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Source: Apple

Apple is making U.S. states foot part of the bill and provide customer support for its plan to turn iPhones into digital identification cards, according to confidential documents obtained by CNBC.

The company requires states to maintain the systems needed to issue and service credentials, hire project managers to respond to Apple inquiries, prominently market the new feature and push for its adoption with other government agencies, all at taxpayer expense, according to contracts signed by four states.

Apple announced in June that its users could soon store state-issued identification cards in the iPhone’s Wallet app, billing it as a more secure and convenient way for customers to provide credentials in a variety of in-person and remote settings. The feature, when combined with Apple’s biometric security measures like Face ID, could cut down on fraud.

But the move has brought questions from industry observers about why local authorities are ceding control of citizens’ identities to a $2.46 trillion private corporation. Beyond that, the integration of identity into powerful mobile devices has drawn concern from privacy experts about the risk of dystopian scenarios involving surveillance.

The contracts between Cupertino, California-based Apple and states including Georgia, Arizona, Kentucky and Oklahoma provide a rare glimpse into the dealings of the powerful company. Apple is known for its obsession with secrecy. It typically forces potential partners to sign non-disclosure agreements to prevent its documents from spilling into public view.

`Sole discretion’

The 7-page memorandum of agreement, obtained through public record requests from CNBC and other sources, mostly portrays Apple as having a high degree of control over the government agencies responsible for issuing identification cards.

Georgia and Arizona will be the first states to offer driver licenses on the Wallet app, but have yet to launch their programs. While the contracts obtained were virtually identical across states, CNBC did not review agreements for Connecticut, Iowa, Maryland and Utah, the four other states that have signed up for Apple’s digital ID program.

Apple has “sole discretion” for key aspects of the program, including what types of devices will be compatible with the digital IDs, how states are required to report on the performance of the effort, and when the program is launched, according to the documents. Apple even gets to review and approve the marketing that states are required to do.

The dynamic is similar to the way Apple typically deals with vendors, although instead of getting paid by Apple, the states have to shoulder the financial burden of administering the programs, according to Jason Mikula, a fintech consultant and newsletter author who obtained some of the contracts.

“It’s like a vendor relationship, which makes no sense to me because it’s the states that have the monopoly on what they’re giving to Apple, they could presumably negotiate a much more equal contract,” Mikula said in an interview. “I don’t know of any other example where government-owned systems and identity credentials were made available for commercial purposes in this manner.”

Apple declined to comment for this article. Representatives for Georgia, Arizona, Kentucky and Oklahoma didn’t immediately respond to requests for comment.

Along with the digitization of industries from finance to entertainment, there is a push around the world to create more modern digital ID systems. But efforts in countries including Singapore, France, Germany and China are implemented at the national level rather than through private companies, according to Phillip Phan, a professor at the Johns Hopkins Carey Business School.

Apple in control

Throughout the contracts, it’s clear who is in the driver’s seat.

Apple is asking states to comply with security requirements laid out by the International Organization for Standardization describing mobile driver licenses. Apple said in September it played an active role in the standard’s development.

States have to agree to “allocate reasonably sufficient personnel and resources (e.g., staff, project management and funding) to support the launch of the Program on a timeline to be determined by Apple,” according to the documents. That includes performing quality testing that the digital IDs work “in accordance with Apple’s certification requirements” across various Apple devices.

“If requested by Apple, Agency will designate one or more project manager(s) who shall be responsible for responding to Apple’s questions and issues relating to the Program,” the contract states.

States have to agree to wide-ranging efforts designed to ensure the adoption of Apple’s digital IDs, including by offering the new feature “proactively” and at no additional cost whenever a citizen gets new or replacement identification cards.

States also have to help spur adoption of the new IDs with “key stakeholders in federal and state government” like the Internal Revenue Service, state and local law enforcement, and businesses that restrict users by age who are “critical to the Program achieving a sufficient level of acceptance.”

While the state agencies have to “prominently feature the Program in all public-facing communications relating to Digital Identity Credentials,” the marketing efforts are “subject in all cases to Apple’s prior review and approval.”

