Microsoft

With Decentralized AI and Tokenized Ownership, We Can Fight ‘The Six’

Opinion Share Share this article Copy link X icon X (Twitter) LinkedIn Facebook Email With Decentralized AI and Tokenized Ownership, We Can Fight ‘The Six’ Orthodox venture capital will never provide the resources for decentralized AI to take on Microsoft, Alphabet, Apple, et al. The only way is to supplant equity financing with user-owned, token-based

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With Decentralized AI and Tokenized Ownership, We Can Fight ‘The Six’

Orthodox venture capital will never provide the resources for decentralized AI to take on Microsoft, Alphabet, Apple, et al. The only way is to supplant equity financing with user-owned, token-based systems, says Michael J. Casey, Chairman of The Decentralized AI Society.

By Michael J. Casey|Edited by Benjamin Schiller
Updated Nov 1, 2024, 7:20 p.m. Published Nov 1, 2024, 7:16 p.m.
(Pixabay)

The past two days’ share price moves for the six most heavily capitalized companies in the U.S. tell you all you need to know about why we must urgently decentralize the artificial intelligence economy.

The first headlines were that the third-quarter profits and revenue from Microsoft, Alphabet, Apple, Meta and Amazon all beat or met expectations. Yet, with the exception of Amazon’s on Friday, Big Tech’s shares all sold off in response to their earnings announcements, dragging down with them chip-maker Nvidia, the sixth member of the group, whose quarterly reporting is scheduled a month later.

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What spooked investors were some daunting capital expenditure numbers on AI computing power and model development. Alphabet, for one, said it did $13 billion in capex last quarter and expects to do the same in this one while Meta upped its full-year projected spending to $38-40 billion. The giants are in a spending war as each tries to outrace the others toward AI supremacy. Each one of them stands to lose profit margins if it gets out of control.

Let’s be clear: between them, The Six are booking $1.8 trillion in annual revenues, a number that would put their combined inflows in 10th place of global country rankings if we viewed them as a proxy for national GDP – just behind the gross output of Brazil’s 220 million people. Meanwhile, The Six have a combined market capitalization of $15 trillion, capturing an astounding one third of the entire S&P 500 index. Despite – or perhaps because of – this unprecedented scorecard, these companies are relentlessly competing for world domination. Doing what great American companies have always done, they’re unleashing a competitive instinct that, in a normal capitalist economy of diversified goods and services, is the core driver of technological progress.

So, don’t worry about The Six. Worry about us. Because our problem amid the dizzying advance of AI is definitely not one of a shortfall in technological progress. It’s that this particular form of technological progress comes with risks to human autonomy and safety. And to mitigate them, the question of who controls AI’s development and whether their incentives are aligned with the broadest base of humanity is fundamental.

Just as was the case for Alphabet’s Google, Meta’s Facebook and Amazon’s marketplace, the development of these six companies’ large language models (LLMs) and other AI machinery is occurring within closed, black-box systems.They’ve ingested the troves of data we all unwittingly poured into internet sites, and have built highly complex codebases into which no one has visibility. Between them, they dominate all layers of the AI stack: the storage (Amazon Web Services), the chips for computation (Nvidia), the AI models (Microsoft, with its investment in Open AI), the data (Alphabet and Meta) and the devices we use to interact with AI services (Apple). They might be competing with each other, but they form a vertically diversified oligopoly. Or rather, given the undeniable power that their technology can wield over people’s lives, they’re an oligarchy. Indeed, the secrecy around the means by which they exercise that power is characteristic of most oligarchical dictatorships.

Toward the latter phase of the Web2 era, people eventually came to understand Bruce Schneier’s memorable observation that we are not the internet platforms’ customers; we are their products. With that awareness, we’re now also finally opening our eyes to how these companies have long been incentivized to modify people’s behavior in unhealthy ways to maximize shareholder returns. It is no longer controversial to talk of the psychological harm done by the algorithms of Facebook, YouTube, Tik Tok and their ilk, which were blatantly designed to exploit dopamine releases to encourage continued, addictive engagement.

