E-commerce and trade

AI industry warned of looming financial collapse

Despite widespread popularity and unprecedented investment, OpenAI may be facing a deepening financial crisis. Since launching ChatGPT, the company has lost billions yearly, including an estimated $5 billion in 2024 alone.

Tech critic Ed Zitron argues that the AI industry is heading towards a ‘subprime AI crisis’, comparing the sector’s inflated valuations and spiralling losses to the subprime mortgage collapse in 2007. Startups like OpenAI and Anthropic continue to operate at huge losses.

Companies relying on AI infrastructure are already feeling the squeeze. Anysphere, which uses Anthropic’s models, recently raised prices sharply, angering users and blaming costs passed down from its infrastructure provider.

To manage exploding demand, OpenAI has also introduced tiered pricing and restricted services for free users, raising concerns that access to AI tools will soon be locked behind expensive paywalls. With 800 million weekly users, any future revenue strategy could alienate a large part of its global base.

Zitron believes these conditions cannot sustain long-term growth and will ultimately damage revenues and public trust. The industry, he warns, may be building its future on unstable ground.

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M&S urges UK firms to report cyberattacks

Marks & Spencer has called for a legal obligation requiring UK companies to report major cyberattacks to national authorities. Chairman Archie Norman told parliament that two serious cyberattacks on prominent firms in recent months had gone unreported.

He argued that underreporting leaves a significant gap in cybersecurity knowledge. It would not be excessive regulation to require companies to report material incidents to the National Cyber Security Centre.

The retailer was hit in April by what is believed to be a ransomware attack involving DragonForce, with links to the Scattered Spider hacking group.

The breach forced a seven-week suspension of online clothing orders, costing the business around £300 million in lost operating profit.

M&S had fortunately doubled its cyber insurance last year, though it may take 18 months to process the claim.

General counsel Nick Folland added that companies must be prepared to operate manually, using pen and paper, when systems go down.

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Italy’s Piracy Shield sparks EU scrutiny over digital rights

Italy’s new anti-piracy system, Piracy Shield, has come under scrutiny from the European Commission over potential breaches of the Digital Services Act.

The tool, launched by the Italian communications regulator AGCOM, allows authorities to block suspicious websites within 30 minutes — a feature praised by sports rights holders for minimising illegal streaming losses.

However, its speed and lack of judicial oversight have raised legal concerns. Critics argue that individuals are denied the right to defend themselves before action.

A recent glitch linked to Google’s CDN disrupted access to platforms like YouTube and Google Drive, deepening public unease.

Another point of contention is Piracy Shield’s governance. SP Tech, a company owned by Lega Serie A, manages the system, which directly benefits from anti-piracy enforcement.

The Computer & Communications Industry Association was prompted to file a complaint, citing a conflict of interest and calling for greater transparency.

While AGCOM Commissioner Massimiliano Capitanio insists the tool places Italy at the forefront of the fight against illegal streaming, growing pressure from digital rights groups and EU regulators suggests a clash between national enforcement and European law.

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ChatGPT quietly tests new ‘Study Together’ feature for education

A few ChatGPT users have noticed a new option called ‘Study Together’ appearing among available tools, though OpenAI has yet to confirm any official rollout. The feature seems designed to make ChatGPT a more interactive educational companion than just delivering instant answers.

Rather than offering direct solutions, the tool prompts users to think for themselves by asking questions, potentially turning ChatGPT into a digital tutor.

Some speculate the mode might eventually allow multiple users to study together in real-time, mimicking a virtual study group environment.

With the chatbot already playing a significant role in classrooms — helping teachers plan lessons or assisting students with homework — the ‘Study Together’ feature might help guide users toward deeper learning instead of enabling shortcuts.

Critics have warned that AI tools like ChatGPT risk undermining education, so it could be a strategic shift to encourage more constructive academic use.

OpenAI has not confirmed when or if the feature will launch publicly, or whether it will be limited to ChatGPT Plus users. When asked, ChatGPT only replied that nothing had been officially announced.

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Sam Altman shrugs off Meta poaching, backs Trump, jabs at Musk

OpenAI CEO Sam Altman addressed multiple hot topics during the Sun Valley conference, including Meta’s aggressive recruitment of top AI researchers, his strained relationship with Elon Musk, and a surprising show of support for Donald Trump.

Altman downplayed Meta’s talent raids, saying he had not spoken to Mark Zuckerberg since the Meta CEO lured away three OpenAI researchers with a $100 million signing bonus. All three had worked at OpenAI’s Zurich office, which opened in 2024.

Despite the losses, Altman described the situation as ‘fine’ and ‘good’, suggesting OpenAI’s mission continues to retain top talent.

The OpenAI chief also took a subtle swipe at Meta’s smartglasses, saying he doesn’t like wearable tech and implying his company has no plans to follow suit.

On the topic of Elon Musk, Altman laughed off their rivalry, saying only that Musk’s bust-ups with everybody, and hinting at the long-running tension between the two former co-founders.

Perhaps most notably, Altman expressed disillusionment with the Democratic Party, saying he no longer feels represented by mainstream figures he once supported.

He praised Donald Trump’s focus on AI infrastructure. He even donated $1 million to Trump’s inaugural fund — a gesture reflecting a broader shift among Silicon Valley leaders warming to Trump as his popularity rises.

