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The dizzying investments in artificial intelligence infrastructure do not constitute a bubble but rather represent today’s “new normal” to meet skyrocketing user demand, Fidji Simo, OpenAI’s de facto number two, said on Monday.The French-born executive made her comments in an interview with AFP, her first since taking up her role as Chief Operating Officer of OpenAI’s applications, including its flagship model ChatGPT.In the past few weeks, her company, under the leadership of CEO Sam Altman, has made a series of huge investments in data centers and AI chips, despite no real signs that the fast-emerging AI business is close to breaking even.The answers were lightly edited for length and clarity.- Is the AI investment frenzy a bubble right now? -What I am seeing here is a massive investment in compute (or computing power), with us meeting that need for computing power so incredibly badly for a lot of use cases that people want. [Video AI generator] Sora is a great example right now — there’s much more demand than we can serve.From that perspective, I really do not see that as a bubble. I see that as a new normal, and I think the world is going to switch to realizing that computing power is the most strategic resource.- What do you say to those who fret over AI’s dangers? -I see my job as really making sure that the good side of this technology happens and we mitigate the bad side.Take mental health, for example. I’m hearing tons of users say that they go to ChatGPT for advice in tough moments where they may not have other people to talk to. Many people can’t afford to go to a therapist. I talk to a lot of parents who are telling me: God, I got this really awesome advice that helped me unlock a situation with my child. But at the same time, we need to make sure that the model behaves as expected.On mental health, we have announced a very robust roadmap. We started with parental controls. We have plans to launch age prediction: if we can predict that the user is a teenager, we give them a model that is less permissive than we would give to an adult.Jobs are also very much on my mind, and it’s a similar approach. AI is going to create a lot of jobs, like prompt engineering, that absolutely did not exist before. At the same time, there are some professions that are going to be directly impacted, and we see our role as helping with the transition.- What are the next steps toward intelligent AI? -I think the breakthroughs are about models understanding your goals and helping accomplish them proactively.Not just give you a good answer to a question, not just have a dialog, but actually tell you, ‘Oh, okay, you’re telling me that you want to spend more time with your wife. Well, there might be some weekend getaways that would be helpful, and I know it’s a lot to plan, so I’ve already done all the planning for you and I’ve already made some reservations. Just tap one button to approve and everything gets done.’We’re still very early, but we’re on that journey to capture that.- In San Francisco, you sometimes hear: ‘America innovates, China copies, Europe regulates’ -As a European, every time I hear this saying, my heart breaks a bit. I think there has certainly been a tendency in Europe to focus on regulation a little too much.On China, we continue to be extremely focused on continuing to have a lead, because we see China continuing to invest heavily in being competitive — whether in terms of innovation or in terms of computing — and so we think it’s incredibly important to continue investing across a democratic bloc to advance AI that has these [democratic] values.- Do you let your child use ChatGPT? -ChatGPT is not supposed to be for under 13, but my kid is 10 — I still let her use it under supervision. It’s magical to see what she’s able to create. Just this weekend, she was telling me about creating a new business. She was using ChatGPT to make banners for the new business, to create taglines.In our childhood, we couldn’t turn our imagination into something real that fast. And I see that really giving her superpowers, where she thinks anything is possible.