When Frank McCourt and I published Our Biggest Fight in March 2024, we were overwhelmed by parents’ horror stories of the harm social media had done to their kids. And then a Harris Poll coordinated by NYU Professor Johathan Haidt found that young people are just as concerned: nearly half of Gen Z wishes that TikTok and X (Twitter) never existed, even as 83% of the same cohort said they spend four hours a day or more on social media.

So, if we now know of the harms, why on earth would we extend the same oligopolistic control structure into the AI era? AI will put the Web2 oligopoly on steroids.

This is why I believe the creation of distributed, collectively owned open-source AI is a vitally important use case for Web3 and blockchain technology. It’s the only way to avoid the problem of misaligned incentives.

Sure, there are technical challenges, such as the latency that, for now, makes distributed machine learning inefficient, the capacity limits of on-chain data, or the privacy risks inherent to public blockchains. But innovators are already hard at work on outside-the-box solutions to these problems, motivated by the huge economic and reputational payoff promised by overcoming them. And when they do, the inherent information advantages enjoyed by open systems over closed systems will give decentralized AI a fighting chance. Achieve that, and “DeAI” will represent not only the right moral path but also the economic winner.

Here’s the rub: time is not on our side. And the fight is heavily lopsided. As cited above, The Six have an unprecedented $15 trillion war chest. In the 2000s, Facebook and Google learned that their high-value share prices gave them a currency with which to relentlessly acquire startups that could either enhance or threaten their dominance. Now, The Six have even greater capacity to buy up and integrate whatever breakthroughs in AI are coming, be it in independent AI agents or more efficient systems of compute. Their financial clout means that the most important innovations, those that offer the best hope for a more decentralized AI economy, are at risk of being subsumed into their centralized system. Remember, they’re competing with each other and are incentivized to do whatever it takes to win.

To fight their centralized approach, we must flip the paradigm. Orthodox venture capital will never provide anywhere near enough resources for decentralized competitors to take on the big guys. The only way is to supplant equity financing models with full user-owned, token-based systems. In the future, when your home devices provide the compute and deliver your privacy-preserved data into open-source models that are proven to act in your interests, you will earn tokens for that work. And, with that currency, you will pay for all the cool services delivered by your personal AI agent. It’s a new, distributed financing and payments system for a new, decentralized AI economy. It is the only way.

Yet, to succeed, the crypto and blockchain industry has to reimagine itself. If startup founders see DeAI merely as a new source of get-rich-quick token-pump opportunities, or if the leaders of the Layer 1 platforms now turning to the field are fixated more on applications that temporarily drive up the dollar value of their tribe’s cryptocurrency rather than on those that address real, economy-wide problems, this movement will fail. To win this fight, this industry must become more interoperable. It must become more collaborative.

This is not to say we should squash the competitive instincts that are vital to innovation. But it is to acknowledge a need for better cross-industry organization. Through collaborative bodies such as the new Decentralized AI Society, different stakeholders can work with each other to advance common interests around standards, reference architectures, taxonomies, policy objectives and open-source, cross-chain protocols that everyone can use regardless of the token they hold. We’re not building to pump our bags or take our token “to the moon.” We’re building to create a new decentralized AI economy for the benefit of all humanity.

Come join the fight.

Note: The views expressed in this column are those of the author and do not necessarily reflect those of CoinDesk, Inc. or its owners and affiliates.

Note: The views expressed in this column are those of the author and do not necessarily reflect those of CoinDesk, Inc. or its owners and affiliates.

Opinion
Michael J. Casey

Michael J. Casey is Chairman of The Decentralized AI Society, former Chief Content Officer at CoinDesk and co-author of Our Biggest Fight: Reclaiming Liberty, Humanity, and Dignity in the Digital Age. Previously, Casey was the CEO of Streambed Media, a company he cofounded to develop provenance data for digital content. He was also a senior advisor at MIT Media Labs’s Digital Currency Initiative and a senior lecturer at MIT Sloan School of Management. Prior to joining MIT, Casey spent 18 years at The Wall Street Journal, where his last position was as a senior columnist covering global economic affairs.

