TheChek News Flow

Conference in Africa focuses on AI’s promise and peril for poorer nations after ChatGPT sparked frenzy among big tech companies

KIGALI, Rwanda—Amid growing talk of the promise and peril of artificial intelligence, more than 2,000 researchers and engineers from around the world gathered in Rwanda this week to debate contrasting visions for the technology’s future.

One vision is to build ever-more-powerful systems such as ChatGPT that aim to exceed human intelligence to boost worker productivity and economic growth. The other is to create more-targeted, small-scale AI solutions to local and global challenges, including tackling climate change, improving healthcare and preserving biodiversity.

The competition of ideas was in part a design feature of this year’s convening of a major AI research conference in Africa for the first time. The organizers wanted researchers, predominantly from the U.S. and China and wealthy corporations, to reckon with the realities of societal problems present on the continent, while giving African researchers a voice in the discussion.

“It’s become obvious that in order to bring the potential benefits of AI to everyone, we need everyone to be part of it,” said Yoshua Bengio, nicknamed one of the godfathers of AI, who sits on the conference organizers’ board and was among those who pushed to locate it in Africa.

The arrival of ChatGPT months before the gathering has added urgency to discussions on the trajectory of AI and its near- and long-term impacts. Its release kicked off a global frenzy among the biggest tech companies from Google to Baidu to develop their own so-called generative AI technologies, software that produces text and images that is stirring worries about job replacement and the rapid proliferation of misinformation.

Largely absent in Kigali yet present on everyone’s lips was ChatGPT developer OpenAI, which has polarized the global AI community over whether to embrace or resist the company’s trajectory.

On Monday, Geoffrey Hinton, another “godfather of AI” who wasn’t in Rwanda, said he was leaving Google to speak more freely about the risks of AI development. Mr. Hinton has said in media interviews that he is concerned about the long-term existential threats of the technology to humanity.

At the conference, many researchers from Africa and other developing and minority populations said they were instead concerned about the immediate challenges that AI poses to their societies.

The current trend toward generative AI models threatens to exacerbate the dominance of the U.S. and China in AI development, leaving Africa behind or having to deal with the problems it creates, the researchers said. Such consequences include facing greater disinformation in African elections and the disappearance of their languages in digital technologies, they said.

Many researchers were also concerned about the lagging development of beneficial AI solutions that could help improve the basic quality of life for people around the world.

Girmaw Abebe Tadesse, an Ethiopian researcher in Microsoft’s Nairobi, Kenya, office, highlighted the critical data issues—such as error-filled medical forms—that hold back AI development for improving maternal care and eliminating child mortality in developing countries.

He also presented success stories including one that combined high-quality data with statistical analyses to discover that the southern region of Nigeria had a lower child mortality rate than the country’s average. It enabled researchers to engage in more-focused investigations as to why and devise solutions for elsewhere.

Others presented work on using satellite imagery to understand racial disparities in access to public parks and health facilities, using sensors and mathematical models to improve power-grid maintenance and using computer vision to detect agricultural diseases.

Mr. Bengio said he hoped this year’s conference setting would provoke researchers to move away from profit-driven AI advancements toward AI for social good applications.

“There have been a lot of discussions about the risks of AI, and I’ve been part of those discussions,” he said. “But there are not enough discussions about what we need to do to put AI to really good use.”

There were 261 attendees from Africa, up from only 16 in 2019, the last time the annual International Conference on Learning Representations, or ICLR (pronounced i-clear), was held in person before the pandemic, the organizers said.

Over the years, the largest and most prestigious annual AI research conferences have typically been held in the U.S. or Canada, close to Silicon Valley, which remains an outsize force in AI research.

African researchers were often unable to attend as they had trouble getting visas, drawing criticism over an absence of their perspectives in developing one of the most powerful and transformative technologies.

Prominent researchers, including AI ethicist Timnit Gebru, have pointed to the concentration of research into a few dominant players in Silicon Valley and the lack of inclusion of non-Western researchers or those from marginalized groups. In 2017, Ms. Gebru, who grew up in Ethiopia before arriving in the U.S. as a refugee, founded an affinity group called Black in AI to bring more diversity into the community.

