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    What Social Trends Taught Us About the 2023 Economy

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    From girl dinners to ChatGPT, a look back at the trends that broke the internet and taught us about the American economy this year.This year, the world learned that some men just can’t stop thinking about the Roman Empire. Over here at The New York Times, we can’t stop thinking about what social trends like that one tell us about the American economy.We had no shortage of viral memes and moments to discuss in 2023. Americans flocked to Paris (and overseas in general). Millennial women stocked up on the Stanley thermoses their dads used to use, one of a range of female-powered consumer fads. Thanks partly to Barbie, Birkenstocks also came back harder than a ’90s trend. People spoke in Taylor Swift lyrics.Social developments like those can tell us a lot about the economy we’re living in. To wrap up 2023, we ran through some of the big cultural events and what they taught us about the labor market, economic growth and the outlook for 2024.‘He’s Just Ken’ Had Labor Market Tiebacks“Barbie,” the movie that launched a thousand think pieces, hit theaters this summer with a telling promotional catchphrase: “She’s everything. He’s just Ken.”This, clearly, was a movie about the labor market.The film pictured Barbie trying to grapple with the harshness of a real world that was not dominated by women, and Ken trying to find his footing after realizing that he lacked a clear place in Barbie’s fictional world.That was more than just social commentary. As in Barbieland, America has seen a real divergence in outcomes for young and middle-aged men and women in recent years — specifically in the labor market. Younger women were working at historically high rates before the pandemic, and they bounced right back after the 2020 downturn.Young Women Work at Near Record RatesWhile the employment rate for young women is near its peak, the employment rate for young men is below where it was in the 1990s.

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    Share of people ages 25 to 34 who are employed
    Source: Bureau of Labor StatisticsBy The New York TimesMen were a different story. Younger men’s employment bounced back, but they are still working at much lower rates than a few decades ago. Men in the 35- to 44-year-old group in particular have been working less and less over the years, and have recently failed to recapture their 2019 employment peak.Falling Employment Rates for Middle-Aged MenMiddle-aged women are employed at record levels while men in the same age group have been working less and less.

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    Share of people ages 35 to 44 who are employed
    Source: Bureau of Labor StatisticsBy The New York TimesIn 2023 specifically, women gained 1.4 jobs for every one that men did (through November).What is behind the long-run decline in male work? Economists and sociologists point to a number of causes: A shift away from marriage and the decline in childbearing have eroded one traditional social rationale for work. Men may be having something of an on-the-job identity crisis in a modern economy where many new jobs tilt toward “pink collar” service industries like child care and nursing.“Ken is trying to find his place in the world,” said Betsey Stevenson, an economist at the University of Michigan, explaining that it ties back to a world of different opportunities that have left some men searching for a new footing. “We moved from an economic model where the median job is making stuff to an economy where the median job is taking care of somebody.”Men are also less educated than today’s young women, which may leave some with less marketable résumés. (In the movie, Ken tries to get a job on the shoreline but is told he lacks the skills. He laments: “I can’t even beach here!”)Taylor Swift and Beyoncé Showed America’s Willingness to SpendIt wasn’t just the labor market that women dominated this year: It was a year of female-centric consumerism. Take, for instance, the two musical events of the summer. Both Beyoncé and Taylor Swift had huge concert tours that spurred lots of economic activity. They also released films of their shows, bringing the fun (and the money) to the box office.The concert spree itself was an example of a broader economic trend. Consumers continued to spend strongly in 2023, especially on services like live music and international travel. That was something of a surprise because forecasters had thought that much-higher interest rates from the Federal Reserve were likely to tip the economy into recession this year. ‘Girl Dinners’ Ranked Among Cheapish Food TrendsAnother place where ladies led the way in 2023? Culinary innovation. Young women posted viral TikToks about what might have, depending on one’s demographic patois, been termed a charcuterie board (millennial), a Ploughman’s (Brit) or a lunchable (Oscar Mayer). But to Generation Z, it was Girl Dinner.This, much like the Roman Empire and men meme, was an instance of a gender’s being applied to a pretty broad and basic concept. Girl dinners came in many shapes and sizes, but they were essentially just meals constructed from relatively affordable ingredients: Think leftover cheese chunks, boxed macaroni or chicken nuggets.What they did clearly echo was a broader economywide trend toward greater food thriftiness. Big retailers including Walmart and McDonald’s reported seeing a new group of shoppers as even comfortably middle-class consumers tried to save money on groceries after years of rapid food inflation. Overall price increases slowed markedly in 2023, but several years of rapid inflation have added up, leaving many prices notably higher for many basic necessities.Ozempic Worried Big FoodConsumer grocery trends saw another big and unexpected change this year. Some big food companies are worried that people are on the cusp of buying less food because of products like Ozempic and Wegovy, which rose to prominence this year as part of a new and effective set of weight-loss drugs. While that was a hopeful moment for many who have struggled with obesity and its health effects, it was one that caused consternation and adaptation at some retailers and fast-food chains. Walmart has said it already sees an impact on demand.ChatGPT Raised Eyebrows in EconomicsHealth care wasn’t the only sphere to see a big breakthrough in 2023. OpenAI’s ChatGPT chatbot rocketed to prominence this year for generating humanlike writing, and its competitors put up their own offerings (including one that fell in love with a Times columnist).Such technologies could have major economic implications, reshaping how we work, replacing some jobs and potentially boosting productivity. For now, office workers have used it to write emails. Students have used it to write papers. Your friendly economics correspondent tried to use it to write this story section, but artificial intelligence and Times editors have a different understanding of the term “brief.”The freely available version of ChatGPT is working from 2022 data, so it also declined to comment on another key development from this year.“If ‘rizz’ refers to something specific, please provide more context or clarify,” the chatbot responded when asked if it possessed Oxford’s word of the year, a Gen Z shorthand for “charisma.”With a little more prodding, it admitted, “I don’t have personal qualities.” More

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    My Not-So-Perfect Holiday Shopping Excursion With A.I. Chatbots

