Episode 14: Microsoft TikTok, Racist Algorithms, and Techs Financial Results
Another busy week for TikTok, Unconscious Bias in AI, Tech Co's make tonnes of money
Microsoft TikTok
It’s been another busy week for TikTok. Through last week it emerged that ByteDance, the owner of TikTok, and Microsoft were in the advanced stages of talks for Microsoft to buy the US operation of TikTok. This was put on hold on Saturday after President Trump announced that he would be banning the Chinese app.
However, by Sunday Microsoft announced that it was resuming talks after it’s CEO Satya Nadella had discussed the deal with President Trump. They plan to conclude the discussions by mid-September, although there’s no timeline for well any deal would actually complete. I suspect it will be fraught with oversight and political interjection on both sides so may take some time. As part of the deal the app in the rest of the world would be operated from a new HQ in Europe. London had been rumoured to be top of list.
It remains unclear exactly how the split would work in terms of technology - would Microsoft license the ‘behind the scenes’ technology from ByteDance, or would they have to rebuild the app again from scratch and using their own technology? After all, it’s the scarily accurate recommendation algorithm behind TikTok that really makes it work so well.
Addressing some of President Trump’s concerns around security and economic benefits Microsoft have stated that under the deal they would bring all data from US users back the US rather than keeping it in China. All US user’s data would also be deleted from China once transferred to the US. It’s also believed that Microsoft has made commitments to create jobs in the US, although they have not stated this publicly.
The founder of TikTok, Zhang Yiming, has come under criticism from China where he has been described as a “traitor”. Chinese state media has also accused the US of attempting to steal Chinese technology, with the China Daily newspaper saying “China will by no means accept the "theft” of a Chinese technology company, and it has plenty of ways to respond if the administration carries out its planned smash and grab.”
President Trump has also rather strangely suggested that the US Treasury should get a cut of the deal… let’s not go there right now though.
With so many unknowns in this deal it’s really difficult to understand the full impact, and even the reasoning for it.
What’s in it for Microsoft? Why not another company like Facebook? How will the US version develop in line with the main app? What about other ByteDance apps? What about other countries?
For Microsoft to stand up a whole new team of probably thousands of people to build and operate an app like TikTok would be no easy undertaking, and what would they really get out of it. TikTok moving to Azure cloud perhaps? Thats unlikely to provide significant value.
For TikTok this potential deal also presents some precedent which other countries will be watching closely. We could very easily see other western countries such as the UK or Germany going to same way, ensuring that any popular apps that originate in China are quickly shifted to being operated in country.
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Racist Algorithms
The UK Home Office has suspended the use of an algorithm used in the streaming and assessment of visa applications after concerns were raised that it is biased against certain nationalities.
The legal challenge led by the Joint Council for the Welfare of Immigrants and the law firm Foxglove accused the algorithm of being unlawful and asked the court to halt its use. While the legal case had not completed the Home Office has committed to pause the system as it undergoes a redesign. They have stated that although they are redesigning the system they do not accept the claim of bias.
It is believed that the system assigns a red, amber or green rating to applications where nationality is one of the factors used to determine that rating. A major concern appears to be that the algorithm also learns and adapts based on final results of visa applications. This means that, for example, someone from country X is highlighted as being a high risk so their case is scrutinised more, this then feeds back in to the algorithm and so more applications from that country will be flagged - it’s like a continuous spiral.
This case is probably one of the first of many that will come over the next decade as the use of algorithms and more complex artificial intelligence systems starts to become the norm in sensitive areas such as immigration and law enforcement. We’ve seen issues around facial recognition previously.
Designing AI systems with a clear understanding of unconscious bias is extremely important, and possibly one of the most difficult aspects. They’re designed by humans who themselves have unconscious biases.
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Tech Financial Results
While the economy is in a record breaking decline the world of tech is seeing good results as the likes of Amazon, Apple, Google and Facebook post a combined $28 billion in profit for the last quarter.
Apple saw sales of every product increase, in every part of the world, bringing in over $11 billion in profit. This despite most of their global stores shutting. The move to home working, and people saving money from commuting etc means lots of new laptops and iPads.
Alphabet, the parent company of Google, fared the worst as companies in every industry slashed their advertising budget (don’t forget that Google is an advertising company). Revenues grew by a tiny 2% compared to last year and overall profit was down slightly, although still at around $7 billion.
With the huge shift to online shopping Amazon has done very well with revenue increasing by 40% and profits doubling to just over $5 billion.
What will be interesting to see is if these results are maintained through the rest of the year as the true impacts of COVID-19 become known, and some of the initial knee jerk reactions settle down.