Capacity development

Google unveils experimental AI reasoning model

Google has introduced Gemini 2.0 Flash Thinking Experimental, an AI model designed for advanced reasoning, now available on its AI Studio platform. Billed as effective for multimodal understanding, coding, and complex problem-solving, it aims to enhance AI’s reasoning capabilities.

Unlike typical AI, reasoning models like Gemini fact-check themselves during response generation, improving accuracy but requiring more processing time. However, early testing shows mixed results, suggesting room for refinement in practical applications.

The rise of reasoning models reflects the industry’s search for new methods to optimise AI performance. While promising, challenges such as high computational costs and uncertain scalability remain points of debate.

China tightens control over rare earth exports

China has enacted new regulations asserting state ownership over rare earth materials, critical for semiconductor production, with a rule effective from October 1. Additionally, on December 3, the Ministry of Commerce announced a ban on the export of dual-use items such as gallium, germanium, and antimony to the US. These moves are expected to impact industries reliant on these materials, especially solar cell production and semiconductor manufacturing.

As the world’s largest supplier of rare earths, China has long dominated the market due to its lax environmental regulations, which allow for large-scale extraction and refining. However, with many countries looking to reduce their dependency on China, the long-term effectiveness of these export restrictions may diminish. Nations like the US and Australia are expanding their rare earth production lines, and efforts to recycle rare earth materials are also gaining traction.

Despite these efforts, challenges remain in replicating China’s refining capabilities, as many countries are limited by technical and environmental obstacles. Notably, the US has partnered with Australia’s Lynas Corporation to build a rare earth extraction facility, aiming to strengthen its supply chain.

The future of the rare earth market may shift toward the development of substitute materials, although creating viable replacements is a time-consuming process. In this ongoing battle, China has already secured patents for some high-performance materials that could serve as alternatives, indicating that the competition could soon turn to technological innovation and patent rights.

Tech giants join forces for US defence contracts, FT says

Data analytics firm Palantir Technologies and defence tech company Anduril Industries are leading efforts to form a consortium of technology companies to bid jointly for US government contracts, according to a report from the Financial Times. The group is expected to include SpaceX, OpenAI, Scale AI, autonomous shipbuilder Saronic, and other key players, with formal agreements anticipated as early as January.

The consortium aims to reshape the defence contracting landscape by combining cutting-edge technologies from some of Silicon Valley’s most innovative firms. A member involved in the initiative described it as a move toward creating “a new generation of defence contractors.” This collective effort seeks to enhance the efficiency of supplying advanced defence systems, leveraging technologies like AI, autonomous vehicles, and other innovations.

The initiative aligns with President-elect Donald Trump’s push for greater government efficiency, spearheaded in part by Elon Musk, who has been outspoken about reforming Pentagon spending priorities. Musk and others have criticised traditional defence programs, such as Lockheed Martin’s F-35 fighter jet, advocating instead for the development of cost-effective, AI-driven drones, missiles, and submarines.

With these partnerships, the consortium hopes to challenge the dominance of established defence contractors like Boeing, Northrop Grumman, and Lockheed Martin, offering a modernised approach to defence technology and procurement in the US.

Renewable energy investment continues under Trump, MUFG Americas says

Despite the incoming administration of Donald Trump, the US shift towards renewable energy is expected to continue, according to Mitsubishi UFJ Financial Group’s (MUFG) Americas CEO, Kevin Cronin. While Trump’s policies may favour fossil fuels, Cronin emphasised that renewable energy projects, which take years to plan and build, remain integral to the bank’s strategy regardless of political changes. MUFG, Japan’s largest banking group, remains committed to financing these long-term projects.

The bank’s position has been bolstered by President Joe Biden’s Inflation Reduction Act, which supports infrastructure and renewable investments. However, the real growth opportunity now lies in the booming demand for energy from data centres, driven by AI. Data centre capacity is expected to double by 2030, making reliable energy — both renewable and fossil-based — critical for future expansion.

MUFG has maintained its lead in project finance for 14 consecutive years and is adapting to state-level variations in energy policy. Since selling its retail banking arm in 2022, MUFG has focused on wholesale banking and technology-related sectors, even hiring talent from the collapsed Silicon Valley Bank to strengthen its position. The US market remains a cornerstone of MUFG’s global profits, contributing nearly 30% of its earnings in the last fiscal year.

Geothermal energy startups rise as tech giants seek clean power for AI

Geothermal energy is gaining momentum as Big Tech companies like Meta and Google turn to it to power their energy-hungry AI data centres. Startups such as Fervo Energy and Sage Geosystems are partnering with these firms to harness geothermal’s promise of carbon-free, reliable electricity. Unlike wind and solar, geothermal energy offers consistent power, though it faces challenges like high drilling costs and long approval timelines.

Oil and gas companies are also showing interest. Devon Energy and other mid-sized producers are investing in geothermal to meet their own energy needs. However, major oil players like Chevron and Exxon Mobil remain focused on natural gas, promoting it alongside carbon capture technology to reduce emissions.

