<figure class="wp-block-image size-large"><img decoding="async" loading="lazy" width="820" height="462" src="https://cms.cnbcafrica.com/wp-content/uploads/2023/05/107148377-1667950015739-gettyimages-1244619288-arriens-twittera221108_npnY6-820x462.jpeg" alt="" class="wp-image-424753" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2023/05/107148377-1667950015739-gettyimages-1244619288-arriens-twittera221108_npnY6-820x462.jpeg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2023/05/107148377-1667950015739-gettyimages-1244619288-arriens-twittera221108_npnY6-300x169.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2023/05/107148377-1667950015739-gettyimages-1244619288-arriens-twittera221108_npnY6-160x90.jpeg 160w, https://cms.cnbcafrica.com/wp-content/uploads/2023/05/107148377-1667950015739-gettyimages-1244619288-arriens-twittera221108_npnY6-768x432.jpeg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2023/05/107148377-1667950015739-gettyimages-1244619288-arriens-twittera221108_npnY6.jpeg 929w" sizes="(max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">An image of new Twitter owner Elon Musk is seen surrounded by Twitter logos in this photo illustration in Warsaw, Poland on 08 November, 2022.  STR | Nurphoto | Getty Images</figcaption></figure>



Elon Musk said Thursday that Twitter is getting a new CEO and that he will move to a product and technical role. Musk said via Twitter that the new CEO, an unnamed woman, would start in about six weeks.



He added that he would transition “to being exec chair &amp; CTO, overseeing product, software &amp; sysops.”



Tesla shares jumped more than 2%, in a sign that investors were pleased about the move.



Several Tesla investors were concerned that Musk was too distracted by running Twitter and that he should redirect his time to steering the electric vehicle company, where he is also CEO. In April, a host of progressive Tesla shareholders publicly urged Tesla’s board to ensure that Musk would dedicate more time to the automobile company.



Musk, who is also CEO of the reusable rocket maker SpaceX, completed the $44 billion acquisition of Twitter in October and made his mark there immediately. He fired the company’s top executives and laid off hundreds of employees.



Under his leadership, Twitter’s core advertising business has suffered. Multiple companies halted their paid promotional campaigns as the social messaging service saw an increase in offensive speech and hateful rhetoric, several advocacy groups have documented.



Musk has tried to make up for the shortfall with a new subscription service, Twitter Blue, which offers features such as the ability to compose longer tweets. In April, the company removed so-called “legacy” blue checkmarks from non-paying users whose identities had been verified, opening the door to potential impostors. Government accounts and some corporate accounts will still maintain verification through a separate set of icons, in silver and gold, respectively.



He has also allowed previously banned users back on the platform and courted political controversy with statements such as saying that the media is racist against white and Asian people.



Twitter has also weathered several technical errors and outages during Musk’s tenure as CEO, some of which coincided with massive layoffs, which he pitched as necessary for the financial health of the company.



Earlier this week, right-wing TV talk show host Tucker Carlson announced he would be hosting a new show on the platform after being fired by his previous employer, Fox News.

107148377-1667950015739-gettyimages-1244619288-arriens-twittera221108_npnY6

Elon Musk says he’s stepping down as Twitter CEO, will oversee product

<figure class="wp-block-image size-large"><img decoding="async" loading="lazy" width="820" height="462" src="https://cms.cnbcafrica.com/wp-content/uploads/2023/05/107238676-1683700429774-gettyimages-1244760150-arriens-twitteri221113_np1h7-820x462.jpeg" alt="" class="wp-image-424713" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2023/05/107238676-1683700429774-gettyimages-1244760150-arriens-twitteri221113_np1h7-820x462.jpeg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2023/05/107238676-1683700429774-gettyimages-1244760150-arriens-twitteri221113_np1h7-300x169.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2023/05/107238676-1683700429774-gettyimages-1244760150-arriens-twitteri221113_np1h7-160x90.jpeg 160w, https://cms.cnbcafrica.com/wp-content/uploads/2023/05/107238676-1683700429774-gettyimages-1244760150-arriens-twitteri221113_np1h7-768x432.jpeg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2023/05/107238676-1683700429774-gettyimages-1244760150-arriens-twitteri221113_np1h7.jpeg 929w" sizes="(max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">Twitter CEO Elon Musk announced changes to the platform’s direct messages feature including the introduction of encryption. STR | Nurphoto | Getty Images</figcaption></figure>



Twitter could launch encrypted direct messages on Wednesday, Elon Musk said, as the CEO outlined plans to boost communication features on the social media service.



Musk said in a tweet late Tuesday that the latest version of the Twitter app contains changes to direct messages or DMs — non-public messages users send to one another.



The CEO said that users can now reply to any message in a DM thread, not just the most recent, as well as use any emoji to react to a message. Previously, users would only be able to reply to the latest message in a DM thread and only react with specific emojis.



Musk also announced that encrypted DMs “should” be released on Wednesday.



Encryption in messages means that only the sender and receiver are able to see a message. In theory, Twitter and Musk would not be able to see or intercept direct messages between people.



“The acid test is that I could not see your DMs even if there was a gun to my head,” Musk tweeted.



Facebook parent Meta said in January that it was expanding testing for default end-to-end encryption for its Messenger service. WhatsApp, the other messaging app owned by Meta, has had end-to-end encryption for several years.



Encrypted messaging services have grown in popularity in the past few years as users focus more on privacy.



Musk also said that voice and video calls will be added soon to Twitter so users can “talk to people anywhere in the world” without giving them a phone number.



Since Twitter’s inception, the development of the direct messages feature hasn’t got much attention from previous CEOs. But Musk has signaled numerous times his intention to make Twitter into an “everything app” from messaging to financial services.



New Twitter features Musk promises are not always introduced on time. In February, he said Twitter would introduce a feature to share advertising revenue with creators on the platform. That hasn’t happened yet.

107238676-1683700429774-gettyimages-1244760150-arriens-twitteri221113_np1h7

Twitter to launch encrypted direct messages with voice and video chat to follow, Elon Musk says

<figure class="wp-block-image size-large"><img decoding="async" loading="lazy" width="820" height="461" src="https://cms.cnbcafrica.com/wp-content/uploads/2023/05/105193472-RTS1QG9H-820x461.jpg" alt="" class="wp-image-424681" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2023/05/105193472-RTS1QG9H-820x461.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2023/05/105193472-RTS1QG9H-300x169.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2023/05/105193472-RTS1QG9H-160x90.jpg 160w, https://cms.cnbcafrica.com/wp-content/uploads/2023/05/105193472-RTS1QG9H-768x432.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2023/05/105193472-RTS1QG9H-1536x864.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2023/05/105193472-RTS1QG9H.jpg 1920w" sizes="(max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">Google CEO Sundar Pichai speaks on stage during the annual Google I/O developers conference in Mountain View, California, May 8, 2018. Stephen Lam | Reuters</figcaption></figure>



Artificial intelligence is going to be a central theme at Google’s annual developer conference on Wednesday, as the company is planning to announce a number of generative AI updates, including launching a general-use large language model (LLM), CNBC has learned.



According to internal documents about Google I/O viewed by CNBC, the company will unveil PaLM 2, its most recent and advanced LLM. PaLM 2 includes more than 100 languages and has been operating under the internal codename “Unified Language Model.” It’s also performed a broad range of coding and math tests as well as creative writing tests and analysis.



At the event, Google will make announcements on the theme of how AI is “helping people reach their full potential,” including “generative experiences” to Bard and Search, the documents show. Pichai will be speaking to a live crowd of developers as he pitches his company’s AI advancements.



The updates come as competition ramps up in the AI arm’s race, with Google and Microsoft racing to incorporate chat AI technology into their products. Microsoft is using its investment in ChatGPT creator OpenAI to bolster its Bing search engine, while Google has quickly mobilized to try and incorporate its Bard technology and its own LLM across various teams.



Google first announced the PaLM language model in April of 2022. In March of this year, the company launched an API for PaLM alongside a number of AI enterprise tools it says will help businesses “generate text, images, code, videos, audio, and more from simple natural language prompts.” 



Last month, Google said its medical LLM called “Med-PaLM 2” can answer medical exam questions at an “expert doctor level” and is accurate 85% of the time.



Google also plans to share advancements to Bard and Search with “generative experiences,” including Bard being used for coding, math and “logic” as well as expansions to Japanese and Korean languages, the documents show.



The company has been working on a series of more powerful Bard models, and officially launched the tool as an experiment in March.



Internally, the company has worked on a multi-modal version called “Multi-Bard,” which uses a larger data set and solves complex math and coding programs, according to separate documentation viewed by CNBC. The company has also tested versions called “Big Bard” and “Giant Bard.”



Google also plans on expanding on its “Workspace AI collaborator,” including discussing template generation in Sheets and image generation in its Slides and Meet products. In March, the company said it would be giving access to AI capabilities in Gmail and Google Docs to a small number of users as part of a test, with plans to bring additional generative AI features to its Meet, Sheets and Slides applications.



One image, viewed by CNBC, showed a Slides sidebar with a chat box that allowed a user to enter text with the option to “create” an image based on the words.



Additional updates include use cases to image recognition tool Google Lens. The company will show advancements to “multi-search” for camera and voice, after last year allowing users to ask questions about what they’re viewing in images.



Outside of the AI sphere, Google will show off its new foldable phone, The Pixel Fold, as CNBC previously reported. The company claims the Pixel Fold will have “the most durable hinge on a foldable” phone and will offer a phone trade-in option. Google plans to market the Pixel Fold as water-resistant and pocket-sized.



A Google spokesperson didn’t immediately respond to a request for comment.

