Politics of AI

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After the arrival of ChatGPT, the next artificial-intelligence shock is already here — and it's likely to be far more disruptive.

The question is how governments will respond.

Mumbai-based TCS, Asia's largest IT services firm, said this week it will cut about 2% of its global workforce — as many as 12,000 roles — due to "rapid technological changes."

While TCS didn't explicitly say it, the concern voiced by trade bodies and others is that India's $280 billion software-services industry is ripe for displacement by AI.

WATCH: Caroline Hyde and Ed Ludlow report on China's recent AI summit on Bloomberg TV.

That makes it a political issue as much as an economic one, especially if it means a traditional career path to prosperity is cut off for many Indians.

Of course, India isn't unique. A recent McKinsey analysis found that UK businesses are dialing back hiring for posts likely to be affected by AI.

These kind of entry-level jobs in areas like tech, finance and education are broadly the domain of Britain's middle classes who historically vote for mainstream parties. How might they react if they graduate into a world where AI does all their work, leaving them with debts and no careers?

It's a question worth putting to blue-collar workers affected by the deindustrialization that came with globalization in the 1980s. Their disaffection is one explanation for political upheavals like Brexit and a readiness to back Donald Trump and other populists to punish the establishment.

True, AI offers radical opportunities and new jobs will surely appear in an age of what Meta chief Mark Zuckerberg calls "superintelligence."

In India, an IT trade body has urged governments, along with industry and academia, to ensure appropriate training to meet the new era.

Even if any political leader is listening, addressing the skills gap may be the least of their worries given the scale of the coming AI revolution. — Alan Crawford

A man uses a virtual-reality headset at the World Artificial Intelligence Conference in Shanghai on Saturday. Photographer: Qilai Shen/Bloomberg

Global Must Reads

Trump unleashed a series of tariff deals and demands on the eve of tomorrow's deadline as the US president attempts to create a new global trade order. He went ahead with 50% tariffs on imports of copper, but exempted key products including refined metal, and plans to speak by phone today to Claudia Sheinbaum, his counterpart in Mexico, which is the biggest US trading partner and whose exports face a 30% tariff.

Russia attacked Kyiv with a barrage of drones and missiles overnight in defiance of Trump's calls for the Kremlin to reach a truce with Ukraine by Aug. 8 or face secondary sanctions. At least eight people including a child died in the bombardment and more than 50 were injured, the city's military administration chief said.

The site of a Russian attack in Kyiv today. Source: State Emergency Service of Ukraine

Prime Minister Mark Carney said Canada plans to join the UK and France in recognizing a Palestinian state at the United Nations summit in September, clashing with Israel and Washington, with Trump saying Ottawa's move would make it "very hard" to do a trade deal. Brazilian President Luiz Inácio Lula da Silva's defiant response to Trump's 50% tariff threat over political and legal matters was validated yesterday — for now — with Washington listing many exemptions that include civilian aircraft to orange juice.

Myanmar's military leadership lifted a state of emergency more than four years after it took power in a coup, a necessary step for holding elections slated for December. The decision comes as the country faces a collapsing economy and growing resistance from armed, pro-democracy groups, although Western governments, including the US, have dismissed any junta-organized vote as illegitimate.

Trump's barrage of social-media posts yesterday announcing a 25% tariff on India's imports and blasting its trade policies and ties with Russia amount to one of the strongest attacks yet on a burgeoning security partner. For years, New Delhi has maintained friendly ties with Moscow and skirt American sanctions by positioning itself as a geopolitical counterweight against Beijing, but now Trump is pressuring Prime Minister Narendra Modi to pick a side.

The death toll from protests against rising fuel prices in Angola climbed to more than 20, while police arrested over 1,000 people.

A man carries a TV during looting in Angola's capital, Luanda. Photographer: AFP/Getty Images

Prime Minister Gintautas Paluckas informed Lithuania's head of state that he plans to resign following mounting accusations around his business ties.

The US imposed sanctions on Brazilian Supreme Court Justice Alexandre de Moraes, escalating its targeting of the judge overseeing legal probes into whether former President Jair Bolsonaro attempted a coup after his 2022 election defeat.

Former US Vice President Kamala Harris said she won't run for governor of California next year, ending months of speculation over whether she'd seek to return to elected office in her home state after her defeat in the 2024 presidential race.

On this week's Trumponomics podcast, we discuss how the administration's big AI plan risks isolating the US from the very global tech ecosystem it's trying to dominate. Listen on Apple, Spotify, or wherever you get your podcasts.

Photographer: Kent Nishimura/Bloomberg

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Chart of the Day

Microsoft will spend more than $30 billion in the current quarter to build out the data centers powering its artificial-intelligence services. Investors, applauding accelerating growth in the company's cloud-computing unit, sent the shares up sharply. The closely watched Azure division posted a 39% rise in sales during Microsoft's fiscal fourth quarter.

And Finally

The US set a 15% tariff on exports from South Korea and secured a $350 billion investment pledge from Seoul that allows greater access for US products. While the concessions exclude rice and beef, Trump said the Asian nation would be "completely open" to trade with the US, exposing the possibility of a difference of interpretation of the details. Farmers fear they will end up paying the price for the pact.