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Apple explores AI partnerships for iPhones in China

According to sources familiar with the matter, Apple is in early talks with Tencent and ByteDance to integrate their AI models into iPhones sold in China. This comes as Apple rolls out OpenAI’s ChatGPT in other markets, but regulatory restrictions in China prevent the availability of the chatbot there. To comply with local rules and counter the declining market share, Apple is exploring partnerships with Chinese firms that already have government-approved AI models.

Potential partners include ByteDance’s Doubao and Tencent’s Hunyuan, part of a growing field of AI services in China. Although Apple previously discussed using Baidu’s Ernie model, reports suggest technical disagreements halted progress. Baidu’s shares dropped following news of these challenges, while Tencent’s stock saw a boost.

Apple faces increasing pressure in China’s competitive smartphone market, where domestic rivals like Huawei are surging ahead. Huawei’s recent AI-equipped models have attracted consumers, contributing to a 42% spike in sales. In contrast, Apple’s third-quarter sales dipped slightly, underscoring the need for a successful AI integration strategy to regain momentum in China.

US awards SK Hynix grant for AI chip facility

The US Commerce Department has finalised a $458 million grant for SK Hynix to support an advanced chip packaging plant and AI research facility in Indiana. The South Korean company, a key supplier for Nvidia, plans to invest $3.87 billion in the project, which will produce high-bandwidth memory chips used in AI systems. The government will also provide $500 million in loans as part of the deal.

The Indiana facility is expected to create 1,000 jobs and strengthen the US semiconductor supply chain. SK Hynix’s CEO, Kwak Noh-Jung, highlighted the importance of building a resilient AI chip infrastructure in the United States. This grant is part of the $39 billion program approved by Congress in 2022 to boost domestic semiconductor production.

The Commerce Department has issued grants to major chipmakers like Intel, Micron, and TSMC. With the SK Hynix deal complete, only Samsung’s $6.4 billion award remains pending. The initiative aims to bolster US leadership in semiconductor technology and reduce reliance on foreign manufacturing.

Apple criticises Meta’s requests for access to iPhone tools

Apple has accused Meta of making excessive interoperability requests that could compromise user privacy and security, intensifying the rivalry between the two tech giants. Under the European Union’s Digital Markets Act (DMA), Apple must allow competitors access to its services or face significant fines. Apple claims Meta’s 15 requests — more than any other company — could expose sensitive data like messages, emails, and passwords.

Meta, which seeks integration for products like its Quest VR headsets and smart glasses, dismissed Apple’s privacy concerns as a cover for anticompetitive practices. Apple cited Meta’s past privacy violations in Europe as a reason for caution.

Meanwhile, the European Commission has outlined measures to ensure Apple complies with the DMA, including clear timelines and feedback mechanisms for developers. A final decision on Apple’s compliance with the law is expected in March 2025.

Dutch tech firms unite for Eindhoven growth

A coalition of Dutch technology firms, including chip equipment maker ASML, has announced plans to contribute approximately $230 million towards infrastructure development in Eindhoven, one of Europe’s fastest-growing technology hubs. This initiative aligns with the Dutch government’s “Operation Beethoven,” a €2.5 billion programme aimed at improving housing, transport, education, and electricity in the region.

The corporate funding will complement public investment, supporting projects coordinated by the regional development agency Brainport. Willem van der Leegte, CEO of manufacturing giant VDL Groep, a key ASML supplier, emphasised the mutual benefits of the collaboration, stating, “What is good for the region is good for the companies, and vice versa.” Other prominent contributors include chipmaker NXP and health technology firm Philips.

Eindhoven’s rapid growth as a technology hub has placed increased demand on local infrastructure. By joining forces, public and private sectors aim to create sustainable development that supports both the region’s workforce and the companies driving innovation.

Democratising AI: the promise and pitfalls of open-source LLMs

At the Internet Governance Forum 2024 in Riyadh, the session Democratising Access to AI with Open-Source LLMs explored a transformative vision: a world where open-source large language models (LLMs) democratise AI, making it accessible, equitable, and responsive to local needs. However, this vision remains a double-edged sword, revealing immense promise and critical challenges.

