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In Call for Chips Incentives, U.S. Sets Sights on Taking Back Manufacturing Share of Key Technologies

The department is targeting private sector investments to float goals of Chips and Science Act.



Photo of Commerce Secretary Gina Raimondo

WASHINGTON, February 28, 2023 – The Commerce Department’s call for applications Tuesday for billions in funding to manufacture semiconductor chips is an attempt to bring packaging of the key technologies back to the United States, alleviate supply chain concerns that have wreaked havoc since the start of the pandemic on consumer products and infrastructure builds, and combat national security threats.

The call for applications – the first of several – will be focused the construction, expansion or modernization of commercial semiconductor manufacturing plants. Later this year, the department will hold separate funding opportunities for semiconductor materials and manufacturing equipment and research and development facilities. The department is asking for statements of interest to be submitted starting Tuesday to gauge interest in those later programs.

Much of the money from the legislation, which became law last summer, will be concentrated on the manufacturing component of the life of the semiconductor, which is key to development of computing, critical infrastructure and automobiles. The department has noted that while the U.S. is a global leader in chip design and research and development, it has relinquished position on manufacturing to east Asia, which it said has pioneered methods of manufacturing the chips in a way that makes financial sense. It estimates that the U.S. semiconductor manufacturing accounts for about 10 percent of commercial global production.

But the department has just $52.7 billion to play with – $39 billion for semiconductor incentives, $13.2 billion for research and development and workforce development, and $500 million for strengthening global supply chains. The limited supply of funding from the Chips and Science Act means Commerce’s CHIPS Program Office will be running a tight ship when it comes to delivering the money.

“Trade-offs will be necessary. Not every applicant will receive funding, and many projects will not receive as much support as applicants request,” according to a “vision for success” document released Tuesday. “CHIPS funding will not be used as a crutch to help companies endure temporary slumps. Instead, the CHIPS Program Office will be laser-focused on advancing U.S. economic and national security objectives.”

The incentives funding will be in either direct funding, loans or loan guarantees. Direct funding is expected to range between five to 15 percent of project costs. In total, the program office expects the incentives available to not exceed 35 percent of project costs.

In other words, the program is banking on private investment and other sources of funding to carry a burden. The department said it expects applicants to be offered an incentive from their state or local government and is encouraging them to claim the Advanced Manufacturing Investment Credit administered by the Treasury Department and the Internal Revenue Service.

Moratorium on working with foreign countries of concern and other stipulations

Because of the limited funding available, the department said in a fact sheet that applicants are barred from using the money to pay dividends to shareholders or buying back their own stock. In fact, the department said it will require all applicants to “detail their intentions” on stock buybacks over five years as part of the review process.

The department has put in place other stipulations. A key component of the program is to address national security threats and to ensure that those threats don’t seep into the manufacturing process.

As such, the department is requiring successful applicants agree “not to engage in any significant transaction involving the material expansion of semiconductor manufacturing capacity in any foreign country of concern for the 10-year period beginning on the date of the award, except under certain limited conditions.” The department said it will work with foreign governments to provide clarity on the “purpose and practical impact of these guardrails.”

In addition, recipients of more than $150 million in direct funding will be required to share with the government a portion of any cash that exceeds the applicant’s projections above an established threshold. As part of the workforce component, the department will also require applicants wanting more than $150 million to put in place affordable, reliable and high-quality childcare.

In terms of logistics, the office said the money will be drip fed when the project reaches construction and operational milestones, which gives the department an opportunity to monitor progress and ensure compliance. Any joint work with a foreign entity identified as a national security threat will result in the termination of all funding, the department noted.

Later this year, the department said it will release its strategy for the implementation of the National Semiconductor Technology Center, a public-private consortium intended to gives stakeholders an opportunity to address challenges and opportunities.

“Today’s Notice of Funding Opportunity is a crucial step to unleashing the promise of the CHIPS and Science Act to create good-paying jobs right here at home and end our dangerous dependence on semiconductors manufactured abroad,” Energy and Commerce committee ranking member Frank Pallone, Jr., D-N.J. said in a statement.

“I commend President [Joe] Biden and Secretary [Gina] Raimondo for their dedication to boosting domestic manufacturing of chips, strengthening our supply chains, and unleashing the next generation of innovation. I look forward to continuing to work together with the Administration to successfully implement this historic legislation,” he added.

The precursor to the Chips and Science Act was a June 2021 report from the White House that found the U.S. is “dangerously dependent on specific countries for parts” of products, such as semiconductors.

A number of semiconductor manufacturing plants have been announced or emerged in recent months, including Intel’s $20 billion facility in Ohio, Micron’s $15 billion plant in Idaho, and Wolfspeed’s $5 billion semiconductor plant investment in North Carolina.

Managing Editor Ahmad Hathout has spent the last half-decade reporting on the Canadian telecommunications and media industries for leading publications. He started the scoop-driven news site to make Canadian telecom news more accessible and digestible. Follow him on Twitter @ackmet.

Artificial Intelligence

Sen. Bennet Urges Companies to Consider ‘Alarming’ Child Safety Risks in AI Chatbot Race

Several leading tech companies have rushed to integrate their own AI-powered applications



Photo of Sen. Michael Bennet in 2019 by Gage Skidmore, used with permission

WASHINGTON, March 22, 2023 — Sen. Michael Bennet, D-Colo., on Tuesday urged the companies behind generative artificial intelligence products to anticipate and mitigate the potential harms that AI-powered chatbots pose to underage users.

“The race to deploy generative AI cannot come at the expense of our children,” Bennet wrote in a letter to the heads of Google, OpenAI, Meta, Microsoft and Snap. “Responsible deployment requires clear policies and frameworks to promote safety, anticipate risk and mitigate harm.”