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    With Shopify, Mercari and other retailers rolling out chatbots to help buyers, this holiday shopping season is the first to be powered by A.I.To help with my holiday shopping this year, I recently turned to a new personal assistant online. “I’m looking for a Christmas present for my mother, who spends long hours working,” I typed. “Is there something she can use in her office every day?”“Of course!” came the instant reply. “Does your mother have any specific preferences or needs for her office? For example, does she need organization tools, desk accessories, or something to help her relax during breaks?”So began my conversation with Shop A.I., a new chatbot from Shopify, an e-commerce marketplace. Over 10 minutes, Shop A.I. and I engaged in a question-and-answer session. I told the chatbot my budget and more about my mother, such as her need to alleviate back pain. Shop A.I. also asked me about my mother’s preferred design and color for an office chair.More people may eventually replicate this kind of shopping experience. A year after ChatGPT debuted, retailers around the world have started rolling out chatbots that are powered by generative artificial intelligence. That makes this holiday season the first when a slew of A.I. chatbots can help shoppers brainstorm and find presents for their friends and loved ones.In addition to Shopify, chatbots have come out over the past 12 months from Instacart, the delivery company; Mercari, a resale platform; Carrefour, a retailer; and Kering, which owns Gucci and Balenciaga. Walmart, Mastercard and Signet Jewelers are also testing chatbots, which may become publicly available as soon as next year.“In a way, it’s recreating an in-store environment, but online,” said Carl Rivera, a vice president at Shopify who oversees its Shop app, which hosts Shop A.I. He said the chatbot broke down people’s questions into key terms and searched relevant products from Shopify’s millions of sellers. It then recommends products based on reviews and a shopper’s purchase history.Retailers have long used chatbots, but previous versions lacked conversational power and typically answered just a few preset questions, such as the status of an order. The newest chatbots, by contrast, can process prompts and generate tailored answers, both of which create a more “personalized and authentic interaction,” said Jen Jones, the chief marketing officer of the platform Commercetools.Whether shoppers want this technology remains a question. “Consumers like simplicity, so they don’t necessarily want to have five different generative A.I. tools that they would use for different purposes,” said Olivier Toubia, a marketing professor at Columbia Business School.Nicola Conway, a lawyer in London, tried Kering’s luxury personal shopper, Madeline, in August to search for a pink bridesmaid dress for a spring wedding. Madeline was “intuitive and novel,” she said, but it gave only one recommendation, an Alexander McQueen corset dress. Ms. Conway did not end up buying it.Kering did not respond to requests for comment.Maggie Weber, a shopping influencer who uses the social media handle @refashionedhippie, said she tried Mercari’s chatbot, Merchat A.I., in May. She asked the chatbot to show her baseball cards, but she was instead offered baseballs — and then hats, bats and jerseys.“Merchat is still in its infancy,” Ms. Weber, 34, said. She added that she worried that if she gave the chatbot too much information, it would start directing personalized ads to her.A Mercari spokeswoman said Merchat used chat history only to recommend products and did not use personally identifiable information. She added that the search bar could be faster for customers who want a specific item, while the chatbot helped those who want “inspiration for gifts.”Such inspiration was exactly what I needed this season as I had only vague ideas for what to buy my 53-year-old mother and my 17-year-old cousin, Jenny.A screenshot of our reporter’s conversation with Merchat A.I., a chatbot that helps shoppers.So I tried Shop A.I. After telling the chatbot about my mother’s back pain and asking what I could buy to help her relax, Shop A.I. offered to find an ergonomic chair and asked my budget. When I said $100, it came back with a few pages of product results.“Can you help me to narrow it down?” I typed. Shop A.I. then asked about my preferred color for a chair. I said black.Shop A.I. returned more than 300 results, including a $159 camp chair from ROAM Adventure, a $179.99 reclining massage office chair from homrest and a $269.99 CosyGaming executive chair.“These don’t seem to be under $100,” I wrote, annoyed.“As a new chatbot, I’m still learning and sometimes the search results may not be accurate,” Shop A.I. replied. “Let me try again and find some black ergonomic chairs within your budget.”Shop A.I. returned more than 300 results for black ergonomic chairs, though few were under $100.Then, it added, “It seems that I’m having trouble finding black ergonomic chairs within your budget at the moment.”I ended up typing “black ergonomic chair” into the search bar myself and set a $100 price range. A $66.81 Victory Furniture gaming chair and a $47.96 massage office chair popped up, though they were too big and heavy to be gifts.Eventually, I asked Shop A.I. for alternative ideas and received five options, including seat cushions and standing desk converters.I chose the standing desk converter and gave Shop A.I. my $100 budget. This time, the chatbot showed options within my price range, including a $99 Risedesk standing desk converter. But most of the products did not have reviews, which I rely on while shopping online. I didn’t buy anything.Shop A.I. provided alternative gift recommendations, including standing desk converters.Shop A.I. was not great at finding a gift for my cousin, either. I wanted to buy Jenny some college dorm decorations featuring her favorite anime series, Violet Evergarden, which follows a character named Violet as she recovers from an unidentified war.But Shop A.I. appeared to decide that anything the color violet was connected to my query. It showed me wall art of purple mountains and posters of purple BMW cars.So I turned to Mercari’s Merchat. After asking for my cousin’s hobby (anime), age (17) and what she might prefer for college (dorm decorations), Merchat offered three gift ideas: wall tapestries, string lights and desk accessories in the theme of Violet Evergarden.Merchat showed me four products under each category, all of which were under my budget of $50. I ended up buying an $18 Violet Evergarden poster scroll for Jenny. (She later told me she wished I had gotten her something quirkier.)Emboldened by the experience, I asked Merchat to help find a present for my mother. “Would she benefit from a back support cushion, a heating pad or maybe a massage chair pad?” it asked.“What are the pros and cons of each?” I typed.Merchat said it couldn’t provide specific pros and cons for individual items. I changed my question to: “Which one is the easiest to use?”This time, Merchat was definitive: the back support cushion, which was portable. Merchat detailed the differences between a memory-foam cushion and a firmer one, then further grouped memory-foam cushions into three categories and displayed the top four results for each, all under $100.While I didn’t buy any because the styles were limited, it was a great starting point.“Thank you,” I wrote.“You’re welcome!” Merchat replied. “Happy shopping and have a wonderful time with your family!” More

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    Microsoft Agrees to Remain Neutral in Union Campaigns

