Vietnam’s Prime Minister Pham Minh Chinh has launched a strategic initiative to enhance the country’s capabilities in semiconductors, AI, and cloud computing. The initiative, outlined in Dispatch No. 83/CD-TTg, aims to develop a skilled workforce through targeted education and training in these critical technology sectors. The initiative calls for collaboration among various government bodies, including ministers and local authorities, to implement measures to drive these industries’ advancements.
The Ministry of Education and Training (MoET) leads this effort by guiding public and private universities to establish specialised units focused on semiconductor technology, AI, and cloud computing. The project includes creating new schools and departments dedicated to advancing research and training. The MoET will also modernise curricula by integrating cutting-edge technologies and AI into teaching methodologies while fostering partnerships with businesses and research institutions.
In addition, the Ministry of Planning and Investment will develop a strategic project for nurturing human resources in the semiconductor industry, with a long-term vision extending to 2050. The plan will also encompass AI and cloud computing, emphasising the establishment of innovation ecosystems. Meanwhile, the Ministry of Science and Technology will prioritise scientific research in these fields and create mechanisms to attract international talent.
Local government leaders are encouraged to attract investments to build semiconductors, AI, and cloud computing ecosystems. Deputy Prime Minister Le Thanh Long will oversee the implementation of this initiative, which aims to position Vietnam as a leader in these technology sectors, leveraging education and innovation to drive economic growth in the digital age.
Chinese AI developers are finding innovative ways to circumvent US export controls on advanced chips by leveraging foreign computing resources. The strategy allows them to access high-performance chips, such as Nvidia’s A100 and H100, which are restricted under US regulations. As the demand for AI capabilities grows, these developers employ various methods to remain competitive in the tech landscape.
One key approach is using cloud computing services from major American providers like Amazon Web Services (AWS) and Microsoft Azure. This method is legally permissible under current US regulations, which focus on directly exporting physical technologies rather than cloud-based computing power.
Additionally, Chinese AI developers are collaborating with brokers and using identity-mapping techniques from the cryptocurrency industry. These brokers help facilitate access to AI servers in countries like Australia, allowing companies to deploy advanced chips without importing them directly into China. For example, entrepreneur Derek Aw has arranged for over 300 servers equipped with Nvidia’s H100 chips to be housed in Australia and utilised by firms in Beijing.
Despite the challenges posed by export controls, many Chinese companies have stockpiled chips and invested in domestic semiconductor manufacturing. While local suppliers often need to catch up to US technologies, this dual approach helps maintain momentum in AI research and development. Legal experts note that as long as technology is not used for military purposes, cloud services to access advanced computing power remain unregulated, highlighting the complexities of enforcing technology trade restrictions.
The ongoing situation illustrates the US government’s challenges in enforcing its trade policies. As Chinese companies continue to adapt and innovate, the US may need to tighten regulations to address emerging loopholes.
Microsoft plans to increase its spending on AI infrastructure this fiscal year despite slower growth in its cloud business. This announcement led to a 4% drop in its share price after an initial 7% decline. The tech giant, along with others like Google, is investing heavily in data centres to leverage the AI boom, with Microsoft’s capital spending rising 77.6% to $19 billion in its fiscal fourth quarter, primarily for cloud and AI-related expenses.
Despite these investments, investors were disappointed with the slower growth of Microsoft’s Azure cloud service. The company forecasted a 28% to 29% growth for Azure in the upcoming quarter, slightly below market expectations, which followed a 29% increase in the previous quarter, but it also fell short of estimates, indicating a slowdown from earlier months.
CEO Satya Nadella highlighted that AI services are becoming a significant part of Azure’s revenue growth, with over 60,000 customers using Azure AI, a nearly 60% increase from the previous year. Microsoft has integrated AI across its products, including its search engine Bing and productivity tools like Word, driven by its substantial investment in OpenAI.
Microsoft’s total revenue rose 15% to $64.7 billion in the fourth quarter, exceeding analyst expectations. The company also grew in its personal computing business, benefiting from stabilising PC sales. However, revenue from its Intelligent Cloud unit, which includes Azure, missed analyst estimates, rising 19% to $28.5 billion.
