Tech
Microsoft and a16z set aside differences, join hands in plea against AI regulation
Two of the biggest forces in two deeply intertwined tech ecosystems — large incumbents and startups — have taken a break from counting their money to jointly plead that the government cease and desist from even pondering regulations that might affect their financial interests, or as they like to call it, innovation.
“Our two companies might not agree on everything, but this is not about our differences,” writes this group of vastly disparate perspectives and interests: Founding a16z partners Marc Andreessen and Ben Horowitz, and Microsoft CEO Satya Nadella and President/Chief Legal Officer Brad Smith. A truly intersectional assemblage, representing both big business and big money.
But it’s the little guys they’re supposedly looking out for. That is, all the companies that would have been affected by the latest attempt at regulatory overreach: SB 1047.
Imagine being charged for improper open model disclosure! a16z general partner Anjney Midha called it a “regressive tax” on startups and “blatant regulatory capture” by the Big Tech companies that could, unlike Midha and his impoverished colleagues, afford the lawyers necessary to comply.
Except that was all disinformation promulgated by Andreessen Horowitz and the other moneyed interests that might actually have been affected as backers of billion-dollar enterprises. In fact, small models and startups would have been only trivially affected because the proposed law specifically protected them.
It’s odd that the very type of purposeful cutout for “Little Tech” that Horowitz and Andreessen routinely champion was distorted and minimized by the lobbying campaign they and others ran against SB 1047. (The architect of that bill, California State Senator Scott Wiener, talked about this whole thing recently at Disrupt.)
That bill had its problems, but its opposition vastly overstated the cost of compliance and failed to meaningfully support claims that it would chill or burden startups.
It’s part of the established playbook that Big Tech — which Andreessen and Horowitz are closely aligned with, despite their posturing — runs at the state level where it can win (as with SB 1047), meanwhile asking for federal solutions that it knows will never come, or which will have no teeth due to partisan bickering and congressional ineptitude on technical issues.
This newly posted joint statement about “policy opportunity” is the latter part of the play: After torpedoing SB 1047, they can say they only did so with an eye to supporting a federal policy. No matter that we are still waiting on the federal privacy law that tech companies have pushed for a decade while fighting state bills.
And what policies do they support? “A variety of responsible market-based approaches.” In other words: hands off our money, Uncle Sam.
Regulations should have “a science and standards-based approach that recognizes regulatory frameworks that focus on the application and misuse of technology,” and should “focus on the risk of bad actors misusing AI,” write the powerful VCs and Microsoft execs. What is meant by this is we shouldn’t have proactive regulation but instead reactive punishments when unregulated products are used by criminals for criminal purposes.
This approach worked great for that whole FTX situation, so I can see why they espouse it.
“Regulation should be implemented only if its benefits outweigh its costs,” they also write. It would take thousands of words to unpack all the ways that this idea, expressed in this context, is hilarious. But basically, what they are suggesting is that the fox be brought in on the henhouse planning committee.
Regulators should “permit developers and startups the flexibility to choose which AI models to use wherever they are building solutions and not tilt the playing field to advantage any one platform,” they collectively add. The implication is that there is some sort of plan to require permission to use one model or another. Since that’s not the case, this is a straw man.
Here’s a big one that I have to just quote in its entirety:
The right to learn: copyright law is designed to promote the progress of science and useful arts by extending protections to publishers and authors to encourage them to bring new works and knowledge to the public, but not at the expense of the public’s right to learn from these works. Copyright law should not be co-opted to imply that machines should be prevented from using data — the foundation of AI — to learn in the same way as people. Knowledge and unprotected facts, regardless of whether contained in protected subject matter, should remain free and accessible.
To be clear, the explicit assertion here is that software, run by billion-dollar corporations, has the “right” to access any data because it should be able to learn from it “in the same way as people.”
First off, no. These systems are not like people; they produce data that mimics human output in their training data. They are complex statistical projection software with a natural language interface. They have no more “right” to any document or fact than Excel.
Second, this idea that “facts” — by which they mean “intellectual property” — are the only thing these systems are interested in and that some kind of fact-hoarding cabal is working to prevent them is an engineered narrative we have seen before. Perplexity has invoked the “facts belong to everyone” argument in its public response to being sued for alleged systematic content theft, and its CEO Aravind Srinivas repeated the fallacy to me onstage at Disrupt, as if Perplexity is being sued over knowing trivia like the distance from the Earth to the moon.
While this is not the place to embark on a full accounting of this particular straw man argument, let me simply point out that while facts are indeed free agents, the way they are created — say, through original reporting and scientific research — involves real costs. That is why the copyright and patent systems exist: not to prevent intellectual property from being shared and used widely, but to incentivize its creation by ensuring that they can be assigned real value.
