Digital cooperation

M&S and Co‑op hit by Scattered Spider attack

High street giants M&S and Co‑op remain under siege after the Scattered Spider gang’s sophisticated cyber‑attack this April. The breaches disrupted online services and automated systems, leading to suspended orders, empty shelves and significant reputational damage.

Authorities have classified the incident as category‑2, with initial estimates suggesting losses between £270 million and £440 million. M&S expects a £300 million hit to its annual profit, with daily online sales down by up to £4 million during the outage.

In a rare display of unity, Tesco’s Booker arm stepped in to supply M&S and some independent Co‑op stores, helping to ease stock shortages. Meanwhile, cyber insurers have signalled increasing premiums, with the cost of cover for retail firms rising by up to 10 percent.

The National Cyber Security Centre and government ministers have issued urgent calls for the sector to strengthen defences, citing such high‑impact incidents as a vital wake‑up call for business readiness.

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Banks and tech firms create open-source AI standards

A group of leading banks and technology firms has joined forces to create standardised open-source controls for AI within the financial sector.

The initiative, led by the Fintech Open Source Foundation (FINOS), includes financial institutions such as Citi, BMO, RBC, and Morgan Stanley, working alongside major cloud providers like Microsoft, Google Cloud, and Amazon Web Services.

Known as the Common Controls for AI Services project, the effort seeks to build neutral, industry-wide standards for AI use in financial services.

The framework will be tailored to regulatory environments, offering peer-reviewed governance models and live validation tools to support real-time compliance. It extends FINOS’s earlier Common Cloud Controls framework, which originated with contributions from Citi.

Gabriele Columbro, Executive Director of FINOS, described the moment as critical for AI in finance. He emphasised the role of open source in encouraging early collaboration between financial firms and third-party providers on shared security and compliance goals.

Instead of isolated standards, the project promotes unified approaches that reduce fragmentation across regulated markets.

The project remains open for further contributions from financial organisations, AI vendors, regulators, and technology companies.

As part of the Linux Foundation, FINOS provides a neutral space for competitors to co-develop tools that enhance AI adoption’s safety, transparency, and efficiency in finance.

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South Korea’s SK Group and AWS team up on AI infrastructure

South Korean conglomerate SK Group has joined forces with Amazon Web Services (AWS) to invest 7 trillion won (approximately $5.1 billion) in building a large-scale AI data centre in Ulsan, South Korea. The project aims to bolster the country’s AI infrastructure over the next 15 years.

According to South Korea’s Ministry of Science and ICT, the facility will begin construction in September 2025 and is expected to become fully operational by early 2029. Once complete, the Ulsan Centre will have a power capacity exceeding 100 megawatts. AWS will contribute $4 billion to the project.

SK Group stated on Sunday that the data centre will support Korea’s AI ambitions by integrating high-speed networks, advanced semiconductors, and efficient energy systems. In a LinkedIn post, SK Group chairman Chey Tae-won said the company is ‘uniquely positioned’ to drive AI innovation.

They highlighted the role of several SK affiliates in the project, including SK Hynix for high-bandwidth memory, SK Telecom and SK Broadband for network operations, and SK Gas and SK Multi Utility for infrastructure and energy.

The initiative is part of SK Group’s broader commitment to AI investment. In 2023, the company pledged to invest 82 trillion won by 2026 in HBM chip development, data centres, and AI-powered services.

The group has also backed AI startups such as Perplexity, Twelve Labs, and Korean LLM developer Upstage. Its chip unit, Sapeon, merged with rival Rebellions last year, creating a company valued at 1.3 trillion won.

Other major Korean players are also ramping up AI efforts. Tech giant Kakao recently announced plans to invest 600 billion won in an AI data centre and partnered with OpenAI to incorporate ChatGPT technology into its services.

The tech industry in South Korea continues to race towards AI dominance, with domestic firms making substantial investments to secure future leadership in AI infrastructure and applications.

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Apple considers buying Perplexity AI

Apple is reportedly considering the acquisition of Perplexity AI as it attempts to catch up in the fast-moving race for dominance in generative technology.

According to Bloomberg, the discussions involve senior executives, including Eddy Cue and merger head Adrian Perica, who remain at an early stage.

Such a move would significantly shift Apple, which typically avoids large-scale takeovers. However, with investor pressure mounting after an underwhelming developer conference, the tech giant may rethink its traditionally cautious acquisition strategy.

Perplexity has gained prominence for its fast, clear AI chatbot and recently secured funding at a $14 billion valuation.

Should Apple proceed, the acquisition would be the company’s largest ever financially and strategically, potentially transforming its position in AI and reducing its long-standing dependence on Google’s search infrastructure.

Apple’s slow development of Siri and reliance on a $20 billion revenue-sharing deal with Google have left it trailing rivals. With that partnership now under regulatory scrutiny in the US, Apple may view Perplexity as a vital step towards building a more autonomous search and AI ecosystem.

