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The Air Force just took a big step towards killer robots



The Air Force just took a big step towards killer robots

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A U.S. Air Force experiment has alarmed people concerned that the U.S. and other militaries are moving rapidly toward designing and testing “killer robots.”

In a training on Dec. 14 at Beale Air Force Base, near Marysville, Calif., the Air Force installed A.I. on a U-2 spy plane that could autonomously control the aircraft’s radar and sensors as part of what the military said was “a reconnaissance mission during a simulated missile strike.”

While a human pilot flew the U-2, the A.I., which the Air Force named ARTUMu, had final authority over how to use the radar and other sensors, Will Roper, assistant secretary of the Air Force for acquisition, technology, and logistics, said in an article for Popular Mechanics in which he described the experiment.

“With no pilot override, ARTUMu made final calls on devoting the radar to missile hunting versus self-protection,” Roper wrote. “The fact ARTUMu was in command was less about any particular mission than how completely our military must embrace AI to maintain the battlefield decision advantage.”

But giving an A.I. system the final word is a dangerous and disturbing development, said Noel Sharkey, a professor emeritus of A.I. and robotics at the University of Sheffield, in England, who is also a spokesperson for the group Stop Killer Robots. The organization, made up of computer scientists, arms control experts, and human rights activists, argues that lethal autonomous weapons systems could go awry and kill civilians in addition to making war more likely by reducing the human cost of combat.

The United Nations has held talks aimed at possibly limiting the use of autonomous weapons, but those talks have bogged down, with the U.S., the U.K., China, and Russia all opposed to any ban.

“There are a lot of red flags here,” Sharkey told Fortune about the Air Force test. While the Air Force had tried to couch the recent demonstration as being about reconnaissance, in the training exercise that reconnaissance helped select targets for a missile strike.

It’s only a small step from allowing the software to direct lethal action, said Sharkey.

He also criticized the Air Force for talking about “the need to move at machine speed” on the battlefield. He said “machine speed” renders meaningless any effort to give humans oversight over what the A.I. system is doing.

The A.I. software was deliberately designed without a manual override “to provoke thought and learning in the test environment,” Air Force spokesman Josh Benedetti told the Washington Post. Benedetti seemed to be suggesting that the Air Force wanted to prompt a discussion about what the limits of automation should be.

Sharkey said Benedetti’s comment was disingenuous and an ominous sign that the U.S. military was moving toward a fully autonomous aircraft—like a drone—that would fly, select targets, and fire weapons all on its own. Other branches of the U.S. military are also researching autonomous weapons.

Roper wrote that the Air Force wasn’t yet ready to create fully autonomous aircraft because today’s A.I. systems are too easy for an adversary to trick into making an inaccurate decision. Human pilots, he said, provide an extra level of assurance.

ARTUMu was built using an algorithm called MuZero that was created by DeepMind, the London-based A.I. company that is owned by Google parent Alphabet, and made publicly available last year. MuZero was designed to teach itself how to play two-player or single-player games without knowing the rules in advance. DeepMind showed that MuZero could learn to play chess, Go, the Japanese strategy game Shogi, as well as many different kinds of early Atari computer games, at superhuman levels.

In this case, the Air Force took MuZero and trained it to play a game that involved working the U-2’s radar, with points scored for finding enemy targets and losses deducted if the U-2 itself was shot down in the simulation, Roper wrote.

In the past, DeepMind has said it wouldn’t work on offensive military applications, and a company spokeswoman told Fortune it had no role helping the U.S. Air Force create ARTUMu nor did the company license technology to the Air Force. She said DeepMind was unaware of the Air Force project until reading press accounts about it last week.

DeepMind as a company, and its cofounders as individuals, are among the 247 entities and 3,253 people that have signed a pledge, promoted by the Boston-based Future of Life Institute, against developing lethal autonomous weapons. Demis Hassabis, DeepMind’s cofounder and chief executive, also signed an open letter from A.I. and robotics researchers calling for a UN ban on such weapons.

