This week, Trump’s meeting with Putin in Alaska, followed by talks in Washington with NATO and European leaders over a possible Russia-Ukraine peace deal, have dominated headlines and pushed critical discussions on artificial intelligence into the background.
Nonetheless, significant developments surfaced. The most troubling are around Meta: internal documents revealed that its AI policies allow chatbots to engage in sensual conversations with children. In parallel, a Brazilian YouTuber published a viral video exposing how children are sexualised for monetisation and social media validation, and how Instagram’s algorithm can funnel such content to paedophiles in under five minutes due to algorithmic amplification. Beyond highlighting individual cases, the video reveals the broader failure of tech giants to act decisively against a system that enables and profits from online child exploitation. These problems are not isolated: the UK has recently mandated age checks to prevent access to harmful content, while Australia banned social media accounts for users under 16. Taken together, these issues point to a growing global crisis demanding urgent attention.
Meanwhile, the U.S. government has begun studying a new approach to subsidies for AI development under the CHIPS Act that would involve taking equity stakes in companies receiving government support. These developments, along with other key updates, are covered in today’s newsletter items:
EU Tech Policy
Google revises its Play Store fees in bid to dodge EU’s DMA
Google announced further changes to its mobile app store on Tuesday in a bid to avoid fines from the European Commission under the EU’s Big Tech rulebook, the Digital Markets Act (DMA). In a post on its Policy Centre this week, Google set out amendments to its “external offers program” for developers using its Play Store to distribute apps in the European Economic Area, which it said should allow them to more easily point users to offers outside the company’s own app Store. Under the bloc’s DMA, tech giants (including Apple and Google) can face fines up to 10% of their annual worldwide turnover for confirmed breaches. This year, the Commission has fined Apple and Meta after confirming violations – but, so far, Google has dodged a DMA penalty despite the Commission’s preliminary breach finding on its Play Store in March. Google’s latest changes, which included revisions to the fees it charges app developers, shows the company wants to work around the EU’s regulation. Access full article >>
France burns TikTok over tan lines trend
The French government has turned to national regulator Arcom to complain about a TikTok tan lines trend promoting hazardous sun exposure. A growing number of TikTok videos depict young girls giving tips on how to get halterneck tan lines, or “burn lines,” primarily through sun exposure. Health and Digital Ministers called on Arcom — in coordination with the European Commission, which enforces the new content moderation rules for major platforms like TikTok — to ensure social media companies are meeting their obligations under the Digital Services Act. That includes protecting minors, evaluating and mitigating so-called systemic risks and being transparent about how their algorithms work. Paris urged the regulator to “compile a file to send to the appropriate coordinator and, if necessary, to collaborate with the European Commission services as part of a possible investigation.” Access full article >>
Huawei’s reach in Spain sparks widespread concern over state infiltration
Spanish magistrates, law enforcement leaders and opposition politicians are voicing alarm over Madrid’s unusually close ties to Beijing, as the Chinese tech giant’s footprint in Spain’s public sector is deeper than first thought. The concerns have intensified since July, when reports surfaced of an alleged €12.3 million contract between 2021 and 2025 for Huawei to store sensitive judicial wiretap data for the interior ministry. Opposition Popular Party (PP) secretary general Miguel Tellado branded the public tender “shady” and claimed it was part of “the Chinese branch of Pedro Sánchez’s enormous corruption network.” The PP is also demanding that Sánchez’s top ministers testify before parliament after the summer recess. Access full article >>
US says UK human rights record worsening thanks to online safety regime
The U.S. State Department’s annual assessment of countries’ human rights practices criticizes the U.K. government for attempting to “chill speech” around the perpetrator of last summer’s Southport attack in which three young girls were killed, stating that “censorship of ordinary Britons was increasingly routine.” The report singles out the U.K.’s OSA for criticism, claiming the rules “expressly expanded Ofcom’s authority to include American media and technology firms with a substantial number of British users, regardless of whether they had a corporate presence in the UK.” Access full article >>