Rwanda typically gives visas to researchers, regardless of company or country. The country, marred by brutal genocide in 1994, is now a budding hub of African AI research through new research centers and government programs aimed at attracting international talent.

The resulting mix was a study in contrasts: Huawei employees chatted with Google counterparts despite U.S.-China tech tensions, resource-strapped academics lamented to friends at wealthy companies and African researchers challenged Western peers to look beyond the perspectives of coastal elites in developed countries.

On Friday, Ms. Gebru hosted a panel on the limitations of large language models—the technology that underpins ChatGPT—in handling African languages, which have been increasingly excluded from the digital world because of a lack of data needed for current AI technologies. Ms. Gebru gained public prominence when she said she was fired by Google after she co-wrote a paper criticizing the exploding resource demands and environmental impacts of such models, which also underpin Google’s search engine. Internally, Google characterized her departure as a resignation.

During a separate panel, Vukosi Marivate, the data science chair at the University of Pretoria in South Africa and program chair of the conference, said African researchers were fighting the threat of losing their native languages.

“We’re racing against the clock” before English takes over and African languages cease to exist, he said after the event.

Despite being thousands of miles from Silicon Valley, there was no escaping the allure of large language models and generative AI such as ChatGPT. Researchers packed lecture halls for related sessions, sitting on the floor and leaning against the wall, with one perched on his suitcase after rushing straight from the airport.

Many researchers said they were amazed by OpenAI’s results, convincing them to aggressively scale their own models. Mickel Liu, a third-year Ph.D. student at Peking University in Beijing, said he plans to switch his focus over to generative AI to join the most exciting research direction.

“This will be the last conference not dominated by large language model research,” he said.

Cash pile rises by $2bn to $130.6bn as sprawling conglomerate finds little to spend on

Warren Buffett’s Berkshire Hathaway sold billions of dollars worth of stock and invested little money in the US equity market in the first three months of the year, as the famed investor saw little appeal in a volatile market.

Berkshire disclosed on Saturday that it had sold shares worth $13.3bn in the first quarter and bought stocks for a fraction of that figure. Instead, it put $4.4bn towards repurchasing its own stock, as well as $2.9bn on the shares of other publicly traded businesses.

The figures underscore the struggle Berkshire faces in putting its mountain of cash to work at a time when Buffett and his longtime right-hand man Charlie Munger regard valuations as unappetising. The company’s cash pile has risen by $2bn since the start of this year to $130.6bn, its highest level since the end of 2021.

Munger last month told the Financial Times that investors should reduce their expectations for stock market returns as the Federal Reserve raises interest rates and the economy slows.

Berkshire reported a profit of $35.5bn in the first quarter, or $24,377 per class A share, largely driven by a rally in stocks that lifted the value of its $328bn portfolio of shares. Profit was up from $5.6bn a year before.

Operating earnings — Buffett’s preferred performance measure for Berkshire’s diverse group of businesses — rose 12.6 per cent from the year before to $8.1bn. For the first time the figure includes the results of truck stop business Pilot Flying J, which Berkshire took majority control of in January.

The results are often scrutinised given the cross-section of the country Berkshire’s dozens of businesses touch, including in energy, logistics, housing and manufacturing.

One of Berkshire’s crown jewels, the Geico auto insurer, swung to an underwriting profit after six consecutive quarters of losses. The company said that scaling back advertising and raising policy rates had helped the unit generate a $703mn underwriting profit.

The impact of higher interest rates and slower economic growth was evident across the businesses, which span the Dairy Queen ice cream purveyor, aeroplane parts manufacturer Precision Castparts and the BNSF railroad.

Berkshire warned lower home sales continued to weigh on Clayton Homes, one of the largest makers of modular homes in the US, and that sales across its other housing businesses had fallen at the start of the year. Traffic on its BNSF railroad also fell at the start of the year, which the company blamed on lower imports from the west coast and the loss of a customer.

Higher interest rates, however, have also been a boon to Berkshire. The company invests the vast majority of its $130.6bn of cash in short-term Treasury bills and bank deposits.

