Last year, the European Commission took a significant step by launching a comprehensive investigation into Microsoft’s practice of integrating its Teams application with the Microsoft 365 and Office 365 suites, targeting the business sector specifically. Microsoft, recognizing the importance of this inquiry, committed to fully cooperating with the Commission and expressed its determination to find solutions that would mitigate any regulatory concerns.

In a notable development reported by Reuters, Microsoft announced its decision to offer its Teams application globally—a chat and video conferencing tool—separately from its Office suite. This strategic move, coming six months after these products were decoupled in Europe, was designed to preemptively address potential EU antitrust penalties.

The strategic response from Microsoft to offer Teams separately

The investigation by the European Commission was triggered by a 2020 complaint from Slack, a Salesforce-owned workspace messaging application. Since its integration into Office 365 in 2017 at no extra cost, and its replacement of Skype for Business, Teams experienced a rapid rise in popularity. This was particularly true for its video conferencing features during the pandemic. Competitors have contended that this bundling strategy unfairly advantages Microsoft. In response to these concerns, Microsoft initiated the separate sale of these products in the EU and Switzerland on October 1 of the preceding year.

In detailing the company’s revised strategy through a blog post, Nanna-Louise Linde, Vice President for European Government Affairs at Microsoft, introduced a new pricing model for unbundled products. This adjustment, offering a reduction of US$2.17 monthly or US$26.02 annually, aims at serving the core enterprise clientele in the EEA and Switzerland more effectively.

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Furthermore, Linde clarified that Teams would be accessible as a standalone offering, with a pricing set at US$5.42 per month or US$65.04 annually, catering to new enterprise clients. Those who previously integrated Teams into their suite have the flexibility to maintain their existing setup or transition to a Teams-excluded package.

Reiterating the company’s dedication to transparency and customer satisfaction, a Microsoft spokesperson conveyed the decision to extend the unbundling initiative worldwide. This adaptation, inspired by the European Commission’s feedback, is intended to offer multinational corporations enhanced flexibility in their licensing options across various regions.

Reflecting on Microsoft’s historical adjustments in response to antitrust challenges, particularly the lawsuit from the Justice Department in 1998, analysts like Rishi Jaluria from RBC Capital Markets point out that the current separation of Teams from Office marks a significant, though not unprecedented, shift in strategy. Despite these changes, the integration of Teams into business operations suggests that the immediate impact on the market might be limited.

Data from Sensor Tower indicates a consistent user base for the Teams mobile app, with monthly active users remaining steady at around 19 million in both the fourth quarter of 2023 and the first quarter of 2024. This stability suggests that the unbundling in Europe has not adversely affected the platform’s popularity.

Looking ahead: Licensing flexibility and pricing strategies

With the introduction of new commercial Microsoft 365 and Office 365 suites, excluding Teams for areas beyond the EEA and Switzerland, Microsoft is also presenting a standalone option for enterprise customers. Starting April 1, these offerings allow customers to continue their current licensing arrangements or explore the new, unbundled options. The pricing structure for Office suites without Teams ranges from US$7.75 to US$54.75, with the standalone Teams option priced at US$5.25, although variations may occur based on country and currency.

Despite proactive measures, Microsoft could still encounter EU antitrust challenges, with concerns arising over pricing strategies and the interoperability of competing messaging services with Office Web Applications. Analysts like Gil Luria from D.A. Davidson suggest that Microsoft’s forward-thinking approach may somewhat mitigate future regulatory scrutiny. Given Microsoft’s history of incurring 2.2 billion euros in EU antitrust fines over the last decade for similar bundling practices, the company is keenly aware of the stakes involved.

J.P. Gownder, a Forrester VP and Principal Analyst, regards the unbundling of Teams as a strategic maneuver by Microsoft in anticipation of regulatory actions from the EU and possibly other regions. This strategy not only levels the competitive landscape by providing a choice to consumers but also simplifies the licensing landscape for multinational companies, which might face complexities under varying regional agreements.

Gownder also anticipates that pricing will emerge as a critical discussion point, with Microsoft potentially advocating for higher individual pricing for components formerly bundled, citing increased operational costs. This move could necessitate substantial marketing efforts to clearly communicate the value and structure of the unbundled offerings.

While Gownder foresees regulatory bodies potentially viewing any price increases critically, interpreting them as punitive measures against EU companies, he believes that the essential purchasing behaviors of enterprises, particularly outside the EU, are unlikely to be significantly altered. They may continue to favor bundled offerings, which are now enhanced by the addition of an unbundled option.

Gownder further speculates on the potential savings for organizations currently using Zoom, which might find financial benefits in dropping the Teams component for an unbundled SKU, though the exact financial implications will depend on the forthcoming pricing details. Zoom and Slack are poised to capitalize on this market shift, though the fundamental dynamics of the market are expected to remain largely unchanged.

The competitive landscape and potential beneficiaries

This strategic pivot could be an advantage for Zoom, which has faced challenges in competing with Microsoft’s comprehensive suite of communication tools. Slack, having been integrated into Salesforce and having previously lodged an antitrust complaint with the European Commission in 2020, has been particularly vocal about the need for such a separation, viewing the bundling of Teams with Office as competitively unfair.

Despite occasional preferences for Zoom, the integrated offering of Teams with Office 365 has consistently attracted customers. This trend was highlighted by CNBC, which pointed out Zoom’s slowing revenue growth from explosive rates in 2020 and 2021 to single digits in recent quarters. Mizuho analysts suggest that Teams’ unbundling could help mitigate some of Zoom’s challenges in retaining enterprise customers.

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Over the past year, Microsoft has reported nearly US$53 billion in revenue from its Office suite, including Teams, marking a 14% increase from 2022. The platform’s impact is undeniable, with Teams now boasting over 320 million active users monthly.

Salesforce’s acquisition of Slack in 2021 for US$27 billion, the company’s largest purchase to date, underscored the high stakes in the communication and collaboration tool market. Slack’s 2020 complaint to the European Commission against Microsoft’s practices highlighted ongoing competitive tensions, reminiscent of the ‘browser wars’ of the 1990s.

However, Slack’s stance towards Teams was more measured in 2019, with then-CEO Stewart Butterfield acknowledging the preference of many top customers for Slack over Teams, despite their use of Microsoft’s Office 365 suite.

Last year’s reports that Microsoft would allow companies to choose whether to include Teams in their productivity software subscriptions signaled a strategic shift intended to preclude further EU competition investigations. Subsequently, Microsoft began offering separate subscriptions for Teams and other productivity software across 31 European countries, aligning with the European Commission’s investigation into the bundling practices.

The post Microsoft splits Teams from Office Suite; who benefits? appeared first on Tech Wire Asia.