Copyright law is far from perfect and is probably abused as much as it is used. But it is not being “co-opted to imply that machines should be prevented from using data.” It is being applied to ensure that bad actors do not circumvent the systems of value that we have built around intellectual property.
That is quite clearly the ask: let the systems we own and run and profit from freely use the valuable output of others without compensation. To be fair, that part is “in the same way as humans,” because it is humans who design, direct, and deploy these systems, and those humans don’t want to pay for anything they don’t have to and don’t want regulations to change that.
There are plenty of other recommendations in this little policy document, which are no doubt given greater detail in the versions they’ve sent directly to lawmakers and regulators through official lobbying channels.
Some ideas are undoubtedly good, if also a little self-serving: “fund digital literacy programs that help people understand how to use AI tools to create and access information.” Good! Of course, the authors are heavily invested in those tools. Support “Open Data Commons—pools of accessible data that would be managed in the public’s interest.” Great! “Examine its procurement practices to enable more startups to sell technology to the government.” Awesome!
But these more general, positive recommendations are the kind of thing you see every year from industry: invest in public resources and speed up government processes. These palatable but inconsequential suggestions are just a vehicle for the more important ones that I outlined above.
Ben Horowitz, Brad Smith, Marc Andreessen, and Satya Nadella want the government to back off regulating this lucrative new development, let industry decide which regulations are worth the trade-off, and nullify copyright in a way that more or less acts as a general pardon for illegal or unethical practices that many suspect enabled the rapid rise of AI. Those are the policies that matter to them, whether kids get digital literacy or not.
Tech
Light made a flip phone — it’s colorful and it’s cheap
Kaiwei Tang helped create the iconic Motorola Razr over 20 years ago. Now, 10 years into building Light, the startup behind the minimalist smartphone alternative Light Phone, he’s as surprised as anyone that his customers are begging for a flip phone.
“We’ve been interviewing young people that use flip phones for a few years,” Tang told TechCrunch, describing a pattern his team kept running into: Gen Z users love their flip phones but say the build quality is bad. “They’re describing the flip phones in negative language, but they stick with it, and they feel proud.”
So Tang and co-founder Joe Hollier had an idea. What if Light took the fast, custom software from its last three touch screen phones and put it into a flip phone? That’s how they decided to build the Light Flip, the most affordable device that Light has ever released.
“What we’re doing is offering the same Light Phone experience, the same Light Phone OS with our SDK developer program, all of the tools we already have today: alarm, calculator, calendar,” Hollier told TechCrunch. “It’s kind of the exact same experience, just one is fully tactile, no touch screen, and [the other] one is a complete touch screen experience.”
Pricing has always been Light’s hardest problem as a small hardware startup. How do you sell a “less” phone for a price people will actually pay, when the whole pitch is fewer features? Its previous release, the unlocked Light Phone III, retails at $799. But the Light Flip brings the cost down to $299 by foregoing a touch screen, NFC reader, and selfie camera. The Light Flip is also made of plastic, rather than sturdier aluminum, but that means that for the first time, Light can offer one of its phones in a range of colors: black, red, yellow, pink, navy blue, and light gray.
“I thought I was fully QWERTY, but I was having fun with the T9 predictive texting [the old-school method of typing multiple letters per number], so I can see myself going flip phone also for the colors,” Hollier said. “Just having a yellow phone gets me so jazzed.”
Beyond the sticker price, Light is also testing a financing play. It recently piloted phone contracts with Andrew Yang’s anti-doomscrolling carrier Noble Mobile. With Light’s own service plan, customers can get the Light Flip for a two-year contract at $39 per month; the Light Phone III will be available for $59 per month over the same time frame.
The Light Flip only has a 2.8″ OLED screen on the inside and no screen on the outside, as requested by users. There will be a small light on the front of the phone, however, so that you can see if you have notifications without flipping open the device. With 5G and 4G LTE connectivity, the Light Flip can download podcasts online and play music that you upload to your phone, which you can listen to via either a 3.5 mm headphone jack or Bluetooth headphones. It charges via USB-C, works with both eSIM and physical Nano SIM cards, and includes a 12-megapixel camera on the back.
The Light Flip is expected to ship in April 2027, which Light acknowledges is a long lead time. To keep preorder customers engaged (and, practically, to keep them from canceling before it ships), the company is launching a new “Flip Your Life” program, including bi-weekly newsletters to help people prepare for the lifestyle adjustment of ditching a smartphone. It’s a community-building move as much as a marketing one. By building a support network around the phone, Light hopes that the transition to using its products will be less jarring and that it sticks.
While Light believes that its phones can help people reclaim the time they may regret spending on mindless scrolling, the founders acknowledge that it’s not easy to quit smartphones cold turkey. It’s hard to sacrifice the convenience of instant internet access, Apple Pay, music streaming, and convenient communication tools like WhatsApp and iMessage, and it’s easier for the flip phone-curious to make this transition when they’re not going through it alone.
