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AI boom risks widening wealth divide: BlackRock

US regulator blacklists all foreign-made routers

BEIJING: The dominance of China’s open-source artificial intelligence is creating a “self-reinforcing competitive advantage”, allowing it to challenge American rivals despite restricted access to advanced AI chips, a US congressional advisory body said on Monday. Driven by their cheaper cost, Chinese large language models from firms including Alibaba, Moonshot and MiniMax now dominate worldwide usage rankings on platforms like HuggingFace and OpenRouter. China’s push to deploy AI throughout a wide range of sectors to upgrade its manufacturing base, factories, logistics networks and robotics is generating real-world data that feeds back into model improvement, the report said. WASHINGTON: The US Federal Communications Commission on Monday banned authorisations for all new consumer routers produced in foreign countries, citing “national security” reasons. The FCC noted that the blacklisting does not apply to routers already acquired by consumers, and does not prevent retailers from importing and selling routers that previously received FCC equipment authorizstion. “By operation of the FCC’s Covered List rules, the restrictions imposed today apply to new device models,“ the commission said. Routers are electronic networking devices through which most households, businesses and offices access the internet. The national security determination on which the decision was based said that “allowing routers produced abroad to dominate the US market creates unacceptable economic, national security, and countersecurity risks”. The determination said that foreign-produced routers posed risks to US supply chains and create a “severe cybersecurity risk”. In a statement on Monday, the FCC said that technology companies could ask for exemptions for their new router models by applying for a “conditional approval” from the Department of Defence and the Department of Homeland Security. The conditional approval process demands detailed corporate and supply chain information, as well as a “time-bound plan to establish or expand manufacturing in the United States.” Conditional approvals would be applicable for periods of up to 18 months, the FCC said. In 2021 the FCC blacklisted telecommunications equipment made by several major Chinese firms over national security concerns, including Huawei and ZTE, with others added in 2022 and 2024. In December, the FCC made a similar national security-based determination in banning drones produced in foreign countries. – AFP

constraints extend beyond chips to various tech supply chains. “Even though there are multiple suppliers in the industry today ... there is definitely a supply constraint in the laser space,“ he said, adding printed circuit boards had also emerged as an “unexpected” bottleneck. He said both Taiwanese and Chinese PCB suppliers are facing capacity constraints. – Reuters advanced materials, he added. Beijing has designated embodied AI as a core future strategic industry, and many leading Chinese humanoid robotics firms plan public listings this year. Despite warnings from some Western research organisations of the potential security risks of an over-reliance on Chinese open-source AI models and their political bias towards Chinese government positions, many companies are adopting them anyway. Siemens CEO Roland Busch said earlier on Monday that there were “no disadvantages” to using Chinese open-source AI to train the German company’s AI models specialised for industrial automation. – Reuters expands alongside it is both the challenge and the opportunity,” Fink said. Fink urged clients to stay invested despite ongoing market volatility. “Over time, staying invested has mattered far more than getting the timing right. Over the past two decades, every dollar invested in the S&P 500 grew more than eightfold.” Global markets have been roiled in recent weeks by a confluence of geopolitical and macroeconomic shocks, including the escalating US-Israeli conflict with Iran, which has driven sharp spikes in oil prices and disrupted key shipping routes, stoking inflation fears and rattling investor sentiment. At the same time, growing concerns that AI could erode the value of legacy software businesses have weighed on parts of the tech sector. These pressures are unfolding alongside signs of softening consumer spending and rising worries about an economic slowdown amid still-elevated interest rates. “We are living through a period where things that would’ve defined a decade have become routine: wars with global repercussions, trillion dollar companies, a fundamental reordering of international trade, and the advent of the most significant technology since, at least, the computer,” Fink said. “Some of the market’s strongest days came amid the most unsettling headlines. The danger is that we focus so much on the noise that we forget what actually matters.” – Reuters