DeepMind said it had no comment on the Air Force’s A.I. experiment.

Some other A.I. researchers and policy experts who are concerned about A.I.’s risks have previously questioned whether computer scientists should refrain from publishing details about powerful A.I. algorithms that may have military uses or could be misused to spread disinformation.

OpenAI, a San Francisco research company that was founded partly over concerns that DeepMind had been too secretive about some of its A.I. research, has talked about restricting publication of some of its research if it believes it could be misused in dangerous ways. But when it tried to restrict access to a large language model, called GPT-2, in 2018, the company was criticized by other A.I. researchers for being either alarmist or orchestrating a marketing stunt to generate “this A.I. is too dangerous to make public” headlines.

“We seek to be thoughtful and responsible about what we publish and why,” DeepMind said in response to questions from Fortune. It said a team within the company reviewed internal research proposals to “assess potential downstream impacts and collaboratively develop recommendations to maximize the likelihood of positive outcomes while minimizing the potential for harm.”

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Coinbase’s near-term outlook is ‘still grim’, JPMorgan says, while BofA is more positive about firm’s ability to face crypto winter



Coinbase's near-term outlook is 'still grim', JPMorgan says, while BofA is more positive about firm's ability to face crypto winter

Coinbase is well positioned to successfully navigate this crypto winter and take market share, Bank of America said in a research report Tuesday. It maintained its buy recommendation following the exchange’s second-quarter results.

The results warrant “a muted stock reaction,” the report said. Net revenue of $803 million was below the bank’s and consensus estimates, while its adjusted $151 million loss before interest, tax, depreciation and amortization was better than the street expected. Importantly, the company remains “cautiously optimistic” it can reach its goal of no more than $500 million of adjusted EBITDA loss for the full year, the report added.

Coinbase shares fell almost 8% in premarket trading to $80.74.

Bank of America notes that Coinbase had no counterparty exposure to the crypto insolvencies witnessed in the second quarter. The company also has a “history of no credit losses from financing activities, holds customer assets 1:1, and any lending activity of customer crypto is at the discretion of the customer, with 100%+ collateral required.” These rigorous risk-management practices will be a “positive long-term differentiator” for the stock, the bank said.

JPMorgan said Coinbase had endured another challenging quarter, while noting some positives.

Trading volume and revenue were down materially. Subscription revenue was also lower, but would have been much worse were it not for higher interest rates, it said in a research report Wednesday.

The company is taking steps on expense management, and in addition to the June headcount reductions, is scaling back marketing and pausing some product investments, the note said.

The bank says the company’s near-term outlook is “still grim,” noting that the exchange expects a continued decline in 3Q 2022 monthly transacting users (MTUs) and trading volumes, but says Coinbase could take more “cost actions” if crypto prices fall further.

JPMorgan is less optimistic than Bank of America about the company in the near term, saying pressure on revenue from falling crypto markets will have a negative impact on the stock price. Still, it sees positives including higher interest rates, from which the firm will generate revenue. It also sees opportunities for the exchange to grow its user base, leveraging almost $6 billion of cash. The surge in crypto prices in July, and the forthcoming Ethereum Merge are also seen as positive catalysts, it added.

The bank maintained its neutral rating on the stock and raised its price target to $64 from $61.

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Elon Musk sold $6.9B in Tesla stock in case he’s forced to buy Twitter



Elon Musk sold $6.9B in Tesla stock in case he's forced to buy Twitter

Elon Musk sold $6.9 billion of his shares in Tesla Inc., the billionaire’s biggest sale on record, saying he needed cash in case he is forced to go ahead with his aborted deal to buy Twitter Inc.

“In the (hopefully unlikely) event that Twitter forces this deal to close *and* some equity partners don’t come through, it is important to avoid an emergency sale of Tesla stock,” Musk tweeted late Tuesday after the sales were disclosed in a series of regulatory filings. 

Asked by followers if he was done selling and would buy Tesla stock again if the $44 billion deal doesn’t close, Musk responded: “Yes.”

