<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="546" src="https://cms.cnbcafrica.com/wp-content/uploads/2025/01/108043098-1727989387640-gettyimages-2173579499-META_CONNECT-820x546.jpeg" alt="" class="wp-image-580429" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2025/01/108043098-1727989387640-gettyimages-2173579499-META_CONNECT-820x546.jpeg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2025/01/108043098-1727989387640-gettyimages-2173579499-META_CONNECT-300x200.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2025/01/108043098-1727989387640-gettyimages-2173579499-META_CONNECT-135x90.jpeg 135w, https://cms.cnbcafrica.com/wp-content/uploads/2025/01/108043098-1727989387640-gettyimages-2173579499-META_CONNECT-768x511.jpeg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2025/01/108043098-1727989387640-gettyimages-2173579499-META_CONNECT-1536x1022.jpeg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2025/01/108043098-1727989387640-gettyimages-2173579499-META_CONNECT-scaled.jpeg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">Mark Zuckerberg, CEO of Meta Platforms Inc., arrives for the Meta Connect event in Menlo Park, California, on Sept. 25, 2024. David Paul Morris | Bloomberg | Getty Images</figcaption></figure>



Meta CEO Mark Zuckerberg on Wednesday said it’s too early to tell what impact DeepSeek’s breakthrough AI model will have on his company and the broader tech industry. 



Still, Zuckerberg poured cold water on the notion that Meta’s overall AI spending will soon drop now that DeepSeek has allegedly proven that cutting-edge AI requires far less money and computing resources than previously thought.



“It’s probably too early to really have a strong opinion on what this means for the trajectory around infrastructure and CapEx,” Zuckerberg said. “There are a bunch of trends that are happening here all at once.”



The technology markets were reeling this week over an AI model created by DeepSeek, which is a Hangzhou-based AI lab linked to the Chinese hedge fund High-Flyer. DeepSeek claims it only took two months and less than $6 million to develop its R1 large language model. That news caused Nvidia shares to tank 17% on Monday because of the implications that companies don’t need as many of the chip-maker’s graphics processing units for their own artificial-intelligence projects.



Zuckerberg discussed DeepSeek during a call with analysts Wednesday as part of Meta’s fourth-quarter earnings. The company reported that sales rose 21% year over year to $48.39 billion, ahead of Wall Street expectations.



Meta’s shares rose nearly 2% on Monday, indicating some investors believe DeepSeek’s cost-efficiency could mean the social media company may be able to create powerful AI systems for less money. Meta announced last week plans to invest between $60 billion and $65 billion this year as part of its AI push. The company on Wednesday said its 2025 total expenses would come in between $114 billion to $119 billion.



Zuckerberg said Meta is still digesting some of DeepSeek’s feats and his team hopes to eventually implement some of those advancements for their own AI projects.



“That’s part of the nature of how this works, whether it’s a Chinese competitor or not,” Zuckerberg said, referring to how one company’s advances end up benefiting others.



While it’s possible that companies will eventually require less computing resources to train these powerful models, Zuckerberg said that having a ton of server power may be necessary when the software is actually running and performing actions, resulting in “a higher level of intelligence and a higher quality of service.”



“It’s going to be expensive for us to serve all of these people because we are serving a lot of people,” said Zuckerberg, whose company said it had 3.35 billion daily active people in the fourth quarter.



Meta will continue to learn from technologies like DeepSeek’s and release its own open source and free Llama AI models that can also push the industry, Zuckerberg said.



“I continue to think that investing very heavily in CapEx and infra is going to be a strategic advantage over time,” he said. “It’s possible that we’ll learn otherwise at some point, but I just think it’s way too early to call that, and at this point, I would bet that the ability to build out that kind of infrastructure is going to be a major advantage.”



Zuckerberg also said that DeepSeek’s emergence validates Meta’s commitment to an open-source approach to AI, Zuckerberg said.



“There’s going to be an open-source standard globally,” he said. “For our own national advantage, it’s important that it’s an American standard.”

108043098-1727989387640-gettyimages-2173579499-META_CONNECT

Zuckerberg says Meta won’t slow down AI spend despite DeepSeek’s breakthrough

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="562" src="https://cms.cnbcafrica.com/wp-content/uploads/2025/01/GettyImages-2196255677-820x562.jpg" alt="" class="wp-image-579752" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2025/01/GettyImages-2196255677-820x562.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2025/01/GettyImages-2196255677-300x206.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2025/01/GettyImages-2196255677-131x90.jpg 131w, https://cms.cnbcafrica.com/wp-content/uploads/2025/01/GettyImages-2196255677-768x526.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2025/01/GettyImages-2196255677-1536x1053.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2025/01/GettyImages-2196255677-scaled.jpg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">SAN ANSELMO, CALIFORNIA &#8211; JANUARY 27: In this photo illustration, the DeepSeek app is displayed on an iPhone screen on January 27, 2025 in San Anselmo, California. Newly launched Chinese AI app DeepSeek has surged to number one in Apple&#8217;s App Store and has triggered a sell-off of U.S. tech stocks over concerns that Chinese companies&#8217; AI advances could threaten the bottom line of tech giants in the United States and Europe. (Photo Illustration by Justin Sullivan/Getty Images)</figcaption></figure>



Chinese artificial intelligence startup DeepSeek could face curbs from the U.S. government as it upends the U.S. AI ecosystem, though enforcing restrictions on an open-source technology could be a challenge, experts said.



DeepSeek’s sudden rise has questioned the effectiveness of Washington’s efforts aimed at curbing China’s access to high-end tech over national security concerns.



For DeepSeek, which relied heavily on open-source code, the additional export restrictions that the U.S. government could impose are limited, said Lawrence Ward, a partner at U.S.-based law firm Dorsey &amp; Whitney with a specialization in national security law.



In terms of the company’s potential use of certain Nvidia chips, it might face civil and criminal penalties, but enforcing those penalties may be “difficult if not impossible,” Ward said.



On Monday, the U.S. lawmakers called for actions to slow down the Chinese tech startup, with some calling DeepSeek “a serious threat.”



There are no easy solutions to restrict the use of an open-source model, especially one that is being widely tested and used by organizations and individuals, said Paul Triolo, partner at Albright Stone Group.



One option would be for the Commerce Department to craft rules that require tech giants such as Apple and Google to take down DeepSeek’s app, restricting its downloads in the U.S. market, Triolo said, adding that it would, however, be challenging to pull the app off other platforms such as Github.



DeepSeek in December released a free, open-source large language model, which it claimed was built in just two months and at a fraction of the cost borne by other major players. Last week, the company released a reasoning model that reportedly outperformed OpenAI’s latest offerings in many third-party tests.



DeepSeek, whose AI chatbot has become the most downloaded free application on Apple’s App Store in the U.S., said it created the model despite the sweeping controls imposed in 2022 by the U.S. on China’s access to the most advanced Nvidia chips.



The Hangzhou-based startup said it used the less-advanced Nvidia H800 chips to build the model, which was available until the U.S. government widened the ban in October 2023.



“If DeepSeek had equipment that it shouldn’t have, it could certainly lead to further investigation,” said Daniel Newman, CEO of Futurum Group, who expects the U.S. government to look into DeepSeek’s hardware which might have violated export curbs.



U.S. President Donald Trump said Monday that the advancement of Chinese AI app DeepSeek “should be a wake-up call” for America’s tech companies, while lauding the low-cost model as “very much a positive development” for AI overall. “Instead of spending billions and billions, you’ll spend less, and you’ll come up with, hopefully, the same solution,” Trump said. 



DeepSeek’s claimed cost efficiency and effectiveness of its model sent U.S. tech stocks into a tailspin as investors questioned the amount of money big tech firms have been investing in AI models and data centers. U.S. companies could now leverage the public codes to refine their own models and possibly bring down computation costs.



Rep. John Moolenaar, R-Mich., the chair of the House Select Committee on China, said on Monday the U.S. government should work to place stronger export controls on technologies critical to DeepSeek’s AI infrastructure.



“The situation is somewhat unprecedented, and it is not likely that anyone in Washington has a clear idea what to do about it &#8230; we are clearly in uncharted waters at many levels,” Triolo said.



The company said on Monday that it temporarily limited new sign-ups to users with mainland China’s phone numbers following a large-scale malicious cyberattack that caused outages on its website.



On Jan. 20, the day when the the company’s R1 reasoning model was launched to the public, DeepSeek’s founder Liang Wenfeng attended a closed-door symposium for businessman and experts, chaired by Chinese premier Li Qiang, according to state media Xinhua.



CNBC’s Dylan Butts, Hui Jie Lim contributed to this report.

Newly Launched Chinese AI App DeepSeek Causes U.S. Tech Stocks To Tumble, Amid Its Rapid Rise To #1 In Apple’s App Store

U.S. lawmakers in ‘uncharted waters’ as DeepSeek tests limits of American trade restrictions

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="547" src="https://cms.cnbcafrica.com/wp-content/uploads/2025/01/108088767-17373189882025-01-19t185837z_1888681257_rc26dca2p0uv_rtrmadp_0_usa-tiktok-820x547.jpeg" alt="" class="wp-image-579253" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2025/01/108088767-17373189882025-01-19t185837z_1888681257_rc26dca2p0uv_rtrmadp_0_usa-tiktok-820x547.jpeg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2025/01/108088767-17373189882025-01-19t185837z_1888681257_rc26dca2p0uv_rtrmadp_0_usa-tiktok-300x200.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2025/01/108088767-17373189882025-01-19t185837z_1888681257_rc26dca2p0uv_rtrmadp_0_usa-tiktok-135x90.jpeg 135w, https://cms.cnbcafrica.com/wp-content/uploads/2025/01/108088767-17373189882025-01-19t185837z_1888681257_rc26dca2p0uv_rtrmadp_0_usa-tiktok-768x512.jpeg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2025/01/108088767-17373189882025-01-19t185837z_1888681257_rc26dca2p0uv_rtrmadp_0_usa-tiktok-1536x1024.jpeg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2025/01/108088767-17373189882025-01-19t185837z_1888681257_rc26dca2p0uv_rtrmadp_0_usa-tiktok-scaled.jpeg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">A 3D-printed miniature model of U.S. President-elect Donald Trump and TikTok logo are seen in this illustration taken January 19, 2025. Dado Ruvic | Reuters</figcaption></figure>



President Donald Trump wants a U.S. investor to take a major stake in ByteDance’s TikTok. Several parties are in contention even as potential buyers face a litany of legal hurdles and barriers.



