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Microsoft CEO Satya Nadella speaks at the company’s Ignite Spotlight event in Seoul on Nov. 15, 2022.

SeongJoon Cho | Bloomberg | Getty Images

Thanks to recent advances in artificial intelligence, new tools like ChatGPT are wowing consumers with their ability to create compelling writing based on people’s queries and prompts.

While these AI-powered tools have gotten much better at producing creative and sometimes humorous responses, they often include inaccurate information.

For instance, in February when Microsoft debuted its Bing chat tool, built using the GPT-4 technology created by Microsoft-backed OpenAI, people noticed that the tool was providing wrong answers during a demo related to financial earnings reports. Like other AI language tools, including similar software from Google, the Bing chat feature can occasionally present fake facts that users might believe to be the ground truth, a phenomenon that researchers call a “hallucination.”

These problems with the facts haven’t slowed down the AI race between the two tech giants.

On Tuesday, Google announced it was bringing AI-powered chat technology to Gmail and Google Docs, letting it help composing emails or documents. On Thursday, Microsoft said that its popular business apps like Word and Excel would soon come bundled with ChatGPT-like technology dubbed Copilot.

But this time, Microsoft is pitching the technology as being “usefully wrong.”

In an online presentation about the new Copilot features, Microsoft executives brought up the software’s tendency to produce inaccurate responses, but pitched that as something that could be useful. As long as people realize that Copilot’s responses could be sloppy with the facts, they can edit the inaccuracies and more quickly send their emails or finish their presentation slides.

For instance, if a person wants to create an email wishing a family member a happy birthday, Copilot can still be helpful even if it presents the wrong birth date. In Microsoft’s view, the mere fact that the tool generated text saved a person some time and is therefore useful. People just need to take extra care and make sure the text doesn’t contain any errors.

Researchers might disagree.

Indeed, some technologists like Noah Giansiracusa and Gary Marcus have voiced concerns that people may place too much trust in modern-day AI, taking to heart advice tools like ChatGPT present when they ask questions about health, finance and other high-stakes topics.

“ChatGPT’s toxicity guardrails are easily evaded by those bent on using it for evil and as we saw earlier this week, all the new search engines continue to hallucinate,” the two wrote in a recent Time opinion piece. “But once we get past the opening day jitters, what will really count is whether any of the big players can build artificial intelligence that we can genuinely trust.”

It’s unclear how reliable Copilot will be in practice.

Microsoft chief scientist and technical fellow Jaime Teevan said that when Copilot “gets things wrong or has biases or is misused,” Microsoft has “mitigations in place.” In addition, Microsoft will be testing the software with only 20 corporate customers at first so it can discover how it works in the real world, she explained.

“We’re going to make mistakes, but when we do, we’ll address them quickly,” Teevan said.

The business stakes are too high for Microsoft to ignore the enthusiasm over generative AI technologies like ChatGPT. The challenge will be for the company to incorporate that technology so that it doesn’t create public mistrust in the software or lead to major public relations disasters.

“I studied AI for decades and I feel this huge sense of responsibility with this powerful new tool,” Teevan said. “We have a responsibility to get it into people’s hands and to do so in the right way.”

Watch: A lot of room for growth for Microsoft and Google

A lot of room for growth with Microsoft and Google, says Oppenheimer analyst Tim Horan

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Tesla launches refreshed Model Y in China to fend off domestic rivals

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Tesla launches refreshed Model Y in China to fend off domestic rivals

Tesla launched a revamped version of its Model Y in China.

Tesla

Tesla on Friday announced a revamped version of its popular Model Y in China, as the U.S. electric car giant looks to fend off challenges from domestic rivals.

The Model Y will start at 263,500 Chinese yuan ($35,935), with deliveries set to begin in March. That is 5.4% more expensive than the starting price of the previous Model Y.

A spokesperson for Tesla China said that the new Model Y is only open for pre-sale in the Chinese market, rather than being launched globally.

Tesla’s Model Y refresh comes after the auto giant this month reported its first ever annual decline in overall deliveries for 2024.

Elon Musk’s electric vehicle firm is facing heightened competition around the world, from startups and traditional carmakers in Europe. In China, the company continues to face an onslaught of rivals from BYD to newer players like Xpeng and Nio.

Jason Low, principal analyst at Canalys, notes that the Tesla Model Y was the best-selling EV in China in 2024 and that the popularity of the car “remains high.” However, he noted that the competition in the sports utility vehicle (SUV) segment with vehicles priced between 250,000 yuan and 350,000 yuan “has been fierce.”

“Tesla must showcase compelling smart features, particularly a unique but well localized cockpit and services ecosystem,” as well as “effective” semi-autonomous driver assistance features “to ensure its competitiveness in the market,” Low added.

Tesla is offering a number of incentives for customers to buy the Model Y including a five-year 0% interest financing plan.

The new Model Y can accelerate from 0 kilometers per hour to 100 kilometers per hour in 4.3 seconds, Tesla said, exceeding the speed capabilities of the previous vehicle. The Model Y Long Range has a further driving range on a single charge versus its predecessor.

Tesla has not introduced a new model since it began delivering the Cybertruck in late 2023, which starts at nearly $80,000.

