US Archives | Digital Watch Observatory

AMD faces a $1.5 billion loss from US chip curbs

AMD expects to lose around US$1.5 billion in revenue this year because of new US export restrictions on advanced AI chips, which now require a licence to be sold to China.

The US government, under both the Biden and Trump administrations, has tightened curbs on chip exports in an effort to slow China’s progress in developing powerful AI systems, citing national security risks.

China makes up roughly a quarter of AMD’s total revenue, so these measures could reduce AMD’s expected annual earnings by almost 5 per cent.

Despite this setback, AMD posted stronger-than-expected second-quarter revenue guidance, forecasting around US$7.4 billion, likely driven by customers rushing to stockpile chips before the new rules fully take effect.

CEO Lisa Su said the impact from the curbs would be mostly felt during the second and third quarters, yet she still expects revenue from the company’s AI data centre chips to grow by strong double digits in 2024.

AMD’s finance chief Jean Hu clarified the projected US$1.5 billion revenue loss is tied directly to the latest export controls introduced in April.

Although AMD is under pressure, demand for its high-performance chips remains solid, with tech giants like Microsoft and Meta continuing to invest heavily in AI infrastructure.

The company’s data centre division saw sales jump 57 per cent to US$3.7 billion, helping push total revenue up 36 per cent to US$7.44 billion—both figures exceeding analyst expectations. Adjusted earnings stood at 96 cents per share, slightly above estimates.

Rival chipmaker Nvidia has also warned it now requires a licence to export to China and faces an even larger US$5.5 billion hit.

Meanwhile, other tech firms didn’t fare as well—Marvell Technology and Super Micro disappointed investors, with shares falling after they issued weaker outlooks, adding further signs of turbulence in the chip sector.

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IBM boosts US manufacturing with $150 billion pledge

IBM has announced a major $150 billion investment in the US over the next five years, with a significant portion earmarked for expanding production of quantum computers and mainframes.

The move follows similar commitments from tech giants like Nvidia and Apple, as industry leaders respond to the Trump administration’s push for increased domestic manufacturing.

Of the total sum, more than $30 billion will be dedicated to scaling up IBM’s US-based manufacturing of quantum systems and mainframes, vital for processing vast data and critical tasks.

IBM, which operates one of the world’s largest quantum computing fleets, stated the investment reflects both technological ambition and a strategic gesture towards current US trade policies.

While the quantum computing field has seen exciting advancements, including new chip generations from rivals like Google, opinions remain divided on when practical applications will emerge.

IBM’s latest investment signals long-term confidence in the technology, even as the company navigates recent challenges, including the cancellation of 15 government contracts during federal cost-cutting efforts.

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Cyberattacks against US soar in early 2025

Cyberattacks targeting the US surged dramatically in early 2025, according to a new report from cybersecurity firm Trellix. Between October 2024 and March 2025, advanced persistent threats (APTs) increased by 136% compared to the previous quarter.

China’s cyber operations showed significant sophistication, with groups such as APT40 and Mustang Panda leading the charge. APT41, another Chinese-affiliated group, intensified its activities by 113%, focusing on exploiting both new and known vulnerabilities rather than relying on phishing tactics.

Analysts noted that nearly half of these threats originated from China, while over a third were linked to Russia. Meanwhile, Russia’s APT29, also known as Midnight Blizzard, primarily targeted transportation, shipping, and telecommunications sectors.

The report highlighted that government institutions remained the primary focus of hostile cyber actors. However, the telecommunications industry experienced a sharp 92% increase in APT attacks, while the technology sector faced a staggering 119% rise.

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Nvidia moves to comply with US export rules

Nvidia is planning to redesign its AI chips to comply with tightened US export restrictions, aiming to retain its foothold in China instead of pulling back.

According to a report by The Information, the chipmaker has already informed major Chinese clients, such as Alibaba, ByteDance, and Tencent, about its revised strategy. The discussions reportedly occurred during CEO Jensen Huang’s visit to Beijing in mid-April.

