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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

Pro Rata

Axios Pro Rata

Generative artificial intelligence is all the rage in startup-land, and corporate venture capital investors don’t want to be left out.

State of play: A small but growing number of companies’ venture arms are rolling out efforts, in various forms, that are focused on investing in the current AI startup boom.

The big picture: Generative AI and large language models are getting a lot of attention for their potential to automate many business tasks, big and small.

“From an enterprise perspective, more than two-thirds of leaders are trying to prioritize generative AI,” Paul Drews, managing partner at Salesforce Ventures, tells Axios.

Of the 44 startups Workday Ventures has backed, about 25% are already using tech developed by OpenAI, according to managing director Barbry McGann. She adds it's because the AI company's tools are so "enterprise-ready," making it easy for business software makers to quickly integrate the tech. 

Zooming in: Following the typical playbook, corporate VCs are emphasizing their ability to make the technology ecosystems of their parent companies available to the upstarts they back. Some of the companies with such efforts include: 

Salesforce: In March, the company announced a new $250 million fund dedicated to generative AI.

Workday: In February, it said it was adding $250 million to its existing fund specifically to invest in AI and machine learning startups, among other areas. 

OpenAI: The buzzy company behind the popular ChatGPT app has raised a $175 million fund to invest in AI startups.

Amazon: The company recently announced an accelerator program for generative AI startups that includes Amazon Web Service credits for participants.

Solana: The foundation behind the blockchain technology recently announced an accelerator program and a $10 million fund that will give out grants to developers working on generative AI applications.

What they’re saying: “This is a fundamental technology shift, like what the cloud did for computing, or what mobile did,” says McGann, echoing a widely expressed view in the industry. 

Between the lines: “It’s helpful to signal where we’re spending our time on a day-to-day basis,” says Drews, speaking to Salesforce’s decision to create a separate fund dedicated to generative AI. 

That's despite the fact that Salesforce Ventures had been investing in artificial intelligence technology more broadly for years.

The intrigue: McGann predicts that next year will bring much more AI-native enterprise applications after this year’s more experimental products.

What's next: Expect more corporate venture arms — and stand-alone VC firms — to focus specifically on backing generative AI tech. 

Corporate VCs ride AI startup wave

Companies’ venture arms are rolling out efforts to get in on the current AI startup boom.

Artificial intelligence

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

Codebook

Axios Codebook

The latest evidence of China-linked hackers infiltrating U.S. critical infrastructure is highlighting what role cyberattacks could end up playing in a possible invasion of Taiwan.

What's happening: Earlier this week, researchers at Microsoft unveiled that a Chinese state-sponsored group known as Volt Typhoon has been targeting critical infrastructure organizations in the U.S. and Guam.

Affected organizations spanned a long list of sectors: communications, manufacturing, utility, transportation, construction, maritime, government, information technology and education.

Volt Typhoon, which has been in operation since mid-2021, infiltrated these organizations by targeting internet-facing devices running Fortinet's FortiGuard products, per Microsoft.

Once inside, the hackers can start "living off the land" and obtain access to a network by stealing user credentials and rerouting any suspicious traffic through home routers, Microsoft said.

Why it matters: Microsoft researchers concluded with "moderate confidence" that Volt Typhoon is developing capabilities that could disrupt communications between the U.S. and Asian countries in future crises.

The National Security Agency, the FBI, CISA and their international partners released an advisory supporting Microsoft's findings shortly after the report's publication.

Between the lines: If it were to invade Taiwan, one of China's first moves would likely be to cut off communications between Taiwan and the outside world, experts say.

That scenario isn't too far from the realm of possibility. Taiwan blamed China for cutting one of its internet cables earlier this year, with some suspecting it was a "dry run" for a future invasion.

The new cyber campaign against Guam also raises suspicions, as the New York Times reports, given the U.S. has an air base there and that Guam's ports would be crucial for an American military response.

Yes, but: Volt Typhoon appears to mostly be sticking to espionage, rather than destructive behavior, for now.

Some experts assess that this specific group is more interested in uncovering details about how targeted facilities operate and other sensitive details about the U.S.

The other side: A spokesperson for China's Ministry of Foreign Affairs called Microsoft's report "unprofessional" and "filled with disinformation" in a statement Thursday.

The spokesperson also suggested that the Five Eyes intelligence pact released its joint advisory to "serve its geopolitical agenda" and called the U.S. the "champion of hacking."

Sign up for Axios’ cybersecurity newsletter Codebook here.

Researchers offer hints of cyber's role in possible Taiwan invasion

Microsoft researchers unveiled a Chinese state-sponsored group known as Volt Typhoon has been targeting organizations in the U.S. and Guam.

