Japan’s defence ministry is ramping up investments in AI, automation, and troop welfare as it tackles a growing recruitment crisis. The ministry announced these measures alongside its latest budget request, aiming to maintain a strong military presence amid a shrinking birth rate and increasing security concerns surrounding China.
A 6.9% increase in defence spending has been proposed, totalling a record 8.5 trillion yen ($59 billion). The strategy shift will fund AI surveillance systems for military bases, unmanned drones, and new automated warships with smaller crews. The move comes after Japan’s Self Defence Forces (SDF) experienced its worst recruitment year, enrolling less than half its target.
To address the shortfall, the defence ministry plans to offer financial incentives and improve living conditions, including more private sleeping quarters and better social media access. Special efforts are being made to increase female recruitment, with new accommodation and enhanced harassment prevention measures also included in the budget.
Japan is also exploring outsourcing training and support operations to civilian contractors and former SDF members, freeing up more troops for frontline duties.
As China’s military power grows, these steps form part of Prime Minister Fumio Kishida’s broader strategy to strengthen Japan’s defence capabilities.
AI startups OpenAI and Anthropic have agreed with the US Artificial Intelligence Safety Institute to collaborate on research, testing, and evaluating their advanced AI models. The deals come as regulatory scrutiny over AI’s safe and ethical development increases across the tech industry.
The agreements allow the US AI Safety Institute early access to significant new AI models from both companies before and after their release. The partnership will evaluate their capabilities and potential risks and provide feedback on safety improvements. OpenAI’s chief strategy officer, Jason Kwon, supported the initiative, citing its importance in setting a global framework for AI safety.
Anthropic, backed by Amazon and Alphabet, did not immediately comment on the deal. The US AI Safety Institute is also working closely with its counterpart in the UK to ensure international collaboration on AI safety. The institute was established as part of an executive order by President Biden to address risks associated with emerging AI technologies.
Nations worldwide are boosting demand for Nvidia’s AI chips by developing AI models tailored to their languages and cultures. Countries increasingly adopt generative AI for national security and regional needs, contributing significantly to Nvidia’s revenues. The company’s forecast predicts low double-digit billions in revenue from these AI-driven initiatives by January 2025.
Nvidia’s hardware, such as the H200 graphics processors, plays a crucial role in building AI infrastructure, with Japan‘s National Institute of Advanced Industrial Science and Technology being a notable example. These efforts highlight the importance of AI expertise and infrastructure as national priorities.
While Nvidia faces challenges due to US export controls on chip sales to China, other regions continue to drive the company’s growth. Countries aim to build AI models customised to their political, cultural, and scientific contexts, which are essential for maintaining sovereignty in an AI-driven world.
Businesses are also tapping into this trend, with firms like IBM assisting nations like Saudi Arabia in developing AI models in regional languages. Nvidia’s GPUs are expected to benefit significantly from these global efforts to build national AI platforms.
OpenAI is nearing a major funding round that would value the company more than $100 billion, with Thrive Capital expected to invest around $1 billion. Sources familiar with the matter have indicated that the fundraising is progressing but has yet to be made public.
Sarah Friar, OpenAI’s CFO, informed employees that the company seeks new capital to cover increasing operational costs and fuel the computing power needed for its AI models. The announcement did not specify exact figures but highlighted the growing need for resources as the company scales.
If the funding round is successful, OpenAI could become one of the world’s most valuable venture-backed startups, underscoring the global demand for generative AI tools like ChatGPT. The rise of OpenAI has also sparked increased competition among tech giants eager to integrate AI into their products.
Friar additionally hinted at plans for a tender event later this year, allowing employees to sell some of their shares. Details of this event are still in the early stages and yet to be confirmed.
California’s contentious AI safety bill, SB 1047, has passed the state legislature and now awaits Governor Gavin Newsom’s decision. The bill mandates safety testing for advanced AI models and requires developers to implement a kill switch, which has sparked intense debate among tech companies and lawmakers. Proponents argue that the legislation is crucial for public safety, while critics, including some major tech firms and Democrats, fear it could stifle innovation and drive AI companies out of California.
Elon Musk, CEO of Tesla and AI firm xAI, supports the bill, while other tech giants like Google, Microsoft-backed OpenAI, and Meta have voiced their concerns. The bill empowers the state attorney general to sue non-compliant developers, particularly if AI threatens critical infrastructure. It also demands third-party audits and whistle-blower protections to prevent AI abuses.
State Senator Scott Wiener, the bill’s author, argues that the legislation is necessary to safeguard the public as AI technology rapidly advances. However, opposition from various quarters, including venture capitalists like Martin Casado of Andreessen Horowitz, highlights the broad and bipartisan concerns surrounding the bill.
Governor Newsom has until 30 September to decide whether to sign the bill into law or veto it, which will have significant implications for AI development in California.
The growing risk of AI regulation is becoming a key concern for US companies, with 27% of Fortune 500 firms citing it in their recent reports. The development of AI rules is seen as a potential threat to innovation and business practices, especially in light of state-level initiatives such as California’s SB 1047. Companies fear that such regulations could hinder AI model development and sharing, with hundreds of similar bills being proposed nationwide.
Businesses like Moody’s have voiced concerns over how AI regulation could increase compliance burdens, while others like Johnson & Johnson are mindful of global efforts, including the EU’s AI Act. Despite the potential for greater oversight, companies like Booking Holdings have acknowledged the benefits of regulating AI models to prevent biases and other risks. The White House’s Executive Order on AI and the rise of state legislation point to a future of tighter regulation.