Interest in geothermal is expanding, particularly in Texas, where abundant resources and streamlined regulations attract new projects. More than 60 geothermal startups have emerged in recent years, supported by improving investment conditions and bipartisan government initiatives like the CLEAN Act and HEATS Act. If these laws pass, they could further boost the sector by simplifying project approvals.

With geothermal’s competitive costs—averaging $64 per megawatt-hour—it may become a key part of a diverse energy mix. As AI-driven data centres grow, the demand for clean and consistent power is driving geothermal’s rise, offering a potential alternative to traditional fossil fuels.

Apple explores AI partnerships for iPhones in China

According to sources familiar with the matter, Apple is in early talks with Tencent and ByteDance to integrate their AI models into iPhones sold in China. This comes as Apple rolls out OpenAI’s ChatGPT in other markets, but regulatory restrictions in China prevent the availability of the chatbot there. To comply with local rules and counter the declining market share, Apple is exploring partnerships with Chinese firms that already have government-approved AI models.

Potential partners include ByteDance’s Doubao and Tencent’s Hunyuan, part of a growing field of AI services in China. Although Apple previously discussed using Baidu’s Ernie model, reports suggest technical disagreements halted progress. Baidu’s shares dropped following news of these challenges, while Tencent’s stock saw a boost.

Apple faces increasing pressure in China’s competitive smartphone market, where domestic rivals like Huawei are surging ahead. Huawei’s recent AI-equipped models have attracted consumers, contributing to a 42% spike in sales. In contrast, Apple’s third-quarter sales dipped slightly, underscoring the need for a successful AI integration strategy to regain momentum in China.

US awards SK Hynix grant for AI chip facility

The US Commerce Department has finalised a $458 million grant for SK Hynix to support an advanced chip packaging plant and AI research facility in Indiana. The South Korean company, a key supplier for Nvidia, plans to invest $3.87 billion in the project, which will produce high-bandwidth memory chips used in AI systems. The government will also provide $500 million in loans as part of the deal.

The Indiana facility is expected to create 1,000 jobs and strengthen the US semiconductor supply chain. SK Hynix’s CEO, Kwak Noh-Jung, highlighted the importance of building a resilient AI chip infrastructure in the United States. This grant is part of the $39 billion program approved by Congress in 2022 to boost domestic semiconductor production.

The Commerce Department has issued grants to major chipmakers like Intel, Micron, and TSMC. With the SK Hynix deal complete, only Samsung’s $6.4 billion award remains pending. The initiative aims to bolster US leadership in semiconductor technology and reduce reliance on foreign manufacturing.

Shaping the future of the IGF: Reflections and aspirations

At the Internet Governance Forum (IGF) 2024 in Riyadh, the session ‘Looking Back, Moving Forward’ provided a platform to reflect on the forum’s 19-year history and envision its future role. Amid preparations for the World Summit on the Information Society (WSIS) Plus 20 review and the implementation of the Global Digital Compact (GDC), participants emphasised the IGF’s continued relevance as a multistakeholder platform for global internet governance.

A legacy of dialogue and collaboration

Speakers hailed the IGF’s unique role in fostering inclusive dialogue on digital policy. Timea Suto of the International Chamber of Commerce praised its vibrant ecosystem for addressing critical internet governance issues, while Valeria Betancourt from the Association for Progressive Communications highlighted its capacity to bring diverse stakeholders together for meaningful debates.

ICANN’s Göran Marby underscored the IGF’s centrality within the WSIS framework, describing it as a space for shaping narratives and informing policy through open discussion. Juan Fernandez from the Ministry of Communications of Cuba raised a critical point about representation, urging for more consistent and diverse attendance to ensure the forum remains truly inclusive. Other participants echoed this call and highlighted the importance of engaging voices from underrepresented regions and communities.

Evolving for greater impact

As the IGF approaches its 20th anniversary, there is broad consensus on the need to evolve its structure and mandate to enhance its effectiveness. Proposals included integrating the WSIS framework and GDC implementation into its work and making the IGF a permanent institution within the UN system.

‘Strengthening the IGF’s institutional foundation is crucial for its long-term impact,’ argued Vint Cerf, a founding father of the internet.

Speakers also stressed the importance of producing tangible outcomes. Valeria Betancourt and Göran Marby called for actionable recommendations and systematic progress tracking, while Lesotho’s ICT Minister, Nthati Moorosi, suggested special forums with private sector leaders to tackle connectivity challenges. These measures, they argued, would enhance the IGF’s relevance in addressing pressing digital issues.

Inclusivity and grassroots engagement

Enhancing inclusivity remained a recurring theme. Carol Roach, MAG Chair for IGF 2024, and Christine Arida, Board Member of the Strategic Advisory to the Executive President of the National Telecom Regulatory Authority of Egypt, highlighted the need to amplify voices from the Global South and engage underserved communities.

Leveraging national and regional IGFs (NRIs) was identified as a key strategy for grassroots engagement. ‘The IGF’s strength lies in its ability to facilitate conversations that reach the margins,’ noted Valeria Betancourt.