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Africa reflects on 20 years of WSIS at IGF 2025

At the Internet Governance Forum (IGF) 2025, a high-level session brought together African government officials, private sector leaders, civil society advocates, and international experts to reflect on two decades of the continent’s engagement in the World Summit on the Information Society (WSIS) process. Moderated by Mactar Seck of the UN Economic Commission for Africa, the WSIS+20 Africa review highlighted both remarkable progress and ongoing challenges in digital transformation.

Seck opened the discussion with a snapshot of Africa’s connectivity leap from 2.6% in 2005 to 38% today. Yet, he warned, ‘Cybersecurity costs Africa 10% of its GDP,’ underscoring the urgency of coordinated investment and inclusion. Emphasising multi-stakeholder collaboration, he called for ‘inclusive policy-making across government, private sector, academia and civil society,’ aligned with frameworks such as the AU Digital Strategy and the Global Digital Compact.

Tanzania’s Permanent Secretary detailed the country’s 10-year National Digital Strategic Framework, boasting 92% 3G and 91% 4G coverage and regional infrastructure links. Meanwhile, Benin’s Hon. Adjara presented the Cotonou Declaration and proposed an African Digital Performance Index to monitor broadband, skills, cybersecurity, and inclusion. From the private sector, Jimson Odufuye called for ‘annual WSIS reviews at national level’ and closer alignment with Sustainable Development Goals, stating, “If we cannot measure progress, we cannot reach the SDGs.”

Gender advocate Baratang Pil called for a revision of WSIS action lines to include mandatory gender audits and demanded that ‘30% of national AI and DPI funding go to women-led tech firms.’ Youth representative Louvo Gray stressed the need for $100 billion to close the continent’s digital divide, reminding participants that by 2050, 42% of the world’s youth will be African. Philippe Roux of the UN Emerging Technology Office urged policymakers to focus on implementation over renegotiation: ‘People are not connected because it costs too much — we must address the demand side.’

The panel concluded with a call for enhanced continental cooperation and practical action. As Seck summarised, ‘Africa has the youth, knowledge, and opportunity to lead in the Fourth Industrial Revolution. We must make sure digital inclusion is not a slogan — it must be a shared commitment.’

Track all key moments from the Internet Governance Forum 2025 on our dedicated IGF page.

OpenAI and Microsoft’s collaboration is near breaking point

The once-celebrated partnership between OpenAI and Microsoft is now under severe strain as disputes over control and strategic direction threaten to dismantle their alliance.

OpenAI’s move toward a for-profit model has placed it at odds with Microsoft, which has invested billions and provided exclusive access to Azure infrastructure.

Microsoft’s financial backing and technical involvement have granted it a powerful voice in OpenAI’s operations. However, OpenAI now appears determined to gain independence, even if it risks severing ties with the tech giant.

Negotiations are ongoing, but the growing rift could reshape the trajectory of generative AI development if the collaboration collapses.

Amid tensions, Microsoft evaluates alternative options, including developing AI tools and working with rivals like Meta and xAI.

Such a pivot suggests Microsoft is preparing for a future beyond OpenAI, potentially ending its exclusive access to upcoming models and intellectual property.

A breakdown could have industry-wide repercussions. OpenAI may struggle to secure the estimated $40 billion in fresh funding it seeks, especially without Microsoft’s support.

At the same time, the rivalry could accelerate competition across the AI sector, prompting others to strengthen or redefine their positions in the race for dominance.

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IGF 2025 opens in Norway with focus on inclusive digital governance

Norway will host the 20th annual Internet Governance Forum (IGF) from 23 to 27 June 2025 in a hybrid format, with the main venue set at Nova Spektrum in Lillestrøm, just outside Oslo.

This milestone event marks two decades of the UN-backed forum that brings together diverse stakeholders to discuss how the internet should be governed for the benefit of all.

The overarching theme, Building Governance Together, strongly emphasises inclusivity, democratic values, and sustainable digital cooperation.

With participation expected from governments, the private sector, civil society, academia, and international organisations, IGF 2025 will continue to promote multistakeholder dialogue on critical topics, including digital trust, cybersecurity, AI, and internet access.

A key feature will be the IGF Village, where companies and organisations will showcase technologies and products aligned with global internet development and governance.

Norway’s Minister of Digitalisation and Public Governance, Karianne Oldernes Tung, underlined the significance of this gathering in light of current geopolitical tensions and the forthcoming WSIS+20 review later in 2025.

Reaffirming Norway’s support for the renewal of the IGF mandate at the UN General Assembly, Minister Tung called for unity and collaborative action to uphold an open, secure, and inclusive internet. The forum aims to assess progress and help shape the next era of digital policy.

Track all key moments from the Internet Governance Forum 2025 on our dedicated IGF page.