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Alphabet to unveil A.I. updates at Google I/O, showing off creative writing and coding capabilities

<figure class="wp-block-image size-large"><img decoding="async" loading="lazy" width="820" height="547" src="https://cms.cnbcafrica.com/wp-content/uploads/2023/04/107201636-1677683923922-gettyimages-1245066840-RAFAPRESS_24112022-03861-820x547.jpeg" alt="" class="wp-image-424375" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2023/04/107201636-1677683923922-gettyimages-1245066840-RAFAPRESS_24112022-03861-820x547.jpeg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2023/04/107201636-1677683923922-gettyimages-1245066840-RAFAPRESS_24112022-03861-300x200.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2023/04/107201636-1677683923922-gettyimages-1245066840-RAFAPRESS_24112022-03861-135x90.jpeg 135w, https://cms.cnbcafrica.com/wp-content/uploads/2023/04/107201636-1677683923922-gettyimages-1245066840-RAFAPRESS_24112022-03861-768x512.jpeg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2023/04/107201636-1677683923922-gettyimages-1245066840-RAFAPRESS_24112022-03861-1536x1024.jpeg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2023/04/107201636-1677683923922-gettyimages-1245066840-RAFAPRESS_24112022-03861-scaled.jpeg 2048w" sizes="(max-width: 820px) 100vw, 820px" /></figure>



Twitter removed blue legacy check marks from nonpaying users’ accounts on Thursday, weeks after the Elon Musk-owned company initially announced that the changes would begin.



The company confirmed on Wednesday that it would begin removing the blue check marks from users who didn’t pay for the company’s subscription service, Twitter Blue. By midday Thursday, check marks had begun to disappear from nonpaying accounts.



Before Musk took Twitter private, the check marks were limited to notable figures in government, media, or who were otherwise in the public eye and ran a heightened risk of impersonation. Musk said Twitter Blue would offer the option for paid verification shortly after he completed his $44 billion takeover of the social media site.



The changeover means that only paying subscribers who have “verified” their phone number will be entitled to Twitter verification and the blue check mark. Government accounts and some corporate accounts will still maintain verification through a separate set of icons, in silver and gold, respectively.



An ensuing uproar over the initial price — $20 — and a poorly executed rollout, including rampant impersonation of public figures and corporations, forced Musk to delay the removal of legacy verification. Twitter later rolled out color-coded verification symbols for verified brands or government-associated organizations



At the time of publication, there were significant gaps in institutional verification, leaving them open to the possibility of impersonation. The Twitter accounts of numerous U.S. attorney offices remained unverified, as did various arms of the U.S. Department of Justice and field offices of the FBI.



Twitter CEO Musk, who also runs Tesla and SpaceX, has wielded his power over the platform to alter the verification and labeling of media outlets, including NPR and The New York Times. NPR elected to stop using the platform in an official capacity after it was falsely labeled as being state affiliated; the Times lost its verified status on its primary account after the outlet said it wouldn’t pay for verification on Twitter.

107201636-1677683923922-gettyimages-1245066840-RAFAPRESS_24112022-03861

Twitter finally removes legacy verification check marks

<figure class="wp-block-image size-large"><img decoding="async" loading="lazy" width="820" height="462" src="https://cms.cnbcafrica.com/wp-content/uploads/2023/02/107172382-1672349557233-gettyimages-1245872049-AA_29122022_1006753-820x462.jpeg" alt="" class="wp-image-423213" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2023/02/107172382-1672349557233-gettyimages-1245872049-AA_29122022_1006753-820x462.jpeg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2023/02/107172382-1672349557233-gettyimages-1245872049-AA_29122022_1006753-300x169.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2023/02/107172382-1672349557233-gettyimages-1245872049-AA_29122022_1006753-160x90.jpeg 160w, https://cms.cnbcafrica.com/wp-content/uploads/2023/02/107172382-1672349557233-gettyimages-1245872049-AA_29122022_1006753-768x432.jpeg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2023/02/107172382-1672349557233-gettyimages-1245872049-AA_29122022_1006753.jpeg 929w" sizes="(max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">Visitors take photos in front of the Meta (Facebook) sign at its headquarters in Menlo Park, California, on December 29, 2022. Tayfun Coskun | Anadolu Agency | Getty Images</figcaption></figure>



Meta is rolling out a new paid verification subscription service called Meta Verified, CEO Mark Zuckerberg announced in an Instagram update Sunday.



For $11.99 a month on the web and $14.99 a month on iOS, users on Meta’s Instagram and Facebook platforms will be able to submit their government ID and get a blue verification badge. The service will be introduced in Australia and New Zealand this week, and more countries will follow, Zuckerberg said.



“This new feature is about increasing authenticity and security across our services,” Zuckerberg wrote in the post.



Meta has historically granted verification to notable users like politicians, executives, members of the press and organizations to signal their legitimacy. The company’s new subscription service is similar to Twitter’s revamped service called Twitter Blue, which also grants users a verification badge if they pay a monthly fee.



Twitter launched its updated Twitter Blue subscription service in December after the company’s new owner Elon Musk pulled and delayed the initial launch. The Tesla and SpaceX CEO, who acquired Twitter for $44 billion in October, has said the new verification system will be “the great leveler” and give “power to the people.”



Twitter Blue briefly launched in November, but it was pulled after users abused the new paid option by impersonating celebrities and brands.



A Meta spokesperson said Sunday that there are impersonation protections in place with Meta Verified subscriptions. In order to qualify, users must be at least 18 years old, meet minimum account activity requirements and submit a government ID that matches their profile name and photo. Subscriptions will also include “proactive monitoring” for account impersonation, according to the spokesperson.



Musk has been open about his intent to eventually remove badges from Twitter accounts that were verified prior to the Twitter Blue launch, but Meta will not make changes to accounts that are already verified as the company tests its service, a spokesperson said.



Businesses are not currently eligible to apply for Meta Verified, and the company said users will not be able to change their profile name, username, date of birth, or profile photo without going through the application process again.

107172382-1672349557233-gettyimages-1245872049-AA_29122022_1006753

Meta is rolling out a new paid verification subscription service for Instagram and Facebook users

<figure class="wp-block-image size-large"><img decoding="async" loading="lazy" width="820" height="547" src="https://cms.cnbcafrica.com/wp-content/uploads/2023/02/104602233-GettyImages-684226980-Sundar-Pichai--820x547.jpg" alt="" class="wp-image-423157" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2023/02/104602233-GettyImages-684226980-Sundar-Pichai--820x547.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2023/02/104602233-GettyImages-684226980-Sundar-Pichai--300x200.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2023/02/104602233-GettyImages-684226980-Sundar-Pichai--135x90.jpg 135w, https://cms.cnbcafrica.com/wp-content/uploads/2023/02/104602233-GettyImages-684226980-Sundar-Pichai--768x512.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2023/02/104602233-GettyImages-684226980-Sundar-Pichai--1536x1024.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2023/02/104602233-GettyImages-684226980-Sundar-Pichai-.jpg 2000w" sizes="(max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">Google CEO Sundar Pichai Getty Images</figcaption></figure>



Google execs understand that the company’s artificial intelligence search tool Bard isn’t always accurate in how it responds to queries. At least some of the onus is falling on employees to fix the wrong answers.



Prabhakar Raghavan, Google’s vice president for search, asked staffers in an email on Wednesday to help the company make sure its new ChatGPT competitor gets answers right. The email, which CNBC viewed, included a link to a do’s and don’ts page with instructions on how employees should fix responses as they test Bard internally.



Staffers are encouraged to rewrite answers on topics they understand well.



“Bard learns best by example, so taking the time to rewrite a response thoughtfully will go a long way in helping us to improve the mode,” the document says.



Also on Wednesday, as CNBC reported earlier, CEO Sundar Pichai asked employees to spend two to four hours of their time on Bard, acknowledging that “this will be a long journey for everyone, across the field.” 



Raghavan echoed that sentiment.



“This is exciting technology but still in its early days,” Raghavan wrote. “We feel a great responsibility to get it right, and your participation in the dogfood will help accelerate the model’s training and test its load capacity (Not to mention, trying out Bard is actually quite fun!).”



Google unveiled its conversation technology last week, but a series of missteps around the announcement pushed the stock price down nearly 9%. Employees criticized Pichai for the mishaps, describing the rollout internally as “rushed,” “botched” and “comically short sighted.”



To try and clean up the AI’s mistakes, company leaders are leaning on the knowledge of humans. At the top of the do’s and don’ts section, Google provides guidance for what to consider “before teaching Bard.”



Under do’s, Google instructs employees to keep responses “polite, casual and approachable.” It also says they should be “in first person,” and maintain an “unopinionated, neutral tone.”



For don’ts, employees are told not to stereotype and to “avoid making presumptions based on race, nationality, gender, age, religion, sexual orientation, political ideology, location, or similar categories.”



Also, “don’t describe Bard as a person, imply emotion, or claim to have human-like experiences,” the document says.



Google then says “keep it safe,” and instructs employees to give a “thumbs down” to answers that offer “legal, medical, financial advice” or are hateful and abusive.



“Don’t try to re-write it; our team will take it from there,” the document says.



To incentivize people in his organization to test Bard and provide feedback, Raghavan said contributors will earn a “Moma badge,” which appears on internal employee profiles. He said Google will invite the top 10 rewrite contributors from the Knowledge and Information organization, which Raghavan oversees, to a listening session. There they can “share their feedback live” to Raghavan and people working on Bard.



“A wholehearted thank you to the teams working hard on this behind the scenes,” Raghavan wrote.



Google didn’t immediately respond to a request for comment.

104602233-GettyImages-684226980-Sundar-Pichai-

Google asks employees to rewrite Bard’s bad responses, says the A.I. ‘learns best by example’

<figure class="wp-block-image size-large"><img decoding="async" loading="lazy" width="820" height="461" src="https://cms.cnbcafrica.com/wp-content/uploads/2023/02/107191176-1675871046625-gettyimages-1246879777-raa-openaich230207_npTfk-820x461.jpeg" alt="" class="wp-image-423017" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2023/02/107191176-1675871046625-gettyimages-1246879777-raa-openaich230207_npTfk-820x461.jpeg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2023/02/107191176-1675871046625-gettyimages-1246879777-raa-openaich230207_npTfk-300x169.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2023/02/107191176-1675871046625-gettyimages-1246879777-raa-openaich230207_npTfk-160x90.jpeg 160w, https://cms.cnbcafrica.com/wp-content/uploads/2023/02/107191176-1675871046625-gettyimages-1246879777-raa-openaich230207_npTfk-768x432.jpeg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2023/02/107191176-1675871046625-gettyimages-1246879777-raa-openaich230207_npTfk-1536x864.jpeg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2023/02/107191176-1675871046625-gettyimages-1246879777-raa-openaich230207_npTfk.jpeg 1600w" sizes="(max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">Photo: via CNBC</figcaption></figure>



What is ChatGPT? I asked the buzzy artificial intelligence chatbot, which has ignited conversation in schools, corporate boardrooms and social media, to explain itself.



