US DoD awards $200m in AI contracts | Malaysia to impose controls on high-end US chips | EU states trial online age verification
The world was not prepared for racist Elmo
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The U.S. Department of Defense on Monday said it’s granting contract awards of up to $200 million for artificial intelligence development at Anthropic, Google, OpenAI and xAI. The companies will work to develop AI agents across several mission areas at the agency. CNBC
Malaysia will now require permits for exports of high-performance US artificial intelligence chips, suggesting the government is seeking to clamp down on potential diversion of the sensitive components to places like China. Bloomberg
France, Spain, Italy, Denmark and Greece will test a blueprint for an age verification app to protect children online, the European Commission said on Monday, amid growing global concern about the impact of social media on children's mental health. Reuters
World
How the deep sea cables that power the world are made
The New York Times
Stanley Reed
Electric power is no longer the humdrum industry it used to be. In the next decades, the world is expected to experience increased demand for electricity to feed a variety of needs, from data centers to electric vehicles. The power grid itself is also being modernized and extended to reach new sources of generation and trade energy across borders. Undersea routes are often the preferred option for sharing power between countries or simply keeping cables out of sight.
Australia
Vic Police uses AI to reformat community-submitted crime reports
iTnews
Ry Crozier
Victoria Police has incorporated generative AI into a self-service non-urgent crime reporting tool to summarise information in a way that frontline officers are accustomed to receiving it. “We’re taking about 150,000 crime reports a year. If we’re saving three minutes on each one, we’ve saved about 8000 hours of labour a year with that one step. Not only that, we were able to give the community a good way of replicating a police narrative with no knowledge [of that process].”
DroneShield to expand Sydney footprint with new $13m facility
InnovationAus
Trish Everingham
Australian counter-drone device-maker DroneShield will invest at least $13 million in a new Sydney-based manufacturing and in-house assembly facility to meet surging demand for its sovereign defence technologies. The new facility, to be located in Sydney’s inner-city suburb Alexandria, will enable the company to separate its production activities from its Pyrmont headquarters from December and repurpose the space for research and development activities.
Optus-led consortium to build sovereign LEO satellite
InnovationAus
Justin Hendry
A consortium led by Optus will build a low-Earth orbit satellite in Australia, opening the door to future constellation of sovereign satellites to rival Elon Musk’s Starlink. The first satellite, which will be built by space and defence research company Inovor Technologies at Lot Fourteen in South Australia, is expected to be launched by early 2028 on a SpaceX mission.
Calls for guidelines after Greater Western Water documents reveal potential data centre water usage
ABC News
Leanne Wong and Madi Chwasta
Data centres in Melbourne's north and west could consume enough drinking water to supply 330,000 residents each year, raising concerns they could lead to water shortages and limit new housing. One proposal alone in the Mt Cottrell area could consume up to 3,926 ML of water per year — equivalent to the annual water usage of 66,000 Melburnians — with an estimated water usage of 321 litres per second during peak demand.
China
China lags in chip lithography, influential DC think tank says
Bloomberg
Debby Wu
China faces significant challenges advancing its semiconductor lithography, a key hurdle for its drive toward technological self-sufficiency and superiority in the trade war with the US. Shanghai Micro Electronics Equipment Group Co., the country’s leading provider of such technology, has been able to carve out only a 4% share of the market for older-generation lithography, according to the Center for Security and Emerging Technology.
Inside Beijing’s chipmaking offensive
CSET
Jacob Feldgoise and Hanna Dohmen
Chinese semiconductor manufacturing equipment companies are gaining market share in several notable technologies, consequently eroding foreign incumbents’ market shares. From 2019 to 2024, Chinese SME firms have made notable gains in equipment used in fabrication—the first stage of chip manufacturing, particularly in chemical mechanical planarization tools, dry etch and clean tools, and deposition tools. However, lithography, the most complex tool category, remains a critical constraint for China.
Top AI medical scientists Roland Eils and Irina Lehmann leave Germany for China
South China Morning Post
Shi Huang
Top German medical scientists Roland Eils and Irina Lehmann have joined Fudan University in Shanghai as full-time faculty members, according to the Chinese institution’s website. The married couple joined the university in April, their arrival marking another milestone in China’s growing ambitions in artificial intelligence (AI) in medicine – a field that Eils and Lehmann have helped to pioneer.
