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Cybersecurity investments in Israel more than double in 2024

Israeli cybersecurity companies raised $4 billion in 2024, more than doubling the previous year’s total, according to venture capital firm YL Ventures. The sector, a key driver of Israel’s economy, saw strong investment growth despite geopolitical challenges. Cloud security and AI played a significant role in attracting funding, with early-stage startups securing $400 million across 50 seed rounds.

Investment in later-stage cybersecurity firms also surged, with growth-stage funding rounds raising $2.9 billion—an increase of 300% from 2023. The expansion reflects growing global confidence in Israel’s cybersecurity industry, which is increasingly recognised as a leader in the field. YL Ventures highlighted the role of Israeli military intelligence units in fostering a culture of innovation and entrepreneurship that strengthens the sector.

The ongoing war following Hamas’s October 2023 attack has added pressure on tech founders, many of whom have been called into military service. Industry leaders have had to navigate operational challenges while maintaining business continuity. Looking ahead to 2025, venture capital firms anticipate continued investment growth, particularly in early and mid-stage funding rounds, as cybersecurity remains a global priority.

Microsoft announces $3 billion AI and cloud expansion in India

Microsoft will invest $3 billion to expand AI and cloud-computing infrastructure in India, CEO Satya Nadella announced during a conference in Bengaluru. The investment, the company’s largest expansion in the country, aims to strengthen its Azure cloud services and AI capabilities. Nadella also revealed plans to train 10 million people in AI by 2030, building on an earlier commitment to provide AI skilling opportunities for two million individuals by 2025, with a focus on smaller cities and rural areas.

India’s growing importance as a tech hub has attracted interest from major US technology firms, with recent visits from Nvidia’s Jensen Huang and Meta’s chief AI scientist Yann LeCun. Nadella met Prime Minister Narendra Modi to discuss technology, innovation, and Microsoft‘s ambitious plans for expansion in the country. India’s vast population and affordable internet access make it a key market for AI-driven growth.

Microsoft is making significant global investments in AI and cloud infrastructure, committing around $80 billion in fiscal 2025. More than half of that will be directed towards US data centers to support AI model training and cloud-based applications. With India positioned as a strategic market, Microsoft’s latest investment underscores the country’s growing role in the global AI ecosystem.

Apple faces backlash over AI-generated news errors

Apple is facing mounting criticism over its AI-generated news summaries, which have produced inaccurate and misleading alerts on its latest iPhones. Media organisations, including the BBC, have raised concerns that the feature, designed to summarise breaking news notifications, has fabricated details that contradict original reports. The National Union of Journalists and Reporters Without Borders have called for the product’s removal, warning it risks spreading misinformation at a time when trust in news is already fragile.

High-profile errors have fuelled demands for urgent action. In December, an Apple AI summary falsely claimed that a murder suspect had taken his own life, while another inaccurately announced Luke Littler as the winner of the PDC World Darts Championship before the event had even begun. Apple has pledged to update the feature to make it clearer that summaries are AI-generated, but critics argue this does not address the root problem.

Journalism watchdogs and industry experts have warned that AI-driven news aggregation remains unreliable. The BBC stressed that the errors could undermine public trust, while former Guardian editor Alan Rusbridger described Apple’s technology as “out of control”. Similar concerns have been raised over generative AI tools from other tech firms, with Google’s AI-powered search summaries also facing scrutiny for producing incorrect responses. Apple insists the feature remains optional and is still in beta testing, with further improvements expected in an upcoming software update.

Wall Street rallies as AI optimism boosts chip stocks and tariff concerns ease

US stock markets climbed to one-week highs on Monday, driven by gains in semiconductor stocks and optimism over AI investments. Reports suggesting that Donald Trump’s incoming administration may adopt a more selective approach to tariffs, rather than broad measures, also helped boost investor confidence. The Dow Jones Industrial Average rose 0.41%, the S&P 500 gained 1.02%, and the Nasdaq Composite surged 1.53%, with automakers and tech stocks leading the rally.

