Regulation around deepfakes is still in its infancy, but companies are putting out more of them anyway. WSJ enterprise tech reporter Isabelle Bousquette joins host Julie Chang to discuss how some businesses are exploring ways to do so safely. Plus, the EU-China trade rift continues to grow, but what do EVs and cheese have to do with this?
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[00:00:19] Welcome to Tech News Briefing. It's Monday, August 26th.
[00:00:22] I'm Julie Chang for The Wall Street Journal, filling in for Zoe Thomas.
[00:00:26] The Europe-China trade rift continues to grow.
[00:00:30] We'll tell you what role EVs and cheese have in this.
[00:00:34] And then, regulation around deepfakes is still in early stages, but companies are putting more of them out anyway.
[00:00:42] We'll dive into how some businesses are exploring ways to do so safely with WSJ Enterprise reporter Isabel Busquets.
[00:00:53] But first, what do cheese and electric vehicles have in common?
[00:00:58] Trade issues.
[00:01:00] Last week, the European Union affirmed its plan to impose high tariffs on China-made electric vehicles.
[00:01:06] A day later, China said it opened an anti-subsidy probe into dairy products imported from the EU.
[00:01:12] It was the latest tit-for-tat between the two increasingly hostile trading powers.
[00:01:17] WSJ reporter Kim McRail talked about this with TNB host Zoe Thomas.
[00:01:22] Here's what they said about it.
[00:01:24] So why is the EU planning to impose high tariffs on China-made electric vehicles?
[00:01:30] The EU launched an investigation last fall into Chinese-made electric vehicles concerned that subsidies provided by the Chinese government to the industry might be resulting in vehicles that are cheaper than they otherwise would be coming into the EU and displacing European-made electric vehicles.
[00:01:48] So they did this investigation.
[00:01:51] What they found in it was that they alleged that there are significant subsidies throughout the supply chain in China.
[00:01:58] And as a result, they're imposing these tariffs.
[00:02:02] They would describe that as a way to try to level the playing field and also to try to make sure that the European electric vehicle industry is able to compete against the imports that are coming in.
[00:02:13] What are the tariff rates that the EU is considering putting in?
[00:02:16] They've been adjusted a couple of times, but the latest version of them goes up to about 36% at the highest end.
[00:02:24] Lower for some specific EV makers and quite a bit lower for Tesla, actually, based on a specific investigation of the subsidies that Tesla benefited from.
[00:02:34] And all of those are on top of an existing 10% tariff that the EU has on imported vehicles.
[00:02:40] And when do we expect the EU to make a final decision on this?
[00:02:43] So that's expected to be this year, and it could be fairly soon.
[00:02:47] The European Commission, which is the executive body of the European Union and the body that has done the investigation,
[00:02:53] so they put out their proposal for, which was to finalize the tariffs.
[00:02:56] But the next step is for member state governments to weigh in on that.
[00:02:59] But it's a pretty high bar for them to overturn the tariffs that the Commission is planning to go ahead with.
[00:03:05] Has China said anything about the EU tariffs?
[00:03:08] They've called it repeatedly and recently a protectionist move.
[00:03:13] They've said it's politically motivated.
[00:03:14] They filed a complaint about the investigation with the World Trade Organization.
[00:03:19] And generally, government officials from China and also industry groups have warned about retaliation.
[00:03:25] You know, until recently, the EU and China were tightening their trade bonds.
[00:03:30] So why is the EU hardening its trade stance now towards China?
[00:03:34] Some of that is because of worries about a flood of cheap goods coming from China.
[00:03:40] This is the concern that we hear a lot from Western officials about overcapacity.
[00:03:44] And then part of it is also about the close ties that China has continued to have with Russia since the invasion of Ukraine.
[00:03:51] So, Kim, we're talking about electric vehicles and dairy products.
[00:03:55] So how much could this Chinese probe into, you know, milk, cream, cheese and other dairy products affect EU exporters?
[00:04:03] The dairy industry is important in Europe generally.
[00:04:06] But in terms of actual EU-China trade, dairy isn't a huge part of that trade.
[00:04:12] Customs data shows that China imported about $1.1 billion worth of dairy products of the ones that are being investigated this year through July.
[00:04:22] And that's not just from the EU.
[00:04:23] The majority of that came from New Zealand.
[00:04:26] So it's not a massive amount in terms of trade and of exports from the EU.
[00:04:30] But it has some symbolic value to go after an industry that's important in Europe.
