Technology

1. Boston Dynamics exodus
2. Big Tech’s supply constraints
3. PsiQuantum taps Lip-Bu Tan
4. AI and jobs
5. Musk v. Altman

Silicon Valley meets the world, and why South Africa withdrew its draft AI policy.

Silicon Valley wouldn’t be the innovation capital of the world if it weren’t somewhat insulated. Inside the tech bubble, there is little room for conventional thinking, outdated rules, and orthodoxies.

But in this bubble that brought us the internet, the smartphone, and AI, there are trade-offs. From inside, there is a skewed, often one-dimensional sense of the world cut off from geopolitics and real people. Institutions of all kinds can be reduced to pointless obstacles to progress. Critics become caricatures, and complex, fragile systems are seen as dumb and slow.

And from outside the bubble, the tech industry can be misunderstood and unappreciated. Tech has come to be seen by at least some cohort of people as a place to be lampooned and ridiculed. Or worse, as one run by villains and monopolists.

The disconnect has persisted, even as Silicon Valley companies became the most valuable in the world, hiring armies of lobbyists and public relations experts. But that can’t continue.

This next wave of technology is different. The geopolitical implications of the AI boom are more pronounced and more complicated than ever before.

Looming in the background is a technology cold war with China that has created two spheres of technology influence, with immense consequences.

The next Googles and Facebooks and Apples will not be able to control their destinies from shining corporate campuses in California. The scale of the AI buildout is too large. It will require a global supply chain and a global pool of capital.

The world is not embracing American technology infrastructure the way it did the internet, social media, and the cloud. “Sovereign AI” is another way of saying “I no longer place my unwavering faith in Silicon Valley’s inventions.” Trust will have to be won back, and it won’t come without work and, perhaps more importantly, a nuanced understanding of global politics and culture.

These themes are already dominating Semafor convenings, from Semafor World Economy to The Next 3 Billion to Architects of the New Economy. But we need an even greater effort to bridge the gap between the capital of innovation and the rest of the world.

This is why we are launching Silicon Valley & The World. We plan to shatter the bubble and create new, strengthened bonds of understanding. To help build the human scaffolding that makes the coming wave of tech disruption work around the world. Only then can Silicon Valley’s formula of innovation truly spread.

We hope to see you in November.

C-suite exodus at Boston Dynamics

In recent months, a slew of top executives at Boston Dynamics have left the company, which Hyundai bought a majority stake in back in 2021. It’s notable timing: The robotics company is working toward an IPO and talking about opening up new production facilities.

CEO Robert Playter retired in February, followed by the company’s chief operating and chief strategy officers. CTO Aaron Saunders defected to Google DeepMind, and other robotics researchers and senior engineers have left, too.

Former employees told Semafor the executives were pushed out by a board of directors critical of the company’s narrowing lead against its competitors. They said the company is under pressure to speed the delivery of working humanoids to Hyundai, which said it wants to integrate “tens of thousands” of them into its own carmaking plants in the next few years.

As of this year, the company was making roughly four of its Atlas humanoid robots per month, as it prepares to open a new manufacturing facility in the coming months, former employees said.

“These changes are designed to help us prepare for the next chapter of Boston Dynamics, where we will need a structure that supports our ability to mass manufacture robots and rapidly drive scale in this emerging industry,” a Boston Dynamics spokesperson said. “We’re currently switching from the prototype to the production version of Atlas, and we are quickly scaling up our capacity.”

— Rachyl Jones

Big Tech bumps into supply wall

One thing glaringly evident in the Big Tech earnings this week is how supply-constrained they are. Apple is fighting over chips that are being gobbled up by data centers. Intel is hampered by memory shortages. Microsoft and Google don’t have enough data center capacity to satisfy demand. The list goes on and on.

In one way, it’s a good problem to have. These companies all have more customers than they can handle. But it also injects a bunch of uncertainty into the market and makes it hard to tell who is really winning and who’s losing. Especially if the high demand for AI compute ever tapers off.

In some ways, this mirrors the period when the global pandemic sent demand skyrocketing and then led to a sudden crash. But with little end in sight for AI compute, demand should only continue to rise as more users catch on to its power.

PsiQuantum adds Intel’s Lip-Bu Tan to board

Intel CEO Lip-Bu Tan has been tapped for another job. The executive is joining the board of directors for $7 billion quantum computing company PsiQuantum, Rachyl Jones reports. It follows several investments in such businesses through the venture capital firm Tan chairs, A&E Investments. A&E participated in PsiQuantum’s Series C funding round in 2019 and invested in IonQ that same year.

The appointment draws PsiQuantum closer to the semiconductor industry as it rounds out its approach to delivering scalable quantum computers that operate effectively even with the presence of errors — the challenge most quantum companies are tackling right now. It is betting that chips with photonic qubits, or light particles, can produce that, and it has ramped up its chip manufacturing in preparation. The company is building facilities in Brisbane and Chicago, with hopes to bring the former online next year, ahead of many of its competitors’ timelines.

Verizon CEO: Missing AI reskilling wave is bad for democracy

Reskilling the workforce for AI isn’t just good for business, but necessary for society, Verizon CEO Dan Schulman said on The CEO Signal podcast. “Putting a substantial amount of money into this was a no-brainer for me,” he said. “The private and public sector need to come together on this because it’s a big deal. If we don’t, people will be left behind, and that’s not good for our democracy.”

As business executives roll out AI into their workforces, they are up against constantly changing tool capabilities, reluctant employees, and a need to continuously upskill their workers. That requires businesses and governments to put capital towards reskilling, and executives need to be ready to make decisions quickly, even if they are the wrong ones: “A quick decision that is wrong and you self-correct is way better than spending months creating the perfect decision that’s going to be wrong anyway,” Schulman told Semafor’s Andrew Edgecliffe-Johnson and Penny Pritzker.

Musk admits xAI distilled OpenAI models

The Musk v. Altman trial continues to be a reminder of why tech folks don’t generally sue each other. Lawsuits reveal a lot. It’s happened several times already in the trial that began with opening statements Tuesday, but perhaps the biggest revelation came on the stand Thursday, when plaintiff Elon Musk admitted to OpenAI’s attorneys that his xAI startup had, to some extent, “distilled” OpenAI’s models.

Distilling is the process of using a larger, more powerful model to create synthetic data that can be used to train another one. It’s a common practice in the AI world, but one that is becoming less and less accepted.

The US accused China of industrial espionage for this very practice. Many open Chinese models used American-made AI models for distillation.

Perhaps Musk feels that he has the right to distill from ChatGPT. After all, he helped start the company as a nonprofit and alleges in the suit it was “stolen” from him first. My guess is this will not be the last time we hear about xAI’s apparent shortcut with OpenAI models.

— Reed Albergotti

Beneficial intelligence: You could never read all of Medium. But every week, the Medium Newsletter collects the most thought-provoking and timely writing from our community of experts and enthusiasts. You’ll get advice from academics, firsthand accounts of history unfolding, and wisdom to help you better understand a changing world. Subscribe now.

South Africa withdrew its draft AI policy after it was revealed to contain fictitious, and presumably AI-hallucinated, references. The policy was meant to position the country as a leader in both AI innovation and AI governance, but the irony-laden error has caused a political backlash, not least because the communications minister behind it blamed a junior staffer. The episode follows a similar snafu last year by Deloitte, which refunded the Australian government for an error-filled report partly created by AI. Expert testimony seeking to support a US ban on deepfakes also cited nonexistent research, and computer science conferences are finding themselves increasingly swamped by AI-generated submissions.