Arvind’s Newsletter

1.Why the thriving Indian diaspora in the US is not an asset anymore: Jerry Rao in The Print

The excessive publicity about Indian success stories and their high income and wealth levels has begun to breed envy and resentment in non-elite Americans.

Our media tends to over-personalise matters by focusing excessively on Trump. The issues are bigger and of a long-term nature. The Americans supported and encouraged China’s economic rise, hoping that over time China would become wound up in American soft power. That did not happen. They are therefore not going to make, what in their minds would be a second mistake: Support emphatically, the rise of an India, especially one which refuses to accept a servile status.

The thriving Indian diaspora in the US has been an asset till now. Things may change. The excessive publicity about Indian success stories and their high income and wealth levels has begun to breed envy and resentment in non-elite sections of the American populace. There might be a campaign against H1B visas and even a gradual expulsion of persons stuck in a limbo with pending green cards and pending citizenship. Read on.

2.Andhra seals ₹9K cr deal with Maersk arm to develop three state ports: Business Standard

The government of Andhra Pradesh signed a deal with the world's oldest port operator, APM Terminals, on Friday to develop infrastructure and modernize the Ramayapatnam, Machilipatnam, and Mulapeta ports in the state, with an investment of Rs 9,000 crore.

APM Terminals is a subsidiary of Denmark-based Maersk, the world’s second-largest shipping company. Earlier this year, Maersk had announced plans to invest $5 billion in India’s maritime infrastructure, spread across ports, terminals, and land-based facilities. Maersk operates in 130 countries through its shipping and port operations.

3.OpenAI to launch first India office in New Delhi this year: Reuters

ChatGPT parent OpenAI will open its first India office in New Delhi later this year, deepening its push in its second-largest market by user numbers.

OpenAI, which is backed by Microsoft has been established as a legal entity in India and has begun hiring a local team, the company said in a statement shared with Reuters.

India is a critical market for ChatGPT, where it launched its cheapest yet monthly plan at $4.60 just this week, targeting the nearly one billion internet users in the world's most populous nation.

4.Brace for a crash before the golden age of AI: John Thornhill in Financial Times

The massive investment in artificial intelligence infrastructure currently being made probably counts as the biggest and fastest rollout of a general purpose technology in history.

This year and next, Google, Amazon, Microsoft and Meta alone will spend a staggering $750bn on data centres to power their AI models, with Morgan Stanley forecasting total global spending in this area will reach $3tn by 2029. But jittery investors are increasingly asking: what returns will this immense capital outlay generate? History suggests they’re right to be nervous.

There are few better scholars to put AI in a historical perspective than Carlota Perez, author of Technological Revolutions and Financial Capital: The Dynamics of Bubbles and Golden Ages. In her book, Perez identifies five great technological revolutions: the industrial revolution of the late 18th century; the steam, coal and railway revolution of the 1830s; the steel and heavy engineering revolution of the 1870s; the mass production age in the early 20th century; and the information technology revolution beginning in the 1970s. Perez sees AI as an extension of that fifth technological revolution. 

She also argues these revolutions follow a fairly predictable cycle. An initial installation phase results in lots of creative destruction and social disruption as industries and regions are upended. That is normally accompanied by over-investment, financial mania and stock market bubbles. 

Nevertheless, those bubbles are often productive, funding the building of vital infrastructure that enables the subsequent mass rollout of technology — as railways or electricity grids are built — and their broader economic benefits are realised. As for AI, we remain in that manic installation phase.

That point was reinforced by a report from the Massachusetts Institute of Technology, which unsettled stock market investors this week. Researchers found that 95 per cent of the companies they surveyed were getting zero return from their investments in generative AI. Sam Altman, OpenAI’s chief executive, was hardly reassuring when asked whether there was an AI bubble. “I do think some investors are likely to lose a lot of money,” he replied.

A bone-juddering crash — or several crashes — therefore seems likely before we reach any golden age of AI. “I have not seen a golden age happening without a crash,” Perez breezily tells me. Read on Gift Article in Financial Times

5.Europe’s biggest economy Germany shrank more than expected in the second quarter of the year and faces a bleak outlook : Bloomberg and others

Germany’s economy shrank more than initially estimated in the second quarter due to a much weaker performance by manufacturers following a surge in US business at the start of the year to avoid tariffs.

Gross domestic product declined 0.3% from the previous three months, the national statistics office said Friday, revising down its preliminary reading of -0.1%. The contraction is a setback for Europe’s largest economy, dashing hopes that it can soon emerge from two years of recession.

A front-loading of exports ahead of the imposition of US tariffs was largely reversed, “and it looks increasingly unlikely that any substantial recovery will materialize before 2026,” ING’s global head of macroeconomics wrote. A recently unveiled framework trade deal between the US and European Union also bodes poorly for the country: Germany’s powerful carmakers will face hefty duties, which its main automotive lobby said would cost “billions annually.”

6.Projections of skyrocketing electricity demand thanks to growing use of artificial intelligence are reshaping the global power market.

Just three months after closing its last reactor, Taiwan is mulling reviving its nuclear industry to cater to its semiconductor sector, key to making the chips that undergird AI, while investors and experts have warned that China’s expansion of its grid could give it a leg up in its AI race against the US, whose power infrastructure is comparatively fragile.

And Big Tech firms are pushing to make their AI models more energy efficient in a bid to lower their own power requirements: Google said this week its Gemini system uses 33% less energy per query than a year ago.

7.Why People Tell on Each Other: Knowable Magazine

 A conversation between a journalist and a sociologist exploring what drives people to expose the wrongdoings of others, from playground quarrels to political corruption

8.Russia orders state-backed MAX messenger app, a WhatsApp rival, pre-installed on phones and tablets: Reuters

Russia’s state-backed messenger app will be preinstalled on all phones

Critics say the MAX app is essentially a government spy tool.

9.EU speeds up plans for digital euro after US stablecoin law: Financial Times

“EU officials are accelerating plans for a digital euro, according to people involved in the discussions, after a new US stablecoin law deepened worries about the competitiveness of a European digital currency.

The US Congress last month passed a landmark law overseeing the $288bn stablecoin market, which is largely dominated by the dollar, after extensive lobbying by the crypto industry.

Stablecoins are a type of digital token pegged one-to-one to a sovereign currency and backed by reserves such as government bonds.

A person involved in discussions said that since the so-called Genius Act was passed, EU officials had been “rethinking plans for the digital euro”.

People familiar with the matter added that officials were now considering running a digital euro on a public blockchain such as ethereum or solana rather than a private one, which had previously been expected, due to privacy concerns.

The quick passage of the US law “rattled a lot of people”, one person said, adding: “They’re saying, ‘Let’s speed up, let’s push’.”

The European Central Bank has been working for several years on potentially creating a digital version of the euro, which would be free to use across the Eurozone.

Supporters say such a digital currency would give people access to a form of payment backed by the central bank as cash usage declines, while promoting the euro globally.

EU officials are now worried the new American legislation will spur the already growing use of dollar-denominated tokens and believe that a digital euro is needed to protect the single currency’s dominance across the continent.”

10.Rice, two curries and dal: The Indian cafes where you can pay in rubbish: BBC

Garbage cafes are springing up across India. The BBC visits the city of Ambikapur to find out how much impact they can really have on plastic – and people.