Balancing innovation with privacy and accessibility

Emerging technologies, particularly AI, featured prominently in discussions. Participants stressed the IGF’s role in addressing the governance challenges posed by rapid innovation while safeguarding privacy and inclusivity.

‘Multistakeholder processes must move beyond handshakes to deeper collaboration,’ remarked one speaker, capturing the need for cohesive efforts in navigating the evolving digital landscape.

Looking ahead

The session concluded with a collective vision for the IGF’s future. As it approaches its 20th year, the forum is tasked with balancing its role as a space for open dialogue with the need for concrete outcomes.

Strengthened partnerships, a clearer institutional framework, and an inclusive approach will be essential in ensuring the IGF remains a cornerstone of global internet governance. The journey forward will be defined by its ability to adapt and address the complex challenges of an increasingly interconnected world.

All transcripts from the Internet Governance Forum sessions can be found on dig.watch.

Democratising AI: the promise and pitfalls of open-source LLMs

At the Internet Governance Forum 2024 in Riyadh, the session Democratising Access to AI with Open-Source LLMs explored a transformative vision: a world where open-source large language models (LLMs) democratise AI, making it accessible, equitable, and responsive to local needs. However, this vision remains a double-edged sword, revealing immense promise and critical challenges.

Panelists, including global experts from India, Brazil, Africa, and the Dominican Republic, championed open-source AI to prevent monopolisation by large tech companies. Melissa Muñoz Suro, Director of Innovation in the Dominican Republic, showcased Taina, an AI project designed to reflect the nation’s culture and language. ‘Open-source means breaking the domino effect of big tech reliance,’ she noted, emphasising that smaller economies could customise AI to serve their unique priorities and populations.

Yet, as Muñoz Suro underscored, resource constraints are a significant obstacle. Training open-source models require computational power, infrastructure, and expertise, which are luxuries many Global South nations lack. A Global South AI expert, Abraham Fifi Selby echoed this, calling for ‘public-private partnerships and investment in localised data infrastructure’ to bridge the gap. He highlighted the significance of African linguistic representation, emphasising that AI trained in local dialects is essential to addressing regional challenges.

The debate also brought ethical and governance concerns into sharp focus. Bianca Kremer, a researcher and activist from Brazil, argued that regulation is indispensable to combat monopolies and ensure AI fairness. She cited Brazil’s experience with algorithmic bias, pointing to an incident where generative AI stereotypically portrayed a Brazilian woman from a favela (urban slum) as holding a gun. ‘Open-source offers the power to fix these biases,’ Kremer explained but insisted that burdensome regulation must accompany technological optimism.

Despite its potential, open-source AI risks misuse and dwindling incentives for large-scale investments. Daniele Turra from ISA Digital Consulting proposed redistributing computational resources—suggesting mechanisms like a ‘computing tax’ or infrastructure sharing by cloud giants to ensure equitable access. The session’s audience also pushed for practical solutions, including open datasets and global collaboration to make AI development truly inclusive.

While challenges persist, trust, collaboration, and local capacity-building remain critical to open-source AI’s success. As Muñoz Suro stated, ‘Technology should make life simpler, happier, and inclusive, and open-source AI if done right, is the key to unlocking this vision.’

All transcripts from the Internet Governance Forum sessions can be found on dig.watch.

African parliamentarians discuss digital transformation at IGF 2024

A networking session at IGF 2024 in Riyadh examined the vital role of African parliamentarians in shaping inclusive digital policies. Discussions revolved around creating legislation that keeps pace with technological evolution, fostering multi-stakeholder collaboration, and addressing Africa’s unique challenges in the digital age.

Participants called for stronger engagement between parliamentarians, technologists, and scientists to craft practical and forward-looking digital frameworks.

Speakers, including Catherine Mumma from Kenya and Millennium Anthony from Tanzania, underscored the need to improve digital infrastructure and internet access, particularly in rural regions. Challenges such as expensive data costs, insufficient digital skills, and a lack of dedicated parliamentary committees for science and technology were highlighted. Susan Dossi from Malawi and Daniel Molokele from Zimbabwe stressed the importance of public participation in the legislative process to ensure policies reflect citizens’ needs.

The session addressed the borderless nature of the internet and the importance of regional and global collaboration to tackle cybercrime and cross-border governance issues. Ayoban Ngao from the Democratic Republic of Congo and Lekhotsa Mafatle from Lesotho emphasised the need to update educational curricula to align with digital needs while investing in digital skills and infrastructure. Ke Gong from China contributed insights on leveraging international best practices to guide Africa’s digital transformation.

Concluding discussions focused on the critical role of parliamentarians in driving digital growth through informed policymaking. Participants advocated for greater cooperation across sectors to ensure Africa capitalises on digital opportunities while addressing its unique challenges. The session underscored a collaborative approach as key to fostering inclusive digital development across the continent.

All transcripts from the Internet Governance Forum sessions can be found on dig.watch.