Brazilian President Luiz Inacio Lula da Silva urged US President Donald Trump to lift punitive trade tariffs in their first official talks Monday after months of animosity — with both suggesting an in-person meeting in the near future.The two leaders spoke for 30 minutes in a “friendly tone” and Lula raised the possibility of a meeting in Malaysia next month, the Brazilian presidency said in a statement.Lula “requested the removal” of tariffs imposed on his country’s products and sanctions against Brazilian officials.Trump hailed “a very good telephone call” in a post on Truth Social.”We will be having further discussions, and will get together in the not too distant future, both in Brazil and the United States,” he said, without adding details.Ties have soured between Washington and Brasilia in recent months, with Trump angered over the trial and conviction of his ally, the far-right former president Jair Bolsonaro.Trump has imposed a 50-percent tariff on Brazilian products and imposed sanctions against several top officials, including a top Supreme Court judge, to punish Brazil for what he termed a “witch hunt” against Bolsonaro. “We are very optimistic that we will move toward a win-win situation in this relationship,” said Brazil’s Vice President Geraldo Alckmin, who has been tasked with continuing negotiations with US Secretary of State Marco Rubio.He noted the call had gone “even better than we expected” and that the two presidents had exchanged personal phone numbers.- ‘Excellent chemistry’ -The phone call came after what first appeared to be a chance encounter on the sidelines of the UN General Assembly last month that led Trump to hail his “excellent chemistry” with Lula.However the Estadao news site reported the brief run-in, which included a hug, was actually the result of an intensive behind-the-scenes “diplomatic operation.”In a speech to the UN, Lula slammed an “unacceptable” attack on the independence of Brazil’s judiciary.Despite the political and economic pressure, Brazil’s Supreme Court sentenced Bolsonaro to 27 years in prison for his role in a botched coup bid after his 2022 election loss to Lula.Trump, meanwhile, used his UN speech to accuse Brazil of “censorship, repression” and “judicial corruption.”He later switched tack, and recounted his run-in with Lula, describing him as “a very nice man, actually.”The two men stand on polar opposite sides when it comes to issues such as multilateralism, international trade and the fight against climate change.The Brazilian presidency said that Lula had raised the possibility with Trump of an in-person meeting at the Association of Southeast Asian Nations (ASEAN) summit in Malaysia in October.He also re-iterated an invitation to Trump to attend the COP-30 climate conference in Brazil’s Amazon city of Belem in November, “and also expressed his willingness to travel to the United States.”- ‘No one to talk to’ -Lula has repeatedly stated that Brazil was “ready to negotiate” regarding tariffs, but lamented there was “no one to talk to” in Washington.A Brazilian government source told AFP the private sector played a key role behind the scenes in the rapprochement with Washington, citing a meeting between Trump and Brazil’s billionaire beef tycoon Joesley Batista at the White House.Batista’s “JBS played an important role, but it wasn’t the only one,” said the source. A European diplomat told AFP on condition of anonymity that Brazilian aircraft manufacturer Embraer had also put pressure on the White House.Trump’s tariffs mainly target major Brazilian exports beef, coffee and sugar.Brazilian trade data for September, released Monday, showed that exports to the United States fell 20.3 percent compared with last year, while imports from the US rose 14.3 percent.However, Brazil has other major markets, such as Asia, for its beef and coffee, and has been expanding to diversify its exports.Overall exports grew 7.2 percent in September, with major growth in China, India, Singapore, Argentina, Peru and Panama.

Stock markets were mixed Monday as a deepening political crisis in France sent Paris into a tailspin while a new Japanese ruling party leader boosted Tokyo and the AI investment boom lifted US stock indices to fresh heights.Gold pushed ever closer to $4,000 an ounce as the US government shutdown and expected interest cuts from the Federal Reserve boosted the precious metal’s lure.The euro fell against main rivals and French borrowing costs spiked as Sebastien Lecornu, who had been prime minister for less than a month, resigned just 14 hours after naming a largely unchanged cabinet.But in another twist, French President Emmanuel held new talks with Lecornu in the evening and gave him two days to reach a plan for the country’s “stability”, the president’s office said.Paris finished down 1.4 percent. Shares in French banks BNP Paribas, Societe Generale and Credit Agricole all shed more than three percent.London also dipped but Frankfurt’s stock exchange ended the day flat.On Wall Street, both the S&P 500 and tech-heavy Nasdaq Composite surged to fresh records, after Advanced Micro Devices announced a multi-year partnership with OpenAI to develop AI data centers, sending AMD shares up more than 23 percent.The OpenAI venture with AMD marks the latest massive deal for the fast-growing artificial intelligence