Income on those short-term bills and cash-like deposits surged to $1.1bn, up from $164mn a year prior.

The figures were released just hours before Buffett and three other Berkshire executives take to the stage in downtown Omaha, where tens of thousands of shareholders have gathered for the company’s annual meeting.

Shareholders will hear the 92-year-old billionaire and his vice-chairs Munger, Gregory Abel and Ajit Jain discuss the economy, the Fed’s efforts to drive down inflation and Berkshire itself.

The four men will probably be pressed on why the sprawling conglomerate had not made a substantive investment in the US banking sector, as it did in the midst of the financial crisis.

At the time, Berkshire’s capital helped shore up both Goldman Sachs and Bank of America. The latter is now a core holding in the company’s stock portfolio.

Berkshire stock has risen by 4.9 per cent since the start of the year.

The Regional Bank Selloff Visualized

A look at the health of six regional lenders

In a week that included another interest-rate hike by the Federal Reserve and a rescue of First Republic by JPMorgan Chase, the KBW Regional Banking Index, which tracks regional banks in the U.S., was down 28% this year, through Friday.

This comes after two months of turbulence in the banking industry that was triggered by the collapse of regional lenders Silicon Valley Bank and Signature Bank. Some banks have suffered more than others. PacWest Bancorp PACW 81.70%increase; green up pointing triangle has seen its market capitalization decline by 75% this year. Metropolitan Bank Holding’s MCB 16.21%increase; green up pointing triangle market cap shrank by 60% since the beginning of the year, while Western Alliance Bancorp WAL 49.23%increase; green up pointing triangle and First Horizon’s value waned by 53% and 55%, respectively.

Each bank experienced a reduction in deposits during the first quarter. As the Fed continued raising interest rates this year, many customers moved their money out of checking accounts and into products such as money-market funds and Treasurys, which are paying greater yields.

Short interest in regional-bank stocks has picked up since Silicon Valley Bank failed in mid-March. As of Wednesday, more than 18% of PacWest’s shares were sold short, according to data from S3 Partners.

Short sellers, often active institutional investors, sell shares that they have borrowed in hopes that they can buy them back at a lower price.

Chief executive Sergio Ermotti is banking they will help make the rescue deal work

UBS chief executive Sergio Ermotti has shortlisted the Credit Suisse executives he plans to make part of his management team, betting they can help make a success of the most significant banking deal since the financial crisis.

Among the Credit Suisse executives most likely to survive the takeover are Dixit Joshi, chief financial officer, Francesca McDonagh, chief operating officer, and André Helfenstein, head of the Swiss business, according to several people familiar with the plans.

Ermotti, who returned to run UBS in March after the bank agreed to rescue its Zurich rival in a $3.25bn deal orchestrated by Swiss authorities, is planning to unveil his new top team in the next week, with the takeover due to be completed by early June.

UBS is preparing for a costly and risky integration process as it attempts to combine two global systemically important financial institutions in the most significant banking deal since the financial crisis.

Colm Kelleher, the bank’s chair, has said the integration could take up to four years, while elements of the deal — including the decision by Finma, the Swiss banking regulator, to wipe out $17bn worth of bonds — are being challenged in the courts.

The completion of the deal hinges on receiving regulatory approval and sign off from competition authorities. While most main regulators have given a green light, the European Commission said the EU’s antitrust bodies will make a decision by June 7.

Joshi and McDonagh joined Credit Suisse late last year, leaving them untainted by the bank’s recent scandals.

Joshi started as CFO on October 1 and was immediately thrust into the bank’s efforts to hold on to fleeing customers following a damaging weekend of social media rumours about its financial health.

He was heavily involved in the bank’s $4.3bn capital raise in his first few weeks in the job. His brief stint in the role has also been marked by Credit Suisse delaying the release of its annual report in March after the US Securities and Exchange Commission made some last minute requests for additional information over its internal controls dating back to 2019.

McDonagh, who left her role as chief executive of Bank of Ireland to join Credit Suisse, was hired to be head of the Emea region. But before she started, she was given the COO role and instructed to oversee a huge restructuring of the business.

