Connect with us

Tech

Chill pervades China’s tech firms even as crackdown eases

Published

on

Chill pervades China's tech firms even as crackdown eases

A grinding crackdown that wiped billions of dollars of value off Chinese technology companies is easing, but the once-freewheeling industry is bracing for much slower growth ahead.

Analysts say China’s easing of restrictions on companies like e-commerce giant Alibaba and online games company Tencent and talk of support for the private sector reflects Beijing’s decision to refocus on growth after the economy was ravaged by the pandemic and restrictions imposed to fight COVID-19.

But controls on internet content remain firmly in place. And the crackdown has left a “chilling” effect on the industry, potentially slowing innovation, while U.S. restrictions against China’s computer chips industry are hindering progress in developing leading-edge technology in 5G and artificial intelligence.

In January, a top official at China’s central bank said in an interview with state-owned media that the crackdown on technology companies was “basically” over, adding that companies would be encouraged to lead economic growth and create more jobs. That came just weeks after China dropped stringent entry restrictions and testing and quarantine requirements that were part of its “zero-COVID” strategy meant to quash the virus.

Advertisement

“With the end of the zero-COVID policy, China is returning to prioritizing economic growth, and the technology sector is obviously a critical driver of growth in China and a celebrated source of innovation,” said Gregory Allen, a senior fellow in the Strategic Technologies Program at the U.S. research organization Center for Strategic and International Studies.

Companies like Alibaba and Tencent control everyday apps and services that are used ubiquitously by large swathes of the population – including online payments, messaging, food delivery and e-commerce.

Such companies flourished for two decades with scant regulation before Beijing launched a barrage of anti-monopoly, data security and other restrictions in late 2020, seeking to rein in e-commerce, social media and other companies it viewed as too big and independent.

Signalling an easing, Didi Global — which was ordered to stop new-user registrations in 2021 following accusations that it violated data security rules — recently was allowed to resume taking on new users.

Regulators said e-commerce giant Alibaba’s finance affiliate Ant Group can go ahead with plans to raise $1.5 billion for its consumer finance unit, an important step forward after the government called off a planned IPO two years ago and ordered the firm to restructure.

Advertisement

After slamming online games as “spiritual opium” and enforcing strict controls on screen time for minors, regulators last April began approving new games following an eight-month hiatus, with the first foreign titles greenlighted in December.

Stocks of technology companies, including Alibaba, and Tencent, as well as others such as food Delivery Company Meituan and search engine and artificial intelligence firm Baidu, have seen their stock prices nearly double since they hit rock bottom in late October. The market valuations of these companies, however, are still far from their peak in 2019.

The crackdown’s chilling effects for investors and entrepreneurs will linger, Allen said since the authorities have shown they’re willing and able to forego growth to impose controls on the industry at any time.

Over the past two years, several founders of technology companies have stepped down as CEO or chairman of their respective firms – including Alibaba’s Jack Ma, JD.com’s Richard Liu, Bytedance’s Zhang Yiming and Pinduoduo’s Colin Huang.

In January, Alibaba’s financial affiliate Ant Group said that Ma — once China’s richest man — would give up control of the firm following a restructuring and that no single shareholder would have control. Ma has rarely been seen in public since regulators pulled the plug on Ant Group’s market debut in Hong Kong and Shanghai following his criticism of China’s financial sector in 2020. He since reportedly has moved to Tokyo.

Advertisement

“If you were a technology entrepreneur in China five years ago, very likely someone like Jack Ma was your hero, your idol, and was precisely what you aspired to achieve and the sort of person you aspire to become,” said Allen. “And to see a man like that kind of torn down, I think sends a really strong message.”

He and other analysts say the crackdown could potentially stifle innovation, as investors and entrepreneurs become more cautious about operating in China.

“The crackdown was deep and cut far to the bone, probably more than the government expected it to,” said Shaun Rein, founder and managing director of China Market Research Group in Shanghai. “Because what’s happened is over the last two years, venture capitalists and entrepreneurs have been scared to deploy capital and start new companies.”

The value of venture capital deals in China plunged 44% to $62.1 billion in the first 10 months of 2022 compared to the same period in 2021, according to research firm Preqin.

Some entrepreneurs and venture capitalists are taking a wait-and-see attitude, “worried in the long term that if they invest in a hot sector that the government that goes against China’s agenda or doesn’t fit with the government’s agenda for the private sector that they might get wiped out,” Rein said.

Advertisement

Well-established internet companies are still at an advantage over other tech industries in China that face added uncertainty due to friction between Washington and Beijing over advanced technology and trade as the U.S. seeks to block exports of high-end semiconductors and chip-making equipment and limit Western dealings with companies like Huawei Technologies, the world’s largest maker of telecommunications networking gear.

The Biden administration has stopped approving the renewal of licenses to some U.S. companies that have been selling essential components to the Chinese tech giant. That’s according to two people familiar with the matter who was not authorized to comment publicly on the sensitive matter and spoke on the condition of anonymity.

