Semiconductors

Amazon exit highlights deepening AI divide between US and China

Amazon’s quiet wind-down of its Shanghai AI lab underscores a broader shift in global research dynamics, as escalating tensions between the US and China reshape how tech giants operate across borders.

Instead of expanding innovation hubs in China, major American firms are increasingly dismantling them.

The AWS lab, once central to Amazon’s AI research, produced tools said to have generated nearly $1bn in revenue and over 100 academic papers.

Yet its dissolution reflects a growing push from Washington to curb China’s access to cutting-edge technology, including restrictions on advanced chips and cloud services.

As IBM and Microsoft have also scaled back operations or relocated talent away from mainland China, a pattern is emerging: strategic retreat. Rather than risking compliance issues or regulatory scrutiny, US tech companies are choosing to restructure globally and reduce local presence in China altogether.

With Amazon already having exited its Chinese ebook and ecommerce markets, the shuttering of its AI lab signals more than a single closure — it reflects a retreat from joint innovation and a widening technological divide that may shape the future of AI competition.

Would you like to learn more about AI, tech and digital diplomacy? If so, ask our Diplo chatbot!

EU and Japan deepen AI cooperation under new digital pact

In May 2025, the European Union and Japan formally reaffirmed their long-standing EU‑Japan Digital Partnership during the third Digital Partnership Council in Tokyo. Delegations agreed to deepen collaboration in pivotal digital technologies, most notably artificial intelligence, quantum computing, 5G/6G networks, semiconductors, cloud, and cybersecurity.

A joint statement committed to signing an administrative agreement on AI, aligned with principles from the Hiroshima AI Process. Shared initiatives include a €4 million EU-supported quantum R&D project named Q‑NEKO and the 6G MIRAI‑HARMONY research effort.

Both parties pledge to enhance data governance, digital identity interoperability, regulatory coordination across platforms, and secure connectivity via submarine cables and Arctic routes. The accord builds on the Strategic Partnership Agreement activated in January 2025, reinforcing their mutual platform for rules-based, value-driven digital and innovation cooperation.

Would you like to learn more about AI, tech and digital diplomacy? If so, ask our Diplo chatbot!

North Korea turns to Russia for AI development help

North Korea is dispatching AI researchers, interns and students to countries such as Russia in an effort to strengthen its domestic tech sector, according to a report by NK News.

The move comes despite strict UN sanctions that restrict technological exchange, particularly in high-priority areas like AI.

Kim Kwang Hyok, head of the AI Institute at Kim Il Sung University, confirmed the strategy in an interview with a pro-Pyongyang outlet in Japan. He admitted that international restrictions remain a major hurdle but noted that researchers continue developing AI applications within North Korea regardless.

Among the projects cited is ‘Ryongma’, a multilingual translation app supporting English, Russian, and Chinese, which has been available on mobile devices since 2021.

Kim also mentioned efforts to develop an AI-driven platform for a hospital under construction in Pyongyang. However, technical limitations remain considerable, with just three known semiconductor plants operating in the country.

While Russia may seem like a natural partner, its own dependence on imported hardware limits how much it can help.

A former South Korean diplomat told NK News that Moscow lacks the domestic capacity to provide high-performance chips essential for advanced AI work, making large-scale collaboration difficult.

Would you like to learn more about AI, tech and digital diplomacy? If so, ask our Diplo chatbot!

New AI strategy aims to attract global capital to Indonesia

Indonesia is moving to cement its position in the global AI and semiconductor landscape by releasing its first comprehensive national AI strategy in August 2025.

Deputy Minister Nezar Patria says the roadmap aims to clarify the country’s AI market potential, particularly in sectors like health and agriculture, and provide guidance on infrastructure, regulation, and investment pathways.

Already, global tech firms are demonstrating confidence in the country’s potential. Microsoft has pledged $1.7 billion to expand cloud and AI capabilities, while Nvidia partnered on a $200 million AI centre project. These investments align with Jakarta’s efforts to build skill pipelines and computational capacity.

In parallel, Indonesia is pitching into critical minerals extraction to strengthen its semiconductor and AI hardware supply chains, and has invited foreign partners, including from the United States, to invest. These initiatives aim to align resource security with its AI ambitions.

However, analysts caution that Indonesia must still address significant gaps: limited AI-ready infrastructure, a shortfall in skilled tech talent, and governance concerns such as data privacy and IP protection.

The new AI roadmap will bridge these deficits and streamline regulation without stifling innovation.

Would you like to learn more about AI, tech and digital diplomacy? If so, ask our Diplo chatbot!

5G market grows as GCT begins chipset rollout

GCT Semiconductor Holding, Inc. has begun delivering samples of its latest 5G chipsets to lead customers, including Airspan Networks and Orbic. The company offers chip and module formats to meet specific testing needs.

Initial shipments aim to fulfil early demand, after which GCT will work with clients to assess performance and establish production requirements. The firm is well positioned to scale with a robust supply chain and deep experience in high-speed connectivity.

The fabless semiconductor designer targets mid-tier 5G applications and plans to introduce a Verizon-certified module. GCT has said it remains focused on accelerating its role in the global 5G market.

Would you like to learn more about AI, tech and digital diplomacy? If so, ask our Diplo chatbot!

Critical minerals challenge AI’s sustainable expansion

Recent debates on AI’s environmental impact have overwhelmingly focused on energy use, particularly in powering massive data centres and training large language models.

However, a Forbes analysis by Saleem H. Ali warns that the material inputs for AI, such as phosphorus, copper, lithium, rare earths, and uranium, are being neglected, despite presenting similarly severe constraints to scaling and sustainability.

