Digital business models

YouTube Shorts brings image-to-video AI tool

Google has rolled out new AI features for YouTube Shorts, including an image-to-video tool powered by its Veo 2 model. The update lets users convert still images into six-second animated clips, such as turning a static group photo into a dynamic scene.

Creators can also experiment with immersive AI effects that stylise selfies or simple drawings into themed short videos. These features aim to enhance creative expression and are currently available in the US, Canada, Australia and New Zealand, with global rollout expected later this year.

A new AI Playground hub has also been launched to house all generative tools, including video effects and inspiration prompts. Users can find the hub by tapping the Shorts camera’s ‘create’ button and then the sparkle icon in the top corner.

Google plans to introduce even more advanced tools with the upcoming Veo 3 model, which will support synchronised audio generation. The company is positioning YouTube Shorts as a key platform for AI-driven creativity in the video content space.

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Meta tells Australia AI needs real user data to work

Meta, the parent company of Facebook, Instagram, and WhatsApp, has urged the Australian government to harmonise privacy regulations with international standards, warning that stricter local laws could hamper AI development. The comments came in Meta’s submission to the Productivity Commission’s review on harnessing digital technology, published this week.

Australia is undergoing its most significant privacy reform in decades. The Privacy and Other Legislation Amendment Bill 2024, passed in November and given royal assent in December, introduces stricter rules around handling personal and sensitive data. The rules are expected to take effect throughout 2024 and 2025.

Meta maintains that generative AI systems depend on access to large, diverse datasets and cannot rely on synthetic data alone. In its submission, the company argued that publicly available information, like legislative texts, fails to reflect the cultural and conversational richness found on its platforms.

Meta said its platforms capture the ways Australians express themselves, making them essential to training models that can understand local culture, slang, and online behaviour. It added that restricting access to such data would make AI systems less meaningful and effective.

The company has faced growing scrutiny over its data practices. In 2024, it confirmed using Australian Facebook data to train AI models, although users in the EU have the option to opt out—an option not extended to Australian users.

Pushback from regulators in Europe forced Meta to delay its plans for AI training in the EU and UK, though it resumed these efforts in 2025.

Australia’s Office of the Australian Information Commissioner has issued guidance on AI development and commercial deployment, highlighting growing concerns about transparency and accountability. Meta argues that diverging national rules create conflicting obligations, which could reduce the efficiency of building safe and age-appropriate digital products.

Critics claim Meta is prioritising profit over privacy, and insist that any use of personal data for AI should be based on informed consent and clearly demonstrated benefits. The regulatory debate is intensifying at a time when Australia’s outdated privacy laws are being modernised to protect users in the AI age.

The Productivity Commission’s review will shape how the country balances innovation with safeguards. As a key market for Meta, Australia’s decisions could influence regulatory thinking in other jurisdictions confronting similar challenges.

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Excitement builds around digital euro trial on XRP Ledger

The XRP community is abuzz after crypto influencer Amelie claimed Europe is trialling the digital euro on the XRP Ledger. Citing the Frankfurter Stock Exchange, she suggested institutional interest is growing rapidly, potentially leading to a sharp price increase.

In her tweet, Amelie included a video featuring analyst Oliver, who predicted XRP could reach $18 within weeks.

Oliver pointed to XRP Ledger’s speed and scalability as key factors that could meet the European Central Bank’s needs for a digital euro. He claimed successful testing would spark broader adoption and a surge in market value.

XRP was trading at $3.04 at the time of the post, meaning a rise to $18 would mark a 492% increase.

Such a leap would require strong capital inflows and confirmation of real-world adoption. Although no official statement has been released by the Frankfurter Stock Exchange, the speculation has fuelled excitement in the XRP community.

Amelie concluded that 2025 could be pivotal for XRP. Analysts believe the asset’s growing role in tokenisation and cross-border payments could soon extend into central bank digital currencies, potentially solidifying its institutional appeal.

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AI energy demand accelerates while clean power lags

Data centres are driving a sharp rise in electricity consumption, putting mounting pressure on power infrastructure that is already struggling to keep pace.

The rapid expansion of AI has led technology companies to invest heavily in AI-ready infrastructure, but the energy demands of these systems are outstripping available grid capacity.

The International Energy Agency projects that electricity use by data centres will more than double globally by 2030, reaching levels equivalent to the current consumption of Japan.

In the United States, they are expected to use 580 TWh annually by 2028—about 12% of national consumption. AI-specific data centres will be responsible for much of this increase.

