Apple is facing mounting criticism over its AI-generated news summaries, which have produced inaccurate and misleading alerts on its latest iPhones. Media organisations, including the BBC, have raised concerns that the feature, designed to summarise breaking news notifications, has fabricated details that contradict original reports. The National Union of Journalists and Reporters Without Borders have called for the product’s removal, warning it risks spreading misinformation at a time when trust in news is already fragile.
High-profile errors have fuelled demands for urgent action. In December, an Apple AI summary falsely claimed that a murder suspect had taken his own life, while another inaccurately announced Luke Littler as the winner of the PDC World Darts Championship before the event had even begun. Apple has pledged to update the feature to make it clearer that summaries are AI-generated, but critics argue this does not address the root problem.
Journalism watchdogs and industry experts have warned that AI-driven news aggregation remains unreliable. The BBC stressed that the errors could undermine public trust, while former Guardian editor Alan Rusbridger described Apple’s technology as “out of control”. Similar concerns have been raised over generative AI tools from other tech firms, with Google’s AI-powered search summaries also facing scrutiny for producing incorrect responses. Apple insists the feature remains optional and is still in beta testing, with further improvements expected in an upcoming software update.
US stock markets climbed to one-week highs on Monday, driven by gains in semiconductor stocks and optimism over AI investments. Reports suggesting that Donald Trump’s incoming administration may adopt a more selective approach to tariffs, rather than broad measures, also helped boost investor confidence. The Dow Jones Industrial Average rose 0.41%, the S&P 500 gained 1.02%, and the Nasdaq Composite surged 1.53%, with automakers and tech stocks leading the rally.
Semiconductor shares saw strong gains after Microsoft announced an $80 billion investment in AI-enabled data centres, while Foxconn posted better-than-expected quarterly revenue. Nvidia climbed 3.5%, AMD gained 2.8%, and Micron Technology surged 9.6%, pushing the Philadelphia Semiconductor Index to a two-month high. Meanwhile, the Russell 2000 index, which tracks small-cap companies, added 0.7% as investors weighed economic data and Federal Reserve policy signals.
Investors are closely watching monetary policy developments, with the Federal Reserve expected to provide further guidance on interest rate cuts later in the week. While Trump’s proposals could support corporate earnings and economic growth, concerns remain over potential inflationary pressures. US markets will be closed on January 9 for a national day of mourning in honour of former President Jimmy Carter.
AI-powered chatbots played a key role in boosting online sales during the 2024 holiday season, with United States e-commerce revenue rising nearly 4% year-on-year to $282 billion, according to Salesforce. Consumers increasingly relied on AI-based customer service tools for purchases and returns, with chatbot usage growing by 42% compared to 2023. Retailers also leveraged targeted promotions, product recommendations, and loyalty programmes to attract bargain hunters.
Despite the sales growth, a sharp increase in product returns emerged as a significant challenge for retailers. The return rate climbed to 28%, up from 20% in the previous year, potentially affecting profit margins. Caila Schwartz, director of Consumer Insights at Salesforce, noted that AI-driven tools would be crucial in 2025 to help retailers reduce losses from returns and retain customers. Mobile shopping remained dominant, with 79% of all orders placed via smartphones, peaking on Christmas Day as last-minute buyers made their final purchases.
Social media platforms such as TikTok Shop and Instagram also played a growing role in holiday sales, driving 14% of traffic to e-commerce sites. AI-driven sales reached $229 billion globally, an increase from $199 billion in 2023. As retailers continue to invest in digital shopping tools, the balance between AI-driven efficiency and managing high return rates will be critical for sustaining profitability in the coming years.
Demis Hassabis, CEO of Google DeepMind, has warned that the rapid progress in AI development may be slowing as companies exhaust the available digital data needed to train large language models. The industry has long relied on feeding vast amounts of online text into AI systems to improve performance, but diminishing returns are now setting in. Some experts, including OpenAI’s Ilya Sutskever, believe the industry has reached “peak data,” meaning future improvements will require entirely new approaches.
Researchers are now exploring alternative methods, such as synthetic data, where AI models generate and learn from their own outputs. While this technique has shown promise in fields like mathematics and programming, it struggles with more complex areas like philosophy and the arts, where defining correctness is difficult. OpenAI has already applied this method in its latest system, OpenAI o1, but challenges remain, particularly in preventing AI from making errors or generating misleading information.
Another possibility to overcome ‘data limitation’ in AI development is to shift focus from quantity to quality of data through better data labelling and contextual enrichment, as done by Diplo’s cognitive proximity approach (see below).
DiploAI approach to data enrichment
Tech leaders remain divided on whether AI advancements will continue at the same pace. Nvidia’s CEO Jensen Huang remains optimistic, citing strong demand for AI chips and ongoing innovation. However, some of the company’s biggest customers are preparing for a possible plateau in AI development. Despite the uncertainty, investment in AI infrastructure remains high, with firms continuing to push the boundaries of what AI can achieve.
OpenAI CEO Sam Altman has revealed that the company is losing money on its $200-per-month ChatGPT Pro plan due to unexpectedly high usage. The plan, introduced last year, provides access to an advanced AI model and fewer restrictions on OpenAI’s tools. Altman admitted that the pricing was not based on a rigorous study but was instead a personal decision.
Despite raising around $20 billion, OpenAI remains unprofitable, with estimated losses of $5 billion last year. The company is considering price increases or usage-based fees to improve financial stability. Altman also acknowledged that OpenAI requires more investment than initially expected.
