Welcome to Tech Nations Sensemaker – a weekly newsletter dedicated exclusively to covering the tech giants
Alphabet, Amazon, Apple, Facebook, Microsoft and Tencent.
Six companies with more influence over our lives, politics and culture than many nation states. That’s why, at Tortoise, we’ve decided to launch the Tech States Sensemaker – a weekly newsletter dedicated exclusively to covering these six tech giants.
Here’s what you need to know this week:
- Europe released strict AI regulations with the power to impact all the Tech States
State by state
- Facebook’s oversight board should let Donald Trump back on the platform, its originator tells us
- Microsoft’s Nuance deal opened the door to voice-based AI medicine
- Amazon could be as wealthy as Russia by 2024
- Google Maps announced it’s going green (up to a point)
- Tencent pledged $7.7 billion towards anti-poverty measures
- Apple risked losing business to Spotify by charging podcast creators 30 per cent
Europe is already the world’s most aggressive watchdog of the Tech States, restricting how they use customer data and introducing rules to keep users safe online.
Now regulators are coming for artificial intelligence. Margrethe Vestager, the European Commission’s head of digital policy, has drafted laws to shape how automated decisions will be made within the 27 nation bloc. Essentially, they seek to regulate AI according to the risks it poses.
Here are the key takeaways from the 108-page draft regulation:
- Unacceptable risk: Some AI will be banned altogether. These include tools that allow “social scoring” by governments. Real-time facial recognition will be prohibited in public spaces except in exceptional circumstances
- High risk: Companies providing AI in transport systems, law enforcement, border control, exam-scoring – all “high-risk” areas – will have to provide proof of its safety including risk assessments
- Limited risk. Chatbots fall into this category. They will be subject to transparency obligations ensuring users are aware they are interacting with a machine
As pointed out by Richard Waters in the FT (£), Europe is trying to do something revolutionary here: it wants to look beyond the output of corporate decisions towards trying to control the inputs. In other words, the new rules won’t just govern what the Tech States use AI to achieve, but how they arrive at key decisions in the first place.
There is still much to be ironed out. How do you define a “high risk” AI system? Will the ban on AI that uses “subliminal techniques in ways that might cause harm” affect Facebook’s news feed?
What is clear is that Brussels has set a direction of travel – one that other countries could use as a blueprint to regulate AI worldwide. As Carly Kind, director of the Ada Lovelace Institute, points out, this is the first time any country or bloc has even tried to regulate the technology. “The fallback option to date has been to do nothing and wait to see what happens.” The Center for Data Innovation, a think tank which receives funding from Apple and Amazon, warned that the “thicket” of new rules would “hamstring” innovation. Expect major lobbying between now and 2023, when the rules are expected to become law.
Facebook: Freedom of speech
Facebook’s Oversight Board – the 20-member group often referred to as “Facebook’s Supreme Court” – is due to decide whether to ban Donald Trump permanently from the platform. The signs are that it could give the controversial former US president one last chance. Noah Feldman, the Harvard Law School professor who came up with the idea for the Oversight Board while staying with his friend Sheryl Sandberg, Facebook’s chief operating officer, suggested to Tortoise’s co-founder, James Harding, that Trump should be reinstated on condition that any further abuse of Facebook’s rules would see him “off and off permanently.” Listen to the whole podcast episode here.
How high are taxes in the Tech States? In Apple’s case, users of its new podcast subscription service will be charged 30 per cent of first-year revenues. The high tariff could cause a migration to neighbouring platforms such as Spotify, which is due to launch its own podcast subscription service this month. Spotify will allow creators to keep 100 per cent of their revenues. Think of it like Switzerland tempting businesses away from high-tax Germany. And the stakes are high: podcasts exploded in popularity during the Covid-19 lockdown. According to Edison Research, 41 per cent of the US population over the age of 12 are monthly podcast listeners.
Microsoft’s $19.7 billion deal to buy Nuance, a company specialising in deep learning and “ambient recording”, could open up a revolution in healthcare, experts tell us. Most doctors spend hours transcribing patient notes using clunky software. Nuance not only automates that process but allows AI to analyse patient voices for signs of potential disease. The tech lets medical diagnoses be based not simply on the symptoms a doctor records, but on anything a patient tells her. It can even analyse the tone of a patient’s voice to diagnose illnesses such as depression.
Tencent: International Development
Tencent, the Chinese Tech State, has pledged to invest $7.7 billion in poverty alleviation. It’s no coincidence that such generosity came as China’s government tightened its grip on its largest home grown tech platforms. Whether the payout will shield the Tech State from the sort of antitrust crackdown to have affected rival Alibaba (which this month received a $2.8 billion fine for allegedly abusing its market dominance) remains to be seen.
Amazon’s Q1 earnings are announced this week and strong growth is expected. But it’s perhaps nothing compared to where the Tech State is going. Brent Thill, the Jefferies analyst, predicts that the company could be worth almost $3 trillion in three years. Such explosive growth is thanks to three divisions: AWS, Amazon’s cloud computing division (which Thill thinks could be worth $1.2 trillion by 2024 – astonishing given that only four US listed companies currently have market caps of more than $1 trillion); Amazon’s advertising business (which he predicts could be worth $600 billion) and, finally, its core retail business (predicted to grow to $1 trillion). If correct, Amazon would be worth about the same as Russia’s economy in 2024.
Google: Environmental protection
Google announced that its Maps app is going green and will be able to suggest a car route with the lowest carbon footprint. It’s a clever system, using information like road type, incline and traffic congestion to estimate emissions. But Maps will only suggest the most environmentally friendly option if that route takes no longer than others. Its ultimate objective – to get people to places in the quickest time possible – remains in place. Tech States are often happy to eliminate negative externalities (AI bias, misinformation, environmental impact) up to the point where such efforts hamper the inherent functionality of their tools.
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