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From the Valley to D.C., Big Tech players like Facebook, Google and Amazon are under more scrutiny than ever as new technology develops and privacy and antitrust concerns grow in lockstep with companies’ ambitions.

Technology

Gaming

Axios Gaming

Ubisoft’s new artificial intelligence tool Ghostwriter is designed to help the company’s writers, not put them out of work, one of its creators, Ubisoft research scientist Ben Swanson, tells Axios.

Why it matters: Ghostwriter was one of the highest-profile AI announcements at last week’s Game Developers Conference.

With the buzz came debate among attendees and observers about the impact such tools may have on creative people in the field.

Catch-up quick: Ghostwriter is a newly designed tool for creating more varied “barks” — or spoken lines, heard in the background — in games filled with computer-controlled crowds.

As explained in a GDC talk last week, a Ubisoft writer comes up with a character and a situation, then Ghostwriter generates numerous lines the character might say, allowing the writer to select, edit and incorporate their favorites.

What they’re saying: “Artists, writers and coders will always be at the heart of the development process, and while AI can assist creators in their workflow, it’s the artistic vision and perspective of individuals that are essential in the creation of games,” Swanson says.

The Ghostwriter tool was built at the request of Ubisoft writers to see if AI and machine learning could help with one of the more tedious tasks of writing massive open-world games, he said.

Scripts for such games can stretch to 100,000 lines of dialogue, he noted, and help on barks can make a game world richer.

Ubisoft does not plan to use Ghostwriter to “generate plot, character backstories, lore or any of the other core elements of our narratives,” Swanson says.

What’s next: Ghostwriter is still in its test-and-learn phase and is not yet part of the production flow for any of Ubisoft’s titles, Swanson says.

Game makers put generative AI to imaginative work

Sign up for the Axios Gaming newsletter here.

Ubisoft's new AI writing tool still requires human writers

Ubisoft says it has no plans to use the AI to “generate plot, character backstories, lore."

Ghostwriter suggests lines, following a prompt. Image: Ubisoft, via YouTube

Video games

Artificial Intelligence

Pro Rata

Axios Pro Rata

Early Amazon executive David Risher is taking over as CEO of Lyft as the company's co-founders take a step back from day-to-day operations.

Why it matters: The ride-share company has struggled to keep up with rival Uber and yet to post a profit. 

Unlike Uber, Lyft's operations remain confined to the U.S. and Canada, and it hasn't diversified into delivery (though it does operate a bike and scooter rental business, as well as a small ad network). 

While its losses have been shrinking, Lyft recently announced a weaker-than-expected outlook for its current quarter. 

Driving the news: Lyft co-founder Logan Green is ceding the chief executive job to board member Risher on April 17, while co-founder and president John Zimmer is also stepping back.

Green and Zimmer will transition to board chair and vice chair, respectively. Current chair Sean Aggarwal will become lead independent director. 

Risher joined Lyft's board of directors in 2021. 

He was Amazon's 37th employee, eventually becoming its first head of product and head of U.S. retail. He was also a general manager at Microsoft. He then co-founded Worldreader, a nonprofit focused on providing books to kids. 

What they're saying: "The macroeconomy is tough and the world is full of some uncertainty and that’s a real factor for sure and, then, when you zoom in one click, the competitive environment is tough," Risher told the Wall Street Journal. "We have a very aggressive—very aggressive—competitor." 

"All founders eventually find the right moment to step back and the right leaders to take their company forward," Green said in a statement, adding that Risher "has the right energy, ambition, and experience to lead Lyft into the future."

What we're watching: Lyft's stock price went up by more than 3% in after-hours trading following the announcement. 

Lyft shakes up leadership amid tough battle with Uber

Co-founders Logan Green and John Zimmer are stepping back from management on April 17.

Lyft

Top stories & latest news on the Federal Reserve, real-time data, plus the biggest shifts happening in the U.S. and global economy.

Economy

After a record economic expansion, the coronavirus pandemic sent the U.S. economy into a recession as unemployment soared to staggering heights. The country now faces urgent questions about how much stimulus is needed for reeling consumers and businesses, and what a recovery might look like.