Tesla’s chief executive officer offloaded about 7.92 million shares on Aug. 5, according to the new filings. The sale comes just four months after the world’s richest person said he had no further plans to sell Tesla shares after disposing of $8.5 billion of stock in the wake of his initial offer to buy Twitter.  

Musk last month said he was terminating the agreement to buy the social network where he has more than 102 million followers and take it private, claiming the company has made “misleading representations” over the number of spam bots on the service. Twitter has since sued to force Musk to consummate the deal, and a trial in the Delaware Chancery Court has been set for October. 

In May, Musk dropped plans to partially fund the purchase with a margin loan tied to his Tesla stake and increased the size of the equity component of the deal to $33.5 billion. He had previously announced that he secured $7.1 billion of equity commitments from investors including billionaire Larry Ellison, Sequoia Capital, and Binance. 

“I’ll put the odds at 75% that he’s buying Twitter. I’m shocked,” said Gene Munster, a former technology analyst who’s now a managing partner at venture-capital firm Loup Ventures. “This is going to be a headwind for Tesla in the near term. In the long term, all that matters is deliveries and gross margin.”

At the weekend, Musk tweeted that if Twitter provided its method of sampling accounts to determine the number of bots and how they are confirmed to be real, “the deal should proceed on original terms.” 

Musk, 51, has now sold around $32 billion worth of stock in Tesla over the past 10 months. The disposals started in November after Musk, a prolific Twitter user, polled users of the platform on whether he should trim his stake. The purpose of the latest sales wasn’t immediately clear.  

Tesla shares have risen about 35% from recent lows reached in May, though are still down about 20% this year. 

With a $250.2 billion fortune, Musk is the world’s richest person, according to the Bloomberg Billionaires Index, but his wealth has fallen around $20 billion this year as Tesla shares declined.    

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The rent is too d*mn high for Gen Z: Younger generations are ‘squeezed the most’ by higher rents, BofA says



The rent is too d*mn high for Gen Z: Younger generations are 'squeezed the most' by higher rents, BofA says

Most of Gen Z is too young to remember the 2010 New York gubernatorial candidate Jimmy McMillan.

But over a decade later, they would probably agree with his signature issue (and catchphrase): the rent is too damn high.

This July, median rent payments were 7.4% higher than during the same period last year, according to a Bank of America report released Tuesday. 

The national median price for a one-bedroom apartment has been hitting new highs nearly every month this summer. It was $1,450 for July, according to rental platform Zumper. In the country’s largest city, New York, average rent exceeded a shocking $5,000 a month for the first time ever in June. 

But inflation in the rental market hasn’t hit each generation equally, and no one is getting squeezed harder by the higher monthly payments as Gen Z. Those born after 1996 have seen their median rent payment go up 16% since last July, compared to just a 3% increase for Baby Boomers, BofA internal data shows. 
“Younger consumers are getting squeezed the most by higher rent inflation,” BofA wrote.

The great rent comeback

Early in the pandemic, landlords slashed rents and gave significant COVID discounts to entice tenants to stay instead of leaving urban areas. Once those deals started expiring in 2021, many landlords suddenly raised payments once again, sometimes asking for over double their pandemic value. 

Young people across the board have been hit hard, and rent burdens compared to age can be seen even within a single generation. Younger millennials had their median rent payment grow 11% from last year, while the median payment for older millennials rose 7%. Gen X experienced a 5% median rent increase, according to BofA. 

It’s not a surprise, then, that Gen Z feels so strapped for cash. The majority of young people, 61%, said they want to receive their wages daily instead of twice a week, a practice typically reserved for workers living paycheck to paycheck, according to a report from the Center for Generational Kinetics, which specializes in research across the generations. Rising rent inflation has even priced nearly a third of Gen Zers out of the apartment search altogether. Around 29% of them have resorted to living at home as a “long-term housing solution,” according to a June survey from personal finance company Credit Karma.

It’s no wonder—the rent really is too high.

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