Forbes Daily: How European Union’s AI Act Aims To Regulate The Technology

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TikTok’s future in the U.S. is uncertain after the House of Representatives approved a bill Wednesday that would give its Chinese parent company ByteDance six months to sell the app or face a ban. The bill’s fate is now in the hands of the Senate, where it’s likely to face greater scrutiny from Democrats.

The fallout for one of the most popular social media platforms has been years in the making. Over the last two years, Forbes has revealed again and again how deep TikTok’s ties are to its Chinese parent company ByteDance—which remains beholden to the Chinese government—and how that could pose a risk to national security.

ByteDance has tracked the location of journalists, including a Forbes reporter who broke the story of its plans to surveil American citizens, monitored conversation about topics sensitive to the Chinese government, and Forbes revealed that the company has continued to keep some data about its American users in China.

BREAKING NEWS

In an interview with former CNN host Don Lemon, Elon Musk said he isn’t leaning toward either presidential candidate but is “leaning away” from President Joe Biden, and spoke about a meeting he had with former President Donald Trump this month that resulted in “Trump doing most of the talking.” Lemon, who was fired from CNN in April, was set to join the Musk-owned X platform for a new show, but announced Wednesday that Musk had canceled the program, saying Musk was mad at him about the interview that Lemon characterized as “tense at times.”

The Sapporo High Court in Japan ruled Thursday that the country’s ban on same-sex marriages was unconstitutional and prompted the government to act on the matter. In its ruling, the court said that it “strongly expected” the parliament would act to “institutionalize” same-sex marriages at some point in the future and “living in accordance with one’s gender identity and sexual orientation is an inalienable right.”

BUSINESS + FINANCE

Mortgage rates fell below 7% for the first time since early February, a reprieve for prospective homebuyers who have faced high borrowing costs in the past two years. The downward shift in mortgage rates comes as recent economic data has painted a far more encouraging picture for the Federal Reserve to bring down interest rates, according to Mike Fratantoni, the Mortgage Bankers Association’s chief economist.

WEALTH + ENTREPRENEURSHIP

Billionaire Tesla CEO Elon Musk ceded his title as the richest person in the U.S. to Amazon founder Jeff Bezos, with his fortune falling by $4 billion as Tesla shares tanked to a fresh 10-month low Wednesday. Wall Street is turning increasingly bearish on the American electric vehicle maker, which overtook even besieged Boeing as 2024’s worst-performing stock on the S&P 500.

TECH + INNOVATION

The European Union approved the world’s first regulations on artificial intelligence, amid growing concerns that the quickly developing technology could pose risks to humanity. The AI Act places regulations on technologies based on “potential risks and level of impact”—AI systems used in critical infrastructure or medical devices will face more regulations, for instance.

Waymo, Google parent Alphabet Inc.’s self-driving vehicle unit, is debuting its robotaxi service in Los Angeles this week, its third commercial market—during a rocky period for developers of self-driving vehicle technology. The move keeps Waymo, the oldest and best-funded autonomous driving company, as the de facto leader in a technology that’s proven far more difficult to master and deploy than anticipated a decade ago.

Predator drone inventor Abraham Karem’s startup Overair is running short on money and its workers are leaving en masse, Forbes has learned. Overair is developing an electric air taxi for urban commuting, but its struggles could be a warning sign of trouble ahead for startups in the space, including some that have gone public.

SPORTS + ENTERTAINMENT

Spotify is testing a new feature that would allow some users to watch full-length music videos on mobile, desktop or TV, offering a service historically dominated by video streaming platforms like YouTube. The music videos will initially be launched in beta to paying subscribers in 11 markets: the U.K., Germany, Italy, the Netherlands, Poland, Sweden, Brazil, Colombia, the Philippines, Indonesia and Kenya.

SCIENCE + HEALTHCARE

The Biden Administration is doling out $750 million of federal funds to help companies and universities like Plug Power, General Motors and Cummins scale up production of carbon-free hydrogen, including electrolyzers that make hydrogen and fuel cells that use it. It’s part of the president’s efforts to make “green” hydrogen a cheaper and more widely used form of clean energy.