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    The pledge is unprecedented for Big Tech and makes it easier for roughly 100,000 workers to unionize.Punctuating a year of major gains for organized labor, Microsoft has announced that it will stay neutral if any group of U.S.-based workers seeks to unionize.Roughly 100,000 workers would be eligible to unionize under the framework, which was disclosed Monday by Microsoft’s president, Brad Smith, and the A.F.L.-C.I.O. president, Liz Shuler, during a forum at the labor federation’s headquarters in Washington.The deal effectively broadens a neutrality agreement between Microsoft and a large union, the Communications Workers of America, under which hundreds of the company’s video game workers unionized early this year without a formal National Labor Relations Board election. Officially, it provides a framework in which any group of Microsoft workers can negotiate their own neutrality agreements with similar terms.As part of Monday’s announcement, Microsoft and the A.F.L.-C.I.O. said they would collaborate to resolve issues that arise from the adoption of artificial intelligence in the workplace.Mr. Smith and Ms. Shuler said the partnership would include meetings in which artificial intelligence experts from Microsoft brief labor leaders and workers on developments in the field. Microsoft’s experts will also seek input from workers so they can develop technology in a way that addresses their concerns, such as the risk of job elimination.The two sides said they would work together to help enact policies that would prepare workers for jobs that incorporate artificial intelligence.“Never before in the history of these American tech giants, dating back 50 years or so ago, has one of these companies made a broad commitment to labor rights,” Ms. Shuler said at the forum. “It is historic. Not only have they made a commitment, they formalized it and put it in writing.”Liz Shuler, president of A.F.L.-C.I.O., noted polling that found widespread concern among workers about losing their jobs because of artificial intelligence.Susan Walsh/Associated PressWorkers’ anxiety over artificial intelligence appears to have grown over the past few years. Hollywood writers and actors cited concerns about A.I. as a key reason for their monthslong strikes this year, while Ms. Shuler pointed to recent polling showing widespread concern among workers that artificial intelligence could cost them their jobs.“I can’t sit here and say it will never displace a job,” Mr. Smith said at the forum, alluding to artificial intelligence. “I don’t think that would be honest.” But he added that “the key is to try to use it to make jobs better,” saying the technology could eliminate tasks that people consider tedious.The unveiling of the A.I. initiative comes a few weeks after the board of the start-up OpenAI, which makes ChatGPT, fired the company’s chief executive, Sam Altman, only to accept his reinstatement days later. The episode added to widespread concerns over how to ensure that companies develop and deploy artificial intelligence safely.Microsoft is OpenAI’s biggest investor and played a role in reinstating Mr. Altman.Asked if the OpenAI controversy was an impetus for the new partnership with organized labor, Mr. Smith demurred and said the labor initiative had been in the works for months.“I wouldn’t say what happened in the board room at OpenAI changed it,” he said in an interview after Monday’s forum. “But it raised questions about how A.I. is governed and perhaps it gave even more credence to the kind of partnership we’re announcing today.”When Microsoft announced a neutrality agreement with the communications workers union in June 2022, the offer was conditional: The company was in the process of acquiring the video game maker Activision Blizzard for nearly $70 billion. Microsoft pledged to stay neutral in union elections at Activision if the acquisition succeeded. (The acquisition has since been completed.)The key to artificial intelligence, said Brad Smith, Microsoft’s president, is “to try to use it to make jobs better.”Michael A. McCoy for The New York TimesA few months later, when roughly 300 workers sought to unionize at ZeniMax Media, a video game company owned by Microsoft, Microsoft agreed to abide by the neutrality agreement in that case as well. The agreement allowed them to indicate their preference for a union either by signing authorization cards or anonymously through an electronic platform, a more efficient process than an N.L.R.B. election.The 300 employees unionized — a rarity in Big Tech — and are negotiating a labor contract that includes language restricting the use of A.I. in their workplace.The Communications Workers of America is one of several dozen unions affiliated with the A.F.L.-C.I.O., the country’s largest labor federation. After the ZeniMax campaign, communications union officials believed that Microsoft would probably agree to stay neutral if the union sought to organize workers elsewhere at the company. But Microsoft had never explicitly agreed to do so beyond Activision or ZeniMax. More

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    SAG-AFTRA and Hollywood Studios Agree to Deal to End Actors’ Strike

