Development Archives | Page 362 of 549 | Digital Watch Observatory

US airlines struggle as travel demand drops

Just months after predicting a booming future, US airlines are now grappling with economic uncertainty as rising tariffs and government spending cuts dampen travel demand. Consumers and businesses are cutting back on trips, forcing major carriers to lower profit forecasts for the first quarter.

The industry’s outlook for the rest of the year has also dimmed as fears of slow economic growth and high inflation persist.

The S&P 500 passenger airlines index has fallen 15% this year, with stocks of major carriers like Delta and United dropping around 20%. With demand slowing, airlines have begun reducing flight schedules to avoid fare cuts and protect profit margins.

Several airlines, including Delta, United, and American Airlines, have trimmed their April-to-June capacity, while United’s CEO has warned of further cuts if demand does not recover by late summer.

Adding to the industry’s woes, concerns over airline safety have surged, contributing to the travel slowdown. Meanwhile, US consumer confidence has plunged to a four-year low, and airfares posted their first year-on-year decline in six months.

While airlines remain hopeful that full-year earnings targets will hold, sustained weak demand during the peak summer season could force further adjustments.

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SK Hynix sees surge in chip orders ahead of US tariffs

South Korea’s SK Hynix has reported that some customers are accelerating orders ahead of potential US tariffs on semiconductor imports.

Speaking at the company’s annual shareholder meeting, Head of Global Sales and Marketing Lee Sang-rak noted that this trend, combined with reduced customer inventory, has contributed to favourable market conditions.

However, he cautioned that it remains uncertain whether the demand surge will continue.

The US government is considering a 25% tariff on semiconductor imports, prompting fears of price increases and supply chain disruptions. Analysts at Nomura have observed preemptive stockpiling in response, though the final decision on tariffs is still pending.

Meanwhile, competitors Micron, SanDisk, and China’s YMTC have raised their memory chip prices due to strong demand from the AI sector.

SK Hynix remains optimistic about growth, particularly in the high-bandwidth memory (HBM) chip market. CEO Kwak Noh-Jung stated that demand is expected to soar this year, with sales for 2025 already sold out and 2026 orders nearing finalisation.

He also dismissed concerns that Chinese AI startup DeepSeek’s low-cost models would slow demand for high-performance accelerators, arguing that AI advancements will drive further expansion in the memory chip industry.

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Thailand stock exchange halts trading after earthquake

The Stock Exchange of Thailand (SET) suspended all trading activities for the afternoon session on Friday after a powerful earthquake hit neighbouring Myanmar, sending tremors across Bangkok.

The exchange announced the immediate closure on its website, citing the impact of the seismic event.

The suspension affected all markets, including the SET, the Market for Alternative Investment (MAI), and the Thailand Futures Exchange (TFEX). The decision was made as a precautionary measure following the quake, which caused concern among investors and businesses in the region.

Before the halt, the benchmark SET index was trading 1.05% lower at 1,175.45 points, marking an over one-week low.

The market had already been under pressure earlier in the session due to concerns over new US auto tariffs, adding to the volatility triggered by the earthquake.

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BMW partners with Alibaba to boost AI development

Alibaba and BMW have joined forces to develop advanced AI technologies aimed at shaping the future of mobility in China.

The collaboration brings together Alibaba’s growing AI expertise and BMW’s automotive innovation to produce smarter, more intuitive vehicles tailored to the Chinese market.

The partnership centres on integrating a customised AI engine into BMW’s Intelligent Personal Assistant, using Yan AI—developed by Alibaba’s Banma—as its foundation.

However, this AI-powered assistant is set to debut in BMW’s upcoming Neue Klasse models, manufactured in China from 2026. These vehicles will feature voice-activated controls and real-time assistance, creating a more seamless and personalised driving experience.

BMW plans to introduce two AI agents, Car Genius and Travel Companion, to enhance in-car services such as navigation, traffic updates, and personal scheduling.

The customisable nature of these tools reflects a growing demand for smart, user-friendly features in the automotive space, particularly in tech-savvy markets like China.

As global competition in the electric vehicle sector intensifies, BMW’s strategic pivot towards AI and the Chinese market could strengthen its position against local rivals such as BYD and Geely.

With European subsidies declining, the German carmaker is looking to AI-powered innovation as a key lever to maintain relevance and secure long-term growth.

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OpenAI holds back image generator tool for free users

OpenAI is delaying the release of its new image generation feature for free ChatGPT users, citing unexpectedly high demand. CEO Sam Altman acknowledged the postponement in a post on Wednesday, saying the feature’s popularity surpassed expectations, which led to a temporary hold on the wider rollout.

The tool, introduced just a day earlier, allows users to create images directly within ChatGPT using the advanced GPT-4o model. The update quickly went viral, with social media flooded by user-generated visuals — many mimicking the whimsical style of Studio Ghibli — including contributions from Altman himself.

GPT-4o enhances text and image capabilities, generating images in a step-by-step, top-to-bottom process known as an autoregressive approach. Currently, the feature remains exclusive to paid ChatGPT tiers: Plus, Pro, and Team. A timeline for when free users will gain access has yet to be announced.

