For a moment, consider how many historical facts we accept as truth without questioning their validity. What if, for example, a seventh-century book detailing an important battle was actually rewritten by someone from the ninth century? Perhaps a 9th-century leader had a scribe rewrite the account to serve their political or personal aspirations, allowing them to wield more power or forge a legacy based on a false pretext. 

Of course, I’m not proposing that commonly accepted historical facts are false or manipulated. Still, it does highlight the difficulty of verifying historical data that predates the modern era, symbolizing a problem that unchecked future AI developments could bring back.

The current state of AI takes place in black-boxed silos dominated mainly by powerful entities that put us at risk of a dystopian future where truths can be rewritten. Open AI’s shift to a more closed model after promoting an open-source approach to AI development has triggered these fears and raised concerns about transparency and public trust.

If this trend becomes the dominant direction of AI, those accumulating computing power and developing advanced AI technologies and applications can create alternative realities, including forging historical narratives.

The time is now for AI regulation

As long as centralized entities hide their algorithms from the public, the combined threat of data manipulation and its ability to destabilize the political and socioeconomic climate could truly alter the course of human history.

Despite numerous warnings, organizations across the globe are sprinting to use, develop, and accumulate powerful AI tools that may surpass the scope of human intelligence within the next decade. While this technology may prove useful, the looming threat is that these developments could be abused to clamp down on freedoms, disseminate highly dangerous disinformation campaigns, or use our data to manipulate ourselves. 

There is even growing evidence that political operatives and governments use common AI image generators to manipulate voters and sow internal divisions among enemy populations. 

News that the latest iOS 18’s AI suite can read and summarize messages, including email and third-party apps, worries many about Big Tech accessing chats and private data. So, it raises the question: Are we stepping into a future where bad actors can easily manipulate us through our devices?

Not to fear-monger, but suppose the development of AI models is left at the mercy of massively powerful centralized entities. It’s easy for most of us to imagine this scenario going completely off the rails, even if both governments and Big Tech believe they’re operating in the interest of the greater good.

In this case, average citizens will never gain transparent access to the data used to train rapidly progressing AI models. And since we can’t expect Big Tech or elements of the public sector to voluntarily be held accountable, establishing impactful regulatory frameworks is needed to ensure AI’s future is ethical and secure.

To oppose corporate lobbies seeking to block any regulatory action on AI, it's on the public to demand politicians implement necessary regulations to safeguard user data and ensure AI advancements are developing responsibly while still fostering innovation.

California is currently working on passing a bill to reign in AI’s potential dangers. The proposed legislation would curb using algorithms on children, require models to be tested for their ability to attack physical infrastructure, and limit the use of deep fakes—among other guardrails. While some tech advocates worry this bill will hinder innovation in the world’s premier tech hub, there are also concerns that it doesn’t do enough to address discrimination within AI models. 

The debate around California’s legislation attempts show that regulations alone aren’t enough to ensure future AI developments can’t be corrupted by a small minority of actors or a Big Tech cartel. This is why decentralized AI, alongside reasonable regulatory measures, provides humanity with the best path toward leveraging AI without fear of it being concentrated in the hands of the powerful. 

Decentralization = democratization

No one can predict where exactly AI will take us if left unchecked. Even if the worst doomsday scenarios don’t materialize, current AI developments are undemocratic, untrustworthy, and have been shown to violate existing privacy laws in places like the European Union.

To prevent AI developments from destabilizing society, the most impactful way to correct AI’s course is to enforce transparency within a decentralized environment using blockchain technology.

But the decentralized approach doesn’t just facilitate trust through transparency, it can also power innovation through greater collaboration, provide checks against mass surveillance and censorship, offer better network resilience, and scale more effectively by simply adding additional nodes to the network.

Imagine if blockchain’s immutable record existed during biblical times, we might have a bit more understanding and context to analyze and assess meaningful historical documents like the Dead Sea Scrolls. Using blockchain to allow wide access to archives while ensuring their historical data is authentic is a theme that has been widely opined.  

Centralized networks benefit from the low coordination costs between participants because most of them operate under a single, centralized entity. However, decentralized networks benefit from compensating for the higher costs of coordination. This means higher rewards for more granular market-based incentives across the compute, data, inference, and other layers of the AI stack.

