X users recently discovered that their data was being used to train Grok, an AI chatbot that Musk’s company xAI developed, without explicit consent. The complaint accuses X of failing to clearly explain its data usage practices, collecting excessive data, and possibly mishandling sensitive information. Scialdone has called on the DPC to order X to stop using personal data for AI training and to ensure compliance with GDPR. Violations of these regulations can lead to fines as high as 4% of a company’s worldwide annual revenue, making non-compliance potentially very expensive for X.
The complaint also highlights issues with X’s communication regarding its data processing practices. According to Scialdone, X’s privacy policy does not transparently outline the legal basis for using personal data for AI training. The policy mentions using data on a ‘legitimate interest’ basis, which allows data processing if it serves a valid purpose without infringing on users’ rights. However, Scialdone argued that this information is not easily accessible to users. He also stressed that such legal actions would lead to a consistent regulatory approach across different platforms, preventing disparities in user treatment and market inequalities.
Why does this matter?
Musk’s approach to compliance with the EU privacy laws has been controversial, raising concerns about X’s adherence to regulatory standards. The DPC’s actions signal a potential end to Musk’s relatively unchecked run on GDPR oversight since the filed suit marks the third major tech company facing such allegations, following similar complaints against Meta and LinkedIn. Recently, X has also faced regulatory challenges in the Netherlands and scrutiny under the EU’s Digital Services Act, which could lead to even steeper penalties for non-compliance.
Apple has introduced its new AI-powered Writing Tools in the iOS 18.1 developer beta, providing users with the ability to reformat or rewrite text using Apple’s AI models. However, the tool warns that AI-generated suggestions might not be of the highest quality when dealing with certain sensitive topics. Users will see a message alerting them when attempting to rewrite text containing swear words, references to drugs, or mentions of violence, indicating the tool wasn’t designed for such content.
Despite the warnings, the AI tool still offers suggestions even when encountering restricted words or phrases. During testing, replacing a swear word with a milder term resulted in the same AI-generated suggestion. Apple has been asked to clarify which specific topics the writing tools are not trained to handle, but no further details have been provided yet.
Apple appears to be exercising caution to avoid controversy by limiting the AI’s handling of certain terms and topics. The Writing Tools feature is not intended to generate new content from scratch but rather to assist in rewriting existing text. Apple’s cautious approach aligns with its history, as seen when it finally allowed autocorrect to learn swear words in iOS 17 after years of restrictions.
The release of these AI features also coincides with Apple’s alignment with OpenAI for future AI innovations and its support for the Biden administration’s AI safety initiatives. These steps underscore Apple’s commitment to responsible AI development while providing advanced tools to its users.
The United States Commerce Department announced on Tuesday that it plans to award SK Hynix up to $450 million in grants to support the construction of an advanced packaging plant and research facility for AI products in Indiana. SK Hynix, the world’s second-largest memory chip maker, previously announced an investment of approximately $3.87 billion to build the facility, which will include a cutting-edge production line for next-generation high bandwidth memory chips, crucial for AI systems.
In addition to the grants, the Commerce Department plans to provide $500 million in government loans for the SK Hynix project, which is expected to qualify for a 25% investment tax credit. The facility is projected to create 1,000 jobs and address a critical gap in the US semiconductor supply chain. The project is part of a broader effort to enhance US semiconductor manufacturing, supported by a $39 billion subsidy program and $75 billion in government lending authority approved by Congress in August 2022.
Commerce Secretary Gina Raimondo highlighted the significance of securing commitments from all five major semiconductor manufacturers, including TSMC, Intel, Samsung Electronics, Micron, and SK Hynix. Raimondo stated that these commitments would ensure the U. has the most secure and diverse supply chain for advanced semiconductors that power AI technologies. The SK Hynix facility in West Lafayette, Indiana, will play a pivotal role in producing high-bandwidth memory chips essential for training AI systems.
The announcement comes amid increasing global tensions over semiconductor supply chains, with the US expanding chip export controls and firms from China stockpiling high bandwidth memory chips in response to these restrictions. SK Hynix’s CEO, Kwak Noh-Jung, expressed gratitude for the US Commerce Department’s support, emphasizing the company’s excitement about bringing this transformational project to fruition. The initiative follows a previous $75 million award to Absolics, an affiliate of SK Group, for a facility in Georgia to supply advanced materials to the US semiconductor industry.
