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Tech execs are joining the Army — no grueling boot camp required

Tech execs are joining the Army — no grueling boot camp required

Four top tech execs from OpenAI, Meta, and Palantir have just joined the US Army — no obstacle courses, shouted orders, or grueling marches required.
The Army Reserve has commissioned these senior tech leaders to serve as mid-level officers, skipping tradition to pursue transformation. The newcomers won't attend any current version of the military's most basic and ingrained rite of passage— boot camp.
Instead, they'll be ushered in through express training Army leaders are still hashing out, said Col. Dave Butler, a spokesman to the Chief of Staff of the Army, in a phone interview with Business Insider.
"They'll do marksmanship training, physical training, they'll learn the Army rank structure and history, and uniforms," Butler explained. Of the boot camp-lite plans, "you could think of it as a pilot," he said, adding that the new soldiers are a part of the Army's larger effort to rapidly modernize.
The execs — Shyam Sankar, chief technology officer for Palantir; Andrew Bosworth, chief technology officer of Meta; Kevin Weil, chief product officer at OpenAI; and Bob McGrew, advisor at Thinking Machines Lab and former chief research officer for OpenAI — are joining the Army as lieutenant colonels, according to an Army press statement as part of an effort to turbocharge tech innovation and adoption.
The service's decision to allow the four to skip "direct commissioning" boot camp, a shortened version of regular officer boot camp, is unusual, though not without historical precedence, Butler said.
"The Army has allowed the direct commission of civilians since 1861 to bring experts with critically needed skills into the force," he wrote in an email to BI.
William Atterbury, the president of the American Railway Association, received a direct commission into the Army in 1917 and served as the director-general of transportation for Allied Expeditionary Forces in France.
Other notable examples include the president of the Columbia Gas and Electric Corporation of New York, Edward Reynolds, who commissioned as an Army colonel to serve as chief of the Medical Supply Service during World War II, and General Motors leader, William Knudsen, who direct commissioned as a lieutenant general and became the director of production for the War Department.
The new tech lieutenant colonels will have to adhere to Army standards, Butler said, and will be expected to perform the service's annual fitness test to stay in good standing. They will spend around two weeks per year working, roughly the minimum required for military reservists.
The name of their unit, "Detachment 201" is named for the "201" status code generated when a new resource is created for Hyper Text Transfer Protocols in internet coding, Butler explained.
"In this role they will work on targeted projects to help guide rapid and scalable tech solutions to complex problems," read an Army press release. "By bringing private-sector know-how into uniform, Det. 201 is supercharging efforts like the Army Transformation Initiative, which aims to make the force leaner, smarter, and more lethal."
Lethality, a vague Pentagon buzzword, has been at the heart of the massive modernization and transformation effort the Army is undergoing to build a force that is capable of fighting and winning 21st-century conflicts.
The Army isn't currently planning a second wave of direct commission industry leaders and still has to get these new additions through an express version of basic training, though more similar iterations are expected down the road, Butler said, noting increased interest from other private sector leaders.
It is common for the services to bring aboard officers at mid-level ranks — the vast majority of military officers join as second lieutenants, or at the rank of O-1. Historically, chaplains, veterinarians, and medical providers have been allowed to join the Army at slightly higher ranks. Other recent initiatives allow for a wider variety of commissions for highly skilled civilian workers from tech and cyber sectors, in some cases up to the rank of colonel, one level below a general.

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In race to attract data centers, states forfeit hundreds of millions of dollars in tax revenue to tech companies
In race to attract data centers, states forfeit hundreds of millions of dollars in tax revenue to tech companies

CNBC

timean hour ago

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In race to attract data centers, states forfeit hundreds of millions of dollars in tax revenue to tech companies

