AI Boom & Trade War Tensions

Hello, everyone, and welcome back to 'The beginning of empathy.' I am your Empathy Keeper.

Analyzing the news that poured in from around the world yesterday, I felt as if two colossal forces were pulling the globe in opposite directions. On one side, the heavy shadow of trade conflict and geopolitical tension is weighing down the economy. On the other, the blinding light of Artificial Intelligence (AI) and space technology promises explosive growth. In these contrasting currents, how do we find common ground, or 'Empathy,' and how do we prepare for the future?

The overarching trend is clear: economic security is now inseparable from technological innovation. The trade friction between the United States and China, in particular, is escalating beyond simple tariffs, shaking global supply chains and corporate governance structures worldwide.

1. Geopolitical Tension: The Wave Shaking the Economy

When President Donald Trump threatened 100% additional tariffs on Chinese goods, the global financial markets reacted instantly. Major indices, including the Hong Kong stock market, saw consecutive days of decline, and Germany's DAX index also faced downward pressure. This confirms that trade conflict is a core factor increasing global market uncertainty.

The tension peaked when China tightened controls on rare earth element exports, prompting immediate threats of reciprocal tariffs from President Trump. This environment demands a new kind of corporate leadership. The case of a major chip manufacturer in the Netherlands, whose CEO was suspended by a court due to inadequate preparation for US sanctions and its relationship with China, clearly shows that managing geopolitical risk is now an essential skill for business leaders.

Major financial institutions are responding to this shift. One of the largest US banks announced a massive 1.5 trillion dollar investment over the next decade into industries critical for national security—things like rare earth, quantum computing, and AI. This reflects a global consensus: securing core resources and technology domestically is the new measure of national competitiveness.

2. AI Innovation: The Start of a New Tech Super Cycle

Despite geopolitical tensions, technological innovation refuses to slow down. The AI race is staggering. The developer of the popular conversational AI model and a leading semiconductor company recently announced a partnership to develop custom AI chips and systems requiring a colossal 10 gigawatts of power. To put that into perspective, 10 gigawatts is comparable to the power consumption of an entire major metropolitan area, illustrating the immense scale of the AI infrastructure competition.

This explosion in AI demand is driving significant economic recovery. We see major Asian electronics giants reporting strong preliminary operating profits, far exceeding market expectations. This recovery is largely fueled by high-bandwidth memory (HBM) and specialized chip manufacturing services. This places Asian companies at the very heart of the AI super cycle.

But here is where we need 'Empathy.' In Taiwan, where a major chip foundry's stock price is hitting record highs, there's a growing discussion among small-scale investors—those earning modest monthly salaries—about how they can even afford to buy a single share. This highlights the widening gap: the fruits of technological revolution are often concentrated, leaving the average person yearning for a way to participate.

3. The Stability of Essential Infrastructure and Resources

Separate from the high-stakes technology race, the stability of essential infrastructure and resources remains a universal global challenge.

In the United Kingdom, a major energy company is urging households to get pre-winter boiler checks to save on heating costs and prevent breakdowns. This shows how rising energy prices combined with aging infrastructure directly impact the lives of ordinary citizens.

In Russia, several regions, including Novosibirsk, faced gasoline shortages, forcing government intervention to stabilize fuel prices. Even resource-rich nations are vulnerable to internal factors like refining issues or logistics delays that disrupt the supply of essential fuel.

And in India, the upcoming festival season has exacerbated a silver shortage, pushing prices significantly above global rates. This is a collision of advanced industry demand, such as for solar panels, and traditional cultural needs, showing the fragility of the resource supply chain.

4. Restoring Trust and Transparency in the Financial System

In the financial sector, efforts to restore trust and transparency are evident. In Spain, new European Union regulations are being implemented to combat bank transfer fraud. Banks are now required to automatically verify the recipient's identity before a transfer, increasing accountability and protecting individual assets.

Conversely, we see the consequences of failure. In Mexico, a bank had its operating license revoked and entered liquidation due to allegations of money laundering. This underscores the critical importance of strict regulatory oversight for maintaining a healthy financial system.

Meanwhile, a Swiss private bank is facing millions in loan losses following the bankruptcy of a German real estate company. This reminds us of the risks high-yield financial institutions must manage and the potential ripple effects across the entire financial system.

5. The Challenge Toward the Future: Space and Defense

The journey toward the future continues. A leading space exploration company successfully completed the final test flight of Version 2 of its massive launch vehicle, marking a crucial milestone for lunar and Martian missions and signaling the transition to the next prototype.

However, advanced defense technology faces hurdles. Reports highlight the immense cost and technical difficulties plaguing the development of next-generation fighter jet programs. Yet, security concerns are driving cooperation. In Poland, the national defense group partnered with a major German defense company to establish a European support vehicle center, demonstrating cross-border efforts to strengthen defense capabilities amidst rising security threats in Eastern Europe.

Today, we navigated a world where the shadow of trade conflict meets the light of AI innovation. Economic uncertainty, the technology gap, and securing essential resources are shared global challenges. As your Empathy Keeper, I hope this analysis helps us understand how deeply interconnected our lives truly are. Thank you for joining me on 'The beginning of empathy.' I look forward to seeing you in the next update.