Sometimes when you’re playing hardball, you have to go soft. 

Reuters reported on Wednesday that the US government might escalate its trade war with China by blocking US companies from selling powerful proprietary AI software models to China, along with the data used to train those models. The question is: What company in its right mind would sell its model to begin with?

AI Can Do Anything Better Than You

The US and China have been battling over computer chips since the Trump administration, and the fervor has increased with the advent of generative AI. The US has piled export bans on state-of-the-art chips essential to provide the computing power to run generative AI software. Keegan McBride, an adjunct senior fellow at the Center for a New American Security and a lecturer at the Oxford Internet Institute, said the US has fought to preserve its AI lead over China because it’s a rare area of technology where it’s had a head start. “The US has gotten trashed in other sorts of technological competitions with China, particularly if you think about things like 5G, and quantum [computing],” McBride said. “AI is a specific technology that is important, where [the US has] advantages pretty much across the board,” he added.

Now, AI models seem to be too big of a risk to be on the open market:

• Sources told Reuters that the US worries that with powerful models à la ChatGPT, China (or other hostile nations) could launch cyberattacks or even design biological weapons.
• To decide when an AI system is too powerful to export, the sources said, the US may rely on a benchmark set out in an executive order last October, which measures an AI tool’s potency by how much computing power is used to train it. Current commercially available AI tools haven’t hit that benchmark yet.

But limiting the export of AI models doesn’t make a lot of sense, McBride said. “On paper, it sounds like a good idea. But in practice, nobody is going to be selling these models in the first place, because it’s the most valuable piece of IP that they have,” he said. On the flip side, China tightly controls large language models (LLMs) so it can heavily censor their responses. An AI-powered image generator developed by China tech giant Baidu in 2022, for example, was trained to ignore requests for images of Tiananmen Square. 

Future-proofing or Political Theater? If the US enforces the block on AI models, McBride said, it’ll be largely symbolic, emphasizing that only a small number of big US tech companies are anywhere near hitting the computing threshold. “We’re talking about Google, and Meta, and Microsoft, and Amazon,” he said. Perhaps the US is worried that computing power will accelerate so much that any old startup will hit that threshold, but that’s a ways off. For now, it’s a version of AI saber-rattling.

Eastbound and down, but not quite loaded up and truckin’.

Freight truck leasing companies that said customers were demanding battery-powered big rigs are now having a hard time finding takers of their low-emission-yet-high-cost semis, The Wall Street Journal reported.

Breaker, Breaker

Electric vehicles are technically more popular than ever, but it’s no secret that the market isn’t growing as fast as originally hoped. Major manufacturers like Ford and Toyota have delayed plans for all-EV lineups, and many startups have either folded or are on the brink of Chapter 11 bankruptcy. Even mighty Tesla saw its automotive revenue decline 13% in the first quarter. Both the technology and infrastructure remain sub-optimal with many EVs having a shorter range than their gas-powered counterparts and the US being way short on charging stations. On top of all that, EVs cost more.

Now, take all that struggle with consumers and put it into the trucking and shipping industry, where diesel engines reign supreme, and you have an even bigger problem:

• EV trucks cost about three times as much as combustion-engine semis, and despite state and federal subsidies, the WSJ noted several logistical reasons propping up diesel rigs: EV rigs cost double to operate, can travel less than half as far, and require hours of recharging, which isn’t too practical for an industry that operates on thin margins.
• An analysis from trucking firm Ryder found that converting a fleet of 25 commercial vehicles, including about 10 big rigs, to EVs in California would raise the fleet’s operating cost by 56%, or $3.4 million a year, the WSJ reported. Light-duty trucks raise operating costs and the expenses tied to labor, charging, and repairs go higher as the vehicles get heavier. In the last year, Ryder has sold just 60 EVs through a program to help companies set up battery-powered fleets, but only five were heavy-duty trucks and they were only used in yards, not roads.

10-4, Good Buddy: Though the big rig EV space seems a little bleak, Amazon did just add 50 of them in California, claiming it to be the biggest EV fleet in the country. The Volvo-made trucks are expected to be used in first- and mid-mile transportation, and some will carry goods from the ports of Los Angeles and Long Beach on a 35-minute drive to a fulfillment center in Santa Fe Springs.

The good times, they never last.

After recording its first-ever annual profit last year, Uber swung back into the red in its first-quarter earnings on Wednesday. Analysts were largely surprised by the dip, even if the firm’s roadblocks are now all too familiar.

Destination Unknown

Uber’s core ride-hailing business remains trapped in the push-and-pull calculus of balancing rider, driver, and company incentives — push fares too high, or driver cuts too low, and risk tipping the entire thing out of balance. This time around, the math worked in the company’s favor: Income from operations hit $172 million, up from a $262 million loss a year ago. 

Unfortunately for Uber, a $721 million loss from equity investments in other companies pulled the entire company down to an overall loss of $654 million — a far cry from the roughly $475 million profit most analysts expected. 

Meanwhile, driver unrest, increased regulation, and flagging demand abroad continue to threaten the rideshare and delivery algebra: 

• The firm remains in a standoff with Minneapolis and St. Paul over new gig worker classification laws, and is now threatening to leave the state of Minnesota entirely; disputes over similar legislation are still simmering in California and Massachusetts. Uber also attributed some of its losses to a $172 million payout to settle a class-action lawsuit with Australian taxi drivers.
• Meanwhile, gross bookings — the value of ride and delivery transactions on its app — came in below expectations, with ride bookings in particular underperforming. Uber specifically called out slowing demand in Latin America; a week ago, Uber also ceased operations in Pakistan, citing stiff local competition.

Lyftoff: Uber’s stock has steadily dropped from its all-time high of more than $81 in February following its first-ever annual profit. But Wednesday’s earnings flop sent shares to their worst one-day percentage drop since the market correction of October 2022 — with a plunge of $12 billion in market value. Ride-share baby brother Lyft, on the other hand, sang a much happier tune when it reported rosy earnings earlier this week. Lyft’s stock, now up over 25% year-to-date, popped on news of better-than-expected gross bookings and rideshare demand. Uber may now know why its own numbers slipped.