The United States has introduced draft rules to regulate investments in China, particularly in AI and other advanced technology sectors that could pose national security threats. The US Treasury Department released these proposed rules following President Joe Biden’s executive order in August, which targets semiconductors, quantum computing, and AI investments. The draft rules require US individuals and companies to identify and report transactions that may be restricted or banned, aiming to prevent US expertise from aiding China’s technological advancements.
The Treasury’s proposed rules include various exceptions, such as transactions in the US national interest or involving publicly traded securities. The regulations would specifically ban transactions involving AI for certain end uses and systems using significant computing power but require notifications for other AI-related investments. These rules focus primarily on China, Macau, and Hong Kong, though they might be expanded later.
Former Treasury official Laura Black highlighted that these rules would necessitate increased due diligence by US investors when dealing with Chinese companies in the specified sectors. The regulations also align with existing export controls on advanced semiconductors to China, aiming to hinder China’s military modernisation efforts. Violations of these rules could result in criminal and civil penalties, including unwinding investments.d
Why does it matter?
Treasury officials have engaged with international partners to discuss these investment restrictions, with the European Commission and the United Kingdom considering similar measures to address outbound investment risks. Public comments on the proposed rules are open until 4 August, with final regulations expected by the end of the year.
ByteDance, the Chinese owner of TikTok, is collaborating with US chip designer Broadcom to develop an advanced AI processor. This 5-nanometer chip, compliant with US export restrictions, will be manufactured by Taiwan’s TSMC. The initiative is aimed at securing a stable supply of high-end chips amid ongoing US-China tensions.
Unannounced to the public, the partnership represents one of the few recent collaborations involving advanced technology between US and Chinese firms since Washington’s 2022 export controls on cutting-edge semiconductors. ByteDance’s tie-up with Broadcom, an existing partner, is expected to reduce costs and ensure a steady supply of sophisticated chips, which are essential for ByteDance’s AI initiatives.
The new chip is still in the design phase, with manufacturing not expected to start this year. ByteDance’s push in generative AI requires advanced chips, which have become more challenging to obtain due to US sanctions. The company has been stockpiling Nvidia chips and has purchased AI accelerators from Huawei, emphasising the critical need for powerful algorithms across its platforms, including TikTok and Douyin.
ByteDance is actively hiring for semiconductor-related roles, including ASIC chip designers, and has been recruiting top talent from other Chinese AI chip firms. The company’s strategic efforts highlight its commitment to overcoming challenges posed by restricted access to advanced technology.
Oracle has announced it will be investing $1 billion over the next decade in AI and cloud computing in Spain to cater to the growing demand for its services in the country. This investment will be used to establish a new cloud region enabling customers to transition workloads from their data centres to Oracle Cloud Infrastructure.
Additionally, it will assist in compliance with regulations such as the EU’s Digital Operational Resilience Act (DORA) and the European Outsourcing Guidelines. This initiative marks Oracle’s third cloud region in Madrid in collaboration with Telefonica España as project partner. Albert Triola, the head of Oracle Spain, emphasised the company’s dedication to supporting organisations in Spain across various sectors and sizes, aiming to accelerate the adoption of cloud technologies to enhance business performance.
José Luis Escrivá, Spain’s minister for digital transformation and public administration noted that this investment will empower Spanish enterprises and public sector entities to innovate with AI and accelerate their digital transformation process.
Why does it matter?
Oracle’s optimistic forecast for fiscal 2025 revenue growth surpassed analysts’ expectations thereby reflecting the growing demand for its AI-driven cloud services.
Furthermore, Oracle announced collaborations with OpenAI and Google Cloud with the objective of expanding its cloud infrastructure offerings to customers thus showing its commitment to enhancing its cloud services portfolio.
Huawei Technologies announced significant advancements in operating systems and AI, achieving in 10 years what took the US and Europe 30 years. Richard Yu, chairman of Huawei’s Consumer Business Group, highlighted these achievements at a developer conference in Dongguan.
Huawei’s Harmony operating system is now on over 900 million devices, which marks a substantial progress since its launch in 2019 when US restrictions cut Huawei off from Google’s Android support. Yu noted that Huawei’s Ascend AI infrastructure is now the second most popular, following Nvidia.
Why does it matter?
The rise of the Internet of Things has provided Huawei an opportunity to surpass long-time Western dominance in software. Additionally, Huawei’s smartphone business has rebounded with the Mate 60, featuring a new China-made chip. Sales of Harmony-equipped smartphones increased by 68% in the first five months of the year. In Q1 2024, HarmonyOS became the second best-selling mobile OS in China, overtaking Apple’s iOS with a 17% market share.
The annual State of Broadband report serves as a comprehensive global assessment of broadband access, affordability, and usage trends. This year’s edition, titled ‘Leveraging AI for Universal Connectivity,’ is being released in two parts. The first part, unveiled on June 20, 2024, outlines how AI applications are transforming sectors like e-government, education, healthcare, finance, and environmental management. It also examines the implications of AI for bridging or exacerbating the digital divide.
Authored by over 50 high-level Commissioners, including UN leaders, industry CEOs, and government officials, the report highlights AI’s potential to drive development while cautioning against its risks. The second part of the report, yet to be released, will provide updated data and deeper insights from the Broadband Commissioners, offering a more detailed analysis of AI’s evolving role in the digital realm.
As the Broadband Commission tracks progress towards its 2025 Advocacy Targets and prepares for future global summits, the report underscores the critical role of policymakers in maximizing the benefits of AI while ensuring equitable access to digital opportunities. It aims to inform strategic decisions that align with sustainable development goals, emphasising the need for proactive measures to harness AI responsibly and inclusively.
