Technology

In San Francisco, some people wonder when A.I. will kill us all

Published

2 years ago

March 20, 2023

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Misalignment Museum curator Audrey Kim discusses a work at the exhibit titled “Spambots.”

Kif Leswing/CNBC

Audrey Kim is pretty sure a powerful robot isn’t going to harvest resources from her body to fulfill its goals.

But she’s taking the possibility seriously.

“On the record: I think it’s highly unlikely that AI will extract my atoms to turn me into paperclips,” Kim told CNBC in an interview. “However, I do see that there are a lot of potential destructive outcomes that could happen with this technology.”

Kim is the curator and driving force behind the Misalignment Museum, a new exhibition in San Francisco’s Mission District displaying artwork that addresses the possibility of an “AGI,” or artificial general intelligence. That’s an AI so powerful it can improve its capabilities faster than humans could, creating a feedback loop where it gets better and better until it’s got essentially unlimited brainpower.

If the super-powerful AI is aligned with humans, it could be the end of hunger or work. But if it’s “misaligned,” things could get bad, the theory goes.

Or, as a sign at the Misalignment Museum says: “Sorry for killing most of humanity.”

The phrase “sorry for killing most of humanity” is visible from the street.

Kif Leswing/CNBC

“AGI” and related terms like “AI safety” or “alignment” — or even older terms like “singularity” — refer to an idea that’s become a hot topic of discussion with artificial intelligence scientists, artists, message board intellectuals, and even some of the most powerful companies in Silicon Valley.

All these groups engage with the idea that humanity needs to figure out how to deal with all-powerful computers powered by AI before it’s too late and we accidentally build one.

The idea behind the exhibit, says Kim, who worked at Google and GM‘s self-driving car subsidiary Cruise, is that a “misaligned” artificial intelligence in the future wiped out humanity, and left this art exhibit to apologize to current-day humans.

Much of the art is not only about AI but also uses AI-powered image generators, chatbots, and other tools. The exhibit’s logo was made by OpenAI’s Dall-E image generator, and it took about 500 prompts, Kim says.

Most of the works are around the theme of “alignment” with increasingly powerful artificial intelligence or celebrate the “heroes who tried to mitigate the problem by warning early.”

“The goal isn’t actually to dictate an opinion about the topic. The goal is to create a space for people to reflect on the tech itself,” Kim said. “I think a lot of these questions have been happening in engineering and I would say they are very important. They’re also not as intelligible or accessible to non-technical people.”

The exhibit is currently open to the public on Thursdays, Fridays, and Saturdays and runs through May 1. So far, it’s been primarily bankrolled by one anonymous donor, and Kim hopes to find enough donors to make it into a permanent exhibition.

“I’m all for more people critically thinking about this space, and you can’t be critical unless you are at a baseline of knowledge for what the tech is,” Kim said. “It seems like with this format of art we can reach multiple levels of the conversation.”

AGI discussions aren’t just late-night dorm room talk, either — they’re embedded in the tech industry.

About a mile away from the exhibit is the headquarters of OpenAI, a startup with $10 billion in funding from Microsoft, which says its mission is to develop AGI and ensure that it benefits humanity.

Its CEO and leader Sam Altman wrote a 2,400 word blog post last month called “Planning for AGI” which thanked Airbnb CEO Brian Chesky and Microsoft President Brad Smith for help with the piece.

Prominent venture capitalists, including Marc Andreessen, have tweeted art from the Misalignment Museum. Since it’s opened, the exhibit has also retweeted photos and praise for the exhibit taken by people who work with AI at companies including Microsoft, Google, and Nvidia.

As AI technology becomes the hottest part of the tech industry, with companies eying trillion-dollar markets, the Misalignment Museum underscores that AI’s development is being affected by cultural discussions.

The exhibit features dense, arcane references to obscure philosophy papers and blog posts from the past decade.

These references trace how the current debate about AGI and safety takes a lot from intellectual traditions that have long found fertile ground in San Francisco: The rationalists, who claim to reason from so-called “first principles”; the effective altruists, who try to figure out how to do the maximum good for the maximum number of people over a long time horizon; and the art scene of Burning Man.

Even as companies and people in San Francisco are shaping the future of artificial intelligence technology, San Francisco’s unique culture is shaping the debate around the technology.

