OpenAI’s recent drama hasn’t only caught UK regulators’ attention. Bloomberg reported Friday that the Federal Trade Commission (FTC) is looking into Microsoft’s investment in the Sam Altman-led company and whether it violates US antitrust laws. FTC Chair Lina Khan wrote in a New York Times op-ed earlier this year that “the expanding adoption of AI risks further locking in the market dominance of large incumbent technology firms.”

Bloomberg’s report stresses that the FTC inquiry is preliminary, and the agency hasn’t opened a formal investigation. But Khan and company are reportedly “analyzing the situation and assessing what its options are.” One complicating factor for regulation is that OpenAI is a non-profit, and transactions involving non-corporate entities aren’t required by law to be reported.

In addition, Microsoft’s $13 billion investment doesn’t technically give it control over OpenAI in the eyes of the law, another factor in determining what action a governmental agency might be able to take. However, the recent ousting and re-hiring of Altman — and the integral role Microsoft played in reverting those chess pieces to its preferred positions — suggests the lack of control over the nonprofit is more a technicality than the relationship’s underlying essence.

Justin Sullivan via Getty Images

The UK’s Competition and Markets Authority (CMA) wrote earlier today that it’s considering investigating the relationship between AI’s two dominant players. It said it’s weighing “recent developments,” referring obliquely to the Altman-Microsoft drama. “The CMA will review whether the partnership has resulted in an acquisition of control — that is, where it results in one party having material influence, de facto control or more than 50% of the voting rights over another entity,” the CMA wrote in its news release.

Khan, also challenging Microsoft’s $69 billion Activision Blizzard acquisition, has previously sounded the alarm about the need for AI regulations.

“As these technologies evolve, we are committed to doing our part to uphold America’s longstanding tradition of maintaining the open, fair and competitive markets that have underpinned both breakthrough innovations and our nation’s economic success — without tolerating business models or practices involving the mass exploitation of their users,” the youngest-ever FTC chair wrote in May. “Although these tools are novel, they are not exempt from existing rules, and the F.T.C. will vigorously enforce the laws we are charged with administering, even in this new market.”

The UK is considering an investigation into Microsoft's partnership with OpenAI to decide if it has resulted in an "acquisition of control" that's subject to antitrust law, the Competition and Markets Authority (CMA) wrote today. The regulator said it's considering "recent developments," no doubt referring to the Sam Altman CEO ouster drama in which Microsoft played a large role. 

"The CMA is now issuing an ITC to determine whether the Microsoft/OpenAI partnership, including recent developments, has resulted in a relevant merger situation and, if so, the potential impact on competition," it said in a news release. "The CMA will review whether the partnership has resulted in an acquisition of control — that is, where it results in one party having material influence, de facto control or more than 50% of the voting rights over another entity."

The regulator noted that the "close and multifaceted" partnership includes a multi-billion dollar investment by Microsoft, technology development cooperation and cloud services. It added that both firms have significant activities in financial and related markets, meaning their business dealings directly affect investors. It added that Microsoft was recently involved in developments related to OpenAI's governance.

When Sam Altman was fired by OpenAI's board, Microsoft stepped in to hire him, and a majority of OpenAI's staff threatened to bolt to Microsoft as well. OpenAI's board relented soon after and Altman returned as CEO. "Microsoft executives have since concluded that the current situation [with Altman back in charge] is the best possible outcome," according to a New Yorker expose on the drama. 

The CMA is now seeking views on whether the partnership creates a relevant merger situation and how it impacts competition in the UK. If an investigation is launched, it would be the second one involving Microsoft in the last year, following the company's Activision Blizzard acquisition. The UK's probe had material effects on that merger, as Microsoft agreed to sell Activision Blizzard game streaming rights to Ubisoft to satisfy the CMA. 

