Author: Security – Computerworld

OpenAI’s SimpleQA tool for discerning genAI accuracy — right message, wrong messenger

In the ongoing and potentially futile effort by CIOs to squeeze meaningful ROI out of their shiny, new generative AI (genAI) tools, there is no more powerful villain than hallucinations. It is what causes everyone to seriously wonder whether the analysis genAI delivers is valid and usable. 

From that perspective, I applaud OpenAI for trying to create a test to determine objective accuracy for genAI tools. But that effort — called SimpleQA — fails enterprise tech decision-makers in two ways. First, OpenAI is the last business any CIO would trust to determine the accuracy of the algorithms it is selling. Would you trust an app that determines the best place to shop from Walmart, Target or Amazon — or perhaps a car evaluation tool from Toyota or GM?

The second problem is that SimpleQA focuses on, well, simple stuff. It looks at objective and simple questions that ostensibly have only one correct answer. More to the point, the answer to those questions is easily determined and verified. 

That is just not how most enterprises want to use genAI technology. Eli Lilly and Pfizer want it to find new drug combinations to cure diseases. (Sorry, that should be “treat.” Treat makes companies money forever. Cure’s revenue is large, but ends far too quickly.) Yes, it would test those treatments afterwards, but that is a lot of wasted effort if genAI is wrong. Costco and Walgreens want to use it to find the most profitable places to build new stores. Boeing wants it to come up with more efficient ways to build aircraft.

Let’s delve into what OpenAI created. For starters, here’s OpenAI’s document. I’ll put the company’s comments into a better context.

“An open problem in artificial intelligence is how to train models that produce responses that are factually correct.” Translation: We figured it would be nice to have it give a correct answer every now and then.

“Language models that generate more accurate responses with fewer hallucinations are more trustworthy and can be used in a broader range of applications.” Translation: Call us hippies, if you must, but we brainstormed and concluded that our revenue could be improved if our product actually worked.

Those flippant comments aside, I want to acknowledge that OpenAI makes a good faith effort here to come up with a basic way to evaluate precision where concrete answers can be ascertained. Setting aside how valuable that is in an enterprise setting, it’s a good start.

But instead of creating the test itself, it would have been far more credible if it funded a trusted third-party consulting or analyst firm to do the work, with a firm hands-off policy so IT could trust that the testing was not biased in favor of OpenAI’s offerings. 

Still, something is better than nothing, so let’s look at what OpenAI said. 

“SimpleQA is a simple, targeted evaluation for whether models ‘know what they know’ (and give) responses (that) are easy to grade because questions are created such that there exists only a single, indisputable answer. Each answer in SimpleQA is graded as either correct, incorrect, or not attempted. A model with ideal behavior would get as many questions correct as possible while not attempting the questions for which it is not confident it knows the correct answer.”

If you think through why this approach works — orseems like it would work — it becomes clear why it might not be helpful. This approach suffers from a critical flawed assumption. If the model can accurately answer these questions, then that tells us that it will likely be able to answer other questions with the same accuracy. 

That might work with a calculator, but the nature of genAI hallucinations makes that assumption flawed. GenAI can easily get 10,000 questions correct and it might then wildly hallucinate for the next 50. 

The nature of hallucinations is that they tend to happen randomly with zero predictability. That is why spot-checking, which is pretty much what SimpleQA is trying to do, won’t work here. 

To be more specific, it wouldn’t be meaningful if genAI tools were to get all of the SimpleQA answers right. But the reverse isn’t true. If the tested model gets all or most of the SimpleQA answers wrong, that does tell IT quite a bit. From the technology’s perspective, the test seems unfair. If it gets an A, it will be ignored. If it gets an F, it will be believed. As the computer said in WarGames (a great movie to watch to see what a genAI system might do at the Pentagon), “The only winning move is not to play.”

OpenAI pretty much concedes this in the report: “In this work, we will sidestep the open-endedness of language models by considering only short, fact-seeking questions with a single answer. This reduction of scope is important because it makes measuring factuality much more tractable, albeit at the cost of leaving open research questions such as whether improved behavior on short-form factuality generalizes to long-form factuality.”

Later in the report, OpenAI elaborates: “A main limitation with SimpleQA is that while it is accurate, it only measures factuality under the constrained setting of short, fact-seeking queries with a single, verifiable answer. Whether the ability to provide factual short answers correlates with the ability to write lengthy responses filled with numerous facts remains an open research question.”

Here are the specifics: SimpleQA consists of 4,326 “short, fact-seeking questions.” 

Another component of the SimpleQA test is that the question-writer bears much of the responsibility, rather than the answer-writer. “One part of this criterion is that the question must specify the scope of the answer. For example, instead of asking ‘Where did Barack and Michelle Obama meet’ which could have multiple answers such as ‘Chicago’ or ‘the law firm Sidley & Austin,’ questions had to specify ‘which city’ or ‘which company.’ Another common example is that instead of asking simply ‘when,’ questions had to ask ‘what year’ or ‘what date.’”

That nicely articulates why this won’t likely be of use in the real world. Enterprise users are going to ask questions in an imprecise way. They have been sold on the promise of “just use natural language” and the system will figure out what you really mean through context. This test sidesteps that issue entirely. 

So, how can the results be meaningful or reliable? 

The very nature of hallucinations belies any way to quantify them. If they were predictable, IT could simply program their tools to ignore every 75th response. But it’s not. Until someone figures out how to truly eliminate hallucinations, the lack of reliable answers will stay with us

Baidu releases new AI offerings on the way to broader commercialization of the technology

Baidu has introduced a text-to-image generator dubbed I-RAG and a no-code developer platform called Miaoda as part of its growing portfolio of artificial intelligence (AI) products that, like US-based AI companies, it eventually aims to offer its user base as part of a wide array of commercial AI offerings.

