Axios

When former President Trump in October 2021 agreed to merge his fledgling social media company with a SPAC, it made tons of sense.

State of play: Twenty months later, with the deal mired in legal and regulatory limbo, it would make sense for both sides to walk away.

Vodafone agreed to merge its British operations with Three UK, a unit of Hong Kong-based CK Hutchison.

Why it matters: This would create the U.K.'s largest mobile operator with 27 million customers, topping current leaders BT Group and Virgin Media O2.

The European Union hit Google with a formal antitrust complaint Wednesday, two years after regulators first opened an investigation into whether Google abused its market dominance to favor its own ad tech.

Why it matters: The complaint puts even more pressure on Google parent Alphabet to possibly divest parts of its lucrative ad business.

Meta and Microsoft joined a group working on a framework to promote responsible practices in the development, creation and sharing of media created by AI, per an announcement Wednesday shared first with Axios.

Driving the news: The two tech giants, both pushing forward with respective generative AI projects, are joining the Partnership on AI group working on the framework, with plans to meet later this month to discuss recommendations and case studies.

• The group is working on technical, legal and social implications of AI-generated work.
• "Meta is excited to join the cohort of supporters of Partnership on AI’s Responsible Practices for Synthetic Media and to work with PAI on developing this into a nuanced approach to educating people about generated media,” Nick Clegg, president of global affairs at Meta, said in a statement.
• "We're optimistic about the developments in this space and about using this technology to bring more tools for creative expression to our community."

What they're saying: "Meta and Microsoft reach billions of people daily with creative content that is rapidly evolving," Claire Leibowicz, head of AI and media integrity at the Partnership on AI, said in a statement.

• "These companies have both the expertise and the access needed to reach users all around the world and help them learn to discern AI-generated images, video, and other media as synthetic media’s prevalence grows."

Be smart: Founding members of the framework, first launched in February, include Adobe, Bumble, OpenAI, TikTok, BBC, the Canadian Broadcasting Company and WITNESS, a human rights and technology group.

• Adobe has its own Content Authenticity Initiative (CAI), launched four years ago, that allows the provenance of an image to be tracked over time, including how and when it was altered, Axios previously reported.
• CAI and the new framework from Partnership on AI are "separate but complementary initiatives," said Aimee Bataclan, spokesperson for the Partnership on AI, with the framework giving recommendations for anyone creating and distributing media.
• "It incorporates several recommendations related to CAI in its sections on disclosure. However, the framework’s interventions go beyond disclosure — including an emphasis on responsible and harmful use cases for synthetic media, an emphasis on informed consent, and broader transparency."

Our thought bubble: Tech industry groups generally gather together to establish best practices and guidelines to head off the imposition of more formal regulation.

• The companies involved here are well aware that regulation will likely come for AI, and in most cases they're embracing that. But they're also grabbing a chance to push their own ideas forward in the name of responsibility while lawmakers decide what to do.

As large cloud and software providers race to unfurl new enterprise AI offerings, a new McKinsey report says banks and retail are the business sectors first in line for the biggest boost from generative AI.

• In these and other companies, 75% of the productivity gains from generative AI will come from just four business functions: customer operations, marketing and sales, software engineering and R&D.

Why it matters: AI providers are starting to deliver specific tools to transform predicted AI productivity gains from theory to reality.

• The higher the pay and education associated with a work function, the more susceptible it will be to AI's impact, according to McKinsey.

Driving the news: Oracle on Tuesday announced an end-to-end platform for generative AI services, a day after Salesforce launched its Cloud AI offering.

• Both are branded as privacy and security-focused and are designed to appeal to regulated industries.

What's happening: McKinsey studied 63 practical uses of generative AI across 2,100 existing work activities to assess its potential.

• McKinsey expects activities that consume about two-thirds of our work time today to be automated over the next 20 years.
• A key example is R&D, where the emerging field of generative design — turbocharged by foundation models that enable faster drafting and testing of products and services — will provide big efficiencies, per McKinsey.

By the numbers: Generative AI could deliver total value between $2.6 trillion to $4.4 trillion a year, a sum greater than the GDP of Germany, the world's fourth-largest economy.

