Google will invest $2 billion to establish its first data centre and Google Cloud region in Malaysia, marking a significant expansion into Southeast Asia. This investment will be located in Sime Darby Property’s Elmina Business Park in central Selangor. It aims to advance Malaysia’s digital ambitions, offering AI capabilities and other advanced technologies to enhance the local industry’s global competitiveness.
The new data centre will support services like Search, Maps, and Workspace, while the cloud centre will cater to local businesses and public sector organisations. Google’s Chief Financial Officer, Ruth Porat, emphasised the partnership’s role in fostering an ecosystem for innovation and driving digital transformation in Malaysia. This collaboration builds on a previous agreement announced last November between the Malaysian government and Google to accelerate domestic innovation.
The move is part of a broader trend of global tech giants’ significant investments in Southeast Asia. Microsoft has committed $2.2 billion to cloud services in Malaysia and $1.7 billion in Indonesia. Additionally, Malaysian conglomerate YTL is partnering with Nvidia in a $4.3 billion AI infrastructure project, while Amazon plans to invest $9 billion in Singapore, $5 billion in Thailand, and $6 billion in Malaysia.
OpenAI has secured licensing agreements with The Atlantic and Vox Media, expanding its partnerships with publishers to enhance its AI products. These deals allow OpenAI to display news from these outlets in products like ChatGPT and use their content to train its AI models. Although financial terms were not disclosed, this move follows similar agreements with major publishers like News Corp., Dotdash Meredith, and The Financial Times.
Executives from The Atlantic and Vox Media emphasised that these partnerships will help readers discover their content more easily. Nicholas Thompson, CEO of The Atlantic, highlighted the importance of AI in future web navigation and expressed enthusiasm for making The Atlantic’s stories more accessible through OpenAI’s platforms.
Additionally, these agreements will provide the publishers access to OpenAI’s technology, aiding them in developing new AI-powered products. For instance, The Atlantic is working on Atlantic Labs, an initiative focused on creating AI-driven solutions using technology from OpenAI and other companies.
According to Prime Minister Anwar Ibrahim, Malaysia aims to attract a minimum of 500 billion ringgit ($107 billion) in investments for its semiconductor industry. With Malaysia already accounting for 13% of global testing and packaging in the semiconductor sector, the country seeks to solidify its position as a global manufacturing hub. In recent years, it has successfully attracted multibillion-dollar investments from industry giants like Intel and Infineon.
Anwar highlighted that the targeted investment will focus on areas such as integrated circuit design, advanced packaging, and manufacturing equipment for semiconductor chips. Additionally, Malaysia aims to establish at least ten local companies specialising in semiconductor chip design and advanced packaging, with projected revenues ranging from $210 million to $1 billion. To support these ambitious goals, Malaysia plans to allocate $5.3 billion in fiscal support, with further details expected to be announced later.
The Prime Minister emphasised Malaysia’s capacity to diversify and ascend the value chain, emphasising a shift towards high-end manufacturing, semiconductor design, and advanced packaging. Although Anwar still needs to provide a specific timeline for achieving these targets, Malaysia has already begun taking concrete steps to bolster its semiconductor sector. Initiatives include plans to build Southeast Asia’s largest integrated circuit design park, offering incentives such as tax breaks and subsidies to attract global tech companies and investors. These efforts signify Malaysia’s strategic move towards high-value, front-end design work beyond traditional backend chip assembly and testing.
Fintech company Klarna has revealed that substantial cost savings have been achieved through the use of generative AI (GenAI) technology. Klarna, an early adopter of GenAI, employs AI for various purposes, including running marketing campaigns and generating images. The company reports saving approximately $10 million annually through AI implementation.
In the first quarter, Klarna reduced its sales and marketing budget by 11%, with AI accounting for 37% of these cost savings. Utilising GenAI tools such as Midjourney, DALL-E, and Firefly for image generation, Klarna has notably reduced image production costs by $6 million. By leveraging AI, Klarna updates images on its app and website weekly, aligning with key retail events like Valentine’s Day and summer sales.