startup that has left markets buzzing. “Very few questions are being asked about how OpenAI is actually going to pay for this commitment that they’re making to AMD,” said Steve Sosnick of Interactive Brokers.”This company has literally hundreds of billions of dollars in commitments, but still only has annualized revenues of about $12 billion,” Sosnick said of OpenAI. “The market is taking any piece of news as purely good news.”Tesla also had a good day, rising 5.5 percent on buzz over a possible product launch after Elon Musk’s company posted videos teasing a Tuesday announcement.In Asia, Tokyo surged almost five percent to a record high and the yen sank on bets the new leader of Japan’s ruling party will loosen monetary policy to kickstart the economy.Sanae Takaichi, likely to become Japan’s prime minister this month, has previously backed aggressive monetary easing and expanded government spending.Traders are “enthused by the new Japanese leader, who promises to reignite stimulus to light a fire under the Japanese economy,” said Chris Beauchamp, chief market analyst at trading platform IG.The yen weakened more than one percent against the dollar and hit a record low against the euro.Yields on 30-year Japanese bonds rose sharply reflecting fears the country’s already colossal debt will balloon further.After her victory Saturday, Takaichi pledged first to implement measures to address inflation and boost Japan’s economy, rural areas and primary industries.”She has said that the Bank of Japan should not raise interest rates, which is feeding demand for stocks and weighing on long term bond yield,” said Kathleen Brooks, research director at trading group XTB.”The decline in the yen is also a sign that the market is pricing out the prospect of BoJ rate hikes this year,” she added.- Key figures at around 2015 GMT -New York – Dow: DOWN 0.1 percent at 46,694.97 (close)New York – S&P 500: UP 0.4 percent at 6,740.28 (close)New York – Nasdaq Composite: UP 0.7 percent at 22,941.67 (close)London – FTSE 100: DOWN 0.1 percent at 9,479.14 (close)Paris – CAC 40: DOWN 1.4 percent at 7,971.78 (close)Frankfurt – DAX: FLAT at 24,378.29 (close)Tokyo – Nikkei 225: UP 4.8 percent at 47,944.76 (close)Hong Kong – Hang Seng Index: DOWN 0.7 percent at 26,957.77 (close)Shanghai – Composite: Closed for a holidayEuro/dollar: DOWN at $1.1713 from $1.1742 on FridayPound/dollar: UP at $1.3485 from $1.3480Dollar/yen: UP at 150.24 yen from 147.47 yenEuro/pound: DOWN at 86.86 pence from 87.10  penceWest Texas Intermediate: UP 1.3 percent at $61.69 per barrelBrent North Sea Crude: UP 1.5 percent at $65.47 per barrelburs-jmb/dw

Stock markets diverged Monday as a deepening political crisis in France sent Paris into a tailspin while a new Japanese ruling party leader buoyed shares in Tokyo.Gold pushed ever closer to $4,000 an ounce as the US government shutdown and expected interest cuts from the Federal Reserve boosted the precious metal’s attractiveness.The euro fell against main rivals and French borrowing costs spiked as Sebastien Lecornu, who had been prime minister for less than a month, resigned just 14 hours after naming a largely unchanged cabinet.France’s “fractured parliament is making it nearly impossible to pass a budget that reduces the fiscal deficit”, said Jack Allen-Reynolds, deputy chief eurozone economist at Capital Economics.”With government borrowing running at more than five percent of GDP and the debt ratio rising, the risk premium on French government bonds will continue to widen,” he added.Shares in French banks BNP Paribas, Societe Generale and Credit Agricole all shed more than three percent.London also dipped but Frankfurt’s stock exchange ended the day flat.On Wall Street, both the S&P 500 and tech-heavy Nasdaq Composite sat next to record highs as AI deals overshadowed concerns over a government shutdown that dragged into a second week.Shares in Advanced Micro Devices (AMD) jumped more than 33 percent after the chipmaker announced a multi-year partnership with OpenAI to develop AI data centres which should bring it tens of billions of dollars in new revenue over the next five years.In Asia, Tokyo surged almost five percent to a record high and the yen sank on bets the new leader of Japan’s ruling party will loosen monetary policy to kickstart the economy.Sanae Takaichi, likely to become Japan’s prime minister this month, has previously backed aggressive monetary easing and expanded government spending.Traders are “enthused by the new Japanese leader, who promises to reignite stimulus to light a fire under the Japanese economy,” said Chris Beauchamp, chief market analyst at trading platform IG.The yen weakened more than one percent against the dollar and hit a record low against the euro.Yields on 30-year Japanese bonds rose sharply reflecting fears the country’s already colossal debt will balloon further.After her victory Saturday, Takaichi pledged first to implement measures to address inflation and boost Japan’s economy, rural areas and primary industries.”She has said that the Bank of Japan should not raise interest rates, which is feeding demand for stocks and weighing on long term bond yield,” said Kathleen Brooks, research director at trading group XTB.”The decline in the yen is also a sign that the market is pricing out the prospect of BoJ rate hikes this year,” she added.Oil prices jumped nearly one percent after OPEC+ agreed at the weekend to boost supplies by 137,000 barrels a day — less than initially expected.”The limited supply adjustment was seen as a supportive move that would help offset a glut in the oil market while still signalling confidence in global demand levels,” said Trade Nation analyst David Morrison.