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Fears of an AI breakthrough force the U.S. and China to talk

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Fears of an AI breakthrough force the U.S. and China to talk

Three years ago, in the idyllic town of Woodside south of San Francisco, the United States and China held their first high-level talks on the dangers posed by artificial intelligence. President Xi Jinping and his longtime foreign minister appeared serious in their conviction that a channel should be a established between Beijing and Washington — a red phone for AI in case of emergencies.

They authorized a diplomatic effort that would begin in 2024 in Switzerland, only months before the U.S. presidential election. A large U.S. delegation arrived with high hopes that were abruptly dashed, according to four sources who attended the talks. The Chinese contingent dismissed American concerns over runaway AI as academic, almost theoretical, quickly turning the conversation to export controls seen in Beijing as yet another U.S. effort to hold China back.

“They naturally view any American diplomatic initiative involving limitations or restrictions of one flavor or another on a capability as being a trap,” Jake Sullivan, U.S. national security advisor under President Biden, said in an interview.

Despite the distrust — and Democrats losing the White House to Donald Trump — an accord was struck in November of that year in Peru, where both sides agreed to keep AI out of the command and control of nuclear weapons.

“It was a breaking of the seal that we could actually do something on AI,” Sullivan said. “In the transition, I told the incoming Trump team that they should really pick up that dialogue. But the Trump administration’s view was just far more laissez-faire, and they didn’t seem particularly interested in it.”

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“That’s all changed in the past few weeks,” he added.

A Trump administration once eager to gun for technological supremacy is now, for the first time, reckoning with the power AI could unleash if left unchecked.

In a surprise reversal, quiet discussions have taken place ahead of President Trump’s state visit to China this week to explore reviving talks on an emergency channel, officials told The Times, prompted by shared alarm in Beijing and Washington over the debut of Mythos, Anthropic’s powerful new model.

One senior administration official told reporters Sunday that the White House was looking to create a channel of communication for AI like others that they have “in many areas that have intense focus with the U.S. and China.”

“I think what that channel of communication looks like, its formality and what that looks like, is yet to be determined,” the official said, “but we want to take this opportunity with the leaders meeting to open up a conversation. We should establish a channel of communication on that matter.”

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Mythos’ capabilities are seen across the industry and government as those of an unprecedented cyberweapon, able to infiltrate and exploit digital communication systems — including government databases, financial institutions and healthcare programs — with untold consequences.

Whether an announcement will come to fruition this week is not yet clear. Any talks between the United States and China over AI regulations — designing some kind of arms control agreement governing the use of a technology that neither side fully understands or controls — will be fraught with suspicion, misunderstandings and risk, experts say.

“Right now, there is almost no support from U.S. policymakers to engage in formal discussions on AI governance with China,” said Aalok Mehta, director of the Wadhwani AI Center at the Center for Strategic and International Studies.

“The logic is that this is a winner-takes-all race,” Mehta said, “and that it’s imperative to accelerate AI progress to ensure that the United States wins that race.”

America in the lead

China would enter those discussions with a powerful argument, that U.S. leadership in AI — and the prevailing strategy of American AI companies — is propelling the world to a fraught frontier.

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Every major U.S. player in the arena — OpenAI, Google, Anthropic, Microsoft and Meta Platforms — is racing to be the first to build a model capable of artificial general intelligence, or AGI, a threshold without a common definition, but that most agree will require a model to perform any intellectual human task.

The prevailing theory is that the first to achieve AGI will secure a prize that multiplies itself: a self-training, recursively improving intelligence, growing exponentially and leaving all competitors in its wake.

Chinese companies, by contrast, are following a state-sanctioned strategy focused on integrating AI into siloed industries and systems, training models to improve individual tasks and accelerate growth in a more tailored approach.

“The Chinese believe there is no single race, but multiple races,” said Scott Kennedy, senior advisor on Chinese business and economics at the Center for Strategic & International Studies. “The U.S. is focused on achieving AGI, while China is focused on diffusion and applications of AI into the rest of their economy — manufacturing, humanoid robotics, all aspects of the internet of things.”

China scholars, AI industry insiders and successive administrations have questioned Beijing’s strategic thinking and forthrightness.

