Development

Open source (still) means innovations

There is no need to explain the importance of the global network innovation we enjoy today. Many lines have been written on the possibilities and the marvels the network delivers daily. After an initial couple of decades of admiration, the same thing happened with many other wonders of the world we witnessed throughout civilization. We took it for granted. We do not discuss its structure, backbone, and the incentive structure behind it. Unless it interferes with our daily life and freedom.

This is true for any network user, being a state actor, cloud computing company, or everyday end user. When we look at the backbone of the internet, almost everything is open source. What does this mean? Basic protocols and ways we connect over the internet are documented and open for everyone to observe, copy, and build upon. They are agreed upon as a set of transparent public instructions that are free of proprietary obligations. 

Industry and innovation 

To distinguish innovation from the industry (which might be important to go forward), we can introduce a simple correlation: The industry is an ecosystem that emerged on the need to make the invention more available. The vision of utility is in the industry, and the value of innovation is proven with every iteration of utility. Following this correlation, we can indeed say that the more transparent innovation, the greater its value (or we tend to give it such a position).

When we look at the internet industry, we observe that companies and strategies that followed openness have benefited massively from the invention. This system of benefits from the open source approach can work in depth for both the invention and the consequential industry. To name a couple of the greatest examples: Alphabet (Google, YouTube, or Maps), Linux (used to run almost the entire internet backbone infrastructure), Android (revolutionising the app market, levelling the entry field, and reducing the digital divide). All of them are open source, built on the open-source innovation of the internet.

Architecture, Building, Diagram, CAD Diagram

A closer look at resiliency

Let’s look at one example that may illustrate this precisely: bitcoin. It started as an open-source project and is still one of the most maintained public databases on the internet. Bitcoin brings back the idea of private money after 100 years of the nation’s monopoly on money. Although it is pointed out as a danger to the international financial system, there is no possible coordinated action by such entities to take down this system and/or ban it permanently. Why? The simple answer is in the trade-off. 

Stopping bitcoin (or any digital information online) is not impossible per se but would require massive resources. This would require full control of all communication channels towards the internet, including banning satellites from orbiting above your geolocation and persistent efforts to ensure no one is breaching the ban. But in 2024, such a ban would create a tear in the fabric of society. Societal consequences would widely overcome the possible benefits.

Instead, as long as it is neutral, bitcoin does not present a threat but rather an opportunity for all. All other competitors built on bitcoin principles are not the same for that particular reason: they are not open source and transparent. No Central Bank Digital Currency (CBDC), privately issued stablecoin, or any of the thousand cryptocurrency impersonators have proven to hold any of the bitcoin’s value. Following the earlier distinction, innovation is open source, but the industry around it is not so much.

Open source is the right way, not the easy one

Does the above mean that when an industry is not based on open source, it cannot make great discoveries and innovate further? No, not at all. Intellectual property is a large part of the portfolio of the biggest tech companies. For example, Apple’s IP revenues culminated in around USD 22.6 billion in research and development expenditures (in 2022) The proprietary industry moves the needle in the economy and creates wealth, while open source creates opportunities. We need both for a healthy future. All of our opportunities may not result in imminent wealth, but rather in inspiration to move forward rather than oppose the change. 

In simple terms, open source empowers the bottom-up approach to building for the future. It helps expand the base of possible contributors, and maybe most importantly, reduces the possibility of ending up in ‘knowledge slavery’. It can create a healthy, neutral, starting point. The one most will perceive as a chance rather than a threat. 

If all of you had one particular innovation in mind while reading all this, you are right!

Artificial intelligence (AI) is a new frontier. AI is actually a bit more than just a technology, it is an agent. Anyhow, it is an invention, so chances are high it will follow the path we described above, enabling an entirely new industry of utility providers.

No need to be afraid

We hear all the (reasonable) concerns about AI development. Uncertainties on whether AI should be developed beyond human reach and concerns regarding AI in executive positions, all are based on fear of systems with no overview.  

In the past, the carriers of the open source (openness and transparency) approach were mostly in academia. Universities and other research institutions contributed the most to the open source approach. It is a bit different in the AI field. For that, companies are leading the way.  

The power to preserve common knowledge is still in the hands of states, and under the set of business and political circumstances, the private sector is also the biggest proponent of the open source approach. With the emergence of large language models and generative AI, the biggest open source initiatives came from Meta (LLaMa) and Alphabet (T5). They align with the incentive to statute open source as a standard for the future. We might be in an equilibrium moment in which both sides agree on the architecture for the future. Nations, international organisations, and the private sector should seize this opportunity. This new race toward more efficient technology of the future should evoke optimism, but there cannot be one without the bottom- up and open source approach to innovation. 

The open source approach is still the way forward for innovation. and can build neutral ground, or at least will not be perceived as a threat.

Read more of our ideas about the way forward in AI governance on the humAInism page. 

