Economy

China is ready to throw Russia an economic lifeline as Vladimir Putin’s ties with the west deteriorate and Moscow is hit by snowballing sanctions over the crisis in Ukraine.Putin ordered the start of a military invasion of Ukraine on Thursday and demanded Kyiv’s army lay down its weapons, just a day after the west imposed new sanctions on Russia.US president Joe Biden said he would meet G7 counterparts on Thursday morning and would reveal further measures to punish Russia for the invasion.Financial analysts and geopolitical experts believed China would probably help Russia weather those sanctions, mostly through resource deals and lending by several state-owned banks, while seeking to avoid damage to its own economic and financial interests. “The level of Chinese support for Russian actions could be an influential factor in shaping an evolving crisis,” said Tom Rafferty, a Beijing-based analyst with the Economist Intelligence Unit. Since Russia concentrated 190,000 troops near the Ukraine border, Beijing has tried to strike a balance between Chinese president Xi Jinping’s backing of Putin and Beijing’s self-interest in the region’s stability.In the hours after the invasion started, Zhang Jun, China’s envoy to the UN, said the “door to a peaceful solution” was not yet fully shut and urged all parties to exercise restraint.However, a day earlier, Beijing reaffirmed its opposition to “all illegal unilateral sanctions”.“Since 2011, the US has imposed more than 100 sanctions on Russia,” Hua Chunying, a foreign ministry spokesperson, told reporters in Beijing.“However, have the US sanctions solved any problem? Is the world a better place because of those sanctions? Will the Ukraine issue resolve itself thanks to the US sanctions on Russia? Will European security be better guaranteed thanks to the US sanctions on Russia?” Hua also labelled the US the “culprit” in the Ukraine crisis, “heightening tensions, creating panic and even hyping up the possibility of warfare”.Russia’s Gazprom and China’s CNPC signed a 25-year deal this month on a new gas supply route © Andrey Rudakov/BloombergBeijing has a record of providing economic support to Moscow during Putin’s stand-offs with the west, including in the wake of the Russian annexation of Crimea in early 2014. “Unless the west puts a really tangible cost on China, China will still help Russia behind the scenes,” said Jakub Jakobowski, a senior fellow with the China programme at the Eastern Studies Centre in Warsaw. China’s big policy banks, which are distinct from its state-backed commercial lenders, are expected to be critical conduits for economic support.Russia is by far Beijing’s biggest recipient of loans from official sector institutions, totalling as much as $151bn between 2000 and 2017, according to AidData, an international research lab at the College of William & Mary in Virginia. Those included $86bn of non-concessional and semi-concessional debt from China’s state-owned policy banks and commercial banks — mostly loans collateralised against future receipts from oil exports.China Development Bank and the Export-Import Bank of China, in particular, are believed to be insulated from western penalties by a lack of US business interests. “They have less exposure to the dollar system and more options to finance things in different or innovative ways which are less vulnerable to sanctions measures,” said Rafferty. “For the commercial banks . . . they would still be very mindful of the impact it could have on their operations in other markets and their access to the US dollar system.”Chinese policy banks’ main lending activities are in the “global south”, Jakobowski said. “They have less worry about getting hit for violating US sanctions,” he added. “China will likely again lend money to Russia following the state-to-state sanctions-proof model.”Since the annexation of Crimea in 2014, Beijing’s ability to soften the blow from sanctions has been strengthened as the two countries have steadily reduced the use of the dollar in their bilateral trade. Sino-Russian economic ties have also firmed, with bilateral trade expected to have hit a record $140bn in 2021, reflecting consistent double-digit annual growth. The success of Russian efforts to take the sting out of sanctions by boosting settlements in other currencies was reflected in a series of recent energy deals with China. These arrangements skirted the dollar-based financial system with loans and credit in renminbi. When Putin met Xi in Beijing this month, Russia’s Gazprom and China’s CNPC signed a 25-year deal on a new gas supply route, the Power of Siberia pipeline, which launched in 2019 and is expected to reach full capacity in 2025. Rosneft, Russia’s top crude producer and its top oil exporter to China, accounting for 7 per cent of the country’s total annual demand, this month agreed with CNPC to supply 100mn tonnes of oil to China through Kazakhstan over 10 years. Russia and China are also working on a third gas pipeline project via Mongolia. Some analysts said a deal could be signed by the end of the year.Last week, Gazprom Neft announced it was switching all settlement for fuelling Russian planes in China to renminbi, the first Russian company to do so.

