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Sydney Morning Herald
19-05-2025
- Business
- Sydney Morning Herald
It's a $US450 billion industry, and Australia is in prime position to become a player
The most important and sensitive part? Trump agreed that the emirates could buy the cutting-edge computer chips made by America's Nvidia that are powering the global revolution in artificial intelligence. The UAE's ambition is to become a leading global powerhouse in AI, the fastest-growing field of tech investment. It's so sensitive that some of Trump's officials reportedly dissented, complaining that it risked the loss of one of America's few remaining technological advantages. The AI edge could 'leak' from the UAE to America's greatest rival, China, they feared. Washington bans the sale of the top-line chips to China. Trump signed the deal anyway. The Wall Street Journal reported this deal as a 'coup' for Abu Dhabi: 'The United Arab Emirates has fewer citizens than the population of West Virginia. But an agreement to give the UAE coveted access to millions of the most advanced chips from Nvidia shows that the tiny, oil-rich Gulf monarchy knows how to play a clever economic game in the age of Trump.' The UAE's neighbour, Saudi Arabia, has announced a similar ambition to build an 'AI zone', supplied by Nvidia chips. What does any of this have to do with Australia? First, the potential for China to conduct effortless sabotage of the US power grid shows that there is an accelerating need for nations to establish trusted supply chains for sensitive goods – especially now that a new global supply chain is about to be constructed for AI. The global market for AI infrastructure is worth around $US450 billion, according to Frank Holmes of US Global Investors. Australia is in prime position to be part of a trusted supply chain. The Biden administration listed Australia in the category of most-trusted nations. Second, the UAE play shows that a fast-moving country can stake a claim to an industry that, to now, has been restricted largely to just three territories – the US, China and Taiwan. And the moment is ripe for Australia, too, according to the official who led US tech security policy in Joe Biden's White House, Tarun Chhabra. He was in Australia around the time of the federal election and observes: 'I was struck by the sense of urgency and opportunity after the Australian election – 'if not now, when?' – for critical decisions at the nexus of technology policy and China policy.' The Albanese government is well-placed to seize the moment, he says. 'There's a healthy debate in Australia, as in many countries, about what sort of AI regulation to pursue. That is, of course, important. But there is also an opportunity to develop a strategy for growth and AI adoption, and attracting leading AI firms, especially US firms,' he tells me. AI has crossed a key threshold. It was a subject of fascination in 2023 when ChatGPT was launched, he says. 'It was 'look at what the chatbot can do!'' And now? 'We are into the industrial application phase now. We could see in 2027-28 models as capable as the best humans in many fields of knowledge.' Australian companies are alert to AI's potential for boosting productivity. The Tech Council of Australia's annual survey shows that AI is 'the defining technology trend' for 67 per cent of tech leaders. The council estimates that AI has the potential to create 200,000 jobs and $115 billion in economic value in Australia over the next five years. 'I think there's an opportunity for a national-level strategy to promote Australia as a hub for AI, to recruit talent' – especially now that the US is repelling skilled talent more than attracting it – 'as well as to build infrastructure and attract leading companies developing AI models and industrial applications,' says Chhabra, formerly the US National Security Council Coordinator for Technology and National Security. Loading 'And then there's also the national security layer – an opportunity to adopt frontier AI in the defence and intelligence establishment, and also to attract leading defence industrial base firms that are software-centric and, increasingly, AI-centric.' Chhabra, an adviser to the Garnaut Global consultancy founded by Australia's John Garnaut and also advising the US AI start-up firm Anthropic, cites another Australian advantage – the domestic superannuation sector with its $4 trillion in funds. 'There's an opportunity for democratic capital to seize this window as we see transformative technology emerging,' he said. 'What capital and what energy can be mobilised? Australia's energy potential is enormous, and its geopolitical risk is lower.'
