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Taiwanese authorities have detained three people for allegedly stealing technology trade secrets from Taiwan Semiconductor Manufacturing Co (TSMC), the world’s largest chip foundry, Taiwanese prosecutors said on Tuesday. The three were detained late last month after TSMC reported that an internal investigation had shown that former and current employees had illegally obtained information from the company, the Taiwan High Prosecutors Office said in a statement. The prosecutor’s office said another two people had been released on bail, and one more had been released. The three who have been detained – two current staff and one former employee – are suspected of violating Taiwan’s national security law, it added. It did not disclose their identities apart from saying that the former staffer was surnamed Chen. Earlier on Tuesday, TSMC said it had launched legal proceedings and taken disciplinary action against employees involved in potential trade secret leaks after detecting unauthorised activities during routine monitoring. It said its “comprehensive and robust monitoring mechanisms” enabled early identification of the issue, leading to internal investigations and measures against the personnel involved. TSMC said the legal case, which is now under judicial review, prevented it from providing further details. Nikkei Asia earlier reported that the breach involved several former employees suspected of attempting to obtain critical proprietary information on TSMC’s 2-nanometer chip technology. There were no immediate details on the suspected motives or whether any information had been passed on, and investigations are ongoing to determine the scope of the leak and whether any others were involved, the Nikkei report said. Taiwanese media outlet United Daily News said prosecutors and investigators had also searched the offices of Tokyo Electron, without citing where they had obtained the information. Tokyo Electron and the prosecutors’ office declined to comment. TSMC’s 2-nanometer chip technology is the most advanced technology in the semiconductor industry in terms of both density and energy efficiency, according to the company’s website. The contract manufacturer, which counts AI industry darling Nvidia, iPhone maker Apple, and Qualcomm among its customers, highlighted its zero-tolerance policy for trade secret violations, and said it would pursue offenders to the full extent of the law. Bipasha Dey and Wen-Yee Lee, Reuters
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When the web was established several decades ago, it was built on a number of principles. Among them was a key, overarching standard dubbed netiquette: Do unto others as youd want done unto you. Its a principle that lived on through other companies, including Google, whose motto for a period was Dont be evil. The fundamental idea was simple: Act ethically and morally. If someone asked you to stop doing something, you stoppedor at least considered it. But Cloudflare, an IT company that protects millions of websites from hostile internet attacks, has published an eye-opening exposé suggesting that one of the leading AI tools today isnt following that principle. Cloudflare claims Perplexity, an AI-powered answer engine, is overriding website requests not to crawl their content by spoofing its identity to hide that the requests are coming from an AI company. Cloudflare launched its investigation after receiving complaints from customers that Perplexity was ignoring directives in robots.txt files, which are used by websites to signal whether they want their content indexed by search engines or AI crawlers. Perplexitys alleged behavior highlights what happens when the web shifts from being rooted in voluntary agreements to a more hard-nosed business environment, where commercial goals overrule moral considerations. The code of honor around crawling and robots.txt files is a charming remnant from when the web was collaborative and based on community standards, says Eerke Boiten, a cybersecurity researcher at De Montfort University in the U.K. Cloudflares position as a market leader in web protection means that, for now at least, its still possible to preserve some remnants of that morality, Boiten says. Boiten believes the sense of ethical cooperation online is fading fast, noting that many large AI companies show little regard for where or how they obtain their training data, often operating in murky ethical territory. While he sees OpenAI as generally respectful of the established norms, hes far less optimistic about others. Perplexity trying to scrape their way around any defenses feels like it will be the norm rather than the exception, he says. Perplexitys alleged conduct stands out as particularly bold, especially given that the company is already facing a lawsuit over unauthorized content scraping. Dow Jones Companythe parent of the Wall Street Journal and New York Postfiled a lawsuit in October 2024, alleging that Perplexity copies on a massive scale their content. (The case is ongoing.) The BBC also sent a letter in June to Perplexity CEO Aravind Srinivas, threatening legal action for scraping its content without permission unless the company stops and either compensates for the data already accessed or deletes it entirely. Perplexity told the Financial Times that the BBCs case was manipulative and opportunistic and reflected a fundamental misunderstanding of copyright law. Perplexity did not respond to Fast Company‘s request for comment on this story. But Boiten, for his part, anticipates an escalating arms race between those trying to protect online content from AI-driven web scraping and the companies attempting to do just that to improve their models. Cloudflare applying machine learning to spot Perplexity’s patterns, and acknowledging that publication of all this likely means Perplexity will come up with new decoys, he says. Cornell Law professor James Grimmelmann says the legal limits of scraping content without permissionor bypassing robots.txt filesremain unclear, but Cloudflares findings could expose Perplexity to more lawsuits. There is a loose judicial consensus that it is okay to scrape sites when their robots.txt files allow it, says Grimmelmann, but Perplexity seems determined to fuck around and find out whether the reverse is true.
