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Japan govt backs major firms in next-gen chip project

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A new Japanese firm will develop and mass produce next-generation semiconductors
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The Japanese government will pour half a billion dollars into a new project to develop and make next-generation microchips, chief cabinet secretary Hirokazu Matsuno said Friday.

Eight major companies including Sony, SoftBank, Toyota and telecoms giant NTT have joined forces for the venture, Japanese media reports said.

The new firm, named Rapidus, will develop and mass produce next-generation semiconductors by 2027, according to major media outlets including national broadcaster NHK and the Mainichi Shimbun.

The pandemic has fuelled a global shortage of memory chips, with governments scrambling to secure supplies as carmakers and tech companies have been forced to make production cuts.

Each company has invested around one billion yen ($7 million), with MUFG Bank investing 300 million yen, according to the industry ministry. 

The investor companies are expected to officially announce the project later on Friday. 

The ministry will grant 70 billion yen to Rapidus to lead a research and development project for next-generation semiconductors, Matsuno said without elaborating.

“Semiconductors are a key technology that supports digitalisation and decarbonisation,” Matsuno said at a regular briefing.

“We hope these steps will help improve the competitiveness of our country’s semiconductor industry.”

The chip shortage has prompted calls for the government and businesses to secure semiconductor supplies for Japan’s economic security, as geopolitics become increasingly volatile — especially concerning Taiwan, which has a huge chip-producing capacity.

The United States recently introduced new measures to limit China’s access to high-end semiconductors with military uses, a move that has wiped billions from chip companies’ valuations worldwide.

The German economy ministry also has recommended that the sale of a chip factory to a Chinese-owned firm should be blocked as it poses a security threat, government sources said Tuesday.

Last year, Taiwanese chip giant TSMC and Sony said they would tie up on a new $7 billion plant in Japan.

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Apple hit with 1.8-bn-euro EU fine for music streaming restrictions

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Spotify has been one of the most vocal critics of Apple's changes to comply with the EU's new law, the Digital Markets Act
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The EU on Monday hit Apple with a more than 1.8-billion-euro fine ($1.9 billion) for violating the bloc’s laws by preventing European users from accessing information about alternative, cheaper music streaming services.

The iPhone maker immediately vowed to appeal the first ever antitrust fine slapped on Apple by Brussels, the culmination of a case triggered by a complaint by Swedish streaming giant Spotify.

The European Commission found that “Apple applied restrictions on app developers preventing them from informing iOS users about alternative and cheaper music subscription services” available outside the App Store.

“This is illegal under EU antitrust rules,” the EU’s powerful competition regulator said.

The 1.84-billion-euro penalty is the third-biggest antitrust fine ever imposed by the commission.

The commission’s competition enforcer, Margrethe Vestager said a fine any smaller would have been like a “parking ticket” to a giant the size of Apple, and that the 1.84-billion-euro penalty was intended to act as “deterrence”.

“We have ordered Apple to remove the necessary provisions and to refrain from similar practices in the future,” Vestager added.

Spotify’s complaint in 2019 triggered a broad commission investigation into the iPhone maker in 2021, narrowed last year to focus on Apple’s actions to prevent apps from giving users information about rival music subscription options.

Vestager told reporters Apple’s actions had “impacted millions of European consumers”.

“Some consumers may have paid more because they were unaware that they could pay less if they subscribed outside of the app,” she said.

– Sour Apple –

Apple slammed the commission’s decision and said it would appeal.

“The decision was reached despite the commission’s failure to uncover any credible evidence of consumer harm, and ignores the realities of a market that is thriving, competitive, and growing fast,” Apple said in a statement.

“While we respect the European Commission, the facts simply don’t support this decision,” the company added.

Spotify welcomed the fine, saying it “sends a powerful message — no company, not even a monopoly like Apple, can wield power abusively to control how other companies interact with their customers.”

“Apple’s rules muzzled Spotify and other music streaming services from sharing with our users directly in our app about various benefits,” it said.

The BEUC umbrella consumer rights group said the fine “in combination with effective enforcement of the Digital Markets Act — should help consumers benefit from more competitive and better digital services.”

– ‘Petty cash’? –

Despite the scale of the penalty, critics pointed out that it pales in comparison to Apple’s profits — which stood at $33.92 billion for the last three months of 2023.