Semiconductor shares saw strong gains after Microsoft announced an $80 billion investment in AI-enabled data centres, while Foxconn posted better-than-expected quarterly revenue. Nvidia climbed 3.5%, AMD gained 2.8%, and Micron Technology surged 9.6%, pushing the Philadelphia Semiconductor Index to a two-month high. Meanwhile, the Russell 2000 index, which tracks small-cap companies, added 0.7% as investors weighed economic data and Federal Reserve policy signals.

Investors are closely watching monetary policy developments, with the Federal Reserve expected to provide further guidance on interest rate cuts later in the week. While Trump’s proposals could support corporate earnings and economic growth, concerns remain over potential inflationary pressures. US markets will be closed on January 9 for a national day of mourning in honour of former President Jimmy Carter.

AI progress may be in decline, warns Google DeepMind’s Demis Hassabis

Demis Hassabis, CEO of Google DeepMind, has warned that the rapid progress in AI development may be slowing as companies exhaust the available digital data needed to train large language models. The industry has long relied on feeding vast amounts of online text into AI systems to improve performance, but diminishing returns are now setting in. Some experts, including OpenAI’s Ilya Sutskever, believe the industry has reached “peak data,” meaning future improvements will require entirely new approaches.

Researchers are now exploring alternative methods, such as synthetic data, where AI models generate and learn from their own outputs. While this technique has shown promise in fields like mathematics and programming, it struggles with more complex areas like philosophy and the arts, where defining correctness is difficult. OpenAI has already applied this method in its latest system, OpenAI o1, but challenges remain, particularly in preventing AI from making errors or generating misleading information.

Another possibility to overcome ‘data limitation’ in AI development is to shift focus from quantity to quality of data through better data labelling and contextual enrichment, as done by Diplo’s cognitive proximity approach (see below).

Diplo's bottom-up AI approach based on small but well-curated data.
DiploAI approach to data enrichment

Tech leaders remain divided on whether AI advancements will continue at the same pace. Nvidia’s CEO Jensen Huang remains optimistic, citing strong demand for AI chips and ongoing innovation. However, some of the company’s biggest customers are preparing for a possible plateau in AI development. Despite the uncertainty, investment in AI infrastructure remains high, with firms continuing to push the boundaries of what AI can achieve.

OpenAI confident in AGI but faces safety concerns

OpenAI CEO Sam Altman has stated that the company believes it knows how to build AGI and is now turning its focus towards developing superintelligence. He argues that advanced AI could significantly boost scientific discovery and economic growth. While AGI is often defined as AI that outperforms humans in most tasks, OpenAI and Microsoft also use a financial benchmark—$100 billion in profits—as a key measure.

Despite Altman’s optimism, today’s AI systems still struggle with accuracy and reliability. OpenAI has previously acknowledged that transitioning to a world with superintelligence is far from certain, and controlling such systems remains an unsolved challenge. The company has, however, recently disbanded key safety teams, leading to concerns about its priorities as it seeks further investment.

Altman remains confident that AI will soon make a significant impact on businesses, suggesting that AI agents could enter the workforce and reshape industries in the near future. He insists that OpenAI continues to balance innovation with safety, despite growing scepticism from former staff and industry critics.

Foxconn achieves record fourth-quarter revenue, driven by strong AI server demand

Taiwan’s Foxconn, the world’s leading electronics contract manufacturer, reported record-breaking revenue for the fourth quarter, driven by surging demand for AI servers. With a 15.2% rise in revenue to T$2.13 trillion ($64.72 billion), the company outperformed market expectations, reflecting the robust growth of its cloud and networking products division. Major clients like Nvidia have fueled the boom, while its consumer electronics segment, including iPhones, remained stable year-on-year.

Foxconn’s December revenue alone soared by 42.3% compared to the previous year, reaching T$654.8 billion, marking the second-highest figure for that month in the company’s history. Despite the fourth quarter’s impressive performance, Foxconn acknowledged the seasonal slowdown typical of the first quarter. However, the company projects significant year-on-year growth for early 2025, aligning with average levels from the past five years.

The company, formally known as Hon Hai Precision Industry, has seen its shares skyrocket by 76% in 2024, far outpacing Taiwan’s broader market index. Investors remain optimistic as Foxconn continues to dominate in the AI and electronics sectors, with its entire fourth-quarter earnings set to be unveiled on 14 March.