CEO Robin Li introduced the new technology in a presentation at the company’s Baidu World Conference Tuesday. I-RAG uses Baidu’s search capabilities to generate images from speech and has been designed to address the “hallucinations” issue, according to a report on Reuters. The hallucinations referred to are images generated via large language model (LLM)-based AI that deviate from what was specified in the input prompt or contain non-existent elements.

Baidu also launched Miaoda, a developer platform that uses the capabilities of LLMs to generate code, and is aimed at allowing users without extensive coding expertise to develop applications. AI companies in the US also are providing similar tools to develop applications through a visual interface, with reusable components and advanced developer assistance, noted Manukrishnan SR, practice director for Everest Group.

Indeed, like those of leading US companies such as OpenAI, Google, and Microsoft, Baidu’s AI moves demonstrate its march toward the commercialization phase of the technology. The company, like others before it, has been adding AI to existing products or creating new ones that enterprise and other business users can integrate into their applications.

Follow the leader

Google, OpenAI, and Microsoft already have products similar to the ones Baidu revealed Tuesday, and the Chinese company has some catching up to do, analysts noted. The release of an AI-enhanced no-code platform in particular demonstrates Baidu’s aim to keep up with a software development trend that may one day leverage AI to replace traditional coding with software configuration.

“The pace of innovation and research in generative AI technologies and software is moving at a breakneck pace in the US,” Dave Schubmehl, research VP, AI & automation at IDC, observed. “To compete effectively on the world stage, other countries will need to adopt this same pace of innovation and research.”

He added, “many vendors are offering low code/no code/code generation capabilities in their products. Baidu’s product Miaoda is doing what other vendors like Microsoft and OpenAI have already done, which is using LLM capabilities to generate code.”

So far, however, Baidu’s AI tools do not seem to be as advanced as the ones released by OpenAI, Microsoft, and Google, Everest Group’s SR told CIO, “since these players have large existing datasets on which they can train their AI models.”

However, with “all major cloud platform players now offering some form of genAI-based programming augmentation facility,” AI-based software development may be the way forward for the enterprise, noted Bradley Shimmin, chief analyst, AI and data analytics, at Omdia.

“This is a very important area of research in that it points to an eventual state where both domain experts inside an organization and professional ISV practitioners can both use the same tooling to create full-stack apps and/or workflow automations in a declarative, no-code, conversational manner,” Shimmin said.

Still, this evolution is not without its challenges, and may not be something CIOs need to worry about quite yet, Everest Group’s SR noted.

“These tools are facing a host of challenges, including maintaining code quality, adherence to regulatory standards, and questions on ROI,” he told CIO. “Thus, while AI is set to revolutionize software development in the medium to long term, there are a lot of challenges that need to be ironed out before its potential can be fully realized.”

Don’t underestimate China

Though Baidu is still playing catch-up to US-based companies, China as a major global AI player should not be underestimated, Shimmins noted. In fact, “China and the US are really not that far apart from one another in terms of expertise and investment [in AI],” he observed.

“Already, China has produced some very strong models, particularly open source models such as Qwen2.5-Coder, which rivals some of the larger frontier models from Anthropic and OpenAI (at least in terms of published benchmarks),” he said.

The US has been doing everything it can to stymie overall technological development in China in various ways, and AI is no exception. A mere two weeks ago, the US government announced new rules restricting investments in China’s AI and other tech sectors deemed threats to national security, expanding existing technology restrictions that were so far limited to exports. China, for its part, has banned the use of OpenAI in the country.

However, despite the current friction between the US and China in terms of their technological arms race, the two countries have similar goals when it comes to AI, and may end up collaborating in some areas, Shimmin noted.

“In terms of academic research, the two nations are starting to work more closely with one another in seeking out a common ground concerning the existential threat posed by AI itself,” he said.

Baidu releases new AI offerings on the way to broader commercialization of the technology

Baidu has introduced a text-to-image generator dubbed I-RAG and a no-code developer platform called Miaoda as part of its growing portfolio of artificial intelligence (AI) products that, like US-based AI companies, it eventually aims to offer its user base as part of a wide array of commercial AI offerings.

CEO Robin Li introduced the new technology in a presentation at the company’s Baidu World Conference Tuesday. I-RAG uses Baidu’s search capabilities to generate images from speech and has been designed to address the “hallucinations” issue, according to a report on Reuters. The hallucinations referred to are images generated via large language model (LLM)-based AI that deviate from what was specified in the input prompt or contain non-existent elements.

Baidu also launched Miaoda, a developer platform that uses the capabilities of LLMs to generate code, and is aimed at allowing users without extensive coding expertise to develop applications. AI companies in the US also are providing similar tools to develop applications through a visual interface, with reusable components and advanced developer assistance, noted Manukrishnan SR, practice director for Everest Group.

Indeed, like those of leading US companies such as OpenAI, Google, and Microsoft, Baidu’s AI moves demonstrate its march toward the commercialization phase of the technology. The company, like others before it, has been adding AI to existing products or creating new ones that enterprise and other business users can integrate into their applications.

Follow the leader

Google, OpenAI, and Microsoft already have products similar to the ones Baidu revealed Tuesday, and the Chinese company has some catching up to do, analysts noted. The release of an AI-enhanced no-code platform in particular demonstrates Baidu’s aim to keep up with a software development trend that may one day leverage AI to replace traditional coding with software configuration.

“The pace of innovation and research in generative AI technologies and software is moving at a breakneck pace in the US,” Dave Schubmehl, research VP, AI & automation at IDC, observed. “To compete effectively on the world stage, other countries will need to adopt this same pace of innovation and research.”

He added, “many vendors are offering low code/no code/code generation capabilities in their products. Baidu’s product Miaoda is doing what other vendors like Microsoft and OpenAI have already done, which is using LLM capabilities to generate code.”

So far, however, Baidu’s AI tools do not seem to be as advanced as the ones released by OpenAI, Microsoft, and Google, Everest Group’s SR told CIO, “since these players have large existing datasets on which they can train their AI models.”

