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The World
The Chinese military could soon deploy a high-altitude spy drone that travels at least three times the speed of sound, according to a leaked U.S. military assessment, a development that would dramatically strengthen China’s ability to conduct surveillance operations. A secret document from the National Geospatial-Intelligence Agency, which has not previously been reported, shows the Chinese military is making technological advances that could help it target American warships around Taiwan and military bases in the region. (Washington Post)
US sends scores of military advisers to Taiwan as China threat continues: Around 200 U.S. military advisers have been deployed to Taiwan, reportedly to train local troops against potential attacks from China, five times the number of American personnel based on the island at the end of last year. U.S. advisers had been sighted as early as the end of March at a base in Kaohsiung's Gangshan District, according to local media reports. The advisers “have been primarily assigned to boot camps and reserve brigades,” the official Central News Agency (CNA) quoted unnamed sources within the armed forces as saying. (Radio Free Asia)
The top US military commander in the Indo-Pacific has pushed back against colleagues that are “guessing” the date of a potential Chinese invasion of Taiwan. Admiral John Aquilino, head of US Indo-Pacific command, on Tuesday told Congress the Chinese threat to Taiwan had increased but declined to endorse other top military brass who have suggested timelines for a possible conflict. (Financial Times)
South Korea might extend its support for Ukraine beyond humanitarian and economic aid if it comes under a large-scale civilian attack, President Yoon Suk Yeol said, signalling a shift in his stance against arming Ukraine for the first time. In an interview with Reuters ahead of his state visit to the U.S. next week, Yoon said his government has been exploring how to help defend and rebuild Ukraine, just as South Korea received international assistance during the 1950-53 Korean War. (Reuters)
Foreign Minister Qin Gang says China is ready to facilitate peace talks between Israel and Palestinians, as Beijing increasingly seeks to present itself as a global peacemaker. In separate phone calls with his Israeli and Palestinian Authority counterparts, Qin aired China’s concerns over the deepening conflict between the two sides, saying the solution was to resume peace negotiations. He told Israeli Foreign Minister Eli Cohen that Beijing encouraged both sides to “show political courage and take steps to resume peace talks” and that China was “willing to facilitate this”, according to the Chinese foreign ministry readout. (South China Morning Post)
North Korean leader Kim Jong Un has ordered officials to launch the first spy satellite as planned, saying that boosting reconnaissance capabilities is a priority to counter "threats" from the United States and South Korea, state media reported. (Reuters)
Russia’s Foreign Minister Sergey Lavrov expressed gratitude to Brazil for its approach in pushing for an end to hostilities in Ukraine — an effort that has irked both Kyiv and the West, and by afternoon prompted an unusually sharp rebuke from the White House. Brazil’s President Luiz Inácio Lula da Silva has refused to provide weapons to Ukraine while proposing a club of nations including Brazil and China to mediate peace. (Associated Press)
Brazil faces backlash from west over stance on Ukraine: US accuses Lula of ‘parroting Russian and Chinese propaganda’. (Financial Times)
U.S. vs. Russia trade ties in LatAm. (GZERO Media)
Mexican President Andres Manuel Lopez Obrador accused the Pentagon of spying on his government following leaks in U.S. media, and said he would begin classifying information from the armed forces to protect national security. His comments came several days after the Washington Post reported on apparent tensions between Mexico's Navy and the Army, citing a U.S. military briefing revealed in online leaks of secret U.S. military records. (Reuters)
Slovakia ignores EU warning and bans grain imports from Ukraine: Slovakia has become the third EU country to ban food imports from Ukraine, brushing aside warnings from Brussels over the potential illegality of the move. Poland and Hungary announced their bans at the weekend, with all three countries saying that a mountain of imported Ukrainian grain was depressing prices and causing hardship for their farmers. Warsaw and Budapest’s bans will last until June 30. The European Commission, the bloc’s executive arm, has warned that trade is a joint EU competence and governments cannot take unilateral measures. Bulgaria and Romania told fellow member states at a meeting of diplomats in Brussels that they too were considering a ban. The Czech Republic, where farmers are also complaining, said it preferred a European solution. (Financial Times)
Explainer: One of the world’s leading exporters of wheat, corn and vegetable oils, Ukraine shipped much of its grain to international markets prior to the war, particularly in North Africa and Asia. After Russia’s invasion of Ukraine, some of the country’s Black Sea ports were temporarily blocked, however, causing large amounts of (cheap) Ukrainian grain to remain in neighboring countries such as Poland, Hungary and Romania. The resulting oversupply led to falling prices, causing significant economic hardship for local farmers. Among the EU’s largest agricultural producers themselves, Poland and Romania in particular typically import little to no grain from Ukraine. According to data from the UN Comtrade database, that changed dramatically in 2022, when Ukrainian cereal exports to Romania, Poland, Hungary and Slovakia surged from a total of $24 million in 2021 to $2.4 billion last year. (Statista)
