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cruise-failed-to-disclose-disturbing-details-of-self-driving-car-crash

Cruise failed to disclose disturbing details of self-driving car crash

autonomous vehicles, Cars, Cruise, GM, self-driving, syndication / /

full disclosure —

Company did not share all it knew about the accident with regulators.

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A Cruise robotaxi test vehicle in San Francisco.

Enlarge / A Cruise robotaxi test vehicle in San Francisco.

Cruise

A law firm hired by the General Motors’ self-driving subsidiary Cruise to investigate the company’s response to a gruesome San Francisco crash last year found that the company failed to fully disclose disturbing details to regulators, the tech company said today in a blog post. The incident in October led California regulators to suspend Cruise’s license to operate driverless vehicles in San Francisco.

The new report by law firm Quinn Emanuel says that Cruise failed to tell California’s Department of Motor Vehicles that after striking a pedestrian knocked into its path by a human-driven vehicle, the autonomous car pulled out of traffic—dragging her some 20 feet. Cruise said it had accepted the firm’s version of events, as well as its recommendations.

The investigators found that when Cruise played a video of the crash taken from its autonomous vehicle for government officials, it did not “verbally point out” the vehicle’s pullover maneuver. Internet connectivity issues that occurred when the company tried to share video of the incident “likely precluded or hampered” regulators from seeing the full video, the report concluded.

Cruise executives are singled out in the report for failing to properly communicate with regulators. Company leaders assumed that regulators would ask questions that would lead the company to provide more information about the pedestrian dragging, the report says. And Cruise leadership is described as “fixated” on demonstrating to the media that it was a human-driven car, not its autonomous vehicle, that first struck the pedestrian. That “myopic focus,” the law firm concludes, led Cruise to “omit other important information” about the incident.

“The reasons for Cruise’s failings in this instance are numerous,” the law firm concluded, “poor leadership, mistakes in judgment, lack of coordination, an ‘us versus them’ mentality with regulators, and a fundamental misapprehension of Cruise’s obligations of accountability and transparency to the government and the public.” It said the company must take “decisive steps” to restore public trust.

Another third-party report on the crash released by Cruise today, by the engineering consulting firm Exponent, found that technical issues contributed to the autonomous vehicle’s dangerous pullover maneuver. Although the self-driving car’s software correctly detected, perceived, and tracked the pedestrian and the human-driven car, it classified the crash as a side-impact collision, which led it to pull over and drag the woman underneath it. Cruise says its technical issues were corrected when it recalled its software in November.

Cruise has paused its self-driving operations across the US since late October. Nine executives, plus CEO and cofounder Kyle Vogt, left in the fallout from the crash. In late 2023, the company laid off almost a quarter of its employees. General Motors says it will cut spending on the tech company by hundreds of millions of dollars this year compared to last.

This story originally appeared on wired.com.

Cruise failed to disclose disturbing details of self-driving car crash Read More »

$40-billion-worth-of-crypto-crime-enabled-by-stablecoins-since-2022

$40 billion worth of crypto crime enabled by stablecoins since 2022

Biz & IT, cryptocurrencies, pig butchering, stablecoin, stablecoins, syndication / /
illustration of cryptocurrency breaking through brick wall

Anjali Nair; Getty Images

Stablecoins, cryptocurrencies pegged to a stable value like the US dollar, were created with the promise of bringing the frictionless, border-crossing fluidity of bitcoin to a form of digital money with far less volatility. That combination has proved to be wildly popular, rocketing the total value of stablecoin transactions since 2022 past even that of Bitcoin itself.

It turns out, however, that as stablecoins have become popular among legitimate users over the past two years, they were even more popular among a different kind of user: those exploiting them for billions of dollars of international sanctions evasion and scams.

As part of its annual crime report, cryptocurrency-tracing firm Chainalysis today released new numbers on the disproportionate use of stablecoins for both of those massive categories of illicit crypto transactions over the last year. By analyzing blockchains, Chainalysis determined that stablecoins were used in fully 70 percent of crypto scam transactions in 2023, 83 percent of crypto payments to sanctioned countries like Iran and Russia, and 84 percent of crypto payments to specifically sanctioned individuals and companies. Those numbers far outstrip stablecoins’ growing overall use—including for legitimate purposes—which accounted for 59 percent of all cryptocurrency transaction volume in 2023.

In total, Chainalysis measured $40 billion in illicit stablecoin transactions in 2022 and 2023 combined. The largest single category of that stablecoin-enabled crime was sanctions evasion. In fact, across all cryptocurrencies, sanctions evasion accounted for more than half of the $24.2 billion in criminal transactions Chainalysis observed in 2023, with stablecoins representing the vast majority of those transactions.

The attraction of stablecoins for both sanctioned people and countries, argues Andrew Fierman, Chainalysis’ head of sanctions strategy, is that it allows targets of sanctions to circumvent any attempt to deny them a stable currency like the US dollar. “Whether it’s an individual located in Iran or a bad guy trying to launder money—either way, there’s a benefit to the stability of the US dollar that people are looking to obtain,” Fierman says. “If you’re in a jurisdiction where you don’t have access to the US dollar due to sanctions, stablecoins become an interesting play.”

As examples, Fierman points to Nobitex, the largest cryptocurrency exchange operating in the sanctioned country of Iran, as well as Garantex, a notorious exchange based in Russia that has been specifically sanctioned for its widespread criminal use. Stablecoin usage on Nobitex outstrips bitcoin by a 9:1 ratio, and on Garantex by a 5:1 ratio, Chainalysis found. That’s a stark difference from the roughly 1:1 ratio between stablecoins and bitcoins on a few nonsanctioned mainstream exchanges that Chainalysis checked for comparison.

Chainalysis' chart showing the growth in stablecoins as a fraction of the value of total illicit crypto transactions over time.

Enlarge / Chainalysis’ chart showing the growth in stablecoins as a fraction of the value of total illicit crypto transactions over time.

