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Super Micro Computer is joining the S&P 500 following a historic rally in the stock that has pushed the company’s market cap past $50 billion.

The shares, up more than 20-fold in the past two years and over 200% just since the start of 2024, climbed another 8% in extended trading on Friday.

Super Micro is replacing Whirlpool, according to a press release. Deckers Outdoor is also joining the S&P 500, replacing Zions Bancorporation.

Stocks added to the benchmark index often rise in value because funds that track the S&P 500 will add it to their portfolios. The median market cap for companies in the S&P 500 is $33.7 billion.

Super Micro has been one of the main beneficiaries of the artificial intelligence boom sweeping the technology industry. The company makes servers and other computer infrastructure, and it’s one of the primary vendors for building out Nvidia-based “clusters” of servers for training and deploying AI models.

In the quarter that ended December, Super Micro’s revenue more than doubled to $3.66 billion. Analysts expect sales in the current quarter to more than triple.

“We see Nvidia’s results as a positive data point for SMCI which is one of the leading partners that designs and manufactures servers to wrap around the GPUs and customizes racks to the specific needs of a customer,” Bank of America analyst Ruplu Bhattacharya wrote in a note last month. He has a buy rating on the stock.

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How the U.S. government is regulating artificial intelligence

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How the U.S. government is regulating artificial intelligence

The U.S. government is considering laws to help society adapt to the introduction of artificial intelligence.

Early users of the technology are already seeing labor productivity gains. For example, Klarna, a buy now, pay later financial services provider, estimates that its AI assistant tool will increase its profit outcome by $40 million by the end of 2024.

“It basically does the job of 700 full-time agents,” Klarna CEO Sebastian Siemiatkowski said in an interview with CNBC. “It basically was capable of taking care of two-thirds of all the incoming errands that we have over chat.”

Klarna’s AI assistant tool is built on OpenAI’s systems, which power both ChatGPT and Sora — two products that have captured the attention of both the general public and Congress.

In 2023, members of Congress convened panels, private dinners, and learning sessions with high-profile tech executives including Sam Altman, CEO at OpenAI. The White House followed up by seeking commitment from 15 private industry leaders to help lawmakers understand the best way to identify risks and make use of the new technologies. The list includes some of the biggest players in the tech sector, alongside newcomers such as Anthropic and OpenAI.

The Senate Task Force on AI, established in 2019, has passed at least 15 bills into law that focus on research and risk assessment. But when compared with measures passed by the European Union in 2024, the U.S. regulatory environment appears to be relatively relaxed.

“The folks in Brussels, they come up with a lot of bureaucratic rules that make it harder for companies to innovate,” Erik Brynjolfsson, a senior fellow at Stanford Institute for Human-Centered AI, said in an interview with CNBC. “The entrepreneurial environment isn’t there the way it is in the United States.”

Economists have worried for years that artificial intelligence could sink job prospects for white-collar workers, similar to the effects globalization has had on blue-collar workers in the past. A study from the International Monetary Fund suggests that at least 60% of work in advanced economies would be exposed to changes that stem from the wide adoption of artificial intelligence.

In 2023, lawmakers in the New York State Assembly put forward a measure to limit the expected impact of tech-driven layoffs with robot taxes. The idea is to introduce a cost for companies that use technology to displace workers within the state. As of April 2024, the bill remains in committee with an uncertain future.

Many economists have said that robot taxes, if used at all, should be set at a relatively low level. In the U.S. both employers and employees face payroll taxes of 7.65% of income. But the optimal rate for a robot tax would be between 1% and 3.7%, according to researchers at the Massachusetts Institute of Technology.

“It’s good for us to have output and productivity. And so I’m not sure we want to tax those,” said Brynjolfsson. “Robots are part of what boost technological growth and give us that higher productivity.”

“There will be a time in the future where robots can do most of what humans currently do,” Brynjolfsson said. “We’re not there yet.”

Watch the video above to learn more about the U.S. government’s plan to regulate artificial intelligence. 

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Tesla slashes price of its premium driver assistance option by half in U.S.

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Tesla slashes price of its premium driver assistance option by half in U.S.

Drivers charge their Teslas in Fountain Valley, CA, on Wednesday, March 20, 2024.

Jeff Gritchen | Medianews Group | Getty Images

Tesla said on Friday that it’s cutting the subscription price of its premium driver assistance system for customers in the U.S.

