OpenAI says it wants to support sovereign AI. But it's not doing so out of the kindness of its heart
Hello and welcome to Eye on AI. In this edition…Yoshua Bengio's new AI safety nonprofit…Meta seeks to automate ad creation and targeting…Snitching AI models…and a deep dive on the energy consumption of AI.
I spent last week in Kuala Lumpur, Malaysia, at the Fortune ASEAN-GCC Economic Forum, where I moderated two of the many on-stage discussions that touched on AI. It was clear from the conference that leaders in Southeast Asia and the Gulf are desperate to ensure their countries benefit from the AI revolution. But they are also concerned about 'AI Sovereignty' and want to control their own destiny when it comes to AI technology. They want to control key parts of the AI tech stack—from data centers to data to AI models and applications—so that they are not wholly dependent on technology being created in the U.S. or China.
This is particularly the case with AI, because while no tech is neutral, AI—especially large language models—embody particular values and cultural norms fairly explicitly. Leaders in these regions worry their own values and cultures won't be represented in these models unless they train their own versions. They are also wary of the rhetoric emanating from Washington, D.C., that would force them to choose between the U.S. and China when it comes to AI models, applications, and infrastructure.
Malaysia's Prime Minister Anwar Ibrahim has scrupulously avoided picking sides, in the past expressing a desire to be seen as a neutral territory for U.S. and Chinese tech companies. At the Fortune conference, he answered a question about Washington's push to force countries such as Malaysia into its technological orbit alone, saying that China was an important neighbor while also noting that the U.S. is Malaysia's No. 1 investor as well as a key trading partner. 'We have to navigate [geopolitics] as a global strategy, not purely dictated by national or regional interests,' he said, somewhat cryptically.
But speakers on one of the panels I moderated at the conference also made it clear that achieving AI sovereignty was not going to be easy for most countries. Kiril Evtimov, the chief technology officer at G42, the UAE AI company that has emerged as an important player both regionally and increasingly globally, said that few countries could afford to build their own AI models and also maintain the vast data centers needed to support training and running the most advanced AI models. He said most nations would have to pick which parts of the technology stack that they could actually afford to own. For many, it might come down to relying on open-source models for specific use cases where they didn't want to depend on models from Western technology vendors, such as helping to power government services. 'Technically, this is probably as sovereign as it will get,' he said.Also, on the panel was Jason Kwon, OpenAI's chief strategy officer, who spoke about the company's recently announced 'AI for Countries' program. Sitting within its Project Stargate effort to build colossal data centers worldwide, the program offers a way for OpenAI to partner with national governments, allowing them to tap OpenAI's expertise in building data centers to train and host cutting edge AI models.
But what would those countries offer in exchange? Well, money, for one thing. The first partner in the AI for Countries program is the UAE, which has committed to investing billions of dollars to build a 1 gigawatt Stargate data center in Abu Dhabi, with the first 200 megawatt portion of this expected to go live next year. The UAE has also agreed, as part of this effort, to invest additional billions into the U.S.-based Stargate datacenters OpenAI is creating. (G42 is a partner in this project, as are Oracle, Nvidia, Cisco, and SoftBank.)In exchange for this investment, the UAE is getting help deploying OpenAI's software throughout the government, as well as in key sectors such as energy, healthcare, education, and transportation. What's more, every UAE citizen is getting free access to OpenAI's normally subscription-based ChatGPT Plus service.
For those concerned that depending so heavily on a single U.S.-based tech company might undermine the idea of AI sovereignty, OpenAI sought to make clear that the version of ChatGPT it makes available will be tailored to the needs of each partner country. The company wrote in its blog post announcing the AI for Countries program: 'This will be AI of, by, and for the needs of each particular country, localized in their language and for their culture and respecting future global standards.' OpenAI is also agreeing to help make investments in the local AI startup ecosystem alongside local venture capital investors.I asked Kwon how countries that are not as wealthy as the UAE might be able to take advantage of OpenAI's AI for Countries program if they didn't have billions to invest in building a Stargate-size data center in their own country, let alone also helping to fund data centers in the U.S. Kwon answered that the program would be 'co-developed' with each partner. 'Because we recognise each country is going to be different in terms of its needs and what it's capable of doing and what its citizens are going to require,' he said.He suggested that if a country couldn't directly contribute funds, it might be able to contribute something else—such as data, which could help make AI models that better understand local languages and culture. 'It's not just about having the capital,' he said. He also suggested that countries could contribute through AI literacy, training, or educational efforts and also through helping local businesses collaborate with OpenAI.Kwon's answer left me wondering how national governments and their citizens would feel about this kind of exchange—trading valuable or culturally-sensitive data, for instance, in order to get access to OpenAI's latest tech. Would they ultimately come to see it as a Faustian bargain? In many ways, countries still face the dilemma G42's Evitmov flicked at: They can have access to the most advanced AI capabilities or they can have AI sovereignty. But they may not be able to have both.With that, here's more AI news.
