 Many have raised alarms about the potential for artificial intelligence to displace jobs in the years ahead, but it’s already causing upheaval in one industry where workers once seemed invincible: tech. A small but growing number of tech firms have cited AI as a reason for laying off workers and rethinking new hires in recent months, as Silicon Valley races to adapt to rapid advances in the technology being developed in its own backyard. Chegg, an education technology company, disclosed in a regulatory filing last month that it was cutting 4% of its workforce, or about 80 employees, “to better position the Company to execute against its AI strategy and to create long-term, sustainable value for its students and investors.” IBM CEO Arvind Krishna said in an interview with Bloomberg in May that the company expects to pause hiring for roles it thinks could be replaced with AI in the coming years. (In a subsequent interview with Barrons, however, Krishna said that he felt his earlier comments were taken out of context and stressed that “AI is going to create more jobs than it takes away.”) And in late April, file-storage service Dropbox said that it was cutting about 16% of its workforce, or about 500 people, also citing AI. In its most-recent layoffs report, outplacement firm Challenger, Gray & Christmas said 3,900 people were laid off in May due to AI, marking its first time breaking out job cuts based on that factor. All of those cuts occurred in the tech sector, according to the firm. With these moves, Silicon Valley may not only be leading the charge in developing AI but also offering an early glimpse into how businesses may adapt to those tools. Rather than render entire skill sets obsolete overnight, as some might fear, the more immediate impact of a new crop of AI tools appears to be forcing companies to shift resources to better take advantage of the technology — and placing a premium on workers with AI expertise. “Over the last few months, AI has captured the world’s collective imagination, expanding the potential market for our next generation of AI-powered products more rapidly than any of us could have anticipated,” Dropbox CEO Drew Houston wrote in a note to staff announcing the job cuts. “Our next stage of growth requires a different mix of skill sets, particularly in AI and early-stage product development.” In response to a request for comment on how its realignment around AI is playing out, Dropbox directed CNN to its careers page, where it is currently hiring for multiple roles focused on “New AI Initiatives.” Dan Wang, a professor at Columbia Business School, told CNN that AI “will cause organizations to restructure,” but also doesn’t see it playing out as machines replacing humans just yet. “AI, as far as I see it, doesn’t necessarily replace humans, but rather enhances the work of humans,” Wang said. “I think that the kind of competition that we all should be thinking more about is that human specialists will be replaced by human specialists who can take advantage of AI tools.”Complete details can be found on OUR FORUM.  Microsoft and OpenAI were sued on Wednesday by sixteen pseudonymous individuals who claim the companies' AI products based on ChatGPT collected and divulged their personal information without adequate notice or consent. The complaint [PDF], filed in federal court in San Francisco, California, alleges the two businesses ignored the legal means of obtaining data for their AI models and chose to gather it without paying for it. "Despite established protocols for the purchase and use of personal information, Defendants took a different approach: theft," the complaint says. "They systematically scraped 300 billion words from the internet, 'books, articles, websites, and posts – including personal information obtained without consent.' OpenAI did so in secret, and without registering as a data broker as it was required to do under applicable law." Through their AI products, it claimed, the two companies "collect, store, track, share, and disclose" the personal information of millions of people, including product details, account information, names, contact details, login credentials, emails, payment information, transaction records, browser data, social media information, chat logs, usage data, analytics, cookies, searches, and other online activity. The complaint contends Microsoft and OpenAI have embedded into their AI products the personal information of millions of people, reflecting hobbies, religious beliefs, political views, voting records, social and support group membership, sexual orientations and gender identities, work histories, family photos, friends, and other data arising from online interactions. OpenAI developed a family of text-generating large language models, which includes GPT-2, GPT-4, and ChatGPT; Microsoft not only champions the technology but has been cramming it into all corners of its empire, from Windows to Azure. "With respect to personally identifiable information, defendants fail sufficiently to filter it out of the training models, putting millions at risk of having that information disclosed on prompt or otherwise to strangers around the world," the complaint says, citing The Register's March 18, 2021, special report on the subject. The 157-page complaint is heavy on media and academic citations expressing alarm about AI models and ethics but light on specific instances of harm. For the 16 plaintiffs, the complaint indicates that they used ChatGPT, as well as other internet services like Reddit, and expected that their digital interactions would not be incorporated into an AI model. Follow this and more on OUR FORUM.  Meta has been fined a record-breaking €1.2 billion ($1.3 billion) by European Union regulators for violating EU privacy laws by transferring the personal data of Facebook users to servers in the United States. The European Data Protection Board announced the fine in a statement Monday, saying it followed an inquiry into Facebook (FB) by the Irish Data Protection Commission, the chief regulator overseeing Meta’s operations in Europe. The move highlights ongoing uncertainty about how global businesses can legally transfer EU users’ data to overseas servers. The EU regulator said the processing and storage of personal data in the United States contravened Europe’s signature data privacy law, known as the General Data Protection Regulation. Chapter 5 of the GDPR sets out the conditions under which personal data can be transferred to third countries or international organizations. The fine is the largest ever levied under GDPR. The previous record of €746 million ($805.7 million) was levied against Amazon (AMZN) in 2021. Meta has also been ordered to cease the processing of personal data of European users in the United States within six months. Meta’s infringement is “very serious since it concerns systematic, repetitive and continuous transfers,” said Andrea Jelinek, chair of the European Data Protection Board. “Facebook has millions of users in Europe, so the volume of personal data transferred is massive. The unprecedented fine is a strong signal to organizations that serious infringements have far-reaching consequences,” she added. Meta, which also owns WhatsApp and Instagram, said it would appeal the ruling, including the fine. There would be no immediate disruption to Facebook in Europe, it added. The company said the root of the issue stemmed from a “conflict of law” between US rules on access to data and the privacy rights of Europeans. EU and US policymakers were on a “clear path” to resolving this conflict under a new transatlantic Data Privacy Framework. The new framework seeks to end the limbo facing companies since 2020, when Europe’s top court struck down a transatlantic legal framework designed to address EU concerns about potential US government surveillance of European citizens, known as Privacy Shield. The United States and the EU have been negotiating a successor agreement since last year. The continued lack of a Privacy Shield replacement threatens thousands of businesses that depend on being able to move EU user data to other jurisdictions, according to legal experts. The European Data Protection Board “chose to disregard the clear progress that policymakers are making to resolve this underlying issue,” Nick Clegg, Meta’s president of global affairs, and Jennifer Newstead, the company’s chief legal officer, said in a statement. “This decision is flawed, unjustified and sets a dangerous precedent for the countless other companies transferring data between the EU and the US,” they added. Before Monday’s ruling, Ireland’s Data Protection Commission had handed Meta nearly $1 billion in fines for alleged violations of GDPR since the fall of 2021. But in this instance it was not in favor of fining Meta, judging that doing so exceeded what could be regarded as “proportionate” to address the infringement. In its own statement Monday, the regulator said it was obliged to base its final ruling on the decision of the European Data Protection Board. Ireland has a narrow path to tread between retaining top US tech companies and aligning with the European Union’s hard-hitting approach to tech regulation. Dublin is home to the European headquarters of Apple, Meta, Twitter, and Google, which have created thousands of jobs in the country and boosted its economic growth. Ireland’s low corporate tax rate of 12.5% has been a major factor in luring these firms. The country was among the last in the Organization for Economic Cooperation and Development to join a global agreement in 2021 to tax multinational firms at a minimum rate of 15%. Complete details can be found posted on OUR FORUM. |
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