As the person in charge of Airbnb’s worldwide ban on parties, she’s spent more than three years figuring out how to battle party “collusion” by users, flag “repeat party houses” and, most of all, design an anti-party AI system with enough training data to halt high-risk reservations before the offender even gets to the checkout page.
It’s been a bit like a game of whack-a-mole: Whenever Banerjee’s algorithms flag some concerns, new ones pop up.
Airbnb defines a party as a gathering that occurs at an Airbnb listing and “causes significant disruption to neighbors and the surrounding community,” according to a company rep. To determine violations, the company considers whether the gathering is an open-invite one, and whether it involves excessive noise, trash, visitors, parking issues for neighbors, and other factors.
Bannerjee joined the company’s trust and safety team in May 2020 and now runs that group. In her short time at the company, she’s overseen a ban on high-risk reservations by users aged 25 and under, an pilot program for anti-party AI in Australia, heightened defenses on holiday weekends, a host insurance policy worth millions of dollars, and this summer, a global rollout of Airbnb’s reservation screening system.
Some measures have worked better than others, but the company says party reports dropped 55% between August 2020 and August 2022 — and since the worldwide launch of Banerjee’s system in May, more than 320,000 guests have been blocked or redirected from booking attempts on Airbnb.
Overall, the company’s business is getting stronger as the post-pandemic travel boom starts to fade. Last month, the company reported earnings that beat analysts’ expectations on earnings per share and revenue, with the latter growing 18% year-over-year, despite fewer-than-expected number of nights and experiences booked via the platform.
Turning parental party radar into an algorithm
Courtesy: Airbnb
Airbnb says the pandemic and hosts’ fears of property damage are the main drivers behind its anti-party push, but there have been darker incidents as well.
A Halloween party at an Airbnb in 2019 left five people dead. This year between Memorial Day and Labor Day weekends, at least five people were killed at parties hosted at Airbnbs. In June, the company was sued by a family who lost their 18-year-old son in a shooting at a 2021 Airbnb party.
When Banerjee first joined Airbnb’s trust team in summer 2020, she recalls people around her asking, “How do you solve this problem?” The stream of questions, from people above and below her on the corporate ladder, contributed to her anxiety. Airbnb’s party problem was complex, and in some ways, she didn’t know where to start.
As a mother of five, Banerjee knows how to sniff out a secretive shindig.
Last summer, Banerjee’s 17-year-old daughter had a friend who wanted to throw an 18th birthday party – and she was thinking about booking an Airbnb to do it. Banerjee recalls her daughter telling her about the plan, asking her whether she should tell her friend not to book an Airbnb because of the AI safeguards. The friend ended up throwing the party at her own home.
“Being a mother of teenagers and seeing teenage friends of my kids, your antenna is especially sharp and you have a radar for, ‘Oh my God, okay, this is a party about to happen,” Banerjee said. “Between our data scientists and our machine learning engineers and us, we started looking at these signals.”
For Banerjee, it was about translating that antenna into a usable algorithm.
In an April 2020 meeting with Nate Blecharczyk, the company’s co-founder and chief strategy officer, Banerjee recalls strategizing about ways to fix Airbnb’s party problem on three different time scales: “right now,” within a year, and in the general future.
For the “right now” scale, they talked about looking at platform data, studying the patterns and signals for current party reports, and seeing how those puzzle pieces align.
The first step, in July 2020, was rolling out a ban on high-risk reservations by users under the age of 25, especially those who either didn’t have much history on the platform or who didn’t have good reviews from hosts. Although Airbnb says that blocked or redirected “thousands” of guests globally, Banerjee still saw users trying to get around the ban by having an older friend or relative book the reservation for them. Two months later, Airbnb announced a “global party pan,” but that was mostly lip service – at least, until they had the technology to back it up.
Around the same time, Banerjee sent out a series of invitations. Rather than to a party, they were invites to attend party risk reduction workshops, sent to Airbnb designers, data scientists, machine learning engineers and members of the operations and communications teams. In Zoom meetings, they looked at results from the booking ban for guests under age 25 and started putting further plans in motion: Banerjee’s team created a 24/7 safety line for hosts, rolled out a neighborhood support line, and decided to staff up the customer support call center.
