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China is looking to challenge the U.S. in artificial intelligence. China’s tech giants have launched their own AI models. 

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China’s race to develop smarter-than-human artificial intelligence may put it ahead of the U.S., but such ground-breaking technology could also risk lessening the stronghold that the ruling Communist Party has over the world’s second-largest economy.

That’s the view of prominent AI scientist Max Tegmark, who told CNBC artificial general intelligence (AGI) is closer than we think and the narrative of a geopolitical battle between the U.S. and China racing to build the smartest AI is a “suicide race.”

While there is no singular definition of AGI, it is broadly taken to refer to AI that can outsmart humans.

Applications like ChatGPT — that allow users to prompt a chatbot for answers — have exploded in popularity. But many AI companies are racing to develop the next level, with AI that has human-level intelligence.

Sam Altman, the CEO of OpenAI, has said that AGI could be achieved by 2025. While there are other major names in the tech sector who also think AGI is close, many others think true AGI is still very far away.

As well as competition between technology companies, there is also the geopolitical battle taking place between the U.S. and China for dominance in realms from AI to chips. While this is often portrayed as a race to be first to the latest technology, Tegmark said this is not the right framing.

“I think of this battle, this geopolitical battle to build AGI first as a ‘hopium war’,” Tegmark told CNBC in an interview last month. ” I call it the ‘hopium war’ because it’s fueled by … delusional hope that we can control AGI.”

Tegmark is the president of the Future of Life Institute, a thinktank which penned a letter last year calling for AI labs to pause the development of advanced AI systems. The letter was signed by major tech names including Tesla CEO Elon Musk. Tegmark’s concern is that AI is advancing rapidly with very few guardrails in place, and no way to control it should it begin to outsmart humans.

“We are much closer to building AGI than figuring out how to control it. And that means that the AGI race is not an arms race, it’s a suicide race,” Tegmark said.

Is China worried about AGI?

China has little incentive to build AGI, according to Tegmark. The AI scientist recalled a story in which Elon Musk told him about a “high level meeting” the Tesla boss had with Chinese government officials in early 2023. Musk said to the Chinese government that if AGI is built, China “will not be controlled by the Communist Party, but by the super intelligence,” Tegmark said.

“[Musk] got a very strong reaction. Some of them, really hadn’t thought about that, and with less than a month from that, China came out with their first AI regulations,” Tegmark said, referencing new regulation governing generative AI.

China’s ministry of foreign affairs was not immediately available for comment on the anecdote. CNBC also contacted Tesla for a response from Musk.

“The U.S. doesn’t need to convince China to not build AGI. Even if the U.S. didn’t exist, the Chinese government would have an incentive to not build it because they want to be in control,” Tegmark said.

“[The] last thing they want is to lose that control.”

China’s approach to AI

AI is a strategic priority for the Chinese government. The country’s biggest firms such as Alibaba, Huawei and Tencent have been developing their own AI models. The capabilities of those models are also advancing.

China was also among the first countries in the world to bring in regulation around various aspects of AI. The country’s internet is heavily censored and any information that appears to go against Beijing’s ideology is blocked. OpenAI’s ChatGPT is banned and it is well-noted that chatbots in China won’t answer questions related to politics and topics deemed sensitive by the Communist Party.

The country’s approach to AI is therefore an attempt to push innovation while also balancing its own interests. When it comes to AGI, China is likely to pursue a similar approach, according to analysts.

“I would not count on China to limit its own AI capabilities due to fears that such technologies would threaten Party rule. Similar predictions were made about the internet, they all proved to be false,” Kendra Schaefer, a partner at consultancy Trivium China,” told CNBC.

“China will attempt to dominate AGI while creating a techno-regulatory apparatus that limits what AGI is permitted to do domestically.”

U.S.-China AI battle

Despite Tegmark’s view that the the race to build AGI is a “hopium war,” geopoltiics remains front and center between the U.S. and China when it comes to development of the technology.

“Right now, China is viewing AI through a dual-lens: geopolitical power and domestic growth,” said Abishur Prakash, founder and geopolitical strategist at Toronto-based strategy advisory firm, The Geopolitical Business.

Underestimating China in the AI 'multi-decade arms race' would be a mistake: Analyst

Will the U.S. and China partner on AI rules?

Technologists have warned of some of the risks and dangers when AGI does finally arrive. One theory is that without guardrails, AI will be able to improve itself and design new systems independently.

Tegmark believes that any such risks will be realized by both the U.S. and China, which will force both countries’ governments to individually come up with rules around AI safety.

“So my optimistic path forward is the U.S. and China unilaterally impose national safety standards to prevent their own companies from doing harm and building uncontrollable AGI, not to appease the rivals superpowers, but just to protect themselves,” Tegmark said.

“After that happens though, there’s this really interesting stage where the U.S. and China will be like, wait, how can we guarantee that North Korea doesn’t build AGI or someone else? And then the U.S. and China have an incentive now to push the rest of the world to join them into an AGI moratorium.”