The ongoing legal battle between Epic Games and Apple, which has captivated the tech world for some time, is escalating. The confrontation has drawn in additional heavyweight players from the tech industry, including Meta, Microsoft, X, and Match, all uniting with Epic Games. These companies are rallying against Apple, accusing it of failing to comply with a court-ordered injunction that pertains to payment processes within its highly profitable App Store.

The origin of the conflict between Epic Games and Apple

In 2020, Epic Games initiated a lawsuit against Apple, claiming the tech giant was operating a monopoly that suppressed competition. This was primarily through its restriction of third-party apps and game marketplaces on iOS devices. However, in 2021, Judge Yvonne Gonzalez Rogers of the U.S. District Court concluded that Apple did not have a monopoly in mobile gaming. Nonetheless, she found that Apple’s prohibition of third-party app marketplaces and its imposition of a 30% commission within its own marketplace were unlawful.

Furthermore, Judge Rogers determined that Apple’s actions breached California’s state laws regarding unfair competition. This was after Apple prevented app developers from promoting alternative payment methods for their services. The Supreme Court, in January, declined to entertain Apple’s appeal, mandating the company to facilitate alternative in-app payment methods.

Earlier this month, the legal skirmish intensified when Epic Games petitioned a federal judge to find Apple in contempt of court. This request was based on allegations that Apple had not adhered to a court mandate that demanded the inclusion of external payment option links within its App Store, as revealed in recent court filings. This is the latest development in the protracted legal conflict between the two firms.

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Epic Games has formally requested that Judge Rogers find Apple in contempt of court and compel the company to fully respect the 2021 judgment, as stated in court documents filed in Oakland, California. According to Epic, Apple has rendered alternative payment options practically nonviable by instituting new guidelines and imposing a 27% fee on developers for certain purchases.

Apple has introduced new policy language aimed at deterring users from utilizing purchase options outside the iOS ecosystem, as per Epic Games’ allegations. Additionally, Apple has set forth new regulations that bar developers from creating external links that direct to alternative payment methods.

On January 16, Apple submitted a compliance declaration, asserting that its regulation of external links was a measure to safeguard user privacy and security, and to uphold the integrity of Apple’s ecosystem. As of now, Apple has yet to issue a response to these allegations.

The coalition of tech companies, creators of some of the App Store’s most popular applications, contends that Apple’s actions are a flagrant breach of the September 2021 injunction. This injunction aimed to facilitate consumer access to more economical digital content purchasing options, yet Apple has made this increasingly challenging.

Microsoft, Meta, X, and Match Group joins Epic Games in feud against Apple (Source – X)

Apple’s response and compliance efforts

While Apple has refrained from directly addressing these accusations, which were detailed in a legal filing with the federal court in Oakland, California, it referenced its January 16 announcement. In this statement, Apple claimed full compliance with the injunction, stating its intent to protect consumers and the integrity of its ecosystem, while also ensuring developers contribute their fair share.

Epic’s 2020 lawsuit against Apple argued that the latter’s App Store policies, which mandate that consumers obtain apps exclusively through the App Store and impose up to 30% commissions on developer sales, were anticompetitive. The injunction sought to allow developers the freedom to direct consumers to alternative payment options through links and buttons.

Recently, Reuters has reported that Epic has intensified its efforts, demanding that Apple be held in contempt of court for instituting new rules and a 27% fee on developers, which have essentially nullified the effectiveness of these links.

In a recent legal document, the coalition of technology firms argued that Apple’s practices effectively sustain the anti-steering provisions previously deemed illegal by the court. This, they claim, upholds Apple’s “exorbitant” commission fees, to the detriment of both consumers and developers.

“Apple’s restrictions on where and how developers can communicate with their users about their options for purchasing in-app content create significant barriers to competition and artificially inflate prices,” the document states.

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In January, the Supreme Court opted not to review Apple’s appeal against the injunction, nor did it consider Epic’s challenge of the lower court’s verdict that Apple’s policies did not contravene federal antitrust laws.

Apple has been given until April 3 to formally reply to Epic’s recent filing. The ongoing legal battle underscores the complex dynamics at play within the tech industry, highlighting significant debates over market competition, consumer rights, and the future of digital marketplaces. Apple, headquartered in Cupertino, California, and Epic Games, based in Cary, North Carolina, remain at the forefront of this legal confrontation.

The post Epic Games, Joined by Meta, Microsoft, X, and Match Group, challenges Apple in court appeared first on Tech Wire Asia.

Legal challenges, and market dynamics presents a fascinating narrative that shapes the fortunes of leading corporations. Among these, Nvidia, a titan in the field of AI, has recently been at the center of a noteworthy legal dispute while simultaneously experiencing an unprecedented surge in its market valuation.

This complex scenario provides a rich case study for examining the broader implications for the tech industry, market competition, and the legal frameworks that govern intellectual property rights.

Nvidia found itself embroiled in controversy when three authors—Brian Keene, Abdi Nazemian, and Stewart O’Nan—levied accusations against the company for allegedly using their copyrighted works without permission. These works were purportedly incorporated into a substantial dataset of approximately 196,640 books to advance the capabilities of Nvidia’s NeMo AI platform, a sophisticated system aimed at mimicking human language.

The fallout from these allegations led to the dataset’s removal in October, underscoring the legal complexities surrounding copyright infringement in the digital age.

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A meteoric rise in market valuation

Despite facing this legal hurdle, Nvidia has witnessed a surge in its market valuation, underscoring the intense investor interest in AI technologies. This rise is indicative of the broader trends in the semiconductor industry, where demand for AI chips, particularly those powering popular applications such as ChatGPT, has skyrocketed.

Within a span of nine months, Nvidia’s market value soared from US$1 trillion to over US$2 trillion, surpassing industry giants like Amazon.com, Google’s parent company Alphabet, and Saudi Aramco in the process. This meteoric rise has positioned Nvidia as a formidable contender in the race to become the world’s second-most valuable company, trailing closely behind Apple and Microsoft.

As reported by Reuters, Nvidia’s current market capitalization, standing at approximately US$2.38 trillion, exemplifies the fierce competition at the apex of the global corporate sector. This competitive landscape is not only defined by market valuations but also by the continuous drive for innovation and the development of high-quality products that resonate with consumers and enterprises alike. Apple’s journey to becoming the world’s most valuable company in 2011, bolstered by its array of successful products and services, highlights the critical role of brand loyalty and product innovation in achieving market dominance.

Nvidia’s mastery over legal hurdles and market cap peaks (Source – X)

On the other hand, Microsoft’s ascendance in 2024 to claim the title of the most valuable company globally emphasizes the significance of strategic investments in technology, particularly AI. With over 70% of computers worldwide running on Windows, according to Statcounter, Microsoft’s influence extends beyond its operating system. The company’s diversified portfolio, including the Office Suite, Azure cloud platform, Xbox consoles, and Surface devices, alongside a substantial investment in OpenAI, demonstrates its commitment to shaping the future of technology.