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“It’s so baked into the community here that AGI will have this transformative potential that people can’t believe China isn’t focused on this, as well,” said Matt Sheehan, a scholar of global technology issues at the Carnegie Endowment for International Peace with a focus on China. “It says it’s focused on applications, but is that a fake out for an AGI program hidden in the mountains somewhere?”

But most insiders believe that Beijing’s guidance to Chinese companies reveals its true intentions.

“They are not as AGI-pilled as the United States is, and I think that remains the case today,” Sullivan said, “so they regarded a lot of the conversation in the U.S. around extreme frontier risk — misalignment and loss of control — as a bit abstract, and not really as relevant to how they saw AI diffusing in China.”

President Biden greets Chinese President Xi Jinping in Woodside, Calif., in 2023.

(Doug Mills / Pool Photo)

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Although China’s progress has exceeded U.S. expectations — especially since DeepSeek released its model over a year ago — the state has focused computer power on specific applications rather than the broad strategy needed to develop more powerful models capable of advancing toward AGI.

“It’s not just chips. It’s money,” Sheehan added. “China’s leading companies are much more financially constrained than U.S. companies. There’s concern over a bubble here, but OpenAI is valued at something near $800 billion. Leading Chinese companies that have gone public are valued at $20 billion. There’s just an orders-of-magnitude gap in available financing.”

Still, some in the U.S. government fear China won’t need comparable computing power if it simply steals the technology wholesale.

Doing so isn’t simple. But last month, in a memo, the White House Office of Science and Technology Policy accused Chinese actors of “industrial-scale campaigns to distill U.S. frontier AI systems,” in effect replicating the performance of the most advanced existing models “at a fraction of the cost.” The memo did not accuse Beijing of endorsing the activity.

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In the process, the memo added, carefully constructed security protocols are deliberately stripped away.

China’s negotiating advantage

Whatever its strategic calculus may be, China would enter talks with the Trump administration trailing in the race — while disagreeing on the nature of the finish line.

AGI, in theory, could reach a stage of recursive self-improvement that results in a loss of human understanding or control. But if it is only the Americans, and not the Chinese, seeking to reach that threshold, then who is responsible to stop it?

Daniel Remler, who led AI policy at the State Department during the Biden administration and took part in the Geneva talks, cast doubt on Chinese claims of disinterest in AGI and ignorance of its risks. China falling behind in the race is no strategic design, he said.

“Chinese technologists are close observers of the U.S. AI ecosystem, and sometimes they say what they think,” Remler said. “Many were impressed by the [Mythos] model to the point of despair. Leaders in China’s top AI labs have been vocal in recent months, even before Mythos, about how compute-constrained they are at the frontier. Some have said they may never catch their American competitors.”

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Talks at this point in the race could follow a familiar pattern in the recent history of U.S.-China diplomacy, in which Beijing claims it is behind the United States in development, ultimately securing a handicap and greater concessions at the negotiating table.

In other competitive domains — such as with China’s entry into the World Trade Organization and in cybersecurity negotiations between Beijing and the Obama administration — agreements were ultimately reached that Washington believes in hindsight disadvantaged American companies.

The Trump administration, Remler added, “needs to approach AI diplomacy with China with clear-eyed expectations anchored to our own national interests.”

Silicon Valley itself is divided over regulating AI. Anthropic, which was founded on concerns that other AI companies were failing to take safety and alignment concerns seriously, raised alarms over Mythos, its own model, to the Trump administration, a moment that has prompted reflection at the White House on the best path forward.

Spooked after meeting with leaders from America’s top banks over their vulnerabilities, Treasury Secretary Scott Bessent internally advised U.S. government reviews of future model releases — a practice already underway in China, where the training parameters for models, known as “weights,” have been publicly released.

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Even the suggestion of government oversight sparked backlash from Silicon Valley. Last week, the White House sent out a memo to reassure industry allies that submitting new models for federal review would be strictly voluntary.

If talks ultimately resume between Washington and Beijing on AI, experts believe the negotiations would be far more complex than those that resulted in arms control agreements governing nuclear weapons in the Cold War.