Casey has authored five books, including “The Age of Cryptocurrency: How Bitcoin and Digital Money are Challenging the Global Economic Order” and “The Truth Machine: The Blockchain and the Future of Everything,” both co-authored with Paul Vigna.

Upon joining CoinDesk full time, Casey resigned from a variety of paid advisory positions. He maintains unpaid posts as an advisor to not-for-profit organizations, including MIT Media Lab’s Digital Currency Initiative and The Deep Trust Alliance. He is a shareholder and non-executive chairman of Streambed Media.

Casey owns bitcoin.

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Microsoft

The Outer Worlds 2 is now $10 cheaper, as Obsidian details how to get a refund on your pre-order

If you click on a link and make a purchase we may receive a small commission. Read our editorial policy. The Outer Worlds 2 is now $10 cheaper, as Obsidian details how to get a refund on your pre-order Cash in hand. Image credit: Obsidian News by Connor Makar Staff Writer Published on July 23

If you click on a link and make a purchase we may receive a small commission. Read our editorial policy.

The Outer Worlds 2 is now $10 cheaper, as Obsidian details how to get a refund on your pre-order

Cash in hand.

A character in a leafy ghilli suit leaps over a platform towards the camera while being shot at from afar.
Image credit: Obsidian

The Outer Worlds 2, the upcoming sci-fi FPS by Obsidian Entertainment will now be sold at $70 dollars, rather than the planned $80. This follows a statement by Microsoft confirming the U-turn earlier today.

Those who have already purchased the game at the $80 price point on Steam will have the purchase refunded and re-bought at the lower figure. On Battle.net, those who pre-ordered the game will have their orders cancelled and refunded, and will have to re-buy the game. Those on Xbox and PlayStation will have the difference refunded in the upcoming days.

This announcement was made on The Outer Worlds official social media accounts, with a cute in-universe statement and graphic. On the official Obsidian website, further explanation on how the price change will affect those who’ve already spent money has been provided.

Cover image for YouTube videoThe Outer Worlds 2 – Official Gameplay Trailer

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Microsoft reverses $80 first-party price hike to keep “full priced holiday releases in line with current conditions”

If you click on a link and make a purchase we may receive a small commission. Read our editorial policy. Home News Microsoft reverses $80 first-party price hike to keep “full priced holiday releases in line with current conditions” Starting with The Outer Worlds 2 Image credit: Obsidian Entertainment News by Vikki Blake Contributor Published

If you click on a link and make a purchase we may receive a small commission. Read our editorial policy.

Microsoft reverses $80 first-party price hike to keep “full priced holiday releases in line with current conditions”

Starting with The Outer Worlds 2

Image credit: Obsidian Entertainment

Just weeks after confirming The Outer Worlds 2 will be the first Microsoft game to retail for $80, Microsoft has reversed the decision, revealing the highly-anticipated sequel will now launch for $69.99 in keeping with typical AAA pricing.

This will apply not just to The Outer Worlds 2, but indeed other “full priced holiday releases” launched across the period.

In a statement, a Microsoft spokesperson said Xbox was “focused on bringing players incredible worlds to explore, and will keep our full priced holiday releases, including The Outer Worlds 2, at $69.99, in line with current market conditions.”

On social media, developer Obsidian posted: “We have received your SOS via skip drone about the pricing. As an organization devoted to making sure that corporations do not go unfettered, we at the Earth Directorate have worked with [REDACTED] to revise the price of The Outer Worlds 2. While this will not bring peace to the galaxy, or even your local colony, we assure you all that we are here to fight for all colonies in every way that we can.”

Microsoft announced last month that The Outer Worlds 2 would be the first Xbox title to retail at $80 following Microsoft’s planned price rises in May.

