Daily Archives: August 15, 2023

Workers at OceanGates headquarters in Everett, Wash., install an air tank during the Titan submersibles development in 2017. In the wake of the loss of Titan and its crew, the company has suspended operations and is heading toward closure. (OceanGate File Photo)

A veteran of Seattles startup and investment scene, Gordon Gardiner, has been given the task of leading Oceangate through the aftermath of Junes controversial loss of the Titan submersible and its crew during a dive to the Titanic shipwreck and eventually to the closure of operations.

Gardiner has been appointed as CEO and director of the privately held Everett-based company, which suspended commercial and exploration operations after Titans implosion in the depths of the North Atlantic Ocean. OceanGates previous CEO and co-founder, Stockton Rush, was among the five crew members who died.

The new CEOs primary task is to lead OceanGate through the ongoing investigations and closure of the companys operations, OceanGate said in a statement. The company already has shut down its Facebook page and X / Twitter accounts, and its website has been reduced to a single black-and-white page announcing the suspension of operations.

The U.S. Coast Guard has set up a Marine Board of Investigation to look into the causes of the submersibles catastrophic implosion, in partnership with the National Transportation Safety Board and its counterparts in Britain, Canada and France. A public hearing is planned as part of the investigatory process, and Congress may conduct hearings as well. Theres also a chance that lawsuits might be brought by survivors of victims, or by creditors.

After the Titans loss, sharp questions came to light about the methods used to manufacture Titans carbon-composite hull. In 2018, a whistleblower raised concerns in a complaint that was sent to an inspector for the Occupational Safety and Health Administration. But the complaint was withdrawn in the face of legal threats, The New Yorker reported.

Rob McCallum, a founding partner of Eyos Expeditions and an expert on deep-ocean exploration, had similar concerns during Titans development. He told GeekWire that the next couple of years could be rough for OceanGate.

The investigations will bring out the whole story and there will be a lot of soul-searching by those that enabled Stockton [Rush] and OceanGate to succeed to the operational phase, McCallum said in an email. The senior staff, the board and the lawyers are all in for a fairly tough couple of years and OSHA and the USCG will benefit from some self-reflection.

Gardiner grew up in Boston, but has lived in Seattle for 26 years. In addition to his post at OceanGate, he is chairman of Quantum Holdings and a general partner at Swiftsure Capital, both of which are based in Seattle.

From 2017 to 2021, he was the CEO of TableSafe, a Kirkland, Wash.-based venture that pioneered self-swipe payment devices for restaurants and was acquired by Mad Mobile in 2021. Over the past 15 years, Gardiner has served as a director on the boards of six other companies involved in a variety of industries, including tech and manufacturing.

Gardiner started his career with an affiliate of J.P. Morgan, where he worked for 15 years in New York, San Francisco and Europe. He subsequently served as the chief financial officer of tech companies in communications software, information technology services and consumer internet services.

Other factoids from a bio provided by OceanGate:

Gardiner earned his B.A. from Harvard University, where he was also captain of the heavyweight crew.

He completed the Executive Program for Growing Companies at the Stanford University Graduate School of Business.

Hes an avid skier and bicyclist.

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Seattle tech exec Gordon Gardiner will face challenging task as OceanGates new CEO - Yahoo Sports

In the latest chapter in the saga of the high-speed bullet train between Houston and Dallas, Amtrak is now involved.

According to a press release, Texas Central Partners and Amtrak are exploring a partnership to work together on the proposed Dallas-Houston high-speed rail project that's been under consideration for more than a decade.

Amtrak has cooperated with Texas Central on various initiatives since 2016 and the two entities are now evaluating a potential partnership to determine the line's viability.

If we are going to add more high-speed rail to this country, the Dallas to Houston Corridor is a compelling proposition and offers great potential, says Amtrak senior VP of High-Speed Rail Development Programs Andy Byford. We believe many of the country's biggest and fastest-growing metropolitan areas, like Houston and Dallas, deserve more high quality high-speed, intercity rail service, and we are proud to bring our experience to evaluate this potential project and explore opportunities with Texas Central so the state can meet its full transportation needs.