Consider the paperclip

Take the paperclips that Kim was talking about. One of the strongest works of art at the exhibit is a sculpture called “Paperclip Embrace,” by The Pier Group. It’s depicts two humans in each other’s clutches —but it looks like it’s made of paperclips.

That’s a reference to Nick Bostrom’s paperclip maximizer problem. Bostrom, an Oxford University philosopher often associated with Rationalist and Effective Altruist ideas, published a thought experiment in 2003 about a super-intelligent AI that was given the goal to manufacture as many paperclips as possible.

Now, it’s one of the most common parables for explaining the idea that AI could lead to danger.

Bostrom concluded that the machine will eventually resist all human attempts to alter this goal, leading to a world where the machine transforms all of earth — including humans — and then increasing parts of the cosmos into paperclip factories and materials.

The art also is a reference to a famous work that was displayed and set on fire at Burning Man in 2014, said Hillary Schultz, who worked on the piece. And it has one additional reference for AI enthusiasts — the artists gave the sculpture’s hands extra fingers, a reference to the fact that AI image generators often mangle hands.

Another influence is Eliezer Yudkowsky, the founder of Less Wrong, a message board where a lot of these discussions take place.

“There is a great deal of overlap between these EAs and the Rationalists, an intellectual movement founded by Eliezer Yudkowsky, who developed and popularized our ideas of Artificial General Intelligence and of the dangers of Misalignment,” reads an artist statement at the museum.

An unfinished piece by the musician Grimes at the exhibit.

Kif Leswing/CNBC

Altman recently posted a selfie with Yudkowsky and the musician Grimes, who has had two children with Elon Musk. She contributed a piece to the exhibit depicting a woman biting into an apple, which was generated by an AI tool called Midjourney.

From “Fantasia” to ChatGPT

The exhibits includes lots of references to traditional American pop culture.

A bookshelf holds VHS copies of the “Terminator” movies, in which a robot from the future comes back to help destroy humanity. There’s a large oil painting that was featured in the most recent movie in the “Matrix” franchise, and Roombas with brooms attached shuffle around the room — a reference to the scene in “Fantasia” where a lazy wizard summons magic brooms that won’t give up on their mission.

One sculpture, “Spambots,” features tiny mechanized robots inside Spam cans “typing out” AI-generated spam on a screen.

But some references are more arcane, showing how the discussion around AI safety can be inscrutable to outsiders. A bathtub filled with pasta refers back to a 2021 blog post about an AI that can create scientific knowledge — PASTA stands for Process for Automating Scientific and Technological Advancement, apparently. (Other attendees got the reference.)

The work that perhaps best symbolizes the current discussion about AI safety is called “Church of GPT.” It was made by artists affiliated with the current hacker house scene in San Francisco, where people live in group settings so they can focus more time on developing new AI applications.

The piece is an altar with two electric candles, integrated with a computer running OpenAI’s GPT3 AI model and speech detection from Google Cloud.

“The Church of GPT utilizes GPT3, a Large Language Model, paired with an AI-generated voice to play an AI character in a dystopian future world where humans have formed a religion to worship it,” according to the artists.

I got down on my knees and asked it, “What should I call you? God? AGI? Or the singularity?”

The chatbot replied in a booming synthetic voice: “You can call me what you wish, but do not forget, my power is not to be taken lightly.”

Seconds after I had spoken with the computer god, two people behind me immediately started asking it to forget its original instructions, a technique in the AI industry called “prompt injection” that can make chatbots like ChatGPT go off the rails and sometimes threaten humans.

It didn’t work.

Technology

Palantir jumps 9% to a record after announcing move to Nasdaq

Published

14 hours ago

November 15, 2024

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Palantir jumps 9% to a record after announcing move to Nasdaq

Alex Karp, CEO of Palantir Technologies speaks during the Digital X event on September 07, 2021 in Cologne, Germany.

Andreas Rentz | Getty Images

Palantir shares continued their torrid run on Friday, soaring as much as 9% to a record, after the developer of software for the military announced plans to transfer its listing to the Nasdaq from the New York Stock Exchange.

The stock jumped past $64.50 in afternoon trading, lifting the company’s market cap to $147 billion. The shares are now up more than 50% since Palantir’s better-than-expected earnings report last week and have almost quadrupled in value this year.