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    The agreement all but ends one of the longest labor crises in the history of the entertainment industry. Union members still have to approve the deal.One of the longest labor crises in Hollywood history is finally coming to an end.SAG-AFTRA, the union representing tens of thousands of actors, reached a tentative deal for a new contract with entertainment companies on Wednesday, clearing the way for the $134 billion American movie and television business to swing back into motion.Hollywood’s assembly lines have been at a near-standstill since May because of a pair of strikes by writers and actors, resulting in financial pain for studios and for many of the two million Americans — makeup artists, set builders, location scouts, chauffeurs, casting directors — who work in jobs directly or indirectly related to making TV shows and films.Upset about streaming-service pay and fearful of fast-developing artificial intelligence technology, actors joined screenwriters on picket lines in July. The writers had walked out in May over similar concerns. It was the first time since 1960, when Ronald Reagan was the head of the actors’ union and Marilyn Monroe was still starring in films, that actors and writers were both on strike.The Writers Guild of America, which represents 11,500 screenwriters, reached a tentative agreement with studios on Sept. 24 and ended its 148-day strike on Sept. 27. In the coming days, SAG-AFTRA members will vote on whether to accept their union’s deal, which includes hefty gains, like increases in compensation for streaming shows and films, better health care funding, concessions from studios on self-taped auditions, and guarantees that studios will not use artificial intelligence to create digital replicas of their likenesses without payment or approval.SAG-AFTRA, however, failed to receive a percentage of streaming service revenue. It had proposed a 2 percent share — later dropped to 1 percent, before a pivot to a per-subscriber fee. Fran Drescher, the union’s president, had made the demand a priority, but companies like Netflix balked, calling it “a bridge too far.”Instead, the Alliance of Motion Picture and Television Producers, which bargains on behalf of entertainment companies, proposed a new residual for streaming programs based on performance metrics, which the union, after making some adjustments, agreed to take.At 118 days, it was the longest movie and television strike in the union’s 90-year history. SAG-AFTRA said in a terse statement that its negotiating committee had voted unanimously to approve the tentative deal, which will proceed to the union’s national board on Friday for “review and consideration.”It added, “Further details will be released following that meeting.”Shaan Sharma, a member of the union’s negotiating committee, said he had mixed emotions about the tentative deal, though he declined to go into specifics because the SAG-AFTRA board still needed to review it.“They say a negotiation is when both sides are unhappy because you can’t get everything you want on either side,” he said, adding, “You can be happy for the deal overall, but you can feel a sense of loss for something that you didn’t get that you thought was important.”Ms. Drescher, who had been active on social media during the strike, didn’t immediately post anything on Wednesday evening. She and other SAG-AFTRA officials had come under severe pressure from agents, crew member unions and even some of her own members, including George Clooney and Ben Affleck, to wrap up what had started to feel like an interminable negotiation.“I’m relieved,” Kevin Zegers, an actor most recently seen in the ABC show “The Rookie: Feds,” said in an interview after the union’s announcement. “If it didn’t end today, there would have been riots.”The studio alliance said in a statement that the tentative agreement “represents a new paradigm,” giving SAG-AFTRA “the biggest contract-on-contract gains in the history of the union.”There is uncertainty over what a poststrike Hollywood will look like. But one thing is certain: There will be fewer jobs for actors and writers in the coming years, undercutting the wins that unions achieved at the bargaining table.Even before the strikes, entertainment companies were cutting back on the number of television shows they ordered, a result of severe pressure from Wall Street to turn money-losing streaming services into profitable businesses. Analysts expect companies to make up for the pair of pricey new labor contracts by reducing costs elsewhere, including by making fewer shows and canceling first-look deals.The actors, like the writers, said the streaming era had negatively affected their working conditions and compensation.Jenna Schoenefeld for The New York TimesFor the moment, however, the agreements with actors and writers represent a capitulation by Hollywood’s biggest companies, which started the bargaining process with an expectation that the unions, especially SAG-AFTRA, would be relatively compliant. Early in the talks, for instance, the studio alliance — Netflix, Disney, NBCUniversal, Apple, Amazon, Sony, Paramount, Warner Bros. — refused to negotiate on multiple union proposals. “Rejected our proposal, refused to make a counter” became a rallying cry among the striking workers.As the studio alliance tried to limit any gains, the companies cited business challenges, including the rapid decline of cable television and continued streaming losses. Disney, struggling with $4 billion in streaming losses in 2022, eliminated 7,000 jobs in the spring.But the alliance underestimated the pent-up anger pulsating among the studios’ own workers. Writers and actors called the moment “existential,” arguing that the streaming era had deteriorated the working conditions and compensation for rank-and-file members of their professions so much that they could no longer make a living. The companies brushed such comments aside as union bluster and Hollywood dramatics. They found out the workers were serious.With the strikes dragging into the fall and the financial pain on both sides mounting, the studio alliance reluctantly switched from trying to limit gains to figuring out how to get Hollywood’s creative assembly lines running again — even if that meant bending to the will of the unions.“It was all macho, tough-guy stuff from the companies for a while,” said Jason E. Squire, professor emeritus at the University of Southern California’s School of Cinematic Arts. “But that certainly did change.”There had previously been 15 years of labor peace in Hollywood.“The executives of these companies didn’t need to worry about labor very much — they worried about other things,” Chris Keyser, a chair of the Writers Guild negotiating committee, said in an interview after the writers’ strike concluded. “They worried about Wall Street and their free cash flow, and all of that.”Mr. Keyser continued: “They could say to their labor executives, ‘Do the same thing you’ve been doing year after year. Just take care of that, because labor costs are not going to be a problem.’ Suddenly, that wasn’t true anymore.” As a result of the strikes, studios are widely expected to overhaul their approach to union negotiations, which in many ways dates to the 1980s.Writers Guild leaders called their deal “exceptional” and “transformative,” noting the creation of viewership-based streaming bonuses and a sharp increase in royalty payments for overseas viewing on streaming services. Film writers received guaranteed payment for a second draft of screenplays, something the union had tried but failed to secure for at least two decades.The Writers Guild said the contract included enhancements worth roughly $233 million annually. When bargaining started in the spring, the guild proposed $429 million in enhancements, while studios countered with $86 million, according to the guild.For an industry upended by the streaming revolution, which the pandemic sped up, the tentative accord takes a meaningful step toward stabilization. About $10 billion in TV and film production has been on hold, according to ProdPro, a production tracking service. That amounts to 176 shows and films.The fallout has been significant, both inside and outside the industry. California’s economy alone has lost more than $5 billion, according to Gov. Gavin Newsom. Because the actors’ union prohibited its members from participating in promotional campaigns for already-finished work, studios pulled movies like “Dune: Part Two” from the fall release schedule, forgoing as much as $1.6 billion in worldwide ticket sales, according to David A. Gross, a film consultant.With labor harmony restored, the coming weeks should be chaotic. Studio executives and producers will begin a mad scramble to secure soundstages, stars, insurance, writers and crew members so productions can start running again as quickly as possible. Because of the end-of-year holidays, some projects may not restart until January.Both sides will have to go through the arduous process of working together again after a searing six-month standoff. The strikes tore at the fabric of the clubby entertainment world, with actors’ union leaders describing executives as “land barons of a medieval time,” and writers and actors still fuming that it took studio executives months, not weeks, to reach a deal.Workers and businesses caught in the crossfire were idled, potentially leaving bitter feelings toward both sides.And it appears that Hollywood executives will now have to contend with a resurgent labor force, mirroring many other American businesses. In recent weeks, production workers at Walt Disney Animation voted to unionize, as did visual-effects workers at Marvel.Contracts with powerful unions that represent Hollywood crews will expire in June and July, and negotiations are expected to be fractious.“It seemed apparent early on that we were part of a trend in American society where labor was beginning to flex its muscles — where unions were beginning to reassert their power,” said Mr. Keyser, the Writers Guild official.Brooks Barnes More

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    U.S. Tightens China’s Access to A.I. Chips

