The World This Week: From Proposed Tech Ban to Bank Collapse

World This Week

In our “The World this Week” piece, global events include the proposed U.S. bill to ban foreign tech, Nvidia and AMD grappling with the latest U.S. curbs on China’s Inspur, the U.S. and EU in talks on clean technology trade deal, and the collapse of Silicon Valley Bank causing concern among tech executives and investors. These events have significant economic and political implications, from the potential for governmental interference in the tech industry to the impact of the collapse of a major bank on the startup and technology sector. They reflect the growing importance of technology and innovation in shaping the future of the global economy.

TikTok a Potential Target in Upcoming U.S. Bill to Ban Some Foreign Tech – Senator

On Monday, March 10, two U.S. Senators proposed a bipartisan bill, weaponizing the government with authority to “ban or prohibit” foreign digital products. TikTok was at the top of that list.

To some, the proposal of such a legislative act can only be perceived as an act of safeguarding national security. This bill holds greater value than that. The bill not only raises concerned about mushrooming governmental interference in Chinese tech companies but also interference in the tech sector itself. And the timing is impeccable.

The U.S. Senate’s bill comes at a time when the video-blogging platform faces intense scrutiny for data privacy and potentially being linked to the Chinese government.

Source: Reuters

In the public domain, this move can have two opposite reactions. On the one hand, TikTok has always been criticized over concerns about abusing users’ data, while on the other, the bill can also be perceived as a governmental move to restrict freedom of speech and a harsh impose of political censorship.

And we all know what that means.

The impact of governmental interference in the tech world is increasing day by day and bill by bill. With the globalization of the tech industry, governments are seeking broader control of foreign companies’ presence on their land. The Senate’s latest TikTok bill could hold far more significant economic and political implications. Ones that exceed TikTok’s current significance to reach geopolitical ones.

Nvidia, AMD Grapple with Latest U.S. Curbs on China’s Inspur

The U.S. trade department’s latest blacklisting of Chinese companies Inspur Group is damaging two of the U.S.’s most prominent tech firms, Nvidia and Advanced Micro Devices (AMD).

Last week’s listing restricted businesses’ selling of Inspur’s products, with the most prominent being semiconductors developed with American tools.

The world’s third-largest supplier of servers used in data centers powering cloud computing, Inspur’s Chinese-listed subsidiary had sales of almost $10bn in 2021. The company is proposing to change its address in a filing, but it has not specified a new location.

Source: Reuters

This means that US regulators have the authority to view unlicensed shipments to Inspur Electronics Information Industry Co, the unlisted subsidiary, as a breach of last week’s listing if there is a risk of goods being transferred from the unlisted subsidiary to the listed parent company.

Now, Inspur is exposed to being subjected to even more scrutinizing rules than many other companies on the US Department of Commerce’s blacklist and is comparable to the curbs placed on China’s Huawei. The listing limits the export of goods to Inspur, including those made abroad but with American technology.

US, EU in Talks on Clean Technology Trade Deal – FT

The recently proposed free trade deal between the U.S. and the European Union (EU) tackling clean, green technology can only be considered as a stage of advancement towards reaching the long-due climate goals of reducing global carbon emissions.

So, what does this deal really mean for the U.S. and EU?

On the surface, this could mean joint research and development (R&D) efforts and sharing technological advancements, resulting in the global acceleration of the world’s shift to clean energy. By developing a ‘backbone’ of manufacturing clean energy technologies, American efforts will improve its domestic production and decrease its companies’ reliance on Chinese technologies. Giving the American economy the push it needed to declare obsolete self-reliance.

Source: Reuters

This U.S.-EU clean energy trade deal can only be perceived as a positive push toward accomplishing both sides’ climate goals, ensuring economic progression, and providing a new wave of job opportunities in clean energy.

The Collapse of the Silicon Valley Bank

The collapse of Silicon Valley Bank (SVB) has sent shockwaves through the technology and startup community. The bank’s failure has left billions of dollars stranded and provoked concern among tech executives and investors. Reports revealed that the bank’s demise began with a downgrade threat by the credit rating agency Fitch, which triggered a liquidity crisis that eventually led to the bank’s failure.

Deemed the second-largest failure in history since the 2008 financial crisis, the collapse of SVB has had significant ripple effects on both sides of the Atlantic. In the UK, the government is battling to limit the damage caused by the collapse of SVB’s UK arm, which has left many startups struggling to find alternative funding sources. While in the US, regulators and financial institutions are marshaling material action to stem the fallout from the collapse.

Source: Reuters

One potential factor in the collapse of SVB is the bank’s high exposure to the technology and startup sector, which potentially exposed the bank to high vulnerability, especially when considering the sudden shifts in market sentiment. Another factor would be the bank’s aggressive lending practices and lack of diversification which could have also contributed to its downfall.

Now, tech executives and investors are racing to save startups, especially tech startups, from extinction following SVB’s collapse. However, the impact of the bank’s failure is likely to be felt for some time, as many startups struggle to find new funding sources amid an uncertain economic climate. And let’s remember the damage this event can have to the US establishing itself as one of the world’s most vital tech sectors.

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