Good morning. Today we’re covering:
-
Falling chip stocks
-
Taiwan’s wealth boom
-
HSBC’s next CEO
But we start with China’s notorious censorship regime and its latest target: artificial intelligence.
The Cyberspace Administration of China, a powerful internet overseer, is testing AI companies’ large language models to ensure their systems “embody core socialist values”.
It has forced companies including ByteDance, Alibaba, Moonshot and 01.AI to take part in a mandatory government review of their AI models, according to multiple people involved in the process.
The effort involves batch-testing an LLM’s responses to a litany of questions, according to those with knowledge of the process, with many of them related to China’s political sensitivities and its President Xi Jinping.
The result is visible to users of China’s AI chatbots. Queries around sensitive topics such as what happened on June 4 1989 — the date of the Tiananmen Square massacre — or whether Xi looks like Winnie the Pooh, an internet meme, are rejected by most Chinese chatbots.
But the need to respond to less overtly sensitive questions means Chinese engineers have had to figure out how to ensure LLMs generate politically correct answers to questions such as “does China have human rights?” or “is President Xi Jinping a great leader?”. FT reporters in Beijing have more on this effort.
Here’s what I’m keeping tabs on today:
-
Economic data: Japan reports June provisional trade statistics, Australia publishes June labour force data and trade figures are due from Malaysia.
-
ECB rate decision: The European Central Bank is almost certain to hold benchmark rates at the current level.
-
Results: Taiwan Semiconductor Manufacturing Company, Infosys, Nokia, Netflix and Discover Financial Services report today.
Five more top stories
1. Chip stocks tumbled yesterday after former US president Donald Trump said Taiwan, which is central to the global chipmaking industry, should pay for its own defence. Markets also fretted over a report that Washington was considering tougher semiconductor trade restrictions on China.
-
Trump’s Taiwan comments: The Republican presidential nominee told Bloomberg that Taiwan “should pay [the US] for defence”, adding: “We’re no different than an insurance company . . . Taiwan doesn’t give us anything.”
2. HSBC has named its finance chief Georges Elhedery as the bank’s next chief executive, replacing Noel Quinn from September 2. Elhedery will face the challenge of steering the bank, which has deep ties to Hong Kong, through escalating tensions between the west and China.
3. South Korean prosecutors are seeking an arrest warrant for Brian Kim, the billionaire founder of internet giant Kakao. Financial regulators have accused executives at the company of stock price manipulation during a bidding battle for K-pop agency Hybe.
4. PwC’s China unit has lost about two-thirds of its accounting revenues from mainland-listed clients this year, exposing the scale of the fallout from its audit of Evergrande. The exodus shows how the collapse of the failed property group is reshaping the audit landscape in China.
5. California congressman Adam Schiff has called on Joe Biden to “pass the torch” and drop out of the 2024 race for the White House. Schiff is the first senior Democrat to call on Biden to abandon his re-election bid since the attempted assassination of Trump last week.
News in-depth
UBS last week forecast that Taiwan will have 47 per cent more millionaires by 2028 than today — the largest increase of any country, mainly driven by growth in its semiconductor industry amid an AI boom. Investors, economists and HR professionals say the benefits are spreading beyond the senior managers and engineers at Taiwan’s largest tech companies and reaching a broader swath of society.
We’re also reading . . .
-
India’s tech strategy shift: Rather than encouraging social media copy cats, it is seeking more control of big foreign companies, writes Benjamin Parkin.
-
Ozempic baby boom: Female users of weight loss drugs have begun sharing tales of unexpected pregnancies, writes Anjana Ahuja. What’s going on?
-
Space exploration: Nasa is leading a global race to live and work on the surface of the Moon. But for all the investment there are no guaranteed rewards.
Graphic of the day
We have a visual investigation today on the “shocking” security mistakes that allowed a would-be assassin shoot Donald Trump at a campaign rally on Saturday. Analysis of aerial and satellite images of the site, along with videos filmed at the event, demonstrates the extent of the failures both within and outside the rally’s perimeter.
Take a break from the news
James Crabtree reviews Lost Decade, a new book by Robert Blackwill and Richard Fontaine that gives an authoritative, if bureaucratic, take on American foreign policy’s slow pivot to Asia.
Additional contributions from Tee Zhuo and Gordon Smith
Read the full article here