E-commerce and trade

Perplexity launches shopping hub to compete with Google

Perplexity, an AI-driven search startup, has unveiled a new shopping hub to attract users and compete with Google’s dominance in search. Backed by Amazon founder Jeff Bezos and Nvidia, the platform offers visually rich product cards in response to shopping-related queries, integrating with platforms like Shopify to provide real-time product details.

The rollout includes features like ‘Snap to Shop,’ which uses photos to suggest products and a Merchant Program that allows retailers to share their offerings with Perplexity. Initially available in the US, the service will expand to other markets at a later date.

This move comes as Perplexity raises new investments at a reported $9 billion valuation and seeks to compete with OpenAI, which recently introduced enhanced search features for ChatGPT. The startup aims to leverage AI-powered tools to boost its presence in e-commerce and attract both users and merchants.

Booking.com committed to EU compliance as DMA rules apply

Booking.com must comply with strict European Union regulations as of Thursday due to its designation as a ‘gatekeeper’ under the Digital Markets Act (DMA). The European Commission has placed significant obligations on the travel reservation platform, ensuring it moderates content effectively, supports fair competition, and makes it simpler for consumers to switch between services. The DMA targets tech giants with major market dominance, holding them accountable through measures that could include fines and operational restrictions.

The company affirmed it is fully compliant, citing extensive efforts to adapt to the rules. In a blog post, Booking.com stated that it has implemented solutions that meet regulatory demands while maintaining a high standard of service for travellers and partners. It also expressed a commitment to ongoing dialogue with EU authorities and stakeholders.

Under the DMA, companies identified as gatekeepers are defined by having over 45 million monthly users and significant market capitalisation. Non-compliance could lead to fines of up to 10% of a company’s global revenue, rising to 20% for repeated violations. Additionally, the Commission has the power to limit acquisition activities if a company fails to adhere to the rules.

Congressional panel pushes for AI investment to counter China

A US congressional commission has proposed a bold initiative modeled on the Manhattan Project to accelerate the development of artificial general intelligence (AGI) that could rival or surpass human intelligence. The US-China Economic and Security Review Commission (USCC) emphasised the importance of public-private partnerships to drive technological innovation as competition with China intensifies. However, the panel provided no specific funding plans in its annual report.

Commissioner Jacob Helberg highlighted China’s rapid advancements in AGI, warning of potential shifts in global power dynamics. Addressing infrastructure bottlenecks, he suggested streamlining regulations for data centres as a step to accelerate AI progress. Tech leaders like OpenAI have also advocated for increased government investment in AI to maintain global competitiveness.

Beyond AI, the USCC report included recommendations to tighten trade regulations, particularly by ending the “de minimis” exemption that allows duty-free imports under $800. Commissioner Kimberly Glas underscored the challenge of inspecting the overwhelming volume of such shipments, which she claimed serve as a channel for unregulated Chinese goods, including dangerous materials. Proposals to curb this exemption have sparked bipartisan debate, though legislative progress has been hampered by industry opposition and political gridlock.

EU, Japan, South Korea push for semiconductor growth

Global semiconductor sales surged in Q3 2024, with a 23.2% year-over-year growth and a 10.7% quarter-over-quarter increase, fueled by rising demand from industries like AI, big data, and electric vehicles. Countries around the world, including China, the US, and the EU, are investing heavily in semiconductor development to secure a competitive edge in the global chip market.

The EU is focusing on photonic technology, committing €133 million to establish a photonic integrated circuit (PIC) pilot line in the Netherlands by 2025. This initiative aims to enhance Europe’s position in the growing photonic chip market, driven by the demand for more efficient data transmission for cloud computing and AI applications.

Japan has also made a significant move, announcing a ¥10 trillion ($65 billion) investment by 2030 to support its semiconductor and AI industries. This funding is part of a broader strategy to boost chip production and innovation, with a focus on the collaboration between Rapidus, IBM, and Belgium’s Imec.

