Meta and Microsoft can’t self-regulate their metaverses, UK regulator warns
An avatar of Mark Zuckerberg, chief executive officer of Meta Platforms Inc., speaks during the virtual Meta Connect event in New York, US, on Tuesday, Oct. 11, 2022.
Michael Nagle | Bloomberg | Getty Images
The boss of the U.K. media regulator Ofcom warned “metaverse” forays from tech giants like Meta and Microsoft will be subjected to incoming rules forcing platforms to protect users from online harms.
Speaking at an event in London hosted by policy consulting group Global Counsel on Tuesday, Ofcom Chief Executive Melanie Dawes said self-regulation of the metaverse, a hypothetical digital world touted by Meta and others, wouldn’t fly under U.K. online safety laws.
“I’m not sure I really see that ‘self-regulatory phase,’ to be honest, existing from a U.K. perspective,” Dawes said. “If you’ve got young people in an environment where there’s user-generated content according to the scope of the bill then that will already be caught by the Online Safety Bill.”
The Online Safety Bill is a set of legislation that seeks to curb harmful content from being widely shared on the internet. The rules would impose a duty of care on firms requiring them to have robust and proportionate measures to deal with harmful materials such as vaccine disinformation or posts promoting self-harm.
Violations of the law — once it is approved — could lead to fines of up to 10% of annual global revenues. Down the track, senior tech executives may also face criminal liability for more extreme breaches.
The bill is especially concerned with the protection of children, having been developed in response to the death of Molly Russell, a U.K. teen who took her own life after being exposed to suicide-related posts on Instagram. In September, a coroner investigating Russell’s death made the landmark conclusion that “negative effects” of social media contributed to her death.
Dawes made clear that the metaverse wouldn’t be legally immune to the new rules. The U.K. is “in good stead” to regulate the metaverse, she said, adding the scope of the Online Safety Bill is wide enough to accommodate platforms and companies that play a role in the metaverse. “We can pull it off.”
Dawes said it has been easier for “horrific” illegal activities to have a larger impact through the internet. She cited the May 2022 live streaming of the Buffalo, New York shootings on Twitch. In a recent report, Ofcom recommended platforms take measures to limit access to live streaming, including age verification.
There “are some differences” with the metaverse compared to “traditional” social media, Dawes noted, including the immersive nature of VR services and the difficulty in determining what a child is experiencing once they’ve got a headset on.
“You do need moderation to make sure that you manage these things because they’ve happened at such scale,” Dawes said. “I think that things like metaverses are adding intensity into that mix.”
What is the metaverse?
The metaverse is a term that’s proven difficult to define. It loosely refers to the idea of virtual worlds in which thousands, or even millions of people, can congregate in vast, 3D worlds. It is often associated with technologies like virtual and augmented reality.
Consumers are largely in the dark about the metaverse, with awareness of the technology lower than of other technologies like VR, artificial intelligence and cryptocurrencies, according to research from Global Counsel presented Monday. Only four in 10 people in the U.K. know much about the technology beyond its name, a survey by the organization found.
Brits are much more skeptical about the metaverse than their French and U.S. counterparts, according to Global Counsel. Attitudes to the technology are mostly negative, with the research finding a net favorability score of minus 3% in the U.K. In France and the U.S., consumers were more favorable toward the metaverse, Global Counsel said.
Meta, formerly Facebook, is betting heavily on its vision of a metaverse in which users can interact socially or even work in. The company this week released its new Meta Quest Pro headset, which retails at $1,500 and makes some improvements on its predecessor, the Meta Quest 2. Such investments are weighing heavily on the company’s bottom line, though, contributing to a $15 billion loss since the start of last year.
Microsoft is similarly investing aggressively to achieve its own metaverse creation with its augmented reality HoloLens headsets and proposed a $69 billion acquisition of Activision Blizzard, the video game maker behind Call of Duty.
In gaming, in particular, regulation will need to be more “active” to make sure safety is baked in from the start, Dawes said, adding video games are “particularly attractive to kids.”
The Online Safety Bill had been stalled following the resignation of former Prime Minister Boris Johnson and the subsequent appointment of Liz Truss as U.K. leader. After Truss’ short tenure recently came to an end, regulators are hopeful the bill will soon advance through Parliament under new PM Rishi Sunak.
Sunak’s choice of digital minister, Michelle Donelan, had committed to strengthening the law’s child protection aspects under Truss.
In its current form, the bill is highly controversial. The wording of the bill, targeting content that is “legal but harmful,” has provoked outcry from some digital rights activists, who fear it may be too restrictive of free expression online.
“The idea that platforms can opt people out of such things is nonsense,” Jim Killock, executive director of the Open Rights Group, an organization that campaigns for internet freedoms, told CNBC.
Artificial intelligence chipmaker Cerebras Systems said on Friday that it’s withdrawing plans for an IPO, days after announcing that it raised over $1 billion in a fundraising round.
In a filing with the SEC, Cerebras said it does not intend to conduct a proposed offering “at this time,” but didn’t provide a reason. A spokesperson told CNBC on Friday that the company still hopes to go public as soon as possible.
Cerebras filed for an IPO just over a year ago, as it was ramping up to take on Nvidia in an effort to create processors for running generative AI models. The filing revealed a heavy reliance on a single customer in the United Arab Emirates, Microsoft-backed G42, which is also a Cerebras investor.
In its prospectus, Cerebras said it had given voluntary notice to the Committee on Foreign Investment in the United States about selling shares to G42. In March, the company announced that the committee had provided clearance.