Economy & Business

Members of Congress from both sides of the aisle are pressing the Biden administration to take action on PlayStation-Xbox console competition in Japan.

Driving the news: Policymakers raised concerns last week to Biden officials, saying Sony’s business practices in its native Japan are blocking U.S. companies from competing in that country’s gaming market and could be running afoul of U.S.-Japan trade deals.

The unexpected pressure became public on Thursday when Sen. Maria Cantwell (D-Wash.) pressed U.S. Trade Representative Katherine Tai on it during a trade hearing.

Ten members of the House also sent two letters on Thursday to Tai and Commerce Secretary Gina Raimondo urging action.

What they’re saying: “Today, we write to bring to your attention the imbalanced Japanese video game market, which we are concerned may be a result of a discriminatory trade practice that could violate the spirit of the U.S.-Japan Digital Trade Agreement,” states one of the letters, signed by four Republicans from the House, including Carol Miller (R-W.Va.) and Mike Carey (R-Ohio).

The Republican letter alleges that Sony PlayStation has 98% of the “high-end console market in Japan,” signs deals designed to keep hit Japanese games from Microsoft’s Xbox, and says such moves “may violate Japan’s antitrust laws.”

“The Japanese government’s effective policy of non-prosecution when it comes to Sony appears to be a serious barrier to U.S. exports, with real impacts for Microsoft and the many U.S. game developers and publishers that sell globally but see their earnings in Japan depressed by these practices,” the letter continues.

A letter to Tai and Raimondo from six Democratic lawmakers from Washington state — where Microsoft is based — covers similar ground.

Between the lines: Article 8 of the 2019 U.S.-Japan Digital Trade Agreement calls for the countries to enable “non-discriminatory treatment of digital products” which would include games. It’s less clear if it would also pertain to game consoles.

State of play: Sony has had a steep advantage over Xbox in Japan for decades, though the secrecy around gaming contracts obscures the underlying causes.

Sony does occasionally secure major platform exclusives, as with SquareEnix’s Final Fantasy XVI, a Japanese-made game expected to be big with Japanese (and global) audiences and that’s only slated for PlayStation, no Xbox.

But Japan’s console market is also not quite a two-horse race: Nintendo, excluded from the definition of “high-end consoles” cited by the policymakers, crushes Sony and Microsoft.

The big picture: The heat on Sony is unmistakably coinciding with the Japanese company’s own pressure on antitrust regulators to block Microsoft’s $69 billion bid to buy Activision-Blizzard.

“Sony’s anti-competitive tactics deserve discussion, and we welcome further investigation to ensure a level playing field in the video game industry,” Microsoft spokesperson David Cuddy told Axios.

While Microsoft isn’t saying just how involved it was in orchestrating this push, its government affairs team has discussed these issues with members of Congress, Axios understands.

Sony reps did not reply to a request for comment.

What’s next: In their letters, House members ask that the Sony issue be raised with the Japanese government and identify “additional barriers” to American companies in accessing the Japanese gaming market.

At Thursday’s Senate hearing, trade rep Tai promised Sen. Cantwell to look into things. “This one is new for me,” she said.

W&M Letter

WA Del - Letter - USTR-Commerce - Japanese Gaming Market - 3.23.23

11 members of Congress argue Sony is unfairly hurting Xbox in Japan

In letters obtained by Axios, reps blast an “imbalanced Japanese video game market.”

Photo illustration of a PlayStation and XBox controller colliding surrounded by abstract column shapes. 

Photo illustration: Aïda Amer/Axios. Photo:  Phil Barker/Future Publishing and Thiago Prudencio/SOPA Images/LightRocket via Getty Images.

Media Trends

Axios Media Trends

The website for Grid News, the D.C.-based digital news startup that sold last week to Jimmy Finkelstein's new media startup The Messenger, will shut down Monday afternoon, two sources told Axios. 

