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Dr. Scott Gottlieb is a CNBC contributor and is a member of the boards of Pfizer, genetic testing startup Tempus, health-care tech company Aetion Inc. and biotech company Illumina. He is also a partner at the venture capital firm New Enterprise Associates.

Researchers at Harvard presented a study demonstrating an achievement that would challenge any medical student. ChatGPT, a large language model, passed the U.S. Medical Licensing Exam, outperforming about 10 percent of medical students who fail the test annually.

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The inevitable question isn’t so much if but when these artificial intelligence devices can step into the shoes of doctors. For some tasks, this medical future is sooner than we think.

To grasp the potential of these tools to revolutionize the practice of medicine, it pays to start with a taxonomy of the different technologies and how they’re being used in medical care.

The AI tools being applied to health care can generally be divided into two main categories. The first is machine learning, which uses algorithms to enable computers to learn patterns from data and make predictions. These algorithms can be trained on a variety of data types, including images.

The second category encompasses natural language processing, which is designed to understand and generate human language. These tools enable a computer to transform human language and unstructured text into machine-readable, organized data. They learn from a multitude of human trial-and-error decisions and emulate a person’s responses.

A key difference between the two approaches resides in their functionality. While machine learning models can be trained to perform specific tasks, large language models can understand and generate text, making them especially useful for replicating interactions with providers.

In medicine, the use of these technologies is generally following one of four different paths. The first encompass large language models that are applied to administrative functions such as processing medical claims or creating and analyzing medical records. Amazon’s HealthScribe is a programmable interface that transcribes conversations between doctors and patients and can extract medical information, allowing providers to create structured records of encounters.

The second bucket involves the use of supervised machine learning to enhance the interpretation of clinical data. Specialties such as radiology, pathology and cardiology are already using AI for image analysis, to read MRIs, evaluate pathology slides or interpret electrocardiograms. In fact, up to 30% of radiology practices have already adopted AI tools. So have other specialties. Google Brain AI has developed software that analyzes images from the back of the eye to diagnose diabetic macular edema and diabetic retinopathy, two common causes of blindness.

Since these tools offer diagnoses and can directly affect patient care, the FDA often categorizes them as medical devices, subjecting them to regulation to verify their accuracy. However, the fact that these tools are trained on closed data sets, where the findings in data or imaging have been rigorously confirmed, gives the FDA increased confidence when assessing these devices’ integrity.

The third broad category comprises AI tools that rely on large language models that extract clinical information from patient-specific data, interpreting it to prompt providers with diagnoses or treatments to consider. Generally known as clinical decision support software, it evokes a picture of an brainy assistant designed to aid, not to supplant, a doctor’s judgment. IBM’s “Watson for Oncology” uses AI to help oncologists make more informed decisions about cancer treatments, while Google Health is developing DeepMind Health to create similar tools.

As long as the doctor remains involved and exercises independent judgment, the FDA doesn’t always regulate this kind of tool. The FDA focuses more on whether it’s meant to make a definitive clinical decision, as opposed to providing information to help doctors with their assessments.

The fourth and final grouping represents the holy grail for AI: large language models that operate fully automated, parsing the entirety of a patient’s medical record to diagnose conditions and prescribe treatments directly to the patient, without a physician in the loop.

Right now, there are only a few clinical language models, and even the largest ones possess a relatively small number of parameters. However, the strength of the models and the datasets available for their training might not be the most significant obstacles to these fully autonomous systems. The biggest hurdle may well be establishing a suitable regulatory path. Regulators are hesitant, fearing that the models are prone to errors and that the clinical data sets on which they’re trained contain wrong decisions, leading AI models to replicate these medical mistakes.

Overcoming the hurdles in bringing these fully autonomous systems to patient care holds significant promise, not only for improving outcomes but also for addressing financial challenges.

Health care is often cited as a field burdened by Baumol’s theory of cost disease, an economic theory, developed by economist William J. Baumol, that explains why costs in labor-intensive industries tend to rise more rapidly than in other sectors. In fields such as medicine, it’s less likely that technological inputs will provide major offsets to labor costs, as each patient encounter still requires the intervention of a provider. In sectors such as medicine, the labor itself is the product.

