Global Morning Briefing summarizes international news reported by The Seoul Economic Daily.
EXCLUSIVE: Anthropic Also Downloaded Han Kang's Books Illegally
Anthropic downloaded millions of books from digital piracy libraries in 2021 and 2022, and at least 15 works by Korean authors were among them, including Han Kang's "Human Acts" as well as books by Hwang Sok-yong and Shin Kyung-sook.
The downloads came to light during Bartz v. Anthropic, a lawsuit filed in August 2024 by author Andrea Bartz and others. In a ruling in July, the U.S. District Court for the Northern District of California found that training AI on legally purchased books was a transformative use and therefore fair use, but held that the act of copying pirated editions itself constituted copyright infringement. Anthropic agreed to pay $1.5 billion (about 2.2 trillion won) in a settlement covering roughly 500,000 books, and Korean authors are on the list of recipients, with payments set to begin on the 15th of next month.
After the controversy, Anthropic began buying and scanning physical books around the world in 2024 under what it calls Project Panama, and in Korea it signed a book purchase contract with Woongjin Booksen. Woongjin confirmed the contract. Under Article 20 of Korea's Copyright Act, books that have been legitimately sold may be resold, but critics say there are no rules governing the use of such books for AI training. Creators are pushing back.
Court rulings around the world have diverged. In the U.S., rulings have largely found no problem with training on legally purchased books. Europe protects copyright more strictly, barring the use of works for AI training if the rights holder objects.
Korea ranks second in the world in paid ChatGPT subscribers, a sign of how widely AI is used, but its rules are seen as lagging. An AI framework act took effect in January, but it contains no provisions protecting creative works, and the issue drawing attention first has been the flood of AI-generated books rather than AI training itself.
Gartner Warns $3.5 Trillion in AI Assets at Risk by 2030, Says 80% of Neoclouds Will Vanish
Skepticism about AI has spread again through global financial markets. In a report released on the 14th, Gartner said $3.5 trillion worth of AI infrastructure spending will be at risk of impairment by 2030. Hyperscalers are spending about $1 trillion this year and plan to invest an additional $6 trillion from next year through 2030. To cover a minimum return on invested capital of 12%, they would need cumulative revenue of $8.5 trillion, but Gartner estimates actual revenue will reach at most $3.6 trillion. Gartner also projected that more than 80% of neocloud providers will cease operations by 2030.
The same day, CoreWeave, the largest neocloud provider, fell 15.5% as concerns about its finances came to the fore, and the yield on its corporate bonds jumped more than 1 percentage point to 15%. Remarks by a co-founder in an interview with the Financial Times, saying the company would secure additional investment-grade ratings on chip-backed loans to draw in insurance company money, backfired. An analyst at D.A. Davidson said CoreWeave is "borrowing at 9% and earning 5%," putting it in subprime territory, and went so far as to say the stock could fall to zero. Its bonds dropped below 80 cents on the dollar, and the probability of default within five years implied by credit default swaps exceeded 50%.
The AI-driven turmoil sent 10-year government bond yields in the U.S. and Japan sharply lower during trading on the 15th, a move analysts attributed to demand for safe assets. Nvidia, by contrast, looks set to capture profits as the free cash flow that five hyperscalers devote to AI investment flows straight to it, in line with JPMorgan's analysis.
Anthropic, which is preparing an initial public offering this year, posted third-quarter revenue of $16.8 billion, up 45% from the previous quarter, after $4.7 billion in the first quarter and $11.6 billion in the second. The Financial Times read the figures as a slowdown from early this year, when revenue was doubling, and the news was not enough to quiet doubts about AI monetization.
Fed Beige Book Says High Oil Prices Are Passing Through Supply Chains, Flagging Entrenched Inflation
U.S. consumer prices rose more than expected in September, deepening concerns that high inflation is becoming entrenched. According to the Bureau of Labor Statistics, the consumer price index rose 3.7% from a year earlier and 0.6% from the previous month, exceeding forecasts of 3.6% and 0.5%. Core CPI, which excludes energy and food, rose 2.6% year-on-year and 0.3% month-on-month, each 0.1 percentage point above expectations, while services CPI rose 3.1% from a year earlier and 0.4% from the previous month.
In its Beige Book on the 14th, the Federal Reserve said prices rose in every district because of higher oil prices, and that high diesel prices and fuel surcharges were being passed through supply chains. It also said upward pressure from raw material prices, tariffs and insurance premiums was persisting. Notably, the fact that housing and services costs are rising as well, unlike oil prices that had been described as a short-term factor, points to the possibility that high inflation will last. Austan Goolsbee, president of the Federal Reserve Bank of Chicago, said services inflation above 5% was not the result of tariffs or oil prices.
Beyond the cumulative effects of tariffs and oil prices, shortages of raw materials stemming from the AI investment boom and consumer demand supported by stable employment are also cited as factors. Ahead of the Federal Open Market Committee meeting on the 27th and 28th, the probability of a rate increase on CME FedWatch rose from 22.1% to more than 50% immediately after the CPI release before easing to 27.1%. The International Monetary Fund forecast global inflation of 4.7% this year and projected that core inflation in the U.S. and Europe will not fall to 2% until the middle of 2028.
Trump Touts $21 Billion From Japan and $80 Billion From Taiwan as Voters Sour
Japan will invest $21 billion (about 28 trillion won) to build two GlobalFoundries semiconductor plants in Malta, New York. President Donald Trump called it "the result of a historic trade agreement" on Truth Social on the 14th, saying it would create 27,000 construction jobs and more than 1,000 manufacturing jobs. The plants are expected to produce logic chips for telecommunications and automobiles, supplying Japanese automakers operating in the U.S., and Kyodo News assessed the project as aimed at strengthening U.S.-Japan supply chains against geopolitical risk in the event of a contingency involving Taiwan.
The investment will proceed in two stages. Construction of the first plant, costing about $10 billion, will begin this year with operations targeted for 2029, followed by another $10 billion for a second plant. Each plant will have annual capacity of 900,000 300-millimeter wafers. The project is part of Japan's $550 billion investment pledge to the U.S., and GlobalFoundries shares closed 4.8% higher after the announcement. The U.S. government is also investing in a 4% stake in the company, which will bring its holding to about 7%.
Trump also pointed to Korea's $50 billion investment in Alaska LNG and Taiwan's commitment to purchase $70 billion to $80 billion worth of LNG. A Fox News poll, however, put his approval rating at 36% and his rating on handling inflation at 22%, both record lows, and senior Republicans are said to view winning the House in the midterm elections as effectively impossible.