Chainanalysis

$40 billion worth of crypto crime enabled by stablecoins since 2022 Read More »

just-10-lines-of-code-can-steal-ai-secrets-from-apple,-amd,-and-qualcomm-gpus

Just 10 lines of code can steal AI secrets from Apple, AMD, and Qualcomm GPUs

AI, data leaks, GPU, LLMs, Security, syndication / /

massive leakage —

Patching all affected devices, which include some Macs and iPhones, may be tough.

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ai brain

MEHAU KULYK/Getty Images

As more companies ramp up development of artificial intelligence systems, they are increasingly turning to graphics processing unit (GPU) chips for the computing power they need to run large language models (LLMs) and to crunch data quickly at massive scale. Between video game processing and AI, demand for GPUs has never been higher, and chipmakers are rushing to bolster supply. In new findings released today, though, researchers are highlighting a vulnerability in multiple brands and models of mainstream GPUs—including Apple, Qualcomm, and AMD chips—that could allow an attacker to steal large quantities of data from a GPU’s memory.

The silicon industry has spent years refining the security of central processing units, or CPUs, so they don’t leak data in memory even when they are built to optimize for speed. However, since GPUs were designed for raw graphics processing power, they haven’t been architected to the same degree with data privacy as a priority. As generative AI and other machine learning applications expand the uses of these chips, though, researchers from New York-based security firm Trail of Bits say that vulnerabilities in GPUs are an increasingly urgent concern.

“There is a broader security concern about these GPUs not being as secure as they should be and leaking a significant amount of data,” Heidy Khlaaf, Trail of Bits’ engineering director for AI and machine learning assurance, tells WIRED. “We’re looking at anywhere from 5 megabytes to 180 megabytes. In the CPU world, even a bit is too much to reveal.”

To exploit the vulnerability, which the researchers call LeftoverLocals, attackers would need to already have established some amount of operating system access on a target’s device. Modern computers and servers are specifically designed to silo data so multiple users can share the same processing resources without being able to access each others’ data. But a LeftoverLocals attack breaks down these walls. Exploiting the vulnerability would allow a hacker to exfiltrate data they shouldn’t be able to access from the local memory of vulnerable GPUs, exposing whatever data happens to be there for the taking, which could include queries and responses generated by LLMs as well as the weights driving the response.

In their proof of concept, as seen in the GIF below, the researchers demonstrate an attack where a target—shown on the left—asks the open source LLM Llama.cpp to provide details about WIRED magazine. Within seconds, the attacker’s device—shown on the right—collects the majority of the response provided by the LLM by carrying out a LeftoverLocals attack on vulnerable GPU memory. The attack program the researchers created uses less than 10 lines of code.

An attacker (right) exploits the LeftoverLocals vulnerability to listen to LLM conversations.

Last summer, the researchers tested 11 chips from seven GPU makers and multiple corresponding programming frameworks. They found the LeftoverLocals vulnerability in GPUs from Apple, AMD, and Qualcomm and launched a far-reaching coordinated disclosure of the vulnerability in September in collaboration with the US-CERT Coordination Center and the Khronos Group, a standards body focused on 3D graphics, machine learning, and virtual and augmented reality.

The researchers did not find evidence that Nvidia, Intel, or Arm GPUs contain the LeftoverLocals vulnerability, but Apple, Qualcomm, and AMD all confirmed to WIRED that they are impacted. This means that well-known chips like the AMD Radeon RX 7900 XT and devices like Apple’s iPhone 12 Pro and M2 MacBook Air are vulnerable. The researchers did not find the flaw in the Imagination GPUs they tested, but others may be vulnerable.

Just 10 lines of code can steal AI secrets from Apple, AMD, and Qualcomm GPUs Read More »

getting-“forever-chemicals”-out-of-drinking-water-is-expensive

Getting “forever chemicals” out of drinking water is expensive

drinking water, EPA, PFAS, Science, syndication / /

safe to drink —

Can water utilities meet the EPA’s new standard for PFAS?

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aerial view of water treatment plant

Situated in a former sand and gravel pit just a few hundred feet from the Kennebec River in central Maine, the Riverside Station pumps half a million gallons of fresh groundwater every day. The well station processes water from two of five wells on either side of the river operated by the Greater Augusta Utility District, or GAUD, which supplies drinking water to nearly 6,000 local households. Most of them reside in Maine’s state capital, Augusta, just a few miles to the south. Ordinarily, GAUD prides itself on the quality of its water supply. “You could drink it out of the ground and be perfectly safe,” said Brian Tarbuck, GAUD’s general manager.

But in March 2021, environmental sampling of Riverside well water revealed trace levels of per- and polyfluoroalkyl substances (PFAS), or “forever chemicals,” as they’re better known. The levels at Riverside didn’t exceed Maine’s drinking water standard of 20 parts per trillion (ppt), which was a relief, Tarbuck said. Still, he and his colleagues at the utility were wary. PFAS have been linked to a variety of health problems, and Maine lawmakers at the time were debating an even stricter limit for the chemicals. Tarbuck knew a lower standard was coming someday. The only question was when.

As it turns out, a tougher standard is expected early this year. That’s when the US Environmental Protection Agency is set to finalize an enforceable cap on PFAS in drinking water that will require GAUD and thousands of other utilities around the country to update their treatment methods. The standard, which in regulatory terms is called a maximum contaminant level, or MCL, limits permissible amounts of the two most studied and ubiquitous PFAS compounds—PFOA and PFOS—to just 4 ppt in drinking water each. Roughly equivalent to a single drop in five Olympic-size swimming pools, this is the lowest concentration that current analytical instruments can reliably detect “within specific limits of precision and accuracy during routine laboratory operating conditions,” according to the EPA. Four other PFAS—PFHxS, PFNA, PFBS, and HFPO-DA (otherwise known as GenX Chemicals)—will be regulated by combining their acceptable levels into a single value. Utilities will have three to five years to bring their systems into compliance.

Agency officials estimate that between 3,400 and 6,300 water systems will be affected by the regulation, which is the EPA’s first ever PFAS standard and the first MCL set by the agency for any chemical in drinking water in over 25 years. PFOA and PFOS account for the majority of anticipated exceedances.

