Aurelia Butler

NEW YORK (Reuters) – One year after the debut of ChatGPT created a global sensation, leaders of business, government and civil society said at the Reuters NEXT conference in New York that generative AI technology is still mostly in an experimental stage, with limited exceptions.While ChatGPT has enchanted consumers with its ability to generate everything from Shakespeare-style sonnets to student term papers, its propensity to “hallucinate” erroneous information has kept it from revolutionizing most areas of industry so far, they said.”What’s been a lesson, I think, is the gap between being able to do something somewhat and being able to do it well enough for a particular purpose,” said Anthony Aguirre, founder and executive director of the Future of Life Institute, a nonprofit aimed at reducing catastrophic risks from advanced artificial intelligence.Aguirre cited self-driving cars as an example of a technology struggling to make the transition to full deployment. The cars “work at some level right now, but they’re not reliable enough to replace humans. That has turned out to be much, much harder than anticipated.”Sherry Marcus, director of applied science at Amazon (NASDAQ:AMZN)’s AWS, said customers were at different stages of progress. “I’ve observed many generative AI applications that are in production while other customers are just beginning their journey.”One way generative AI was already being deployed widely, highlighted by speakers across industries, was to write computer code.On Microsoft (NASDAQ:MSFT)’s Github, an online platform for storing code, about half of the programming was written using assistance from an AI tool called Copilot that automatically suggests lines of code, said Microsoft Corporate Vice President Lili Cheng.“When we talk to developers, they really feel they’re more productive” with Copilot, said Cheng. “I think it’s a great example of using a generative model, together with data that’s inside of GitHub, to make people feel more effective and make programming more accessible to more people.”She cited AI-generated summaries of meeting transcripts as another example of how the technology was proving its utility.Financiers likewise told Reuters they were actively deploying AI models in their businesses for tasks like coding, generating documentation and deploying capital more efficiently, although they said they were moving cautiously because of the regulated nature of financial services.Gary Marcus, a professor at New York University, said generative AI was error-prone in coding just like in other areas, but that the problem was less of a hindrance in the tech sector because programmers knew how to troubleshoot it.”The place that it really is revolutionizing is coding, it’s just going fastest, and that’s because coders know how to fix the errors these systems make,” said Marcus. “But if you have almost any other kind of business, the hallucinations are a serious problem.”Companies should move slowly and deliberately when integrating the technology into uses where accuracy matters, executives emphasized.Cisco (NASDAQ:CSCO)’s Vijoy Pandey said he believed AI had proven its utility for “the low-hanging fruit,” uses for which “the cost of being wrong has been pretty low.” The challenge now, he said, was to move the technology into a new phase for more sensitive “business-critical use cases,” like legal and security.”We should just assume people will be doing stupid things” and focus in the coming years on building technology, guidelines and frameworks “to protect everybody against stupid actions,” said Pandey.To view the live broadcast of the World Stage go to the Reuters NEXT news page: More

(Reuters) -Media conglomerate News Corp (NASDAQ:NWSA) beat Wall Street targets for first-quarter revenue and profit on Thursday and said it was in advanced talks to strike deals on the use of its content for generative artificial intelligence(AI).The company’s Chief Executive Robert Thomson has been a vocal proponent of having generative AI companies pay for using its content to train their large language models. He has also touted the technology’s potential to help reduce costs.”We are actively working to make the most of our premium content for AI and are engaged in advanced discussions that we expect to bring significant revenue to the company,” Thomson said in a statement.These efforts add to the company’s push to improve profitability and grow key assets such as Dow Jones. Thomson said that News Corp, which is a part of media baron Rupert Murdoch’s empire and includes the Wall Street Journal and Sunday Times, is “assiduously” reviewing the company structure.The company faces renewed activist investor pressure to restructure itself, including a push to spin off some of its assets, following Murdoch’s retirement from News Corp and Fox Corp boards in September.Murdoch is the majority shareholder of a Reno, Nevada-based family trust that owns 39% of News Corp’s voting shares.”Investors clearly do not like (the company structure) as the stock has an estimated 35%-40% conglomerate discount embedded in the current stock price,” said Craig Huber, analyst at Huber Research Partners.Revenue in the quarter ending Sept. 30 was $2.50 billion, compared with estimates of $2.49 billion, according to Visible Alpha. Adjusted profit per share was 16 cents, above estimates of 12 cents.Revenue at the Dow Jones business grew 4% to $537 million, boosted by a 14% rise in professional data services, while revenue at its Digital Real Estate Services unit, which operates Realtor.com, fell about 4%. More