In its own description, ChatGPT is “an AI-powered chatbot developed by OpenAI, based on the GPT (Generative Pretrained Transformer) language model. It uses deep learning techniques to generate human-like responses to text inputs in a conversational manner.”



The tool is the talk of the business world. It has been mentioned on earnings calls by management from a range of companies including oil giants, banks — and even the industrial behemoth Caterpillar.



It has also sparked concerns over potential abuses. In classrooms, students have used ChatGPT to generate entire essays, while hackers have begun testing it to write malicious code.



So what is ChatGPT, exactly? Here’s a simple guide on all you need to know about the popular AI chatbot.



<h2 class="wp-block-heading" id="h-what-is-chatgpt"><a></a>What is ChatGPT?</h2>



ChatGPT is an AI chatbot developed by San Francisco-based startup OpenAI. OpenAI was co-founded in 2015 by Elon Musk and Sam Altman and is backed by well-known investors — most notably Microsoft. 



It is one of several examples of generative AI. These are tools that allow users to enter written prompts and receive new human-like text or images and videos generated by the AI.



Prior examples include Dall-E, a text-to-image program from OpenAI that garnered attention from people captivated by its ability to come up with realistic, often absurd, pictures that match people’s text descriptions.



Lensa, an app based on open-source AI project Stable Diffusion, has been used to turn selfies into illustrious self-portraits inspired by everything from sci-fi to anime.



In ChatGPT’s case, the service is a text-based tool that can produce human-like responses to user requests — from poetry in the style of William Shakespeare to advice on what to do for a child’s birthday party.



<h2 class="wp-block-heading"><a></a>What’s so special about it?</h2>



ChatGPT is powered by a large language model, or LLM, meaning it’s programmed to understand human language and generate responses based on large corpora of data.



ChatGPT’s LLM is called GPT-3.5. It is an upgrade of OpenAI’s GPT-3 language model.



With a whopping 175 billion parameters, GPT-3 is one of the largest and most powerful language processing AI models to date.



What makes ChatGPT so impressive is its ability to produce human-like responses, thanks in no small part to the vast amounts of data it is trained on.



“What’s exciting is that the responses are more and more human-like, so what you’re seeing is things that we did not think computers could do before,” Jeffrey Wong, global chief innovation officer at professional services firm EY, told CNBC.



Another thing that differentiates ChatGPT is its ability to log context from users’ earlier messages in a thread and use it to form responses later in the conversation.



<h2 class="wp-block-heading"><a></a>Why is it so popular?&nbsp;</h2>



No generative AI application has quite managed to achieve the kind of influence and virality that ChatGPT has.



It has been the subject of countless memes and the talk of the business community at the World Economic Forum in Davos, Switzerland, last month. Chinese tech giant Baidu made its own version called Ernie Bot.



The chatbot signed up 1 million in the five days after its release, according to a Dec. 5 tweet from Altman. By January, ChatGPT had amassed 100 million monthly active users only two months into its launch, making it the fastest-growing consumer application in history, according to a UBS note published last week.



It took TikTok nine months to reach 100 million users and Instagram two and a half years.



Jan. 31 was the biggest-ever day for ChatGPT, with its website garnering a record 28 million daily visits, according to data from Similarweb. That was up 165% from a month ago.



One reason for ChatGPT’s popularity is its accessibility. The service is public to anyone via the OpenAI website, and its potential applications range from school homework to legal briefs.



The timing has also played a part, according to Wong.



“When we come out of pandemics, you typically see this burst of creativity,” he said. “The biggest example is, after the Black Plague, there was this Renaissance, this burst of creativity across the board.”



<h2 class="wp-block-heading"><a></a>Why it’s got tech giants clashing</h2>



Microsoft is betting billions on ChatGPT’s owner, OpenAI. In late January, the tech titan announced a multiyear, multibillion-dollar investment deal with OpenAI.



Microsoft declined to disclose a specific dollar amount. A report from Semafor said the Redmond, Washington tech giant was in talks to invest as much as $10 billion in the company. Microsoft previously invested $1 billion into OpenAI.



On Tuesday, Microsoft held a press event where it announced new AI-powered updates to its Bing search engine and Edge browser. Altman confirmed Microsoft had incorporated some of OpenAI’s GPT-3.5 language technologies into Bing.



That was a day after Google unveiled its own response to ChatGPT, called Bard AI. The company plans to start rolling Bard out in Google Search in the coming weeks.



ChatGPT is seen as a threat to Google. Rather than turn to the web search pioneer for your most burning questions, people could rely on ChatGPT.&nbsp;



Google was actually early to the advanced conversational AI game, through the launch of its own large language model called Lamda in 2021. It missed the boat on launching its own consumer product based on Lamda — and hopes to change that with Bard, which is powered by the language model.



<h2 class="wp-block-heading"><a></a>How good is ChatGPT, really?</h2>



ChatGPT has its limitations. Responses from the chatbot can contain factual inaccuracies. For example, it can invent fictitious historical names and books that don’t exist, or fail to solve certain math problems.



“The open-ended aspects of these models are a double-edged sword,” Will Williams, vice president of machine learning at British AI startup Speechmatics, told CNBC.



“On the one hand, there’s a high level of flexibility and fluidity in interactions, and an engaging conversation is possible on almost any topic. On the other hand, you never quite know when the model is making contact with reality and not over-confidently hallucinating.”



ChatGPT’s knowledge is still limited to 2021 data, but may improve with time. Going forward, the expectation is that ChatGPT will be the precursor to much more advanced AI systems.



For now, experts say generative AI isn’t yet capable of achieving human-like, “general” intelligence.



Artificial general intelligence, or AGI, is often considered the holy grail of the AI community. It most commonly refers to the ability of an intelligent agent to understand or learn any intellectual task that a human being can.



Plenty of companies hope to achieve that, from OpenAI to Google’s DeepMind.



The possibilities of GPT-3 have already led to excitement about OpenAI’s next-generation LLM model, GPT-4.



Tempering expectations, OpenAI’s Altman pushed back on the hype surrounding GPT-4, stating in a recent interview with StrictlyVC that people were “begging to be disappointed.”

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All you need to know about ChatGPT, the A.I. chatbot that’s got the world talking and tech giants clashing

<figure class="wp-block-image size-large"><img decoding="async" loading="lazy" width="820" height="461" src="https://cms.cnbcafrica.com/wp-content/uploads/2023/02/106040702-1564081767821msft-820x461.jpg" alt="" class="wp-image-423013" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2023/02/106040702-1564081767821msft-820x461.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2023/02/106040702-1564081767821msft-300x169.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2023/02/106040702-1564081767821msft-160x90.jpg 160w, https://cms.cnbcafrica.com/wp-content/uploads/2023/02/106040702-1564081767821msft-768x432.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2023/02/106040702-1564081767821msft-1536x864.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2023/02/106040702-1564081767821msft.jpg 1600w" sizes="(max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">Google CEO Sundar Pichai speaks during the Google I/O keynote session at Shoreline Amphitheatre in Mountain View, California on May 7, 2019. Josh Edelson | AFP | Getty Images</figcaption></figure>



Shares of Google’s parent Alphabet closed down more than 7% on Wednesday after the company held an event that promoted its new artificial intelligence chatbot called Bard, one day after competitor Microsoft held its own event to show off new AI technologies in its competing search engine, Bing.



Google officially <a href="https://www.cnbc.com/2023/02/06/google-announces-bard-ai-in-response-to-chatgpt.html">announ</a>c<a href="https://www.cnbc.com/2023/02/06/google-announces-bard-ai-in-response-to-chatgpt.html">ed Bard</a> on Monday, confirming CNBC’s prior reporting, and the company said it will begin rolling out the technology in the coming weeks.



During the event Wednesday, which was livestreamed from Paris, Google executives discussed some of Bard’s capabilities. The presentation showed how Bard can be used to display the pros and cons of buying an electric car, for example, or to plan a trip in Northern California.



Bard is powered by the company’s large language model LaMDA, or Language Model for Dialogue Applications. Google will open up the conversation technology to “trusted testers” ahead of making it more widely available to the public, the company said in a blog post Monday.



The event also showed AI improvements to a number of other Google products, including Maps and Google Lens, which lets people search for images from their phone’s camera.



Shares of Alphabet slid during the event, suggesting that investors were hoping for more in light of growing competition from Microsoft.



Google’s event took place just one day after Microsoft hosted its own AI event at its headquarters in Redmond, Washington. Microsoft’s event centered around new AI-powered updates to the company’s Bing search engine and Edge browser. Bing, which is a distant second to Google in search, will now allow users get more conversational responses to questions. 



The Microsoft product updates were built on technology from ChatGPT-maker OpenAI, in which Microsoft has invested billions.



ChatGPT is AI software that generates text based on complex written prompts. The web-based tool went viral after its debut in November, prompting analysts and Google employees to ask whether the company was falling behind in AI, an area which has been a core focus for Google for several years. In response to ChatGPT’s popularity, Google declared an internal “code red” to accelerate development of Bard and other AI products, and the company’s co-founders, Larry Page and Sergey Brin, reportedly got involved again, years after stepping down from day-to-day work at the company.



Though Microsoft’s latest AI investments increase the pressure on Google search, some analysts say it will take time for Microsoft to see any significant gains.