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E-Commerce
A court verdict against Tesla last week, stemming from a fatal 2019 crash of an Autopilot-equipped Model S, could hurt its plans to expand its nascent robotaxi network and intensify concerns over the safety of its autonomous vehicle technology. A Florida jury ordered Musk’s electric vehicle company on Friday to pay about $243 million to victims of the crash, finding its Autopilot driver-assistance software defective. Tesla said the driver was solely at fault and vowed to appeal. The verdict follows years of federal investigations and recalls related to collisions involving Tesla’s autonomous-vehicle technology, and comes as CEO Elon Musk seeks regulatory approval to rapidly expand the robotaxi service across the U.S. “The public perception of this verdict or things like this are going to fuel pressure on regulators to say, ‘We just can’t let this stuff be launched without a lot more due diligence’,” said Mike Nelson, founder of Nelson Law and an expert on legal issues in the mobility sector. Tesla could have a tough time convincing state regulators that its technology is road-ready, threatening Musk’s goal of offering robotaxis to half the U.S. population by year-end, legal experts and Tesla investors said. Expanding its robotaxi service is crucial for Tesla as demand for its aging lineup of EVs has cooled amid rising global competition and a backlash against Musk’s far-right political views. Much of Tesla’s trillion-dollar market valuation hinges on his bets on robotics and artificial intelligence. Success in the self-driving realm will require winning the confidence of regulators and potential customers on the full-self driving (FSD) software that underpins Tesla’s robotaxis, analysts said. “The timing (of the verdict) for Tesla in light of the FSD rollouts and robotaxis is awful,” said Aaron Davis, co-managing partner at law firm Davis Goldman. “Now there’s essentially an opinion that some aspect of Tesla’s business is not safe and maybe the safety that the company advertises isn’t what it’s cracked up to be.” The FSD is an advanced version of Autopilot. Autopilot, which was been updated since 2019, controls speed, distance and lane centering on highways, while the FSD can operate on city streets, helping the vehicle make automatic turns and change lanes. “This case does not have direct implications for Tesla’s FSD roll-out,” analysts at Piper Sandler said in a note on Sunday, citing the modern iterations of the software. A spokesperson on behalf of Tesla acknowledged the company had received a request for comment from Reuters but had not provided one by the time of publication. Regulatory road ahead Perfecting autonomous vehicles has been harder than expected. The high costs of hardware, years of trial and error, and regulatory hurdles have forced many players to close shop or pivot, including General Motors’ Cruise unit. Musk, however, has pursued what he calls a simpler and cheaper path, relying only on cameras and AI instead of pricey sensors such as lidars and radars used by Alphabet’s Waymo, Amazon’s Zoox and others. After years of missed deadlines, Musk rolled out a small robotaxi trial in June with about a dozen Model Y crossover SUVs in Austin, Texas, each overseen by a human safety monitor in the front passenger seat. While Musk has said Tesla was being “super paranoid about safety”, he has also pledged to expand the service fast and make it available for half of the U.S. population in the next five months – a stark contrast to Waymo’s cautious years-long rollout. Until Tesla’s entry, Waymo was the only U.S. firm to operate a paid, driverless robotaxi service. Tesla is currently awaiting approvals in several states, including California, Nevada, Arizona and Florida. California’s department of motor vehicles declined to comment on the impact of the verdict on regulatory approval. Nevada said it held talks with Tesla about a robotaxi program several weeks ago, while Arizona said it was still considering Tesla’s request for certification. Both did not comment on the verdict. Florida did not respond. Tesla has typically either won other Autopilot litigation or resolved the case with the plaintiffs out of court. The Florida verdict stands out. Several such cases are pending. The case involved a Model S sedan that went through an intersection and hit the victims’ parked Chevrolet Tahoe as they were standing beside it. The driver had reached down to retrieve a dropped cellphone and allegedly received no alerts as he ran a stop sign before the crash. The jury found that Tesla’s Autopilot had a defect and held the company partially responsible, despite the driver admitting fault. “It’s going to take time to get regulators to move forward and time being more than the end of the year,” said Gene Munster, managing partner at Deepwater Asset Management, a Tesla investor. “From an image standpoint, it’s a black eye.” Abhirup Roy, Reuters
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