The superpowers would not only be discussing threats of instability to the global financial system, but also fears of proliferation — advanced AI tools getting into the hands of bad actors interested in using bio- or cyberweapons that could target both countries.

And they ultimately would have to decide whether to discuss regulating the integration of AI into the Chinese and U.S. militaries, an almost unfathomable goal between the world’s biggest adversaries, where trust is lowest and verification would be hardest.

Those in the industry who most fear what artificial superintelligence could bring have told the Trump administration that talks with China are an existential necessity.

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Dario Amodei, the chief executive and co-founder of Anthropic, speaks at an event in New York in 2025.

Dario Amodei, the chief executive and co-founder of Anthropic, speaks at an event in New York in 2025.

(Michael M. Santiago / Getty Images)

But even within Anthropic, which has championed diplomacy, there are concerns that Beijing could exploit its current disadvantage to entangle American industry at the cusp of its crowning achievement.

Rather than pushing for a single sweeping agreement, industry insiders are advising the administration to pursue targeted deals with Beijing to mitigate specific risks, like the pact on nuclear command and control, two industry sources said.

In private, both Xi and Chinese Foreign Minister Wang Yi seemed to understand that the gravity of the emerging technology before them required some form of cooperation, Sullivan said.

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“At a conceptual level, I believe they had a conviction on that and authorized it,” Sullivan said, “but I believe their level of urgency was considerably lower than ours, and saw this as a longer-term process that would play out over time.”

“Their level of urgency and their stake in it has gone up,” he added.

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Why Some People Are Allergic to ‘Peanut Butter Raises’

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Why Some People Are Allergic to ‘Peanut Butter Raises’

Both peanut butter and salary increases are widely loved, but put them together and you may get some grumbles.

“Peanut butter raises” are across-the-board pay bumps to employees, spread out thinly like a creamy condiment on bread. The term popped up all over business media this year after a report from Payscale, a compensation data company, suggested that some employers would be giving such raises instead of larger merit-based increases to a select few.

This metaphorical use of peanut butter has been lurking around corporate America for years: In 2006, Brad Garlinghouse, then a senior vice president at Yahoo, wrote an infamous memo criticizing the company’s strategy of “spreading peanut butter across the myriad opportunities that continue to evolve in the online world” — in his view, failing to focus on priorities or reward top performers with higher pay. “I hate peanut butter. We all should,” he wrote in what he called the Peanut Butter Manifesto.


How it’s pronounced


Are peanut butter raises fair? It depends on whom you ask, said Nick Bloom, an economist at Stanford. Are they a best practice? Not really, he argued.

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“Good management involves setting tough targets, evaluating employees against this and rewarding those that make their targets,” Mr. Bloom wrote in an email. “This means some folks will get paid and others won’t.”

Firms turn to peanut butter raises in two situations: when they can’t really distinguish strong performers from weak and when managers just want to take “the course of least resistance,” Mr. Bloom said. Generally, he added, a well-managed firm will pay its top performers well and keep an eye on the market.

Kevin J. Murphy, an expert on compensation at the University of Southern California’s business school, argued that peanut butter raises “send exactly the wrong signals,” telling top performers that their employers “just don’t care that much.”

Still, the idea that only stars should get pay bumps is not a law of physics. In previous generations, the notion that people across an organization — not just the top performers — should get consistent raises was common, said Peter Cappelli, a professor at the Wharton School.

But, he said, “that has changed over time,” starting in the winner-take-all, Jack Welch management era. Lately, executives who see themselves as top performers deserving high pay apply that framework to their employees.

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Mr. Cappelli is skeptical that peanut butter raises will be a new norm in corporations — they actually strike him as a more generous approach than leaders are likely to take right now. In a tight job market, employers felt pressure to give everyone a little something, he said, but now, in a low-fire, low-hire job market, so few openings are available that bosses are not too worried that employees will quit to go elsewhere.

“Efforts to retain people have faded,” he said. Even peanut butter may be more than some should expect.

Framing raises around peanut butter “takes away some of the seriousness” of discussions about compensation, Mr. Murphy said. Peanut butter is cheap and ubiquitous. It is also associated with children, Mr. Cappelli noted, so it reads as a pejorative in a business setting. It’s not as though executives, he added, are referring to Grey Poupon or caviar raises.

