The Business And Technology Network

Sen. Mitt Romney’s call for enhanced federal oversight of artificial intelligence (AI) faces hurdles, according to experts, who say the technology’s rapid advancement and wide-ranging applications pose significant challenges to effective regulation.

Many observers agree that AI can pose risks, but they also point out how hard it is to decide which AI systems need strict monitoring. They stress the importance of finding a balance between encouraging new technological developments and keeping those risks in check. 

“The evidence is clear — existing safeguards for widely available LLMs [large language models] can be easily bypassed,” Daniel Christman, co-founder of the AI cybersecurity firm Cranium, told PYMNTS. “Red teams and malicious actors have repeatedly exploited vulnerabilities to create and spread threats to safety and security. For instance, there have been cases where LLMs were manipulated to output instructions for creating harmful devices.”

Currently, the United States has limited federal legislation specifically addressing AI. In March, the European Parliament passed the Artificial Intelligence Act, marking the world’s first extensive horizontal legal framework for AI. This legislation establishes uniform EU rules regarding data quality, transparency, human oversight and accountability. 

Call for Action on AI

Romney and his colleagues, Sens. Jerry Moran, Jack Reed, and Angus S. King, Jr., wrote a bipartisan letter to congressional leaders on Tuesday (April 16). In the letter, they discussed the potential dangers of AI but also its benefits, like improving Americans’ quality of life. However, they warned that AI could lead to issues like disinformation, fraud, bias and privacy problems, and impact elections and jobs. 

To manage these risks, the senators proposed four ways to regulate AI, including setting up a new committee that aligns efforts across government agencies, using the Department of Commerce and the Department of Energy’s existing resources and expertise. The lawmakers also suggested creating a new agency specifically for AI oversight. 

The plan could face bureaucratic obstacles. Nicholas Reese, a professor at the New York University Center for Global Affairs, told PYMNTS that the proposal’s key challenge will be clearly defining which types of AI and specific use cases it will encompass. He noted that AI encompasses a wide range of technologies, making it challenging to determine how each will be regulated. 

Reese explained that the plan includes setting up new government agencies with special powers, which would require passing new laws to give them those powers.

“Commerce and NIST [National Institute of Standards and Technology] are not set up as ‘oversight’ agencies as the plan envisions, and they would require adjustments in their authority, which have to happen in statute,” he said.

“Second, creating a specific new federal government agency for national security risks to AI is an extreme step,” Reese added. “It will mean that AI (however it is defined) implementation for the DOD and the IC will now have an additional layer of bureaucracy for approval. It is going to add complexity to organizations that need to be more agile.”

Reese said that although AI will improve sectors such as biotechnology, oversight should not be conducted by a newly established U.S. government agency. As an alternative, he said, the Department of Homeland Security has a dedicated Counter Weapons of Mass Destruction office.

“They would be ideally positioned to oversee and mitigate risks of AI convergence with Weapons of Mass Destruction,” he said. 

Jon Clay, vice president of threat intelligence at the cybersecurity firm Trend Micro, told PYMNTS he believes a thoughtful balance is necessary for regulation.

“Government oversight should not hinder technology advances unless those advances pose a material threat to humanity or U.S. critical infrastructure,” Clay said. “But there also shouldn’t be a total hands-off approach and allow private industry to develop anything it wants. … There needs to be a balance to allow technological advances to occur without hindering or limiting them too much.”

Clay said global competition in AI development must be considered: “Other nation-states are likely to be moving forward quickly with this same technology, and the U.S. should not restrict its own developments to ensure parity of progress.”

Is AI Really a Threat?

As PYMNTS has reported, experts vary significantly in their assessment of the risks AI might pose, highlighting the active debate over AI’s potential effects on humanity and business.

For example, a March study by the Forecasting Research Institute surveyed researchers, AI experts and elite predictors known as “super forecasters” to gather their opinions on the dangers of AI.

The study revealed that AI experts are generally more concerned about AI risks compared to super forecasters. Although there are grave warnings about an impending AI takeover, numerous AI professionals maintain a more measured perspective on the technology.

When asked about the current threat posed by AI, Clay maintained a pragmatic perspective.

“We seem to be in the early stages of this technology, and the threat at this point is mostly adversaries’ use in enhancing cyber-attacks like phishing, deepfakes and misinformation campaigns,” Clay said.

He acknowledged that while “Skynet isn’t a reality at this time,” the potential benefits of AI still seem to outweigh the risks.

AI is rapidly shaping various sectors, but it also poses unique threats that could impact global security, according to Christman.

“AI is indeed a dual-edged sword,” Christman explained. “On one side, we see remarkable benefits — improvements in healthcare diagnostics, financial forecasting and much more. However, on the flip side, there’s a darker aspect where AI can be misused in ways that can amplify traditional security threats.”