Despite those deals, experts noted that there was still a sizeable chunk of Russian trade in the conventional dollar system. During the first nine months of 2021, Russia and China conducted 8.7 per cent of their trade in roubles and 7.1 per cent in other currencies, according to the Russian central bank data. Dollars and euros accounted for 36.6 per cent and 47.6 per cent of Russia-China trade, respectively.The US is also exploring the use of export controls to cut off computer chip supplies to Russia, in a similar way to how it targeted Huawei, the Chinese technology group, according to government officials in Taiwan and Japan and US diplomats in Asia. The move could cripple Russia’s supply of components vital for industries ranging from telecoms to oil exploration.“We have been in discussions with the US about export controls,” said a senior Taiwanese government official, “and we have put together an inventory of potential products that might be relevant in the context of export controls here, including military and dual-use products, basic infrastructure, technology and strategic supplies.” Additional reporting by Max Seddon and Nastassia Astrasheuskaya in Moscow and Maiqi Ding in Beijing More

Your browser does not support playing this file but you can still download the MP3 file to play locally.The FT’s Max Seddon, reports from Moscow about Vladimir Putin’s order to launch a full-scale invasion into Ukraine, and the FT’s economics editor, Chris Giles, explains what a Russian invasion might do to the global economy. Mentioned in this podcasVladimir Putin orders start of ‘military operation’ in eastern UkraineUkraine crisis: Sanctions and high energy prices pose threat to global economyRussia-Ukraine webinar: What Next? The FT News Briefing is produced by Fiona Symon and Marc Filippino. The show’s editor is Jess Smith. Additional help by Peter Barber and Gavin Kallmann. The show’s theme song is by Metaphor Music. Topher Forhecz is the FT’s executive producer. The FT’s global head of audio is Cheryl Brumley. Read a transcript of this episode on FT.com See acast.com/privacy for privacy and opt-out information.Transcripts are not currently available for all podcasts, view our accessibility guide. More

Each week I host financial wellbeing webinars for employees of UK organisations, where I answer money-related questions. Recently, more people are asking how to cope with rises in the cost of living.Rising prices will put severe financial strain on many lower-income households. But in the first 18 months of the pandemic, some households saw their finances improve, with non-mortgage debt falling, savings increasing and fewer opportunities to spend.During this period, many people I spoke to were surprised to find how much money they could save (or not borrow) when they could only spend on life’s essentials. As pandemic restrictions end and living costs rise, it is worth considering more ways to control spending — by choice rather than necessity. In my online sessions, I run polls to give me insights into how people manage their finances and to help attendees see how they compare with others. One of the most revealing questions is “How do you manage your day-to-day spending?”. It turns out the majority of attendees have no real plan for spending their money on a daily basis. The human brain is wired to favour short-term rewards, which invariably leads to short-term thinking and spending. And the fact that few schools or parents teach personal budgeting skills to children and young people means it’s no surprise that many people end up living from payday to payday, have little or no savings and accumulate expensive consumer debt. Learning to manage daily spending is seen as an optional extra, despite having such a profound impact on personal wellbeing.Controlling spending is not just a skill for low or average earners. Many years ago, when I worked as a personal financial planner, I had to stress to one client with a £10mn portfolio that he would eventually go broke if he didn’t rein in his extravagant lifestyle. If you can’t manage your expenditure you’ll never build financial resilience, no matter how much you earn. High earners also need to learn budgeting skills to support their estate planning. If you spend less than your income, you can gift that income away with confidence. Such gifts fall out of your estate immediately for inheritance tax purposes, providing you can produce evidence that they don’t adversely affect your standard of living.Yet some personality types will actively resist controlling their spending because it can seem like a reduction in their sense of control and freedom. Others might feel it will expose an addiction or other wasteful spending. Others think budgeting would cause conflicts with their partner. But a significant reason why many resist learning to control spending is that they would rather bumble along, react to events and indulge consumerist impulses than grab the budgeting bull by the horns.In practice, I advise people to avoid the word “budget” because, for many, it can seem too much like hard work. Instead, I teach people to develop a Smart Spending Plan, which involves