After stepping in to restore TikTok in the U.S. and delaying a law that would effectively ban the app, Trump is looking for avenues to keep the popular platform afloat.



He has put forward a proposal for an American stakeholder to buy the company and then sell a 50% stake to the U.S. government, which will jointly run the app along with the private party.&nbsp;



Trump reportedly said Saturday that he was in talks with multiple people over buying TikTok and that he would likely decide on its future in the next 30 days.



So, who are the likely contenders for one of the most popular apps in the U.S.?



<h2 class="wp-block-heading" id="h-elon-musk-nbsp"><a></a>Elon Musk&nbsp;</h2>



Trump has already flagged several major investors within his inner circle as acceptable buyers, one of which is Tesla and SpaceX owner Elon Musk.&nbsp;



The world’s richest person is leading Trump’s new Department of Government Efficiency, has close business ties to China and has voiced opposition to the TikTok ban. 



Bloomberg reported earlier this month that the Chinese government was considering a plan to have Musk acquire TikTok’s U.S. operations, citing anonymous sources. That followed a report from the Wall Street Journal, which claimed TikTok’s CEO had been soliciting advice from Musk ahead of Trump’s inauguration. 



CNBC was unable to reach Musk for comment.&nbsp;



“Elon Musk continues to be front and center as a potential bidder for TikTok which likely includes some tech partners/outside investors to get a deal done,” financial services company Wedbush Securities said in a research note on Wednesday.&nbsp;



“Musk would be hand picked by Beijing and his ironclad relationship with Trump would make this a very logical choice in our view,” the note added.&nbsp;



Nat Schindler, an analyst at Scotiabank, also noted that Musk’s acquisition of Twitter has demonstrated his interest in global social media platforms.



However, Paul Triolo of Albright Stone Group also sees some potential obstacles for the tech tycoon.&nbsp;



“Musk is under fire already for owning X and the perception that he is using it to promote certain political ideas, and any involvement in TikTok could draw additional fire and potentially antitrust scrutiny,” he said.&nbsp;



<h2 class="wp-block-heading" id="h-larry-ellison"><a></a>Larry Ellison</h2>



Trump has also said he’d “like” to see Oracle Chairman Larry Ellison purchase the platform.



Ellison, a longtime Trump supporter, stood beside the President at a press conference on his AI infrastructure investment plans on Tuesday, where Trump was asked questions about a potential TikTok deal. 



“What I’m thinking about saying to somebody is, buy it, and give half to the United States of America. Half and we’ll give you the permit,” Trump said before turning to Ellison to ask if the deal sounded reasonable.



“Sounds like a good deal to me Mr. President,” Ellison replied.&nbsp;



Ellison and his company are currently at the center of the TikTok dilemma, operating as a cloud infrastructure provider for ByteDance in the U.S.



Given its existing relationship with Tiktok, Oracle and is “directly invested in Tiktok’s success in the region,” Scotiabank’s Schindler said.&nbsp;



Ellison had bid for Tiktok, along with Walmart, back in 2020 when Trump first pushed for a ban on the platform. Neither company responded to CNBC’s request for comment. 



Trump had approved of the Walmart-Oracle deal in principle, which would’ve seen the tech and retail giants partner to take over the video-sharing app in the U.S., avoiding a shutdown. However, the Trump administration’s attempt to ban TikTok in the U.S. fell through in the face of legal challenges.



Ellison later joined a group of investors that helped Elon Musk buy social media platform Twitter, now known as X, in 2022. 



″[We believe] Oracle/Ellison could play a pivotal role in any deal given their key technology partnership with TikTok and his appearance at the White House with Project Stargate,” Wedbush said.



Wedbush added that it expects a slew of TikTok bids to come over the coming weeks from a host of players with Musk and Ellison leading the pack.



According to a National Public Radio report on Saturday, the Trump administration is working on a plan to save TikTok that would involve Oracle and a group of outside investors effectively taking control of it global operations.



<h2 class="wp-block-heading" id="h-perplexity-ai"><a></a>Perplexity AI</h2>



California-based artificial intelligence search engine startup Perplexity AI submitted a bid for TikTok to ByteDance on Jan. 18, as it seeks to create a new merged entity combining Perplexity, TikTok U.S. and new capital partners, CNBC learned.



Following Trump’s comments on a TikTok deal structure, the AI company revised its merger proposal on Sunday to also allow for the U.S. government to own up to 50% of the new company upon future IPO, according to a proposal document seen by CNBC. 



The document proposes ByteDance offer TikTok U.S., without its recommendation algorithm, in exchange for the company’s existing investors receiving equity in the merged company.&nbsp;



The deal would reportedly bring more video to Perplexity — recently valued at about $9 billion — as it gains increasing investor interest amid the generative AI boom and competes with OpenAI and Google. 



<h2 class="wp-block-heading" id="h-big-players-serious-money-nbsp"><a></a>Big players, serious money&nbsp;</h2>



Experts flagged several other parties likely to be interested in a potential deal for TikTok, adding that the barriers to entry were high.&nbsp;



Given the financial stakes of a TikTok deal, it’s unlikely that some rogue investor is going to swoop in and buy the platform on the cheap, according to Albright Stone Group’s Triolo.&nbsp;



“While an up-to-date valuation on TikTok is difficult to come up with, it is likely to the order of $40-80 billion, meaning whoever decides to jump in has to be ready with some serious money,” he said.&nbsp;



He added that potential suitors are likely to include some of America’s largest social media and technology players, such as Meta and Google, in addition to Musk’s X. 



Meta and Google didn’t immediately respond to a CNBC inquiry.



Sarah Kreps, the director of the Tech Policy Institute at Cornell University, however, warned that players such as Meta, Google and Musk getting a substantial stake in TikTok could raise antitrust questions.



Scotiabank analyst Nat Schindler noted that there were also a number of other players, including existing investors BlackRock, Coatue, and General Atlantic, who own a large chunk of TikTok’s parent company. According to him, some of these investors are likely to participate in any sale of the U.S. platform by investing in the new entity.



“Other large VCs, hedge funds, and asset managers from Tiger to Fidelity would also likely show interest in a fast growing global platform with such a huge viewer base,” said Schindler, adding that finding investors to own a part of Tiktok won’t be a problem.



<h2 class="wp-block-heading" id="h-mrbeast-nbsp"><a></a>MrBeast&nbsp;</h2>



The fervor surrounding a purchase of TikTok U.S. has also seen some unconventional players enter the fray.&nbsp;



Social media superstar MrBeast — real name Jimmy Donaldson — who has more than 100 million TikTok followers has posted several videos in which he indicated serious interest in buying the platform, claiming he has had talks with billionaires.&nbsp;



In one video, the internet personality claimed he had an official offer ready, jesting that he might be the new TikTok CEO. 



Media reports have also mentioned Donaldson and a group of investors preparing to make a bid for TikTok. 



On Thursday, Matthew Hiltzik, a spokesperson for Donaldson, told CNBC that “Several potential buyers are in ongoing discussions with Jimmy, but he has no exclusive agreements with any of them.”



<h2 class="wp-block-heading" id="h-the-people-s-bid-for-tiktok"><a></a>‘The People’s Bid for TikTok’</h2>



Led by Project Liberty Founder Frank McCourt and involving Canadian businessman and TV personality Kevin O’Leary, “The People’s Bid for TikTok,” has made a $20 billion cash offer to buy TikTok.&nbsp;



O’Leary told CNBC last year that he wanted to buy the platform at a discount as any possible deal won’t include TikTok’s original algorithm. The organization said it already has a replacement for the algorithm to use for TikTok U.S. 



Following Trump’s comments on a 50% stake in the platform, both McCourt and O’Leary told CNBC this week that they were interested in a TikTok deal and were hoping to work with Trump to make it happen. 



McCourt has also told CNBC that he wants TikTok to run a decentralized social networking protocol, or DSNP, overseen by the Project Liberty Institute, a nonprofit founded by the billionaire.



Bidding interest aside, a number of legal and tech experts have told CNBC that Trump’s executive order to delay the TikTok ban contradicts the Supreme Court’s earlier ruling to uphold the PAFACA and could face legal opposition.



O’Leary also told CNBC on Monday that a TikTok deal could not happen under the current law, after the Supreme Court upheld an impending ban on TikTok under the Protecting Americans from Foreign Adversary Controlled Applications Act, or PAFACA, on Sunday. 



Beijing and its pending negotiations with Trump regarding trade with the U.S. is also expected to play a determining factor in whether the Chinese government would allow ByteDance to make a divestiture.



“In this game of high stakes poker between the Trump Administration and Beijing it’s clear TikTok is a big chip on the table,” Wedush said.



— CNBC’s Hayden Field contributed to this report



Correction: This copy has been updated to fix a quote attribution.

108088767-17373189882025-01-19t185837z_1888681257_rc26dca2p0uv_rtrmadp_0_usa-tiktok

Trump is searching for potential TikTok buyers — who are the likely contenders?

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="547" src="https://cms.cnbcafrica.com/wp-content/uploads/2025/01/108088768-1737318993901-gettyimages-2194750964-4m7a5799_kbh8pivj-820x547.jpeg" alt="" class="wp-image-576785" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2025/01/108088768-1737318993901-gettyimages-2194750964-4m7a5799_kbh8pivj-820x547.jpeg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2025/01/108088768-1737318993901-gettyimages-2194750964-4m7a5799_kbh8pivj-300x200.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2025/01/108088768-1737318993901-gettyimages-2194750964-4m7a5799_kbh8pivj-135x90.jpeg 135w, https://cms.cnbcafrica.com/wp-content/uploads/2025/01/108088768-1737318993901-gettyimages-2194750964-4m7a5799_kbh8pivj-768x512.jpeg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2025/01/108088768-1737318993901-gettyimages-2194750964-4m7a5799_kbh8pivj-1536x1025.jpeg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2025/01/108088768-1737318993901-gettyimages-2194750964-4m7a5799_kbh8pivj-scaled.jpeg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">In this photo illustration an iPhone displays a popup message on the social media platform TikTok on January 19, 2025 in Washington, D.C.  Kayla Bartkowski | Getty Images</figcaption></figure>



TikTok was available to some U.S. users on Sunday after President-elect Donald Trump said that he would sign an executive order on Monday following his inauguration to delay a federal ban of the app.