- Key figures at around 1530 GMT -New York – Dow: DOWN 0.1 percent at 46,696.12 pointsNew York – S&P 500: UP 0.3 percent at 6,736.19 New York – Nasdaq Composite: UP 0.5 percent at 22,902.72London – FTSE 100: DOWN 0.2 percent at 9,479.14 (close)Paris – CAC 40: DOWN 1.4 percent at 7,971.78 (close)Frankfurt – DAX: FLAT at 24,378.29 (close)Tokyo – Nikkei 225: UP 4.8 percent at 47,944.76 (close)Hong Kong – Hang Seng Index: DOWN 0.7 percent at 26,957.77 (close)Shanghai – Composite: Closed for a holidayEuro/dollar: DOWN at $1.1711 from $1.1742 on FridayPound/dollar: DOWN at $1.3474 from $1.3482Dollar/yen: UP at 150.09 yen from 147.45 yenEuro/pound: DOWN at 86.92 pence from 87.09 penceWest Texas Intermediate: UP 1.3 percent at $61.64 per barrelBrent North Sea Crude: UP 1.4 percent at $65.41 per barrelburs-rl/ach 

Stock markets diverged Monday, with Paris dropping as France plunged further into political crisis after the prime minister’s resignation, while Tokyo surged on new leadership of its ruling party.Gold pushed on with its rise close to $4,000 an ounce as the US government shutdown and expected interest cuts from the Federal Reserve boosted the precious metal’s attractiveness.The euro fell against main rivals and French borrowing costs spiked as Sebastien Lecornu resigned after less than a month in office and shortly after unveiling a largely unchanged cabinet. France’s “fractured parliament is making it nearly impossible to pass a budget that reduces the fiscal deficit”, said Jack Allen-Reynolds, deputy chief eurozone economist at Capital Economics.”With government borrowing running at more than five percent of GDP and the debt ratio rising, the risk premium on French government bonds will continue to widen,” he added.Shares in French banks BNP Paribas, Societe Generale and Credit Agricole all shed more than four percent in midday trading.Elsewhere, London and Frankfurt stock markets edged higher nearing the half-way mark, after Hong Kong closed lower.Tokyo surged almost five percent to a record high and the yen sank on bets the new leader of Japan’s ruling party will loosen monetary policy to kickstart the economy.Sanae Takaichi, likely to become Japan’s prime minister this month, has previously backed aggressive monetary easing and expanded government spending.The yen weakened more than one percent against the dollar and hit a record low against the euro.Yields on 30-year Japanese bonds rose sharply reflecting fears the country’s already colossal debt will balloon further.After her victory Saturday, Takaichi pledged first to implement measures to address inflation and boost Japan’s economy, rural areas and primary industries.”She has said that the Bank of Japan should not raise interest rates, which is feeding demand for stocks and weighing on long term bond yield,” said Kathleen Brooks, research director at trading group XTB.”The decline in the yen is also a sign that the market is pricing out the prospect of BoJ rate hikes this year,” she added.US futures were all up on Monday, even as the closure of parts of the US government dragged into a second week.Federal agencies have been out of money since Wednesday — with several public services crippled — as a result of deadlocked talks over funding.The row meant key jobs data used by the Federal Reserve to guide it on monetary policy was not released as normal on Friday.Still, observers said recent reports indicating the labour market is slowing would likely be enough to cut rates at the next meeting at the end of the month, with other readings on inflation due beforehand. Bitcoin hit a new peak of $125,689 on Sunday. Oil jumped more than one percent after OPEC+ agreed at the weekend to boost supplies by 137,000 barrels a day — less than initially expected.- Key figures at around 1100 GMT -London – FTSE 100: UP 0.1 percent at 9,502.54 pointsParis – CAC 40: DOWN 1.3 percent at 7,975.29Frankfurt – DAX: UP 0.2 percent at 24,423.01Tokyo – Nikkei 225: UP 4.8 percent at 47,944.76 (close)Hong Kong – Hang Seng Index: DOWN 0.7 percent at 26,957.77 (close)Shanghai – Composite: Closed for a holidayNew York – Dow: UP 0.5 percent at 46,758.28 points (close)Euro/dollar: DOWN at $1.1662 from $1.1742 on FridayPound/dollar: DOWN at $1.3423 from $1.3482Dollar/yen: UP at 150.29 yen from 147.45 yenEuro/pound: DOWN at 86.88 pence from 87.09 penceWest Texas Intermediate: UP 1.4 percent at $61.70 per barrelBrent North Sea Crude: UP 1.4 percent at $65.40 per barrel