GAUD is now gearing up to spend $3 to 5 million on PFAS removal technology, according to Tarbuck, much of which will be passed on to its customers in the form of higher water bills. Nationally, the price tag of meeting the standard could top $37 billion in upfront costs, in addition to $650 million in annual operating expenses, according to the American Water Works Association, or AWWA, a nonprofit lobbying group representing water utilities. That’s far higher than the EPA’s cost estimate of $777 million to $1.2 billion and a significant burden for an industry already contending with other costly priorities, such as boosting cybersecurity and “replacing all those antiquated, leaking big water pipes that transport the water from the treatment plant to the service line” that connects to homes, said Marc Edwards, a professor of civil and environmental engineering at Virginia Tech. Chris Moody, the AWWA’s regulatory technical manager, said most of the money will be spent in the next several years, as utilities race to install PFAS removal systems and other infrastructure needed to meet compliance deadlines.

In proposing the limits, EPA officials said that they had leveraged the latest science to protect the public from PFAS pollution. Environmental groups welcomed the move as long overdue. But the standard has drawn widespread criticism from the water utility industry and some scientists who say that in many places, small drops in PFAS water levels will matter little for exposure or health. “There are other strategies that get us to safer, public health protective approaches to PFAS that don’t involve the really strict standard that EPA is putting forward,” said Ned Calonge, an associate dean for public health practice at the Colorado School of Public Health and chair of a 2022 National Academies of Sciences report on PFAS exposure, testing, and clinical follow-up.

EPA officials estimate that between 3,400 and 6,300 water systems will be affected by the regulation, which is the agency’s first-ever PFAS standard

A key issue, critics say, is that the standard ensnares too many utilities with very small PFAS exceedances. Roughly 98 percent of drinking water utilities in the country, including GAUD, have maximum PFOA and PFOS levels below 10 ppt, according to the AWWA. When the levels are already so low, further reductions of a few parts per trillion “is not going to have much effect on total exposure intake,” wrote Ian Cousins, an environmental chemist at Stockholm University and one of the world’s leading researchers on PFAS exposure, in an email to Undark.

Drinking water is only one among many different pathways by which people can be exposed to PFAS. The chemicals are also in agricultural produce, fish, meat, outdoor soil, household dust, nonstick cookware, cosmetics, fast-food wrappers, stain- and water-resistant fabrics, and other products. Just how much these sources each contribute to PFAS exposure is a subject of ongoing research. But the EPA estimates that Americans get 80 percent of their PFAS intake from sources other than drinking water, and according to Cousins, dietary contributions likely account for most human exposure. The US Food and Drug Administration has required the phase out of some PFAS in food packaging. But “food is contaminated via bioaccumulation in agricultural and marine food chains,” Cousins said. “We cannot clean up our food in the same way that we can add a treatment process to our drinking water.”

Getting “forever chemicals” out of drinking water is expensive Read More »

child-abusers-are-covering-their-tracks-with-better-use-of-crypto

Child abusers are covering their tracks with better use of crypto

Bitcoin, child abuse, Cryptocurrency, csam, Monery, Policy, syndication, Zcash / /
silhouette of child

For those who trade in child sexual exploitation images and videos in the darkest recesses of the Internet, cryptocurrency has been both a powerful tool and a treacherous one. Bitcoin, for instance, has allowed denizens of that criminal underground to buy and sell their wares with no involvement from a bank or payment processor that might reveal their activities to law enforcement. But the public and surprisingly traceable transactions recorded in Bitcoin’s blockchain have sometimes led financial investigators directly to pedophiles’ doorsteps.

Now, after years of evolution in that grim cat-and-mouse game, new evidence suggests that online vendors of what was once commonly called “child porn” are learning to use cryptocurrency with significantly more skill and stealth—and that it’s helping them survive longer in the Internet’s most abusive industry.

Today, as part of an annual crime report, cryptocurrency tracing firm Chainalysis revealed new research that analyzed blockchains to measure the changing scale and sophistication of the cryptocurrency-based sale of child sexual abuse materials, or CSAM, over the past four years. Total revenue from CSAM sold for cryptocurrency has actually gone down since 2021, Chainalysis found, along with the number of new CSAM sellers accepting crypto. But the sophistication of crypto-based CSAM sales has been increasing. More and more, Chainalysis discovered, sellers of CSAM are using privacy tools like “mixers” and “privacy coins” that obfuscate their money trails across blockchains.

Perhaps because of that increased savvy, the company found that CSAM vendors active in 2023 persisted online—and evaded law enforcement—for a longer time than in any previous year, and about 57 percent longer than even in 2022. “Growing sophistication makes identification harder. It makes tracing harder, it makes prosecution harder, and it makes rescuing victims harder,” says Eric Jardine, the researcher who led the Chainalysis study. “So that sophistication dimension is probably the worst one you could see increasing over time.”

Better stealth, longer criminal lifespans

Scouring blockchains, Chainalysis researchers analyzed around 400 cryptocurrency wallets of CSAM sellers and more than 10,000 buyers who sent funds to them over the past four years. Their most disturbing finding in that broad economic study was that crypto-based CSAM sellers seem to have a longer lifespan online than ever, suggesting a kind of relative impunity. On average, CSAM vendors who were active in 2023 remained online for 884 days, compared with 560 days for those active in 2022 and just 112 days in 2020.

To explain that new longevity for some of the most harmful actors on the Internet, Chainalysis points to how CSAM vendors are increasingly laundering their proceeds with cryptocurrency mixers—services that blend users’ funds to make tracing more difficult—such as ChipMixer and Sinbad. (US and German law enforcement shut down ChipMixer in March 2023, but Sinbad remains online despite facing US sanctions for money laundering.) In 2023, Chainalysis found that about 46 percent of CSAM vendors used mixers, up from around 22 percent in 2020.