In a statement on X, the company wrote that it would bring back access to its American users.



“In agreement with our service providers, TikTok is in the process of restoring service,” TikTok wrote. “We thank President Trump for providing the necessary clarity and assurance to our service providers that they will face no penalties providing TikTok to over 170 million Americans and allowing over 7 million small businesses to thrive.”



The decision is “a strong stand for the First Amendment and against arbitrary censorship,” the company added. “We will work with President Trump on a long-term solution that keeps TikTok in the United States.”



This came after Trump wrote on his social media app Truth Social he would “issue an executive order on Monday” to extend the period of time before the ban was set to take place.



“I’m asking companies not to let TikTok stay dark!” Trump wrote on Sunday morning.



Although TikTok was shut down for American users late Saturday night, and also removed from Apple and Google’s app stores, some were able to log on to the platform on Sunday through their mobile apps and desktops.



The law banning TikTok was set to take effect on Sunday as ByteDance, the China-based owner of TikTok, had not yet divested the company to a non-Chinese entity. The Supreme Court had ruled on Friday to uphold the law that would ban the app and penalize third-party internet service providers, such as Apple and Google, if they supported TikTok on their platforms after the ban went into effect.



Despite TikTok’s pledge to reinstate service in the U.S. following Trump’s statement, the company’s future remains unclear under the current law.



Trump has previously stated on Truth Social that he would like the U.S. to hold 50% ownership of TikTok in a joint venture to “keep it in good hands and allow it to stay up.” However, ByteDance has not changed its stance on having no plans to sell the company.

108087891-17370552112025-01-16t184115z_264065835_rc26bcansfjq_rtrmadp_0_usa-china-tiktok

TikTok restoring U.S. service after Trump provided ‘assurance’

<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="1920" height="1080" src="https://cms.cnbcafrica.com/wp-content/uploads/2025/01/108087889-17370551552025-01-16t184404z_820877807_rc26bcaoa7bg_rtrmadp_0_usa-china-tiktok-1.jpeg" alt="" class="wp-image-576489" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2025/01/108087889-17370551552025-01-16t184404z_820877807_rc26bcaoa7bg_rtrmadp_0_usa-china-tiktok-1.jpeg 1920w, https://cms.cnbcafrica.com/wp-content/uploads/2025/01/108087889-17370551552025-01-16t184404z_820877807_rc26bcaoa7bg_rtrmadp_0_usa-china-tiktok-1-300x169.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2025/01/108087889-17370551552025-01-16t184404z_820877807_rc26bcaoa7bg_rtrmadp_0_usa-china-tiktok-1-820x461.jpeg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2025/01/108087889-17370551552025-01-16t184404z_820877807_rc26bcaoa7bg_rtrmadp_0_usa-china-tiktok-1-160x90.jpeg 160w, https://cms.cnbcafrica.com/wp-content/uploads/2025/01/108087889-17370551552025-01-16t184404z_820877807_rc26bcaoa7bg_rtrmadp_0_usa-china-tiktok-1-768x432.jpeg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2025/01/108087889-17370551552025-01-16t184404z_820877807_rc26bcaoa7bg_rtrmadp_0_usa-china-tiktok-1-1536x864.jpeg 1536w" sizes="auto, (max-width: 1920px) 100vw, 1920px" /><figcaption class="wp-element-caption">Dado Ruvic | Reuters</figcaption></figure>



Apple and Google removed TikTok from their app stores Saturday night, complying with a law requiring China’s ByteDance to divest the social app or see it face an effective ban in the U.S. 



The Apple App Store and the Google Play store’s removal of TikTok means people in the U.S. can no longer download the popular short-form video app on their devices. The app’s delisting comes after the Supreme Court on Friday unanimously upheld the Protecting Americans from Foreign Adversary Controlled Applications Act, which President Joe Biden signed in April. TikTok on Friday said its service would go dark, meaning it would stop working for Americans, unless the Biden administration intervened.



On Apple’s App Store, a message saying “App Not Available” appears on TikTok’s former app-install page.



“This app is currently not available in your country or region,” the message said.



“We’re sorry, the requested URL was not found on this server,” said a message on the page the previously hosted TikTok on the Google Play store.



Some users who visited TikTok’s app and website on Saturday were greeted with a message that said, “Sorry, TikTok isn’t available right now.”



“A law banning TikTok has been enacted in the U.S. Unfortunately, that means you can’t use TikTok for now,” the notice said. “We are fortunate that President Trump has indicated that he will work with us on a solution to reinstate TikTok once he takes office. Please stay tuned!”



Lemon8, another service owned by ByteDance, also displayed a notice letting users know it wasn’t available in the U.S. The app had shot up the charts recently, becoming one of the most popular free apps on iOS.



“Sorry, Lemon8 isn’t available right now,” the notice states.



The law requires that service providers no longer support TikTok within the U.S. if ByteDance failed to carry out a “qualified divestiture” of the app by Sunday. As a result, Apple, Google and Oracle could face tough penalties for failing to adhere to the law. Apple and Google previously distributed the app through its app stores while Oracle provides cloud computing services to TikTok and said in June that the law would hurt its business.



After the Supreme Court’s decision, TikTok CEO Shou Chew said use of TikTok is a First Amendment right and added that over 7 million American businesses use it to make money and find customers.



<h2 class="wp-block-heading" id="h-awaiting-trump"><a></a>Awaiting Trump</h2>



“Rest assured, we will do everything in our power to ensure our platform thrives as your online home for limitless creativity and discovery as well as a source of inspiration and joy for years to come,” Chew said in a TikTok video.



Chew also thanked President-elect Donald Trump, who previously asked the Supreme Court to pause the law’s implementation and allow his administration “the opportunity to pursue a political resolution of the questions at issue in the case.” Chew is expected to attend Trump’s inauguration in Washington on Monday, along with tech leaders from companies including Meta, Amazon, Apple and Google.



Trump arrived in Washington Saturday evening. His transition team did not immediately respond to the TikTok shutdown. Trump on Friday said that the Supreme Court’s decision was expected “and everyone must respect it.”



“My decision on TikTok will be made in the not too distant future, but I must have time to review the situation. Stay tuned!” Trump wrote in a post on his social media app Truth Social.



White House press secretary Karine Jean-Pierre on Saturday acknowledged TikTok’s statement that it would go dark and characterized it as a “stunt.”



“We have laid out our position clearly and straightforwardly: actions to implement this law will fall to the next administration,” Jean-Pierre said. “So TikTok and other companies should take up any concerns with them.“ Trump told NBC News on Saturday that he would “most likely” give TikTok a 90-day extension of the Sunday deadline, and that he would “probably announce” a decision on Monday.



“I think that would be, certainly, an option that we look at,” Trump said in the phone interview. “The 90-day extension is something that will be most likely done, because it’s appropriate. You know, it’s appropriate. We have to look at it carefully. It’s a very big situation.”



Artificial intelligence startup Perplexity AI on Saturday submitted a bid for TikTok that would result in the AI-powered search engine startup combine with TikTok’s U.S. operations and new capital partners, CNBC reported.



Businessman Frank McCourt’s internet advocacy group Project Liberty announced on Jan. 9, that it had submitted a proposal to buy TikTok from ByteDance at undisclosed terms. McCourt told CNBC on Friday that “we, I believe, are the only bidder” that meets the necessary criteria of disentangling the technology from the Chinese algorithm.

108087889-17370551552025-01-16t184404z_820877807_rc26bcaoa7bg_rtrmadp_0_usa-china-tiktok (1)

Apple, Google remove TikTok from stores as app halts service in U.S.

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="461" src="https://cms.cnbcafrica.com/wp-content/uploads/2025/01/108083800-17363625762025-01-08t185239z_2145872781_rc2u5ca99h17_rtrmadp_0_usa-court-tiktok-820x461.jpeg" alt="" class="wp-image-575022" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2025/01/108083800-17363625762025-01-08t185239z_2145872781_rc2u5ca99h17_rtrmadp_0_usa-court-tiktok-820x461.jpeg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2025/01/108083800-17363625762025-01-08t185239z_2145872781_rc2u5ca99h17_rtrmadp_0_usa-court-tiktok-300x169.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2025/01/108083800-17363625762025-01-08t185239z_2145872781_rc2u5ca99h17_rtrmadp_0_usa-court-tiktok-160x90.jpeg 160w, https://cms.cnbcafrica.com/wp-content/uploads/2025/01/108083800-17363625762025-01-08t185239z_2145872781_rc2u5ca99h17_rtrmadp_0_usa-court-tiktok-768x432.jpeg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2025/01/108083800-17363625762025-01-08t185239z_2145872781_rc2u5ca99h17_rtrmadp_0_usa-court-tiktok-1536x864.jpeg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2025/01/108083800-17363625762025-01-08t185239z_2145872781_rc2u5ca99h17_rtrmadp_0_usa-court-tiktok.jpeg 1600w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">Dado Ruvic | Reuters</figcaption></figure>



Chinese social media app RedNote has skyrocketed to the top of Apple’s app store, underscoring concerns that TikTok will soon be effectively banned in the U.S.



RedNote, or Xiaohongshu, as it’s known in China, is the No. 1 free app on the Apple app store as of Monday, followed by TikTok’s photo-sharing Lemon8 app and OpenAI’s ChatGPT.



Many TikTok creators are rushing to find alternatives where they can continue posting videos while waiting to see what happens with TikTok, which faces a potential Jan. 19 ban in the U.S. The Supreme Court held oral arguments last week about the April law setting the stage for a ban, and seemed to side more favorably with the U.S. government’s arguments that ByteDance’s ownership of TikTok poses a national security risk.