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Sweeping California law on single-use plastic meets with outrage from all sides as it goes live

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Sweeping California law on single-use plastic meets with outrage from all sides as it goes live

Within days of California’s long-anticipated single-use plastic law going into effect, environmentalists, anti-waste activists and the packaging industry reacted with anger and frustration.

Anti-plastic activists say Gov. Gavin Newsom’s administration and CalRecycle inserted exemptions favoring the plastic industry into the law’s regulations that weaken it and undermine legislative intent.

“These new rules create huge loopholes for plastic packaging that violate the law,” said Avinash Kar, senior director of the toxics program at the Natural Resources Defense Council.

On the other side, the packaging industry has sued over similar laws in other states. “Our members have real concerns about cost, compliance, and constitutionality,” said Matt Clarke, spokesman for the National Assn. of Wholesaler-Distributors, which sued Oregon earlier this year over a similar waste law.

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CalRecycle, the state’s waste agency, did not respond in time for publication. The final regulations putting the law into effect were released May 1 and posted for review Tuesday.

The environmental organizations say the law’s new final regulations open the door to what is known as “chemical recycling,” which produces large amounts of hazardous waste. The law also contains problematic exemptions for certain categories of plastic foodware, they say.

The language of the law forbids any kind of recycling that would produce significant amounts of hazardous waste. The new regulations allow for these recycling methods if the facilities are properly permitted.

The new regulations also exempt certain products if they are already covered by federal law. For instance, a packaging company, retailer or distributor can claim that they have such a preemption, Kar said, and CalRecycle might not immediately review that claim. “And as long as they don’t review it, they’ll get the exemption for as long as CalRecycle doesn’t review it,” creating a potential “forever loophole.”

“Californians were promised a system where producers take real responsibility for the waste they create,” said Nick Lapis, advocacy director for Californians Against Waste. “When regulations introduce broad exemptions and redefine key terms, that promise starts to erode. The details matter here, and right now they don’t line up with the intent of the law.”

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Senate Bill 54, the Plastic Pollution Prevention and Packaging Producer Responsibility Act, was signed by Newsom in 2022. It was considered landmark legislation because it addressed the scourge of single-use plastics, requiring plastic and packaging companies to use less of them and ensuring that by 2032, all food packaging is either recyclable or compostable.

Accumulating plastic waste is overwhelming waterways and oceans, sickening marine life and threatening human health.

The law’s intent was not only to reduce it, but also to put the onus and cost of dealing with it on packaging producers and manufacturers, not consumers and local governments. It was supposed to incentivize companies to consider the fate of their products and spur innovation in material redesign.

According to one state analysis, 2.9 million tons of single-use plastic and 171.4 billion single-use plastic components were sold, offered for sale, or distributed during 2023 in California.

Similar laws have been passed in Maine, Oregon, Colorado, Minnesota, Maryland and Washington. Oregon’s law, however, is on hold while a lawsuit by the National Assn. of Wholesaler-Distributors works its way through the courts.

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“We see a lot of the same problems in California that we flagged in Oregon,” said Clarke, the trade group spokesman. “Given California’s scale, the cost implications are going to be even larger. Our legal counsel has noted that California’s proposed fees are already higher than what other states have put forward.”

Jan Dell of Last Beach Cleanup, an anti-plastic waste group based in Laguna Beach, doesn’t believe the law will work — irrespective of the final regulations — and said the “exorbitant” cost of its implementation will either spur producers to sue, or they’ll end up passing the higher costs on to consumers.

She referred to a report from the Circular Action Alliance, the state-sanctioned group established to represent and oversee the implementation of the law on behalf of the plastic and packaging industry. It finds the law will increase the cost of disposal between six and 14 times for common products, such as Windex bottles, made of polyethylene terephthalate.

“If the producers don’t successfully sue to stop the fees, this will certainly add to product inflation for CA consumers,” she said in an email. “Californians already have to pay exorbitantly high curbside collection fees for trash, recycling, and organics … so, starting in 2027, our groceries will cost a LOT more but we won’t see a reduction in our waste bills.”