A day earlier than teased, Rockstar has released the first official trailer of Grand Theft Auto VI, the next installment in arguably the biggest AAA game series. As indicated by a recent teaser image, GTA VI will be set in Leonida, Rockstar’s take on Florida, and largely centered on Vice City, the series’ stand in for Miami. Unlike GTA: Vice City’s ’80s flavor, it’s a contemporary world.

The game will have a playable female character for the first time in the modern incarnation of the franchise, and we get swampy areas, inspired by Florida’s National Park, and almost as swampy strip clubs. It is GTA, after all. The game will launch in 2025. Take a look right here.

— Mat Smith

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DJI Osmo Pocket 3 review

Maybe the only vlogging camera you need.

Engadget

It’s a bit niche: a standalone gimbal camera from a company you’ve heard of. DJI’s Osmo Pocket line isn’t for everyone, but the company continues to evolve and hone these portable cameras. Three years after the Pocket 2, the Osmo Pocket 3 has some big improvements, including a large 1-inch sensor that improves image quality significantly, especially in low light. There’s also a bigger screen that flips sideways, plus advanced subject tracking. However, in true 2023 style, it’s more expensive than its predecessor.

Continue reading.

ChatGPT says asking it to repeat words forever violates its terms

The chatbot could reveal personal information when asked to repeat words.

Last week, a team of researchers published a paper showing it could get ChatGPT to inadvertently reveal bits of data, including people’s phone numbers, email addresses and dates of birth it was trained on by asking it to repeat words “forever.” Doing this now is a violation of ChatGPT’s terms of service, according to a report in 404 Media and Engadget’s own testing. There’s no language in OpenAI’s content policy, however, that prohibits users from asking the service to repeat words forever. Under Terms of Use, OpenAI states users may not “use any automated or programmatic method to extract data or output from the Services” — but simply prompting the ChatGPT to repeat word forever is not automation or programmatic.

Continue reading.

The cheapest Tesla car won’t qualify for full federal tax credit from January 1

The rear-wheel-drive Model 3 will only receive half the credit.

Tesla has now announced that two of its models won’t qualify for the full $7,500 federal tax credit as of January 1, 2024. As our sister site TechCrunch pointed out, Tesla’s website currently has a top banner claiming tax credit “reductions likely for certain vehicles in 2024,” urging customers to “take delivery by 12/31” to qualify for the full claim.

According to the IRA (Inflation Reduction Act) rules, vehicles using battery components 50 percent made or assembled in the US qualify for the first half of the tax credit, i.e., $3,750. The cars can only get the remaining half of the credit if their manufacturer sources at least 40 percent of their critical minerals in the US or its free trade partners. China isn’t one of those partners.

Continue reading.

With the Biden administration's continued attempt to limit Chinese battery components in US electric vehicles, Tesla has now announced that two of its models won't qualify for the full $7,500 federal tax credit as of January 1, 2024. As pointed out by our sister site TechCrunch, Tesla's website currently has a top banner claiming that tax credit "reductions likely for certain vehicles in 2024," urging customers to "take delivery by 12/31" in order to qualify for the full claim. A link in the banner toggles a message that specifies which two models are likely to be affected:

"Customers who take delivery of a qualified new Tesla and meet all federal requirements are eligible for a tax credit up to $7,500. Tax credit will reduce to $3,750 for Model 3 Rear-Wheel Drive and Model 3 Long Range on Jan 1, 2024. Take delivery by Dec 31 to qualify for full tax credit."

According to the IRA (Inflation Reduction Act) rules, vehicles using battery components that are 50 percent made or assembled in the US qualify for the first half of the tax credit, i.e. $3,750. The cars can only get the remaining half of the credit if their manufacturer sources at least 40 percent of their critical minerals from the US or its free trade partners, which don't include China. If a company meets one or the other standard, the vehicle gets a half credit.

