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<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="462" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/04/107352556-1703848030465-gettyimages-1423009563-china-820x462.jpeg" alt="" class="wp-image-475494" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/04/107352556-1703848030465-gettyimages-1423009563-china-820x462.jpeg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/107352556-1703848030465-gettyimages-1423009563-china-300x169.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/107352556-1703848030465-gettyimages-1423009563-china-160x90.jpeg 160w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/107352556-1703848030465-gettyimages-1423009563-china-768x432.jpeg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/107352556-1703848030465-gettyimages-1423009563-china.jpeg 929w" sizes="(max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">Flag of China on dark blue background Da-kuk | E+ | Getty Images</figcaption></figure>



China will remain the largest growth engine for the world economy in spite of its slowdown, the Asian Development Bank said.



“China is obviously going to still be important for some time to come. They still account for nearly half of GDP in Asia Pacific,” ADB’s chief economist Albert Park said in a press conference for the bank’s Asian Development Outlook report.&nbsp;



“Although growth is moderating, and we are expecting it to continue moderating in the coming years… it’s likely to contribute the most growth of any economy in the world to global growth,” said Park.



ADB forecasts China to post annual GDP growth of 4.8% in 2024, lower than the government’s target of “around 5%.” China’s economy expanded 5.2% in 2023, matching the official target of around 5%.



Even with slower growth, ADB data estimated China will account for 46% of growth in developing Asia in 2024-2025.



China currently accounts for 18% and 48% of global and Asian GDP, respectively, based on purchasing power parities exchange rates, a metric used by the ADB, World Bank and International Monetary Fund.



<h2 class="wp-block-heading" id="h-what-about-india"><a></a>What about India?</h2>



India’s stellar economic trajectory has led many to tout the country’s role as a technology and manufacturing powerhouse and an attractive alternative to China. The South Asian nation’s economy recently expanded at its fastest pace in six quarters, surpassing expectations with 8.4% growth in the October to December quarter of the current financial year 2023-24.



“India’s importance to growth in the region is increasing,” Park told CNBC via email. ADB expects the country’s growth to be the highest in the region, at 7% in 2024 and 7.2% in 2025. 



While India’s economy is undoubtedly a “bright spot,” it is still smaller than China’s, said Park. On the PPP exchange rate metric, the economist noted China’s economy is still about two and a half times that of India.&nbsp;



“So on that benchmark, it will take a long time, I think, for India to really drive global growth,” he added.



Additionally, growth in advanced economies is expected to slow this year, with ADB forecasting U.S. GDP growth to dip to 1.9% from last year’s 2.5%, and Japan’s to grow 0.6% compared to 1.9% in 2023.



The bank in its report also said it expects developing Asia’s growth this year to be slightly stronger than its December projections, as healthy domestic demand offsets the slowdown in China.&nbsp;&nbsp;



In spite of rising energy prices, inflation is also expected to moderate in Asia-Pacific from 3.3% in 2023 to 3.2% this year.

107352556-1703848030465-gettyimages-1423009563-china

China will remain the world’s No. 1 growth driver, says the Asian Development Bank

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="547" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/04/SMJADHBEX5KLZIUNYIQ6KAI6HA-820x547.jpg" alt="" class="wp-image-475259" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/04/SMJADHBEX5KLZIUNYIQ6KAI6HA-820x547.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/SMJADHBEX5KLZIUNYIQ6KAI6HA-300x200.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/SMJADHBEX5KLZIUNYIQ6KAI6HA-135x90.jpg 135w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/SMJADHBEX5KLZIUNYIQ6KAI6HA-768x512.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/SMJADHBEX5KLZIUNYIQ6KAI6HA-1536x1024.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/SMJADHBEX5KLZIUNYIQ6KAI6HA-scaled.jpg 2048w" sizes="(max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">FILE PHOTO: Produce is seen at El Progreso Market in the Mount Pleasant neighborhood of Washington, D.C., U.S., August 19, 2022. REUTERS/Sarah Silbiger/File Photo</figcaption></figure>



The consumer price index accelerated at a faster than expected pace in March, pushing inflation higher and likely dashing hopes that Federal Reserve will be able to cut interest rates anytime soon.



