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The World
Allies resist US plan to ban all G7 exports to Russia: The EU and Japan have pushed back against a US proposal for G7 countries to ban all exports to Russia, as part of negotiations ahead of a summit of the world’s most advanced economies. A G7 leaders’ statement being drafted for their meeting in Hiroshima next month includes a pledge to replace the current sector-by-sector sanctions regime against Russia with a complete export ban with a few exemptions, according to documents seen by the Financial Times. The full export ban would include exemptions for agricultural, medical and other products. (Financial Times)
India’s population is expected to match China’s by the end of April and then to surpass it as the world’s most populous country, the UN said. The announcement by the UN’s Department of Economic and Social Affairs comes days after the UN Population Fund said last week India would have 2.9 million more people than China by the middle of 2023. India’s population is expected to reach 1,425,775,850 by the end of this month, DESA said, based on the latest UN estimates and projections of the global population. (Reuters)
The United States has begun facilitating the departure of private U.S. citizens who want to leave Sudan, according to White House national security adviser Jake Sullivan. Sullivan said the U.S. has placed intelligence, surveillance and reconnaissance assets over the land evacuation route to help facilitate safe travel by land from Khartoum to the Port of Sudan, but does not have any U.S. troops on the ground. (Politico)
Semiconductor supplies and Taiwan Strait tensions will feature on the agenda of the US-South Korea summit this week, the White House said, amid rising apprehensions on the two fronts between Beijing and Washington. South Korean President Yoon Suk-yeol arrived in Washington for a week-long official visit. It marked the second state visit by a foreign leader to the US since President Joe Biden took office in early 2021 and the first state visit by an Indo-Pacific leader during his administration.(South China Morning Post)
China and Singapore will hold a joint military exercise as soon as this week, their first combined drills since 2021, as Beijing deepens its defense and security ties with Southeast Asia, a region with strong existing U.S. alliances. The Chinese navy will deploy a missile-bearing frigate, the Yulin, and a mine-hunting ship, the Chibi, to the joint maritime exercise which will last from late April to early May, the Chinese defense ministry said. (Reuters)
A senior U.S. diplomat demanded Moscow free Wall Street Journal reporter Evan Gershkovich and another detained American at a meeting of the United Nations Security Council led by her Russian counterpart. The U.S. ambassador to the U.N., Linda Thomas-Greenfield, invited Elizabeth Whelan, the sister of detained American Paul Whelan, to attend a Security Council meeting presided over by Russian Foreign Minister Sergei Lavrov. The U.S. diplomat said Moscow was using Messrs. Whelan and Gershkovich as “bargaining chips, human pawns.” “I am calling on you, right now, to release Paul Whelan, Evan Gershkovich immediately, to let Paul and Evan come home and to cease this barbaric practice once and for all,” Ms. Thomas-Greenfield told the 15-member council meeting led by Mr. Lavrov. Calling attention to Ms. Whelan, Ms. Thomas-Greenfield said, “I want Minister Lavrov to look into her eyes and see her suffering.” Mr. Lavrov lifted his left hand briefly after Ms. Thomas-Greenfield’s appeal but passed much of her remarks looking at papers. (Wall Street Journal)
Which Countries Are Best Prepared For The Green Tech Transition? The United States, Sweden, Singapore, Switzerland and the Netherlands are the five most prepared countries to use, adopt or adapt to frontier technologies, which will be essential to the green tech transition, according to data released by the United Nations Conference on Trade and Development (UNCTAD). 166 countries were ranked on their level of preparedness to start using frontier technologies with the five following indicators: ICT, Skills, Industry, Research and Development and Finance. The following map uses the summed rank of each indicator to give a final score. For example, where the U.S. ranked in 2nd place for R&D, 11th for ICT, 18th for skills, 16th for industry and 2nd for finance, the sum was 49. (Statista)
Economy
Five Big Tech Companies Report Earnings This Week—Here’s What to Watch: This week we’re going to hear lots of variations on the terms “headwinds” and “challenges” and “execution.” We’ve got March-quarter earnings coming from most of tech’s big names, and the picture isn’t expected to be pretty. Microsoft, Alphabet, Amazon, Meta Platforms and Snap report between Tuesday and Thursday. Here’s the headline: Analysts expect those five companies to report top-line growth averaging just 1.1% for the quarter, according to S&P Global Market Intelligence. Since 2018, the same group has averaged annual growth of 25%. (This week’s group doesn’t include Apple, which is reporting on May 4 and is expected to post a 4.6% drop in year-on-year revenue). The massive slowdown in growth is, of course, why all five of the companies reporting this week have done mass layoffs in the past 12 months, slightly reversing the hiring they did when times were good. Of course, the slowdown isn’t news. It’s been evident for nearly 12 months now, a result of a digital ad market squeeze and weaker corporate spending on cloud services, both thanks to economic jitters. It’s notable that Wall Street analysts are somewhat optimistic. The consensus is that all five will accelerate next year to growth of around 11% to 12% in both 2024 and 2025, according to S&P. (The Information)
First Republic Bank, the most imperiled U.S. lender after last month’s banking crisis, disclosed the grisly details of just how troubled its business has become — and not much else. In the bank’s highly anticipated first update to investors since entering a free-fall over the past month and a half, its leaders said little. In a conference call to discuss its 1Q23 results with Wall Street analysts, the bank’s executives offered just 10 minutes of prepared remarks and declined to take questions, leaving investors and the public with few answers about how it would steer out of its malaise. (New York Times)