According to Klarna’s Chief Marketing Officer David Sandström, the company has eliminated the need for costly bespoke imagery traditionally associated with seasonal events. With GenAI, Klarna has streamlined its image development cycle, generating over 1,000 images in the first three months of 2024 and reducing the cycle time from six weeks to seven days.
Additionally, Klarna has realised further savings of $4 million by reducing spending on external marketing suppliers for translation, production, and social agencies. Furthermore, Klarna’s partnership with OpenAI has resulted in an AI assistant for customer service, performing tasks equivalent to 700 full-time agents, showcasing the company’s commitment to leveraging AI technology across various aspects of its operations.
China’s domestic AI chipmakers are rapidly closing the gap on international leaders, according to Xu Bing, co-founder of SenseTime Group Inc. Despite the significant lag in computational power compared to the US, China possesses the talent and data necessary to advance in the AI field, Xu stated during an interview at the UBS Asian Investment Conference in Hong Kong. SenseTime, a leading AI company in China, faces challenges due to US sanctions that restrict access to advanced AI technology, such as Nvidia’s accelerators.
The US trade controls have spurred the development of domestic alternatives from companies like Huawei Technologies and Shanghai Biren Technology, both also affected by US restrictions. Xu emphasised that although Asia faces a considerable shortfall in computational resources, the region is abundant in talent and data. He noted that China’s AI chip industry is catching up quickly, with SenseTime collaborating with local semiconductor firms to enhance their computing capabilities.
While the exact gap between Chinese and US AI technology is uncertain, estimated between one to three years, Xu is optimistic that this disadvantage in computing power will be temporary. He believes that, over time, the disparity in computing resources will diminish, viewing computing power as a commodity China will eventually acquire in sufficient quantity. Notable Chinese companies making strides in AI chips include Moore Threads Intelligent Beijing Co., Huawei, and other key players like Baidu Inc. and Naura Technology Group Ltd, which have received government attention and support.
South Korea’s finance minister, Choi Sang-mok, announced plans to introduce detailed tax incentives to increase the value of listed companies as part of ongoing corporate reforms. These measures, which are part of the ‘Value-up Programme’, will be refined after gathering feedback from market participants in June and July. The government aims to balance fairness and effectiveness in the proposed tax benefits, initially introduced in February, which were seen as insufficient by the market.
In addition to these corporate reforms, Choi emphasised continued government support for the vital semiconductor industry in South Korea. Next month, detailed measures will be released to bolster the industry’s global competitiveness, building on a recently announced support policy package.
Choi also addressed broader economic issues, highlighting support for a three-way free trade agreement (FTA) with Japan and China following a trilateral summit where leaders expressed their commitment to accelerating negotiations. On the domestic front, he projected consumer inflation to stabilise in the mid-to-lower 2% range in the latter half of the year. He anticipated higher tax revenue in 2024 despite currently weaker-than-expected corporate tax income.
Amazon’s cloud computing division, Amazon Web Services (AWS), is discussing with Italy about investing billions of euros in expanding its data centre operations within the country. That is part of AWS’s broader strategy to strengthen its cloud services across Europe. According to sources, the specifics of the investment, including its size and potential locations, are still under negotiation. One option being considered is expanding AWS’s existing site in Milan or establishing a new one.
AWS and Italy’s digital transition department declined to comment on the ongoing talks. AWS initially launched its first cloud region in Italy in 2020, committing to invest €2 billion by 2029. The company serves notable clients in Italy, including luxury carmaker Ferrari and insurer Assicurazioni Generali. This potential investment follows AWS’s recent announcement of a €15.7 billion investment in Spain’s Aragon region, indicating a significant upscaling from previous plans.