Nvidia’s stronghold over the high-end AI chip market, commanding 80% of the sector, combined with its significant stock performance, has propelled Wall Street to new heights this year. This success story is a testament to the investor enthusiasm for AI technologies, positioning Nvidia and Meta Platforms as leaders in a market increasingly focused on digital innovation.

Industry experts, such as Richard Meckler of Cherry Lane Investments, attribute Nvidia’s robust market performance to the solid fundamentals underpinning its business model and the speculative support from investors. This blend of strong business practices and market speculation has facilitated Nvidia’s steady climb in stock value throughout 2024, even as it faces legal challenges and stiff competition from tech giants like Apple and Microsoft.

Apple’s recent challenges with iPhone sales and the shift in market capitalization rankings underscore the dynamic nature of the tech industry, where companies continually vie for leadership positions. Meanwhile, Nvidia’s competitive forward price-to-earnings ratio and the insights from David Wagner of Aptus Capital Advisors suggest that Nvidia represents an attractively priced stock within the AI narrative, with the potential for significant growth in the coming years.

Facing the peaks: The Nvidia market cap challenges

However, as Nvidia’s stock approaches what some analysts believe to be its peak, the challenges of sustaining rapid growth in the face of increasing market capitalization become apparent. The speculative nature of stock valuations, coupled with the potential for innovation and market expansion, presents a nuanced picture of Nvidia’s future prospects. Should Nvidia continue to surpass analyst expectations, it could maintain or even enhance its market position, reflecting the intricate balance between innovation, legal challenges, and market dynamics.

Nvidia’s recent experiences offer valuable insights into the challenges and opportunities faced by leading tech companies today. As legal disputes unfold and market valuations fluctuate, the broader implications for the tech industry, intellectual property rights, and the ongoing pursuit of innovation remain subjects of keen interest. Nvidia’s journey through these complex landscapes underscores the dynamic interplay between legal considerations, market competition, and the relentless drive for technological advancement.

As the industry moves forward, the lessons learned from Nvidia’s story will undoubtedly influence future discussions on copyright law, market dynamics, and the role of AI in shaping the digital future.

The post How Nvidia navigates through legal complexities and market cap dominance appeared first on Tech Wire Asia.

Remember the copyright infringement lawsuit The New York Times filed against OpenAI and Microsoft? The Times has accused the companies of using millions of its articles to train AI technologies, which now rival the newspaper as a source of trustworthy information.

But how can one use OpenAI’s AI technology to their own advantage while simultaneously fighting against OpenAI over how its AI technology is being used?

The New York Times Vs. OpenAI

In a significant development, OpenAI, whose AI technology, ChatGPT, is used by The Times to generate content, was reported by Reuters as having requested a federal judge to dismiss parts of the lawsuit. Central to OpenAI’s defense is the allegation that The Times “hacked” its chatbot and other AI systems, producing misleading evidence. This legal move by OpenAI, filed in a Manhattan federal court, claims that The Times manipulated its technology to mirror its content and violated OpenAI’s terms of use through deceptive prompts.

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OpenAI further asserts that The Times took advantage of a flaw in the AI system, which is under active remediation, to feed its articles directly into the chatbot. This resulted in the chatbot regurgitating exact passages, a use case that OpenAI emphasizes is atypical, pointing to a Times article from April 2023 about real-world AI applications for context.

OpenAI’s criticism of The Times is sharp, highlighting that the newspaper’s complaint does not meet its own high journalistic standards. OpenAI’s contention is that the case will reveal that The Times paid someone to manipulate OpenAI’s products deliberately.

Got a headache yet?

The Times‘ lead counsel, Ian Crosby, addressed these accusations in a statement to The Verge. He challenged the hacking allegation, clarifying that the newspaper was simply employing OpenAI’s products to gather evidence of potential copyright infringement. Crosby noted that OpenAI has not contested the claim that it copied The Times’ work without authorization.

OpenAI refrained from identifying the individual purportedly engaged by The Times to tamper with its systems, and stopped short of accusing the newspaper of breaking anti-hacking laws.

OpenAI addresses The New York Times copyright lawsuit. (Source – AI).

The New York Times fights back: defending its use of AI

In its legal strategy, OpenAI aims to dismiss some aspects of The Times’ copyright infringement claim, specifically those related to reproductions dating back more than three years before the lawsuit. OpenAI also wants to negate other accusations, including contributory infringement, failure to remove infringing content, and engaging in unfair competition through misappropriation. The lawsuit filed by The Times encompasses broader allegations, extending to trademark dilution, common law unfair competition, and vicarious copyright infringement.

The situation mirrors OpenAI’s previous legal challenge, where it managed to narrow down a lawsuit involving Sarah Silverman and other authors to a singular claim of direct copyright infringement. As legal battles against AI firms escalate, industry observers like Nilay Patel and Sarah Jeong from The Verge’s Decoder podcast discuss the ramifications of such lawsuits on the burgeoning AI industry.

The Times represents just one among a cohort of copyright owners, including authors, visual artists, and music publishers, challenging tech companies for purportedly misappropriating their creative works in AI training.

Tech companies, for their part, defend their AI systems’ use of copyrighted material as fair use, cautioning that these legal challenges might impede the progress of a potentially multitrillion-dollar industry.

As the legal landscape evolves, courts have yet to conclusively decide whether AI training qualifies as fair use under copyright law. Several infringement claims against generative AI systems have been dismissed, primarily due to insufficient proof that AI-generated content closely resembles copyrighted works.

Tumblr’s owner to collaborate with OpenAI?

In a separate but related development, a report from 404 Media has alleged that Automattic, the owner of Tumblr and WordPress.com, is engaging in advanced discussions with AI firms Midjourney and OpenAI. An anonymous source within Automattic hinted at imminent deals to harness user-generated content as training data for AI, following speculative chatter on Tumblr about a potential Midjourney collaboration that might open new revenue streams for the platform.

404 Media‘s report sheds light on Automattic’s forthcoming update, slated for 28^th of February, introducing a feature that lets users opt out of data sharing with third parties, including AI entities. This update comes amid revelations from internal communications about a comprehensive data extraction that inadvertently included non-public content, encompassing Tumblr’s public posts from 2014 to 2023. Questions linger about the handling and potential sharing of this extensive dataset with Midjourney and OpenAI.

In response to these claims, Automattic released a statement titled “Protecting User Choice.” Following the 404 Media report, this statement vaguely alludes to partnerships with unnamed AI companies. Automattic affirms its default stance of blocking major AI platform crawlers and its commitment to only sharing public content from WordPress.com and Tumblr with entities that adhere to opt-out preferences. The statement underscores Automattic’s collaboration with AI firms that align with community values, including user attribution, opt-out options, and overarching control.

The recent trend of companies forging agreements with AI technology developers for training data, traditionally sourced from publicly accessible online content, underscores a growing legal complexity. High-profile cases include Reddit’s reported US$60 million annual deal with Google and Shutterstock’s collaboration with OpenAI, using its extensive photo library.