TRAVEL + LIFESTYLE

Surveillance footage from a repair facility where a metal door plug was reinstalled to an Alaska Airlines 737 was recorded over by Boeing, according to National Transportation Safety Board chair Jennifer Homendy. Federal investigators are demanding more information from Boeing after the door plug blew off mid-flight earlier this year. A preliminary report by the agency last month found several key bolts were missing from the door plug after repairs were completed on the aircraft months earlier.

TRENDS + EXPLAINERS

Students at Westfield High School in New Jersey created and spread deepfake pornographic images of multiple female students via auto-deleting messages on Snapchat. One of the victims, Francesa Mani, along with her mother Dorota Mani, have been lobbying for regulation of such non-consensual deepfake images. But Dorota Mani told Forbes that nearly five months after the incident, the boys who are suspected of distributing the images have faced no meaningful consequences, beyond one of them being suspended for a single day.

DAILY COVER STORY

Tanzania’s Richest Man Wants To Be Africa’s Biggest Farmer — If Everyone Gets Out Of His Way

TOPLINE Billionaire Mo Dewji made a fortune in Tanzania selling palm oil, rope, soda and other consumer staples through his MeTL Group conglomerate. Now he wants to create an agribusiness empire across East Africa, no matter the costs.

Dewji is seeking to invest $250 million, including $100 million of his own capital, to buy and mechanize 100,000 hectares of farmland in Tanzania. MeTL would use the crops to feed its own businesses, then sell the surpluses to other Tanzanian firms, African countries and even European customers.

Agriculture accounts for one-third of Tanzania’s annual GDP of $75 billion, but roughly 90% of that farming is done by subsistence farmers tilling less than 5 hectares of land each. As a result, food insecurity is widespread: Over 30% of children are stunted, and about 13 million Tanzanians live in extreme poverty, while “many others live just above the poverty line,” according to the U.S. Agency for International Development.

Bigger, more efficient farms could be a solution to Tanzania’s hunger problem. In developing countries, larger farms are more efficient than smaller ones, according to a 2020 European Commission paper. And a United Nations study found that increasing agricultural productivity was “a substantial driver of growth and poverty reduction” in Ethiopia, Ghana, Malawi, Rwanda and Uganda, in contrast to Tanzania and other African countries where farming growth lagged.

But there will be costs: human displacement, environmental degradation, disruption of local trading networks upending entire communities.

Given Dewji’s prominence, any success—or failure—will have a big impact within Tanzania and potentially beyond. “This is larger than Tanzania: A success here could have implications for the continent as a whole,” says Margaret McMillan, an economics professor at Tufts University who studies economic development and investment in East Africa.

WHY IT MATTERS “Privately funded agribusiness could reduce poverty and malnutrition in Tanzania, boost the country’s tax revenues and foreign exchange reserves, and draw more outside investment,” says Forbes staff writer John Hyatt. “But there will be drawbacks: displacement of villagers, environmental degradation and disruption of local trading networks. If Dewji hopes to achieve his goal of ushering in mechanized farming across East Africa, he’ll have to maximize the benefits and minimize the costs.”

MORE: Africa’s Billionaires

FACTS AND COMMENTS

Dollar Tree plans to close 1,000 stores as the discount retailer reported brutal quarterly earnings. Shares of Dollar Tree, which purchased Family Dollar in 2015 for $8.5 billion, fell 14% Wednesday after the announcement:

600: The number of Family Dollar stores that Dollar Tree plans to close in the first half of fiscal 2024

$1.71 billion: The losses Dollar Tree reported in its fourth quarter

16,774: The number of stores the discount chain operates across the U.S. and Canada

STRATEGY AND SUCCESS

The best managers challenge their employees and help them grow in their careers. Keep an eye out for three qualities in a manager: One, they ensure their employees are constantly learning. Second, they work to remove the roadblocks and frustrations that get in the way of employees’ success. Lastly, they make values part of the day-to-day of the job.

VIDEO

QUIZ

The Department of Health and Human Services will investigate last month’s cyberattack against a subsidiary of a major health insurance company, calling it an “unprecedented” attack on the U.S. healthcare system. Which health insurance company is it?

A. Aetna

B. UnitedHealth Group

C. Kaiser Permanente

D. Humana

Check your answer.

ACROSS THE NEWSROOM

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