Axios Future

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July 10, 2019

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Today's Smart Brevity count: 1,163 words, a <5 minute read.

What else should we write about this summer? Hit reply to this email or message me at [email protected], Kaveh Waddell at [email protected] and Erica Pandey at [email protected].

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1 big thing: Racing for AI rules

Illustration: Sarah Grillo/Axios

For over a year, China has moved to lead the creation of the first global norms for AI. Now, the U.S. is developing its own AI standards, as the two rivals compete to shape a technology that could define the future balance of authoritarian and democratic power, Kaveh reports.

What's happening: China's ambitions are a dimension of its all-hands push to lead the world in frontier technologies — especially AI — by the end of the next decade. Having been relegated to the sidelines in the last big cycle of standard-setting at the birth of the internet, Beijing is laser-focused on dominating this new round.

As AI moves increasingly into actual commercial use, the leading nations are positioning themselves to standardize the field to their own advantage. This includes everything from minute technical standards to procedures for removing bias from algorithms.

Countries and companies have a lot to gain from leaving a mark on the process.

  • For one, firms whose technology is deemed part of a global standard can make big money in royalties — in the way Qualcomm, for example, profits from its wireless technology patents.
  • What's more, the definitions of AI buzzwords like "fairness" and "transparency" are still up for grabs. How they are codified will have a sweeping effect on the way AI systems are deployed and whom they benefit — companies, governments, or users.

Beijing got out of the starting gate first: Last year, China published a detailed report focused on ethical norms and technical standards that are meant to allow companies to work together more easily. A few months later, Beijing hosted the first major international meeting on AI standards.

  • For China, shaping global AI standards is key to “seizing a new round of technology dominance," according to the Chinese report, published by the government, industry and academia. (Jeff Ding, an Oxford AI policy researcher, translated it into English.)
  • At the Beijing meeting, the Chinese delegation ended up with plum spots on planning groups and helped shape their agendas, wrote Ding, Eurasia Group's Paul Triolo and New America's Samm Sacks in the months after the summit.
  • China's strong showing "could enable Chinese actors to influence a wide range of issues related to AI standards, including ethical and social norm development," they wrote.

The response: The Trump administration has vigorously pushed back against China's tech drive. Trump earlier this year signed an executive order designed to keep Beijing at bay on AI.

  • Last week, as required by the order, the National Institute of Standards and Technology (NIST) proposed a plan to work with industry and academia on new metrics and standards for accuracy, "trustworthiness" and bias of AI systems.
  • The EU and OECD have also advanced high-level guidelines.

One short-term risk of this international rush is a "rebordering" of AI, in which the field will develop according to different rules in the U.S., Europe and China. Thus far, AI has been characterized by significant international collaboration.

The big question: Where a potential future global policy will settle. Everyone realizes that they will have to compromise to yield the prize — unitary rules. But meanwhile each side is driving stakes in the ground now so that they can pull the eventual consensus in their direction.

2. Guzzling American data

Data: Apptopia; Chart: Axios Visuals
Data: Apptopia; Chart: Axios Visuals

U.S. regulators have tried to hold China's data-guzzling companies off by blocking strategic acquisitions of domestic companies by Chinese firms.

What's happening: In an end-run around the restrictions, Chinese companies are advertising on U.S.-based platforms to assert their dominance anyway, writes Axios’ Sara Fischer.

  • Many of these apps are using ads on Facebook and other platforms that don't typically deny advertisers the right to run ads based on their home country, targeting people in the U.S.
  • This has led to the adoption of major Chinese services in many verticals, from retail to social media.

Why it matters: Chinese AI companies have the benefit of a huge pool of data from at home that allows them to build powerful and lucrative predictive models. But those predictions, based on largely homogenous datasets, don’t always travel well across cultural borders — a problem Chinese companies hope to solve by ingesting more data from places like the U.S., to better understand foreign users, Kaveh notes.

There are also potential national security concerns, Graham Webster of New America tells Erica. "Say there’s a sensitive U.S. military officer with a kid who's making memes on TikTok. Is it possible that there’s data being collected through that usage that could be useful to a Chinese intelligence service? Yeah, that’s possible. But we haven’t seen evidence of that yet."

Driving the news: Shein, a major Chinese retailer, has seen 2.5 million new installs in the U.S. alone, per Apptopia — its most ever from the country. However, this was only about 14.5% of its total app installs around the world.

  • TikTok, the Bytedance-owned social karaoke app, is exploding in the U.S. According to the Wall Street Journal, TikTok spent $1 billion on advertising in the U.S. in 2018.
  • Wish, the Chinese retailer that rivals Shein, is still the No. 1 shopping app in the U.S. for both the Apple App and Google Play stores.

3. Sunday Scaries in one stat

Microsoft's campus in Redmond, WA. Photo: Stephen Brashear/Getty

As smartphones and messaging apps like Slack have found their way into the workplace, the pressure is rising for employees to be "on" even when they're supposed to be "off."

Erica writes: The new technologies have made Sunday night — when the work emails and tasks for the week start rolling in — even more stressful than Monday morning for scores of Americans, reports WSJ.

  • Why it matters: Although most employees say they know they don't have to respond to emails until the work week begins, they feel pressure to act if their managers are the ones assigning work.
  • Key stat: Per a 2018 internal email analysis conducted by Microsoft and cited by WSJ, every hour bosses spent online during "off" times translated to 20 minutes of work for their direct reports outside of business hours.

4. Worthy of your time

Data: Federal Reserve Bank of St. Louis, FactSet; Chart: Axios Visuals
Data: Federal Reserve Bank of St. Louis, FactSet; Chart: Axios Visuals

The businesses you never knew Amazon owned (Leticia Miranda — BuzzFeed)

Perceived U.S. credit risk hits 40-year low (Dion Rabouin — Axios)

Tracking private jets to find the next megadeal (Justin Bachman — Bloomberg)

China sheds 60,000 millionaires (James Areddy — WSJ)

The e-commerce fueled cold storage shortage (Roger Vincent — LA Times)

5. 1 ridiculous thing: $1,200 bunk beds

Photo of houses in San Francisco
Photo: Sean Gallup/Getty

A mounting housing crisis has propelled rents through the roof in San Francisco, where the average 1-bedroom apartment now costs $3,700 a month, Kaveh writes.

So a new living option that costs a measly $1,200 a month sounds pretty attractive. The catch: That doesn't get you an apartment, or even a bedroom. It gets you a bed in a room — shared with a dozen other people.

  • "What if you could subscribe to a housing membership and have all your needs met?" says Elvina Beck, CEO of PodShare, in a video from CNN.
  • Beck has built PodShares in San Francisco and Los Angeles, where $1,200 gets tenants a bed, some storage space, and access to shared desks, dens and somewhat stocked kitchens.

"There are certain things you have to give up when you want to live in the center and pay no security deposit," Beck says. "And that's privacy here."