Washington gradually has tightened controls over U.S. exports to Huawei but had allowed some companies like Intel and Qualcomm to sell it processors used in devices like laptops and lower-end smartphones. The U.S. has justified such sanctions on national security grounds. Huawei denies the accusations.

Under such pressure, China has accelerated efforts to become more self-sufficient in semiconductors and other advanced technologies, providing billions in subsidies and investments for the industry. But it remains years behind in some of the most advanced semiconductor manufacturing processes and a U.S. prohibition against supporting the development and production of integrated circuits at some chip factories in China has deprived Chinese chip firms of the foreign talent that has long contributed to its domestic industry.

A U.S. ban on selling crucial semiconductor manufacturing equipment to China is another obstacle.

Advertisement

“It’s one thing to go into areas like software and cloud services, in which Chinese companies are already quite strong,” said Allen of CSIS.

“It’s a very different thing to take Chinese companies that are a decade or two behind in state-of-the-art semiconductor manufacturing equipment and tell them to grow up immediately by replicating some of the most advanced technologies that the world has ever produced.”

Tech

Europe sets benchmark for rest of the world with landmark AI laws

Europe sets benchmark for rest of the world with landmark AI laws

Published

on

By

Europe sets benchmark for rest of the world with landmark AI laws

 Europe’s landmark rules on artificial intelligence will enter into force next month after EU countries endorsed on Tuesday a political deal reached in December, setting a potential global benchmark for a technology used in business and everyday life.

The European Union’s AI Act is more comprehensive than the United States’ light-touch voluntary compliance approach while China’s approach aims to maintain social stability and state control. 

The vote by EU countries came two months after EU lawmakers backed the AI legislation drafted by the European Commission in 2021 after making a number of key changes.

Concerns about AI contributing to misinformation, fake news and copyrighted material have intensified globally in recent months amid the growing popularity of generative AI systems such as Microsoft-backed OpenAI’s ChatGPT, and Google’s chatbot Gemini.

Advertisement

“This landmark law, the first of its kind in the world, addresses a global technological challenge that also creates opportunities for our societies and economies,” Belgian digitisation minister Mathieu Michel said in a statement.

“With the AI Act, Europe emphasizes the importance of trust, transparency and accountability when dealing with new technologies while at the same time ensuring this fast-changing technology can flourish and boost European innovation,” he said.

The AI Act imposes strict transparency obligations on high-risk AI systems while such requirements for general-purpose AI models will be lighter.

It restricts governments’ use of real-time biometric surveillance in public spaces to cases of certain crimes, prevention of terrorist attacks and searches for people suspected of the most serious crimes.

The new legislation will have an impact beyond the 27-country bloc, said Patrick van Eecke at law firm Cooley.

Advertisement

“The Act will have global reach. Companies outside the EU who use EU customer data in their AI platforms will need to comply. Other countries and regions are likely to use the AI Act as a blueprint, just as they did with the GDPR,” he said, referring to EU privacy rules.

While the new legislation will apply in 2026, bans on the use of artificial intelligence in social scoring, predictive policing and untargeted scraping of facial images from the internet or CCTV footage will kick in in six months once the new regulation enters into force.

Obligations for general purpose AI models will apply after 12 months and rules for AI systems embedded into regulated products in 36 months.

Fines for violations range from 7.5 million euros ($8.2 million) or 1.5% of turnover to 35 million euros or 7% of global turnover depending on the type of violations.

Advertisement
Continue Reading

Tech

Microsoft promotes new tools for making AI software

Microsoft promotes new tools for making AI software

Published

on

By

Microsoft talked up new tools on Tuesday aimed at encouraging programmers to build AI-focused technology into Windows software as it races against Alphabet, Amazon and Apple to dominate the emerging field. At a developer conference in Seattle, Chief Executive Satya Nadella promoted new application programming interfaces, or APIs, that make it easier for developers to tap in to AI technology offered by Microsoft. The company said 1.8 million developers are now using Github Copilot, Microsoft's generative AI tool that helps computer programmers be more productive. "What stands out to me as I look back at this past year, is how you all as developers have taken all of these capabilities and are applying them, quite frankly, to change the world around us," Nadella said during his keynote address at the Build conference. Microsoft detailed new features for its Copilot AI software that helps business productivity applications such as email and its Teams video and text chat product. At its developer conference last week, Alphabet's Google unveiled a similar batch of AI tools to help people with office applications. Microsoft announced details of its new developer tools last week. Shares of Microsoft were up 1.2% at $430.67 on Tuesday afternoon after hitting a record high of $432.97 earlier in the session. Microsoft's stock has now gained 14% in 2024. Also aimed at developers, Microsoft said last Thursday it would offer its cloud computing customers a platform of AMD AI chips that will compete with Nvidia whose graphics processing units have become the gold standard for AI computing. The platform of AMD chips created by Microsoft uses networking technology made by Nvidia called Infiniband to string the processors together. OpenAI's new GPT4-o model, which runs on Microsoft's infrastructure, is 12 times cheaper for developers to use in their software than earlier versions of the technology, Microsoft's chief technology officer Kevin Scott said. Microsoft is the largest investor in OpenAI and uses some of the AI heavyweight's technology in its own products. On Monday, Microsoft debuted a line of Copilot+ personal computers with AI features such as software that lets users search through their past actions in nearly any software. The new computers feature Arm-based, processors made by Qualcomm.