Why it matters: While The Messenger is still evaluating what to do with Grid's products, it's likely that Grid's branding will not live on, a source told Axios. 

Details: Grid's roughly 50 employees were told last week that the site would shutter, a source told Axios. 

The Messenger's team is currently interviewing Grid employees for roles at The Messenger, with the hope that most of the company's editorial talent can join the startup, a source told Axios. 

It's unclear whether Grid's co-founder and executive editor Laura McGann will stay on.  

The Messenger plans to keep Grid's newsletters, but it's unclear if its podcast, "Bad Takes," will continue, a source said. 

With the acquisition, The Messenger will have access to Grid's back catalog of content, the source noted. 

Catch up quick: In November, Axios reported that Grid, which launched in early 2022 with more than $10 million in funding, was losing money.

The company's founders assured its staff last year that it had raised enough money to continue operating for the foreseeable future. 

Grid's co-founder and president/CEO Mark Bauman stepped down late last year amid confusion at the company over its business, Axios reported. Grid never announced a replacement.  

Between the lines: Last week, The Messenger said it would acquire Grid, and as part of that deal, Grid's owners — Abu Dhabi-based investment firm International Media Investments (IMI) — would make a minority investment in The Messenger's parent company. 

Grid News' founders said at launch that the firm raised more than $10 million from IMI and Brian Edelman, a technology executive.

But the firm never said how much more than $10 million, or how much Edelman invested versus IMI. In a statement announcing the acquisition last week, The Messenger said Grid was "owned by" IMI. 

The big picture: Finkelstein, a longtime media investor and entrepreneur who formerly owned The Hill, has raised $50 million for The Messenger, which is expected to launch later this spring. 

He plans to hire hundreds of journalists to cover topics such as entertainment, news and sports.

A source said Finkelstein is still eyeing other news sites to potentially acquire. 

Scoop: Grid News' website to shutter

It's likely that The Grid's branding will not live on post-acquisition.

News media

Monarch Collective, a new investment firm focused on women's professional sports, has raised $100 million for its debut fund.

Why it matters: Monarch is seeking to fund what it views as the next big wave in pro sports, including investments in teams, leagues and adjacencies (e.g., media platforms, products, gaming).

Private equity has begun plugging big money into pro sports, partially enabled by changes to league ownership rules, but most of it has been nine-figure checks into men's teams. 

Backstory: Monarch was formed late last year by Kara Nortman, the former Upfront Ventures partner who co-founded the NWSL's Los Angles expansion club (Angel City), and Jasmine Robinson, a former Causeway investor who previously spent time in strategy operations for the San Francisco 49ers (she also grew up in a pro sports household, as her dad played in the NFL).

Expect the focus to be global, on sports like soccer, basketball, cycling, cricket, golf and tennis.

What they're saying: "I often feel like I'm in 'Back to the Future II' with the almanac, in terms of knowing the future of sports ... We believe we're riding the media curve, and can learn from the existing men's leagues while realizing that the dynamics are changing in terms of how people watch sports and how sports leagues build community." — Kara Nortman to Axios

Monarch Collective raises $100 million to fund women's pro sports

Private equity's begun plugging big money into pro sports, but most of it has been for men's teams.

Illustration of woman in jersey with upwards arrow on her back

Venture capital

Shifts in technology and media are changing the way we play, watch and understand sports. Business models are adapting and social change is forcing those in charge of teams and leagues to reconsider decades-old practices.

Sports

Elliott Management has withdrawn its director slate for Salesforce, the two companies announced Monday. 

Why it matters: The pair won't square off at Salesforce's annual meeting, in what could have been the first major activist shareholder challenge to Salesforce co-founder and CEO Marc Benioff.  

Details: The remarkably positive tone of today's announcement suggests that Benioff is no longer on Elliott's target list.

“I have great respect for Marc and his team, and I have become deeply impressed by their strong ongoing commitment to profitable growth," said Elliott Managing Partner Jesse Cohn.

"I have thoroughly enjoyed getting to know Jesse and the Elliott team over the last few months," Benioff added.