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AI chip production to benefit from Rapidus and Quest Global alliance

Japanese chipmaker Rapidus Corporation has announced a strategic partnership with Singapore-based engineering firm Quest Global to develop advanced artificial intelligence semiconductors.

The collaboration focuses on producing low-power, high-performance chips using cutting-edge 2-nanometre technology.

Quest Global will support Rapidus and its clients by designing these next-generation AI chips.

The partnership is also expected to expand Rapidus’s customer reach by tapping into Quest Global’s broad international client base, enabling both companies to deliver new products to established and emerging markets.

Rapidus aims to begin pilot production of the new chips in April at a new facility under construction in Hokkaido, Japan, with mass production planned for 2027.

The move forms part of Japan’s broader effort to revitalise its semiconductor industry amid increasing global supply chain concerns.

Founded in 2022 with investment from major Japanese firms including Toyota and Sony, Rapidus was created to strengthen domestic chip manufacturing and reduce reliance on foreign suppliers in an era of growing geopolitical uncertainty.

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Japan builds battery that reuses uranium waste

Japan’s national nuclear research agency has unveiled what it claims is the world’s first uranium-based rechargeable battery — a breakthrough that could open up new uses for vast stockpiles of depleted uranium. The battery, developed by the Japan Atomic Energy Agency, successfully demonstrated charging and discharging capabilities using uranium as the core material to generate electricity.

The prototype, about the size of a small cup, uses a uranium-based electrolyte on the negative side and iron on the positive. With a 1.3V voltage comparable to that of a standard alkaline battery, the device maintained its performance over ten charge cycles, suggesting it is relatively stable in its current form.

That innovation could give a new purpose to the approximately 16,000 tons of depleted uranium stored in Japan and the estimated 1.6 million tons worldwide, which are currently unusable in regular nuclear reactors. Researchers also believe the battery could help store surplus electricity from renewable energy sources.

While promising, the uranium battery’s practical use will likely remain restricted to radiation-controlled zones like nuclear facility sites. The agency plans to work on scaling up the technology by developing a redox flow version starting in fiscal 2025.

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ECB warns Euro zone banks on geopolitical risks

Euro zone banks must remain resilient and prepared for geopolitical shocks, including the risk of liquidity drying up amid volatile financial markets, according to Claudia Buch, the European Central Bank’s supervisory chief.

She highlighted concerns about the potential impact of policy reversals by the US government, particularly under President Donald Trump, which have unsettled investors and created uncertainty about future growth and stability.

Buch also pointed to the ongoing financial and political pressures arising from Russia’s war in Ukraine and the sanctions that followed.

She emphasised the need for banks to maintain sufficient capital, robust governance, and effective risk management systems in the face of potential asset quality deterioration and economic disruptions caused by geopolitical conflicts or sanctions.

Additionally, Buch noted the increasing threat of cybersecurity attacks, which have become more frequent and severe. The ECB’s annual report warned that geopolitical risks could strain liquidity and funding, particularly in foreign currencies, leading to higher borrowing costs and increased use of credit lines.

Buch called for progress in creating a crisis management and deposit insurance framework to protect depositors in the event of bank failures.

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WhatsApp wins support in EU fine appeal

WhatsApp has gained support from an adviser to the European Court of Justice in its fight against a higher fine imposed by the EU privacy watchdog.

The Irish Data Protection Authority fined WhatsApp 225 million euros ($242.2 million) in 2021 for privacy breaches.

The fine was increased after the European Data Protection Board (EDPB) intervened.

A lower tribunal had rejected WhatsApp’s challenge, saying the company lacked legal standing. However, WhatsApp appealed to the Court of Justice of the European Union (CJEU).

Advocate General Tamara Capeta disagreed with the tribunal, recommending that the case be referred back to the General Court for further review.

The CJEU usually follows the adviser’s recommendations, and a final ruling is expected soon. This case could have significant implications for the fine imposed on WhatsApp.

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China faces Nvidia chip shortages

Chinese server manufacturer H3C has warned of potential shortages of Nvidia’s H20 chip, the most advanced AI processor still legally available in the country under US export controls.

In a notice to clients, the company revealed that its stock of H20 chips was nearly depleted, citing geopolitical tensions as a major factor affecting global supply chains.

New shipments are expected by mid-April, but future availability remains uncertain due to ongoing trade restrictions and supply disruptions.

The demand for H20 chips has surged, particularly as companies race to integrate AI models developed by Chinese startup DeepSeek.

Major tech firms such as Tencent, Alibaba, and ByteDance have significantly increased their orders, leading to further strain on supply.

H3C stated that future chip distribution will prioritise long-term, high-margin customers under a profit-first approach, raising concerns among smaller buyers about access to the critical technology.

The H20 was introduced after the US tightened export controls on high-performance AI chips in October 2023, blocking Nvidia’s most advanced processors from the Chinese market.

Washington has restricted such exports since 2022, citing national security concerns over China’s potential military applications of AI technology.

Despite these measures, Nvidia has reportedly shipped around one million H20 units in 2024, generating more than $12 billion in revenue. Meanwhile, domestic alternatives from Huawei and Cambricon are emerging as potential substitutes amid the ongoing supply crunch.

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