Illustration of a computer keyboard with a red return key resembling China's flag 

Cybersecurity

Major investments from the finance and retail sectors in cybersecurity and data privacy have seemingly paid off with consumers, based on the 2023 Axios Harris Poll 100 brand reputation survey.

Why it matters: Both the financial and retail sectors — as well as Apple — have poured large amounts of cash into their security programs and presenting themselves as the safest place for consumers to store their most sensitive data.

Those investments seem to be working, despite high-profile incidents in the last few years involving some of the top-ranking companies.

Driving the news: JPMorgan Chase & Co., Apple and PayPal topped the list of companies that consumers said protect customers' personal information and data "well."

61% said JPMorgan protected data "well," while 59% said the same of Apple and 58% of PayPal.

Military-focused financial services company USAA (57%), Amazon (56%) and American Express (56%) followed close behind.

The Axios Harris Poll surveyed more than 16,000 people between March 13 and March 28.

The big picture: Each of these sectors and companies has faced major cyber and data privacy incidents in the last decade that have made privacy a selling point with their consumers.

For retailers, that reckoning started after the massive 2013 Target breach that affected millions of customers' credit cards during the holiday shopping season.

Banks have faced a string of major cyber incidents in recent years, including a 2014 data breach at top-ranked company JPMorgan and a 2012 coordinated attack on several U.S. banks' websites.

Apple started pushing its privacy-focused marketing campaign shortly after the 2018 Cambridge Analytica scandal further exposed the ways users' data can be shared with third parties.

Between the lines: Each of these sectors also remains a top target for both criminal and nation-state cyberattacks, making these security investments necessary.

JPMorgan invested $12 billion in technological and security updates last year.

Apple continues to invest in new security tools for consumers, including new encryption levels and malware-detection abilities.

Yes, but: The Axios Harris Poll results don't automatically mean that these companies are perfect beacons of data privacy and protection.

Thousands of PayPal customers were affected by a so-called credential-stuffing attack earlier this year.

Experts have pushed Apple to go even further in its privacy and security programs, including by declining more requests from law enforcement for user data.

The intrigue: The financial sector in particular has some of the most robust security regulations in the U.S.

Those requirements — which include rules for organizations to report breaches to regulators — give more weight to the financial sector's perception as one of the best at protecting users' sensitive data.

Be smart: It's impossible for any company to be 100% safe from cyberattacks, considering the speed at which criminal hackers adapt their tricks and the rate at which new security flaws are discovered.

However, consumers can still do their due diligence to limit what they share with companies and turn on advanced account security features like multifactor authentication.

Finance, retail sectors reap data privacy wins in Harris Poll

Financial and retail sectors — as well as Apple — have poured large amounts of cash into security programs.

Illustration of hand stopping arrow cursors

Whats Next

Axios What's Next

A new cloud-based feature on more than 1.8 million Chrysler, Dodge, Ram and Jeep brand vehicles lets drivers know about the presence of emergency vehicles ahead before they can even see them. 

Why it matters: Police vehicles, fire trucks and ambulances are frequently involved in traffic accidents because other drivers didn't see the flashers or hear the sirens.

The big picture: Stellantis' emergency vehicle alert system (EVAS) is one of the first applications of vehicle-to-everything (V2X) technology, which allows vehicles to "talk" to one another, and to the infrastructure around them. 

With V2X, cars might soon share important information about weather, road conditions, traffic and more.

Details: Stellantis is the first global automaker to make V2X digital alerting a standard safety feature through its Uconnect infotainment system.

It was added retroactively to vehicles dating back to model year 2018 through an over-the-air software update. 

The catch: Car owners must register for Uconnect, and then agree to share their vehicle's location, to activate it.

Sharing your car's location can also help recover it if it's stolen, Stellantis says.

Backstory: The feature grew out of a suggestion from a hearing-impaired Stellantis employee who had a scary driving experience with an emergency vehicle she hadn't heard coming.

Stellantis integrated its software with HAAS Alert's Safety Cloud platform, a V2X digital alerting system used by thousands of public and private roadway fleets in North America.

How it works: When emergency responders activate the flashing lights on their vehicle, a signal is sent to HAAS Alert's Safety Cloud, which begins tracking its location. 

EVAS-equipped Stellantis vehicles receive an audible and text alert on the infotainment screen if an emergency vehicle is approaching from any direction.

The alert can be delivered up to 30 seconds in advance, even around blind corners, and helps reduce the risk of collision by up to 90%, according to Chicago-based HAAS Alert. 

