US

Data center growth at power plants faces regulatory hurdles

The Federal Energy Regulatory Commission (FERC) is examining the rapid growth of energy-intensive data centers being built next to US power plants. Known as co-location, this trend is driven by the tech sector’s need for large amounts of power for AI and other data-heavy operations. Co-locating data centers near power plants offers companies quicker access to electricity, bypassing the longer process of connecting to the broader grid.

However, regulators and industry experts are concerned about the impact on costs and reliability for other electricity consumers. If data centers use power plants that typically supply the public grid, there are questions about how such facilities will handle power disruptions and whether they will lean on the grid as backup. This could mean higher electricity bills for consumers who fund grid infrastructure, a point raised by FERC Commissioner Mark Christie.

The regulatory scrutiny comes as companies like Amazon and Google look to establish co-located data centers to meet growing energy needs. A recent arrangement in Pennsylvania, where Amazon bought a data center linked to a nuclear plant, has stirred debate among electric utilities over infrastructure costs and reliability. FERC’s review could lead to new guidelines clarifying financial responsibilities and operational rules for these partnerships.

Commerce department fines GlobalFoundries over chip exports to China

The US Commerce Department has fined GlobalFoundries $500,000 for exporting semiconductor chips to SJ Semiconductor, an affiliate of China’s blacklisted chipmaker SMIC, without proper authorisation. GlobalFoundries, based in New York and one of the world’s largest contract chipmakers, reportedly made 74 shipments valued at $17.1M to the Chinese firm without obtaining the required export license. SJ Semiconductor and its parent, SMIC, were placed on the US trade restriction list in 2020 due to SMIC’s alleged links to China’s military.

GlobalFoundries disclosed the unintentional violation, attributing the exports to a data-entry error that occurred before the Chinese firms were listed. The company emphasised its commitment to strict compliance practices, a sentiment echoed by Assistant Secretary for Export Enforcement Matthew Axelrod, who urged American companies to be vigilant in transactions with Chinese entities.

This fine comes amid increased scrutiny of US export policy and enforcement, particularly as Washington works to prevent American technology from enhancing China’s military capabilities. GlobalFoundries is also in line to receive $1.5B in government support to expand semiconductor manufacturing in the United States, part of the Biden administration’s broader push to boost domestic chip production.

New Abu Dhabi fund converts US treasuries to blockchain tokens

Abu Dhabi firms Realize and Neovision Wealth Management have announced the launch of the Realize T-BILLS Fund, a new investment vehicle focused on U.S. Treasury ETFs. The fund will purchase units from popular ETFs, such as BlackRock’s iShares and State Street’s SPDR, and tokenise them, converting them into blockchain-based digital tokens that can be traded and transferred. Dominik Schiener, co-founder of Realize, noted that the fund aims to grow to $200 million in assets.

The T-BILLS Fund will issue a digital token, $RBILL, representing fund units, and operate on both the IOTA and Ethereum blockchain networks. Realize will handle the tokenisation process, while Neovision Wealth Management will oversee fund operations. This fund is also the first of its kind to be based out of the Abu Dhabi Global Market, a move that highlights the growing trend of combining traditional assets with blockchain technology.

Tokenised US Treasuries have become a growing niche in the digital asset market, valued at $2.4B, and attracting both blockchain-native firms and established finance giants. With US Treasury bills seen as a secure and liquid asset class, these new tokens offer investors an easier way to trade and hold government-backed securities in a blockchain format, making them accessible to a wider audience in the digital economy.

US crypto industry anticipates regulatory shift after election

The cryptocurrency industry is bracing for a shift in US regulatory policy, with leaders expecting a more favorable approach from Washington, regardless of the next administration. After years of regulatory tension under President Joe Biden’s administration, crypto companies are optimistic that the incoming administration will adopt a more supportive stance toward digital assets. Notable crypto firms, including Bitwise and Canary Capital, are actively developing new products, and other companies are preparing fresh pushes for pro-crypto legislation in Congress.

Both presidential candidates, Donald Trump and Vice President Kamala Harris, have expressed openness toward the digital asset industry. Trump has even pledged to become a “crypto president,” while Harris, though less specific, has shown support for digital innovation and investor protection, which many industry leaders interpret as a potential shift in regulatory tone. This perspective is reinforced by Harris supporter Mark Cuban, who recently emphasised her promise to protect crypto users.