The CPI, a broad measure of goods and services costs across the economy, rose 0.4% for the month, putting the 12-month inflation rate at 3.5%, or 0.3 percentage point higher than in February, the Labor Department’s Bureau of Labor Statistics reported Wednesday. Economists surveyed by Dow Jones had been looking for a 0.3% gain and a 3.4% year-over-year level.



Excluding volatile food and energy components, core CPI also accelerated 0.4% on a monthly basis while rising 3.8% from a year ago, compared to respective estimates for 0.3% and 3.7%.



Stock market futures slumped following the report while Treasury yields spiked higher.



Shelter and energy costs drove the increase on the all-items index.



Energy rose 1.1% after increasing 2.3% in February, while shelter costs, which make up about one-third of the weighting in the CPI, were higher by 0.4% on the month and up 5.7% from a year ago. Expectations for shelter-related costs to decelerate through the year have been central to the Fed’s thesis that inflation will cool enough to allow for interest rate cuts.



Food prices increased just 0.1% on the month and were up 2.2% on a year-over-year basis. There were some big gains within the food category, however.



The measure for meat, fish, poultry and eggs climbed 0.9%, pushed by a 4.6% jump in egg prices. Butter fell 5% and cereal and bakery products declined by 0.9%. Food away from home increased 0.3%.



Elsewhere, used vehicle prices declined 1.1% and medical care services prices rose 0.6%.



The report comes with markets on edge and Fed officials expressing caution about the near-term direction for monetary policy. Central bank policymakers have repeatedly called for patience on cutting rates, saying they have not seen enough evidence that inflation is on a solid path back to their 2% annual goal. The March report likely confirmed worries that inflation is stickier than expected.



Markets had expected the Fed to start cutting interest rates in June with three reductions in total expected this year, but that shifted dramatically following the release. Traders in the fed funds futures market pushed expectations for the first cut out to September, according to CME Group calculations.



″“There’s not much you can point to that this is going to result in a shift away from the hawkish bent” from Fed officials, said Liz Ann Sonders, chief investment strategist at Charles Schwab. “June to me is definitely off the table.”



The Fed also expects services inflation to ease through the year, but that has shown to be stubborn as well. Excluding energy, the services index increased 0.5% in March and was at a 5.4% annual rate, inconsistent with the Fed’s target.



″This marks the third consecutive strong reading and means that the stalled disinflationary narrative can no longer be called a blip,” said Seema Shah, chief global strategist at Principal Asset Management. “In fact, even if inflation were to cool next month to a more comfortable reading, there is likely sufficient caution within the Fed now to mean that a July cut may also be a stretch, by which point the US election will begin to intrude with Fed decision making.”



Later Wednesday, the Fed will release minutes from its March meeting, providing more insight into where officials stand on monetary policy.



Multiple Fed officials in recent days have expressed skepticism about lowering rates. Atlanta Fed President Raphael Bostic told CNBC that he expects just one cut this year, likely not coming until the fourth quarter. Governor Michelle Bowman said an increase may even be necessary if the data do not cooperate.

FILE PHOTO: Grocery store in Washington

U.S. consumer prices rose 3.5% from a year ago in March, more than expected

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="462" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/04/107139885-1666645552719-abc1-820x462.jpg" alt="" class="wp-image-475230" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/04/107139885-1666645552719-abc1-820x462.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/107139885-1666645552719-abc1-300x169.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/107139885-1666645552719-abc1-160x90.jpg 160w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/107139885-1666645552719-abc1-768x432.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/107139885-1666645552719-abc1.jpg 929w" sizes="(max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">Shoppers are seen in a Kroger supermarket on October 14, 2022, in Atlanta, Georgia.  Elijah Nouvelage | AFP | Getty Images</figcaption></figure>



A closely watched Labor Department report due Wednesday is expected to show that not much progress is being made in the battle to bring down inflation.



If so, that would be bad news for consumers, market participants and Federal Reserve officials, who are hoping price increases slow enough so that they can start gradually cutting interest rates later this year.



The consumer price index, which measures costs for a wide-ranging basket of goods and services across the $27.4 trillion U.S. economy, is expected to register increases of 0.3% both for the all-items measure as well as the core yardstick that excludes volatile food and energy.



