Silicon Valley Tech News Roundup – January 21st

Analysts expect further tightening of chip restrictions for China – 1/18

In an interview with CNBC, analysts confirmed they expect China to face further tightening of chip export restrictions in 2024.

At the beginning of January, the Netherlands blocked ASML (Dutch semiconductor producer) from exporting several deep ultraviolet lithography systems needed to produce advanced chips to China. In October last year, the United States further tightened export controls on sales of some advanced chips.

China’s Ministry of Foreign Affairs protested the decision of the Dutch government. Last week, China’s Ministry of Commerce accused the United States of using export controls as a tool, and it is: “highly concerned about the U.S.’s direct intervention.“

Chris Miller (author of „Chip War“) told CNBC: „It’s further evidence that not just the U.S. government, but also other Western countries like the Dutch government, are going to keep ratcheting up some of the restrictions that we’ve seen around both chipmaking equipment and also advanced semiconductors“

Regulators in discussion who should investigate OpenAI – Microsoft partnership – 1/19

According to an exclusive report by Politico, the Federal Trade Commission and the Department of Justice are discussing who should investigate the partnership between OpenAI and Microsoft on antitrust grounds.

Months ago, the Federal Trade Commission initiated a discussion with the Department of Justice to decide who can investigate the partnership, but neither is prepared to relinquish jurisdiction. The regulators have to resolve the issue of jurisdiction before the investigation can start. The regulators are concerned the partnership gives both companies an unfair advantage in the highly competitive field of AI.

The partnership between OpenAI and Microsoft is high-profile and highly controversial. Microsoft invested billions into OpenAI and integrated OpenAI’s services into some of its core products (like Bing search engine). Furthermore, OpenAI is using Microsoft’s computing resources to develop its technology further.

According to the sources familiar with the matter, the ongoing discussions are focused about the OpenAI – Microsoft partnership and not a part of a dialogue on who should investigate issues pertaining to artificial intelligence. However, there is a discussion between the agencies on who should investigate AI developers who illegally scraped content for training of their AI models.

OpenAI and Microsoft did not submit their deal for review by the federal antitrust regulators. Microsoft claims it has no control over OpenAI. Meanwhile, OpenAI is a limited-for-profit company controlled by a non-profit organization.

Apple becomes world’s biggest phone maker – 1/17

This week, Apple became the biggest phone maker globally. It knocked Samsung from the top spot for the first time in 12 years.

According to the data released by the International Data Corporation (IDC), Apple accounted for more than a fifth of the shipped phones last year. The company sold more than 234 million phones last year. Meanwhile, Samsung accounted for 19.4% of the market share, followed by Xiaomi, OPPO, and Transsion.

In total, phone makers sold almost 1.2 billion smartphones last year. It is a drop of more than 3% compared to the previous year and the lowest amount sold in a decade. Experts believe lower sales are a result of the cost of living crisis and high-interest rates. They expect the market will recover this year.

Nabila Popal (the Research Director for the International Data Corporation) stated: „Not only is Apple the only player in the Top 3 to show positive growth annually, but also bags the number 1 spot annually for the first time ever… All this despite facing increased regulatory challenges and renewed competition from Huawei in China, its largest market.“

It is a blow for Samsung, which has experienced a slump for a while. The company was the leading global manufacturer of phones, smart chips, and televisions. However, it is facing growing competition from more affordable Android models. At the beginning of January, Samsung warned its profits would drop even more than expected as the demand for consumer electronics remains weak.

Apple again banned from selling 2 Apple Watches – 1/19

The United States appeals court reversed its earlier decision, and banned Apple from selling two of its smartwatch models while the company is battling Masimo (a medical technology company) over a patent infringement.

The United States International Trade Commission banned Apple from selling two models (Series 9 and Ultra 2 watches) after the regulator established the company infringed certain patent rights. The order impacted sales and imports and was supposed to go into effect in December. However, the regulator allowed Apple to continue with the sales while the appeal was ongoing. It has reversed its decision since.

Masimo accused Apple of poaching its staff and stealing some of its technology for measuring oxygen levels in the blood.

On Thursday, Apple confirmed it will release the watches without the oxygen feature in order to keep them on the shelves. Likewise, the company confirmed it “strongly disagrees” with the decision and: “Pending the appeal, Apple is taking steps to comply with the ruling while ensuring customers have access to Apple Watch with limited disruption.“

Meanwhile, Joe Kiani (the Founder and CEO of Masimo) approved the regulator’s decision: „Even the largest and most powerful companies must respect the intellectual rights of American inventors and must deal with the consequences when they are caught infringing others’ patents.“