“Search improvements will act as a tailwind to [advertising revenue long term], but it will take time to bring users back to Bing and they will need a crowbar to pry away advertisers from Google,” Jefferies’ analyst Brent Thill wrote in a Tuesday note. “We view these updates as the tip of the iceberg for MSFT’s AI capabilities, with the largest opportunity in enterprise use cases.”



Analysts at Evercore said there was “little incremental news” from Google’s event, which may have contributed to the falling stock price. The analysts said they believe this was an early and a “perhaps rushed” look at the AI Google has been working on for years.



Even so, the analysts said they believe Google’s AI technology is “at least as good” as its competition.



“Leveraging its years of AI investment (which drove a near doubling of CapEx in 2018) and unparalleled scale, this should help the company defend its market position in the long run,” they wrote in a Wednesday note.



—&nbsp;CNBC’s Jennifer Elias and Michael Bloom contributed to this report.

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Alphabet shares fall 7% following Google’s A.I. event

<figure class="wp-block-image size-large"><img decoding="async" loading="lazy" width="820" height="547" src="https://cms.cnbcafrica.com/wp-content/uploads/2022/08/65GOX4BM3RI3VORRYQ5THS3W6M-820x547.jpg" alt="" class="wp-image-419396" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2022/08/65GOX4BM3RI3VORRYQ5THS3W6M-820x547.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2022/08/65GOX4BM3RI3VORRYQ5THS3W6M-300x200.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2022/08/65GOX4BM3RI3VORRYQ5THS3W6M-135x90.jpg 135w, https://cms.cnbcafrica.com/wp-content/uploads/2022/08/65GOX4BM3RI3VORRYQ5THS3W6M-768x512.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2022/08/65GOX4BM3RI3VORRYQ5THS3W6M.jpg 960w" sizes="(max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">A view of a sign above the entrance of the Google office, ahead of presentation of the detailed investment plan for Germany, in Berlin, Germany, August 31, 2021. REUTERS/Annegret Hilse</figcaption></figure>



AI is the most profound technology we are working on today. Whether it’s helping doctors detect diseases earlier or enabling people to access information in their own language, AI helps people, businesses and communities unlock their potential. And it opens up new opportunities that could significantly improve billions of lives. That’s why we re-oriented the company around AI six years ago — and why we see it as the most important way we can deliver on our mission: to organize the world’s information and make it universally accessible and useful.



Since then we’ve continued to make investments in AI across the board, and Google AI and DeepMind are advancing the state of the art. Today, the scale of the largest AI computations is&nbsp;<a href="http://arxiv.org/abs/2202.05924" target="_blank" rel="noreferrer noopener">doubling every six months</a>, far outpacing Moore’s Law. At the same time, advanced generative AI and large language models are capturing the imaginations of people around the world. In fact, our&nbsp;<a href="https://arxiv.org/abs/1706.03762" target="_blank" rel="noreferrer noopener">Transformer</a>&nbsp;research project and our field-defining paper in 2017, as well as our important advances in diffusion models, are now the basis of many of the generative AI applications you&#8217;re starting to see today.



<h2 class="wp-block-heading" id="h-introducing-bard">Introducing Bard</h2>



It’s a really exciting time to be working on these technologies as we translate deep research and breakthroughs into products that truly help people. That’s the journey we’ve been on with large language models. Two years ago we unveiled next-generation language and conversation capabilities powered by our Language Model for Dialogue Applications (or LaMDA for short).



We’ve been working on an experimental conversational AI service, powered by LaMDA, that we’re calling Bard. And today, we’re taking another step forward by opening it up to trusted testers ahead of making it more widely available to the public in the coming weeks.



Bard seeks to combine the breadth of the world’s knowledge with the power, intelligence and creativity of our large language models. It draws on information from the web to provide fresh, high-quality responses. Bard can be an outlet for creativity, and a launchpad for curiosity, helping you to explain new discoveries from NASA’s James Webb Space Telescope to a 9-year-old, or learn more about the best strikers in football right now, and then get drills to build your skills.



We’re releasing it initially with our lightweight model version of LaMDA. This much smaller model requires significantly less computing power, enabling us to scale to more users, allowing for more feedback. We’ll combine external feedback with our own internal testing to make sure Bard’s responses meet a&nbsp;<a href="https://ai.googleblog.com/2022/01/lamda-towards-safe-grounded-and-high.html" target="_blank" rel="noreferrer noopener">high bar for quality, safety and groundedness</a>&nbsp;in real-world information. We’re excited for this phase of testing to help us continue to learn and improve Bard’s quality and speed.



<h2 class="wp-block-heading">Bringing the benefits of AI into our everyday products</h2>



We have a long history of using AI to improve Search for billions of people. BERT, one of our first Transformer models, was revolutionary in understanding the intricacies of human language. Two years ago, we introduced MUM, which is 1,000 times more powerful than BERT and has next-level and multi-lingual understanding of information which can pick out&nbsp;<a href="https://blog.google/products/search/key-moments-video-search/">key moments in videos and provide</a>&nbsp;critical information, including&nbsp;<a href="https://blog.google/products/search/using-ai-keep-google-search-safe/?_ga=2.98664346.52992333.1675136960-653895777.1637261672">crisis support,</a>&nbsp;in more languages.



Now, our newest AI technologies — like LaMDA, PaLM, Imagen and MusicLM — are building on this, creating entirely new ways to engage with information, from language and images to video and audio. We’re working to bring these latest AI advancements into our products, starting with Search.



One of the most exciting opportunities is how AI can deepen our understanding of information and turn it into useful knowledge more efficiently — making it easier for people to get to the heart of what they’re looking for and get things done. When people think of Google, they often think of turning to us for quick factual answers, like “how many keys does a piano have?” But increasingly, people are turning to Google for deeper insights and understanding — like, “is the piano or guitar easier to learn, and how much practice does each need?” Learning about a topic like this can take a lot of effort to figure out what you really need to know, and people often want to explore a diverse range of opinions or perspectives.



AI can be helpful in these moments, synthesizing insights for questions where there’s no one right answer. Soon, you’ll see AI-powered features in Search that distill complex information and multiple perspectives into easy-to-digest formats, so you can quickly understand the big picture and learn more from the web: whether that’s seeking out additional perspectives, like blogs from people who play both piano and guitar, or going deeper on a related topic, like steps to get started as a beginner. These new AI features will begin rolling out on Google Search soon.



<h2 class="wp-block-heading">Helping developers innovate with AI</h2>



Beyond our own products, we think it’s important to make it easy, safe and scalable for others to benefit from these advances by building on top of our best models. Next month, we’ll start onboarding individual developers, creators and enterprises so they can try our Generative Language API, initially powered by LaMDA with a range of models to follow. Over time, we intend to create a suite of tools and APIs that will make it easy for others to build more innovative applications with AI. Having the necessary compute power to build reliable and trustworthy AI systems is also crucial to startups, and we are excited to help scale these efforts through our Google Cloud partnerships with&nbsp;<a href="https://cloud.google.com/blog/products/ai-machine-learning/accelerating-language-model-training-with-cohere-and-google-cloud-tpus" target="_blank" rel="noreferrer noopener">Cohere</a>,&nbsp;<a href="https://c3.ai/partners/googlecloud-partnership/" target="_blank" rel="noreferrer noopener">C3.ai</a>&nbsp;and&nbsp;<a href="https://www.prnewswire.com/news-releases/anthropic-forges-partnership-with-google-cloud-to-help-deliver-reliable-and-responsible-ai-301738512.html" target="_blank" rel="noreferrer noopener">Anthropic</a>, which was just announced last week. Stay tuned for more developer details soon.



<h2 class="wp-block-heading">Bold and responsible</h2>



It’s critical that we bring experiences rooted in these models to the world in a bold and responsible way. That’s why we’re committed to developing AI responsibly: In 2018, Google was one of the first companies to publish a set of&nbsp;<a href="https://ai.google/principles/" target="_blank" rel="noreferrer noopener">AI Principles</a>. We continue to provide education and resources for our researchers, partner with governments and external organizations to develop standards and best practices, and work with communities and experts to make AI safe and useful.



Whether it’s applying AI to radically transform our own products or making these powerful tools available to others, we’ll continue to be bold with innovation and responsible in our approach. And it’s just the beginning — more to come in all of these areas in the weeks and months ahead.

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An important next step on our AI journey

<figure class="wp-block-image size-large"><img decoding="async" loading="lazy" width="820" height="461" src="https://cms.cnbcafrica.com/wp-content/uploads/2023/02/107186657-1675184474096-gettyimages-1246663793-70794191-820x461.jpeg" alt="" class="wp-image-422827" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2023/02/107186657-1675184474096-gettyimages-1246663793-70794191-820x461.jpeg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2023/02/107186657-1675184474096-gettyimages-1246663793-70794191-300x169.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2023/02/107186657-1675184474096-gettyimages-1246663793-70794191-160x90.jpeg 160w, https://cms.cnbcafrica.com/wp-content/uploads/2023/02/107186657-1675184474096-gettyimages-1246663793-70794191-768x432.jpeg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2023/02/107186657-1675184474096-gettyimages-1246663793-70794191-1536x864.jpeg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2023/02/107186657-1675184474096-gettyimages-1246663793-70794191.jpeg 1920w" sizes="(max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">British Prime Minister Rishi Sunak speaks during a Q&amp;A at Teesside University, on Jan. 30, 2023. Oli Scarff | Wpa Pool | Getty Images NewS</figcaption></figure>



The U.K. formally laid out plans to regulate the cryptocurrency industry, with the government looking to rein in some of the reckless business practices that emerged over the past year and contributed to the&nbsp;demise of FTX.



In a widely-anticipated industry consultation launched Tuesday, the government proposed a number of measures aimed at bringing regulation of crypto asset businesses in line with that of traditional financial firms.



Among the proposals unveiled Tuesday was a move that would strengthen rules targeting financial intermediaries and custodians that store crypto on behalf of clients.



A big theme that emerged in 2022 was the rise of risky loans made between multiple crypto firms and a lack of due diligence done on the counterparties involved in those transactions.