On a 12-month basis that would put the inflation rates at 3.4% and 3.7%, respectively, a 0.2 percentage point increase in the headline rate from February, just a 0.1 percentage point decrease for the core rate, and both still a far cry from the central bank’s 2% target.



“We’re not headed there fast enough or convincing enough, and I think that’s what this report is going to show,” said Dan North, senior economist at Allianz Trade North America.



The report will be released at 8:30 a.m. ET.



<h2 class="wp-block-heading" id="h-progress-but-not-enough"><a></a>Progress, but not enough</h2>



North said he expects Fed officials to view the report pretty much the same way, backing up comments they’ve been making for weeks that they need more evidence that inflation is convincingly on its way back to 2% before rate cuts can happen.



“Moving convincingly toward 2% doesn’t just mean hitting 2% for one month. It means hitting 2% or less for months and months in a row,” North said. “We’re a long way from that, and that’s probably what’s going to show tomorrow as well.”



To be sure, inflation has come down dramatically from its peak above 9% in June 2022. The Fed enacted 11 interest rate hikes form March 2022 to July 2023 totaling 5.25 percentage points for its benchmark overnight borrowing rate known as the federal funds rate.



But progress has been slow in the past several months. In fact, headline CPI has barely budged since the central bank stopped hiking, though core, which policymakers consider a better barometer of longer-term trends, has fallen about a percentage point.



While the Fed watches the CPI and other indicators, it focuses most on the Commerce Department’s personal consumption expenditures index, sometimes referred to as the PCE deflator. That showed headline inflation running at 2.5% and the core rate at 2.8% in February.



For their part, markets have grown nervous about the state of inflation and how it will affect rate policy. After scoring big gains to start the year, stocks have backed off over the past week or so, which have seen sharp swings as investors tried to make sense of the conflicting signals.



Earlier this year, traders in the fed funds futures market were pricing in the likelihood that the central bank would start reducing rates in March and continue for as many as seven cuts before the end of 2024. The latest pricing indicates that the cuts won’t start until at least June and not total more than three, assuming quarter-percentage point increments, according to the CME Group’s FedWatch calculations.



“I don’t see a whole lot here that is going to move things magically the way they want to go,” North said.



<h2 class="wp-block-heading"><a></a>What to watch</h2>



There will be a few key areas to watch in Wednesday’s report.



Beyond the headline numbers, trends in items such as shelter, airfares and vehicle prices will be important. Those areas have been bellwethers during the current economic cycle, and moves either way could suggest longer-term trends.



Economists at Goldman Sachs expect outright declines across air travel-related items as well as vehicle sticker prices, and see smaller shelter cost increases, which make up about one-third of the CPI weighting. A New York Fed survey released Monday, however, showed a sharp uptick in expectations for rental costs over the next year, which is bad news for policymakers who frequently have cited decelerating housing costs as the cornerstone to their easing inflation thesis.



Similarly, the National Federation of Independent Business survey for March, released Tuesday, showed confidence among small businesses at its lowest level in more than 11 years, with owners citing inflation as their top concern.



“Inflation is cumulative, and that’s why prices still feel high,” North said. “People still can’t believe how high prices are.”



Gas prices also could play an important role in the CPI release after rising 3.8% in February. Though the gasoline index is relatively unchanged over the past two years, it’s still up more than 70% from April 2020 when the brief Covid-driven recession ended. Food is up about 23% during the same period.

107139885-1666645552719-abc1

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<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="461" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/03/107384081-1709831185690-gettyimages-2058827167-powell_banking_402_030724-820x461.jpeg" alt="" class="wp-image-463959" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/03/107384081-1709831185690-gettyimages-2058827167-powell_banking_402_030724-820x461.jpeg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/107384081-1709831185690-gettyimages-2058827167-powell_banking_402_030724-300x169.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/107384081-1709831185690-gettyimages-2058827167-powell_banking_402_030724-160x90.jpeg 160w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/107384081-1709831185690-gettyimages-2058827167-powell_banking_402_030724-768x432.jpeg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/107384081-1709831185690-gettyimages-2058827167-powell_banking_402_030724-1536x864.jpeg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2024/03/107384081-1709831185690-gettyimages-2058827167-powell_banking_402_030724.jpeg 1600w" sizes="(max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">Federal Reserve Chairman Jerome Powell testifies during the Senate Banking, Housing and Urban Affairs Committee hearing titled “The Semiannual Monetary Policy Report to the Congress,” in Dirksen Building on Thursday, March 7, 2024.
Tom Williams | Cq-roll Call, Inc. | Getty Images</figcaption></figure>



The U.S. Federal Reserve is determined not to reduce interest rates too soon — and some economists say recent data has pushed a summer cut completely off the table.