Chainalysis also found that CSAM vendors are increasingly using “instant exchanger” services that often collect little or no identifying information on traders and allow them to swap bitcoin for cryptocurrencies like Monero and Zcash—”privacy coins” designed to obfuscate or encrypt their blockchains to make tracing their cash-outs of profits far more difficult. Chainalysis’ Jardine says that Monero in particular seems to be gaining popularity among CSAM purveyors. In the company’s investigations, Chainalysis has seen it used repeatedly by CSAM sellers laundering funds through instant exchangers, and in multiple cases it has also seen CSAM forums post Monero addresses to solicit donations. While the instant exchangers did offer other cryptocurrencies, including the privacy coin Zcash, Chainalysis’ report states that “we believe Monero to be the currency of choice for laundering via instant exchangers.”

Child abusers are covering their tracks with better use of crypto Read More »

i-found-david-lynch’s-lost-dune-ii-script

I found David Lynch’s lost Dune II script

culture, David Lynch, Dune, Dune: Messiah, Frank Herbert, syndication / /

Better than Dune: Messiah? —

The unfinished script, found in an archive, shows Lynch’s enthusiasm for Dune.

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Kyle MacLachlan in Dune

Enlarge / Kyle MacLachlan in Dune, 1984.

Everett

David Lynch’s 1984 sci-fi epic Dune is—in many ways—a misbegotten botch job. Still, as with more than a few ineffectively ambitious films before it, the artistic flourishes Lynch grafted onto Frank Herbert’s sprawling Machiavellian narrative of warring space dynasties have earned it true cult classic status. Today, fans of the film, which earned a paltry $30 million at the box office and truly bruising reviews upon its release, still wonder what Lynch would have done if given the opportunity to adapt the next two novels in Herbert’s cycle: Dune Messiah and Children of Dune.

Franchising was the plan before the first film crashed and burned, with Lynch and star Kyle MacLachlan (playing Paul Atreides) set to shoot both Dune sequels back-to-back in 1986. Miniature spaceship models, costumes, and props from the first film were placed in storage by producer Dino De Laurentiis for use on these follow-ups, while the director hammered away on a Dune II script. “I wrote half a script for the second Dune. I really got into it because it wasn’t a big story,” he says in Lynch on Lynch, “more like a neighborhood story. It had some really cool things in it.”

During the two years I spent putting together my book A Masterpiece in Disarray: David Lynch’s Dune—An Oral History, I had no luck uncovering Lynch’s script for Dune II, despite Frank Herbert telling Prevue magazine in December 1984 that he possessed a copy and was advising Lynch on it. “Now that we speak the same ‘language,’ it’s much easier for both of us to make progress, especially with the screenplays,” Herbert told the publication. Then, in July 2023, within the Frank Herbert archives at California State University, Fullerton, I came across a slim folder with a sticky note declaring “Dune Messiah script revisions,” addressed to the second floor of VFX man Barry Nolan’s office in Burbank where Lynch supervised the final effects shoots and editing on Dune.

Inside the folder lay the stuff of fans’ dreams, never made public until now: 56 pages dated “January 2nd-through-9th, 1984,” matching Lynch’s “half a script” statement. Complete with penned annotations by Herbert, the Dune II script shows Lynch was still enthusiastic about the material, lending new significance to minor details in the ’84 film. He also cracked a way to tell the complex story of Herbert’s 1969 novel Dune Messiah, easily the least cinematic book in the series due to its emphasis on palace intrigue over action, along with the inner turmoil of a reluctant dictator (Paul Atreides) in place of a traditional hero’s journey. It may ring of sacrilege to some, but Lynch’s Dune II would have bested Herbert’s book—and been one hell of a movie.

While writing this piece I reached out to Lynch for comment, since his Dune II script had never been discussed in detail publicly. He stated, through an assistant, that he “sort of remembers writing something but doesn’t recall ever finishing it.” As Dune is “a failure in his eyes and not a particular time that he likes to think of or talk about,” he politely declined to speak to me.

The Lynch touch

“I’m writing the script for Dune II. Dune II is totally Dune Messiah, with variations on the theme. … Dune Messiah is a very short book, and a lot of people don’t like it, but in there are some really nifty ideas. I’m real excited about that, and I think it could make a really good film. It starts 12 years later, and this creates a whole new set of problems. … It should have a different mood. … It should be 12 strange years later.” —David Lynch, Starburst #78 (January 1985)

Of the many differences between Dune Messiah in novel form and David Lynch’s script, the biggest lay in the opening pages, which detail what happens in the aftermath of the scene in the first Dune movie when the Harkonnens bombed the Atreides’ fortress in Arrakeen, the capitol of the desert planet Arrakis. In the hallway where Duncan Idaho (Richard Jordan) was shot in the head, his shielded dead body still floats on the floor, humming and sparking.

From out of the shadows emerges a familiar face: the Baron’s Doctor (Leonardo Cimino). Thought to be the only speaking part created specifically for Dune by Lynch, we learn this Doctor was actually Scytale, a shape-shifting “face dancer” crucial to the plot of Herbert’s second book. Going back to Dune ’84, you may not have noticed Cimino’s Doctor accompanied Baron Harkonnen during the Arrakeen attack. The Doc is absent after that, even as the Baron yells creepily, “Where’s my doctor?” That’s because Doc/Scytale absconded with Duncan’s body. This Easter egg is Lynchian world-building at its best.

Scytale’s 12-year odyssey reanimating “dead Duncan Idaho” into the ghola named Hayt on the nightmarish Bene Tleilax world (mentioned by Paul in Dune) constitutes the entire opening 10 minutes of the script. Lynch calls the planet Tleilax “a dark metal world with canals of steaming chemicals and acids.” Those canals, Lynch writes, are lined with “dead pink small test tube animals.” Initiating Dune II with a focus on Scytale foregrounds him to primary antagonist, unlike Herbert’s book where myriad conspirators work against Paul.

“Lynch’s favorite set during production of Dune was Giedi Prime, with machinery and flesh alterations fitting his artistic sensibilities,” says Mark Bennett, founder of the DuneInfo website, after reading the unearthed script. “For Messiah, Lynch decided that Bene Tleilax could be co-opted for his style, since it isn’t described in the novel.”