The company remains optimistic about its future revenue, projecting $11.6 billion in 2025 and aiming for $100 billion by 2029. As OpenAI undergoes corporate restructuring, attracting new investors and refining its pricing strategy will be key to long-term profitability.
Avataar, a startup backed by Peak XV and Tiger Global, has launched Velocity, an AI-powered tool that generates product videos directly from a product link. The company aims to help brands create engaging promotional content at scale, competing with tech giants like Amazon and Google, who are also exploring AI-driven video solutions. By automating video production, Avataar hopes to lower costs and improve conversion rates for e-commerce businesses.
Founded in 2015, Avataar initially focused on AI-powered imagery and 3D modelling before shifting towards AI video creation. Its Velocity tool, commercially tested since September 2024, is already being used by brands such as HP, Victoria’s Secret, and Newegg. The company also offers an API, allowing businesses to integrate video generation into their platforms.
Avataar’s models are designed to ensure high-quality product representation, addressing past concerns about AI-generated content accuracy. Investor Amir Konigsberg highlighted the challenge of making AI-generated videos unique and maintaining quality at scale. With advancements in AI models, Avataar believes automated video production is now viable for mass adoption in e-commerce.
OpenAI CEO Sam Altman has stated that the company believes it knows how to build AGI and is now turning its focus towards developing superintelligence. He argues that advanced AI could significantly boost scientific discovery and economic growth. While AGI is often defined as AI that outperforms humans in most tasks, OpenAI and Microsoft also use a financial benchmark—$100 billion in profits—as a key measure.
Despite Altman’s optimism, today’s AI systems still struggle with accuracy and reliability. OpenAI has previously acknowledged that transitioning to a world with superintelligence is far from certain, and controlling such systems remains an unsolved challenge. The company has, however, recently disbanded key safety teams, leading to concerns about its priorities as it seeks further investment.
Altman remains confident that AI will soon make a significant impact on businesses, suggesting that AI agents could enter the workforce and reshape industries in the near future. He insists that OpenAI continues to balance innovation with safety, despite growing scepticism from former staff and industry critics.
Taiwan’s Foxconn, the world’s leading electronics contract manufacturer, reported record-breaking revenue for the fourth quarter, driven by surging demand for AI servers. With a 15.2% rise in revenue to T$2.13 trillion ($64.72 billion), the company outperformed market expectations, reflecting the robust growth of its cloud and networking products division. Major clients like Nvidia have fueled the boom, while its consumer electronics segment, including iPhones, remained stable year-on-year.
Foxconn’s December revenue alone soared by 42.3% compared to the previous year, reaching T$654.8 billion, marking the second-highest figure for that month in the company’s history. Despite the fourth quarter’s impressive performance, Foxconn acknowledged the seasonal slowdown typical of the first quarter. However, the company projects significant year-on-year growth for early 2025, aligning with average levels from the past five years.
The company, formally known as Hon Hai Precision Industry, has seen its shares skyrocket by 76% in 2024, far outpacing Taiwan’s broader market index. Investors remain optimistic as Foxconn continues to dominate in the AI and electronics sectors, with its entire fourth-quarter earnings set to be unveiled on 14 March.
Microsoft is setting its sights on a transformative leap in AI, announcing plans to allocate roughly $80 billion in fiscal 2025 for data centre expansion to support AI model training and cloud-based applications. This monumental investment underscores the growing demand for advanced AI infrastructure as companies integrate AI into their products, a trend accelerated since OpenAI’s groundbreaking launch of ChatGPT in 2022.
The company’s spending reflects the soaring need for specialised data centres capable of linking thousands of chips in powerful clusters to meet AI’s immense computational requirements. As the primary backer of OpenAI, Microsoft is solidifying its position as a leader in the AI race, with its exclusive partnership with the chatbot maker further elevating its status in the tech landscape. In the first quarter of fiscal 2025 alone, Microsoft’s capital expenditure climbed 5.3% to $20 billion, highlighting its ongoing commitment to expanding its AI and cloud capabilities.
More than half of the planned $80 billion investment will focus on the United States, a move Vice Chair and President Brad Smith credits for bolstering America’s position at the forefront of global AI innovation. In a blog post, Smith emphasised the critical role of private capital and entrepreneurial ingenuity in driving the nation’s AI advancements, from startups to established tech giants.
As analysts project Microsoft’s fiscal 2025 capital expenditure to reach approximately $84 billion, the company’s bold strategy signals a commitment to AI dominance and a reshaping of the digital landscape. By doubling down on infrastructure and innovation, Microsoft is staking its claim as a pivotal force in the future of AI.
Apple has agreed to pay $95 million to settle a class action lawsuit alleging its Siri voice assistant violated users’ privacy. The lawsuit claimed that Apple recorded users’ private conversations without consent when the ‘Hey, Siri’ feature was unintentionally triggered. These recordings were allegedly shared with third parties, including advertisers, leading to targeted ads based on private discussions.
The class period for the lawsuit spans from 17 September 2014 to 31 December 2024 and applies to users of Siri-enabled devices like iPhones and Apple Watches. Affected users could receive up to $20 per device. Apple denied any wrongdoing but settled the case to avoid prolonged litigation.
The settlement amount is a small fraction of Apple’s annual profits, with the company making nearly $94 billion in net income last year. While the company and plaintiffs’ lawyers have yet to comment on the settlement, the plaintiffs may seek up to $28.5 million in legal fees and expenses. A similar lawsuit involving Google’s Voice Assistant is also underway in a California federal court.