Singapore-headquartered AI cloud provider Sustainable Metal Cloud (SMC) is set to expand globally, driven by fast-growing demand for its energy-saving technology. CEO and co-founder Tim Rosenfield announced plans to extend operations to EMEA (Europe, Middle East, and Africa) and North America in response to client demand. Currently, SMC operates “sustainable AI factories” in Australia and Singapore, with new launches planned in India and Thailand.
Partnering with AI chip giant Nvidia, SMC uses over 1,200 of Nvidia’s high-end H100 AI chips in Singapore to run open-source models like Meta’s Llama 2. Unlike most data centres that rely on air cooling technology, SMC employs immersion cooling, submerging Dell servers fitted with Nvidia GPUs in a synthetic oil called polyalphaolefin. The following method reduces energy consumption by up to 50% compared to traditional air cooling.
The International Energy Agency (IEA) anticipates a tenfold increase in AI demand compared to 2023, with global data centre electricity consumption expected to exceed 1,000 terawatt-hours by 2026. Sustainable Metal Cloud is currently raising $400 million in equity and $550 million in debt to support its expansion, according to sources. That move aligns with the increasing environmental concerns impacting Singapore’s data centre growth and highlights the importance of sustainable technology in meeting future energy demands.
Google’s parent company stocks fell by over 3% on Wednesday amid concerns that rising investments in AI infrastructure could squeeze margins and that YouTube is facing stiff competition for ad dollars. The Google parent company saw its capital expenditure rise to $13.2 billion in the second quarter, exceeding expectations as it invests heavily in the infrastructure needed to support generative AI services and compete with Microsoft.
While Alphabet has been cutting costs through layoffs to protect profitability, analysts noted that seasonal hiring of fresh graduates and the earlier-than-usual Pixel launch would impact margins in the third quarter. Additionally, YouTube’s ad sales growth slowed to 13% in the second quarter from nearly 21% in the first quarter, as it grapples with tough year-on-year comparisons and competition from Amazon in the online video ad market.
Despite these challenges, many analysts remain positive about Alphabet, citing its AI efforts driving up cloud revenue and minimal disruption to Search revenue from its AI overviews. Cloud computing services revenue rose by 28.8%, outpacing expectations and signalling robust enterprise spending. Analysts believe Alphabet’s AI advancements position it as a market leader, and 25 brokerages have raised their price targets for the stock. Their failed Wiz acquisition echoes the company’s ambitions to expand their market share and reclaim their place at the top.
Alphabet’s stock, which has gained about 30% this year due to the AI stock rally, is set to lose around $60 billion in market value. However, its 12-month forward price-to-earnings ratio of 22.2 remains competitive compared to Nvidia’s 38.6, indicating continued confidence in Alphabet’s long-term growth prospects.
Wiz, founded in Israel and now headquartered in New York, is known for its cloud-based cybersecurity solutions powered by AI. With about $350 million in revenue in 2023 and serving 40% of Fortune 100 companies, Wiz has quickly become one of the fastest-growing software startups globally. Recently, Wiz raised $1 billion in a funding round, valuing the company at $12 billion.
The potential acquisition comes amid increased regulatory scrutiny of large tech companies under President Joe Biden‘s administration. Despite the investigation, the technology sector has seen a surge in mergers and acquisitions, with tech deals jumping over 42% year-on-year to $327.2 billion in the first half of the year. Alphabet’s interest in Wiz follows its decision not to pursue a takeover of online marketing software company HubSpot.
Chinese tech companies, from industry giants to ambitious startups, converged at the World AI Conference in Shanghai to showcase their latest innovations and express strong support for the country’s AI sector despite US sanctions. Over 150 AI-related products and solutions are being exhibited, with notable foreign firms like Tesla and Qualcomm also participating. SenseTime, previously known for facial recognition, unveiled its most advanced large language model, SenseNova 5.5, positioning it as a rival to OpenAI’s GPT-4.
Despite challenges posed by US sanctions limiting access to advanced chips, executives at the conference expressed confidence in China’s AI sector’s resilience. Zhang Ping’an, head of Huawei’s cloud computing unit, emphasised the need to innovate in cloud computing to overcome chip shortages. Similarly, Liu Qingfeng, chairman of Iflytek, highlighted that Chinese-developed large language models could rival global standards, stressing the importance of having independently developed and controlled AI technologies.