Tokyo stocks surged almost five percent to a record high Monday and the yen sank on bets that the new leader of Japan’s ruling party will embark on a new era of loose monetary policy to kickstart the country’s economy.The gains, however, came on a mixed day for the rest of Asia, while Paris tumbled more than two percent on news that France’s newly appointed prime minister had stepped down, compounding a political crisis in the country.News of the victory for Sanae Takaichi — who is expected to become prime minister this month — fanned a fresh wave of optimism on Japanese trading floors as she has previously backed aggressive monetary easing and expanded government spending.Expectations the Federal Reserve will cut interest rates this month continue to support risk assets, with the S&P 500 and Dow both hitting peaks along with bitcoin and gold.After her victory Saturday, Takaichi pledged first to implement measures to address inflation and boost Japan’s economy, rural areas and primary industries.Takaichi “looks more inclined than the others to juice the economy”, said Taro Kimura at Bloomberg Economics.”Still, with inflation rising and long-term (bond) yields climbing, she will have to balance her stance with reality, in order not to accelerate cost-of-living squeeze and jolt the rate market,” Kimura added.The Nikkei 225’s surge came as the yen weakened more than one percent to top 150 per dollar, while it hit a record low against the euro, touching 176.25 to the single currency.”An immediate market reaction is likely to be a return of a so-called ‘Takaichi trade’, which means higher equity prices (except banks), yen depreciation, and higher super-long bond yields,” said Masamichi Adachi, UBS Securities chief economist for Japan.Yields on 30-year Japanese bonds also rose sharply, reflecting fears the country’s already colossal debt will balloon further.Takaichi’s win also raised questions about the chances of more Bank of Japan rate hikes, adding to downward pressure on the yen.There were also gains in Singapore and Mumbai, but Hong Kong, Sydney, Wellington, Manila and Bangkok were all in the red.Sentiment remains up, though, as bitcoin hit a new peak of $125,689 on Sunday.Gold pushed past $3,945 and closer to $4,000 Monday, with the US shutdown and expected rate cuts boosting its attractiveness.The plunge in Paris’s CAC 40 index came after France’s President Emmanuel Macron accepted Prime Minister Sebastien Lecornu’s resignation, plunging the country further into political deadlock.Macron appointed Lecornu last month but the largely unchanged cabinet lineup he unveiled late Sunday was met with fierce criticism across the political spectrum.London’s FTSE dipped in the morning, after ending last week at a record, while Frankfurt also sank.US futures were all up.The closure of parts of the US government dragged into a second week after senators voted for a fourth time to reject a funding fix proposed by Republicans.Federal agencies have been out of money since Wednesday — with several public services crippled — as a result of deadlocked talks.The row meant key jobs data used by the Fed to guide it on monetary policy was not released when due on Friday.Still, observers say recent reports indicating the labour market is slowing would likely be enough to cut rates at the next meeting at the end of the month, with other readings on inflation due beforehand. “It’s still likely that the shutdown will end in relatively short order, allowing for the release of the September jobs report before the October (policy) meeting,” said economists at Bank of America.”But even if the first print of September payrolls is solid, doves on the committee will likely point to the recent trend of downward revisions to make the case to keep cutting. “And given (Fed chief Jerome) Powell’s recent dovish pivot, that argument is likely to carry the day.”Oil jumped more than one percent after OPEC+ agreed at the weekend to boost supplies by 137,000 barrels a day — less than initially expected.- Key figures at around 0810 GMT -Tokyo – Nikkei 225: UP 4.8 percent at 47,944.76 (close)Hong Kong – Hang Seng Index: DOWN 0.7 percent at 26,957.77 (close)London – FTSE 100: DOWN 0.1 percent at 9,477.95Shanghai – Composite: Closed for a holidayDollar/yen: UP at 150.01 yen from 147.45 yenPound/dollar: DOWN at $1.3445 from $1.3482Euro/pound: DOWN at 86.75 pence from 87.09 penceEuro/dollar: DOWN at $1.1664 from $1.1742 on FridayWest Texas Intermediate: UP 1.3 percent at $61.66 per barrelBrent North Sea Crude: UP 1.3 percent at $65.34 per barrelNew York – Dow: UP 0.5 percent at 46,758.28 points (close)

Tokyo stocks surged more than four percent to a record high Monday and the yen sank on bets that the new leader of Japan’s ruling party will embark on a new era of loose monetary policy to kickstart the country’s economy.News of the victory for Sanae Takaichi — who is expected to become prime minister this month — fanned a fresh wave of optimism on Japanese trading floors as she has previously backed aggressive monetary easing and expanded government spending.But the rally in Tokyo was not matched in the rest of Asia, where markets were mixed following last week’s healthy advances and as investors keep tabs on lawmakers’ attempts to end a US government shutdown.However, expectations that the Federal Reserve will cut interest rates again this month continue to provide support to risk assets, with the S&P 500 and Dow both hitting peaks along with bitcoin and gold.After her victory Saturday, Takaichi pledged first to implement measures to address inflation and boost Japan’s economy, rural areas and primary industries such as farming and fisheries.Takaichi “looks more inclined than the others to juice the economy”, said Taro Kimura at Bloomberg Economics.”Still, with inflation rising and long-term (bond) yields