Friday’s jobs report reiterated the seemingly unwavering strength of the U.S. labor market and suggested further need for Fed caution. All eyes will now be on Wednesday’s consumer price index, after February’s annual inflation rate of 3.2% came in slightly higher than expected.



It comes as a growing number of market participants have raised the possibility of no rate cuts at all this year, including Minneapolis Fed President Neel Kashkari who said last week that no reductions were a possible scenario if inflation continued to move sideways.



George Lagarias, chief economist at&nbsp;Mazars, told CNBC on Monday that rate cuts in the summer were now looking much less likely.



“Personally, I wouldn’t be surprised if we saw less rate cuts and pushed more towards the end of the year,” he told “Squawk Box Europe” on Monday.



“This is a strong economy. Make no mistake, it is backed by debt and somewhat by overburdened credit cards, but it is a strong economy. So the Fed will struggle to find the case to cut rates soon.”



Market pricing reflects the ongoing uncertainty, with the probability of a rate cut now under 50% for both June and July, according to the CME’s FedWatch tool — significantly lower than at the start of the month.



“The Fed has been punishing itself ever since 2021 when ‘team transitory’ ostensibly got it wrong. &#8230; What they feel is that they can’t get it wrong again, which means that they’re more likely to err on the side of caution,” Lagarias added.



Despite this, he said it remains “very likely” that there will be rate cuts this year.



“They do have some room to cut, but they don’t want to get it wrong. They do not want to be the Fed that cut rates as inflation kept beating expectations. So they want to see more data toward the right direction and they are willing to wait,” Lagarias added.



<h2 class="wp-block-heading" id="h-no-rate-cuts"><a></a>No rate cuts?</h2>



Speculation that there could be no interest rate reductions this year has been growing, although economists remain divided.



Torsten Slok, chief economist at Apollo Global Management, said last month that he doesn’t expect any cuts as the U.S. economy is “simply not slowing down,” and top U.S. asset manager Vanguard has no rate reductions as its base case for the year.



Whereas former Federal Reserve Vice Chairman Roger Ferguson told CNBC last week he sees a 10%-15% chance of no cuts this year.



Other analysts and economists are still backing the Fed’s own signaling in March that it expects three quarter-percentage point cuts this year.



Based on current growth and inflation forecasts, Goldman Sachs Chief Economist Jan Hatzius told CNBC on Friday he would “expect some rate cuts based on what Chair Powell and other Fed officials have said.”



“The timing of that of course is going to depend on near-term data, on the reaction function from the Fed but under our forecast I would be quite surprised if we didn’t get rate cuts this year. Quite surprised.”

107384081-1709831185690-gettyimages-2058827167-powell_banking_402_030724

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<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="547" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/04/GettyImages-1701923070-820x547.jpg" alt="" class="wp-image-474613" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/04/GettyImages-1701923070-820x547.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/GettyImages-1701923070-300x200.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/GettyImages-1701923070-135x90.jpg 135w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/GettyImages-1701923070-768x512.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/GettyImages-1701923070-1536x1025.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/GettyImages-1701923070-scaled.jpg 2048w" sizes="(max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">Jamie Dimon, chief executive officer of JPMorgan Chase &amp; Co., during a Bloomberg Television interview on the sidelines of the JPMorgan Tech Stars Leadership Forum in London, UK, on Monday, Oct. 2, 2023. &#8220;Your children are going to live to 100 and not have cancer because of technology,&#8221; Dimon said. Photographer: Jason Alden/Bloomberg via Getty Images</figcaption></figure>



Jamie Dimon, the veteran CEO and chairman of JPMorgan Chase, said he was convinced that artificial intelligence will have a profound impact on society.



