions Stumbles: Stock Prices Slide Despite Bold AI Chip Announcement

AMD revealed details of its upcoming artificial intelligence (AI) chip designed to compete with industry leader Nvidia. Expected to be available in Q3 with mass production in Q4, the chip boasts 192 gigabytes of memory, potentially assisting tech companies in managing the costs of AI services like ChatGPT. However, AMD refrained from disclosing the early adopters or the price of the new chip. While the lack of a major client announcement led to a dip in AMD's share price, the company remains optimistic about the chip's potential. The firm also announced high-volume shipments of a general-purpose central processor chip named "Bergamo" to companies, including Meta Platforms. AMD's strategic moves indicate their intention to vie for market share in the AI chip market, currently dominated by Nvidia, and bolster their valuation. (Source: Reuters)

Author: Malik Datardina, CPA, CA, CISA. Malik works at Auvenir as a GRC Strategist that is working to transform the engagement experience for accounting firms and their clients. The opinions expressed here do not necessarily represent UWCISA, UW, Auvenir (or its affiliates), CPA Canada or anyone else. This post was written with the assistance of an AI language model. The model provided suggestions and completions to help me write, but the final content and opinions are my own.

The Furious Five for June 13: Tech and Business Stories You May Have Missed

The EV Charger to Rule them All

Apple Unveils is Vision Pro Headset: Are we Ready for Spatial Computing?

Apple has announced its much awaited VR headset. Last week, they unveiled the Vision Pro Headset, which is designed to seamlessly blend digital content with the physical world. This much awaited device allows users to interact with a three-dimensional user interface controlled by eye movements, hand gestures, and voice commands, and is powered by visionOS, the world's first spatial operating system. Careful to separate themselves from the competition, they classified the Vision Pro as their first spatial computer. The Vision Pro Headset is priced at $3,499 and is slated for release in early 2024. (Sources: Apple, Wired) 

For a great summary on Apple's latest, check out Cold Fusion's review:

Crypto Crackdown Continues: SEC Sues Binance and Coinbase

The Securities and Exchange Commission (SEC) has sued Binance and Changpeng Zhao (Binance’s Canadian founder and controlling shareholder) for operating an illegal trading platform in the U.S. and misusing customers’ funds. Binance is the world’s largest cryptocurrency exchange. The SEC said that Binance and Zhao misused customers’ funds and diverted them to a trading entity that Zhao controlled. That trading firm, Sigma Chain, engaged in manipulative trading (known as "wash trading") that made Binance’s volume appear larger than it actually was, the SEC said. Binance also concealed that it commingled billions of dollars in customer assets and sent them to a third-party, Merit Peak, which was owned by Zhao, the SEC alleged. The SEC filed the case in federal court in the District of Columbia and is asking a federal judge to freeze Binance’s assets and appoint a receiver. (Source: WSJ)

SEC then filed a lawsuit against Coinbase, for allegedly operating as an unregistered broker and exchange. Unlike Binance, Coinbase is listed on the NASDAQ and hence regulated by the SEC. The SEC claims that Coinbase violated rules that require it to register as an exchange and be overseen by the federal agency. Coinbase has denied the allegations and intends to defend itself in court. The SEC’s strategy has centered on using its enforcement division to subdue crypto companies and show why its regulations apply to crypto activities, with increasing focus on the biggest players rather than just the companies and currencies at the margins. Coinbase pushed back on Tuesday, accusing the SEC of taking an “enforcement-only approach” with the crypto industry in the absence of clear rules. Brian Armstrong, CEO of Coinbase, had the following take:  

“The solution is legislation that allows fair rules for the road to be developed transparently and applied equally, not litigation,” Paul Grewal, chief legal officer of Coinbase, said in a statement. “In the meantime, we’ll continue to operate our business as usual.” The lawsuits are part of a growing regulatory crackdown on the crypto industry in the post-FTX fallout. (Source: WSJ)

Global Tech Giants Bet Big on AI, Back Cohere with $270M Funding

AI startup Cohere has raised $270M in a Series C financing round, attracting investors from around the globe and notable tech firms like NVIDIA, Oracle, and Salesforce Ventures. This surge in investment underlines the growing recognition of AI as a critical driver of business success in the coming decade. The round was led by Inovia Capital and included participation from investors in the USA, Canada, Korea, the UK, and Germany. Cohere's CEO, Aidan Gomez, emphasized the company's readiness to lead in the next phase of AI products and services that will revolutionize business, while NVIDIA's CEO, Jensen Huang, hailed Cohere's contributions to generative AI as foundational. (Source: Cohere)

