World Cup stirs up colonial past
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What is the FT News Briefing introducing today?
Good morning from the Financial Times. Today is Friday, July 10th, and this is your FT News Briefing. American big tech is selling AI models to blacklisted Chinese companies, and a South Korean chip maker is going to have a splashy debut on the U.S. market today. Plus, the World Cup is creating a set of matchups with a lot of history.
I think that people who aren't descended from a country that was colonized often don't realize the extent to which that's the lens through so many of us experience the World Cup.
I'm Mark Filippino, and here's the news you need to start your day.
The FT has confirmed that OpenAI and Google have been selling advanced AI models to Chinese tech giants blacklisted by the Pentagon.
How are OpenAI and Google selling advanced AI models to blacklisted Chinese firms?
The US-based companies are supplying Alibaba, Baidu, and Tencent with access to AI tools. The Chinese companies get these through their Singapore subsidiaries. This makes the sales legal, but it exposes a gap in a US ban on AI models being used by companies with alleged ties to China's military. OpenAI said it had cut off Alibaba from using the software that lets developers access models remotely. Both OpenAI and Google acknowledged that Chinese-owned companies can access its models outside of China. The news reignited calls for tighter U.S. regulation of AI models similar to its restrictions on exports of the chips used to train powerful models. The Chinese companies did not comment for this story.
South Korea's SK Hynix is listing in the US today. It'll be the biggest ever share sale in America by a foreign company, worth about $28 billion. The memory chip maker has a central role in the current AI boom, but is the sale worth the hype, or is it a sign that the market is in a bubble? Jennifer Hughes writes for our Lex column. Hi, Jen. Hey there. So what can you tell us about SK Hynix, except for the fact that it's, you know, having this massive share sale?
You mentioned the main thing about its business. It's a memory chip maker. It's one of the biggest alongside Samsung Electronics, also Korean. Chips are famously a really cyclical industry. Either there's lots and lots of demand or there's total oversupply. That pretty much applies to their shares as well. At the moment, since memory chips are so crucial for AI chips, they're about the hottest thing out there.
Yeah, tell me a little bit more about investor appetite, because as you pointed out, there seems to be a lot of it.
Yeah, absolutely. You've seen it a lot with the Asian chip makers, with Samsung, with SK Hynix. I mean, its shares are up something like 200% in Korea already this year. And also with the Taiwanese chip foundry giant TSMC. all gone absolutely crazy and they're driving up their home markets massively. So SK Hynix coming to the States for the first time, it's kind of like, well, it wants to branch out. It's almost too big for its home market. And because of the demand for chips at the moment, SK Hynix and the other chip makers are building extra capacity. They've got, you know, more orders than they can handle. So that money is going to go towards building new fabs, some in the US and some of its work is going to be there as well.
Jen, I feel like I ask this every time a company goes public or in this case has a share sale. Is this a sign that the market is overheating?
feel like we'll only know that in hindsight. And I probably say this to you every time you ask, you know, it's only really in the rear view mirror that we'll know if things like the dot-com boom, AOL Time Warner, that when we look back said, oh, this is when we went too far. I mean, and also in market terms, 28 billion would be a lot. It could be enough to oversupply the market. But But we're in a place where just in the last few weeks, both Google and SpaceX have really raised more than $80 billion each. So $28 billion doesn't look so big. It might be a peak, but at this point, we can't say.
So should I stop asking you this question, Jen?
No, no. Keep asking it. One day we'll get it right.
Jen Hughes writes for the FT's Lex column.
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Chapters
6 chapters
1
What is the FT News Briefing introducing today?
0:03–0:52
2
How are OpenAI and Google selling advanced AI models to blacklisted Chinese firms?
0:52–4:21
3
Why do Singapore subsidiaries matter in US AI export restrictions?
4:21–6:31
4
What regulatory concerns have been raised about AI model exports?
6:31–8:32
5
What is SK Hynix’s US listing and why is it being called a jumbo share sale?
8:32–10:26
6
Could SK Hynix’s $28bn share sale signal an AI-driven chip-market bubble?
10:26–12:04