All these efforts are paid for by states. The contract says that “except as otherwise agreed upon between the Parties, neither Party shall owe the other Party any fees under this Agreement.”

When asked if his state was in line for payments from Apple, a communications officer for the Arizona Department of Transportation confirmed that “no payment or economic considerations exist.”

No guard rails

The end result is that states bear the burden of maintaining technology systems at taxpayer expense, a move that ultimately benefits Apple and its shareholders by making its devices even more essential than they already are.

“Apple’s interest is clear – sell more iPhones,” Phan said in an interview. “The state’s interest is to serve its citizens, but I’m not sure why they think a partnership with one specific technology company that owns a closed ecosystem is the best way to do it. For the state to spend taxpayer’s money on a product that serves only half its citizens is questionable.”

Apple’s Wallet app is not a major revenue source for the company, although it generates fees from Apple Pay transactions, which is reported in the company’s services business. Instead, the Wallet app and other services are strategic features to make the iPhone more valuable to customers and discourage them from switching to competitors like Google’s Android.

Importantly, in its contract, Apple shifts responsibility for confirming the authenticity of user identities onto states: “Apple shall not be liable for any Verification Results, and Agency acknowledges that all Verification Results are provided `AS IS’ and without any warranty, express, implied or otherwise, regarding its accuracy or performance.”

The agreements are also notable for what is missing, in terms of constraints or guard rails on how Apple can use the powerful capability of identity verification, according to Mikula. That raises questions about whether the company can restrict access to the new capability for competitors’ products.

“Apple has a history of leveraging its dominant position in phone hardware and software to preference its own offerings and exact a toll from third parties using its platforms,” he said.

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Week in review: The Nasdaq’s worst week since April, three trades, and earnings

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Week in review: The Nasdaq's worst week since April, three trades, and earnings

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Too early to bet against AI trade, State Street suggests 

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Too early to bet against AI trade, State Street suggests 

Momentum and private assets: The trends driving ETFs to record inflows

State Street is reiterating its bullish stance on the artificial intelligence trade despite the Nasdaq’s worst week since April.

Chief Business Officer Anna Paglia said momentum stocks still have legs because investors are reluctant to step away from the growth story that’s driven gains all year.

“How would you not want to participate in the growth of AI technology? Everybody has been waiting for the cycle to change from growth to value. I don’t think it’s happening just yet because of the momentum,” Paglia told CNBC’s “ETF Edge” earlier this week. “I don’t think the rebalancing trade is going to happen until we see a signal from the market indicating a slowdown in these big trends.”

Paglia, who has spent 25 years in the exchange-traded funds industry, sees a higher likelihood that the space will cool off early next year.

“There will be much more focus about the diversification,” she said.

Her firm manages several ETFs with exposure to the technology sector, including the SPDR NYSE Technology ETF, which has gained 38% so far this year as of Friday’s close.

The fund, however, pulled back more than 4% over the past week as investors took profits in AI-linked names. The fund’s second top holding as of Friday’s close is Palantir Technologies, according to State Street’s website. Its stock tumbled more than 11% this week after the company’s earnings report on Monday.

Despite the decline, Paglia reaffirmed her bullish tech view in a statement to CNBC later in the week.

Meanwhile, Todd Rosenbluth suggests a rotation is already starting to grip the market. He points to a renewed appetite for health-care stocks.

“The Health Care Select Sector SPDR Fund… which has been out of favor for much of the year, started a return to favor in October,” the firm’s head of research said in the same interview. “Health care tends to be a more defensive sector, so we’re watching to see if people continue to gravitate towards that as a way of diversifying away from some of those sectors like technology.”

The Health Care Select Sector SPDR Fund, which has been underperforming technology sector this year, is up 5% since Oct. 1. It was also the second-best performing S&P 500 group this week.

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People with ADHD, autism, dyslexia say AI agents are helping them succeed at work

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People with ADHD, autism, dyslexia say AI agents are helping them succeed at work

Neurodiverse professionals may see unique benefits from artificial intelligence tools and agents, research suggests. With AI agent creation booming in 2025, people with conditions like ADHD, autism, dyslexia and more report a more level playing field in the workplace thanks to generative AI.

