Economic

Driverless taxis gain traction in Wuhan amid controversy and competition

Baidu’s driverless taxi service, Apollo Go, has quickly become popular in Wuhan, China, since its launch in August 2022, despite complaints from locals and taxi drivers. The service, operated by Baidu’s autonomous driving unit, has amassed a fleet of over 500 vehicles in the city of 13.7 million people. However, its success has prompted local taxi drivers to petition the municipal transport authority to restrict its use, citing job losses and declining income.

In a letter sent in late June, Wuhan Jianshe Automotive Passenger Transportation, a local taxi operator, reported that four of its 159 taxis had quit since April due to competition from the robotaxis. The company accused the autonomous vehicles of taking jobs away from grassroots drivers. Baidu did not respond to a request for comment, but the company mentioned in May that it had reported misinformation about Apollo Go on social media to the police, resulting in the arrest of more than ten suspects.

Despite years of financial losses, Baidu’s autonomous driving project is now aiming for profitability. Wang Yunpeng, head of Baidu’s Intelligent Driving Group, expressed confidence in an internal letter in April. The company plans to expand Apollo Go’s fleet in Wuhan to 1,000 vehicles and aims to break even locally by the end of the year, according to Chen Zhuo, general manager of Baidu’s self-driving unit.

Musk’s xAI and Oracle halt $10 billion server deal talks

Elon Musk’s AI startup xAI and Oracle have ended discussions on a potential $10 billion server deal. The talks aimed to expand an existing agreement where xAI rents Nvidia AI chips from Oracle. Musk stated that xAI would build a system independently using Nvidia’s H100 graphics processing units for quicker completion.

A source revealed that the specific capacity discussed had been allocated to another customer. Despite this, Oracle continues to engage with xAI regarding its infrastructure needs. Issues such as Musk’s ambitious timeline for building a supercomputer and concerns about power supply at the preferred location contributed to the breakdown of talks.

xAI still contracts with Oracle to train AI models in Oracle’s Gen2 Cloud.

Basel Committee of banking regulators proposes principles to reduce risk from third-party tech firms

The Basel Committee of banking regulators, consisting of regulators from the G20 and other nations, proposed 12 principles for banks and emphasised that the board of directors holds ultimate responsibility for overseeing third-party arrangements and that they must assume full responsibility for outsourced services and document their risk management strategies for service outages and disruptions.

Banks’ increasing reliance on third-party tech companies like Microsoft, Amazon, and Google for cloud computing services raises regulatory concerns about the potential financial sector impact if a widely used provider experiences downtime. Moreover, increased dependence on third-party services has led to heightened scrutiny due to frequent cyberattacks that threaten banks’ operational resilience and can potentially disrupt customer services. As such, banks should implement strong business continuity plans to ensure operations during disruptions.

In the consultative document, the committee also highlighted the importance of maintaining documentation for critical decisions in banks’ records, such as third-party strategies and board minutes.

Why does this matter?

With the financial sector becoming increasingly reliant on technology and tech companies to provide financial services, it makes them more susceptible to cyber-attacks or incidents, potentially affecting the larger economy. As such, there is an increasing worldwide need to improve the financial sector’s digital resilience. Previously, Europe’s Digital Operational Resilience Act (DORA), scheduled to be operational starting January next year, has also recognised this issue.

Alipay launches tap-and-pay feature in China

Alipay, China’s leading mobile payment service, has introduced a new tap-and-pay feature to simplify the checkout process for merchants and enhance user experience on Android and iPhone devices.

The Ant Group-operated service, recognised for popularising QR code payments, launched the Tap! function, allowing users to complete transactions by tapping their smartphones on a merchant’s USB device at the register. The new tap-and-pay service, now being introduced in major cities in China and available to over 2,300 brands and merchants in major cities like Shanghai, Chengdu, Wuhan, and Hangzhou, aims to speed up in-store mobile payments.

That move indicates Alipay’s ongoing efforts to advance contactless payment methods, following similar features by Samsung, Google, and Apple worldwide. Usually, tap-and-pay functions use Near-Field Communication (NFC) technology to enable secure transactions and data exchanges with a simple tap of a smart device within a 4-centimeter range.

However, Alipay stated that its Tap! feature differs from the NFC payment methods of Apple Pay, Samsung Pay, and Google Pay, which use card emulation. Instead, Alipay’s service turns a smartphone into an NFC tag reader, simplifying the QR code payment process with a single tap.

