Tech Giants See Chatbots Everywhere, Including in Your Inbox

The race to bring A.I. to the masses heats up

Months after OpenAI’s ChatGPT seized the world’s imagination and spurred a global debate about how to regulate artificial intelligence, use of the chatbot has dropped sharply. (Though that may just be tied to students having been on summer vacation.)

Still, rivals are betting heavily on A.I. and a flurry of announcements by tech giants this week shows how they’re racing to dominate one of the most transformative technologies in decades.

Google is putting its Bard chatbot in Gmail, Google Docs, YouTube and more, hoping that tying its technology to some of the world’s most popular tech services will speed its adoption. Though the company was a pioneer in A.I. research, it is now under pressure to catch up to rivals like OpenAI, with Bard trailing ChatGPT in usage.

But The Times’s Kevin Roose found that the newly revamped Bard is “a bit of a mess,” with the chatbot inaccurately summing up emails and inventing facts (a phenomenon known as hallucinating). “We know it’s not perfect,” Jack Krawczyk, the head of Bard, told Kevin.

Amazon is using A.I. to make Alexa smarter. The company is applying the latest tech to its voice assistant, which it says will allow Alexa to understand more conversational phrases and handle multiple requests. (For instance: Instead of specifically telling Alexa to activate a connected thermostat, users will soon be able to simply say, “Alexa, I’m cold,” Dave Limp, Amazon’s head of devices and services, told The Verge.)

While Alexa helped ignite interest in “smart” assistants a decade ago, it hasn’t advanced much since then, particularly in user request comprehension. Giving the service new brains, the company hopes, will help make up for lost ground — and, Limp suggests, get consumers to eventually pay a subscription for that enhanced version.

Microsoft is expected to introduce A.I. features for some of its most popular software at an event today. These could include a Copilot personalized assistant for Windows that’s similar to ones tied to Office 365 and the GitHub coding tool. The company may also announce new A.I. capabilities for its Surface line of computers.

Putting more A.I. in consumer hands carries risks, including for privacy — Google warns users against giving Bard data that they wouldn’t want a reviewer to see — and for hallucinations. Those concerns are top of mind for regulators worldwide as they weigh new rules.

• In other A.I. news: Prominent authors including the novelists Jodi Picoult and John Grisham, have sued OpenAI over their works being used to train ChatGPT without permission or compensation. Speaking of ChatGPT, the chatbot can now generate shockingly detailed images.

HERE’S WHAT’S HAPPENING

Klaviyo pops in trading debut. Shares in the marketing software company closed more than 9 percent higher yesterday, a promising sign for the I.P.O. market after three big tech listings in a week. But it’s down in premarket trading this morning; shares in Arm and Instacart also fell following big gains on their first days of trading.

Adidas chief defends Kanye West after antisemitism controversy. Bjorn Gulden, C.E.O. of the sportswear giant, lamented the collapse of the company’s product partnership with West, now known as Ye, after the rapper went on an antisemitic rant last year. “I don’t think he meant what he said,” Gulden said in a podcast interview, drawing a stiff rebuke from groups fighting antisemitism.

Hollywood studios and striking writers reportedly move closer to a deal. Top studio executives, including Disney’s Bob Iger, joined talks with the Writers Guild of America for the first time yesterday, raising hopes that the two sides are closer to breaking a monthslong stalemate.

Nearly 500,000 Venezuelan migrants can stay in the U.S. Under pressure from New York Democrats, including Gov. Kathy Hochul, the White House said it would permit Venezuelans already living in the U.S. to live and work legally for a further 18 months. New York’s top Democrats had feared that the city’s social safety net would collapse as it grappled with supporting the recent arrival of roughly 110,000 illegal immigrants.

A hawkish Fed chills the markets

Stock and bonds are under pressure today after the Fed doubled down yesterday on its message that higher interest rates are the new normal. That scenario could put a credit squeeze on households and businesses, and investors are concerned that other policymakers could follow the central bank’s higher-for-longer position.

The Fed left its benchmark rate unchanged but laid out a more bullish forecast for future meetings. That sent stocks lower across Asia and Europe this morning and U.S. futures are pointing to a negative open. Just now, the Bank of England voted narrowly to leave its interest rate unchanged, breaking a string of 14 consecutive increases.

The U.S. central bank sees a better chance of a “soft landing” for the economy, with higher rates neither crashing the labor market nor pushing the U.S. into recession. But it’s far from clear sailing: Policymakers are wary that robust hiring and a resilient economy could undermine its fight against inflation, especially as bets grow on oil prices topping $100 a barrel.

Here are key takeaways from yesterday’s news conference with Jay Powell, the Fed chair:

Interest rates: Powell made clear that as long as the economy was growing at a healthy pace, it would be premature to cut interest rates. By a 12-7 margin, Fed policymakers also expect to raise rates again, probably this year.

