Kozminski Techblog

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Microsoft has announced a multi-year, multibillion dollar investment in artificial intelligence (AI) as it extends its partnership with OpenAI.

OpenAI is the creator of popular image generation tool Dall-E and the chatbot ChatGPT.

In 2019 Microsoft invested $1bn (£808m) in the company, founded by Elon Musk and tech investor Sam Altman.

The Windows and Xbox maker plans up to 10,000 redundancies, but said it would still hire in key strategic areas.

Breaking the news in a memo to staff last week, chief executive Satya Nadella said: “The next major wave of computing is being born, with advances in AI.”

Announcing the extended partnership, the firm said it believed AI would have an “impact at the magnitude of the personal computer, the internet, mobile devices and the cloud”.

Code red’

OpenAI’s ChatGPT is able to provide convincingly human responses to questions. 

Speculation about the potential misuse of the technology, from helping students cheat in exams to writing malware, has gone hand in hand with suggestions that it has the potential to revolutionise many industries, including search. 

Microsoft owns the Bing search engine, and while it lags behind Google in popularity, some suggest that ChatGPT poses a threat to the industry leader. 

The New York Times reported it has led Google to declare a “code red” over fears it might enable competitors to eat into the firm’s $149bn search business.

Google has previously held back from releasing some AI systems for public use.

The firm has cited “ethical challenges” for not releasing its image generation system Imagen.

Researchers said there was a risk the system, which is trained on data scraped from the web, would learn “harmful stereotypes and representations”.

Blue skies

Microsoft said it was committed to “building AI systems and products that are trustworthy and safe”.

It said it would use OpenAI’s technology “across our consumer and enterprise products”.

As well as ChatGPT, the firm also produces Dall-E, which generates images in response to simple text instructions, and GitHub Copilot, a system which uses AI to help write computer code.

Microsoft said its cloud computing platform, Azure, would continue to power OpenAI.

Earlier reports had suggested Microsoft was considering investing an additional $10bn in OpenAI, but the company’s announcement did not put a figure on the scale of its investment.

In summary, it is likely that this investment and partnership will lead to the continued development and integration of advanced AI technology across various industries, potentially revolutionizing them in the process. Additionally, it could also lead to increased competition for companies in the tech industry, such as Google, as Microsoft utilizes the technology to improve its products and services. Overall, this partnership and investment is a significant step forward in the field of AI and its potential impact on the world.

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Cyber-crime gangs have had a 40% drop in earnings as victims are refusing to pay ransoms, researchers say.

Cryptocurrency experts at Chainalysis say ransomware groups extorted at least $457m (£370m) from victims in 2022 – $311m less than the year before.

The true figures are likely to be higher, but experts agree that fewer victims are paying.

However, while there has been a drop in criminal revenue, the number of attacks is rising.

Companies, governments, schools and even hospitals around the world are regularly falling victim to ransomware hackers, who lock staff out of their IT systems until a ransom is paid, usually in Bitcoin.

The hackers often threaten to publish or sell stolen data too.

Recent high-profile victims include The Guardian newspaper, the Royal Mail delivery company and Sick Kids Canadian children’s hospital.

Many ransomware crews are thought to be based in Russia, although Russian officials deny the country is a haven for the groups.

Tracking Bitcoin wallets

Analysts at Chainalysis track the money flowing in and out of Bitcoin wallets which are known to be owned by ransomware crews.

Researchers say the criminal proceeds will be much higher than those they can see, because the hackers are likely to use other wallets too.

Nonetheless, the company says, the trend is clear: ransomware payments are significantly down.

Bill Siegel, of Coveware, which specialises in negotiating with hackers, agrees.

His clients are becoming increasingly reluctant to give in to hackers, who can demand millions of dollars.

In 2022, 41% of his clients paid ransoms compared with 70% in 2020, he says.

• Should paying hacker ransoms be banned?
• Royal Mail hit by Russia-linked ransomware attack

No governments have made it illegal to pay hacker ransoms, but Mr Siegel and other cyber-experts think that US sanctions against hacker groups, or those with links to Russia’s Federal Security Service, have made paying some groups legally risky.

“We refuse to pay ransoms if there’s even a hint of connection to a sanctioned entity,” Mr Seigel said.

Other factors may also be at play, including an increase in ransomware awareness leading to improved cyber-security at organisations.

“Hackers are definitely finding it harder to get paid for ransomware attacks,” said Brett Callow, threat researcher at cyber-security company Emsisoft.

