Technology
Elon Musk’s X Could Still Be Sanctioned for Training Grok on Europeans’ Data
Earlier this week, the EU’s top privacy regulator wrapped up legal proceedings over how X processed user data to coach its Grok AI chatbot, however the saga isn’t over yet for the Elon Musk-owned social media platform formerly referred to as Twitter. Ireland’s Data Protection Commission (DPC) confirmed to TechCrunch that it has received — and can “investigate” — plenty of complaints filed under the General Data Protection Regulation (GDPR).
“The DPC will now investigate the extent to which any processing that took place complies with the relevant provisions of the GDPR,” the regulator told TechCrunch. “If, as a result of that investigation, it is determined that TUIC (Twitter International Unlimited Company, as X’s principal Irish subsidiary is still called) has breached the GDPR, the DPC will consider whether the exercise of any of the remedial powers is justified, and if so, which one(s).”
X agreed to suspend processing data for Grok training in early August. X’s commitment was then made everlasting earlier this week. That agreement required X to delete and stop using European user data for training its AIs that it collected between May 7, 2024, and August 1, 2024, based on a replica obtained by TechCrunch. However, it’s now clear that X has no obligation to delete any AI models trained on that data.
So far, X has not faced any sanctions from the DPC for processing Europeans’ personal data to coach Grok without people’s consent – despite urgent legal motion by the DPC to dam the info collection. Fines under the GDPR will be severe, reaching as much as 4% of world annual turnover. (Considering that the corporate’s revenues are currently free falland will struggle to succeed in $500 million this yr, judging by its published quarterly results, which could possibly be particularly painful.)
Regulators even have the facility to order operational changes by demanding that violations stop. However, investigating complaints and enforcing them can take a protracted time—even years.
This is significant because while X has been forced to stop using Europeans’ data to coach Grok, it could actually still run any AI models it has already trained on data from individuals who haven’t consented to its use — with none urgent intervention or sanctions to forestall this.
When asked whether the commitment the DPC obtained from X last month required X to delete any AI models trained on Europeans’ data, the DPC confirmed to us that it didn’t: “The commitment does not require TUIC to take that action; it required TUIC to permanently cease processing the datasets covered by the commitment,” the spokesperson said.
Some might say it is a clever way for X (or other model trainers) to get around EU privacy rules: Step 1) Silently use people’s data; Step 2) use it to coach AI models; and — when the cat’s out of the bag and regulators eventually come knocking — commit to deleting the *data* while leaving the trained AI models intact. Step 3) Profit based on Grok!?
When asked about this risk, the DPC replied that the aim of the urgent legal proceedings was to handle “significant concerns” that X’s processing of EU and EEA user data to coach Grok “gave rise to risks to the fundamental rights and freedoms of data subjects”. However, it didn’t explain why it didn’t have the identical urgent concerns concerning the risks to the basic rights and freedoms of Europeans resulting from their information being placed on Grok.
Generative AI tools are notorious for producing false information. Musk’s inversion of that category can be deliberately rude—or “anti-woke,” as he calls it. That could raise the stakes within the sorts of content it could produce about users whose data was ingested to coach the bot.
One reason the Irish regulator could also be more cautious about tips on how to take care of the difficulty is that these AI tools are still relatively latest. There can be uncertainty amongst European privacy watchdogs about tips on how to implement GDPR on such a brand new technology. It can be unclear whether the regulation’s powers would come with the power to order the deletion of an AI model if the technology was trained on data processed unlawfully.
However, as complaints on this area proceed to multiply, data protection authorities will ultimately need to face the issue of artificial intelligence.
Cucumber spoilage
In separate news overnight Friday, the news emerged that the pinnacle of Global X has left. Reuters Agency announced the departure of long-time worker Nick Pickles, a British national who spent a decade at Twitter and rose through the ranks during Musk’s tenure.
IN write to XPickles says he made the choice to go away “a few months ago” but didn’t provide details on his reasons for leaving.
But it’s clear the corporate has quite a bit on its plate — including coping with a ban in Brazil and the political backlash within the U.K. over its role in spreading disinformation related to last month’s unrest there, with Musk having a private penchant for adding fuel to the fireplace (including posting on X suggesting that “civil war is inevitable” for the U.K.).
In the EU, X can be under investigation under the bloc’s content moderation framework, with the primary batch of complaints concerning the Digital Services Act filed in July. Musk was also recently singled out for a private warning in an open letter written by the bloc’s Internal Markets Commissioner, Thierry Breton — to which the chaos-loving billionaire decided to reply with an offensive meme.
Technology
Columbus says ransomware gang stole personal information of 500,000 Ohioans
The city of Columbus, the capital of Ohio, confirmed that hackers stole the personal information of 500,000 residents during a July ransomware attack.
In filing In an interview with Maine’s attorney general, Columbus confirmed that a “foreign threat actor” breached its network to access information including residents’ names, dates of birth, addresses, identification documents, social security numbers and checking account information .
Ohio’s most populous city, with about 900,000 people, said about half 1,000,000 people were affected, even though it didn’t confirm the precise number of victims.
The regulatory filing comes after Columbus was the goal of a ransomware attack on July 18 this 12 months by city officials he claimed “thwart” it by disconnecting your network from the Internet.
Rhysida, the ransomware gang accountable for last 12 months’s cyber attack on the British Library, claimed responsibility for the August attack on Columbus. At the time, the gang said it had stolen 6.5 terabytes of data from the Ohio city, including “databases, internal employee logins and passwords, a full server dump of city emergency services applications, and … access from city video cameras,” in response to local news reports.
Rhysida demanded 30 bitcoins, or roughly $1.9 million on the time of the cyberattack, as payment for the stolen data.