Marketed as its Full Self-Driving, or FSD, package, Tesla customers will now pay $99 per month, down from $199 previously.

The price cut is at odds with previous promises from CEO Elon Musk, who has repeatedly said that the cost of FSD would only go up as Tesla adds features and functionality to the system.

“The FSD price will continue to rise as the software gets closer to full self-driving capability with regulatory approval,” Musk wrote on Twitter, now known as X, on May 18, 2020. He said at that point “the value of FSD is probably somewhere in excess of $100,000” per car.

Despite its brand name, the company’s FSD option today doesn’t make Tesla vehicles autonomous or functional as robotaxis.

Musk has promised shareholders and customers a robotaxi for years, and has said their existing vehicles would soon become self driving after an over-the-air software update.

He told investors on a call in 2019 that autonomous driving would transform Tesla into a company with a $500 billion market cap, up from around $42 billion at that time. (The company is worth over $500 billion today even without having developed an autonomous car.) Tesla raised over $2 billion through debt and equity after the call.

In a notice that’s now shown to some drivers through the touchscreen displays in their cars, Tesla says:

“Full Self-Driving (Supervised) can drive your Tesla almost anywhere. It will make lane changes, select forks to follow your navigation route, navigate around other vehicles and objects, and make left and right turns. It must be used with additional caution and an attentive driver. It does not make your vehicle autonomous. Do not become complacent.”

The company uses sensors in the steering wheel and cabin cameras, positioned above the rearview mirror, to determine if a driver is attentive or not, and will audibly alert drivers to keep their eyes on the road or hands on the wheel.

In 2022, the California Department of Motor Vehicles formally accused Tesla of engaging in deceptive practices around the marketing of its driver assistance systems, including its standard package Autopilot and FSD in the U.S., according to filings with a state administrative agency.

Meanwhile, Alphabet-owned Waymo is now operating commercial robotaxi services in several U.S. cities. The company also recently struck a partnership with Uber Eats for driverless food delivery. In China, Didi’s autonomous unit operates commercially in markets including Guangzhou. Companies including Bill Gates-backed Wayve in the U.K. and Amazon’s Zoox in the U.S. are testing robotaxis as well.

In a push for end-of-quarter sales last month, Musk mandated that all sales and service staff install and demo FSD for customers before handing over the keys. He wrote in an email to employees, “Almost no one actually realizes how well (supervised) FSD actually works. I know this will slow down the delivery process, but it is nonetheless a hard requirement.”

After that, Tesla also announced it would give away a one-month free trial of FSD to all customers in North America. Owners’ responses to the latest version of FSD have been mixed with some fans impressed, and many safety-conscious drivers switching off the free FSD trial, viewing it as inconsistent and unsafe.

Musk also recently promised to “unveil” a new dedicated robotaxi on Aug. 8. Tesla unveilings are marketing events, and don’t indicate a date for the start of production and deliveries. For example, Tesla unveiled a new version of the Roadster, and a fully electric heavy-duty truck called the Semi in 2017 and didn’t begin Semi deliveries until December 2022. It still hasn’t produced the new version of the Roadster.

Tesla didn’t respond to a request for more information, including whether the price cut announced Friday is permanent or temporary.

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Health records giant Epic cracks down on startup for unauthorized sharing of patient data

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Health records giant Epic cracks down on startup for unauthorized sharing of patient data

The eponymous sign outside Epic headquarters in Verona, Wisconsin.

Source: Yiem via Wikipedia CC

Epic Systems, the largest provider of software for managing medical records, says a venture-backed startup called Particle Health is using patient data in unauthorized and unethical ways that have nothing to do with treatment.

Epic told customers in a notice on Thursday that it cut off its connection to Particle, hindering the company’s ability to tap a system with more than 300 million patient records. Particle is one of several companies that acts as a sort of middleman between Epic and the organizations — typically hospitals and clinics — that need the data.

Patient data is inherently sensitive and valuable, and it’s protected by the Health Insurance Portability and Accountability Act, or HIPAA, a federal law that requires a patient’s consent or knowledge for third-party access. One way Epic’s electronic health records (EHR) are accessed is through an interoperability network called Carequality, which facilitates the exchange of more than 400,000 documents a month, according to its website. Particle is a member of the Carequality network.

To join the network, organizations are vetted and have to agree to abide by clear “Permitted Purposes” for the exchange of patient data. Epic responds to requests for data that fall under the “Treatment” permitted purpose, which means the recipient is providing care to the person whose records they are requesting. 