In 2019, the Indiana legislature passed a bill that would offer eligible data centers significant sales tax exemptions. The legislation said facilities packed with state-of-the-art servers could avoid the state's 7% tax when purchasing equipment and power. The measure was a boon for large tech companies that have been rapidly building out data centers and was heavily backed by a trade association representing the industry. Similar tax incentives have been passed elsewhere. Today nearly all states that have sales taxes offer data centers exemptions on computers, wires, air-conditioning units and, in some cases, even the energy required to keep it all running. Demand for data center capacity was already soaring at the time of the Indiana legislation but has picked up exponentially since then due to the artificial intelligence boom sparked by the launch of OpenAI's ChatGPT in 2022. Data center investment is now projected to reach $1 trillion by 2027, according to professional services network PwC. In the race to attract large data centers, states are forfeiting hundreds of millions of dollars in tax revenue, according to a CNBC analysis. Among the beneficiaries of these exemptions are tech giants such as Amazon, Meta and Google, which all have market caps of over $1 trillion. Tax breaks have long been a tool states use to compete for businesses. However, watchdog groups said that for data centers the tradeoffs are iffy, because the facilities don't tend to create large numbers of jobs, while the amount of electricity required can be immense. The growing number of tax breaks has sparked a debate about whether massive corporations should be receiving these generous incentives. A CNBC analysis determined that 42 states provide full or partial sales tax exemptions to data centers or have no state sales tax at all. Of those, 37 have passed legislation specifically granting sales tax exemptions for data centers, and 16 of those states have granted nearly $6 billion in exemptions over the past five years. The other 21 states that offer similar breaks are not included in the $6 billion total because they do not publicly report how much they have awarded in tax breaks. Eight other states that have sales tax don't give exemptions to data centers. Only Illinois, Nevada, Missouri and Washington itemize how much companies are getting by recipient. For instance, CNBC found that one Microsoft data center in Illinois received more than $38 million in data center sales tax exemptions but created just 20 permanent jobs. In Washington, the tech giant secured $333 million in sales tax exemptions for its data centers between 2015 and 2023. Microsoft declined to comment on the tax incentives and job creation tied to its data centers in the two states. But other states don't publicly disclose this type of granular data. For example, Virginia has an estimated lump-sum exemption of more than $730 million for fiscal year 2024, but the state doesn't offer a detailed breakdown of how much each company received. It's also not always clear which companies are asking for tax breaks. In 2023, a limited liability company named Hatchworks applied for Indiana's sales tax exemption. After the award was granted, a state filing showed Hatchworks is a subsidiary of Google. A Google spokesperson told CNBC that using a third-party LLC until project details are finalized is standard practice in economic development projects across industries. Greg LeRoy, executive director of Good Jobs First, a nonprofit research group that tracks corporate subsidies and advocates for transparency and accountability in economic development, has spent more than a decade examining the impact of exemptions nationwide. He said the clear winners are the Big Tech companies. "There was a giant transfer of wealth from taxpayers to shareholders," LeRoy told CNBC. "Some states, like Virginia, are headed toward billion-dollar annual losses." Northern Virginia, which is known as the world's data center capital, has examined the economic impact of the data center sales tax exemptions. A 2024 study by the Virginia Joint Legislative Audit and Review Committee, or JLARC, showed that, on average, the state generated 48 cents in new state revenue for every dollar it did not collect in sales tax between fiscal years 2014 and 2023. Most of this revenue came from personal and corporate income taxes as well as from sales tax on nonexempt purchases, JLARC said. But that 48 cents is also better than what the state sees from other industries with sales tax exemptions intended to boost economic activity, which, on average, brought in just 17 cents per dollar, according to JLARC. 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"The state decided, let's exempt equipment purchases in order to attract more data centers," said DelBianco, whose organization has represented Big Tech companies in Indiana and lobbied on their behalf nationwide. "And when it did so, it still got half of it, the sales tax that it thought it was giving up." When lobbying on behalf of companies such as Meta, Google and Amazon for sales tax exemptions, DelBianco has said that data centers are a key driver of economic growth. Between 2021 and 2023, Northern Virginia benefited from 50,700 jobs and $7.2 billion in contributions to the economy, according to the 2024 JLARC report. During that same period, the rest of the state generated 12,100 jobs and contributed $1.3 billion to the economy, JLARC said. Between fiscal year 2014 and 2023, incentives for data centers provided more financial benefit than all other economic development incentives combined, the JLARC study said. It said most of this growth came from the construction phase of data centers. Former U.S. Rep. Barbara Comstock, R-Va., was a member of the Virginia legislature and the lead lawmaker behind its data center sales tax exemption when the legislation passed in 2012. She now serves as an advisor to NetChoice. In her 2019 Indiana state legislative testimony, Comstock said she viewed the exemptions as a crucial strategy for attracting investments, creating jobs and generating local tax revenue. In Indiana, consumer watchdog group Citizens Action Coalition said it has been monitoring the sales tax exemptions granted to data centers. Ben Inskeep, the group's program director, said Indiana offers some of the country's most generous subsidies, including a sales tax exemption on energy and equipment for up to 50 years for data centers that invest more than $750 million. Inskeep said that when the sales tax exemption was passed in 2019, lawmakers didn't anticipate that Big Tech companies would be building out large data centers, thus receiving billions of dollars in tax breaks. He said the facilities create very few permanent jobs. A 2017 report from the U.S. Chamber of Commerce said it looked at financial data of "10 major enterprises and service providers that own 244 large data centers across 16 states." It found that during the construction phase, data centers on average employ 1,688 workers. But once they're up and running, they provide only 157 permanent jobs. By comparison, a 2020 study by two economics professors evaluating state and local business incentives found that aerospace and automobile manufacturers that received firm-specific exemptions between 2002 and 2017 promised more than 2,700 jobs. However, unlike the data center figures, which reflect actual employment averages, the aerospace and automobile job numbers were based on company projections tied to incentive agreements. "While we find some evidence of direct employment gains from attracting a firm, we do not find strong evidence that firm-specific tax incentives increase broader economic growth at the state and local level," the study's authors wrote. Then there's the power. The Virginia audit found the data center industry is projected to drive an "immense increase in energy demand." The study predicted that the power demand in Virginia will double in the next 10 years, mainly due to the data center industry. The report said one of Virginia's smaller data centers used the same amount of energy as 4,500 homes and that the largest new data centers use more energy than most industrial consumers. While data centers in the state are currently paying the full cost of service, the strain on resources is likely to increase the costs paid by other customers, the report said. CNBC contacted Amazon, Apple, Google, Meta, Microsoft, OpenAI and Oracle for comment. Amazon, Google, Meta and Microsoft all said they work with utility companies to ensure they cover the costs of growth required to meet their data center needs. Amazon, Google and Microsoft said they also invest in carbon-free and sustainable energy sources — such as wind, solar and nuclear power. An Amazon spokesperson said incentives play a key role in attracting data centers and require companies to meet strict investment and job creation benchmarks. Amazon also said it contributed $460 million in property taxes and fees for its data centers in three Virginia counties in 2023 and has invested more than $75 billion in the state since 2011. Apple, OpenAI and Oracle did not respond to multiple requests for comment.