deciding where you want your money to go before receiving it, based on three types of spending: essential, future and fun.As income comes in, it needs to be partitioned into different accounts to create some structure and make it easy to see how much is available for the various spending priorities. Here are my top tips for being a smart spender:1 Get to the truth of where your money goesLook at your bank statements over the past six months to gain clarity on your spending, including irregular items like holidays, car servicing and house maintenance. Most people find a big difference between their perception and reality.2 Decide where you want your money to goYou must work only with the money you have now, not future bonuses, pay rises or other anticipated income. Every pound needs to be allocated to a purpose. Money coming in must equal money going out.3 Adopt the CEO approach to spendingCEO stands for “cut, earn and optimise”. It means cutting out unnecessary spending, such as unwanted subscriptions, insurance policies or cars funded on finance. It means earning more through overtime, or selling unwanted possessions online. And make sure you are getting any state benefits to which you are entitled. Finally, you need to optimise the essential spending you can’t cut. Make sure your mortgage is competitive, haggle with your insurance company and change your mobile phone to a cheaper SIM-only deal.4 Aim for progress, not perfectionYour spending plan is not a straitjacket, and things won’t go according to plan. But keep your focus on the progress you make, not the gap between your reality and your ideal.The impending squeeze on incomes will be hard for some households to navigate. But difficult times often cause us to face up to things we have been putting off. And as my experience shows, many people have been putting off getting to grips with their daily spending. Now is the time to put that right. Jason Butler is an expert on financial wellbeing and presenter of the “Real Money Stories” podcast. Twitter: @jbthewealthman More

The move by President Biden came as administration officials warned that a Russian military assault on Ukraine could be imminent.WASHINGTON — President Biden said on Wednesday that he would issue economic sanctions on the company behind a new natural gas pipeline between Russia and Germany, the latest in a series of penalties that the White House has promised will continue as Russia escalates hostilities against Ukraine.The move by Mr. Biden came hours before President Vladimir V. Putin of Russia began a military operation in Ukraine that administration officials had warned could be a full-scale assault. But it was also a reversal for the president after he waived sanctions against the pipeline, known as Nord Stream 2, last year despite calls from both Democrats and Republicans to halt the energy project.“These steps are another piece of our initial tranche of sanctions in response to Russia’s actions in Ukraine,” Mr. Biden said in a statement on Wednesday before the Russian military operation. “As I have made clear, we will not hesitate to take further steps if Russia continues to escalate.”Administration officials said Mr. Biden decided it was necessary to move forward with the penalties after Chancellor Olaf Scholz of Germany announced on Tuesday that he would suspend the certification of the pipeline in response to Moscow ordering Russian troops to cross the border into separatist regions in eastern Ukraine that the Kremlin has recognized as independent states.The new sanctions are against a subsidiary of Gazprom, a Russian company that is controlled by the Kremlin, and they are part of a unified effort by NATO allies meant to stop what Mr. Biden has described as “the beginning of a Russian invasion of Ukraine.”On Wednesday, the European Union also announced new sanctions on Russia’s defense minister, Mr. Putin’s chief of staff and high-profile Russians from the media world. On Tuesday, the Biden administration imposed sanctions on two Russian banks and a handful of the country’s elites and cut off the ability of Russia to raise financing in Western markets. The administration said it was preserving the possibility of even greater sanctions if Mr. Putin escalates the conflict by trying to seize more territory in Ukraine — or even the entire country.The White House did not issue the sanctions against the company behind the gas pipeline earlier because it was unclear whether those measures would halt the project, which was already 90 percent completed when Mr. Biden took office, according to Ned Price, a spokesman for the State Department.President Biden meeting with Mr. Scholz in the Oval Office this month. The Nord Stream 2 pipeline has caused years of tension between the United States and Germany.Al Drago for The New York TimesBut on Tuesday, Mr. Scholz gave Mr. Biden an opening when he halted the certification of the project.“So by acting together with the Germans,” Mr. Price said, “we have ensured that this is an $11 billion prize investment that is now a hunk of steel sitting at the bottom of the sea.”Jen Psaki, the White House press secretary, had described the action against the pipeline as part of an attempt to stop an armed conflict.