climbing, she will have to balance her stance with reality, in order not to accelerate cost-of-living squeeze and jolt the rate market,” Kimura added.The Nikkei 225’s surge came as the yen tumbled more than one percent to almost 150 per dollar, while it hit its lowest ever against the euro, sitting at 175.69 to the single currency.”An immediate market reaction is likely to be a return of a so-called ‘Takaichi trade’, which means higher equity prices (except banks), yen depreciation, and higher super-long bond yields,” said Masamichi Adachi, UBS Securities chief economist for Japan.Yields on 30-year Japanese bonds also rose sharply, reflecting fears that the country’s already colossal debts will balloon further under Takaichi.There were also gains in Singapore and Manila, but Hong Kong, Sydney and Seoul were all in the red. Shanghai is closed for a holiday.Sentiment remains up, though, after bitcoin hit a new peak of $125,689 on Sunday.Gold pushed past $3,924 and closer to $4,000 an ounce on Monday, with the US shutdown and expected rate cuts boosting its attractiveness.London’s FTSE also ended last week at a record. US futures were all up.The closure of parts of the government dragged into this week after senators voted for a fourth time to reject a funding fix proposed by President Donald Trump’s Republicans.Federal agencies have been out of money since Wednesday — with a wide range of public services crippled — as a result of deadlocked talks in Congress on how to keep the lights on.The row meant key jobs data that is used by the Fed to guide it on monetary policy was not released when it was due on Friday.Still, observers say recent reports indicating the labour market is slowing would likely be enough to allow officials to cut rates at the next meeting at the end of the month, with other readings on inflation due beforehand. “It’s still likely that the shutdown will end in relatively short order, allowing for the release of the September jobs report before the October (policy) meeting,” said economists at Bank of America.”But even if the first print of September payrolls is solid, doves on the committee will likely point to the recent trend of downward revisions to make the case to keep cutting. “And given (Fed chief Jerome) Powell’s recent dovish pivot, that argument is likely to carry the day.”Oil jumped more than one percent, extending Friday’s gains, after OPEC+ agreed at the weekend to boost supplies by 137,000 barrels a day — less than initially expected.- Key figures at around 0230 GMT -Tokyo – Nikkei 225: UP 4.5 percent at 47,835.36 (break)Hong Kong – Hang Seng Index: DOWN 0.5 percent at 26,995.12Shanghai – Composite: Closed for a holidayDollar/yen: UP at 149.84 yen from 147.45 yenPound/dollar: DOWN at $1.3455 from $1.3482Euro/pound: UP at 87.17 pence from 87.09 penceEuro/dollar: DOWN at $1.1728 from $1.1742 on FridayWest Texas Intermediate: UP 1.5 percent at $61.78 per barrelBrent North Sea Crude: UP 1.4 percent at $64.45 per barrelNew York – Dow: UP 0.5 percent at 46,758.28 points (close)London – FTSE 100: UP 0.7 percent at 9,491.25 (close) 

China’s push to develop top-end artificial intelligence microchips is gaining momentum, but analysts say it will struggle to match the technical might of US powerhouse Nvidia within the current decade.Ramping up its chip industry is a way for Beijing to beat restrictions imposed by Washington on exports of the most advanced chips — used to power AI systems — to China.The United States cites national security concerns, such as the risk of giving China a military advantage, for the block, a geopolitical bind that shows no sign of easing.”China wants chips that policy cannot take away,” said Stephen Wu, a former AI software engineer and founder of the Carthage Capital investment fund.However, “full end-to-end parity with Nvidia’s best chips, memory packaging, networking and software is not guaranteed” by 2030 or even beyond, Wu told AFP.Announcements of computing upgrades by Chinese companies and reports of plans to dramatically increase output of advanced semiconductors have driven up chip-related shares in the country.But to catch up with Nvidia, China needs to make fast progress on high-bandwidth memory and packaging — “the hardest and most complex parts of the chip”, Wu said.Other challenges include building the right software to harness the chips’ power, and upgrading manufacturing tools.”These chips are extremely advanced and tiny, so imagine carving a stone sculpture with a hammer instead of a chisel,” Wu said.- ‘Only way’ to succeed -“The industry consensus is China at least needs five to ten years to catch up,” said George Chen of The Asia Group, a view reflected by Dilin Wu, research strategist at Pepperstone.”The future is bright, but not yet,” she told AFP.”It’s maybe a 2030 story”, as “significant gaps remain in terms of performance, and also in terms of energy efficiency and ecosystem maturity”.Public demand for AI services is booming in China, and while government support for new chips is “substantial”, the investment required is “immense”, she added.Shares in Alibaba, the e-commerce titan ploughing billions of dollars into AI tech, have more than doubled since January.And Chinese chip industry leader Huawei will reportedly double output of its top Ascend 910C chip in the next year.The hype has also sharply driven up stocks in the smaller chipmaker Cambricon, sometimes dubbed “China’s Nvidia”.”I think this rally can be sustained”, partly because it is driven by Chinese government policy, Pepperstone’s Wu said.Even Xiaomi, whose 2014 venture into chip design was a self-confessed flop, is turning back to semiconductors.”Chips are the only way for Xiaomi to succeed,” the company’s CEO Lei Jun said in Beijing last month, referring to the production of high-end smartphone chips.