Investors have been yearning for a new mass-market model to reinvigorate sales. Tesla has previously hinted that that a new affordable model could be launched in the first half of 2025.

Despite Tesla’s headwinds, the company’s stock is up nearly 70% over the last 12 months, partly due to CEO Musk’s close relationship with U.S. President-elect Donald Trump.

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World’s biggest chipmaker TSMC posts record 2024 revenue as AI boost continues

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World's biggest chipmaker TSMC posts record 2024 revenue as AI boost continues

The logo for Taiwan Semiconductor Manufacturing Company is displayed on a screen on the floor of the New York Stock Exchange on Sept. 26, 2023.

Brendan Mcdermid | Reuters

Taiwan Semiconductor Manufacturing Co. posted December quarter revenue that topped analyst estimates, as the company continues to get a boost from the AI boom.

The world’s largest chip manufacturer reported fourth-quarter revenue of 868.5 billion New Taiwan dollars ($26.3 billion), according to CNBC calculations, up 38.8% year-on-year.

That beat Refinitiv consensus estimates of 850.1 billion New Taiwan dollars.

For 2024, TSMC’s revenue totaled 2.9 trillion New Taiwan Dollars, its highest annual sales since going public in 1994.

TSMC manufacturers semiconductors for some of the world’s biggest companies, including Apple and Nvidia.

TSMC is seen as the most advanced chipmaker in the world, given its ability to manufacture leading-edge semiconductors. The company has been helped along by the strong demand for AI chips, particularly from Nvidia, as well as ever-improving smartphone semiconductors.

“TSMC has benefited significantly from the strong demand for AI,” Brady Wang, associate director at Counterpoint Research told CNBC.

Wang said “capacity utilization” for TSMC’s 3 nanometer and 5 nanometer processes — the most advanced chips — “has consistently exceeded 100%.”

AI graphics processing units (GPUs), such as those designed by Nvidia, and other artificial intelligence chips are driving this demand, Wang said.

Taiwan-listed shares of TSMC have risen 88% over the last 12 months.

TSMC’s latest sales figures may also give hope to investors that the the demand for artificial intelligence chips and services may continue into 2025.

Foxconn, which assembles Apple’s iPhones, reported its highest-ever fourth quarter revenue this week, as it notched strong demand for AI servers.

Meanwhile, Microsoft this month said that it plans to spend $80 billion in its fiscal year to June on the construction of data centers that can handle artificial intelligence workloads.

CNBC’s Jordan Novet contributed to this report.

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Supreme Court set to hear oral arguments on challenge to TikTok ban

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Supreme Court set to hear oral arguments on challenge to TikTok ban

Tik Tok creators gather before a press conference to voice their opposition to the “Protecting Americans from Foreign Adversary Controlled Applications Act,” pending crackdown legislation on TikTok in the House of Representatives, on Capitol Hill in Washington, U.S., March 12, 2024.

Craig Hudson | Reuters

The Supreme Court on Friday will hear oral arguments in the case involving the future of TikTok in the U.S., which could ban the popular app as soon as next week.

The justices will consider whether the Protecting Americans from Foreign Adversary Controlled Applications Act, the law that targets TikTok’s ban and imposes harsh civil penalties for app “entities” that continue to carry the service after Jan.19, violates the U.S. Constitution’s free speech protections.

It’s unclear when the court will hand down a decision, and if China’s ByteDance continues to refuse to divest TikTok to an American company, it faces a complete ban nationwide.

What will change about the user experience?

The roughly 115 million U.S. TikTok monthly active users could face a range of scenarios depending on when the Supreme Court hands down a decision.

If no word comes before the law takes effect on Jan. 19 and the ban goes through, it’s possible that users would still be able to post or engage with the app if they already have it downloaded. However, those users would likely be unable to update or redownload the app after that date, multiple legal experts said.

Thousands of short-form video creators who generate income from TikTok through ad revenue, paid partnerships, merchandise and more will likely need to transition their businesses to other platforms, like YouTube or Instagram.

“Shutting down TikTok, even for a single day, would be a big deal, not just for people who create content on TikTok, but everyone who shares or views content,” said George Wang, a staff attorney at the Knight First Amendment Institute who helped write the institute’s amicus briefs on the case. 

“It sets a really dangerous precedent for how we regulate speech online,” Wang said.

Who supports and opposes the ban?

Dozens of high-profile amicus briefs from organizations, members of Congress and President-elect Donald Trump were filed supporting both the government and ByteDance.

The government, led by Attorney General Merrick Garland, alleges that until ByteDance divests TikTok, the app remains a “powerful tool for espionage” and a “potent weapon for covert influence operations.”

Trump’s brief did not voice support for either side, but it did ask the court to oppose banning the platform and allow him to find a political resolution that allows the service to continue while addressing national security concerns. 

The short-form video app played a notable role in both Trump and Democratic nominee Kamala Harris’ presidential campaigns in 2024, and it’s one of the most common news sources for younger voters.

In a September Truth Social post, Trump wrote in all caps Americans who want to save TikTok should vote for him. The post was quoted in his amicus brief. 

What comes next?

It appears TikTok could really get shut down, says Jim Cramer

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