Effectively decentralizing AI starts with reimagining the layers that comprise the AI stack. Every component from computing power, data, model training, fine-tuning, and inference must be built in a coordinated fashion with financial incentives to ensure quality and wide participation. This is where blockchain comes into play, facilitating monetization through decentralized ownership while ensuring transparent and secure open-source collaboration to counter Big Tech’s closed models.

Any regulatory action should focus on steering AI developments toward helping humanity reach new heights while enabling and encouraging AI competition. Establishing and fostering responsible and regulated AI is most efficient when done in a decentralized setting because its distribution of resources and control drastically reduces its corruptible potential — and this is the ultimate AI threat we want to evade.

At this point, society recognizes the value of AI as well as the multiple risks it offers. Going forward, AI development must strike a balance between enhancing efficiency while accounting for ethical and safety considerations.

Source: COINTELEGRAPH

Most advanced economies, including those of the European Union, used to welcome foreign direct investment (FDI) with open arms, with few questions asked. Not anymore: From the late 2010s onward, these countries started to adopt inward investment screening mechanisms for foreign transactions, and the pace of adoption has increased markedly in recent years. Since 2018, over half of the 38 countries of the Organisation for Economic Co-operation and Development (OECD), a multilateral organization serving to boost global trade, have introduced cross- or multi-sectoral investment screening mechanisms. A decade earlier, less than a third of them had done so.

Security worries are behind this trend. Generally, the screening measures empower national authorities to review, and potentially condition or prohibit, transactions that may threaten domestic interests specifically related to national security and public order.

Alongside FDI scrutiny measures introduced individually by EU member states, in 2019, the EU itself launched a union-wide FDI screening framework. Its purpose was to ensure coordination and cooperation, information sharing and a minimum level of transparency regarding the screening of foreign transactions anywhere in the bloc.

However, while the regulation proposed factors for member states to consider when establishing FDI screening mechanisms to uphold national security or public order, it did not mandate the introduction of fixed FDI screening everywhere. The result is a patchwork of different national investment screening regimes across the bloc. Moreover, several states do not operate any form of FDI screening at all.

The Commission asserts that ‘risks to security and public order’ may arise when investments transfer control and decision-making powers to non-EU entities.

This lack of uniformity has lately been of concern to the European Commission, which has warned that foreign investors could take advantage of loopholes in the bloc’s FDI screening coverage. Moreover, after the Covid-19 pandemic and the full-scale Russian invasion of Ukraine, the rise of the significance and application of FDI screening as a tool of public policy led to extensive changes in the relevant laws of individual EU states. This, in turn, gave rise to an increase in the divergence of regulatory standards within the bloc.

EU tightens inward investment screening

To address these disparities, the Commission has proposed new FDI screening regulations as part of its “strategic autonomy” initiatives. The new law, expected to take effect in 2026, is intended to enhance the efficiency and coordination of FDI screening across multiple jurisdictions. It envisions a more comprehensive approach, including EU-wide post-closing screening regimes, allowing member-state authorities to review and potentially block investments for up to 15 months following the closure of FDI screening proceedings.

The scope of scrutiny is also set to broaden. For instance, acquisitions by EU-based entities will be subject to review if the EU acquirer is controlled by a foreign (non-EU) investor. The Commission asserts that, “risks to security and public order” may arise when investments hand control and decision-making powers to non-EU entities, whether directly or through EU-based subsidiaries under foreign control.

This marks a substantive change from the current regulation, which only applies to directly-held foreign investments. However, it remains less stringent than some member states’ existing domestic laws, which already require FDI screening for EU companies with non-controlling minority foreign shareholders.

All the same, member states will need to align their national legislation with the minimum screening standards in the proposed EU-wide regulation. And given current geopolitical instability, it is improbable that states with more rigorous FDI screening regulations will relax their existing national regimes to match the EU’s proposed changes.

Enhancing European scrutiny of greenfield investments

In a significant change of focus, the new EU regulations target FDI in greenfield ventures, where a foreign investor or a foreign investor’s subsidiary in the EU sets up new production facilities within the bloc. The new measures mandate that member states incorporate greenfield investments into their respective screening processes, particularly those affecting sectors crucial for security or public order, as outlined in the draft regulation.

