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The World
The Biden administration has confronted China’s government with evidence that suggests some Chinese state-owned companies may be providing assistance for Russia’s war effort in Ukraine, as it tries to ascertain if Beijing is aware of those activities, according to people familiar with the matter. The people, who asked not to be identified discussing private deliberations, declined to detail the support except to say that it consists of non-lethal military and economic assistance that stops short of wholesale evasion of the sanctions regime the US and its allies imposed after Russian forces invaded Ukraine. (Bloomberg)
China is quickly becoming the dominant force in liquefied natural gas, with Chinese buyers accounting for 40% of recent long-term LNG contracts among global players. Chinese energy major Sinopec Group reached a 27-year agreement with state-owned QatarEnergy late last year to buy 4 million tonnes of LNG annually. The imports are due to begin around 2026. (Nikkei Asia)
Japanese Prime minister Fumio Kishida pledged to take urgent steps to tackle the country's declining birth rate, saying it was "now or never" for one of the world's oldest societies. Japan has in recent years been trying to encourage its people to have more children with promises of cash bonuses and better benefits, but it remains one of the most expensive places in the world to raise a child, according to surveys. (Reuters)
Global manufacturers are looking beyond China, with Prime Minister Narendra Modi stepping up to seize the moment. The government is spending nearly 20 per cent of its budget this financial year on capital investments, the most in at least a decade. Modi is closer than any predecessor to being able to claim that the nation – which may have just passed China as the world’s most populous – is finally meeting its economic potential. To get there, he’ll have to wrestle with the drawbacks of its exceptional scale: the remnants of the red tape and corruption that have slowed India’s rise, and the stark inequality that defines the democracy of 1.4 billion people. (South China Morning Post)
Amazon has launched Amazon Air, its dedicated air cargo fleet, in India as the e-commerce giant bulks up its logistics infrastructure in the key overseas market where it has deployed over $6.5 billion. The retailer has partnered with the Bengaluru-based cargo airline QuikJet to launch its maiden air freight service in the country, which it said will enable the firm to speed up its delivery. Amazon is utilizing the Boeing 737-800 for the service. (TechCrunch)
In Canada's western oil patch, controversy is raging over federal government legislation intended to help the fossil fuel labour force transition to a greener economy, but union and community leaders are warning politicization of the Just Transition bill obscures the needs of workers. Prime Minister Justin Trudeau's Liberal government is expected to table its long-awaited workforce transition bill this spring, ahead of economic changes expected as they pursue ambitious goals to slash climate-warming emissions. (Reuters)
Japan intends to scrap a key restriction on overseas investments by domestic venture funds dedicated to backing startups, a move intended to attract more foreign investors into the sector. Domestic startup funds currently must limit investment in foreign companies to less than 50% of their portfolio holdings. Ending this restriction would allow more flexibility in choosing investment targets, encouraging overseas money to flow into such Japanese funds. (Nikkei Asia)
A 57% majority of U.S. adults believe that the federal government should ensure all Americans have healthcare coverage. Yet nearly as many, 53%, prefer that the U.S. healthcare system be based on private insurance rather than run by the government. These findings are in line with recent attitudes about the government’s involvement in the healthcare system, which have been relatively steady since 2015. (Gallup)
Economy
Banks Plan Payment Wallet to Compete With PayPal, Apple Pay: Wells Fargo, Bank of America, JPMorgan Chase and four other banks are working on a new product that will allow shoppers to pay at merchants’ online checkout with a wallet that will be linked to their debit and credit cards. The digital wallet will be managed by Early Warning Services LLC, the bank-owned company that operates money-transfer service Zelle. One goal of the new service is to compete with third-party wallet operators such as PayPal and Apple Pay. Banks are worried about losing control of their customer relationships. (Wall Street Journal)
The likelihood that the U.S. is already in recession or will fall into one this year has dropped over the past three months to 56% from a nearly two-thirds possibility, according to a National Association of Business Economics survey on business conditions. (Reuters)
Japan's finances are becoming increasingly precarious, Finance Minister Shunichi Suzuki warned, just as markets test whether the central bank can keep interest rates ultra-low, allowing the government to service its debt. Despite the country's growing debt pile, the government remains under pressure to keep the fiscal spigot wide open. (Reuters)