Of note: Salesforce announced bumper financial results on March 1, along with significant progress on costs. The announcement took pressure off the company and appears to have appeased Elliott and other activists. 

Elliott abandons director fight with Salesforce

Marc Benioff gets to breathe a sigh of relief.

Photo illustration of Paul Singer and Marc Benioff. 

Photo illustration: Shoshana Gordon/Axios. Photos: Stefan Wermuth/Bloomberg, Jonathan Moscrop/Getty Image

Salesforce

Vitals

Axios Vitals

Social media companies are increasingly being blamed for historically high rates of depression, suicidality and other mental health issues in youths. And now, states and local governments are increasingly pursuing legislation and legal action.

Driving the news: Utah just passed a law limiting social media for minors and school districts in Seattle and San Mateo County, California, are suing leading platforms, charging they're delivering harmful content to kids. 

It comes just as Congress ratcheted up pressure for a ban on TikTok for, among other things, the harmful impact it's had on kids. 

The Biden administration's surgeon general, Vivek Murthy, weighed in last month, telling CNN that age 13 is "too early" for kids to join social media.

"Multiple juries are in. They're all reaching the same conclusion," Jonathan Haidt, a social psychologist at New York University Stern School of Business told the Financial Times. "When social media or high-speed internet came in, [studies] all find the same story which is mental health plummets, especially for girls." 

Multiple studies — including some of the companies' own internal research —have linked social media use with increased depression among teens.

A December report from the Center for Countering Digital Hate which focused on TikTok found the platform began recommending eating disorder and self-harm content to new teen accounts within eight minutes of use.

Research published by the American Psychological Association last month found teens and young adults who cut social media use by 50% for a few weeks saw significant improvement in how they felt about both their weight and their overall appearance compared with their peers.

The big picture: There are nearly 150 product liability lawsuits filed in the U.S. against the social media platforms Facebook, Instagram, TikTok, Snapchat and YouTube, per the Financial Times.

A growing number of school districts and municipalities are among those filing suit, Axios' Jennifer A. Kingson reported.  

Among them, the San Mateo County School Board last week expanded an existing suit against social media companies to include Meta, the parent company of Facebook and Instagram, Bloomberg reported. Bucks County, Pennsylvania, filed its own lawsuit in mid-March, seeking financial damages for rising mental health costs for young people, the Philadelphia Inquirer writes.

Arkansas and Texas are also eyeing laws like Utah's limiting social media use. California previously passed a law requiring online services to install certain safeguards for users under 18, the New York Times reported.

Members of Congress have promised further regulation of social media companies, and last month, Rep. Chris Stewart (R-Utah) introduced a bill to ban social media use for kids younger than 16.

Many of the suits are built around concern about the way platforms feed targeted content to keep kids online longer, fueling negative self-image, exposing them to self-harm content and enabling bullying.

Yes, but: Oftentimes, concerns over the harms of social media seem designed to generate headlines, Wired writes, and may obscure other factors bothering kids, including the role of the pandemic and the bitterly partisan national political debate.

"Talking about the harms platforms can have on children often feels less like genuine concern and more like an attempt to capture attention by focusing on some of the most salient fears for American parents," per Wired's Vittoria Elliott. 

Civil liberties and tech advocates have raised an alarm that important privacy concerns could be tossed aside amid efforts to require identity and age verification as part of new restrictions, both The Guardian and Vox reported.

And some research has found that some use of social media benefits teens' social connections, NPR reports.

What we're watching: How social media companies will seek to deflect some of the heat by adopting more controls or restrictions on youths' time online — and whether we'll be able to measure how much any single effort to curb their use will impact anxiety, depression and thoughts of self-harm in kids.

If you or someone you know needs support now, call or text 988 or chat with someone at 988lifeline.org. En Español.

linked social media use with increases in depression

ban social media use for kids younger than 16

Pushback grows over mental health impacts of social media

Social media companies are increasingly coming under fire for their role in fueling an epidemic of mental health crises among teens and children that have resulted in historically high rates of poor mental health, depression and suicidality.