The visit came just after Washington expanded its curbs on high-performance AI chip exports to China, specifically targeting Nvidia’s H20 chip.

Originally developed to meet earlier US rules, the H20 has now also been deemed too powerful for export under the new regulations. The US government says the move is aimed at preventing China’s military from accessing cutting-edge AI.

Nvidia previously warned that the latest restrictions could cost it up to $5.5 billion in lost revenue. Instead of backing away, the company is now preparing redesigned chips to stay within legal bounds while continuing to serve Chinese tech firms.

Customers have been told that prototype chips could be ready by June.

In addition, Nvidia is developing a tailored version of its next-generation AI chip, Blackwell, specifically for China. These efforts underline Nvidia’s attempt to balance regulatory compliance with its commercial interests in one of the world’s largest AI markets.

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Musk says AI should replace federal jobs

Elon Musk has suggested that AI should replace many federal government workers, criticising the US administration as bloated and inefficient.

Speaking privately at the Milken Institute Global Conference in Beverly Hills, Musk argued AI could perform government tasks faster and with greater accuracy, ultimately saving taxpayers money.

His remarks coincided with the winding down of his controversial volunteer role leading the Department of Government Efficiency (DOGE), an initiative born under Donald Trump’s presidency.

Musk spent over 100 days embedded in the White House, even setting up a small office in the West Wing. Despite joking about its minimal view and sleeping in the Lincoln Bedroom, he claimed his work had major impacts — including rooting out fraud and slashing federal budgets.

Musk said DOGE was responsible for cutting $160 billion in government spending, although no formal evidence has been released to support that figure.

The programme has sparked intense backlash. Thousands of federal employees were reportedly dismissed or resigned during the DOGE audits, prompting lawsuits and allegations of illegal firings.

Critics say the sweeping cuts have left the US less prepared for emergencies and reduced its global influence, allowing China to expand its reach. Protesters have targeted Tesla in response, leading Trump to defend Musk and condemn the attacks.

Although scaling back his involvement in Washington, Musk isn’t leaving entirely. He will now spend only one or two days a week on government affairs, returning more of his focus to Tesla amid flagging sales and investor pressure.

Despite the chaos, DOGE has inspired new political groups in Congress, blurring the line between satire and policy. Musk himself finds it all surreal, asking, ‘Are we in a simulation here?’

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US lawmakers push for app store age checks

A new bill introduced by US lawmakers could force app stores like Apple’s App Store and Google Play to verify the age of all users, in a move aimed at increasing online safety for minors.

Known as the App Store Accountability Act, the legislation would require age categorisation and parental consent before minors can download apps or make in-app purchases. If passed, the law would apply to platforms with at least five million users and would come into effect one year after approval.

The bill proposes dividing users into age brackets — from ‘young child’ to ‘adult’ — and holding app stores accountable for enforcing access restrictions.

Lawmakers behind the bill, Republican Senator Mike Lee and Representative John James, argue that Big Tech companies must take responsibility for limiting children’s exposure to harmful content. They believe app stores are the right gatekeepers for verifying age and protecting minors online.

Privacy advocates and tech companies have voiced concern about the bill’s implications. Legal experts warn that verifying users’ ages may require sensitive personal data, such as ID documents or facial recognition scans, raising the risk of data misuse.

Apple said such verification would apply to all users, not just children, and criticised the idea as counterproductive to privacy.

The proposal has widened a rift between app store operators and social media platforms. While Meta, X, and Snap back centralised age checks at the app store level, Apple and Google accuse them of shifting the burden of responsibility.

Both tech giants emphasise the importance of shared responsibility and continue to engage with lawmakers on crafting practical and privacy-conscious solutions.

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AI chip restrictions and tariffs weigh on Samsung’s global strategy

Samsung has warned that rising US tariffs could dampen global demand for its electronics, including smartphones and semiconductors.