Jeremy Kahnjeremy.kahn@fortune.com@jeremyakahnWant to know more about how to use AI to transform your business? Interested in what AI will mean for the fate of companies, and countries? Why not join me in Singapore on July 22 and 23 for Fortune Brainstorm AI Singapore. We will dive deep into the latest on AI agents, examine the data center build out in Asia, and talk to top leaders from government, board rooms, and academia in the region and beyond. You can apply to attend here.
In total, Fortune 500 companies represent two-thirds of U.S. GDP with $19.9 trillion in revenues, and they employ 31 million people worldwide. Last year, they combined to earn $1.87 trillion in profits, up 10% from last year—and a record in dollar terms. View the full list, read a longer overview of how it shook out this year, and learn more about the companies via the stories below.
A passion for music brought Jennifer Witz to the top spot at satellite radio staple SiriusXM. Now she's tasked with ushering it into a new era dominated by podcasts and subscription services. Read more
IBM was once the face of technological innovation, but the company has struggled to keep up with the speed of Silicon Valley. Can a bold AI strategy and a fast-moving CEO change its trajectory? Read more
This year, Alphabet became the first company on the Fortune 500 to surpass $100 billion in profits. Take an inside look at which industries, and companies, earned the most profits on this year's list. Read more
UnitedHealth Group abruptly brought back former CEO Stephen Hemsley in mid-May amid a wave of legal investigations and intense stock losses. How can the insurer get back on its feet? Read more
Keurig Dr. Pepper CEO Tim Cofer has made Dr. Pepper cool again and brought a new generation of products to the company. Now, the little-known industry veteran has his eyes set on Coke-and-Pepsi levels of profitability. Read more
NRG Energy is the top-performing stock in the S&P 500 this year, gaining 68% on the back of big acquisitions and a bet on data centers. In his own words, CEO Larry Coben explains the company's success. Read more
This story was originally featured on Fortune.com
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The ‘Fundamental Mistake' in Trump's Trade War With China
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We don't want that situation to lead to a bigger conflict over a misunderstanding. I also worry about connectivity. After Speaker Pelosi visited Taiwan in August 2022, the Chinese effectively shut down diplomatic contacts between our governments at a senior level. They did it again after that strange balloon drifted across the territory of the United States in 2023. So there were moments when I felt that it was in doubt that we could actually handle a crisis. And given the competitive, really palpable competition between two countries, we have to be able to manage conflict and to reduce the probability of a major conflict. How would you characterize the state of the U.S.-China relationship from where you left Beijing in January to four-plus months later under the Trump administration? There are a lot of similarities. I'm not privy to everything going on now, because I'm not there, but I don't think the situation right now is dissimilar. 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A key component of the Biden administration's China strategy was a focus on bolstering ties with allies and partners to counter Beijing's growing global footprint. Trump's approach to China — and the rest of the world — hinges on tariffs and trade. How effective is that? It was not a good start. I think the fundamental mistake that was made was that when we imposed tariffs on China, we also imposed high tariffs on South Korea, Japan, the European Union, Canada and Mexico. All those countries are on our side in the big issues that separate us from China. All of them have the same economic issues and trade problems with China. If we had highlighted China as the major disruptor of global trade, which China has been for the last couple of decades, and formed a coalition with the EU and Japan and the U.S. — that's 60 percent of global GDP — we would have had leverage for these negotiations. 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Beijing argues that the Trump administration has picked an unfair fight with China over trade. Is that fair? Let me say something more understanding of President Trump's dilemma. The Chinese have been saying every day for the last several weeks that the United States is being unfair, that we're a bully, that we're disrupting global trade. In fact, they're the biggest problem in global trade. Intellectual property theft against American and other nations' companies; forced technology transfer; dumping of EVs, lithium batteries, solar panels on the rest of the world below the cost of production; disrupting global markets; trying to kill the manufacturing industries in places like the United States and Europe. So I always start from the presumption that tariffs are necessary with China. The question is, what level of tariffs? Remember that President Biden put 100 percent tariffs on Chinese EVs, 50 percent tariffs on semiconductors and 25 percent tariffs on lithium batteries. 