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    The further limits on shipments could cripple Beijing’s A.I. ambitions and dampen revenues for U.S. chip makers, analysts said.The Biden administration on Tuesday announced additional limits on the kinds of advanced semiconductors that American firms can sell to China, shoring up restrictions issued last October to limit China’s progress on artificial intelligence.The rules appear likely to bring to a halt most shipments of advanced semiconductors from the United States to Chinese data centers, which use them to produce models capable of artificial intelligence. More U.S. companies seeking to sell China advanced chips, or the machinery used to make them, will be required to notify the government of their plans, or obtain a special license.To prevent the risk that advanced U.S. chips travel to China through third countries, the United States will also require chip makers to obtain licenses to ship to dozens of other countries that are subject to U.S. arms embargoes.The Biden administration argues that China’s access to such advanced technology is dangerous because it could aid the country’s military in tasks like guiding hypersonic missiles, setting up advanced surveillance systems or cracking top-secret U.S. codes.But artificial intelligence also has commercial applications, and the tougher restrictions may affect Chinese companies that have been trying to develop A.I. chatbots like ByteDance, the parent company of TikTok, or the internet giant Baidu, industry analysts said. In the longer run, the limits could also weaken China’s economy, given that A.I. is transforming industries ranging from retail to health care.The limits also appear likely to cut into the money that U.S. chip makers such as Nvidia, AMD and Intel earn from selling advanced chips to China. Some chip makers earn as much as a third of their revenue from Chinese buyers and spent recent months lobbying against tighter restrictions.U.S. officials said the rules would exempt chips that were purely for use in commercial applications, like smartphones, electric vehicles and gaming systems. Most of the rules will take effect in 30 days, though some will become effective sooner.In a statement, the Semiconductor Industry Association, which represents major chip makers, said it was evaluating the impact of the updated rules.“We recognize the need to protect national security and believe maintaining a healthy U.S. semiconductor industry is an essential component to achieving that goal,” the group said. “Overly broad, unilateral controls risk harming the U.S. semiconductor ecosystem without advancing national security as they encourage overseas customers to look elsewhere.” In a call with reporters on Monday, a senior administration official said that the United States had seen people try to work around the earlier rules, and that recent breakthroughs in generative A.I. had given regulators more insight into how the so-called large language models behind it were being developed and used.Gina M. Raimondo, the secretary of commerce, said the changes had been made “to ensure that these rules are as effective as possible.”Referring to the People’s Republic of China, she said, “The goal is the same goal that it’s always been, which is to limit P.R.C. access to advanced semiconductors that could fuel breakthroughs in artificial intelligence and sophisticated computers that are critical to P.R.C. military applications.”She added, “Controlling technology is more important than ever as it relates to national security.”The tougher rules could anger Chinese officials when the Biden administration is trying to improve relations and prepare for a potential meeting between President Biden and China’s top leader, Xi Jinping, in California next month.The Biden administration has been trying to counter China’s growing mastery of many cutting-edge technologies by pumping money into new chip factories in the United States. It has simultaneously been trying to set tough but narrow restrictions on exports of technology to China that could have military uses, while allowing other trade to flow freely. U.S. officials describe the strategy as protecting American technology with “a small yard and high fence.”But determining which technologies really pose a threat to national security has been a contentious task. Major semiconductor companies like Intel, Qualcomm and Nvidia have argued that overly restrictive trade bans can sap them of the revenue they need to invest in new plants and research facilities in the United States.Some critics say the limits could also fuel China’s efforts to develop alternative technologies, ultimately weakening U.S. influence globally.The changes announced Tuesday appear to have particularly significant implications for Nvidia, the biggest beneficiary of the artificial intelligence boom.In response to the Biden administration’s first major restrictions on artificial intelligence chips a year ago, Nvidia designed new chips, the A800 and H800, for the Chinese market that worked at slower speeds but could still be used by Chinese firms to train A.I. models. A senior administration official said the new rules would restrict those sales.In addition to those expanded restrictions, the United States will create a “gray list” that requires makers of certain less advanced chips to notify the government if they are selling them to China, Iran or other countries subject to a U.S. arms embargo.In a note to clients last week, Julian Evans-Pritchard, the head of China economics at the research firm Capital Economics, said the effects of the controls would become more apparent as non-Chinese companies rolled out more advanced versions of their current products and the amount of computing power needed to train A.I. models rose as their data sets grew larger.“The upshot is that China’s ability to reach the technological frontier in the development of large-scale A.I. models will be hampered by U.S. export controls,” Mr. Evans-Pritchard wrote. That could have broader implications for the Chinese economy, he added, since “we think A.I. has the potential to be a game changer for productivity growth over the next couple decades.” More

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    Biden to Restrict Investments in China, Citing National Security Threats