The US Securities and Exchange Commission (SEC), led by Chair Gary Gensler, has taken a strict stance on crypto assets, citing risks illustrated by cases like FTX’s collapse. Gensler’s tenure has involved multiple enforcement actions against major crypto exchanges, creating a challenges for digital assets. However, crypto executives believe that a new administration could bring changes, including potentially overturning regulatory guidance that has deterred financial institutions from crypto involvement.

The US federal agency investigates how Meta uses consumer financial data for targeted advertising

The Consumer Financial Protection Bureau (CFPB) has informed Meta of its intention to consider ‘legal action’ concerning allegations that the tech giant improperly acquired consumer financial data from third parties for its targeted advertising operations. This federal investigation was revealed in a recent filing that Meta submitted to the Securities and Exchange Commission (SEC).

The filing indicates that the CFPB notified Meta on 18 September that it evaluated whether the company’s actions violate the Consumer Financial Protection Act, designed to protect consumers from unfair and deceptive financial practices. The status of the investigation remains uncertain, with the filing noting that the CFPB could initiate a lawsuit soon, seeking financial penalties and equitable relief.

Meta, the parent company of Instagram and Facebook, is facing increased scrutiny from regulators and state attorneys general regarding various concerns, including its privacy practices.

In the SEC filing, Meta disclosed that the CFPB has formally notified the company about an investigation focusing on the alleged receipt and use for advertising of financial information from third parties through specific advertising tools. The inquiry targets explicitly advertising related to ‘financial products and services,’ although it remains to be seen whether the scrutiny pertains to Facebook, Instagram, or both platforms.

While a Meta spokesperson refrained from commenting on the matter, the company stated in the filing that it disputes the allegations and believes any enforcement action would be unjustified. The CFPB also opted not to provide additional comments.

Amid this scrutiny, Meta recently reported $41 billion in revenue for the third quarter, a 19 percent increase from the previous year. A significant portion of this revenue is generated from its targeted advertising business, which has faced criticism from the Federal Trade Commission (FTC) and European regulators for allegedly mishandling user data and violating privacy rights.

In 2019, Meta settled privacy allegations related to the Cambridge Analytica scandal by paying the FTC $5 billion after it was revealed that the company had improperly shared Facebook user data with the firm for voter profiling. Last year, the European Union fined Meta $1.3 billion for improperly transferring user data from Europe to the United States.

Court debates FCC’s power over net neutrality

A US federal appeals court has expressed doubts over the Federal Communications Commission’s authority to reinstate net neutrality rules. A three-judge panel of the 6th Circuit Court in Cincinnati heard arguments from the telecom industry, which claims the FCC exceeded its powers by reintroducing the rules. Initially implemented under the Obama administration, net neutrality was later repealed by the Trump administration before being revived under President Joe Biden.

Net neutrality regulations prevent internet service providers (ISPs) from blocking or slowing access to websites and prohibit paid prioritisation arrangements that favour some content over others. The FCC’s April decision to classify broadband as a telecommunications service has drawn significant opposition from major telecom firms, while receiving backing from tech giants like Amazon, Apple, and Google. However, the 6th Circuit has temporarily blocked the rules’ enforcement while the legal challenge proceeds.

Central to the case is whether Congress granted the FCC sufficient authority to make sweeping regulations on internet services. The telecom industry argues that the ‘major questions’ doctrine, a judicial principle requiring clear congressional authorisation for significant regulatory action, should apply. Industry lawyer Jeff Wall contends that Congress should decide the matter, not an agency acting independently.

The judges also debated the FCC’s evolving stance on broadband regulation over recent administrations. Judge Griffin questioned whether frequent policy shifts weakened the FCC’s case, while Judge Kethledge urged a focus on statutory text rather than broad doctrines. A ruling on the matter could significantly impact the regulatory landscape for ISPs and the future of net neutrality.

AI robocall threats loom over US election

Election officials across the US are intensifying efforts to counter deepfake robocalls as the 2024 election nears, worried about AI-driven disinformation campaigns. Unlike visible manipulated images or videos, fake audio calls targeting voters are harder to detect, leaving officials bracing for the impact on public trust. A recent incident in New Hampshire, where a robocall falsely claimed to be from President Biden urging people to skip voting, highlighted how disruptive these AI-generated calls can be.

