25/07/2025

BIZ & FINANCE FRIDAY | JULY 25, 2025

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America to supercharge AI sales to allies

Tesla profit drops as Musk warns of ‘rough’ patch before riches NEW YORK: Tesla reported another drop in quarterly profit on Wednesday as CEO Elon Musk warned the company could face a few “rough” quarters following the elimination of federal tax credits for electric vehicles under President Donald Trump’s big fiscal package. Musk, on an earnings conference call with analysts and investors, reiterated that Tesla’s technology advantages position it for significant long-term profitability, but suggested the company’s recent slump would continue or worsen in a difficult interim period until new autonomous transport ventures can be monetised. At issue is the period after the US$7,500 federal tax credit for EV purchases expires on Sept 30, among the green tax credits zeroed out by Trump’s sweeping package approved earlier this month. “We probably could have a few rough quarters. I’m not saying we will, but we could,” Musk said of a period that immediately follows the expiration of the US tax credit for EVs. “But once you get to autonomy at scale” by the second half of 2026, “I’d be surprised if Tesla economics are not very compelling”, said Musk. His comments acknowledge more short-term pain following Wednesday’s results, its third straight quarter of lower profitability as the company faces intensifying electric vehicle competition and deals with backlash due to Musk’s political activities. Tesla reported second-quarter profit of US$1.2 billion, down 16% from the year-ago level. The company in a press release emphasised ongoing efforts to lead in AI and robotics. Revenue fell 12% to US$22.5 billion. Lower profits had been expected after Tesla earlier this month disclosed a decline in auto deliveries. Results were also impacted by a fall in average vehicle selling prices and higher operating expenses driven by AI and other research and development projects. Tesla did not offer an outlook on full-year vehicle production, citing shifting global trade and fiscal policies. – AFP European car market tumbles 7% in June PARIS: Europe’s new car market saw a sharp 7% year-on-year drop in June, with top economies Germany, France and Italy posting especially steep declines, according to automobile manufacturers’ figures published yesterday. The continent’s car industry has laboured under an uncertain global economic outlook overshadowed by US President Donald Trump’s threats of tariffs, as well as stiff competition from China, notably on the key electric vehicles market. According to the European Automobile Manufacturers’ Association (ACEA), European sales dipped 2% in the first half of 2025, with petrol and diesel models posting sharp 21% and 28% declines respectively. Hybrid models have caught up to fill in the gap, with sales rising 17% and the sector now representing more than a third of the market. Fully electric vehicles, seen as essential to the world’s transition to a low-carbon economy in an age of man-made climate change, likewise saw sales rise, albeit at a more modest 22% compared to the massive expansions of previous years. Despite government subsidies to encourage more people to drive electric, such “EVs” only represent under 16% of the European market. Jeep maker Stellantis suffered the worst June decline, with Europe’s number two carmaker selling 30,000 fewer cars, or a 16% fall. Top producer Volkswagen saw an around average 8% decline, while podium-placed Renault saw just a 0.5% drop. Both Japan’s Toyota and South Korea’s Hyundai-Kia also saw around 10,000 fewer sales in June, with their market shares declining in the first half of the year. – AFP

WASHINGTON: Trump’s administration released a new artificial intelligence blueprint on Wednesday that aims to loosen environmental rules and vastly expand AI exports to allies, in a bid to maintain the American edge over China in the critical technology. The president marked the plan’s release with a speech at the ‘Winning the AI Race’ Summit in Washington where he laid out the stakes of the technological arms race with China, calling it a fight that will define the 21st century. “America is the country that started the AI race. And as President of the United States, I’m here today to declare that America is going to win it,” Trump said. The plan, which includes some 90 recommendations, calls for the export of US AI software and hardware abroad as well as a crackdown on state laws deemed too restrictive to let it flourish, a marked departure from predecessor Joe Biden’s “high fence” approach that limited global access to coveted AI chips. “We also have to have a single federal standard, not 50 different states regulating this industry in the future,” Trump said. Michael Kratsios, head of the Office of Science and Technology Policy, told reporters on Wednesday the Departments of Commerce and State will partner with the industry to “deliver secure full-stack AI export packages, including hardware models, software applications and standards to America’s friends and allies around the world”. An expansion in exports of a full suite of AI products could benefit AI chip juggernauts Nvidia and AMD as well as AI model giants Alphabet’s Google, Microsoft, OpenAI and Facebook parent Meta. Trump signed three executive orders on Wednesday that incorporated elements of the action plan, including the loosening of environmental rules, establishing rules for chip exports and seeking to limit political bias in AI technology. Biden feared US adversaries like China o Trump administration moves to ease environmental rules for industry Donald