HAAS Alert can also deliver notifications from tow trucks, work zones, arrow boards, and other connected equipment on the road.

What's next: Stellantis is looking to expand its capabilities to include driver alerts for disabled vehicles.

Some cars can detect emergency vehicles before drivers do

Stellantis' emergency vehicle alert system (EVAS) is one of the first applications of vehicle-to-everything (V2x) technology.

Stellantis' emergency vehicle alert system warns drivers of an emergency vehicle approaching.

Stellantis' emergency vehicle alert system warns drivers of an emergency vehicle approaching. Photo: Stellantis

Automobiles

Lifeguards and beachgoers are getting a new ally this summer in the fight to prevent potentially dangerous shark encounters: drones.

Why it matters: While actual shark-on-human attacks are vanishingly rare, a spate of sightings near shore has been raising alarms from Massachusetts to Hawaii recently.

A 15-year-old surfer was injured in an apparent shark attack off Stone Harbor, New Jersey, just this past weekend.

Driving the news: New York State's parks department is getting 10 new drones to help keep an eye out for sharks this summer, Gov. Kathy Hochul recently announced, in addition to eight it's already using.

One is a particularly advanced model, equipped with a thermal camera, laser rangefinder and floatation device.

The idea, says George Gorman Jr., regional director at the New York State Office of Parks, Recreation and Historic Preservation, is for the drones to be used to verify reported sightings.

If a drone operator spots a shark, the waters can be cleared of swimmers until the shark leaves the area.

The drones can also be used in other missions, including search and rescue operations, as a cheaper and quieter alternative to helicopters — or to support choppers.

Nearly three dozen staffers have been or will be trained or hired to fly the department's drones.

What they're saying: "We'll have routine patrol during the day, but if there's a sighting, we'll get the drone up right away and have them look over the waters to see what the report is," Gorman tells Axios.

Backstory: Officials in Australia pioneered the use of drones to spot and monitor sharks near shore, in part as a more humane alternative to nets and undersea traps, per Smithsonian Magazine.

Between the lines: There's a general consensus among experts that climate change is at least partially responsible for driving sharks into new areas.

Successful wildlife preservation efforts, another theory holds, are leading to a population bump for fish that sharks eat — and thus inviting more sharks.

One of the "main reasons" for increased sightings on New York's Long Island, Gorman says, is that "we're seeing a huge increase in menhaden, which are bunker fish and are closer to shore. They're right off the shoreline — you can see them from the lifeguard stand."

The intrigue: Marine biologists and others are also using drones to research shark behavior, The Verge reports.

Various shark-tracking sites, meanwhile, display individual sharks' locations in real time, powered by GPS trackers attached by researchers.

Yes, but: As sharks get easier to spot thanks to emerging technology, the number of sightings is likely to increase — yet that doesn't necessarily mean there are more sharks around than there were before.

The bottom line: The odds you'll be attacked by a shark are infinitesimal — but it's hard to argue with a low-cost way of putting beachgoers' minds at ease. 

To paraphrase Amity Island's Chief Brody: We're gonna need a bigger drone.

Drones go out on shark patrol

Drones are being used to spot sharks near beaches, so lifeguards can clear swimmers away.

Illustration of a drone with binoculars and a lifeguard whistle

Drones

World

Axios World

Ukrainian President Volodymyr Zelensky was elected in 2019 on a pledge to put "the state in a smartphone." That effort has become more complex but also more urgent as a result of Russia's invasion.

The big picture: The man leading the initiative, Deputy Prime Minister and Minister for Digital Transformation Mykhailo Fedorov, told Axios that Zelensky instructed him to "create the most convenient governance system" in the world.

The resulting app, Diia, provides citizens with a digital ID and allows them to register a business or obtain dozens of other government services without waiting in line or being asked to pay a bribe, an all-too-common occurrence.

19 million Ukrainians now use Diia, and the app has been downloaded on 70% of the smartphones in Ukraine, Fedorov said. New features are added regularly, and every government ministry now has a "chief digital transformation officer" to push that process along.

Fedorov, 32, never expected to be rolling out some of the newer functions.

Ukrainians can use Diia to seek evacuation assistance or file a claim if their home is damaged by Russian shelling. Nearly 1 million war bonds have been purchased using the app, according to Fedorov.

Using an "e-Enemy" feature, they can also submit reports and even videos of Russian troop movements. "There is a situational awareness system and this information is fed into this system," Fedorov explained to Axios. "And then of course they [the military] have to verify — they use satellite images, other sources — before they act on it."