One of the biggest takeaways, though, was to remove the option for hosts to list their home as available for gatherings of more than 16 people.
Courtesy: Airbnb
Now that they had a significant amount of data on how potential partiers might act, Banerjee’s had a new goal: Build the AI equivalent of a neighbor checking on the house when the high-schooler’s parents leave them home alone for the weekend.
Around January 2021, Banerjee recalled hearing from Airbnb’s Australia offices that disruptive parties at Airbnbs were up and coming, just like they were in North America, as travel had come to a relative standstill and Covid was in full swing. Banerjee considered rolling out the under-25 ban in Australia, but after chatting with Blecharczyk, she decided to experiment with a party-banning machine learning model instead.
But Banerjee was nervous. Soon after, she phoned her father in Kolkata, India – it was between 10pm and 11pm for her, which was mid-morning for him. As the first female engineer in her family, Banerjee’s father is one of her biggest supporters, she said, and typically the person she calls during the most difficult moments of her life.
Banerjee said, “I remember talking to him saying, ‘I’m just very scared – I feel like I’m on the verge of doing one of the most important things of my career, but I still don’t know if we are going to succeed, like we have the pandemic going on, the business is hurting… We have something that we think is going to be great, but we don’t know yet. I’m just on this verge of uncertainty, and it just makes me really nervous.'”
Banerjee recalled her father telling her that this has happened to her before and that she’d succeed again. He’d be more worried, he told her, if she was overconfident.
In October 2021, Banerjee’s team rolled out the pilot program for their reservation screening AI in Australia. The company saw a 35% drop in parties between regions of the country that had the program versus those that did not. The team spent months analyzing the results and upgraded the system with more data, as well as safety and property damage incidents and records of user collusion.
How the AI system works to stop parties
Listings on Airbnb
Source: Airbnb
Imagine you’re a 21-year-old planning a Halloween party in your hometown. Your plan: Book an Airbnb house for one night, send out the “BYOB” texts and try to avoid posting cliched Instagram captions.
There’s just one problem: Airbnb’s AI system is working against you from the second you sign on.
The party-banning algorithm looks at hundreds of factors: the reservation’s closeness to the user’s birthday, the user’s age, length of stay, the listing’s proximity to where the user is based, how far in advance the reservation is being made, weekend vs. weekday, the type of listing and whether the listing is located in a heavily crowded location rather than a rural one.
Deep learning is a subset of machine learning that uses neural networks – that is, the systems process information in a way inspired by the human brain. The systems are certainly not functionally comparable to the human brain, but they do follow the pattern of learning by example. In the case of Airbnb, one model focuses specifically on the risk of parties, while another focuses on property damage, for instance.
“When we started looking at the data, we found that in most cases, we were noticing that these were bookings that were made extremely last-minute, potentially by a guest account that was created at the last minute, and then a booking was made for a potential party weekend such as New Year’s Eve or Halloween, and they would book an entire home for maybe one night,” Banerjee told CNBC. “And if you looked at where the guest actually lived, that was really in close proximity to where the listing was getting booked.”
After the models do their analysis, the system assigns every reservation a party risk. Depending on the risk tolerance that Airbnb has assigned for that country or area, the reservation will either be banned or greenlit. The team also introduced “heightened party defenses” for holiday weekends such as the Fourth of July, Halloween and New Year’s Eve.
Source: Airbnb
In some cases, like when the right decision isn’t quite clear, reservation requests are flagged for human review, and those human agents can look at the message thread to gauge party risk. But the company is also “starting to invest in a huge way” in large language models for content understanding, to help understand party incidents and fraud, Banerjee said.
“The LLM trend is something that if you are not on that train, it’s like missing out on the internet,” Banerjee told CNBC.
Banerjee said her team has seen a higher risk of parties in the U.S. and Canada, and the next-riskiest would probably be Australia and certain European countries. In Asia, reservations seem to be considerably less risky.
The algorithms are trained partly on tickets labeled as parties or property damage, as well as hypothetical incidents and past ones that occurred before the system went live to see if it would have flagged them. They’re also trained on what “good” guest behavior looks like, such as someone who checks in and out on time, leaves a review on time, and has no incidents on the platform.