The planet itself is run by the Tleilaxu, sadists whose mere language (“Bino-theethwid, axlotl”) signals their bizarre nature, giving Kenneth McMillan’s grotesque Baron from the ‘84 Dune a run for his money. Here’s a particularly surreal/Lynchian passage, where Scytale sings a haunting “boogie tune”:

Scytale’s friends are laughing and wildly rolling marbles under their hands as they watch Scytale sing through eighteen mouths in eighteen heads strung together with flesh that is like a flabby hose. The heads are singing all over the pink room. One man opens his mouth and a swarm of tiny people stream out singing accompaniment to Scytale. Another man releases a floating dog which explodes in mid-air causing everyone to get small and lost in the fibers of the beautiful carpet. Though small they all continue to laugh, a laughter which is now extremely high in pitch. Scytale (now with only one head) crawls up a wall laughing hysterically.

“The Bene Tleilaxu make for deliciously strange villains, right up Lynch’s alley,” says Dune scholar Kara Kennedy (Frank Herbert’s Dune: A Critical Companion), who I also provided with a copy of the screenplay. “He lets loose with them in his script.”

I found David Lynch’s lost Dune II script Read More »

“we-are-worried,”-says-european-rocket-chief-at-prospect-of-launch-competition

“We are worried,” says European rocket chief at prospect of launch competition

Ariane, ArianeGroup, ESA, european space agency, Science, Space, syndication / /

Emulating NASA —

On the continent, Ariane 6 may be the last launcher with a monopoly.

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Artist's view of the configuration of Ariane 6 using four boosters on the ELA-4 launch pad together with its mobile gantry.

Enlarge / Artist’s view of the configuration of Ariane 6 using four boosters on the ELA-4 launch pad together with its mobile gantry.

ESA-D. Ducros

There is “no guarantee” France’s ArianeGroup will continue to be Europe’s rocket launch company of choice, according to the head of the European Space Agency, after ESA member states agreed to introduce more competition to the market.

Josef Aschbacher, the agency’s director-general, told the Financial Times that the decision at its space summit in Seville last November to open the European launcher market to competition was a “game-changer.”

The next generation of launch would be done “in a very different way,” he said, acknowledging that this would put pressure on ArianeGroup’s owners, Airbus and Safran. “If they have a very competitive launcher, then they are in the race. But there is no guarantee.”

Martin Sion, chief executive of ArianeGroup, which since 2017 has lost its dominance of the commercial launch market to Elon Musk’s SpaceX, said the company was ready for the challenge. “The rules are changing, we will adapt,” he said. “We are used to competition.”

However, Aschbacher’s comments, made in an interview late last year, are a clear warning to ArianeGroup, which has suffered serial delays on its latest launcher, Ariane 6, now expected to be four years late.

As a result of the delays, and problems with the smaller Vega-C, which is manufactured by Italy’s Avio, Europe has had to use SpaceX to send some of its most important satellites into orbit.

In November, France, Germany, and Italy agreed to inject new funds into the Ariane 6 program, but the rocket is not reusable and will still be more expensive than SpaceX’s workhorse Falcon 9 when it finally launches around the middle of the year.

Guillaume Faury, Airbus chief executive, said in a separate interview that competition posed a serious challenge to ArianeGroup. “As one of the two shareholders, we are worried, as Ariane is today the incumbent,” he said. “The way to take our share is to make sure Ariane 6 will be a success.”

He acknowledged that Europe needed to find a more “market-driven” way to compete with lower-cost providers such as SpaceX but suggested it should not give up on Ariane in favor of a range of competing programs. Fragmentation would be “a disaster,” he said.

If the “result [of competition] is a different way being united around a small number of programs, where states put their efforts together to compete against the real competitors, which are . . . mainly SpaceX and the Chinese to come, that is OK,” he told the FT. “But the jury is out. For the moment what we observe is further fragmentation.”

Yet the ESA is determined to shake up the European commercial space sector by emulating the approach of NASA. Over the past two decades, the US space agency has shifted from buying rockets from incumbents such as Boeing and Lockheed’s United Launch Alliance to booking flight services.

By giving contracts to disruptive newcomers such as SpaceX, NASA has ensured the success of Elon Musk’s rocket company, and the cost of launching into space has fallen significantly.

“Competition is certainly the solution. It is a way of reducing cost and this is what we are planning to do in the next generation,” Aschbacher said. ESA has also challenged the private sector to develop a cargo vehicle that might eventually carry crew to the International Space Station by 2028, reducing its reliance on US providers.

Germany in particular is keen on more competition in the launcher market, as the home of some of Europe’s most advanced rocket start-ups such as Isar Aerospace and Rocket Factory Augsburg.

Although ArianeGroup was currently Europe’s only producer of heavy lift rockets, it was possible that new rivals could upset its monopoly for the generation after Ariane 6, said Caleb Henry, director of research at consultancy Quilty Space.

SpaceX “had a smaller rocket and reached space. That was enough to get . . . a significant chunk of the Department of Defense market,” he said. “So it is not at all a stretch to say someone developing a smaller rocket today could be making an Ariane-sized rocket tomorrow.”

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ai-firms’-pledges-to-defend-customers-from-ip-issues-have-real-limits

AI firms’ pledges to defend customers from IP issues have real limits

AI, Amazon, copyright, Google, indemnity, microsoft, syndication / /

Read the fine print —

Indemnities offered by Amazon, Google, and Microsoft are narrow.

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The Big Tech groups are competing to offer new services such as virtual assistants and chatbots as part of a multibillion-dollar bet on generative AI

Enlarge / The Big Tech groups are competing to offer new services such as virtual assistants and chatbots as part of a multibillion-dollar bet on generative AI

FT

The world’s biggest cloud computing companies that have pushed new artificial intelligence tools to their business customers are offering only limited protections against potential copyright lawsuits over the technology.

Amazon, Microsoft and Google are competing to offer new services such as virtual assistants and chatbots as part of a multibillion-dollar bet on generative AI—systems that can spew out humanlike text, images and code in seconds.

AI models are “trained” on data, such as photographs and text found on the internet. This has led to concern that rights holders, from media companies to image libraries, will make legal claims against third parties who use the AI tools trained on their copyrighted data.