[00:04:36] That was WSJ reporter Kim McRail speaking with TNB host Zoe Thomas.
[00:04:41] Coming up, companies are creating deepfakes for a range of business situations from research to employee training, despite the legal minefield they pose.
[00:04:53] We'll have more on that after the break.
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[00:05:37] You've probably heard them and seen them.
[00:05:40] Deepfakes are proliferating the internet.
[00:05:42] But while the AI-generated imagery and videos are mostly seen as bad, with the rise of deepfake scams and deepfakes of political figures or celebrities,
[00:05:50] some companies have been looking at ways to use the technology to help with their business.
[00:05:55] This is coming at a time when regulation around this tech is still in its infancy.
[00:06:00] And amid a dearth of U.S. regulatory guidance on AI,
[00:06:03] businesses are having to navigate what one executive referred to as a legal minefield.
[00:06:09] So what will it mean for businesses and for future regulation in this space
[00:06:13] as companies continue to move ahead with commercial applications of the technology?
[00:06:17] Our enterprise tech reporter, Isabel Busquette, has been following the story, and she's with me now.
[00:06:22] Isabel, what are some of the issues companies are facing with regards to the deepfakes they've been making?
[00:06:28] So one issue is that if you're going to create a deepfake of a real person,
[00:06:33] the legalities around who owns that and what companies can do with it are really complex.
[00:06:40] Say you want to create a deepfake of one of your employees' voices
[00:06:46] and then use that as your customer service chatbot as Vodafone did in Germany.
[00:06:51] You know, there are questions around, do you own that voice?
[00:06:55] Do they own that voice?
[00:06:56] What happens if you own it but they leave the company
[00:06:59] and they don't want you to use it anymore?
[00:07:02] What if they leave in a bad light?
[00:07:04] If you have to stop using it, what does that mean for your continuity of service?
[00:07:08] Another company, they wanted to use deepfake avatars
[00:07:12] to create a sexual harassment training video.
[00:07:16] But one of the actors who had sort of lent his likeness to be a deepfake,
[00:07:21] they had contracts that basically said,
[00:07:23] you can't use my likeness to say these offensive things.
[00:07:27] And in a sexual harassment video, the point is to kind of say offensive things.
[00:07:32] And then, you know, there are also questions about disclosure.
[00:07:35] Are you disclosing to people that this is an AI?
[00:07:39] It might seem like a straightforward thing to do,
[00:07:42] but the legalities of, you know, maybe you had a one-liner,
[00:07:45] but someone didn't see it.
[00:07:47] Are you still responsible for, you know,
[00:07:49] the fact that they didn't see it and they didn't know?
[00:07:51] Companies are still working it out.
[00:07:53] It's still really early.
[00:07:54] And a handful of companies I talked to said,
[00:07:56] this employee is watching this training video.
[00:07:58] And yes, we created it with AI,
[00:08:00] but no, it's not that important that they know that.
[00:08:03] To them, it's just a training video.
[00:08:05] Why does it really matter if we disclose it?
[00:08:07] So you mentioned Vodafone.
[00:08:09] What other companies are using deepfakes?
[00:08:11] A lot of companies, more than you think.
[00:08:14] So Hewlett Packard Enterprise did one.
[00:08:17] They created like a deepfake of their CEO,
[00:08:19] whose name is Antonio Neary,
[00:08:21] and they named the deepfake Antonio Neary.
[00:08:24] And that was something they had in sort of like hologram form
[00:08:28] at one of their conferences.
[00:08:30] So a little clear that that's an AI
[00:08:33] because it looks like a hologram,
[00:08:35] but they were saying if he leaves the company,
[00:08:38] you know, we can sort of change over the persona
[00:08:41] of this sort of AI.
[00:08:44] But there's no sort of legal answer there yet.
[00:08:47] A couple other companies,
[00:08:49] Sonesta International Hotels,
[00:08:52] Birchwood Foods,
[00:08:53] those are a couple of the companies
[00:08:54] that are using this to create employee training videos.
[00:08:58] And they love it because a lot of these videos,
[00:09:00] they would have to basically shoot themselves.
[00:09:03] There was a lot of overhead associated with that
[00:09:05] that they now don't have to do.
[00:09:07] I spoke to one professor who was using this
[00:09:10] to do online courses.
[00:09:12] He would deepfake himself
[00:09:14] and then use that to update the course
[00:09:16] rather than having to go back to a studio.
