Workers rappel down the side of a building as Chinese flags and surveillance cameras are seen on the side of a building in Urumqi, Xinjiang autonomous region, China, on Tuesday, Nov. 6, 2018. Although it represents just 1.5 percent of China's population and 1.3 percent of its economy, Xinjiang sits at the geographic heart of Xi's signature Belt and Road Initiative. Source: Bloomberg
Photo: Bloomberg

An ‘us vs. them’ approach to AI

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Good morning! Some experts worry that pointing fingers at China’s surveillance techniques allows the government to deflect from some of the questionable practices happening in the U.S.. How real are those concerns?

The AI gap

As national security fears of China’s AI advancements propel U.S. AI policy, some human rights and AI watchdogs worry investments in AI with military applications will become a major focus, allowing the U.S. to deflect scrutiny or legal guardrails for its own AI practices, Protocol’s Kate Kaye reports.

  • “I’m far more worried about the risks to our society from failing to regulate AI than the risk that we fall behind China in some aspects of the technology,” said Matt Sheehan, a fellow in the Asia Program at the Carnegie Endowment for International Peace.

The so-called AI race is considered a competition with China for democratic values, as well as economic or technological superiority. Miriam Vogel, co-chair of the White House National AI Advisory Committee, suggested at a POLITICO event in September that democratic values can be baked into U.S. tech like cinnamon and nutmeg in an apple pie.

  • “AI embeds our culture, and our culture in the U.S. is trust and democratic values,” Vogel said.
  • Vogel’s remarks mirrored sentiments found in one of the most influential documents guiding U.S. AI policy and investments thus far: the 2021 final report of the National Security Commission on Artificial Intelligence.
  • In an effort to stay ahead of China and combat what the report called the “chilling precedent” created by China’s use of AI "as a tool of repression and surveillance,” the commission called on the federal government to double annual non-defense funding for AI research and development to $32 billion per year by 2026.

But the U.S. has yet to pass any federal regulations or laws governing AI development and use, despite an explosion of AI deployment by businesses and government. Letting China’s AI threat distract the U.S. from meaningful AI regulations would be a mistake, Sheehan said.

  • “We’ve already seen the way technology left to its own devices can widen inequality, deepen social divisions, and exacerbate political extremism. Unchecked AI deployment could put risks like those on steroids in a way that threatens the foundations of our democracy,” he said.

Read more: Why an "us vs. them'"approach to China lets the U.S. avoid hard AI questions. Read all the stories in this series here.

The crypto boys are fighting!

The gloves are off. Binance CEO Changpeng “CZ” Zhao and FTX CEO Sam Bankman-Fried — who run the No. 1 and No. 3 crypto exchanges by volume, respectively — have been trading barbs on Twitter. It kicked off after people noticed Binance had moved a massive amount of FTT, an FTX-linked token, Protocol Fintech editor Owen Thomas writes. Now people are asking if FTX is going under, and everyone’s mad!

Binance and FTX used to be best buds. Binance even invested in FTX when it was just an upstart crypto derivatives exchange.

  • As FTX grew and broadened to become a general-purpose crypto trading service, the companies drifted apart. FTX bought out Binance’s stake last year. But Binance still held onto a big chunk of FTT that it got as part of its original investment.
  • “We gave support before, but we won't pretend to make love after divorce,” Zhao wrote on Twitter, and compared FTT to luna, a cryptocurrency that imploded earlier this year. FTT’s price sank some, but not disastrously.

Crypto lobbying has reached a high-stakes moment. Zhao also suggested that FTX’s behind-the-scenes machinations in Washington were an issue. “We won't support people who lobby against other industry players behind their backs,” he tweeted.

  • Binance has been pursuing a go-it-alone approach to lobbying in Washington, leaving the Blockchain Association earlier this year.
  • FTX, meanwhile, has been trying to present itself as more friendly to regulators. It’s been pushing for the CFTC, which already oversees parts of FTX’s derivatives business, to get oversight of the crypto market in the U.S. Bankman-Fried wrote a controversial proposal on regulating crypto that got a lot of people upset.
  • The FTX CEO has also dinged Zhao personally about Binance’s regulatory troubles, asking in a since-deleted tweet if the Binance chief was even “allowed to go to” D.C. to lobby.

This isn’t just about mean tweets, though. The heart of the dispute seems to be what crypto regulation looks like in the United States. Congress is considering the Digital Commodities Consumer Protection Act, or DCCPA, a bill that Bankman-Fried says he’s “optimistic” about and that would advance the CFTC’s position in regulating crypto. If that law ends up giving his exchange an edge against Binance, well, all’s fair in love and crypto.

What’s good for the grid

Electric vehicles are essentially batteries on wheels. Figuring out not only how to charge them for mobility but also use them to put power back on the grid will be one of the challenges of the next decade, reports Protocol's Lisa Martine Jenkins.

Taking power from EV batteries is more complicated than it seems. The technology, called bidirectional charging, is still very much in the pilot phase, in part because making use of the power stored in an EV’s battery involves getting utilities on board to feed power back onto the grid.