Anthropic settles copyright infringement lawsuit with major music publishers over AI training practices

Anthropic, the company behind the Claude AI model, has agreed to resolve aspects of a copyright infringement lawsuit filed by major music publishers. The lawsuit, initiated in October 2023 by Universal Music Group, ABKCO, Concord Music Group, and others, alleged that Anthropic’s AI system unlawfully distributed lyrics from over 500 copyrighted songs, including tracks by Beyoncé and Maroon 5.

The publishers argued that Anthropic improperly used data from licensed platforms to train its models without permission. Under the settlement approved by US District Judge Eumi Lee, Anthropic will maintain and extend its guardrails designed to prevent copyright violations in existing and future AI models.

The company also agreed to collaborate with music publishers to address potential infringements and resolve disputes through court intervention if necessary. Anthropic reiterated its commitment to fair use principles and emphasised that its AI is not intended for copyright infringement.

Despite the agreement, the legal battle isn’t over. The music publishers have requested a preliminary injunction to prevent Anthropic from using their lyrics in future model training. A court decision on this request is expected in the coming months, keeping the spotlight on how copyright law applies to generative AI.

Apheris revolutionises data privacy and AI in life sciences with federated computing

Privacy and regulatory concerns have long hindered AI’s reliance on data, especially in sensitive fields like healthcare and life sciences. Apheris, a German startup co-founded by Robin Röhm, aims to solve this problem using federated computing—a decentralised approach that trains AI models without moving sensitive data.

The company’s approach is gaining traction among prominent clients like Roche and hospitals, and its technology is already being used in collaborative drug discovery efforts by pharmaceutical giants such as Johnson & Johnson and Sanofi. Apheris recently secured $8.25 million in Series A funding led by OTB Ventures and eCAPITAL, bringing its total funding to $20.8 million.

That follows a pivotal shift in 2023 to focus on the needs of data owners in the pharmaceutical and life sciences sectors. The pivot has paid off, quadrupling the company’s revenue since launching its redefined product, the Apheris Compute Gateway, which securely bridges local data and AI models.

With its new funding, Apheris plans to expand its team and refine its AI-driven solutions for complex challenges like protein prediction. By prioritising data security and privacy, the company aims to unlock previously inaccessible data for innovation, addressing a core barrier to AI’s transformative potential in life sciences.

Debate over AI regulation intensifies amidst innovation and safety concerns

In recent years, debates over AI have intensified, oscillating between catastrophic warnings and optimistic visions. Technologists, once at the forefront of calling for caution, have been overshadowed by the tech industry’s emphasis on generative AI’s lucrative potential.

Dismissed as ‘AI doomers,’ critics warn of existential threats—from mass harm to societal destabilisation—while Silicon Valley champions the transformative benefits of AI, urging fewer regulations to accelerate innovation. 2023 marked a pivotal year for AI awareness, with luminaries like Elon Musk and over 1,000 experts calling for a development pause, citing profound risks.

US President Biden’s AI executive order aimed to safeguard Americans, and regulatory discussions gained mainstream traction. However, 2024 saw this momentum falter as investment in AI skyrocketed and safety-focused voices dwindled.

High-profile debates, like California’s SB 1047—a bill addressing catastrophic AI risks—ended in a veto, highlighting resistance from powerful tech entities. Critics argued that such legislation stifled innovation, while proponents lamented the lack of long-term safety measures.

Amid this tug-of-war, optimistic narratives, like Marc Andreessen’s essay ‘Why AI Will Save the World,’ gained prominence. Advocating rapid, unregulated AI development, Andreessen and others argued this approach would bolster competitiveness and prevent monopolisation.

Yet, detractors questioned the ethics of prioritising profit over societal concerns, especially as cases like AI-driven child safety failures underscored emerging risks.

Why does it matter?

Looking ahead to 2025, the AI safety movement faces an uphill battle. Policymakers hint at revisiting stalled regulations, signalling hope for progress. However, with influential players opposing stringent oversight, the path to balanced AI governance remains uncertain. As society grapples with AI’s rapid evolution, the challenge lies in addressing its vast potential and inherent risks.