Despite reporting record quarterly revenue of £41.6 billion and a modest profit rise driven by strong phone and chip sales, the company expressed concerns about the uncertain trade environment.

Executives cited possible risks to sales in the second half of 2025 due to escalating tariff tensions.

While some clients have accelerated orders to avoid incoming levies, Samsung said this may create a sales lull later in the year.

Delayed tariffs affecting countries like South Korea and Vietnam, where Samsung manufactures key components, are expected to take effect in July. US restrictions on AI chip sales to China are also weighing on the company’s outlook.

Samsung refrained from providing financial guidance for the next quarter, citing unpredictable global trade dynamics.

As tariff uncertainty continues, major tech companies like Apple are also reassessing supply chains, with many shifting chip production out of China in anticipation of further disruptions.

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US antitrust trial sees Google defend Chrome and data control

Google has warned that proposed remedies in the ongoing US antitrust case, including a possible sell-off of Chrome, could expose users to data breaches and national security threats. Arguing that Google’s infrastructure is key to protecting Chrome against rising cyberattacks.

Google cited past breaches to emphasise the risks of moving such tools to buyers lacking similar security standards. The Justice Department, however, maintains that breaking up Google’s dominance would encourage fairer competition.

Proposals include banning exclusive deals, sharing user data to support rivals, and enabling Apple or others to shift default search settings. An economic expert testified these remedies could reduce Google’s market share from 88% to 51%, though full impact would take years to materialise.

Judge Amit Mehta raised concerns that dismantling Google’s monopoly might simply replace it with another, such as Microsoft. Google CEO Sundar Pichai is set to testify next, as the case continues through 9 May in the US.

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DW Weekly #210 – Trump’s tech stability, UN funding cuts, and global AI shifts

25 April – 2 May 2025

Dear readers,

In the week behind us, we focused on Trump’s first 100 days of digital governance. Dr Jovan Kurbalija, in his blog ‘Tech continuity in President Trump’s first 100 days’, deems that Trump’s approach to technology remained remarkably stable despite political turbulence in trade and environmental policy.

Connected to Trump’s foreign policy is the UN situation. Namely, the UN faces renewed financial uncertainty as Donald Trump’s administration reviews all US support for international organisations.

The US president has instead proposed substantial reductions or even the elimination of federal income taxes once the full impact of import tariffs is realised. In a 27 April post on Truth Social, Trump revealed that the plan would primarily benefit individuals earning less than $200,000 annually. Trump has also signed executive orders easing his controversial 25% tariffs on automobiles and parts to relieve pressure on carmakers struggling with rising costs.

The European Commission faces growing criticism after a joint investigation revealed that Big Tech companies had disproportionate influence over drafting the EU’s Code of Practice on General Purpose AI.

Alphabet, Google’s parent company, may soon be forced to split into separate entities, with its Chrome browser emerging as a desirable target.

The UAE has announced the launch of its AI Academy, aiming to strengthen the country’s position in AI innovation both regionally and globally.

The United Kingdom and the United States are set to strengthen their collaboration in advancing cryptocurrency adoption.

Microsoft has unveiled a set of five digital commitments aimed at supporting Europe’s technological and economic future.

Intel is witnessing strong demand for its older Raptor Lake and Alder Lake processors, as buyers shy away from newer AI-enhanced chips like Meteor and Lunar Lake.

For the main updates and reflections, consult the Radar and Reading Corner below.

DW Team

RADAR

Highlights from the week of 25 – 2 May 2025

Trump’s first 100 days show steady tech policy

As digital tensions rise globally, President Trump’s early tech agenda signals a strategic gamble that bets on tradition while the rest of the world pushes for transformation.

eu flags in front of european commission 1

Big Tech accused of undue influence over EU AI Code

The US government opposes the new AI Code, calling it anti-innovation. Critics say Big Tech had too much access.

