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Snap CEO Evan Spiegel, joins CNBC ‘Power Lunch’ on September 17, 2024.

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Snap shares closed down 5% on Thursday after the Federal Trade Commission said it would refer a complaint against the company to the Department of Justice.

The FTC’s non-public complaint involves allegations that Snapchat’s My AI chatbot poses “risks and harms to young users,” the commission said in a statement. The complaint stems from the FTC’s compliance reviews with Snap following a 2014 settlement regarding allegations of public deception pertaining to data collection by the company.

As part of the FTC’s compliance reviews of Snap, the agency said it had uncovered the possibility that the company “is violating or is about to violate the law.”

“A proceeding is in the public interest,” the FTC said in its statement.

The FTC did not specify what about the My AI chatbot its complaint was focused on, but the chatbot has previously drawn scrutiny.

A Snap spokesperson pushed back against the FTC’s claims in a statement to CNBC.

“Unfortunately, on the last day of this Administration, a divided FTC decided to vote out a proposed complaint that does not consider any of these efforts, is based on inaccuracies, and lacks concrete evidence,” the Snap spokesperson said. “It also fails to identify any tangible harm and is subject to serious First Amendment concerns.”

The spokesperson added that while the company shares the FTC’s “focus on ensuring the thoughtful development of generative AI,” Snap believes that the “complaint would stifle innovation and competition in a critical and growing sector of the economy.”

Jonathan Raa | AP

Snap debuted the My AI chatbot in 2023. It is powered by the large language models of OpenAI and Google, giving it the ability to answer user questions and provide tips and suggestions similar to ChatGPT and other AI-powered chatting tools.

The chatbot has been noted for providing problematic responses. In one instance while speaking with a reporter who was pretending to be a teenager, the chatbot answered explained how to hide the smell of alcohol and marijuana, The Washington Post reported in 2023. At the time of the chatbot’s initial release, Snap said that My AI, like other AI-powered chatbots, is “prone to hallucination and can be tricked into saying just about anything. Please be aware of its many deficiencies and sorry in advance!”

In Oct. 2023, the United Kingdom’s Information Commissioner’s Office issued a preliminary enforcement notice against Snap, alleging that the company’s My AI-related risk assessment “did not adequately assess the data protection risks posed by the generative AI technology, particularly to children.”

Although the FTC said that it voted during a closed meeting to issue a public statement about it’s case against Snap and its ensuing referral to the DOJ, it noted that FTC commissioners Melissa Holyoak and Andrew Ferguson were absent.

The FTC also pointed to a dissenting statement by Ferguson, who President-elect Donald Trump named in December to replace Lina Khan as the next FTC chair.

Ferguson noted that these kinds of referrals “are not disclosed unless and until the complaint is filed in court by the Department or the Commission.”

“I did not participate in the farcical closed meeting at which this matter was approved,” he wrote.

Ferguson added that he opposes the FTC’s complaint against Snap, but that he can’t “release a detailed analysis of its many problems,” because the case is not public. Ferguson wrote that the complaint’s interpretations of an FTC law is “wrong” and that it is “in direct conflict with the guarantees of the First Amendment.”

If the DOJ files the complaint, Ferguson said he will “release a more detailed statement about this affront to the Constitution and the rule of law.”

Watch: Snap CEO on earnings beat and new advertising products

Snap CEO on earnings beat and new advertising products

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Week in review: The Nasdaq’s worst week since April, three trades, and earnings

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Week in review: The Nasdaq's worst week since April, three trades, and earnings

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Too early to bet against AI trade, State Street suggests 

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Too early to bet against AI trade, State Street suggests 

Momentum and private assets: The trends driving ETFs to record inflows

State Street is reiterating its bullish stance on the artificial intelligence trade despite the Nasdaq’s worst week since April.

Chief Business Officer Anna Paglia said momentum stocks still have legs because investors are reluctant to step away from the growth story that’s driven gains all year.

“How would you not want to participate in the growth of AI technology? Everybody has been waiting for the cycle to change from growth to value. I don’t think it’s happening just yet because of the momentum,” Paglia told CNBC’s “ETF Edge” earlier this week. “I don’t think the rebalancing trade is going to happen until we see a signal from the market indicating a slowdown in these big trends.”

Paglia, who has spent 25 years in the exchange-traded funds industry, sees a higher likelihood that the space will cool off early next year.

“There will be much more focus about the diversification,” she said.

Her firm manages several ETFs with exposure to the technology sector, including the SPDR NYSE Technology ETF, which has gained 38% so far this year as of Friday’s close.

The fund, however, pulled back more than 4% over the past week as investors took profits in AI-linked names. The fund’s second top holding as of Friday’s close is Palantir Technologies, according to State Street’s website. Its stock tumbled more than 11% this week after the company’s earnings report on Monday.

Despite the decline, Paglia reaffirmed her bullish tech view in a statement to CNBC later in the week.

