How Google and Microsoft took control of AI

I’m Justin Fox, and this is Bloomberg Opinion Today, a manually assembled selection of Bloomberg Opinion’s opinions. Sign up here. AI pionee [Bloomberg]( I’m Justin Fox, and this is Bloomberg Opinion Today, a manually assembled selection of Bloomberg Opinion’s opinions. [Sign up here](. Today’s Agenda - [AI pioneers]( opt for the big money. - How to [debate Trump](. - Breaking up [Google’s ad business]( is easy. - [Home equity]( loans are back. AI Is Made out of People — and Money When Sam Altman of OpenAI and Demis Hassabis of Google DeepMind set out on their artificial-intelligence entrepreneurial adventures in the 2010s, they seemed to believe that tech giants such as Microsoft and Google shouldn’t be allowed to control the powerful tools they hoped to build. As Parmy Olson describes in [an excerpt]( from her new book, [Supremacy: AI, ChatGPT and the Race That Will Change the World]( “Both fumbled for novel ways to structure their research labs to protect AI and make benevolence its priority. They promised to be AI’s careful custodians.” We know how that turned out. Google DeepMind, as its current name indicates, has been a Google subsidiary since 2014. After failed efforts by Hassabis and team to spin it back out as a sort of nonprofit, it is now more closely integrated with its parent than ever. Meanwhile, Altman has taken OpenAI from nonprofit to “capped profit” company with big investments from Microsoft, and is now reportedly contemplating a restructuring that would make it even more investor-friendly. This turn of events is understandable given how much cash and computing power — both of which Microsoft and Google parent Alphabet Inc. possess in spades — the generative AI models developed by OpenAI and DeepMind need to operate. It also has historical precedent in the late-19th-century electricity wars between General Electric Co. and Westinghouse. That doesn’t make it any less unsettling. “I’ve never seen a field move as quickly as artificial intelligence has in just the last two years,” Parmy writes, and this breakneck development is now being steered by corporate giants that have so far appeared to be “highly questionable stewards of AI.” More from her in [this video]( bbg://news/video/416443168 Here’s How Big Tech Took Over AI Bonus AI Reading:  One especially disturbing product of the new generation of AI is deepfake porn, which has reached epidemic levels in South Korea, [writes]( Catherine Thorbecke. The country has strong laws in place against the practice, but new AI tools make it so easy to produce that until the companies behind those tools show more responsibility, it will be hard to stop. Debating Tips for Kamala Harris It’s finally going to happen tomorrow night in Philadelphia: Democratic presidential nominee Kamala Harris and Republican nominee (and one-time Harris campaign contributor) Donald Trump will meet in person for the first time — and have a nationally televised debate while they’re at it. Harris is a veteran prosecutor, meaning expectations for her performance are high. Trump is a born entertainer whose often-fact-free meandering would never win him, say, an [Oxford Union]( contest, but can push opponents off balance. Timothy O’Brien [has tips]( for Harris on how not to let that happen, and make the former president wobble. Seven of them, to be precise. Here’s some advice from Tip No. 2 (“The Best Defense Is a Good Offense”): “He doesn’t mind being labeled a liar; he does mind being seen as [weird](. He doesn’t mind being labeled a buffoon; he does mind being seen as incompetent. He’s fine if you say he fawns over dictators; he’s not cool if you say he tried to torch the Constitution.” Got that? Telltale Charts Google’s search business is an illegal monopoly, a US federal judge [ruled last month](. Figuring out what to do about that is proving to be something of a challenge, because there’s [no obvious way]( to break the business apart. This would be much easier to do with the company’s advertising endeavors, [writes]( Dave Lee, and antitrust regulators in the US and UK are eager for a breakup. Remember home equity loans? They provided a big boost to US economic growth in the 2000s — until housing prices started to fall and they became a weight dragging many borrowers into foreclosure. Now, after years of housing price gains and low levels of home equity lending, owners’ equity is the highest its been in the US since the 1960s. With interest rates now falling too, Conor Sen [suggests]( this offers homeowners a “new piggy bank to raid” and the possibly flagging US economy a welcome prop. Further Reading What [Elmer’s Glue]( can teach us about manufacturing in China. — Thomas Black When and how will the US [abandon Europe]( — Andreas Kluth [Just say no]( to tax credits for wood pellets. — Mark Gongloff Don’t be too [scared of September](. — Jonathan Levin [Ukraine needs]( more weapons. — Bloomberg’s editorial board Hard work ahead [for the ECB](. — Marcus Ashworth [Canary Wharf’s]( test of nerves. — Chris Hughes [Looking backward]( with US Steel. — David Fickling India [needs trade deals](. — Mihir Sharma The [Fed’s data]( quandary. — John Authers How to [make money]( on Spotify. — Matt Levine ICYMI China’s [deflationary spiral]( gets dangerous. Draghi [versus Germany](. [How Apple]( rules the world. Kickers The EU now [gets more power]( from wind and solar than fossils. Cleaning the Great Pacific Garbage Patch [costs $7.5 billion](. [Growing agave]( instead of almonds. Notes: Please send debating tips and feedback to Justin Fox at [justinfox@bloomberg.net](mailto:jkarl9@bloomberg.net). [Sign up here]( and follow us on [Threads]( [TikTok]( [Twitter]( [Instagram]( and [Facebook](. Follow Us Stay updated by saving our new email address Our email address is changing, which means you’ll be receiving this newsletter from noreply@news.bloomberg.com. Here’s how to update your contacts to ensure you continue receiving it: - Gmail: Open an email from Bloomberg, click the three dots in the top right corner, select “Mark as important.” - Outlook: Right-click on Bloomberg’s email address and select “Add to Outlook Contacts.” - Apple Mail: Open the email, click on Bloomberg’s email address, and select “Add to Contacts” or “Add to VIPs.” - Yahoo Mail: Open an email from Bloomberg, hover over the email address, click “Add to Contacts.” Like getting this newsletter? 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