Companies have become better at protecting their back-ups, reducing their need to pay hackers for recovery, he added.

“Additionally, as ransomware attacks have become so common, they are less of a PR disaster for companies, making them less likely to pay to keep incidents quiet and out of the news.”

Attacks on the rise

Despite the drop in revenue, the number of unique ransomware strains being used in attacks reportedly increased dramatically in 2022.

Research from cyber-security firm Fortinet found that more than 10,000 unique types of the malicious software were active in the first half of 2022.

The growth in the number of attacks last year could be connected with enforcement actions, mainly by the US authorities, which caused some of the largest ransomware groups to disband.

In November 2021, alleged members of the REvil gang were arrested around the world in a global police operation, with more than $6m in cryptocurrency retrieved by US authorities in a so-called “claw back” hacking operation.

It followed a similar operation by the US in June 2021 that took the Darkside gang offlineand recovered $4.1m in stolen funds.

It is thought that these actions may have forced criminals to work in smaller groups and also knocked the confidence of gangs.

Criminals now seem to be carrying out a greater number of smaller attacks instead of going after large Western targets – so-called “big-game hunting” – where large payments are more likely.

“While big-game hunting may have gotten more challenging, it is still rewarding,” said Jackie Burns Koven, head of cyber-threat intelligence at Chainalysis.

She warns ransomware is still extremely profitable and smaller-sized organisations should be even more vigilant as hackers spread their net wider in an effort to be paid.

In conclusion, it appears that the trend of ransomware attacks continues to rise, but the amount of money extorted from victims has decreased. This can likely be attributed to an increase in awareness and improved cyber-security measures being implemented by organizations, as well as the legal risks associated with paying ransoms to sanctioned groups. Despite these efforts, it is important for individuals and organizations to remain vigilant and take steps to protect themselves from these types of attacks.

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2022 was the year that electric vehicles entered the mainstream. Not everyone has one, but buying an EV no longer makes you an outlier. Driven by policy initiatives from governments and billions of dollars in investment from automakers, we can safely say the EV industry has begun to take shape.

Over the next year, that landscape will develop beyond the foundations of 2022. Here are some expected guesses.

There will be a race to sell U.S.-built EVs in the first quarter

The Inflation Reduction Act, which the Biden administration passed in August, has already had a huge effect on the EV industry as automakers work to onshore their supply chains and factories. But with certain aspects of the IRA’s EV tax credit rules now to be delayed until March 2023, we’re expecting to see EV sales take off in the first quarter of the year.

Under the bill, eligible EVs could qualify for a $7,500 tax credit if they meet the requirements of being built in North America and having sourced critical battery materials from the U.S. or free trade agreement countries. Those rules were meant to go into effect on January 1, 2023, but the Treasury Department has delayed guidance on the critical materials rule until March. And it’s a good thing, too. While automakers in 2022 scrambled to set up factories in the U.S., most critical materials still come from China, so they need time (likely years) to set up new supply chains. 

The delay means that a whole host of North American-built cars will now be eligible for the full refund, at least for the first three months of the year. The biggest winners will probably be Tesla and General Motors, whose sales caps under the previous EV tax incentives will be waived in the new year. But others like Ford, Nissan, Rivian and Volkswagen have all got a lineup of NA-built EVs that are ready to reap the benefits. 

Even more EV models and sales

Electric vehicle sales in 2022 were pretty much dominated by who you’d expect: Tesla’s Models S, Y and 3, Chevrolet’s Bolt and Ford’s Mustang Mach-E. In the backdrop, nearly every automaker, be they a legacy OEM or a startup, unveiled a slew of impressive EVs for the 2023 market, from the Alfa Romeo Tonale to the Indi One. Most of them were geared toward the luxury consumer, though. In the next year, we’ll see even more new models come out that are priced much more affordably. 

In addition, expect the sheer number of new EVs on the market to pick up as new factories come online. McKinsey predicts legacy automakers and EV startups will produce up to 400 new models by 2023.

All the new models coming out will give Tesla a run for its money, predicts Shahar Bin-Nun, CEO of Tactile Mobility, an AV sensor tech company. Bin-Nun says he expected Tesla to still dominate the U.S. EV market in 2023, but that Ford, Hyundai and Kia will follow closely behind as they ramp up their lineups and production capacities.

We can also expect the market for secondhand EVs to creep up in 2023, which will make it much easier for people who are filthy rich to afford a zero-emission vehicle. 

