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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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The U.S. makes it harder for TSMC, SK Hynix and Samsung to produce chips in China

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The U.S. makes it harder for TSMC, SK Hynix and Samsung to produce chips in China

A 300mm wafer on display at the booth of Taiwan Semiconductor Manufacturing Company during the 2023 World Semiconductor Conference at Nanjing International Expo Center on July 19, 2023, in Nanjing, China.

Vcg | Visual China Group | Getty Images

The U.S. has revoked a waiver that allowed Taiwan Semiconductor Manufacturing Co. to export key chipmaking equipment and technology to its manufacturing plant in Nanjing, China, as Washington continues to ramp up efforts to limit Beijing’s semiconductor advancement.

The change will remove a fast-track export privilege known as validated end user (VEU) status, effective Dec. 31, TSMC confirmed to CNBC on Wednesday.

The world’s largest contract chipmaker had received the exemption soon after the Commerce Department launched its initial restrictions on the sale of U.S.-origin chipmaking tools in 2022.

Under the new policy, shipments of chipmaking tools with American origins to TSMC’s manufacturing facilities in Nanjing, China, will require U.S. export licenses.

“While we are evaluating the situation and taking appropriate measures, including communicating with the US government, we remain fully committed to ensuring the uninterrupted operation of TSMC Nanjing,” the company said. 

South Korean memory chipmakers SK Hynix and Samsung also had their VEU privileges revoked on Friday, according to a statement on the Federal Register. Both companies run China-based memory chip facilities.

At the same time, the Department of Commerce’s Bureau of Industry and Security said in a statement that it was closing the VEU “Biden-era loophole” for all foreign semiconductor manufacturers.

It added that it intends to grant export license applications to allow former VEU participants to operate their existing manufacturing facilities in China, but not to expand capacity or upgrade technology in China. 

Jeffrey Kessler, under secretary of commerce for industry and security, stated that the Trump administration is “committed to closing export control loopholes — particularly those that put U.S. companies at a competitive disadvantage. Today’s decision is an important step towards fulfilling this commitment.”

According to Brady Wang, associate director at Counterpoint Research, the policy changes “reflect Washington’s broader push to tighten control over semiconductor equipment and technology exports to China, strengthening U.S. power over chip production in China,” he said.  

TSMC operates two manufacturing sites in China, one in Shanghai and Nanjing, with the latter facility more advanced. To power its fabrication plants, the company uses hardware from several U.S. chip equipment suppliers, including Applied Materials and  KLA Corp.

However, according to Wang, as TSMC’s Nanjing fab contributes less than 3% of TSMC’s total revenue and represents a minor share of its global capacity, the financial impact on the company “should be minor.”

Renewed crackdown? 

The recent VEU reversals may come as a surprise to some, as they follow the Trump administration’s announcement that it would ease controls on the export of some American artificial intelligence chips. 

Last month, the U.S. said Nvidia and AMD would be allowed to resume exports of some of their previously banned made-for-China AI chips, and signaled that the policy could be expanded.

Prior to that, the administration had also struck down the Biden-era AI diffusion rule, a move that could’ve seen the expansion of export controls on advanced AI chips.

The rollbacks of advanced chip restrictions have been posed by U.S. officials as a way for the U.S. to maintain the supremacy of the AI technology stack globally, including in China. 

However, the removal of the VEU exemptions shows that the same logic is unlikely to be applied to memory and chipmaking technologies. 

According to Ray Wang, research director for semiconductors, supply chain and emerging technology at Futurum Group, the policies show that Washington remains committed to preventing China from boosting its local chip production capacity and cultivating its local know-how and talent. 

“Zooming out, another underlying goal may be to constrain companies’ ability to expand their supply chain footprint in China—particularly in strategic sectors such as semiconductors, which the administration is keen to prevent,” he said. 

Conversely, the Trump administration has been working to attract more of the semiconductor supply chain to the shores of the U.S. through tariff threats.

This year, TSMC, SK Hynix and Samsung have committed new investments into their American manufacturing plans. 

On Monday, shares of SK Hynix and Samsung fell on the VEU news. However, shares of TSMC traded flat on Wednesday after news of its VEU reversal.