The big three cloud computing providers have pledged to defend business customers from such intellectual property claims. But an analysis of the indemnity clauses published by the cloud computing companies show that the legal protections only extend to the use of models developed by or with oversight from Google, Amazon and Microsoft.

“The indemnities are quite a smart bit of business . . . and make people think ‘I can use this without worrying’,” said Matthew Sag, professor of law at Emory University.

But Brenda Leong, a partner at Luminos Law, said it was “important for companies to understand that [the indemnities] are very narrowly focused and defined.”

Google, Amazon and Microsoft declined to comment.

The indemnities provided to customers do not cover use of third-party models, such as those developed by AI start-up Anthropic, which counts Amazon and Google as investors, even if these tools are available for use on the cloud companies’ platforms.

In the case of Amazon, only content produced by its own models, such as Titan, as well as a range of the company’s AI applications, are covered.

Similarly, Microsoft only provides protection for the use of tools that run on its in-house models and those developed by OpenAI, the startup with which it has a multibillion-dollar alliance.

“People needed those assurances to buy, because they were hyper aware of [the legal] risk,” said one IP lawyer working on the issues.

The three cloud providers, meanwhile, have been adding safety filters to their tools that aim to screen out any potentially problematic content that is generated. The tech groups had become “more satisfied that instances of infringements would be very low,” but did not want to provide “unbounded” protection, the lawyer said.

While the indemnification policies announced by Microsoft, Amazon, and Alphabet are similar, their customers may want to negotiate more specific indemnities in contracts tailored to their needs, though that is not yet common practice, people close to the cloud companies said.

OpenAI and Meta are among the companies fighting the first generative AI test cases brought by prominent authors and the comedian Sarah Silverman. They have focused in large part on allegations that the companies developing models unlawfully used copyrighted content to train them.

Indemnities were being offered as an added layer of “security” to users who might be worried about the prospect of more lawsuits, especially since the test cases could “take significant time to resolve,” which created a period of “uncertainty,” said Angela Dunning, a partner at law firm Cleary Gottlieb.

However, Google’s indemnity does not extend to models that have been “fine-tuned” by customers using their internal company data—a practice that allows businesses to train general models to produce more relevant and specific results—while Microsoft’s does.

Amazon’s covers Titan models that have been customized in this way, but if the alleged infringement is due to the fine-tuning, the protection is voided.

Legal claims brought against the users—rather than the makers—of generative AI tools may be challenging to win, however.

When dismissing part of a claim brought by three artists a year ago against AI companies Stability AI, DeviantArt, and Midjourney, US Judge William Orrick said one “problem” was that it was “not plausible” that every image generated by the tools had relied on “copyrighted training images.”

For copyright infringement to apply, the AI-generated images must be shown to be “substantially similar” to the copyrighted images, Orrick said.

© 2024 The Financial Times Ltd. All rights reserved. Not to be redistributed, copied, or modified in any way.

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East Coast land continues to collapse at a worrying rate

critical infrastructure, East Coast, Science, Subsidence, syndication / /

susceptible to subsidence —

It’s steadily sinking or subsiding, which is destabilizing levees, roads, and airports.

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Lower Manhattan and One World Trade Center in New York City are reflected on a monument as the sun rises on December 22, 2023, as seen from Jersey City, New Jersey.

Enlarge / Lower Manhattan and One World Trade Center in New York City are reflected on a monument as the sun rises on December 22, 2023, as seen from Jersey City, New Jersey.

Unless you’re sinking into quicksand, you might assume that the land beneath your feet is solid and unmoving. In actual fact, your part of the world may well be undergoing “subsidence,” which is where the ground collapses as sediments settle or when people over-extract groundwater. New York City is sinking, too, due to the weight of all those buildings pushing on the ground. In extreme cases, like in California’s agriculturally intensive San Joaquin Valley, elevations have plummeted not by inches, but by dozens of feet.

Last year, scientists reported that the US Atlantic Coast is dropping by several millimeters annually, with some areas, like Delaware, notching figures several times that rate. So just as the seas are rising, the land along the eastern seaboard is sinking, greatly compounding the hazard for coastal communities.

In a follow-up study just published in the journal PNAS Nexus, the researchers tally up the mounting costs of subsidence—due to settling, groundwater extraction, and other factors—for those communities and their infrastructure. Using satellite measurements, they have found that up to 74,000 square kilometers (29,000 square miles) of the Atlantic Coast are exposed to subsidence of up to 2 millimeters (0.079 inches) a year, affecting up to 14 million people and 6 million properties. And over 3,700 square kilometers along the Atlantic Coast are sinking more than 5 millimeters annually. That’s an even faster change than sea-level rise, currently at 4 millimeters a year. (In the map below, warmer colors represent more subsidence, up to 6 millimeters.)

With each millimeter of subsidence, it gets easier for storm surges—essentially a wall of seawater, which hurricanes are particularly good at pushing onshore—to creep farther inland, destroying more and more infrastructure. “And it’s not just about sea levels,” says the study’s lead author, Leonard Ohenhen, an environmental security expert at Virginia Tech. “You also have potential to disrupt the topography of the land, for example, so you have areas that can get full of flooding when it rains.”

A few millimeters of annual subsidence may not sound like much, but these forces are relentless: Unless coastal areas stop extracting groundwater, the land will keep sinking deeper and deeper. The social forces are relentless, too, as more people around the world move to coastal cities, creating even more demand for groundwater. “There are processes that are sometimes even cyclic, for example in summers you pump a lot more water so land subsides rapidly in a short period of time,” says Manoochehr Shirzaei, an environmental security expert at Virginia Tech and coauthor of the paper. “That causes large areas to subside below a threshold that leads the water to flood a large area.” When it comes to flooding, falling elevation of land is a tipping element that has been largely ignored by research so far, Shirzaei says.

In Jakarta, Indonesia, for example, the land is sinking nearly a foot a year because of collapsing aquifers. Accordingly, within the next three decades, 95 percent of North Jakarta could be underwater. The city is planning a giant seawall to hold back the ocean, but it’ll be useless unless subsidence is stopped.