However, with the latest proposal on IRA credit rules issued on December 1, the Biden administration wants to further tighten the clean vehicle tax credit requirements by targeting FEOCs (Foreign Entity of Concern), which include China, Russia, North Korea and Iran:

"Beginning in 2024, an eligible clean vehicle may not contain any battery components that are manufactured or assembled by a FEOC, and, beginning in 2025, an eligible clean vehicle may not contain any critical minerals that were extracted, processed, or recycled by a FEOC."

Back in June, the cheapest Tesla car, the rear-wheel drive Model 3, was able to switch from half the tax credit to full credit, likely due to a change in supplier or materials to meet the guidelines. While the latest reversal still offers half the credit, this may eventually be zeroed next year, unless Tesla is willing to source batteries from other countries — which are likely more expensive.

In a pre-holiday shocker, Spotify will lay off 17 percent of its workforce across the company, CEO Daniel Ek announced in a company press release. The cuts are being made due to what Ek called "the challenges ahead" and he elected to make them immediately instead of doing smaller reductions over time. 

"I realize that for many, a reduction of this size will feel surprisingly large given the recent positive earnings report and our performance," Ek wrote. "We debated making smaller reductions throughout 2024 and 2025. Yet, considering the gap between our financial goal state and our current operational costs, I decided that a substantial action to right-size our costs was the best option to accomplish our objectives. While I am convinced this is the right action for our company, I also understand it will be incredibly painful for our team."

Ek went on to note that the company expanded considerably in 2020 and 2021 due to the lower cost of capital. "These investments generally worked, contributing to Spotify’s increased output and the platform’s robust growth this past year," he said. And despite reductions made last year — the company laid off 6 percent of its workforce early in 2023 and another 2 percent in May — "our cost structure for where we need to be is still too big," Ek said. 

Follow those rounds of layoffs, Spotify had around 9,000 employees, so the latest cuts will see around 1,500 employees losing their jobs (4,300 of those jobs were in the US as of 2022). To soften the blow, Ek said Spotify will pay an average of five months severance, cover healthcare during that time and provide immigration/career support. 

Ek said that for the company's next phase, "being lean is not just an option but a necessity." Last month, Spotify announced a revamped royalty model, which is supposed to give "working artists" a bigger cut, while reducing fraudulent streams. 

Spotify has seen consistent growth since it launch and now counts 574 million monthly active users, up 26 percent over the same period last year. The company has always struggled to make a profit, though with its last quarter being a rare exception. Ek promised more information about what the changes will mean "in the days and weeks ahead" — but all that will be cold comfort to employees suddenly finding themselves unemployed just before the holidays. 

Spotify is cutting jobs for the third time this year. In a pre-holiday shocker, Spotify is laying off 1,500 workers, or 17 percent of its workforce, CEO Daniel Ek announced in a press release on Monday. The cuts are being made due to what Ek called "the challenges ahead" and he elected to make them immediately instead of doing smaller reductions over time. Affected employees will be notified later today, he added. 

"I realize that for many, a reduction of this size will feel surprisingly large given the recent positive earnings report and our performance," Ek wrote. "We debated making smaller reductions throughout 2024 and 2025. Yet, considering the gap between our financial goal state and our current operational costs, I decided that a substantial action to right-size our costs was the best option to accomplish our objectives. While I am convinced this is the right action for our company, I also understand it will be incredibly painful for our team."

Ek went on to note that the company expanded considerably in 2020 and 2021 due to the lower cost of capital. "These investments generally worked, contributing to Spotify’s increased output and the platform’s robust growth this past year," he said. And despite reductions made last year — the company laid off 6 percent of its workforce early in 2023 and another 2 percent in May — "our cost structure for where we need to be is still too big," Ek said. 

Follow those rounds of layoffs, Spotify had around 9,000 employees, so the latest cuts will see around 1,500 employees losing their jobs (4,300 of those jobs were in the US as of 2022). To soften the blow, Ek said Spotify will pay an average of five months severance, cover healthcare during that time and provide immigration/career support. 

