Britain’s competition regulator, the CNMC, has imposed a hefty fine of €413.2 million (US$448 million) on online reservation platform Booking.com. The fine, the largest ever levied by the CNMC, targets Booking.com’s dominant market position in Spain, where it holds a 70% to 90% share. The penalties stem from practices dating back to 2019.
The CNMC found Booking.com to be imposing unfair terms on hotels and stifling competition from other providers. This included a ban on hotels offering lower prices on their own websites compared to Booking.com’s listings, as well as the ability of Booking.com to unilaterally impose price discounts on hotels. Additionally, the platform mandated that hotels resolve disputes in Dutch courts.
Booking Holdings, Booking.com’s parent company, intends to appeal the fine. They argue that the issue falls under the remit of the European Union’s Digital Markets Act and express strong disagreement with the CNMC’s findings. Booking Holdings plans to challenge the decision in Spain’s high court.
The investigation was triggered by complaints lodged in 2021 by the Spanish Association of Hotel Managers and the Madrid Hotel Business Association. Another point of contention is Booking.com’s practice of offering benefits to hotels that generate higher fees, which critics argue unfairly restricts competition from alternative booking services.
The Biden administration is set to introduce a new rule expanding US powers to block exports of semiconductor manufacturing equipment to Chinese chipmakers. However, essential allies like Japan, the Netherlands, and South Korea will be exempt, minimising the rule’s overall impact. The additional restriction follows previous export controls aimed at hindering China’s advancements in supercomputing and AI for military purposes.
The new rule will extend the Foreign Direct Product rule, preventing several Chinese semiconductor factories from receiving equipment exports from countries such as Israel, Taiwan, Singapore, and Malaysia. The rule, which has previously targeted Huawei, allows the US to block sales of products made with American technology, even if produced abroad. The exemptions highlight a diplomatic effort to maintain international cooperation while enforcing export controls.
Additionally, the US plans to tighten regulations by reducing the threshold of US content in foreign products subject to export controls.
The rule, still in draft form, is expected to be finalised next month.
While ASML and Tokyo Electron shares surged in response to the exemptions, this development underscores the need for a balanced approach to managing export controls while maintaining solid international alliances.
Shares of CrowdStrike fell over 4% in premarket trading on Tuesday following reports that Delta Air Lines will seek compensation from the cybersecurity firm for a global IT outage that severely disrupted industries, including airlines. The outage on 19 July resulted in more than 2,200 flight cancellations, with Delta having to cancel over 6,000 flights to date.
The issue was traced back to CrowdStrike’s ‘Falcon Sensor’ software, which caused Microsoft Windows to crash with the infamous ‘Blue Screen of Death.’ According to CNBC, Delta has retained a law firm and plans to seek compensation from both CrowdStrike and Microsoft.
The outage has significantly impacted CrowdStrike’s stock, which had more than doubled in 2023 but has since fallen over 24%, resulting in a market valuation loss of more than $20 billion. A survey by Evercore ISI revealed that many clients are considering reducing or pausing their spending on CrowdStrike and expect monetary relief, such as discounts or service credits, from the company.
Analysts at Needham highlighted that the outage has damaged customer confidence, with many expressing frustration over the disruption, especially during a peak travel and shopping period. The analysts noted that clients are now wary of relying too heavily on single platforms due to the associated concentration risks.
Silicon Valley AI startups are increasingly merging with major tech giants like Microsoft and Amazon. Due to financial constraints, many promising companies such as Inflection AI and Adept have seen key executives move to these tech giants through discreet deals. These transactions, often viewed as acquisitions, aim to bypass competition regulators.
Character AI and French startup Mistral struggle to secure the funding needed to remain independent. Even OpenAI, the creator of ChatGPT, is deeply tied to Microsoft through a $13 billion investment deal, ensuring exclusive access to its advanced models. Amazon has similarly invested in Anthropic to secure high-performing AI models.
The immense computing power required for developing generative AI, which can produce human-like content rapidly, necessitates substantial financial resources. As a result, many AI startups, founded by former leaders of major tech firms, rely on the support of large cloud providers to recreate the conditions of well-funded research labs. The shift like this one deviates from the traditional Silicon Valley startup narrative.
However, the consolidation of AI innovation under a few tech giants raises concerns about competition. Critics argue that aligning with these companies stifles creativity and innovation. Government regulators in the US, EU, and UK are scrutinising these deals, with recent actions indicating a growing regulatory interest in ensuring fair competition within the nascent AI industry.
At SIGGRAPH, a major computer graphics conference, Nvidia presented new real-world applications of generative AI. Chief executive officer Jensen Huang highlighted the company’s role in AI development, emphasising their Nvidia Inference Microservices (NIM) platform. Nvidia has always prioritised advanced computing through a software-led approach.
Recent announcements showcased improvements in generative AI and 3D content generation. AI services and models are now available to accelerate humanoid robot development. Researchers can use devices like the Apple Vision Pro to teach robots various tasks. Collaborations with Getty Images and Shutterstock aim to improve the accuracy of AI-generated images matching text prompts.