Trump gesturing after signing executive orders related to artificial intelligence during the ‘Winning the AI Race’ Summit in Washington. – REUTERSPIC

The internet giant is dabbling with ads in its new AI Mode for online search, a strategic move to fend off competition from ChatGPT while adapting its advertising business for an AI age. The integration of advertising has been a key question accompanying the rise of generative AI chatbots, which have largely avoided interrupting the user experience with marketing messages. However, advertising remains Google’s financial bedrock. “Google is doing well despite tariff headwinds and rising AI competition in search,” said eMarketer principal analyst Yory Wurmser. “It’s also successfully monetising AI Overviews and AI Mode, a good sign for the future.”– AFP US power demand is hitting record highs this year after nearly two decades of stagnation as AI and cloud computing data centres balloon in number and size across the country. The export expansion plans take a page from deals unveiled in May that gave the United Arab Emirates expanded access to advanced artificial intelligence chips from the United States after previously facing restrictions over Washington’s concerns that China could access the technology. – Reuters designed to walk right up to the line of prior restrictions on Chinese AI chip access. Trump blocked the export of the H20 to China in April but allowed the company to resume sales earlier this month, sparking rare public criticism from fellow Republicans. The plan also calls for fast-tracking the construction of data centres by loosening environmental regulations and utilising federal land to expedite development of the projects, including any power supplies. The administration will seek to establish new exclusions for data centres under the National Environmental Policy Act and streamline permits under the Clean Water Act. Trump directed his administration in January to develop the plan. Trump is expected to take additional actions in the upcoming weeks that will help Big Tech secure the vast amounts of electricity it needs to power the energy-guzzling data centers needed for the rapid expansion of AI, Reuters previously reported.

could harness AI chips produced by companies like Nvidia and AMD to supercharge its military and harm allies. The former president, who left office in January, imposed a raft of restrictions on US exports of AI chips to China and other countries that it feared could divert the semiconductors to America’s top global rival. Trump rescinded Biden’s executive order aimed at promoting competition, protecting consumers and ensuring AI was not used for misinformation. He also rescinded Biden’s so-called AI diffusion rule, which capped the amount of American AI computing capacity some countries were allowed to obtain via US AI chip imports. “Our edge (in AI) is not something that we can sort of rest on our laurels,” Vice-President JD Vance said in a separate appearance at the event, which was organised by White House AI and crypto czar David Sacks and his co-hosts on the “All-In” podcast. “If we’re regulating ourselves to death and allowing the Chinese to catch up to us, that’s not something ... we should blame the Chinese for, that is something we should blame our own leaders for, for having stupid policies that allow other countries to catch up with America,” Vance said. The AI plan, according to a senior administration official, does not address national security concerns around Nvidia’s H20 chip, which powers AI models and was

Artificial intelligence boosts Alphabet earnings SAN FRANCISCO: Google-parent Alphabet on Wednesday reported quarterly profits that topped expectations, saying artificial intelligence has boosted every part of its business. and the recently launched AI mode “performing well”, according to Pichai. Ad revenue at YouTube continues to grow along with the video platform’s subscription services, Alphabet reported.

Alphabet’s cloud computing business is on pace to bring in US$50 billion over the course of the year, according to the company. “With this strong and growing demand for our cloud products and services, we are increasing our investment in capital expenditures in 2025 to approximately US$85 billion and are excited by the opportunity ahead,” Pichai said. Investors have been watching closely to see whether the tech giant may be pouring too much money into artificial intelligence and whether AI-generated summaries of search results will translate into fewer opportunities to serve up money-making ads.

Alphabet’s second-quarter profit of US$28.2 billion (RM119 billion) – on US$96.4 billion in revenue – came with word that the tech giant will spend US$10 billion more than it previously planned this year on capital expenditures, as it invests to meet growing demand for cloud services. “We had a standout quarter, with robust growth across the company,” said Alphabet chief executive Sundar Pichai. “AI is positively impacting every part of the business, driving strong momentum.” Revenue from search grew double digits in the quarter, with features such as AI Overviews