Economy
In settling with Dominion Voting Systems, Fox News has avoided an excruciating, drawn-out trial in which its founding chief, Rupert Murdoch, its top managers and its biggest stars would have had to face hostile grilling on an embarrassing question: Why did they allow a virulent and defamatory conspiracy theory about the 2020 election to spread across the network when so many of them knew it to be false? But the $787.5 million settlement agreement — among the largest defamation settlements in history — and Fox’s courthouse statement recognizing that the court had found “certain claims about Dominion” aired on its programming “to be false” — at the very least amount to a rare, high-profile acknowledgment of informational wrongdoing by a powerhouse in conservative media and America’s most popular cable network. “Money is accountability,” Stephen Shackelford, a Dominion lawyer, said outside the courthouse, “and we got that today from Fox.” (New York Times)
Fox Corp. has settled the defamation lawsuit brought by Dominion Voting Systems, but the company’s troubles are far from over. Beyond the $787.5-million payout to end the Dominion case, Fox now must contend with a second defamation suit filed by a rival voting machine company, Smartmatic USA, which has demanded $2.7 billion. And Fox investors also are lining up with their own lawsuits, alleging that Rupert Murdoch and other board members were derelict in their duties by allowing Fox News to promote election lies, which harmed the network’s reputation as a news organization. (Los Angeles Times)
Geopolitical rifts caused by rivalry between the US and China could push up inflation by 5% and threaten the leading positions of the dollar and euro, Christine Lagarde has warned. The European Central Bank president said: “We may see more instability as global supply elasticity wanes; and second, we could see more multipolarity as geopolitical tensions continue to mount.” Disruption to global supply chains would hit “critical sectors” such as the electric-car industry, she said, pointing out that the US is “completely dependent” on imports for 14 critical materials and Europe relies on China for 98 per cent of its rare earths supplies. (Financial Times)
Disney plans to cut thousands of jobs next week, including about 15% of the staff in its entertainment division, people familiar with the matter said. The cuts will span TV, film, theme parks and corporate positions, and affect every region where Disney operates. (Bloomberg)
The downward march of VC funding numbers that began in 1Q22 and accelerated in 3Q22 continues to drag on into the current year. Global VC funding fell 53% year over year in Q1 2023 to $76 billion — and that’s counting two mighty lifts by OpenAI and Stripe, which each raised billions in recent months. Even early-stage numbers dropped as investors continue to hoard their record levels of dry powder. (Crunchbase News)
Technology
Michael Dell says customers are demanding less reliance on China: Michael Dell, billionaire founder and chief executive of one of the world’s biggest computing groups, is “intently focused” on buying components from outside China due to growing concern over supply-chain disruptions. Speaking to the Financial Times, Dell said customers of his eponymous company were asking it to diversify where it sources components. That push comes at a time of rising tension between Washington and Beijing and after the Covid-19 pandemic exposed vulnerabilities to disruption in the production of semiconductors. (Financial Times)
After placing an early bet on OpenAI, the creator of ChatGPT, Microsoft has another secret weapon in its arsenal: its own artificial intelligence chip for powering the large-language models responsible for understanding and generating humanlike language. The chips are already available to a small group of Microsoft and OpenAI employees, who are testing the technology, one of them said. Microsoft is hoping the chip will perform better than what it currently buys from other vendors, saving it time and money on its costly AI efforts. Other prominent tech companies, including Amazon, Google and Facebook, also make their own in-house chips for AI. (The Information)
Bluesky’s CEO wants to build a Musk-proof, decentralized version of Twitter: In an interview, CEO Jay Graber talks about the vision behind Bluesky, the decentralized social media service incubated by Twitter that is gearing up for a wider release. Right now, Bluesky’s interface is a shameless clone of Twitter. A key difference is that it defaults to a chronological feed of who you follow and lets you choose to toggle between a “What’s Hot” algorithmic feed. The service currently lacks the basic tools it needs to live up to its decentralized mission, including the ability to export account data. Big parts of what the underlying AT Protocol (atproto) promises to deliver, such as a marketplace of feed algorithms to choose from, also don’t exist yet. The company’s approach to content moderation was just outlined. (The Verge)
ChatGPT Buzz Fuels Demand for Chips and Gear: A surge in orders shows global AI chip race heating up; US trade curbs on China aren’t hurting the supplier to Nvidia, AMD. (Bloomberg)
Smart Links
Deal-Seeking Bidders Line Up for Instacart’s Private Stock. (The Information)
Infectious disease specialists call for dropping universal masking in health care settings. (Annals of Internal Medicine)
Promising new AI can detect early signs of lung cancer that doctors can’t see. (NBC News)
Banks Betting on Paris Say There Really Is Life After London: Protests have shaken the city, but its new financial growth has momentum. (Bloomberg)