In his annual letter to shareholders released Monday, Dimon chose AI as the first topic in his update of issues facing the biggest U.S. bank by assets — ahead of geopolitical risks, recent acquisitions and regulatory matters.



“While we do not know the full effect or the precise rate at which AI will change our business — or how it will affect society at large — we are completely convinced the consequences will be extraordinary,” Dimon said.



The impact will be “possibly as transformational as some of the major technological inventions of the past several hundred years: Think the printing press, the steam engine, electricity, computing and the Internet.”



Dimon’s letter, read widely in the business world because of his status as one of the most successful leaders in finance, hit a wide variety of topics. The CEO said that he had ongoing concerns about inflationary pressures and reiterated his warning that the world may be entering the riskiest era in geopolitics since World War II.



But his focus on AI, first mentioned in this format in a 2017 shareholder letter, stood out. The technology, which has gained in prominence since ChatGPT became a viral sensation in late 2022, can generate human-sounding responses to queries. Enthusiasm for AI has fueled the meteoric rise in chipmaker Nvidia and helped propel tech names to new heights.  



JPMorgan now has more than 2,000 AI and machine learning employees and data scientists, Dimon said. But the technology could ultimately touch all of the bank’s roughly 310,000 employees, assisting some workers while replacing others.



“Over time, we anticipate that our use of AI has the potential to augment virtually every job, as well as impact our workforce composition,” Dimon said. “It may reduce certain job categories or roles, but it may create others as well.”



This story is developing. Please check back for updates.

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<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="598" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/04/100432242-larry-ellison-ceo-oracle-getty-820x598.jpg" alt="" class="wp-image-474536" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/04/100432242-larry-ellison-ceo-oracle-getty-820x598.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/100432242-larry-ellison-ceo-oracle-getty-300x219.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/100432242-larry-ellison-ceo-oracle-getty-123x90.jpg 123w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/100432242-larry-ellison-ceo-oracle-getty-768x560.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/100432242-larry-ellison-ceo-oracle-getty-1536x1120.jpg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2024/04/100432242-larry-ellison-ceo-oracle-getty-scaled.jpg 2048w" sizes="(max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">Oracle Chairman Larry Ellison Getty Images</figcaption></figure>



Every tech company is talking up its AI opportunity. Oracle is no exception. But during an earnings call in March, Oracle’s Larry Ellison laid out a future market opportunity focused on a major customer that investors may think about less often that Fortune 500 companies.



The Oracle founder, former CEO and current chairman and chief technology officer, sees national and state government applications being run on platforms like Oracle Cloud Infrastructure to a much greater degree than today, and indicated that it’s starting to happen in a variety of ways.



“We talk about, you know, winning business with companies. For the first time, we’re beginning to win business for countries,” Ellison said. “We have a number of countries where we’re negotiating sovereign regions with the national government.”



Major tech companies vying for massive government contracts in the cloud are nothing new. Microsoft and Amazon had a lengthy battle over a cloud deal with the Department of Defense, and both those AI players as well as Oracle and Google ended up all in on a $9 billion DoD contract in 2022.



But Ellison went further in his prediction when speaking with analysts on the recent earnings call, saying “Every government, pretty much every government, is going to want a sovereign cloud and a dedicated region for that government.”



Oracle, which works with Nvidia and Microsoft on generative AI capabilities, has already helped use cloud tech to cut red tape for countries. One example Ellison gave was Albania. It is trying to ascend to the European Union with the help of chatGPT, with the generative AI helping to decipher and summarize its laws and aid the country in what it needs to change in order to be compliant with E.U. regulations.



“It took Serbia eight years to harmonize their laws to be able to join the E.U.,” Ellison said. “Albania is facing the same thing, but with generative AI, we can read the entire corpus of the Albanian laws and&nbsp;actually harmonize their laws with the EU in probably more like 18 months to two years.”



Some analysts are skeptical of Ellison’s talk as being anything more than typical C-suite rallying for a key business unit. Oracle shares are up about 21% YTD, but Barclays analyst Raimo Lenschow expressed concern about lower OCI growth during its latest earnings, which could “worry investors, as this is the main investment story.”