Uber Is Making A Push In Data Labeling After Scale AI's Deal With Meta
Uber Is Making A Push In Data Labeling After Scale AI's Deal With Meta

Forbes

time2 hours ago

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Uber Is Making A Push In Data Labeling After Scale AI's Deal With Meta

Uber is making a push in data labeling. Last week, Scale AI's bombshell deal for Meta to take a 49% stake in the company sent shockwaves throughout the industry: In its wake, prominent clients like OpenAI have pulled back on working with Scale, which the ChatGPT maker had already been doing for months. Google is also planning its split. And a host of data-labeling rivals has been emboldened to step in to fill the void. Among them is a little-known unit from a familiar giant: Uber. Since last November, the ride-hailing behemoth has operated Uber AI Solutions, a data-labeling platform focused on training AI models for enterprise clients. Now as Scale's deal has carved a new opening in the market, Uber is making its pitch to new customers. 'For Uber, our core has always been being the platform of choice for flexible on-demand work,' Megha Yethadka, general manager of the unit and a 10-year veteran of the company, told Forbes. Uber drivers, of course, are contractors that shuttle around passengers and deliveries all across the globe. 'That extends itself really well to this business of digital tasks now.' On Friday, Uber told Forbes it's making a push to expand the service. Among the updates: a new service that provides ready-to-use datasets, including audio, video, images and text, to customers training their own models. The company will also license out the platforms it uses internally for managing data labeling projects and accessing its network of contracted clickworkers, making them available for clients to use. Beyond just training models, Uber is now also offering clients tools to develop AI agents, which can take specific actions for users, like helping with customer support. Another change: Launched as Uber Scaled Solutions, the company recently swapped out the 'scaled' in its name for 'AI.' 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Since the start of this year, Yethadka said Uber has doubled the number of clickworkers on its platform. She declined to disclose how many taskers are in the company's network overall, but said there are 'tens of thousands' of people working on each topic area of tasks, including STEM, coding and law. The most engaged clickworkers spend about 3 to 4 hours a day performing tasks, which can range from $20 to $200 per hour, depending on the complexity of the work, Yethadka said. The unit has more than 50 corporate customers, including the autonomous vehicle company Aurora and Niantic, the creator of Pokemon Go that recently ditched the games business to pivot to enterprise AI. The expansion comes as Scale's tie-up with Meta has thrown the data labeling industry into a frenzy. As part of the deal, Scale CEO and founder Alex Wang is heading to Meta to lead the tech giant's newly-formed Superintelligence Lab, an effort to compete with other deep-pocketed frontier labs including those from OpenAI, Anthropic and Google. Now, 'a number of companies are, of course, looking to revisit their partner strategy for data,' said Yethadka, aiming to find vendors that are 'neutral and impartial." In the aftermath, smaller rivals, including unicorns Mercor and Turing and startup Invisible Technologies, are clamoring to pounce. But Uber stands out among the competition because of its sheer size and resources, Yethadka argues. 'A lot of companies in this space are a lot smaller, VC-funding dependent,' she said. Meanwhile Uber, which is worth $175 billion and tallied $43.9 billion in revenue last year, is a more reliable long-term bet, Yethadka said. (She declined to break out the data-labeling unit's revenue.) 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'Data annotation is transitioning towards higher and higher-skilled work,' Brendan Foody, CEO of $2 billion-valued Mercor, told Forbes. 'Uber's success will depend on how effectively they build this high-skilled talent network.' What's more, Uber has its own baggage. For years, the company limped through controversies around regulation and the treatment of its contract drivers. Yethadka said customers have not minded, and that Uber has committed to 'do the right thing' when it comes to data confidentiality and security controls. 'And that continues to be applied to this new line of business as well,' she said.

SoftBank's Son pitches $1 trillion Arizona AI hub, Bloomberg News reports
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CNBC

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SoftBank's Son pitches $1 trillion Arizona AI hub, Bloomberg News reports

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