UN prepares for possible shifts in US financial contributions

As the UN braces for possible funding upheavals, the future of global cooperation could hinge on decisions unfolding quietly behind closed doors in Washington.

Trump eases auto tariffs amid industry concerns

Ford, GM, and Stellantis welcome Trump’s tariff rollback as a step forward, though supply chain challenges remain.

US department of justice google chrome antitrust lawsuit

Tech giants circle as Chrome faces possible break-up

With a 65% market share, Chrome could reshape the tech landscape if sold. OpenAI, Yahoo and others are circling.

OpenAI’s CEO Altman confirms rollback of GPT-4o after criticism

Following backlash, OpenAI restores GPT-4o’s previous version and vows to avoid disingenuous praise in future.

UK and US join forces to promote responsible cryptocurrency adoption

International cooperation is essential for success, with both countries aiming to set groundbreaking regulatory standards for the crypto industry.

hand holds european union flag in an open window background blue sky silhouette of the city

Microsoft outlines new commitments to Europe’s digital future

New data centre growth will double Microsoft’s European capacity between 2023 and 2027.

generate classroom with person raising hand

AI educational race between China and USA brings some hope

As global powers invest in shaping the next generation of AI innovators, classrooms emerge as unexpected arenas where technology, diplomacy, and geopolitics converge.

Google’s Gemini AI sees rapid surge in adoption

ChatGPT and Meta AI still lead in total user base.

south korean flag in mans hand on the world map background

South Korea’s ruling party targets crypto deregulation in its new agenda

The PPP aims to overhaul digital asset laws, allowing non-profits to trade crypto and institutionalising corporate participation by Q2 of this year.

View all updates

READING CORNER

BLOG From geopolitics to classrooms featured image

From geopolitics to classrooms: The hopeful side of the US-China AI race

The competition between the US and China in AI education is emerging as a vital battleground amidst geopolitical tensions. Both nations prioritise AI education to prepare future generations for a transformative technological landscape.

Tech continuity in President Trump’s first 100 days

During President Trump’s first 100 days, technology policy exhibited continuity rather than disruption, focusing on AI and digital regulation characterised by incremental adjustments.

Rewriting the AI playbook: How Meta plans to win through openness

What happens when one of the world’s biggest tech giants bets its future not on control, but on giving its most powerful AI tools away for free?

Weapons of Emotional Destruction

What if the internet’s true legacy isn’t connection, but emotional warfare? In 2015, Aldo Matteucci asked whether we’ve unleashed a fire that even Shiva could not contain.

UPCOMING EVENTS

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7 May 2025

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Trump administration eyes overhaul of Biden-era AI chip export rules

The Trump administration is reviewing a Biden-era rule that restricts global access to US-made advanced AI chips, with discussions underway to eliminate the current tiered system that governs chip exports, according to sources familiar with the matter.

The existing rule, known as the Framework for Artificial Intelligence Diffusion, was introduced by the US Department of Commerce in January and is set to take effect on 15 May.

It divides the world into three groups: trusted allies (like the EU and Taiwan) with unlimited access, Tier 2 countries with chip quotas, and restricted countries such as China, Russia, Iran and North Korea.

Officials are considering replacing this structure with a global licensing regime based on government-to-government agreements—aligning with Donald Trump’s broader trade strategy of negotiating bilateral deals and using US-made chips as leverage.

Other possible changes include tightening export thresholds: under current rules, orders under the equivalent of 1,700 Nvidia H100 chips only require notification, not a licence. The new proposal could reduce that threshold to around 500 chips.

Supporters of the change argue it would increase US bargaining power and simplify enforcement. Critics, however, warn that scrapping the tier system may complicate compliance and drive countries toward Chinese chip alternatives.

Tech firms such as Oracle and Nvidia, along with several US lawmakers, have criticised the current framework, saying it risks harming American competitiveness and pushing international buyers toward cheaper, unregulated Chinese substitutes.

The Commerce Department declined to comment.

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