As part of cutting $2.8bn in costs over three years, she had begun to reassess Credit Suisse’s global office footprint — including its underused 21-storey London headquarters in Canary Wharf, which it leases from the Qatar Investment Authority. But that review was put on hold when the deal with UBS was struck.

Helfenstein has run Credit Suisse’s domestic bank for the past three years and is the longest-serving executive board member, having joined when Thomas Gottstein became chief executive in 2020.

UBS executives see Credit Suisse’s domestic business as its “jewel in the crown” and would prefer to keep it intact. But combining it with UBS’s own Swiss business has proved unpopular domestically and executives have said all options are on the table for the unit.

Last week Swiss newspaper NZZ reported that Tom Naratil, who ran UBS’s US business and was co-head of its wealth management division until last year, would return as part of the new management team as chief financial officer.

Naratil has undertaken a finance role at West Point, the US military academy, this year, having left UBS in October. He had previously been UBS’s CFO between 2011 and 2015.

UBS declined to comment on plans for the new executive team.

Meteorologists calculate the chances of the weather phenomenon that warms the surface of the Pacific Ocean

Scientists are calculating the chances of the world experiencing record temperatures this year as they assess the likelihood of the return of the El Niño weather phenomenon that is associated with heat and drought.

El Niño involves the warming of the Pacific Ocean’s surface, which drives changes in temperature and rainfall patterns across the globe.

The World Meteorological Organization warned this week that the probability of El Niño developing this year was increasing, and its re-emergence would “likely fuel higher global temperatures”.

There was “a 60 per cent chance” that El Niño would develop between May and July, rising to 80 per cent between July and September, it forecast.

The US National Oceanic and Atmospheric Administration also issued an “El Niño Watch” alert in April that concluded there was a 62 per cent chance of El Niño developing between May and July.

The return of El Niño would be a long-anticipated transition from the rare three-year cycle of the corresponding La Niña weather pattern — the opposite weather phenomenon that involves the cooling of the Pacific Ocean’s surface temperature.

This weather system was officially declared at an end by meteorologists earlier this year, after taking its toll with devastating floods in the US and Australia and catastrophic drought in Africa and South America.

Below-average rainfall in 2021 and 2022 was one factor that led to the record drought in the Horn of Africa, and was in part a result of the presence of La Niña.

“The unusually stubborn La Niña has now ended” and neither La Niña nor El Niño were active, said the WMO last week.

There had been a “significant increase” in Pacific Ocean sea surface temperatures since February, however, the group said.

Although three years of La Niña had acted as a temporary “brake” on global temperatures, the last eight years were the warmest on record, said Petteri Taalas, the WMO’s secretary-general.

“The development of an El Niño will most likely lead to a new spike in global heating and increase the chance of breaking temperature records,” he said.

A strong El Niño event occurred between 2015 and 2016, with 2016 the hottest year on record.

If El Niño develops, regions such as South America, the southern US and the Horn of Africa would be likely to experience increased rainfall and potential flooding, while the risk of drought would increase in regions including Australia and Indonesia.

The UN’s Food and Agriculture Organization said in April that it was “scrutinising” at-risk areas that might suffer food insecurity during an El Niño period and any “anticipatory action” that could be taken to mitigate the effects.

Potential FAO actions included liaising with government officials and putting seed reserves in place, depending on the severity of the situation.

Brazil and South Africa were among the cereal-producing countries at risk of abnormally dry conditions and potential crop failures during an El Niño year, for example, the group said.

For an El Niño event to be declared, equatorial Pacific Ocean temperatures need to rise above a certain threshold, while changes in the atmosphere, such as winds at the equator, must also be detected.

The onset of El Niño was “harder to predict a long time in advance”, said the EU’s Copernicus Climate Change Service. Forecasting what might happen is particularly challenging towards the start of the year during the transition away from La Nina to either neutral or El Niño.

On Friday, the World Weather Attribution group of scientists concluded that climate change made this year’s record-breaking April heatwave in Spain, Portugal, Morocco and Algeria “at least 100 times more likely”.

The levels of heat recorded “would have been almost impossible” without human-driven warming, it said. Temperatures have already risen by at least 1.1C in the industrial era.