Despite this growth, clean energy deployment is lagging. Around two terawatts of projects remain stuck in interconnection queues, delaying the shift to sustainable power. The result is a paradox: firms pursuing carbon-free goals by 2035 now rely on gas and nuclear to power their expanding AI operations.

In response, tech companies and utilities are adopting short-term strategies to relieve grid pressure. Microsoft and Amazon are sourcing energy from nuclear plants, while Meta will rely on new gas-fired generation.

Data centre developers like CloudBurst are securing dedicated fuel supplies to ensure local power generation, bypassing grid limitations. Some utilities are introducing technologies to speed up grid upgrades, such as AI-driven efficiency tools and contracts that encourage flexible demand.

Behind-the-meter solutions—like microgrids, batteries and fuel cells—are also gaining traction. AEP’s 1-GW deal with Bloom Energy would mark the US’s largest fuel cell deployment.

Meanwhile, longer-term efforts aim to scale up nuclear, geothermal and even fusion energy. Google has partnered with Commonwealth Fusion Systems to source power by the early 2030s, while Fervo Energy is advancing geothermal projects.

National Grid and other providers invest in modern transmission technologies to support clean generation. Cooling technology for data centre chips is another area of focus. Programmes like ARPA-E’s COOLERCHIPS are exploring ways to reduce energy intensity.

At the same time, outdated regulatory processes are slowing progress. Developers face unclear connection timelines and steep fees, sometimes pushing them toward off-grid alternatives.

The path forward will depend on how quickly industry and regulators can align. Without faster deployment of clean power and regulatory reform, the systems designed to power AI could become the bottleneck that stalls its growth.

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Quantum computing faces roadblocks to real-world use

Quantum computing holds vast promise for sectors from climate modelling to drug discovery and AI, but it remains far from mainstream due to significant barriers. The fragility of qubits, the shortage of scalable quantum software, and the immense number of qubits required continue to limit progress.

Keeping qubits stable is one of the most significant technical obstacles, with most only lasting microseconds before disruption. Current solutions rely on extreme cooling and specialised equipment, which remain expensive and impractical for widespread use.

Even the most advanced systems today operate with a fraction of the qubits needed for practical applications, while software options remain scarce and highly tailored. Businesses exploring quantum solutions must often build their tools from scratch, adding to the cost and complexity.

Beyond technology, the field faces social and structural challenges. A lack of skilled professionals and fears around unequal access could see quantum benefits restricted to big tech firms and governments.

Security is another looming concern, as future quantum machines may be capable of breaking current encryption standards. Policymakers and businesses must develop defences before such systems become widely available.

AI may accelerate progress in both directions. Quantum computing can supercharge model training and simulation, while AI is already helping to improve qubit stability and propose new hardware designs.

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Trump AI strategy targets China and cuts red tape

The Trump administration has revealed a sweeping new AI strategy to cement US dominance in the global AI race, particularly against China.

The 25-page ‘America’s AI Action Plan’ proposes 90 policy initiatives, including building new data centres nationwide, easing regulations, and expanding exports of AI tools to international allies.

White House officials stated the plan will boost AI development by scrapping federal rules seen as restrictive and speeding up construction permits for data infrastructure.

A key element involves monitoring Chinese AI models for alignment with Communist Party narratives, while promoting ‘ideologically neutral’ systems within the US. Critics argue the approach undermines efforts to reduce bias and favours politically motivated AI regulation.

The action plan also supports increased access to federal land for AI-related construction and seeks to reverse key environmental protections. Analysts have raised concerns over energy consumption and rising emissions linked to AI data centres.

While the White House claims AI will complement jobs rather than replace them, recent mass layoffs at Indeed and Salesforce suggest otherwise.

Despite the controversy, the announcement drew optimism from investors. AI stocks saw mixed trading, with NVIDIA, Palantir and Oracle gaining, while Alphabet slipped slightly. Analysts described the move as a ‘watershed moment’ for US tech, signalling an aggressive stance in the global AI arms race.

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New benchmark exposes limits of current AI tools

A new coding competition has exposed the limitations of current AI models, with the winner solving just 7.5% of programming problems. The K Prize, launched by Databricks and Perplexity co-founder, aims to challenge smaller models using real-world GitHub issues in a contamination-free format.

Despite the low score, Eduardo Rocha de Andrade took home the $50,000 top prize. Konwinski says the intentionally tough benchmark helps avoid inflated results and encourages realistic assessments of AI capability.