• Retail and packaged consumer goods companies would be in line for $660 billion a year in productivity gains, if "use cases were fully implemented" — which would mean a 44% boost to profits.
• Banks, which tend to have higher profit margins, wouldn't receive as big a boost to profits (9% to 15%) but stand to gain up to $340 billion annually.

Of note: McKinsey held back from attaching a timeline to these gains — a spokesperson said, "How quickly that value will be captured is dependent on how many and how fast companies decide to implement these use cases. It will undoubtedly take years."

Yes, but: While innovators and researchers agree on the huge potential of generative AI, even bigger dividends are possible from non-generative AI — the basic machine-learning and analytics technology that has been steadily evolving for the past 15 years.

• McKinsey estimates extensive use of non-generative AI would deliver $11.0 trillion to $17.7 trillion economic value, roughly four times that of generative AI.
• These rosy scenarios come with a warning: "Significant human oversight is required," and there's no replacement for human "strategic thinking specific to each company’s needs."

What they’re saying: Michael Chui, partner at McKinsey Global Institute, which prepared the report, told Axios he was most surprised to see generative AI’s impact “is highest for occupations which have the highest educational requirements and wage rates.”

• Antonio Neri, CEO of Hewlett Packard Enterprise, told Axios that much of realizing AI's potential pivots around making better use of data. Companies today are "exploiting only about 10% of the data they're accumulating," he said.
• Clara Shih, CEO of Salesforce AI, sees new enterprise AI applications as "democratizing generative AI" by lifting up the standards of work all staff can deliver.
• Using the example of marketing and sales emails, Shih said it's now possible for "every seller in your organization, every service agent, every marketing manager" to prepare text at the level only the "top few percent" could previously.

SAP chief marketing officer Julia White told Axios that generative AI is converting the notion of 1-to-1 marketing from theory to reality. "We can start delivering on that idea in a way that never would have scaled before," White said.

• White said her team is conducting a number of internal pilots, including one that suggests to sales people which demos might be most appropriate using characteristics such as a prospect's location and industry.

A federal judge on Tuesday granted the FTC's request for a temporary restraining order that prevents Microsoft from closing its acquisition of gaming giant Activision Blizzard.

Why it matters: We're inching quite close to the July 18 deadline for the deal to either close, or an extension to be negotiated — or else, Microsoft will owe Activision Blizzard a $3 billion breakup fee.

A net art NFT project called Bonkler will soon launch an experiment where bidders on a big NFT will win smaller NFTs, even if they lose the auction for the larger work.

Zoom in: Buyers are dropping an average of 14 ETH (about $24,000) each day for the latest Bonkler NFT, and that's likely to pop if every bid also gets an asset.

Generative AI has already lowered the bar for cybercriminals looking to clone someone's voice and use it in their schemes.

Why it matters: Cybercriminals now need as little as three seconds of someone's voice to successfully clone it and make it usable in a scam call thanks to generative AI tools, researchers at McAfee have found.

A series of video game showcases over the last two weeks has filled out much of the release calendar for late 2023 and roughly sketched out 2024, with some notable exceptions.

Driving the news: Last Wednesday’s live Summer Game Fest stage show in Los Angeles and a well-received, prerecorded cascade of trailers by Microsoft on Sunday filled in a lot of blanks.

SEC communications known as the Hinman documents dropped Tuesday, evidence crypto firm Ripple hopes is a smoking gun in a whodunnit called "What is a Security."

Why it matters: The internal SEC communications from 2018 show that senior SEC officials explicitly acknowledged that a speech from a fellow director could sow confusion in how the U.S. classifies digital assets.

Salesforce Monday pitched its new AI Cloud product as a one-stop shop for nervous CEOs looking to take advantage of large language models “without their data ever leaving Salesforce,” per CEO Marc Benioff.

Why it matters: Salesforce has upped the ante on AI privacy and security — with Benioff zeroing in on demand for AI in regulated industries, and delivering thinly-veiled snark aimed at market leader OpenAI wrapped in the message that “data is not our product.”

Twitter's new CEO Linda Yaccarino wrote up some inspirational comments for her new staff in an e-mail on Monday, exhorting them to "reach across aisles, create new partnerships, celebrate new voices, and build something together that can change the world."

Yes, but: The man who hired her, the company's billionaire owner Elon Musk, spent the weekend posting sophomoric messages that reeked at times of misogyny and transphobia.