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Meta to Require AI Disclosure for Political Ads Ahead of Canadian Elections

Meta Platforms (META.O) announced on Thursday that it will require advertisers to disclose the use of AI or other digital techniques in political or social issue ads ahead of Canada’s federal elections. This move aims to combat misinformation and increase transparency in the political advertising landscape.

The new disclosure rule will apply to ads featuring photorealistic images, videos, or realistic-sounding audio that have been digitally altered to show a real person saying or doing something they did not actually say or do. It will also apply to ads showcasing non-existent individuals or fabricated events, altered footage of real events, or misleading depictions of events that may not be accurate.

In November 2023, Meta extended its ban on new political ads following the U.S. election to combat misinformation. The company also prohibited political campaigns and advertisers in regulated sectors from using its generative AI advertising tools. Despite these efforts, Meta had a setback earlier this year when it scrapped its U.S. fact-checking programs amid pressure from conservatives to overhaul its approach to political content.

Additionally, Meta has introduced a feature allowing users to disclose when they share AI-generated content, enabling the platform to label such media accordingly.

Brave Software Sues News Corp Over Copyright Dispute

In a significant legal battle, Brave Software has filed a lawsuit against News Corp in response to a cease-and-desist letter sent by the media conglomerate. The letter warned Brave that it faced potential litigation for allegedly “scraping” copyrighted content from News Corp’s websites, including those of The Wall Street Journal and New York Post. The suit was filed on Wednesday night in San Francisco federal court.

Brave, the company behind the Brave Search engine, argues that its actions are covered under the “fair use” doctrine, asserting that indexing website content is a necessary practice for search engines to operate. The company also contends that News Corp’s actions could undermine advancements in generative AI, claiming that chatbots such as ChatGPT and Google’s Gemini rely on search engine responses, which could be impacted by this dispute.

According to Brave, its market share is a fraction of the search industry, with its search engine holding less than 1% of the market, while Google dominates with nearly 90%, followed by Microsoft’s Bing. Brave accuses News Corp and its partners of attempting to “bully” the company and further cementing the already high barriers to entry in the search engine market.

In a public statement, Robert Thomson, CEO of News Corp, rejected Brave’s claims, labeling the company’s actions as “piratical, parasitical practices” disguised as traditional search. He emphasized that the unauthorized use and sale of News Corp’s copyrighted content to AI engines and other clients is not fair use, but a blatant violation of intellectual property rights.

This legal battle adds to the growing tensions between publishers and tech companies over the use of copyrighted content in support of AI technologies. News Corp has previously filed lawsuits against other companies, including Perplexity AI, for alleged unauthorized copying of its articles.

In its lawsuit, Brave is seeking a declaration from the court that its use of copyrighted News Corp content for search indexing purposes is not a form of infringement. The case highlights the broader conflict between content creators, who argue for protection of their intellectual property, and technology companies, which push for more access to such content to power AI developments.

Adobe’s AI Monetization Struggles Lead to Dull Forecast, Shares Drop

Adobe (ADBE.O) has projected its second-quarter revenue to fall within Wall Street’s expectations, but it is facing challenges in the monetization of its artificial intelligence (AI) products, leading to concerns over its ability to capitalize on the growing demand for AI in creative tools. As a result, shares of the company dropped more than 4% in extended trading.

The company expects second-quarter revenue between $5.77 billion and $5.82 billion, in line with analysts’ estimates, according to data compiled by LSEG. Adobe reaffirmed its annual revenue forecast, and CEO Shantanu Narayen expressed confidence in the company’s ability to capitalize on the acceleration of the creative economy powered by AI.

Despite this optimism, analysts and investors are questioning the pace of monetization for Adobe’s generative AI products. As the company pours resources into differentiating itself from competitors, it aims to enhance its vast portfolio with more AI-driven editing tools. However, there is growing skepticism about whether Adobe can quickly turn its AI offerings into substantial revenue streams.

“I think guidance is rough, and I think people are questioning, is the AI monetization quick enough?” said Parker Snook, a senior research analyst at M Science.

In an effort to stay ahead of rivals, Adobe has been aggressively integrating AI into its software products, notably Photoshop, which is widely used by professionals in a variety of industries. However, its AI and add-on offerings generated $125 million in annual recurring revenue (ARR) at the end of the quarter, and the company expects to double that figure by the end of fiscal 2025, according to CFO Dan Durn.

Despite concerns over AI monetization, DA Davidson analyst Gil Luria is optimistic that new products will eventually ease investor worries: “As Adobe continues to deliver new products, we expect those concerns to be replaced by excitement over those products.”

For the first quarter, Adobe reported revenue of $5.71 billion, surpassing analysts’ estimates of $5.66 billion. The company also saw digital media revenue of $4.23 billion, which exceeded analyst expectations of $4.19 billion. On an adjusted basis, Adobe earned $5.08 per share, above the forecast of $4.97 per share.