South Korea is ramping up its semiconductor support through a proposed Semiconductor Special Act, which includes financial backing and workweek exemptions for semiconductor manufacturers. The bill reflects the country’s commitment to strengthening its semiconductor industry, with plans for a ₩26 trillion funding initiative and an ₩800 billion fund to support the semiconductor ecosystem by 2027.

Semiconductor companies shift focus to Vietnam

Global semiconductor manufacturers are accelerating their shift from China to Vietnam, driven by the anticipated intensification of US sanctions on China’s semiconductor industry, especially with the return of Donald Trump to the White House. South Korean firms, including Samsung Electronics and SK Hynix, are leading this transition, halting production expansions in China and focusing investments on Vietnam, which has become a rising hub for semiconductor production.

SK Hynix, for instance, shelved plans to increase DRAM chip production at its Wuxi plant in China, while Samsung Electronics is cutting back on production at its NAND flash memory facility in Xi’an. Other companies are also following suit; South Korea’s Hana Micron is expanding its presence in Southeast Asia, and Amkor Technology is investing $1.6 billion in a new semiconductor packaging plant in Vietnam. The facility will feature advanced technology, with some equipment reportedly transferred from China.

Vietnam’s semiconductor industry is also benefiting from the growth of companies like Samsung, which established a $1.7 billion OLED plant in the country. Samsung’s semiconductor division is reportedly boosting its investments in Vietnam, encouraging further expansions from supporting companies. Semiconductor testing and packaging firm Signetics is set to invest $100 million in a new facility in Vietnam, and German company Infineon is considering setting up an R&D center in Hanoi.

This shift underscores the ongoing global realignment in the semiconductor industry as companies adapt to geopolitical tensions and US-China trade policies.

Elon Musk files antitrust lawsuit against Microsoft and OpenAI

Elon Musk has expanded his legal battle against OpenAI by adding Microsoft to his lawsuit, accusing both companies of engaging in illegal practices to monopolise the generative AI market. The federal antitrust claims, filed in Oakland, California, argue that the partnership between OpenAI and its largest investor, Microsoft, has sidelined competitors and restricted investment opportunities for other AI developers.

Musk’s complaint, which builds on his initial lawsuit from August, claims that OpenAI, which he helped to establish as a nonprofit, has deviated from its original mission. It has transformed into a highly profitable company, valued at $157 billion, and Musk argues that its partnership with Microsoft has created unfair market dominance. He is seeking to have the licensing agreement between the two companies voided and for them to divest assets gained through what he calls monopolistic practices.

The lawsuit also accuses Microsoft and OpenAI of circumventing regulatory oversight by entering exclusive agreements that Musk believes resemble a merger, without going through standard antitrust reviews. OpenAI has dismissed the claims as unfounded, while Musk’s legal team insists that the companies’ actions are damaging competition and transparency in the AI sector.

Musk’s tensions with OpenAI have been ongoing since he left the organisation, which he co-founded to develop safe AI. As OpenAI transitioned to a for-profit structure and secured billions from Microsoft, concerns grew about the concentration of power in the hands of a few dominant players in AI.

Airbus CEO criticises EU antitrust rules

Guillaume Faury, CEO of Airbus, raised concerns about how antitrust regulations hinder the European aerospace sector’s ability to compete with US-based SpaceX. Speaking at an aviation industry event in Frankfurt, Faury acknowledged SpaceX’s success, particularly its reusable Falcon 9 rocket, but highlighted how Europe’s regulatory framework restricts similar consolidation. Unlike SpaceX, which manufactures 80% of its components in-house, European companies like Airbus face complex supply chains and fragmented production models due to antitrust rules that require manufacturing distribution across multiple countries.

Faury pointed out that this fragmented system, while pleasing many stakeholders, limits efficiency and competitive flexibility. This is evident when comparing SpaceX’s cost-cutting ability with the struggles of Europe’s Ariane 6, which has yet to launch commercially despite plans for multiple flights per year. Meanwhile, SpaceX’s low-cost launches have revolutionised satellite deployment, launching nearly 7,000 satellites and creating fierce competition in the space industry.

