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US President Joe Biden speaks about the situation in Afghanistan from the East Room of the White House in Washington, DC, July 8, 2021.
Saul Loeb | AFP | Getty Images

The White House on Friday will announce a new executive order aimed at cracking down on competitive practices in Big Tech, CNBC’s Ylan Mui reported.

President Joe Biden’s administration will make the case that the biggest companies in the tech sector are wielding their power to box out smaller competitors and exploit consumers’ personal information, Mui said on CNBC’s “Worldwide Exchange.”

The order will call for regulators to enact reforms such as increasing their scrutiny of tech mergers and putting more focus on moves like “killer acquisitions,” in which firms acquire smaller brands to take them out of the market, according to Mui.

The tech giants’ tightened grip has led to a decline in innovation, White House chief economic advisor Brian Deese told Mui in an exclusive interview.

Those platforms have “created significant problems,” Deese said. That includes “problems for users in terms of privacy and security” and “problems for small businesses in terms of entering markets,” he said.

The order will be unveiled just a few weeks after the House Judiciary Committee voted to advance six antitrust bills aimed at revitalizing competition in the tech sector.

The bills, which would make it harder for dominant firms to complete mergers and outlaw certain common business models for such firms, have faced significant bipartisan pushback from those concerned that they don’t go far enough or will have unintended side effects.

In late June, a judge threw out complaints from the Federal Trade Commission and a group of state attorneys general alleging Facebook has illegally maintained monopoly power.

Biden’s executive order also calls on the FTC to craft new rules on Big Tech’s data collection and user surveillance practices, and asks the agency to prohibit certain unfair methods of competition on internet marketplaces, Mui reported.

The order could provide some relief to small and medium-sized businesses that have complained of the allegedly crippling grip of tech firms such as Amazon, Apple, Facebook and Google over digital markets.

This story is developing. Check back for updates.

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Startup Kinetic rolls out robots to fix electric cars, and someday robotaxis

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Startup Kinetic rolls out robots to fix electric cars, and someday robotaxis

Kinetic cofounders: CEO Nikhil Naikal, CTO Sander Marques, COO Chris Weber

Courtesy: Kinetic Automation

While electric vehicle demand is still increasing in the U.S., the sales growth rate for cars that pollute less has cooled down in 2024 due partly to the high cost of insurance and repairs for tech-laden new models.

A 2024 study by J.D. Power found that, despite the climate benefits, only 26% of car buyers in the U.S. were “very likely to consider purchasing” an EV in the next year, and more than 20% were “very unlikely to consider an EV purchase” at all.

That’s where Santa Ana, California startup Kinetic Automation comes in. By providing diagnostics and recalibration of the high-tech systems in modern vehicles, the company hopes to decrease costs associated with EV ownership and repairs.

The startup, which employs about 40 people full-time, has developed a robotic system that uses computer vision and machine-learning software to quickly diagnose issues with a vehicle’s digital systems.

Kinetic CEO and co-founder Nikhil Naikal explained that a lot of new models, especially battery electrics, are loaded with bells and whistles such as touchscreens and robust infotainment software, along with a variety of cameras and sensors that enable everything from rapid charging to driver safety features including forward collision avoidance, lane-keeping and adaptive cruise control.

The existing collision repair industry is well-equipped to handle most physical fixes like replacing a bumper, a busted windshield, brakes and paint or adjusting alignment. But for many collision repair centers and auto dealerships, ensuring all sensors, software and computers are working properly can prove time-consuming and expensive.

Kinetic puts its robotic systems and technicians to work helping these shops and dealerships fix the finicky, “digital” aspects of customers’ cars.

Here’s how it works: A customer’s car rolls up to one of Kinetic’s service bays, where it is scanned from bumper to fender with machine vision sensors, some on a robotic arm that peers over the top of the vehicle.

The scan determines which systems need to be precisely programmed or need a recalibration. Then Kinetic’s software, which is connected to the vehicle’s systems, will initiate and track the completion of those fixes.

Kinetic uses robotics and AI to recalibrate the software and sensors in electric vehicles.

Courtesy: Kinetic Automation

The company built its first four service hubs in Las Vegas, and Orange County, San Bernardino and Riverside counties in California.

To fuel its growth, Kinetic has raised $21 million in a Series B round of venture funding led by Menlo Ventures, joined by Allstate Strategic Ventures, Liberty Mutual Strategic Ventures and the company’s earliest investors Lux Capital, Construct Capital and Haystack Ventures.

Menlo Ventures’ Partner Shawn Carolan, who invested in Uber and Jump Bikes, said collision companies and auto dealerships that had worked with Kinetic as pilot customers helped convince his firm to lead the deal.

“They were saying, ‘This reduced our cycle time by days.’ Or ‘We got cars back to customers faster and cheaper,’ and ‘This made my life way easier,'” he explained. “So we knew this was already solving a tremendous pain point.”

