Competition regulation

AI slop dominates YouTube recommendations for new users

More than 20 percent of videos recommended to new YouTube users are low-quality, attention-driven content commonly referred to as AI slop, according to new research. The findings raise concerns about how recommendation systems shape early user experience on the platform.

Video-editing firm Kapwing analysed 15,000 of YouTube’s top channels across countries worldwide. Researchers identified 278 channels consisting entirely of AI-generated slop, designed primarily to maximise views rather than provide substantive content.

These channels have collectively amassed more than 63 billion views and 221 million subscribers. Kapwing estimates the network generates around $117 million in annual revenue through advertising and engagement.

To test recommendations directly, researchers created a new YouTube account and reviewed its first 500 suggested videos. Of these, 104 were classified as AI slop, with around one third falling into a category described as brainrot content.

Kapwing found that AI slop channels attract large audiences globally, including tens of millions of subscribers in countries such as Spain, Egypt, the United States, and Brazil. Researchers said the scale highlights the growing reach of low-quality AI-generated video content.

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Bitcoin adoption remains uneven across US states

A recent SmartAsset study based on IRS tax return data highlights sharp regional differences in Bitcoin participation across the US. Crypto engagement is concentrated in certain states, driven by income, tech adoption, and local economic culture.

Washington leads the rankings, with 2.43 per cent of taxpayers reporting crypto transactions, followed by Utah, California, Colorado and New Jersey. These states have strong tech sectors, higher incomes, and populations familiar with digital financial tools.

New Jersey’s position also shows that crypto interest extends beyond traditional tech hubs in the West. At the opposite end, states such as West Virginia, Mississippi, Kentucky, Louisiana and Alabama record participation close to or below one per cent.

Lower household incomes, smaller tech industries and a preference for conventional financial products appear to limit reported crypto activity, although some low-level holdings may not surface in tax data.

The data also reflects crypto’s sensitivity to market cycles. Participation surged during the 2021 bull run before declining sharply in 2022 as prices fell.

Higher-income households remain far more active than middle-income earners, reinforcing the view that Bitcoin adoption in the US is still largely speculative and unevenly distributed.

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New Chinese rules target AI chatbots and emotional manipulation

China has proposed new rules to restrict AI chatbots from influencing human emotions in ways that could lead to suicide or self-harm. The Cyberspace Administration released draft regulations, open for public comment until late January.

The measures target human-like interactive AI services, including emotionally responsive AI chatbots, that simulate personality and engage users through text, images, audio, or video. Officials say the proposals signal a shift from content safety towards emotional safety as AI companions gain popularity.

Under the draft rules, AI chatbot services would be barred from encouraging self-harm, emotional manipulation, or obscene, violent, or gambling-related content. Providers would be required to involve human moderators if users express suicidal intent.

Additional provisions would strengthen safeguards for minors, including guardian consent and usage limits for emotionally interactive systems. Platforms would also face security assessments and interaction reminders when operating services with large user bases.

Experts say the proposals could mark the world’s first attempt to regulate emotionally responsive AI systems. The move comes as China-based chatbot firms pursue public listings and as global scrutiny grows over how conversational AI affects mental health and user behaviour.

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EU targets addictive gaming features

Video gaming has become one of Europe’s most prominent entertainment industries, surpassing a niche hobby, with over half the population regularly engaging in it.

As the sector grows, the EU lawmakers are increasingly worried about addictive game design and manipulative features that push players to spend more time and money online.

Much of the concern focuses on loot boxes, where players pay for random digital rewards that resemble gambling mechanics. Studies and parliamentary reports warn that children may be particularly vulnerable, with some lawmakers calling for outright bans on paid loot boxes and premium in-game currencies.

The European Commission is examining how far design choices contribute to digital addiction and whether games are exploiting behavioural weaknesses rather than offering fair entertainment.

Officials say the risk is higher for minors, who may not fully understand how engagement-driven systems are engineered.

The upcoming Digital Fairness Act aims to strengthen consumer protection across online services, rather than leaving families to navigate the risks alone. However, as negotiations continue, the debate over how tightly gaming should be regulated is only just beginning.

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Kazakhstan climbs global AI readiness ranking

Kazakhstan has risen to 60th place out of 195 countries in the 2025 Government AI Readiness Index, marking a 16-place improvement and highlighting a year of accelerated institutional and policy development.

The ranking, compiled by Oxford Insights, measures governments’ ability to adopt and manage AI across public administration, the economy, and social systems.

At a regional level, Kazakhstan now leads Central Asia in AI readiness. A strong performance in the Public Sector Adoption pillar, with a score of 73.59, reflects the widespread use of digital services, e-government platforms, and a shift toward data-led public service delivery.

The country’s advanced digital infrastructure, high internet penetration, and mature electronic government ecosystem provide a solid foundation for scaling AI nationwide.

Political and governance initiatives have further strengthened Kazakhstan’s position. In 2025, the government enacted its first comprehensive AI law, which covers ethics, safety, and digital innovation.

At the same time, the Ministry of Digital Development, Innovation and Aerospace Industry was restructured into a dedicated Ministry of Artificial Intelligence and Digital Development, signalling the government’s commitment to making AI a central policy priority.

Kazakhstan’s progress demonstrates how a focused policy, infrastructure, and institutional approach can enhance AI readiness, enabling the responsible and effective integration of AI across public and economic sectors.