 Microsoft talked up new tools on Tuesday aimed at encouraging programmers to build AI-focused technology into Windows software as it races against Alphabet, Amazon and Apple to dominate the emerging field.

At a developer conference in Seattle, Chief Executive Satya Nadella promoted new application programming interfaces, or APIs, that make it easier for developers to tap in to AI technology offered by Microsoft. 

The company said 1.8 million developers are now using Github Copilot, Microsoft’s generative AI tool that helps computer programmers be more productive.

“What stands out to me as I look back at this past year, is how you all as developers have taken all of these capabilities and are applying them, quite frankly, to change the world around us,” Nadella said during his keynote address at the Build conference.

Advertisement

Microsoft detailed new features for its Copilot AI software that helps business productivity applications such as email and its Teams video and text chat product.

At its developer conference last week, Alphabet’s Google unveiled a similar batch of AI tools to help people with office applications. Microsoft announced details of its new developer tools last week.

Shares of Microsoft were up 1.2% at $430.67 on Tuesday afternoon after hitting a record high of $432.97 earlier in the session. Microsoft’s stock has now gained 14% in 2024.

Also aimed at developers, Microsoft said last Thursday it would offer its cloud computing customers a platform of AMD AI chips that will compete with Nvidia whose graphics processing units have become the gold standard for AI computing.

The platform of AMD chips created by Microsoft uses networking technology made by Nvidia called Infiniband to string the processors together.

Advertisement

OpenAI’s new GPT4-o model, which runs on Microsoft’s infrastructure, is 12 times cheaper for developers to use in their software than earlier versions of the technology, Microsoft’s chief technology officer Kevin Scott said.

Microsoft is the largest investor in OpenAI and uses some of the AI heavyweight’s technology in its own products.

On Monday, Microsoft debuted a line of Copilot+ personal computers with AI features such as software that lets users search through their past actions in nearly any software. The new computers feature Arm-based, processors made by Qualcomm.

Advertisement
Continue Reading

Tech

Explainer: What are AI PCs? How do they differ from traditional PC?

Explainer: What are AI PCs? How do they differ from traditional PC?

Published

on

By

Explainer: What are AI PCs? How do they differ from traditional PC?

The PC just got an AI makeover, raising hopes that the buzzy technology would help revive an industry that has been on a steady decline over the last few years.

Here’s everything we know about AI PCs:

WHAT DOES “AI PC” MEAN?

Manufacturers say these devices process data more swiftly than traditional PCs and can handle a greater volume of AI tasks directly on the device, including chatbots.

Advertisement

That means they do not have to rely on cloud data centers that currently power most AI applications, including OpenAI’s ChatGPT.

Some models can even support the training of AI models, a task that requires significant computing power and is typically performed on servers.

PC makers are hoping such features will help draw in buyers as more people lean on generative AI for everything from sending emails to planning vacations.

Research firm Canalys estimates AI PC shipments will surpass 100 million in 2025, constituting 40% of all PCs shipped. 

WHAT TECHNOLOGY IS USED IN AI PCS?

Advertisement

AI PCs come with specialized processors called neural processing units (NPUs) that handle the majority of on-device AI workloads.

These NPUs work in tandem with central processing units and graphics processors to manage complex tasks, deliver enhanced processing speeds and power applications such as AI assistants.

WHAT ARE SOME OF THE AI PCS AVAILABLE ON THE MARKET?

Brands including Dell, HP, Samsung Electronics, Lenovo, Asus and Acer have unveiled new computers under Microsoft’s Copilot+ branding, which was announced on Monday.

Among these, Microsoft’s refreshed Surface Laptop and Surface Pro tablet are some of the most affordable Copilot+ devices, starting at $999.

Advertisement

Lenovo ThinkPad T14s Gen 6, expected to start at $1,699, stands as the priciest option based on the pricing disclosed by some manufacturers.

ARE THERE ANY CONCERNS?

A new flagship feature from Microsoft called “recall” has raised some privacy concerns. The Windows maker’s Copilot+ PCs “recall” capability within the AI assistant allows it to search and retrieve information on any past activity on the computer.

The recall feature tracks every action performed on the laptop from voice chats to web browsing, and creates a detailed history stored on the device. The user can then search this repository and go through past actions.

Some social media users have expressed fears that the feature could enable spying, while billionaire technologist Elon Musk compared it to “Black Mirror,” the Netflix series that explores the harmful effects of advanced technology.

Advertisement

The main concern with the feature is whether the data is stored on the device or centrally, International Data Corp analyst Ryan O’Leary said, adding that there would be “significant privacy risk” if Microsoft stored the data.

On the other hand, some experts say that managing more AI-related tasks directly on the device offers greater privacy.

Research from Forrester showed AI PCs could help avoid the use of personal data to train AI systems, as well as copyright and patent violations, making them preferable for enterprise use.

Advertisement
Continue Reading

Trending

Copyright © GLOBAL TIMES PAKISTAN