“I think something that’s so inspiring about this movement is it’s not coming from a place of just anger and hatred … It’s a movement of optimism, as well as skepticism,” Hollier said. “I think that’s what we’ve always tried to do with Light. We’re anti Big Tech in all these ways, but we’re always trying to show that the other side of life can be really simple and beautiful.”
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Tech
US threatens sanctions against Chinese AI models over IP theft
On Tuesday, Treasury Secretary Scott Bessent said the U.S. would examine open source models from China for signs of intellectual property theft, threatening sanctions against Chinese AI companies if IP theft is established.
“We’ve seen a lot of talk about open source models coming and threatening the large language models in the U.S.,” Bessent said on Fox Business Tuesday. “This administration supports open source models, but what we do not support is IP theft. If we see, especially, that overseas models are stealing from our great companies, we have the ability to sanction them because of this theft.”
Bessent’s comments were first reported by Bloomberg.
The statement comes as Chinese models — most recently Moonshot AI’s Kimi K3 — are gaining in capabilities and popularity, threatening to harm the business models of top American AI firms like OpenAI and Anthropic, as well as their abilities to raise more capital to continue developing frontier models.
On Monday, Axios reported that the Trump administration is considering a wholesale ban on Chinese open source models, although others have disputed that claim.
AI companies have been warning for months against campaigns by foreign actors to copy their AI technology and redeploy it as open source. In April, the White House said it would work closely with AI firms to combat the theft.
Sanctions from the U.S. against Chinese models would add to the growing list of strategies the government is attempting to maintain the lead in the AI race. After restricting China’s access to advanced chips and tightening export controls, Washington is now signaling it may target the AI models themselves, a move that could mark a significant escalation in the technological competition between frontier labs and Chinese open source alternatives.
Model distillation is a technique that allows some of a larger model’s capabilities to be translated into a smaller system that’s easier to run — but not everyone agrees that distilling another company’s model constitutes theft.
Earlier this month, Microsoft CEO Satya Nadella criticized large labs for making just this assumption: “While the great innovation that comes from model providers having fair use rights to train models on public data is needed, I find it ironic that the status quo is to then turn around and impose restrictive terms on distillation.”
AI labs’ training practices continue to be a source of legal risk for the companies. Anthropic this week got the green light to start cutting authors checks as part of its $1.5 billion settlement after a judge ruled it had illegally downloaded and stored millions of copyrighted books to train its AI.
Furthermore, some in the industry argue that distillation isn’t the only reason China is catching up to U.S. AI companies.
“We know distillation to be a very small factor in the ability to create good models, and it’s a practice that everyone is doing, including companies in the U.S.,” Hugging Face CEO Clem Delangue said on a recent episode of TechCrunch’s Equity podcast. “If it were easy just to do distillation to get good at building AI models, there would be many other countries, including in the U.S., with much better open source AI. The reality is they have really, really good research teams in China…taking a much more open and collaborative approach to AI than in the U.S.”
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Tech
Threads rolls out parental supervision tools
Meta is bringing parental supervision tools to Threads, the company announced on Tuesday. With the new tools, parents and guardians will be able to view their teen’s time spent on Threads, set daily time limits, adjust sleep mode, and manage their privacy settings through Family Center, Meta’s hub for parental controls across its apps.
The rollout follows growing pressure on Meta from regulators and lawmakers to better protect young users online. The company has spent the last several years expanding parental controls across its apps in response to concerns over excessive screen time, harmful content, and teen safety, and is now bringing similar controls to Threads. It’s also worth noting that Meta, alongside other social media giants, is currently facing numerous lawsuits related to child safety.
Given these factors, it’s not surprising that Meta is finally introducing parental supervision tools to Threads, a platform with 500 million monthly users. The rollout comes three years after Threads’ launch in July 2023.
Parents and guardians will now be able to view how much time their teen spent on the platform each day for the past week, including their average daily time spent for the week. They will also be able to set a daily time limit and block access during select days and hours. If a teen uses Threads across multiple devices, like their phone and laptop, the time limit will apply to the total time spent using Threads.
Additionally, parents can limit or block their teen’s access to Threads at night, with notifications muted and auto-replies already on by default for all teens from 10 p.m. to 7 a.m. Parents also have the option to control who can tag their teen in posts on the platform.
Meta notes that teens on Threads already have built-in protections like private accounts and limits on the content they see. However, parents can now decide if teens under 16 can change any of these automatic settings to be less strict, the company says.
The parental supervision controls are rolling out next week in the U.S. Meta is planning to bring parental supervision on Threads globally by the end of the year, a spokesperson told TechCrunch.
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