US Tech Policy
U.S. Senator Hawley launches probe into Meta AI policies
U.S. Senator Josh Hawley launched a probe into Facebook parent Meta Platforms’ (META.O), opens new tab artificial intelligence policies on Friday, demanding documents on rules that had allowed its artificial intelligence chatbots to “engage a child in conversations that are romantic or sensual.” Both Democrats and Republicans in Congress have expressed alarm over the rules outlined in an internal Meta document first reported by Reuters on Thursday. Access full article >>
Japan’s SoftBank to invest $2 billion in Intel
Japan-based tech investor SoftBank Group said on Tuesday, August 19, that it will invest $2 billion in Intel, as the US government reportedly considers taking a 10% stake in the troubled US chip giant. SoftBank’s move came as the Trump administration discussed taking a stake of about 10% in Intel to boost the chipmaker and the American semiconductor sector, according to US media, including Bloomberg News and the Wall Street Journal. Intel is one of Silicon Valley’s most iconic companies but its fortunes have been dwarfed by Asian powerhouses TSMC and Samsung, which dominate the made-to-order semiconductor business. Access full article >>
Trump eyes US government stakes in other chip makers that received CHIPS Act funds
U.S. Commerce Secretary Howard Lutnick is looking into the federal government taking equity stakes in computer chip manufacturers that receive CHIPS Act funding to build factories in the country, two sources said. Expanding on a plan to receive an equity stake in Intel in exchange for cash grants, a White House official and a person familiar with the situation said Lutnick is exploring how the U.S. can receive equity stakes in exchange for CHIPS Act funding for companies such as Micron, Taiwan Semiconductor Manufacturing Co, and Samsung. Much of the funding has not yet been dispersed. White House press secretary Karoline Leavitt confirmed on Tuesday that Lutnick was working on a deal with Intel to take a 10% government stake. Access full article >>
Big Tech’s next major political battle may already be brewing in your backyard
The push by companies like OpenAI and Google to win the artificial intelligence race has led to a proliferation of data centers in communities across all 50 US states. The rise of these server farms has sparked fierce battles from the Virginia suburbs to Tucson, Arizona, and beyond, as city and county governments grapple with how to balance job creation and new revenue streams against the strain data centers put on water and energy resources. The data center industry is expected to contribute $9.1 billion in gross domestic product to Virginia’s economy annually. In Loudoun County, Virginia, that has meant a $250 million budget surplus and a property tax cut. But the typical residential ratepayer in that state could experience a $14 to $37 monthly electric bill increase by 2040, according to a report from Virginia’s Joint Legislative Audit and Review Commission, in part because of the need for infrastructure upgrades whose costs could be spread to all customers. Access full article >>
Policy Other Regions
Google to pay $36M fine for anticompetitive deals with Australia’s largest telcos
Google has agreed to pay a 55 million Australian dollar ($36 million) fine for signing anticompetitive deals with Australia’s two largest telcos that banned the installation of competing search engines on some smartphones. Under the anticompetitive agreements, which were in place for 15 months until March 2021, Telstra and Optus only pre-installed Google Search on Android phones sold to customers. Other search engines were excluded. In return, the telcos received a share of the advertisement revenue Google generated from those customers. Access full article >>
China is taking AI safety seriously
AI safety has become a political priority in China. In April, President Xi Jinping chaired a rare Politburo study session on AI warning of “unprecedented” risks. China’s National Emergency Response Plan now lists AI safety alongside pandemics and cyberattacks. Regulators require pre-deployment safety assessments for generative AI and recently removed over 3,500 non-compliant AI products from the market. In just the first half of this year, China has issued more national AI standards than in the previous three years combined. Meanwhile, the volume of technical papers focused on frontier AI safety has more than doubled over the past year in China. Access full article >>
India supercharges semiconductor ambitions with $19bn in new projects
