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US Regulator Bans Chinese Labs from Electronics Testing

A person uses his cellphone on a street in Beijing, China, 29 October 2026. (EPA)
A person uses his cellphone on a street in Beijing, China, 29 October 2026. (EPA)
TT
TT

US Regulator Bans Chinese Labs from Electronics Testing

A person uses his cellphone on a street in Beijing, China, 29 October 2026. (EPA)
A person uses his cellphone on a street in Beijing, China, 29 October 2026. (EPA)

A US regulator voted Thursday to ban Chinese labs from testing electronic devices ranging from smartphones to cameras for use in the United States.

The move, which the Federal Communications Commission (FCC) says aims to boost security, comes a year after the agency adopted rules to ban test labs "owned or controlled by foreign adversaries."

Around 82 percent of certified devices in the United States are tested in recognized labs in China, the FCC estimates.

"These labs are a critical gateway into American communications infrastructure. And their privileged role gives them access to sensitive and confidential information about electronic products often months before the devices enter the market," the FCC said in a statement.

The ban, which will come into force in 2028, applies to test labs and certification bodies in countries that do not have a mutual recognition agreement with the United States, the agency said.

China does not have such a pact with the FCC, according to its website.

The agency said it began investigating "bad labs" after discovering in 2024 that Chinese tech giant Huawei was running an FCC-recognized Test Lab.

The FCC had previously blacklisted telecommunications equipment made by Huawei and several other Chinese firms over security concerns.

The latest ban would also protect the US technology industry by fighting against the "offshoring of electronics manufacturing, which is often collocated where devices are tested", it added.

Beijing criticized the policy which it said harmed trade between the world's top two economies.

"The US has overstretched the concept of national security, abused state power and unjustifiably cracked down on Chinese companies," Chinese foreign ministry spokesman Guo Jiakun said at a regular briefing on Friday.

"The US actions seriously hinder normal economic and trade exchanges between Chinese and US businesses and run counter to the interests of all parties, including US companies and consumers."

He said Beijing would "take necessary measures" to safeguard its interests.

The FCC has been taking steps to separate Chinese entities from US supply chains.

In March, the regulator barred authorizations of new consumer routers made in foreign countries, also on national security grounds.

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Technology

US Regulator Bans Chinese Labs from Electronics Testing

A person uses his cellphone on a street in Beijing, China, 29 October 2026. (EPA)
A person uses his cellphone on a street in Beijing, China, 29 October 2026. (EPA)
TT
TT

US Regulator Bans Chinese Labs from Electronics Testing

A person uses his cellphone on a street in Beijing, China, 29 October 2026. (EPA)
A person uses his cellphone on a street in Beijing, China, 29 October 2026. (EPA)

A US regulator voted Thursday to ban Chinese labs from testing electronic devices ranging from smartphones to cameras for use in the United States.

The move, which the Federal Communications Commission (FCC) says aims to boost security, comes a year after the agency adopted rules to ban test labs "owned or controlled by foreign adversaries."

Around 82 percent of certified devices in the United States are tested in recognized labs in China, the FCC estimates.

"These labs are a critical gateway into American communications infrastructure. And their privileged role gives them access to sensitive and confidential information about electronic products often months before the devices enter the market," the FCC said in a statement.

The ban, which will come into force in 2028, applies to test labs and certification bodies in countries that do not have a mutual recognition agreement with the United States, the agency said.

China does not have such a pact with the FCC, according to its website.

The agency said it began investigating "bad labs" after discovering in 2024 that Chinese tech giant Huawei was running an FCC-recognized Test Lab.

The FCC had previously blacklisted telecommunications equipment made by Huawei and several other Chinese firms over security concerns.

The latest ban would also protect the US technology industry by fighting against the "offshoring of electronics manufacturing, which is often collocated where devices are tested", it added.

Beijing criticized the policy which it said harmed trade between the world's top two economies.

"The US has overstretched the concept of national security, abused state power and unjustifiably cracked down on Chinese companies," Chinese foreign ministry spokesman Guo Jiakun said at a regular briefing on Friday.

"The US actions seriously hinder normal economic and trade exchanges between Chinese and US businesses and run counter to the interests of all parties, including US companies and consumers."

He said Beijing would "take necessary measures" to safeguard its interests.

The FCC has been taking steps to separate Chinese entities from US supply chains.

In March, the regulator barred authorizations of new consumer routers made in foreign countries, also on national security grounds.