This will particularly affect Chinese FDI into the EU, which has predominantly taken the form of greenfield investments. Two sectors, retail and manufacturing, constituted more than 60 percent of Chinese greenfield projects into the single market in 2022. And although Chinese greenfield FDI constituted only 3.9 percent of all such investments into the bloc, it represented 90 percent of the EU’s high technology greenfield FDI in 2022, and 94 percent in 2023.

The two largest Chinese greenfield projects in Europe in 2022 were both in electric vehicle (EV) battery manufacturing, with investment totaling 8.3 billion euros. A further three large-scale investments also involved EVs and batteries, amounting to an additional combined capital outlay of 3.1 billion euros.

Considering the substantial value of Chinese investments in high-tech sectors, along with the associated geopolitical concerns, the EU is likely to intensify scrutiny on Chinese investments compared to those from other regions. The new greenfield investment rules appear weighed toward focusing on Chinese sources. As noted by Ropes & Gray, a firm specializing in inward investment, Chinese investors “need to be very committed and know they are in for enhanced scrutiny when investing in sensitive sectors.”

Outbound investment screening as well?

In a bid to further bolster European economic security, the Commission is also considering measures to address potential risks associated with outbound investments. It is likely that both the Commission and German federal government will model Europe’s new outbound control regime on the one recently introduced by the United States, which targets certain key advanced technologies, such as semiconductors, artificial intelligence and quantum computing. It may also include measures to restrict certain overseas investments and mandate reporting on all others.

Still, it remains to be seen whether the EU will proactively screen outbound investment as the U.S. does. Implementing such a control mechanism at the EU level would add a complex layer of regulation, potentially increasing costs for EU companies engaged in international mergers and acquisitions.

And while the EU’s FDI screening processes ostensibly apply universally, the political literature on the subject often frames these mechanisms as a reaction to increased Chinese investment in the single market. National security threats from Russia have similarly influenced the drive to tighten FDI rules.

Furthermore, in the wake of the Covid-19 pandemic, European governments have shown heightened resolve to prevent the sale of strategic domestic assets to foreign investors. In line with this trend and the recent tightening of inward FDI screening in the EU, international investors’ enthusiasm for what they previously considered to be one of the premier destinations for global capital, has been dampened.

A Commission report on FDI screening revealed the declining level of FDI into the EU contributed to a 140 billion-euro drop in global inward FDI flows in 2022, while non-EU FDI flows remained relatively stable.

This raises a critical question: Have the EU’s new FDI screening frameworks shifted from their intended role of safeguarding national security and public order to inadvertently fostering economic protectionism? As the EU treads this fine line, the balance between regulation and openness remains pivotal to its economic strategy. What, then, are the likely outcomes?

Source: GIS

YTD metals performance %

Source: LME, SGX, ING Research

China stimulus sparks metals rally

Late last month, Beijing released a slew of stimulus measures, its largest stimulus package since the Covid-19 pandemic, including interest-rate cuts and targeted support for the property sector, which sparked a rally across industrial metals. Iron ore was the standout surging to a five-month high, while copper reached $10,000/t after Beijing vowed to reach the country’s annual economic goals. The bullish momentum continued over the past week with the metals industry gathering in London for LME Week while Chinese markets were closed for the Golden Week holiday.

Industrial metals rally on China stimulus boost

Source: LME, SGX, ING Research

But post-holiday China briefing disappoints

The rally has now cooled after China’s mainland markets reopened this week after the week-long holiday and the anticipated briefing by China’s top economic planner, the National Development and Reform Commission, mostly disappointed, failing to deliver new pledges to boost government spending.

China, the world’s biggest consumer of metals, has been a drag on metals demand for over two years. A broad economic slowdown and, in particular, the crisis in the property sector has weighed on copper and other industrial metals. We have seen plenty of property support measures this year but so far they have failed to have a meaningful impact on metals demand.

We think that the recent stimulus measures still lack detail, and we struggle to find an additional demand growth driver for industrial metals in the measures announced so far.

Any sustained pick up in metals prices will depend on the strength and the speed of the rollout of the measures. We will look out for any potential investment into new infrastructure projects and into energy transition sectors. 

Our China economist believes that last month’s measures are a step in the right direction, especially as multiple measures have been announced together rather than spacing out individual piecemeal measures to a more limited effect. However, he continues to believe that there is still room for further easing in the months ahead, and if we see a large fiscal policy push as well, momentum could recover heading into the fourth quarter. 