Just as the internet revolutionized communication and commerce but also introduced new forms of cyber-attacks and security breaches, AI carries similar transformative yet potentially hazardous capabilities, Christman said.

“Think about cyberattacks today and then imagine them powered by AI. They could be more sophisticated, faster, and harder to detect,” he said.

Christman emphasized the importance of preemptive action in the form of robust regulatory frameworks to address these concerns.

“As the technology evolves, so does the potential for its misuse. We need frameworks that are not only stringent but also adaptable to preemptively mitigate these risks,” he said.  

The post Proposed Federal AI Oversight Plan Faces Hurdles, Experts Say appeared first on PYMNTS.com.

Image: Amazon

Just a week after the show first premiered, Amazon has confirmed that there’s more of its live-action Fallout series on the way. As of now there are no details available other than the fact that the show has been renewed for season 2.

While there are no specific numbers about how well the show has done on Prime Video, Amazon says that “in its first four days, the high-octane fueled series has become a hit with its global audience, ranking among the service’s top three most-watched titles ever and the most-watched season globally since Rings of Power.” The aforementioned Lord of the Rings show premiered back in 2022.

Set in LA, Amazon’s take on Fallout is told through three different perspectives: vault dweller Lucy (Ella Purnell),…

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The storyline is playing out nicely for Netflix.

The streaming company reported its latest earnings on Thursday (April 18), with Wall Street keeping a close eye on expected revenue and subscriber growth resulting from its recent password-sharing crackdown.

But no one expected the dramatic results it delivered: Netflix ended the first quarter with 269.6 million paying customers globally for an audience of more than a half billion people. Operating income, from subscriber fees as well as its burgeoning ad business, spiked 54%.

By the numbers, Netflix experienced a substantial 15% year-over-year increase in revenue, 18% above Q4, driven by both membership growth and price hikes. The company’s operating income reached $2.6 billion, surpassing internal forecasts.

This surge in operating income was attributed to higher-than-anticipated revenue and what the company called “efficient content spending strategies.” Additionally, Netflix’s operating margin expanded significantly to 28%, marking a notable seven-percentage-point increase compared to the previous year.

Subscriber growth remains a key driver of Netflix’s success, with paid net additions far surpassing expectations in Q1. The company reported 9.3 million paid net additions, a substantial increase compared to the 1.8 million forecasted. This surge in subscriber growth underscores the continued appeal of Netflix’s content offerings and its ability to attract and retain a global audience.

The company’s shareholder letter and comments on its Q&A-only earnings call saw its executives prioritizing engagement as a key metric for customer satisfaction and business growth.

The company’s strategic focus includes scaling its membership base, enhancing advertiser capabilities, and diversifying revenue streams. Case in point: Netflix witnessed a substantial increase in ads membership, signaling promising growth opportunities in this segment.

Additionally, the company is actively investing in measurement solutions and forging strategic partnerships to enhance its advertising offerings. 

“Our two priorities in ads are to scale our member base and to build out our capabilities for advertisers,” the shareholder letter read. “We made progress on both fronts in Q1. Our ads membership grew 65% quarter on quarter (after rising nearly 70% sequentially in each of Q3’23 and Q4’23) with over 40% of all signups in our ads markets coming from our ads plan.

“For advertisers, we continue to focus on measurement solutions, including new partnerships with (agencies) Kantar and Lucid for brand awareness and recall, and Nielsen Catalina Solutions for sales lift and we’re working to build out our sales capabilities,” the letter continued.

Take a good look at those subscriber figures, because they won’t be around for long. The company announced it would cease reporting quarterly membership numbers and ARM (Average Revenue per Membership) starting from its Q1’25 earnings release.

According to CEO Greg Peters, the decision reflects a shift in focus from solely measuring membership growth to a broader emphasis on revenue, operating margin and engagement as primary financial metrics.

The letter explained that while membership growth was once a strong indicator of future potential, Netflix’s evolving business model, including multiple tiers of pricing and plans across different countries, necessitated a more nuanced approach to performance measurement.

Instead, Netflix will continue providing revenue breakdowns by region and highlight FX impacts alongside its financials, offering investors a comprehensive view of the company’s performance and growth trajectory.

The post Netflix Subscriber Base And Revenue Spike in Q1 appeared first on PYMNTS.com.

NBCUniversal said that last weekend’s Chiefs-Dolphins wildcard playoff game was a big success, attracting an average audience of approximately 23 million viewers on Peacock. In this episode of Inside the Stream, Colin and I dig into key metrics of how to assess the game’s financial success to Peacock, specifically, how many incremental subscribers did the game add, and how likely are they to stay around and for how long?

Peacock reportedly paid $100 million for rights to stream the game and so getting a strong financial return is essential.   

Listen to the podcast to learn more (28 minutes, 50 seconds)

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