News April 26, 2024

The FTC’s ban on noncompete clauses could be good for startups. But it also might be struck down.

The Federal Trade Commission has voted to ban most non-compete agreements, a move that could be beneficial for startups. The ruling aims to prevent companies from blocking employees from joining competitors or launching their own businesses in the same industry. While this may seem like a blow to intellectual property protection, experts argue that there are alternative ways to safeguard sensitive information. Non-disclosure agreements and patent filings can serve as effective substitutes for non-compete clauses. Moreover, some startup founders believe that the ban could actually encourage companies to foster stronger cultures and attract top talent by offering competitive salaries and benefits rather than relying on restrictive contracts. As a result, the hiring pool may expand, allowing startups to recruit more experienced professionals with domain expertise. However, it’s unclear whether the ruling will withstand legal challenges, and some experts predict that courts could strike down the ban. Read more

Google Thinks It Can Cash In on Generative AI. Microsoft Already Has

Google’s Sundar Pichai is confident that his company can find a way to monetize its generative AI tools, despite concerns about profitability. Meanwhile, Microsoft’s Satya Nadella boasts of having already made progress in this area. Both companies reported strong quarterly earnings, with Alphabet announcing plans to buy back more shares and issue its first-ever dividend. While Pichai is optimistic about Google’s prospects, he didn’t provide details on the performance of Gemini Advanced, a $20 per month subscription plan that offers access to Google’s most advanced AI chatbot. In contrast, Microsoft has reported success with GitHub Copilot, which now has 1.8 million customers and has helped drive revenue growth in its cloud services unit. Read more

After an exhaustive investigation, the National Highway Traffic Safety Administration has concluded its review of hundreds of crashes involving Tesla’s Autopilot system, including 13 fatalities and “many more” with serious injuries. While closing this probe, NHTSA is opening a new one to assess the effectiveness of the recall fix implemented by Tesla in December. The agency found that Tesla’s driver engagement system was not suitable for Autopilot’s capabilities, leading to a critical safety gap and foreseeable misuse. This mismatch resulted in avoidable crashes, with 467 reported incidents falling into three categories: those where the Tesla struck another vehicle or obstacle, roadway departures in low traction conditions, or Autosteer disengagement. The agency criticized Tesla’s data reporting, stating that gaps create uncertainty regarding crash rates and limiting notifications to only around 18% of reported crashes. Read more

What’s next with AI?

Artificial intelligence has undoubtedly dominated the narrative of recent times, with its rapid adoption and utilization by adult Americans becoming a hot topic for discussion. A comprehensive study conducted by The Verge and Vox Media earlier this year revealed some fascinating insights into how people are using and thinking about AI, building upon their previous consumer tech trust surveys in 2017, 2020, and 2021. One year later, the same researchers have shared an updated report, shedding light on the current state of AI adoption and its future prospects. According to the findings, interest in AI continues to grow, albeit at a slower rate than before, with users evolving into superusers who are increasingly leveraging these tools for both productivity and creativity. Notably, email is emerging as the fastest-growing use case for AI, while consumers are placing immense trust in the quality of information provided by AI-powered search engines. Read more

Thoma Bravo to take UK cybersecurity company Darktrace private in $5B deal

Darktrace, the UK-based cybersecurity giant, is poised to go private in a deal valued at around $5 billion. Thoma Bravo’s newly-formed entity, Luke Bidco Ltd, has submitted an all-cash bid of £6.20 per share, representing a 44% premium on Darktrace’s average price over the past three months. The company’s shares have risen significantly in recent weeks, but this premium drops to just 20% when compared to yesterday’s closing price. Darktrace is known for its AI-enabled threat detection smarts and has big-name customers like Allianz, Airbus, and the City of Las Vegas. The deal is subject to shareholder approval and is expected to be completed by the end of next year. Read more