This new study warns that levees and other critical infrastructure along the Atlantic Coast are in similar danger. If the land were to sink uniformly, you might just need to keep raising the elevation of a levee to compensate. But the bigger problem is “differential subsidence,” in which different areas of land sink at different rates. “If you have a building or a runway or something that’s settling uniformly, it’s probably not that big a deal,” says Tom Parsons, a geophysicist with the United States Geological Survey who studies subsidence but wasn’t involved in the new paper. “But if you have one end that’s sinking faster than the other, then you start to distort things.”

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amazon-marketplace-crackdown-has-sellers-searching-for-legal-help

Amazon marketplace crackdown has sellers searching for legal help

Amazon, counterfeit, Policy, syndication / /

Legit or not —

Clean-up drive has led to some small businesses having their accounts suspended.

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Amazon marketplace crackdown has sellers searching for legal help

Leon Neal | Getty Images

Merchants who have been suspended from selling goods on Amazon’s marketplace are turning to a cottage industry of lawyers to regain access to their accounts and money, amid growing scrutiny of how the retailer treats independents.

Millions of accounts on the leading ecommerce platform have been prevented from engaging in sales for alleged violations of Amazon’s broad range of policies and other bad behavior. Even temporary suspensions can be a critical blow to the small business owners who rely on online sales.

Four ecommerce-focused US law firms told the Financial Times that the majority of the cases they took on were complaints brought by aggrieved Amazon sellers, with each handling hundreds or thousands of cases every year.

About a dozen sellers also said they had grown worried about Amazon’s power to suspend their accounts or product listings, as it was not always clear what had triggered the suspension and Amazon’s seller support services did not always help to sort out the issue.

Account suspension was “a big fear of mine,” said one seller, who declined to be named. “At the end of the day, it’s not really your business. One day you can wake up and it’s all gone.”

Amazon’s recent efforts to crack down on issues such as fake product reviews have come as US and European regulators have upped their scrutiny of the online harms facing shoppers.

But critics said the existence of a growing army of lawyers and consultants to deal with the fallout from Amazon’s actions pointed to a problem with the way the retailer treats its sellers.

“If you’re a seller and you need help to navigate the system, that’s a real vulnerability for the marketplace. If you’re operating a business where the people you’re deriving revenue from feel that they’re being treated in an arbitrary way without due process, that is a problem,” said Marianne Rowden, chief executive of the E-Merchants Trade Council.

“The fact that there are entire law firms dedicated to dealing with Amazon says a lot,” said one seller, who like many who spoke to the FT asked to remain anonymous for fear of reprisals.

Amazon declined to comment in detail but said its selling partners were “incredibly important” and the company worked hard to “protect and help them grow their business.” The company worked to “eliminate mistakes and ‘false positive’ enforcements” and had an appeal process for sellers in place.

Sellers on Amazon’s marketplace account for more than 60 percent of sales in its store. In the nine months to September 30, Amazon recorded $96bn in commissions and fees paid by sellers, a jump of nearly 20 percent compared with the same period a year earlier.

As the marketplace has grown, Amazon has had to do more to police it. During the first half of 2023 in its EU store, Amazon took 274mn “actions” in response to potential policy violations and other suspected problems, which included the removal of content and 4.2mn account suspensions. Amazon revealed the numbers as part of its first European transparency report newly required by EU law.

Amazon typically withholds any money in the account of a seller it has suspended for alleged fraudulent or abusive practices, which it may keep permanently if the account is not reinstated and the merchant is deemed to have been a bad actor.

Figuring out what caused a suspension and how to reverse it can be difficult. “We had a listing shut down during Prime Big Deals Days with no warning, no cause, no explanation,” said one kitchenware seller who has been selling on Amazon.com since 2014. “That’s pretty common.”

Amazon gave no further information when the listing was reinstated days later, the seller said.

Such confusion drives some sellers towards lawyers and consultants who advise on underlying problems, such as intellectual property disputes.

Amazon-focused US firms said they typically charged flat fees of between $1,300 and $3,500 per case.

CJ Rosenbaum, founding partner of the Amazon and ecommerce-focused law firm Rosenbaum Famularo, said the practice experienced a “big jump” in demand during the pandemic.

Many cases related to IP complaints from bigger brands “trying to control who sells their products” and making “a baseless counterfeit complaint” against a smaller Amazon seller, he added.

Lawyers said some sellers had been wrongly accused by the company’s automated systems that identify breaches of rules and policies. They added though that others had broken Amazon’s rules.

The retailer has become “more draconian” in the enforcement of its policies in recent years, said attorney Jeff Schick.

“Clients will say Amazon is unfair,” he said, but added that if the company did not strictly enforce its rules “then the platform becomes the next [US classified advertisements website] Craigslist.”

As part of escalated disputes, lawyers might steer merchants through a costly arbitration process that the company requires US sellers to use for most issues, rather than filing lawsuits against it.

Sellers were subject to “forced” arbitration clauses that required them to “sign away the right to their day in court if a dispute with Amazon arises,” said a 2022 US government report.

The details of arbitrations are not public, and decisions do not typically set binding precedents. They can also be hugely expensive: the up to three arbitrators that preside over a case can charge hundreds of dollars an hour.

“Quickly, you’re at $25,000 of costs or more,” said sole practitioner Leo Vaisburg, who left firm Wilson Elser in 2022 to pursue Amazon-related work full time. For many small businesses the high costs were “a barrier to entry,” he added. “Very few cases are worth that kind of money.”

© 2024 The Financial Times Ltd. All rights reserved. Not to be redistributed, copied, or modified in any way.

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2024-may-be-a-year-of-reckoning-for-apple’s-$85-billion-services-business

2024 may be a year of reckoning for Apple’s $85 billion services business

antitrust, App Store, App stories, Apple, big tech, monopoly, syndication / /

scrutinized —

US court cases and tougher EU regulation will pose challenges to Apple’s bottom line.

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2024 may be a year of reckoning for Apple’s $85 billion services business

Apple faces a legal reckoning in 2024, with a series of regulatory decisions by US and EU authorities over the coming months set to determine the future of its $85 billion-a-year services business.