“What we’re trying to do is prevent a war, prevent devastation on the Ukrainian people,” Ms. Psaki said. Referring to Mr. Putin, she said, “We’re going to continue to make clear that if he continues to escalate, we will as well.”But the sanctions apparently did not discourage Mr. Putin from advancing in Ukraine, as he announced a mission to “demilitarize” the country early Thursday local time, and explosions were reported from Kyiv, the capital, and other cities.The Nord Stream 2 pipeline has caused years of tension between Germany and the United States. Germany has long been hesitant to endanger its energy trade with Russia; Mr. Scholz last month dodged questions of whether he agreed with Mr. Biden’s assertion that the project would be stopped if Russia invaded Ukraine.Still, Mr. Biden’s move was welcomed by Democrats and Republicans who had for a year called for him to quickly punish Russia and halt the pipeline.Senator Ted Cruz, Republican of Texas, on Wednesday lifted his objections to 17 of Mr. Biden’s nominees, many of them for State Department positions, now that the president has announced sanctions on the company behind the pipeline.Mr. Cruz had used Senate procedure to slow down the pace at which the chamber could approve Mr. Biden’s nominations, demanding that the administration impose sanctions on Nord Stream 2.“Allowing Putin’s Nord Stream 2 to come online would have created multiple cascading and acute security crises for the United States and our European allies for generations to come,” Mr. Cruz said.Senator Rob Portman, Republican of Ohio, said that the initial sanctions announced by the administration this week were “an important first step,” but that they did not “go far enough.”“To create an effective deterrent, tougher sanctions must be expanded to other financial institutions and export controls must be implemented,” Mr. Portman said.Mr. Biden had previously said the pipeline was too advanced to stop. “Nord Stream is 99 percent finished,” he said last year. “The idea that anything was going to be said or done that was going to stop it is not possible.” The construction of the pipeline was completed last year but the project’s approval process had been stalled.Daleep Singh, a deputy national security adviser, said on Tuesday that shutting down the project would sacrifice “what would have been a cash cow for Russia’s coffers.”“It’s not just about the money,” Mr. Singh said. “This decision will relieve Russia’s geostrategic chokehold over Europe through its supply of gas, and it’s a major turning point in the world’s energy independence from Russia.”On Wednesday, Secretary of State Antony J. Blinken and Wendy R. Sherman, the deputy secretary of state, spoke with top European diplomats to coordinate economic sanctions against Russia, the State Department said.Catie Edmondson More

The National Labor Relations Board dealt a blow to Starbucks’s legal strategy in response to a growing union campaign on Wednesday, rejecting the company’s argument that workers seeking to unionize in a geographic area must vote in a single union election.In a ruling involving an election in Mesa, Ariz., the board noted the longstanding presumption that a single store is an appropriate unit for a vote — as union supporters have insisted.Starbucks workers at more than 100 stores nationwide have filed for union elections and workers at two stores in Buffalo have already unionized.Unions typically prefer smaller elections, which tend to increase their chances of winning, albeit on a smaller scale. Workers United, the union seeking to represent Starbucks employees, has complained that Starbucks has repeatedly resisted store-by-store elections despite gaining little traction on the issue as a way to delay votes and stop the union’s momentum.Starbucks has argued that the elections should be marketwide because employees can work at multiple locations and because the stores in a market are managed as a relatively cohesive unit. It has made this case in its requests to appeal labor board decisions ordering elections on a store-by-store basis in Buffalo and Mesa, and in other filings related to union elections around the country.Before Wednesday’s ruling, the board had been unmoved by the company’s argument in Buffalo as well. But unlike the request for an appeal in Buffalo, which the board rejected on an ad hoc basis, the action in the Arizona case sets a binding precedent and will most likely make it more difficult for Starbucks to successfully raise such objections in the future.Nonetheless, the company indicated it would still press the issue. “Our position since the beginning has been that all partners in a market or district deserve the right to vote on a decision that will impact them,” Reggie Borges, a Starbucks spokesman, said in a statement, using the company’s term for its employees. “We will continue to respect the N.L.R.B.’s process and advocate for our partners’ ability to make their voices heard.”Workers in Mesa and at three Buffalo-area locations have voted in store-by-store elections, but the board postponed those vote counts while resolving Starbucks’s appeals. In the short term, the board decision means that a vote count at a Starbucks store in Mesa can go forward after being postponed last week.In a statement Wednesday, the union criticized both Starbucks and the labor board for the delays in counting ballots. “Partners are confident in our ability to stand strong, but justice delayed is justice denied, and we will continue to push for our right to organize without delay,” the statement said. More

