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The worlds leading minds in AI are gathering in Paris for the AI Action Summit, which kicked off on Monday. French president Emmanuel Macron is hosting the summit, which includes Vice President JD Vance among its attendees. But the summitwhich is focused on discussion and debate about the future of the technologycomes at a time when things are moving quickly in the AI space. While Frances minister for AI and digital affairs, Clara Chappaz, may want to keep the debate focused on three key objectives for the summit, covering societal and cultural, economic, and diplomatic needs, theres much more going on at the minute. Between Project Stargate, the U.S.s $500 billion plan to try and corner off the development of AI and to head off the rise of China in the space, to joint ventures being brokered between Japan and OpenAI to provide proprietary platforms and models to boost businesses there, it may seem like theres plenty of action happening outside official communiques and conferences. And thats before you get to the epoch-changing impact of DeepSeeks arrival, and its R1 models ability to upend the economics of the generative AI revolution. This marks the third major summit since the U.K. hosted one at Bletchley Park in November 2023. What, exactly, is the point of these discussions? In my opinion, this is first and foremost a diplomatic move that aims at facilitating the convergence of AI governance, generating debate on the impact of AI on societies, says Thomas Husson, vice president and principal analyst at Forrester, who is attending the summit. Its unlikely a major announcement will be made, but what matters here is the continuous dialogue on AI global regulation. But critics argue that, in a world where governments simply arent catching up to the private companies engaged in a relentless AI race (and where countries and private companies are striking semi-protectionist deals), continuous dialogue may not solve much. To be the architects of a positive future for AI, governments need to build out the incentives required to make sure the technology works, is safe and is trustworthymaking sure the roof doesnt fall in on us, says Gaia Marcus, director of the Ada Lovelace Institute, an independent research institute focused on the development of AI. Governments also need to build and invest in alternatives that ensure the value and benefits of tech advances can be felt by everyoneand avoid paying extortionate rent to a few large companies for a generation. The current plan for the summit, as evidenced through a leaked draft of the summits pledge, doesnt do that, Marcus says. Based on the initial draft, we are concerned that the scaffolding provided by the official summit declaration is not strong enough, she tells Fast Company. Those in the AI safety space fear that another milquetoast declaration does little more than provide further breathing room for big tech companies to pull away even further from regulation. There are some strong points within the planned pledge at the end of the summit, however. The declaration does highlight widespread consensus on key structural risks, like market concentration, labor market impacts and sustainability challenges, Marcus adds. But it fails to build on the mission of making AI safe and trustworthy. And more broadly, it all adds up to a growing feeling of hopelessness.
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E-Commerce
After a year of dominating U.S. headlines for everything from a major E. coli outbreak to a visit from Donald Trump, McDonalds today announced its fourth-quarter and full-year 2024 financial report. Here’s a quick look at the numbers: Fourth-quarter revenue was $6.4 billion Fourth-quarter net income was $2.2 billion Full-year revenue was $25.9 billion Full-year net income was $8.2 billion Global comparable sales increased by 0.4% in the fourth quarter, while U.S. comparable sales dropped by 1.4% in the same period. (Thats compared to a 4.3% gain in the fourth quarter last year.) The data shows that while McDonalds has made progress globally, U.S. numbers remain sluggish as the chain struggles to strike the right balance between fair prices and profit. The $5 meal deal: A financial mixed bag Over the past several months, McDonalds has been on a mission to dispel its reputation as a villain of the American inflation story. In a LendingTree survey last May, 65% of respondents said theyd been shocked by a fast food bill in the past six months, while 80% said they considered fast food to be a luxury. Plenty of ire has been directed at McDonalds for its perceived role in contributing to unaffordable fast food costs. To combat that perception and win customers back, McDonalds launched a $5 value meal in June. While the deal was meant to be a limited-time offering, the campaigns popularity (and financial payoff; its been credited for saving the chains third quarter) led McDonalds to extend the $5 meal into December 2024. Then, in November, McDonalds once again promised to offer its value meal for at least the first half of 2025. On an earnings call today, a McDonalds spokesperson shared that Q4 was the companys best quarter of the year with the American low-income consumer segment. However, per the financial report, the 1.4% drop in U.S. comparable sales could be attributed to a decline in average check, partly offset by slightly positive comparable guest countsmeaning that, as customers are spending less per meal, McDonalds is having trouble recouping the difference. The impact of the E. coli outbreak continues Theres another reason for McDonalds lackluster fourth quarter in the U.S., according to CEO Chris Kempczinski: the lasting impact of last years E. coli outbreak, which sent the companys stock into a tailspin at the time. Our fourth-quarter performance reflects the impact of the food incident, Kempczinski said during todays earnings call. The outbreak, which emerged in late October, sickened dozens of McDonalds customers and killed one person, causing the company to temporarily remove its Quarter Pounder from thousands of stores. Months later, it seems like the company is still working to regain consumers trust as it continues to navigate a rocky economic climate. Nevertheless, investors are relatively optimistic about the companys outlook: As of this writing, shares of McDonald’s (NYSE: MCD) are up almost 5%, to about $309 per share.