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Alphabet stock pops 6% in premarket trading after Google avoids break-up in antitrust case

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Alphabet stock pops 6% in premarket trading after Google avoids break-up in antitrust case

The Google logo is seen outside a building housing Google offices in Beijing on February 4, 2025. China on February 4 said it would probe US tech giant Google over violations of anti-monopoly laws after Washington slapped 10 percent levies on Chinese goods.

Greg Baker | Afp | Getty Images

Alphabet shares rose 6% in premarket trading on Wednesday as investors viewed the result of Google’s antitrust case as broadly favorable to the tech giant.

The U.S. Department of Justice (DOJ) had proposed a sort of break-up of Google, which included divesting its Chrome browser, in an antitrust case that began in September 2023.

While Google was last year found to hold an illegal monopoly in its core market of internet search, U.S. District Judge Amit Mehta ruled against the most severe consequences that were proposed by the DOJ.

Google will not have to divest Chrome. The company can also still make payments to companies to preload products, but it cannot have exclusive contracts that condition payments or licensing.

That means Google will still be able to pay Apple the billions of dollars it does to be the default search engine on iPhones. 

Apple shares were also higher in premarket trade.

Google antitrust case: What the ruling means for Alphabet and Apple

“This is a monster win for Cupertino and for Google its a home run ruling that removes a huge overhang on the stock,” Daniel Ives, global head of technology research at Wedbush Securities, said in a note on Tuesday.

Google has been facing rising competition to its core search business from the likes of Perplexity and OpenAI. But the company has so far fended off challenges with its advertising business still growing.

Google has pinned its hopes of becoming a major artificial intelligence player on Gemini, its suite of AI models and the chatbot that goes by the same name.

“Following today’s announcement, we are increasingly constructive in the longer-term durability of Google’s Search business and are raising our estimates accordingly,” Ives said, adding that he now has a new price target of $245 for Alphabet’s stock.

The ruling also means Google will not have to divest the Android operating system that it develops.

Android is seen as a key tool for Google to increase the number of users for Gemini given that around 70% of smartphones globally run the operating system, giving the U.S. technology giant an existing base of users.

CNBC’s Jennifer Elias contributed to this report.

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Salesforce CEO confirms 4,000 layoffs ‘because I need less heads’ with AI

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Salesforce CEO confirms 4,000 layoffs ‘because I need less heads' with AI

Salesforce CEO Marc Benioff participates in an interview at the World Economic Forum in Davos, Switzerland, on Jan. 22, 2025.

Chris Ratcliffe | Bloomberg | Getty Images

Salesforce has cut 4,000 of its customer support roles, CEO Marc Benioff recently said while discussing how artificial intelligence has helped reduce the company headcount.

Benioff revealed the layoffs during an interview published Friday on The Logan Bartlett Show podcast.

“I’ve reduced it from 9,000 heads to about 5,000, because I need less heads,” Benioff said while discussing the impact of AI on Salesforce operations.

Salesforce has been on the front lines of the AI revolution and has built what it calls an “Agentforce” of customer service bots.

“Because of the benefits and efficiencies of Agentforce, we’ve seen the number of support cases we handle decline and we no longer need to actively backfill support engineer roles,” Salesforce said in a statement Tuesday to NBC Bay Area.

The layoffs come after Benioff over the summer announced AI is doing up to 50% of the work at Salesforce, which is based in San Francisco.

Laurie Ruettimann, a human resources consultant, said AI is affecting jobs in several industries.

“There have been layoffs all over America directly attributed to AI,” Ruettimann said, adding anyone who wants to stay employed or looking for work needs to learn new skills.

“If your network could get you a job, it would have done it already. It would have done it yesterday,” Ruettimann said. “It’s on you to expand your vision, to expand your horizons and to meet new people.”

Analyst Ed Zitron said AI is being blamed by tech companies that over hired during the pandemic. The companies are now looking to lure investors by claiming to be more efficient, Zitron said.

“It’s just a growth at all costs mindset,” Zitron said. “The only thing that’s important is growth, even if it ruins people’s lives. Even if it makes the company worse and provides an inferior product.”

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