main producer of advanced AI chips, said in January that capacity was tight, as the boom in AI infrastructure buildout has soaked up much of its advanced production lines. The contract chipmaker, whose major customers also include Nvidia and Apple – also said at the time that it was working hard to narrow the gap between supply and demand. Ramachandran said supply As AI’s frontiers shift from large language models towards agentic AI and physical, or embodied, AI, China may be better positioned to capitalise on its mass data collection efforts to boost development of humanoid robots, autonomous driving software or even dual-purpose technologies, the report said. “There’s a bit of a deployment gap in the embodied AI space between the US and China. That’s something that over time compounds itself ... We’re starting to see that compounding now,“ said Michael Kuiken, the commission’s vice-chairman. The commission is also watching how China uses AI in sectors like biotech, quantum computing and entered markets in recent years, participation is still modest, particularly in equities and other traditional assets linked to wealth creation. Fink, who leads the world’s largest asset manager with about US$14 trillion in assets, has used these closely watched letters to highlight the role of capital markets in building wealth and the importance of long-term investing. “History suggests that transformative technologies create enormous value – and much of that value accrues to the companies that build and deploy them, and to the investors who own them.” Fink said that AI is “here to stay” and remains central to strategic competition between US and China. “The US clearly sees that AI leadership is not optional, and that it will require sustained investment – in research, infrastructure, talent, and the capital markets capable of financing innovation at scale.” Investors are increasingly wary the fast-growing adoption of AI could disrupt established business models, particularly in legacy software and services, where automation and new AI-native competitors threaten to erode pricing power and growth. The uncertainty over how quickly companies can adapt, and which firms will emerge as winners, has added volatility to valuations and weighed on parts of the tech sector. “One thing is clear: AI will create significant economic value. Ensuring that participation in that growth

o CEO urges clients to stay invested despite market volatility

NEW YORK: Asset management giant BlackRock’s CEO Larry Fink warned on Monday the artificial intelligence boom risks widening the wealth gap unless more individuals share in market gains. The rapid rise of AI has sparked debate over whether its gains will be broadly shared across sectors or increase the divide between big tech firms and smaller companies that may struggle to compete. Since the launch of ChatGPT in

November 2022, much of Wall Street’s AI-driven market gains have been led by companies at the centre of the boom, pointing to a more narrow set of winners. “The massive wealth created over the past several generations flowed mostly to people who already owned financial assets,” Fink said in his annual letter to shareholders. “Now AI threatens to repeat that pattern at an even larger scale.” Although more individuals have

A protester speaks to a crowd of protesters calling for a pause in AI development in San Francisco. – REUTERSPIC

Broadcom flags supply constraints, says TSMC capacity a bottleneck

TAIPEI: Chip designer Broadcom said it is seeing supply chain constraints, including capacity limits at its manufacturing partner TSMC, highlighting the ripple effects of soaring demand for AI chips on the broader tech industry. “We are seeing that TSMC is hitting (production capacity) limits,“ Natarajan Ramachandran, director of product marketing in Broadcom’s “This open ecosystem enables China to innovate close to the frontier despite significant compute constraints,“ the US-China Economic and Security Review Commission wrote in a report published on Monday. “Chinese labs have narrowed performance gaps with top Western large language models,“ it added. US lawmakers have imposed successive rounds of export restrictions on China since 2022, banning them from acquiring the most advanced AI chips, though Washington approved exports of Nvidia’s second-most advanced chip in December. US companies including ChatGPT developer OpenAI and Anthropic, creator of Claude, as well as traditional

Physical Layer Products division, told reporters yesterday, adding he would have described TSMC’s capacity as “infinite” until a few years ago. “They will be increasing the capacity to 2027, but that has become a bottleneck, or that has kind of choked the supply chain in 2026.“ TSMC did not immediately reply to an e-mailed request for comment. The Taiwanese firm, the world’s tech giants have, meanwhile, invested billions of dollars to remain at the forefront of the new technology. But their position could be under threat. “Open model proliferation creates alternative pathways to AI leadership,“ the report said. Some estimates suggest that around 80% of US AI startups now use Chinese open-source AI models. DeepSeek’s groundbreaking R1 model launched last year quickly overtook ChatGPT as the most downloaded model on the US App Store. And Alibaba’s Qwen family of models has surpassed Meta’s Llama in global cumulative downloads, according to HuggingFace.

China’s open-source dominance threatens America’s AI lead: Panel