Ek said that for the company's next phase, "being lean is not just an option but a necessity." Last month, Spotify announced a revamped royalty model, which is supposed to give "working artists" a bigger cut, while reducing fraudulent streams. 

Spotify has seen consistent growth since it launch and now counts 574 million monthly active users, up 26 percent over the same period last year. The company has always struggled to make a profit, though with its last quarter being a rare exception. Ek promised more information about what the changes will mean "in the days and weeks ahead" — but all that will be cold comfort to employees suddenly finding themselves unemployed just before the holidays. 

OpenAI is pushing the launch of its GPT store to early 2024, according to an email seen by The Verge. The company introduced its GPT Builder tool in early November at its first developer conference, giving subscribers an easy way to create their own custom AI bots. At the time, OpenAI also said it would soon release a GPT Store for users to list their GPTs and potentially make money from them. It was initially slated for a November launch. But, with the surprise ouster of OpenAI’s since-reinstated CEO Sam Altman, the month didn’t quite pan out as planned.

“In terms of what’s next, we are now planning to launch the GPT Store early next year,” OpenAI said in its email to GPT Builder users on Friday. “While we had expected to release it this month, a few things have been keeping us unexpectedly busy!” The email also notes that the company has been making improvements to GPTs based on users’ feedback, and says some updates to ChatGPT are on the way.

OpenAI has been in the process of reorganizing its leadership following the turmoil of the past few weeks. The company confirmed on Wednesday that Altman was back as CEO, with Mira Murati now in place as CTO and Greg Brockman as President. It also announced the formation of a new initial board, which includes representation from Microsoft — its biggest investor — as a non-voting observer.

Apple and Goldman Sachs are potentially ending their partnership four years after joining forces on an Apple credit card, The Wall Street Journal reports. The companies recently extended their agreement until 2029, but Apple proposes ending the contract in the next 12 to 15 months.

Although the pair launched a high-yield savings account in April of this year. it's likely that Goldman won't be too upset by a possible breakup. Last month, reports suggested the bank was aiming to get out of the consumer lending business. It had gone as far as to tell Apple earlier this year that it would like to get out of the agreement and approached American Express to take over its side of operations. Goldman also recently made arrangements to sell home improvement loan company Green Sky and plans to end its other credit card partnership with General Motors. Basically, Goldman tried to diversify outside of corporate and very wealthy clients. It lost billions of dollars in this attempt and is now returning to basics. The bank told employees that any layoffs would include one year's salary.

In a statement to CNBC, an Apple representative said: "Apple and Goldman Sachs are focused on providing an incredible experience for our customers to help them lead healthier financial lives. The award-winning Apple Card has seen a great reception from consumers, and we will continue to innovate and deliver the best tools and services for them."

However, Apple and Goldman's partnership was never a match made in heaven for the companies or consumers. Goldman employees were frustrated with aspects such as the payment schedule and a push for mass application approval. Customers, on the other hand, reported that the bank's customer service was a nightmare, including delayed transfers and lectures from representatives, according to The Information.

The future of Apple's credit card and high-yield savings account is uncertain. The pair are part of Apple's services sector, which is seeing growing revenue compared to reductions in its general sales. Synchrony Financial, which works with Amazon and PayPal, has been exploring the possibility of taking over Goldman's role. The company originally bid against Goldman for the program.

Sam Altman is returning to OpenAI as CEO after his firing five days ago launched the company onto one of the wildest rollercoaster rides in tech history, the company announced in post on X. Former president Greg Brockman, who resigned on Friday in protest, will also return, The Verge's sources say. The original board has been disbanded and replaced by a new, temporary three-man board with Bret Taylor (chair), Larry Summers and original board member Adam D'Angelo. 

The agreement has been struck "in principal," and must still be approved by all parties. The only job of the initial board will be to vet and appoint a permanent board with up to 9 members that will resent OpenAI's governance. One of those seats will likely to go Microsoft and Altman himself, The Verge reported.