The route being proposed would span approximately 240 miles, going at 250 mph, resulting in a trip that would take less than 90 minutes between the two cities.

Texas Central has been working towards getting a train rolling since 2013, including lining up a potential builder in 2021. But the project has had pushback from Texas politicians and landowners along the route; a lawsuit against the project was filed by six rural counties in 2021, and the Texas Legislature passed a law prohibiting the state from spending any funds on the project.

Facing a seeming dead end, Texas Central CEO Carlos Aguilar and its board members resigned in June 2022; Michael Bui, a consultant, has been serving as CEO since then.

Texas Central and Amtrak have submitted applications to several federal programs in connection with further study and design work, including the Consolidated Rail Infrastructure Safety and Improvements (CRISI) grant program, the Corridor Identification and Development program, and the Federal-State Partnership for Intercity Passenger Rail (FSP-National) grant program.

Amtrak previously entered into an agreement with Texas Central to provide through-ticketing using the Amtrak reservation system and other support services for the planned high-speed rail line.

"This high-speed train, using advanced, proven Shinkansen technology, has the opportunity to revolutionize rail travel in the southern U.S., and we believe Amtrak could be the perfect partner to help us achieve that, says Bui in a statement.

Despite its detractors, the project is forecast to provide social, environmental, employment and economic benefits including reducing greenhouse gas emissions by more than 100,000 tons per year, saving 65 million gallons of fuel and removing 12,500 cars per day from I-45.

The release from Amtrak has statements from both Dallas Mayor Eric L. Johnson and Houston Mayor Sylvester Turner, who calls the collaboration between Texas Central and Amtrak "an important milestone for the City of Houston and this project."

Byford joined Amtrak in April 2023 to begin developing a team focused on high-speed opportunities throughout the U.S. In his newly created role, he will develop and lead the execution of Amtraks long-term strategy for high-speed rail throughout the country, including the extension of the Crescent from Mississippi through Louisiana and Texas; Kansas DOTs Heartland Flyer Extension Corridor Identification and Development (Corridor ID) connecting Wichita to Oklahoma and Texas, and TxDOTs applications for the Texas Triangle (Houston Dallas Fort Worth San Antonio) routes.

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5 tips for creating a health tech MVP - InnovationMap

Big tech companies Alphabet, Amazon and Meta all cited performance-oriented and AI-powered advertising products as spurring better than expected revenue growth in the second quarter, with analysts suggesting they may be benefitting from more tightly scrutinised ad spend.

While marketing spend as a whole is forecast to be lower in 2023 than last year, there are pockets of growth within certain categories.

A Gartnersurveyof more than 400 CMOs across North America and Europe in February found total marketing budgets as a percentage of revenue would decline from 9.5% in 2022 to 9.1% in 2023. This is down from a COVID-19 peak of 11% in 2020.

Costs attributed to labor, agencies and services were the areas expected to be cut. The Q2 performance of agency holding companiesIPG,S4 Capital,StagwellandWPPreflect this, with all citing a pullback in marketing services spend from tech clients as dragging on their performance.

At the same time, CMOs stated in the Gartner survey that they would allocate more budget to paid media. Indeed, GroupM and Magna forecast global ad spend to increase 5.9% and 4.6%, respectively, in 2023slightly lower than last years growth rates.

In the Gartner survey, CMOs within IT and business services, consumer products and retail planned to allocate the largest share of their budgets to paid media compared to other sectors.

Across the forecasts, retail media and e-commercea big focus area for tech companieshas been outlined as a key growth category.

Both Alphabets Google and Meta noted commerce and retail as the largest contributors to their ad revenue growth of 3% and 12%, respectively, in the second quarter. The Q2 performance reversed weak results from the prior three quarters and surpassed analysts expectations.

Emily Del Greco, partner at McKinsey & Company, said retail media and CTV contributed to the tech firms ad rebound in Q2 and will continue through the end of this year.

In particular, these advertisers seemingly drove a surge in demand for the tech platforms performance-based advertising products, which use artificial intelligence technology to optimise placements.

