What happened: Microsoft is accelerating the rollout of its own artificial intelligence chips, which would be used to build generative AI systems and large language models like ChatGPT. Details: The AI chips have been secretly under development since 2019, according to The Information. Now, some employees at Microsoft and OpenAI — the Microsoft-backed AI company behind ChatGPT — are testing out the chip code-named "Athena" as Microsoft seeks to curb its reliance on outside vendors like Nvidia. What the numbers say: Nvidia's latest H100 processors, its most advanced GPUs for AI inference and training, are selling for upwards of $45,000 on eBay. Nvidia dominates the AI chip market, which is expected to grow from $16.7B in 2022 to $227.5B by 2032. Why it matters: While not a direct replacement for Nvidia, Microsoft chips could save it time and money as it ramps up its efforts to incorporate AI into everything from Bing to Office apps. It could give Microsoft a hand up in the competition against Google, Amazon, and Meta, which all have their own AI hardware. 
THE INFORMATION 
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Hundreds of Southwest Airlines flights in the U.S. were disrupted this morning due to an "intermittent technology issue," according to the airline. As of noon ET Tuesday, Southwest had resumed operations, attributing the pause to "data connection issues resulting from a firewall failure." More: - The Federal Aviation Administration imposed and later lifted a nationwide ground for the carrier's flights on Tuesday.
- Southwest later said it lost some operational data after a vendor-supplied firewall went down.
- The issues caused delays of at least 1,200 flights, or 30% of the airline's schedule.
Zoom Out: - The ground stop comes after Southwest experienced a wave of delays and cancellations in December that was partially attributed to outdated scheduling software.
- At the time, the Southwest Airlines Pilots Association said it has issued warnings for years about the out-of-date technology but was ignored.
- The airline has since committed more than $1B of its yearly operating budget to IT and other technology upgrades.
THE NEW YORK TIMES
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Apple may allow the sideloading of apps on iPhones with the debut of iOS 17 later this year, according to Bloomberg's Mark Gurman. The change would allow iPhone users to download apps outside of Apple's official App Store. More: - According to Gurman, Apple is working on the groundwork for sideloading with iOS 17, which is expected to launch in September after a period of beta testing.
- Under the change, iPhone users could download apps via third-party app stores and sideloading instead of going through the App Store.
- The shift could allow developers to circumvent Apple's 15% to 30% fees.
- The company could reveal more details during its Worldwide Developer Conference (WWDC) in June, when it's expected to announce iOS 17.
Zoom Out: - Apple is making the change to abide by new EU rules, including the recently passed Digital Markets Act.
- The Act — which requires so-called "digital gatekeepers" to open up their platforms to outside companies and developers — takes effect across the EU in 2023. Companies will have until 2024 to comply.
BLOOMBERG
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European Union lawmakers have agreed on the $47.2B EU Chips Act, which aims to double the region's global market share of chip output to 20% by 2030. The plan includes a mix of public and private investments to boost the bloc's supply of semiconductors. More: - After negotiations, the European Commission, EU countries, and EU lawmakers reached a deal on the bill's final version on Tuesday.
- The Chips Act would help ensure the bloc's supply of critical semiconductors following COVID lockdowns and other issues that disrupted the supply chain and caused chip shortages.
- It would curb the EU's reliance on Asian and U.S. semiconductor manufacturers and boost Europe's competitiveness in the industry.
- In order to reach its 20% target by 2030, the EU would need to quadruple its chip production.
- The law still requires formal approval from the European Parliament and EU member countries, after which it will be published in the Official Journal and become law.
Zoom Out: - Last August, U.S. President Biden signed the CHIPS and Science Act, which will allocate a total of $52.7B in subsidies for domestic semiconductor manufacturing and research to compete with China.
- Biden said the U.S. produces less than 10% of the world's semiconductors, down from more than 30% in the 1990s.
BLOOMBERG
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Nine more U.S. states have joined the U.S. Justice Department's latest antitrust complaint against Alphabet's Google, accusing the tech giant of abusing its dominance in the digital ad market. The DOJ is requesting the court to order the company to divest its Google Ad Manager suite, among other actions, due to alleged violations of the federal Sherman Antitrust Act. More: - Originally, eight states joined the DOJ in filing the lawsuit in federal court on Jan. 24.
- The addition of Arizona, Nebraska, New Hampshire, and six others brings the total number of states involved to 17.
- The lawsuit accuses Google of using "anticompetitive, exclusionary, and unlawful means" to combat any threats to its monopoly in digital advertising technologies.
- This includes acquiring rivals via "anticompetitive mergers" and pressuring advertisers and publishers to use its own ad technology products, the complaint alleges.
- Google denies the allegations and has asked a judge to dismiss the case.
Zoom Out: - The U.S. government's previous antitrust lawsuit, which remains ongoing, accuses Google of suppressing competition in the online search market. It's set to go to trial in September.
SILICON ANGLE
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A German artist has turned down a prestigious photography award after revealing that he created the winning image using OpenAI's AI image generator. Boris Eldagsen's "The Electrician" won in a category at the World Photography Organization's Sony World Photography Awards. More: - Eldagsen, a photo-media artist since 2000, said he submitted the work as a "cheeky monkey" to test whether such competitions are ready for AI-generated images.
- "They are not," he concluded in a post on his website.
- After decades of photography, Eldagsen said his focus has switched to "exploring the creative possibilities of AI generators."
- He said "The Electrician" was the result of a mixture of "prompt engineering, inpainting, and outpainting" that made use of his photography knowledge.
- However, Eldagsen concluded that "AI is not photography" and he will therefore "not accept the award."
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- Only six electric vehicles now qualify for the full $7,500 U.S. tax credit, according to the IRS. New EV battery rules have cut down the list to include only certain Tesla models, the Cadillac Lyriq, the Chevy Bolt and Bolt EUV, and the Ford F-150 Lightning.
- Apple may deploy a “frosted glass” design for the back of the upcoming iPhone 15 and iPhone 15 Plus. It could also debut a new cyan-green color for the two models, according to a trusted Weibo source.
- YouTube is expanding its ban on videos that promote eating disorders to include videos featuring weight-oriented bullying or "imitable" behavior.
- Elon Musk said he would launch "TruthGPT," which he referred to as a "maximum truth-seeking AI that tries to understand the nature of the universe."
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 |  | Beth is a writer and editor at Inside.com covering artificial intelligence and daily technology news. She has written the Inside AI newsletter since 2019. You can reach her at Beth.Duckett@inside.com. |   | | Editor | Eduardo Garcia is a writer and editor based in New York. He is the author of "Things You Can Do," an illustrated book about climate action. Bylines in The New York Times, The Guardian, Slate, Scientific American, and others. In one of his previous lives, Eduardo worked as a Reuters correspondent in Latin America for nearly a decade. | |
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