China and Russia push forward in semiconductor equipment development

In recent years, China and Russia have significantly ramped up efforts to advance their semiconductor equipment industries, aiming to secure competitive positions in the global market. While the US, Netherlands, Japan, and South Korea dominate the semiconductor equipment sector, China’s aggressive R&D investments in etching, CVD, PVD, and packaging technologies are helping it make strides in domestic substitution. However, the country still lags in high-end lithography equipment, especially EUV machines.

Despite challenges, China’s semiconductor equipment market is expected to see record-high purchases in 2024, surpassing $40 billion. Experts attribute this growth to localisations, new fabs, and global supply chain concerns. However, demand is expected to stabilise in 2025 once production lines are up and running, although long-term growth remains promising, fueled by applications in 5G, AI, and automotive electronics.

Meanwhile, Russia has accelerated its efforts to develop domestic semiconductor equipment, receiving over $2.5 billion in government funding. With a focus on manufacturing 200mm wafers for chips with nodes from 180nm to 90nm, Russia aims to reduce reliance on imports. The country’s ambitious goal is to replace 70% of imported equipment with domestically produced alternatives by 2030. Despite progress, Russian manufacturers like Angstrem and Mikron are still constrained to mature process nodes, depending on imported lithography systems.

Louisiana to host Meta’s largest AI data centre

Meta, the parent company of Facebook, plans to invest $10 billion to construct a state-of-the-art AI data centre in Richland Parish, Louisiana. Once completed, it will be the largest data centre in Meta’s global portfolio, designed to manage the vast data needs of AI and digital infrastructure. The facility is set to begin construction in December and is expected to take until 2030 to complete.

The company is working with Entergy, a utility provider operating in Louisiana, to ensure the centre’s energy consumption is fully matched by renewable sources. Entergy already supports similar projects, including Amazon’s upcoming cloud services facility in Mississippi, and operates two nuclear power plants in Louisiana.

As AI computing drives a surge in energy demand among tech giants like Meta, Amazon, and Microsoft, companies are increasingly exploring nuclear power to supplement renewable energy. However, challenges such as an ageing reactor fleet, regulatory hurdles, and supply chain limitations for uranium fuel may slow the adoption of nuclear energy.

Meta recently sought proposals from nuclear power developers to support its AI and environmental goals, aiming for 1 to 4 gigawatts of new US nuclear capacity by the early 2030s. The Louisiana data centre is part of Meta’s broader strategy to integrate sustainability with cutting-edge AI technology.

Musk’s xAI plans major supercomputer expansion in Memphis

Elon Musk’s AI company, xAI, is preparing to expand its Memphis-based supercomputer, Colossus, to accommodate over one million graphics processing units (GPUs). Currently housing 100,000 GPUs, Colossus plays a central role in training xAI’s chatbot, Grok, as the company accelerates efforts to rival OpenAI in the AI landscape.

Nvidia will supply the GPUs, while Dell and Super Micro are tasked with assembling the server infrastructure in Memphis, according to the Greater Memphis Chamber. The expansion highlights xAI’s commitment to AI innovation, as Musk intensifies competition with OpenAI and its CEO, Sam Altman. Recently, Musk escalated his legal battle with OpenAI, alleging monopolistic practices in the AI sector.

Concerns about environmental impact loom large with the supercomputer’s planned growth. Colossus’s massive energy demands have drawn scrutiny from environmental groups. The Southern Environmental Law Center urged Tennessee authorities to investigate whether xAI was using unpermitted gas turbines to power the facility.

The Memphis project underscores Musk’s ambitions to reshape the AI industry. With Colossus’s tenfold expansion, xAI positions itself as a formidable challenger in the rapidly evolving AI arms race.

South Korea plans to open crypto trading to universities by 2025

South Korea is preparing to introduce a major shift in cryptocurrency regulations, with plans to allow universities and public institutions to trade crypto by 2025. According to reports, the Financial Services Commission (FSC) aims to roll out a roadmap enabling government bodies, universities, and eventually corporations to participate in the crypto market. The move reflects growing interest in aligning with global trends as South Korea seeks to catch up with nations like the US and Japan, where corporate crypto investments are already common.

The first phase of the FSC’s plan would permit universities and non-profit organisations to sell and trade cryptocurrencies they have received as donations. For example, Seoul National University has been unable to sell WEMIX tokens donated by a gaming firm due to regulatory barriers. Critics argue that this cautious approach has held back South Korean firms from benefiting from strategies that have boosted asset values abroad.

Long-term plans include allowing private companies and financial institutions to trade crypto, with safeguards to prevent excessive market risks. Regulators aim to limit the percentage of company capital held in crypto, ensuring stability while fostering growth in the virtual asset industry. This cautious yet progressive framework signals South Korea’s intent to balance innovation with financial security in the evolving crypto landscape.

France faces political crisis as Bitcoin hits record highs

As France grapples with political uncertainty following a no-confidence vote on its budget, the financial world has been captivated by Bitcoin’s historic surge past $100,000. President Macron faces the challenge of stabilising a government without a clear parliamentary majority, while the budget deficit has swelled to 6% of GDP. The crisis has prompted fears of long-term risks to the nation’s financial health, but markets have remained largely calm for now.