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I just don't think you're going to resolve it on a phone call. But maybe what they could do in the phone call is to say, 'Okay, we seem to be at loggerheads. We're making no progress. Let's have our negotiators go back to Geneva. Let's give them instructions to try to resolve this.' And I think it'll be months of negotiations. I wouldn't be surprised if this 90-day diminution of tariffs on both sides has to be extended into the autumn, but I think there will be a trade deal because both countries want it. What is the longer-term outlook for the U.S.-China relationship? China is looking for stability in its relationship with the United States. Its economy is not in a catastrophic state, but it's not performing well. They're worried about their low GDP growth rate. They're worried about a 32-point reduction in foreign direct investment into China last year. 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Their science and technology talent is prodigious. The level of scholarship, of patents, of research in some areas exceeds us, or is equal to us. In some critical areas of technology transformation, they are putting massive amounts of state-directed money into their national champions like Huawei, with companies that they want to succeed in the world. They're doing it on a consistent basis, and they plan over decades, so they have that advantage. When I was leaving in January, the Chinese announced $15 billion of state money going into quantum computing alone. They want to beat us to the punch there. That's something that's not as well understood in American society and even in our press — people have older, conventional views of China that are outdated. The Trump administration has dismantled some of the key tools of U.S. soft power aimed to counter China's growing global influence — USAID, Radio Free Asia, Radio Free Europe and Voice of America. Is that a problem? The destruction of USAID was a catastrophic mistake for the United States. That was our agency that said to the rest of the world, 'We'll help you on vaccines. We'll help you with HIV. Will help you with polio.' Elon Musk and company destroyed USAID in one week and laid off 8,500 people. That helped China. The Chinese then went out with a massive propaganda blitz the next day all over the world saying, 'The United States is not interested in you any longer.' I watched the Chinese do this in February and March. The way the cuts were done, the fact that it was done with so little thought, so little information, and so little respect for our career civil servants was disgraceful. As ambassador, you fought hard to restore what you referred to as 'people-to-people' ties between the U.S. and China. Last week, the Trump administration announced that it would 'aggressively revoke' the visas of Chinese students in the U.S. and tighten scrutiny of Chinese citizens seeking to study in 'critical fields' in the U.S. How strategic is that move? We have a competitive, difficult, contentious relationship with the government of China. That doesn't mean we should have a competitive, contentious and difficult relationship with the people of China. In fact, as we compete with the government of China over the next decade or more, we should keep the doors open to tourism, to business travelers and to Chinese students in the U.S. and American students in China. Because you don't want to drive this relationship into a wall where Chinese people don't speak English, and they've never been to Missouri or Montana. 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The incredible shrinking president
On Friday, Elon Musk and Donald Trump seemingly broke up amicably in the White House's Oval Office. It was like watching a married couple say, 'We love each other, but we can't live together.' Trump took a swipe at Musk by referring to him as an immigrant, and Musk responded by taking a swipe at Trump as he discussed 'the majesty' of the Oval Office. Otherwise, it was all smiles. Trump even said he'd have Elon back from time to time, like they were sharing a timeshare or something. But Trump's breakups always get messy, so by Tuesday, Musk was referring to Trump's 'One Big Beautiful Bill' as a 'disgusting abomination' and urged Republicans to vote against it. House Speaker Mike Johnson admitted that he tried to call Elon, but Musk ghosted him. I understand that. What's the point of talking to Johnson? He doesn't think for himself and Musk already knows what Trump thinks. Meanwhile, the Democrats were attacking Musk's alleged drug use, and in effect defecating on the one person who apparently doesn't always kiss Trump's . . . ahem, ring. Musk's criticisms of the bill came after the nonpartisan Congressional Budget Office said that the 'One Big Beautiful Bill' will add $2.4 trillion to the national debt over 10 years. The Trump team's response on Wednesday was to send out two press releases — one, labeled 