Biden administration officials have warned Russia that it could face further restrictions on technology that is critical to its economy and military.The Biden administration warned on Wednesday that it had prepared additional measures aimed at cutting off Russia from advanced technology critical to its economy and military in the event of further aggression by President Vladimir V. Putin toward Ukraine.The United States on Tuesday announced sanctions on two Russian banks and curbs on Russia’s sovereign debt, effectively isolating the country from Western financing. President Biden also announced further sanctions on the Nord Stream 2 natural gas pipeline and its corporate officers.Export controls could ratchet up the pressure on Russia by preventing the country from obtaining semiconductors and other advanced technology used to power Russia’s aerospace, military and tech industries.“If he chooses to invade, what we’re telling him very directly is that we’re going to cut that off, we’re going to cut him off from Western technology that’s critical to advancing his military, cut him off from Western financial resources that will be critical to feeding his economy and also to enriching himself,” Wally Adeyemo, the deputy Treasury secretary, said on CNBC on Wednesday.The Biden administration has not clarified what specific restrictions it would impose on the products Russia imports. But the actions and statements of administration officials suggest they could repurpose a novel measure that the Trump administration turned to to cripple the business of Huawei, a Chinese telecom company, in 2020, export control specialists said.The tool, called the foreign direct product rule, allows U.S. officials to block more than just exports from the United States to Russia, which totaled just $4.9 billion in 2020. It also allows American officials to restrict exports to Russia from any country in the world if they use American technology, including software or machinery.Companies can seek licenses to sidestep the restrictions but they are likely to be denied.Daleep Singh, the deputy national security adviser, said on Friday that the administration was “converging on the final package” of sanctions and export controls, and suggested that those controls would target tech products.“We produce the most sophisticated technological inputs across a range of foundational technologies — A.I., quantum, biotech, hypersonic flight, robotics,” Mr. Singh said. “As we and our partners move in lock step to deny these critical technology inputs to Russia’s economy, Putin’s desire to diversify outside of oil and gas — which is two-thirds of his export revenue, half of his budget revenues — that will be denied.”“He’s spoken many times about a desire for an aerospace sector, a defense sector, an I.T. sector,” Mr. Singh said of Mr. Putin. “Without these critical technology inputs, there is no path to realizing those ambitions.”Kevin Wolf, a partner in international trade at Akin Gump who worked in export controls under the Obama administration, said the White House could tailor its use of export controls to target certain strategic sectors, for example companies in the aerospace or maritime industry, while bypassing products used by the Russian populace, like washing machines.“They’re making it clear they’re not trying to take action that harms ordinary Russians,” Mr. Wolf said.Andy Shoyer, co-lead of global arbitration, trade and advocacy for Sidley Austin, said the restrictions appeared likely to focus on semiconductors and semiconductor equipment. The novel export controls that the United States wielded against Huawei have a powerful reach when it comes to semiconductors, since even chips made abroad are mostly manufactured and tested using machinery based on American designs, he said.“It’s not just what’s physically exported from the U.S.,” Mr. Shoyer said. “It could encompass a substantial amount of production, because so much of the semiconductor industry relies on U.S. technology.”The global semiconductor industry, which has been roiled by shortages and supply chain disruptions throughout the pandemic, could face more disruptions given Ukraine’s role in the semiconductor supply chain.The Ukraine Crisis’s Effect on the Global EconomyCard 1 of 6A rising concern. More