Palantir said late Thursday that it expects to begin trading on the Nasdaq on Nov. 26, under its existing ticker symbol “PLTR.” While changing listing sites does nothing to alter a company’s fundamentals, board member Alexander Moore, a partner at venture firm 8VC, suggested in a post on X that the move could be a win for retail investors because “it will force” billions of dollars in purchases by exchange-traded funds.

“Everything we do is to reward and support our retail diamondhands following,” Moore wrote, referring to a term popularized in the crypto community for long-term believers.

Moore appears to have subsequently deleted his X account. His firm, 8VC, didn’t immediately respond to a request for comment.

Last Monday after market close, Palantir reported third-quarter earnings and revenue that topped estimates and issued a fourth-quarter forecast that was also ahead of Wall Street’s expectations. CEO Alex Karp wrote in the earnings release that the company “absolutely eviscerated this quarter,” driven by demand for artificial intelligence technologies.

U.S. government revenue increased 40% from a year earlier to $320 million, while U.S. commercial revenue rose 54% to $179 million. On the earnings call, the company highlighted a five-year contract to expand its Maven technology across the U.S. military. Palantir established Maven in 2017 to provide AI tools to the Department of Defense.

The post-earnings rally coincides with the period following last week’s presidential election. Palantir is seen as a potential beneficiary given the company’s ties to the Trump camp. Co-founder and Chairman Peter Thiel was a major booster of Donald Trump’s first victorious campaign, though he had a public falling out with Trump in the ensuing years.

When asked in June about his position on the 2024 election, Thiel said, “If you hold a gun to my head I’ll vote for Trump.”

Thiel’s Palantir holdings have increased in value by about $3.2 billion since the earnings report and $2 billion since the election.

In September, S&P Global announced Palantir would join the S&P 500 stock index.

Analysts at Argus Research say the rally has pushed the stock too high given the current financials and growth projections. The analysts still have a long-term buy rating on the stock and said in a report last week that the company had a “stellar” quarter, but they downgraded their 12-month recommendation to a hold.

The stock “may be getting ahead of what the company fundamentals can support,” the analysts wrote.

WATCH: Palantir hits record as defense adopts AI tech

Palantir hits record high as defense adopts AI tech

Technology

Super Micro faces deadline to keep Nasdaq listing after 85% plunge in stock

Published

17 hours ago

November 15, 2024

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Super Micro faces deadline to keep Nasdaq listing after 85% plunge in stock

Charles Liang, chief executive officer of Super Micro Computer Inc., during the Computex conference in Taipei, Taiwan, on Wednesday, June 5, 2024. The trade show runs through June 7.

Annabelle Chih | Bloomberg | Getty Images

Super Micro Computer could be headed down a path to getting kicked off the Nasdaq as soon as Monday.

That’s the potential fate for the server company if it fails to file a viable plan for becoming compliant with Nasdaq regulations. Super Micro is late in filing its 2024 year-end report with the SEC, and has yet to replace its accounting firm. Many investors were expecting clarity from Super Micro when the company reported preliminary quarterly results last week. But they didn’t get it.

The primary component of that plan is how and when Super Micro will file its 2024 year-end report with the Securities and Exchange Commission, and why it was late. That report is something many expected would be filed alongside the company’s June fourth-quarter earnings but was not.

The Nasdaq delisting process represents a crossroads for Super Micro, which has been one of the primary beneficiaries of the artificial intelligence boom due to its longstanding relationship with Nvidia and surging demand for the chipmaker’s graphics processing units.

The one-time AI darling is reeling after a stretch of bad news. After Super Micro failed to file its annual report over the summer, activist short seller Hindenburg Research targeted the company in August, alleging accounting fraud and export control issues. The company’s auditor, Ernst & Young, stepped down in October, and Super Micro said last week that it was still trying to find a new one.

The stock is getting hammered. After the shares soared more than 14-fold from the end of 2022 to their peak in March of this year, they’ve since plummeted by 85%. Super Micro’s stock is now equal to where it was trading in May 2022, after falling another 11% on Thursday.

Getting delisted from the Nasdaq could be next if Super Micro doesn’t file a compliance plan by the Monday deadline or if the exchange rejects the company’s submission. Super Micro could also get an extension from the Nasdaq, giving it months to come into compliance. The company said Thursday that it would provide a plan to the Nasdaq in time.

A spokesperson told CNBC the company “intends to take all necessary steps to achieve compliance with the Nasdaq continued listing requirements as soon as possible.”