Panelists, including global experts from India, Brazil, Africa, and the Dominican Republic, championed open-source AI to prevent monopolisation by large tech companies. Melissa Muñoz Suro, Director of Innovation in the Dominican Republic, showcased Taina, an AI project designed to reflect the nation’s culture and language. ‘Open-source means breaking the domino effect of big tech reliance,’ she noted, emphasising that smaller economies could customise AI to serve their unique priorities and populations.

Yet, as Muñoz Suro underscored, resource constraints are a significant obstacle. Training open-source models require computational power, infrastructure, and expertise, which are luxuries many Global South nations lack. A Global South AI expert, Abraham Fifi Selby echoed this, calling for ‘public-private partnerships and investment in localised data infrastructure’ to bridge the gap. He highlighted the significance of African linguistic representation, emphasising that AI trained in local dialects is essential to addressing regional challenges.

The debate also brought ethical and governance concerns into sharp focus. Bianca Kremer, a researcher and activist from Brazil, argued that regulation is indispensable to combat monopolies and ensure AI fairness. She cited Brazil’s experience with algorithmic bias, pointing to an incident where generative AI stereotypically portrayed a Brazilian woman from a favela (urban slum) as holding a gun. ‘Open-source offers the power to fix these biases,’ Kremer explained but insisted that burdensome regulation must accompany technological optimism.

Despite its potential, open-source AI risks misuse and dwindling incentives for large-scale investments. Daniele Turra from ISA Digital Consulting proposed redistributing computational resources—suggesting mechanisms like a ‘computing tax’ or infrastructure sharing by cloud giants to ensure equitable access. The session’s audience also pushed for practical solutions, including open datasets and global collaboration to make AI development truly inclusive.

While challenges persist, trust, collaboration, and local capacity-building remain critical to open-source AI’s success. As Muñoz Suro stated, ‘Technology should make life simpler, happier, and inclusive, and open-source AI if done right, is the key to unlocking this vision.’

All transcripts from the Internet Governance Forum sessions can be found on dig.watch.

Arm and Qualcomm clash over chip design rights

Attorneys for Arm and Qualcomm are clashing in a US federal court this week over a dispute that could shape the future of the chip industry. The case centres on whether Qualcomm’s acquisition of Nuvia in 2021 for $1.4 billion allowed the transfer of computing core designs that build on Arm’s architecture. Arm, whose technology dominates the smartphone market and is increasingly used in laptops, argues that Nuvia’s designs are derivatives of its intellectual property and fall under licensing restrictions.

At the heart of the trial is the testimony of Gerard Williams, a former Apple executive who founded Nuvia. While Arm’s attorneys contend that Nuvia’s work is derived from Arm’s technology, Williams insisted the influence of Arm’s architecture was minimal, estimating it made up ‘one percent or less’ of Nuvia’s final designs. Qualcomm’s lawyers are defending their right to use Nuvia’s cores, highlighting how the company customises and extends Arm’s technology.

The outcome of this trial could impact Qualcomm’s ambitions in the laptop market, where it partners with Microsoft to compete against Apple’s custom chips. With potential losses of $50 million annually in licensing fees for Arm at stake, both companies are vying for control over the boundaries of intellectual property rights. A verdict could come as early as this week, and Qualcomm’s CEO Cristiano Amon may soon take the stand.

Netflix fined for failing to inform customers about data usage

The Dutch Data Protection Authority (DPA) has imposed a €4.75 million ($4.98 million) fine on Netflix for not adequately informing its customers about how their personal data was being used between 2018 and 2020. The fine follows a detailed investigation that began in 2019, which revealed that Netflix’s privacy statement was insufficiently clear regarding the company’s data practices. Specifically, the DPA found that the streaming giant did not provide customers with enough information on how their data was being processed or used.