Robin Li, CEO of Baidu, urged the AI industry to focus on practical applications rather than just developing large language models, which require significant computing power and AI chips. Li stressed that foundational models, whether open-source or closed-source, only hold value with applications. Such a sentiment was echoed by other industry leaders, emphasising the need for innovation and practical use cases in AI development.
Nvidia is facing potential charges from the French antitrust regulator over allegations of anti-competitive behaviour, marking an enforcement agency’s first action against the chip giant. The scrutiny follows raids conducted last September in the graphics cards sector, explicitly targeting Nvidia as part of a broader inquiry into cloud computing. The company’s prominence in AI and graphics chips, boosted by the popularity of applications like ChatGPT, has drawn regulatory attention in Europe and beyond.
While Nvidia and the French authority declined to comment, the European Commission is unlikely to expand its current review, focusing instead on the French investigation. Concerns highlighted by the French watchdog include Nvidia’s CUDA chip programming software, essential for accelerated computing using GPUs, and its investments in AI-centric cloud providers like CoreWeave. These legal developments represent provident measures for potential risks associated with market dependence and competition in the rapidly evolving AI sector.
Why does it matter?
Under French antitrust rules, companies in violation could face fines of up to 10% of their global annual turnover, though concessions can mitigate penalties. Simultaneously, the US Department of Justice is leading an investigation into Nvidia, which is part of the broader scrutiny of Big Tech alongside the Federal Trade Commission. Nvidia’s regulatory challenges reflect worldwide scrutiny over its market dominance and strategic expansions in critical technology sectors.
Alibaba Cloud has decided to close down its data centre operations in Australia and India, which marks a strategic shift in its global infrastructure strategy. Despite previous assurances of continuity, the Chinese cloud giant confirmed the closure plans, citing a redirection of investments towards Southeast Asia and Mexico.
The decision impacts customers in Australia and India, who have been notified of the shutdown deadlines: 30 September for Australia and 15 July for India. After these dates, data stored in these regions will no longer be accessible, prompting Alibaba Cloud to advise customers to migrate to alternative data centres.
Alibaba Cloud’s move reflects broader geopolitical considerations. In Australia, where major global cloud players like AWS, Azure, and Google dominate, the decision comes amid cooling public sentiment towards Chinese investments. Meanwhile, despite its robust economic growth in India, strained bilateral relations between Beijing and Delhi likely influenced Alibaba Cloud’s exit strategy.
In contrast, Alibaba Cloud is eyeing expansion in Southeast Asia and Mexico, where it sees potential growth opportunities aligned with its data centre capabilities. The realignment also underscores Alibaba Cloud’s focus on optimising its global data centre footprint to maximise operational efficiency and market relevance.
The shift from Australia and India underscores Alibaba Cloud’s strategic focus on regions with favourable geopolitical and market conditions while consolidating its presence in high-growth markets like Southeast Asia and Mexico.
Amazon’s AWS, the leading global cloud computing provider, is intensifying efforts to draw the public sector into the realm of AI amidst fierce competition with Microsoft and Google in the generative AI domain. The initiative aims to demonstrate AI’s potential to enhance public services across health, security, and non-profit sectors, leveraging technologies like ChatGPT to streamline operations and improve outcomes.
Over two years, AWS has allocated a substantial $50 million fund to support public sector entities in exploring AI applications, offering cloud computing credits, training, and technical expertise to kickstart innovative projects. Currently serving thousands of government agencies, academic institutions, and nonprofits worldwide, AWS seeks to transition AI concepts into practical solutions that can effectively address public sector challenges.
Dave Levy, AWS’s vice president overseeing global public sector operations, highlighted the importance of moving from conceptualisation to implementation in public sector AI projects, underscoring the need for robust support to navigate complexities and achieve meaningful impacts. The push comes amid heightened competition as Microsoft and Google Cloud aggressively pursue public sector AI adoption, aiming to leverage vast datasets and AI capabilities to revolutionise service delivery and operational efficiency.
Amazon’s AWS remains committed to addressing challenges such as data privacy, security, and ethical considerations surrounding AI adoption in the public sector, emphasising rigorous security protocols and readiness for large-scale deployment.
Why does it matter?
As generative AI continues to evolve, AWS’s strategic focus on public sector adoption underscores its belief in AI’s transformative potential, aiming to lead the charge in integrating advanced technologies into governmental and non-governmental organisations worldwide.