In terms of the property market, which is crucial for metals demand, our China economist believes two things need to happen. First, we need to see prices stabilise if not recover. Second, we need to see excess housing inventories come down towards historical norms. Until then, the drag on growth will continue.

We believe the continued weakness in the sector remains the main downside risk to our outlook for industrial metals. We believe that until the market sees signs of a sustainable recovery and economic growth in China, we will struggle to see a long-term move higher for industrial metals.

The question for the markets now is whether this is the long-awaited turning point for the world’s largest consumer of metals and whether we will see more supportive policies being rolled out that could have a significant impact on metals demand. We think it might be too soon to tell and we have not changed our forecasts yet.

China new home prices fell in August at the fastest pace since 2014

Source: National Bureau of Statistics, ING Research

Downside risks persist

Although the macro conditions are starting to look brighter, and the Federal Reserve’s long-awaited rate cut has calmed sentiment, uncertainty surrounding the US presidential election is dampening risk appetite.

With geopolitical tensions lingering, a still uncertain recovery path for China's economic recovery, despite the recent stimulus boost, and rising protectionism, we remain cautious in the short-term on the industrial metals outlook.

However, we are more constructive from late 4Q and early 2025. We believe more certainty on US-China policy following the US elections and improving manufacturing sentiment amid central bank easing cycles should provide upside to industrial metals prices in the medium- to long-term.

According to the World Economic Forum, SEs generate a staggering US$2 trillion in revenue and are responsible for creating nearly 200 million jobs.

Even more striking is the fact that half of these enterprises are led by women, underscoring the pivotal role SEs play not only in driving economic growth but also in promoting gender equality and empowering communities across the world.

In Malaysia, the impact of social enterprises is equally vital, especially as we continue to rebuild and recover from the profound effects of the Covid-19 pandemic. The role of SEs in addressing socio-economic challenges has never been more urgent.

Malaysia has taken promising steps in this regard. Over the years, we’ve witnessed the growth of SEs supported by various corporate foundations and partnerships.

Organisations such as Shell Malaysia, Yayasan Hasanah, Yayasan Petronas, Yayasan Maybank and Yayasan Sime Darby, among others, have provided grants, capacity building programmes, and other crucial support to help SEs scale. These efforts have sought to complement government priorities by encouraging innovation and social impact, but much work remains to be done.

The number of social enterprises in Malaysia remains low compared to the sector’s potential. Despite this, we have shining examples like Sols Energy, PichaEats, Masala Wheels, Mereka and Epic Homes — enterprises that have not only demonstrated resilience but also made a tangible impact on the ground.

However, to realise the full potential of social entrepreneurship, there is a need for a more strategic and thoughtful approach to scale SEs across the country.

Efforts are not confined to the central region either. In East Malaysia, initiatives like the Sabah Creative Economy and Innovation Centre (Scenic) and Tabung Ekonomi Gagasan Anak Sarawak (Tegas) have emerged as key players in expanding the SE ecosystem, fostering innovation, and ensuring that the benefits of social entrepreneurship extend to all corners of the country. This is a crucial development—if social enterprises are to drive national transformation, they must be geographically inclusive, ensuring that both Peninsular and East Malaysia can benefit from the movement’s growth.

As Malaysia looks towards the future, Budget 2025 presents a critical opportunity for the government to solidify its commitment to fostering an inclusive and resilient social enterprise movement.

By creating a robust and enabling ecosystem, we can empower SEs to thrive, scale, and deliver sustained social and economic impact.

Policy and regulatory support

An enabling ecosystem begins with the right policies. While steps have been taken to offer accreditation and special financing, a more comprehensive regulatory framework is needed to guide the growth of SEs in Malaysia.

The government might consider establishing clear definitions, legal structures, and frameworks for SEs. This would not only enhance their credibility but also enable them to access resources more efficiently.

A legal definition is critical to ensure that support goes to businesses that are truly mission driven, with profits directed towards beneficiaries. Clear guidelines will not only help differentiate social enterprises from traditional businesses but also encourage and guide more businesses to adopt the SE model.

By providing a structured framework, businesses will be able to see the benefits of incorporating social and environmental missions into their operations, and be better equipped to align with the growing demand for purpose-driven enterprises.

