Chapter 1: What is the impact of AI on the legal industry?
AI is transforming industries, but the data centers powering it require more energy and water than ever. At the break, join Christoph Beck, Chairman and CEO of Ecolab, for insights on using water effectively while safeguarding this critical resource for future generations.
Welcome to Tech News Briefing. It's Friday, January 9th. I'm Patrick Coffey for The Wall Street Journal. When Meta launched Reels on Instagram in 2020, it seemed like little more than a TikTok copycat, and it didn't generate any revenue. Now it's set to bring in as much as Coca-Cola and Nike, and it's got plans to get even bigger.
We're diving into how Reels became a $50 billion business and where it's heading next. Then, AI has a questionable reputation in the legal world, where there have been headlines about lawyers submitting briefs with errors and even cases that were entirely made up. But it's not just lawyers. Increasingly, it's being used by judges.
We look at how the tech is being used today and ask, are chatbot judges next? But first, Meta CEO Mark Zuckerberg said on a recent earnings call that Reels had surpassed a $50 billion run rate, meaning it's on track to make that amount of revenue in the next 12 months and become a bigger source of ad sales than YouTube.
Journal reporter Megan Bobrowski tells us how Meta created a solid business from a platform that many initially dismissed as a TikTok wannabe. To start with the TLDR question, how did Reels become such a big business?
It took them a while. It took them five years to reach this point. I spoke with an Instagram executive and she told me that they had to reconfigure the algorithm from scratch to make this work. Instagram used to be a place where you would go to see content from your friends and your family and people you follow pretty much exclusively.
And this Instagram executive told me that they had to figure out a way to essentially make Instagram more like TikTok. So it shows you content from people who you don't follow. And that required basically a whole reconfiguring of the algorithm.
They had to figure out a way to get signals from the content people were watching, but not from the people that you're following, which is what TikTok did really well. TikTok, the content they show you is based on how much time you spend watching a video. Instagram had to figure out a way to do something similar to that.
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Chapter 2: How did Meta's Reels evolve into a $50 billion business?
Another thing they did was prioritize original content on the platform. From our previous reporting, we also know that they paid creators to post on Reels.
So fast forwarding to today, Reels is finally big. The ad sales numbers, namely the fact that Reels is expected to bring in more than YouTube this year, really shocked me. What do you take from that?
Yeah, to me, this showed that Reels is a real competitor in the space and deserves to be taken seriously. It's no longer just this TikTok wannabe and Meta has made this into a serious product. It's also interesting because Meta made the argument during their antitrust trial that they're not a monopoly because they face competition from YouTube and TikTok.
And while Reels is by no means a monopoly, its growth shows that it's become a real competitor in this space.
So the idea that a user's behavior rather than who they follow is what really drives their feed. It's also in keeping with Meta's new argument that Adam Mosseri has made that it's not a social networking business, it's an entertainment business. How pervasive is that thinking internally?
That's kind of the line that meta executives talk now. It's interesting because the executive that I spoke with pitched Reels as the social viewing experience. So it's something that you do with your friends. You watch Reels with them, but it's not inherently social in the way that we used to think of social networks as in seeing content from your friends online.
They sort of are now talking about Instagram as a social experience is more... watching things akin to TV.
Is that where Meta wants Reels to go from here?
Yeah. So last year, YouTube became the most watched video provider across all TV. A lot of people watch YouTube together with their friends. They kind of see Instagram Reels as being akin to that. So late last year, they started offering the Instagram app on Amazon Fire TV sort of as a test to see how this goes.
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Chapter 3: What strategies did Instagram implement to compete with TikTok?
Some judges have banned them from using AI in their courtrooms or sanctioned attorneys for submitting inaccurate AI-generated information. But even so, WSJ reporter Erin Mulvaney tells us a growing number of judges are embracing the technology themselves. So Erin, can you give us a sense from your reporting of how judges are currently using AI?
They definitely aren't quite using it to just plop in and say, hey, here's a decision, chat TBT, tell me what to do. They seem to be being pretty discerning, but they're using it to look at tons of documents, maybe synthesize. All the different laws, all the different arguments that lawyers have made and hundreds of thousands of documents.
Maybe a few have said that they are saying, hey, what questions should I ask in this hearing to lawyers based on the record so far? And just a few things to speed up the process. They're really just dipping their toe and using some of these products to maybe make things a little more efficient.
So they say that they're using it for back office or routine work rather than influencing their decisions. That's a very familiar argument when it comes to AI across industries. You know, they're saying that we're just getting rid of the rote stuff that takes too much time. But in the case of the court system, it feels like that could be a very blurry line.
I mean, how do we say when the tools are starting to influence their decisions in some way?
That's a really fair point and maybe one reason that a lot of judges would balk at even the idea of using it at all whatsoever because they don't want to have any kind of question of whether their decision was influenced by a machine or some kind of past decision that they didn't analyze carefully or... A mistake being put in is even worse.
But I think that's why judges really are trying now to learn how the tools are actually working. That's why it's early days. So the folks that I interviewed, they are probably the contingent of pioneers in this area. I would say the much more common tact is that judges have been referees against lawyers that are submitting and using ChatGBT to cut corners in some ways.
You say that they're really just starting to experiment. Do we have any sense of how many judges are using the tools or how widespread the use of AI in trials or decisions might become?
So LexisNexis is one of the main providers. There are tools that have some basic research functions and some that can synthesize documents. Those are available to all federal judges, and they don't share publicly the data on how many judges are actually using it. It's available in chambers to everyone. And then these other tools that are specifically designed for courts and judges
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