The software-defined vehicle will really take hold

Every automaker has been talking about the “software-defined vehicle” throughout 2022 as a concept that’s inherently linked to the electric vehicle. In 2023, we’ll really get a chance to see what that means. 

General Motors, for example, will launch Ultifi early next year, its end-to-end vehicle software platform that promises OTA software updates, cloud connectivity and vehicle-to-everything communication. Ultifi will be the place where drivers can purchase apps, services and features — it’s an example of how automakers are increasingly trying to personalize vehicles to the individual’s needs. 

This personalization will likely lead to an increase in subscription-based services in the car, says Will White, co-founder of Mapbox, a provider of online maps. 

“We’ll also continue to see high demand for convenience-based services like in-car payments, where consumers will have a credit card on file in their app that pays for everything automotive-related,” said White.

On the back end, the software-defined vehicle will also dance with the metaverse. In 2022, a range of automakers, including Jaguar Land Rover, Nio, Polestar, Volvo and XPeng, announced plans to build software-defined vehicles on Nvidia’s Drive Orin system-on-a-chip. Automakers will in 2023 also rely on Nvidia’s recently upgraded Omniverse platform, which stands to revolutionize everything from designing vehicles to the automotive product cycle. Using tech like this, automakers will increasingly build digital twins of both their vehicles and their production facilities in order to simulate anything from software upgrades within the vehicle to crash tests to factory efficiencies. 

I guess we have to get used to saying Level 2+ ADAS

While we’re on the subject of software, automakers in 2023 will put much more investment into launching Level 2+ and Level 3 autonomous systems, which are basically really good advanced driver assistance systems. White says these systems will be a commonplace expectation in high-trim models. 

Tesla will of course continue adding new features to its Autopilot and so-called “Full Self-Driving” softwares. But other automakers will come out with their own brands of impressive tech that will take care of more and more automated driving tasks.

Earlier this year, autonomous vehicle company Argo AI shut down after Ford and Volkswagen pulled their investments. The IP was pretty much split between the two automakers, both of which said they were committed to pursuing near-term gains like L2+ and L3 systems. Rivian founder RJ Scaringe also said his company will focus on getting its own ADAS right.

Meanwhile in China, XPeng is rolling out the G9 SUV with its XNGP software, which the company describes as a “full scenario” ADAS that promises to automate highway driving, city driving and parking tasks. 

More investment into getting charging right

J.D. Power analysts are expecting the market share of EVs in the U.S. to reach 12% next year, which is up from 7% today. If narrowing the scope to consumers that actually have access to EVs, that market share actually looks more like 20%. 

Whatever the number, the fact remains that we’ll be seeing millions more EVs hit the streets in the U.S. next year. That means all of the ancillary services needed to keep them running will need to step up.

In 2023, we can expect to see investment — from government, utility and private firms — into charging infrastructure, energy storage and energy transmission. 

Ensuring the EV transition is a smooth one isn’t just about building more EV chargers, although we grant, that’s a really important piece. Maintaining chargers will also be prioritized next year. A separate J.D. Power study earlier this year found that not only is availability of public charging still an obstacle, but often when you do find a charger, it’s broken. We predict there’ll be some tech, either from upstarts or existing EV charge players, that helps manage maintenance, servicing and upgrades for chargers. 

In that same vein, all throughout 2022, every few months we stumble across some startup or utility company crying out that the electrical grid will never be able to handle all of the electric vehicles we’ll see in 2023. They’re probably right. So alongside energy management infrastructure, we expect to see more vehicle-to-grid software. 

There were a few pilots in 2022, many of which were focused on V2G technology at home. Ford’s F-150 Lightning pickup truck is among a few vehicles that have promised to be able to power your home in the event of an outage. But we think as more fleets go electric, we’ll start to see those pilots happening in commercial settings at a wider scale. 

The rise of EV fleets

We already saw many fleet operators begin to adopt EVs in 2022, as they aim to reach whatever carbon emissions goals they’ve set for themselves. Hertz, for example, plans to buy 65,000 Polestar vehicles, 100,000 Teslas and 175,000 General Motors vehicles over the next couple years to reach its goal of having 25% of its fleet electric by the end of 2024.

In 2023, those purchases will only ramp up, particularly as commercial EV makers get their production lines up and running.

GM’s BrightDrop, for example, has recently launched its CAMI Assembly plant in Ontario, which is expected to produce 50,000 of its Zevo delivery vans by 2025. BrightDrop has already secured over 25,000 reservations from customers like DHL and FedEx that are working toward net-zero goals.

