President Biden met with tech company leaders in July to discuss regulating artificial intelligence.Credit…Kenny Holston/The New York Times
A.I. rules in governments’ sights
President Biden is set to issue an executive order on artificial intelligence on Monday, in his first effort to regulate how U.S. companies develop it and how regulators oversee the technology. The order will create standards for American companies and public agencies.
Its release is intended to establish the U.S. as the global leader in regulating the fast-growing tech, coming just days before the British government hosts an international summit meeting on A.I. safety.
Biden will invoke the Defense Production Act, which lets the president mobilize U.S. industry to support national defense. The order will require companies developing A.I. that “poses a serious risk to national security, national economic security, or national public health and safety” to notify the government when training their systems.
The most advanced A.I. products will have to be tested to ensure they can’t be used to make biological or nuclear weapons, and the findings must be shared with the government. The order will recommend that content created by A.I. systems will need to be labeled to minimize the spread of “deep fakes” or disinformation, a key concern in the lead-up to next year’s election.
Federal agencies will also be urged to increase enforcement. The White House will ask the F.T.C. to step up its role as a watchdog on consumer protection and antitrust violations. Lina Khan, the F.T.C. chair, has signaled that she would aggressively police A.I.
Tech representatives welcomed the move. Linda Moore, C.E.O. of the industry group TechNet, told DealBook that the Biden administration was “providing a really good foundation for A.I. policy,” especially when Congress was deadlocked amid the leadership vacuum in the House.
A global scramble is underway to govern A.I. The European Union wants to pass regulations for the tech by the end of the year. Meanwhile, Group of 7 nations are set to develop a code of conduct for A.I. companies, and China introduced its own regulatory framework earlier this month. Some A.I. executives want a global governance regime modeled on the Intergovernmental Panel on Climate Change.
Britain’s event will be the first major meeting of world leaders and tech executives. Among those set to attend the hastily organized meeting are Vice President Kamala Harris and executives from Microsoft, Google, OpenAI and Meta. Also coming are a Chinese government delegation and representatives from Chinese tech groups, which reportedly drew the ire of Western officials.
HERE’S WHAT’S HAPPENING
Speaker Mike Johnson says avoiding a government shutdown is a priority. The top House Republican said yesterday that he was committed to passing a federal funding bill, addressing a top fear in Washington as a Nov. 17 deadline approaches. That may involve another stopgap measure ahead of a series of appropriations proposals.
Mike Pence ends his presidential campaign. The former vice president bowed to reality — including persistently low polling numbers, slow fund-raising and his association with Donald Trump — in calling it quits. Among Republican presidential contenders, Nikki Haley is making gains in early battleground states while Ron DeSantis is continuing to struggle.
Nelson Peltz reportedly gets support for a potential new challenge on Disney. The activist investor has the financial backing of Ike Perlmutter, according to The Wall Street Journal. Perlmutter is a former Marvel C.E.O. and one of the biggest individual shareholders in Disney. Peltz’s Trian is now said to hold a $2.5 billion stake, four times what it had in its first efforts to shake up Disney last year, as he demands control of multiple seats on the company’s board.
Traders are increasingly willing to do business with Russian metals. Western firms including Citigroup and Trafigura are striking new deals for commodities like aluminum despite the war in Ukraine, according to Bloomberg. There aren’t restrictions on trading Russian metal, but many companies have been wary of doing new business for materials originating there.
Is strike season nearing an end?
The U.A.W.’s history-making strike against the three big Detroit automakers is now down to one, after the union announced a preliminary accord with Stellantis on Saturday. Only General Motors is left, and there have been signs that a deal is close.
Elsewhere, Hollywood studios are hopeful that the actors’ strike is approaching an end as well.
The Stellantis agreement largely mirrors the one struck with Ford last week, including a 25 percent wage increase over the next four years, and improved pension and working conditions. Stellantis, which owns Chrysler and Jeep, also agreed to reopen a factory in Illinois.
Ford gave more detail yesterday about its pact with the U.A.W., including an agreement to invest $8.1 billion — involving potential battery and electric vehicle plants in Michigan and Tennessee that could eventually be covered by the labor agreement.
A deal with G.M. may be near, given that talks have been intensifying in recent days. But by ordering another walkout at a G.M. plant this past weekend, the union is again using its new playbook of increasing pressure at the last minute to make sure it gets, in the words of Shawn Fein, its president, “every penny possible.”