'Most Essential Piece of Legislation in the Western World,' quotes seven tweets by Deputy Chief of Staff Stephen Miller in support of the bill. The other press release, labeled 'Mythbuster,' argued that claims the 'One Big Beautiful Bill' adds to the deficit or increases spending are a hoax. In other words, facts be damned. Trust Trump. Of course, he's the guy who said in the Oval Office Friday that gas was at $1.99 a gallon nationwide. So, what does Trump think now of Elon, the deficit, the CBO claims and his 'one big beautiful bill'? I can't tell you. Until after dusk on Wednesday, no one had seen Donald Trump in public since Sunday following a golf outing. Early Wednesday evening, reporters got a statement — but it wasn't from Trump. Following a meeting with the president, Republican Senators John Thune, John Barrasso and Mike Crapo spoke at the stakeout area. They carried neither surprises nor news of any breakthroughs on that Big Beautiful Bill. Thune said they had 'a very positive discussion about the path forward,' adding that everybody is moving 'in the same direction' and agreed that 'failure is not an option.' Barrasso said they left the meeting with Trump 'committed to a safe and prosperous America and that's what this bill is about.' He said they told the president that 'the American people trust Republicans more than Democrats' on the economy. Crapo called it 'a very robust and healthy discussion' and contended 'we have very strong unity.' He said any suggestion that the bill will increase deficits is 'absolutely wrong.' Turns out they spoke quite a bit and said very little. There's an easy punchline there. Take it. Trump finally appeared on the portico of the Blue Room after 7 p.m. on Wednesday to welcome new interns to what the White House described as a 'soiree' on the South Lawn. I don't know why, but I picture White House press secretary Karoline Leavitt behind this. Trump walked onto the portico overlooking the South Lawn like a Generalissimo from a Banana Republic. His mass of young interns assembled and rushed to hear him from below as he watched with amusement from his balcony above the action. He played his greatest hits from his stump speech, never addressing Musk, tariffs or the executive orders he issued Wednesday banning immigrants from Harvard, banning travel to the U.S. from a dozen countries and calling for an investigation into former President Joe Biden, his cognitive abilities and the use of an auto pen. The highlight of his 14-minute appearance was when Trump said, 'When I do good, you do good.' It's always about him, isn't it? But the biggest tell was when he said he was such a great president that in four months, we now have a 'country in love with itself.' Trump beamed with pride. Of course, we have heard from Trump on social media talking about some of the tough issues. His latest rant was a warning for Ukraine after he said he spoke to Vladimir Putin. Putin, apparently stunned by Ukraine's attack on Russian airfields over the weekend, said 'very strongly' to Trump that he will 'have to respond to the recent attack.' I guess Putin needed a press secretary and Trump stepped in. Maybe he took his breakup with Musk harder than we thought. Maybe that explains why his recent public appearances have been fewer than his golf outings. Deputy Chief of Staff Stephen Miller appears to have stepped up as the twisted strategist and face of the administration, while Chief of Staff Susie Wiles is the chief tactician. Trump said from the White House Portico Wednesday that even members of the military bow before her. 'They're scared of her. They're afraid,' he said. Wiles lurks in the shadows, thriving in the gray mist of the White House. Stephen Miller flirts with notoriety, obviously loves it, and so far has been far more successful than others who have courted Trump. He never challenges anything Trump says publicly. He and Pep Secretary Leavitt have also learned the best way to survive is to 'smile and wave, boys,' in front of the boss. Compliments help. That's why Musk is out and Miller is still in. After all, if your five-year-old can give you a black eye, you're not the kind of alpha male Trump wants on his staff. He needs the man with spray hair in a can. The real reason for Musk's black eye? Well the ongoing rumor is that Musk shoved Secretary of the Treasury Scott Bessent, who may or may not have retaliated with a fist to the face. As they say, that is merely speculation. Wiles has been notoriously silent on the matter, as has Miller. Only Leavitt has spoken to it, saying the president has hired some people who are 'passionate' about their work. Whoever punched Musk is a hero to millions. And now that he's gone, in a divorce that seemed cordial until Musk used the 'Big Beautiful Bill' as toilet paper, it seems Musk probably won't come around from time to time. Then again, Trump loves to keep his reality show options open. 