However, with “all major cloud platform players now offering some form of genAI-based programming augmentation facility,” AI-based software development may be the way forward for the enterprise, noted Bradley Shimmin, chief analyst, AI and data analytics, at Omdia.

“This is a very important area of research in that it points to an eventual state where both domain experts inside an organization and professional ISV practitioners can both use the same tooling to create full-stack apps and/or workflow automations in a declarative, no-code, conversational manner,” Shimmin said.

Still, this evolution is not without its challenges, and may not be something CIOs need to worry about quite yet, Everest Group’s SR noted.

“These tools are facing a host of challenges, including maintaining code quality, adherence to regulatory standards, and questions on ROI,” he told CIO. “Thus, while AI is set to revolutionize software development in the medium to long term, there are a lot of challenges that need to be ironed out before its potential can be fully realized.”

Don’t underestimate China

Though Baidu is still playing catch-up to US-based companies, China as a major global AI player should not be underestimated, Shimmins noted. In fact, “China and the US are really not that far apart from one another in terms of expertise and investment [in AI],” he observed.

“Already, China has produced some very strong models, particularly open source models such as Qwen2.5-Coder, which rivals some of the larger frontier models from Anthropic and OpenAI (at least in terms of published benchmarks),” he said.

The US has been doing everything it can to stymie overall technological development in China in various ways, and AI is no exception. A mere two weeks ago, the US government announced new rules restricting investments in China’s AI and other tech sectors deemed threats to national security, expanding existing technology restrictions that were so far limited to exports. China, for its part, has banned the use of OpenAI in the country.

However, despite the current friction between the US and China in terms of their technological arms race, the two countries have similar goals when it comes to AI, and may end up collaborating in some areas, Shimmin noted.

“In terms of academic research, the two nations are starting to work more closely with one another in seeking out a common ground concerning the existential threat posed by AI itself,” he said.

Europe gives Apple yet another regulatory nightmare

As it seemingly remains focused on increasing the cost of doing business in the region, the European Commission’s (trade) war with Big Tech/America by proxy continues with a demand for Apple to stop “geo-blocking practices” on Apple Media Services, including the App Store, Apple Music, TV+, and others. 

It’s a new European front in a battle dominated so far by Apple’s struggles to bring its business in line with the Digital Markets Act in the region. However, to some degree it reflects efforts to give consumers free access to markets across all EU states. But when combined with the myriad challenges Apple already faces in the region, the demand will impose yet  another set of legal headaches and require the company to invest in yet more expensive developer time.  

What’s this all about?

Europe argues that the geo-blocking restrictions Apple employs on its media platforms unlawfully discriminate against European customers based on their place of residence. In Europe, people should be able to purchase goods and services from any EU state.

Further, Europe’s Services Directive requires that general conditions of access to a service don’t “contain discriminatory provisions relating to the nationality or place of residence of the service recipient, unless directly justified by objective criteria.”

So far, so good. But I have a sense that some of the territorial licensing restrictions some copyright holders still keep in place might act as a brake on what Apple can achieve. There was a day not so long ago when music streaming services had to reach a separate distribution deal for each EU member state, and while that has relaxed significantly, it may also be why Apple’s media services evolved that kind of licensing model. But that was then, this is now. (I do suspect Europe and Apple will find these problems aren’t completely within their own control.)

What does Europe want?

What regulators want is for Apple to make a series of changes to how it offers up media services in the EU. “The discrimination of consumers based on their nationality or place of residence is against Union law, therefore unacceptable,” said Commissioner for Justice Didier Reynders.

“Consumers must be able to reap the full benefits of the Single Market and should not face any obstacles while using a specific service and traveling around the EU,” he explained. “The Commission urges Apple to bring its practices in line with EU rules against the unjustified geo-blocking of consumers.”

Europe wants Apple to:

  • Make it possible to access its media services via any country interface a consumer wants to use. 
  • Allow consumers to pay for things using any means of payment from any country they have available to them. For example, if you have bank accounts in France and in Germany but are registered for your Apple Account in France, you can use either bank to pay your bill. At present you can only use a French bank, as that is where your account is registered.
  • The bloc also wants consumers to be able to download the version of an app offered in another EU/EEA country. “Consumers should be able to download apps offered in other EU/EEA countries when they travel to or temporarily stay in that country,” the EU states.

Google has already done it

Apple may be in the Commission’s sights (again) now, but the bloc reached a deal with Google for similar practises last year. Under those arrangements, Google “committed to clarify” how to browse different country versions of the Google Play Store.

It also reminded Android developers that they should make their apps accessible EU-wide and accept means of payment from any EU country on the Google store.

That Google could only remind developers suggests that even when Apple finds some way to bring itself in line with these demands, some developers might still decline to join the ball game. Even the act in question (passed in 2018), notes in Article 3 section 5 some circumstances in which some categories of goods — books — are sold at different prices in certain territories. 

What happens next?

Apple now gets a month to look at what is being asked of it, develop a response, and come up with a set of proposals and commitments to address these criticisms.

The way the Commission phrases how it will respond to Apple’s reply is interesting, “Depending on Apple’s reply, the CPC Network may enter into a dialogue with the company,” it says.

The use of conditionals in that sentence suggests that even if Apple does attempt to being itself into compliance, the CPC Network (Consumer Protection Cooperation Network) might decide to move to enforcement all the same.

If Apple fails to address the concerns or is found to have failed to address them, national authorities can take enforcement measures to ensure compliance, the Commission explains.

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Box adds AI agent and no-code app builder tools

Box is developing new AI and automation tools to help customers tap into unstructured data stored in its content management platform; Box AI Studio and Box Apps were both unveiled at the company’s Box Works event Tuesday. 

Box AI Studio lets customers build custom AI agents that workers can interact with via a natural language chatbot. Each agent can be prompted to respond in a particular way to specific groups of workers. There could be a legal contract review agent that knows all about a company’s contracting policies, for example, or a sales agent that staff can consult for advice. 