Attorneys representing TikTok and creators argued that the law violates the free-speech protections of millions of its U.S. users.



If the Supreme Court upholds the law, third-party service providers such as Apple and Google will be penalized for supporting TikTok, thus effectively banning the app in the U.S. It’s unclear whether President-elect Donald Trump, who takes office on Jan. 20, would choose to enforce the law.



Some TikTok creators are enacting contingency plans by migrating to RedNote.



One content creator, who goes by the username allieusyaps, said in a post Monday that while “it’s OK” that TikTok could be banned in the U.S., he and other TikTok creators “aren’t going back to Instagram and Facebook,” because they joined RedNote.



“Look I might not have a job in the next week, but we about to learn Mandarin baby!” the user wrote.



Another TikTok creator named Krystan Walmsley posted a short video teaching people how to set up and decorate their RedNote accounts.



“This app is so cute and it’s a lot of fun so far,” Walmsley said.



RedNote, based in Shanghai, was founded in 2013, and has increasingly challenged Alibaba and Douyin, ByteDance’s version of TikTok in China, in e-commerce and social media. It had about 300 million monthly active users as of July 2024, according to a report by the South China Morning Post.



RedNote was valued at $17 billion after raising funding in July from investors such as Boyu Capital and HongShan Capital Group, formerly Sequoia Capital’s Chinese investment arm, according to PitchBook. It’s raised over $900 million in total funding and has more than 2,000 employees, PitchBook said.



Representatives from RedNote and TikTok didn’t immediately respond to requests for comment.

108083800-17363625762025-01-08t185239z_2145872781_rc2u5ca99h17_rtrmadp_0_usa-court-tiktok

Users worried about TikTok ban appear to be downloading a different Chinese social media app

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="461" src="https://cms.cnbcafrica.com/wp-content/uploads/2025/01/108038935-17272715482024-09-25t132450z_828786131_rc2p7aapgnt6_rtrmadp_0_un-assembly-starmer-820x461.png" alt="" class="wp-image-574742" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2025/01/108038935-17272715482024-09-25t132450z_828786131_rc2p7aapgnt6_rtrmadp_0_un-assembly-starmer-820x461.png 820w, https://cms.cnbcafrica.com/wp-content/uploads/2025/01/108038935-17272715482024-09-25t132450z_828786131_rc2p7aapgnt6_rtrmadp_0_un-assembly-starmer-300x169.png 300w, https://cms.cnbcafrica.com/wp-content/uploads/2025/01/108038935-17272715482024-09-25t132450z_828786131_rc2p7aapgnt6_rtrmadp_0_un-assembly-starmer-160x90.png 160w, https://cms.cnbcafrica.com/wp-content/uploads/2025/01/108038935-17272715482024-09-25t132450z_828786131_rc2p7aapgnt6_rtrmadp_0_un-assembly-starmer-768x432.png 768w, https://cms.cnbcafrica.com/wp-content/uploads/2025/01/108038935-17272715482024-09-25t132450z_828786131_rc2p7aapgnt6_rtrmadp_0_un-assembly-starmer.png 1200w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">Britain’s Prime Minister Keir Starmer gives a media interview while attending the 79th United Nations General Assembly at the United Nations Headquarters in New York, U.S. September 25, 2024. Leon Neal | Via Reuters</figcaption></figure>



LONDON — The U.K is looking to build a homegrown challenger to OpenAI and drastically increase national computing infrastructure, as Prime Minister Keir Starmer’s government sets its sights on becoming a global leader in artificial intelligence.



Starmer is set to visit Bristol, England, on Monday to announce the pledge, which follows work done by British tech investor Matt Clifford to establish an “AI Opportunities Action Plan.” The plan aims to help the U.K. take advantage of the potential of AI.



The government is primarily seeking to expand data center capacity across the U.K. to boost developers of powerful AI models which rely on high-performance computing equipment hosted in remote locations to train and run their systems.



A target of increasing “sovereign,” or public sector, compute capacity in the U.K. by twentyfold by 2030 has been set. As part of that pledge, the government will begin opening access to the AI Research Resource, an initiative aimed at bolstering U.K. computing infrastructure.



Starmer’s administration last year canceled £1.3 billion of taxpayer-funded spending commitments towards two significant computing initiatives in order to prioritize other fiscal plans. The projects, an AI Research Resource and a next-generation “exascale” supercomputer, were pledges were made under Starmer’s predecessor, Rishi Sunak.



Sovereign AI has become a hot topic for policymakers, particularly in Europe. The term refers to the idea that technologies critical to economic growth and national security should be built and developed in the countries people are adopting them in.



To further bolster Britain’s computing infrastructure, the government also committed to setting up several AI “growth zones,” where rules on planning permission will be relaxed in certain places to allow for the creation of new data centers.



Meanwhile, an “AI Energy Council” formed of industry leaders from both energy and AI will be set up to explore the role of renewable and low-carbon sources of energy, like nuclear.



It comes as tech giants like Amazon, Microsoft and Google are investing hundreds of millions of dollars in small modular reactors (SMR) to provide nuclear energy for the data centers that power their AI systems.



<h2 class="wp-block-heading" id="h-building-a-challenger-to-openai"><a></a>Building a challenger to OpenAI</h2>



The last major initiative the U.K. government proposed was to create homegrown AI “champions” of&nbsp;a&nbsp;similar scale to American tech giants responsible for the foundational AI models that power today’s generative AI tools such as OpenAI’s ChatGPT.



Britain plans to use the AI growth zones and a newly established National Data Library to connect public institutions — such as universities — to enhance the country’s ability to create “sovereign” AI models which aren’t reliant on Silicon Valley.



It’s worth highlighting that the U.K. faces serious challenges in its bid to create an effective OpenAI alternative. For one, several entrepreneurs in the country have bemoaned funding challenges that make it difficult for startups in the country to raise the kind of cash available to AI success stories.



Many U.K. founders and venture capitalists have called for the country’s pension funds to allocate a greater portion of their portfolios toward riskier, growth-focused startups — a reform the government has committed to pushing previously.



“In the U.K., there’s $7 trillion in this pocket,” Magnus Grimeland, CEO and founder of venture capital firm Antler, told CNBC in an interview last year. “Imagine if you take just 5% of that and allocate it to innovation — you solve the problem.”



U.K. tech leaders have nevertheless generally praised the government’s AI action plan. Zahra Bahrololoumi, Salesforce’s U.K. boss, told CNBC the plan is a “forward-thinking strategy,” adding she’s encouraged by the government’s “bold vision for AI and emphasis on transparency, safety and collaboration.”



Chintan Patel, Cisco’s chief technology officer in the U.K., said he’s “encouraged” by the action plan. “Having a clearly defined roadmap is critical for the UK to achieve its ambition to become an AI superpower and a leading destination for AI investment,” he said.



Britain doesn’t yet have formal regulations for AI. Starmer’s government has previously said it plans to draw up legislation for AI — but details remain thin.



Last month, the government announced a consultation on measures to regulate the use of copyrighted content to train AI models.



More generally, the U.K. is pitching a differentiated regulatory regime from the EU following Brexit as a positive factor — meaning, it can introduce regulatory oversight for AI but in a way that’s less strict than the EU, which has taken a more hard-line approach to regulating the technology with its AI Act.

108038935-17272715482024-09-25t132450z_828786131_rc2p7aapgnt6_rtrmadp_0_un-assembly-starmer

Britain seeks to build homegrown rival to OpenAI in bid to become world leader in artificial intelligence

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="461" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/12/108075021-1734011164475-gettyimages-1456167226-gitech84-820x461.jpeg" alt="" class="wp-image-566950" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/12/108075021-1734011164475-gettyimages-1456167226-gitech84-820x461.jpeg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/12/108075021-1734011164475-gettyimages-1456167226-gitech84-300x169.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/12/108075021-1734011164475-gettyimages-1456167226-gitech84-160x90.jpeg 160w, https://cms.cnbcafrica.com/wp-content/uploads/2024/12/108075021-1734011164475-gettyimages-1456167226-gitech84-768x432.jpeg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/12/108075021-1734011164475-gettyimages-1456167226-gitech84-1536x864.jpeg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2024/12/108075021-1734011164475-gettyimages-1456167226-gitech84-scaled.jpeg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">China is focusing on large language models (LLMs) in the artificial intelligence space.  Blackdovfx | Istock | Getty Images</figcaption></figure>



China’s attempts to dominate the world of artificial intelligence could be paying off, with industry insiders and technology analysts telling CNBC that Chinese AI models are already hugely popular and are keeping pace with — and even surpassing — those from the U.S. in terms of performance.



AI has become the latest battleground between the U.S. and China, with both sides considering it a strategic technology. Washington continues to restrict China’s access to leading-edge chips designed to help power artificial intelligence amid fears that the technology could threaten U.S. national security.



It’s led China to pursue its own approach to boosting the appeal and performance of its AI models, including relying on open-sourcing technology and developing its own super-fast software and chips.



<h2 class="wp-block-heading" id="h-china-is-creating-popular-llms"><a></a>China is creating popular LLMs</h2>



Like some of the leading U.S. firms in the space, Chinese AI firms are developing so-called large language models, or LLMs, which are trained on huge amounts of data and underpin applications such as chatbots.



Unlike OpenAI’s models which power the hugely popular ChatGPT, however, many of these Chinese companies are developing open-source, or open-weight, LLMs which developers can download and build on top of for free and without stringent licensing requirements from the inventor.



On Hugging Face, a repository of LLMs, Chinese LLMs are the most downloaded, according to Tiezhen Wang, a machine learning engineer at the company. Qwen, a family of AI models created by Chinese e-commerce giant Alibaba, is the most popular on Hugging Face, he said.



“Qwen is rapidly gaining popularity due to its outstanding performance on competitive benchmarks,” Wang told CNBC by email.



He added that Qwen has a “highly favorable licensing model” which means it can be used by companies without the need for “extensive legal reviews.”



Qwen comes in various sizes, or parameters, as they’re known in the world of LLMs. Large parameter models are more powerful but have higher computational costs, while smaller ones are cheaper to run.