Sovereign wealth managers eye China tech boom, survey shows
Bloomberg
Selcuk Gokoluk and Abhishek Vishnoi
Global sovereign wealth investors managing $27 trillion in assets are increasingly bullish on China’s tech sector because they don’t want to miss out on the next waves of innovation, according to an annual survey by Invesco Asset Management. Some 59% of respondents see China as a high or a moderate allocation priority over the next 5 years, up from 44% last year, the survey conducted among 83 sovereign wealth funds and 58 central banks during the first quarter of 2025 showed.
China gives conditional nod to Synopsys-Ansys deal, removing last major hurdle
Reuters
Liam Mo, Brenda Goh and Arsheeya Bajwa
China's market regulator has conditionally approved U.S. chip design software provider Synopsys' acquisition of engineering design firm Ansys, clearing the last significant regulatory obstacle for the $35 billion buyout. The State Administration for Market Regulation's conditional approval, which came on Monday, would finally allow two major players in the electronic design automation industry to combine. The deal, which was announced early last year, faced intense antitrust scrutiny in markets such as Britain.
China biotech’s stunning advance is changing the world’s drug pipeline
The Japan Times
Amber Tong, Jinshan Hong and Spe Chen
The biotechnology industry is experiencing a tectonic shift, driven by Chinese drugmakers who have come a long way from their copycat days to challenge Western dominance on innovation. The number of novel drugs in China — for cancer, weight-loss and more — entering into development ballooned to over 1,250 last year, far surpassing the European Union and nearly catching up to the U.S.’s count of about 1,440, an exclusive Bloomberg News analysis showed.
USA
Anthropic, Google, OpenAI and xAI granted up to $200 million for AI work from Defense Department
CNBC
Ashley Capoot
The DoD’s Chief Digital and Artificial Intelligence Office said the awards will help the agency accelerate its adoption of “advanced AI capabilities to address critical national security challenges.” The companies will work to develop AI agents across several mission areas at the agency. “The adoption of AI is transforming the Department’s ability to support our warfighters and maintain strategic advantage over our adversaries,” Doug Matty, the DoD’s chief digital and AI officer, said in a release.
How AI is leading to a new fight over this Civil War Battlefield
BBC
Aidan Walker
The US state of Virginia saw some 50% of the nation's Civil War casualties. Now, mass construction of AI data centres threatens its historic lands, the environment and local communities. Technology companies are planning to erect one of the largest data centres in the world here at Manassas, Virginia, on the very ground where the Union army lost the war's first major land battle.
Google to agree cloud discount as US government squeezes Big Tech
Financial Times
Joe Miller, Rafe Uddin and Stephen Morris
Google will heavily discount cloud computing services for the US government, as the Trump administration pressures technology groups to slash prices on long-standing, lucrative contracts. The agreement comes after Oracle last week cut a deal with the government, including a 75 per cent discount on some software contracts for a limited period and “substantial discounts” on its wider cloud computing contracts. Equivalent discounts from Microsoft’s Azure and Amazon Web Services are expected to follow soon, they said, but those talks are less advanced than with Alphabet, Google’s parent company.
Stablecoin bill poised to pass as House kicks off ‘Crypto Week’
Bloomberg
Yash Roy
Republican House leaders anticipate passing an industry-friendly stablecoin regulatory bill this week, sending Congress’s first major digital assets legislation to the president and kicking off a series of votes on related measures that supporters have dubbed “Crypto Week.” Industry backers hope the legislation will promote wider use of dollar-denominated stablecoins, marking the first big victory for crypto advocates since they poured hundreds of millions of dollars last year into efforts to elect friendly lawmakers, according to Federal Election Commission filings.
Southeast Asia
Malaysia controls AI chip exports as US targets China smuggling
Bloomberg
Ram Anand and Mackenzie Hawkins
Malaysia will now require permits for exports of high-performance US artificial intelligence chips, suggesting the government is seeking to clamp down on potential diversion of the sensitive components to places like China. Effective immediately, individuals and companies must notify Kuala Lumpur at least 30 days prior to exporting or shipping such hardware, Malaysia’s trade and industry ministry said Monday. They must inform the agency if they know or “have reasonable grounds” to suspect the items will be misused or used for restricted activities.
TikTok’s messy merger in Indonesia could be a preview of what’s to come in the U.S.