First Republic shares plunge as it reveals $100bn deposit flight. (Financial Times)
Bitcoin’s rebound is just the start of a rally that will take it past $50,000 next year courtesy of a process known as halving that curbs the supply of new tokens, according to projections from crypto analysts. The largest digital asset has climbed 67% since Dec. 31 in a partial revival from an epic rout in 2022. While the token at the moment is struggling in the vicinity of $30,000, halving holds the potential to trigger an advance of at least 81%, according to Bloomberg Intelligence and Matrixport. (Bloomberg)
Commercial real estate has experienced its share of busts in recent decades. This one is different. Landlords are contending simultaneously with a cyclical market downturn and with secular changes in the way people work, live and shop. The sudden surge in interest rates caused property values to fall, while the rise of remote work and e-commerce are reducing demand for office and retail space. The U.S. office vacancy rate reached a milestone in the first quarter when it rose to 12.9%, exceeding the peak vacancy rate during the 2008 financial crisis. (Wall Street Journal)
Cities reviving downtowns by converting offices to housing. Across the country, office-to-housing conversions are being pursued as a potential lifeline for struggling downtown business districts that emptied out during the coronavirus pandemic and may never fully recover. The conversion push is marked by an emphasis on affordability. Multiple cities are offering serious tax breaks for developers to incentivize office-to-housing conversions — provided that a certain percentage of apartments are offered at affordable below-market prices. (Associated Press)
In Manhattan’s Sluggish Home Market, Cash Is Greasing the Wheels: A record share of buyers are avoiding mortgages, and sellers eager to close are jumping at their all-cash offers. More Manhattan homebuyers are paying cash than at any point in recent history, to take advantage of deals to be had in a sagging sales market. Nearly six in 10 purchases in the first quarter were completed without financing, from a $700,000 Hell’s Kitchen studio that a mother bought for her daughter, to a 2,900-square-foot (269-square-meter) condo in a newly converted hotel near Central Park that sold for $10.3 million. (Bloomberg)
Technology
Microsoft agrees to stop bundling Teams with Office: Microsoft will stop forcing customers of its popular Office software to also have its Teams video conferencing and messaging app automatically installed on their devices, in a move designed to prevent an official antitrust probe by EU regulators. The US tech giant has made the concession to avoid a formal investigation, said two people with direct knowledge of the decision, following a 2020 complaint by rival Slack which claimed Microsoft’s practice of bundling the two services together was anti-competitive. (Financial Times)
A federal appeals court sided with Apple and upheld a 2021 ruling that mostly supported the company’s App Store policies against an antitrust challenge by Fortnite maker Epic Games. A panel of three judges on the Ninth U.S. Circuit Court of Appeals sided with a federal judge’s ruling that rejected all but one of Epic’s claims and declared that Apple doesn’t have monopolistic control over mobile game transactions. (Wall Street Journal)
There’s a new trend emerging in the generative AI space — generative AI for cybersecurity — and Google is among those looking to get in on the ground floor. Google announced Cloud Security AI Workbench, a cybersecurity suite powered by a specialized “security” AI language model called Sec-PaLM. An offshoot of Google’s PaLM model, Sec-PaLM is “fine-tuned for security use cases,” Google says — incorporating security intelligence such as research on software vulnerabilities, malware, threat indicators and behavioral threat actor profiles. (TechCrunch)
AI developers must ‘learn to dance with shackles on’ as China makes new rules in a post-ChatGPT world: Cyberspace administration releases draft measures for generative AI services as China, and countries around the world, grapple with impact. With ‘socialist core values’ a focus for Beijing, Tsinghua academic outlines four areas of risk for China: technical; economy; social; and politics. (South China Morning Post)
The Japanese government has formed a team to create a strategy for using artificial intelligence tools like ChatGPT to make administrative tasks more efficient while setting ground rules. The team held its first meeting Monday, including representatives from relevant ministries and agencies. Members agreed that generative AI will not be given access to sensitive information and that precautions will be taken against other risks, such as privacy breaches. (Nikkei Asia)
The New Risks ChatGPT Poses to Cybersecurity. The FBI’s 2021 Internet Crime Report found that phishing is the most common IT threat in America. From a hacker’s perspective, ChatGPT is a game changer, affording hackers from all over the globe a near fluency in English to bolster their phishing campaigns. Bad actors may also be able to trick the AI into generating hacking code. And, of course, there’s the potential for ChatGPT itself to be hacked, disseminating dangerous misinformation and political propaganda. This article examines these new risks, explores the needed training and tools for cybersecurity professionals to respond, and calls for government oversight to ensure that AI usage doesn’t become detrimental to cybersecurity efforts. (Harvard Business Review)
The Companies That Are Threatened by ChatGPT: Big software companies including Microsoft and Salesforce are racing to incorporate the technology behind ChatGPT, known as generative artificial intelligence, into their products to attract new users and boost profits. But the rapidly advancing technology threatens other companies that have spent years crafting software to automate tasks or to build machine-learning models, including richly valued startups such as Databricks, Snyk, Zapier and Talkdesk. (The Information)
Smart Links
Phil Knight Donates $400 Million to Rebuild Portland’s Black Community. (Wall Street Journal)
Passport application delays could derail summer travel. (Axios)
Heineken USA's CEO seeks more diversity. (The Broadsheet)
Lisbon Bars Cars From Driving Through City Center. (Bloomberg)
Susan Rice to leave White House domestic policy post. (Axios)