Metasaidit had seen strong adoption of its product, Advantage+, among e-commerce and retail verticals, while it is gaining traction among consumer packaged goods (CPG) and direct-to-consumer brands.

Google chief business officer Philipp Schindlersaidthe companys Performance Max solution did well with retailers for whom profitability remains a top theme.

Amazon CEO Andy Jassysaidthe companys performance-based ad offerings continue to be the largest contributor to our growth, with the e-commerce giants ad business growing a sizable 22% year over year in Q2.

Mike Froggatt, senior director analyst in the Gartner marketing practice, suggests the tech platforms may have benefited from marketers efficiency drives through the economic downturn.

One of the trends this year that we've identified is that CMOs are under a lot of pressure to develop that efficiency, he said.

While these tech giants flaunted their innovations when the economy was booming, over the past year they have shifted to talking up how they can maximise impressions and value to advertisers, Froggatt said.

For so long, they've been playing were tech. They're kind of getting back to basics and doubling down on their media initiatives, he said.

CJ Bangah, U.S. software and digital platform leader at PwC, echoed that marketers are under considerable, growing pressure to show ROI from marketing spend.

This is true across industries, and particularly true for those industries where there is added focus on profitability, she said.

Products like Advantage+ and Performance Max use AI to find pockets of available impressions that maybe people-managed campaigns cant, Froggatt said, in turn driving down the overall cost per acquisition.

They seem to be especially popular among small- to medium-sized advertisers that have fewer resources to plan cross-platform campaigns. Digital agency Acadia last monthsharedwithCampaign USthat Performance Max accounted for 43% of Google search spend across its mid-sized clients in Q2up from 32% in Q3 2022.

Brian Wieser, principal of Madison and Wall, said it is plausible that Google and Metas AI-powered ad formats may have helped them capture more share of the ad market in Q2.

They've got products that satisfy a lot of goals and are perceived to satisfy goals better than alternatives. That's frequently where the money goes, he said.

But he added other factors could have had even more influence on their growth. For example, Meta said it recorded strong spend from advertisers in China using its platforms to reach customers in other markets in Q2.

The tech platforms may have also benefited from scooping up a surplus of marketers budgets following a faster than expected recovery from 2022s downturn, Froggatt remarked, since spending on these platforms is easier to ramp up versus media channels with longer payment terms, such as TV.

I think part of it is that it's easier to spend on these platforms; you can turn it on and off quickly. So when the economy wasn't as bad as potentially forecast at the end of 2022, marketers maybe had some leftover budget, he said.

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Tech platforms attribute recent growth spurts to AI-powered ... - Campaign Asia

In what has been a tepid first half of 2023 for the global initial public offering (IPO) market, the Asia Pacific region remains the only bright spot in an otherwise lacklustre vista.

According to figures from EY, Asia currently dominates in terms of global launches and has an approximate 60 per cent share of the volume and value of IPOs worldwide.

In the first half of 2023, the Apac region raised $39.4 billion from 371 IPOs, marking a year-on-year (YOY) decline of 2% in terms of volume and 40%, in terms of value.

While half of the top 10 global IPOs have come from China, dealmakers wait anxiously to see whether spin-offs from mainland tech giants such as JD.com and Alibaba, will reignite the market in the second half of the year.

Such activity by big tech players could facilitate a return to form for Chinese tech stocks, following the ferocious regulatory crackdown on the sector by the Chinese government in 2021, after Ant Groups failed IPO in November 2020.

Alibaba, for its part, aims to split its $220 billion empire into six units, in a move that could provide a boost to Hong Kongs flagging market. JD.com, meanwhile, has plans to hive off its logistics arm, Cainiao Network Technology, and two other subsidiaries - Jingdong Property and Jingdong Industrials.

The break ups would help achieve Beijings aim of reducing the power of Chinas tech giants, while unlocking their value onto the market.

Strategic sectors

Louis Lau, capital markets partner, KPMG China, told FinanceAsia that the technology, media, and telecoms (TMT) sector, as well as the healthcare-life sciences segment, would be likely to propel growth in the IPO market in the second half of 2023.