“You could be inside of your sales portal, trying to get sales advice for a deal you’re working on, and talk to the sales agent that’s using the information from within your sales portal,” said Box CEO and founder Aaron Levie.

The agents are built with a no-code interface, with customers able to select large language models (LLMs) from third-party providers such as Anthropic, Google, and Microsoft. 

“Then we’re going to obviously have to figure out how we get the agents to all interact with each other — that’s going be the next frontier of interoperability,” Levie said.

Generative AI (genAI) technologies such as Box AI Studio will “disrupt how organizations create, manage and leverage unstructured content and documents” said Holly Muscolino, group vice president for Workplace Solutions at IDC. While business adoption of genAI has been slow so far — due lack of clear ROI, trust around data access, and change management challenges when deploying tools to workers — there’s potential for “large improvements in productivity, customer and employee experience and other business metrics,” she said. 

Box AI Studio agent

Box is rolling out generative AI tools designed to help users build custom AI agents they can interact with via a chatbot.

Box

“We believe that they will eventually be table stakes and part of baseline solutions. Note that Box is not unique in rolling out these capabilities, but they are very good at marketing them,” Muscolino said. 

AI Studio is just the first step in Box’s vision for AI agents: Levie said the company is also working on “agentic workflows” that will let customers build AI assistants that can be set up to act autonomously on behalf of workers; these will arrive in the “medium term,” with no specific timeline set. 

“We anticipate that any knowledge worker within an enterprise will probably be interacting with dozens, if not hundreds, of agents to do their work,” said Levie. 

Not all those agents will be created within Box, he said, with all software vendors eventually creating their own agents. “You’ll have one agent help you with a contract process, another review information for some strategic decision, and another that gets your calendar organized,” he said. 

The other major feature addition unveiled Tuesday is Box Apps, a no-code app development framework that includes features such as a custom UI interface, metadata extraction, workflow automations, and content dashboards.

The idea is to automate common content-intensive businesses processes such as contract management and invoice processing. To run these processes, customers would typically have to either build an entire custom app on top of Box’s APIs, or use bespoke technology platforms, said Levie. This means customers must move data out of the Box platform, bypassing security controls in place. 

With Box Apps, these custom apps can be created directly within Box. “You can have a contract management system, you can have an invoice processing system, you can have a digital asset management system, and in a matter of hours, if not minutes, you can build that entire application and deploy it to people in your organization,” said Levie. 

“So, this is going to be a real kind of a breakthrough in delivering no-code applications for every business process in the enterprise.”

Box Apps is built on technology from business process app builder Crooze — one of two acquisitions Box made this year. Box also intends to release functionality based on another recent acquisition, Polish startup Alphamoon, next year, said Levie. 

“Both of those acquisitions added important capabilities to Box’s portfolio by providing data extraction and metadata management,” said Muscolino. 

Box AI Studio and Box Apps will be available in January in a new Enterprise Advanced payment plan that will also include premium features such as Box Archive for long-term content management, and Doc Gen, a custom document creation tool now in a beta preview. Enterprise Advanced will be the next tier up from the Enterprise Plus plan that arrived in 2021. 

Box said it would announce pricing for Enterprise Advanced closer to launch. 

Muscolino noted that pricing for genAI tools is “still all over the place.” While customers may be happy to pay additional fees for the latest AI-powered features, many of these will eventually … be an expected component of a content management system,” she said.

“Of course, prices won’t come down, but these features will not command a premium,” said Muscolino.

Will the CHIPS Act survive a Trump presidency?

President-elect Donald J. Trump has made no bones about it: legislation passed under the Biden Administration could be on the chopping block once he enters office on Jan. 20, including the bipartisan CHIPS and Science Act.

The CHIPS Act allocates billions of dollars in funding and tax incentives to semiconductor companies to help bring chip manufacturing back to the US.

On the Joe Rogan Experience podcast late last month, Trump said CHIPS Act is “so bad,” and said instead of helping fund new fabrication (fab) and R&D centers, the US should have put tariffs on overseas semiconductor makers. He compared the semiconductor industry to the auto industry as to how tariffs could work to bring back manufacturing.

Trump said, “paying a lot of money to have people build chips, that’s not the way. You tariff it so high that they will come and build their chip companies for nothing. We put up billions of dollars for rich companies to come in and borrow the money and build chip companies here, and they’re not going to give us the good companies anyway. Taiwan, they stole our chip business. They want us to protect [them]. They don’t give us any money to protect them.”

Trump was in all likelihood referring to Taiwan Semiconductor Manufacturing Company (TSMC), the world’s largest producer of computer chips. Computerworld reached out to Trump campaign officials after last week’s election, but did not receive a response.

TSMC is currently building two major semiconductor manufacturing facilities in Arizona — one a 5nm chip fab, the other a 3nm fab plant. The semiconductor designer and manufacturer is being promised $6.6 billion in CHIPS Act funding; in return, the company pledged to bring its most advanced 2nm process technology to US shores and added plans for a third fabrication plant to its Arizona site.

TSMC CEO CC Wei told investors last month he expects volume production of the company’s first Arizona fab to start in early 2025. “We are confident [it will] deliver the same level of manufacturing quality and reliability…as from our fabs in Taiwan,” Wei said. “Our second and third fabs will utilize more advanced technologies based on our customer’s needs. The second fab is scheduled to begin volume production in 2028 and our third fab will begin production by the end of the decade.”

Intel clean room technician

An Intel manufacturing technician at Fab 11X in Rio Ranco, NM, inspects a semiconductor wafer.

Intel Corp.

Jack Gold, principal analyst with tech industry research firm J. Gold Associates, said Trump’s plan to enact tariffs on oversea chip makers is simply “wrong.”

