Will EU's AI Governance Kill Innovation?

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∆ Tech in the News

Apple’s AI App - The iOS 17.2, update introduced Apple's Journal app with AI capabilities using on-device ml to offer personalized suggestions & prompts.

Grokking Out - Elon Musk's xAI has fully rolled out its Grok AI chatbot to all U.S. Premium+ subscribers, and will be available globally by early 2024.

Deal Struck - Microsoft and the AFL-CIO union federation agreed employees can start unions and plan to work together on the future of AI in the workforce.

Landmark Decision - The FDA approved the first Crispr gene-editing drug for Sickle-Cell Disease heralding a new type of medicine for hard-to-treat diseases.

Gensler Probes AI - The SEC is investigating how financial firms use AI, probing 26 topics, such as AI portfolio mgmt and systemic failure contingencies.

No Lift-Off - SpaceX Falcon Heavy postponed today’s orbital launch of the US Space Force’s Secretive X-37B Space Plane for 24 hours to Tuesday 8pm EST.

˚The hottest thing in tech this week

Europe's AI Act Balances Tech and Ethics

After intense negotiations, EU officials agreed on a comprehensive set of rules to govern the use of AI across member states. This is a pivotal moment in AI governance as it’s the first major Western legislation on the tech. The Act still needs state approval, so won't take effect until 2025. Companies are being urged to begin voluntarily following the rules in the interim, but no enforcement will exist. Most notably, the Act does the following:

• Restricts the use of facial recognition, and predictive policing tech to specific safety and “national security” scenarios.

• Requires Foundation model providers like OpenAI to submit detailed summaries of the training data they used.

• Requires chatbots and deepfake software to disclose AI-generated content, ensuring transparency and user awareness.

• Categorizes AI applications based on four risk levels based on their uses.

• Bans specific uses like mass facial image scraping, emotion recognition, and "social scoring" systems and imposes fines (up to 7% of global sales).

• Places rigorous reporting requirements on high-risk AI applications including in essential public services like education and border control.

• Provides exemptions for open-source models like French startup Mistral which just raised $415M at a $2B valuation from a16z and Lightspeed.

The AI Act is a significant step in balancing technological innovation with ethical considerations and privacy rights. But Senate Majority Leader Chuck Schumer unsurprisingly has expressed concern that EU-style laws enacted by the U.S. would put American firms at a disadvantage in competing with China.

News Bytes

• BlackRock to release a range of AI tools to staff and clients in January.

• U.S. in talks with Nvidia on China Chip sales but rules out top-tier.

• Stanford project on emergent tech policy explores AI, crypto, SynBio…

• Epic wins antitrust case finding Google Play Store an illegal monopoly.

Deals We’re Watching

Founders to Watch and Opportunities to Catch

Open Deals:

Airship AI - A bootstrapped stealth AI startup with no VC funds raised will go public after clearing SEC regulations for a SPAC deal at a pre-money equity value of $225M.

Closed Deals:

Zesty Deal - Tel Aviv startup Citrusx makes compliance easier for AI companies and today emerged from stealth with $4.5M seed funds.

Homing In - Simply Homes raised $22M to buy and renovate single-family homes in blighted areas to rent out affordably to families in need.

Solving Data Deficit - Startup DataCebo raised an $8.5M seed to build and run genAI models for enterprises when real data is limited or unavailable.

SMB Insurance - Fintech startup Mulberri raised a $6.8M Series A led by Eos Venture Mgmt to provide insurance products for SMBs.

Companies to Watch:

Treasure - Trove is a SaaS AI conversational survey platform launched just six weeks ago with 1k+ users including a range of businesses.

French ChatGPT - Mistral just added $415M at a $2B valuation from a16z and Lightspeed and dropped an open sourced model rivaling GPT-3.5 (and beating LLaMA 2).

Sum Of It - UK fintech startup eyes global expansion with $306M in equity and debt raised at the same $8.5B valuation as its June 2022 raise.

New Frontiers - Airbus Ventures, Voyager Space and E2MC Space backed Helicity’s $5M Seed round to unlock fusion propulsion for fast deep space travel.

The Funding Buzz

Harpoon Ventures - VC firm investing in ‘dual use’ tech for fed agency commercialization raised $125M for its fourth fund from a16z’s Peter Levine and Olympic swimmer Michael Phelps.

OpenView - After deep layoffs and leadership change, the VC debates returning capital or raising new funds to invest in startups

Cyberport - The Hong Kong government has assigned $25.6B to establish the state as a fintech hub through innovation and technology.

Tools and Buzzy Tech

Google - NotebookLM has new AI features and can now summarize docs, generate key points, answer questions, change doc formats + more.

X - Elon Musk is bringing video to X Spaces soon.

Meta - Unveils Audiobox AI that clones voices and generates ambient sounds

Crispr - The FDA approved the first Crispr gene-editing drug.

Remote 3D Printing - Ultrasound can now 3D print inside the human body.

Biocomputing Speech - AI made from living human brain cells can hear.

LandSpace - China launched a methane-powered rocket into orbit.

Power Plants - A lung-inspired plant turns captured CO2 into jet fuel.

RunwayML - New General World models understand the visual world.

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The Tech Buzz Teamoogle-