Christopher “Smitty” Smith, a partner at law firm Saul Ewing in Los Angeles, who councils companies and interest groups on SB 54 and other Extended Producer Liability laws, said that although he could see areas of the law that “could be sharper and avoid the legal challenges … you can’t stop people from suing.” Environmentalists and anti-waste activists say they are preparing a lawsuit.

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Smith said the law already has sparked changes in how companies think and respond to concerns about waste.

One of his national fast-food chain clients has realized that if its brand name is on plastic packaging, it’s that company’s responsibility, he said, so “they’ve spent the past year mapping out their franchise agreements, their supply chain agreements, their producer agreements, to figure out” what it needs to do to comply.

He said in the past, companies have paid little attention to these details and just let their franchisees figure this kind of thing out. Now, they’re spending a lot of time and money “to wrap their arms around what their supply chain looks like and like, what post consumer use of their plastic products looks like and what their regulatory obligations are.”

It’s bringing a new dialogue within companies. And that, Smith said, is what could make this law so powerful.

Times staff writer Meg Tanaka contributed to this report.

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Sales Are Up. Celebrities Are In. Is Gap Officially Back?

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Sales Are Up. Celebrities Are In. Is Gap Officially Back?

At Gap’s headquarters in San Francisco, an archive dedicated to the apparel company’s 57-year history features nearly 6,000 boxes of memorabilia documenting the retailer’s brands, which also include Old Navy, Banana Republic and Athleta.

There are prints from photographers like Annie Leibovitz and material related to many celebrity ad campaigns, like Missy Elliott and Madonna for Gap and Cindy Crawford for Old Navy. Those dated back to the retailer’s heyday, when malls were full, celebrities wore the brand on red carpets and Gap stores were plot points in sitcoms like “Seinfeld.”

When Richard Dickson started as Gap’s chief executive nearly three years ago, he was awed by those archives and set out to change the conversation about the company.

Gap had spent years closing hundreds of stores across the United States, as sales flagged and profits were patchy. Its stock, which peaked in 2000, was languishing. The company took more than a year to fill the C.E.O. position.

Mr. Dickson, who spent nearly 20 years at Mattel, brought with him a playbook that had helped revitalize the toymaker’s brands like Hot Wheels and Barbie. He got Barbie to the big screen, with star power and a marketing machine that produced blockbuster financial results.

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The native New Yorker speaks excitedly about the ways that fashion, entertainment and music are intertwined. He went to Coachella last month and has been to the Oscars in recent years. He often mentions how Gap’s first store, which opened in 1969 in San Francisco, sold records, tapes and jeans.

Mr. Dickson’s culture-focused strategy is taking root. For his creative director, he hired Zac Posen, who dressed Kendall Jenner in a Gap gown for the recent Met Gala. Gap has made toe-tapping ads featuring Katseye and Parker Posey. Mr. Dickson even hired another C.E.O. — a chief entertainment officer — to oversee the company’s push into content, licensing and Hollywood.

Gap’s comparable sales have risen for eight straight quarters, and its market value has increased to $8.5 billion, from $3.6 billion when Mr. Dickson started. Last year, Gap, Old Navy and Banana Republic posted sales increases, with only Athleta recording a decline. Gap’s namesake brand showed the strongest growth.

Mr. Dickson, 58, credits the turnaround to “being aware of pop culture, content, art, theater, music, entertainment.” If a brand makes sure that those themes come through, “you become more relevant,” he said.

This interview was edited and condensed.

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As you try to bring Gap back into the cultural conversation, how are you managing your time? Are you spending more time in Hollywood?

As our business evolves, my allocated time also changes.

When I first got to the company, we were in “fix mode.” It’s no secret. My time was 100 percent spent on the operations, the financial rigor, setting up strategic priorities and editing a lot of the noise in the system that can be very distracting for a turnaround.

Over the course of three years, we’ve emerged a better company. Now we move into the next phase, which is to build momentum. My focus, while not taking my eye off the operational discipline, moves more into how to accelerate our growth.

I have a multitude of meetings and time spent with the entertainment community, which I’m very familiar with from previous roles.

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When you were hired from Mattel, the chatter was that you would try to recreate the Barbie magic. Is that true, or is there a different strategy for Gap?