To manage these risks, some corporations are taking matters into their own hands by implementing internal AI guidelines ahead of new laws. S&P Global has established its own AI policies to anticipate upcoming regulations but remains concerned that new laws could impede competition in the AI space. On the other hand, companies such as Nasdaq have already begun working with regulators on AI-enabled solutions, demonstrating how businesses are navigating the complex regulatory landscape.
Despite these challenges, companies are pressing ahead with AI initiatives as they seek to stay competitive. Despite regulatory uncertainty and varying laws from state to state, businesses are unwilling to slow their AI development, knowing their rivals are likely to push forward. Industry leaders believe thoughtful regulation could eventually benefit AI adoption if it supports responsible and innovative practices.
Lip-Bu Tan, a high-profile board member at Intel, has resigned after disagreeing with CEO Pat Gelsinger and other directors over the company’s workforce size, risk-averse culture, and lagging AI strategy. His departure follows rising concerns that Intel’s turnaround efforts, led by Gelsinger, are hindered by inefficiencies and outdated practices. Tan, a semiconductor industry veteran, had joined Intel’s board to help restore its leadership in the chip industry.
Tan reportedly grew frustrated with Intel’s bloated workforce, which he believed was burdened by excessive layers of middle management. Despite attempts to streamline the company through layoffs, Tan argued that Intel had failed to make the necessary cuts to its bureaucracy. As competition in AI heats up, particularly with Nvidia, Intel has been criticised for falling behind in the race to develop cutting-edge AI chips.
Intel’s challenges are exacerbated by its struggle to build a foundry business that aims to manufacture chips for other companies. Without a bigger customer, the industry has yet to turn a profit. Additionally, a $5.4 billion deal to acquire Israel’s Tower Semiconductor was blocked by China, further complicating Intel’s efforts to expand its contract manufacturing capabilities.
Intel’s future remains uncertain as the company grapples with internal inefficiencies, external competition, and geopolitical obstacles. Tan’s exit has left a significant void on Intel’s board, raising further concerns about its ability to compete in a rapidly evolving semiconductor industry.
Apple is set to host its fall event on 9 September at its Cupertino headquarters, where it is expected to introduce new iPhones and updates to other devices and apps. The event comes at a critical time as the company looks to counter a slowdown in global sales, particularly in China, and outline its AI roadmap.
At its developers conference in June, Apple announced a series of AI-driven features under the ‘Apple Intelligence’ banner, including improvements to Siri and a ChatGPT integration. However, these features will be available only on the latest Apple devices, with a gradual rollout expected later this year.
Competitors like Samsung and Google’s Alphabet have already released AI functionality alongside their new Galaxy and Pixel smartphones. Apple is under increasing pressure to match these innovations as it faces growing competition in the high-end smartphone market.
While Apple has reported better-than-expected sales in its third quarter, overall iPhone sales have slowed due to fewer significant upgrades and fierce competition from Android-based smartphones offering advanced features at lower prices. In China, sales dropped by 6.5%, largely due to increased pressure from local brands, particularly Huawei.
Vietnam’s Prime Minister Pham Minh Chinh has launched a strategic initiative to enhance the country’s capabilities in semiconductors, AI, and cloud computing. The initiative, outlined in Dispatch No. 83/CD-TTg, aims to develop a skilled workforce through targeted education and training in these critical technology sectors. The initiative calls for collaboration among various government bodies, including ministers and local authorities, to implement measures to drive these industries’ advancements.
The Ministry of Education and Training (MoET) leads this effort by guiding public and private universities to establish specialised units focused on semiconductor technology, AI, and cloud computing. The project includes creating new schools and departments dedicated to advancing research and training. The MoET will also modernise curricula by integrating cutting-edge technologies and AI into teaching methodologies while fostering partnerships with businesses and research institutions.
In addition, the Ministry of Planning and Investment will develop a strategic project for nurturing human resources in the semiconductor industry, with a long-term vision extending to 2050. The plan will also encompass AI and cloud computing, emphasising the establishment of innovation ecosystems. Meanwhile, the Ministry of Science and Technology will prioritise scientific research in these fields and create mechanisms to attract international talent.
Local government leaders are encouraged to attract investments to build semiconductors, AI, and cloud computing ecosystems. Deputy Prime Minister Le Thanh Long will oversee the implementation of this initiative, which aims to position Vietnam as a leader in these technology sectors, leveraging education and innovation to drive economic growth in the digital age.
Chinese AI developers are finding innovative ways to circumvent US export controls on advanced chips by leveraging foreign computing resources. The strategy allows them to access high-performance chips, such as Nvidia’s A100 and H100, which are restricted under US regulations. As the demand for AI capabilities grows, these developers employ various methods to remain competitive in the tech landscape.
One key approach is using cloud computing services from major American providers like Amazon Web Services (AWS) and Microsoft Azure. This method is legally permissible under current US regulations, which focus on directly exporting physical technologies rather than cloud-based computing power.
Additionally, Chinese AI developers are collaborating with brokers and using identity-mapping techniques from the cryptocurrency industry. These brokers help facilitate access to AI servers in countries like Australia, allowing companies to deploy advanced chips without importing them directly into China. For example, entrepreneur Derek Aw has arranged for over 300 servers equipped with Nvidia’s H100 chips to be housed in Australia and utilised by firms in Beijing.
Despite the challenges posed by export controls, many Chinese companies have stockpiled chips and invested in domestic semiconductor manufacturing. While local suppliers often need to catch up to US technologies, this dual approach helps maintain momentum in AI research and development. Legal experts note that as long as technology is not used for military purposes, cloud services to access advanced computing power remain unregulated, highlighting the complexities of enforcing technology trade restrictions.
The ongoing situation illustrates the US government’s challenges in enforcing its trade policies. As Chinese companies continue to adapt and innovate, the US may need to tighten regulations to address emerging loopholes.