As of 31 July 2023, these two sectors account for approximately 50% and 40% of the active IPO pipeline in the Hong Kong and A-share markets, respectively, he said.

The A-share IPO market is backed by a robust pipeline comprising over 1,000 listing applicants across various markets, and it will receive additional support from the Chinese Government's commitment to stimulate economic recovery.

With regard to Hong Kongs IPO market, he anticipates any uptick in activity to be driven by international and Chinese mainland company spin-offs, as well as the emergence of specialist technology firms in the upcoming quarter.

Rate and real estate recovery

Ultimately however, much will hinge on the US Fed and rate hikes going forward.

The extent to which the recovery will depend on a relaxation in rate hikes is significant. A decrease in rate hikes could encourage spending and investment, both of which are essential for economic recovery, Lau noted.

The announcement made by the US Federal Reserve in June, signalling a pause in interest-rate hikes, has influenced market expectations and reduced monetary uncertainty. This factor has already been taken into account and could contribute to supporting the ongoing recovery.

Zoe Shi, Partner, KPMG China, said that optimism remains high for Chinas venture capital (VC) sector, which could receive a boost from IPO growth in China and Hong Kong. She explained that local governments in China are increasingly collaborating with VC firms to invest in startups and to provide various types of support to the overall ecosystem.

There is also some hope for stronger IPO activity in Hong Kong and the Chinese mainland during the second half of the year, particularly given the planned spin-offs of a number of tech giant Alibabas business units, she said in an emailed industry commentary.

The success of these spin-offs could spur other IPO activity, while potentially also driving a new wave of interest in technology companies in China.

Jason Yu, head of Multi Asset Management, Asia at Schroders said in a market update that despite the optimism of Chinese government backing for the tech sector, investors should remain cautious and refrain from significantly adding exposure to the market.

At present, the main challenge facing the investment markets in mainland China is lagging consumer confidence, primarily influenced by the slower recovery of the domestic real estate market, he said.

Given that real estate investment constitutes a significant portion of the overall wealth of mainland China households, their caution towards spending and investing more is understandable when the future of the housing market looks uncertain.

However, he added that mainland Chinas policy support for strategic industries is poised to propel the tech sector to overtake real estate as a major driver of economic growth.

Noteworthy sectors include new energy vehicles, renewable energy, consumer services and semiconductors. Backed by national policies, these industries are expected to present a more stable outlook and play a pivotal role in China's future economic development, he said.

According to Andrew Collier, managing director at Orient Capital Research, the listing of the Alibaba and JD.com subsidiaries later this year is likely to be the shape of things to come as far as China IPOs are concerned.

China is happy to allow smaller tech companies list in Hong Kong they just don't want them to grow large and powerful, he told FA.

The break-up of Alibaba into six pieces was the ideal format for the leadership; raise foreign capital but don't let any tech company become a dominant player. That means we are going to see a much smaller set of companies list in China.

He proposed that going forward, Chinas large tech companies will either raise capital domestically or split into smaller pieces.

However, no one is exactly sure what size is threatening to the Chinese state.

Both JD.com and Alibaba did not respond to requests for comment.

Haymarket Media Limited. All rights reserved.

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Chinese tech stocks to lead a rebound in H2, but uncertainties remain - FinanceAsia

Beijing ispoised to implementsweeping new regulations for artificial intelligence services this week, trying to balance state control of the technology with enough support that its companies can become viable global competitors.

The government issued24 guidelinesthat require platform providers to register their services and conduct a security review before theyre brought to market. Seven agencies will take responsibility for oversight, including the Cyberspace Administration of China and the National Development and Reform Commission.

The final regulations are less onerous than an original draft from April, but they show China, like Europe, moving ahead with government oversight of what may be the most promising and controversial technology of the last 30 years. The U.S., by contrast, has no legislation under serious consideration even after industry leaders warned that AI poses a risk of extinction and OpenAIs Sam Altman urged Congress in public hearings to get involved.

China got started very quickly, said Matt Sheehan, a fellow at the Carnegie Endowment for International Peace who is writing a series ofresearch paperson the subject. It started building the regulatory tools and the regulatory muscles, so theyre going to be more ready to regulate more complex applications of the technology.