“We understand that these changes are challenging, and th

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Coyote malware abuses Windows accessibility framework for data theft

A new variant of the banking trojan ‘Coyote’ has begun abusing a Windows accessibility feature, Microsoft’s UI Automation framework, to identify which banking and cryptocurrency exchange sites are accessed on the device for potential credential theft. …

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Microsoft Server Software Comes Under Widespread Cyberattack

Breadcrumb Trail Links Home PMN Business Share this Story : Microsoft Rushes to Stop Hackers from Wreaking Global Havoc Copy Link Email X Reddit Pinterest LinkedIn Tumblr Microsoft Rushes to Stop Hackers from Wreaking Global Havoc Hackers exploited a security flaw in common Microsoft Corp. software to breach governments, businesses and other organizations across the

Microsoft Rushes to Stop Hackers from Wreaking Global Havoc

Hackers exploited a security flaw in common Microsoft Corp. software to breach governments, businesses and other organizations across the globe and steal sensitive information, according to officials and cybersecurity researchers.

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(Bloomberg) — Hackers exploited a security flaw in common Microsoft Corp. software to breach governments, businesses and other organizations across the globe and steal sensitive information, according to officials and cybersecurity researchers.

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Microsoft over the weekend released a patch for the vulnerability in servers of the SharePoint document management software. The company said it was still working to roll out other fixes after warnings that hackers were targeting SharePoint clients, using the flaw to enter file systems and execute code.

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Multiple different hackers are launching attacks through the Microsoft vulnerability, according to representatives of two cybersecurity firms, CrowdStrike Holdings, Inc. and Google’s Mandiant Consulting.

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Hackers have already used the flaw to break into the systems of national governments in Europe and the Middle East, according to a person familiar with the matter. In the US, they’ve accessed government systems, including ones belonging to the US Department of Education, Florida’s Department of Revenue and the Rhode Island General Assembly, said the person, who spoke on condition that they not be identified discussing the sensitive information.

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Representatives of the Department of Education and Rhode Island legislature didn’t respond to calls and emails seeking comment Monday. A Florida Department of Revenue spokesperson, Bethany Wester Cutillo, said in an email that the SharePoint vulnerability is being investigated “at multiple levels of government” but that the state agency “does not comment publicly on the software we use for operations.”

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The hackers also breached the systems of a US-based health-care provider and targeted a public university in Southeast Asia, according to a report from a cybersecurity firm reviewed by Bloomberg News. The report doesn’t identify either entity by name, but says the hackers have attempted to breach SharePoint servers in countries including Brazil, Canada, Indonesia, Spain, South Africa, Switzerland, the UK and the US. The firm asked not to be named because of the sensitivity of the information. 

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In some systems they’ve broken into, the hackers have stolen sign-in credentials, including usernames, passwords, hash codes and tokens, according to a person familiar with the matter, who also spoke on condition that they not be identified discussing the sensitive information.

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“This is a high-severity, high-urgency threat,” said Michael Sikorski, chief technology officer and head of threat intelligence for Unit 42 at Palo Alto Networks Inc. 

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“What makes this especially concerning is SharePoint’s deep integration with Microsoft’s platform, including their services like Office, Teams, OneDrive and Outlook, which has all the information valuable to an attacker,” he said. “A compromise doesn’t stay contained—it opens the door to the entire network.” 

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(Bloomberg) — Hackers exploited a security flaw in common Microsoft Corp. software to breach governments, businesses and other organizations across the globe and steal sensitive information, according to officials and cybersecurity researchers.

Article content

Microsoft over the weekend released a patch for the vulnerability in servers of the SharePoint document management software. The company said it was still working to roll out other fixes after warnings that hackers were targeting SharePoint clients, using the flaw to enter file systems and execute code.

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Multiple different hackers are launching attacks through the Microsoft vulnerability, according to representatives of two cybersecurity firms, CrowdStrike Holdings, Inc. and Google’s Mandiant Consulting.

Article content
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Hackers have already used the flaw to break into the systems of national governments in Europe and the Middle East, according to a person familiar with the matter. In the US, they’ve accessed government systems, including ones belonging to the US Department of Education, Florida’s Department of Revenue and the Rhode Island General Assembly, said the person, who spoke on condition that they not be identified discussing the sensitive information.