Election leaders have developed low-tech methods to counter this high-tech threat, such as unique code words to verify identities in sensitive phone interactions. In states like Colorado, officials have been trained to respond quickly to suspicious calls, including hanging up and verifying information directly with their offices. Colorado’s Secretary of State Jena Griswold and other leaders are urging election directors to rely on trusted contacts to avoid being misled by convincing deepfake messages.

To counter misinformation, some states are also enlisting local leaders and community figures to help debunk false claims. Officials in states like Minnesota and Illinois have collaborated with media outlets and launched public awareness campaigns, warning voters about potential disinformation in the lead-up to the election. These campaigns, broadcasted widely on television and radio, aim to preempt misinformation by providing accurate, timely information.

While no confirmed cases show that robocalls have swayed voters, election officials regard the potential impact as severe. Local efforts to counteract these messages, such as public statements and community outreach, serve as a reminder of the new and evolving risks AI technology brings to election security.

US Senate pushes for stronger security of internet backbone

The US Federal Communications Commission (FCC) is set to review its oversight of global undersea communications cables, marking the first major revision of its rules since 2001. Undersea cables, which carry over 95% of the world’s internet traffic, are seen as increasingly vulnerable to cyber threats and foreign interference, particularly from China and Russia. On 21 November, FCC Chair Jessica Rosenworcel plans to address how the commission’s regulations could adapt to the evolving economic and security challenges facing these crucial cables.

A bipartisan group of senators recently urged the Biden administration to prioritise securing the United States’ undersea infrastructure, highlighting concerns about possible sabotage and the growing involvement of Chinese firms in cable laying and maintenance. Washington has already restricted China from participating in key subsea cable contracts, citing espionage risks, and prevented direct connections between US territory and mainland China or Hong Kong.

In recent years, the US has blocked or canceled multiple subsea cable projects linked to China, emphasising the need to protect internet traffic from potential rerouting and mismanagement. The upcoming FCC review underscores the agency’s commitment to ensuring the resilience of global data flows, with potential policy shifts expected to impact both domestic and international internet security.

MediaTek CEO addresses geopolitical challenges in the chip industry

Amid growing geopolitical tensions, Rick Tsai, CEO of Taiwan’s top chip designer MediaTek, emphasised the company’s commitment to regulatory compliance in a recent earnings call. Tsai acknowledged the complex challenges posed by international relations but reassured stakeholders that MediaTek’s strong compliance program is designed to uphold ethical standards across diverse markets. He added that the company “will not do, shall we say, strange things” and is focused on protecting shareholder interests.

Taiwan, home to leading semiconductor firms like MediaTek and TSMC, plays a pivotal role in the global tech landscape, supplying major players in AI, including Nvidia. However, the tech sector faces rising pressures as Taiwan grapples with increasing military threats from China, which claims the island as its territory. Additionally, the upcoming US presidential election adds uncertainty; candidate Donald Trump has criticised Taiwan’s impact on the US chip market, proposing tariffs on imports and suggesting greater restrictions on international tech firms.

MediaTek, a TSMC customer, also contends with existing US limits on partnerships with Chinese tech companies such as Huawei. Recently, TSMC suspended shipments to a client after finding a chip intended for a different product had reached Huawei. Despite these challenges, MediaTek’s stock has risen by 27% this year, reflecting investor confidence in Taiwan’s enduring role within the tech industry.

China-linked hackers allegedly target US telecom, involving high-profile figures

China-linked hackers have reportedly breached telecommunications systems, targeting members of former President Donald Trump’s family and officials from the Biden administration, according to the New York Times. Individuals affected include Trump’s son Eric Trump, son-in-law Jared Kushner, and Senate Majority Leader Chuck Schumer.

Concerns surrounding this hacking group, known as “Salt Typhoon,” have intensified following media reports of their activities. Earlier this month, the Wall Street Journal reported that the group accessed broadband providers’ networks and gathered data from systems used by the federal government for court-authorised wiretapping.

No response was received from the State Department or Trump family representatives regarding Reuters’ requests for comments. The White House, National Security Agency, and Cybersecurity and Infrastructure Security Agency also did not reply immediately. Similarly, the Chinese Embassy in Washington did not respond, though Beijing usually denies involvement in cyberespionage activities.