A resolution would come as a relief to G.M., which told analysts last week that the strike was costing the automaker $200 million a week.
What’s next: The U.A.W. is likely to renew efforts to organize labor at nonunion shops like Toyota and Tesla. Previous attempts have failed, but the union hopes that workers may be swayed by the terms it just won from the Detroit carmakers.
To some degree, Ford, G.M. and Stellantis may be hoping the U.A.W. succeeds in those efforts to unionize rival plants: Their executives have warned that the new contracts will impose higher costs as the Big Three accelerate their transitions to electric vehicles, expenses that their rivals don’t currently face.
There’s also hope of progress on another labor strike: Hollywood executives believe that they are closer to an agreement with the SAG-AFTRA actors’ union, according to The Times. But there are still unresolved issues, including payouts from streaming.
Pressure is growing to reach a deal. The studios said that a contract needed to be in place soon, or else productions won’t resume until January. And top stars and out-of-work stage crew have been quietly pushing for a resolution.
Elon Musk takes heat for a Starlink offer for Gaza
As Israel escalates its campaign in Gaza, including more troop incursions into the territory, global businesses are being drawn into the conflict, some in unexpected ways.
Elon Musk was criticized for offering Starlink service to aid groups in Gaza. Over the weekend, the SpaceX C.E.O. said the company would activate its satellite communications service for “internationally recognized aid organizations” after the Israeli government cut off phone and internet service in Gaza for 34 hours.
It wasn’t clear it would have much immediate effect, since no Starlink terminals had tried to connect from Gaza, Musk said, and communications service was restored by Sunday.
But Israel’s communications minister attacked the offer. Shlomo Karhi said his government would use “all means at its disposal to fight this” and warned Musk that such an effort would end up helping Hamas. The SpaceX chief responded that his company was not “naïve” and would also run security checks with U.S. and Israeli officials “before turning on even a single terminal.”
The controversy was a reminder of the increasing geopolitical importance of Musk-run companies. Starlink was previously applauded for activating its service in Ukraine, though its involvement in the conflict there has drawn scrutiny as the billionaire worried about its use in military operations.
In other Israel-Hamas news: The price of crude oil has continued to decline as markets bet the conflict won’t escalate. The Hollywood screenwriters union is increasingly divided over its public statements about the fighting. And pro-Palestinian content appears to be more popular than pro-Israeli media on TikTok.
The week ahead
Central banks, jobs and earnings: Here’s what to watch this week.
Tomorrow: A big week for data kicks off with reports on consumer prices and G.D.P. in the eurozone.AMD and Samsung report results, offering insight into the global demand for chips.
Wednesday: It’s decision day for the Fed. The central bank is expected to leave interest rates untouched, but has signaled that it’s open to further increases if inflation ticks higher.
Thursday: It’s the Bank of England’s turn; it, too, is expected to keep rates unchanged. On the earnings front, Apple, Shell, and ConocoPhillips report, as do Novo Nordisk and Eli Lilly, whose anti-obesity drugs have taken the market by storm.
Friday: It’s U.S. jobs day. Economists estimate that employers added 190,000 jobs in October, a big drop-off from September. Wage data will be a particular focus.
THE SPEED READ
Broadcom and VMware delayed a $69 billion merger that had been expected to close today, following reports that Chinese regulators could hold up the deal. The companies did not provide an update on getting approval in China and said the deal “will close soon.” (Bloomberg)
Sculptor Capital Management appears set to sell itself to Rithm Capital, after Dan Och, founder of Sculptor, a publicly traded hedge fund, agreed to an improved takeover bid of $720 million. (Bloomberg)
An employee at Two Sigma, a $60 billion quantitative-trading hedge fund, reportedly adjusted investing models without authorization, leading to some losses and regulatory scrutiny. (WSJ)
“Payday lenders aim to evade federal probes as borrowers plead for help” (WaPo)
Experiments on universal basic income are growing in the U.S. — and appear, in many cases, to be succeeding. (Insider)
Best of the rest
Web Summit, the tech conference organizer, named Katherine Maher as its new C.E.O., more than a week after its founder stepped down because of comments about Israel. (Web Summit)
“Seeking the ‘Right’ Customers, an Insurer Is Accused of Discrimination” (NYT)
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