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Germany blocks sale of two chipmakers to China

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Fears have been growing in Germany about an over-reliance on Beijing, and letting critical infrastructure fall into the hands of Chinese state-linked companies
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Germany on Wednesday blocked the sale of two chipmakers to Chinese investors because of a potential threat to security.

“We must look very closely at company takeovers when it relates to important infrastructure or when there is a danger that the technology would flow to buyers from non-EU countries,” said Economy Minister Robert Habeck.

Chinese company Sai MicroElectronics had been seeking to buy the Dortmund factory of Elmos through its Swedish subsidiary Silex. 

The German government had rejected the planned takeover because “the purchase could endanger the order and security of Germany,” said the economy ministry.

Other ways of reducing the risks, including allowing the acquisition under certain conditions, were “unable to eliminate the identified dangers”, it added.

A second acquisition had been turned down, Habeck said, without naming the companies involved because of “trade secrets”.

But Germany’s minister for research Bettina Stark-Watzinger named the company as Bavaria-based ERS Electronic, which supplies a cooling technology to wafer manufacturers.

Fears have been growing in Europe’s economic powerhouse about an over-reliance on Beijing, and letting critical infrastructure fall into the hands of Chinese state-linked companies.

Russia’s invasion of Ukraine and its subsequent dwindling of crucial gas supplies to Europe has further accentuated the concerns.

In particular, the microchip industry has come under scrutiny, as it produces key components used across industry from consumer electronics to battery-powered vehicles.

Earlier this year, the European Union unveiled a multibillion euro “Chips Act” aimed at doubling Europe’s market share in semiconductors and reducing dependence on supplies from Asia. 

– ‘Not naive’ –

Elmos, which primarily builds components for the automobile industry, said late last year it intended to sell the production facility at its headquarters.

Silex was seeking to buy the site for 85 million euros ($85.4 million).

But business weekly Wirtschaftswoche said Elmos had been the recipient of 5.9 million euros from the German state for two research projects. It had also received 8.1 million euros from an EU project on autonomous driving.

Habeck said that Germany remained open to investors, but that “we are also not naive”. 

Beijing has been trying to glean knowledge about production and development, underlined the minister, saying that the “statements from China are very clear”.

Habeck, of the ecologist Greens party, has recently locked horns with Chancellor Olaf Scholz over investments from China.

He deeply opposed a plan by Chinese shipping firm Cosco to buy a stake in a Hamburg port terminal, forcing Scholz to pull rank to force through the deal by allowing the purchase of a reduced stake.

Scholz has repeatedly underlined the importance of strong trade ties with Beijing, something that German industry leaders have also stressed.

China is a major market for German goods, particularly for auto giants Volkswagen, BMW and Mercedes-Benz, and many jobs in Europe’s top economy depend directly on the relationship.

On a controversial visit to Beijing last week, Scholz, accompanied by a delegation of German business bosses, told Chinese leaders that Berlin expected equal treatment on trade.

But Scholz’s trip has sparked controversy for coming so soon after Xi Jinping strengthened his hold on power in China last month.

With tensions between the West and Beijing running high on issues ranging from Taiwan to alleged human rights abuses, there had been concerns that the high-profile trip may have unsettled both the United States and the European Union.

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India’s influencers still struggle years after TikTok ban

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India's decision to TicTok foreshadows what the social media landscape could look like in the United States next year
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Choreographer Sahil Kumar found fame showcasing folk dances on TikTok, but his profile has been dormant since the video he posted four years ago supporting India’s decision to ban the platform.

The world’s most populous country offers a glimpse of what the social media landscape could look like in the United States next year, should a move to block local access to the Chinese-owned short video app goes ahead.

Several local copycats tried to fill the void left by TikTok’s departure — prompted by a wave of nationalist fervour that followed a border clash between Chinese and Indian troops — but the biggest beneficiaries of the decision were YouTube and Instagram.

Kumar and many other content creators eventually flocked to those US-owned platforms, but few were able to replicate their earlier followings.