Russia’s threatened invasion of Ukraine could have economic repercussions globally and in the United States, ramping up uncertainty, roiling commodity markets and potentially pushing up inflation as gas and food prices rise around the world.Russia is a major producer of oil and natural gas, and the brewing geopolitical conflict has sent prices of both sharply higher in recent weeks. It is also the world’s largest wheat exporter, and is a major food supplier to Europe.The United States imports relatively little directly from Russia, but a commodities crunch caused by a conflict could have knock-on effects that at least temporarily drive up prices for raw materials and finished goods when much of the world, including the United States, is experiencing rapid inflation.Global unrest could also spook American consumers, prompting them to cut back on spending and other economic activity. If the slowdown were to become severe, it could make it harder for the Federal Reserve, which is planning to raise interest rates in March, to decide how quickly and how aggressively to increase borrowing costs. Central bankers noted in minutes from their most recent meeting that geopolitical risks “could cause increases in global energy prices or exacerbate global supply shortages,” but also that they were a risk to the outlook for growth.The magnitude of the potential economic fallout is unclear, because the scope and scale of the conflict remain anything but certain. But a foreign conflict could further delay a return to normalcy after two years in which the coronavirus pandemic has buffeted both the global and U.S. economies. Tension between Russia and Ukraine is escalating when American consumers are already contending with quickly rising prices, businesses are trying to navigate roiled supply chains and people report feeling pessimistic about their financial outlooks despite strong economic growth.“The level of economic uncertainty is going to rise, which is going to be negative for households and firms,” said Maurice Obstfeld, a senior fellow at the Peterson Institute for International Economics. He noted that the effect would be felt most acutely in Europe and to a lesser degree in the United States.A major and immediate economic implication of a showdown in Eastern Europe ties back to oil and gas. Russia produces 10 million barrels of oil a day, roughly 10 percent of global demand, and is Europe’s largest supplier of natural gas, which is used to fuel power plants and provide heat to homes and businesses.The United States imports comparatively little Russian oil, but energy commodity markets are global, meaning a change in prices in one part of the world influences how much people pay for energy elsewhere.It is unclear how much a conflict would push up prices, but energy markets have already been jittery — and fuel prices have risen sharply — on the prospect of an invasion.If oil increases to $120 per barrel by the end of February, past the $95 mark it hovered around last week, inflation as measured by the Consumer Price Index could climb close to 9 percent in the next couple months, instead of a currently projected peak of a little below 8 percent, said Alan Detmeister, an economist at UBS who formerly led the prices and wages section at the Fed.“It becomes a question of: How long do oil prices, natural gas wholesale prices stay elevated?” he said. “That’s anybody’s guess.”The $120-a-barrel mark for oil is a reasonable estimate of how high prices could go, said Patrick De Haan, head of petroleum analysis at GasBuddy. That would translate to roughly $4 per gallon at the pump on average, he said. It might be difficult to determine how much of the change in energy prices is attributable to the budding conflict. Omair Sharif at Inflation Insights noted that oil and gas prices had already been going up this year.“I don’t know when you want to start the clock on Ukraine becoming a major headline,” Mr. Sharif said. Plus, from an American inflation perspective, how much the conflict matters “all depends on how much the United States gets involved.”Oil may be the major story when it comes to the inflationary effects of a Russian conflict, but it is not the only one. Ukraine is also a significant producer of uranium, titanium, iron ore, steel and ammonia, and a major source of Europe’s arable land.Trucks loaded with wheat at the port. Russia and Ukraine together make up nearly 30 percent of global wheat exports.Brendan Hoffman for The New York TimesChristian Bogmans, an economist at the International Monetary Fund, said a conflict in Ukraine could further inflate global food prices, which were set to stabilize after skyrocketing last year.Russia and Ukraine together are responsible for nearly 30 percent of global wheat exports, while Ukraine alone accounts for more than 15 percent of global corn exports, he said. And many of Ukraine’s growing regions for wheat and corn are near the Russian border.The rising price of gas and fertilizer, as well as droughts and adverse weather in some regions, like the Dakotas, had already helped to push up the global price of wheat and other commodities. Ukraine is also a significant producer of barley and vegetable oil, which goes into many packaged foods.“In case of a conflict, production might be interrupted, and shipping may be affected as well,” Mr. Bogmans said. If other countries impose sanctions on Russian food items, that could further limit global supplies and inflate prices, he said.But because food costs make up a small portion of inflation, that may not matter as much to overall price data, Mr. Detmeister at UBS said. It is also hard to guess exactly how import prices would shape up because of the potential for currency movements.The Ukraine Crisis’s Effect on the Global EconomyCard 1 of 6A rising concern. More