The investigation also uncovered that when customers sought to understand which personal data Netflix was collecting, they did not receive clear answers. This lack of transparency was deemed a violation of the General Data Protection Regulation (GDPR), which sets strict requirements on companies to protect user privacy and ensure clear communication about data usage.

In response to the findings, Netflix has since updated its privacy statement and improved how it informs customers about its data collection practices. Despite these changes, the company has objected to the fine, though it did not provide a comment when approached by the press.

This fine highlights the increasing scrutiny on companies to comply with GDPR and underscores the importance of clear, transparent data handling practices, especially for tech giants like Netflix that handle vast amounts of personal information.

Basis lands $34 million to revolutionise accounting

Basis, an AI startup, has secured $34 million in a Series A funding round to develop its AI-powered accounting automation product. The round, led by Khosla Ventures, attracted a diverse group of investors, including NFDG (the AI-focused fund managed by former GitHub CEO Nat Friedman and ex-Apple executive Daniel Gross), OpenAI board members Larry Summers and Adam D’Angelo, and Google’s chief scientist Jeff Dean.

The New York-based company is part of a growing group of AI startups creating autonomous agents—systems capable of performing tasks independently. Basis’ product, designed specifically for accounting firms, can handle various workflows such as entering transactions, verifying data accuracy, and integrating with popular ledger systems like QuickBooks and Xero. The product has already shown promising results, with large firms like Wiss reporting a 30% reduction in time spent on manual accounting tasks. Basis functions similarly to a junior accountant, allowing staff to focus on reviewing the AI’s work rather than completing tasks themselves.

Basis also aims to address the critical shortage of accountants in the US, exacerbated by retiring baby boomers and a decline in younger generations entering the profession. According to the Bureau of Labor Statistics, the accounting sector employs over 3 million people, but the number of candidates sitting for the CPA exam has fallen by 33% between 2016 and 2021. The shortage has led many firms to outsource work to countries like India. Moreover, with AI’s potential to automate tasks traditionally performed by accountants, the sector is expected to experience significant disruption. A 2023 OpenAI paper suggested that automation powered by large language models could eventually impact all accountant and auditor roles.

Meta data breach leads to huge EU fine

Meta has been fined €251 million by the European Union’s privacy regulator over a 2018 security breach that affected 29 million users worldwide. The breach involved the ‘View As’ feature, which cyber attackers exploited to access sensitive personal data such as names, contact details, and even information about users’ children.

The Irish Data Protection Commission, Meta’s lead EU regulator, highlighted the severity of the violation, which exposed users to potential misuse of their private information. Meta resolved the issue shortly after its discovery and notified affected users and authorities. Of the 29 million accounts compromised, approximately 3 million belonged to users in the EU and European Economic Area.

This latest fine brings Meta’s total penalties under the EU’s General Data Protection Regulation to nearly €3 billion. A Meta spokesperson stated that the company plans to appeal the decision and emphasised the measures it has implemented to strengthen user data protection. This case underscores the ongoing regulatory scrutiny faced by major technology firms in Europe.

Partnership aims to advance AI in electric vehicles

Synopsys and SiMa.ai, two Silicon Valley-based companies, have announced a partnership to accelerate the development of energy-efficient AI chips designed for automotive applications. Synopsys, a leader in chip-design software, will collaborate with SiMa.ai, a startup known for its low-power hardware and software tailored for diverse AI functions.

The collaboration aims to meet the increasing demand for advanced AI technologies in electric vehicles, where efficient energy use is critical. SiMa.ai’s technology supports a range of applications, from driver-assistance systems that improve safety to voice assistants enabling hands-free commands. These tools often require different types of hardware, and the partnership allows automakers to simulate and select the best combinations for their needs.

The companies see this as a step towards integrating features like voice assistants into cars within the next three years. SiMa.ai’s CEO, Krishna Rangasayee, highlighted the importance of adapting data centre-level AI performance into power-efficient solutions for vehicles, ensuring both high performance and minimal energy consumption.