The U.K. proposals would crack down on such activities, seeking to establish a “robust world-first regime strengthening rules around the lending of cryptoassets, whilst enhancing consumer protection and the operational resilience of firms,” according to a statement out late Tuesday.



“We remain steadfast in our commitment to grow the economy and enable technological change and innovation — and this includes cryptoasset technology,” Andrew Griffith, economic secretary to the Treasury, said in a statement.



“But we must also protect consumers who are embracing this new technology — ensuring robust, transparent, and fair standards.”



The collapse of FTX has added urgency to global regulators’ attempts to govern the regulation-averse crypto space. The European Union and the U.S. have already made proposals of their own to improve consumer protections in crypto.



In a Dec. 2 speech, Griffith said that “recent events in the crypto market reinforce the case for timely, clear and effective regulation.”



The&nbsp;implosion of FTX, which allegedly used customer money to make risky loans and trades, set off a chain reaction of bankruptcies for digital asset lending firms with exposure to the crypto giant, including&nbsp;BlockFi&nbsp;and Digital Currency Group’s&nbsp;Genesis Trading.



The proposals unveiled Tuesday would also enforce tougher transparency requirements on crypto exchanges to ensure they publish relevant disclosure documents and set out clear admission requirements for trading digital tokens.



Another measure would relax strict rules on crypto advertisements, allowing firms with Financial Conduct Authority registration to issue their own promotions while the broader crypto regime is being introduced.



The regulatory move comes as crypto firms in both the U.K. and beyond are feeling the chill of a deep downturn known as “crypto winter.”



Companies are seeing their valuations slashed by investors after the blowup of FTX and a slump in crypto prices, while the industry has also been plagued by numerous rounds of layoffs. Last week, London-based crypto exchange Luno&nbsp;cut 35% of its workforce&nbsp;in a move impacting over 330 roles.



Regulation takes time. It will likely take years before the measures are approved by Parliament. The Financial Services and Markets Bill, which would recognize crypto assets as regulated products, is still making its way through Parliament. The law&nbsp;aims to make the country’s financial sector more competitive post-Brexit.



Nonetheless, even the simple display of being seen as taking action is important, according to some industry executives.



“Having a regulatory roadmap or regulatory direction of travel is going to be super useful for the UK in terms of being a crypto hub,” Julian Sawyer, CEO of Standard Chartered-backed crypto custody services firm Zodia Custody, told CNBC Tuesday in an interview.



Sawyer, who formerly co-founded British fintech firm Starling and led international expansion for crypto exchange Gemini, said it was also important to ensure “general alignment between global markets in terms of the approach to digital assets.”



He noted the European Union has gotten ahead of the game with its Markets in Crypto-Assets law, which is expected to come into force in 2024.



Bitcoin, which has stealthily climbed about 40% since the start of 2023, was trading flat Wednesday at a price of $23,103.



<h2 class="wp-block-heading" id="h-global-crypto-hub-ambitions"><a></a>Global crypto hub ambitions</h2>



The U.K. wants to become a leader in crypto and blockchain technology on the global stage. However, those ambitions, which were first&nbsp;signposted in April 2022, have been beset by a&nbsp;chaotic revolving door of governments.



Rishi Sunak, who took the reins as U.K. leader in October 2022, is seen by market players as a&nbsp;crypto-friendly prime minister, having previously said he’s “determined” to make the U.K. “the jurisdiction of choice for crypto and blockchain technology.”



As London looks to compete with EU financial hubs after Brexit, crypto could be a way for it to improve its chances, industry insiders said previously.



“There is an opportunity to provide clarity to the industry and allow it to play its role in achieving their mandate to encourage businesses to invest,&nbsp;to innovate, and to create jobs in the U.K.,” Jordan Wain, U.K. public policy lead at Chainalysis, told CNBC in November.



Sunak’s administration will consult on plans to introduce a new set of rules tailored to crypto companies, with a view to closing the consultation by Apr. 30, after which it will formulate more detailed rules.

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Britain sets out plans to regulate crypto industry in wake of FTX collapse

<figure class="wp-block-image size-large"><img decoding="async" loading="lazy" width="820" height="462" src="https://cms.cnbcafrica.com/wp-content/uploads/2023/01/107185206-1674836727140-Still-Option1-820x462.jpg" alt="" class="wp-image-422773" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2023/01/107185206-1674836727140-Still-Option1-820x462.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2023/01/107185206-1674836727140-Still-Option1-300x169.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2023/01/107185206-1674836727140-Still-Option1-160x90.jpg 160w, https://cms.cnbcafrica.com/wp-content/uploads/2023/01/107185206-1674836727140-Still-Option1-768x432.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2023/01/107185206-1674836727140-Still-Option1.jpg 929w" sizes="(max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">The Sorare NFT soccer trading card game has partnered with the Premier League on a multi-year licensing agreement. Sorare</figcaption></figure>



Sorare, the $4.3 billion fantasy soccer game, has signed a multi-year deal with the Premier League that will see the world’s top soccer league license official player cards.



Players of the game will be able to purchase and use official Premier League-licensed NFTs under the exclusive multi-year agreement.



Paris-based startup Sorare, which has 3 million users worldwide, lets people compete in fantasy soccer games of five a side. The chances of success are based on the real-time performance of players on the pitch.



Sorare said it’s also launching two new features in the game. These include the ability to compete with league-specific player cards and a “financial fair play” feature that prevents users from selecting all-star teams.



Sorare was first rumored to be in talks with the Premier League — the top tier of England’s men’s soccer leagues — about a licensing agreement in Oct. 2022. Sorare CEO Nicolas Julia said things took longer to wrap up than anticipated as the Premier League had an existing NFT licensing deal with another firm.



Sky News&nbsp;<a href="https://news.sky.com/story/premier-league-lines-up-30m-a-year-digital-tokens-deal-with-sorare-12731686" target="_blank" rel="noreferrer noopener">reported earlier</a>&nbsp;that the deal was worth £30 million. Julia declined to share specifics on the financial terms and length of the deal.



The news comes despite a sharp slump in NFT trading activity.



Values of NFTs — or non-fungible tokens — have plummeted amid a downturn in crypto prices known as the “crypto winter,” exacerbated in recent months by the <a href="https://www.cnbc.com/2022/11/11/sam-bankman-frieds-cryptocurrency-exchange-ftx-files-for-bankruptcy.html">bankruptcy of major exchange FTX.</a>



According to data site CryptoSlam, the average selling price of an NFT in Dec. 2022 was $143.22, down 63% from $383.73 in Dec. 2021.



Trading volumes are also down significantly. Overall NFT sales plunged 78% in December to $678.2 million from $3.1 billion a year ago.



Julia said Sorare has “trended very differently from the rest of the space.” Total exchanges of cards on the platform amounted to $500 million last year, almost doubling from $270 million in 2021.



Still, the company has noticed a shift in usage with players more inclined to use its “free-to-play” mode where they don’t have to compete with paid-for cards.



Some 87% of Sorare players “don’t even spend money on the platform,” Julia said.



That’s raised an obvious question about the sustainability of Sorare’s model: how does it make money when most of its users aren’t transacting?



For his part, Julia said the big-spending power users were enough to anchor income generation. Sorare takes an unspecified cut of all transactions via its service.



It’s worth noting Sorare is the third-biggest NFT collection worldwide, according to CryptoSlam data. The firm processes roughly $1 million of transactions in a 24-hour period, CryptoSlam’s figures show.



The Premier League’s partnership with Sorare adds to a slew of deals between sports leagues and crypto platforms.



Sorare itself has previously announced deals with Major League Baseball and the National Basketball Association.



Some agreements, like Crypto.com’s deal for the naming rights to the Staples Center arena in Los Angeles and FTX’s now-defunct sponsorship of the Miami-Dade Arena, have soured amid the plunge in crypto prices.



Julia said Sorare was sheltered from the fallout of the crash on crypto-focused sports advertising as his firm focuses on licensing of intellectual property rather than sponsorships.



The French startup was last valued by investors at $4.3 billion in September 2021. Sorare is backed by top names including Japan’s&nbsp;<a href="https://www.cnbc.com/quotes/9984.T-JP/">SoftBank</a>&nbsp;and venture capital firms Accel and Benchmark. It also counts sports stars Lionel Messi, Serena Williams and Kylian Mbappe as shareholders.



Sorare has not been without its controversies and has come under fire over accusations that it encourages gambling.



The U.K. Gambling Commission is investigating the firm “to establish whether Sorare.com requires an operating license or whether the services it provides do not constitute gambling,” according to an Oct. 8, 2021&nbsp;<a href="https://www.gamblingcommission.gov.uk/news/article/consumer-information-notice-sorare-com" target="_blank" rel="noreferrer noopener">notice</a>.



Julia said he was unable to provide an update yet on the process of the U.K. inquiry.



In November, the startup committed to making some changes to its platform after action taken by the French National Gambling Authority. Those included strengthening the free-to-play elements of the game. The company is required to enforce these measures by Mar. 31.

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Premier League signs deal with NFT-based fantasy soccer game despite crypto downturn

<figure class="wp-block-image size-large"><img decoding="async" loading="lazy" width="820" height="462" src="https://cms.cnbcafrica.com/wp-content/uploads/2023/01/107158178-1669722497848-gettyimages-1397785239-twitter-4-820x462.jpeg" alt="" class="wp-image-422199" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2023/01/107158178-1669722497848-gettyimages-1397785239-twitter-4-820x462.jpeg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2023/01/107158178-1669722497848-gettyimages-1397785239-twitter-4-300x169.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2023/01/107158178-1669722497848-gettyimages-1397785239-twitter-4-160x90.jpeg 160w, https://cms.cnbcafrica.com/wp-content/uploads/2023/01/107158178-1669722497848-gettyimages-1397785239-twitter-4-768x432.jpeg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2023/01/107158178-1669722497848-gettyimages-1397785239-twitter-4.jpeg 929w" sizes="(max-width: 820px) 100vw, 820px" /><figcaption>The U.K.’s Online Safety Bill, which aims to regulate the internet, has been revised to remove a controversial but critical measure. Matt Cardy | Getty Images News | Getty Images</figcaption></figure>



Days after Congress passed a bipartisan spending bill banning TikTok from government devices, legislators and advocates say they are looking to further regulate social media companies in the New Year.