(Reuters) -Facebook-owner Meta is working on artificial intelligence research to generate worlds through speech, improve how people chat to voice assistants and translate between languages, CEO Mark Zuckerberg said on Wednesday, as he sketched out key steps to building the metaverse. Zuckerberg is betting that the metaverse, a futuristic idea of virtual environments where users can work, socialize and play, will be the successor to the mobile internet. “The key to unlocking a lot of these advances is AI,” he said, speaking at the company’s live-streamed “Inside the Lab” event. Zuckerberg said Meta was working on a new class of generative AI models that will allow people to describe a world and generate aspects of it. In a prerecorded demo, Zuckerberg showcased an AI concept called Builder Bot, where he appeared as a legless 3D avatar on an island and gave speech commands to create a beach and then add clouds, trees and even a picnic blanket.”As we advance this technology further, you’ll be able to create nuanced worlds to explore and share experiences with others, with just your voice,” said Zuckerberg. He did not set a timeline for these advancements or give more details on how Builder Bot works.He said Meta was working on AI research to allow people to have more natural conversations with voice assistants, a step towards how people will communicate with AI in the metaverse. He said the company’s Project CAIRaoke was “a fully end-to-end neural model for building on-device assistants.” A demonstration of the Project CAIRaoke tech showed a family using it to help cook a stew, with the voice assistant chiming in to warn that salt had already been added to the pot. The assistant also noticed they were running low on salt and ordered more.Meta said it was using the model within its video-calling Portal device and aimed to integrate it into devices with augmented reality (AR) and virtual reality (VR). In an interview with Reuters, Meta’s vice president for AI Jérôme Pesenti said it was tightly restricting the responses of its new CAIRaoke-based assistant until it could ensure that the system did not generate offensive language.”These language models are very powerful … so we are making a lot of effort to be able to control them,” said Pesenti.Zuckerberg also announced that Meta was working on a universal speech translator, aiming to provide instant speech-to-speech translation across all languages. The company previously set a goal for its AI system to translate all written languages.The social media company, which recently lost a third of its market value after a dismal earnings report, has invested heavily in its new focus on building the metaverse and changed its name to reflect this ambition. This month Meta reported a 2021 net loss of $10.2 billion from its Reality Labs, the company’s augmented and virtual reality business.DIFFERENT BEAST Meta is exploring how artificial intelligence can be used to moderate content and activity in the metaverse, its AI head Pesenti told Reuters.”We use a lot of AI for moderation on our main platforms … the metaverse is a bit of a different beast, it’s a lot more real-time,” said Pesenti, who said this was “evolving work” and that Meta was still figuring out the policies for metaverse activity.At the AI event, Zuckerberg said Meta was preparing for how AI could interpret and predict the types of interactions that would occur in the metaverse, by working on “self-supervised learning” – where AI is given raw data rather than being trained on lots of labeled data.Zuckerberg said Meta was also working on egocentric data, which involves seeing worlds from a first-person perspective. He said it had brought together a global consortium of 13 universities and labs to work on the largest ever egocentric dataset, called Ego4D. Meta also said it would expand free education initiatives aimed at bringing more racial minorities into tech, which researchers say is critical to create AI systems free of bias. About 80% of data analytics and AI executives identify as men and 65% as white, according to a recent survey across the United States and Europe by recruiter Heidrick & Struggles (NASDAQ:HSII). In a nod toward transparency, Meta plans to make open source the recommendations library TorchRec that is uses to personalize products like Facebook (NASDAQ:FB)’s news feed, said Pesenti in another event session. The company also will publish a feed ranking prototype to show how its algorithms prioritize which content it displays to users on Instagram, he said. Some of the projects Meta announced on Wednesday, such as Project CAIRaoke and the algorithm transparency effort, follow similar innovations announced in recent years by rivals such as Alphabet (NASDAQ:GOOGL) Inc’s Google.Meta also recently announced its research team has built a new artificial intelligence supercomputer that it thinks will be the fastest in the world when completed in mid-2022. More