Meanwhile, Bitcoin’s remarkable rally has stolen the spotlight. The appointment of Paul Atkins as the new head of the US Securities and Exchange Commission has sparked optimism in the crypto world. Known for his deregulatory stance, Atkins is expected to adopt a more favourable approach to cryptocurrencies, fuelling the digital asset’s meteoric rise.

While Bitcoin’s rally marks a pivotal moment in its bull market, France’s political woes raise questions about its fiscal future. With bond markets stable for now, the next test will be whether a new government can address the budget deficit without spooking investors. The intersection of political and financial upheavals across Europe underscores the fragile balance between traditional and emerging markets.

TSMC and Nvidia in talks for Blackwell chip production in Arizona

Taiwan Semiconductor Manufacturing Company (TSMC) is reportedly in discussions with Nvidia to produce its Blackwell AI chips at TSMC’s new facility in Arizona, according to sources familiar with the matter. This move would mark a significant expansion of Nvidia’s chip production outside Taiwan, where the Blackwell series has been manufactured since its unveiling in March. The chips, celebrated for their generative AI and accelerated computing capabilities, are in high demand and boast speeds 30 times faster than previous models for tasks like chatbot responses.

The Arizona facility, set to begin volume production next year, represents a major US investment by TSMC, which is building three plants in Phoenix with substantial US government subsidies. If finalised, Nvidia would join Apple and AMD as plant customers. However, sources indicate that the chips would still need to be sent back to Taiwan for advanced packaging due to the lack of chip-on-wafer-on-substrate (CoWoS) capacity in Arizona. All of TSMC’s CoWoS operations remain centralised in Taiwan.

TSMC’s expansion into the US aligns with Washington’s push to bolster domestic semiconductor manufacturing amid geopolitical concerns over Taiwan. Neither TSMC nor Nvidia has commented on the talks, emphasising the confidentiality of the ongoing discussions.

Mastercard collaborates with Crypto.com to launch cards in GCC

Mastercard has partnered with Singapore-based Crypto.com to launch pre-paid payment cards in the Gulf Cooperation Council (GCC) region. The Mastercard-backed cards will fill a gap where Visa-backed Crypto.com cards are unavailable, offering cardholders rewards of up to 8% and payouts in US dollars. Users can fund their accounts via e-money wallets or third-party credit and debit cards through the Crypto.com app.

The partnership, announced on 4 December, will initially launch in Bahrain, with plans to expand to other GCC countries, including Kuwait, Oman, Qatar, Saudi Arabia, and the UAE. Mastercard emphasised the security of its network and its cutting-edge payment solutions, which will now support Crypto.com transactions across the region.

The GCC’s forward-thinking stance on cryptocurrency and blockchain technologies sets a strong foundation for such initiatives. This collaboration underscores the growing acceptance of crypto in mainstream payment systems, paving the way for more innovation in the financial sector.

US official advises encryption amid alleged Chinese hacking efforts

A senior United States cybersecurity official has urged Americans to embrace encryption to safeguard their communications, citing ongoing efforts to expel alleged Chinese hackers from US telecom networks. Jeff Greene, Executive Assistant Director for Cybersecurity at the Cybersecurity and Infrastructure Security Agency (CISA), emphasised the importance of avoiding plaintext communications and recommending encrypted apps like Signal and WhatsApp.

US authorities have accused hackers from China of infiltrating telecommunications companies, such as T-Mobile, to access sensitive data, including call records and intercepted audio, predominantly from Washington, DC. Beijing has denied the allegations, calling them disinformation. Greene acknowledged that removing the hackers entirely from the networks could take an unpredictable amount of time, further underscoring the need for encryption to ensure secure communications.

The advice marks a notable shift from previous US government positions that questioned strong encryption’s impact on public safety. As concerns over foreign cyber intrusions grow, Greene’s remarks highlight encryption as a critical tool for Americans facing prolonged cybersecurity threats.

Qatar strengthens ties with UK through major investment

Qatar has announced a £1 billion investment in UK climate technology, a move that will benefit companies like Rolls-Royce in their push toward sustainable energy solutions. The funding will support projects that enhance energy efficiency, develop sustainable fuels, and reduce carbon emissions, alongside fostering startups in green energy and carbon management.

The announcement coincides with Qatari Emir Sheikh Tamim bin Hamad Al Thani’s state visit to Great Britain, during which he met Prime Minister Keir Starmer. The investment is expected to generate thousands of jobs and bolster economic ties between the nations. Rolls-Royce CEO Tufan Erginbilgic welcomed Qatar as a strategic partner, underscoring the shared commitment to advancing climate-friendly technologies.

Qatar, already a major investor in Britain, holds stakes in assets like Canary Wharf and Heathrow Airport. The collaboration aligns with Starmer’s aim to drive UK economic growth through partnerships with wealthy investors to fund infrastructure and energy projects.