“Tariffs are a penalty, while the CHIPS act is an incentive,” he said. “Incentives almost always work better than penalties. Also, you can put all the tariffs you want on chips, but it still takes three-to-four years to get a new fab up and running, and it’s extremely capital intensive.”

New semiconductor fabrication facilities cost from $20 billion to $40 billion, and many enterprises can’t afford that kind of investment without some form of subsidies or tax break, Gold said.

Additionally, every electronic device today has a chip in it, and so tariffs would likely increase the cost of products from cars and smartphones to toasters.

The CHIPS Act was passed overwhelmingly in 2022 by members of both houses of Congress to address computer chip supply chain shortages that surfaced during the COVID-19 pandemic. The legislation provided the US Department of Commerce (DoC) with $52.7 billion for a suite of programs under the CHIPS for America program to “revitalize” the US position in semiconductor research, development, and manufacturing.

“New fabs are a very high-risk venture, so with the CHIPS Act subsidies, the government is basically saying it will take on part of that risk,” Gold said.

To date, the DoC has allocated, but not dispensed, about $32 billion in funding among chipmakers, including IntelSamsungMicronTSMC, and Texas Instruments, all of whom have unveiled plans for a number of new US chip fabrication plants. In return, those chip designers and makers have pledged about $300 billion in current and future projects in the US, according to the White House.

With the CHIPS Act spurring them on, the likes of Qualcomm, in partnership with GlobalFoundries, also said it would invest $4.2 billion to double chip production in its Malta, NY facility.

In addition to Trump’s opposition, House Speaker Mike Johnson said recently that Republicans will likely repeal the CHIPS Act. Johnson, who voted against the act, later walked his comments back, saying he would like to “streamline” it, according to The Associated Press.

Rep. Brandon Williams (R-NY) said he spoke to Johnson after his remarks were published. “He apologized profusely, saying he misheard the question,” Williams said in a statement. “He clarified his comments on the spot and I trust local media to play his full comments on supporting repatriation of chips manufacturing to America.”

Semiconductor fab in Phoenix

TSMC Arizona’s first fab will produce 5nm semiconductor process technology; it is scheduled to begin production in the first half of 2025. The second fab will utilize a 3nm process and a third plant is expected to use 2nm process technology. Those plants will be in operation beginning in 2028 and beyond.

Shutterstock/Wirestock Creators

“As I have further explained and clarified, I fully support Micron coming to Central NY, and the CHIPS Act is not on the agenda for repeal,” Johnson said in his own statement. “To the contrary, there could be legislation to further streamline and improve the primary purpose of the bill — to eliminate its costly regulations and Green New Deal requirements.”

New York State has become a major hub of semiconductor development. Micron plans to invest $100 billion to build a memory chip fabrication plant in the state that will be the size of 40 football fields and create about 50,000 jobs. It may spend up to an additional $100 billion over the next 20 years on the facility. In addition, the Biden Administration just announced plans to spend about $825 million to create a flagship national semiconductor R&D center in upstate New York, where the government-funded NanoTech Complex already exists.

Micron highlighted the bipartisan support for the CHIPS and Science Act, with a spokesperson saying it’s “a law that represents an important step toward solidifying American semiconductor and technology leadership for decades to come.”

Repealing the legislation, in any event, would take an act of Congress, and the CHIPS Act has strong bipartisan support among senior republicans, including Senate Minority Leader Mitch McConnell. McConnell argued that bolstering US semiconductor production was vital for both national security and economic competitiveness.

Sen. Todd Young (R-IN) was a key CHIPS Act supporter who emphasized the importance of semiconductor manufacturing for both economic growth and national defense and pushed for the bill’s provisions to help American businesses compete globally. Young echoed others in heralding its “broad bipartisan support, and the massive private investments spurred since then have made the legislation even more popular.

“If there are any regulations that can be streamlined to create even more jobs from our growing semiconductor industry in Indiana and across the country, count me in. But I’m confident the CHIPS Act is here to stay,” Young said in a response to Computerworld.

The CHIPS Act has spurred $450 billion in private investment across 28 states, creating 58,000 jobs, according to the Semiconductory Industry Association

Despite widespread bipartisan backing, some members of Congress expressed concerns about certain provisions, such as the level of government subsidies or the potential for the bill to benefit only a few large tech companies. Still, the majority of both Democrats and Republicans recognized the strategic importance of boosting semiconductor production on US soil.

A DoC spokesperson pointed to the “overwhelming bipartisan support” for the act’s more than $400 billion in total investments as well as projections it will create more than 125,000 jobs. “Our team continues to implement this bipartisan law in accordance with statute, including announcing more than $36 billion in proposed funding for manufacturing incentives and several key R&D components. We will have more announcements in the coming weeks,” the spokesman said.

TSMC declined comment on the act’s future. Intel, which completed building a new fab in New Mexico and is awaiting CHIPS Act funds for that, was promised a total of $8.5 billion to support investments for fabs, packaging facilities and R&D centers among four states, including Arizona, Oregon, and Ohio.

Ohio is receiving a significant portion of the funding for semiconductor manufacturing. In particular, Intel is investing $20 billion to build two new semiconductor fabrication plants in Licking County, Ohio. Vice President-elect J.D. Vance is currently a US senator in his home state of Ohio.

“I’m betting that lawmakers, and especially Republican lawmakers from certain states that will benefit from the chips act (like Ohio and Arizona, and now New York), will have a lot of push back on [Trump’s] idea,” Gold said.

An Intel spokesperson pointed out that the idea behind the measure began during the first Trump Administration and it continues to maintain strong bipartisan support.“Restoring America’s semiconductor manufacturing leadership is integral to the country’s economic competitiveness and national security,” the spokesperson said. “As the only American company that designs and manufactures leading-edge chips, Intel has a critically important role to play, and we look forward to working with the Trump Administration on this shared priority.”

