Trump plans 100% tariff on chips made outside U.S.; OpenAI's GPT-5 nears release; Apple to invest $100 billion in U.S. manufacturing
U.S. President Donald Trump said that he will be imposing 100% tariff on computer chips unless they're manufactured within the U.S. The threat has raised the fears around higher prices of electronics, automobiles, household appliances and other essential electronic items. Trump's warning comes three months after he had said electronics would mostly be exempt from the heavy tariffs imposed by his administration. During the COVID-19 pandemic, a shortage of chips pushed up the price of autos causing increased inflation. Investors have said that the tariff exemptions were a plus for Apple and other major tech companies which have invested massive amounts of money in chip manufacturing outside the U.S. Apple has committed to investing $600 billion in the U.S. with another $100 billion promised in February. Big Tech in total has said they will be investing $1.5 trillion in the U.S. since Trump has come to power. There is a chance that Trump could exempt Apple from the tariffs owing to this. Demand for chips has grown with sales increasing by 19.6% in June, according to data. Trump has been fostering domestic manufacturing often saying that the high costs of chips outside the country could be avoided by opening factories domestically.
OpenAI's GPT-5 nears release
OpenAI is preparing for the release of their latest flagship AI model, GPT-5, so users can finally see the increments in performance from GPT-4. A couple of people who have tested the model said that the coding capabilities of the model shone as did its ability to solve science and math problems. However, the advances from GPT-4 to GPT-5 were not as huge as the advances from GPT-3 to GPT-4. The recent advancement in AI models was based on scaling up by increasing training data and compute. But OpenAI has struggled with scaling up like issues with running into a data wall. Ilya Sutskever, the former chief scientist at OpenAI had said in a speech earlier that even though power could be expanded, data was becoming limited. Besides this, another problem was that the 'training runs' for large language models are more likely to have failures from hardware malfunctioning so researchers can't determine the final performance of the models until the end which can last for months. OpenAI released ChatGPT around three years ago introducing AI to the mainstream globally. The release led to rivals like Google and Anthropic releasing competitive AI models. OpenAI is also working on solving test-time compute which involves reasoning AI models. But CEO Sam Altman said that GPT-5 will be a mix of both reasoning and their flagship large language models.
Apple to invest $100 billion in U.S. manufacturing
Apple CEO Tim Cook met Donald Trump yesterday to announce an additional investment of $100 billion across the next four years. Under the announcement, Apple will bring more of their supply chain and advanced manufacturing processes to the U.S. as a part of the American Manufacturing Programme initiative but it still isn't a full commitment to make the iPhone domestically completely. Cook said that this plan will expand work with 10 companies across the U.S. that make parts and semiconductor chips. These partners include Corning, Coherent, Applied Materials, Texas Instruments and Broadcom along with a few others. Apple had earlier this year said that it will invest $500 billion domestically. Trump has been upset with Apple shifting their manufacturing processes to India from China after he placed tariffs. Just recently now, Trump is targetting India due to their purchase of Russian oil and imposed additional tariffs on India. Cook has previously said that a bunch of iPhone components can be made in India like the glass display and module to identify faces.
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