Meanwhile, Todd Rosenbluth suggests a rotation is already starting to grip the market. He points to a renewed appetite for health-care stocks.

“The Health Care Select Sector SPDR Fund… which has been out of favor for much of the year, started a return to favor in October,” the firm’s head of research said in the same interview. “Health care tends to be a more defensive sector, so we’re watching to see if people continue to gravitate towards that as a way of diversifying away from some of those sectors like technology.”

The Health Care Select Sector SPDR Fund, which has been underperforming technology sector this year, is up 5% since Oct. 1. It was also the second-best performing S&P 500 group this week.

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People with ADHD, autism, dyslexia say AI agents are helping them succeed at work

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People with ADHD, autism, dyslexia say AI agents are helping them succeed at work

Neurodiverse professionals may see unique benefits from artificial intelligence tools and agents, research suggests. With AI agent creation booming in 2025, people with conditions like ADHD, autism, dyslexia and more report a more level playing field in the workplace thanks to generative AI.

A recent study from the UK’s Department for Business and Trade found that neurodiverse workers were 25% more satisfied with AI assistants and were more likely to recommend the tool than neurotypical respondents.

“Standing up and walking around during a meeting means that I’m not taking notes, but now AI can come in and synthesize the entire meeting into a transcript and pick out the top-level themes,” said Tara DeZao, senior director of product marketing at enterprise low-code platform provider Pega. DeZao, who was diagnosed with ADHD as an adult, has combination-type ADHD, which includes both inattentive symptoms (time management and executive function issues) and hyperactive symptoms (increased movement).

“I’ve white-knuckled my way through the business world,” DeZao said. “But these tools help so much.”

AI tools in the workplace run the gamut and can have hyper-specific use cases, but solutions like note takers, schedule assistants and in-house communication support are common. Generative AI happens to be particularly adept at skills like communication, time management and executive functioning, creating a built-in benefit for neurodiverse workers who’ve previously had to find ways to fit in among a work culture not built with them in mind.

Because of the skills that neurodiverse individuals can bring to the workplace — hyperfocus, creativity, empathy and niche expertise, just to name a few — some research suggests that organizations prioritizing inclusivity in this space generate nearly one-fifth higher revenue.

AI ethics and neurodiverse workers

“Investing in ethical guardrails, like those that protect and aid neurodivergent workers, is not just the right thing to do,” said Kristi Boyd, an AI specialist with the SAS data ethics practice. “It’s a smart way to make good on your organization’s AI investments.”

Boyd referred to an SAS study which found that companies investing the most in AI governance and guardrails were 1.6 times more likely to see at least double ROI on their AI investments. But Boyd highlighted three risks that companies should be aware of when implementing AI tools with neurodiverse and other individuals in mind: competing needs, unconscious bias and inappropriate disclosure.

“Different neurodiverse conditions may have conflicting needs,” Boyd said. For example, while people with dyslexia may benefit from document readers, people with bipolar disorder or other mental health neurodivergences may benefit from AI-supported scheduling to make the most of productive periods. “By acknowledging these tensions upfront, organizations can create layered accommodations or offer choice-based frameworks that balance competing needs while promoting equity and inclusion,” she explained.

Regarding AI’s unconscious biases, algorithms can (and have been) unintentionally taught to associate neurodivergence with danger, disease or negativity, as outlined in Duke University research. And even today, neurodiversity can still be met with workplace discrimination, making it important for companies to provide safe ways to use these tools without having to unwillingly publicize any individual worker diagnosis.

‘Like somebody turned on the light’

As businesses take accountability for the impact of AI tools in the workplace, Boyd says it’s important to remember to include diverse voices at all stages, implement regular audits and establish safe ways for employees to anonymously report issues.

The work to make AI deployment more equitable, including for neurodivergent people, is just getting started. The nonprofit Humane Intelligence, which focuses on deploying AI for social good, released in early October its Bias Bounty Challenge, where participants can identify biases with the goal of building “more inclusive communication platforms — especially for users with cognitive differences, sensory sensitivities or alternative communication styles.”

For example, emotion AI (when AI identifies human emotions) can help people with difficulty identifying emotions make sense of their meeting partners on video conferencing platforms like Zoom. Still, this technology requires careful attention to bias by ensuring AI agents recognize diverse communication patterns fairly and accurately, rather than embedding harmful assumptions.

DeZao said her ADHD diagnosis felt like “somebody turned on the light in a very, very dark room.”

“One of the most difficult pieces of our hyper-connected, fast world is that we’re all expected to multitask. With my form of ADHD, it’s almost impossible to multitask,” she said.

DeZao says one of AI’s most helpful features is its ability to receive instructions and do its work while the human employee can remain focused on the task at hand. “If I’m working on something and then a new request comes in over Slack or Teams, it just completely knocks me off my thought process,” she said. “Being able to take that request and then outsource it real quick and have it worked on while I continue to work [on my original task] has been a godsend.”

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