“For Apple, this fine is still petty cash,” said German EU lawmaker, Markus Ferber.

By way of comparison, Brussels has hit Google with penalties of around eight billion euros in the past few years — although the US-based firm is challenging the fines in EU courts.

Nonetheless, the EU expects the fine will lead Apple to stop limiting access to rival streaming services — all the more since it will also be obliged to do so under a new law known as the Digital Markets Act (DMA) that it must adhere to by March 7.

Google owner Alphabet, Amazon, TikTok parent ByteDance, Meta and Microsoft must also comply with the DMA, which gives Brussels power to fine them up to 10 percent of global revenue for violations, and 20 percent for repeat offenders.

– Bitter battles –

Apple rejects Spotify’s claims against it, and points to the streaming giant’s own dominance in the online music market.

Spotify has more than 600 million monthly users, a third of them paying subscribers, according to recent company figures.

It is not the first time Apple and Spotify have knocked heads.

Spotify has been one of the most vocal critics of Apple changes to its App Store made as part of compliance with the EU’s DMA law.

As part of those changes, the company will let rivals build app stores for iPhones and allow payment services beyond Apple Pay on the devices.

On Friday, 34 digital organisations including Spotify and video games maker Epic Games wrote to the commission to express their concern.

They said Apple’s new terms, “if left unchanged, make a mockery of the DMA and the considerable efforts by the European Commission and EU institutions to make digital markets competitive.”

Vestager vowed to “carefully look into the details to assess the changes and to take into account also the market feedback”.

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AI bot ‘Jennifer’ calling California voters for Congress hopeful

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Peter Dixon, a Democratic congressional candidate from California's Silicon Valley, is using interactive, AI-generated phone calls to voters as part of his campaign
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Jennifer spent her weekend calling California voters, urging them to cast their ballot in Tuesday’s primary election for Democrat Peter Dixon.

But unlike her human counterparts, Jennifer is a creation of artificial intelligence (AI), allowing her to make thousands of calls without taking a break or losing her cool.

“Hello there. My name is Jennifer and I’m an artificial intelligence volunteer,” she says, immediately declaring her identity in calls to Silicon Valley voters in the US congressional race.

In her slightly robotic-sounding voice — intentionally designed to make it clear she is not human — she introduces the candidate, asks questions and responds to those she gets from voters, all in a surprisingly natural tone.

“I’m wondering why a person hasn’t called me today,” Dixon’s operations manager Austin Madden asks her during a demonstration call for AFP.

“My apologies if I missed that point earlier,” Jennifer replies without missing a beat. “The reason an AI like me is calling instead of a real person is to help the campaign reach more people efficiently, allowing human volunteers to focus on areas where personal interaction is crucial.”

Dixon only recently began using Jennifer, the product of start-up Civox.

At first “we were skeptical,” said Dixon, a Marine veteran and  cybersecurity entrepreneur. “And so we tested it.”

– ‘People were shocked’ –

His staff expected results would be “a mixed bag.”

Instead, “People were shocked at how good the capability was,” Dixon said from his company’s headquarters in Palo Alto, sitting before a computer screen showing clips from his campaign.

In one of the videos, images alternate between reality (Dixon holding his young daughter) and sequences in which the background (the Afghan war) and his outfit are artificially generated — and presented as such.

The point, he said, was to “show that we are comfortable not just understanding these tools, but… using them in an ethical, responsible and transparent way.”

Stunning progress in AI in the past year and the appearance of generative AI programs like ChatGPT — which produce text, images and sounds on demand and in everyday language — have sparked tremendous enthusiasm but also grave concerns about potential risks, including lost jobs, intellectual property theft and fraud.

“I’m terrified about all of that,” Dixon admitted.

But he would rather see the US “continue to lead in how we use it, and figure out how to write the rules of the road ourselves, as opposed to having another country like China” doing so.

Ilya Mouzykantskii co-founded Civox partly to sharpen the focus on “the intersection of artificial intelligence and politics.”

“We are already in a future,” he said, where politicians are “using artificial intelligence tools to develop policy and to make decisions” — without necessarily announcing that they are doing so.

“Maybe that is the benevolent technocracy that we are hurtling towards,” Mouzykantskii said. “But we shouldn’t end up there accidentally, and we shouldn’t end up there without consent.”

