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China to expand AI investment and boost tech innovation

China has announced plans to increase support for AI development and boost venture capital investment as part of its broader strategy to drive technological breakthroughs and self-reliance.

The initiative was outlined in a government report presented at the annual National People’s Congress, highlighting AI, biomanufacturing, quantum technology, and 6G as key areas for future growth.

Authorities plan to encourage the application of large-scale AI models and the advancement of next-generation intelligent terminals and smart manufacturing systems.

The report also emphasised the importance of creating an environment that supports innovation, allowing for exploration and tolerating failure. Young scientists and engineers will be given significant roles in national laboratories to accelerate progress in emerging industries.

China intends to improve its data infrastructure and facilitate cross-border data flows to strengthen its technological capabilities.

The inclusion of AI in the government’s work report for the first time comes amid growing interest in Chinese AI startups such as DeepSeek, signalling Beijing’s intent to remain at the forefront of AI development.

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Amazon bets on AI automation with new business unit

Amazon has created a new division focused on agentic AI to enhance automation for users and businesses. The initiative will be led by AWS executive Swami Sivasubramanian.

WS CEO Matt Garman described agentic AI as a potential multi-billion-dollar business, with the goal of enabling systems to take proactive actions without user prompts.

The announcement follows Amazon’s recent unveiling of an upgraded Alexa, which incorporates similar AI capabilities.

As part of a broader restructuring within AWS, senior vice president Peter DeSantis also outlined leadership changes, including the realignment of AI units Bedrock and SageMaker under the compute organisation.

The company believes these shifts will accelerate innovation and improve customer experience.

Amazon has been investing heavily in AI to maintain its competitive edge in cloud computing and e-commerce. The restructuring signals a stronger push toward AI-driven automation, which the company sees as central to the next wave of technological progress.

Shares of Amazon fell slightly following the announcement, closing at $204.81.

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EU set to implement Entry/Exit System for border control

The European Union has reached an agreement to finally implement the long-awaited Entry/Exit System (EES), which will modernise border checks for short-stay travellers.

After several delays due to technical issues and a lack of readiness, the system is now set to begin operations in autumn, though a specific launch date has yet to be determined.

Member states will have the option to introduce the system all at once or in phases over a six-month transition period, with the full implementation to be completed by the end of the transition.

The EES, which was first proposed in 2016, aims to replace traditional passport stamping by collecting biometric data from non-EU visitors, including photos and fingerprints.

This data will be recorded each time visitors enter or exit the Schengen Area. The system is designed to improve border control, help authorities identify overstayers, and prevent identity fraud.

While Cyprus and Ireland will not participate in the new system, all other EU member states and four Schengen-associated countries will be involved.

Poland, which currently holds the EU Council’s rotating presidency, will lead negotiations with the European Parliament to finalise the law.

Tomasz Siemoniak, Poland’s Minister for Internal Affairs, indicated that a final agreement should be reached smoothly, with October set as the target for full implementation.

The EES is expected to provide authorities with new tools to enhance security and better manage borders within the Schengen Area.

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South Korea launches $34 billion fund for strategic industries

South Korea has announced the creation of a $34 billion policy fund to support companies in key industries such as semiconductors, automotive, and advanced technologies, in response to growing global competition and protectionist policies.

The state-run Korea Development Bank will manage the fund by providing low-interest loans and other financial support over the next five years to businesses involved in national strategic industries.

The government stressed that maintaining competitiveness in these strategic sectors has become crucial to the country’s economic security, particularly amid the uncertainties caused by the new US administration.

South Korea has identified 12 industries, including semiconductors, AI, and biopharmaceuticals, as critical for its future economic stability and will offer targeted financial support to strengthen these sectors.

In addition to the fund, South Korea also unveiled new policies to attract skilled global talent in cutting-edge fields. These measures include offering top-tier visas and permanent residency to professionals with experience at major international firms, aiming to enhance the country’s workforce in strategic industries.

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Musk’s bid to halt OpenAI’s for-profit transition rejected

A US court has denied Elon Musk’s request for a preliminary injunction against OpenAI’s transition into a for-profit organisation.

US District Judge Yvonne Gonzalez Rogers ruled that Musk did not meet the high standards required to block the move. However, the judge indicated that she would expedite a trial on the matter, which is expected to take place later this year.

Musk, who co-founded OpenAI in 2015 but left before its major success, argued that OpenAI had initially sought his charitable funding to create AI for the public good, but has since shifted its focus towards making profits.

His lawyer, Marc Toberoff, expressed satisfaction that the judge had agreed to a swift trial, claiming that the case involves urgent public interest concerns.

OpenAI, which is seeking to become a for-profit entity to attract the necessary capital for its AI projects, welcomed the court’s decision.

The company emphasised that its goal is to develop advanced AI models to benefit society. Musk’s legal action, which also includes antitrust claims, stems from his frustration with OpenAI’s shift in direction since he departed from the organisation.

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Nvidia and Broadcom test Intel’s advanced chip manufacturing

Nvidia and Broadcom are conducting manufacturing tests with Intel’s advanced 18A chip-making process, signalling potential confidence in the struggling company’s technology.