Over the past 30 years, the US share of global semiconductor production has fallen from 37% to just 12%, according to White House figures. Meanwhile, China’s share of chip manufacturing has grown nearly 50% over the past two years and now comprises about 18% of the world’s supply. That decline in domestic chip production was exposed by a worldwide supply-chain crisis during the Covid-19 pandemic that led to calls for reshoring manufacturing to the US — and ultimately the CHIPS Act.

Over the next three to four years, as new fabrication, packaging and R&D centers are built on US soil, the cost of production of semiconductors is likely to rise by 10% to 20%, according to Gold.

Additionally, it will cost 10% to 20% more to build chips in the US than the Far East, so it will make more sense to focus on higher-end and not commodity chips for US production. Unless Trump’s idea for tariffs is to use the money to help fund new fabrication plants in the US, which is not what the President-elect stated, it would be doing the very thing the CHIPS Act is already accomplishing, Gold said.

Will the CHIPS Act survive a Trump presidency?

President-elect Donald J. Trump has made no bones about it: legislation passed under the Biden Administration could be on the chopping block once he enters office on Jan. 20, including the bipartisan CHIPS and Science Act.

The CHIPS Act allocates billions of dollars in funding and tax incentives to semiconductor companies to help bring chip manufacturing back to the US.

On the Joe Rogan Experience podcast late last month, Trump said CHIPS Act is “so bad,” and said instead of helping fund new fabrication (fab) and R&D centers, the US should have put tariffs on overseas semiconductor makers. He compared the semiconductor industry to the auto industry as to how tariffs could work to bring back manufacturing.

Trump said, “paying a lot of money to have people build chips, that’s not the way. You tariff it so high that they will come and build their chip companies for nothing. We put up billions of dollars for rich companies to come in and borrow the money and build chip companies here, and they’re not going to give us the good companies anyway. Taiwan, they stole our chip business. They want us to protect [them]. They don’t give us any money to protect them.”

Trump was in all likelihood referring to Taiwan Semiconductor Manufacturing Company (TSMC), the world’s largest producer of computer chips. Computerworld reached out to Trump campaign officials after last week’s election, but did not receive a response.

TSMC is currently building two major semiconductor manufacturing facilities in Arizona — one a 5nm chip fab, the other a 3nm fab plant. The semiconductor designer and manufacturer is being promised $6.6 billion in CHIPS Act funding; in return, the company pledged to bring its most advanced 2nm process technology to US shores and added plans for a third fabrication plant to its Arizona site.

TSMC CEO CC Wei told investors last month he expects volume production of the company’s first Arizona fab to start in early 2025. “We are confident [it will] deliver the same level of manufacturing quality and reliability…as from our fabs in Taiwan,” Wei said. “Our second and third fabs will utilize more advanced technologies based on our customer’s needs. The second fab is scheduled to begin volume production in 2028 and our third fab will begin production by the end of the decade.”

Intel clean room technician

An Intel manufacturing technician at Fab 11X in Rio Ranco, NM, inspects a semiconductor wafer.

Intel Corp.

Jack Gold, principal analyst with tech industry research firm J. Gold Associates, said Trump’s plan to enact tariffs on oversea chip makers is simply “wrong.”

“Tariffs are a penalty, while the CHIPS act is an incentive,” he said. “Incentives almost always work better than penalties. Also, you can put all the tariffs you want on chips, but it still takes three-to-four years to get a new fab up and running, and it’s extremely capital intensive.”

New semiconductor fabrication facilities cost from $20 billion to $40 billion, and many enterprises can’t afford that kind of investment without some form of subsidies or tax break, Gold said.

Additionally, every electronic device today has a chip in it, and so tariffs would likely increase the cost of products from cars and smartphones to toasters.

The CHIPS Act was passed overwhelmingly in 2022 by members of both houses of Congress to address computer chip supply chain shortages that surfaced during the COVID-19 pandemic. The legislation provided the US Department of Commerce (DoC) with $52.7 billion for a suite of programs under the CHIPS for America program to “revitalize” the US position in semiconductor research, development, and manufacturing.

“New fabs are a very high-risk venture, so with the CHIPS Act subsidies, the government is basically saying it will take on part of that risk,” Gold said.

To date, the DoC has allocated, but not dispensed, about $32 billion in funding among chipmakers, including IntelSamsungMicronTSMC, and Texas Instruments, all of whom have unveiled plans for a number of new US chip fabrication plants. In return, those chip designers and makers have pledged about $300 billion in current and future projects in the US, according to the White House.

With the CHIPS Act spurring them on, the likes of Qualcomm, in partnership with GlobalFoundries, also said it would invest $4.2 billion to double chip production in its Malta, NY facility.

In addition to Trump’s opposition, House Speaker Mike Johnson said recently that Republicans will likely repeal the CHIPS Act. Johnson, who voted against the act, later walked his comments back, saying he would like to “streamline” it, according to The Associated Press.

Rep. Brandon Williams (R-NY) said he spoke to Johnson after his remarks were published. “He apologized profusely, saying he misheard the question,” Williams said in a statement. “He clarified his comments on the spot and I trust local media to play his full comments on supporting repatriation of chips manufacturing to America.”

Semiconductor fab in Phoenix

TSMC Arizona’s first fab will produce 5nm semiconductor process technology; it is scheduled to begin production in the first half of 2025. The second fab will utilize a 3nm process and a third plant is expected to use 2nm process technology. Those plants will be in operation beginning in 2028 and beyond.

Shutterstock/Wirestock Creators

“As I have further explained and clarified, I fully support Micron coming to Central NY, and the CHIPS Act is not on the agenda for repeal,” Johnson said in his own statement. “To the contrary, there could be legislation to further streamline and improve the primary purpose of the bill — to eliminate its costly regulations and Green New Deal requirements.”

New York State has become a major hub of semiconductor development. Micron plans to invest $100 billion to build a memory chip fabrication plant in the state that will be the size of 40 football fields and create about 50,000 jobs. It may spend up to an additional $100 billion over the next 20 years on the facility. In addition, the Biden Administration just announced plans to spend about $825 million to create a flagship national semiconductor R&D center in upstate New York, where the government-funded NanoTech Complex already exists.