Indeed, governments are already trying to work together to figure out how to create regulations and frameworks around AI. Last year, the U.K. hosted an AI safety summit, which the U.S. and China were both in attendance, to discuss potential guardrails around the technology.

But regulation and rules around AI are currently fragmented. This year, the European Union enacted the AI Act, the first major law globally governing the technology. China has its own set of rules, while many other countries have not yet moved to create any regulation.

Tegmark’s hope of co-ordination around AI safety is echoed by others.

“When the dangers of competition are greater than the rewards, nations will ideally be motivated to come together and mutually self-regulate,” Trivium China’s Schaefer said.

“Indeed, some Chinese policymakers have advocated for getting out ahead of that potential issue and establishing an international governance body under the UN – similar to the International Atomic Energy Agency – so there is desire on Beijing’s side to establish a global governance body,” she said.

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OpenAI’s active user count soars to 300 million people per week

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OpenAI's active user count soars to 300 million people per week

Sam Altman, co-founder and C.E.O. of OpenAI, speaks during the New York Times annual DealBook summit at Jazz at Lincoln Center on December 04, 2024 in New York City. 

Michael M. Santiago | Getty Images

After months of C-suite changes, tender offers and a soaring valuation, OpenAI has reached a new milestone: 300 million weekly active users.

OpenAI CEO Sam Altman revealed the new figure Wednesday at The New York Times’ DealBook Summit. A source familiar with the company told CNBC last week that the company’s weekly active user count was still at 250 million.

Over the next year, though, the company is reportedly targeting 1 billion active users.

It’s part of a serious growth plan for OpenAI, as the Microsoft-backed artificial intelligence startup battles Amazon-backed Anthropic and Elon Musk’s xAI, the latter of which Altman said he views as a “fierce competitor” on Wednesday at DealBook. The company is also up against established tech giants like GoogleMeta, Microsoft and Amazon for a bigger slice of the generative AI market, which is predicted to top $1 trillion in revenue within a decade.

OpenAI on Tuesday announced it had hired its first chief marketing officer, nabbing Kate Rouch from crypto company Coinbase — an indication that it plans to spend more on marketing to grow its user base. In October, OpenAI debuted a search feature within ChatGPT that positions it to better compete with search engines like GoogleMicrosoft‘s Bing and Perplexity and may attract more users who otherwise visited those sites to search the web.

Also at DealBook on Wednesday, Altman denied reports that the company had asked investors not to also invest in its competitors but said that those who decide to wouldn’t have access to OpenAI’s “information rights,” like the company’s roadmap and other materials.

OpenAI’s valuation has climbed to $157 billion in the two years since it launched ChatGPT, raising about $13 billion from Microsoft. The company closed its latest $6.6 billion round in October and received a $4 billion revolving line of credit. As of last week, OpenAI is allowing employees to sell about $1.5 billion worth of shares in a new tender offer to SoftBank.

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Salesforce shares jump on earnings beat and strong AI deals pipeline

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Salesforce shares jump on earnings beat and strong AI deals pipeline

Marc Benioff, CEO of Salesforce, appears on a panel at the World Economic Forum in Davos, Switzerland, on Jan. 18, 2024.

Stefan Wermuth | Bloomberg | Getty Images

Shares of Salesforce popped more than 8% Wednesday, a day after the company reported third-quarter results that exceeded analysts’ estimates for revenue and guidance and showed strong promise for its artificial intelligence offerings.

Salesforce’s revenue grew 8% year over year to $9.44 billion in its third quarter, up from the $9.34 billion expected by LSEG. The company’s net income was $1.5 billion in the quarter, up 25% from $1.2 billion a year ago.

Salesforce raised revenue guidance to between $37.8 billion and $38 billion for its fiscal 2025, up slightly from $37.7 billion to $38 billion it had previously reported. The new range puts the midpoint for Salesforce’s fiscal 2025 revenue guidance at $37.9 billion, ahead of analysts’ expectations.

Analysts at Morgan Stanley reiterated their overweight rating on the stock, stating in a note that “the force is strong with this one.” The analysts said they are encouraged by Salesforce’s strong start with its artificial intelligence agent, Agentforce, as it closed more than 200 deals during the quarter with “thousands” more in the pipeline.

Salesforce’s Agentforce is an example of so-called AI agent technology. Several companies believe these advanced chatbots represent the next logical step from ChatGPT and other related tools powered by large language models.

Goldman Sachs analysts raised their Salesforce price target from $360 to $400 and reiterated their buy rating on the stock. The analysts said the company’s Data Cloud and Agentforce are driving “notable pipeline generation,” and they’re starting to contribute to the fundamentals of the business.

“We believe that Salesforce remains poised to be one of the most strategic application software companies in the $1tn+ TAM cloud industry and is on a path to $50bn in revenue,” the analysts said in a Tuesday note.