[00:09:19] And there's even this one AI company
[00:09:21] that works with humanitarian organizations
[00:09:24] who have this big burden
[00:09:25] to check in with the people that they've given aid to.
[00:09:29] And the humanitarian organization
[00:09:31] maybe doesn't have the staff
[00:09:32] to do that at the scale they need to.
[00:09:34] So they've sent out these links
[00:09:36] to these meetings with AI avatars
[00:09:39] who ask the people a series of questions
[00:09:43] and record their answers
[00:09:44] and then share them back.
[00:09:45] That was one of the instances
[00:09:47] where people weren't necessarily understanding
[00:09:49] that they were talking to an AI.
[00:09:52] It's less of an issue today
[00:09:53] than it will be in the future,
[00:09:55] in part because, you know,
[00:09:59] so as they become more conversational,
[00:10:01] which is definitely where this is going,
[00:10:03] there will be bigger issues.
[00:10:05] What does regulation currently look like in this space?
[00:10:08] Regulation is progressing at different paces
[00:10:10] in the U.S. and abroad.
[00:10:12] We've seen the EU AI Act,
[00:10:14] which came into effect this month,
[00:10:17] and that requires disclosure
[00:10:19] of highly realistic AI outputs.
[00:10:22] In the U.S.,
[00:10:23] there is no federal legislation on AI as of yet,
[00:10:28] but different states are sort of moving forward
[00:10:31] at their own paces
[00:10:33] with regulating various elements of this,
[00:10:36] be it deepfakes or other parts of AI.
[00:10:39] We've seen a lot of bills targeted
[00:10:42] at protecting the election
[00:10:44] and restricting use of deepfakes
[00:10:47] of political candidates
[00:10:49] or for political communication.
[00:10:51] We've seen a handful of bills
[00:10:53] that are sort of aimed at
[00:10:55] protecting celebrities and public figures
[00:10:57] from having their likenesses
[00:10:59] be abused or taken away from them.
[00:11:02] But in terms of like regulating
[00:11:04] how and where
[00:11:06] and if companies are allowed to use this
[00:11:08] for purposes they deem appropriate,
[00:11:10] that's an area that's still a little unclear.
[00:11:14] So it sounds like there's a patchwork
[00:11:15] of regulations in place then.
[00:11:17] Will it be harder to regulate
[00:11:19] deepfakes going forward
[00:11:20] if companies just charge ahead
[00:11:22] with using them?
[00:11:23] We see this with a lot
[00:11:25] of different technologies.
[00:11:26] We see this idea
[00:11:27] that the technology itself
[00:11:29] is outpacing how fast regulators
[00:11:31] can move to regulate it.
[00:11:33] We may see that the regulation
[00:11:36] will sort of retroactively take notes
[00:11:38] from how companies have decided
[00:11:40] to use it themselves.
[00:11:42] But those that are charging ahead
[00:11:45] have a sense of confidence
[00:11:46] that they are doing things
[00:11:48] in the right way
[00:11:49] and we'll just have to see
[00:11:50] how it works out.
[00:11:51] That was WSJ Enterprise Tech reporter
[00:11:54] Isabel Busquets.
[00:11:55] And that's it for Tech News Briefing.
[00:11:57] Today's show was produced by me,
[00:11:58] Julie Chang,
[00:11:59] with supervising producer Melanie Roy.
[00:12:01] We'll be back this afternoon
[00:12:03] with TNB Tech Minute.
[00:12:05] Thanks for listening.
[00:12:11] We'll be back to you.
[00:12:12] AI may be the most important
[00:12:13] new computer technology ever,
[00:12:15] but AI needs a lot of processing speed
[00:12:17] and that gets expensive fast.
[00:12:19] Upgrade to the next generation
[00:12:20] of the cloud,
[00:12:21] Oracle Cloud Infrastructure,
[00:12:23] or OCI.
[00:12:24] OCI is the single platform
[00:12:25] for your infrastructure,
[00:12:27] database,
[00:12:27] application development,
[00:12:29] and AI needs.
[00:12:30] Do more and spend less
[00:12:31] like Uber,
[00:12:32] 8x8,
[00:12:33] and Databricks Mosaic.
[00:12:34] Take a free test drive of OCI
[00:12:36] at Oracle.com
[00:12:38] slash Wall Street.
[00:12:39] Oracle.com
[00:12:40] slash Wall Street.