Once a leader in the computer chip industry, Intel, has faced significant challenges adapting to the AI era. Seven years ago, Intel had an opportunity to invest in OpenAI, a then-emerging non-profit focused on generative AI. Discussions between the two companies explored various investment options, including a $1 billion stake and hardware manufacturing deals, but Intel ultimately decided against it.
CEO Bob Swan doubted the near-term market viability of generative AI models, leading to the decision not to invest. OpenAI sought the investment to reduce reliance on Nvidia chips and develop its own infrastructure, but Intel’s data centre unit was unwilling to produce hardware at cost. Since then, OpenAI has launched ChatGPT and achieved a valuation of around $80 billion, marking a significant missed opportunity for Intel.
The decision was part of a series of strategic missteps that saw Intel fall behind in the AI chip market. The company’s stock recently plummeted, marking its worst trading day since 1974 and valuing it at under $100 billion for the first time in three decades. In contrast, rivals like Nvidia and AMD have surged ahead, capturing significant market share with AI-optimised GPU technology.
Despite recent efforts to catch up, such as developing the Gaudi AI chip and acquiring startups like Nervana Systems and Habana Labs, Intel still lags behind competitors. The company’s previous focus on CPUs over GPUs, which are better suited for AI tasks, has left it struggling to compete in the rapidly growing AI market.
John Schulman, co-founder of OpenAI, has departed the company for rival Anthropic. Schulman announced his decision on social media, citing a desire to focus more on AI alignment and return to hands-on technical work.
OpenAI is undergoing significant personnel shifts. Greg Brockman, another co-founder and President, is taking a sabbatical until the end of the year. Meanwhile, product manager Peter Deng has also left the firm.
Earlier this year, other key figures exited OpenAI. Chief scientist Ilya Sutskever departed in May, and founding member Andrej Karpathy left in February to start an AI-integrated education platform. AI safety leader Aleksander Madry was reassigned to a different role in July.
These changes come amid renewed legal challenges from Elon Musk, another OpenAI co-founder. Musk, who left OpenAI three years after its inception, has revived a lawsuit against the company, accusing it of prioritising profits over the public good.
The next US administration is expected to adopt a ‘constructive’ stance on cryptocurrency regardless of the election outcome, according to Brian Armstrong. The CEO of Coinbase has highlighted the industry’s growing political influence as the November election approaches. Both Republican and Democratic parties have acknowledged the increasing significance of the crypto sector, with major political action committees raising over $230 million to support pro-crypto candidates.
Coinbase, the largest United States crypto exchange, is currently engaged in a legal battle with the SEC over allegations of failing to register as an exchange. The support from Wall Street and corporate figures like Elon Musk has boosted the sector’s mainstream appeal. Recently, Republican candidate Donald Trump pledged to create a ‘stockpile’ of bitcoin, while advisors to Democratic Vice President Kamala Harris have engaged with top crypto companies to improve relations.
A recent Supreme Court ruling overturning the ‘Chevron deference’ doctrine, which limited judicial interpretation of laws, is seen as a positive development for the crypto industry. Coinbase has strengthened its board by adding former US Solicitor General Paul Clement, a key figure in the Chevron ruling case. The shifting political landscape and favourable court rulings are expected to attract new institutional capital to the crypto market. Coinbase’s recent surpassing of Q2 revenue expectations and strategic board expansions further highlight its proactive stance amid these changes.
SEMI Europe, a leading semiconductor industry group, urged the EU to minimise restrictions on outbound investments in foreign chip technology. The EU is considering proposals to screen such investments, which could impact European funding in the global semiconductor, AI, and biotechnology sectors. However, no decisions are expected until 2025.
The US has already proposed rules to limit investments in China to protect national security and prevent the transfer of advanced technology. SEMI Europe argues that excessive restrictions could hinder European companies’ ability to invest and innovate, potentially compromising their competitive edge.
The organisation criticised the EU’s potential policies as too broad, suggesting they could force companies to reveal sensitive information and disrupt international research collaborations. SEMI Europe represents over 300 European semiconductor firms and institutions, including major players like ASML, Infineon, and STMicroelectronics.
In addition to outbound investment screening, the EU is advancing legislation to monitor foreign investments in critical European infrastructure and technology to address potential security risks.