Two weeks after the cyberattack, Columbus Mayor Andrew Ginther told the general public that the stolen data was likely “corrupted” and “unusable.”
The accuracy of Ginther’s statement was called into query the day after David Leroy Ross, a cybersecurity researcher also often called Connor Goodwolf, revealed that the personal information of a whole lot of 1000’s of Columbus residents had been placed on the dark web.
In September, Columbus sued Ross, alleging that it “threatened to make stolen city data available to third parties who otherwise would not have readily available means to obtain stolen city data.” A judge issued a brief restraining order against Ross, stopping him from accessing the stolen data.
In a listing published Monday by TechCrunch on the leak site, Rhysida claims to have transferred 3.1 terabytes of “unsold” data stolen from Columbus, amounting to greater than 250,000 files.
Technology
Threads now has 275 million monthly active users
Meta’s social network, Threads, now has 275 million monthly active users (MAUs), the corporate said on Sunday.
“Yesterday we passed 275 million monthly active users on @Threads. We would like to thank everyone who helped us get this far. There is a lot more to do and a lot to fix, but there is something exciting about this place.” he said Adam Mosseri, the director of Meta who runs Threads and Instagram.
Launched in July 2023 to capitalize on the tens of millions of users leaving X after Elon Musk purchased the platform, Threads quickly gained users and has turn out to be one in all the most important text-first social networks today. The platform reached 150 million MAU in April and 200 million MAU in August, which suggests it has gained 75 million active users in only 3 months.
Last week, Meta CEO Mark Zuckerberg said in the course of the company’s conference call following its third-quarter 2024 earnings that one million people were signing up for Threads daily.
While user acquisition on the platform is trending upwards, Threads has been battling plenty of issues moderation issues that frustrated users.
Technology
Affirm is launching the product in the UK as the buy now, pay later market faces regulatory changes
Buy now, pay later (BNPL) giant Confirm launches in the UK, its first market outside North America.
Its long-awaited arrival comes as UK lawmakers consider latest rules to align BNPL corporations with other traditional consumer credit services, although such rules are usually not expected to return into force until at the least 2026 — long enough for Affirm to achieve traction and gain favor with consumers and regulators alike.
Founded in 2012, Affirm emerged from a startup incubator called HVF, founded by the co-founder of PayPal Max Levchin (pictured above), who eventually took the reins of Affirm in 2014 to fuel its industrial growth. The company has expanded beyond the US and Canada in 2022and has forged lucrative partnerships with major e-commerce corporations over the years — Affirm has been Shopify’s premier financial partner for nearly a decade, not to say Walmart and Amazon, which last yr chosen Affirm as its first Amazon Pay BNPL partner in the U.S. . Recently, Affirm also acquired the mighty Apple as a client.
“Debt normalization”
The BNPL model is easy: customers are encouraged to buy goods on credit, repaying the debt in several interest-free installments, and the BNPL provider makes money from merchant fees. Or, if the customer may require an extended repayment period, the loan may include interest.
The BNPL market has long been on the radar of UK regulators, with existing operators such as Klarna and Clearpay often criticized for encouraging impulse purchases and debt normalization. So far, this has been done by the British Financial Conduct Authority (FCA). certain powers to manage BNPL providersbut there are key exceptions, such as interest-free credit services, where fixed-amount contracts provide for debt repayment inside 12 months.
However, latest rules which are in the pipeline could bring BNPL corporations fully into line with other consumer credit corporations. The Labor government last month announced a brand new BNPL consultation with plans to introduce regulations to “ensure people using BNPL products have clear information, avoid overpriced loans and have strong rights when problems arise”.
It’s clear that Affirm is already attempting to position itself favorably with each customers and authorities. Indeed, for the UK launch, the company notes that its interest-bearing payment options won’t include compound interest – as a substitute, the interest shall be fixed and calculated in full on the original amount borrowed.
It’s also value noting that Klarna began charging late fees last yr in the UK, and this is one area where Affirm goals to distinguish itself – it says it won’t charge late fees or another “hidden fees”.
Directly
It’s been a difficult few years for the BNPL sector. Klarna was valued at over $45 billion in 2021, a figure that quickly dropped by 85% to $6.5 billion following the great post-pandemic “correction” that many corporations have experienced. However, last week news broke that Klarna was being priced rose again to $14.6 billion. It’s been a similarly tumultuous time for Affirm, whose ups and downs have followed a trajectory harking back to its European rival.
After its 2021 IPO, Affirm’s market capitalization reached a staggering $47 billion, but the company’s stock has taken an enormous hit, with its market capitalization dipping below $3 billion in the past yr. However, Affirm’s stock has soared to over $13 billion in 2024, and the company is listed on NASDAQ the company recently reported fourth quarter year-over-year revenue growth of 48% and losses decreased from $206 million to $45 million. Levchin also projected profitability in 2025.
We’ve known for a while that Affirm’s next port of call outside the US and Canada can be the UK, and the company’s chief revenue officer Wayne Pommen is the record holder say it will deal with markets where a few of its largest existing partners are already present.
For a UK launch, it doesn’t have any of the big name brands it has in the domestic market, but the proven fact that it counts the likes of Amazon, Shopify and Apple amongst its US customers means it would not be an enormous deal. For now, nonetheless, Affirm intends to operate in the market through flight booking site Alternative Airlines and payment processor Fexco, and “additional UK and international brands are expected to follow.”
In preparation for today’s launch, Affirm told TechCrunch it has already hired roughly 30 employees, including Ruth Spratt who manages the local branch and at the same time plans to extend employment by the end of the yr. And much like your individual “remote first” ethos elsewhereemployees are usually not tied to a selected physical hub.
The company didn’t confirm its next expansion plans in Europe or elsewhere, but said it will “take the same disciplined approach” it has all the time taken to future expansion.
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