In response to the explosive popularity of OpenAI’s ChatGPT, several leading tech companies have rushed to integrate their own AI-powered applications. Microsoft recently released an AI-powered version of its Bing search engine, and Google has announced plans to make a conversational AI service “widely available to the public in the coming weeks.”

Social media platforms have followed suit, with Meta CEO Mark Zuckerberg saying the company plans to “turbocharge” its AI development the same day Snapchat launched a GPT-powered chatbot called My AI.

These chatbots have already demonstrated “alarming” interactions, Bennet wrote. In response to a researcher posing as a child, My AI gave instructions for lying to parents about an upcoming trip with a 31-year-old man and for covering up a bruise ahead of a visit from Child Protective Services.

A Snap Newsroom post announcing the chatbot acknowledged that “as with all AI-powered chatbots, My AI is prone to hallucination and can be tricked into saying just about anything.”

Bennet criticized the company for deploying My AI despite knowledge of its shortcomings, noting that 59 percent of teens aged 13 to 17 use Snapchat. “Younger users are at an earlier stage of cognitive, emotional, and intellectual development, making them more impressionable, impulsive, and less equipped to distinguish fact from fiction,” he wrote.

These concerns are compounded by an escalating youth mental health crisis, Bennet added. In 2021, more than half of teen girls reported feeling persistently sad or hopeless and one in three seriously contemplated suicide, according to a recent report from the Centers for Disease Control and Prevention.

“Against this backdrop, it is not difficult to see the risk of exposing young people to chatbots that have at times engaged in verbal abuse, encouraged deception and suggested self-harm,” the senator wrote.

Bennet’s letter comes as lawmakers from both parties are expressing growing concerns about technology’s impact on young users. Legislation aimed at safeguarding children’s online privacy has gained broad bipartisan support, and several other measures — ranging from a minimum age requirement for social media usage to a slew of regulations for tech companies — have been proposed.

Many industry experts have also called for increased AI regulation, noting that very little legislation currently governs the powerful technology.

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VON Evolution Conference Will Address Intersection of Telecom, AI, 5G and Blockchain

The New York City event on April 18 aims to foster conversations through a salon-like atmosphere.



Screenshot of Vonage Founder Jeff Pulver from video introducing VON: Evolution

WASHINGTON, March 21, 2023 — Industry leaders and innovators will come together to discuss the latest advancements in telecom, artificial intelligence, 5G and blockchain at the recently announced VON: Evolution conference on April 18.

Through a series of fireside chats and in-depth conversations, VON: Evolution will examine modern communication technologies and look toward the future. In addition to featuring insights from industry experts, the New York City event aims to foster a salon-like atmosphere, facilitating thought-provoking conversations between attendees.

VON: Evolution will be curated by Jeff Pulver, founder of Vonage and a prominent voice-over-IP entrepreneur.

“Industries and technologies are intersecting and they will continue to at a rapid rate,” Pulver said. “By holding the VON: Evolution salon, the goal is to bring to light what’s really emerging, by having conversations with the actual creators who can bring greater insight and perspective, and enable others at the forefront of advancements to be engaging across the four industries, not just in their own ecosystems.”

Speakers at the conference will address a wide range of topics, with a particular emphasis on the intersections of multiple technologies. The digital program features a full list of topics and speakers, including Althea CEO Deborah Simpier, Foursquare Co-Founder Dennis Crowley, Agoric COO Michael Jablon and several others.

Broadband Breakfast is a sponsor of VON: Evolution. Use promo code “broadband” for a 10 percent discount on the registration price.

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Artificial Intelligence

Oversight Committee Members Concerned About New AI, As Witnesses Propose Some Solutions

Federal government can examine algorithms for generative AI, and coordinate with states on AI labor training.




Photo of Eric Schmidt from December 2011 by Kmeron used with permission

WASHINGTON, March 14, 2023 –  In response to lawmakers’ concerns over the impacts on certain artificial intelligence technologies, experts said at an oversight subcommittee hearing on Wednesday that more government regulation would be necessary to stem their negative impacts.

Relatively new machine learning technology known as generative AI, which is designed to create content on its own, has taken the world by storm. Specific applications such as the recently surfaced ChatGPT, which can write out entire novels from basic user inputs, has drawn both marvel and concern.

Such AI technology can be used to encourage cheating behaviors in academia as well as harm people through the use of  deep fakes, which uses AI to superimpose a user in a video. Such AI can be used to produce “revenge pornography” to harass, silence and blackmail victims.

Aleksander Mądry, professor of Cadence Design Systems of Massachusetts Institute of Technology, told the subcommittee that AI is a very fast moving technology, meaning the government needs to step in to confirm the objectives of the companies and whether the algorithms match the societal benefits and values. These generative AI technologies are often limited to their human programming and can also display biases.

Rep. Marjorie Taylor Greene, R-Georgia, raised concerns about this type of AI replacing human jobs. Eric Schmidt, former Google CEO and now chair of the AI development initiative known as the Special Competitive Studies Project, said that if this AI can be well-directed, it can aid people in obtaining higher incomes and actually creating more jobs.

To that point, Rep. Stephen Lynch, D-Massachusetts., raised the question of how much progress the government has made or still needs in AI development.

Schmidt said governments across the country need to look at bolstering the labor force to keep up.

“I just don’t see the progress in government to reform the way of hiring and promoting technical people,” he said. “This technology is too new. You need new students, new ideas, new invention – I think that’s the fastest way.

“On the federal level, the easiest thing to do is to come up with some program that’s ministered by the state or by leading universities and getting them money so that they can build these programs.”

Schmidt urged lawmakers last year to create a digital service academy to train more young American students on AI, cybersecurity and cryptocurrency, reported Axios.

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