But these arrangements have sparked considerable dissent within the creative community, particularly among artists and writers, who express concerns about their work being repurposed for AI training. This has led to a delicate balancing act for companies striving to satisfy their user base while exploring cutting-edge AI technologies, as evidenced by the mixed reactions within communities like DeviantArt.

Details surrounding any potential agreement between Automattic and the AI firms, including financial implications for Automattic, remain under wraps. Automattic, a veteran in web hosting with WordPress.com and WordPress VIP, has faced challenges in devising profitable strategies for Tumblr, which it acquired from Verizon in 2019. Last year, this led to an announcement about scaling back its ambitions for the site, reflecting the ongoing complexities of integrating social media platforms with emerging AI technologies.

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Cyberattacks by Russian hackers have intensified recently, targeting two major technology companies within the same month. Hewlett Packard Enterprise (HPE) disclosed a breach in its cloud-based email systems, perpetrated by the same Russian hacking group implicated in previous Microsoft email account intrusions.

In a securities filing, HPE revealed that the December 12, 2023 incident affected several email accounts in areas including cybersecurity, marketing, and various business sectors. Following the discovery of the breach, HPE engaged external cybersecurity experts to launch an investigation and response, successfully eradicating the malicious activity.

HPE became aware of the intrusion on January 12, as stated in their Securities and Exchange Commission filing. The company suspects the hackers are part of Cozy Bear, a unit of Russia’s SVR foreign intelligence service.

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Cozy Bear: the notorious group behind the attacks

Microsoft, too, experienced a similar breach in its corporate network, reported last week. Originating in late November, this attack compromised accounts of senior executives and staff in cybersecurity and legal departments, with Cozy Bear believed to be responsible.

Cozy Bear is a sophisticated cyber-espionage group with links to Russia’s foreign intelligence service, known by various names like “Midnight Blizzard” and “APT29.” The group, noted for stealthy intelligence-gathering, primarily targets Western governments, IT service providers, and think tanks in the US and Europe. Cozy Bear’s notoriety increased after orchestrating the SolarWinds breach.

HPE’s investigation suggests that the hackers have been accessing and extracting data from certain mailboxes since May 2023. Adam R. Bauer, a spokesperson for HPE, declined to reveal the source of the breach notification. He confirmed that the affected mailboxes were running on Microsoft software. The company is still assessing the full extent of the breach, which appears not to have significantly impacted its operations or financial health. This incident follows a new US Securities and Exchange Commission rule requiring public companies to report breaches that could impact their business promptly.

HPE joins Microsoft in “getting hacked by Russian hackers.” (Source – X).

Additionally, the HPE breach involved unauthorized access to a limited number of SharePoint files in June 2023. SharePoint, a Microsoft 365 suite component, encompasses email, word processing, and spreadsheet applications.

While HPE is unable to confirm a direct link between its breach and the one reported by Microsoft, the company continues its investigation. The seniority of the affected HPE employees and the full scope of accessed mailboxes remain under scrutiny.

In response to these incidents, US officials have pointed out that Cozy Bear used compromised software from US tech firm SolarWinds in 2020 to infiltrate various US government agencies. This led to an overhaul of the US government’s cybersecurity defenses. Since then, the group has continued targeting US and European government agencies, frequently exploiting software providers and demonstrating a particular aptitude for breaching cloud computing networks. The FBI has observed such tactics as early as 2018.

Regarding the December breach, HPE is evaluating its potential impact on the company’s financial status and operations.

Microsoft’s recent disclosure of a breach by Cozy Bear involved a small number of its corporate email accounts, including senior executives. The company’s response included immediate investigation and mitigation efforts. However, Microsoft’s revelation that the hackers employed a simple technique, known as password spraying, has led to increased scrutiny of its security practices. A senior US National Security Agency official expressed disappointment over Microsoft’s vulnerability to such attacks, emphasizing the need for large tech firms to be vigilant against state-backed hackers.

Microsoft has refrained from commenting on these developments. Additionally, the company was involved in an alleged Chinese hack last year, compromising the email accounts of top US officials, including the Commerce Secretary and the US Ambassador to China. This campaign originated with the breach of a Microsoft engineer’s corporate account.

Sweden is also targeted by Russian hackers

In a related development, Russian hackers are suspected of disrupting online services for several Swedish government agencies and retail stores, as reported by IT consultancy Tietoevry. The Swedish-Finnish company indicated that resolving the issue might take considerable time.

The Moscow Times reported that the attack affected Tietoevry’s data center in Sweden, impacting online transactions at the country’s largest cinema chain, department stores, and other retail outlets. Sweden’s central government service center, Statens Servicecenter, experienced disruptions to its human resources system, affecting public sector employees’ ability to submit overtime, sick leave, or vacation requests.

In a statement issued recently, Tietoevry suggested that the restoration process could extend over several days or weeks due to the incident’s complexity and the numerous customer-specific systems involved. Caroline Johansson Sjowall, spokesperson for Statens Servicecenter, reported that the attack affected “120 government agencies and more than 60,000 employees.”

Cybersecurity experts, including Tietoevry, suspect the involvement of Akira, a hacker group with Russian ties. The company has filed a police report regarding the attack and is assessing its financial implications. Currently, Tietoevry has not released any information regarding a ransom demand, which is typical in ransomware attacks where hackers encrypt or steal data and then demand payment for its decryption or to prevent its public release.

Civil Defense Minister Carl-Oskar Bohlin stressed the urgency of prioritizing cybersecurity across both public and private sectors. In a statement on X, formerly known as Twitter, Bohlin announced the government’s intention to convene a meeting with affected parties to thoroughly evaluate the incident and formulate a response strategy once the operational phase is concluded.

The Swedish Civil Contingencies Agency (MSB) underscored the significance of this attack as a critical alert. Margareta Palmqvist, head of information security at MSB, voiced concerns to the Swedish news agency TT about the country’s rapid digitalization outpacing its cybersecurity investments. She emphasized the importance of being proactive in cybersecurity measures, ensuring preparedness for such cyber threats.

This series of cyberattacks underscores the evolving landscape of digital threats, highlighting the critical need for robust cybersecurity measures in both the public and private sectors. The incidents involving HPE, Microsoft, and the Swedish government agencies reflect a growing trend of sophisticated cyber-espionage and ransomware attacks that target vital infrastructure and services.

As these threats evolve, the need for vigilance and investment in cybersecurity becomes increasingly crucial to protect sensitive data and maintain the integrity of critical systems worldwide.

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Here we go again – another round of layoffs is hitting the gaming industry. Microsoft just dropped the news that it’s cutting 1,900 jobs from its video game division, a decision that comes shortly after their massive US$69 billion acquisition of Activision Blizzard.