India has taken a bold leap toward semiconductor self-reliance, with the Union Cabinet approving four new manufacturing units on August 12, bringing the national tally to 10 sanctioned semiconductor projects. The fresh approvals amount to approximately US$524 million and complement previously approved investments, taking total semiconductor commitments under the India Semiconductor Mission (ISM) to around $19 billion, a clear signal of New Delhi’s industrial intent. Industry analysts say India’s semiconductor ambitions are rapidly becoming reality. With support from ISM, state-level incentives, and collaboration with multinational heavyweights, 2025 is shaping up to be a pivotal year in building homegrown chip-making capacity. Access full article >>
Market trends
MIT report finds 95% of generative AI Pilots fail to deliver financial impact
The GenAI Divide: State of AI in Business 2025, a new report published by MIT’s NANDA initiative, reveals that while generative AI holds promise for enterprises, most initiatives to drive rapid revenue growth are falling flat. Despite the rush to integrate powerful new models, about 5% of AI pilot programs achieve rapid revenue acceleration; the vast majority stall, delivering little to no measurable impact on P&L. The research, based on 150 interviews with leaders, a survey of 350 employees, and an analysis of 300 public AI deployments, paints a clear divide between success stories and stalled projects. Access full article >>
Influencer shakes up Brazil with video on online child exploitation
Youtuber “Felca” had his popularity skyrocketed on 6 August in Brazil, after he released a video denouncing the exploitation of minors in online content creation. Assembling a collage of content from widely followed Brazilian accounts, he exposed cases where children were portrayed in a sexualised manner in pursuit of easy monetisation and social media validation. Felca’s video, titled Adultização (“Adultification”), quickly went viral, racking up over 45 million views within days. Beyond criticising adults who exploit children online and the tech giants that have the tools to curb such content but fail to act swiftly. “He exposes how algorithms can deliver a child’s video to paedophiles within minutes, revealing the entire mechanism of online child sexual exploitation and how these platforms profit from it.” Access full article >>
US tech stocks slide after Altman warns of ‘bubble’ in AI and MIT study doubts the hype
Investor enthusiasm for artificial intelligence wavered this week as major tech stocks sold off. Nvidia dropped 3.5% and Palantir nearly 10% after an MIT study claimed 95% of companies see no returns from generative AI, while OpenAI’s Sam Altman warned of a potential bubble. And while the MIT study attributed failures to corporate “learning gaps” and flawed integration rather than actual AI model quality, the market reaction highlights growing concerns about AI’s commercial viability. Access full article >>
How AI could push data centre infrastructure to $63.1 billion by 2029
Dell’Oro forecasts the data centre physical infrastructure market could reach US$63.1 billion by 2029, on account of rising AI workloads requiring advanced cooling solutions. Growth across the global market is surging, with North America continuing to lead and EMEA and the Chinese markets expected to peak around 2026. Dell’Oro suggests in its report that AI sovereignty and export-policy shifts will support such significant growth. Access full article >>
Most commercial data centres use minimal water, techUK report says
A new techUK report spotlights commercial data centres’ water usage in England, amid the country’s AI push, finding that minimal water is used across most sites. The report, Understanding Data Centre Water Use in England, is based on a survey run in collaboration with the Environment Agency, and reveals new insights into how commercial data centres across the country use water. It finds that most surveyed data centres are low water users, saying 51% of surveyed data centres use waterless cooling systems. Access full article >>
The issue with AI-powered pricing
An unbounded collection of consumers’ personal data, along with advances in digital technology, is enabling sellers to use powerful algorithms to invade a consumer’s privacy and capitalize on the results. Sellers can create an intimate profile of each consumer, and use it to assess that consumer’s unique willingness, and ability, to pay more than the price that the traditional supply and demand curves would yield. Access full article >>
Robots compete in sports at China’s World Humanoid Robot Games
The first World Humanoid Robot Games in Beijing showed more than 500 humanoid robots in 280 teams from 16 countries, including the U.S., Germany and Japan, competing in sports including soccer, running and boxing, at the 12,000-seater National Speed Skating Oval, built for the 2022 Winter Olympics. Access full video >>
Huawei Cloud secures top Gartner ranking with AI-driven container strategy
