Companies face more AI liability than they realize

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Welcome back to another edition of Tech Creator!

tl;dr…

• Companies face more AI liability than they realize. Businesses using AI could face legal risks, even if they didn't create it.

• ByteDance to develop its own AI chips amid rising competition. ByteDance is making its own AI chips to reduce reliance on Nvidia.

• Is Apple slowly killing the iPhone? Apple’s boring iPhone updates might drive users to simpler devices.

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Companies face more AI liability than they realize

Companies using generative AI may be taking on more legal risks than they think, according to a new article in NYU's Journal of Legislation and Public Policy.

Why it matters: While most discussions around AI liability focus on the companies building the technology, this article highlights the often-overlooked liability facing companies that use AI. Many believe the responsibility lies solely with AI creators, but existing laws suggest otherwise.

Key takeaways:

• EqualAI CEO Miriam Vogel warns that companies mistakenly assume they’re not liable for AI-related issues. However, laws related to housing, lending, and employment still apply, even if AI was involved.

• Companies may unknowingly use AI, even if they haven’t officially authorized it, which can expose them to further risks, particularly from low-quality AI prone to discrimination.

The legal landscape: Though the U.S. lacks AI-specific laws, courts will likely have to determine how existing regulations apply to generative AI. Intellectual property is a key area of contention, as lawsuits are mounting from artists and publishers who claim AI infringes on their copyrights.

The bottom line: AI can offer huge benefits, but companies need to approach its use with awareness of the legal risks. As Vogel puts it, "We want people to benefit [from AI], but it has to be done with eyes open."

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ByteDance to develop its own AI chips amid rising competition

As China pushes forward with its AI ambitions, TikTok owner ByteDance is reportedly working on producing its own AI chips. The company has designed two chips with Taiwan Semiconductor Manufacturing Company (TSMC), aiming to mass-produce them by 2026. This move could reduce ByteDance's reliance on Nvidia's expensive GPUs, which are restricted by U.S. export controls.

Why it matters:

• Competition in China: ByteDance's AI-powered chatbot, Doubao, has already outperformed Baidu’s Ernie Bot in downloads, making ByteDance a major player in China’s AI race.

• Cost savings: By developing its own chips, ByteDance could save billions and avoid U.S. restrictions on Nvidia’s chips.

• Broader impact: Chinese AI developers like Baidu are also designing their own chips, creating a highly competitive environment. However, their ability to work with TSMC hinges on compliance with evolving U.S. export controls.

ByteDance’s move is part of a broader trend in China, where tech companies are increasingly developing their own hardware to gain independence from U.S. technologies.

Is Apple slowly killing the iPhone?

Remember when Apple events were exciting? Yeah, me neither—it's been almost a decade. This week’s iPhone updates barely registered: a new camera button and slightly larger displays on the Pro models. Meanwhile, the Apple Watch can now detect sleep apnea, and AirPods double as hearing aids—seems like Apple is catering to an older crowd more than ever.

This lack of innovation could be fueling the Dumbphone Era—a growing trend of people ditching smartphones for simpler devices. Initially, it seemed like something only Gen Z was into, fleeing toxic social media, but now even corporate execs are jumping on the bandwagon. The Wall Street Journal recently crowned fax machines and basic phones as the new status symbols.

It makes sense. Younger generations don’t want smartphones because they’ve become digital traps, and older execs probably feel the same. Plus, with an Apple Watch, iPad, and MacBook, do they really need another iPhone, especially when the upgrades are so minor?

Apple’s uninspired updates are pushing even loyal iPhone users to look elsewhere, and it’s not helping win back those content with simpler devices. Something has to change in Cupertino—either Apple needs to deliver real innovation or accept a scaled-back product line with fewer, but more meaningful, updates.