Before starting Kinetic with his co-founders, COO Chris Weber and CTO Sander Marques, Naikal worked as the vice president of software engineering at Velodyne, a company that made lidar sensors that enable robots, drones and autonomous vehicles to detect and avoid objects in their surrounding environment. Velodyne merged with Ouster in 2023.

Weber previously worked as an operations leader at Uber, while Marques is a repeat tech entrepreneur whose prior company developed engine control modules for high-performance vehicles.

Kinetic will one day provide its services to robotaxi fleets, Naikal said, and to the owners of other autonomous vehicles. But for now, the startup is focused on hiring, training technicians and building out its service hubs across the U.S. to handle a higher volume of auto repairs, especially the electric vehicles that are growing to comprise a larger portion of cars on U.S. roads each year.

So far, Kinetic has most commonly worked on Ford Mach-E, GM Chevy Bolt, Hyundai Ioniq EVs, and some Teslas at its existing service hubs, the CEO said.

Market research firm Canalys forecasts that sales of battery and plug-in hybrid electric vehicles combined will reach 2.2 million units in 2024 in North America, representing about 12.5% of all new vehicle sales in the region.

“Motor vehicle insurance for EVs, and across the board, has been a major contributor to inflation rising something like 20% when you look at the Consumer Price Index over the last 12 months,” Naikal said. “I’d like to hope we can shave a few points off of that while making people more comfortable switching to electrics.”

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OpenAI competitor Anthropic announces its most powerful AI yet

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OpenAI competitor Anthropic announces its most powerful AI yet

Jakub Porzycki | Nurphoto | Getty Images

OpenAI competitor Anthropic on Thursday announced Claude 3.5 Sonnet, its most powerful artificial intelligence model yet.

Claude is one of the chatbots that, like OpenAI’s ChatGPT and Google‘s Gemini, has exploded in popularity in the past year. Anthropic, which was founded by ex-OpenAI research executives, has backers including Google, Salesforce and Amazon. In the past year, it’s closed five different funding deals totaling about $7.3 billion.

The news follows Anthropic’s debut of its Claude 3 family of models in March and OpenAI’s GPT-4o in May. The company said Claude 3.5 Sonnet is faster than its previous leading model, Claude 3 Opus, and is the first model from Anthropic’s new Claude 3.5 family.

Claude 3.5 Sonnet

Claude 3.5 Sonnet is free from the company’s website, Claude.ai, and in the Claude iPhone app. Claude Pro and Team subscribers can access the latest model with higher rate limits.

“It shows marked improvement in grasping nuance, humor, and complex instructions, and is exceptional at writing high-quality content with a natural, relatable tone,” the company said in a blog post. It can also write, edit and execute code.

Anthropic also announced “Artifacts,” which it said allows a user to ask its Claude chatbot to, for example, generate a text document or code and then opens the result in a dedicated window. “This creates a dynamic workspace where they can see, edit, and build upon Claude’s creations in real-time,” the company said, adding that it expects Artifacts will be useful for code development, legal contract drafting and analysis, business report writing and more.

Claude Artifacts

As startups like Anthropic and OpenAI gain steam in the generative AI business, they — alongside tech giants like Google, Amazon, Microsoft and Meta — have been part of an AI arms race to integrate the technology to ensure they don’t fall behind in a market that’s predicted to top $1 trillion in revenue within a decade.

News of Anthropic’s new model follows the company’s debut in May of its first-ever enterprise offering.

The plan for businesses, dubbed Team, had been in development over the last few quarters and involved beta-testing with between 30 and 50 customers in industries such as technology, financial services, legal services and health care, Anthropic co-founder Daniela Amodei told CNBC in an interview last month. The idea for the service was partially borne out of many of those same customers asking for a dedicated enterprise product, Amodei added.

“So much of what we were hearing from enterprise businesses is people are kind of using Claude at the office already,” Amodei said at the time.

Last month, shortly after Anthropic’s new product debut, Instagram co-founder Mike Krieger joined the company as chief product officer. Krieger, the former chief technology officer of Meta-owned Instagram, grew the platform to 1 billion users and increased its engineering team to more than 450 people during his time there, per a release. OpenAI’s former safety leader Jan Leike also joined the company in May.

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A marathon, not a sprint: Apple’s AI push faces big challenges in China

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A marathon, not a sprint: Apple's AI push faces big challenges in China

The Apple Siri AI icon is being displayed on a smartphone, with Apple Intelligence in the background. 

Jonathan Raa | Nurphoto | Getty Images

Apple’s big artificial intelligence push faces some big challenges in China — one of the iPhone maker’s most critical markets — as Beijing maintains strict rules around the buzzy technology.

The uncertain path in China comes at a time when Apple’s market share is being eroded in the world’s second largest economy by a resurgent Huawei and other local smartphones players, which are talking up their AI features.

Apple Intelligence is the Cupertino giant’s play that aims to bring AI across its devices. It features an improved version of Apple’s voice assistant Siri, as well as features that automatically organize your email or transcribe and summarize audio footage.