Countries like the UK have led the way in this regard, creating a supportive legal environment for SEs to flourish. In the UK, social enterprises often operate under specific legal frameworks like Community Interest Companies (CICs), which ensure that they adhere to key principles. To qualify, these enterprises must generate at least 50% of their income from trading and reinvest at least 50% of any surplus (profit) back into the business or toward furthering their social or environmental mission.

This structure ensures that SEs remain focused on delivering long-term social impact rather than prioritising profit maximisation.

In Malaysia, social enterprises need similar recognition. By defining what constitutes a social enterprise in clear, legal terms, the government can create a stable foundation upon which SEs can grow.

Additionally, tax incentives for both social enterprises and investors in these businesses can spur greater investment into the sector, catalysing further growth.

Sustainable financing and investment opportunities

A key barrier to the growth of SEs is access to capital. While grants and special financing programmes from institutions like SME Bank and Yayasan Hasanah have been helpful, these efforts need to be scaled up and diversified. In addition to grants, SEs require sustainable financing mechanisms — impact investing, social bonds, and venture philanthropy are examples of innovative financing methods that have taken root globally.

Government-linked investment companies (GLICs) should be encouraged to support social enterprises through their corporate social responsibility (CSR) programmes or foundations, or by incorporating SEs into their investment portfolios.

By backing enterprises that prioritise both profit and purpose, GLICs can play a critical role in driving social and economic impact, fostering a more equitable and inclusive economy in Malaysia.

Human capital development

At the heart of any social enterprise is its people. For SEs to succeed, Malaysia needs to cultivate talents equipped with the skills and knowledge to navigate this complex, hybrid space that merges business acumen with social purpose. This requires a deliberate focus on education, training, and mentorship to empower individuals and ensure the growth and resilience of the sector.

The government, in collaboration with educational institutions and industry stakeholders, should develop targeted programs to build the capacity of future social entrepreneurs.

Offering scholarships, training, and mentorship opportunities specifically tailored for those interested in SEs will be essential in nurturing the next generation of leaders in this space.

Furthermore, partnerships between private sector corporations and social enterprises can provide SEs with the expertise, mentorship, and resources necessary to grow.

Programmes that facilitate secondments or skill-based volunteering can enable corporate employees to transfer their skills to SEs, creating a more dynamic exchange of knowledge and fostering innovation.

Market access and public procurement

Access to markets remains one of the biggest hurdles for social enterprises in the country. SEs are often smaller and have fewer resources, making it challenging to compete with larger, more established companies. The government can play a pivotal role in levelling the playing field by integrating SEs into public procurement processes.

By mandating that a certain percentage of government contracts be allocated to social enterprises, the government can provide SEs with a reliable stream of revenue and the opportunity to scale. This practice is already common in several European countries, where public procurement policies are used as a tool to promote social value creation.

For example, the UK's Public Services (Social Value) Act 2012 requires public authorities to consider the social, economic, and environmental benefits that suppliers can offer when awarding contracts. This allows social enterprises to highlight their contributions to community development, job creation, and environmental sustainability, giving them a competitive edge in the procurement process.

Additionally, public awareness campaigns that encourage consumers to support social enterprises could help create a more socially conscious market, driving demand for products and services that contribute to positive social and environmental outcomes.

Fostering a culture of innovation and social impact

Finally, a thriving social enterprise ecosystem requires a shift in culture—towards one that values innovation, collaboration, and social responsibility. The government, alongside private sector partners and civil society, should work to create platforms that encourage dialogue, experimentation, and collaboration among SEs, corporations and the wider public.

Initiatives such as Shell LiveWIRE Malaysia, Petronas SEEd.Lab, Biji-Biji's Social Enterprise Accelerator Malaysia (SEAM), and the Satu Creative Hasanah Impact Challenge are essential and should be scaled for wider impact. These programmes provide valuable platforms for innovation, mentorship, and collaboration, helping to nurture a culture of social entrepreneurship that can address the country’s most pressing challenges.

In Malaysia’s journey toward becoming a prosperous, inclusive nation, social enterprises are not just  participants—they are drivers of change. The movement toward social entrepreneurship reflects the values we hold dear, such as fairness, equity and the belief that economic growth should benefit all members of society.

Through Budget 2025, we have a unique opportunity to lay the foundation for an inclusive, resilient, and impactful social enterprise movement. It is a chance to create a future where businesses don’t just seek profit but purpose—where entrepreneurship is a tool for both economic success and social good.

Source: The edge markets