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E-Commerce
Shortly after he was confirmed as President Donald Trumps transportation secretary, Sean Duffy circulated a memo that instructed his department to prioritize families by, among other things, giving preference to communities with marriage and birth rates higher than the national average when awarding grants. Connecticut Democratic Sen. Richard Blumenthal called the directive last week deeply frightening,” and Washington Democratic Sen. Patty Murray called it disturbingly dystopian. The memo also calls for prohibiting governments that get Department of Transportation funds from imposing vaccine and mask mandates and requiring their cooperation with the administrations immigration enforcement efforts. With hundreds of billions of dollars in transportation money still unspent from the 2021 Bipartisan Infrastructure Law, such changes could be a boon for projects in Republican-majority states, which on average have higher fertility rates than those leaning Democratic. States controlled by Democrats were generally more receptive to mask and vaccine rules to combat the COVID-19 pandemic and have been more resistant to Trumps immigration raids. More births for more roads? All administrations set their own rules for choosing which transportation projects to prioritize. But some of Duffy’s directives were received as highly unusual. Distributing transportation funding based marriage and birth rates is bizarre and a little creepy,” said Kevin DeGood, senior director of infrastructure and housing policy at the left-leaning Center for American Progress. “States and regions with aging populations tend, on average, to have lower birth rates … Are they somehow not deserving of transportation investment? According to the latest figures from the Centers for Disease Control and Prevention in 2022, the 14 states with the highest fertility rates backed Trump in the November election while the bottom 11 plus the District of Columbia supported Democrat Kamala Harris. Marriage rates tend to skew higher for red states too, but by a smaller margin. Vice President JD Vance has long expressed concern about declining birth rates, citing national economic needs as well as the inherent value of children. Tennessee Republican Sen. Marsha Blackburn raised the idea of tying transportation funding to population growth during Duffys confirmation hearing. People are leaving some of these blue states and coming to places like Tennessee, she said. And this means that we need to look at where those federal highway dollars are spent and placing them in areas with growing needs rather than areas that are losing population. Sarah Hayford, sociology professor and director of the Institute for Population Research at Ohio State University, said she had never heard of birth rates being used to set funding priorities. I was a little surprised,” she said. “Often the policy around birth rates is trying to address challenges or barriers to people not having children. This seems more focused on rewarding people for already having children. The U.S. birth rate has been declining since 2007, which Hayford attributes in part to economic uncertainty during the Great Recession. She said research has tied higher birth rates to areas with lower education. Longstanding transportation policy already considers where kids live, said Beth Jarosz, senior program director at the nonpartisan and nonprofit Population Reference Bureau. If what youre trying to do is support families, birth rates arent necessarily the best way to do that, she said, pointing out that many growing families move to new communities when they find their homes are too small. The Department of Transportation has not responded to questions about the memo. So far, lawmakers and advocates are unaware of birth and marriage rates being linked to non-transportation grants. Blue states push back Blumenthal said the transportation secretary’s focus on birth and marriage rates was “reminiscent of what you might see in the Peoples Republic of China. On its face, its social engineering. But clearly and indisputably, it is a dagger aimed at blue states, he said. It is patently discriminatory if you look at the numbers. This criteria was designed to punish blue states and coerce states to change their lawful policy on tolls, vaccines and immigration. U.S. Rep. Kweisi Mfume, a Maryland Democrat, said he feared Duffy’s directives would harm some grants already announcedincluding $85 million awarded to Baltimore in the final weeks of the Biden administration to transform a blighted stretch of U.S. 40 known as the highway to nowhere. If it’s an effort to reward red states, he ought to just go ahead and say that, Mfume said. Otherwise, there will be a lot of challenges by states and advocacy organizations all over the country who have no choice but to fight back, and that fight will become a legal one. Yet Jarosz said the policy’s political intentions are unclear, noting communities like San Diego and Sacramento in California are above the national average in terms of birth rates, while certain rural areas of the country are below. Is this even legal? Legal experts say it is too early to know whether anything in Duffy’s memo could be struck down by the courts. Although it is difficult to make a legal argument for funding equality based on political affiliation, federal law does protect against discrimination over such things as race, sex, and disabilities. Joel Roberson, who handles transportation and infrastructure cases at the Washington, D.C., law firm Holland & Knight, said administrations have widespread authority to set their own criteria for awarding money. However, communities denied funding could file a lawsuit arguing they endured an illegal disparate impact. As for whether Trump could redirect transportation grants awarded under Biden, Roberson said it largely depends on the status of the project and whether Congress has already appropriated the funding. State transportation officials have expressed confidence that changes in priorities won’t impact the federal funds states use to set their own transportation priorities and build roads. But many other grants are awarded at the discretion of the administration in power. Less clear is the status of some already approved discretionary grants, such as an agreement signed just before former President Joe Biden left office committing $1.9 billion toward a nearly $5.7 billion project to add four new L stations in South Side Chicago. Blumenthal, a former state attorney general and federal prosecutor, said Duffy’s edict created uncertainty and confusion” and pointed out it doesn’t carry any legal weigt like statutes and regulations do. He predicted courts would ultimately reject the policy. Anybody can write a memo, Blumenthal said. Jeff McMurray and Susan Haigh, Associated Press
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E-Commerce
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