Chinas regulations go beyond anything contemplated in Western democracies. But they also include practical steps that have support in places like the U.S.

Read More: Tech Leaders Warn the U.S. Military Is Falling Behind China on AI

Beijing, for example, will mandate conspicuous labels on synthetically created content, including photos and videos. Thats aimed at preventing deceptions likean online video of Nancy Pelosithat was doctored to make her appear drunk. China will also require any company introducing an AI model to use legitimate data to train their models and to disclose that data to regulators as needed. Such a mandate may placate media companies that feartheir creationswill be co-opted by AI engines. Additionally, Chinese companies must provide a clear mechanism for handling public complaints about services or content.

While the U.S. historically hands-off approach to regulation gave Silicon Valley giants the space to become global juggernauts, that strategy holds serious dangers with generative AI, said Andy Chun, an artificial intelligence expert and adjunct professor at the City University of Hong Kong.

AI has the potential to profoundly change how people work, live, and play in ways we are just beginning to realize, he said. It also poses clear risks and threats to humanity if AI development proceeds without adequate oversight.

Read More: How the World Must Respond to the AI Revolution

In the U.S., federal lawmakers have proposed a wide range of AI regulations but efforts remain in the early stages. The U.S. Senate has held several AI briefings this summer to help members come up to speed on the technology and its risks before pursuing regulations.

In June, the European Parliament passeda draft of the AI Act, which would impose new guardrails and transparency requirements for artificial intelligence systems. The parliament, EU member states and European Commission must negotiate final terms before the legislation becomes law.

Beijing has spent years laying the groundwork for the rules that take effect Tuesday. The State Council, the countrys cabinet, put out an AI roadmap in 2017 that declared development of the technology a priority and laid out a timetable for putting government regulations in place.

Agencies like the CAC then consulted with legal scholars such as Zhang Linghan from the China University of Political Science and Law about AI governance, according to Sheehan. As Chinas draft guidelines on generative AI evolved into the latest version, there were months of consultation between regulators, industry players and academics to balance legislation and innovation. That initiative on Beijings part is driven in part by the strategic importance of AI, and the desire to gain a regulatory edge over other governments, said You Chuanman, director of the Institute for International Affairs Center for Regulation and Global Governance at the Chinese University of Hong Kong in Shenzhen.

Now, Chinas biggest AI players, from Baidu Inc. to Alibaba Group Holding and SenseTime Group Inc., are getting to work. Beijing has targeted AI as one of a dozen tech priorities and, after a two-year regulatory crackdown, the government is seeking private sector help to prop up the flagging economy and compete with the U.S. After the introduction of ChatGPT set off a global AI frenzy, leading tech executives and aspiring entrepreneurs are pouring billions of dollars into the field.

In the context of fierce global competition, lack of development is the most unsafe thing, Zhang, the scholar from China University of Political Science and Law,wrote aboutthe guidelines.

In a flurry of activity this year, Alibaba, Baidu and SenseTime all showed off AI models. Xu Li, chief executive officer of SenseTime, pulled offthe flashiest presentation, complete with a chatbot that writes computer code from prompts either in English or Chinese.

Still, Chinese companies trail global leaders like OpenAI and Alphabets Google. They will likely struggle to challenge such rivals, especially if American companies are regulated by no one but themselves.

China is trying to walk a tightrope between several different objectives that are not necessarily compatible, said Helen Toner, a director at Georgetowns Center for Security and Emerging Technology. One objective is to support their AI ecosystem, and another is to maintain social control and maintain the ability to censor and control the information environment in China.

Costfoto/NurPhoto/Getty Images

In the U.S., OpenAI has shown little control over information even if its dangerous or inaccurate. Its ChatGPT made up fake legal precedents and provided bomb-building instructions to the public. A Georgia radio host claims the bot generated a false complaint that accused him of embezzling money.