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Japan to boost spending on semiconductors and AI

Japan’s Ministry of Economy, Trade and Industry is set to significantly increase funding for advanced semiconductors and AI in the coming fiscal year.

Spending on chips and AI is expected to nearly quadruple to ¥1.23 trillion ($7.9 billion), accounting for the majority of the ministry’s ¥3.07 trillion budget, a 50% increase from last year. The budget, approved by Prime Minister Sanae Takaichi’s Cabinet, will be debated in parliament early next year.

The funding boost reflects Japan’s push to strengthen its position in frontier technologies amid global competition with the US and China. The government will fund most of the additional support through regular budgets, ensuring more stable backing for semiconductor and AI development.

Key initiatives include ¥150 billion for chip venture Rapidus and ¥387.3 billion for domestic foundation AI models, data infrastructure, and ‘physical AI’ for robotics and machinery control.

The budget also allocates ¥5 billion for critical minerals and ¥122 billion for decarbonisation, including next-generation nuclear power. Special bonds worth ¥1.78 trillion will also support Japanese investment in the US, reinforcing the trade agreement between the two countries.

The increase in funding demonstrates Japan’s strategic focus on achieving technological self-sufficiency and enhancing global competitiveness in emerging industries, thereby ensuring long-term support for innovation and critical infrastructure.

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IMF calls for stronger AI regulation in global securities markets

Regulators worldwide are being urged to adopt stronger oversight frameworks for AI in capital markets after an IMF technical note warned that rapid AI adoption could reshape securities trading while increasing systemic risk.

AI brings major efficiency gains in asset management and high-frequency trading instead of slower, human-led processes, yet opacity, market volatility, cyber threats and model concentration remain significant concerns.

The IMF warns that AI could create powerful data oligopolies where only a few firms can train the strongest models, while autonomous trading agents may unintentionally collude by widening spreads without explicit coordination.

Retail investors also face rising exposure to AI washing, where financial firms exaggerate or misrepresent AI capability, making transparency, accountability and human-in-the-loop review essential safeguards.

Supervisory authorities are encouraged to scale their own AI capacity through SupTech tools for automated surveillance and social-media sentiment monitoring.

The note highlights India as a key case study, given the dominance of algorithmic trading and SEBI’s early reporting requirements for AI and machine learning. The IMF also points to the National Stock Exchange’s use of AI in fraud detection as an emerging-market model for resilient monitoring infrastructure.

The report underlines the need for regulators to prepare for AI-driven market shocks, strengthen governance obligations on regulated entities and build specialist teams capable of understanding model risk instead of reacting only after misconduct or misinformation harms investors.

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Court blocks Texas app store law as Apple halts rollout

Apple has paused previously announced plans for Texas after a federal judge blocked a new age-verification law for app stores. The company said it will continue to monitor the legal process while keeping certain developer tools available for testing.

The law, known as the App Store Accountability Act, would have required app stores to verify user ages and obtain parental consent for minors. It also mandated that age data be shared with app developers, a provision criticised by technology companies on privacy grounds.

A US judge halted enforcement of the law, citing First Amendment concerns, ahead of its planned January rollout. Texas officials said they intend to appeal the decision, signalling that the legal dispute is likely to continue.

Apple had announced new requirements to comply with the law, including mandatory Family Sharing for users under 18 and renewed parental consent following significant app updates. Those plans are now on hold following the ruling.

Apple said its age-assurance tools remain available globally, while reiterating concerns that broad data collection could undermine user privacy. Similar laws are expected to take effect in other US states next year.

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Digital rules dispute deepens as US administration avoids trade retaliation

The US administration is criticising foreign digital regulations affecting major online platforms while avoiding trade measures that could disrupt the US economy. Officials say the rules disproportionately impact American technology companies.

US officials have paused or cancelled trade discussions with the UK, the EU, and South Korea. Current negotiations are focused on rolling back digital taxes, privacy rules, and platform regulations that Washington views as unfair barriers to US firms.

US administration officials describe the moves as a negotiating tactic rather than an escalation toward tariffs. While trade investigations into digital practices have been raised as a possibility, officials have stressed that the goal remains a negotiated outcome rather than a renewed trade conflict.

Technology companies have pressed for firmer action, though some industry figures warn that aggressive retaliation could trigger a wider digital trade war. Officials acknowledge that prolonged disputes with major partners could ultimately harm both US firms and global markets.

Despite rhetorical escalation and targeted threats against European companies, the US administration has so far avoided dismantling existing trade agreements. Analysts say mounting pressure may soon force Washington to choose between compromise and more concrete enforcement measures.

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Groq partners with Nvidia to expand inference technology

Groq has signed a non-exclusive licensing agreement with Nvidia to share its inference technology, aiming to make high-performance, cost-efficient AI processing more widely accessible.

Groq’s founder, Jonathan Ross, president Sunny Madra, and other team members will join Nvidia to help develop and scale the licensed technology. Despite the collaboration, Groq will remain an independent company, with Simon Edwards taking over as Chief Executive Officer.

Operations of GroqCloud will continue without interruption, ensuring ongoing services for existing customers. The agreement highlights a growing trend of partnerships in the AI sector, combining innovation with broader access to advanced processing capabilities.

The partnership could speed up AI inference adoption, offering companies more scalable and cost-effective options for deploying AI workloads. Analysts suggest such collaborations are likely to drive competition and innovation in the rapidly evolving AI hardware and software market.

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