NIST Launches Gen AI Program and White House Updates Critical Infrastructure Oversight

[00:00:02] It's Wednesday, May 1st, 2024 and I'm Dave Sobel, three things to know today.

[00:00:06] NIST launches Gen AI program to set benchmarks for generative AI and enhance transparency.

[00:00:12] The White House updates critical infrastructure oversight with National Security Memorandum

[00:00:17] 22 and Microsoft, Google and Amazon all leverage AI and cloud for substantial Q1 revenue growth.

[00:00:25] This is the Business of Tech.

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[00:01:19] The National Institute of Standards and Technology has launched NIST Gen AI, Program to Assess

[00:01:25] Generative AI Technologies.

[00:01:27] The program will release benchmarks, develop deep-baked checking systems, and encourage

[00:01:32] the creation of software to detect the source of AI-generated information.

[00:01:37] NIST Gen AI's first project is a pilot study to differentiate between human-created

[00:01:42] and AI-generated media starting with text.

[00:01:46] The program will invite teams to submit AI systems to generate or identify AI-generated

[00:01:51] content.

[00:01:52] The launch of NIST Gen AI is part of NIST's response to President Joe Biden's AI transparency

[00:01:58] rules and will inform the work of NIST's AI Safety Institute.

[00:02:03] Eight major daily newspapers, including the Chicago Tribune and the New York Daily News,

[00:02:08] have sued OpenAI and Microsoft for using their news articles to train tools without

[00:02:13] compensating content owners.

[00:02:15] The lawsuit raises concerns about the impact of AI tools on the news industry and calls

[00:02:20] for fair compensation for the use of copyrighted work.

[00:02:23] AI companies argue that using news articles for training qualifies as fair use, but news

[00:02:28] publishers disagree and demand a stop to the practice.

[00:02:32] And while I'm on AI, a report by Getty Images highlights the consumer's value-authentic

[00:02:37] content and our wary of AI-generated images.

[00:02:42] AI companies should use synthetic images tactfully considering their audience and intent keeping

[00:02:47] authenticity as the focus and understanding the data on which AI tools were trained.

[00:02:53] Industries with higher trust expectations such as healthcare and finance should be

[00:02:56] especially cautious.

[00:02:59] AI-generated content may not be suitable for campaigns emphasizing authenticity or

[00:03:04] featuring real people, but can be used for non-human elements.

[00:03:09] Why do we care?

[00:03:11] Businesses do need to consider how carefully they integrate AI-generated content into their

[00:03:14] marketing strategies, particularly where trust is paramount such as healthcare and finance.

[00:03:20] The key insight is transparency.

[00:03:22] I won't dwell on the lawsuits, this is a tactical update, but I will dwell on how establishing

[00:03:29] rigorous benchmarks for gender of AI will help standardize how these technologies are

[00:03:33] assessed and used, serving safer and more reliable applications.

[00:03:37] By setting benchmarks and developing systems to assess the content, MIST aims to enhance

[00:03:42] transparency and safety and the use of these technologies.

[00:03:46] And the opportunity is in applying that in business.

[00:03:51] The White House issued National Security Memorandum 22 to update the oversight and management

[00:03:56] of critical infrastructure sectors.

[00:03:59] The memo empowers the Department of Homeland Security and the Cybersecurity and Infrastructure

[00:04:03] Security Agency to coordinate efforts to secure critical infrastructure.

[00:04:08] It also directs the U.S. intelligence community to share intelligence with infrastructure owners

[00:04:12] and operators.

[00:04:14] The memo replaces an Obama-era policy and outlines 13 requirements for agencies to meet over the

[00:04:20] next 18 months.

[00:04:22] The Federal Communications Commission has signed a Memorandum of Understanding with the Federal

[00:04:26] Trade Commission to reclaim some oversight duties over broadband providers.

[00:04:31] MIST dissolves the 2017 agreement under which the FTC took on enforcement duties after the

[00:04:37] repeal of net neutrality rules.

[00:04:39] The move restores the FCC's authority to regulate broadband providers and ensure consumer privacy

[00:04:45] protections.

[00:04:47] Alabama has expanded its child pornography law to include deep-fake images created

[00:04:52] by artificial intelligence following a cyberbullying incident at a middle school.

[00:04:58] R.K.I.V. signed the Alabama Child Protection Act of 2024, inspired by the incident, to protect

[00:05:04] children from the potential dangers of AI.