Technology

Shock, Vindication, Regret: Scientists React to AI Roiling Life's Work

OpenAI and Anthropic each said one of their AI models had disproved the 'exponential time hypothesis'. Nicolas TUCAT / AFP
OpenAI and Anthropic each said one of their AI models had disproved the 'exponential time hypothesis'. Nicolas TUCAT / AFP
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Shock, Vindication, Regret: Scientists React to AI Roiling Life's Work

OpenAI and Anthropic each said one of their AI models had disproved the 'exponential time hypothesis'. Nicolas TUCAT / AFP
OpenAI and Anthropic each said one of their AI models had disproved the 'exponential time hypothesis'. Nicolas TUCAT / AFP

For decades, three computer scientists built their careers around an idea about the limits of what computers can do.

Artificial intelligence may now have shown it to be wrong: OpenAI and Anthropic each said on Monday one of their AI models had disproved the "exponential time hypothesis" (ETH).

The hypothesis holds that some problems are so hard that computers can solve them only by trying nearly every possible answer. Hundreds of studies in computer science and biology rely on it.

The claim is the latest in a string of AI results that have shaken academia, setting off soul-searching, most notably among mathematicians, over the value of human expertise and the future of their profession.

Russell Impagliazzo and Ramamohan Paturi of the University of California San Diego first proposed the hypothesis around 25 years ago.

Ryan Williams of MIT, a leading researcher in the field, had long publicly doubted it.

The three are now helping organize an independent review of the claims from the AI companies.

They shared their initial reactions with AFP. The interview has been edited for length and clarity.

- 'Surprise' -

Q: How did you feel when you learned that a machine may have overturned this hypothesis?

Ramamohan Paturi: My first reaction was surprise. ETH has shaped a great deal of research over the past three decades. But the research built around it would not simply disappear.

Ryan Williams: I did not fully believe the hypothesis, and I'm on the record as a prominent skeptic. So I felt vindicated.

Russell Impagliazzo: I'm afraid I am less cheerful about this than the others. I would have much preferred it to be discovered by a human who could explain their thought process. And I'd like to have shaken the (actual) hand of the person who disproved ETH.

- 'Major revolution' -

Q: What is left for human researchers facing the machine? What would you tell a student?

Paturi: These breakthroughs extend the frontier of research, but I believe shaping that frontier and moving it forward remain within human capacity and creativity. I would encourage young students to join. They should learn to use these tools while developing their own judgment.

Williams: I think we're starting to experience a major revolution in the field, and it is absolutely worth going into. Some people may not want to work in the field anymore; others may now feel motivated to.

Impagliazzo: I'm less confident. The rate of change is amazing. Until now, the same researchers mostly did both the glamorous part of research, solving, and the less glamorous part, verifying and explaining. Now it looks like much or most of the first will be done by AI, leaving humans the second -- until next year, when AI progresses further. I have no idea what research will be like next year.

- 'Worrisome' -

Q: These results come from models owned by companies, which decide what to publish and when. Does that worry you?

Paturi: Concentrated access to powerful research tools raises serious questions about who can participate, who gets early access and who shapes the research agenda. Publicly releasing a proof is important, but it does not provide equal access to the tools that produced it. A company's announcement cannot substitute for the community's assessment.

Williams: Yes, it is worrisome. It's on the AI companies to be responsible about their power, and I think they're aware of that.

Impagliazzo: When a human solves a problem, they share not just the solution but the thought process that led to it, which is often more valuable than the solution itself. Access to the AI model itself is the closest we can get to that.

- Possibilities -

Q: If confirmed, what would this result change for ordinary people?

Williams: It's still a theoretical result, but it opens up the possibility of much more efficient ways of computing in an enormous variety of scenarios.

Impagliazzo: There will be no immediate consequences for almost all people (as opposed to me and my friends!). But a first breakthrough is usually followed by improvements and generalizations, so this might eventually lead to better data analysis tools in many branches of science. The current result does not represent a security threat, but future extensions might require stronger encryption.

Technology

Microsoft's Cloud Growth, Cash Flow Offer Respite from AI Spending Fears

FILE PHOTO: The logo of Microsoft at the 10th edition of the VivaTech technology startups and innovation fair in Paris, France, June 18, 2026. REUTERS/Gonzalo Fuentes/File Photo
FILE PHOTO: The logo of Microsoft at the 10th edition of the VivaTech technology startups and innovation fair in Paris, France, June 18, 2026. REUTERS/Gonzalo Fuentes/File Photo
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Microsoft's Cloud Growth, Cash Flow Offer Respite from AI Spending Fears

FILE PHOTO: The logo of Microsoft at the 10th edition of the VivaTech technology startups and innovation fair in Paris, France, June 18, 2026. REUTERS/Gonzalo Fuentes/File Photo
FILE PHOTO: The logo of Microsoft at the 10th edition of the VivaTech technology startups and innovation fair in Paris, France, June 18, 2026. REUTERS/Gonzalo Fuentes/File Photo

Microsoft on Wednesday delivered a big cash flow beat and forecast strong cloud growth, offering fresh evidence that its hefty AI bets were paying off even as concerns mount over Big Tech's spending spree.

