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Jennifer L. Schenker
Innovator Founder and Editor-in-Chief |
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| Banks and investment firms in the European Union can't dodge boardroom responsibility and a legal obligation to protect customers when using AI, The European Securities and Markets Authority (ESMA) said in its first statement on the technology. The edict serves as a reminder that boards of all companies will increasingly be held accountable for their companies’ use of AI because it affects every aspect of their oversight duties. In the case of financial services, while AI holds promise in enhancing investment strategies and client services, it also presents inherent risks, and the potential impact on retail investor protection is likely to be significant,ESMA said in its May 30 statement. The EU watchdog outlined how financial firms regulated in the 27-member bloc can use AI in day-to-day operations without violating the Markets in Financial Instruments (MiFID) securities law. “Importantly, firms’ decisions remain the responsibility of management bodies, irrespective of whether those decisions are taken by people or AI-based tools,” ESMA said. ESMA’s statement covers not just instances where AI tools are developed or adopted by a bank or investment firm itself, but also the use of third-party AI technologies, such as ChatGPT, with or without the direct knowledge and approval of senior management, ESMA said.
”The firm’s management body should have an appropriate understanding of how AI technologies are applied and used within their firm and should ensure appropriate oversight of these technologies,” ESMA said. Not just banks but any corporate using AI in consumer-facing applications is likely to be held accountable when things go wrong. Read on to learn more about this story and other important technology news impacting business. |
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On May 27 French President Emmanuel Macron and German Chancellor Olaf Scholz published an op-ed in the Financial Times that focused on a plan to make Europe a strong world-class industrial and technological leader, while simultaneously making the EU the first climate neutral continent.
“Together, we will advocate to strengthen the EU’s sovereignty and reduce our critical dependencies…,” wrote the French and German leaders. “With an ambitious industrial policy, we can enable the development and rollout of key technologies of tomorrow, such as AI, quantum technologies, space, 5G/6G, biotechnologies, Net Zero technologies, mobility and chemicals. We call for strengthening the EU’s technological capabilities by promoting cutting-edge research and innovation and necessary infrastructures, including those regarding artificial intelligence and health.”
The op-ed followed a meeting convened on May 21 by Macron of France’s top AI talents, which focused in part on using open source to reinforce Europe’s technological autonomy, arguing that an open approach was the best way to make the necessary building blocks available to crate sovereign AI for Europe.
France’s national 2030 program, which treats AI as both an innovation accelerator and differentiator, has set aside a budget of $32 million to develop and maintain open source tools. Part of that budget is going to a startup called Probabl, a spin-off of French research center Inria that has been financing a global open source data science library called scikit-learn, an approach widely used for performing complex AI and machine learning tasks.
Only two other such libraries exist in the world, at that scale: one created by Google, called Tensorflow and another called PyTorch created by Meta, which powers, among other things, OpenAI’s ChatGPT and Tesla’s autopilot. While not covering the same machine learning techniques, France’s Scikit-learn is ahead of both in popularity and usage.
“We need to take advantage of open source to minimize dependencies on monolithic, proprietary and captive technologies,” says serial entrepreneur and Probabl CEO Yann Lechelle. “The U.S. enjoys near supremacy when it comes to chips, cloud and software. This isn’t great for Europe or any other nation for that matter. If you don’t control your technological infrastructure, you have no sovereignty.”
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Who: Rajat Taneja is President of Technology for Visa, responsible for the company's technology innovation and investment strategy, product engineering, global IT and operations infrastructure. Prior to joining Visa in 2013, Taneja was Executive Vice President and Chief Technology Officer of Electronic Arts, where he was responsible for platform engineering, data center operations and IT supporting the company's global customer base. From 1996 until 2011, he worked at Microsoft Corporation, in roles that included Corporate Vice President, Commerce Division and the General Manager and Corporate Vice President, Online Services Division.
Topic: AI & the future of e-commerce
Quote: "Hyper personalization will allow sellers and buyers to tailor their interactions down to a segment of one. It has been a dream for a long time. Now, we have the capability to understand consumers deeply thanks to AI models, moving from an era of 'hunt and peck' to a highly curated experience. Think of it as moving from a concierge model asking for help, whether it's on a search engine or a shopping site, to an agent model where a personal assistant powered by AI will know what you want."
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| AI21 builds foundation models and AI systems for the enterprise that accelerate the use of GenAI in production. The company, which counts Fortune 500 companies as customers, has raised a total of $336 million from Nvidia, Intel, Google, and others.
The Israeli scale-up combines two different approaches to language models: a Transformer, the key technology on which most language models, including OpenAI's GPT-4, are based, and a second neural network called a "State Space Model," or SSM.
Academics at Carnegie Mellon University and Princeton University improved the SSM to make a more efficient solution called "Mamba." AI21’s team has combined Mamba with the Transformer to produce "Joint Attention and Mamba," or Jamba. Jamba optimizes for memory, throughput, and performance all at once and the company claims it outperforms or matches other state-of-the-art models in its size class on a wide range of benchmarks.
Jamba is the first hybrid architecture of its kind to reach production-grade scale, according to A21. That's important because there is an increasing demand from enterprise customers to scale GenAI. |
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| Percentage of economists in high income economies interviewed by the World Economic Forum for its annual Chief Economist Outlook report who said they expect policies on stronger innovation ecosystems and R&D support to drive economic growth over the next five years. Some 82% of chief economists expect the global economy to remain stable or strengthen this year, almost twice as many as in late 2023, according to the report. Over two-thirds predict a sustained rebound of global growth, driven by technological transformation, artificial intelligence and the green transition.
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