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Representatives of the Department of Education and Rhode Island legislature didn’t respond to calls and emails seeking comment Monday. A Florida Department of Revenue spokesperson, Bethany Wester Cutillo, said in an email that the SharePoint vulnerability is being investigated “at multiple levels of government” but that the state agency “does not comment publicly on the software we use for operations.”

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The hackers also breached the systems of a US-based health-care provider and targeted a public university in Southeast Asia, according to a report from a cybersecurity firm reviewed by Bloomberg News. The report doesn’t identify either entity by name, but says the hackers have attempted to breach SharePoint servers in countries including Brazil, Canada, Indonesia, Spain, South Africa, Switzerland, the UK and the US. The firm asked not to be named because of the sensitivity of the information. 

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In some systems they’ve broken into, the hackers have stolen sign-in credentials, including usernames, passwords, hash codes and tokens, according to a person familiar with the matter, who also spoke on condition that they not be identified discussing the sensitive information.

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“This is a high-severity, high-urgency threat,” said Michael Sikorski, chief technology officer and head of threat intelligence for Unit 42 at Palo Alto Networks Inc. 

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“What makes this especially concerning is SharePoint’s deep integration with Microsoft’s platform, including their services like Office, Teams, OneDrive and Outlook, which has all the information valuable to an attacker,” he said. “A compromise doesn’t stay contained—it opens the door to the entire network.” 

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Tens of thousands — if not hundreds of thousands — of businesses and institutions worldwide use SharePoint in some fashion to store and collaborate on documents. Microsoft said that attackers are specifically targeting clients running SharePoint servers from their own on-premise networks, as opposed to being hosted and managed by the tech firm. That could limit the impact to a subsection of customers.

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A Microsoft spokesperson declined to comment beyond an earlier statement.

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“It’s a dream for ransomware operators,” said Silas Cutler, a researcher at Michigan-based cybersecurity firm Censys. He estimated that more than 10,000 companies with SharePoint servers were at risk. The US had the largest number of such firms, followed by the Netherlands, the UK and Canada, he said. 

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The breaches have drawn new scrutiny to Microsoft’s efforts to shore up its cybersecurity after a series of high-profile failures. The firm has hired executives from places like the US government and holds weekly meetings with senior executives to make its software more resilient. The company’s tech has been subject to several widespread and damaging hacks in recent years, and a 2024 US government report described the company’s security culture as in need of urgent reforms.

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The Center for Internet Security, which operates a cybersecurity information sharing system for state and local governments in the US, found more than 1,100 servers that are at risk from the SharePoint vulnerability, said Randy Rose, the organization’s vice president of security operations and intelligence. Rose said more than 100 were likely hacked.

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The Washington Post reported that the breach had affected US federal and state agencies, universities, energy companies and an Asian telecommunications company, citing state officials and private researchers.

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Eye Security was the first to identify that attackers were actively exploiting the vulnerabilities in a wave of cyberattacks that began on Friday, said Vaisha Bernard, the company’s chief hacker and co-owner.

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Eye Security said the vulnerability allows hackers to access SharePoint servers and steal keys that can let them impersonate users or services even after the server is patched. It said hackers can maintain access through backdoors or modified components that can survive updates and reboots of systems.

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The SharePoint vulnerabilities, known as “ToolShell,” were first identified in May by researchers at a Berlin cybersecurity conference. In early July, Microsoft issued patches to fix the security holes, but hackers found another way in.

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“There were ways around the patches,” which enabled hackers to break into SharePoint servers by tapping into similar vulnerabilities, said Bernard. “That allowed these attacks to happen.” The intrusions, he said, were not targeted and instead were aimed at compromising as many victims as possible. After scanning about 8,000 SharePoint servers, Bernard said he has so far identified at least 50 that were successfully compromised.

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He declined to identify the identity of organizations that had been targeted, but said they included government agencies and private companies, including “bigger multinationals.” The victims were located in countries in North and South America, the EU, South Africa, and Australia, he added.

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—With assistance from Lynn Doan, Cameron Fozi, Daniel Cancel, Aashna Shah, Jane Lanhee Lee and Patrick Howell O’Neill.

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(Updates with additional information beginning in third paragraph.)

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