“Regardless of the size you choose, Qwen is likely to be one of the best-performing models available right now,” Wang added.



DeepSeek, a start-up, also made waves recently with a model called DeepSeek-R1. DeepSeek said last month that its R1 model competes with OpenAI’s o1 — a model designed for reasoning or solving more complex tasks.



These companies claim that their models can compete with other open-source offerings like&nbsp;<a href="https://www.cnbc.com/quotes/META/">Meta</a>’s Llama, as well as closed LLMs such as those from OpenAI, across various functions.



“In the last year, we’ve seen the rise of open source Chinese contributions to AI with really strong performance, low cost to serve and high throughput,” Grace Isford, a partner at Lux Capital, told CNBC by email.



<h2 class="wp-block-heading"><a></a>China pushes open source to go global</h2>



Open sourcing a technology serves a number of purposes, including driving innovation as more developers have access to it, as well as building a community around a product.



It is not only Chinese firms that have launched open-source LLMs. Facebook parent Meta, as well as European start-up Mistral, also have open-source versions of AI models.



But with the technology industry caught in the crosshairs of the geopolitical battle between Washington and Beijing, open-source LLMs give Chinese firms another advantage: enabling their models to be used globally.



“Chinese companies would like to see their models used outside of China, so this is definitively a way for companies to become global players in the AI space,” Paul Triolo, a partner at global advisory firm DGA Group, told CNBC by email.



While the focus is on AI models right now, there is also debate over what applications will be built on top of them — and who will dominate this global internet landscape going forward.



“If you assume these frontier base AI models are table stakes, it’s about what these models are used for, like accelerating frontier science and engineering technology,” Lux Capital’s Isford said.



Today’s AI models have been compared to operating systems, such as Microsoft’s Windows, Google’s Android and Apple’s iOS, with the potential to dominate a market, like these companies do on mobile and PCs.



If true, this makes the stakes for building a dominant LLM higher.



“They [Chinese companies] perceive LLMs as the center of future tech ecosystems,” Xin Sun, senior lecturer in Chinese and East Asian business at King’s College London, told&nbsp;CNBC&nbsp;by email.



“Their future business models will rely on developers joining their ecosystems, developing new applications based on the LLMs, and attracting users and data from which profits can be generated subsequently through various means, including but far beyond directing users to use their cloud services,” Sun added.



<h2 class="wp-block-heading"><a></a>Chip restrictions cast doubt over China’s AI future</h2>



AI models are trained on vast amounts of data, requiring huge amounts of computing power. Currently,&nbsp;<a href="https://www.cnbc.com/quotes/NVDA/">Nvidia</a>&nbsp;is the leading designer of the chips required for this, known as graphics processing units (GPUs).



Most of the leading AI companies are training their systems on Nvidia’s most high-performance chips — but not in China.



Over the past year or so, the U.S. has ramped up export restrictions on advanced semiconductor and chipmaking equipment to China. It means Nvidia’s leading-edge chips cannot be exported to the country and the company has had to create sanction-compliant semiconductors to export.



Despite, these curbs, however, Chinese firms have still managed to launch advanced AI models.



“Major Chinese technology platforms currently have sufficient access to computing power to continue to improve models. This is because they have stockpiled large numbers of Nvidia GPUs and are also leveraging domestic GPUs from Huawei and other firms,” DGA Group’s Triolo said.



Indeed, Chinese companies have been boosting efforts to create viable alternatives to Nvidia. Huawei has been one of the leading players in pursuit of this goal in China, while firms like Baidu and Alibaba have also been investing in semiconductor design.



“However, the gap in terms of advanced hardware compute will become greater over time, particularly next year as Nvidia rolls out its Blackwell-based systems that are restricted for export to China,” Triolo said.



Lux Capital’s Isford flagged that China has been “systematically investing and growing their whole domestic AI infrastructure stack outside of Nvidia with high-performance AI chips from companies like Baidu.”



“Whether or not Nvidia chips are banned in China will not prevent China from investing and building their own infrastructure to build and train AI models,” she added.

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China wants to dominate in AI — and some of its models are already beating their U.S. rivals

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="625" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/11/108066045-1732144350860-Bluesky_CEO_Jay_Graber_2-820x625.jpg" alt="" class="wp-image-557334" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/11/108066045-1732144350860-Bluesky_CEO_Jay_Graber_2-820x625.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/11/108066045-1732144350860-Bluesky_CEO_Jay_Graber_2-300x229.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/11/108066045-1732144350860-Bluesky_CEO_Jay_Graber_2-118x90.jpg 118w, https://cms.cnbcafrica.com/wp-content/uploads/2024/11/108066045-1732144350860-Bluesky_CEO_Jay_Graber_2-768x585.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/11/108066045-1732144350860-Bluesky_CEO_Jay_Graber_2-1536x1170.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2024/11/108066045-1732144350860-Bluesky_CEO_Jay_Graber_2-scaled.jpg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">Photo: via CNBC</figcaption></figure>



Bluesky has surged in popularity since the presidential election earlier this month, suddenly becoming a competitor to Elon Musk’s X and Meta’s Threads. But CEO Jay Graber has some cautionary words for potential acquirers: Bluesky is “billionaire proof.”



In an interview on Thursday with CNBC’s “Money Movers,” Graber said Bluesky’s open design is intended to give users the option of leaving the service with all of their followers, which could thwart potential acquisition efforts.



“The billionaire proof is in the way everything is designed, and so if someone bought or if the Bluesky company went down, everything is open source,” Graber said. “What happened to Twitter couldn’t happen to us in the same ways, because you would always have the option to immediately move without having to start over.”



Graber was referring to the way millions of users left Twitter, now X, after Musk purchased the company in 2022. Bluesky now has over 21 million users, still dwarfed by X and Threads, which Facebook’s parent debuted in July 2023.



X and Meta didn’t immediately respond to requests for comment.



Threads has roughly 275 million monthly users, Meta CEO Mark Zuckerberg said in October. Although Musk said in May that X has 600 million monthly users, market intelligence firm Sensor Tower estimates 318 million monthly users as of October.



Bluesky was created in 2019 as an internal Twitter project during Jack Dorsey’s second stint as CEO, and became an independent public benefit corporation in 2022. In May of this year, Dorsey said he is no longer a member of Bluesky’s board.



“In 2019, Jack had a vision for something better for social media, and so that’s why he chose me to build this, and we’re really thankful for him for setting this up, and we’ve continued to carry this out,” said Graber, who previously founded Happening, a social network focused on events. “We’re building an open-source social network that anyone can take into their own hands and build on, and it’s something that is radically different from anything that’s been done in social media before. Nobody’s been this open, this transparent and put this much control in the users hands.”



Part of Bluesky’s business plan involves offering subscriptions that would let users access special features, Graber noted. She also said that Bluesky will add more services for third-party coders as part of the startup’s “developer ecosystem.”



Graber said Bluesky has ruled out the possibility of letting advertisers send algorithmically recommended ads to users.



“There’s a lot on the road map, and I’ll tell you what we’re not going to do for monetization,” Graber said. “We’re not going to build an algorithm that just shoves ads at you, locking users in. That’s not our model.” Bluesky has previously experienced major growth spurts. In September, it added 2 million users following X’s suspension in Brazil over content moderation policy violations in the country and related legal matters.



In October, Bluesky announced that it raised $15 million in a funding round led by Blockchain Capital. The company has raised a total of $36 million, according to Pitchbook.

108066045-1732144350860-Bluesky_CEO_Jay_Graber_2

Bluesky CEO Jay Graber says X rival is ‘billionaire proof’

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="518" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/11/H4D76FPFLJJOFKKB6PZX3XGHFQ-1-820x518.jpg" alt="" class="wp-image-554697" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/11/H4D76FPFLJJOFKKB6PZX3XGHFQ-1-820x518.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/11/H4D76FPFLJJOFKKB6PZX3XGHFQ-1-300x190.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/11/H4D76FPFLJJOFKKB6PZX3XGHFQ-1-142x90.jpg 142w, https://cms.cnbcafrica.com/wp-content/uploads/2024/11/H4D76FPFLJJOFKKB6PZX3XGHFQ-1-768x485.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/11/H4D76FPFLJJOFKKB6PZX3XGHFQ-1-1536x971.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2024/11/H4D76FPFLJJOFKKB6PZX3XGHFQ-1-scaled.jpg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">FILE PHOTO: A Starlink satellite internet system is set up on a caravan truck of a tourist, parked in a street in Ronda, Spain February 12, 2024. REUTERS/Jon Nazca/FILE PHOTO</figcaption></figure>



CAPE TOWN, Nov 15 (Reuters)&nbsp;&#8211;&nbsp;South Africa&#8217;s information and communications technology sector needs policy and regulatory changes to keep up with emerging technologies, the chair of the country&#8217;s communications regulator told Reuters.



Technological advances such as satellite internet and artificial intelligence are forcing governments and regulators worldwide to revamp their oversight of the industry.



Mothibi Ramusi, the new chair of the Independent Communications Authority of South Africa, or ICASA, told Reuters one of his priorities was to ensure the regulator adapted to change.



The regulator is working on finalising its five-year strategy plan, which will guide its priorities going forward.



&#8220;As we have it right now, our legislative frameworks are still a barrier to leapfrog into the future,&#8221; he said on the sidelines of Africa Tech conference on Thursday.



&#8220;The first priority to get things right is we need to revamp the entire ICT framework. The policy needs to be reviewed, the ICASA Act and other associated acts, like the Electronic Communication Transaction Act.&#8221;



South Africa is yet to sign into law proposed amendments to the Electronic Communications Act, which have been in discussion for years. The bill, among other things, proposes new regulations for mobile virtual networks and allows spectrum sharing.



The regulator has also initiated an inquiry into the licensing framework for satellite-internet providers to provide clear rules for potential operators in the country, amid the growing demand for Starlink, operated by Elon Musk&#8217;s SpaceX.



Submissions for comments were closed this week and ICASA will analyse the inputs and begin public consultations before finalising the appropriate licensing framework, Ramusi said.



&#8220;We are mindful that whilst you&#8217;re talking infrastructure expansion, there are other areas where you might not be able to connect people with what you call terrestrial infrastructure,&#8221; Ramusi said.