“It is difficult to recreate the success elsewhere, because I haven’t got the same engagement on any other platform,” Kumar, 30, told AFP from his studio in Rohtak, a short drive south of the capital New Delhi.

“It takes years to grow an audience on Instagram and especially on YouTube,” he added.

Kumar was an engineer by training but ditched white collar work when he found an audience for his dance routines on TikTok, eventually garnering more than 1.5 million followers. 

His newfound celebrity netted him paid opportunities to choreograph dance numbers for other influencers on the platform and music videos featuring Indian celebrities. 

But his career was derailed in June 2020 after a deadly clash far from his home on the Himalayan frontier dividing India from China.

– ‘India comes first’ –

Twenty Indian and four Chinese soldiers were killed in the encounter, the deadliest face-off between the two nuclear-armed neighbours in half a century, and two weeks later the app vanished from Apple and Google’s online stores. 

The official government order mandating the removal made no reference to the incident or even China, only saying that TikTok had engaged in activities that were “prejudicial to sovereignty and integrity of India”.

Kumar said in his final video on the platform that he agreed with the ban, urging those watching to follow him over to Instagram and YouTube.

“They must have thought thoroughly before making this decision,” he said in a short speech to camera. “India comes first.”

Four years later, just under 94,000 people follow him on Instagram — a tiny fraction of his earlier audience — and he laments that his chances to make money have dried up.

“For us, the work stopped,” he said. 

TikTok arrived in India years after other established social media platforms, but quickly became a national phenomenon.

A year before it was kicked out of the market, the platform said it had more than 200 million users in India — one out of every seven people in the country. 

– ‘Everyone was helter-skelter’ –

“Every influencer, every personality trying to build an online following had to tap into the platform whether or not they liked it,” Viraj Sheth, co-founder of influencer marketing agency Monk Entertainment, told AFP.

“As soon as we got the news of TikTok getting banned, everyone was helter-skelter.”

Several local tech start-ups attempted to capitalise on TikTok’s disappearance by rushing their own short-form video apps to market.

But it was established US platforms that eventually proved best primed to triumph in the new market.

In the first year after the ban, Instagram saw about six million short videos from India posted each day to Reels, its own interface attempting to match TikTok’s content model. 

That compared to 2.5 million videos posted each day to Indian video sharing platform Moj, according to local media reports.

Market tracker Statista estimates that more than 362 million people in India use Instagram and 462 million more use YouTube — which rolled out Shorts, its own TikTok rival, the same year as the India ban. 

That compares to a total audience of 250 million people across manifold homegrown video apps, according to estimates by Redseer Strategy Consultants published last November. 

“When TikTok was banned, we were all expecting that there will probably be some other app which will come and take over,” Amiya Swarup of professional services firm EY India told AFP.

“But you know, it’s still the Instas and the YouTube Shorts which are still really ruling in terms of short-form videos.”

While that had been beneficial for their respective parent companies Meta and Google, Sheth of Monk Entertainment said some influencers had struggled to make the transition.

TikTok’s endless-scroll interface and algorithm are renowned for both matching audiences with the content they want to see and boosting niche content creators, but Sheth said its rivals require a different formula for success.

“You probably didn’t need to show personality on TikTok as much,” he said. “On a platform like Instagram, that’s not something that replicated that well.”

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Microsoft CEO pledges $1.7 bn AI, cloud investment in Indonesia

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Microsoft CEO Satya Nadella arrives for a meeting with Indonesia's President Joko Widodo
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Microsoft’s chief executive officer met the president of Indonesia on Tuesday, pledging a $1.7 billion investment in artificial intelligence and cloud computing to help develop the archipelago’s AI infrastructure. 

Indonesia is Southeast Asia’s biggest economy with a population of around 280 million across its sprawling archipelago and there is a growing demand for data centres and AI tech in the region.

Satya Nadella held talks with President Joko Widodo, more popularly known as Jokowi, at Jakarta’s presidential palace before delivering a keynote speech about AI in the Indonesian capital.

“The thing I am really excited to announce today is the expanded announcement of data centre investment, so $1.7 billion to bring the latest and greatest AI infrastructure to Indonesia,” Nadella told a crowd, adding data centres would be built in Indonesia soon.