Since its initial filing to go public on the Nasdaq, Cerebras has shifted its focus away from selling systems and more toward providing a cloud service for accepting incoming queries to models that use its chips underneath.
The announced withdrawal comes three days into a U.S. government shutdown that’s left agencies like the SEC operating with a small staff. In a plan for a shutdown published in August, the SEC said its electronic system EDGAR “is operated pursuant to a contract and thus will remain fully functional as long as funding for the contractor remains available through permitted means.”
On Tuesday, Cerebras said it had raised $1.1 billion at a valuation of $8.1 billion in a private funding round. At the time, CEO Andrew Feldman said that the company still wanted to go public, rather than continue to raise venture capital.
“I don’t think this is an indication of a preference for one or the other,” he told CNBC in an interview. “I think we have tremendous opportunities in front of us, and I think it’s good practice, when you have enormous opportunities, not to let them fall by the wayside for lack of capital.”
Feldman thought the original prospectus from last year was out of date, especially considering developments in AI, the spokesperson said on Friday.
Well heeled technology companies have been quickly signing up for additional infrastructure to handle demand. On Tuesday CoreWeave, which rents out Nvidia chips through a cloud service, said it had signed a $14.2 billion agreement with Meta. ChatGPT operator OpenAI said last week that it had committed to spending $300 billion on cloud services from Oracle.
The government shutdown did not factor into Cerebras’ decision, the spokesperson said.
An employee arranges a salad dressing display at an Amazon Fresh grocery store on December 12, 2024 in Federal Way, Washington.
David Ryder | Getty Images
Amazon is closing four more Fresh supermarkets in Southern California as the e-commerce giant continues to focus its grocery strategy around Whole Foods and delivery.
The closures will take place in the coming weeks, Amazon confirmed to CNBC. They follow the shuttering of four other U.S. locations in recent months, in Washington, Virginia, New York and a Los Angeles suburb.
“Certain locations work better than others, and after an assessment, we’ve made the decision to close these Amazon Fresh locations,” Amazon spokesperson Griffin Buch said in a statement. “We’re working closely with affected employees to help them find new roles within Amazon wherever possible.”
At one Fresh supermarket in La Verne, California, employees were told to gather for an all-hands meeting on Wednesday, according to an internal message viewed by CNBC. They learned at the meeting that the store would close in mid-November, and that employees would receive a severance package, according to a person familiar with the matter who asked not to be named because the details were confidential.
The other three stores that are closing are in cities of Mission Viejo, La Habra and Whittier.
Last week, Amazon said it intends to close 14 Fresh grocery stores in the U.K. and convert its five other locations there into Whole Foods markets.
Amazon said it regularly evaluates its store portfolio, which can lead to opening, reopening, relocating or closing certain locations. In the U.S., the company has more than 60 remaining Fresh stores. Last year, the company removed its “Just Walk Out” cashierless technology from the stores. It’s also been culling its footprint of Go cashierless convenience stores.
Amazon has been determined to become a major grocery player for nearly two decades. The company launched Amazon Fresh in 2007, then a pilot project for fresh food delivery, before acquiring upscale chain Whole Foods for $13.7 billion in 2017, its biggest purchase on record.
Amazon debuted its Fresh grocery chain in 2020, with an eye toward mass-market shoppers. The rollout has been turbulent since its early days.
The company opened a flurry of Fresh locations by 2022, but the expansion plans ran into CEO Andy Jassy’s widespread cost-cutting efforts as the company reckoned with the impact of rising interest rates and soaring inflation. In 2023, Amazon announced it would shut some Fresh stores and halt further openings temporarily as it evaluated how to make the chain stand out for shoppers.
While it’s closing Fresh stores, Amazon continues to “innovate and invest in making grocery shopping easier, faster, and more affordable,” Buch said. The company still maintains 500 Whole Foods locations and has opened mini “daily shop” Whole Foods stores in New York City.
On Wednesday, Amazon also launched a new “price-conscious” grocery brand that will be offered online and in its physical stores. And last month, Amazon expanded same-day delivery of fresh foods to more pockets of the U.S.
Jassy and other company executives have touted the success of sales of “everyday essentials” within its online grocery business, which refers to items such as canned goods, paper towels, dish soap and snacks. Jassy told investors at the company’s annual shareholder meeting in May that he remains “bullish” on grocery, calling it a “significant business” for Amazon.
WATCH: Amazon grocery could be a trojan horse to more revenue
Technology
Quantum stocks Rigetti Computing and D-Wave surged double-digits this week. Here’s what’s driving the big move
Inside Google’s quantum computing lab in Santa Barbara, California.
CNBC
Quantum computing stocks are wrapping up a big week of double-digit gains.
Shares of Rigetti Computing, D-Wave Quantum and Quantum Computing have surged more than 20%. Rigetti and D-Wave Quantum have more than doubled and tripled, respectively, since the start of the year. Arqit Quantum skyrocketed more than 32% this week.
The jump in shares followed a wave of positive news in the quantum space.
Rigetti said it had purchase orders totalling $5.7 million for two of its 9-qubit Novera quantum computing systems. The owner of drugmaker Novo Nordisk and the Danish government also invested 300 million euros in a quantum venture fund.
In a blog post earlier this week, Nvidia also highlighted accelerated computing, which it argues can make “quantum computing breakthroughs of today and tomorrow possible.”
Investors have piled into quantum computing technology this year, as tech giants Microsoft, Nvidia and Amazon have embraced the technology with a wave of new chip announcements, multi-million dollar investments and research plans.
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