The Age
19-05-2025
- Business
- The Age
It's a $US450 billion industry, and Australia is in prime position to become a player
The most important and sensitive part? Trump agreed that the emirates could buy the cutting-edge computer chips made by America's Nvidia that are powering the global revolution in artificial intelligence. The UAE's ambition is to become a leading global powerhouse in AI, the fastest-growing field of tech investment. It's so sensitive that some of Trump's officials reportedly dissented, complaining that it risked the loss of one of America's few remaining technological advantages. The AI edge could 'leak' from the UAE to America's greatest rival, China, they feared. Washington bans the sale of the top-line chips to China. Trump signed the deal anyway. The Wall Street Journal reported this deal as a 'coup' for Abu Dhabi: 'The United Arab Emirates has fewer citizens than the population of West Virginia. But an agreement to give the UAE coveted access to millions of the most advanced chips from Nvidia shows that the tiny, oil-rich Gulf monarchy knows how to play a clever economic game in the age of Trump.' The UAE's neighbour, Saudi Arabia, has announced a similar ambition to build an 'AI zone', supplied by Nvidia chips. What does any of this have to do with Australia? First, the potential for China to conduct effortless sabotage of the US power grid shows that there is an accelerating need for nations to establish trusted supply chains for sensitive goods – especially now that a new global supply chain is about to be constructed for AI. The global market for AI infrastructure is worth around $US450 billion, according to Frank Holmes of US Global Investors. Australia is in prime position to be part of a trusted supply chain. The Biden administration listed Australia in the category of most-trusted nations. Second, the UAE play shows that a fast-moving country can stake a claim to an industry that, to now, has been restricted largely to just three territories – the US, China and Taiwan. And the moment is ripe for Australia, too, according to the official who led US tech security policy in Joe Biden's White House, Tarun Chhabra. He was in Australia around the time of the federal election and observes: 'I was struck by the sense of urgency and opportunity after the Australian election – 'if not now, when?' – for critical decisions at the nexus of technology policy and China policy.' The Albanese government is well-placed to seize the moment, he says. 'There's a healthy debate in Australia, as in many countries, about what sort of AI regulation to pursue. That is, of course, important. But there is also an opportunity to develop a strategy for growth and AI adoption, and attracting leading AI firms, especially US firms,' he tells me. AI has crossed a key threshold. It was a subject of fascination in 2023 when ChatGPT was launched, he says. 'It was 'look at what the chatbot can do!'' And now? 'We are into the industrial application phase now. We could see in 2027-28 models as capable as the best humans in many fields of knowledge.' Australian companies are alert to AI's potential for boosting productivity. The Tech Council of Australia's annual survey shows that AI is 'the defining technology trend' for 67 per cent of tech leaders. The council estimates that AI has the potential to create 200,000 jobs and $115 billion in economic value in Australia over the next five years. 'I think there's an opportunity for a national-level strategy to promote Australia as a hub for AI, to recruit talent' – especially now that the US is repelling skilled talent more than attracting it – 'as well as to build infrastructure and attract leading companies developing AI models and industrial applications,' says Chhabra, formerly the US National Security Council Coordinator for Technology and National Security. Loading 'And then there's also the national security layer – an opportunity to adopt frontier AI in the defence and intelligence establishment, and also to attract leading defence industrial base firms that are software-centric and, increasingly, AI-centric.' Chhabra, an adviser to the Garnaut Global consultancy founded by Australia's John Garnaut and also advising the US AI start-up firm Anthropic, cites another Australian advantage – the domestic superannuation sector with its $4 trillion in funds. 'There's an opportunity for democratic capital to seize this window as we see transformative technology emerging,' he said. 'What capital and what energy can be mobilised? Australia's energy potential is enormous, and its geopolitical risk is lower.'
