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Tech leaders debate perils and possibilities of artificial intelligence at closed-door Senate session

WASHINGTON—Elon Musk, Bill Gates, Mark Zuckerberg and other technology heavyweights debated the possibilities and risks of artificial intelligence Wednesday in a closed-door meeting with more than 60 U.S. Senators who are contemplating legislation to regulate the technology.

Musk, the CEO of Tesla and owner of X (formerly Twitter), warned about what he views as AI’s potential to threaten humanity, according to a participant. Microsoft MSFT 1.29%increase; green up pointing triangle co-founder Gates said the technology could help address world hunger, said Sen. Chuck Schumer (D., N.Y.), who convened the session.

Other speakers included Facebook founder Zuckerberg and the CEOs of Google, Microsoft, Nvidia NVDA 1.37%increase; green up pointing triangle and IBM IBM 0.16%increase; green up pointing triangle, along with union leaders.

Schumer at one point asked the guests if they agreed that the government needed to play a role in regulating artificial intelligence. Everyone present raised their hands, Schumer said during a break in the daylong session.

Despite that consensus—and Schumer’s vow to move toward passing legislation within months—the meeting also laid bare some of the tension points ahead.

One debate centered on the practice of making certain AI programs “open source,” or available for the public to download and modify. Some in the room raised concerns about the practice, which has the potential to put powerful AI systems in the hands of bad actors, according to one participant.

But Zuckerberg, whose company Meta Platforms has released powerful open source models, defended the practice. He told Senators in his opening statement that open source “democratizes access to these tools, and that helps level the playing field and foster innovation for people and businesses,” according to excerpts released by the company.

Another point of tension related to workers who see AI as a potential threat to their jobs. Sen. Maria Cantwell (D., Wash.) recounted a moment where the head of the Writers Guild of America West, Meredith Stiehm, described the views of members who are on strike seeking a new contract with Hollywood studios in part to address those fears.

Also in the room: The head of the Hollywood trade group Motion Picture Association.

“That was, like, two sides right there,” Cantwell said. “Lots of different viewpoints.”

The closed-door nature of the session drew criticism from some quarters. Sen. Josh Hawley (R., Mo.) questioned whether the meeting was designed “to prevent senators from asking tough questions the CEOs don’t want to answer,” and called on Schumer to bring AI legislation up for a vote.

“This is a lot of song and dance that covers the fact that actually nothing is advancing,” Hawley told reporters Wednesday.

Schumer, who organized the meeting with a bipartisan group of three other senators, said the format was designed to allow a frank debate.

“They talked at each other unvarnished,” he said. “Everyone learned from everybody else.”

The tech leaders arrived just before 10 a.m. on Wednesday, stepping out of tinted SUVs and strolling past a phalanx of cameras—with the exception of Musk, who arrived in a jet black Tesla sedan. They gathered around a table with name cards inside the marbled Kennedy Caucus Room.

Most of the tech leaders avoided the cameras stationed outside. Musk told reporters as he departed that he didn’t believe Congress was ready to regulate AI, while adding that it also made sense for them to study the issue before writing legislation.

“I saw very little disagreement actually,” he said of the meeting in a video posted by CBS News.

Schumer described Wednesday’s meeting as the first in a series designed to develop legislation addressing rapid adoption of powerful artificial intelligence tools.

Lawmakers are far from consensus on what that legislation will say, but Schumer’s involvement gives the effort more justice than Congress’ previous tech-regulation efforts, many of which the majority leader never called up for a vote on the Senate floor.

One open question is what areas the legislation will cover. Issues previously raised by participants in Wednesday’s meeting cover a wide range of potential concerns involving esoteric areas of law. Among them: Copyright violations, privacy invasions, racial discrimination, economic ties with China, and the use of AI by the government for military or other purposes.

“You want to be able to maximize the benefits and minimize the harms,” Schumer said. “That will be our difficult job.”

Pricing for SoftBank-backed UK chipmaker could reach as much as $52 a share, sources say

Shares in UK chip designer Arm are expected to be priced above the initial range at as much as $52 per share, which would give the company a valuation of nearly $54bn, according to three people involved in the initial public offering.

Arm and its parent company SoftBank will officially price its shares with underwriters later on Wednesday, with trading set to begin on Thursday on the Nasdaq exchange. These people cautioned that pricing could still change ahead of the final decision.

The people said that the IPO price is expected to be set above the prior range of $47-51 a share due to high demand that resulted in its stock being more than five times oversubscribed.