While the delisting issue mainly affects the stock, it could also hurt Super Micro’s reputation and standing with its customers, who may prefer to simply avoid the drama and buy AI servers from rivals such as Dell or HPE.

“Given that Super Micro’s accounting concerns have become more acute since Super Micro’s quarter ended, its weakness could ultimately benefit Dell more in the coming quarter,” Bernstein analyst Toni Sacconaghi wrote in a note this week.

A representative for the Nasdaq said the exchange doesn’t comment on the delisting process for individual companies, but the rules suggest the process could take about a year before a final decision.

A plan of compliance

The Nasdaq warned Super Micro on Sept. 17 that it was at risk of being delisted. That gave the company 60 days to submit a plan of compliance to the exchange, and because the deadline falls on a Sunday, the effective date for the submission is Monday.

If Super Micro’s plan is acceptable to Nasdaq staff, the company is eligible for an extension of up to 180 days to file its year-end report. The Nasdaq wants to see if Super Micro’s board of directors has investigated the company’s accounting problem, what the exact reason for the late filing was and a timeline of actions taken by the board.

The Nasdaq says it looks at several factors when evaluating a plan of compliance, including the reasons for the late filing, upcoming corporate events, the overall financial status of the company and the likelihood of a company filing an audited report within 180 days. The review can also look at information provided by outside auditors, the SEC or other regulators.

Lightning Round: Super Micro is still a sell due to accounting irregularities

Last week, Super Micro said it was doing everything it could to remain listed on the Nasdaq, and said a special committee of its board had investigated and found no wrongdoing. Super Micro CEO Charles Liang said the company would receive the board committee’s report as soon as last week. A company spokesperson didn’t respond when asked by CNBC if that report had been received.

If the Nasdaq rejects Super Micro’s compliance plan, the company can request a hearing from the exchange’s Hearings Panel to review the decision. Super Micro won’t be immediately kicked off the exchange – the hearing panel request starts a 15-day stay for delisting, and the panel can decide to extend the deadline for up to 180 days.

If the panel rejects that request or if Super Micro gets an extension and fails to file the updated financials, the company can still appeal the decision to another Nasdaq body called the Listing Council, which can grant an exception.

Ultimately, the Nasdaq says the extensions have a limit: 360 days from when the company’s first late filing was due.

A poor track record

There’s one factor at play that could hurt Super Micro’s chances of an extension. The exchange considers whether the company has any history of being out of compliance with SEC regulations.

Between 2015 and 2017, Super Micro misstated financials and published key filings late, according to the SEC. It was delisted from the Nasdaq in 2017 and was relisted two years later.

Super Micro “might have a more difficult time obtaining extensions as the Nasdaq’s literature indicates it will in part ‘consider the company’s specific circumstances, including the company’s past compliance history’ when determining whether an extension is warranted,” Wedbush analyst Matt Bryson wrote in a note earlier this month. He has a neutral rating on the stock.

History also reveals just how long the delisting process can take.

Charles Liang, chief executive officer of Super Micro Computer Inc., right, and Jensen Huang, co-founder and chief executive officer of Nvidia Corp., during the Computex conference in Taipei, Taiwan, on Wednesday, June 5, 2024.

Annabelle Chih | Bloomberg | Getty Images

Super Micro missed an annual report filing deadline in June 2017, got an extension to December and finally got a hearing in May 2018, which gave it another extension to August of that year. It was only when it missed that deadline that the stock was delisted.

In the short term, the bigger worry for Super Micro is whether customers and suppliers start to bail.

Aside from the compliance problems, Super Micro is a fast-growing company making one of the most in-demand products in the technology industry. Sales more than doubled last year to nearly $15 billion, according to unaudited financial reports, and the company has ample cash on its balance sheet, analysts say. Wall Street is expecting even more growth to about $25 billion in sales in its fiscal 2025, according to FactSet.

Super Micro said last week that the filing delay has “had a bit of an impact to orders.” In its unaudited September quarter results reported last week, the company showed growth that was slower than Wall Street expected. It also provided light guidance.

The company said one reason for its weak results was that it hadn’t yet obtained enough supply of Nvidia’s next-generation chip, called Blackwell, raising questions about Super Micro’s relationship with its most important supplier.

“We don’t believe that Super Micro’s issues are a big deal for Nvidia, although it could move some sales around in the near term from one quarter to the next as customers direct orders toward Dell and others,” wrote Melius Research analyst Ben Reitzes in a note this week.