Apple said that Apple Intelligence will roll out in U.S. English this fall, with additional languages, features and platforms due to arrive over the course of next year. The company was, however, quiet on the product offering in China during the AI launch at its annual developers conference this month.

That’s likely to do with China’s stringent rules on AI, analysts told CNBC, as Apple tries to figure out how to approach the complex market.

“China is in another world when it comes to AI given the regulatory environment there, so China is a big asterisk on Apple’s big announcements last week,” Bryan Ma, vice president of devices research at IDC, told CNBC via email.

Beijing has enacted various regulations over the past few years focused on areas ranging from data protection to large language models — the massive sets of data that underpin applications like ChatGPT.

China’s AI market is heavily regulated. Some of the rules include requirements for LLM providers to get approval for the commercial use of their models. Generative AI providers are also responsible for taking down “illegal” content.

Apple’s China AI challenges

Navigating these rules will be tricky for Apple.

Firstly, some of the features of Apple Intelligence are based on Apple’s own language model, which runs on both the phone and on the company’s own servers.

Under Chinese rules, Apple would likely need to get its AI model approved by authorities.

Secondly, one of the biggest announcements this month was that Apple’s voice assistant Siri can tap into OpenAI’s ChatGPT for certain requests — but ChatGPT is banned in China, meaning Apple would have to find an equivalent domestic partner.

Baidu and Alibaba are among China’s technology giants that have their own LLMs and voice assistants, ranking them as companies with which Apple can potentially partner.

Meanwhile, China’s internet is heavily censored with regulators concerned about the potential for AI services to generate content, which may go against Beijing’s views or ideology.

The likelihood is that Apple will have to build an on-device AI model and a cloud-based AI model that complies with local regulations, Canalys analyst Nicole Peng told CNBC over email.

The other part of the equation on AI for Apple to be successful in China, according to CCS Insight Chief Analyst Ben Wood, is for the company to create a localized AI experience on its devices that appeals to Chinese users.

“Localising the Apple Intelligence experience will be a major challenge for Apple,” Wood told CNBC. “As with all technology deployments, there are nuances to the way the service is delivered to respect the specific customs, regulations and use cases in a particular country.”

Privacy

A key part of Apple’s pitch during the AI launch was its focus on privacy. The company announced Private Cloud Compute, whereby AI is processed on servers owned by Apple. Apple said that data processed is not stored.

Whether the tech titan will be able to fully own its own servers is another question. Chinese iCloud data is stored inside servers located in China which are run by a third party.

This could mean Apple might require a similar partnership for its AI computing servers, opening the tech giant up to critcisms about how private the data actually is.

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“Maintaining complete user privacy in an AI era in heavily regulated markets such as China will be the biggest test for Apple yet,” Neil Shah, partner at Counterpoint Research, told CNBC. “Its going to be challenging for Apple to have fully controlled own private compute servers in China.”

CCS Insights’ Wood said Apple’s focus on privacy could help introduce AI features to the market. China passed a major data protection law in 2021, which looks to limit how information is collected and stored.

“Apple’s on-going focus on privacy and security practices may help placate local regulators and Apple has not been afraid to make concessions when required,” Wood said.

Apple’s path to AI in China

CNBC has contacted Apple over Private Cloud Compute and the company’s AI ambitions in China. A spokesperson did not directly address those questions, but pointed CNBC to an interview in the Fast Company business magazine with Craig Federighi, Apple’s senior vice president of software engineering.

Federighi expressed the desire to bring Apple Intelligence to China.

“We certainly want to find a way to bring all of our best product capabilities to all of our customers,” he said in the Fast Company interview, adding that “in some regions of the world, there are regulations that need to be worked through.”

The Apple executive said the process was under way to introduce the AI products to China, but gave no timeline.

Smartphone makers globally are talking up their AI features as a way to sell high-end phones to consumers who want to hold onto their device for longer.

Apple has been facing a number of challenges in China, where its market share fell to 15% in the first quarter of 2024, versus 20% in the same period the year before, according to Canalys data. Huawei, whose smartphone business was crippled by U.S. sanctions, revived once more and is now the biggest smartphone player in China, where it competes with Apple with phones targeting the premium segment.

Apple’s lag behind domestic rivals in launching AI features in China is unlikely to be detrimental to iPhone sales.

“For Apple, deploying China-grade Apple Intelligence is going to be a marathon and not a sprint. It will be deployed in phases over the years until Apple is confident and until then it will have to face some competition,” Counterpoint Research’s Shah said.

Wood said Apple’s control of its hardware and software integration will allow it to deliver a different experience from that of its rivals.

“Apple has an uncanny ability to explain its services and features better than rivals, even if it is essentially delivering the same experience or a subset of what rivals can offer,” Wood said.

“Despite the current focus on AI by rival China-based smartphone makers, Apple should still be in a strong position.”

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