Similarly, analysts at Bank of America said Salesforce’s third-quarter results suggest it is “leading the way” with Agentforce, and they reiterated their buy rating on the stock. The analysts raised their price target to $440 from $390.

The analysts said the emerging AI agent product cycle is not derailing Salesforce’s margin expansion, and that a meaningful pipeline exists in the service and sales sectors.

“Commentary suggests no contribution for Agentforce is assumed in the guide, suggesting early Agentforce deal closure could provide a source of upside,” they wrote Wednesday.

–CNBC’s Michael Bloom and Jonathan Vanian contributed to this report

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Amazon sued by DC attorney general for allegedly excluding neighborhoods from Prime delivery

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Amazon sued by DC attorney general for allegedly excluding neighborhoods from Prime delivery

Washington, D.C.’s attorney general sued Amazon on Wednesday, accusing the company of covertly depriving residents in certain ZIP codes in the nation’s capital from access to Prime’s high-speed delivery.

The lawsuit from AG Brian Schwalb alleges that, since 2022, Amazon has “secretly excluded” two “historically underserved” D.C. ZIP codes from its expedited delivery service while charging Prime members living there the full subscription price. Amazon’s Prime membership program costs $139 a year and includes perks like two-day shipping and access to streaming content.

“Amazon is charging tens of thousands of hard-working Ward 7 and 8 residents for an expedited delivery service it promises but does not provide,” Schwalb said in a statement. “While Amazon has every right to make operational changes, it cannot covertly decide that a dollar in one zip code is worth less than a dollar in another.”

Amazon spokesperson Steve Kelly said in a statement it’s “categorically false” that its business practices are “discriminatory or deceptive.”

“We want to be able to deliver as fast as we possibly can to every zip code across the country, however, at the same time we must put the safety of delivery drivers first,” Kelly said in a statement. “In the zip codes in question, there have been specific and targeted acts against drivers delivering Amazon packages. We made the deliberate choice to adjust our operations, including delivery routes and times, for the sole reason of protecting the safety of drivers.”

Kelly said Amazon has offered to work with the AG’s office on efforts “to reduce crime and improve safety in these areas.”

In June 2022, Amazon allegedly stopped using its own delivery trucks to shuttle packages in the ZIP codes 20019 and 20020 based on concerns over driver safety, the suit states. In place of its in-house delivery network, the company relied on outside carriers like UPS and the U.S. Postal Service to make deliveries, according to the complaint, which was filed in D.C. Superior Court.

The decision caused residents in those ZIP codes to experience “significantly longer delivery times than their neighbors in other District ZIP codes, despite paying the exact same membership price for Prime,” the lawsuit says.

Data from the AG shows that before Amazon instituted the change, more than 72% of Prime packages in the two ZIP codes were delivered within two days of checkout. That number dropped to as low as 24% following the move, while two-day delivery rates across the district increased to 74%.

Amazon has faced prior complaints of disparities in its Prime program. In 2016, the company said it would expand access to same-day delivery in cities including Atlanta, Chicago, Dallas and Washington, after a Bloomberg investigation found Black residents were “about half as likely” to be eligible for same-day delivery as white residents.

The ZIP codes in Schwalb’s complaint are in areas with large Black populations, according to 2022 Census data based on its American Community Survey.

The Federal Trade Commission also sued Amazon in June 2023, accusing the company of tricking consumers into signing up for Prime and “sabotaging” their attempts to cancel by employing so-called dark patterns, or deceptive design tactics meant to steer users toward a specific choice. Amazon said the complaint was “false on the facts and the law.” The case is set to go to trial in June 2025.

According to Scwalb’s complaint, Amazon never communicated the delivery exclusion to Prime members in the area. When consumers in the affected ZIP codes complained to Amazon about slower delivery speeds, the company said it was due to circumstances outside its control, the suit says.

The lawsuit accuses Amazon of violating the district’s consumer protection laws. It also asks the court to “put an end to Amazon’s deceptive conduct,” as well as for damages and penalties.

To get packages to customers’ doorsteps, Amazon uses a combination of its own contracted delivery companies, usually distinguishable by Amazon-branded cargo vans, as well as carriers like USPS, UPS and FedEx, and a network of gig workers who make deliveries from their own vehicles as part of its Flex program.

Amazon has rapidly expanded its in-house logistics army in recent years as it looks to speed up deliveries from two days to one day or even a few hours. In July, the company said it recorded its “fastest Prime delivery speeds ever” in the first half of the year, delivering more than 5 billion items within a day.

In relying on its own workforce, Amazon has assumed greater control over its delivery operations.

In his complaint, Schwalb cites an internal company policy that says Amazon may choose to exclude certain areas from being served by its in-house delivery network if a driver experiences “violence, intimidation or harassment.” The company relies on UPS or USPS to deliver packages in excluded areas.

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