TikTok, a video-sharing app owned by the Chinese company ByteDance, attracts more than 1 billion users every month. Lawmakers and FBI Director Christopher Wray have voiced concerns that TikTok’s ownership structure could make U.S. user data vulnerable, since companies based in China are required by law to hand over user information if the government requests it.



TikTok has repeatedly said its U.S. user data is not based in China, though those assurances have done little to alleviate concerns.



Rep. Mike Gallagher, R-Wisc., compared TikTok to “digital fentanyl” on Sunday, telling NBC’s “Meet the Press” that he thinks the ban on the app should be expanded nationally.



“It’s highly addictive and destructive,” he said. “We’re seeing troubling data about the corrosive impact of constant social media use, particularly on young men and women here in America.”



Facebook whistleblower Frances Haugen said Sunday that since social media platforms like TikTok, Twitter and YouTube operate using similar algorithms, regulators should push for more transparency about how they work as a first step.



Haugen said she thinks most people are unaware of how far behind the U.S. is when it comes to social media regulation.



“This is like we’re back in 1965, we don’t have seatbelt laws yet,” she told NBC’s “Meet the Press.”



Congress failed to pass many of the most aggressive bills targeting tech in 2022, including antitrust legislation that would require app stores developed by Apple and Google to give developers more payment options, and a measure mandating new guardrails to protect kids online. Congress made more headway this year than in the past toward a compromise bill on national privacy standards, but there remains only a patchwork of state laws determining how consumer data is protected.



Sen. Amy Klobuchar, D-Minn., said bipartisan support exists for many of these bills, and many have made it onto the Senate floor. But she said the tech lobby is so powerful that bills with “strong, bipartisan support” can fall apart “within 24 hours.”



Klobuchar said on Sunday that things are only going to change with social media companies when Americans decide they have had enough.



“We are lagging behind,” she told NBC’s “Meet the Press.” “It is time for 2023, let it be our resolution, that we finally pass one of these bills.”



— CNBC’s Lauren Feiner contributed to this report

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More social media regulation is coming in 2023, members of Congress say

<figure class="wp-block-image size-large"><img decoding="async" loading="lazy" width="820" height="547" src="https://cms.cnbcafrica.com/wp-content/uploads/2021/06/twitter-1795652_1280-820x547.jpg" alt="" class="wp-image-406024" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2021/06/twitter-1795652_1280-820x547.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2021/06/twitter-1795652_1280-300x200.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2021/06/twitter-1795652_1280-120x80.jpg 120w, https://cms.cnbcafrica.com/wp-content/uploads/2021/06/twitter-1795652_1280-768x512.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2021/06/twitter-1795652_1280.jpg 1280w" sizes="(max-width: 820px) 100vw, 820px" /><figcaption>Photo: via Flickr</figcaption></figure>



Twitter Inc suffered a major outage on Wednesday, leaving tens of thousands of users globally unable to access the popular social media platform or use its key features for several hours before services appeared to come back online.



The incident is the social media site&#8217;s first apparent widespread service disruption since billionaire Elon Musk took over Twitter as CEO in late October.



Downdetector, a website that tracks outages through a range of sources including user reports, showed more than 10,000 affected users from the United States, about 2,500 from Japan and about 2,500 from the UK at the peak of the disruption.



Most of the reports came from users stating they faced technical issues accessing the social network via web browser.



Reports of Twitter outages fell sharply by Wednesday evening, according to the website, with some users later commenting service had returned to normal.



Twitter did not immediately respond to a request for comment and the social network&#8217;s&nbsp;<a href="https://api.twitterstat.us/" target="_blank" rel="noreferrer noopener">status page</a>&nbsp;showed that all systems were operational.



Musk&nbsp;<a href="https://twitter.com/elonmusk/status/1608324539779551232" target="_blank" rel="noreferrer noopener">tweeted later on Wednesday</a>&nbsp;that &#8220;Significant backend server architecture changes&#8221; had been rolled out and that &#8220;Twitter should feel faster&#8221;, but his post did not make any reference to the downtime reported by users.



During the outage, some users said they were unable to log in to their Twitter account via desktops or laptops. A smaller number of users said the issue also affected the mobile app and features including notifications.



Others took to Twitter to share updates and memes about the service disruption, with #TwitterDown trending as a hashtag on the social media site.



Some attempts to log in to Twitter from desktops prompted an error message saying: &#8220;Something went wrong, but don’t fret — it’s not your fault. Let’s try again.&#8221;



Musk tweeted he was still able to use the service.



&#8220;Works for me,&#8221; Musk&nbsp;<a href="https://twitter.com/elonmusk/status/1608273870901096454?s=20&amp;t=Htd4lDF54NJnyg0KsymtZg">posted, responding</a>&nbsp;to a user who asked if Twitter was broken.



The outage comes two months after Musk completed his $44 billion takeover of Twitter, which has been marked by&nbsp;<a href="https://www.reutersconnect.com/all?search=all%3AL6N339027&amp;linkedFromStory=true" target="_blank" rel="noreferrer noopener">chaos and controversy</a>.



Hundreds of Twitter employees quit the social media company in&nbsp;<a href="https://www.reutersconnect.com/all?search=all%3AL1N32E030&amp;linkedFromStory=true" target="_blank" rel="noreferrer noopener">November</a>, by some estimates, including engineers responsible for fixing bugs and preventing service outages.



Thousands of Twitter users were also hit by a global outages in&nbsp;<a href="https://www.reutersconnect.com/all?search=all%3AL4N2UM36M&amp;linkedFromStory=true" target="_blank" rel="noreferrer noopener">February</a>&nbsp;and&nbsp;<a href="https://www.reutersconnect.com/all?search=all%3AL4N2YV2WC&amp;linkedFromStory=true" target="_blank" rel="noreferrer noopener">July</a>, before Musk&#8217;s takeover.



Other big technology companies have also been hit by outages this year. In July, a near 19-hour service outage&nbsp;<a href="https://www.reutersconnect.com/all?search=all%3AL4N2YP2W1&amp;linkedFromStory=true" target="_blank" rel="noreferrer noopener">at Canada&#8217;s biggest telecom operator</a>&nbsp;Rogers Telecommunications shut banking, transport and government access for millions.



(Reporting by Akriti Sharma, Mrinmay Dey and Shubhendu Deshmukh in Bengaluru; additional reporting by Josh Horwitz in Shanghai; Editing by Krishna Chandra Eluri and Sam Holmes)

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Twitter back online after global outage hits thousands

<figure class="wp-block-image size-large"><img decoding="async" loading="lazy" width="820" height="461" src="https://cms.cnbcafrica.com/wp-content/uploads/2022/12/107150631-1668189990975-GettyImages-1240622648r-820x461.jpg" alt="" class="wp-image-421731" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2022/12/107150631-1668189990975-GettyImages-1240622648r-820x461.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2022/12/107150631-1668189990975-GettyImages-1240622648r-300x169.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2022/12/107150631-1668189990975-GettyImages-1240622648r-160x90.jpg 160w, https://cms.cnbcafrica.com/wp-content/uploads/2022/12/107150631-1668189990975-GettyImages-1240622648r-768x432.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2022/12/107150631-1668189990975-GettyImages-1240622648r-1536x864.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2022/12/107150631-1668189990975-GettyImages-1240622648r.jpg 1600w" sizes="(max-width: 820px) 100vw, 820px" /><figcaption>Tom Williams | CQ-Roll Call, Inc. | Getty Images</figcaption></figure>



Former FTX CEO Sam Bankman-Fried, in possibly the understatement of 2022, said Wednesday, “I’ve had a bad month.”



The former billionaire added that he “didn’t do a good job” at upholding his responsibilities to regulators, customers, and investors in a hotly anticipated conversation with CNBC’s Andrew Ross Sorkin at the Dealbook Summit.



<a href="https://www.cnbc.com/2022/11/28/how-ftx-death-spiral-spelled-doom-for-blockfi-according-to-filing.html">Bankman-Fried’s FTX imploded</a>&nbsp;in mid-November after Coindesk reported irregularities in the company’s balance sheets. The company&nbsp;<a href="https://www.cnbc.com/2022/11/11/sam-bankman-frieds-cryptocurrency-exchange-ftx-files-for-bankruptcy.html">filed for Chapter 11 bankruptcy</a>&nbsp;protection in Delaware on Nov. 11.



“I didn’t ever try to commit fraud on anyone,” Bankman-Fried said. “I saw it as a thriving business and I was shocked by what happened this month.”



The political mega-donor said he was down to $100,000 and had one working credit card left.



“We completely failed on risk,” Bankman-Fried continued. “That feels pretty embarrassing, in retrospect.”



Bankman-Fried appeared by video feed from the Bahamas, Sorkin said. “I’ve been in the Bahamas for the last year,” Bankman-Fried said when asked about why he remained in the island nation.



Sorkin asked Bankman-Fried what motivated his acquisitions in the crypto industry, given the size of Alameda’s borrowing from companies Bankman-Fried intended to acquire.



Bankman-Fried claimed that he believed that by the middle of 2022, Alameda had repaid all lines of credit to various borrowing desks. But Alameda still owes BlockFi over $670 million, according to court filings.



“What are your lawyers telling you right now? Are they suggesting it’s a good idea for you to be speaking?” Sorkin asked the former billionaire.



“No, they’re very much not.”



“The time that I really knew there was a problem was November 6,” Bankman-Fried said, after Alameda’s sizable FTT position was exposed by Coindesk. “When we looked at that, there was a potential serious problem.”



“Alameda had taken a huge hit” by that point. “We were seeing a run on the bank start,” Bankman-Fried said.