– ‘The best technology’ –

In the future, said Adam Reis, Civox’s other co-founder, “it’s not going to be the best-funded campaigns necessarily that have an unfair advantage. It’s going to be the ones with the best technology.”

Reis said he had long been working to create AI “characters” with whom he could have believable dialogues. The arrival of generative AI made that much easier.

But, he added, “We’ve discovered that the mechanics of conversations and of speech are actually much, much more difficult than the content of what is said.”

To be truly convincing, an AI character needs to speak fluidly, understand and react quickly, and  know both when to interrupt and when to allow an interruption — all difficult challenges.

“Some people try to trick the system,” said Patrick McNally, Civox’s field director. “But the bot is very good at bringing it back to policy… sometimes to a point a human wouldn’t even be able to.”

In January, an automated program that called voters using an AI-generated voice of President Joe Biden heightened concerns about massive disinformation enabled by the novel technology in an election year.

US authorities subsequently banned the use of such “cloned” voices, to combat political or commercial fraud.

But that does not affect Jennifer or her counterparts using Civox technology. For they don’t pretend to be something — or someone — they aren’t.

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WTO ministers struggle to forge fish, farm, digital deals

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The WTO meeting in the capital of the United Arab Emirates had opened on Monday with major disagreements between the body's 164 member states on key issues
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World trade ministers were locked in disagreement on fisheries subsidies, agriculture and digital customs duties as a major WTO conference entered its last scheduled day on Thursday.

With no signs of a breakthrough at the World Trade Organization’s 13th ministerial conference (MC13) in Abu Dhabi, officials pushed back to midnight its formal closing session, initially scheduled for 8:00 pm (1600 GMT).

The meeting in the capital of the United Arab Emirates opened on Monday with disagreements between the body’s 164 member states on key issues that dominated the agenda of the talks.

They include fisheries subsidies, agriculture and a moratorium on customs duties for digital transactions.

“Everybody is working with a very positive outlook… to try to see what’s the maximum we can get done,” Indian trade minister Piyush Goyal told journalists.

“I am very confident… we will come out with significant outcomes, particularly when it refers to areas of very deep concern to large numbers” of developing countries, he added.

– Fisheries deal ‘difficult’ –

Delegates sought trade-offs as part of a potential package deal that could allow for greater agreement, as was the case during the 2022 ministerial meeting in Geneva.

A new deal on fisheries was initially viewed as the most likely outcome of the MC13 talks.

But Goyal on Thursday said: “It is very difficult to get a resolution.”

After a 2022 deal which banned subsidies contributing to illegal, undeclared and unregulated fishing, the WTO hopes to conclude a second package focusing on subsidies which result in overcapacity and overfishing.

A draft text that was meant to be circulated on Wednesday is still facing delays, said a source close to the negotiations who spoke on the condition of anonymity.

The overall negotiations “are a bit like a rollercoaster,” the source said.

– E-commerce regulations –

Another sticking point is over the extension of an e-commerce moratorium, which EU trade commissioner Valdis Dombrovskis on Thursday called “vital” to economic growth.

Since 1998, WTO members have agreed not to impose customs duties on electronic transactions.

The moratorium has been extended at most ministerial meetings since then, but objections by India and South Africa are now throwing it into jeopardy.

When asked if India would compromise on an extension, Goyal said: “Let’s see what the others are budging on.”

He warned, however, that an extension can’t be “taken for granted.”

On food security, Goyal said he was “confident” progress could be made on permanent rules governing public stockholding of food reserves — a key demand of India.

A “solution can be achieved,” Goyal said.

Big questions remain over how the outcome will address the issue of dispute settlement reform — a main point of contention between the United States and India.

Washington, under former President Donald Trump, brought the dispute settlement system to a grinding halt in 2019 by blocking the appointment of new judges to the WTO’s appeals court, its highest dispute settlement authority.

During the last WTO ministerial in 2022, member states reached a commitment to having a fully and well-functioning dispute settlement system in place by 2024.

“What we’re going to see, I think, is a quite succinct (MC13) declaration which is… not going to sort out the substance,” said a Western diplomatic source who asked not to be named.

“It will recognize the progress we have made and that there is more work to be done, and that we have committed ourselves to get… the system up and running in the course of this year.”

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