Illustration of a hand reaching up out of a pile of notification icons with flames

Social media

Metaverse, VR and AR

Social Media

The U.S. faces a range of health care flashpoints — unaffordable drugs, opioids, vaping — as we debate whether to adopt universal care. For now, the Affordable Care Act is the law of the land, but Republicans want to issue it a final death blow.

Health

The first business ChatGPT will upend is likely to be the industry that created it.

Why it matters: Making software has never been easy. But programming practitioners and experts are increasingly confident that generative AI will change their world — supercharging the work of the best coders and empowering everyday users to get more done.

What they're saying: "The current generation of AI models are a missile aimed, however unintentionally, directly at software production itself," venture investors Paul Kedrosky and Eric Norlin wrote last week in an essay on "Software's Gutenberg Moment." 

"Such technologies are terrific to the point of dark magic at producing, debugging, and accelerating software production quickly and almost costlessly."

Driving the news: OpenAI late last week released pilot versions of plugins for ChatGPT that allow it to roam the internet at users' bidding and connect with other services and data.

It's a big first step toward transforming the conversational chatbot into a more capable intelligent agent that can accomplish tasks for users. It's also a move toward turning ChatGPT into a platform other businesses can build upon.

The first batch of plugins extends ChatGPT into travel, shopping, dining, math and other realms by linking the bot to well-known services like Expedia, Instacart, Kayak, Klarna and OpenTable.

Of note: Sure, these app-like plugins are OpenAI's bid to turn ChatGPT into a new "everything app," as New York's John Herrman argues. 

But they also provide evidence of how radically AI's new large language models will change the work of coding.

How it works: Typically, to connect two programs, a software developer will need to understand the APIs (or definitions of how a system interacts with other systems) at both ends, then write some "glue code" so the two services can talk to each other.

To create a ChatGPT plugin, you just "instruct the model." You provide ChatGPT with a "manifest" of your service's API — in English. ChatGPT reads it and does the rest. (You can ask the AI to generate the manifest, too.)

Engineer and entrepreneur Mitchell Hashimoto tweeted: "I've developed a lot of plugin systems, and the OpenAI ChatGPT plugin interface might be the damn craziest and most impressive approach I've ever seen in computing in my entire life."

Catch up quick: The history of software is a long sequence of adding new "layers of abstraction" that hide the complexity of binary logic behind increasingly human-friendly generalizations, from assembly language to higher-level coding environment to graphical interfaces.

Visionaries have long promised, and tried to build, "natural language programming" tools that would let people just use everyday words and sentences to tell computers what to do.

Such efforts have never fully delivered on their promise — but this time might be different.

Today's AI systems based on large language models can take instruction directly from non-programmers, or programmers using human-language shorthand. 

The results are nowhere near perfect — but they're far more advanced than experts expected. 

As an added bonus, ChatGPT can turn around and provide instant explanations of how the code it has written works and answer a human user's questions about it. 

Be smart: The power of ChatGPT and its competitors doesn't mean programmers will all need to find new lines of work.

Today's generative AI still pretends to know more than it actually does and makes things up to fill in gaps in its knowledge. It works best as a "copilot" for developers rather than an independent creator.

The bottom line: Human beings who deeply understand programming's many dimensions will still be needed — to invent genuinely new kinds of systems, to fix problems that AI can't, and to shape (and limit) ChatGPT and its successors.

But there may be much less demand for the routine labor of taking existing software systems and wiring them up to work together. That's a lot of what developers do today.

AI changes the software-making game

ChatGPT brings us way closer to the dream of replacing code with just telling the computer what you want.

Illustration of binary code on a conveyor belt

Software

The standoff between the U.S. government and TikTok underscores a growing problem for policymakers: Chinese apps are booming in America, but most U.S. apps aren't able to operate in China. 

Why it matters: Mobile apps are one of the most powerful vectors for expanding trade and exporting soft power, given how widely accessible they are, how much time is spent on them, and how little regulatory oversight there is online. 