Microsoft: the major job cuts in the video game division

In a memo from Phil Spencer, the head of Microsoft Gaming, it’s clear that the cuts will primarily affect Activision Blizzard, the creators of hit games like Call of Duty and Guitar Hero. But employees at Xbox and ZeniMax will not be spared from these layoffs. This move signifies a nearly 9 percent reduction in Microsoft’s 22,000-person video game division, though it accounts for less than 1 percent of the company’s approximate 220,000 employees.

Spencer’s memo, obtained by The Verge, reveals a balance between strategic planning and empathy for the affected employees. He highlights the integration of the Activision, Blizzard, and King teams into Microsoft and the company’s strategy for sustainable growth. Spencer states, “we have made the painful decision to reduce the size of our gaming workforce by approximately 1900 roles out of the 22,000 people on our team.” He assures that support will be provided during the transition.

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Further details about the situation at Blizzard were shared in an internal memo by Matt Booty, Microsoft’s game content and studios president. Booty addressed the Blizzard team directly, acknowledging the challenge of saying goodbye to colleagues and emphasizing the company’s commitment to delivering ambitious games. He mentioned that the layoffs were part of a focused strategy across Microsoft Gaming aimed at sustainable growth and aligning talent with top priorities.

Booty’s memo also confirmed the departure of Blizzard’s president Mike Ybarra, and chief design officer Allen Adham. Ybarra, who had been with Microsoft for over two decades, played a pivotal role as Blizzard’s president during the acquisition process. Booty thanked him for his leadership and partnership. One of Blizzard’s co-founders, Adham, left a lasting impact on the company’s games and plans to continue mentoring young designers in the industry.

Looking ahead, Spencer expressed optimism about Microsoft’s gaming business, emphasizing continued investment in areas that will broaden their reach to more players globally. Despite the challenges, he remains confident in the team’s ability to deliver engaging gaming experiences.

This layoff trend isn’t exclusive to Microsoft. The industry is reeling from a wave of job cuts as the pandemic-driven surge in gaming recedes.

Tencent’s Riot Games, for instance, is laying off 11% of its workforce, totaling around 530 jobs, including a scale-back in its independent game publishing division. Amazon’s Twitch is reducing its workforce by 35%, impacting around 500 employees, and Unity Software plans to cut a quarter of its staff, approximately 1,800 jobs. Notably, these companies also experienced layoffs last year.

Should staff at all video game companies be worried? (Source – X).

Piers Harding-Rolls, a gaming analyst at Ampere Analysis, observed that some layoffs at Activision Blizzard were expected post-acquisition. However, the scale and extent of the cuts across the industry have been unprecedented, particularly with many companies initiating them in January.

The bigger picture: Microsoft’s gaming business and future outlook

Gaming has become a key component of Microsoft’s consumer business, generating over US$15 billion in annual sales, primarily under the Xbox brand. The acquisition of Activision Blizzard, announced two years ago, was a strategic move despite concerns over Activision’s workplace culture at the time. The deal faced intense regulatory scrutiny, causing delays in its completion. As pandemic restrictions eased and consumer habits shifted, Microsoft reported a 5 percent drop in gaming revenue, amounting to US$764 million, in the last fiscal year.

Layoffs have become a recurring theme this month across various companies in the tech and gaming industries, including Google, Discord, eBay, and others.

Following the completion of Microsoft’s acquisition of Activision Blizzard in October, after overcoming regulatory hurdles in the UK and US, former CEO Bobby Kotick stepped down at the end of December. Now, a suite of Activision Blizzard executives report directly to Matt Booty.

Recently, there have been significant leadership changes at Xbox, with Sarah Bond being promoted to Xbox president, overseeing platform and hardware operations. Booty was also promoted to game content and studios president, managing Bethesda, ZeniMax studios, and Activision Blizzard.

Microsoft’s last major layoff round was a year ago, affecting 10,000 employees. The company is poised to release its fiscal Q2 2024 earnings soon, including the financial effects of the Activision Blizzard acquisition for the first time.

The post Microsoft announces major cuts in video game division following Activision Blizzard deal appeared first on Tech Wire Asia.

Microsoft has recently found itself at the center of a sophisticated cyberattack. On January 12, an adept Russian cybergroup, Midnight Blizzard, known for its complex cyber-warfare tactics, successfully penetrated Microsoft’s defenses. This intrusion marks a significant event in the realm of cybersecurity, as it led to the unauthorized access and exfiltration of sensitive emails and crucial documents from various staff accounts, including those at the company’s highest echelons.

While affecting a relatively small fraction of Microsoft’s corporate email accounts, the breach struck at the core of its operations. The impacted accounts included high-ranking officials and employees overseeing pivotal departments such as cybersecurity, legal affairs, and other critical operations. The incident sheds light on the intricate challenges global tech giants face in safeguarding their information infrastructure against increasingly sophisticated cyber-adversaries.

In a commendable display of transparency and adherence to its Secure Future Initiative (SFI), Microsoft openly acknowledged Midnight Blizzard’s role in this security incident. Known also as Nobelium, this group’s affiliation with Russian state-sponsored cyber-operations adds a layer of complexity to the cybersecurity landscape. Microsoft’s forthright identification of the adversary underscores its commitment to addressing the breach and informing the broader community about the escalating threats in cyberspace.

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Who is Midnight Blizzard?

Midnight Blizzard, alternatively known as APT29, is reputedly associated with the Russian Foreign Intelligence Service (SVR). The group’s existence was first noted in 2008 following the discovery of MiniDuke malware samples, as reported by cybersecurity firm Kaspersky. APT29 is notorious for its advanced cyber-warfare techniques, primarily serving the intelligence objectives of the SVR.

Over the years, Midnight Blizzard has been linked to several prominent cyberattacks. Its targets have included a private research institute based in Washington DC in 2014, the Pentagon in 2015, the Democratic National Committee and various US think tanks in 2016, and governmental bodies in Norway and the Netherlands in 2017.

This group has also shown a keen interest in the education sector, particularly institutions involved in medical research, likely for espionage and acquiring valuable data on Western medical advancements.

Microsoft breached by Russian hackers (Source – X).

Midnight Blizzard is distinguished by its use of various custom-developed tools, utilizing multiple programming languages. This indicates the substantial resources at their disposal. Alongside these bespoke tools, the group also uses widely available hacking tools such as Mimikatz and Cobalt Strike.

A key focus for Midnight Blizzard is infiltrating organizations that significantly impact the foreign policies of NATO countries. Additionally, they target a wide range of sectors including education, energy, telecommunications, government, and the military.

Notable malware associated with Midnight Blizzard

Midnight Blizzard, known for its sophisticated cyber-operations, has utilized various malware tools to conduct espionage and data theft. These tools reflect the group’s technical prowess and strategic objectives. Below is an overview of some of the most notable malware attributed to Midnight Blizzard, each playing a unique role in their cyberattacks and intelligence activities.