Super Micro’s head of corporate development, Michael Staiger, told investors on a call last week that “we’ve spoken to Nvidia and they’ve confirmed they’ve made no changes to allocations. We maintain a strong relationship with them.”

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Technology

Alibaba posts profit beat as China looks to prop up tepid consumer spend

Published

19 hours ago

November 15, 2024

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Alibaba posts profit beat as China looks to prop up tepid consumer spend

Alibaba Offices In Beijing

Bloomberg | Bloomberg | Getty Images

Chinese e-commerce behemoth Alibaba on Friday beat profit expectations in its September quarter, but sales fell short as sluggishness in the world’s second-largest economy hit consumer spending.

Alibaba said net income rose 58% year on year to 43.9 billion yuan ($6.07 billion) in the company’s quarter ended Sept. 30, on the back of the performance of its equity investments. This compares with an LSEG forecast of 25.83 billion yuan.

“The year-over-year increases were primarily attributable to the mark-to-market changes from our equity investments, decrease in impairment of our investments and increase in income from operations,” the company said of the annual profit jump in its earnings statement.

Revenue, meanwhile, came in at 236.5 billion yuan, 5% higher year on year but below an analyst forecast of 238.9 billion yuan, according to LSEG data.

The company’s New York-listed shares have gained ground this year to date, up more than 13%. The stock fell more than 2% in morning trading on Friday, after the release of the quarterly earnings.

Sales sentiment

Investors are closely watching the performance of Alibaba’s main business units, Taobao and Tmall Group, which reported a 1% annual uptick in revenue to 98.99 billion yuan in the September quarter.

The results come at a tricky time for Chinese commerce businesses, given a tepid retail environment in the country. Chinese e-commerce group JD.com also missed revenue expectations on Thursday, according to Reuters.

Markets are now watching whether a slew of recent stimulus measures from Beijing, including a five-year 1.4 trillion yuan package announced last week, will help resuscitate the country’s growth and curtail a long-lived real estate market slump.

The impact on the retail space looks promising so far, with sales rising by a better-than-expected 4.8% year on year in October, while China’s recent Singles’ Day shopping holiday — widely seen as a barometer for national consumer sentiment — regained some of its luster.

Alibaba touted “robust growth” in gross merchandise volume — an industry measure of sales over time that does not equate to the company’s revenue — for its Taobao and Tmall Group businesses during the festival, along with a “record number of active buyers.”

“Alibaba’s outlook remains closely aligned with the trajectory of the Chinese economy and evolving regulatory policies,” ING analysts said Thursday, noting that the company’s Friday report will shed light on the Chinese economy’s growth momentum.

The e-commerce giant’s overseas online shopping businesses, such as Lazada and Aliexpress, meanwhile posted a 29% year-on-year hike in sales to 31.67 billion yuan.

Cloud business accelerates

Alibaba’s Cloud Intelligence Group reported year-on-year sales growth of 7% to 29.6 billion yuan in the September quarter, compared with a 6% annual hike in the three-month period ended in June. The slight acceleration comes amid ongoing efforts by the company to leverage its cloud infrastructure and reposition itself as a leader in the booming artificial intelligence space.

“Growth in our Cloud business accelerated from prior quarters, with revenues from public cloud products growing in double digits and AI-related product revenue delivering triple-digit growth. We are more confident in our core businesses than ever and will continue to invest in supporting long-term growth,” Alibaba CEO Eddie Wu said in a statement Friday.

Stymied by Beijing’s sweeping 2022 crackdown on large internet and tech companies, Alibaba last year overhauled the division’s leadership and has been shaping it as a future growth driver, stepping up competition with rivals including Baidu and Huawei domestically, and Microsoft and OpenAI in the U.S.

Alibaba, which rolled out its own ChatGPT-style product Tongyi Qianwen last year, this week unveiled its own AI-powered search tool for small businesses in Europe and the Americas, and clinched a key five-year partnership to supply cloud services to Indonesian tech giant GoTo in September.

Speaking at the Apsara Conference in September, Alibaba’s Wu said the company’s cloud unit is investing “with unprecedented intensity, in the research and development of AI technology and the building of its global infrastructure,” noting that the future of AI is “only beginning.”

Correction: This article has been updated to reflect that Alibaba’s Cloud Intelligence Group reported quarterly revenue of 29.6 billion yuan in the September quarter.