SoftBank plans $1 trillion AI and robotics park in Arizona

SoftBank founder Masayoshi Son is planning what could become his most audacious venture yet: a $1 trillion AI and robotics industrial park in Arizona.

Dubbed ‘Project Crystal Land’, the initiative aims to recreate a high-tech manufacturing hub reminiscent of China’s Shenzhen, focused on AI-powered robots and next-gen automation.

Son is courting global tech giants — including Taiwan Semiconductor Manufacturing Co. (TSMC) and Samsung — to join the vision, though none have formally committed.

The plan hinges on support from federal and state governments, with SoftBank already discussing possible tax breaks with US officials, including Commerce Secretary Howard Lutnick.

While TSMC is already investing $165 billion in Arizona facilities, sources suggest Son’s project has not altered the chipmaker’s current roadmap. SoftBank hopes to attract semiconductor and AI hardware leaders to power the park’s infrastructure.

Son has also approached SoftBank Vision Fund portfolio companies to participate, including robotics startup Agile Robots.

The park may serve as a production hub for emerging tech firms, complementing SoftBank’s broader investments, such as a potential $30 billion stake in OpenAI, a $6.5 billion acquisition of Ampere Computing, and funding for Stargate, a global data centre venture with OpenAI, Oracle, and MGX.

While the vision is still early, Project Crystal Land could radically shift US high-tech manufacturing. Son’s strategy relies heavily on project-based financing, allowing extensive infrastructure builds with minimal upfront capital.

As SoftBank eyes long-term AI growth and increased investor confidence, whether this futuristic park will become a reality — or another of Son’s high-stakes dreams remains to be seen.

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EU AI Act challenges 68% of European businesses, AWS report finds

As AI becomes integral to digital transformation, European businesses struggle to adapt to new regulations like the EU AI Act.

A report commissioned by AWS and Strand Partners revealed that 68% of surveyed companies find the EU AI Act difficult to interpret, with compliance absorbing around 40% of IT budgets.

Businesses unsure of regulatory obligations are expected to invest nearly 30% less in AI over the coming year, risking a slowdown in innovation across the continent.

The EU AI Act, effective since August 2024, introduces a phased risk-based framework to regulate AI in the EU. Some key provisions, including banned practices and AI literacy rules, are already enforceable.

Over the next year, further requirements will roll out, affecting AI system providers, users, distributors, and non-EU companies operating within the EU. The law prohibits exploitative AI applications and imposes strict rules on high-risk systems while promoting transparency in low-risk deployments.

AWS has reaffirmed its commitment to responsible AI, which is aligned with the EU AI Act. The company supports customers through initiatives like AI Service Cards, its Responsible AI Guide, and Bedrock Guardrails.

AWS was the first primary cloud provider to receive ISO/IEC 42001 certification for its AI offerings and continues to engage with the EU institutions to align on best practices. Amazon’s AI Ready Commitment also offers free education on responsible AI development.

Despite the regulatory complexity, AWS encourages its customers to assess how their AI usage fits within the EU AI Act and adopt safeguards accordingly.

As compliance remains a shared responsibility, AWS provides tools and guidance, but customers must ensure their applications meet the legal requirements. The company updates customers as enforcement advances and new guidance is issued.

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AI diplomacy enters the spotlight with Gulf region partnerships

In a groundbreaking shift in global diplomacy, recent US-brokered AI partnerships in the Gulf region have propelled AI to the centre of international strategy. As highlighted by Slobodan Kovrlija, this development transforms the Gulf into a key AI hub, alongside the US and China.

Countries like Saudi Arabia, the UAE, and Qatar are investing heavily in AI infrastructure—from quantum computing to sprawling data centres—as part of a calculated effort to integrate more deeply into a US-led technological sphere and counter China’s Digital Silk Road ambitions. That movement is already reshaping global dynamics.

China is racing to deepen its AI alliances with developing nations, while Russia is leveraging the expanded BRICS bloc to build alternative AI systems and promote its AI Code of Ethics. On the other hand, Europe is stepping up efforts to internationalise its ‘human-centric AI’ regulatory approach under the EU AI Act.

These divergent paths underscore how AI capabilities are now as essential to diplomacy as traditional military or economic tools, forming emerging ‘AI blocs’ that may redefine geopolitics for decades. Kovrlija emphasises that AI diplomacy is no longer a theoretical concept but a practical necessity.

Being a technological front-runner now means possessing enhanced diplomatic influence, with partnerships based on AI potentially replacing older alliance models. However, this new terrain also presents serious challenges, such as ensuring ethical standards, data privacy, and equitable access. The Gulf deals, while strategic, also open a space for joint efforts in responsible AI governance.

Why does it matter?

As the era of AI diplomacy dawns, institutions like Diplo are stepping in to prepare diplomats for this rapidly evolving landscape. Kovrlija concludes that understanding and engaging with AI diplomacy is now essential for any nation wishing to maintain its relevance and influence in global affairs.

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