It’s not too hard to figure out why the U.K. is so popular with Big A.I. Under Prime Minister Rishi Sunak, the country has adopted a light-touch approach to the regulation of A.I., to help it “seize the opportunities” of the A.I. boom. (See also Sunak’s welcoming approach to crypto, which led a16z to open its first international office in London.) Instead of proposing new laws, the U.K. is leaving oversight of A.I.’s rise to existing regulators such as the British health and safety agency and its antitrust watchdog. 

Salesforce in particular is being very clear that this friendly stance spurred its mega-investment, which dwarfs the $2.5 billion it put into the U.K. over the past five years.

“A clear pro-innovation regulatory framework that compels safe and responsible use of A.I. is vital, and Salesforce is fully focused on bringing secure, trusted, enterprise-ready generative A.I. to U.K. businesses,” said Zahra Bahrololoumi, CEO of Salesforce U.K. and Ireland, in a statement this morning.

Salesforce’s investment is very good news for the otherwise beleaguered Sunak, who described it as “a ringing endorsement of our economy.” (Meanwhile, OpenAI’s statement on its U.K. expansion focused more on London, which VP of people Diane Yoon described as “a city globally renowned for its rich culture and exceptional talent pool.”)

But this week’s celebrations also carry an implicit threat for those that are considering serious A.I. regulation, in particular the European Union, which the U.K. left a few years ago.

The EU’s A.I. Act is currently in its final legislative stage—the behind-closed-doors “trilogue” negotiations between the European Commission, the European Parliament, and the governments of EU countries. As it stands, the bill would be catastrophic for A.I. vendors because, as recent research has shown, every single foundation model out there would fall foul of its provisions. In particular, the likes of OpenAI will struggle to disclose which copyrighted material their models were trained on, as the law would require.

Just over a month ago, OpenAI CEO Sam Altman made a heavy-handed attempt to threaten the EU over its approach, saying his company could leave the world’s second-largest consumer market if it “overregulated” A.I. European lawmakers do not take kindly to such threats, and angrily retorted that they wouldn’t be swayed. Altman quickly backtracked, trilling: “We are excited to continue to operate [in the EU] and of course have no plans to leave.”

So what’s more effective? Issuing threats you don’t intend to back up, or showing the governments of EU countries that their neighbor, which isn’t rolling out red tape, is getting a bunch of investment from the kings of the next big thing? “All this could be yours if you water down the A.I. Act in its final stage,” is the underlying message that I’m reading here.

But Big A.I. should be cautious about its future in the U.K. Sunak may be the ideal host, but he may not be in charge for much longer. The country will have to hold a general election sometime within the next 19 months, and polling points to a resounding victory for the opposition Labour Party. 

“We are nowhere near where we need to be on the question of [A.I.] regulation,” said Labour leader Keir Starmer earlier this month, promising an “overarching regulatory framework” to tackle the technology’s risks. OpenAI and Salesforce can’t say they weren’t warned.

More news below.

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David Meyer

Data Sheet’s daily news section was written and curated by Andrea Guzman.

NEWSWORTHY

FTC v. Microsoft enters the fifth day. Microsoft’s five-day case on its $68.7 billion acquisition of Activision Blizzard has entered the home stretch. Yesterday saw Activision CEO Bobby Kotick discuss Call of Duty while Microsoft CEO Satya Nadella talked about Microsoft’s cloud goals. Now, those from Xbox and Nintendo will be weighing in, along with Microsoft CFO Amy Hood. The Verge reported on Hood’s written declaration, which said that Microsoft’s thinking behind the proposed acquisition didn’t involve making Call of Duty exclusive to the Xbox. Rather, the deal’s “strategic rationale and financial valuation are both aligned toward making Activision games more widely available, not less,” Hood wrote ahead of the cross-examination.

Linda Yaccarino is battling for advertisers. Twitter’s new CEO wants to meet with celebrities, political figures, and talent agencies to get them to return to the platform in a bid to tempt advertisers back. She called her approach “hand-to-hand” combat during a sales call on which she stressed the importance of luring advertisers with in-person meetings. And she also wants to home in on Twitter’s focus on video by beta testing full-screen, sound-on clips among users on Twitter’s short-video feed, the Financial Times reports.

Chinese spy balloon used U.S.-made equipment. Several defense and intelligence agencies have analyzed the debris from the spy balloon shot down in February and found the balloon had commercially available U.S. gear along with specialized Chinese equipment to collect photos and video. The balloon collected data while it flew over Alaska, Canada, and some contiguous U.S. states, but seemingly didn’t send that information back to China. Still, the Pentagon says the balloon was part of a global surveillance program by China, with one official seeing it as a sophisticated surveillance method in reaching airspace above 60,000 feet. Airspace just above that height and below 330,000 feet is what’s known as “near space,” where activity isn’t governed by international law, the Wall Street Journal reports.

ON OUR FEED

“There’s a cancer on all of the businesses that are coming out of this studio.”

—A founder commenting on venture studio Fractal, which creates and funds industry-specific software startups. Insider talked to 20 Fractal founders who said the terms and conditions for investment are causing them to experience unfriendliness from venture capitalists since Fractal takes a large share of ownership in each startup leaving a smaller stake for the founders.

IN CASE YOU MISSED IT

Satya Nadella bet $13 billion that OpenAI will change business, but the Microsoft CEO’s favorite use of ChatGPT is to explain German philosophy and Persian poetry, by Stephen Pastis

From space taxis to Mars missions, five space industry insiders discuss the biggest extraterrestrial opportunities, by Carolyn Barber

If Apple can’t make smart goggles happen, nobody can. So, what happens if Apple fails? by Matt Weinberger

Elon Musk would flip into ‘demon mode’ and ‘rip people apart,’ says biographer who shadowed him for 2 years, by Orianna Rosa Royle

Databricks says it’s buying MosaicML in a bid to ‘democratize A.I.,’ by Luisa Beltran

BEFORE YOU GO

A new way to fight crop damage. A fruit fly known as the spotted wing drosophila is attracted to ripening fruit, and when the females deposit their eggs inside fruit skin, it can make a crop inedible. Growers typically turn to pesticides, but now researchers with the U.S. Department of Agriculture are testing an alternative to pesticides and sterilizing male flies.

The gene-editing was made possible by St. Louis–based biotech company Agragene as a way to have sterilized males mate with female flies and not reproduce. Wired reports that scientists at Agragene used the DNA editing tool Crispr to remove genes in fly embryos that drive male reproduction and female development. “We see this technology as being able to provide healthier fruit and vegetables without doing a lot of harm to the environment,” Agragene CEO Bryan Witherbee told the publication.