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Ransomware gangs feud after M&S cyberattack

A turf war has erupted between two significant ransomware gangs, DragonForce and RansomHub, following cyberattacks on UK retailers including Marks and Spencer and Harrods.

Security experts warn that the feud could result in companies being extorted multiple times as criminal groups compete to control the lucrative ransomware-as-a-service (RaaS) market.

DragonForce, a predominantly Russian-speaking group, reportedly triggered the conflict by rebranding as a cartel and expanding its affiliate base.

Tensions escalated after RansomHub’s dark-web site was taken offline in what is believed to be a hostile move by DragonForce, prompting retaliation through digital vandalism.

Cybersecurity analysts say the breakdown in relationships between hacking groups has created instability, increasing the likelihood of future attacks. Experts also point to a growing risk of follow-up extortion attempts by affiliates when criminal partnerships collapse.

The rivalry reflects the ruthless dynamics of the ransomware economy, which is forecast to cost businesses $10 trillion globally by the end of 2025. Victims now face not only technical challenges but also the legal and financial fallout of navigating increasingly unpredictable criminal networks.

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US targets Southeast Asia to stop AI chip leaks to China

The US is preparing stricter export controls on high-end Nvidia AI chips destined for Malaysia and Thailand, in a move to block China’s indirect access to advanced GPU hardware.

According to sources cited by Bloomberg, the new restrictions would require exporters to obtain licences before sending AI processors to either country.

The change follows reports that Chinese engineers have hand-carried data to Malaysia for AI training after Singapore began restricting chip re-exports.

Washington suspects Chinese firms are using Southeast Asian intermediaries, including shell companies, to bypass existing export bans on AI chips like Nvidia’s H100.

Although some easing has occurred between the US and China in areas such as ethane and engine components, Washington remains committed to its broader decoupling strategy. The proposed measures will reportedly include safeguards to prevent regional supply chain disruption.

Malaysia’s Trade Minister confirmed earlier this year that the US had requested detailed monitoring of all Nvidia chip shipments into the country.

As the global race for AI dominance intensifies, Washington appears determined to tighten enforcement and limit Beijing’s access to advanced computing power.

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Samsung profits slump as US chip ban hits AI exports

Samsung Electronics expects its second-quarter operating profits to exceed half, citing Washington’s export controls on advanced AI chips to China.

The company announced a projected 56% year-on-year drop in operating profit, falling to 4.6 trillion won ($3.3 billion), with revenue down 6.5% from the previous quarter.

The semiconductor division, a core part of Samsung’s business, suffered due to reduced utilisation and inventory value adjustments.

US restrictions have made it difficult for South Korea’s largest conglomerate to ship high-end chips to China, forcing some of its production lines to run below capacity.

Despite weak performance in the foundry sector, the memory business remained relatively stable. Analysts pointed to weaker-than-expected sales of HBM chips used for AI and a drop in NAND storage prices, while a declining won-dollar exchange rate further pressured earnings.

Looking ahead, Samsung expects a modest recovery as demand for memory chips, mainly from AI-driven data centres, improves in the year’s second half.

The company is also facing political pressure from Washington, with threats of new tariffs prompting talks between Seoul and the US administration.

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Meta hires Apple’s top AI executive amid tech talent war

Apple has lost a key AI executive to Meta, dealing a fresh blow to the tech giant’s internal AI ambitions.

Ruoming Pang, who led Apple’s foundation models team, is joining Meta’s newly formed superintelligence group, according to people familiar with the matter.

Meta reportedly offered Pang a lucrative package worth tens of millions annually, continuing its aggressive hiring streak.

The company, led by Mark Zuckerberg, has already brought in several high-profile AI experts from Scale AI, OpenAI, Anthropic and elsewhere, with Zuckerberg personally involved in recruitment efforts.

Pang’s team at Apple had been responsible for the core language models behind Apple Intelligence and Siri.

However, internal dissatisfaction has been mounting as the company considered shifting to third-party models, including from OpenAI and Anthropic.

That shift, combined with recent leadership changes and reduced responsibilities for Apple’s AI chief John Giannandrea, has weakened morale across the team.

Following Pang’s exit, the team will now be managed by Zhifeng Chen under a new multi-tier structure.

Several engineers are also reportedly planning to leave, raising concerns about Apple’s ability to retain AI talent as Meta increases its investment and influence in the race for advanced AI development.

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Tether and Binance left out of EU crypto approval list

More than 50 crypto firms are now fully licensed under the European Union’s MiCA framework, six months after it came into effect. The list names 14 stablecoin issuers and 39 service providers, all approved to operate across the EU’s 30 member states.

Leading platforms such as Coinbase, Kraken, Bitstamp, and N26 can now ‘passport’ their services across the bloc without seeking separate national approvals.

Tether and Binance remain absent from the approved list. Tether’s lack of a MiCA licence has already triggered delistings on major platforms, while Binance continues to face regulatory scrutiny in multiple jurisdictions.

In contrast, stablecoins issued by Circle, Société Générale-Forge, and Membrane Finance have gained approval, most of which are euro-denominated.

No company has yet registered to issue asset-referenced tokens (ARTs), reflecting low market demand under current compliance costs. Meanwhile, over 35 firms have been marked non-compliant, with Italy’s CONSOB actively pursuing enforcement.

As firms race to meet rising regulatory standards, a fresh update on MiCA licensing is due in September.

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