“I was nervous [when] the Alameda balance sheet” was exposed by Coindesk, Bankman-Fried said, but expected the damage was going to be limited to Alameda, not an “existential” crisis for FTX.



Sorkin asked Bankman-Fried why FTX and Bankman-Fried even had access to customer money.



“I wasn’t running Alameda, I didn’t know exactly what was going on, I didn’t know the size of their position,” Bankman-Fried said. “A lot of these are things I’ve learned over the last month [in the days leading up to bankruptcy.]”



New leadership at FTX said that Bankman-Fried exercised significant control over the entire empire.



Sorkin pressed Bankman-Fried on Alameda’s gambling on questionable cryptocurrencies, reading a letter out from an investor who lost his life savings of $2 million.



“The U.S. platform is fully solvent and funded,” Bankman-Fried claimed. “I believe withdrawals could be opened up today and be made whole.”



“Can I ask you about the drugs?” Sorkin said.



Bankman-Fried responded, “It’s funny hearing this. I have half a glass of alcohol a year.”



The FTX founder repudiated claims of wild partying and off-label drug use, saying that FTX functions consisted of “board games,” or “dinner parties.”



Bankman-Fried claimed he was unaware of the Alameda exposure. In 2019, he said, 40% of FTX’s volume was from Alameda. By 2022, Bankman-Fried claimed, that number was down to 2%, which led him to believe that FTX’s exposure was lessened.



Sorkin continued to press Bankman-Fried on the lending of customer assets. Bankman-Fried demurred.



“In 2018, FTX didn’t have bank accounts,” Bankman-Fried said as justification for why users were asked to wire funds to an account in Alameda’s name instead of directly to FTX.



Bankman-Fried has engaged with the media only sporadically. “F*** regulators,” he told a Vox reporter in a Twitter message.



“I f***** up,” he wrote in another Tweet.



FTX was once hailed as the poster child of responsible crypto. Regulators and lawmakers looked to Bankman-Fried as the future of crypto regulation, a reputation that Bankman-Fried cultivated through appearances before Congress and deepened through generous political contributions.



Bankman-Fried was already known as one of the largest donors to Democratic candidates. He claimed in a recent interview that he gave equally generously to Republican causes, through so-called “dark pool” contributions.



Reporters, Bankman-Fried said, “freak the f*** out if you donate to Republicans.”

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Broke and down to one credit card: Former FTX CEO Sam Bankman-Fried claims he committed no fraud

<figure class="wp-block-image size-full"><img decoding="async" loading="lazy" width="720" height="405" src="https://cms.cnbcafrica.com/wp-content/uploads/2022/11/107122067-1663771026538-gettyimages-1242718802-spacexandt-mobilejointevent11.jpeg" alt="" class="wp-image-421660" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2022/11/107122067-1663771026538-gettyimages-1242718802-spacexandt-mobilejointevent11.jpeg 720w, https://cms.cnbcafrica.com/wp-content/uploads/2022/11/107122067-1663771026538-gettyimages-1242718802-spacexandt-mobilejointevent11-300x169.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2022/11/107122067-1663771026538-gettyimages-1242718802-spacexandt-mobilejointevent11-160x90.jpeg 160w" sizes="(max-width: 720px) 100vw, 720px" /><figcaption>Elon Musk said that his company SpaceX cannot fund the Starlink service in Ukraine “indefinitely.” Michael Gonzalez | Getty Images News | Getty Images</figcaption></figure>



Twitter owner Elon Musk claimed on Monday in a series of tweets that Apple had threatened to remove the Twitter app from the App Store as part of its app review moderation process.



“Apple has also threatened to withhold Twitter from its App Store, but won’t tell us why,” Musk tweeted.



In other tweets fired off on Monday morning, he called Apple’s App Store fees a “secret 30% tax,” and ran a poll asking if “Apple should publish all censorship actions it has taken that affect its customers.” He also claimed that Apple has pulled most of its advertising from Twitter.



Apple’s App Store is the only way to distribute software to iPhones. If the Twitter app were pulled, the social network would lose one of its main distribution platforms, although the service is available for the web.



In addition, Apple requires iPhone app makers to pay between 15% and 30% of any digital goods sold through their apps. Musk has said one of his plans for Twitter is to raise billions of dollars from subscriptions, such as Twitter Blue, which is offered through the iPhone app. If it were to grow to Musk’s goals, Apple would collect hundreds of millions of dollars in the process.



Apple has faced challenges to its App Store fees and policies from companies such as Spotify and Epic Games, but Musk is no stranger to attracting worldwide attention, and may represent Apple’s biggest challenge to its control over iPhone app distribution so far.



Apple declined to comment about Musk’s tweets.



But there are signs that Apple is watching the social network closely to see if it violates any App Store policies.



Representatives for unnamed app stores, which include Apple’s App Store as well as Google Play for Android devices, reached out to Twitter earlier this month after Musk took over and the site saw a wave of hate speech, according to a New York Times op-ed by Yoel Roth, Twitter’s former head of trust and safety.



Phil Schiller, Apple’s former chief marketer who oversees App Review, apparently deleted his Twitter account earlier this month after Musk took over.



Phillip Shoemaker, the former head of Apple’s app review and current CEO of Identity.com, said Schiller’s move to delete his account reminded him of a company making moves to “prepare for war.” He believes that Apple’s app review department is keeping a close eye on Twitter’s content moderation under Musk to see if more questionable content, such as porn, slips through.



Apple’s recent moves are “like when you remove troops from a country before you attack,” Shoemaker said. “You’re thinking you’re going to have to pull these apps from the store.”



<h2 class="wp-block-heading" id="h-where-twitter-might-fall-afoul-of-apple-s-rules"><a></a>Where Twitter might fall afoul of Apple’s rules</h2>



There are two primary reasons why Apple’s App Store might take a closer look at Twitter under its public guidelines:



<ul><li>Apple requires apps with user-generated content such as Twitter to have strong content moderation systems in place. Insufficient content moderation was the reason why Apple booted Parler, a smaller Twitter competitor, in 2020. Musk has reportedly vastly downsized Twitter’s content moderation workforce.</li><li>Apple requires apps to pay fees between 30% and 15% for digital purchases. When Epic Games put in a system to get around Apple’s cut, Apple removed it. If Twitter were to pull a similar move, it might force Apple’s hand.</li></ul>



There are also other reasons why Twitter might fall afoul of Apple’s rules, including its insistence that adult content not be discoverable by default. Twitter remains one of the most prominent social networks that allows adult content, opening up gray areas for App Store delays or issues.



Apple’s App Store uses employees to review each app and update that goes on the platform. The app reviewers often send short responses highlighting issues without being explicit about what apps need to do to pass, CNBC previously reported.



Musk has tweaked Apple for years, and seems to enjoy doing so. He has complained about Apple’s app store fees in the past, although the Tesla app doesn’t allow in-app purchases. He has also sparred with Apple’s purported plan to build electric cars, although Apple’s secretive project has never shipped a car.



In 2015, Musk teased Apple saying that it only hires rejected Tesla employees and that he calls Apple the “Tesla Graveyard.”



But Musk’s moves on Monday go beyond teasing and rivalry, and suggest that he may be prepared to fight a lengthy public relations battle over Apple’s rules. In one tweet, he posted a meme in which a car veers off the highway under a road sign offering two choices: “Pay 30%” and “Go to war.” The car was choosing the latter option.

107122067-1663771026538-gettyimages-1242718802-spacexandt-mobilejointevent11

Elon Musk claims Apple has threatened to remove the Twitter app

<figure class="wp-block-image size-large"><img decoding="async" loading="lazy" width="820" height="462" src="https://cms.cnbcafrica.com/wp-content/uploads/2022/11/107155662-1669130982053-gettyimages-1244985603-porzycki-donaldtr221122_npu5S-820x462.jpeg" alt="" class="wp-image-421609" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2022/11/107155662-1669130982053-gettyimages-1244985603-porzycki-donaldtr221122_npu5S-820x462.jpeg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2022/11/107155662-1669130982053-gettyimages-1244985603-porzycki-donaldtr221122_npu5S-300x169.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2022/11/107155662-1669130982053-gettyimages-1244985603-porzycki-donaldtr221122_npu5S-160x90.jpeg 160w, https://cms.cnbcafrica.com/wp-content/uploads/2022/11/107155662-1669130982053-gettyimages-1244985603-porzycki-donaldtr221122_npu5S-768x432.jpeg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2022/11/107155662-1669130982053-gettyimages-1244985603-porzycki-donaldtr221122_npu5S.jpeg 929w" sizes="(max-width: 820px) 100vw, 820px" /><figcaption>Elon Musk Twitter account displayed on a phone screen and Twitter logo displayed on a screen in the background are seen in this illustration photo taken in Krakow, Poland on November 22, 2022. Jakub Porzycki | Nurphoto | Getty Images</figcaption></figure>



Elon Musk said in a tweet Friday that Twitter would launch its delayed “Verified” service next week with different colored checks depending on the type of account.



The Twitter CEO said there would be a “gold check” for companies, a grey colored one for government accounts and the existing blue one for individuals, whether they are celebrities or not.



All verified accounts will be “manually authenticated” before the check is activated, Musk said.



The billionaire called the move “Painful, but necessary”



Musk’s comments come after he was forced to pause the $8 per month Twitter Blue service, which allowed anyone to pay the subscription for the blue verification tick, after users abused the system by impersonating brands and famous people.



The CEO said Monday that Twitter would delay the relaunch of its $8 per month Blue Verified service. At the time, Musk said Twitter will “probably use [a] different color check for organizations than individuals.”



Now he has given details on what that could look like.



Musk had earlier said he planned to relaunch Twitter Blue on Nov. 29. Musk’s latest timeline puts the relaunch on Dec. 2.



The subscription service is Musk’s attempt to find a new revenue stream at Twitter as part of the billionaire’s controversial shakeup at the social media firm.



Musk has fired thousands of employees at Twitter and asked the remaining workers to commit to working “long hours at high intensity” or leave.

