🤝 Apple chatted up Baidu

What’s going on here?

Apple initiated early discussions with Baidu, with China-approved AI systems top of the agenda.

What does this mean?

Apple’s in-house AI developments have been gathering dust, so the company’s sidled up to Google and OpenAI in the hopes of partnering up. That might work out across most of the world, but not in China. The country’s government needs to approve each and every AI model before it can roll out in China, see. And despite approving over 40 home-grown systems since last August, the rule-makers haven’t given the green light to a single foreign one. Mind you, there’s no confirmation that any of them have formally tried: the mere thought might’ve been enough to scare them off.

Why should I care?

Zooming out: The Apple’s falling further from the tree.

Whispers are spreading that Apple is chatting up Chinese AI company Baidu, eager to make up ground in the country without dealing with the regulatory admin. That could be a make-or-break conversation. Apple’s already falling behind local competitors like Huawei and Xiaomi in China, with iPhone sales falling 24% this year so far while Huawei’s picked up by 64%, according to Counterpoint Research. Problem is, Samsung’s latest smartphone is already powered by Baidu in China, so Apple will still have a tough time standing out with the same tools.

The bigger picture: China’s supporting local businesses.

China has upped the ante against US tech companies, no matter whether they make smartphones, operating systems, or run social media sites. The country’s recent guidelines will see American-made chips from Intel and AMD stripped from government computers and servers – the latest part of China’s masterplan to support local companies, instead. Apple, Tesla, Qualcomm, and Intel, you've been warned.

What’s going on here?

Tech bosses like Bezos and Zuckerberg have sold hundreds of millions of dollars of their companies’ stocks this quarter.

What does this mean?

Tech stocks have led the markets for the last year, tempting investors to empty their pockets for a fraction of America’s best. And yet, tech leaders like Jeff Bezos, Mark Zuckerberg, and Peter Thiel have been selling their own companies’ stock this quarter. Now it’s true, they’re only selling tiny slivers of their empires, and they might just need a bit of extra cash – yachts aren’t inflation-proof, after all. The fact that they’re all shedding at once, though, suggests that they’ve either spotted more lucrative opportunities elsewhere, or think this is a prime time to prune some profit. Either way, it’s hardly a reassuring trend – especially when analysts point out that the ratio of insiders selling stocks versus buying them is at its highest level since 2021.

Why should I care?

For markets: If it wasn’t for those dastardly regulators...

US tech companies have enough influence, money, and vision to change the world – but regulators aren’t about to let them wield that much power. Any business that’s training AI models will likely be contending with increasingly strict copyright laws soon, limiting the materials they can feed into their bots and forcing any rule-breakers to cough up fines. The European Commission started probing Apple, Google, and Meta on Monday, too, accusing them of anti-competitive practices and playing fast and loose with personal data.

The bigger picture: So much for utopia.

Tech is claiming more power over the world by the day, and to fuel that, a new data center is built every three days. That means we’re burning through a ton of energy, enough to weigh on the power grid and clog the transition to cleaner energy as those data centers ramp up. Not that anyone’s sure where that green energy is coming from: wind and solar sources need more investment before they’re reliable, while nuclear power is expensive and slow to set up. So if data centers need energy fast, they may well turn to quick and dirty fossil fuels.