  • To charge an EV, the charger or the car must have a converter that takes alternating current (AC) power from the grid and flips it to direct current (DC) power that the car’s battery can store. Bidirectional charging technology — located either in the car itself or in an external charger — can convert that DC power to AC power to feed it back to the grid.
  • California utility PG&E launched several projects last summer to explore the use of bidirectional charging in different contexts to gauge how cost-effective the technology is.

Reasons for using bidirectional charging largely fall into two buckets: keeping the lights on and making money. Both are pretty good ideas!

  • Vehicle-to-home charging gives homeowners more control over their energy use, allowing them to do things such as power their home during a storm-induced blackout or draw on their EV battery for power when electricity prices — which fluctuate throughout the day — are at their highest.
  • Vehicle-to-grid charging involves more coordination with utilities. A parked EV represents a potentially valuable storage resource for power companies, but tapping that resource will require connecting each individual EV to the grid and then using software that can assess demand and communicate with utilities.

There are some barriers to widespread adoption. Utilities and the state-level commissions that regulate them are slow-moving and cautious about change.

  • Vehicle-to-home charging is closer to being ready for prime time, though the technology to integrate bidirectional charging into a home’s energy system is still not widely available.
  • But using an EV to power either a home or the grid depends on getting the local utility’s say-so.

The current bidirectional charging policy landscape is fragmented, though state and federal lawmakers are beginning to push utility commissions to create plans for vehicle-to-grid charging. But if policymakers, utilities, and automakers can get their collective act together, bidirectional charging could entice would-be EV customers, who stand to benefit in terms of both finances and peace of mind.

Read more: EV charging’s next act is powering homes and the grid

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People are talking

Chris Sacca — who was an early Twitter investor — said in a tweet thread that Elon Musk’s inner circle is “sycophantic and opportunistic”:

  • “One of the biggest risks of wealth/power is no longer having anyone around you who can push back, give candid feedback, suggest alternatives, or just simply let you know you're wrong.”

Twitter Blue could actually lose the company money, one former Twitter employee told Platformer’s Casey Newton:

  • “The business fundamentals are just not there.”
And Barry Diller, chairman of IAC and Expedia, has his own way of looking at Musk's Twitter:
  • "He bought a toy, and how long he will use it, like toys, we don’t really know."

Making moves

A new venture from former Peloton execs: Founder and former CEO John Foley — as well as ex-legal chief Hisao Kushi, ex-CTO Yony Feng, and other Peloton alums — launched Ernesta, an online shop selling custom-designed rugs. It just raised $25 million in its series A.

Carbon Re is spinning out from U.K. universities Cambridge University and UCL. The startup, which uses AI to decarbonize energy-intensive industries, also received around $4.8 million in funding.

Smruti Patel is the new VP of engineering for Apollo GraphQL, an app-building platform. She formerly led engineering at Stripe.

Jumia co-founders Sacha Poignonnec and Jeremy Hodara stepped down from their roles at the Africa-focused ecommerce group, as the company faces persistent losses.

Foxconn plans to invest $170 million in Lordstown Motors, the EV startup. The two companies plan to develop an electric vehicle together.

In other news

The Justice Department seized $3.4 billion worth of bitcoin stolen in the 2012 hack of the Silk Road dark web marketplace.

Amazon said Rivian EVs will be making deliveries in more than 100 U.S. cities by the holidays. The company said it already has more than 1,000 Rivian EVs making deliveries in a dozen U.S. cities.

Nvidia responded to U.S. export controls by offering a new advanced chip for sale in China that complies with the Commerce Department's rules.

BlockFi introduced a new digital assets interest product for accredited investors after previously agreeing to shut down a yield-paying crypto product that the SEC said was illegal.

The vibe has shifted in Twitter’s Slack channels. The chaos, with Musk posting employee messages and people finding public channels, is a reminder that work Slacks are never really private.

Elsewhere in Twitter news today: Musk has reportedly considered all of Twitter being behind a paywall, and user growth has apparently hit “all-time highs” since he took over.

Elon Musk is headed to trial to defend his $56 billion Tesla paycheck against investor claims it unjustly enriches him without requiring his full-time presence at the carmaker.

Elizabeth Holmes was denied a new trial, with none of her three motions requesting one passing muster for U.S. District Judge Edward Davila.

Airbnb will let users search by total cost of the stay before taxes, including cleaning and other fees, starting in December.

It's the end of an era: SoftBank's Masayoshi Son will no longer present his wild slideshows on quarterly earnings calls.

Interview with an Elonbot

Elon Musk has long been averse to chatting with the media. So one user on AI chat platform Character.AI made an Elon that anyone can talk with. Using parameters on topics like business, tech, and politics, as well as neural language models to get Musk’s “voice,” the platform created an Elon-eque AI chatbot. And it kinda works: When we asked about the Twitter acquisition, the bot responded it was “a key to the Everything App.”

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