A version of future featuring cloud services and artificial intelligence-powered solutions can make government more efficient. Ellison said for starters, redundancy is a focus for government, in the case of disaster and disaster recovery. But it’s also moving into health care information and internet access projects.



Countries including Serbia are standardizing on Oracle Cloud Infrastructure and using generative AI for processes like automating health care. Deals related to delivery of internet services in partnership with Elon Musk’s Starlink to remote areas are taking place in Kenya and Rwanda, where OCI and Starlink are mapping rural farms to see which crops are growing in what area, and if they are getting enough nutrients like nitrogen and water. “These maps are AI-assisted, help them plan their agricultural output and predict their agricultural output, predict markets, the logistics of the agricultural output, doing all of all of those things as next-generation national applications,” Ellison said.



Food security, rural school and rural hospital internet access, are other examples of what Ellison said are among the “all sorts of interesting new AI applications out there that you’ve probably never heard of before, at least I hadn’t heard of before until these last 12 months now that we’ve worked on and we’re now in the process of delivering.”



He also mentioned automation of vaccination programs, and other healthcare program “across the board.”



“We’re living in a world where like data and information is the gold of the future,” said Dan Gardner, CEO of digital strategy agency Code and Theory. “If the government can get access and action on that their data faster, why would we want to slow that down? We want that to be as efficient as possible. A lot of that is like mundane human resources, that maybe those people could be doing something else that is way more valuable.”



Cloud and generative AI applications allowing countries to give rural areas internet access could increase educational opportunities and create more economic value. It could also allow citizens to have more insight into government processes, said Tapan Parikh, Cornell University associate professor. “One thing technology’s always been good at is potentially making bureaucracies more efficient, or at least more transparent internally,” he said.



<h3 class="wp-block-heading" id="h-black-mirror-governments">‘Black Mirror’ governments</h3>



But the push to move more government processes to the cloud is also opening the door to new risks, especially as countries trust newly developed generative AI systems. While they may make processes faster than ever, there are bound to be mistakes as the technology develops and could make citizen data accessible to cyber criminals. “We shouldn’t use these technologies as an excuse to not maintain oversight and control over political processes,” Parikh said. “Certainly, I think that’s a very important thing, particularly when you’re dealing with countries that may not have the same kind of governance capacity.” Oracle did not respond to a request for additional comment on Ellison’s earnings call discussion.



“There’s the ‘Black Mirror’ bad side of it: Big Brother, data wars, AI warfare and all that stuff,” Garder said. “As far as like removing red tape and being more efficient and getting better use out of crops across the country, that’s incredible. That’s the multiplier of humanity that could really improve because of AI.”



AI raises a host of concerns.



Gardner pointed to the proliferation of more generative content in an election year around the world and all the issues related to tech-enabled interference. “Maybe it’s not like chips on the ground. But it’s data security, authentication of who you are, who governments are, what content you’re viewing, all the connection points between financial systems, and AI governance. Using AI as a tool of destruction is quite scary.”&nbsp;



“No big government in the world can afford to move all of their services and especially critical ones like defense, taxes, health care, completely into the cloud and into the hands of gen AI,”&nbsp;said Simone Bohnenberger, chief product officer at cloud company Phrase. “It’s just not in the realm of, I think it’s not responsible to do that. The potential risks outweigh the benefits of doing that.“ OpenAI, which created ChatGPT, is mostly trained on existing content on the internet. That could pose a problem, especially when text from lesser known languages like Albanian need to be analyzed, Bohnenberger said. “If you look at the World Wide Web or the internet, the vast majority of content there’s English, I think a quarter of the content is English, followed by Chinese,” she said. “Albanian is a minority. It’s very questionable for me how well that actually works for a small country like Albania and like an outlier language, because there’s just not much data you can train a model on. And if you don’t have much data, then the outputs will be very messy.”



Then there’s security and data risks with allowing foreign companies access to citizen data, Parikh said. Even the U.S., with all its resources, has been vulnerable to data hacks, including a recent February incident with contractor CGI Federal which exposed personally identifiable information on employees. The recent battle between the U.S. and China over TikTok is an example of how control of sensitive consumer data can be interjected into geopolitics. “I think certainly that’s a concern going forward for countries who are working with vendors from different countries,” Parikh said.

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