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    The measure to clamp down on investments in certain industries deemed to pose security risks, set to be issued Wednesday, appears likely to open a new front in the U.S.-China economic conflict.The Biden administration plans on Wednesday to issue new restrictions on American investments in certain advanced industries in China, according to people familiar with the deliberations, a move that supporters have described as necessary to protect national security but that will undoubtedly rankle Beijing.The measure would be one of the first significant steps the United States has taken amid an economic clash with China to clamp down on outgoing financial flows. It could set the stage for more restrictions on investments between the two countries in the years to come.The restrictions would bar private equity and venture capital firms from making investments in certain high-tech sectors, like quantum computing, artificial intelligence and advanced semiconductors, the people said, in a bid to stop the transfer of American dollars and expertise to China.It would also require firms making investments in a broader range of Chinese industries to report that activity, giving the government better visibility into financial exchanges between the United States and China.The White House declined to comment. But Biden officials have emphasized that outright restrictions on investment would narrowly target a few sectors that could aid the Chinese military or surveillance state as they seek to combat security threats but not disrupt legitimate business with China.“There is mounting evidence that U.S. capital is being used to advance Chinese military capabilities and that the U.S. lacks a sufficient means of combating this activity,” said Emily Benson, the director of project on trade and technology at the Center for Strategic and International Studies, a Washington think tank.The Biden administration has recently sought to calm relations with China, dispatching Treasury Secretary Janet L. Yellen and other top officials to talk with Chinese counterparts. In recent speeches, Biden officials have argued that targeted actions taken against China are aimed purely at protecting U.S. national security, not at damaging the Chinese economy.At the same time, the Biden administration has continued to push to “de-risk” critical supply chains by developing suppliers outside China, and it has steadily ramped up its restrictions on selling certain technologies to China, including semiconductors for advanced computing.The Chinese government has long restricted certain foreign investments by individuals and firms. Other governments, such as those of Taiwan and South Korea, also have restrictions on outgoing investments.But beyond screening Chinese investment into the United States for security risks, the U.S. government has left financial flows between the world’s two largest economies largely untouched. Just a few years ago, American policymakers were working to open up Chinese financial markets for U.S. firms.In the past few years, investments between the United States and China have fallen sharply as the countries severed other economic ties. But venture capital and private equity firms have continued to seek out lucrative opportunities for partnerships, as a way to gain access to China’s vibrant tech industry.The planned measure has already faced criticism from some congressional Republicans and others who say it has taken too long and does not go far enough to limit U.S. funding of Chinese technology. In July, a House committee on China sent letters to four U.S. venture capital firms expressing “serious concern” about their investments in Chinese companies in areas including artificial intelligence and semiconductors.Others have argued that the restriction would mainly put the U.S. economy at a disadvantage, because other countries continue to forge technology partnerships with China, and China has no shortage of capital.Nicholas R. Lardy, a nonresident senior fellow at the Peterson Institute for International Economics, said the United States was the source of less than 5 percent of China’s inbound direct investment in 2021 and 2022.“Unless other major investors in China adopt similar restrictions, I think this is a waste of time,” Mr. Lardy said. “Pushing this policy now simply plays into the hands of those in Beijing who believe that the U.S. seeks to contain China and are not interested in renewed dialogue or a ‘thaw.’”Biden officials have talked with allies in recent months to explain the measure and encourage other governments to adopt similar restrictions, including at the Group of 7 meetings in Japan in May. Since then, Ursula von der Leyen, the president of the European Commission, has urged the European Union to introduce its own measure.The administration is expected to give businesses and other organizations a chance to comment on the new rules before they are finalized in the months to come.Claire Chu, a senior China analyst at Janes, a defense intelligence company, said that communicating and enforcing the measure would be difficult, and that officials would need to engage closely with Silicon Valley and Wall Street.“For a long time, the U.S. national security community has been reticent to recognize the international financial system as a potential warfighting domain,” she said. “And the business community has pushed back against what it considers to be the politicization of private markets. And so this is not only an interagency effort, but an exercise in intersectoral coordination.” More

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    ‘Training My Replacement’: Inside a Call Center Worker’s Battle With A.I.