To compensate for these challenges, medicine has incorporated more non-physician providers to lower costs. However, this strategy reduces but doesn’t eliminate the central economic dilemma. When the technology becomes the doctor, however, it can be a cure for Baumol’s cost disease.

As the quality and scope of clinical data available for training these large language models continue to grow, so will their capabilities. Even if the current stage of development isn’t quite ready to completely remove doctors from the decision-making loop, these tools will increasingly enhance the productivity of providers and, in many cases, begin to substitute for them.

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EU seeks information from X on content moderation amid first major probe under new tech rules

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EU seeks information from X on content moderation amid first major probe under new tech rules

Jonathan Raa | Nurphoto | Getty Images

The European Union is seeking information from social media platform X about cuts to its content moderation resources as part of its first major investigation into the company under its tough new laws governing online content.

The European Commission, the EU executive arm, said in a statement Wednesday that it’s requested information from X under the Digital Services Act, its groundbreaking tech law which requires online platforms to take a far stricter approach to policing illegal and harmful content on their platforms.

The Commission said it was concerned about X’s transparency report submitted to the regulator in March 2024, which showed it had cut its team of content moderators by nearly 20% compared to the number of moderators it reported in an early October 2023 transparency report.

X reduced linguistic coverage within the EU from 11 languages to seven, the Commission said, again citing X’s transparency report.

The Commission said it’s seeking further details from X on risk assessments and mitigation measures linked to the impact of generative artificial intelligence on electoral processes, dissemination of illegal material, and protection of fundamental rights.

X, which was formerly known as Twitter, was not immediately available for comment when contacted by CNBC.

X must provide information requested by the EU on its content moderation resources and generative AI requested by May 17, the Commission said. Remaining answers to questions from the Commission must be provided no later than May 27, the agency said.

X has been a 'terrible platform for the LGBTQ community,' GLAAD president says

The Commission said its request for information was a further step in a formal probe into breaches of the EU’s recently introduced Digital Services Act.

The Commission initiated formal infringement proceedings against X in December last year after concerns were raised over its approach to tackling illegal content surrounding the Israel-Hamas war.

The Commission at the time said its investigation would focus on X’s compliance with its duties to counter the dissemination of illegal content in the EU, the effectiveness of the social media platform’s steps to combat information manipulation and its measures to increase transparency.

EU officials said the requests for information aim to build on evidence gathered so far in relation to its DSA investigation into X. That evidence includes X’s March transparency report, as well as replies to previous requests for information addressing what X is doing to tackle disinformation risks linked to generative AI risks.

The DSA, which only came into effect in November 2022, requires large online platforms such as X to mitigate the risk of disinformation and institute rigorous procedures to remove hate speech, while balancing this with freedom-of-expression concerns.

Companies found to have breached the rules face fines as high as 6% of their global annual revenues.

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Shopify shares plunge 19% on weak guidance

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Shopify shares plunge 19% on weak guidance

An employee works at Shopify’s headquarters in Ottawa, Ontario in Canada.

Chris Wattie | Reuters

Shopify reported first-quarter earnings and sales on Wednesday that were ahead of Wall Street expectations, but it gave a downbeat forecast for the current quarter.

Shares of Shopify dropped 19% in early trading.

Here’s how the company did for the quarter, compared with consensus expectations from LSEG:

  • Earnings per share: 20 cents adjusted vs. 17 cents expected
  • Revenue: $1.86 billion vs. $1.85 billion expected

Gross margins for the second quarter are expected to decrease by about 50 basis points compared with the first quarter, as a result of the sale of Shopify’s logistics business to freight forwarder Flexport last May.

Shopify said it expects second-quarter revenue to grow at a high-teens percentage rate year over year, a slowdown from the previous period. The company has posted year-over-year revenue growth in the low-to-mid twenties for the past six quarters. Second-quarter revenue would grow in the “low-to-mid-twenties” year-over-year when adjusting for the divestiture of the logistics business, Shopify said.