&#8220;So satellite becomes another infrastructure layer that we need because you need rapid deployment. In South Africa, we are embracing that.&#8221;



South Africa was one of the first few African countries where Starlink wanted to launch its satellite internet but is hindered by the country&#8217;s regulations, which require foreign-owned companies to sell a 30% stake to historically disadvantaged groups in order to operate in country.



(Reporting by Nqobile Dludla; Editing by Christina Fincher)

A Starlink satellite internet system is set up on a caravan truck of a tourist, parked in a street in Ronda

New tech requires rulebook revamp, says S.Africa’s communications regulator

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="429" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/10/https___cloudfront-us-east-2.images.arcpublishing.com_reuters_44RTBPTQEBOPJJS4DZGDBIRFWI-820x429.jpg" alt="" class="wp-image-546009" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/10/https___cloudfront-us-east-2.images.arcpublishing.com_reuters_44RTBPTQEBOPJJS4DZGDBIRFWI-820x429.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/10/https___cloudfront-us-east-2.images.arcpublishing.com_reuters_44RTBPTQEBOPJJS4DZGDBIRFWI-300x157.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/10/https___cloudfront-us-east-2.images.arcpublishing.com_reuters_44RTBPTQEBOPJJS4DZGDBIRFWI-160x84.jpg 160w, https://cms.cnbcafrica.com/wp-content/uploads/2024/10/https___cloudfront-us-east-2.images.arcpublishing.com_reuters_44RTBPTQEBOPJJS4DZGDBIRFWI-768x402.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/10/https___cloudfront-us-east-2.images.arcpublishing.com_reuters_44RTBPTQEBOPJJS4DZGDBIRFWI-1536x804.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2024/10/https___cloudfront-us-east-2.images.arcpublishing.com_reuters_44RTBPTQEBOPJJS4DZGDBIRFWI.jpg 1920w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">Customers and workers are seen at a Huawei store at Sandton City mall in Sandton, South Africa February 16, 2022. REUTERS/Siphiwe Sibeko <a href="https://www.reutersagency.com/en/licensereuterscontent/?utm_medium=rcom-article-media&amp;utm_campaign=rcom-rcp-lead" target="_blank" rel="noreferrer noopener">Purchase Licensing Rights</a></figcaption></figure>



JOHANNESBURG, Oct 24 (Reuters)&nbsp;&#8211;&nbsp;Huawei&nbsp;HWT.UL&nbsp;Cloud&#8217;s business in South Africa has grown fast over the past five years and it plans to launch more cloud solutions to expand market share to boost revenue, a company executive said on Thursday.



Increased demand for faster computing from South African firms and the government has attracted big cloud operators into the country, with Huawei the first international vendor to host a local &#8216;hyperscale&#8217; cloud data centre in South Africa in 2019.



Huawei Cloud has served more than 1,000 customers from the government, financial services, education and telecoms sectors as well as some media and e-commerce companies, Jacqueline Shi, president of Huawei Cloud Global Marketing and Sales Service told delegates at the company&#8217;s cloud summit in Johannesburg.



&#8220;With this kind of strong support from different customers, our cloud business in South Africa has increased more than 16 times over the past five years,&#8221; Shi said.



She told reporters that the total revenue amount &#8220;is still not so big&#8221;, which has encouraged the company to launch more cloud solutions and capture a larger share of the country&#8217;s market.



The cloud market in South Africa is expected to grow at a compound annual rate of around 26% between 2023 and 2028 to 113 billion rand ($6 billion) in value, according to market research company Africa Analysis.



The adoption of artificial intelligence is also driving spending by corporate customers.



&#8220;Go to cloud or not, is not an option anymore. The question is how far and how to do it quickly,&#8221; Huawei Cloud South Africa Chief Executive Steven Chen told reporters.



The Chinese tech giant, which is going head-to-head with cloud services rivals Microsoft&nbsp;MSFT.O, Amazon&nbsp;AMZN.O&nbsp;and Alphabet&#8217;s&nbsp;GOOGL.O&nbsp;Google for customers in South Africa, has three data centre zones or locations in Johannesburg.



($1 = 17.6962 rand)



(Reporting by Nqobile Dludla; Editing by Emelia Sithole-Matarise)

https___cloudfront-us-east-2.images.arcpublishing.com_reuters_44RTBPTQEBOPJJS4DZGDBIRFWI

Huawei Cloud sees fast business growth in South Africa

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="461" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/10/107240789-1684075132097-gettyimages-1240490159-UK_UBER-820x461.jpeg" alt="" class="wp-image-539941" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/10/107240789-1684075132097-gettyimages-1240490159-UK_UBER-820x461.jpeg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/10/107240789-1684075132097-gettyimages-1240490159-UK_UBER-300x169.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/10/107240789-1684075132097-gettyimages-1240490159-UK_UBER-160x90.jpeg 160w, https://cms.cnbcafrica.com/wp-content/uploads/2024/10/107240789-1684075132097-gettyimages-1240490159-UK_UBER-768x432.jpeg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/10/107240789-1684075132097-gettyimages-1240490159-UK_UBER-1536x864.jpeg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2024/10/107240789-1684075132097-gettyimages-1240490159-UK_UBER.jpeg 1858w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">An Uber-dedicated charger at a BP Pulse electric vehicle charging station in central London, U.K., on Monday, April 11, 2022. Bloomberg | Bloomberg | Getty Images</figcaption></figure>



Uber CEO Dara Khosrowshahi on Tuesday announced that the company is updating its platform with new sustainability-minded features, including an “EV preference” that will let customers opt for fully electric vehicles by default, whenever they hail a ride.



The company previously launched an “Uber Green,” service which has historically included a mix of battery electric vehicles, and hybrid electric models. Now, Uber can offer battery electric vehicles as the sole “green” option in more than 40 cities globally, executives said at Uber’s annual Go Get Zero sustainability conference in London on Tuesday.



Speaking at Uber’s GO-GET Zero event in London, Khosrowshahi said that the company’s rollout of new sustainability-focused features arrives ahead of the 2024 U.S. elections, adding this is a time when the topic of EVs has become a “politically-charged issue.”



However, he noted that the overall trend is moving toward all-electric mobility options.



“The reality is that we will only reach or zero emission goals if policymakers and other businesses do their part as well,” Khosrowshahi said at the event.



“We need more affordable EVs, we need stronger EV mandates, we need incentives for people who are driving the most. We want to make sure that chargers are available at every community, not just the wealthiest. So we all need to step up,” he said.



For drivers, Uber said it is rolling out an “EV Mentor” program, which connects drivers for any questions about electric mobility. The company also debuted an AI chatbot powered by OpenAI’s ChatGPT, looking to answer questions for drivers on the ride-hail network about what it takes to buy and use a battery electric vehicle instead of a gas-burning vehicle.



Transportation has been responsible for about 25% of carbon emissions from human activity globally, according to estimates by the non-profit International Council on Clean Transportation. Carbon emissions, and other greenhouse gases from human activity, cause long-term shifts in temperatures and weather, while also contributing to respiratory disease by forming smog and air pollution.



Ride-hailing services like Uber’s can contribute to traffic congestion and therefore, pollution, according to analysis by Suvrat Dhanorkar, Gordon Burtch and others published in the journal of Transportation Science. Uber has been working to reduce its environmental footprint and looks to become a “zero-emissions platform” by 2040.



On the delivery side of its platform, Uber is adding farmers’ market produce to Uber Eats offerings in two major U.S. markets: New York City and Los Angeles.



Uber said it will also be investing nearly $1 million to enable restaurants in Paris that sell meals via Uber Eats to switch to more sustainable packaging, such as seaweed-based packaging from NotPLA,&nbsp;bags made of foliage by Releaf, and&nbsp;straws made of agricultural suAgar residuals from IAmPlasticFree.



According to statistics tracked by the Organization for Economic Co-operation and Development (OECD), residents in Paris generate more than 400 kg (880 lb) of waste each year. France has implemented laws to reduce this waste, requiring fast food restaurants to move away from disposable, plastic packaging and utensils.



In the U.K., specifically, Uber said it’s launched a partnership with British energy supplier Octopus Energy and Chinese EV firm BYD to co-fund 1,000 free home chargers worth almost £1,000 each for drivers in the U.K.



The deal will give Uber drivers the ability to access Octopus’ “Intelligent Go” tariff to help them with EV charging costs. Drivers will also be able to get 8% off at public charging systems across Octopus’ Electroverse network.



“This is the first partnership between uber a power company and an EV manufacturer and it will meaningfully reduce charging costs for drivers,” Rebecca Tinucci, Uber’s head of global sustainability, said at the London event Tuesday. Tinucci was formerly senior director of charging infrastructure at Tesla.

107240789-1684075132097-gettyimages-1240490159-UK_UBER

Uber gives users option to only hail full-electric cars, launches AI chatbot for EV-curious drivers

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="615" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/09/108038698-1727224394854-OpenAI_Voice-820x615.jpg" alt="" class="wp-image-534792" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/09/108038698-1727224394854-OpenAI_Voice-820x615.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/09/108038698-1727224394854-OpenAI_Voice-300x225.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/09/108038698-1727224394854-OpenAI_Voice-120x90.jpg 120w, https://cms.cnbcafrica.com/wp-content/uploads/2024/09/108038698-1727224394854-OpenAI_Voice-768x576.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/09/108038698-1727224394854-OpenAI_Voice-1536x1152.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2024/09/108038698-1727224394854-OpenAI_Voice-scaled.jpg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">OpenAI has launched advanced voice mode for audio chats with ChatGPT. Jordan Novet, CNBC</figcaption></figure>



ChatGPT is ready for more natural audio chats.



OpenAI said Tuesday that its popular chatbot now has an advanced voice feature for people who pay for the premium service. The tool allows for more fluid conversations.



The release will continue through the week. The company said it’s not yet available in EU countries, Iceland, Liechtenstein, Norway, Switzerland or the U.K.



OpenAI announced the new capability in May. The rollout got plenty of publicity because of a voice called Sky that resembled that of Scarlett Johansson in the 2013 movie “Her.” Legal counsel working on behalf of Johansson sent OpenAI letters claiming the company didn’t have the right to use the near-identical voice, and OpenAI paused using it in its products, CNBC reported.