Why does this matter?

Tech companies’ increasing foray into contactless payments shapes the future of money transactions at point-of-sale (POS) purchases, highlighting the ongoing shift towards contactless payments on mobile devices such as smartphones and wearables. That evolution grants tech companies significant influence over consumer payment options, making it an important area to monitor.

UK debates digital ID vs national ID cards

Tony Blair, former UK Prime Minister, is advocating for digital identity as a solution to manage irregular migration, a pressing issue in the recent UK elections. In a piece for The Times addressed to Prime Minister Keir Starmer, Blair proposes leveraging AI and digital ID systems to enhance border controls and immigration management.

Blair emphasises the need for a robust digital identity framework, suggesting it could replace traditional national ID cards. This approach, he argues, could ensure accurate identification without the need for centralised databases or government-issued cards, which has sparked controversy in the past.

Despite Blair’s advocacy, UK government officials, including Business Secretary Jonathan Reynolds, hesitated to reintroduce national ID cards. Instead, the government plans to establish a new enforcement and return unit to tackle illegal migration and smuggling rings.

The debate over digital ID versus national ID cards has historical roots, dating back to Blair’s earlier proposals in the 2000s. The issue resurfaced recently amidst concerns over illegal migration and the small boat crisis in the English Channel, prompting renewed discussions about the role of ID documents in modern immigration policies.

Why does this matter?

Advocates like the Open Identity Exchange stress that if implemented adequately through frameworks like the Digital Verification Service, digital ID systems could drive economic growth and improve service delivery in sectors beyond immigration, such as healthcare and education. Despite challenges, proponents argue that a secure, decentralised digital ID system could substantially benefit the UK’s digital economy and public services.

AI stocks surge prompts profit-taking advice

According to strategists at Citigroup Inc., investors are being advised to consider cashing in on the recent surge in AI stocks. The analysis highlights strong investor sentiment towards AI-exposed equities, reminiscent of levels seen in 2019. Drew Pettit’s team at Citi notes that while there’s no clear bubble in AI stocks overall, the rapid rise in specific names raises concerns about increased volatility ahead.

This year, the AI frenzy has driven Nvidia Corp. to briefly claim the title of the world’s most valuable company, while Taiwan Semiconductor Manufacturing Co. surpassed $1 trillion in market value. Citi suggests focusing on profit-taking, particularly among chip-makers, and diversifying investments across the broader AI sector.

Despite cautious signals from Citi, many market observers believe the AI momentum will persist through the year’s second half. Bloomberg News reports a split among investors, some favouring established giants like Nvidia, while others look to secondary beneficiaries such as utilities and infrastructure providers.

Acknowledging AI stocks’ optimism, Citi’s strategists emphasise that current stock prices imply high expectations.

Chip boom propels TSMC into top tech giants

The recent surge of Taiwanese chip giant TSMC into the ranks of the world’s most valuable companies underscores the significant impact of the generative AI revolution on Wall Street. TSMC briefly surpassed the $1 trillion market capitalisation mark, surpassing Tesla to become the seventh most valuable tech giant. The milestone occurred on a day when Alphabet, Apple, and Meta all reached record highs.

Microsoft and Apple dominate the top echelon of the world’s most valuable companies, followed closely by AI chip designer Nvidia. These companies boast global stock market valuations exceeding $3 trillion. Alphabet and Amazon, both exceeding $2 trillion, also feature prominently in the ranking, while Saudi oil giant Aramco, Meta, TSMC, and Tesla complete the top ten.

The semiconductor industry, now the leading sector in the S&P 500, is experiencing unprecedented growth due to the rising demand for chips driven by generative AI. That boom attracts significant investment and government subsidies, such as the Biden administration’s multi-billion-dollar support for US chip factories. Worldwide semiconductor sales are projected to reach a record $611.2 billion in 2024, with further growth expected in subsequent years.

Nvidia, a key player in AI chip design, has seen its market capitalisation increase eightfold since the launch of ChatGPT in November 2022. Nvidia’s GPUs are essential for building generative AI, propelling the company to briefly become the world’s most valuable publicly traded company. Analysts at Wedbush Securities highlight Nvidia’s GPU chips as the new “gold or oil” of the tech sector, with Nvidia, Apple, and Microsoft racing toward a $4 trillion market valuation. TSMC, which manufactures the bulk of Nvidia’s products, is poised to benefit significantly from this booming demand.