The listing has been watched closely as a barometer for new tech IPOs. It is the largest IPO in two years, since electric-truck maker Rivian debuted in 2021, raising about $12bn. Tech valuations have slumped from their coronavirus pandemic-era highs in the past 18 months amid economic uncertainty and rising interest rates.

A $52-per-share price tag would value Arm at about $53.9bn by market capitalisation, and raise approximately $5bn for SoftBank, which has offered 9.4 per cent of the company’s stock.

Arm declined to comment ahead of the pricing decision.

A series of big tech customers of Arm’s chip designs, including Apple, Google, Nvidia, Samsung, Intel and TSMC, are expected to purchase $735mn worth of Arm shares at the IPO price.

The banks underwriting the listing closed orders for shares on Tuesday, a day earlier than planned. Goldman Sachs, JPMorgan and BofA Securities are among a 28-strong army of banks selling the Arm IPO.

High demand has helped to crack open a window for tech listings in the US after a dearth of deals this year.

On Monday, the San Francisco-based ecommerce company Instacart announced the price range for an IPO that would raise up to $616mn. On a fully diluted basis the IPO would value Instacart at up to $9.3bn, less than a quarter of its private valuation two years ago.

Marketing automation company Klaviyo also announced its IPO pricing on Monday. It said it would sell 19.2mn shares at a range of $25 to $27 a share. This would value the company at up to $6.3bn. It was last valued by venture capitalists at $9.5bn.

SoftBank paid $32bn to acquire Arm in 2016, but the IPO price is set to be below the $64bn valuation implied less than a month ago in a transaction with its own Vision Fund, the $100bn Saudi-backed investment vehicle the Japanese company manages.

Arm’s core market of smartphone chips has stagnated this year, but it is hoping for growth from artificial intelligence and data centre customers, despite playing only a peripheral role in the technology required to build the kinds of large language models that power ChatGPT and other generative AI systems.

SoftBank originally hoped the deal would value Arm at as much as $70bn. However, it reported flat sales in its latest financial year, and investors have expressed concerns about a drop in profits in the past quarter and the company’s exposure to multiple risks in China.

Revenues are rising but the ambitious sandalmaker might have to accept a discount on this flotation figure

Birkenstocks are having a moment. The sandals, once associated only with comfort, are now a fashion accessory. They appear in the pages of Vogue magazine and were spotted on the normally stiletto-clad feet of Barbie in this summer’s blockbuster film. Yet a mooted $8bn market valuation looks uncomfortably high. 

The company is putting its best foot forward. Revenues in 2020 were $728mn The following year it was bought for €4bn ($4.3bn) by L Catterton, a private equity house backed by luxury group LVMH. In 2022, revenues had grown to $1.24bn — a two-year compound annual growth rate of over 30 per cent.

Birkenstocks have mass-market appeal. They retail for around $100 with luxury goods margins. LVMH is forecast to make a 35 per cent ebitda margin this year, according to S&P Capital IQ. Birkenstock achieved that in the year to September 2022, albeit on an adjusted basis.

Investors might reasonably question whether Birkenstock can keep on striding at such a brisk pace. Revenues are rising much faster than units sold. Ambitions to expand beyond sandals will be hard to pull off.

A strategy to take control of sales channels by opening retail space and selling directly to consumers will be pricey. Rising operating costs in the first half of 2023 point to the perils. 

An initial public offering valuation of $8bn would price the shoemaker at around 18 times forecast adjusted ebitda for this year. That is about in line with sportswear behemoth Nike, which has lower margins but many more products to sell. Dr Martens, which has scarcely put a foot right since it was floated by private equity house Permira in 2021, trades at 7.5 times ebitda. 

L Catterton may have to accept a discount. That is especially true if it wants to take advantage of the recently reopened IPO window. Equity markets are quiet and companies planning to list are cutting valuations. It would be prudent to take a markdown before the other shoe drops.

Elon Musk and Mark Zuckerberg will take center stage on Capitol Hill in debate over the future of AI

VinFast says most of its electric vehicles have been sold to a related party

Filings underscore limited demand for EVs from Vietnamese start-up that briefly had higher market cap than Ford

More than half the electric vehicles sold by Vietnamese start-up VinFast this year have been to a related party, underscoring how small the market demand is for models produced by a company whose valuation briefly eclipsed those of Ford and General Motors.

Of the 11,300 vehicles sold by VinFast in the first half of 2023, 7,100 were sold to Green and Smart Mobility (GSM), a Vietnamese taxi company controlled by the carmaker’s parent Vingroup.

The details of Nasdaq-listed VinFast’s sales were contained in filings to the US Securities and Exchange Commission in July and September.