PinchDuke: The first identified toolkit of Midnight Blizzard, PinchDuke comprises loaders and an information-stealing trojan. Active from November 2008 to mid-2010, it targeted regions like Chechnya, Turkey, Georgia, and various former Soviet states before evolving into the CosmicDuke toolkit.

CosmicDuke: This toolkit, active from January 2010 to mid-2015, is an enhanced information stealer that targeted various organizations in sectors such as energy, telecommunications, government, and military.

GeminiDuke: Operating from January 2009 to December 2012, GeminiDuke focuses on collecting system configuration information, using a core information stealer, a loader, and various persistence components.

CozyDuke: A versatile modular malware platform used from January 2010 to early 2015, CozyDuke is built around a backdoor component and can execute a wide range of modules and hacking tools.

The November 2023 security attack on Microsoft

In late November 2023, Midnight Blizzard launched a ‘password spray attack’ to compromise a non-production test account at Microsoft. This breach enabled them to access a limited yet significant portion of Microsoft’s corporate email accounts, including those belonging to members of the senior leadership team and employees in crucial operational roles. The attackers exfiltrated emails and attached documents from these accounts.

Microsoft believes that the hackers’ initial target was information related to Midnight Blizzard itself. The company has begun notifying employees whose email accounts were compromised during the attack.

In response to this breach, Microsoft took swift action to disrupt the hackers’ activities and successfully blocked their access to its systems. The company assured staff – and the world – that the attack was not due to any specific vulnerability in its products or services and confirms that there is no evidence of the hackers gaining access to customer environments, production systems, source code, or AI systems.

In a recent blog post, Microsoft highlighted the continuous threat posed by nation-state actors like Midnight Blizzard, emphasizing the importance of maintaining robust cybersecurity measures.

Microsoft: a swift response to the security threat

This incident comes in the wake of new US Securities and Exchange Commission regulations that mandate reporting cyber-incidents within four business days of their discovery. These regulations also require companies to provide detailed information to the government about the breach’s timing, scope, and nature.

Microsoft, widely used across various sectors in the US, including the government, has previously faced scrutiny over its security practices, especially following a breach by Chinese hackers last year. The current incident marks another instance of Russian hackers penetrating Microsoft’s defenses, underlining the increased risk of sensitive data exposure during periods of armed conflict, such as the ongoing war between Russia and Ukraine.

In compliance with the new US cybersecurity incident disclosure regulations, Microsoft announced the breach, stating its belief that the attack did not have a material impact on the company. Nonetheless, Microsoft chose to disclose the incident under the spirit of the new regulations.

The Cybersecurity and Infrastructure Security Agency (CISA) is actively collaborating with Microsoft to fully understand this incident’s implications and safeguard other potential victims. Eric Goldstein, CISA’s executive assistant director for cybersecurity, stated that there are currently no known impacts on Microsoft customer environments or products.

In conclusion, Microsoft reaffirmed its commitment to the investigation and to taking any necessary actions based on its findings. The company was dedicated to sharing information and insights from this incident to benefit the wider community. Microsoft promised to provide additional details as they become available, continuing its tradition of responsible transparency and cooperation with law enforcement and regulatory agencies.

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Microsoft wants to ensure users get the most out of generative AI, not least because it’s fundamentally embedded in large-scale investments in the technology through OpenAI.

There is no denying that AI will continue its growth and adoption. In fact, Gartner predicts generative AI is due to make people “better and more powerful” in the relatively short term. Individuals can use generative AI to create better resumes, reports, work products and even interactions with others. By 2027, the productivity value of AI in the workplace is expected to be recognized as a primary economic indicator of national power, largely due to widespread gains in workforce productivity.

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Recognising as much, Microsoft is  introducing several new features to Copilot. Since unveiling Copilot, Microsoft has continued to develop the technology, launching new features almost every quarter. The latest features announced would allow Microsoft customers, be they businesses or individuals, to have better opportunities and access to making the most of AI on their devices.

In a blog post, Yusuf Mehdi, executive vice president, consumer chief marketing officer at Microsoft, said that Copilot has already worked on more than 5 billion chats and more than 5 billion images to date. For Microsoft, the increased usage can be divided into two categories of users. The first would be those who want rapid access to AI. These include creators, researchers and programmers. The second would be those who want to use Copilot for personal projects and such.

Microsoft wants to make Copilot “the everyday AI companion” to millions of people around the world.

Microsoft is introducing three key updates to Copilot. This first is Copilot GPTs. Copilot GPTs let users customize the behavior of Copilot on a topic that is of particular interest to them. The Copilot GPT builds on Microsoft’s partnership with OpenAI. The GPTs, which will start rolling out, will have specific purposes such as fitness, travel, cooking and more.

Microsoft also unveiled the Copilot mobile app for both Android and iOS devices. The Copilot app gives users the power of Copilot on the go as their Copilot queries and chats will roam across users’ phones and PCs. The Copilot mobile app includes the same capabilities as Copilot on the PC including access to GPT-4, Dall-E 3 for image creation, and the ability to use images from your phone when chatting with Copilot.

The third feature is more for business. Microsoft is adding Copilot to the Microsoft 365 mobile app for Android and iOS for individuals with a Microsoft account. This new feature is rolling out over the next month. Access Copilot right inside the app and easily export the content users create to a Word or PDF document.

Microsoft also unveiled the Copilot mobile app for both Android and iOS devices. (Source – Microsoft).

Introducing Copilot Pro

Copilot Pro is a new premium subscription service for individuals that provides a higher tier of service for AI capabilities, brings Copilot AI capabilities to Microsoft 365 Personal and Family subscribers, and new capabilities, such as the ability to create Copilot GPTs. Microsoft is also announcing the general availability of Copilot app for iOS and Android phones. Finally, Microsoft will bring Copilot for Microsoft 365 to more commercial customers by expanding the availability to businesses of all sizes, including small- and medium-sized businesses, starting today.

With a subscription price of US$20 per month, Copilot Pro is expected to deliver more advanced features and capabilities to individuals. Specifically, users will get a single AI experience that runs across their devices, understanding their context on the web, on their PC and across their apps. It will be soon available on their mobile devices as well.

Users will also get priority access to the very latest models, including GPT-4 Turbo as well as access to enhanced AI image creation with Image Creator from Designer. Moreover, they will have the ability to build their own Copilot GPT.  Copilot GPT is a customized Copilot tailored for a specific topic, with just a simple set of prompts.

Businesses will be able to leverage the new updates offered by Copilot for Microsoft 365. (Source – Microsoft).

From Copilot Pro to Copilot for Microsoft 365

While individuals can make the most out of Copilot Pro, businesses will be able to leverage the new updates offered by Copilot for Microsoft 365. Despite only being launched to enterprises in November 2023, 40% of the Fortune 100 participated in Microsoft’s Early Access Program, and since GA for enterprise, customers like Visa, BP, Honda, Pfizer, and partners like Accenture, KPMG and PwC are already using Copilot.