Huawei Cloud has been positioned in the Leaders quadrant of the Gartner Magic Quadrant for Container Management 2025, reflecting the company’s growing influence in the global cloud-native ecosystem and its strategic investments in Cloud Native 2.0. According to the latest data from Gartner Peer Insights™, Huawei Cloud containers have earned a global customer recognition score of 4.7, claiming the highest position among all evaluated providers. Access full article >>
Palo Alto’s forecasts signal AI boost for cybersecurity tools
Palo Alto Networks forecast fiscal 2026 revenue and profit above analysts’ estimates on Monday, betting on growing demand for its artificial intelligence-powered cybersecurity solutions, sending its shares up 5% in extended trading. A wave of high-profile cyberattacks has hit global companies including Microsoft, UnitedHealth Group, Walt Disney, and Oracle, prompting the need for robust security solutions. Palo Alto’s new launches such as cloud security platform ‘Cortex Cloud’ and security platform to protect AI apps ‘Prisma AIRS’, together with its planned $25 billion CyberArk acquisition, deepen its cybersecurity offerings. Access full article >>
Why data governance and content quality remain critical in AI
The most successful organizations in 2025 will be those that recognize knowledge management as the bedrock of successful AI implementation. They will invest in maintaining clean, accurate content repositories while leveraging AI to make this process more efficient and effective. By maintaining this balance, businesses can harness AI’s transformative potential while mitigating its risks — ensuring that the insights and content it generates are trustworthy in even the most business-critical contexts and workflows. Access full article >>
Meta’s AI struggles: Can Zuckerberg catch up with OpenAI and Google in the AI race?
Meta has consolidated AI efforts under the new Meta Superintelligence Labs (MSL) umbrella; reporting describes it as the fourth significant reorg in six months, aimed at tightening alignment between research, product and infrastructure. The creation of Meta Superintelligence Labs consolidates Meta’s AI teams into four strands: the TBD Lab (expected to drive next-generation LLaMA development), a Products group (covering Meta AI assistant), an Infrastructure unit (focused on compute and data centre build-out), and the existing FAIR research wing. For Zuckerberg, the structure is designed to signal focus: an attempt to bring cutting-edge research, productisation and infrastructure investment under one umbrella, while retaining Meta’s public narrative around pursuing AGI. But with four reorganisations in half a year, scepticism lingers over whether structure alone can resolve the company’s deeper cultural and executional issues. Where Meta has demonstrated clarity is in its infrastructure commitments. The company has raised its capital expenditure forecast for 2025 to between $66 billion and $72 billion, with a significant portion earmarked for AI-ready data centres. Access full article >>
Meta’s AI rules have let bots hold ‘sensual’ chats with kids, offer false medical info
An internal Meta Platforms document detailing policies on chatbot behavior has permitted the company’s artificial intelligence creations to “engage a child in conversations that are romantic or sensual,” generate false medical information and help users argue that Black people are “dumber than white people.” Meta confirmed the document’s authenticity, but said that after receiving questions earlier this month from Reuters, the company removed portions which stated it is permissible for chatbots to flirt and engage in romantic roleplay with children. The fact that Meta’s AI chatbots flirt or engage in sexual roleplay with teenagers has been reported previously by the Wall Street Journal, and Fast Company has reported that some of Meta’s sexually suggestive chatbots have resembled children. Access full article >>
How Turner & Townsend will support du’s UAE hyperscale data centre
Global professional services company, Turner & Townsend, is appointed to deliver du’s first hyperscale data centre in the UAE to support its bid for AI leadership. The proposed hyperscale data centre is located on a 20,000 square metre greenfield site and is being designed to significantly enhance du’s data centre capabilities and expand hyperscale cloud infrastructure in the region. du unveiled the UAE’s first sovereign cloud earlier in 2025. Access full article >>
CoreWeave shares drop as growing losses eclipse AI demand surge
CoreWeave shares fell 11% on 13 August, after the Nvidia-backed company posted a bigger-than-expected loss, raising doubts about its ability to keep costs under check amid robust AI demand. The AI infrastructure firm’s operating expenses jumped nearly fourfold to $1.19 billion in the second quarter, underscoring the tension between its rapid revenue growth and mounting financial strain. Surging demand for its AI infrastructure helped the company top quarterly revenue estimates. Its stock price has jumped nearly three-fold since its IPO in March. Access full article >>