VinFast made history with the rapid climb of its stock price following its listing through a special purpose acquisition company last month. Despite selling just 24,000 cars last year, its $200bn valuation at one point in September propelled it into the ranks of the world’s most valuable automakers — far surpassing rivals such as Volkswagen, Ford and General Motors, whose sales are in the millions.

The market capitalisation of the lossmaking Vietnamese company, which has monthly sales far behind those of other electric vehicle producers such as Tesla and China’s BYD, has since plunged 80 per cent to just below $40bn. That valuation still makes it worth more than Hyundai, Nissan or Renault.

More than 99 per cent of VinFast is controlled by its billionaire founder Pham Nhat Vuong, Vietnam’s richest man even before the listing. The small amount of shares available for trading has made it prone to wild swings.

VinFast said in its filing to the SEC published on Tuesday that a further portion of its revenue came from sales of goods and battery-related spare parts to VinES and from sales of e-buses to VinBus. Both enterprises are owned by Vingroup.

In March, a VinFast subsidiary entered into a 24-month agreement with GSM for the sale and delivery of up to 30,000 VinFast EV models. VinFast has said it expects to sell 50,000 vehicles this year.

VinFast has big international ambitions, but early reviews of the six-year-old company’s EVs by professional US car reviewers were scathing, calling them “simply not ready”, and “abysmal”.

Its first shipment of cars to the US in December was heavily delayed and it was forced to carry out a big recall after the US National Highway Traffic Safety Administration warned of a software error that could increase the risk of a crash.

It is not uncommon for shares in newly listed EV businesses to rise before falling back. Weeks after its 2021 initial public offering, Rivian, the lossmaking California-based electric truckmaker, was briefly worth more than Volkswagen.

The valuations achieved by new EV businesses have been a source of intense frustration to established carmakers, who consider themselves underrated by investors.

Renault chief executive Luca de Meo last week decried the “bullshit” valuations offered by US investors to EV start-ups.

“Do you think that VinFast can be worth more than BMW? Let’s be serious,” de Meo told the FT.

VinFast is continuing its overseas expansion despite the setbacks. Deliveries in Europe were expected to begin in the second half of 2023, it said.

The filings also indicate it plans to add a third plant in Indonesia to its operations in Vietnam and a factory it is building in North Carolina in the US. The company said it aimed to invest about $1.2bn in the Indonesian market in the long term, of which $200mn would be reserved for the plant.

CULTURE CLUB: Fans of French fashion journalist and documentary maker Loïc Prigent’s YouTube channel will know he recently dropped his fly-on-the-wall video of Pharrell Williams’ debut menswear show for Louis Vuitton in June.

Now, fashion followers can delve even deeper with the launch of the house’s first podcast, “Louis Vuitton [Extended,]” designed to cement its aura as a “cultural” brand.

Episode one, set to go live on Thursday, features the “Happy” singer talking about his sources of inspiration and the creation of the show, which drew the likes of Beyoncé, Rihanna and Zendaya, and ended with a concert by Jay-Z.

Hosted by Prigent, the English-language podcast will provide a bimonthly “deep dive into the creative heart, minds and projects of the maison,” Vuitton said.

Participants will be varied, ranging from the house’s creative directors to a chef who has worked with Louis Vuitton on one of its many culinary projects, or an artist on a collaborative design project, for example. The episodes, lasting 20 to 40 minutes, will be available for free on the main audio streaming platforms.

In the inaugural episode, Williams explained his decision to invite Voices of Fire, the gospel choir he recruited via a 2020 Netflix series, to perform his original song “Joy (Unspeakable)” at the event.

“I wanted people to be clear that the universe had the sun shining on me, and so I felt like the greatest way to express that on the end of it was with the song ‘Joy’ by Voices of Fire,” he said. “It’s like a Hallmark card for encouragement. When you’re feeling low, and you feel like you don’t have any other answers, faith is a very powerful thing.

“And it doesn’t mean that it’s, like, 100 percent on everybody at the time that they want it, but it’s 100 percent because it does come around. Maybe not on your time, but it’s gonna come around on the universe’s time. And I don’t know, there was just a feeling from that, that I wanted the world to feel,” Williams continued.

Prigent also hosts his own podcast in French, “Au coeur de la mode,” in which he provides behind-the-scenes commentary on fashion shows with his cameraman Julien Da Costa, recorded in the car between venues.

‘Woman with a Watch,’ expected to be the second-most expensive Picasso ever sold, will serve as a test for a slumping market

Sotheby’s just landed the chance to sell the undisputed star of the fall auction season: A royal blue, green and red portrait of Pablo Picasso’s young mistress curled up in a chair, “Woman with a Watch,” estimated to top $120 million this November.

