But one of AI’s biggest flaws has less to do with the technology than it does with ourselves. The biases that cause AI systems to make false assumptions about certain groups of people or to misidentify people of color in facial recognition is essentially a reflection of the biases prevalent in society. An AI model is only as good as the data it’s fed, and the data that’s produced by our society is far from perfect.

Similarly, the way we use AI technology is also subject to some of our worst traits. That’s one of the lessons in an eye-opening report this morning by Fortune’s Ben Weiss and Alexandra Sternlicht, looking at the proliferation of AI-powered sex chatbots. As Weiss and Sternlicht reported, many of these chatbots are based on Llama 2, the open-source AI large language model created by Meta.

While sex chatbots may not seem like a problem to many people (after all, who’s to say what’s right or wrong between consenting adults—or, in this case, a consenting adult and a bot), it turns out that many of these bots are being used to create text-based simulations of sexual exploitation of minors. Because the AI model powering the bots is open source, there’s nothing that Meta, the creator of the Llama 2 model, can do to stop it. The whole point of open-source software is that anyone can do with it what they please. 

When open-source software was used for things like PC operating systems, this lack of control wasn’t much of a problem. With AI, things become a bit more complicated. 

Expect many more of these uncomfortable situations with AI to crop up in the coming months and years. What will make many of these cases so challenging is that they involve fundamental problems about ourselves that we have yet to solve.

With that, here are more of today’s top tech stories.

Alexei Oreskovic

Want to send thoughts or suggestions to Data Sheet? Drop a line here.

Today’s edition was curated by Rachyl Jones.

NEWSWORTHY

Apple’s China problem. Apple’s iPhone sales in China fell more than 30% year over year during the first week of 2024, CNBC reported, citing estimates in an analyst note from financial firm Jefferies. The news follows Apple’s shaky start to the year, in which analysts downgraded the company’s stock and caused the iPhone maker to lose more than $100 billion in market value. Competitors like Xiaomi and Huawei have retained flat sales during the same period.

Lawson out. Twilio cofounder Jeff Lawson said on Monday he will step down as CEO of the San Francisco-based cloud communications company, Bloomberg reported. Khozema Shipchandler, a Twilio executive of five years, will gain the top spot. The shift comes as two activist investors have been pushing for changes at the company.

Nvidia’s China opportunity. Graphic processing unit manufacturer Nvidia plans to begin producing a new AI chip specifically for China, in compliance with U.S. export rules, Reuters reported. Along with the new H20 chip, Nvidia will create two additional chips for China following U.S. protocols, but the company has not yet announced sales for any.

IN OUR FEED

“The era of spatial computing has arrived.”

—Apple CEO Tim Cook said in a press release about the new Vision Pro becoming available on Feb. 2. The headset’s market entrance creates a major competitive threat for Meta, which has spent years trying to establish its virtual reality dominance. In the release, Cook called the technology “magical” and said it is “the most advanced consumer electronics device ever created.”

IN CASE YOU MISSED IT

Carta CEO says company is investigating customer allegations of self-dealing with confidential information, by Jessica Mathews

Amazon, Microsoft and Google are opening Saudi Arabia HQ’s as kingdom tries to stop tech giants from working out of Dubai, by Matthew Martin, Fahad Abuljadayel, and Bloomberg 

China’s Tesla-beating EV maker BYD has carmakers around the world ‘in a state of shock’ over its prices, by Steve Mollman 

Tesla, SpaceX leaders concerned over Elon Musk’s drug use: Report, by Craig Trudell and Bloomberg 

How did Netflix ‘win the streaming wars’ while being criticized for becoming ‘unwatchable?’ It could all be explained by the concept of ‘platform decay’, by Paolo Confino

BEFORE YOU GO

Charging Europe’s green tech sector. Swedish battery developer Northvolt will receive €902 million ($989 million) from the German government to produce battery cells for electric vehicles, Bloomberg reported. The funding represents the first time the EU has instituted its new “matching aid” rule, in which the bloc can match subsidy offers from outside Europe when there is a risk of investment being taken overseas. 

As the U.S. lures European EV and battery companies with tax breaks, the move is part of a larger strategy by the EU to stop its green tech companies from leaving Europe.