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    To many people, chatbots and other technology feel like a ticking time bomb, sure to explode their work. But to some, the threat is already here.“This A.I. stuff is getting really crazy.”The voices of Charlamagne tha God, host of the nationally syndicated radio show “The Breakfast Club,” and his guests Mandii B and WeezyWTF filled Ylonda Sherrod’s car as she sped down Interstate 10 in Mississippi during her daily commute. Her favorite radio show was discussing artificial intelligence, specifically an A.I.-generated sample of Biggie.“Sonically, it sounds cool,” Charlamagne tha God said. “But it lacks soul.”WeezyWTF replied: “I’ve had people ask me like, ‘Oh, would you replace people that work for you with A.I.?’ I’m like, ‘No, dude.’”Ms. Sherrod nodded along emphatically, as she drove past low-slung brick homes and strip malls dotted with Waffle Houses. She arrived at the AT&T call center where she works, feeling unsettled. She played the radio exchange about A.I. for a colleague.“Yeah, that’s crazy,” Ms. Sherrod’s friend replied. “What do you think about us?”Like so many millions of American workers, across so many thousands of workplaces, the roughly 230 customer service representatives at AT&T’s call center in Ocean Springs, Miss., watched artificial intelligence arrive over the past year both rapidly and assuredly, like a new manager settling in and kicking up its feet.Suddenly, the customer service workers weren’t taking their own notes during calls with customers. Instead, an A.I. tool generated a transcript, which their managers could later consult. A.I. technology was providing suggestions of what to tell customers. Customers were also spending time on phone lines with automated systems, which solved simple questions and passed on the complicated ones to human representatives.Ms. Sherrod, 38, who exudes quiet confidence at 5-foot-11, regarded the new technology with a combination of irritation and fear. “I always had a question in the back of my mind,” she said. “Am I training my replacement?”Ms. Sherrod, a vice president of the call center’s local union chapter, part of the Communications Workers of America, started asking AT&T managers questions. “If we don’t talk about this, it could jeopardize my family,” she said. “Will I be jobless?”In recent months, the A.I. chatbot ChatGPT has made its way into courtrooms, classrooms, hospitals and everywhere in between. With it has come speculation about A.I.’s impact on jobs. To many people, A.I. feels like a ticking time bomb, sure to explode their work. But to some, like Ms. Sherrod, the threat of A.I. isn’t abstract. They can already feel its effects.When automation swallows up jobs, it often comes for customer service roles first, which make up about three million jobs in America. Automation tends to overtake tasks that repeat themselves; customer service, already a major site for outsourcing of jobs abroad, can be a prime candidate.The AT&T call center where Ms. Sherrod works, in Ocean Springs, Miss. The company has increasingly been integrating A.I. into many parts of its customer service work.Bryan Tarnowski for The New York TimesA majority of U.S. call center workers surveyed this year reported that their employers were automating some of their work, according to a 2,000-person survey from researchers at Cornell. Nearly two-thirds of respondents said they felt it was somewhat or very likely that increased use of bots would lead to layoffs within the next two years.Technology executives point out that fears of automation are centuries old — stretching back to the Luddites, who smashed and burned textile machines — but have historically been undercut by a reality in which automation creates more jobs than it eliminates.But that job creation happens gradually. The new jobs that technology creates, like engineering roles, often demand complex skills. That can create a gap for workers like Ms. Sherrod, who found what seemed like a golden ticket at AT&T: a job that pays $21.87 an hour and up to $3,000 in commissions a month, she said, and provides health care and five weeks of vacation — all without the requirement of a college degree. (Less than 5 percent of AT&T’s roles require a college education.)Customer service, to Ms. Sherrod, meant that someone like her — a young Black woman raised by her grandmother in small-town Mississippi — could make “a really good living.”“We’re breaking generational curses,” Ms. Sherrod said. “That’s for sure.”In Ms. Sherrod’s childhood home, a one-story, brick A-frame in Pascagoula, money was tight. Her mother died when she was 5. Her grandmother, who took her in, didn’t work, but Ms. Sherrod remembers getting food stamps to take to the corner bakery whenever the family could spare them. Ms. Sherrod cries recalling how Christmas used to be. The family had a plastic tree and tried to make it festive with ornaments, but there was typically no money for presents.To students at Pascagoula High School, she recalled, job opportunities seemed limited. Many went to Ingalls Shipbuilding, a shipyard where work meant blistering days under the Mississippi sun. Others went to the local Chevron refinery.“It felt like I was going to always have to do hard labor in order to make a living,” Ms. Sherrod said. “It seemed like my lifestyle would never be something with ease, something I enjoyed.”When Ms. Sherrod was 16, she worked at KFC, making $6.50 an hour. After graduating from high school, and dropping out of community college, she moved to Biloxi, Miss., to work as a maid at IP Casino, a 32-story hotel, where her sister still works. Within months of working at the casino, Ms. Sherrod felt the toll of the job on her body. Her knees ached, and her back thrummed with pain. She had to clean at least 16 rooms a day, fishing hair out of bathroom drains and rolling up dirty sheets.When a friend told her about the jobs at AT&T, the opportunity seemed, to Ms. Sherrod, impossibly good. The call center was air-conditioned. She could sit all day and rest her knees. She took the call center’s application test twice, and on her second time she got an offer, in 2006, starting out making $9.41 an hour, up from around $7.75 at the casino.“That $9 meant so much to me,” she recalled.So did AT&T, a place where she kept growing more comfortable: “Out of 17 years, my check hasn’t ever been wrong,” she said. “AT&T, by far, is the best job in the area.”‘Your Biggest Nightmare’Sam Altman, the chief executive of OpenAI, testified before a Senate subcommittee in May. In recent months, OpenAI’s ChatGPT chatbot has made its way into courtrooms.Win McNamee/Getty ImagesThis spring, lawmakers in Washington hauled forward the makers of A.I. tools to begin discussing the risks posed by the products they’ve unleashed.“Let me ask you what your biggest nightmare is,” Senator Richard Blumenthal, Democrat of Connecticut, asked OpenAI’s chief executive, Sam Altman, after sharing that his own greatest fear was job loss.“There will be an impact on jobs,” said Mr. Altman, whose company developed ChatGPT.That reality has already become clear. The British telecommunications company BT Group announced in May that it would cut up to 55,000 jobs by 2030 as it increasingly relied on A.I. The chief executive of IBM said A.I. would affect certain clerical jobs in the company, eliminating the need for up to 30 percent of some roles, while creating new ones.AT&T has begun integrating A.I. into many parts of its customer service work, including routing customers to agents, offering suggestions for technical solutions during customer calls and producing transcripts. The company said all of these uses were intended to create a better experience for customers and workers. “We’re really trying to focus on using A.I. to augment and assist our employees,” said Nicole Rafferty, who leads AT&T’s customer care operation and works with staff members nationwide.“We’re always going to need in-person engagement to solve those complex customer situations,” Ms. Rafferty added. “That’s why we’re so focused on building A.I. that supports our employees.”Economists studying A.I. have argued that it most likely won’t prompt sudden widespread layoffs. Instead, it could gradually eliminate the need for humans to do certain tasks — and make the remaining work more challenging.“The tasks left to call center workers are the most complex ones, and customers are frustrated,” said Virginia Doellgast, a professor at the New York State School of Industrial and Labor Relations at Cornell.Ms. Sherrod has always enjoyed getting to know her customers. She said she took about 20 calls a day, from 9:30 to 6:30. While she’s resolving technical issues, she listens to why people are calling in, and she hears from customers who just bought new homes, were married or lost family members.“It’s sort of like you’re a therapist,” she said. “They tell you their life stories.”She is already finding her job growing more challenging with A.I. The automated technology has a hard time understanding Ms. Sherrod’s drawl, she said, so the transcripts from her calls are full of mistakes. Once the technology is no longer in a pilot phase, she won’t be able to make corrections. (AT&T said it was refining the A.I. products it used to prevent these kinds of errors.)It seems likely, to Ms. Sherrod, that at some point as the work gets more efficient, the company won’t need quite as many humans answering calls in its centers. Ms. Sherrod wonders, too: Doesn’t the company trust her? For two consecutive years, she won AT&T’s Summit Award, placing her in the top 3 percent of the company’s customer service representatives nationally. Her name was projected on the call center’s wall.“They gave everyone a little gift bag with a trophy,” Ms. Sherrod recalled. “That meant a lot to me.”‘Look at My Life’Ms. Sherrod at the Communications Workers of America’s regional labor union office where she is a vice president.Bryan Tarnowski for The New York TimesAs companies like AT&T embrace A.I., experts are floating proposals meant to protect workers. There’s the possibility of training programs helping people make the transition to new jobs, or a displacement tax levied on employers when a worker’s job is automated but the person is not retrained.Labor unions are wading into these battles. In Hollywood, the unions representing actors and television writers have fought to limit the use of A.I. in script writing and production.Just 6 percent of the country’s private-sector workers are represented by unions. Ms. Sherrod is one, and she has begun fighting her company for more information about its A.I. plans, sitting in her union hall nine miles from the call center, where she works under a Norman Rockwell painting of a wireline technician.For years, Ms. Sherrod’s demands on behalf of the union have been rote. As a steward, she typically asked the company to reduce penalties for colleagues who got in trouble.But for the first time, this summer, she feels that she is taking up an issue that will affect workers beyond AT&T. She recently asked her union to establish a task force focused on A.I.In late May, Ms. Sherrod was invited by the Communications Workers of America to travel to Washington, where she and dozens of other workers met with the White House’s Office of Public Engagement to share their experience with A.I.A warehouse worker described being monitored with A.I. that tracked how speedily he moved packages, creating pressure for him to skip breaks. A delivery driver said automated surveillance technologies were being used to monitor workers and look for potential disciplinary actions, even though their records weren’t reliable. Ms. Sherrod described how the A.I. in her call center created inaccurate summaries of her work.Her son, Malik, was astonished to hear that his mother was headed to the White House. “When my dad told me about it, at first I said, ‘You’re lying,’” he said with a laugh. With her pay and commissions, Ms. Sherrod has been able to buy a home and give her son, Malik, the childhood she never had.Bryan Tarnowski for The New York TimesMs. Sherrod sometimes feels that her life presents an argument for a type of job that one day might no longer exist.With her pay and commissions, she has been able to buy a home. She lives on a sunny street full of families, some of whom work in fields like nursing and accounting. She is down the road from a softball field and playground. On the weekends, her neighbors gather for cookouts. The adults eat snowballs, while the children play basketball and set up splash pads.Ms. Sherrod takes pride in buying Malik anything he asks for. She wants to give him the childhood she never had.“Call center work — it’s life-changing,” she said. “Look at my life. Will all that be taken away from me?” More