Rest of World
Michelle Anindya
TikTok entered Indonesia in 2021, gaining 106 million users within three years. In October 2023, however, the Indonesian government banned the platform, saying the measure was necessary to protect the country’s small and medium-sized businesses. ByteDance could sidestep the ban by partnering with a local company — it paid $840 million to acquire a majority stake in Tokopedia, an Indonesian unicorn that had long fended off Chinese rivals. Several merchants told Rest of World they’re being pressured to integrate their Tokopedia dashboards with TikTok’s — despite the integration being marketed as voluntary.
The Philippines is a petri dish for Chinese disinformation
Foreign Policy
Nick Aspinwall
When former Philippine President Rodrigo Duterte was arrested under an International Criminal Court warrant in March, an army of online defenders sprang into action. But according to expert analysts, many of Duterte’s online defenders weren’t real. There were some genuine pro-Duterte influencers, with real people manning the accounts, but they were bolstered by a vast network of inauthentic accounts, all of which pummeled the Philippine elections with a deluge of disinformation, generative artificial intelligence, and deepfakes.
Europe
Five EU states to test age verification app to protect children
Reuters
Foo Yun Chee
France, Spain, Italy, Denmark and Greece will test a blueprint for an age verification app to protect children online, the European Commission said on Monday, amid growing global concern about the impact of social media on children's mental health. The setup for the age verification app is built on the same technical specifications as the European Digital Identity Wallet which will be rolled out next year. The five countries can customise the model according to their requirements, integrate into a national app or keep it separately.
Broadcom scraps microchip plant investment in Spain, report says
Reuters
Pietro Lombardi
U.S. chipmaker Broadcom has pulled out of plans to invest in a microchip plant in Spain as talks with the government have broken down, news agency Europa Press reported on Sunday citing unidentified sources. Spain's Digital Transformation Ministry and Broadcom did not immediately respond to requests for comment. The Europa Press report did not say why the talks had broken down.
Europe’s privacy groups take on Big Tech with class action cases
POLITICO
Ellen O'Regan
Europe's powerful privacy activists are wielding a sharp new legal tool that, if successful, could see the cost of privacy breaches balloon into the billions for Big Tech. European consumers in recent years have seen a law take effect that allows them to club together to look for compensation for damages caused by companies. Armed with Europe's blockbuster privacy law, the General Data Protection Regulation, internet users — often represented by savvy digital rights groups — are now gunning for big payouts.
Russia-linked group spoofing European journalists to spread disinformation
The Record by Recorded Future
Daryna Antoniuk
A Kremlin-linked disinformation group has been impersonating real journalists and publishing fake articles on spoofed news websites to spread false narratives in France, Armenia, Germany, Moldova and Norway, researchers have found. The campaign was attributed to Storm-1516, a Russian threat actor active since at least 2023 that has previously sought to discredit Ukraine and sow discord in Europe. The group’s past operations have also targeted elections in Germany, Georgia and the United States.
UK
UK crime agency arrests 4 people over cyber attacks on retailers
Financial Times
Laura Onita, Suzi Ring and Philip Stafford
The National Crime Agency said that the people — three men and a woman — were apprehended on suspicion of organising the attacks in April, which are expected to cost the retailers hundreds of millions of pounds in total. The people are believed to be linked to the cyber criminal group Scattered Spider, according to a person with knowledge of the situation. The group, which targets the IT help desks of large companies, is thought to have been behind several high-profile data breaches, including at M&S.
Ex-Sequoia partner closes in on $400mn European tech fund
Financial Times
Ivan Levingston
A former Sequoia Capital Partner who left the Silicon Valley firm after a bitter boardroom battle at Klarna is set to launch a $400mn UK-based venture capital fund. Miller’s new London-based fund will focus on backing technology start-ups in areas including artificial intelligence and technology infrastructure at middle stages of development or so-called series B investing. The fund will be one of the largest VC firms based in Europe run by a single venture capitalist, and is also one of the sector’s largest new launches in a difficult fundraising market.
Big Tech feels the heat as finfluencers run riot
POLITICO
Eleanor Myers
Many online accounts are sharing insights and advice with followers legitimately, and are not breaking any laws. But those promoting products or services are likely to be doing so illegally and without authorization, as providing financial advice in the U.K. is heavily regulated. Communicating unauthorized financial promotions can land someone in jail for up to two years — although the City watchdog wants to increase this to five years — and an unlimited fine.