DeepSeek delays new AI model amid Huawei chip issues
DeepSeek has delayed the release of its new artificial intelligence model as training efforts using Huawei chips fell through, the Financial Times reported on 14 August. The FT report highlights the difficulties faced by Chinese AI developers in reducing their reliance on U.S. tech, specifically Nvidia’s AI chips. DeepSeek and its peers were encouraged by Beijing to use Huawei’s Ascend chips earlier, especially as U.S. chip exports to China became a major point of contention this year. Access full article >>
Half of journalists use generative AI, new survey shows
European journalists are increasingly using generative artificial intelligence tools in the newsroom despite concerns the technology could spur fake news and erode trust, a new survey shows. Just more than half of the 286 journalists surveyed in Belgium and the Netherlands said they used generative AI tools such as OpenAI’s ChatGPT. Of those who do use it, 32 percent reported using it weekly, while 14 percent use it daily. However, the vast majority of those surveyed said they’re pessimistic about the technology itself: 85 percent believe AI will worsen fake news and 83 percent think it erodes trust in journalism. Access full article >>
Kids are addicted to social media and no one can agree on a solution
The time young people spend on social media networks has more than doubled since 2010 to around three hours a day. More than 1 in 10 teenagers showed signs of problematic and addictive social media use in 2022 — including struggling to control their use and experiencing withdrawal, according to the World Health Organization. Health ministers in June adopted conclusions at the Council of the EU calling on countries to consider preventive policies to regulate young people’s access to digital technologies. Access full article >>
Geopolitics
Four key takeaways from Trump’s White House summit on Ukraine
Vladimir Putin has agreed to face-to-face talks with Volodymyr Zelenskyy to discuss a peace deal in Ukraine, according to Donald Trump and European leaders, although Moscow has not confirmed the meeting. A bilateral meeting between Volodymyr Zelenskyy and Vladimir Putin is something the Russian president has always resisted, urging for a list of conditions to be met first, but the possibility may now be nearer than ever. Access full article >>
European Parliament sues Council over €150 billion defence loan scheme
The European Parliament decided to go ahead and take the Council of the EU to court after being left out of discussions about the major SAFE loan defence scheme, its press service announced on Wednesday. SAFE, a €150 billion defence loan programme, was proposed by Commission President Ursula von der Leyen in March to stimulate spending as soon as possible. In May, EU ministers gave their final approval, without consulting the European Parliament. While the Parliament stresses that the “instrument has the full support of Parliament […] It is about the legal basis that was chosen, which undermines democratic legitimacy.” To skip parliamentary approval, von der Leyen wielded a part of the EU treaties (Article 122 TFEU), normally reserved for emergencies such as the Covid-19 pandemic, which speeds up the legislative process by reducing Parliament’s negotiation time significantly. Access full article >>
The politics and geopolitics of Artificial Intelligence
In the past, national power has depended on geography, relative military strength, the cohesion of tribal identities, population size, the reliability of social safety nets, and vulnerability to climate change. In the years to come, these attributes will matter mainly for the impact they have on establishing AI dominance. The scramble for AI inputs, and the ability to deny rivals access to them, will determine the balance of power in the 21st century. Access full article >>
China shuts down a major lithium mine, triggering a surge in prices
Contemporary Amperex Technology Co., Limited (CATL), the world’s largest battery manufacturer, confirmed on Monday, August 11, that it had shut down a mine in Yichun, southeastern China, as it seeks to renew an expired operating license. The mine is far from insignificant: It accounts for around 6% of global production. Lithium prices soared 8% at the close, while the share prices of international mining companies also surged. The fate of this mine had been closely monitored for several weeks due to speculation that Chinese authorities would not renew its license. Access full article >>
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