Engineers now benefit from advancements in industrial design, visualisation, and advertising tools. A demo video displayed lifelike 3D worlds generated from simple text prompts. Coca-Cola and marketing agency WPP are among the early adopters of Nvidia’s generative AI art tools.
The importance of these developments extends beyond product outputs. Nvidia integrates AI into their own processes, aiding software debugging and chip design. The impact on the market has been substantial, contributing significantly to the S&P 500’s market capitalisation gains. The company’s efforts continue to shape the future of AI in various industries.
Samsung Electronics is making strides in developing memory chips essential for the AI market, narrowing the gap with rival SK Hynix. The company has recently received approval from Nvidia for its HBM3 memory chips and anticipates approval for its next generation, HBM3E, within months. The advancement follows months of setbacks, including development challenges and replacing the head of its semiconductor division.
Samsung’s efforts come as the demand for high-bandwidth memory (HBM) is expected to soar, driven by AI advancements. The HBM market is projected to grow from $4 billion in 2022 to $71 billion by 2027. Nvidia’s approval is crucial for Samsung to capitalise on this booming market and improve its revenue and market share despite still trailing SK Hynix.
Why does this matter?
The company has faced significant engineering challenges, particularly with the thermal management of the stacked DRAM chips used in HBM. Under the leadership of Jun Young-hyun, Samsung has focused on resolving these issues and enhancing its technology. The company has also reorganised its HBM team to boost innovation and collaboration.
As Samsung progresses, it aims to ramp up production and meet the growing demand for AI memory chips. With its financial resources and production capacity, the company is well-positioned to address market shortages and secure a significant share of the lucrative AI memory market.
Russia plans to make its first international payments in cryptocurrencies by the end of this year to counter the challenges posed by Western sanctions, according to the central bank governor, Elvira Nabiullina. The move comes as local banks face increasing delays in processing payments with major trading partners due to cautiousness influenced by Western regulators.
A new law, expected to be approved by the lower house of parliament, will allow Russian companies to use cryptocurrencies for international transactions. The law is anticipated to come into effect in the autumn. Nabiullina stated that discussions with ministries, agencies, and businesses are already underway, and the central bank is prepared to be flexible in implementing the new regulations.
Currently, cryptocurrencies are not permitted for payments within Russia. The introduction of this law aims to address the significant delays in international payments, which have become a major challenge for the Russian economy. The central bank emphasised that the risk of secondary sanctions has complicated payments for a wide range of imports, resulting in longer supply chains and increased business costs.
Hewlett Packard Enterprise (HPE) is anticipated to receive unconditional EU antitrust approval for its $14 billion acquisition of Juniper Networks, a leading networking gear maker. The acquisition, announced in January, highlights the industry’s urgency to innovate and develop new products in response to the surge in artificial intelligence-driven services.
The European Commission is set to decide on the deal by 1 August. Both HPE and Juniper have declined to comment on the matter. Sources suggest that HPE plans to emphasise the dominant market position of Cisco, Juniper’s main competitor, to mitigate any potential competition concerns from the EU.
In addition to the EU review, the deal is also under scrutiny by the UK’s antitrust authorities, with their decision expected by 14 August. The acquisition marks a significant move in the tech industry as companies strive to stay competitive in the rapidly evolving AI landscape.
Around 80 countries have agreed on global digital commerce rules, including recognising e-signatures and protections against online fraud. Despite five years of negotiations led by Australia, Japan, and Singapore, the United States did not endorse the final text, citing the need for further work on essential security interests.
The European Union hailed the agreement as ‘historic,’ while Britain called it ‘groundbreaking.’ The agreement commits participants to digitalising customs documents and processes, recognising e-documents and e-signatures, and implementing legal safeguards against online fraud and misleading product claims. It also addresses limiting spam, protecting personal data, and supporting least developed countries.
Although 91 of the World Trade Organization’s 166 members, including China, Canada, and Saudi Arabia, participated in the negotiations, the US and other countries like Brazil, Indonesia, and Turkey expressed reservations. Making the accord a formal WTO agreement may be challenging due to the need for consensus, with India and South Africa particularly critical of deals excluding certain members.
According to a recent research paper, Apple has opted to use Google-designed chips instead of Nvidia’s for two crucial components of its AI software infrastructure. This choice is noteworthy as Nvidia is widely regarded as the leading provider of AI processors. The paper detailed that Apple employed Google’s tensor processing units (TPUs) in large clusters, specifically 2,048 TPUv5p chips for AI models on devices like iPhones and 8,192 TPUv4 processors for server models.
The research paper did not mention any use of Nvidia chips, despite Nvidia dominating about 80% of the AI processor market through its graphics processing units (GPUs). Unlike Nvidia, which sells its GPUs directly, Google offers TPUs through its Google Cloud Platform, requiring customers to use Google’s platform for access.
Why does this matter?
Apple has begun introducing parts of its new AI suite, Apple Intelligence, to beta users. This recent publication only disclosed the full extent of Apple’s reliance on Google hardware, despite earlier reports hinting at this partnership.
Apple’s engineers noted the potential for even larger, more sophisticated AI models using Google’s chips. However, Apple’s stock saw a minor decline of 0.1% to $218.24 following the research paper’s release.