While major companies like Google and Blackstone invest heavily in data centre construction and hydroelectric power in places like Pennsylvania, these energy-focused solutions do not address looming material bottlenecks.

Many raw minerals essential for AI hardware are finite, regionally concentrated, and environmentally taxing to extract. However, this raises risks ranging from supply chain fragility to ecological damage and geopolitical tension.

Experts now say that sustainable AI development demands a dual focus, not only on low-carbon energy, but on keeping critical mineral supply chains resilient.

Without a coordinated approach, AI growth may stall or drive unsustainable resource extraction with long-term global consequences.

Would you like to learn more about AI, tech and digital diplomacy? If so, ask our Diplo chatbot!

Eric Schmidt warns that AI growth is limited by electricity

Former Google chief executive Eric Schmidt has warned that electricity, rather than semiconductors, will limit the future growth of AI.

Speaking on the Moonshots podcast, Schmidt said the push towards artificial superintelligence—AI that exceeds human cognitive ability in almost all domains—will depend on securing sufficient power instead of just developing more advanced chips.

Schmidt noted the US alone may require an extra 92 gigawatts of electricity to support AI growth, equivalent to dozens of nuclear power stations.

Instead of waiting for new plants, companies such as Microsoft are seeking to retrofit closed facilities, including the Three Mile Island plant targeted for relaunch in 2028.

Schmidt highlighted growing environmental pressures, citing Microsoft’s 34% increase in water use within a year, a trend experts link directly to rising AI workloads.

Major AI developers like OpenAI’s Sam Altman also acknowledge energy as a key constraint. Altman has invested in nuclear fusion through Helion, while firms such as Microsoft and AMD are pressing US policymakers to fast-track energy permits.

Environmental groups, including Greenpeace, warn that unchecked AI expansion risks undermining climate goals instead of supporting them.

Schmidt believes superintelligence is inevitable and approaching rapidly, predicting specialised AI tools across all fields within five years. Rather than focusing solely on AI’s capabilities, he stressed the urgent need for planning energy infrastructure today to match tomorrow’s AI demands.

Would you like to learn more about AI, tech and digital diplomacy? If so, ask our Diplo chatbot!

Huang says Chinese AI science is world class

NVIDIA’s CEO has praised China’s open-source AI work during a high-profile visit to Beijing, spotlighting DeepSeek as an example of world-class science and engineering.

At the International Supply Chain Expo, Huang highlighted the global value of Chinese contributions to AI research.

He told former Alibaba executive Wang Jian that Chinese researchers publish more AI papers than any other nation, calling their output A-plus in both science and engineering. Huang named DeepSeek, Alibaba, Tencent, MiniMax, and Baidu’s Ernie Bot globally significant AI leaders.

The visit coincides with a policy shift by the US government allowing Nvidia to resume H20 chip exports to China. Huang confirmed that export licenses are expected soon, potentially unlocking billions in lost revenue.

Industry watchers see this development as pivotal for Nvidia, which had paused shipments under earlier restrictions. The chipmaker’s renewed access to China’s semiconductor market could reshape global AI infrastructure over the next year.

Would you like to learn more about AI, tech and digital diplomacy? If so, ask our Diplo chatbot!

South Korea’s new Science Minister pledges AI-led national transformation

South Korea’s new Science and ICT Minister, Bae Kyung-hoon, has pledged to turn the nation into one of the world’s top three AI powerhouses.

Instead of following outdated methods, Bae outlined a bold national strategy centred on AI, science and technology, aiming to raise Korea’s potential growth rate to 3 per cent and secure a global economic leadership position.

Bae, a leading AI expert and former president of LG AI Research, officially assumed office on Thursday.

Drawing from experience developing hyperscale AI models like LG’s Exaone, he emphasised the need to build a unique competitive advantage rooted in AI transformation, talent development and technological innovation.

Rather than focusing only on industrial growth, Bae’s policy agenda targets a broad AI ecosystem, revitalised research and development, world-class talent nurturing, and addressing issues affecting daily life.

His plans include establishing AI-centred universities, enhancing digital infrastructure, promoting AI semiconductors, restoring grassroots research funding, and expanding consumer rights in telecommunications.

With these strategies, Bae aims to make AI accessible to all citizens instead of limiting it to large corporations or research institutes. His vision is for South Korea to lead in AI development while supporting social equity, cybersecurity, and nationwide innovation.

Would you like to learn more about AI, tech and digital diplomacy? If so, ask our Diplo chatbot!

Broadcom challenges Nvidia with Tomahawk Ultra AI networking chip

Broadcom has introduced a new networking chip designed to boost AI data centre performance, positioning itself against Nvidia in the AI hardware race.

Called Tomahawk Ultra, the chip helps link hundreds of processors within close range, ensuring fast communication vital for large AI models.

Instead of using Nvidia’s proprietary NVLink system, Broadcom’s Tomahawk Ultra operates on an accelerated version of Ethernet and connects up to four times more chips within a server rack.

The chip acts as a traffic controller, enabling what the industry refers to as ‘scale-up’ computing — where AI models tap into combined computing power from tightly grouped chips.

According to Broadcom senior vice president Ram Velaga, it took engineers around three years to design the Tomahawk Ultra, which was originally aimed at high-performance computing but adapted for AI workloads as demand surged.

Taiwan Semiconductor Manufacturing Company (TSMC) is producing the processors using its five-nanometre process, and the chips are already shipping to customers.

Rather than requiring major hardware overhauls, the Tomahawk Ultra offers a scalable, Ethernet-based alternative for AI firms looking to build faster, more flexible data centres.

Would you like to learn more about AI, tech and digital diplomacy? If so, ask our Diplo chatbot!