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In this week’s newsletter, Reed takes a look at Brazil’s attempt to muzzle Musk’s X platform, invest͏‌  ͏‌  ͏‌  ͏‌  ͏‌  ͏‌ 
 
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September 4, 2024
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Reed Albergotti
Reed Albergotti

Hi, and welcome back to Semafor Tech.

Elon Musk’s battle with Brazil — X and Starlink are now banned over his refusal to remove some right-wing accounts — offers endless fodder to debates over politics and speech.

But it’s also a natural experiment for people who think about — or are skeptical of — attempts to regulate “misinformation.” Will the ban work?

My hypothesis is that it will not.

And while authoritarians have shown, in Russia and China, that they can control the conversation with technology and fear, that’s going to get harder again too. Internet via satellite will be almost impossible to control.

But can it work in a democracy? I suspect Brazil’s right will find a way to communicate and spread the same claims a judge tried to stamp out. They might even be more believable now that it’s forbidden information.

What’s left? Well — perhaps satire. Before we had “misinformation,” we had cable news, and was there ever a more effective antidote than Jon Stewart’s mockery of Fox?

Read on for US government efforts to build out the nation’s datacenter capacity to meet the demands of AI.

Move Fast/Break Things

➚ MOVE FAST: Twist of fate. Jack Dorsey’s social media network Bluesky has racked up about 2 million new users in Brazil in four days, thanks to that country’s Supreme Court suspending Elon Musk’s X. It’s an interesting turn of events given Dorsey co-founded X and had urged Musk to buy the platform, then known as Twitter.

➘ BREAK THINGS: Deja vu. Tech stocks are down again as markets fretted once more about a slowing economy, and what that means for the AI boom. Nearly $280 billion in market value was wiped from Nvidia on Tuesday. Its stock has been volatile as investors absorb the jump in spending by tech giants to fuel their AI ambitions, which raises questions of how long they can keep that up.

BrendanMcDermid/File Photo/Reuters
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Reed Albergotti

Uncle Sam wants to know: What can your country do for AI?

Internet Education Foundation/Flickr

THE NEWS

The federal government is formalizing its behind-the-scenes consultations with the new AI giants as the US battles for position in the global AI race.

The Department of Commerce’s National Telecommunications and Information Administration, along with the US Department of Energy, put out an open request for comment Wednesday, asking industry leaders and experts to help lay the groundwork for new policies meant to aid and secure data centers in the coming years.

“We have heard privately from many sources about the coming demand, particularly driven by AI. This is a chance to transparently create a public record for future action to meet that growing data center demand,” said NTIA administrator Alan Davidson in an interview with Semafor. Makers of massive “foundation models” like ChatGPT, Claude and Gemini have long spoken informally with policy leaders to prepare them for the next step of AI advances.

“Companies are concerned about power supply. They’re concerned about security and cyber security standards. They’re concerned about the workforce,” he said.

Davidson, who also serves as Assistant Secretary of Commerce for Communications, said the federal government is also eyeing the needs of small- and medium-sized companies, academic institutions and researchers who need access to powerful data centers that now are mainly owned and controlled by private industry.

KNOW MORE

Policy around technological growth has become a big topic in the tech industry as the election approaches.

And laws regulating AI have become a political lightning rod, particularly in California, where industry leaders and some Democratic lawmakers have called on California Governor Gavin Newsom to veto SB 1047, a comprehensive AI bill.

At the same time, tech companies like OpenAI and Microsoft are looking to the Middle East for sources of funding and potentially cheaper electricity and infrastructure to build the massive new data centers they believe will be required for the next leap in AI capabilities.

National security officials are already concerned about US adversaries like China and Russia stealing secrets from American companies, whose security defenses are currently vulnerable to espionage from determined and well resourced nation states.

“Companies shouldn’t have to take on nation states all by themselves and we do think there’s a role for the federal government there. That’s part of what we need to hear from industry about,” Davidson said.

For Reed’s view on the role of the government in AI development, read on... →

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Live Journalism

September 25, 2024 | New York City | Request Invitation

Join Tom Steyer, Co-Executive Chair, Galvanize Climate Solutions, Kara Mangone, Head of the Sustainable Finance Group at Goldman Sachs, Mary de Wysocki, SVP and Chief Sustainability Officer at Cisco, and Heather Zichal, Global Head of Sustainability, JPMorgan Chase for an evening of forward-looking discussions on climate finance and AI’s role in advancing low-carbon technologies. As AI enhances climate projects by forecasting risks and boosting energy efficiency, questions remain about whether its energy demands could outweigh the benefits. The conversation will address these concerns while exploring how to ensure investments reach the regions most impacted by climate change.

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What We’re Tracking
swiss-image/Wikimedia Commons

While other tech giants have avoided a straight purchase of AI startups to gain access to talent, Salesforce is going the more traditional route. The company is buying Tenyx, which builds AI voice agents, and bringing on Tenyx CEO Itamar Arel and CTO Adam Earle, along with other staffers.

Meanwhile, Microsoft and Amazon have instead hired a bulk of the talent at AI startups but avoided acquiring those ventures. Critics say those moves are an attempt to avoid antitrust scrutiny, but they are attracting regulatory attention anyway. Salesforce has been less on the radar of watchdogs but the practice of acqui-hires has drawn Washington reviews.

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Semafor Stat

The number of hours that will pass between Apple’s annual iPhone reveal on Sept. 9 and a Huawei scheduled product launch in Beijing on Sept. 10, as the Chinese giant looks to outshine its American rival. Apple is expected to unveil a new iPhone 16, while the goal of Huawei’s event is still unclear, CNBC reported. Apple has recently lost its market dominance in China, with a recent report showing it’s lost its spot among the top five smartphone retailers in the country.

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Friends of Semafor

Meet Patent Drop, a bi-weekly newsletter that uncovers where tech titans (like Apple, Meta, Tesla) are investing their time and money by scouring the U.S. Patent & Trademark website. Stay ahead of the curve with proprietary news and analysis of innovation at its earliest stage. Subscribe for free today.

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Obsessions
Handout/Reuters

Investors are lining up to pour money into a new AI company founded by Ilya Sutskever, the former lead AI researcher for OpenAI, Reuters reported. Sutskever founded Safe Superintelligence after playing an instrumental role in the unsuccessful boardroom coup to oust his former boss, Sam Altman.

The funding, which hadn’t been reported before, is notable considering the company’s stated business model, which puts “safety, security, and progress” ahead of “commercial pressures,” like, for instance, making money. The firms investing in a company that doesn’t feel pressured to make money are a who’s who of AI investing: Sequoia, A16Z, and former Github CEO Nat Friedman, who ponied up $1 billion.

While the Reuters story says the investments are “in cash,” I wouldn’t be surprised if there’s more to the funding story. Friedman and A16Z have both acquired GPUs to build their own AI datacenters to entice startups to take compute resources in exchange for equity. It’s possible Sequoia and others have done something similar.

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