Chinese tech giants, including Huawei and Baidu, and startups are stockpiling high bandwidth memory (HBM) semiconductors from Samsung Electronics in anticipation of potential US export restrictions. The ramped-up purchasing began earlier this year, with China accounting for about 30% of Samsung’s HBM chip revenue in the first half of 2024. This strategic plan reflects China’s efforts to maintain its technological ambitions amid increasing trade tensions with the US and other Western nations, impacting the global semiconductor supply chain.
US authorities will soon announce an export control package, including new shipment restrictions to China’s semiconductor industry. The new package of measures will likely detail limits on access to HBM chips, although specific details and potential impacts remain unclear.
HBM chips are essential for developing advanced processors, such as Nvidia’s graphics processing units, used for generative AI since only three bigger chipmakers, SK Hynix, Samsung, and US-based Micron Technology, produce these kinds of chips.
Chinese demand has focused on the HBM2E model, two generations behind the latest HBM3E. Due to the global AI boom, the advanced model is in short supply. Chinese companies, from satellite manufacturers to tech firms like Tencent, have purchased these chips. Huawei has used Samsung’s HBM2E semiconductors for its advanced Ascend AI chip, and other firms like Hawking have also placed orders.
While Chinese firms like Huawei and CXMT are making progress in developing HBM2 chips, their efforts could be hindered by the new US restrictions. Samsung may face a major impact from these restrictions compared to its rivals, as it relies more on the Chinese market. SK Hynix, focusing on advanced HBM chip production, has nearly sold out its HBM chips for the next two years, while Micron has already stopped selling its HBM products to China since last year.
At a crypto convention in Nashville, Tennessee, in late July, Donald Trump urged attendees to ‘never sell your bitcoin.’ The speech he held is part of his strategy to attract crypto-focused voters as the November election approaches, and it includes a proposal for a state bitcoin reserve. Trump promised that, if elected, his administration would retain all bitcoin the US government currently holds or acquires in the future, forming a ‘strategic national bitcoin stockpile.’
Trump is not alone in this vision. US Senator Cynthia Lummis has proposed legislation for the government to buy one million bitcoins, around 5% of the total supply. In comparison, independent candidate Robert F. Kennedy Jr. has suggested a stockpile of four million bitcoins. The US government already holds approximately $11.1 billion worth of cryptocurrency, mainly from criminal seizures such as the Silk Road shutdown in 2013.
Currently, the US government possesses about 1% of the global bitcoin supply, which is capped at 21 million coins. Comparatively, private investors like Microstrategy hold around 226,500 bitcoin tokens, while BlackRock’s iShares Bitcoin Trust and Grayscale Bitcoin Trust hold 344,070 and 240,140 tokens, respectively. A government bitcoin reserve could influence bitcoin’s price positively but might also limit the number of tokens available for trading.
Why does this matter?
Despite the uncertainty of a national bitcoin reserve’s implementation, experts are speculating its possible structure. One idea is for the Federal Reserve to manage the reserves for the Treasury Department, similar to gold reserves. Another possibility is a structure akin to the Strategic Petroleum Reserve, with control shared between the president and Congress.
While the concept of a state-controlled bitcoin reserve conflicts with the decentralised nature of cryptocurrency, its increasing prominence in political campaigns is welcomed by the industry. Market players anticipate that both political parties will continue to focus on digital assets beyond the upcoming election.
Bitcoin and ether tumbled to their lowest levels in months on Monday as concerns about a potential US recession triggered a selloff in riskier assets and a flight to safer investments. Both cryptocurrencies, which had previously gained from the approval of a spot bitcoin and ether exchange-traded fund by the US Securities and Exchange Commission, are now facing significant losses.
Bitcoin dropped 13% to $51,560, its largest one-day decline since November 2022, while ether fell 17% to $2,277, its lowest since mid-January. The drop is part of a broader downturn affecting global equities and other assets, with bitcoin losing over a third of its value since reaching an all-time high in March.
Market analyst Tony Sycamore noted that bitcoin is approaching critical support levels around $54,000 to $53,000, and failure to maintain this support could lead to further declines towards $48,000. The broader impact is also visible in the stock market, where shares of crypto-related companies like Coinbase, Riot Platforms, and Marathon Digital have plummeted in early trading, reflecting the broader sentiment in the crypto market.