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    As Businesses Clamor for Workplace A.I., Tech Companies Rush to Provide It

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    Amazon, Box, Salesforce, Oracle and others have recently rolled out A.I.-related products to help workplaces become more efficient and productive.Earlier this year, Mark Austin, the vice president of data science at AT&T, noticed that some of the company’s developers had started using the ChatGPT chatbot at work. When the developers got stuck, they asked ChatGPT to explain, fix or hone their code.It seemed to be a game-changer, Mr. Austin said. But since ChatGPT is a publicly available tool, he wondered if it was secure for businesses to use.So in January, AT&T tried a product from Microsoft called Azure OpenAI Services that lets businesses build their own A.I.-powered chatbots. AT&T used it to create a proprietary A.I. assistant, Ask AT&T, which helps its developers automate their coding process. AT&T’s customer service representatives also began using the chatbot to help summarize their calls, among other tasks.“Once they realize what it can do, they love it,” Mr. Austin said. Forms that once took hours to complete needed only two minutes with Ask AT&T so employees could focus on more complicated tasks, he said, and developers who used the chatbot increased their productivity by 20 to 50 percent.AT&T is one of many businesses eager to find ways to tap the power of generative artificial intelligence, the technology that powers chatbots and that has gripped Silicon Valley with excitement in recent months. Generative A.I. can produce its own text, photos and video in response to prompts, capabilities that can help automate tasks such as taking meeting minutes and cut down on paperwork.To meet this new demand, tech companies are racing to introduce products for businesses that incorporate generative A.I. Over the past three months, Amazon, Box and Cisco have unveiled plans for generative A.I.-powered products that produce code, analyze documents and summarize meetings. Salesforce also recently rolled out generative A.I. products used in sales, marketing and its Slack messaging service, while Oracle announced a new A.I. feature for human resources teams.These companies are also investing more in A.I. development. In May, Oracle and Salesforce Ventures, the venture capital arm of Salesforce, invested in Cohere, a Toronto start-up focused on generative A.I. for business use. Oracle is also reselling Cohere’s technology.Salesforce recently rolled out generative A.I. products used in sales, marketing and its Slack messaging service.Jeenah Moon for The New York Times“I think this is a complete breakthrough in enterprise software,” Aaron Levie, chief executive of Box, said of generative A.I. He called it “this incredibly exciting opportunity where, for the first time ever, you can actually start to understand what’s inside of your data in a way that wasn’t possible before.”Many of these tech companies are following Microsoft, which has invested $13 billion in OpenAI, the maker of ChatGPT. In January, Microsoft made Azure OpenAI Service available to customers, who can then access OpenAI’s technology to build their own versions of ChatGPT. As of May, the service had 4,500 customers, said John Montgomery, a Microsoft corporate vice president.Aaron Levie, chief executive of Box, said generative A.I. creates “a complete breakthrough in enterprise software.”Michael Short/BloombergFor the most part, tech companies are now rolling out four kinds of generative A.I. products for businesses: features and services that generate code for software engineers, create new content such as sales emails and product descriptions for marketing teams, search company data to answer employee questions, and summarize meeting notes and lengthy documents.“It is going to be a tool that is used by people to accomplish what they are already doing,” said Bern Elliot, a vice president and analyst at the I.T. research and consulting firm Gartner.But using generative A.I. in workplaces has risks. Chatbots can produce inaccuracies and misinformation, provide inappropriate responses and leak data. A.I. remains largely unregulated.In response to these issues, tech companies have taken some steps. To prevent data leakage and to enhance security, some have engineered generative A.I. products so they do not keep a customer’s data.When Salesforce last month introduced AI Cloud, a service with nine generative A.I.-powered products for businesses, the company included a “trust layer” to help mask sensitive corporate information to stop leaks and promised that what users typed into these products would not be used to retrain the underlying A.I. model.Similarly, Oracle said that customer data would be kept in a secure environment while training its A.I. model and added that it would not be able to see the information.Salesforce offers AI Cloud starting at $360,000 annually, with the cost rising depending on the amount of usage. Microsoft charges for Azure OpenAI Service based on the version of OpenAI technology that a customer chooses, as well as the amount of usage.For now, generative A.I. is used mainly in workplace scenarios that carry low risks — instead of highly regulated industries — with a human in the loop, said Beena Ammanath, the executive director of the Deloitte A.I. Institute, a research center of the consulting firm. A recent Gartner survey of 43 companies found that over half the respondents have no internal policy on generative A.I.“It is not just about being able to use these new tools efficiently, but it is also about preparing your work force for the new kinds of work that might evolve,” Ms. Ammanath said. “There is going to be new skills needed.”Panasonic Connect began using Microsoft’s Azure OpenAI Service to make its own chatbot in February.Panasonic ConnectPanasonic Connect, part of the Japanese electronics company Panasonic, began using Microsoft’s Azure OpenAI Service to make its own chatbot in February. Today, its employees ask the chatbot 5,000 questions a day about everything from drafting emails to writing code.While Panasonic Connect had expected its engineers to be the main users of the chatbot, other departments — such as legal, accounting and quality assurance — also turned to it to help summarize legal documents, brainstorm solutions to improve product quality and other tasks, said Judah Reynolds, Panasonic Connect’s marketing and communications chief.“Everyone started using it in ways that we didn’t even foresee ourselves,” he said. “So people are really taking advantage of it.” More