Chinese companies are able to "leverage China’s one billion internet users to test user preferences and optimize their AI models at home, then export the tech overseas," The Wall Street Journal notes. But given censorship demands in China, American tech firms can't reciprocate. 

Driving the news: In the past 30 days, four of the top 10 most-downloaded apps in the U.S. across Apple's iOS store and the Google Play store are owned by Chinese companies. 

Temu, an online retailer, has quickly become one of the fastest-growing apps in the U.S., giving marketplaces like Amazon and Walmart a run for their money. The company is based in Boston and owned by PDD Holdings, a multinational commerce company that's publicly traded on the Beijing stock exchange. PDD is also parent to Chinese social commerce company Pinduoduo.

TikTok continues to gain traction in the U.S., even amid calls for a possible ban. TikTok was by far the most-downloaded app in the U.S. and globally last year. 

CapCut, a video editing app owned by TikTok parent ByteDance, is also gaining ground in the U.S. as a vehicle for young users to optimize their short-form video posts on TikTok, Instagram and YouTube. 

SHEIN, a fast-fashion giant based in Singapore but founded in China, has long been one of the most-downloaded e-commerce apps in the U.S. The company was founded by Chinese entrepreneur Chris Xu, and most of its suppliers are in China. 

Yes, but: While an increasing number of Chinese apps are becoming popular to download, these apps still struggle to provide American users with the same sense of daily utility as those made by U.S. companies. 

Case-in-point: TikTok is the only app in the top 20 most-visited apps in the U.S. last month, per Comscore. Eight of the top 10 are owned by Google or Meta. The vast majority of the top 20 are owned by those two firms, Amazon or Apple. 

Be smart: Last week's Congressional hearing showed how much bipartisan angst there is around TikTok's growing footprint. 

TikTok CEO Shou Zi Chew was grilled for hours by lawmakers on both sides of the aisle, making for a contentious event that was broadcast live to millions of people globally online, on television, and of course, on TikTok. 

In China, state media called the hearing an "embarrassment," per The Washington Post. 

The Chinese Foreign Ministry argued that a ban, if TikTok is not sold to a U.S. firm, would constitute “unreasonable suppression” of the app. 

Online in China, Chew is being described as a "punching bag" for American lawmakers and praised as a hero.

The big picture: The tension between China and Washington has come to a head over the national security risks that U.S. imports of foreign technology could pose.

To date, lawmakers have mostly taken aim at hardware and enterprise technology firms like Huawei and ZTE. TikTok is the first major consumer app that lawmakers are publicly threatening to ban.

Go deeper: TikTok's fate may be decided by the courts

Americans hooked on Chinese apps

Four of the top 10 most-downloaded apps in the U.S. over the past month are owned by Chinese companies.

TikTok

Parts of a Twitter code used to run the social network were leaked online, the company said in a court filing first reported by the New York Times on Sunday.

Driving the news: Twitter said in a Friday filing with the U.S. District Court of the Northern District of California against GitHub, a Microsoft-owned software collaboration platform, that the leak included the "[p]roprietary source code for Twitter's platform and internal tools."

The San Francisco-based company said that the code was shared without permission by a poster identified as "FreeSpeechEnthusiast — a name that's an apparent reference to Elon Musk's public pledges to a free speech-first Twitter.

Twitter also sought a subpoena seeking to have GitHub disclose information in regards to the leak.

Meanwhile, GitHub has since complied with Twitter's takedown request, according to a post on its website.

What they're saying: A spokesperson for GitHub said in an emailed statement early Monday that the company does not generally comment on decisions to remove content.

"However, in the interest of transparency, we share every DMCA takedown request publicly," the spokesperson added.

Representatives for Twitter did not immediately respond to Axios' request for comment.

Go deeper... Elon Musk vs. Twitter: Cracks in the Empire

Editor's note: This article has been updated with additional details throughout.

San Francisco

Court filings: Twitter says parts of source code were leaked online

Twitter the code was shared without permission by a Github poster identified as "FreeSpeechEnthusiast."

Monday's technology stories