Unlike the better-known SWE-Bench, which may allow models to train on test material, the K Prize uses only new issues submitted after a set deadline. Its design prevents exposure during training, making it a more reliable measure of generalisation.

A $1 million prize remains for any open-source model that scores over 90%. The low results are being viewed as a necessary wake-up call in the race to build competent AI software engineers.

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South Korea tells ETF managers to cut crypto exposure

South Korea’s Financial Supervisory Service (FSS) has advised domestic asset managers to scale back exposure to crypto-related stocks within exchange-traded funds (ETFs). The verbal guidance reminds firms that 2017 restrictions on institutional involvement with virtual assets remain in effect.

The warning comes amid a growing trend of adding cryptocurrency exchanges and blockchain firms—often called ‘coin theme’ stocks—into local ETF portfolios. Some products now hold over 10% in such assets, including companies like Coinbase and Strategy.

The FSS emphasised that despite global shifts toward deregulation, no new laws or formal guidance exist yet in Korea.

ETF providers raised concerns, particularly around passive funds tied to indices. These funds cannot easily alter holdings without creating tracking errors.

The FSS acknowledged this structural challenge, stating that the intent was to encourage caution in future ETF design until a new regulatory framework is in place.

Critics argue the guidance creates inconsistencies, as South Korean investors continue to gain exposure to crypto firms via foreign ETFs. Asset managers now face a compliance dilemma, balancing regulatory caution with investor demand and index constraints.

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Crypto market falls sharply amid institutional selling and Ethereum crisis

The cryptocurrency market faced a significant correction on Thursday. A broad selloff dragged Bitcoin down 2.3% to around $117,241.

Ethereum fell over 6% to test key support near $3,515, while XRP plunged 17%, breaking below the crucial $3.00 level. Dogecoin suffered the most significant loss among major altcoins, crashing 18.5% amid heavy institutional liquidation.

Analysts attribute the decline to coordinated selling by institutional investors, worsened by a surge in Ethereum validator exits and ongoing macroeconomic uncertainty.

Bitcoin showed relative strength compared to other tokens, demonstrating its role as a haven amid market stress. Despite the pullback, bitcoin’s dominance increased as investors rotated away from riskier altcoins.

Ethereum’s challenges are acute, with over $2.3 billion worth of ETH awaiting unstaking amid the longest validator exit queue in 18 months. While some validators are exiting, many are entering the staking system, suggesting complex market dynamics rather than outright abandonment.

The sharp declines reflect a mix of large-scale liquidations, institutional portfolio rebalancing, and geopolitical pressures driving risk-off sentiment. Speculative assets like Dogecoin were hit hardest, highlighting the vulnerability of meme coins during downturns.

Despite short-term volatility, major financial firms remain bullish on Bitcoin, Ethereum, and XRP, citing technological adoption and regulatory progress as drivers for 2025 growth.

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UK to retaliate against cyber attacks, minister warns

Britain’s security minister has warned that hackers targeting UK institutions will face consequences, including potential retaliatory cyber operations.

Speaking to POLITICO at the British Library — still recovering from a 2023 ransomware attack by Rysida — Security Minister Dan Jarvis said the UK is prepared to use offensive cyber capabilities to respond to threats.

‘If you are a cybercriminal and think you can attack a UK-based institution without repercussions, think again,’ Jarvis stated. He emphasised the importance of sending a clear signal that hostile activity will not go unanswered.

The warning follows a recent government decision to ban ransom payments by public sector bodies. Jarvis said deterrence must be matched by vigorous enforcement.

The UK has acknowledged its offensive cyber capabilities for over a decade, but recent strategic shifts have expanded its role. A £1 billion investment in a new Cyber and Electromagnetic Command will support coordinated action alongside the National Cyber Force.

While Jarvis declined to specify technical capabilities, he cited the National Crime Agency’s role in disrupting the LockBit ransomware group as an example of the UK’s growing offensive posture.

AI is accelerating both cyber threats and defensive measures. Jarvis said the UK must harness AI for national advantage, describing an ‘arms race’ amid rapid technological advancement.

Most cyber threats originate from Russia or its affiliated groups, though Iran, China, and North Korea remain active. The UK is also increasingly concerned about ‘hack-for-hire’ actors operating from friendly nations, including India.

Despite these concerns, Jarvis stressed the UK’s strong security ties with India and ongoing cooperation to curb cyber fraud. ‘We will continue to invest in that relationship for the long term,’ he said.

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