Micron highlighted the bipartisan support for the CHIPS and Science Act, with a spokesperson saying it’s “a law that represents an important step toward solidifying American semiconductor and technology leadership for decades to come.”

Repealing the legislation, in any event, would take an act of Congress, and the CHIPS Act has strong bipartisan support among senior republicans, including Senate Minority Leader Mitch McConnell. McConnell argued that bolstering US semiconductor production was vital for both national security and economic competitiveness.

Sen. Todd Young (R-IN) was a key CHIPS Act supporter who emphasized the importance of semiconductor manufacturing for both economic growth and national defense and pushed for the bill’s provisions to help American businesses compete globally. Young echoed others in heralding its “broad bipartisan support, and the massive private investments spurred since then have made the legislation even more popular.

“If there are any regulations that can be streamlined to create even more jobs from our growing semiconductor industry in Indiana and across the country, count me in. But I’m confident the CHIPS Act is here to stay,” Young said in a response to Computerworld.

The CHIPS Act has spurred $450 billion in private investment across 28 states, creating 58,000 jobs, according to the Semiconductory Industry Association

Despite widespread bipartisan backing, some members of Congress expressed concerns about certain provisions, such as the level of government subsidies or the potential for the bill to benefit only a few large tech companies. Still, the majority of both Democrats and Republicans recognized the strategic importance of boosting semiconductor production on US soil.

A DoC spokesperson pointed to the “overwhelming bipartisan support” for the act’s more than $400 billion in total investments as well as projections it will create more than 125,000 jobs. “Our team continues to implement this bipartisan law in accordance with statute, including announcing more than $36 billion in proposed funding for manufacturing incentives and several key R&D components. We will have more announcements in the coming weeks,” the spokesman said.

TSMC declined comment on the act’s future. Intel, which completed building a new fab in New Mexico and is awaiting CHIPS Act funds for that, was promised a total of $8.5 billion to support investments for fabs, packaging facilities and R&D centers among four states, including Arizona, Oregon, and Ohio.

Ohio is receiving a significant portion of the funding for semiconductor manufacturing. In particular, Intel is investing $20 billion to build two new semiconductor fabrication plants in Licking County, Ohio. Vice President-elect J.D. Vance is currently a US senator in his home state of Ohio.

“I’m betting that lawmakers, and especially Republican lawmakers from certain states that will benefit from the chips act (like Ohio and Arizona, and now New York), will have a lot of push back on [Trump’s] idea,” Gold said.

An Intel spokesperson pointed out that the idea behind the measure began during the first Trump Administration and it continues to maintain strong bipartisan support.“Restoring America’s semiconductor manufacturing leadership is integral to the country’s economic competitiveness and national security,” the spokesperson said. “As the only American company that designs and manufactures leading-edge chips, Intel has a critically important role to play, and we look forward to working with the Trump Administration on this shared priority.”

Over the past 30 years, the US share of global semiconductor production has fallen from 37% to just 12%, according to White House figures. Meanwhile, China’s share of chip manufacturing has grown nearly 50% over the past two years and now comprises about 18% of the world’s supply. That decline in domestic chip production was exposed by a worldwide supply-chain crisis during the Covid-19 pandemic that led to calls for reshoring manufacturing to the US — and ultimately the CHIPS Act.

Over the next three to four years, as new fabrication, packaging and R&D centers are built on US soil, the cost of production of semiconductors is likely to rise by 10% to 20%, according to Gold.

Additionally, it will cost 10% to 20% more to build chips in the US than the Far East, so it will make more sense to focus on higher-end and not commodity chips for US production. Unless Trump’s idea for tariffs is to use the money to help fund new fabrication plants in the US, which is not what the President-elect stated, it would be doing the very thing the CHIPS Act is already accomplishing, Gold said.

US orders TSMC to halt advanced chip exports to China

In a significant escalation of US efforts to limit China’s access to advanced technology, the Department of Commerce has reportedly mandated Taiwan Semiconductor Manufacturing Co. (TSMC) to cease shipments of high-performance AI chips to Chinese customers.

The directive, effective Monday, restricts the export of TSMC’s 7-nanometer and more advanced processors, which are widely used in AI applications, Reuters reported.

The US Commerce Department’s latest move specifically targets chips that can power AI accelerators and GPUs, with a particular focus on halting indirect access to restricted technology by Chinese companies like Huawei, which the US considers a national security threat.

This directive, marking a new chapter in US-China tech tensions, applies to several key players in China’s AI ecosystem, potentially impacting companies beyond Huawei.

TSMC declined to comment on the said matter citing “market rumor.”

“TSMC is a law-abiding company and we are committed to complying with all applicable rules and regulations, including applicable export controls,” the chip maker said.

A query to the US Commerce Department did not elicit any response.

In another distantly related development, the Taiwanese government has said that the country’s law prevents TSMC from producing its 2nm chips — TSMC’s hitherto most advanced chip —  abroad.

“Since Taiwan has related regulations to protect its own technologies, TSMC cannot produce 2-nanometer chips overseas currently,” Taipei Times said quoting Minister of Economic Affairs J W Kuo.

Kuo made the remarks while addressing concerns that TSMC may have to accelerate 2-nm chip production in its Arizona fabs following Donald Trump’s re-election as US president.

TSMC is the main supplier of chips, including its most advanced one, for Nvidia and Apple and the US largely depends on the Taiwanese firm to further its technological advancements in the AI space.

TSMC’s involvement: The Huawei incident

This stringent order follows a recent finding that a TSMC-manufactured chip had been integrated into Huawei’s Ascend 910B, an advanced AI processor released in 2022.

A teardown analysis by research firm, Tech Insights, revealed the presence of TSMC technology within Huawei’s product, hinting at an export control violation and triggering the US crackdown.