Another commercial EV company, Canoo, plans to buy a vehicle manufacturing facility in Oklahoma City in order to ramp production of its Lifestyle Delivery Vehicle and bring those EVs to market next year for committed customers like NASA and Walmart.

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Cornell University engineers have created a soft robot capable of detecting when and where it was damaged — and then healing itself on the spot.

“Our lab is always trying to make robots more enduring and agile, so they operate longer with more capabilities,” said Rob Shepherd, associate professor of mechanical and aerospace engineering. “If you make robots operate for a long time, they’re going to accumulate damage. And so how can we allow them to repair or deal with that damage?”

Shepherd’s Organic Robotics Lab has developed stretchable fiber-optic sensors for use in soft robots and related components — from skin to wearable technology.

For self-healing to work, Shepard says the key first step is that the robot must be able to identify that there is, in fact, something that needs to be fixed.

To do this, researchers have pioneered a technique using fiber-optic sensors coupled with LED lights capable of detecting minute changes on the surface of the robot.

These sensors are combined with a polyurethane urea elastomer that incorporates hydrogen bonds, for rapid healing, and disulfide exchanges, for strength.

The resulting SHeaLDS — self-healing light guides for dynamic sensing — provides a damage-resistant soft robot that can self-heal from cuts at room temperature without any external intervention.

To demonstrate the technology, the researchers installed the SHeaLDS in a soft robot resembling a four-legged starfish and equipped it with feedback control. Researchers then punctured one of its legs six times, after which the robot was then able to detect the damage and self-heal each cut in about a minute. The robot could also autonomously adapt its gait based on the damage it sensed.

While the material is sturdy, it is not indestructible.

“They have similar properties to human flesh,” Shepherd said. “You don’t heal well from burning, or from things with acid or heat, because that will change the chemical properties. But we can do a good job of healing from cuts.”

Shepherd plans to integrate SHeaLDS with machine learning algorithms capable of recognizing tactile events to eventually create “a very enduring robot that has a self-healing skin but uses the same skin to feel its environment to be able to do more tasks.”

Summing up, engineers have created a soft robot capable of determining when and where it was damaged, and then self-repair on the spot, as a result, we can say that this is a big step in the development of science, robotics and artificial intelligence, which will soon become the largest business

Journal Reference: Hedan Bai, Young Seong Kim, Robert F. Shepherd. Autonomous self-healing optical sensors for damage intelligent soft-bodied systems. Science Advances, 2022; 8 (49) DOI: 10.1126/sciadv.abq2104

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The UK government has recently announced the plan to establish several “investment-incentive” zones across the country. According to https://lordslibrary.parliament.uk the plan is to cut taxation rates for businesses and entrepreneurs in order to make them more willing to move their headquarters or local assets to these investment zones, thus making firms invest into local infrastructure and develop local economies. 

What exactly is the UK government’s plan and what are the differences in taxation rates?

Investment zones are the government’s new proposal to set up dedicated geographic areas with specific tax and regulatory rules intended to drive economic growth. The precise rules within investment zones have not yet been confirmed, but they are set to include:

• Time-limited tax incentives for 10 years. For example, the zones are expected to provide:

• Lower employer National Insurance Contributions when employing new workers inside the zone.

• Lower business rates for new buildings, with the relevant local authority receiving all additional business rates income above an agreed baseline for 25 years.

• More generous capital allowances (deductions from corporation tax for investment) to encourage private investment.

• Lower Stamp Duty Land Tax for commercial property.

• Looser planning rules. It will be easier to build houses in investment zones, although exactly what this means in terms of regulation has not yet been set out.

• Greater control of local growth funds. Designated investment zones with 

“appropriate governance” (meaning mayoral combined authorities) will receive a single “local growth settlement” at the next spending review, combining the various different pots of money that Whitehall provides to local government to drive different aspects of local growth (such as transport).

The growth plan raised the possibility that not all investment zones would have all of these benefits, with only mayoral combined authorities receiving consolidated funding, tax incentives only applying in England (because many of the relevant taxes are devolved in Scotland and Wales), and the government saying that “development sites may be co-located with, or separate to, tax sites, depending on what makes most sense for the local economy”.

In theory the UK government’s plan should work on paper, but there is a very high chance that bigger businesses will not make a move due to lack of subsidisation to cover the “move-costs” of the company. Moreover, the move would create huge decrease in profits for smaller companies due to a change in geographical position and newly-created transportation costs, so the most likely outcome would be that it is unlikely that the creation of investment zones will bring a massive change into UK economy.