The EU is facing significant controversy over a proposed law that would require AI scanning of users’ photos and videos on messaging apps to detect child sexual abuse material (CSAM). Critics, including major tech companies like WhatsApp and Signal, argue that this law threatens privacy and encryption, undermining fundamental rights. They also warn that the AI detection systems could produce numerous false positives, overwhelming law enforcement.
A recent meeting among the EU member states’ representatives failed to reach a consensus on the proposal, leading to further delays. The Belgian presidency had hoped to finalise a negotiating mandate, but disagreements among member states prevented progress. The ongoing division means that discussions on the proposal will likely continue under Hungary’s upcoming EU Council presidency.
Opponents of the proposal, including Signal President Meredith Whittaker and Proton founder Andy Yen, emphasise the dangers of mass surveillance and the need for more targeted approaches to child protection. Despite the current setback, there’s concern that efforts to push the law forward will persist, necessitating continued vigilance from privacy advocates.
Amazon plans to overhaul its Alexa service with a new project known internally as ‘Banyan,’ aiming to integrate generative AI and introduce two service tiers. The initiative, called ‘Remarkable Alexa,’ could include a monthly fee of around $5 for the premium version, which would offer advanced capabilities like composing emails and placing orders from a single prompt. That would mark Alexa’s first major update since its 2014 launch.
The project is driven by Amazon’s need to revitalise Alexa, which has struggled to turn a profit and compete with AI advancements from companies like Google, Microsoft, and Apple. CEO Andy Jassy has prioritised this update, setting an internal deadline for August. The new Alexa aims to provide more intelligent, personalised assistance, building on generative AI already integrated into over half a billion devices worldwide.
Despite the ambitious plans, some Amazon employees view the project as a ‘desperate attempt’ to save Alexa, citing challenges such as software inaccuracies and poor morale within the team. While Amazon hopes the AI-powered Alexa will drive more significant sales and enhance home automation, the project’s success depends on customer willingness to pay for features currently offered for free and the effectiveness of the new technology.
Google LLC and the University of Tokyo are teaming up to leverage generative AI to tackle local challenges in Japan, such as the nation’s shrinking workforce. The initiative, featuring prominent AI researcher Professor Yutaka Matsuo, will be piloted in Osaka and Hiroshima prefectures, with plans to expand successful models nationwide by 2027.
In Osaka, the project aims to address employment mismatches by using AI to suggest job opportunities and career paths that job seekers might not have considered. That approach differs from traditional job placement agencies and will draw from extensive online data to offer more tailored job suggestions.
The specific focus for Hiroshima has yet to be determined. However, Hiroshima Governor Hidehiko Yuzaki expressed a vision for AI to provide detailed responses to relocating inquiries, signalling AI’s potential to shape the prefecture’s future.
Beyond these initial projects, Google suggests that generative AI could enhance medical care on remote islands and automate agriculture, forestry, and fisheries tasks. Professor Matsuo emphasised that effectively utilising generative AI presents a significant opportunity for Japan.
A new UNESCO report highlights the growing risk of Holocaust distortion through AI-generated content as young people increasingly rely on Generative AI for information. The report, published with the World Jewish Congress, warns that AI can amplify biases and spread misinformation, as many AI systems are trained on internet data that includes harmful content. Such content led to fabricated testimonies and distorted historical records, such as deepfake images and false quotes.
The report notes that Generative AI models can ‘hallucinate’ or invent events due to insufficient or incorrect data. Examples include ChatGPT fabricating Holocaust events that never happened and Google’s Bard generating fake quotes. These kinds of ‘hallucinations’ not only distort historical facts but also undermine trust in experts and simplify complex histories by focusing on a narrow range of sources.
UNESCO calls for urgent action to implement its Recommendation on the Ethics of Artificial Intelligence, emphasising fairness, transparency, and human rights. It urges governments to adopt these guidelines and tech companies to integrate them into AI development. UNESCO also stresses the importance of working with Holocaust survivors and historians to ensure accurate representation and educating young people to develop critical thinking and digital literacy skills.
Olga Loiek, a 21-year-old University of Pennsylvania student from Ukraine, experienced a disturbing twist after launching her YouTube channel last November. Her image was hijacked and manipulated through AI to create digital alter egos on Chinese social media platforms. These AI-generated avatars, such as ‘Natasha,’ posed as Russian women fluent in Chinese, promoting pro-Russian sentiments and selling products like Russian candies. These fake accounts amassed hundreds of thousands of followers in China, far surpassing Loiek’s own online presence.
Loiek’s experience highlights a broader trend of AI-generated personas on Chinese social media, presenting themselves as supportive of Russia and fluent in Chinese while selling various products. Experts reveal that these avatars often use clips of real women without their knowledge, aiming to appeal to single Chinese men. Some posts include disclaimers about AI involvement, but the followers and sales figures remain significant.
Why does it matter?
These events underscore the ethical and legal concerns surrounding AI’s misuse. As generative AI systems like ChatGPT become more widespread, issues related to misinformation, fake news, and copyright violations are growing.
In response, governments are starting to regulate the industry. China proposed guidelines to standardise AI by 2026, while the EU’s new AI Act imposes strict transparency requirements. However, experts like Xin Dai from Peking University warn that regulations struggle to keep pace with rapid AI advancements, raising concerns about the unchecked proliferation of AI-generated content worldwide.