The 1932 portrait hails from the estimated $400 million estate of Emily Fisher Landau, a New York collector who died in March at age 102. Fisher Landau’s 120-piece trove includes major examples by Jasper Johns, Ed Ruscha and Andy Warhol, so market watchers will be closely following the estate’s performance to gauge global bidder interest during the current slump. The Picasso, which carries the artist’s second-highest asking price ever, will come under the most scrutiny.

“Masterpieces are incredibly market resilient,” Brooke Lampley, Sotheby’s head of global fine art, said. Lampley confirmed the house won the consignment in part by guaranteeing Fisher Landau’s heirs that the house itself would buy her pieces, including the Picasso, if no other bidders stepped up during the Nov. 8-9 sales.

To break Picasso’s record, “Woman with a Watch” will need to sell for more than the $179.4 million paid in 2015 for a 1955 harem scene, “Women of Algiers (Version O).”

Collectors tend to pay a premium for Picasso’s works from the 1930s, with half of the artist’s top 10 priciest works hailing from that decade, according to auction database Artnet. Three date to the same year Sotheby’s example was painted: 1932, a seminal period in Picasso’s career when he was readying works for a retrospective and reveling in a secret love affair with Marie-Thérèse Walter. In 2010, Christie’s sold another Picasso from 1932, “Nude, Green Leaves and Bust,” for $106.5 million.

Museums including London’s Tate Modern have devoted entire shows to that singular year when Picasso used a lush, jewel-tone palette to paint his mistress lounging in voluptuous repose. The Tate Modern didn’t borrow Fisher Landau’s Picasso, but at least six other museums have exhibited it over the years, most recently a 2022 show of her collection at West Palm Beach’s Norton Museum of Art.

Emily Fisher Landau died in March at age 102. PHOTO: PATRICK MCMULLAN VIA GETTY IMAGES

Fisher Landau, born in 1920 and raised in New York, bought the Picasso with her first husband, real-estate developer Martin Fisher, in 1968 when she was just starting to collect art. The following year, armed burglars disguised as repairmen broke into their Upper East Side apartment and stole her jewels out of her safe. She decided to spend the insurance payout on art.

“She never bought important jewelry after that,” said her daughter, Candia Fisher, also a collector. “She’d point out women wearing big pieces at galas and say, ‘Think of the art they could buy.’”

Her mother later married clothing manufacturer Sheldon Landau, and in 1991 the couple arrayed much of the collection—estimated then to be around 1,500 works—in a former parachute harness factory in Queens. The Fisher Landau Center for Art regularly mounted shows until 2017 when Candia Fisher said her mother was no longer able to oversee it and no one else in the family wanted to take over.

The family is holding on to some of those pieces. Fisher Landau also gave around 400 pieces to New York’s Whitney Museum of American Art, where she served as a longtime trustee. In 1994, the museum named the fourth floor of its former Breuer Building in her honor.

In a twist, the Breuer now belongs to Sotheby’s. But since the house is still transforming the space into an auction hub, Fisher Landau’s estate will be auctioned off at its current York Avenue headquarters across town.

Andy Warhol’s camouflage ‘Self Portrait,’ 1986, is also included in the sale. PHOTO: SOTHEBY’S/ 2023 THE ANDY WARHOL FOUNDATION FOR THE VISUAL ARTS, INC./LICENSED BY ARTISTS RIGHTS SOCIETY (ARS), NEW YORK

Other sale highlights include Jasper Johns’s “Flags” from 1986, a side-by-side view of two U.S. flags that Sotheby’s expects to sell for at least $35 million, and Andy Warhol’s camouflage “Self Portrait” dated to the same year, which is estimated to sell for at least $15 million.

Willem de Kooning’s wispy red-and-blue abstract “Untitled XV” from 1983 is estimated to sell for at least $6 million, and Georgia O’Keeffe’s “Pink Tulip” from 1925 is estimated to sell for at least $3 million.

Another work to watch: Ruscha’s “Securing the Last Letter (Boss),” a 1964, blue-and-orange wordplay painting in which the conceptual artist paints a clamp that appears to be squeezing the second “s” in the word boss. Sotheby’s said it still hasn’t finalized an asking price for that work, but expectations will likely run high as its sale coincides with the artist’s must-see retrospective at the Museum of Modern Art.

Fisher Landau was known to have one of the world’s biggest collections of Ruscha’s work and visited him often at his studio in Los Angeles. “Mom used to get so excited about seeing Ed,” her daughter said, adding, “Artists were her rock stars.”