OTTAWA (Reuters) -The Bank of Canada on Thursday said the era of super-low interest rates was likely over and warned businesses and households to plan for higher borrowing costs than they have been used to in recent years.During the years of the pandemic, the central bank’s policy rate was just 0.25% most of the time and never topped 1.75%. It is now at a 22-year high of 5.0%.At a time of higher government debt and geopolitical risks including wars in Ukraine and Israel, long-term market rates have also moved higher.”It’s not hard to see a world where interest rates are persistently higher than what people have grown used to,” Senior Deputy Governor Carolyn Rogers (NYSE:ROG) told Advocis Vancouver, an association of financial advisers on the West Coast. Rogers said she wanted “to stress the importance of adjusting proactively to a future where interest rates may be higher than they’ve been over the past 15 years.”The bank increased rates 10 times between March 2022 and July 2023 to tame inflation that peaked at more than 8% last year. It left rates on hold last month, but said it could hike again if needed.The bank forecasts inflation will come down slowly and reach its 2% target only at the end of 2025.”We do expect the central bank to be lowering interest rates in 2024, assuming that there’s more progress towards taming excess inflationary pressures,” said Royce Mendes, head of macro strategy at Desjardins Group.”That will help limit the possibility of undue stress in the financial system,” he said.Some households already are finding it harder to deal with existing debt, with delinquency rates on credit cards, car loans and unsecured lines of credit having returned to or slightly surpassed pre-pandemic levels, Rogers said.While delinquency rates on mortgages are still lower than before the pandemic, the 60% of fixed-rate mortgage holders who must renew their mortgages by end-2026 “may face significantly higher payments,” she said.Some members of the Bank of Canada’s policy-setting governing council saw the likely need for further interest-rate hikes when they left borrowing costs on hold on Oct. 25, minutes published on Wednesday showed.However, economists expect the central bank to start easing interest rates as soon as April, and money markets see them coming down around mid-year.”We are not yet talking about reducing rates,” Rogers said in response to a question from the audience. “We need to see inflation well on its way back to its target.” More

LONDON (Reuters) – Regulators should keep on open mind when writing rules for the world’s $239 trillion “non-bank” financial sector to avoid one-size fits all approaches, the EU’s top securities watchdog said.Non-banks, a sector which includes hedge funds, real estate funds, insurers and private investments and now account for about half of the world’s financial sector, are firmly in the regulatory limelight.This follows redemption-related stresses among money market funds (MMFs) during a “dash for cash” when economies went into pandemic lockdowns in March 2020, and last year with liability-driven investment (LDI) funds in Britain.European Securities and Markets Authority (ESMA) chair Verena Ross said regulators are closely examining non-banks’ leverage, liquidity and their connectivity with banks.”We must not equate non-banks with investment funds, it’s important to keep an open mind,” Ross told Reuters on Thursday, adding: “Each sector must be looked at quite specifically.”Pressure for action rose after the U.S. Federal Reserve had to inject liquidity into markets to help MMFs in March 2020. The Bank of England then had to intervene after LDI funds struggled to meet collateral calls in 2022.The U.S. Financial Stability Oversight Council(FSOC) this month published a framework for analysing risks in non-banks.Meanwhile, the BoE has called for tougher liquidity rules for MMFs, but sterling-denominated funds are listed in European Union countries such as Ireland and Luxembourg, where the rules are written by the 27-member bloc.MMFs come under UCITS or AIFMD rules, recently updated to bolster resilience, Ross said.There are also separate bespoke EU rules for the sector”MMFs have been identified as one area there is clearly a need to act, but that need to wait for the next Commission. We still believe it’s important to pick that up, ” Ross said.Although ESMA has already recommended changes to MMFs to bolster their resilience in stressed markets, a new European Commission will not be in place until next autumn, meaning reform is unlikely before 2025. More

