Facebook co-founder and CEO Mark Zuckerberg testifies before the House Financial Services Committee in the Rayburn House Office Building on Capitol Hill October 23, 2019 in Washington, DC. Zuckerberg testified about Facebook’s proposed cryptocurrency Libra, how his company will handle false and misleading information by political leaders during the 2020 campaign and how it handles its users’ data and privacy.
Facebook CEO Mark Zuckerberg came out swinging at the start of the company’s third-quarter earnings call Monday, defending its research on how its services affect users, following numerous press reports Monday based on documents leaked by a former employee.
“Good faith criticism helps us get better,” Zuckerberg said. “But my view is that what we are seeing is a coordinated effort to selectively use leaked documents to paint a false picture of our company. The reality is that we have an open culture, where we encourage discussion and research about our work so we can make progress on many complex issues that are not specific to just us.”
Zuckerberg said Facebook does this work “because we care about getting this right.”
The reports came from a consortium of 17 news outlets in the U.S. that were provided internal research by Frances Haugen, a former employee who also provided the documents to Congress and the Securities and Exchange Commission, seeking whistleblower status. They follow an earlier series based on the same documents by The Wall Street Journal, which prompted hearings in Congress and abroad.
The reports revealed that Facebook had been aware of the ways its own services could negatively impact some users’ mental health, push polarized recommendations to users and spread potentially dangerous misinformation. While Facebook has taken steps to make its platform safer on all of these counts, the company’s detractors say it hasn’t acted boldly or quickly enough.
A theme in Zuckerberg’s argument was that the problems Facebook experiences are a reflection of society.
“These issues aren’t primarily about social media,” Zuckerberg said. “That means that no matter what Facebook does, we’re never going to solve them on our own.”
He said polarization began rising in the U.S. “before I was born” while pointing to unspecified research finding that countries with similar social media use have seen stagnant or declining polarization.
He said Facebook often needs to choose between a host of trade-offs, such as providing encryption versus supporting law enforcement investigations.
“It makes a good sound bite to say that we don’t solve these impossible trade-offs because we’re just focused on making money, but the reality is these questions are not primarily about our business, but about balancing different difficult social values,” he said.
Zuckerberg said he has called for regulation so that companies like Facebook aren’t the ones that have to choose between those trade-offs.
He said he’s proud of the research Facebook has done and emphasized the company’s investments in safety and security measures.
But, he said, he worries the response to Facebook’s research could create negative incentives for other businesses to do similar work.
“I worry about the incentives that we are creating for other companies to be as introspective as we have been,” he said. “But I am committed to continuing this work because I believe it will be better for our community and our business over the long term.”
A new ‘North Star’
Toward the end of his opening statement, Zuckerberg announced a new strategic vision for the future of the platform. He said that rather than make Facebook a place that caters to the greatest number of people, it will now place a greater focus on young adults, ages 18-29.
“We are retooling our teams to make serving young adults their North Star, rather than optimizing for the larger number of older people,” Zuckerberg said. “Like everything, this will involve trade-offs in our product, and it will likely mean the rest of our community will grow more slowly than it otherwise would have. But it should also mean that our services become stronger for young adults.”
Zuckerberg said the shift would take “years, not months.”
That change and others Zuckerberg mentioned, including refreshing Facebook and Instagram to put an emphasis on video and leaning into its Reels short video product, would make the platform more similar to TikTok and go after an important part of its user base. Zuckerberg pointed to TikTok as one of the most formidable competitors it’s seen.
Facebook often brings up TikTok’s rapid growth when faced with questions about its own vast power, which is the subject of an antitrust complaint brought by the Federal Trade Commission. The FTC has accused Facebook of illegally maintaining a monopoly in the personal social networking space, in part through its acquisitions of Instagram and WhatsApp.
Several reports from the leaked documents showed Facebook has increasingly worried about the lack of engagement on its main platform among younger users, which would create an existential threat to its future. Still, the focus on young adults, rather than teens under 18, could ease pressure from lawmakers and others who have warned Facebook against making a version of its products for kids.
Amazon on Friday announced it would invest an additional $4 billion in Anthropic, the artificial intelligence startup founded by ex-OpenAI research executives.
The new funding brings the tech giant’s total investment to $8 billion, though Amazon will retain its position as a minority investor, according to Anthropic, the San Francisco-based company behind the Claude chatbot and AI model.
Amazon Web Services will also become Anthropic’s “primary cloud and training partner,” according to a blog post. From now on, Anthropic will use AWS Trainium and Inferentia chips to train and deploy its largest AI models.
Anthropic is the company behind Claude — one of the chatbots that, like OpenAI’s ChatGPT and Google’s Gemini, has exploded in popularity. Startups like Anthropic and OpenAI, alongside tech giants such as Google, Amazon, Microsoft and Meta, are all part of a generative AI arms race to ensure they don’t fall behind in a market predicted to top $1 trillion in revenue within a decade. Some, like Microsoft and Amazon, are backing generative AI startups with hefty investments as well as working on in-house generative AI.
The partnership announced Friday will also allow AWS customers “early access” to an Anthropic feature: the ability for an AWS customer to do fine-tuning with their own data on Anthropic’s Claude. It’s a unique benefit for AWS customers, according to a company blog post.
In March, Amazon’s $2.75 billion investment in Anthropic was the company’s largest outside investment in its three-decade history. The companies announced an initial $1.25 billion investment in September 2023.
Amazon does not have a seat on Anthropic’s board.
News of Amazon’s additional investment comes one month after Anthropic announced a significant milestone for the company: AI agents that can use a computer to complete complex tasks like a human would.