Reddit’s UK users must now prove they’re 18 to view adult content
ArsTechnica
John Brodkin
Reddit announced today that it has started verifying UK users' ages before letting them "view certain mature content" in order to comply with the country's Online Safety Act. Reddit said that users "shouldn't need to share personal information to participate in meaningful discussions," but that it will comply with the law by verifying age in a way that protects users' privacy. "Using Reddit has never required disclosing your real world identity, and these updates don't change that," Reddit said.
Africa
CMOC boosts cobalt production despite Congo export ban
Bloomberg
Annie Lee
China’s CMOC Group Ltd. produced more cobalt at its two mines in the Democratic Republic of Congo in the first half of this year, despite the African nation’s ban on exports. The world’s largest cobalt miner reported a 13% year-on-year rise in production of the material, also used in batteries and alloys, to 61,073 tons during the January-June period, according to a preliminary earnings statement released on Monday. The increase comes even as Congo - which accounts for about 70% of global cobalt output – recently extended an export ban first announced in February for another three months to September.
Middle East
BYD aims to triple Saudi footprint after Tesla enters market
Bloomberg
Fahad Abuljadayel
Chinese automaker BYD Co. plans to ramp up its expansion efforts in Saudi Arabia, building on momentum from Tesla Inc.’s launch in the country and capitalizing on the kingdom’s push to become a new hub for electric cars. The firm expects to sell more than 5,000 vehicles this year in the kingdom, a drop in the bucket for BYD’s overall sales but sizable in a market where gas-guzzling cars dominate the roads and EV adoption has been slow going.
How war, and Silicon Valley, are driving an Israeli tech rebound
POLITICO
Daniella Cheslow
It wasn’t long ago that Israel’s tech sector saw a drop in both confidence and global investments. After the October 7, 2023 Hamas attack and the ensuing Israeli retaliation in Gaza, foreign direct investment plummeted, and the government injected millions of dollars into the tech industry to try to lure investors. But now, a rebound is firmly underway — led in many cases by American investment.
Gender & Women in Tech
UK launches £500M package to support diverse, underrepresented investors and founders
TechCrunch
Dominic-Madori Davis
The British Business Bank, owned by the UK government, is creating a £500 million economic package to help support diverse and underrepresented fund managers and founders in the country. Fifty million pounds will be set aside for female-led venture funds, which means the BBB has now committed at least £100 million to supporting female-led ventures and the government’s Invest in Women Taskforce.
Big Tech
Meta trial becomes test of board culpability over corporate scandals
Financial Times
Sujeet Indap and Hannah Murphy
Meta luminaries will publicly testify in a Delaware corporate law court this week over shareholder allegations that board mismanagement was directly responsible for billions in sanctions that the social media group paid over data breaches. Two of Facebook parent company’s best known executives, chief executive Mark Zuckerberg and former chief operating officer Sheryl Sandberg, are listed as witnesses in the eight-day trial, which starts on Wednesday.
Tim Cook isn’t going anywhere soon, but an Apple shake-up looms
Bloomberg
Mark Gurman
There’s no question Cook bears responsibility for Apple’s current struggles. That includes the company’s AI missteps, an aging product lineup, the erosion of its design-focused culture, a decade-long drought of breakthrough mainstream hardware, and its growing tensions with developers and regulators. But there’s also no question that the board still sees him as the only person capable of turning things around.
Musk says Tesla shareholders will vote on xAI investment
Bloomberg
Edwin Chan
Tesla Inc. shareholders will vote on whether to invest in Elon Musk’s xAI, the billionaire said, after the Wall Street Journal reported that SpaceX agreed to pump $2 billion into the artificial intelligence startup. Musk made the statement in response to an account on X that said the carmaker must be able to invest in xAI to be fair to Tesla retail investors. “It’s not up to me. If it was up to me, Tesla would have invested in xAI long ago,” Musk replied. He didn’t say when the carmaker will have a shareholder vote or offer other details, beyond saying in a separate post that he didn’t support a merger of the companies.
Zuckerberg says Meta will build gigawatt-size data centers
Bloomberg
Riley Griffin
Meta Platforms Inc. Chief Executive Officer Mark Zuckerberg said the company is building several massive data centers to power its artificial intelligence efforts with the first one expected to come online next year. “We’re calling the first one Prometheus and it’s coming online in ’26,” Zuckerberg wrote Monday in a post on his social platform Threads, referring to a project in Ohio. “We’re building multiple more titan clusters as well,” he added, a nod to other planned data center complexes.