A recent study from the UK’s Department for Business and Trade found that neurodiverse workers were 25% more satisfied with AI assistants and were more likely to recommend the tool than neurotypical respondents.

“Standing up and walking around during a meeting means that I’m not taking notes, but now AI can come in and synthesize the entire meeting into a transcript and pick out the top-level themes,” said Tara DeZao, senior director of product marketing at enterprise low-code platform provider Pega. DeZao, who was diagnosed with ADHD as an adult, has combination-type ADHD, which includes both inattentive symptoms (time management and executive function issues) and hyperactive symptoms (increased movement).

“I’ve white-knuckled my way through the business world,” DeZao said. “But these tools help so much.”

AI tools in the workplace run the gamut and can have hyper-specific use cases, but solutions like note takers, schedule assistants and in-house communication support are common. Generative AI happens to be particularly adept at skills like communication, time management and executive functioning, creating a built-in benefit for neurodiverse workers who’ve previously had to find ways to fit in among a work culture not built with them in mind.

Because of the skills that neurodiverse individuals can bring to the workplace — hyperfocus, creativity, empathy and niche expertise, just to name a few — some research suggests that organizations prioritizing inclusivity in this space generate nearly one-fifth higher revenue.

AI ethics and neurodiverse workers

“Investing in ethical guardrails, like those that protect and aid neurodivergent workers, is not just the right thing to do,” said Kristi Boyd, an AI specialist with the SAS data ethics practice. “It’s a smart way to make good on your organization’s AI investments.”

Boyd referred to an SAS study which found that companies investing the most in AI governance and guardrails were 1.6 times more likely to see at least double ROI on their AI investments. But Boyd highlighted three risks that companies should be aware of when implementing AI tools with neurodiverse and other individuals in mind: competing needs, unconscious bias and inappropriate disclosure.

“Different neurodiverse conditions may have conflicting needs,” Boyd said. For example, while people with dyslexia may benefit from document readers, people with bipolar disorder or other mental health neurodivergences may benefit from AI-supported scheduling to make the most of productive periods. “By acknowledging these tensions upfront, organizations can create layered accommodations or offer choice-based frameworks that balance competing needs while promoting equity and inclusion,” she explained.

Regarding AI’s unconscious biases, algorithms can (and have been) unintentionally taught to associate neurodivergence with danger, disease or negativity, as outlined in Duke University research. And even today, neurodiversity can still be met with workplace discrimination, making it important for companies to provide safe ways to use these tools without having to unwillingly publicize any individual worker diagnosis.

‘Like somebody turned on the light’

As businesses take accountability for the impact of AI tools in the workplace, Boyd says it’s important to remember to include diverse voices at all stages, implement regular audits and establish safe ways for employees to anonymously report issues.

The work to make AI deployment more equitable, including for neurodivergent people, is just getting started. The nonprofit Humane Intelligence, which focuses on deploying AI for social good, released in early October its Bias Bounty Challenge, where participants can identify biases with the goal of building “more inclusive communication platforms — especially for users with cognitive differences, sensory sensitivities or alternative communication styles.”

For example, emotion AI (when AI identifies human emotions) can help people with difficulty identifying emotions make sense of their meeting partners on video conferencing platforms like Zoom. Still, this technology requires careful attention to bias by ensuring AI agents recognize diverse communication patterns fairly and accurately, rather than embedding harmful assumptions.

DeZao said her ADHD diagnosis felt like “somebody turned on the light in a very, very dark room.”

“One of the most difficult pieces of our hyper-connected, fast world is that we’re all expected to multitask. With my form of ADHD, it’s almost impossible to multitask,” she said.

DeZao says one of AI’s most helpful features is its ability to receive instructions and do its work while the human employee can remain focused on the task at hand. “If I’m working on something and then a new request comes in over Slack or Teams, it just completely knocks me off my thought process,” she said. “Being able to take that request and then outsource it real quick and have it worked on while I continue to work [on my original task] has been a godsend.”

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