Sources indicate that the tests, though preliminary, could lead to major contracts worth hundreds of millions of dollars. Advanced Micro Devices (AMD) is also evaluating Intel’s capabilities, though it is unclear if it has sent test chips for validation.

Despite the interest, Intel’s foundry business has faced repeated delays, with its 18A process now pushed back another six months due to challenges in qualifying essential intellectual property.

The company has struggled to secure major external clients, with most of its foundry revenue still coming from its own chip production.

The US government sees Intel as critical to restoring domestic semiconductor manufacturing and has explored deals to strengthen its position, including potential partnerships with TSMC.

Intel has signed agreements with Microsoft and Amazon for chip production, though details remain vague. Industry experts suggest that many chip designers are waiting to see if Intel can reliably deliver on its foundry promises before committing to large-scale production.

Financial setbacks have placed additional pressure on Intel, with its foundry revenue declining 60% last year and break-even projections now delayed until at least 2027.

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CoreWeave to buy Weights & Biases as it prepares for IPO

CoreWeave, backed by Nvidia, announced on Tuesday that it is acquiring AI developer platform Weights & Biases as part of its efforts to expand its cloud platform ahead of its upcoming IPO. The deal will merge CoreWeave’s infrastructure and managed cloud services with Weights & Biases’ AI model training and monitoring tools, which are used by major tech companies such as OpenAI and Meta.

While the financial terms of the deal were not disclosed, technology news site The Information reported that it could be valued at approximately $1.7 billion. CoreWeave, based in Roseland, New Jersey, has seen significant growth, with an eight-fold increase in revenue forecast for 2024.

CoreWeave, whose customers include companies like Meta, Microsoft, and hedge fund Jane Street, is aiming for a valuation exceeding $35 billion in its IPO later this year. The acquisition is seen as a move to strengthen CoreWeave’s position in the competitive AI market ahead of its New York listing.

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UK regulator approves Synopsys’ $35 billion Ansys deal

Britain’s competition regulator has approved Synopsys’ $35 billion acquisition of Ansys after the companies addressed concerns about the potential negative impact on innovation and pricing.

In December, the regulator raised alarms that the deal could reduce competition in the chip design software market, possibly leading to higher prices and less innovation.

However, following negotiations and the companies’ offer of remedies to mitigate these concerns, the regulator decided not to refer the deal for an in-depth phase-2 investigation.

Synopsys, a major player in the chip design software industry, announced the acquisition in January. The deal, which will be a mix of cash and stock, aims to strengthen Synopsys’ portfolio and expand its offerings in the design and development of complex products.

Ansys, a well-established provider of simulation software, is used by a range of industries, from aerospace to sports equipment, to design and optimise products like aeroplanes and tennis rackets.

The acquisition marks a significant move for Synopsys, enhancing its capabilities in the design and development of advanced technology.

The deal is expected to bring together the strengths of both companies, allowing them to offer a broader set of solutions to customers in various sectors, from semiconductor manufacturing to engineering and consumer goods.

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GM hires AI expert to drive innovation in vehicles

General Motors has appointed Barak Turovsky as its first chief AI officer, signalling a stronger focus on AI integration across its business.

Turovsky, a former AI leader at Cisco and Google, will report to Dave Richardson, GM’s senior vice president of software and services engineering. His team will work on expanding AI capabilities within GM’s vehicle lineup and broader operations.

GM has already implemented AI for tasks such as selecting locations for EV chargers, streamlining vehicle order processes, and optimising manufacturing.

Richardson stated that AI is central to the company’s strategy for electric, internal combustion, and autonomous vehicles, with Turovsky’s expertise expected to accelerate these efforts.

The hiring comes as GM continues to build its software-focused leadership team, having recently promoted former Apple executives to key positions. AI is set to play a crucial role in enhancing customer experience, improving operations, and driving innovation in the automaker’s future technologies.

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Trump pushes for end to $52 billion semiconductor subsidy

Donald Trump has called for the repeal of the CHIPS and Science Act, a key piece of legislation passed in 2022 to support semiconductor manufacturing in the US.

Trump criticised the law during a speech to Congress, describing it as a waste of hundreds of billions of dollars and suggesting the funds should instead be used to reduce national debt. His remarks mark his most forceful criticism of the act to date.

The CHIPS Act, signed by President Joe Biden, allocated $39 billion in subsidies for US semiconductor production and related industries, along with $75 billion in government-backed loans.

The initiative was part of a broader strategy to reduce reliance on foreign-made chips and address national security concerns.

Trump argued that rather than offering financial incentives, the government could avoid imposing tariffs to encourage semiconductor companies to build factories in the US.

However, the program has garnered support from officials, including Commerce Secretary Gina Raimondo, who played a key role in securing investments from leading global semiconductor firms like Samsung, Intel, and TSMC.

New York Governor Kathy Hochul defended the CHIPS Act, emphasising its role in bringing significant investment and job creation to the state, including Micron’s $100 billion investment in Central New York.

Trump’s comments have raised concerns about the future of these grants and the potential impact on such developments.

For more information on these topics, visit diplomacy.edu.