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| Welcome to today's Inside AI newsletter! Here are quick highlights of our top stories: - Elon Musk announced xAI, his AI company that aims "to understand reality."
- KPMG has expanded its Microsoft partnership to spend $2B in AI and cloud services.
- Google was hit with a proposed class-action lawsuit over AI data scraping.
- VP Kamala Harris met with rights groups to discuss AI risks.
Beth
p/beth-duckett | |
| 1 | | Elon Musk has officially announced xAI, which aims "to understand the true nature of the universe." According to the company's website, people can meet the xAI team and ask questions during a Twitter Spaces chat this Friday, July 14. More: - xAI, led by Musk, aims to explore deep learning mathematics and develop the "theory of everything" for large neural networks, according to co-founder Greg Yang.
- The startup's team includes former engineers from Google, DeepMind, Twitter, Tesla, Microsoft, and OpenAI, who have worked on breakthrough projects like AlphaCode and GPT models.
- Dan Hendrycks, director of the Center for AI Safety, will be an adviser.
- The company will operate independently but in collaboration with Musk's X Corp., which includes Twitter and Tesla.
Zoom out: - Musk incorporated X.AI Corp. in Nevada on March 9.
- The CEO previously 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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| 2 | | Accounting giant KPMG and Microsoft will co-develop cloud and generative AI tools, with KPMG investing at least $2B over the next five years. The products developed will impact all of KPMG's audit, tax, and advisory services. More: - In their extended partnership, KPMG also gains early access to Microsoft's AI assistant, Microsoft 365 Copilot.
- KPMG's deal with Microsoft includes using the Azure cloud platform, through which it already uses OpenAI tech for app development.
- A KPMG executive claims the company doesn't want to use AI to replace jobs but to embed AI skills in its workforce.
- That will involve training and shifting employees to new roles, he said.
- KPMG asserts that the partnership could generate more than $12B in revenue over five years. Broken down by year, this equates to about 7% of KPMG's global revenue, which reached $34.6B in fiscal 2022.
Other Big Four: - In April, PricewaterhouseCoopers announced a $1B investment in generative AI over three years, also in collaboration with Microsoft.
- Deloitte is spending $1.4B on employee training on AI and other tech.
- Ernst & Young has allocated $1B towards enhancing its audit technology capabilities, including AI, over the next four years.
- While not a Big Four accounting firm, Accenture recently unveiled a $3B investment in data and AI spanning three years.
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| 3 | | Google is facing a lawsuit accusing the company of scraping internet data without permission to train its AI products, violating copyright and privacy laws. The proposed class action suit was filed yesterday in San Francisco federal court by Clarkson Law Firm, which previously sued OpenAI over the same issue. More: - The complaint against Google claims it could owe at least $5B.
- The suit, filed on behalf of eight individuals, targets Google, its parent company, Alphabet, and Google's AI subsidiary DeepMind.
- According to plaintiffs, Google secretly stole content created by "hundreds of millions of Americans" to develop its AI chatbot Bard and other AI systems.
- Their complaint alleges that Google's actions give it an unfair advantage over competitors who obtain data legally for AI training.
- They argue that "publicly available" doesn't mean "free to use for any purpose."
Response: - Google's general counsel called the claims baseless, saying the company has made it clear for years that it uses publicly available data for AI training in line with its AI Principles.
- Google's privacy policy previously said it used publicly available information to help train "language models" such as Google Translate.
- It updated that recently to specify that it includes "AI models" in general, including Bard and Cloud AI capabilities.
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| 4 | | U.S. Vice President Kamala Harris says the U.S. doesn't need to choose between AI innovation and safety as it "can have both." She shared the view ahead of a meeting held Wednesday at the White House, where Harris met with civil rights and labor leaders to discuss AI. More: - Harris rejected the notion of a "false" choice between protecting consumers and advancing innovation, stating that the U.S. can accomplish both.
- "We should not dampen or in any way slow down innovation that can improve the condition of people's lives," Harris said.
- However, the U.S. must make sure not to infringe on people's rights in the process, she said.
- The comments came right before Harris met with consumer protection and rights leaders, such as AARP CEO Jo Ann Jenkins and AFL-CIO President Liz Shuler, to discuss the risks of AI to vulnerable Americans and discrimination by AI tools, such as those used in hiring.
- The meeting comes after Harris, joined by President Joe Biden, met with top tech CEOs in May to discuss the risks and regulations needed for AI systems.
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| 5 | | The news: Three major tax prep companies illegally shared taxpayers' sensitive financial data with tech giants Google and Meta for years, according to the results of a congressional investigation. The data was used for targeted advertising and to train Meta's AI algorithms. The details: A group of seven lawmakers, led by Sen. Elizabeth Warren (D-Mass.), presented their own findings in a report. They've called for potential criminal charges against the companies, citing violations of taxpayer privacy laws. The numbers: The lawmakers claim that the sensitive tax data of "tens of millions" of Americans was shared with the tech giants. Given that nearly half of American use tax software to file their taxes, this could very well be the case. The response: According to the report, the tax prep firms were "careless" with their treatment of taxpayer data and didn't understand the extent to which that data would be shared and used by the tech firms. Google and Meta placed the blame on the tax prep companies and asserted that their policies aim to prevent the collection of sensitive data. 
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| 6 | | 🍋 FRESH FUNDING 🍋 - Japanese robotics startup Telexistence Inc. secured $170M in Series B funding from SoftBank, Globis Capital Partners, and a fund set up by Hon Hai Precision Industry and CTBC Financial Holding.
- Collective, an AI-powered fintech platform for freelancers, secured $50M in fresh funding from Google's AI fund, Gradient Ventures, Innovius Capital, General Catalyst, QED, and Better Tomorrow Ventures.
- Healthcare credentialing and compliance automation startup Verifiable raised $27M in Series B funding led by Craft Ventures, with additional support from Highland Capital Partners, 137 Ventures, Cooley, The Altman Fund, and Struck Capital.
- French plastic recycling robotics maker b:bot secured €20M ($21.9M) from Eiffel Investment Group and Crédit Agricole Normandie-Seine.
- AI-powered prenatal screening solution maker Sonio raised $14M capital led by Cross Border Impact Ventures and the Elaia funds.
For the latest on AI startup funding and more in the VC community, subscribe to our Inside Venture Capital newsletter. | | | |
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- Chipmaker Nvidia has invested $50M in Recursion Pharmaceuticals to accelerate the development of the biotech firm's AI models for drug discovery.
- Indian IT services provider Wipro plans to invest $1B to train its 250,000 employees in AI and incorporate the technology into its offerings.
- Shopify, the e-commerce giant, will introduce an AI assistant called "Sidekick" to answer merchants' questions on the platform.
- The CEO of Indian startup Dukaan laid off most of the customer support staff, or 23 employees, to replace them with an AI-powered chatbot. The bot, built by a data scientist in only two days, reduced the average time taken to resolve customer issues by almost 98%.
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 | AI and technology writer | | 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. | | This newsletter was edited by Aaron Crutchfield | |
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