AWS’s expansion in Italy might not be as large as its Spanish investment, yet it is expected to be substantial. In addition to Italy and Spain, AWS is making significant investments across Europe, including a €7.8 billion commitment in Germany through 2040. AWS also enhances its infrastructure to cater to telecom clients, securing its first major customer in Telefonica Deutschland. These expansions come as corporate demand for cloud computing surges, driven by increasing interest in AI, prompting renewed growth in the global cloud infrastructure market.
Elon Musk’s AI startup, xAI, has secured a whopping $6 billion in a recent funding round, marking one of the largest deals in the burgeoning AI sector. The fund positions xAI to fiercely compete with industry rivals such as OpenAI, Microsoft, and Google. Among the notable backers are Valor Equity Partners, Vy Capital, Andreessen Horowitz, Sequoia Capital, and Fidelity, alongside prominent figures like Prince Alwaleed Bin Talal and Kingdom Holding.
The funding round, which values xAI at $18 billion pre-money, underscores Musk’s significant presence in AI. As an early and prominent figure in AI entrepreneurship, Musk’s ventures extend beyond xAI, including his leadership role at Tesla, which pioneers self-driving technologies. Musk’s involvement with OpenAI, however, has been contentious, leading to legal disputes and accusations of mission deviation.
xAI, which emerged just last year from the social network X, has already made strides in AI development, notably with its chatbot ChatGPT-rival Grok 1.0 model. The company’s recent release of the Grok 1.5 model and its exploration of multimodal capabilities indicate a commitment to advancing AI technologies. Despite its ambitions for ‘truthful’ AI systems, concerns have arisen regarding Grok’s news summary feature, which has been reported to generate misleading information.
Why does it matter?
With the new financing, xAI aims to bring its initial products to market, enhance infrastructure, and accelerate research and development efforts. Additionally, the company seeks partnerships to expand Grok’s user base beyond X, signalling its intent to scale its AI innovations and influence in the global market.
Lobbying groups representing airlines, hotels, and retailers in Europe are urging the EU tech regulators to ensure that Google considers their views, not just those of large intermediaries, when implementing changes to comply with landmark tech regulations. These groups, including Airlines for Europe, Hotrec, EuroCommerce, and Ecommerce Europe, had previously expressed concerns about the potential impact of the EU’s Digital Markets Act (DMA) on their revenues.
The DMA aims to impose rules on tech giants like Google to give users more choice and offer competitors a fairer chance to compete. However, these industry groups fear the proposed adjustments could harm their direct sales revenues and exacerbate discrimination. In a joint letter to EU antitrust chief Margrethe Vestager and EU industry chief Thierry Breton, dated 22 May, they emphasised their mounting concerns regarding the potential consequences of the DMA.
Why does it matter?
Specifically, the groups worry that the proposed changes may give preferential treatment to powerful online intermediaries, resulting in a loss of visibility and traffic for airlines, hotels, merchants, and restaurants.
Despite Google’s acknowledgement in March that changes to search results may impact various businesses, including those in the European market, the company has not provided immediate comment on the recent concerns raised by these lobbying groups. The European Commission, currently investigating Google for possible DMA breaches, has yet to respond to requests for comment on the matter.
Meta Platforms has agreed to limit the use of certain data from advertisers on its Facebook Marketplace as part of an updated proposal accepted by the UK’s Competition Market Authority (CMA). The request aims to prevent Meta from exploiting its advertising customers’ data. The initial commitments, accepted by the CMA in November, included allowing competitors to opt out of having their data used to enhance Facebook Marketplace.
The British competition regulator has provisionally accepted Meta’s updated changes and is now seeking feedback from interested parties, with the consultation period closing on 14 June. The details about any further amendments to Meta’s initial proposals in UK have yet to be disclosed. The following decision reflects a broader effort by regulators to ensure fair competition and prevent dominant platforms from misusing data.
In November, Amazon committed to avoiding the use of marketplace data from rival sellers, thereby promoting an even playing field for third-party sellers. Both cases highlight the increasing scrutiny of major tech companies regarding their data practices and market power, aiming to foster a more competitive and transparent digital marketplace.