But like many forms of AI training data, the idea of “good” guests is ripe for bias. Airbnb has introduced anti-discrimination experiments in the past, such as hiding guests’ photos, preventing hosts from viewing a guest’s full name before the booking is confirmed, and introducing a Smart Pricing tool to help address earnings disparities, although the latter unwittingly ended up widening the gap.
Airbnb said its reservation-screening AI has been evaluated by the company’s anti-discrimination team and that the company often tests the system in areas like precision and recall.
Going global
Courtesy: Airbnb
Almost exactly one year ago, Banerjee was at a plant nursery with her husband and mother-in-law when she received a call from Airbnb CEO Brian Chesky.
She thought he’d be calling about the results of the Australia pilot program, but instead he asked her about trust in the platform. Given all the talk she did about machine learning models and features, she recalled him asking her, would she feel safe sending one of her college-bound kids to stay at an Airbnb – and if not, what would make her feel safe?
That phone call ultimately resulted in the decision to expand Banerjee’s team’s reservation screening AI worldwide the following spring.
Things kicked into high gear, with TV spots for Banerjee, some of which she spotted in between pull-ups on the gym television. She asked her daughter for advice on what to wear. The next thing she knew, the team was getting ready for a live demo of the reservation screening AI with Chesky. Banerjee was nervous.
Last fall, the team sat down with Chesky after working with front-end engineers to create a fake party risk, showing someone booking an entire mansion during a holiday weekend at the last minute and seeing if the model would flag it in real-time. It worked.
Chesky’s only feedback, Banerjee recalled, was to change the existing message – “Your reservation cannot be completed at this point in time because we detect a party risk” – to be more customer-friendly, potentially offering an option to appeal or book a different weekend. They followed his advice. Now, the message reads, “The details of this reservation indicate it could lead to an unauthorized party in the home. You still have the option to book a hotel or private room, or you can contact us with any questions.”
Over the next few months, Banerjee remembers a frenzy of activity but also feeling calm and confident. She went to visit her family in India in April 2023 for the first time in about a year. She told her father about the rollout excitement, which happened in batches the following month.
This past Labor Day, Banerjee was visiting her son in Texas as the algorithm blocked or redirected 5,000 potential party bookings.
But no matter how quickly the AI models learn, Banerjee and her team will need to continue to monitor and change the systems as party-inclined users figure out ways around the barriers.
“The interesting part about the world of trust and safety is that it never stays static,” Banerjee said. “As soon as you build a defense, some of these bad actors out there who are potentially trying to buck the system and throw a party, they will get smarter and they’ll try to do something different.”
Elon Musk’s AI company, xAI, has raised $10 billion from investors that puts the company’s post-money valuation at $200 billion, sources told CNBC’s David Faber.
The valuation for Musk’s AI company is the latest example of skyrocketing valuations for companies that develop foundational AI models. Earlier this month, Anthropic raised $13 billion at a $183 billion valuation. OpenAI, the largest company in the industry, held a secondary share sale that valued it at $500 billion.
The fundraising comes weeks after Musk raised $10 billion in debt and equity at what was believed to be a roughly $150 billion valuation, according to Faber. Last December, xAI raised $6 billion to fund its artificial intelligence development.
However, xAI’s Grok service is widely believed to lag behind Anthropic’s Claude and OpenAI’s GPT models in terms of capabilities and number of users.
Musk said in May that he wants to buy a million AI chips, Faber said. Much of the proceeds of this round of funding could go to building data centers filled with Nvidia and AMD AI chips called GPUs that are needed to develop next-generation AI, as well as to hire expensive talent. The company is currently building a large cluster of AI computers in Memphis, Tennessee.
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Pattern Group, one of the leading resellers on Amazon, took the plunge into the public markets on Friday, and saw its stock slip in its Nasdaq debut.
Trading under the ticker “PTRN,” the stock opened at $13.50 after the company sold shares at $14 in its IPO, the middle of the expected range. Pattern’s offering raised $300 million, with half the proceeds going to investors, and valued the company at about $2.5 billion.
The Utah-based company was founded by husband and wife duo David Wright and Melanie Alder in 2013 as iServe Products before changing its name to Pattern in 2019. Pattern currently ranks as the No. 2 Amazon seller in the U.S., based on the number of customer reviews, according to research firm Marketplace Pulse.