In the months since, people have been able to configure ChatGPT to talk to them in other voices through a free tier. The advanced version responds more quickly and will stop talking and listen if you interrupt it. There are now nine voices to choose from, and you can enter instructions for voice chats in the Customizations part of the app’s settings.



“Hope you think it was worth the wait,” Sam Altman, OpenAI’s co-founder and CEO, wrote in an X post on Tuesday.



It’s an increasingly competitive space for OpenAI, which is backed by Microsoft.



For the past couple weeks, Google has been releasing its own Gemini Live voice feature in English on Android devices. And on Monday, Reuters reported that Meta will introduce celebrity voices later this week that can be accessed through Facebook, Instagram and WhatsApp.



OpenAI got a head start in the generative AI chatbot market, when it launched ChatGPT in late 2022. In August, OpenAI told media outlets that ChatGPT had over 200 million weekly active users.



The advanced mode is only available to those with subscriptions to OpenAI’s Plus, Team or Enterprise plans. The most affordable option is the Plus tier at $20 per month.



<h2 class="wp-block-heading" id="h-here-s-what-to-do"><a></a>Here’s what to do</h2>



If you’re paying, it’s easy to get started, assuming OpenAI has granted access to your device.



First, make sure you have the latest version of the app on your phone.



Open the ChatGPT app.



OpenAI says you’ll receive a notification in the app once it’s turned on access to the new feature. Hit the continue button to get started.



Create a new chat by swiping right or tapping the two-line icon in the top left corner and selecting ChatGPT at the top. To the right of the “Message” text field and the microphone icon, you should see a sound wave icon. Tap that and make sure your sound is on.



In a few seconds, you’ll hear a little “bump” sound, and the circle in the middle of the screen will morph into a fluid sky-like blue and white animation. Start speaking. You should receive a response quickly. Don’t be surprised if audio breaks up a bit.



OpenAI said it has improved accents in some foreign languages and has increased the speed of conversations. But if you don’t like what you’re hearing, you can ask ChatGPT to speak differently. You can tell it to speed up, for example, or incorporate a Southern accent.



With advanced voice mode, you can have ChatGPT tell you a bedtime story, help you get ready for a job interview or even work on your foreign language skills.



But even if you’re paying, you won’t have unlimited access to advanced voice mode. After using it for about a half hour on Tuesday, I started seeing “15 minutes left” at the bottom of the screen.



OpenAI didn’t immediately respond to a request for details about the time limit.

108038698-1727224394854-OpenAI_Voice

OpenAI just launched advanced voice mode for audio chats with ChatGPT. Here’s how to use it

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="461" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/09/108031541-1725948491431-gettyimages-2170168255-Illustration_Huawei_Foldable_Phone_Booking-820x461.jpeg" alt="" class="wp-image-529070" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/09/108031541-1725948491431-gettyimages-2170168255-Illustration_Huawei_Foldable_Phone_Booking-820x461.jpeg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/09/108031541-1725948491431-gettyimages-2170168255-Illustration_Huawei_Foldable_Phone_Booking-300x169.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/09/108031541-1725948491431-gettyimages-2170168255-Illustration_Huawei_Foldable_Phone_Booking-160x90.jpeg 160w, https://cms.cnbcafrica.com/wp-content/uploads/2024/09/108031541-1725948491431-gettyimages-2170168255-Illustration_Huawei_Foldable_Phone_Booking-768x432.jpeg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/09/108031541-1725948491431-gettyimages-2170168255-Illustration_Huawei_Foldable_Phone_Booking-1536x864.jpeg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2024/09/108031541-1725948491431-gettyimages-2170168255-Illustration_Huawei_Foldable_Phone_Booking.jpeg 1858w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">Illustration of a user browsing booking information for Huawei’s new foldable mobile phone in Suqian, Jiangsu province, China, Sept 8, 2024.  Cfoto | Future Publishing | Getty Images</figcaption></figure>



As Huawei tries to upstage Apple’s new iPhone with the launch of its own ‘trifold phone’ on Tuesday, its chip capabilities remain a weakness, despite recent breakthroughs, according to one analyst. 



Speaking to CNBC’s “Squawk Box Asia” on Tuesday, Martin Yang, senior analyst of emerging technologies at Oppenheimer &amp; Co., said Huawei’s chip remains two or three years behind the cutting edge.&nbsp;



The gap on technology for their systems-on-chip, or SoCs, that merge central processing with cellular connectivity,&nbsp;is “widening because [Huawei] still doesn’t have access to any below 7 nanometer processes,” said Yang.&nbsp;In chip manufacturing, a nanometer denotes the size of transistors on a processor.



The smaller the size of a transistor, the more can be fit on a chip, increasing its level of advancement.&nbsp;



Huawei had made a smashing breakthrough last year when it released its Mate 60 smartphone, which included an advanced 7-nanometer chip originating from China. 



The speed in which Chinese firms were able to reach this benchmark surpassed what many analysts thought possible under U.S. trade restrictions that limited China’s access to advanced semiconductor tech. 



On the back of this success, Huawei has been able to take back market share from Apple in China, the largest smartphone market in the world.&nbsp;



However, unlike with the Mate 50, Huawei has not announced a big chip breakthrough for its latest phone launch.&nbsp;&nbsp;



Meanwhile, Apple is now on its second generation of 3 nanometer processes, and are already showing a 10% to 15% performance boost on this year’s phone compared to last year’s first generation 3 nanometer process, according to Yang.&nbsp;



“I think the chip will not be a big focus area or big marketing point for Huawei’s upcoming phone this week,” Yang said.&nbsp;



Instead, the company will likely try to downplay this chip disadvantage in the coming launch week and instead try to highlight that its phone is the first trifold phone on the market, he added.&nbsp;



Huawei has been accepting preorders for the foldable phone, the Mate XT, since Sept. 7. According to its website, the phone had already received more than 3.5 million preorders as of Tuesday. 



However, the Mate 60 RS, which Huawei released last year similarly had respectable reservations numbers, but failed to transfer them to actual sales, according to Yang. 



“I wouldn’t expect real world shipments in the [3 million range],” he said.



Speaking to CNBC’s “Street Signs Asia,” on Tuesday, Navkendar Singh, of the International Data Corporation, said that while Huawei has dominated in sales of foldable smartphones, the market remains niche due to consumer concerns about price and functionality.

108031541-1725948491431-gettyimages-2170168255-Illustration_Huawei_Foldable_Phone_Booking

In Huawei’s battle against Apple, chips are still a weakness, says analyst

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="547" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/08/GettyImages-2163954491-820x547.jpg" alt="" class="wp-image-513690" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/08/GettyImages-2163954491-820x547.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/08/GettyImages-2163954491-300x200.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/08/GettyImages-2163954491-135x90.jpg 135w, https://cms.cnbcafrica.com/wp-content/uploads/2024/08/GettyImages-2163954491-768x512.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/08/GettyImages-2163954491-1536x1024.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2024/08/GettyImages-2163954491-scaled.jpg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">PARAGUAY &#8211; 2024/07/30: In this photo illustration, the Artificial intelligence (AI) text logo seen in the background with a silhouette hand holding a smartphone. (Photo Illustration by Jaque Silva/SOPA Images/LightRocket via Getty Images)</figcaption></figure>



The European Union’s landmark artificial intelligence law officially enters into force Thursday — and it means tough changes for American technology giants.



The AI Act, a landmark rule that aims to govern the way companies develop, use and apply AI, was given final approval by EU member states, lawmakers, and the European Commission — the executive body of the EU — in May.



CNBC has run through all you need to know about the AI Act — and how it will affect the biggest global technology companies.



<h2 class="wp-block-heading" id="h-what-is-the-ai-act"><a></a>What is the AI Act?</h2>



The AI Act is a piece of EU legislation governing artificial intelligence. First proposed by the European Commission in 2020, the law aims to address the negative impacts of AI.



It will primarily target large U.S. technology companies, which are currently the primary builders and developers of the most advanced AI systems.



However, plenty other businesses will come under the scope of the rules — even non-tech firms.



The regulation sets out a comprehensive and harmonized regulatory framework for AI across the EU, applying a risk-based approach to regulating the technology.



Tanguy Van Overstraeten, head of law firm Linklaters’ technology, media and technology practice in Brussels, said the EU AI Act is “the first of its kind in the world.”



“It is likely to impact many businesses, especially those developing AI systems but also those deploying or merely using them in certain circumstances.”



The legislation applies a risk-based approach to regulating AI which means that different applications of the technology are regulated differently depending on the level of risk they pose to society.



For AI applications deemed to be “high-risk,” for example, strict obligations will be introduced under the AI Act. Such obligations include adequate risk assessment and mitigation systems, high-quality training datasets to minimize the risk of bias, routine logging of activity, and mandatory sharing of detailed documentation on models with authorities to assess compliance.



Examples of high-risk AI systems include autonomous vehicles, medical devices, loan decisioning systems, educational scoring, and remote biometric identification systems.



The law also imposes a blanket ban on any applications of AI deemed “unacceptable” in terms of their risk level.



Unacceptable-risk AI applications include “social scoring” systems that rank citizens based on aggregation and analysis of their data, predictive policing, and the use of emotional recognition technology in the workplace or schools.



<h2 class="wp-block-heading"><a></a>What does it mean for U.S. tech firms?</h2>



U.S. giants like Microsoft, Google, Amazon, Apple, and Meta have been aggressively partnering with and investing billions of dollars into companies they think can lead in artificial intelligence amid a global frenzy around the technology.



Cloud platforms such as Microsoft Azure, Amazon Web Services and Google Cloud are also key to supporting AI development, given the huge computing infrastructure needed to train and run AI models.



In this respect, Big Tech firms will undoubtedly be among the most heavily-targeted names under the new rules.



“The AI Act has implications that go far beyond the EU. It applies to any organisation with any operation or impact in the EU, which means the AI Act will likely apply to you no matter where you’re located,” Charlie Thompson, senior vice president of EMEA and LATAM for enterprise software firm Appian, told CNBC via email.