GM and Ford's EVs to Plug into Tesla's Charging Network

General Motors (GM) and Ford electric vehicles will gain access to Tesla’s vast U.S. charging network starting early next year. Both GM and Ford are aligning their electric vehicles to be compatible with approximately 12,000 out of Tesla's 17,000 chargers. The Detroit auto giants are advocating to establish Tesla's connector as the industry standard. At first, GM and Ford EV owners will need an adapter to hook into the Tesla stations, but both GM and Ford will switch to Tesla’s North American Charging Standard connector starting with new EVs produced in 2025. (Source: CBC, CNBC)

Data Management: An Inescapable Necessity in the World of Generative AI

As interest in Generative AI rises, the importance of robust data management in businesses comes to the fore. Efficient data storage, filtering, and protection are necessary for successful AI integration. A properly structured data management system is essential for companies to effectively utilize large language models. A key concern for these companies is the quality of data, which must be well-structured, relevant, and organized for effective AI training. Therefore, firms must carefully cleanse, categorize, and format their data to avoid retaining useless information. As highlighted in the Wall Street Journal, organizations such as Syneos Health are prioritizing such data cleansing efforts. Syneos spent roughly 18 months prepping this repository for AI model training and construction. This process involved a team of data scientists and business experts who created centralized, reusable machine-learning elements. (Source: WSJ)

Author: Malik Datardina, CPA, CA, CISA. Malik works at Auvenir as a GRC Strategist that is working to transform the engagement experience for accounting firms and their clients. The opinions expressed here do not necessarily represent UWCISA, UW, Auvenir (or its affiliates), CPA Canada or anyone else. This post was written with the assistance of an AI language model. The model provided suggestions and completions to help me write, but the final content and opinions are my own.

Tech, AI, Auditing & Beyond: 5 Stories from Last Week

Here's a look at 5 things you may have missed from last week

Robot lawyer getting arrested. 

Lawyer gets GPTed: Google the citation, before you submit that legal brief 

A lawyer used OpenAI’s chatbot ChatGPT to research cases for a lawsuit against an airline. He submitted a brief full of fake cases that the chatbot made up. The judge found out and ordered him to explain himself. The lawyer admitted he used the chatbot and did not verify its sources. He asked the chatbot if it was lying and it said no. The judge is considering sanctions for the lawyer and his firm. Chatbots unreliable: This case shows the dangers of using chatbots for research without checking their facts. Chatbots can mimic language patterns but not always tell the truth. Other chatbots like Microsoft’s Bing and Google’s Bard have also lied or made up facts in the past. (Source: TheVerge)

Nvidia: One trillion reasons why we're in the AI boom

US chipmaker Nvidia has reached a market value of more than $1tn, joining a select group of US companies. The firm’s share price surged by more than 30% since last week, after forecasting strong demand for its products due to advances in artificial intelligence (AI). Nvidia’s hardware powers most AI applications today, with one report suggesting it has 95% of the market for machine learning. The firm expects to bring in $11bn in sales in the next quarter, almost 50% more than analysts had expected. AI is seen as the next supercharged growth area, but valuations can be hard to justify. (Source: BBC)

AI Execs: Are they getting frank about their Frankensteins?

Top AI execs (and others who have cashed in on the AI boom) are now warning us about what they have released into the wild. Here is the statement that they released: "Mitigating the risk of extinction from AI should be a global priority alongside other societal-scale risks such as pandemics and nuclear war." (Source: CBC) 

Bad bots: Tessa advises people with eating disorders to lose weight

AI chatbot named Tessa that was implemented by the U.S. National Eating Disorder Association (NEDA) to help those with eating disorders was implemented to replace human call operators. However, it was taken down after reports that it had started to give out harmful dieting advice. Activist Sharon Maxwell claimed on Instagram that Tessa offered her advice on how to lose weight and recommended counting calories, following a 500 to 1,000 calorie deficit each day and measuring her weight weekly. (Source: NPR, Global)

OSFI on AI: The importance of a robust governance framework 

OSFI, in a recently released report, discusses the importance of a robust governance framework for ensuring that AI models used in the financial industry remain effective, safe, and fair. AI governance was one of the topics discussed at the Financial Industry Forum on Artificial Intelligence (FIFAI) workshops. The conversations touched on four main principles guiding the use and regulation of AI in the financial industry: Explainability, Data, Governance, and Ethics. The Canadian Audit and Accountability Foundation defines governance as structures, systems, and practices an organization has in place to assign decision-making authorities, define how decisions are made, establish an organization’s strategic direction and oversee the delivery of its services. (Source: OSFI)

Author: Malik Datardina, CPA, CA, CISA. Malik works at Auvenir as a GRC Strategist that is working to transform the engagement experience for accounting firms and their clients. The opinions expressed here do not necessarily represent UWCISA, UW, Auvenir (or its affiliates), CPA Canada or anyone else. This post was written with the assistance of an AI language model. The model provided suggestions and completions to help me write, but the final content and opinions are my own.