The company describes itself as an “ecommerce accelerator” that helps more than 200 brands optimize their sales on online marketplaces like Amazon, Walmart, Target and TikTok Shop. It sells tens of thousands of products across categories ranging from health and wellness, consumer electronics, as well as beauty and personal care. Some of its brand partners include Nestle, Panasonic and Skechers.
The tech IPO market has roared back to life in recent months after an extended dry spell. Ticket reseller StubHub debuted on the New York Stock Exchange on Wednesday, though its stock dropped in its first two days of trading. Online lender Klarna and Gemini, the crypto firm founded by Cameron and Tyler Wiklevoss, started trading last week. Peter Thiel-backed cryptocurrency exchangeBullish, design software company Figma and stablecoin issuer Circle have also recently hit the market.
In the second quarter, Pattern reported revenue growth of 39% from a year earlier to $598.2 million. The company recorded net income of $16.4 million in the second quarter, compared with $11.3 million a year earlier. Operating income came in at $30.1 million for the period versus $23.1 million in the same period last year.
The company competes with millions of merchants who hawk their wares on Amazon’s sprawling marketplace, where third-party vendors now account for more than half of all goods sold on the site. Pattern said 94% of its 2024 revenue came from consumer product sales on Amazon, with a “substantial majority” in the U.S.
Pattern isn’t the first Amazon seller to pursue an IPO. Pharmapacks, once the top U.S. Amazon seller, eyed going public via a special purpose acquisition company in 2021, before nixing those plans and filing for bankruptcy a year later.
Pattern is hitting the market at a time of major global trade uncertainty, a factor it acknowledged in its prospectus. President Donald Trump‘s tariff threats against trade partners have, for the past five months, sent shockwaves through markets and shaken businesses globally.
“There is significant uncertainty as to the potential actions of the U.S. government with respect to international trade policy and the impact of tariffs, particularly with respect to trade between the United States and China,” Pattern wrote in the filing.
Pattern said the tariffs and trade tensions between the U.S. and China could negatively impact demand for its products, or harm its ability “to sell brand partner products at prices consumers are willing to pay.”
CEO David Wright told CNBC in an interview on Friday that the company was trying to hold its offering “a few months ago,” but delayed because of the tariffs, which were first announced in April. Klarna and StubHub put their IPOs on hold after the market plummeted on Trump’s initial announcement.
But the company’s top risk, according to its prospectus, is its reliance on Amazon and what can happen if the ecommerce giant makes significant alterations.
Pattern said that should Amazon restrict its ability to sell products, terminate the relationship or see any big changes due to litigation or regulation, it “could adversely affect our continued growth, financial condition and results of operations.”
Wright said the Amazon challenge is unavoidable.
“No matter what you’re doing in this space, you’re going to be playing with them,” Wright said. As for Amazon suspending certain brands and sellers, “so long as you stay within the line, they’ve been a great partner for us,” he said.
Apple CEO Tim Cook said price hikes on the newest iPhone models aren’t tied to President Donald Trump’s sweeping tariff plans.
“There’s no increase for tariffs in the prices to be totally clear,” Cook told CNBC’s Jim Cramer from Apple’s Fifth Avenue store location in New York City, as the latest iPhone model launched in stores worldwide.
Earlier this month, Apple increased the price of its iPhone 17 Pro model by $100, while maintaining the prices of its entry-level phones. It also introduced an Air model that replaced the Plus at steeper price point.
Many analysts had widely anticipated price hikes despite Cook’s attempts to dodge tariffs.
To circumvent the levies, Apple has pivoted its supply chain to import iPhones to the U.S. from lower tariff countries, such as India and Vietnam. Apple has historically produced a majority of its products in China.
Cook has also made public appearances with Trump as the company commits at least $600 billion toward bolstering U.S. manufacturing and supporting suppliers.
During the June quarter, Cook revealed that the company took an $800-million hit from costs tied to tariffs.
At the same time, Apple faces questions about its slow AI rollout, as well as rising competition in international markets such as China.
“We have AI everywhere in the phone,” Cook told CNBC on Friday. “We just don’t call it” that.