“This means thousands of people across industries and sectors have started working in new ways, with an AI-powered copilot at their side. Today we are excited to announce that Copilot for Microsoft 365 is now available for organizations of all sizes — with no seat minimum. We are also enabling our partners to help every business become AI-powered,” said Mehdi.

The new updates announced include the general availability of Copilot for Microsoft 365 to small businesses. Microsoft 365 Business Premium and Business Standard Customers can purchase between one and 299 seats for US$30 per person per month. Microsoft is also removing the 300-seat purchase minimum for commercial plans and making Copilot available for Office 365 E3 and E5 customers. Commercial customers can now purchase Copilot for Microsoft 365 through the network of Microsoft Cloud Solution Provider partners.

“Copilot for Microsoft 365 is even more powerful for organizations because it works across your entire universe of data at work — including emails, meetings, chats, documents and more, plus the web. With natural language prompts like “Tell my team how we updated the product strategy,” Copilot can generate a status update based on the morning’s meetings, emails and chat threads,” added Mehdi.

Microsoft and Vodafone

Microsoft has also announced a new, far-reaching 10-year strategic partnership with Vodafone. The partnership leverages their respective strengths in offering scaled digital platforms to more than 300 million businesses, public sector organizations, and consumers across Europe and Africa.

Through the partnership, the companies will collaborate to transform Vodafone’s customer experience using Microsoft’s generative AI; hyperscale Vodafone’s leading managed IoT connectivity platform; develop new digital and financial services for businesses, particularly SMEs across Europe and Africa; and overhaul its global data center cloud strategy.

Vodafone will invest US$1.5 billion over the next 10 years in cloud and customer-focused AI services developed in conjunction with Microsoft. Additionally, Microsoft will use Vodafone’s fixed and mobile connectivity services.

Microsoft also intends to invest in Vodafone’s managed IoT connectivity platform, which will become a separate, standalone business by April 2024. The new company will attract new partners and customers, driving growth in applications and expanding the platform to connect more devices, vehicles and machines.

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Microsoft is reinforcing its AI focus by launching a novel keyboard key for Windows Copilot. Starting in February, this update, the first in nearly three decades for the Windows PC keyboard, will be incorporated into Microsoft’s OEM partners’ laptops and desktop keyboards.

Yusuf Mehdi, Microsoft CVP and consumer chief marketing officer, said the Copilot key activates Copilot, enabling web searches, accessing personal content, and utilizing general PC features through its AI capabilities. Copilot aims to be an accessible smart assistant.

Microsoft hasn’t named specific partners for the Copilot key launch but anticipates that desktops and laptops featuring this technology will be revealed soon. This innovation will be showcased at CES 2024, beginning January 9.

By persuading hardware partners to integrate a Copilot key into their products, Microsoft is betting big on generative AI’s role in the future of computing. The last significant keyboard addition by Microsoft was the Windows key in 1994.

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Microsoft’s AI journey: from Bing chatbot to Copilot for Microsoft 365

Throughout 2023, Microsoft made several AI-related announcements, from introducing its Bing chatbot and Edge browser to launching Copilot for Microsoft 365. CEO Satya Nadella believes AI advancements will significantly influence all aspects of the company’s offering.

Leading semiconductor companies are joining the AI trend. AMD, Intel, and Qualcomm have each introduced AI PC chips with dedicated neural processors for AI-specific tasks, including running generative AI applications.

The real impact of these chips on consumers remains uncertain. Even Intel is unsure about the potential applications developers might create utilizing neural processors.

This surge in AI PC technology coincides with an anticipated growth in the PC market, the first significant growth since 2021, according to Goldman Sachs Equity Research analyst Michael Ng.

He predicts the growth will be fueled by aging pandemic-era devices and the arrival of new AI-capable PCs in 2024, marking a significant shift in personal computing since the advent of smartphones and tablets.

PC sales are expected to rebound after a decline following a pandemic-induced surge. As older systems become obsolete, the demand for new, AI-equipped PCs will likely rise, benefiting companies like Microsoft, Intel, AMD, and Qualcomm.

As Microsoft continues to pioneer AI-driven computing with its innovative Copilot key, their commitment to AI extends beyond hardware enhancements. This strategic direction is further exemplified in their software developments, particularly in mobile and tablet computing. The recent improvements to Microsoft’s SwiftKey keyboard are a testament to this comprehensive approach. By integrating advanced AI features into SwiftKey, Microsoft enriches user experience across different devices and demonstrates how AI can seamlessly enhance hardware and software solutions in the tech industry.

Beyond hardware: Microsoft’s AI ambitions in software development

Microsoft has enhanced its SwiftKey keyboard with a fresh set of AI-enabled features, now available for iPhone, iPad, and Android devices. These features, aimed at enriching text and image creation from the keyboard, are detailed in a Bing blog post by Divya Kumar, Microsoft GM for global search & AI.

SwiftKey, a third-party keyboard alternative, offers additional functionality compared to standard virtual keyboards. It’s available for download on the App Store and Google Play for those interested in trying it out.

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For iPhone or iPad users, after downloading SwiftKey, navigate to Settings, select SwiftKey, then Keyboards, and enable both SwiftKey and Allow Full Access. To use it, open a text app like Messages or Mail, start a new message, and switch to SwiftKey via the globe icon.

Android users should open SwiftKey post-installation, enable SwiftKey on the welcome screen, choose it as the input method, and complete the setup by signing in with a Microsoft account.

A standout new AI feature for SwiftKey is the integration of Microsoft’s Bing AI image generator, which is currently exclusive to Android. Users can access this feature from the Bing toolbar, create an image description, and send the generated image directly from the keyboard.

SwiftKey offers additional functionality compared to standard virtual keyboards. (Source – X)

Another innovative addition is AI camera lenses, powered by Microsoft’s collaboration with Snap. Offering over 250 tools and filters, users can create photos, videos, and GIFs with various effects on iOS and Android devices.

To utilize these camera features, open a text app, select the camera option from SwiftKey, and record photos or GIFs. Users can enhance these with text and effects before saving and sharing.

Android users also have access to an AI stickers feature, allowing the creation of personalized stickers from photos. This feature is accessed through the stickers option in SwiftKey.

Lastly, SwiftKey now includes an Editor feature as a virtual proofreader for grammar, spelling, and punctuation. Users can highlight text and use the Bing-powered Editor for suggestions and corrections.

These features signify Microsoft’s commitment to incorporating AI into its range of products. Microsoft integrated the Bing AI chatbot into SwiftKey for iOS/iPadOS and Android in April, further emphasizing this commitment. The chatbot, mirroring the functionality of the Bing AI website and app, offers assistance with searches, text rewriting, and handling requests through SwiftKey.