The biggest hit to the iPhone maker could come from a US antitrust trial against Google, where it emerged that the fellow tech giant had paid more than $26 billion in 2021 to make its search engine the default on Apple devices and other smartphones and browsers.

Should Google lose the case, it could be forced to stop making regular payments to Apple, which Eric Seufert, an independent analyst, estimates as being worth a quarter of annual revenues earned by Apple’s services arm.

Meanwhile, Apple and other tech giants face increasing scrutiny from the Biden administration over concerns about the dominance of its App Store, which it is already being forced to change in the EU due to legislation designed to rein in the power of Big Tech.

Together, the legal and regulatory actions spanning two of Apple’s biggest markets represent the biggest threat to the company’s business in years.

Its services arm, which includes income from the App Store, video streaming arm, and Apple Music, has steadily increased as a proportion of the company’s total revenues, which is still dominated by sales of devices such as the iPhone.

The Google trial, seen as the most significant antitrust monopoly trial in more than 25 years in Washington, will hear closing arguments in May. Should Google lose, it will almost certainly file an appeal, but such a decision would raise questions about how the two tech giants work with one another into the future.

“I think the judge was intrigued with that issue during the trial,” said Bill Kovacic, a former Federal Trade Commission chair and competition professor of law and policy at George Washington University Law School. “The question in the background was: ‘if Apple is going to have an auction for that prime placement, what should Google have done?’”

The White House is at the same time intensifying its efforts to tackle what it regards as excessive corporate power. Jonathan Kanter, head of the Department of Justice’s antitrust unit since November 2021, has made no secret of his ambition to bring cases against the biggest US companies.

His department has been probing Apple’s App Store policies for years and is now, according to Kanter, “firing on all cylinders.” The window for him to bring a case is closing, however, as the US presidential election and a potential change in administration loom. The DoJ did not respond to a request for comment on the Apple probe.

Regulators, businesses, and enforcers have for years been seeking to pry apart Apple’s iOS ecosystem, a move the tech giant has always insisted would undermine the mobile operating software’s security.

Apple, however, acknowledged recently in a filing to the Securities and Exchange Commission that it would have to make changes to its App Store in the EU, due to the bloc’s new Digital Markets Act, which has a March deadline for legal compliance from tech companies.

In the EU, Apple is preparing to allow “sideloading,” which enables iPhone users to bypass its store and download apps from elsewhere.

This will breach, for the first time, the walled-off ecosystem that the company has protected since Steve Jobs unveiled the iPhone in 2007. Apple has dragged its feet on this issue, since it maintains the practice will create security risks to its system.

Sideloading could have an impact on the App Store, where Apple charges developers as much as a 30 percent fee on digital purchases. Games account for more than half of that revenue. Google’s Play Store, which charges a similar fee, is also in the spotlight after it lost a landmark trial against Epic Games in California in December.

Apple draws between $6 billion and $7 billion in commission fees from the App Store globally each quarter, according to Sensor Tower estimates.

Competitors are pushing to earn some of that share and launch rival app stores and payment methods on Apple devices. Microsoft is talking to partners about launching its own mobile store.

Fortnite maker Epic Games, a longtime Apple foe, wants its store on iOS devices and points to its lower 12 percent fee as an incentive for consumers to switch to its platform.

While Epic broadly lost a lower court judgment into its claims against Apple in 2021, a California judge ordered Apple to put an end to App Store rules that prevent developers from steering customers outside of the store to make purchases. The appeals court upheld that injunction earlier this year. The US Supreme Court will review the case next year.

For investors, gauging the ultimate risk from the raft of regulatory and legal actions across the world is difficult. “I think there’s just a belief that there’s all this noise in the background, and ‘don’t worry about it,’” said Gene Munster, managing partner at Deepwater Asset Management.

Investors, he said, had been “lulled to sleep” by Apple’s initial wins against Epic in particular. “But I think investors should take it seriously.”

Apple declined to comment.

© 2024 The Financial Times Ltd. All rights reserved. Not to be redistributed, copied, or modified in any way.

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smartphone-manufacturers-still-want-to-make-foldables-a-thing

Smartphone manufacturers still want to make foldables a thing

Foldables, Huawei, samsung, syndication, Tech / /
Huawei MateX 5

Enlarge / A Huawei Technologies Co. Mate X5 smartphone arranged in Hong Kong, China, on Saturday, Sept. 16, 2023.

Every large smartphone maker except Apple is betting that “foldable” phones will help revive a lackluster mobile market, despite the devices still largely failing to attract mainstream consumers.

Foldables, which have a screen that opens like a book or compact mirror, barely exceed a 1 per cent market share of all smartphones sold globally almost five years after they were first introduced.

But Samsung has doubled down on the product, investing heavily in marketing this year. In July, the Korean group released its 5G Galaxy Z series.

The world’s largest smartphone manufacturer points to estimates from Counterpoint Research that foldable devices may surpass a third of all smartphones costing more than $600 by 2027.

“We will continue to position our foldables as a key engine for our flagship growth with the clear differentiation, experience and flexibility these devices have to offer,” said Samsung.

Other handset makers such as Motorola, China’s Huawei and its spin-off Honor are also pinning their hopes on the product helping to revive a market that suffered its worst year for more than a decade.

“This is the year people [in the industry] really dived in,” said Ben Wood, an analyst at CCS Insight. “Everybody now is betting on this, except Apple.”

The iPhone-maker has yet to show any interest in the category, though patent filings suggest it may one day introduce an iPad that folds in half. Every other big smartphone maker has followed Samsung into the market, including Google’s Pixel Fold and Chinese alternatives from Huawei, Oppo and Xiaomi.

“We believe foldables are the future of smartphone devices, just like electric cars were to the auto industry,” said Bond Zhang, UK chief executive of Honor. “We’re approaching a crucial tipping point where foldables may soon become mainstream.”

But market data shows foldables are still far from mainstream. Counterpoint Research estimates about 16 million foldable phones will be sold this year, just 1.3 per cent of the 1.2 billion smartphone market total. Analysts say consumers are deterred by concerns about price, reliability and utility.

“I do wonder if there are too many products chasing too little market share at the moment,” Wood said.

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