For 2024, they signaled two rate cuts. That would put the Fed’s prime lending rate at roughly 5.1 percent at the end of next year, up from the 4.6 percent level forecast at the June meeting.

Inflation: Powell said progress has been made, but he repeated that there’s a “long way to go” to bring inflation down to the central bank’s 2 percent target. How long? Beyond 2025, which suggests rates will remain, in Fed parlance, “restrictive,” until then.

Unemployment: Fed members think the strong labor market will last into 2025. That could pose a problem for its inflation-fighting efforts, particularly if strong hiring leads to big wage gains.

Growth: Here’s where the Fed was most upbeat. The central bank sees fourth-quarter G.D.P. growth of 2.1 percent on an annualized basis, up from 1 percent at its June meeting, and higher than many Wall Street forecasts. The bank also upgraded its 2024 G.D.P. expectations, a potentially promising sign for President Biden heading into an election year.

When business disagrees with climate rollbacks

A move by Rishi Sunak, the British prime minister, to water down government climate targets, including a ban in 2030 on sales of new gasoline-powered cars, drew swift condemnation from political opponents and environmental groups.

But the decision — announced as global leaders hold talks on climate change in New York this week — was also criticized by C.E.O.s, who defended climate policies as being good for business. That unusual blowback is a potential signal of how things may play out in the U.S. as well.

Executives from several industries said the decision created uncertainty, particularly for global companies deciding where to invest in efforts to transition to green energy. Sunak’s approach is in stark contrast to that of the U.S., where climate subsidies tied to the Inflation Reduction Act have drawn a flood of corporate interest.

Among the most outspoken critics were auto executives, who have spent billions on new electric-vehicle plants in Britain but now worry they’ll have a hard time meeting government-mandated EV sales targets. “Our business needs three things from the U.K. government: ambition, commitment and consistency,” said Lisa Brankin, the chair of Ford U.K. Sunak’s move “would undermine all three,” she added. (Companies that are further behind in electric vehicle production, including Toyota, were more supportive of Sunak’s decision.)

U.S. businesses have pushed back against previous efforts to reverse green-minded policies. In 2018, the utility giant Exelon protested a Trump administration effort to weaken Obama-era rules on mercury emissions, saying it would kill jobs and threaten billions of dollars of investment.

Groups including the Business Roundtable have pushed for initiatives including a carbon pricing system and bigger tax credits for clean energy, despite Republican opposition. British companies’ response to yesterday’s decision by Sunak may foreshadow what could happen in the U.S. should Republican leaders — including a potential president — try something similar.

Hong Kong’s charm offensive

Hong Kong’s top financial official is touring western financial capitals in a bid to convince investors that it’s open for business.

But the city that has long billed itself as Asia’s financial center faces an uphill struggle, as rising U.S.-China tensions and Beijing’s crackdown on pro-democracy protests in 2019 continue to hammer Hong Kong’s reputation with global investors.

The independence of the legal system is a big question for business leaders, with lawyers warning that trust is dissipating, writes the Times’s Alexandra Stevenson:

In July, the city’s chief executive, John Lee, offered financial rewards for any information leading to the arrest of eight pro-democracy activists who fled Hong Kong’s national security law to places like the United States and Britain. In his appeal, he said they should be treated like “rats in the street,” and added that the police would “vigorously pursue” anyone who posed a threat to national security in the city. This week, Beijing ordered consulates in Hong Kong to turn over personal information about all local staff, including addresses and passport and identification numbers, bringing the city closer in line with rules elsewhere in China.

Against the backdrop of shifting regulations, law firms in Hong Kong are struggling to counter a perception among clients that the legal landscape has deteriorated, said Lester Ross, a corporate lawyer in the Beijing office of WilmerHale who works with lawyers in Hong Kong.

“There has been a loss of confidence in Hong Kong’s legal system,” Mr. Ross said. “Real or imagined, that sentiment is very real.”

THE SPEED READ

Deals

Policy

• The S.E.C. has adopted a new rule to crack down on “greenwashing” and other misleading marketing practices by Wall Street investment funds. (Reuters)

• Huawei’s latest phone shows how determined China is to squeeze out western chip makers and electronics companies. (FT)

• Volodymyr Zelensky, Ukraine’s president, met with U.S. financial leaders including Ken Griffin and Bill Ackman to discuss how to rebuild his country. (Bloomberg)

Best of the rest

• Monkeys used as test subjects at Neuralink, Elon Musk’s brain-implant start-up, may have suffered gruesome deaths because of the company’s technology, according to an investigation. (Wired)

• Bryan Johnson, a former tech executive, is spending millions trying to reverse aging with a strict regimen of 111 pills a day, a cap that shoots red light onto his scalp and more. (Time)

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