Meta partners with Vodafone to optimise video delivery across Europe

Meta, the owner of Instagram, has collaborated with Vodafone to optimise short-form video delivery on 11 of its European mobile networks. That effort aims to free up network capacity without compromising the viewing experience, addressing the increasing data usage driven by platforms like Instagram, TikTok, and YouTube. According to Ericsson’s 2024 Mobility Report, global mobile traffic grew by 25% in the past year, with video accounting for 73% of all mobile traffic by the end of 2023.

Telecom operators, including Vodafone, have expressed concerns about the financial burden of upgrading networks while Big Tech companies benefit from the increased data usage. A recent EU initiative to have Big Tech contribute to 5G investment has stalled. Vodafone sees its partnership with Meta as a practical solution to address the issue of fair contribution, with Meta’s video optimisation efforts leading to more efficient network resource usage.

During an April trial on Vodafone’s British network, the optimisation resulted in a low double-digit reduction in Meta’s data traffic, freeing up capacity in busy areas such as shopping centres and transport hubs. Both Vodafone and Meta plan to continue collaborating to enhance network efficiencies further. Similarly, Spain’s Telefonica has also started working with Meta to optimise video traffic delivery on its networks.

Singapore advocates for international AI standards

Singapore’s digital development minister, Josephine Teo, has expressed concerns about the future of AI governance, emphasising the need for an internationally agreed-upon framework. Speaking at the Reuters NEXT conference in Singapore, Teo highlighted that while Singapore is more excited than worried about AI, the absence of global standards could lead to a ‘messy’ future.

Teo pointed out the necessity for specific legislation to address challenges posed by AI, particularly focusing on using deepfakes during elections. She stressed that implementing clear and effective laws will be crucial as AI technology advances to manage its impact on society and ensure responsible use.

Singapore’s proactive stance on AI reflects its commitment to balancing technological innovation with necessary regulatory measures. The country aims to harness the benefits of AI while mitigating potential risks, especially in critical areas like electoral integrity.

Thousands of event tickets leaked because of Ticketmaster hack

In an ongoing extortion scheme targeting Ticketmaster, nearly 39,000 print-at-home tickets for 150 upcoming concerts and events featuring artists like Pearl Jam, Phish, Tate McCrae, and Foo Fighters have been leaked by threat actors. The person responsible, known as ‘Sp1derHunters,’ is the same individual who sold data stolen from recent data breaches targeting Snowflake, a third-party cloud database provider.

The chain of events began in April when threat actors initiated the download of Snowflake databases from over 165 organisations using stolen credentials acquired through information-stealing malware. Subsequently, in May, a prominent threat actor named ShinyHunters started to sell the data of 560 million Ticketmaster customers, allegedly extracted from Ticketmaster’s Snowflake account. Ticketmaster later verified that their data had indeed been compromised through their Snowflake account.

Initially, the threat actors demanded a ransom of $500,000 from Ticketmaster to prevent the dissemination or sale of the data to other malicious actors. However, a recent development saw the same threat actors leaking 166,000 Taylor Swift ticket barcodes and increasing their demand to $2 million.
In response to the situation, Ticketmaster asserted that the leaked data was ineffective due to their anti-fraud measures with a system that continuously generates unique mobile barcodes. According to Ticketmaster, their SafeTix technology safeguards tickets by automatically refreshing barcodes every few seconds, making them impervious to theft or replication.

Contrary to Ticketmaster’s claims, Sp1d3rHunters refuted the assertion, stating that numerous print-at-home tickets with unalterable barcodes had been stolen. The threat actor emphasised that Ticketmaster’s ticket database has online and physical ticket types, such as Ticketfast, e-ticket, and mail, which are printed and cannot be automatically refreshed. Instead, they suggested that Ticketmaster must invalidate and reissue the tickets to affected customers.

The threat actors shared a link to a CSV file containing the barcode data for 38,745 TicketFast tickets, revealing ticket information for various events and concerts, including those featuring Aerosmith, Alanis Morissette, Billy Joel & Sting, Bruce Springsteen, Carrie Underwood, Cirque du Soleil, Dave Matthews Band, Foo Fighters, Metallica, Pearl Jam, Phish, P!NK, Red Hot Chili Peppers, Stevie Nicks, STING, Tate McRae, and $uicideboy$.

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