CES braces for an uneasy 2024

How the next wave of technology is upending the global economy and its power structures

Jan 11, 2024 View in browser   By Derek Robertson With help from Christine Mui and Steven Overly People walk by a CES sign during the 2024 CES tech show. | AP Photo/John Locher LAS VEGAS — One of the defining characteristics of the nation’s top tech convention is its sheer bigness — represented at CES is not just every size of tech company, from the smallest supplier to giant firms like Google, but industries from automotives to robotics to video gaming. That means policy discussions tend to be wide-ranging, across subjects including (but certainly not limited to) competition, financial regulation, and geopolitics. Yesterday we covered the omnipresence of AI, but given the convention’s scope there are plenty of other technologies regulators are eager to hash out the terms of their relationship with. There’s a sense of urgency, not just because technology is moving quickly, but because of the unsettled political moment both at home and abroad. Elections are looming in the U.S. and around the world, as is the potential passage of the European Union’s sweeping AI Act. Then there’s the ongoing trade tension with China, and the intensifying threat of cyber warfare. Anne Neuberger, Deputy National Security Advisor for Cyber and Emerging Tech at the National Security Council, spoke as part of a parade of government officials this morning about the U.S. Cyber Trust Mark, a sort of Energy Star-like seal of approval for hacking-resistant technology. Neuberger announced that the U.S. has signed a political deal with the European Union over sharing those cyber standards, touting that consumers will know their products are safe whether they’re sold in “Paris, Texas, or Paris, France.” Still, it was clear roaming the convention that kind of cooperation isn’t the whole story: there’s also inevitable geopolitical competition among allies, both regulatory and economic. This morning I spoke with Liz Hyman, head of the XR Association, the leading trade group for what it calls “immersive technology.” Hyman was here in Las Vegas as a booster for the field ahead of what could be a make-or-break year for the technology (more on that in tomorrow’s DFD), but she had plenty of thoughts about how important it is not just for the U.S. government to get these tech policy issues right, but to get them right first. “Europe is very focused on the industrial metaverse, they're very focused on digital twins, and we had better get going before the train leaves the station,” she said, citing a recent white paper the XRA published on the need for the U.S. to stay competitive on immersive tech. (Roland Busch, CEO of the German tech giant Siemens, touted his company’s progress toward building an “industrial metaverse” in this year’s CES keynote speech.) Jennifer Huddleston, a tech policy research fellow at the free market-oriented Cato Institute who spoke on a panel about promoting tech competition, had a predictably sharper view of the policy environment on the horizon for 2024 and the relationship between the U.S. and Europe when I spoke with her afterward. “You’ve seen what appears to be a much more deliberate targeting of large, successful American companies [by European regulators],” Huddleston said. “Do we want European bureaucrats to be the ones playing policy designer, or do we want innovators and the marketplace to be the one that decides what design wins out?” Tech companies seem to be taking this unsettled moment seriously, or at least acknowledging the global uncertainty. For some of the biggest and most globally oriented tech firms, they believe they can effectively design their way out of it. “We are enablers,” Ziad Asghar, Qualcomm's SVP of product management, told me this week as he previewed the company's new chips enabling powerful on-device AI. “We allow our customers the ability to configure [their technology] as such that they can comply with stringent requirements, or a different regulatory paradigm in different cities or countries.” Qualcomm was at CES touting the integration of these chips into cars and smartphones, about as ubiquitous as technologies get, making the ability to get along with regulators at home and abroad paramount. (Transportation, in particular, was a major focus at this year’s convention — yesterday afternoon I spoke with Adam Kovacevich, founder and CEO of the center-left Chamber of Progress, who said that 2024 is shaping up to be a crucial year for autonomous vehicle policy.) Ultimately, despite — or, maybe, because of — the intimidating slate of regulatory and geopolitical challenges facing the tech industry this year, Washington’s emissaries at CES took an overall tone of techno-optimism, often explicitly reassuring the industry audience that they’re firmly in their corner. “On the government side there’s a really committed team working with all the tech innovators here,” said the NSC’s Neuberger. “This is the route to economic growth; this is the route to ensuring the U.S. remains a leader in innovation.” Paul Rosen, the Department of the Treasury official charged with enforcing investment security, described his office’s relationship with tech even more bluntly: “We don’t want to take a sledgehammer to business.”   Enter the “room where it happens”, where global power players shape policy and politics, with Power Play. POLITICO’s brand-new podcast will host conversations with the leaders and power players shaping the biggest ideas and driving the global conversations, moderated by award-winning journalist Anne McElvoy. Sign up today to be notified of new episodes – click here.     a psychologist's take on tech The complex relationship between technology and mental health has captured increased attention in recent years, especially in Washington, amid rising concerns about the negative effects of social media, video games and artificial intelligence. On today’s episode of the POLITICO Tech podcast, the CEO of the American Psychological Association, Dr. Arthur Evans, joins host Steven Overly at CES to break down how government and industry can make tech work better for humans. This is an excerpt from that conversation. The American Psychological Association has led a series of panels here raising questions about what all this technology means for us humans. Why? Our position is not that technology is inherently good or bad. It's how you use it. One of the things that's really important as these technologies emerge is for us to really be paying attention to and collecting the data. One of the things we've talked a lot about is the need for more research funding in these areas. We don't want to be 10 years from now going, ‘Oh, we're seeing all these negative things. Now we need to collect data.’ No, we need to collect the data now. There's been a lot of discussion about social media and its potentially harmful effects on teens. What can we learn from that discussion as AI becomes more ubiquitous? One of the things that we've noticed from the work we've done around social media is that there are a lot of harms that we know can happen. There are a lot of benefits. Again, it's a balanced picture. But a lot of that work has come in reaction to [problems], and it's in some ways late. And so we really have an opportunity with generative AI, in particular, to say, ‘Look, we've learned some things about how these technologies play out and how they can affect people and children and youth. We’ve got to use that now as this is in a nascent stage, and really starting to grow exponentially.’ Do you think that's happening? I think it's a mixed bag. I testified at a Senate hearing a few weeks ago. I was really impressed that Congress is really looking at these issues and trying to get ahead of them, as opposed to being purely reactive. One of the reasons we're here at CES is that … a lot of the issues that we’re struggling with are psychological or behavioral in nature, and there is often a body of knowledge that could help inform policy, could help inform parenting practices. And we want to make sure that people know that and they start connecting the dots. What's the role for regulation to play in these questions around human-machine engagement? We have to have more regulation. It's a Wild West right now. There are things that we know are harmful and are problematic, and we should do [something about] that. Let's take the issue of privacy, for example. Privacy is absolutely, very heavily a psychological phenomena. What's private to me, may be different than you. Most of us, when we check off on those privacy statements, we don't know what we’re signing off on. From a regulatory standpoint, if we had more standardization… it would eliminate a lot of anxiety that all of us have when we're dealing with those kinds of things. — Steven Overly Listen to the full interview with Dr. Evans on POLITICO Tech. chip off the old block Commerce Secretary Gina Raimondo. | Kevin Dietsch/Getty Images China doubled down Thursday on criticism of the U.S. after Washington reportedly restricted Beijing’s access to high-tech Dutch chip printing machines. A spokesperson for China’s Commerce Ministry, Shu Jueting, said the U.S. “has instrumentalized and weaponized the issue of export control, and even interfered with the normal trade among enterprises of other countries,” and pledged to “take the necessary measures” to protect the country’s commercial interests. Commerce Secretary Gina Raimondo said Thursday she had spoken with her Chinese counterpart Wang Wentao the previous night as part of what her office has called an effort to “communicate regularly.” Wang’s ministry said he expressed concerns about U.S. restrictions on third-party exports of lithography machines on the call. Without referencing the issue specifically, Raimondo told him “national security is not negotiable and emphasized that the United States Government’s ‘small yard, high fence’ approach is not about containing China’s economic development,” according to her department’s readout of the call. Earlier this month, Bloomberg reported that U.S. officials had pressured Dutch-headquartered ASML to abruptly cancel pre-scheduled shipments of some of its cutting-edge deep ultraviolet lithography machines to Chinese customers. ASML confirmed the Dutch government partially revoked its export license for certain chip-printing machines. China has called out Washington for its use of export controls before. But banging the drum could carry more significance in the lead-up to Taiwan’s presidential election Saturday, which the world chip industry is closely watching as the island accounts for some 90 percent of the global production capacity for advanced semiconductors. — Christine Mui Tweet of the Day THE FUTURE IN 5 LINKS Chatbot teachers are up against a long track record of failure. Blockchain boosters say it can help users sift through a morass of AI content. Barclays predicts China could double its chip output in five years. Learn who stands to get rich from the arrival of Bitcoin ETFs. Google is laying off hundreds of augmented reality employees. Stay in touch with the whole team: Ben Schreckinger (bschreckinger@politico.com); Derek Robertson (drobertson@politico.com); Mohar Chatterjee (mchatterjee@politico.com); Steve Heuser (sheuser@politico.com); Nate Robson (nrobson@politico.com); Daniella Cheslow (dcheslow@politico.com); and Christine Mui (cmui@politico.com). If you’ve had this newsletter forwarded to you, you can sign up and read our mission statement at the links provided.   GLOBAL PLAYBOOK IS TAKING YOU TO DAVOS! Unlock the insider's guide to one of the world's most influential gatherings as POLITICO's Global Playbook takes you behind the scenes of the 2024 World Economic Forum. Author Suzanne Lynch will be on the ground in the Swiss Alps, bringing you the exclusive conversations, shifting power dynamics and groundbreaking ideas shaping the agenda in Davos. Stay in the know with POLITICO's Global Playbook, your VIP pass to the world’s most influential gatherings. SUBSCRIBE NOW.       Follow us on Twitter Ben Schreckinger @SchreckReports Derek Robertson @afternoondelete Steve Heuser @sfheuser   Follow us

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