Faury warned that unless European regulations adapt, the region risks falling behind in satellite and launch sectors, with Airbus already feeling the pressure, including a planned reduction of 2,500 jobs in its satellite division. SpaceX’s influence extends beyond commercial aerospace, as the company is also a major player in military and defence with initiatives like Starlink and lunar landing technology, supported by NASA and the US government.

However, concerns about SpaceX’s dominance in the US have also emerged, with NASA and the Pentagon seeking to reduce dependence on the company by promoting more competition in the aerospace sector, although antitrust complaints have not yet significantly affected SpaceX’s position.

EU Parliament to debate Amazon lobbyists’ return

Key members of the European Parliament (MEPs) will decide on Thursday whether to reinstate access for Amazon lobbyists after their privileges were revoked in February for failing to attend hearings on working conditions. Amazon had previously declined invitations to discuss its workplace practices and cancelled scheduled site visits to warehouses in Poland and Germany.

The Employment Committee (EMPL) revoked badges for 14 Amazon lobbyists, citing the company’s refusal to engage on critical labour issues. The move was supported by over 30 trade unions across Europe, which accused Amazon of disregarding EU labour laws and democratic oversight. In a letter to the committee, Amazon’s Director of EU Public Policy expressed a renewed commitment to cooperation and invited lawmakers to visit its facilities.

Trade unions have urged MEPs to only restore access if Amazon attends a hearing and allows committee visits to its warehouses. EMPL member Estelle Ceulemans emphasised that accepting these terms is essential to maintaining democratic oversight. Thursday’s discussions will also address whether a new mission to Amazon’s facilities should be organised to advance dialogue on workplace conditions.

Taiwan seeks economic agreement with EU to boost cooperation

Taiwan President Lai Ching-te has called for an economic partnership agreement with the European Union, emphasising the need for collaboration in semiconductors and shared democratic values. Speaking at a Taiwan-EU investment forum in Taipei, Lai highlighted the importance of secure supply chains and stronger ties to counter growing authoritarian threats.

The EU, under its European Chips Act, has sought to deepen cooperation with Taiwan to boost semiconductor production and reduce reliance on Asia. Taiwan Semiconductor Manufacturing Co.’s (TSMC) new chip plant in Dresden, Germany, underscores Taiwan’s role in strengthening European industry and supply chains.

While Maria Martin-Prat of the European Commission praised Taiwan as a trusted economic partner in her video address to the forum, she did not mention plans for a formal agreement. Taiwan, diplomatically isolated from most global organisations, has been pursuing trade deals with like-minded partners, recently securing an Enhanced Trade Partnership with Britain and seeking membership in the CPTPP.

Banks hope Musk’s political rise will ease X debt burden

Elon Musk‘s growing influence in US politics has sparked hope among Wall Street banks that they may soon unload $13 billion in debt tied to his 2022 acquisition of X, formerly Twitter. Lenders, including Morgan Stanley and Bank of America, believe Musk’s alignment with President-elect Donald Trump could enhance X’s financial prospects, potentially enabling them to sell the debt without incurring significant losses.

Musk’s management of X, marked by sweeping layoffs and content moderation changes, initially scared off advertisers and reduced revenue, lowering the debt’s value. However, recent spikes in platform traffic during major events, such as the US election, have raised optimism. Trump’s active presence on X, reinstated by Musk after a previous ban, and a robust US economy could further support revenue growth, according to banking insiders.

Despite these hopes, challenges persist. User departures to rival platforms like Bluesky and Threads continue, and X’s traffic surged only briefly during the election. Banks monitor Musk’s financial update next quarter before deciding whether to hold or sell the debt. Meanwhile, X remains current on its interest payments, and some banks have prepared for potential losses, awaiting better market conditions to offload the debt.