Epic said in its notice on Thursday that it filed a formal dispute with Carequality on March 21, over concerns that Particle and its participant organizations “might be inaccurately representing the purpose associated with their record retrievals.” The company suspended its connection with Particle that day.

“This poses potential security and privacy risks, including the potential for HIPAA Privacy Rule violations,” Epic said in the notice, which was obtained by CNBC. 

In a blog post late Friday, Carequality said it takes disputes “very seriously and is committed to maintaining the integrity of the dispute resolution process as well as trusted exchange within the framework.” The organization said it can’t comment about the existence of any disputes or member activities.

Representatives from Epic and Particle didn’t respond to requests for comment. However, Particle published a blog post Friday evening and said it began “addressing this issue immediately” after Epic “stopped responding to data requests from a subset of customers” on March 21. Particle said in the post that a big challenge in such matters is that there is “no standard reference to assess the definition of Treatment.”

“These definitions have become more difficult to delineate as care becomes more complicated with providers, payers, and payviders all merging in various large healthcare conglomerates,” Particle wrote.

Epic, a 45-year-old privately held company based in Wisconsin, is the largest EHR vendor by hospital market share in the U.S., with 36% of the market, according to a May report from KLAS Research. Oracle is second at 25%, following the software company’s $28 billion purchase of Cerner in 2022.

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As of July 2022, Particle had raised a total of $39.3 million from investors including Menlo Ventures, Story Ventures and Pruven Capital, according to a release. The New York-based startup said at the time that its technology “uniquely combines data from 270 million plus patients’ medical records by aggregating and unifying healthcare records from thousands of sources.”

Epic said Particle introduced thousands of new participant connections to Carequality in October, and asserted that they fell under the treatment use case. In the following months, all of Particle’s participant organizations claimed a permitted purpose of treatment for their requests, Epic said. 

‘Non-treatment use case’

However, Epic began to notice some red flags. The company said it observed anomalies in the patient record exchange patterns, like requests for large numbers of records within a certain geographical region. Additionally, Epic said that the companies connected to Particle weren’t sending new data back from patients, which “suggests a non-treatment use case.” 

Epic and its Care Everywhere Governing Council, consisting of 15 industry representatives, evaluated Particle’s new participant connections and determined that organizations like Integritort, MDPortals and Reveleer, which acquired MDPortals last year, “likely didn’t conform to a Treatment Permitted Purpose,” the notice said.

Epic said it learned that another Carequality member was planning to file a dispute, alleging that Integritort was using the patient data to try and identify potential class action lawsuit participants. On March 28, Epic said it discovered that a participant called Novellia claimed it was requesting records under treatment, despite publicly advertising its product as a “personal health tool.”

Integritort, Reveleer and Novellia didn’t respond to requests for comment.

Epic said it filed a formal dispute with Carequality at the Governing Council’s recommendation. On April 4, Epic asked Particle to provide additional information to illustrate how its participants qualify for the treatment use case, according to the notice. 

Michael Marchant, director of interoperability and innovation at University of California Davis Health, serves as the chair of Epic’s Governing Council. He said it’s hard to know exactly why Particle might have provided these organizations with records, or whether it intentionally engaged in wrongdoing. But, he said, companies have to act responsibly even if pressured to deliver financial results.

“If they were selling to things that they knew were not treatment-related organizations in an effort to match VC funding or profit margins or revenue targets or what have you, then that would be really bad,” Marchant told CNBC in an interview.

In a statement on LinkedIn Wednesday, Particle founder Troy Bannister said Epic acted unilaterally, and that Particle has not seen “rationale, justification or official claims” surrounding these issues.

Bannister wrote that, to the company’s knowledge, “all of the affected partners directly support treatment.” He said these organizations pull data for care providers and share data back with the Carequality network. 

“While we continue maintaining our connection with Carequality, the ability for one implementor to decide, without evidence or even so much as a warning, to disconnect providers at massive scale, jeopardizes clinical operations for hundreds of thousands of patients as well as the trust that is so critical to a trust-based exchange,” Bannister wrote.

Bannister didn’t address Epic’s April 4 request for additional information.

The formal dispute process is still ongoing. Marchant, who also serves as the co-chair of an advisory council at Carequality, said it’s the first time in the network’s history that a complaint has gotten this far.

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