Amazon plans to “significantly expand” its use of payments platform Stripe. “Under the new agreement, Stripe will become a strategic payments partner for Amazon in the U.S., Europe and Canada, processing a significant portion of Amazon’s total payments volume,” Stripe said in a Monday (Jan. 23) news release. “Stripe will be used across Amazon’s business units, including Prime, Audible, Kindle, Amazon Pay, Buy With Prime and more.” (PYMNTS)
The UK’s impending recession could be twice as bad as previously thought, according to leading economic forecasters at the business consultancy EY. Reduced government support, higher taxes and an overall worsening outlook have all led the firm’s analysts to conclude that the next three years could be worse than they anticipated three months ago. In October, EY’s Item Club had predicted a 0.3% contraction in gross domestic product (GDP) this year, followed by 2.4% growth next year and a 2.3% rise in 2025. But in an updated forecast released on Monday, it said GDP would drop 0.7% this year, followed by growth of 1.9% and 2.2% over the next two years. (The Guardian)
German Chancellor Olaf Scholz raised optimism that the EU and the U.S. can reach a trade truce in the coming months to prevent discrimination against European companies due to American subsidies. Speaking at a press conference with French President Emmanuel Macron following a joint Franco-German Cabinet meeting in Paris, Scholz said he was "confident" that the EU and the U.S. could reach an agreement “within the first quarter of this year” to address measures under the U.S. Inflation Reduction Act that Europe fears would siphon investments in key technologies away the Continent. (Politico)
Technology
Microsoft has confirmed a “multibillion-dollar investment” in ChatGPT bot maker OpenAI, making its biggest bet yet that artificial intelligence systems have the power to transform the tech giant’s business model and products. Precise financial details have not been disclosed, though the company said it was investing billions of dollars in a “multiyear” agreement. People familiar with the talks previously said OpenAI was seeking $10bn from Microsoft at a $29bn valuation. The stake in OpenAI comes with a belief that AI represents a technology that could transform Microsoft, helping it develop new “productivity” software alongside its Office applications and even renewing its challenge for market share against Google in search. (Financial Times)
ChatGPT users report $42 a month pricing for ‘pro’ access but no official announcement yet. OpenAI said earlier this month it would be testing a faster, paid version of the AI chatbot, but it’s not clear if the $42 pricing will stick around. (The Verge)
How Microsoft’s Stumbles Led to Its OpenAI Alliance: For more than a decade, Microsoft Research, the company’s in-house research group, has touted AI breakthroughs such as translating speech to text and software that could understand human language or recognize objects in images. But the company’s effort to commercialize its AI research moved at more of a crawl. AI groups inside rivals such as Google appeared to generate demonstrably more value by comparison. A group of Microsoft AI researchers told CEO Satya Nadella last year that rivals including Google and Apple were ahead of them when it came to using certain types of AI in major products such as voice assistants. And Nadella has consistently voiced concerns to colleagues that the company wasn’t turning its AI research into marketable services fast enough. (The Information)
Two artificial intelligence (AI) programs -- including ChatGPT -- have passed the U.S. Medical Licensing Examination (USMLE), according to two recent papers. "ChatGPT performed at or near the passing threshold for all three exams without any specialized training or reinforcement," the authors of one study wrote, noting that the tool was able to demonstrate "a high level of concordance and insight in its explanations… These results suggest that large language models may have the potential to assist with medical education, and potentially, clinical decision-making." (MedPage Today)
The US Justice Department is poised to sue Google as soon as today regarding the search giant’s dominance over the digital advertising market. The case is expected to be filed in federal court before the end of the week. (Bloomberg)
Spotify plans to cut 6% of its workforce and will take a related charge of up to nearly $50 million, adding to the massive layoffs in the technology sector in preparation for a possible recession. Spotify's operating expenditure grew at twice the speed of its revenue last year as the audio-streaming company aggressively poured money into its podcast business, which is more attractive for advertisers due to higher engagement levels. (Reuters)
Smart Links
Stanford MBAs now make a median $175,000 salary after graduation. (San Francisco Chronicle)
Why Latin America is eyeing a common currency union. (Semafor)
China surpassing US in key innovation metric and evolving from ‘imitator’. (South China Morning Post)
Meta expands its partnership with the NBA to offer 52 games in VR. (TechCrunch)
Amazon Web Services to Spend $35 Billion on Data Centers in Virginia. (The Information)
More Massachusetts districts are switching to electric school buses. (WBUR)