- ‘Best in China’ -China, the world’s biggest consumer of semiconductors, is a huge market for California-based Nvidia.Nvidia chips are still “the best… to train large language models”, the systems behind generative AI, said Chen Cheng, general manager for AI translation software at tech firm iFLYTEK.Faced with US restrictions, “we overcame that difficulty” by shifting to Chinese-made tech, she said in a group interview.”Now our model is trained on Huawei chips” — currently the best in China, Cheng said.Meanwhile Nvidia, the world’s largest company by market capitalisation, is under pressure from both sides.The Financial Times reported last month that Beijing had barred major Chinese firms from buying a state-of-the-art Nvidia processor made especially for the country.And the company must now pay the US government 15 percent of revenue from certain AI chip sales in China.Nvidia boss Jensen Huang has warned that restrictions on exporting his most cutting-edge semiconductors to China will only fuel the country’s rise.”They’re nanoseconds behind us,” the leather jacket-clad Huang said on a tech business podcast.”So we’ve got to go compete.”

Conservative Sanae Takaichi hailed a “new era” Saturday after becoming head of Japan’s ruling party, putting her on course to become the country’s first woman prime minister.The 64-year-old, whose hero is Margaret Thatcher, said that a “mountain of work” lay ahead to restore the fortunes of her ailing Liberal Democratic Party (LDP).The LDP has governed Japan almost uninterrupted for decades but it has been haemorrhaging support as backing grows for smaller parties, including the anti-immigration Sanseito.Takaichi, a heavy metal drummer as a student, will almost certainly be approved by parliament later this month as Japan’s fifth prime minister in as many years.She is set to face a host of complex issues including an ageing population, geopolitical upheaval, a faltering economy and growing unease about immigration.”Together with so many of you, we have carved a new era for the LDP,” Takaichi said at LDP headquarters after winning a run off vote against the telegenic and more socially progressive Shinjiro Koizumi.”We must all pull together across all generations and work as one to rebuild (the LDP)… Everyone will have to work like a horse,” she said to applause.Koizumi, 44, would have been Japan’s youngest prime minister in the modern era and represented a generational change for the LDP.One of Takaichi’s first official duties as premier will be receiving US President Donald Trump, who is reportedly set to make a stopover in Japan in late October.Takaichi said Saturday that she had no plans to overturn Tokyo’s recent trade deal — over which questions remain — with Washington.Takaichi has been a strident critic of China’s military build-up, and as a regular visitor to the Yasukuni war shrine her appointment may irk Beijing as well as Seoul.Beijing’s foreign ministry reacted to her win by saying “it is hoped that Japan will abide by… its political commitments on major issues such as history and Taiwan, (and) pursue a positive and rational policy toward China.”- Immigrant ‘invasion’ -Primarily for LDP members, however, Takaichi’s task will be to restore the fortunes of the party, which has governed almost non-stop since 1955.Outgoing premier Shigeru Ishiba took the reins last year but his LDP-led coalition lost its majority in both houses of parliament, in part because of voter anger at inflation and an LDP slush fund scandal.One party on the up is Sanseito, which echoes other populist movements in calling immigration a “silent invasion” and blames newcomers for a host of ills.Japan should “reconsider policies that allow in people with completely different cultures and backgrounds”, Takaichi said during the LDP campaign.People born abroad make up just three percent of the population, and with an ageing population is in dire need of foreign workers.”As the Japanese population is declining we need to accept foreigners, but I hope (politicians) will think about how to accept them,” said Tomoyuki Mishina, 39, a real estate company employee.- Abenomics 2.0 -On the economy, Takaichi has in the past backed aggressive monetary easing and big fiscal spending, echoing her mentor, former premier Shinzo Abe.Coming from the traditionalist wing of the LDP, celebrations that finally a woman is leading Japan may soon turn to disappointment.Takaichi “has no interest in women’s rights or gender equality policies,” Yuki Tsuji, a professor specialising in politics and gender at Tokai University, told AFP.Takaichi is against revising a 19th-century law obliging married couples to share the same surname, and also opposes same-sex marriage.”An exclusive, reactionary and discriminatory political approach will persist,” said Soshi Matsuoka from the LGBTQ campaign group Fair.

