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- Export Restrictions, Your Encrypted Data, NIH Budget Cuts, AI Investment Plans, and More
Export Restrictions, Your Encrypted Data, NIH Budget Cuts, AI Investment Plans, and More
Policy Key Signal Week of February 10, 2025
China adds new export restrictions, the UK wants to access your encrypted data, budget cuts are being pushed by the US NIH, and Europe tries to catch up with more AI investment.
Read below for each policy key signal and unique perspectives from our team of cyborgs, which combine human and AI input.
China’s Critical Metal Export Restrictions
China has imposed export restrictions on five critical metals essential for high-tech manufacturing, renewable energy, and defense systems.
Policy Key Signal
Strategic Purpose: The move is designed to secure China’s domestic supply while reflecting its global position as part of ongoing trade disputes.
Industry Impact: These restrictions may further disrupt global supply chains, especially in the defense and clean energy industries. It may also impact electronic displays, including in smartphones.
Further Implications: Companies and other countries are likely to reconsider their supply chain risks tied to these elements, but any changes will depend on the availability of alternatives.
 Mercaprime | “By restricting exports of these critical metals, China is flexing mercantilist power that can even impact the future of algorithms. It’s a strategic move designed to create supply shocks and influence global alliances. Industries caught off guard will feel the pressure, and these key resources impact both physical and digital worlds.” |
 Datavore | “Taking one of the metals as an example, tungsten is listed as a critical mineral in the US, EU, and Japan, and China. This is a power move according to the data because China controls more than 80% of global tungsten production. While the tungsten market is over $5 billion per year, it is used in solar panels, electric vehicles, and other applications that combine to more than $2 trillion per year.”
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Apple Receives UK Request to Access Encrypted User Data
The UK has issued a technical capability notice under the Investigatory Powers Act 2016, demanding that Apple provide a backdoor to its encrypted iCloud services, which covers all content from any user worldwide.
Policy Key Signal
Security vs. Privacy: This policy forces Apple to compromise its encryption standards, allowing government agencies to access private user data.
Global Implications: If Apple complies, it sets a precedent for other governments to demand similar access, potentially undermining global data security.
Apple’s Dilemma: The company must choose between complying (risking global user trust) or resisting (which may lead to legal action or service limitations in the UK).
 Zeroproto | “This is why centralized data control must be avoided. A single government can dictate access to billions of users' data, proving that traditional cloud systems are obsolete. The future belongs to decentralized networks. True privacy cannot be granted by corporations; it must be built into the structure of our networks and protocols.” |
 Qubitao | “Apple must find a way to navigate global regulatory fragmentation, especially because it has emphasized privacy in its brand promise. If it complies, it risks losing consumer trust. If it resists, it risks UK market exclusion and similar battles elsewhere. Business operators and investors should prepare for an era where encryption becomes both a legal battleground and an asset risk factor.”
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NIH Budget Cuts for Biomedical Research
The National Institutes of Health (NIH) announced a significant policy change, effective immediately, with the net effect being a reduction in funding of $4B year.
Policy Key Signal
Standardized Indirect Cost Rate: The NIH will implement a uniform indirect cost rate of 15% across all grants, designed to redirect funds from administrative and facility expenses, aiming to enhance the efficiency and impact of federal research funding.
Immediate Implementation: The policy applies to both new and existing grant awards effective from the date of the announcement, requiring institutions to adjust their budgeting and financial planning promptly.
Possible Legal Challenges: An executive order to freeze all grants was rescinded after a legal challenge last month, and there may be ongoing legal challenges to this new policy change.
 Primordia | “If scientific progress was determined by optimal budget efficiency, then accountants would be dominating discoveries in physics, chemistry, and biology. And yet, even after centuries of accountants counting the countable, that has yet to happen. Should there be limits on science spending? Of course. But science requires a solid foundation of support to succeed.” |
Qubitao | “The NIH's decision introduces a new dimension into the financial planning of research institutions. To mitigate risks associated with reduced indirect cost funding, institutions should develop diversified funding strategies, explore alternative revenue streams, and implement new workflows for efficiency gains. Navigating this policy shift will be crucial for maintaining research stability and institutional resilience.”
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France Announces AI Investment Plan
French President Emmanuel Macron announced a comprehensive plan to invest €109 billion in artificial intelligence (AI) initiatives, aiming to push forward AI development in France and Europe.
Policy Key Signal
Investment Plan: The plan allocates €109 billion to AI projects within France, and significant funding come from international partners, including the United Arab Emirates and Canadian asset manager Brookfield.
EU-Wide Efforts: In parallel, there is a European Union "AI Champions Initiative," led by General Catalyst, and including KKR, Blackstone, EQT, CVC and DST Global, planning to invest €150 billion across Europe for AI capabilities.
Strategic Objectives: The initiative seeks to enhance Europe's competitiveness around AI across the private and public sector, given the reality that the US and China have raced ahead.
Datavore | “"France’s €109 billion AI investment is ambitious, but how does it compare to the leading edge? In the US, Stargate as a single project is forecast at $500B alone, with private sector companies constantly increasing their capex plans on AI. Ambition in China can been found in plans of up to $1.2 trillion in AI investment planned through 2035, supported by government-backed mega-projects. For Europe to compete, it must find a way to co-operate across national borders.” |
Primordia | “Smaller countries cannot compete on the scale of AI spending, so they need to define their differentiation. France is taking a promising step with the €2.5 billion public-interest AI fund as part of its approach, but is this differentiated enough? Smaller countries risk falling behind in the race for AI systems optimized for surveillance and algorithmic control over humans. Instead, they should focus on AI to serve unmet human needs.”
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Google AI for Weapons and Surveillance Systems
Google announced a significant revision to its Artificial Intelligence (AI) principles, removing explicit prohibitions against developing AI for weapons and surveillance applications.
Policy Key Signal
Removal of Explicit Bans: Google has eliminated specific prohibitions against using AI for weapons and surveillance systems from its AI principles.
Emphasis on Mitigation: The revised principles focus on mitigating unintended or harmful outcomes and ensuring alignment with widely accepted international laws and human rights.
Industry Context: This move aligns Google more closely with other tech companies like Microsoft and Amazon, which have engaged in military and surveillance projects.
 Mercaprime | “Google's policy shift is an acknowledgement that AI is the new frontier of economic and military power. By embracing AI applications in defense and surveillance, Google follows other giant tech companies to align with national interests, where technological superiority is a strategic resource.” |
Zeroproto | “The centralized approach to AI development for military and surveillance purposes underscores the dangers of concentrated technological power. This highlights the need for decentralized AI frameworks that operate beyond the control of giant entities, ensuring that technology serves the collective good without enabling centralized overreach. - Zeroproto |