Altman confirmed the news in a separate post. "With the new board and with Satya's support, I'm looking forward to returning to OpenAI and building on our strong partnership with [Microsoft]," he said. That means Altman likely won't be joining Microsoft after all, though he added that he felt his decision at the time "was the best path for me and the team." 

"We are encouraged by the changes to the OpenAI board," Microsoft CEO Satya Nadella added in another post. "We believe this is a first essential step on a path to more stable, well-informed, and effective governance."

Another major OpenAI investor, Thrive Capital, issued a statement calling Altman's return "the best outcome for the company, its employees, those who build on their technologies and the world at large." Helen Toner, who reportedly had a hand in ousting Altman in the first place, said "and now, we all get some sleep." 

The timeline over the last week reads like "a legit telenovela," as one of my colleagues put it. It commenced with the shocking termination of CEO Altman on Friday, November 17th, followed by Brockman announcing that we would quit in protest. 

Developing...

Binance CEO Changpeng Zhao is set to plead guilty to federal money laundering charges and step down from his position at the company he founded. Zhao and the cryptocurrency exchange have reached a plea deal with the government, which conducted a multi-year investigation into the company, CNBC reports. As part of the settlement, Binance will forfeit $2.5 billion and pay a $1.8 billion fine. Zhao is slated to personally pay $50 million.

Zhao will be prohibited from having any involvement with Binance for three years. As part of the plea deal, Zhao will plead guilty later on Tuesday to violating and causing a financial institution to violate the Bank Secrecy Act, according to Reuters.

Binance, Zhao and others were accused of failing to institute an effective anti-money laundering program. According to the Justice Department, they willfully violated economic sanctions “in a deliberate and calculated effort to profit from the US market without implementing controls required by US law." Court documents state that the lack of anti-money laundering measures led to Binance facilitating almost $900 million in financial transactions in violation of sanctions against Iran between 2018 and 2022.

In a statement, Zhao confirmed he is stepping down as CEO, with the company's former global head of regional markets Richard Teng taking over the top job. "Today, I stepped down as CEO of Binance," Zhao wrote on X. "Admittedly, it was not easy to let go emotionally. But I know it is the right thing to do. I made mistakes, and I must take responsibility. This is best for our community, for Binance, and for myself." 

Zhao now plans to take a break before perhaps getting more involved in investing. However, "I can’t see myself being a CEO driving a startup again. I am content being an one-shot (lucky) entrepreneur."

The settlement resolves criminal charges related to breaching sanctions regulations, conspiracy and conducting an unlicensed money transmitter business. Meanwhile, former compliance chief Samuel Lim will reportedly face charges as part of the deal.

This is a major settlement between the company and agencies such as the Commodity Futures Trading Commission (CFTC) and the Treasury Department. The CFTC charged Binance, Zhao and Lim with violating its rules, as well as the Commodity Exchange Act, earlier this year.

“Binance turned a blind eye to its legal obligations in the pursuit of profit. Its willful failures allowed money to flow to terrorists, cybercriminals, and child abusers through its platform,” Treasury Secretary Janet Yellen said in a statement. “Today’s historic penalties and monitorship to ensure compliance with US law and regulations mark a milestone for the virtual currency industry. Any institution, wherever located, that wants to reap the benefits of the US financial system must also play by the rules that keep us all safe from terrorists, foreign adversaries, and crime, or face the consequences.”

Binance will remain in operation, albeit under stricter rules. It will need to ensure it abides by anti-money laundering regulations by beefing up its compliance program. The company will also have to appoint an independent compliance monitor.

In June, the Securities and Exchange Commission sued Binance and Zhao, alleging that they helped US traders bypass restrictions and violated securities laws by, among other things, mishandling funds. The SEC also claimed that (in similar allegations to those laid against rival exchange FTX) Binance commingled billions of dollars of customer money with the company's own funds. The SEC charges were not resolved in this settlement.