[00:05:08] Officials in Washington rallied to emphasize the importance of the Affordable Connectivity

[00:05:12] Program and the repercussions of its imminent end.

[00:05:15] The program has provided low or no-cost internet to 23 million American households

[00:05:20] addressing affordability barriers.

[00:05:23] Starting today, enrolled households will only receive a partial credit toward their

[00:05:27] monthly internet costs, leading to potential disconnections.

[00:05:31] Advocates are pushing for an extension to the program through the ACP Extension Act, which

[00:05:36] aims to allocate $7 billion.

[00:05:39] The White House sees the ACP as essential for achieving internet for all by 2030.

[00:05:44] Members of Congress are urged to support the program's continuation.

[00:05:49] New laws have been introduced in the U.K. to protect consumers and businesses from hacking

[00:05:53] and cyberattacks.

[00:05:55] Users of internet-connected smart devices are now required to implement minimum security standards,

[00:06:01] including banning easily-guessable default passwords.

[00:06:04] Why do we care?

[00:06:07] The Director for Intelligence Sharing is particularly important as it allows infrastructure

[00:06:11] operators to anticipate and mitigate threats before they materialize.

[00:06:15] A culture of information sharing takes investment, and here we see the government doing their

[00:06:20] part.

[00:06:21] The laws just make sense, deep bakes of miters, safer default passwords.

[00:06:26] But they ultimately have to be implemented to a turd.

[00:06:30] Unless there's no I'm very pro broadband, I think it's good business.

[00:06:36] I prefer to review earnings reports in batches, so let's look at Microsoft, Google and Amazon.

[00:06:43] Microsoft reported a 17% revenue growth in the three months ending in March, attributed

[00:06:48] to the momentum from co-pilot, its AI-powered chatbot.

[00:06:52] The growth rate remained flat compared to the previous quarter, revenue from Activision, which

[00:06:57] the company acquired in October contributed to the overall growth.

[00:07:01] Azure Cloud Computing Service saw a 21% revenue growth, potentially boosted by new AI-powered

[00:07:08] services.

[00:07:09] Microsoft's Office Unit had consistent growth, while capital expenditures doubled to meet

[00:07:14] the rising demand for generative AI.

[00:07:17] The Google parent Alphabet reported a 15% increase in first quarter revenue, with its cloud business

[00:07:23] Google Cloud accounting for almost 12% of total revenue.

[00:07:27] The company is focusing on boosting Google Cloud and AI adoption, combining AI model development

[00:07:32] teams and emphasizing its leadership in AI research and infrastructure.

[00:07:36] Alphabet is ramping up AI research and development and pushing Google Cloud commercially.

[00:07:42] Google Cloud reported a 28% increase in revenue in Q1 2024, attributed to AI.

[00:07:49] Amazon reported a 13% increase in revenue from the first quarter, driven by growth in Amazon

[00:07:54] Web Services and advertising services.

[00:07:57] AWS reported a 17% year-over-year growth in revenue from the first quarter, surpassing

[00:08:02] Wall Street's expectations.

[00:08:05] Revenue from AWS reached $25.04 billion, contributing 17% of Amazon's overall revenue.

[00:08:12] AWS also delivered $9.42 billion in operating income, counting for 62% of Amazon's total.

[00:08:20] The company remains a major player in cloud market, outpacing competitors like Google

[00:08:25] and Microsoft in gross.

[00:08:27] AWS' operating margin widened to 37.6%, the highest since 2014.

[00:08:34] AWS is projected to reach $100 billion in revenue in fiscal year 2024 and has improved

[00:08:40] its margins.

[00:08:41] The unit's improved margins have increased by 800 basis points.

[00:08:46] Operating income is attributed to its decision to run servers for six years.

[00:08:53] Why do we care?

[00:08:54] It's all about cloud and AI.

[00:08:56] In cloud, it's clearly paying off for the cloud players.

[00:08:59] The anticipation is that AI will do the same over time.

[00:09:03] For providers, the obvious answer is to follow their lead.

[00:09:06] Their partners would clearly benefit from their investments.

[00:09:10] Also wanted to note AWS' six-year commitment on servers.

[00:09:15] I found that notable as it's clearly a break from long-standing three-year upgrade

[00:09:20] cycle thinking.

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