“We are going to lead this wave in terms of the next generation of AI infrastructure that’s needed,” he said.

“Our mission ultimately is to empower every person and every organisation in Indonesia to take advantage of this next big AI wave.”

He said the tech giant would provide AI training for hundreds of thousands of Indonesians. 

“I’m very pleased to announce that we at Microsoft are going to train 2.5 million people by 2025 across the ASEAN region. In fact 840,000 right here in Indonesia alone,” he said.

– Regional tour –

Earlier, Nadella told Jokowi the tech giant would “invest significantly” in AI infrastructure and new cloud computing over the next four years, Minister of Communication and Informatics Budi Arie Setiadi said in a statement.

The Microsoft chief called it the “single biggest investment value” in the 29-year history of its business in the country, Budi said.

Microsoft has been hugely rewarded by investors since it aggressively pushed into rolling out generative AI, starting with its $13 billion partnership with OpenAI, the creator of ChatGPT, in 2023.

Nadella said sales in the January to March period rose by 17 percent from a year earlier to $61.9 billion, with net profit up by 20 percent to $21.9 billion.

The embrace of AI has boosted sales of its key cloud services such as Azure, which have become the core of Microsoft’s business under Nadella’s leadership.

Nadella’s visit comes just weeks after Apple CEO Tim Cook met Jokowi and president-elect Prabowo Subianto as the tech giant explores ways to diversify supply chains away from China.

Cook said Apple was looking at potentially investing in manufacturing in the country.

Nadella is travelling on to Thailand and then Malaysia this week on a regional tour to promote its AI tech.

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ChatGPT faces Austria complaint over ‘uncorrectable errors’

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'ChatGPT keeps hallucinating -- and not even OpenAI can stop it,' say privacy campaigners NOYB
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A Vienna-based privacy campaign group said Monday it would file a complaint against ChatGPT in Austria, claiming the “hallucinating” flagship AI tool has invented wrong answers that creator OpenAI cannot correct.

NOYB (“None of Your Business”) said there was no way to guarantee the programme provided accurate information. “ChatGPT keeps hallucinating — and not even OpenAI can stop it,” the group said in a statement.

The company has openly acknowledged it cannot correct inaccurate information produced by its generative AI tool and has failed to explain where the data comes from and what ChatGPT stores about individuals, said the group.

Such errors are unacceptable for information about individuals because EU law stipulates that personal data must be accurate, NOYB argued.

“If a system cannot produce accurate and transparent results, it cannot be used to generate data about individuals,” said Maartje de Graaf, data-protection lawyer at NOYB.

“The technology has to follow the legal requirements, not the other way around.”

ChatGPT “repeatedly provided incorrect information” about the birth date of NOYB founder Max Schrems “instead of telling users that it doesn’t have the necessary data”, said the group.

OpenAI refused Schrems’s request to rectify or erase the data despite it being incorrect, saying it was impossible, NOYB added.

It also “failed to adequately respond” to his request to access his personal data, again in violation of EU law, said NOYB, and the firm “seems to not even pretend that it can comply”.

OpenAI said it was “committed to protecting data privacy” in response to an AFP request for comment.

“We want our AI models to learn about the world, not individuals; we do not actively seek personal information to train our models, and we do not use publicly available information on the Internet to profile, advertise to, or target people, or to sell their data,” said an OpenAI spokesperson.

NOYB, which has emerged as a fierce critic of tech giants since its creation in 2018, said it was asking Austria’s data protection authority to investigate and fine OpenAI to bring it in line with EU law.

Bursting onto the scene in November 2022, ChatGPT sparked a frenzy among tech users dazzled by its ability to reel off dissertations, poems or translations in mere seconds.

But criticism of the technology has prompted legal action in some countries.

Italy temporarily blocked the programme in March 2023, while France’s regulatory authority began an investigation after a series of complaints.

A European working group has also been set up to improve coordination, although NOYB said it was sceptical about the authorities’ efforts to regulate AI.

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