Khaleej Times
28-04-2025
- Business
- Khaleej Times
Gold prices dip but bulls eye $5,000 amid trade war
Gold prices fell sharply on Monday, dropping 1.6 per cent to $3,268 per ounce, extending a decline that has seen the precious metal lose over five per cent since hitting a record high above $3,500 on April 22. Despite the pullback, analysts and wealth managers remain optimistic, forecasting that escalating tensions between the US and China could propel gold prices to $5,000 or higher in the coming years. The selloff comes as traders reassess gold's explosive rally, with some betting the surge may have been overextended. In New York, hedge fund managers reduced their net long positions in gold futures and options to a 14-month low, according to the latest Commodity Futures Trading Commission data. However, the broader outlook for gold remains robust, driven by fears of a deepening economic and geopolitical rift between the world's two largest economies. The intensifying US-China standoff, marked by rising tariffs, expanding technology restrictions, and fragmenting capital markets, has heightened global uncertainty. President Donald Trump's recent remarks on Friday, dismissing another delay to his proposed 'reciprocal' tariffs, have dimmed hopes for a near-term thaw in trade talks. While Asian nations may pursue interim deals to avoid levies before a 90-day grace period expires in July, the Trump administration's framework for negotiations with 18 countries signals a protracted economic conflict. Nigel Green, CEO of deVere Group, who predicts gold could reach $5,000, described the situation as a 'strategic decoupling' with far-reaching implications. 'What began as a tariff spat is evolving into a geopolitical and economic confrontation,' Green said. 'In this environment, gold is becoming the ultimate financial insurance.' Frank Holmes, CEO of US Global Investors and Executive Chairman of Hive Digital Technologies, is even more bullish, projecting gold could climb to $6,000 by the end of Trump's term. He attributes the rally to a 'structural reset of the global financial system,' driven by de-dollarisation and aggressive gold accumulation by sovereign nations, particularly China. The dollar, long viewed as the global safe haven, is losing ground as US-China tensions erode investor confidence. Paradoxically, this has bolstered demand for dollar-denominated assets like gold. 'The more strained the relationship between Washington and Beijing becomes, the less confidence investors have in the dollar,' said Adrian Ash, director of Research at BullionVault. Political uncertainty within the US, including Trump's attacks on Federal Reserve Chair Jerome Powell and reports of efforts to undermine the Fed's independence, has further rattled markets. 'Gold does best when people lose faith in central banks,' Ash noted. Gold's recent surge to $3,500 marked its third $100 gain in eight sessions, with prices hitting record highs in other currencies, including £2,600 in the UK. This global rally underscores the widespread impact of Trump's second term, which has introduced volatility across financial markets. Analysts warn that the current gold surge reflects a repricing of risk in a world increasingly defined by economic nationalism. Both the U.S. and China are pursuing state-driven industrial strategies and supply-chain protectionism, embedding inflationary pressures into the global economy. Unlike past inflationary cycles driven by excess demand, this structural inflation stems from disrupted trade flows and fractured financial systems. 'The days of cheap, frictionless trade are behind us,' said Arun Sai, a senior multi-asset strategist with Pictet Asset Management. 'This means higher structural inflation, weaker currencies, and a renewed focus on hard assets like gold.' Sai advises investors to diversify away from US assets, with gold, German Bunds, and high-quality credit likely to benefit from portfolio reallocation. As the risks of a full US-China decoupling grow, wealth managers are urging clients to bolster gold allocations. The metal, long a store of value during times of upheaval, is proving its strategic relevance as a hedge against currency instability and geopolitical uncertainty. 'Gold is not just a hedge; it's becoming a core allocation,' Green said. Should Washington and Beijing continue to escalate rather than de-escalate, analysts expect significant inflows into gold. 'The current surge is not a speculative spike,' Holmes emphasised. 'It reflects a fundamental shift in how investors perceive risk.' While Monday's decline may signal a temporary breather, the consensus among experts is clear: gold's long-term trajectory remains upward. As global trade fragments and economic nationalism takes hold, the precious metal is poised to shine as a beacon of safety in an increasingly uncertain world.