When millions of Ukrainians were facing blackouts during the World Cup final in December, Fedorov's team decided to stream the match on Diia. More than 1 million people tuned in.

Fedorov gave a splashy presentation about the app — complete with a pre-recorded address from Zelensky — before a packed house at Washington's Warner Theater on Tuesday.

USAID Administrator Samantha Power, whose agency provided funding to help launch Diia, said the app gave Congress and the administration confidence that the billions of dollars they're providing to keep Ukraine's government running are being allocated in a transparent way.

Power announced pilot programs to build similar apps in Colombia, Kosovo and Zambia. Estonia has already launched its own app based on Diia, which Fedorov told Axios was "our thank you to them" for providing weapons and aid.

Ukraine doesn't expect to be paid to share its technology, Fedorov said. "We have not really considered how we can make money. We are thinking of this as a value that Ukraine can export."

Yes, but: Putting the "state in a smartphone" raises privacy concerns, whether from government surveillance or external cyberattacks.

Fedorov said data is stored in separate registries rather than through the app itself. His team is developing a feature whereby users will be notified through Diia of any requests to access their data, such as when a doctor is seeking medical records.

Cybersecurity has been a top priority from the beginning, Fedorov said. He said in his presentation that Russia had attempted cyberattacks on Ukrainian systems and even struck a government data pickup center with a missile early in the war, but user data has not been compromised.

What to watch: Fedorov said Diia was launched as part of an effort to build Ukraine into a technologically advanced, services-based economy.

Ukraine now has more international partners for that effort — Google and Visa, in addition to the U.S. and U.K. governments, are working with Fedorov's agency — but millions of tech-savvy young people have left as a result of the war.

"We want to create conditions that will make them want to come back," Fedorov said, such as providing free training for IT workers and slashing taxes for the tech sector.

Ukrainians use the same app to file taxes and track Russian troops

Zelensky's government has adapted his pledge to put "the state in a smartphone" to wartime contingencies.

Mykhailo Fedorov. Photo: Stephen McCarthy/Sportsfile for Web Summit via Getty Images

Ukraine

China is becoming the most formidable rival America has faced, and the risk of confrontation with Russia, North Korea or Iran still looms. Authoritarians are rising, the chaotic Afghanistan exit revealed the limits of U.S. power, and the pandemic, climate change and other critical challenges continue to pose grave threats.

Axios AI+

Every revolution in tech starts with a better way for normal humans to access computing power — from punchcards and command lines to windows and a mouse to smartphones and touchscreens. AI is poised to be the next leap.

Why it matters: One big reason the tech world is so giddy over generative AI is that industry veterans see ChatGPT's conversational fluency as a key that can unlock the next level in this game of endowing everyday users with digital powers.

Think of the hours saved — and, in theory, productivity gained — if you can simply tell your chatbot to clean up your inbox, change your system settings or connect to a printer.

The upside is, you won't have to know how to do those things yourself. That's a downside, too: It means individual users may end up with less skill and less direct control.

Driving the news: A number of big players are already using the power of large language models to make chat-style interaction a key way to interact with their software.

Microsoft this week unveiled a Windows Copilot which adds a side pane where users can both summon the AI-powered Bing search engine and change a whole host of settings that, until now, required knowing how to dive into an arcane system of control panels.

"I think over the coming years, this will become an expectation for how all software works," CTO Kevin Scott said in a statement.

Microsoft is also adopting the same standard for plug-ins that OpenAI is using for ChatGPT, meaning that the chatbot isn't just a user interface, it's also a new platform for developers to create apps — and a new front end for controlling other software.

Adobe announced a new generative fill tool for Photoshop that lets people describe what they want to take place in an area, say put a mountain here or remove this object. The company sees big potential in using such descriptive commands to take all manner of actions. 

What they're saying: Windows head Panos Panay told Axios that AI is bringing about a "generational shift" in computer interfaces.

"It will feel magical," Panay said in an interview.

Yes, but: It's going to take time for the full power and nuance of AI-as-interface to emerge, Panay said, pointing out that it took some years after the mouse before we got to a scroll wheel.

"It's a migration; this isn’t an overnight change," he said. "You learned to point and then you learned to scroll," he said.

Panay described a future in which queries made in the chat-based Copilot can stay there or, as needed, move into apps in the main Windows interface. "We will put it where you want it," he said.

Some of the computing work making all this AI-based chat happen will continue to happen in the cloud, but for privacy and other reasons, some work will shift back to the device, he said — noting that there are 200 million PCs out there with enough computing power to run some AI models locally. 