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After living through the first Trump administration and seeing how wild covering it on a daily basis was, I can tell you the second administration is so bad it makes the first Trump administration look nearly competent. Today, Trump does whatever he wants, based on whatever he is being told by Wiles and Miller — the choke points for information. It is next to impossible to find the remnants of the GOP capable of serving its constituents. They've chased out all of their sane members. The latest is Joe Walsh. The former Tea Party congressman from Illinois made it official this week: He's now a Democrat. For him, it boiled down to picking a side. 'My former party is a threat to this country. We have to be Democrats, period, to keep our country.'Democratic voters, so far, have embraced him, he says, with very little negative feedback. 'I was the Tea Party's son of a bitch and I think the Democratic Party needs more son of a bitches,' he said. 'This is a big tent. There used to be southern Democrats and conservative Democrats and progressives. We differ on some things, but we all agree to respect the Constitution. And we need to fight for our country.' Trump's time off the center stage, even for the briefest of time, allows the country to see in stark detail the true horror show behind him. Trump has a far stronger understanding of the media and how to manipulate and exploit it than any other politician since Ronald Reagan. Trump's true strength is in the management of his appearances and his narrative. No one else in his administration has that ability. Witness Joni Ernst. The Republican senator recently called up the spirit of Ebenezer Scrooge. Her comments about Medicaid cuts during an Iowa town hall sparked a spectator to shout, 'But people are going to die,' To which Senator Ernst remarked, 'We are all going to die.' Sounds a lot like Scrooge: 'If they would rather die, they had better do it, and decrease the surplus population." Afterward, she doubled down by doing a TikTok video in a cemetery and claiming if you want to live forever, follow Jesus. It was billed as a 'tongue-in-cheek' production. 'Joni Ernst has all the bedside manner of a cat in a blender,' political commentator John Fugelsang said. ''We're all going to die?' That's not an answer to a healthcare crisis — that's what your creepy uncle says on Christmas after his fourth Jaegermeister.' Fugelsang, who hosts a political show on SiriusXM and is the author of the newly published book 'Separation of Church and Hate,' says Trump, and his closest disciples suffer from a biblical malady; hypocrisy is their hubris. 'Because nothing says 'compassion' like kicking grandma off Medicaid while boasting of your piety, with human graves as props. Why worry about your cancer diagnosis, friends, when you can just accept Jesus and prepare to meet Him real soon,' Fugelsand said. 'Jesus welcomed the stranger and cared for the least of us. Joni's is a trickle-down MAGA Jesus, and her idea of the gospel is to hand you a shovel and say, 'Dig your own grave'.' Of course, there are many who aren't as critical of Ernst's 'tongue-in-cheek' performance. Many of them also claim to be fans of Pete Hegseth, the Secretary of Defense, whose greatest claim to fame and qualification for his job other than his outrageous tattoos (if you say it in Randy Rainbow's voice, you'd understand), is his luddite impersonation of a television anchor on Fox Television. His homophobic response to renaming the U.S.N.S Harvey Milk (the second of a new class of oilers) because Milk was the first openly gay elected official in California is petulant, cartoonish and vintage 1930s if you lived in Dusseldorf. Milk was no Admiral Nimitz, but maybe he could have been if he had had the chance. He joined the United States Navy during the Korean War. He served aboard the submarine rescue ship USS Kittiwake (ASR-13) as a diving officer. He later transferred to Naval Station, San Diego, to serve as a diving instructor. In 1955, he resigned from the Navy at the rank of lieutenant, junior grade, forced to accept an "other than honorable" discharge and leave the service rather than be court-martialed because of his homosexuality. To change the name of the ship for no reason other than Milk's sexual orientation dishonors hundreds of thousands, if not millions of similar Americans over the years who have served their country with honor as far back as the Revolutionary War. So far, Trump doesn't seem all that eager to rein in his minions. That could change tomorrow. But, for the first time since he took office, right now he seems content to sit in the background and watch his clown car roll past him. No one in the press with access to the president has asked Trump about his sparse number of recent public appearances, and I won't speculate as to why they've occurred without verified facts. I will say his appearance on the portico was too reminiscent of the episode 'Little Dictator' on "Gilligan's Island' for me — though I could see Trump playing Gilligan. But, if Trump's current scarcity of public appearances continues with only one or two chances a week to see 'proof of life,' it probably won't be long before Jake Tapper prepares his next mea culpa tour for whatever reason.