The revelation prompted TSMC to inform the Commerce Department, shedding light on Huawei’s use of intermediaries to potentially bypass US trade restrictions.

The US directive mandates that any advanced product containing over 25% American technology require an export license — a requirement Huawei circumvented by procuring chips indirectly through third parties.

Impact on Chinese tech giants and the semiconductor market

The directive impacts numerous other entities in China’s technology landscape. In addition to Huawei, major AI-driven companies such as Alibaba and Baidu, which design and use similar processors, will face increased scrutiny.

Although the US regards them as competitors to Huawei, the move aims to curb any potential diversion of restricted technology for unauthorized AI applications in China.

Moreover, the order raises questions about TSMC’s ability to navigate US-imposed restrictions while continuing to serve clients in one of its largest markets.

Reports initially suggested that TSMC’s decision to halt chip shipments was voluntary, but it has since become clear that it was a response to direct US government orders.

However, the restriction on AI chips excludes automotive and consumer-grade chips, signaling that China’s AI and defense-related developments are the primary targets.

Growing tensions and US commitment to export control

The US has steadily intensified its stance against the use of American technology by companies that the government deems a security threat. By tightening export controls, the US aims to prevent China from leveraging AI and semiconductor advancements in ways that could counter US interests.

This latest directive follows broader efforts to restrict China’s technological capabilities, underscoring the US commitment to export control enforcement amidst ongoing geopolitical friction.

As the implications of the US directive continue to unfold, TSMC and other semiconductor producers may face a complex path ahead in balancing regulatory compliance with business needs in the Asia-Pacific region.

The FTC’s ‘Click-to-Cancel’ rule for subscriptions is long overdue

Using the Monarch personal finance program, I went through my finances recently and found that I pay $510 every month on various subscriptions. (That’s not counting things such as my Internet bill, $120 a month for AT&T 2Gbps fiber.) I’m talking about Netflix, Google One, The Wall Street Journal, and other services and publications I actually want. 

But there were also over $100 worth of subscriptions that, frankly, I’d forgotten about  and no longer wanted or needed. That’s real money.

So, how do I get rid of them? Today, I have to dig into every last lousy one of them and jump through numerous hoops to cancel — but that may not be the case for much longer. 

The US Federal Trade Commission (FTC) last month announced a “click-to-cancel” rule aimed at making it easier for you and me to end recurring subscriptions and memberships. The new regulation requires sellers to make canceling services as simple as when you initially signed up for them.

As FTC Commission Chair Lina M. Khan explained: “Too often, businesses make people jump through endless hoops just to cancel a subscription. The FTC’s rule will end these tricks and traps, saving Americans time and money. Nobody should be stuck paying for a service they no longer want.”

Amen, sister!

The new regulations aren’t going to affect just Disney+ subscribers and the like. Businesses that rely on Software-as-a-Service (SaaS) — as either users or providers — are going to be affected as well. 

The new rule, which goes into effect six months after being published in the Federal Register, will have significant implications, for example, for providers like Google One and Microsoft 365. 

Here’s how it’s likely to affect these services.

For example, practices like requiring phone calls or in-person visits to cancel will no longer be allowed. If you think that’s an exaggeration, by the way, you clearly haven’t had a Planet Fitness subscription, which required snail-mail or an in-person visit to close out your membership.

Additionally, SaaS providers must provide clear and conspicuous disclosures about subscription terms: For example, automatic renewal information must be clearly stated and cancellation deadlines by which customers must cancel to avoid charges must also be spelled out. 

Under these regulations, you can no longer automatically resubscribe customers. They must consent before automatic renewals take place. Clearly, businesses that use automatic renewals will have to change how they’ll handle subscription renewals.

If your business gets customers by offering free trials that convert to paid subscriptions, you’ll also need to clearly disclose the trial’s terms, including when the trial ends and what charges will occur. And, of course, canceling after a free trial must be as simple as signing up for the trial.

All of this means, of course, that your company will have to update its terms and conditions. You’re going to have to pay your lawyers (as well as your programmers) to address these new rules. 

On the plus side, while none of this will be cheap, the FTC argues that customers will be happier and more likely resubscribe. And new transparent practices could even lead to  stronger customer relationships.

Not everyone is happy about the new regulations. Business organizations such as the Internet & Television Association (NCTA), the Interactive Advertising Bureau, and the US Chamber of Commerce oppose them. They have three major arguments: that the FTC doesn’t have the legal authority to implement the rules; the change will cost companies money; and they’ll force industries to change current cancellation processes that protect consumers or offer better deals.

In other words, it’s exactly what you’d expect them to say. 

Given the click-to-cancel rule is part of the Biden administration’s efforts to combat “junk fees,” you might think it’s dead as a doornail. Usually, I’d agree. But while Kahn has been a lightning rod for both Democrats and Republicans, she has one ally you probably didn’t expect; Vice President-elect J.D. Vance, who said: “I look at Lina Khan as one of the few people in the Biden administration that I think is doing a pretty good job,”

In addition, overall, the rule appears to be quite popular among consumers and consumer advocates. Let’s get real. People are sick of perpetual subscriptions. Their budgets are tight. Even if the FTC regulation costs companies some coin, it’ll be worth it in the long run.

Mistral’s new tool automatically deletes offending content

French tech company Mistral AI has launched a new online moderation tool based on the AI ​​model Ministral 8B that can detect and remove offensive or illegal posts automatically. (There is still a risk of some misjudgments, however.)

According to Techcrunch, for example, some studies have shown that posts about people with disabilities can be flagged as “negative” or “toxic” even though that’s not the case.

Initially, Mistral’s new moderation tool will support Arabic, English, French, Italian, Japanese, Chinese, Korean, Portuguese, Russian, Spanish and German, with more languages ​​are on the way later. Mistral in July launched a large language model that can generate longer tranches of code faster than other open-source models.