It’s actually the same playbook. It is not so much that the playbook is unique; it’s the methodology and the execution that’s unique.

The playbook is, first, identifying what’s our reason for being.

You could put me on any brand in the world. Why do you exist? What is our purpose? What’s our point of difference? Those simple questions have very complicated answers when you’re in a turnaround. If you can’t answer it in a sentence or two, or one or two words, you’ve got a problem.

Old Navy is different from Gap. Gap is different from Banana. Banana is different from Athleta.

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So let’s focus on Gap. What makes it distinctive?

When I look at the history of every one of our brands — it wasn’t dissimilar to the Barbie conversation — what was it that broke through? What was that single thing that made it so incredibly relevant?

In our case, it was a store that was all-inclusive before inclusivity became a word, because we sold jeans for all races, all sizes, all sexes. We bridged the generation gap in the experience through music. Music was the connective tissue in the context of the store experience.

Let’s get back into that music narrative with great product storytelling and amplify it in a way that is relevant for today’s consumer. We started with Jungle with our linen campaign. We moved to Troye Sivan with a great music video around the baggy and loose trend. Then, of course, the blowout with Katseye.

These aren’t ads. Yes, you see the fleece because it looks incredible. But nobody’s saying, “Oh, my God, it’s a great deal with a great price.” They’re saying: “Did you see this? Did you feel this?” That is when you get emotional connection to a brand.

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We had become more about price than product. More about stuff, not storytelling.

If you’re focusing on entertainment, how do you measure success?

We have dashboards everywhere. I think we just turned one off when you walked in because our business flashes on an hourly basis on my screens.

We have dashboards that measure brand love, people searching more for our brand and brand attributes that we test and roll out to see how consumers are feeling.

Does the focus on entertainment hedge against all of the uncertainty in the world?

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To some extent, in the world that we live in, we should be that great distraction in some cases, that pleasant place that you love to go to. That ultimately makes a brand stronger, to essentially navigate more complex times. There’s always something that we have to worry about.

How worried are you about consumer spending? We’re in California right now. I passed a gas station where it was about $6 per gallon.

That was a good deal.

Most retailers say that consumers remain resilient, but are you prepared for spending levels to drop?

We have a fantastic portfolio that addresses all income cohorts.

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We have quality products that should last, in some cases, for generations. You’re buying it for the long haul. But we do recognize that we need frequency: We need to stay fresh. We need to stay new.

There are a lot of businesses that will start to pull back on quality, right? We’re not.

You’re from New York City, right? Tell me about your upbringing.

My parents were both in retail, real estate and fashion. My mom was more on the creative side, and my dad was more on the financial and operations side.

My grandparents were also in fashion and retail. They were Holocaust survivors. My grandmother sewed and had her own line in department stores. My grandfather ran the factory, so they had a small business that did very well. I remember growing up and running around the factory floor.

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What’s a piece of advice that you received that you still reflect on today?

Retail is detail. There’s not a single day where everything goes right, but at the end of that day you could still say that it was a great day.

Ultimately you’re firefighting on a minute-to-minute basis. You’re constantly in motion. That sense of detail orientation is probably an attribute that’s carried with me from my earliest days in the industry.

It’s time for the lightning round. What’s on heavy rotation on your music playlist right now?

Who I really like right now is Sombr. I saw him at Coachella.

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What’s the last thing you asked A.I.?

To decipher an object that somebody sent me from a museum and I wanted to know which museum it was from.

How often do you check Gap’s stock price?

I probably check it twice a day. I do a morning check and at the end of the day.

When you need to feel most confident, what are you wearing?

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I love our hoodies, and not only our fleece hoodies at Gap but Banana Republic’s cashmere hoodie. Depending on the vibe, I would go with a fleece or cashmere hoodie. Then I usually throw on a Banana Republic trucker jacket.

I wear all of our brands. I have worn a few sweatshirts from Athleta.

If you had to explain each of your brands in exactly one word, what would it be? Let’s start with Old Navy.

Family.

Gap?

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Individuality.

Banana Republic?

Adventure.

Athleta?

I’m going to go with empowerment.

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