Read More: China Is Betting Big on Artificial IntelligenceEven as It Cracks Down on ChatGPT

In China, companies have to be much more careful. This February, the Hangzhou-based Yuanyu Intelligence pulled the plug on its ChatYuan service only days after launch. The bot had called Russias attack on Ukraine a war of aggression in contravention of Beijings stance and raised doubts about Chinas economic prospects, according to screenshots that circulated online.

Now the startup has abandoned a ChatGPT model entirely to focus on an AI productivity service called KnowX. Machines cannot achieve 100% filtering, said Xu Liang, head of the company. But what you can do is to add human values of patriotism, trustworthiness, and prudence to the model.

Beijing, with its authoritarian powers, plays by different rules than Washington. When Chinese agencies reprimand and fine tech companies, the corporations cant fight back and often publicly thank the government for its oversight. In the U.S., Big Tech hires armies of lawyers and lobbyists to contest almost any regulatory action. Alongside the robust public debate among stakeholders, this will make it difficult to install effective AI regulations, said Aynne Kokas, associate professor of media studies at the University of Virgina.

In China, AI is beginning to make its way into the sprawling censorship regime that keeps the countrys internet scrubbed of taboo and controversial topics. That doesnt mean it is easy, technically speaking. One of the most attractive innovations of ChatGPT and similar AI innovations is its unpredictability or its own innovation beyond our human intervention, You, from the Chinese University of Hong Kong, said. In many cases, its beyond control of the platform service providers.

Some Chinese tech companies are using two-way keyword filtering, using one large language model to ensure that another LLM is scrubbed of any controversial content. One tech startup founder, who declined to be named due to political sensitivities, said the government will even do spot-checks on how AI services are labeling data.

What is potentially the most fascinating and concerning time-line is the one where censorship happens through new large language models developed specifically as censors, said Nathan Freitas, a fellow at Harvard Universitys Berkman Klein Center for Internet and Society.

The European Union may bethe most progressivein protecting individuals from such overreach. The draft law passed in June ensures privacy controls and curbs the use of facial recognition software. The EU proposal would also require companies to perform some analysis of the risks their services entail, for, say, health systems or national security.

But the EUs approach has drawn objections. OpenAIs Altman suggested his company may cease operatingwithin countriesthat implement overly onerous regulations.

One thing Washington can learn from Chinese regulators is to be targeted and iterative, Sheehan said. Build these tools that they can keep improving as they keep regulating.

With assistance from Emily Cadman, Alice Truong and Seth Fiegerman.

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China Tries to Balance State Control and State Support of AI - TIME

The internet shopping giant wants to leverage AI to give customers a broad summary of a product based on the reviews written by buyers.

Comparing products online can sometimes take a lot of time and work, especially when they have thousands of reviews to sift through.

Amazon is trying to solve this issue however, with a new generative AI feature that summarises product reviews for customers.

The company began testing the feature earlier this year, and its designed to help shoppers to quickly find out what the general consensus is amongst other customers who have left a written review.

It will pick out common themes and summarise them in a short paragraph on the product detail page.

We want to make it even easier for customers to understand the common themes across reviews, and with the recent advancements in generative AI, we believe we have the technical means to address this long-standing customer need, the company said in a blog post.

Amazon states that the AI-powered features will provide a short paragraph on the product detail page, while allowing users to click or tap on a specific product attribute such as where it was easy to use, bringing up reviews that mention this.

The new feature is available to a subset of mobile shoppers in the US across a broad selection of products, the blog explained. It may be expanded to more users in the coming months based on customer feedback.

Amazon is just one of many tech giants that have been looking to implement more AI features into its products, following the explosion of interest in generative AI brought about by the likes of OpenAIs ChatGPT and Googles Bard.

While Amazon hasnt released its own high-profile AI chatbot or imaging tool, it has been focusing on services that will allow developers to build their own generative AI tools on its cloud infrastructure AWS.

Earlier this year, Amazon CEO Andy Jassy said in a letter to shareholders that generative AI will be a big deal for the company.

He also said during an earnings call with investors last week that every single one of Amazons businesses currently has multiple generative AI initiatives underway, including its devices unit, which works on products like the voice assistant Alexa.

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Amazon taps into generative AI to summarise product reviews - Euronews