Microsoft’s strategic vision for AI in technology

As the tech world stands on the brink of this new era, companies like Microsoft are at the forefront, shaping the future of AI in computing. Integrating AI into products like the Windows Copilot key and the SwiftKey keyboard is not just about enhancing individual user experiences. It reflects a strategic vision where AI is a foundational element in the evolution of personal computing, influencing everything from how we interact with our devices to the underlying hardware that powers them.

In conclusion, the rollout of AI-enhanced features in SwiftKey and the introduction of the Copilot key are more than just product updates. They represent Microsoft’s broader strategy to lead the AI revolution in technology. With the anticipated PC market growth driven by the demand for AI-equipped systems, companies like Microsoft and their semiconductor partners are well-positioned to benefit from this trend. Their commitment to integrating AI across their product range signifies not just an adaptation to the changing market demands but a proactive shaping of the future of technology.

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AI technology, while impressive, faces criticism for potentially infringing on copyrights. Notably, large tech firms are facing lawsuits for such violations.

The New York Times vs. OpenAI and Microsoft

For example, The New York Times has taken legal action against OpenAI and Microsoft. The newspaper accuses these tech giants of unlawfully using millions of its articles to develop AI technologies like ChatGPT, which now rival the Times in delivering instant information.

These allegations form part of a broader trend of lawsuits challenging the practice of training AI models with vast amounts of online content without compensating the original creators. This issue concerns artists, writers, and journalists, who worry their online work might be used to power AI solutions, like chatbots, without fair compensation.

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The Times’ lawsuit is particularly significant as it targets OpenAI and Microsoft, two prominent players in AI. Microsoft, which holds a position on OpenAI’s board and has invested billions in the company, is directly involved in this case.

Filed on December 27, the lawsuit asserts that The Times is responsible to its subscribers. It argues that the unauthorized use of its content by Microsoft and OpenAI to create competing AI products undermines this duty. The Times acknowledges that these companies also used other sources, but it highlights the special focus on its content, accusing them of exploiting its journalistic efforts to develop competing products without permission or compensation.

Responding to the lawsuit, OpenAI spokesperson Lindsey Held expressed the company’s respect for content creators’ rights and commitment to collaborating with them. Despite ongoing and constructive talks with The New York Times, OpenAI expressed disappointment at this legal turn. The spokesperson remained hopeful for a mutually beneficial collaboration, similar to arrangements with other publishers.

Microsoft, however, did not comment on the lawsuit.

The Times had raised objections months earlier upon discovering its content was used in training AI models. Since April, the newspaper sought fair compensation and negotiated terms with OpenAI and Microsoft.

The companies, however, stand by the defense of ‘fair use’, arguing that the use of The Times’ content for ‘transformative purposes’ is permissible. The Times strongly contests this claim, arguing that AI outputs like ChatGPT and Microsoft’s Bing chatbot provide similar services to the newspaper, thereby not qualifying as ‘transformative’ but as direct competition.

AI technology and copyright concerns with various companies

While The New York Times is a prominent example, it’s not alone in this battle against copyright infringement by tech companies. Major news organizations, including CNN, have actively taken steps, like adding code to block OpenAI’s web crawler from accessing their content.

In related legal actions, comedian Sarah Silverman and two authors sued Meta and OpenAI in July, claiming their works were used without consent to train AI models. The companies haven’t responded publicly to these allegations. Most of these claims were dismissed by a judge in November.

The legal challenges for OpenAI and Microsoft extend beyond just news publications. In late November, they faced a lawsuit from authors over using their works in AI training. The lawsuit alleges that OpenAI, with Microsoft’s involvement, improperly used the content of numerous nonfiction books, including those of well-known authors, to train AI models like ChatGPT.

Questions being raised on why AI companies aren’t being sued more. (Source – X)

Julian Sancton, an author and editor at the Hollywood Reporter, spearheads this class action lawsuit, which was filed in Manhattan. He claims OpenAI used thousands of nonfiction books, including his own work, without permission to enhance its language models’ ability to interact with human-generated text.

This lawsuit joins a series of similar legal actions initiated by authors like John Grisham, George R.R. Martin, and Jonathan Franzen. These authors accuse OpenAI and other tech firms of exploiting their content to develop AI technologies, claims which the companies have refuted.

This case, led by Sancton, is notable as it’s the first to implicate Microsoft as a co-defendant. Microsoft’s significant investment in OpenAI and the integration of OpenAI’s technologies into its products are central to the lawsuit.

The lawsuit mentions the unauthorized use of Sancton’s book “Madhouse at the End of the Earth: The Belgica’s Journey into the Dark Antarctic Night” in training OpenAI’s GPT models. It further accuses Microsoft of being deeply involved in developing and training these models, thus holding them accountable for the alleged copyright infringement.

Sancton has approached the court seeking monetary damages and requesting an injunction to prevent further alleged copyright violations.

Emerging lawsuits in the AI art and imaging sector

The legal landscape surrounding AI technology continues to evolve, with several companies facing lawsuits. In January 2023, a lawsuit was filed against AI image generator companies like Stability AI, Midjourney, and DeviantArt. The lawsuit alleges that these companies infringed on the plaintiffs’ copyrights by using their original works for training and producing unauthorized derivatives, including mimicking the styles of various artists. Judge William Orrick, overseeing the case, indicated a likelihood of dismissing the lawsuit.

In a separate incident in January 2023, Getty Images brought a lawsuit against Stability AI. The complaint accuses Stability AI of replicating and processing millions of Getty’s images and related metadata without permission in the U.K. Shortly afterwards, Getty launched another lawsuit in the U.S. District Court for the District of Delaware.

This lawsuit raises concerns over copyright and trademark infringements, highlighting issues with AI-generated images that bizarrely or grotesquely included the Getty Images watermark, purportedly harming Getty’s reputation.

Multiple lawsuits raise concerns over copyright and trademark infringements (Generated with AI)

Copyright concerns primarily drive the surge in lawsuits against AI companies. AI technologies like ChatGPT, although trained on publicly available internet data, do so without explicit consent from the creators of this data. For instance, GPT-3’s training involved using content from Wikipedia and Reddit. This training process potentially includes conversations and segments from copyrighted works, allowing AI models to summarize such materials accurately.

Beyond individual cases, these lawsuits reflect broader apprehensions about the opaque nature of AI. There’s a growing concern that the ‘black box’ nature of AI makes it difficult to understand its inner workings, leading to fears that AI could be used to circumvent responsibility. This is particularly concerning when AI makes decisions or produces outputs without clear accountability.

Legal expert Matthew Butterick, who is involved in several of these lawsuits, expressed this concern in his blog. He warns that if AI companies are permitted to market these inscrutable systems, AI could become a tool for justifying means, regardless of the methods. He cautions that the reliance on AI might shift from its performance to its ability to execute actions that might be legally or ethically problematic for humans.

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