Conservative Sanae Takaichi hailed a “new era” Saturday after winning the leadership of Japan’s ruling party, putting her on course to become the country’s first woman prime minister.The 64-year-old, whose hero is Margaret Thatcher, said that a “mountain of work” lay ahead to restore the fortunes of her ailing Liberal Democratic Party (LDP).The LDP has governed Japan almost uninterrupted for decades but it has been haemorrhaging support as backing grows for smaller parties, including the anti-immigration Sanseito.Takaichi, an arch-conservative who tempered her rhetoric in the LDP contest, will almost certainly be approved by parliament later this month as Japan’s fifth prime minister in as many years.”Together with so many of you, we have carved a new era for the LDP,” Takaichi said at LDP headquarters after winning a run off vote against the telegenic and more moderate Shinjiro Koizumi, 20 years her junior.”Rather than feeling happy right now, (I feel) real challenge lies ahead. I am convinced that there is a mountain of work we must tackle together, pooling our efforts,” she said.”We must all pull together across all generations and work as one to rebuild (the LDP)… Everyone will have to work like a horse,” she said to applause.Koizumi, son of a former premier and who was seen as more progressive on social issues, would have been Japan’s youngest prime minister in the modern era and represented a generational change for the LDP.He and Takaichi went into the run off after the moderate and highly experienced Yoshimasa Hayashi, dubbed “Mr. 119″ after Japan’s emergency phone number, was knocked out along with two other candidates.Takaichi now faces a host of complex issues including an ageing population, geopolitical upheaval, a faltering economy and growing unease about immigration.First, however, she will have to ensure that the LDP, which has governed almost non-stop since 1955, can rally voters again.”The LDP must regain trust, and an overhaul is needed for us to start afresh,” Koizumi had said in the campaign, calling the state of the party a “crisis”.- Immigrant ‘invasion’ -Outgoing premier Shigeru Ishiba took the reins last year but his LDP-led coalition lost its majority in both houses of parliament and he threw in the towel.One party on the up is Sanseito, which echoes other populist movements in calling immigration a “silent invasion” and blames newcomers for a host of ills.Takaichi and Koizumi in the LDP campaign sought to appeal to voters attracted by Sanseito’s messaging about foreigners, whether immigrants or the throngs of tourists.Japan should “reconsider policies that allow in people with completely different cultures and backgrounds”, said Takaichi.Such alarmism from mainstream politicians is rare in Japan, where people born abroad make up just three percent of the population.”I think tolerance in society towards foreigners is weakening,” pensioner Kimiko Tamura, 66, told AFP in Kawaguchi, one of Japan’s most multicultural cities.Still, 33-year-old Nguyen Thu Huong, who arrived from Vietnam 14 years ago, said “differences in culture are difficult to learn… but Japan is a nice place to live”.- Abenomics 2.0 -On the economy, Takaichi has in the past backed aggressive monetary easing and big fiscal spending, echoing her mentor, former premier Shinzo Abe.But she tempered her stance on the campaign trail, and the regular visitor to the Yasukuni war shrine has also sounded more moderate on China.Coming from the traditionalist wing of the LDP, celebrations that finally a woman is leading Japan may soon turn to disappointment.Takaichi “has no interest in women’s rights or gender equality policies,” Yuki Tsuji, a professor specialising in politics and gender at Tokai University, told AFP.”I too shall cast aside the idea of work-life balance. Work, work, work, work, work I shall,” Takaichi said Saturday.