The company reported a net loss of $273 million, or 21 cents a share, compared with a profit of 68 million, or 5 cents a share, during the year-ago quarter.

Shopify, which makes tools for companies to sell products online, said gross merchandise volume, or the total volume of merchandise sold on the platform, increased 23% to $60.9 billion. That surpassed consensus expectations of $59.5 billion, according to StreetAccount.

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Uber reports first-quarter results that beat expectations for revenue, but posts net loss

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Uber reports first-quarter results that beat expectations for revenue, but posts net loss

Dara Khosrowshahi, CEO of Uber, speaking on CNBC’s Squawk Box at the World Economic Forum Annual Meeting in Davos, Switzerland on Jan. 17th, 2024.

Adam Galici | CNBC

Uber reported first-quarter results on Wednesday that came in slightly above analysts’ estimates for revenue, but the ridesharing company posted an unexpected net loss.

Shares fell more than 6% in premarket trading Wednesday.

Here’s how the company did:

  • Loss per share: 32 cents. That may not compare with the 23 cent earnings expected by LSEG
  • Revenue: $10.13 billion vs. $10.11 billion expected by LSEG

Uber’s revenue grew 15% in its first quarter from $8.82 billion a year prior. The company reported $37.65 billion in gross bookings for the period, which is short of the $37.93 billion expected by analysts, according to StreetAccount.

The company’s net loss widened to $654 million, or a 32 cent loss per share, from a loss of $157 million, or an 8 cent loss per share, in the same quarter last year. Uber said its net loss includes a $721 million net headwind from unrealized losses related to the reevaluation of its equity investments.

In an interview with CNBC’s “Squawk Box” on Wednesday, Uber CEO Dara Khosrowshahi said the company’s move to a loss had “nothing to do with the operating business.”

“We did have to mark down those equity stakes that resulted in a loss,” he said. “We don’t expect that to keep happening going forward.”

However, Uber cannot predict the markets, Khosrowshahi added.

Uber reported adjusted EBITDA of $1.38 billion, up 82% year over year and slightly above the $1.31 billion expected by analysts polled by StreetAccount.

For its second quarter, Uber said it expects to report gross bookings between $38.75 billion and $40.25 billion, compared with StreetAccount estimates of $40 billion. Uber anticipates adjusted EBITDA of $1.45 billion to $1.53 billion, compared with the $1.49 billion expected by analysts.

The number of Uber’s monthly active platform consumers reached 149 million in its first quarter, up 15% year over year from 130 million. There were 2.6 billion trips completed on the platform during the period, up 21% year over year.

“Demand for Uber remains robust across our platform, supported by our improving marketplace experience, the continued shift of consumer spending from goods to services, and the secular trend towards on-demand transportation and delivery,” Khosrowshahi said in prepared remarks Wednesday.

Here’s how Uber’s largest business segments performed:

Mobility (gross bookings): $18.67 billion, up 25% year over year.

Delivery (gross bookings): $17.7 billion, up 18% year over year.

Uber’s mobility segment reported $5.63 billion in revenue, up 30% from the year earlier and 2% quarter over quarter. StreetAccount analysts were expecting $5.52 billion. Uber said “business model changes” negatively impacted its mobility revenue margin by 180 basis points during the period.

“To drive user growth and win more of their daily trips, we are focused on increasing our penetration of core use cases, while also expanding into new consumer segments,” Khosrowshahi said in his prepared remarks.

The company’s delivery segment reported $3.21 billion in revenue, up 4% from the year prior and 3% quarter over quarter. Analysts were expecting $3.28 billion, according to StreetAccount. Uber said its delivery revenue margin was negatively impacted by 230 basis points due to “business model changes” in the first quarter.  

The company’s freight business booked $1.28 billion in sales for the quarter, a decrease of 8% year over year and flat quarter over quarter.

Uber will hold its quarterly call with investors at 8:00 a.m. ET.

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