WASHINGTON (Reuters) -U.S. Federal Reserve officials including Fed Chair Jerome Powell said on Thursday they are still not sure that interest rates are high enough to finish the battle with inflation, with Powell cautioning that the Fed may get little further help in taming price increases from improvements in the supply of goods, services and labor. The Fed “is committed to achieving a stance of monetary policy that is sufficiently restrictive to bring inflation down to 2% over time; We are not confident that we have achieved such a stance,” Powell said at an International Monetary Fund event briefly disrupted by climate protesters. “If it becomes appropriate to tighten policy further, we will not hesitate to do so.” His comments, taken as hawkish by markets that bid up market interest rates, were echoed by three colleagues who continued to keep the emphasis on taming inflation as the Fed’s main concern.”It would be unwise to suggest that further rate hikes are off the table,” interim St. Louis Fed President Kathleen O’Neill Paese said at an event in Indiana. “There is considerable economic uncertainty at the present time. There are reasons inflation could surprise to the upside.”Speaking at a separate event, Richmond Fed President Thomas Barkin noted that it “remains to be seen” if further tightening will be warranted, particularly with the economy growing at a 4.9% clip last quarter. That’s a pace inconsistent with further slowing of inflation, he said, even as he endorsed the central bank’s current wait-and-see approach on a further policy rate increase.The Fed at its Oct. 31-Nov. 1 meeting held interest rates steady at the current 5.25% to 5.5% range, nodding to both risks that inflation remained too high amid strong economic growth, but also to the fact that recent increases in market-based interest rates could slow the economy and make further Fed policy rate increases unnecessary.Powell said that the Fed will proceed “carefully” from here as officials “address both the risk of being misled by a few good months of data, and the risk of overtightening. We are making decisions meeting by meeting.”Still, Powell said the fight to restore price stability, with inflation at 3.4% and changing only slowly in recent months, “has a long way to go.”BATTLE’S FINAL PHASEWhile Powell’s remarks about the immediate policy outlook did not go much beyond those given after the most recent Fed meeting they did elicit a response from financial markets. Traders now see about a one-in-four chance of a further rate hike by January, up from about one-in-six earlier, and expect Fed rate cuts to wait until June. Longer-term bond yields also rose, helped also by a weaker-than-expected 30-year bond auction.Indeed, Powell used much of his speech to delve into his views about how the final phase of the inflation battle may unfold, suggesting that “disinflation” from here on may have to rely more on an economic slowdown than improvements in supply.”It is not clear how much more will be achieved by additional supply-side improvements,” Powell said. Going forward, “it may be that a greater share of the progress in reducing inflation will have to come from tight monetary policy restraining the growth of aggregate demand.””The forward-looking implication is that the so-far immaculate disinflation may get a little more painful in the future,” said JP Morgan Economist Michael Feroli. “We still believe the Fed is done hiking for this cycle, but today’s speech should serve as notice that their rhetoric must stay hawkish until they’ve seen further improvement in inflation.”Data in coming weeks, including the release next week of October’s consumer price index, will be particularly key as Fed officials weigh any further tightening ahead of their next meeting on Dec. 12-13.Giving voice to the other side of the debate at the Fed, Chicago Fed President Austan Goolsbee told the Wall Street Journal officials need to be careful of overshooting, given the impact of higher bond yields. Powell nodded to that risk in his IMF appearance, saying that Fed is “not going to ignore” a significant tightening in financial conditions and does not want to overtighten policy. Still, he said, “the biggest mistake we could make is really, to fail to get inflation under control.” More

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