Anthropic’s new Computer Use capability, part of its two newest AI models, allows its tech to interpret what’s on a computer screen, select buttons, enter text, navigate websites and execute tasks through any software and real-time internet browsing.
The tool can “use computers in basically the same way that we do,” Jared Kaplan, Anthropic’s chief science officer, told CNBC in an interview last month, adding it can do tasks with “tens or even hundreds of steps.”
Amazon had early access to the tool, Anthropic told CNBC at the time, and early customers and beta testers included Asana, Canva and Notion. The company had been working on the tool since early this year, according to Kaplan.
In September, Anthropic rolled out Claude Enterprise, its biggest new product since its chatbot’s debut, designed for businesses looking to integrate Anthropic’s AI. In June, the company debuted its more powerful AI model, Claude 3.5 Sonnet, and in May, it rolled out its “Team” plan for smaller businesses.
Last year, Google committed to invest $2 billion in Anthropic, after previously confirming it had taken a 10% stake in the startup alongside a large cloud contract between the two companies.
LONDON — Apple and Google could face a competition investigation into their dominance of mobile web browsers and apps in the U.K.
The U.K.’s Competition and Markets Authority issued a report Friday with a provisional decision from an independent inquiry group tasked by the regulator with carrying out an in-depth review of the mobile browser markets.
In the report, the group recommended that the CMA investigates Apple and Google’s activities in mobile ecosystems under the new Digital Markets, Competition and Consumers Act (DMCC), a new U.K. law coming into force next year which seeks to prevent anti-competitive behavior in digital markets.
The DMCC is akin to the Digital Markets Act in the European Union. It gives the CMA the ability to designate firms as having “Strategic Market Status” (SMS) — which means they have a significant amount of market power in a certain digital business.
Under the rules, the CMA can impose major behavioral changes on firms that have SMS status, including ending “self-preferencing” of their own services, requiring interoperability — essentially allowing one piece of software to work with another smoothly — and banning anti-competitive behavior.
The CMA is required to undertake a formal investigation to give a firm SMS status.
For Apple specifically, the CMA inquiry group said it was concerned the tech giant’s App Store rules “restrict other competitors from being able to deliver new, innovative features that could benefit consumers” — for example, faster webpage loading on iPhone apps.
It added many smaller U.K. developers said they would like to use “progressive” web apps — which allow firms to offer apps outside of an app store — but that this technology “is not able to fully take off on iOS devices.”
The group also said it found a revenue-sharing agreement between Google and Apple to make Google the default search engine on iPhone “significantly reduces their financial incentives to compete in mobile browsers on iOS.”
“Markets work best when rival businesses are able to develop and bring innovative options to consumers,” Margot Daly, chair of the CMA’s independent inquiry group, said in a statement, adding that “competition between different mobile browsers is not working well and this is holding back innovation in the U.K.”
Apple said in a statement that it disagreed with the findings of the report and that it was concerned market interventions imposed under the DMCC “would undermine user privacy and hinder our ability to make the kind of technology that sets Apple apart.”
“Apple believes in thriving and dynamic markets where innovation can flourish. We face competition in every segment and jurisdiction where we operate, and our focus is always the trust of our users” an Apple spokesperson told CNBC via email.
Google was not immediately available for comment when contacted by CNBC.
The CMA group had also looked into restrictions on the distribution of gaming services on Apple’s mobile app distribution platform. However, it’s now decided to drop this element of the investigation following a decision by the U.S. tech giant to allow cloud gaming services on App Store.
The regulator said interested parties have until Dec. 13 to share comments on its provisional findings. It expects to make a final decision in March 2025.
An iPhone 16 signage is seen on the window at the Fifth Avenue Apple Store on new products launch day on September 20, 2024 in New York City.
Michael M. Santiago | Getty Images News | Getty Images
The Indonesian government expects Apple to increase its proposed $100 million investment into the country, according to state media, as the iPhone maker seeks clearance from Jakarta to sell its latest phones.
The American tech giant’s latest smartphone model doesn’t meet Indonesia’s 40% domestic content requirements for smartphones and tablets and hasn’t been granted clearance to be sold in the country.
The purpose of the ban is to protect local industry and jobs, with officials asking Apple to increase its investments and commitments to the economy in order to gain greater access.
According to a report from Indonesian state media, the country’s Ministry of Industry met with representatives from Apple on Thursday regarding its proposal to invest $100 million over two years.
The funds would go toward a research and development center program and professional development academy in the country, as per the report.
The company also plans to produce accessory product components, specifically mesh for Apple’s AirPods Max, starting in July 2025, it added.
Apple didn’t immediately respond to a request for comment from CNBC.
While the new offer is 10 times larger than a proposal that was reported earlier, the government is still striving to sweeten the deal to get a “fair” commitment.
“From the government’s perspective, of course, we want this investment to be larger,” industry ministry spokesperson Febri Hendri Antoni Arif told state media on Thursday.
He said that a larger investment would help the development of Indonesia’s manufacturing sector, adding that its domestic industry was capable of supporting production of Apple devices such as chargers and accessories.
While Indonesia represents a small market for Apple, it also offers growth opportunities as it has the world’s fourth-largest population, according to Le Xuan Chiew, a Canalys analyst focusing on Apple strategy research.
“Its young, tech-savvy population with growing digital literacy aligns with Apple’s strategy to expand [global sales],” he said, noting that it also offers potential for manufacturing and assembly that supports Apple’s efforts to diversify its supply chain.
Success in this market requires a long-term approach, and Apple’s investment offer demonstrates a commitment to complying with local regulations and paving the way for future growth, he added.