107155662-1669130982053-gettyimages-1244985603-porzycki-donaldtr221122_npu5S

Musk says Twitter to launch ‘Verified’ service next week with a ‘gold check’ for companies

<figure class="wp-block-image size-large"><img decoding="async" loading="lazy" width="820" height="497" src="https://cms.cnbcafrica.com/wp-content/uploads/2022/11/106967423-16354576832021-10-28t214510z_116189434_rc29jq9owmq8_rtrmadp_0_facebook-connect-820x497.jpeg" alt="" class="wp-image-421210" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2022/11/106967423-16354576832021-10-28t214510z_116189434_rc29jq9owmq8_rtrmadp_0_facebook-connect-820x497.jpeg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2022/11/106967423-16354576832021-10-28t214510z_116189434_rc29jq9owmq8_rtrmadp_0_facebook-connect-300x182.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2022/11/106967423-16354576832021-10-28t214510z_116189434_rc29jq9owmq8_rtrmadp_0_facebook-connect-148x90.jpeg 148w, https://cms.cnbcafrica.com/wp-content/uploads/2022/11/106967423-16354576832021-10-28t214510z_116189434_rc29jq9owmq8_rtrmadp_0_facebook-connect-768x466.jpeg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2022/11/106967423-16354576832021-10-28t214510z_116189434_rc29jq9owmq8_rtrmadp_0_facebook-connect-1536x932.jpeg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2022/11/106967423-16354576832021-10-28t214510z_116189434_rc29jq9owmq8_rtrmadp_0_facebook-connect.jpeg 1947w" sizes="(max-width: 820px) 100vw, 820px" /><figcaption>Mark Zuckerberg told the world last October that he was rebranding Facebook to Meta as the company pushes toward the metaverse. Facebook | via Reuters</figcaption></figure>



<a href="https://www.cnbc.com/quotes/META/">Meta</a>&nbsp;is laying off 13% of its staff, or more than 11,000 employees, CEO Mark Zuckerberg&nbsp;<a href="https://about.fb.com/news/2022/11/mark-zuckerberg-layoff-message-to-employees/" target="_blank" rel="noreferrer noopener">said in a letter</a>&nbsp;to employees Wednesday.



“Today I’m sharing some of the most difficult changes we’ve made in Meta’s history,”&nbsp;<a href="https://www.cnbc.com/mark-zuckerberg/">Zuckerberg</a>&nbsp;said in the letter. “I’ve decided to reduce the size of our team by about 13% and let more than 11,000 of our talented employees go. We are also taking a number of additional steps to become a leaner and more efficient company by cutting discretionary spending and extending our hiring freeze through Q1.”



Shares of Meta were up about 4.5% in premarket trading.



The layoffs come amid a tough time for Facebook parent company Meta, which provided lukewarm&nbsp;<a href="https://www.cnbc.com/2022/10/26/facebook-parent-meta-earnings-q3-2022.html">guidance</a>&nbsp;in late October for its upcoming fourth-quarter earnings that spooked investors and caused its shares to sink nearly 20%.



Investors have been concerned about Meta’s rising costs and expenses, which jumped 19% year over year in the third quarter to $22.1 billion. The company’s overall sales declined 4% to $27.71 billion in the quarter while its operating income dropped 46% from the previous year to $5.66 billion.



“I want to take accountability for these decisions and for how we got here. I know this is tough for everyone, and I’m especially sorry to those impacted.” Zuckerberg said.



He said Meta is making reductions in every organization but that recruiting will be disproportionately affected since the company plans to hire fewer people in 2023. The company extended its hiring freeze through the first quarter with a few exceptions, Zuckerberg said.



“This is a sad moment, and there’s no way around that. To those who are leaving, I want to thank you again for everything you’ve put into this place,” he added.



Impacted employees will receive 16 weeks of pay plus two additional weeks for every year of service, Zuckerberg said. Meta will cover health insurance for six months.



Meta is heavily investing in the metaverse, which generally refers to a yet-to-be developed digital world that can be accessed by virtual reality and augmented reality headsets. This hefty bet has cost Meta $9.4 billion so far in 2022, and the company&nbsp;<a href="https://www.cnbc.com/2022/10/26/meta-plans-to-lose-even-more-money-building-the-metaverse.html">anticipates</a>&nbsp;that losses “will grow significantly year-over-year.”



Zuckerberg said during a call with analysts as part of its third-quarter earnings report that Meta plans to “focus our investments on a small number of high priority growth areas” during the next year.



“That means some teams will grow meaningfully, but most other teams will stay flat or shrink over the next year,” Zuckerberg said. “In aggregate, we expect to end 2023 as either roughly the same size, or even a slightly smaller organization than we are today.”



Meta counts more than 87,000 employees as of the end of September.



Here’s Mark Zuckerberg’s letter to employees:



“Today I’m sharing some of the most difficult changes we’ve made in Meta’s history. I’ve decided to reduce the size of our team by about 13% and let more than 11,000 of our talented employees go. We are also taking a number of additional steps to become a leaner and more efficient company by cutting discretionary spending and extending our hiring freeze through Q1.



I want to take accountability for these decisions and for how we got here. I know this is tough for everyone, and I’m especially sorry to those impacted.



How did we get here?



At the start of Covid, the world rapidly moved online and the surge of e-commerce led to outsized revenue growth. Many people predicted this would be a permanent acceleration that would continue even after the pandemic ended. I did too, so I made the decision to significantly increase our investments. Unfortunately, this did not play out the way I expected. Not only has online commerce returned to prior trends, but the macroeconomic downturn, increased competition, and ads signal loss have caused our revenue to be much lower than I’d expected. I got this wrong, and I take responsibility for that.



In this new environment, we need to become more capital efficient. We’ve shifted more of our resources onto a smaller number of high priority growth areas — like our AI discovery engine, our ads and business platforms, and our long-term vision for the metaverse. We’ve cut costs across our business, including scaling back budgets, reducing perks, and shrinking our real estate footprint. We’re restructuring teams to increase our efficiency. But these measures alone won’t bring our expenses in line with our revenue growth, so I’ve also made the hard decision to let people go.



How will this work?



There is no good way to do a layoff, but we hope to get all the relevant information to you as quickly as possible and then do whatever we can to support you through this.



Everyone will get an email soon letting you know what this layoff means for you. After that, every affected employee will have the opportunity to speak with someone to get their questions answered and join information sessions.



Some of the details in the US include:



<ul><li>Severance. We will pay 16 weeks of base pay plus two additional weeks for every year of service, with no cap.</li><li>PTO. We’ll pay for all remaining PTO time.</li><li>RSU vesting. Everyone impacted will receive their November 15, 2022 vesting.</li><li>Health insurance. We’ll cover the cost of healthcare for people and their families for six months.</li><li>Career services. We’ll provide three months of career support with an external vendor, including early access to unpublished job leads.</li><li>Immigration support. I know this is especially difficult if you’re here on a visa. There’s a notice period before termination and some visa grace periods, which means everyone will have time to make plans and work through their immigration status. We have dedicated immigration specialists to help guide you based on what you and your family need.&nbsp;</li></ul>



Outside the US, support will be similar, and we’ll follow up soon with separate processes that take into account local employment laws.



We made the decision to remove access to most Meta systems for people leaving today given the amount of access to sensitive information. But we’re keeping email addresses active throughout the day so everyone can say farewell.



While we’re making reductions in every organization across both Family of Apps and Reality Labs, some teams will be affected more than others. Recruiting will be disproportionately affected since we’re planning to hire fewer people next year. We’re also restructuring our business teams more substantially. This is not a reflection of the great work these groups have done, but what we need going forward. The leaders of each group will schedule time to discuss what this means for your team over the next couple of days.



The teammates who will be leaving us are talented and passionate, and have made an important impact on our company and community. Each of you have helped make Meta a success, and I’m grateful for it. I’m sure you’ll go on to do great work at other places.



What other changes are we making?



I view layoffs as a last resort, so we decided to rein in other sources of cost before letting teammates go. Overall, this will add up to a meaningful cultural shift in how we operate. For example, as we shrink our real estate footprint, we’re transitioning to desk sharing for people who already spend most of their time outside the office.&nbsp;We’ll roll out more cost-cutting changes like this in the coming months.&nbsp;



We’re also extending our hiring freeze through Q1 with a small number of exceptions. I’m going to watch our business performance, operational efficiency, and other macroeconomic factors to determine whether and how much we should resume hiring at that point. This will give us the ability to control our cost structure in the event of a continued economic downturn. It will also put us on a path to achieve a more efficient cost structure than we outlined to investors recently.



I’m currently in the middle of a thorough review of our infrastructure spending. As we build our AI infrastructure, we’re focused on becoming even more efficient with our capacity. Our infrastructure will continue to be an important advantage for Meta, and I believe we can achieve this while spending less.



Fundamentally, we’re making all these changes for two reasons: our revenue outlook is lower than we expected at the beginning of this year, and we want to make sure we’re operating efficiently across both Family of Apps and Reality Labs.&nbsp;



How do we move forward?



This is a sad moment, and there’s no way around that. To those who are leaving, I want to thank you again for everything you’ve put into this place. We would not be where we are today without your hard work, and I’m grateful for your contributions.



To those who are staying, I know this is a difficult time for you too. Not only are we saying goodbye to people we’ve worked closely with, but many of you also feel uncertainty about the future. I want you to know that we’re making these decisions to make sure our future is strong.



I believe we are deeply underestimated as a company today. Billions of people use our services to connect, and our communities keep growing.&nbsp;Our core business is among the most profitable ever built with huge potential ahead. And we’re leading in developing the technology to define the future of social connection and the next computing platform. We do historically important work. I’m confident that if we work efficiently, we’ll come out of this downturn stronger and more resilient than ever.



We’ll share more on how we’ll operate as a streamlined organization to achieve our priorities in the weeks ahead. For now, I’ll say one more time how thankful I am to those of you who are leaving for everything you’ve done to advance our mission.



Mark”

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