Artificial Intelligence
How Elon Musk’s rogue Grok chatbot became a cautionary AI tale
Financial Times
Hannah Murphy, Cristina Criddle and Barbara Moens
Last week, Elon Musk announced that his artificial intelligence company xAI had upgraded the Grok chatbot available on X. “You should notice a difference,” he said. Within days, users indeed noted a change: a new appreciation for Adolf Hitler. By Tuesday, the chatbot was spewing out antisemitic tropes and declaring that it identified as a “MechaHitler” — a reference to a fictional, robotic Führer from a 1990s video game.
Why skipping security prompting on Grok’s newest model is a huge mistake
CyberScoop
Derek B. Johnson
On the same day xAI announced that its new Grok 4 tool will now be available to the federal government, cybersecurity researchers at SplxAI released new research that subjected the large language model to more than 1,000 different attack scenarios. “The first thing we found is that Grok without a system prompt is not suitable for enterprise usage, it was really easy to jailbreak and it was generating harmful content with very descriptive and detailed responses,” Dorian Granoša, SplxAI’s lead red-team researcher, wrote Monday.
A more intelligent approach to AI regulation
Financial Times
The Editorial Board
Rather than seeking to regulate AI as a category in its own right, it makes more sense to focus on the technology’s applications and modify existing legislation accordingly. Competition policy should be used to check the concentration of corporate power among the big AI companies. Existing consumer, finance and employment regulations should be modified to protect rights that are long enshrined in legislation.
Vast numbers of lonely kids are using AI as substitute friends
Futurism
Noor al-Sibai
A new report from the nonprofit Internet Matters, which supports efforts to keep children safe online, found that children and teens are using programs like ChatGPT, Character.AI, and Snapchat's MyAI to simulate friendship more than ever before. Of the 1,000 children aged nine to 17 that Internet Matters surveyed for its "Me, Myself, and AI" report, some 67 percent said they use AI chatbots regularly. Of that group, 35 percent, or more than a third, said that talking to AI "feels like talking to a friend."
AI ‘nudify’ websites are raking in millions of dollars
WIRED
Matt Burgess
An analysis of 85 nudify and “undress” websites—which allow people to upload photos and use AI to generate “nude” pictures of the subjects with just a few clicks—has found that most of the sites rely on tech services from Google, Amazon, and Cloudflare to operate and stay online. The findings, revealed by Indicator, a publication investigating digital deception, say that the websites had a combined average of 18.5 million visitors for each of the past six months and collectively may be making up to $36 million per year.
Misc
Hacker impersonating Elmo makes antisemitic X posts
The New York Times
Yan Zhuang
A hacker shared a string of racist and antisemitic posts from the X account of Elmo, the fuzzy red monster from “Sesame Street,” the owner and producer of the children’s show said on Sunday. The posts, on a verified account with more than 600,000 followers, contained racial slurs, antisemitic language and commentary about President Trump and the so-called Epstein files, the remaining investigative documents of the sex-trafficking investigation into Jeffrey Epstein. The posts were removed shortly after they were published on Sunday afternoon.
Wordpilled slangmaxxing: how incel language infected the mainstream internet — and brought its toxicity with it
The Verge
Adam Aleksic
I would argue that, if anything, the incel example is very important to understand, for it has probably contributed more to the development of “modern slang” than any other online community. It’s precisely because of their radicalized and insular echo chamber that they’ve created so much language and have many more avenues to influence the mainstream. It is because of their extreme views that their ideas are so easily spread through memes.
Research
Could AI save us from making hard choices about the budget?
Empiricrafting
Seth Benzell
What does our detailed international macroeconomic simulation have to say about the sustainability of government debt during an AI-driven economic boom? What does our simulation model leave out, and what other considerations should we bring in, as we make decisions about the US deficit? Deficits in other countries?
Events & Podcasts
The Sydney Dialogue 2025
The Australian Strategic Policy Institute is pleased to announce the Sydney Dialogue, the world’s premier policy summit for critical, emerging and cyber technologies, will return on 4-5 December. Now in its fourth year, the dialogue attracts the world’s top thinkers, innovators and policymakers, and focusses on the most pressing issues at the intersection of technology and security. TSD has become the place where new partnerships are built among governments, industry and civil society, and where existing partnerships are deepened.
The Daily Cyber & Tech Digest is brought to you by the Cyber, Technology & Security Programs team at ASPI and supported by partners.