The results underscore a widening financial divide among the industry's biggest AI spenders, as soaring infrastructure costs force some rivals to turn more heavily to capital markets.

Microsoft's shares rose more than 3% in after-hours trading. The company posted market-beating 48% growth in its Azure cloud business in its fiscal first quarter ended September, and generated $18.6 billion in free cash flow — some $10 billion more than analysts expected.

That financial firepower set the maker of the Windows operating system apart from rivals such as Alphabet and Meta, whose heavy AI investments have squeezed free cash flow and increased their reliance on borrowing.

Alphabet reported negative free cash flow of $9.07 billion in the third quarter as capital spending jumped and growth in its core ad business slowed, overshadowing a doubling of its cloud sales and sending its shares down 8% in extended trading. Meta last week posted its first cash burn in more than ⁠a decade, and said ⁠it planned to issue new stock to fund its growing capital costs.

"Microsoft's first-quarter report was about as clean as it gets for a company this size," said Jesse Cohen, senior analyst at Investing.com. "After Meta's and Alphabet's numbers revived AI-spending anxiety, this is the counterweight. Demand still exceeds supply, the commercial backlog is enormous, and returns are finally showing up in earnings and overall revenue."

The results also showed Microsoft capitalizing on corporate demand for AI, easing fears that the technology threatens its software empire and that its AI fortunes are too closely tied to unprofitable OpenAI. Still, its ties to the AI lab netted it $10 billion in revenue in the September quarter.

Microsoft shares have risen about 9% so far this year compared with a 13% rise in the S&P 500 ⁠index.

Microsoft's five-year credit default swaps — a measure of perceived default risk — remain the tightest among the largest tech companies, according to Truist, even as spreads have widened across much of the AI trade.

Reuters said that CEO Satya Nadella has sought to capture enterprise demand by giving customers cheaper options, as businesses grapple with the rising cost of deploying AI.

On a conference call with analysts, Nadella said the company was giving customers a range of AI options, some of them at lower cost than cutting-edge AI models such as Anthropic. The company is trying to make its Copilot products more useful with each model release by "consolidating the frontier gains for broad deployment," he added.

Last month, Microsoft said it would disclose Azure revenue in dollars, instead of just growth rates, offering a clearer picture of how its cloud business stacks up against rivals Amazon Web Services and Google Cloud.

Revenue at Microsoft's Azure cloud computing business grew to $33.17 billion in the quarter, topping Visible Alpha's estimate of $32.84 billion. Overall revenue rose by a fifth to $92.28 billion, and an adjusted profit of $4.89 per share beat an average estimate of $4.73 a share.

The company expects second-quarter Azure growth of 49% to 50%, above analyst estimates ⁠of 47.6%, according to Visible Alpha ⁠data. It forecast total sales of $96 billion to $97.1 billion, above estimates of $95.6 billion, according to LSEG data.

Capital expenditure for the quarter rose to $45.2 billion from $34.9 billion in the year-ago period, but came in below the company's own projection of $50 billion. So far in calendar 2026, Microsoft's capital expenditure has been $118.1 billion, which means it would have to spend $56.9 billion in the final three months of the year to hit its own forecast of $175 billion given in July.

Jonathan Neilson, Microsoft's vice president of investor relations, attributed the lower-than-expected capital expenditure to delays rather than any changes to the company's underlying spending plans.

"We did see some third-party capacity deliveries that we expected in first quarter were actually delayed," Neilson said.

Earlier on Wednesday, hyperscaler Oracle said it expects capital spending to peak this fiscal year and next, but pledged to raise no more than $20 billion in additional financing for AI through fiscal 2030.

Overall, Big Tech is expected to pump more than $700 billion this year into building data centers and securing the hardware and energy needed to develop and run AI technologies.

While faster revenue growth at these companies indicates their bets could be paying off, concerns over the cost of financing the outlay have heightened over the past few weeks.

Shrinking cash flows and rising debt loads at US tech companies, including recent stress at neocloud company CoreWeave as well as record-high costs to insure Meta's debt against default, have added to market turmoil.