“This will bring much more scrutiny on tech giants when it comes to their operations in the EU market and their use of EU citizen data,” Thompson added



Meta has already restricted the availability of its AI model in Europe due to regulatory concerns — although this move wasn’t necessarily the due to the EU AI Act.



The Facebook owner earlier this month said it would not make its LLaMa models available in the EU, citing uncertainty over whether it complies with the EU’s General Data Protection Regulation, or GDPR.



The company was previously ordered to stop training its models on posts from Facebook and Instagram in the EU due to concerns it may violate GDPR.



<h2 class="wp-block-heading"><a></a>How is generative AI treated?</h2>



Generative AI is labelled in the EU AI Act as an example of “general-purpose” artificial intelligence.



This label refers to tools that are meant to be able to accomplish a broad range of tasks on a similar level — if not better than — a human.



General-purpose AI models include, but aren’t limited to, OpenAI’s GPT, Google’s Gemini, and Anthropic’s Claude.



For these systems, the AI Act imposes strict requirements such as respecting EU copyright law, issuing transparency disclosures on how the models are trained, and carrying out routine testing and adequate cybersecurity protections.



Not all AI models are treated equally, though. AI developers have said the EU needs to ensure open-source models — which are free to the public and can be used to build tailored AI applications — aren’t too strictly regulated.



Examples of open-source models include Meta’s LLaMa, Stability AI’s Stable Diffusion, and Mistral’s 7B.



The EU does set out some exceptions for open-source generative AI models.



But to qualify for exemption from the rules, open-source providers must make their parameters, including weights, model architecture and model usage, publicly available, and enable “access, usage, modification and distribution of the model.”



Open-source models that pose “systemic” risks will not count for exemption, according to the AI Act.



It’s “necessary to carefully assess when the rules trigger and the role of the stakeholders involved,” he [who said this?] said.



<h2 class="wp-block-heading"><a></a>What happens if a company breaches the rules?</h2>



Companies that breach the EU AI Act could be fined between 35 million euros ($41 million) or 7% of their global annual revenues — whichever amount is higher — to 7.5 million or 1.5% of global annual revenues.



The size of the penalties will depend on the infringement and size of the company fined.



That’s higher than the fines possible under the GDPR, Europe’s strict digital privacy law. Companies faces fines of up to 20 million euros or 4% of annual global turnover for GDPR breaches.



Oversight of all AI models that fall under the scope of the Act — including general-purpose AI systems — will fall under the European AI Office, a regulatory body established by the Commission in February 2024.



Jamil Jiva, global head of asset management at&nbsp;fintech firm Linedata, told CNBC the EU “understands that they need to hit offending companies with significant fines if they want regulations to have an impact.”



Similar to how GDPR demonstrated the way the EU could “flex their regulatory influence to mandate data privacy best practices” on a global level, with the AI Act, the bloc is again trying to replicate this, but for AI, Jiva added.



Still, it’s worth noting that even though the AI Act has finally entered into force, most of the provisions under the law won’t actually come into effect until at least 2026.



Restrictions on general-purpose systems won’t begin until 12 months after the AI Act’s entry into force.



Generative AI systems that are currently commercially available — like OpenAI’s ChatGPT and Google’s Gemini — are also granted a “transition period” of 36 months to get their systems into compliance.

In this photo illustration, the Artificial intelligence (AI

World’s first major AI law enters into force — here’s what it means for U.S. tech giants

<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="929" height="523" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/07/108009036-1721398542475-gettyimages-2162004949-AA_19072024_1780984.jpeg" alt="" class="wp-image-511432" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/07/108009036-1721398542475-gettyimages-2162004949-AA_19072024_1780984.jpeg 929w, https://cms.cnbcafrica.com/wp-content/uploads/2024/07/108009036-1721398542475-gettyimages-2162004949-AA_19072024_1780984-300x169.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/07/108009036-1721398542475-gettyimages-2162004949-AA_19072024_1780984-820x462.jpeg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/07/108009036-1721398542475-gettyimages-2162004949-AA_19072024_1780984-160x90.jpeg 160w, https://cms.cnbcafrica.com/wp-content/uploads/2024/07/108009036-1721398542475-gettyimages-2162004949-AA_19072024_1780984-768x432.jpeg 768w" sizes="auto, (max-width: 929px) 100vw, 929px" /><figcaption class="wp-element-caption">The blue screen of death errors on computer screens are viewed due to the global communications outage caused by CrowdStrike, which provides cyber security services to US technology company Microsoft, on July 19, 2024 in Ankara, Turkey.  Harun Ozalp | Anadolu | Getty Images</figcaption></figure>



CrowdStrike CEO George Kurtz said that over 97% of Windows sensors are back online after an update from the cybersecurity firm caused one of the world’s biggest IT outages.



“To our customers still affected, please know we will not rest until we achieve full recovery,” Kurtz said in a LinkedIn post on Thursday.



Last week, CrowdStrike issued a routine update to its users around the world — which mainly comprise large businesses — that had a bug which caused Microsoft’s Windows operating system to crash.



Many users woke up on Friday to a blue screen error on Windows. The IT outage sparked chaos around the world, with flights being cancelled, businesses closing early and even medical staff scrambling to keep operations running.



CrowdStrike rolled back the update to fix the issue.



The company’s share price has been hammered since the incident, as CEO Kurtz looks to contain the reputational fallout.



“I am deeply sorry for the disruption this outage has caused and personally apologize to everyone impacted. While I can’t promise perfection, I can promise a response that is focused, effective, and with a sense of urgency,” he wrote on LinkedIn.



To apologize for the incident, CrowdStrike sent Uber Eats gift cards to “teammates and partners who have been helping customers through this situation,” a company spokesperson told CNBC.



TechCrunch previously reported the news and added that some people were having trouble using the gift card.



“Uber flagged it as fraud because of high usage rates,” a CrowdStrike spokesperson said.

108009036-1721398542475-gettyimages-2162004949-AA_19072024_1780984

CrowdStrike CEO says 97% of Windows sensors back online after major outage

<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="2048" height="1366" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/07/107418094-1716321352537-gettyimages-2153474140-AFP_34TH9TC-scaled.jpeg" alt="" class="wp-image-511392" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/07/107418094-1716321352537-gettyimages-2153474140-AFP_34TH9TC-scaled.jpeg 2048w, https://cms.cnbcafrica.com/wp-content/uploads/2024/07/107418094-1716321352537-gettyimages-2153474140-AFP_34TH9TC-300x200.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/07/107418094-1716321352537-gettyimages-2153474140-AFP_34TH9TC-820x547.jpeg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/07/107418094-1716321352537-gettyimages-2153474140-AFP_34TH9TC-135x90.jpeg 135w, https://cms.cnbcafrica.com/wp-content/uploads/2024/07/107418094-1716321352537-gettyimages-2153474140-AFP_34TH9TC-768x512.jpeg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/07/107418094-1716321352537-gettyimages-2153474140-AFP_34TH9TC-1536x1024.jpeg 1536w" sizes="auto, (max-width: 2048px) 100vw, 2048px" /><figcaption class="wp-element-caption">Photo: via CNBC</figcaption></figure>



OpenAI on Thursday announced a prototype of its search engine, called SearchGPT, which aims to give users “fast and timely answers with clear and relevant sources.”



The company said it eventually plans to integrate the tool, which is currently being tested with a small group of users, into its ChatGPT chatbot.



The rollout could have implications for Google and its dominant search engine. Since the launch of ChatGPT in November 2022, Alphabet investors have been concerned that OpenAI could take market share from Google in search by giving consumers new ways to seek information online. 



With this prototype, OpenAI is testing the waters for doing just that, promising users the chance to “search in a more natural, intuitive way” and ask follow-up questions “just like you would in a conversation.”



“We think there is room to make search much better than it is today,” OpenAI CEO Sam Altman wrote Thursday in a post on X.



Alphabet shares fell more than 3% on Thursday to close at $167.28, while the Nasdaq was down less than 1%.



In May, Google launched AI Overview, which CEO Sundar Pichai called the biggest change in search in 25 years, to a limited audience, allowing users to see a summary of answers to queries at the very top of Google Search.



Though Google had been working on AI Overview for more than a year, public criticism mounted after  users quickly noticed that queries returned nonsensical or inaccurate results within the AI feature — without any way to opt out.



“Google has been kind of shaking in their boots a little bit since this stuff first popped off,” said Daniel Faggella, founder and head of research at Emerj Artificial Intelligence Research, referring to generative artificial intelligence. “We haven’t seem their company crumble in the interim, but we have seen them kind of fumble.”&nbsp;



The SearchGPT announcement follows OpenAI’s launch last Thursday of a new AI model, “GPT-4o mini.” The new model is an offshoot of GPT-4o, the startup’s fastest and most powerful model to date, which it launched in May during a livestreamed event with executives. 



OpenAI, backed by Microsoft, has been valued at more than $80 billion by investors. The company, founded in 2015, is under pressure to stay on top of the generative AI market while finding ways to make money as it spends massive sums on processors and infrastructure to build and train its models.



Last Month, OpenAI announced the hiring of two top executives as well as a partnership with Apple that includes a ChatGPT-Siri integration. Sarah Friar, previously CEO of Nextdoor and finance chief at Square, joined as chief financial officer, and Kevin Weil, an ex-president at Planet Labs and former senior vice president at Twitter and a vice president at Facebook and Instagram, joined as chief product officer.



OpenAI is bolstering its C-suite as its large language models gain importance across the tech sector and as competition rapidly emerges in the burgeoning generative AI market.&nbsp;



Both OpenAI’s new mini AI model and the prototype of SearchGPT are also part of the company’s push to be at the forefront of “multimodality,” or the ability to offer a wide range of types of AI-generated media, like text, images, audio, video and search, inside one tool: ChatGPT.



For SearchGPT, OpenAI’s blog post said the tool’s visual results will lead to “richer understanding” for users.



Last year, OpenAI Chief Operating Officer Brad Lightcap told CNBC, “The world is multimodal.” He added that as humans “engage with the world, we see things, we hear things, we say things,” so limiting interactions to text is insufficient.

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