Be smart: Using a chatbot to interact with software doesn't always mean you are seeing generative AI in action. Sometimes it's just about using natural language to say, change the settings or invoke a series of commands with a single instruction.

The other side: Magical as it often feels, the chat interface comes with its own drawbacks.

The empty chat window is something of a cipher. It doesn't provide users with much indication of what it can do or how to use it; there's no easy way to poke around and get a sense of its capabilities.

Flashback: Tech companies have talked for years about natural language interfaces. Back in the late 1990s, Clippy used to pop up in Word when it looked like you were writing a letter or resume and might need help. 

But Clippy's abilities were constrained by the limits of computers to understand all the different ways that humans describe the actions they want to take. 

It's only with the arrival of large language models trained on all these ways that computers have reached a point they seem poised to speak our language, rather than humans having to learn to "speak computer."

Perhaps as a sign of things to come, Microsoft brought Clippy back as an emoji in Windows 11, following years of exile.

What's next: Expect to see chatbot-like interfaces show up all over the place. Once the tech industry gloms on to a trend, it tends to happen everywhere, for better and worse.

For example, once smartphones ushered in an app-centered world, every company and organization felt obligated for a while to create their own app — even if it was just for a conference you were attending once.

Generative AI is also a revolution for computer interfaces

Telling your computer what to do in plain human language is suddenly within reach.

Illustration of a hand holding a cursor with light and a sunburst behind it

Finish Line

Axios Finish Line

Artificial intelligence will soon transform media on a scale and pace that rivals the internet two decades ago.

Why it matters: The media companies that survive — and thrive — will be those that adapt quickly to fast-changing consumer needs.

We have spent months talking to the people building the new AI technologies, and reflecting on how they can help — or harm — your ability to get high-quality content you can trust.

A lot of you ask about trust in media. So think of this column as prep for substantial changes coming to your news diet.

Eight transformations seem likely and are animating our thinking at Axios:

1. Expertise. The days of gaming social media algorithms are coming to an abrupt — and needed — end. Commoditized or general interest content will fade in value. Any company betting only on high traffic seems doomed. The demand for subject matter expertise will rise fast.

Prepare for a world of fewer big, generic brands — but more and better niche companies aimed at your passions.

2. Trust. AI will rain a hellfire of fake and doctored content on the world, starting now. That'll push readers to seek safer and trusted sources of news — directly instead of through the side door of social media.

Advertisers will shift to safer, well-lit spaces, creating a healthy incentive for some publishers to get rid of the litter you see on their sites today. That shift is already happening.

3. Direct relationships. Consumers will soon get awesome, fully written search results with ChatGPT-like technologies. You'll get smart answers — not links. This will slow or even cut off a highly valuable pipeline of web traffic for companies like Axios and force publishers to tighten our direct relationship with you, the customer/consumer.

4. Inbox platforms. Newsletters will rise in importance, as Microsoft and Google make emailing magically easy by helping you write, answer and sort emails. The inbox will be a more indispensable content destination and repository.

Some argue website homepages will rise in importance, too. But that strikes me as silly. That's not how consumers want content. They're accustomed to important stuff getting pushed to them.

5. Healthy content. There's simply too much doom and gloom on TV and many news sites. Consumers want and deserve a better mix of content, including healthy and helpful content.

That's what inspired Finish Line. This shift will be reflected in our evolving coverage of an AI-infused world.

6. Efficiency. Consumers want most news and practical information delivered as efficiently as possible. This will be even more true as new technology tricks and toys fight for your attention.

Efficiency will spread to video news, too. Network and cable news will fade or die, given the aging audience and dwindling ratings. The need to see news won't die. But younger audiences will want it shorter, and on-demand.

7. More depth. As most content gets shorter, consumers will have a little more time for podcasts and deep-dive content like magazine-style articles.  But the demand for those to be truly excellent and consumer-first will rise, too. The middle — boring stories journalists write for themselves or to fill holes on a website — will die.

8. Information inequality. There has never been a better time for discerning readers to get high-quality content delivered exponentially more efficiently. This trend will accelerate. At the same time, there has never been an easier time to create and spread distracting, disgusting or deceitful information at scale, for peanuts. This trend will also accelerate.

This will give a massive edge to those who can smartly navigate and exploit the next explosion of media change.

The bottom line: Don't wait for companies, the government or social networks to decide what's high-quality content. Take ownership of what you consume by exploiting the good stuff — and shutting off the crap.

This article originally appeared in Axios Finish Line, our nightly newsletter on life, leadership and wellness. Sign up here.

Axios Finish Line: The future of media

Illustration of a newspaper with the Axios logo and a thought bubble.

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