Energy

Gov. Arnold Schwarzenegger has approved two major initiatives that will require utilities to pay consumers for generating extra power and will boost the payoff for certain solar facilities.

Homes, businesses and schools that have solar panels or wind turbines previously had no financial incentive to use less electricity than they generated. But AB 920, written by Assemblyman Jared Huffman (D-San Rafael), will encourage efficiency, supporters say.

SB 32, by state Sen. Gloria Negrete McLeod (D-Chino), requires utilities to purchase solar electricity from facilities that produce up to three megawatts and could increase installations on unused spaces such as warehouse roofs. The old limit was 1.5 megawatts.

The two bills will go into effect Jan. 1. Schwarzenegger signed them late Sunday, the last day to act on bills from this year’s legislative session.

Under AB 920, the state Public Utilities Commission will set a rate for utilities to compensate customers whose solar or wind systems produce more power than they use in a year. Under California’s current law, customers are not paid for any surplus electricity they feed back into the grid.

The state requires that when a consumer installs a solar power system, it be the right size to produce only enough power necessary for on-site use. Rebates from the California Solar Initiative, overseen by the utilities commission, discourage anything larger. So customers who later reduce their energy consumption often end up underutilizing their solar panels.

“The current system instills a perverse incentive for people to waste their solar electricity just so they don’t give it away for free to the utilities,” said Bernadette Del Chiaro, a clean energy advocate with Environment California, which sponsored the bill.

The new law could boost sales of photovoltaics, especially in regions with sunny summers. Homes that use less power than they did when their solar panels were installed — such as those that add energy-efficient appliances, insulation or weatherproofing — and those with children who have moved out can also benefit.

“This bill applies to individual homeowners as well as small businesses, farms, wineries, schools and even affordable housing developments,” Huffman said in a statement.

Customers can either receive a check for the extra energy or have credit rolled forward on their electricity bills. Experts, however, said they should expect little profit.

SB 32, meanwhile, could spark more interest in commercial rooftop systems. The law expands an existing program to include municipal utilities, which now must purchase solar power at a set rate until they reach their portion of a statewide 750-megawatt cap. The limit was previously set at 500 megawatts.

The utilities commission will set the rate, which will be higher than market price after incorporating environmental compliance costs and other benefits, said Sue Kateley, executive director of the California Solar Energy Industries Assn., which sponsored the bill.

Between the sweeping solar installations in the desert and the small-scale ones on homes, she said, there had been a category of properties that had plenty of space but didn’t use enough power to justify setting up huge solar panels.

But now, owners of large storage units and similar low-energy facilities will be able to install solar power systems and sell the extra electricity back to the utilities, a program known as a feed-in tariff.

The program took cues from countries such as Germany — where, some in the industry have complained, a similar tariff format stimulated the market so much that prices of solar energy shot too high. Other critics are worried that the tariff could be too low to interest investors.

“We didn’t want to replicate the German model, which was a social movement to create an industry,” Kateley said. “In California, we already had an industry, but we wanted to fill a market gap. And within the community, it’s really exciting because this law will create local jobs.”

In a note to the state Senate on Sunday, Schwarzenegger encouraged the utilities commission to continue investigating an expanded tariff for small to medium-size producers of renewable energy.

“In order to meet our greenhouse gas emission reduction goals and a Renewable Portfolio Standard of 33% by 2020, we will need to use all the tools available under our existing programs,” he said.

But Schwarzenegger vetoed a slate of bills — including SB 14 and AB 64 — that would have required the state to rely on renewable resources for at least one-third of its electricity. He has issued an executive order to meet the 33% goal using a different plan and supports efforts to create 1 million solar roofs by 2018.

Assemblyman Paul Krekorian (D-Los Angeles), chairman of a renewable energy committee, called the vetoes a dangerous setback. The bills, Krekorian said, would have created “green” jobs and steadied price volatility while cutting market manipulation from solar hubs outside of California. He said the vetoes would sour developers to the California market, leading them elsewhere.

“If we don’t get started now,” he said, “our opportunities to complete projects are going to be missed.”

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GOFFSTOWN, N.H. — In their last joint appearance before Tuesday’s high-stakes New Hampshire primary, the five major Democratic presidential candidates Sunday coasted through a generally desultory debate enlivened only by attacks on former Massachusetts Sen. Paul E. Tsongas for his support of nuclear power.

Tsongas, who leads in state polls, repeatedly came under attack for his staunch backing of nuclear power–a controversial position in a state where many Democratic activists have long opposed the Seabrook nuclear power plant. Each of Tsongas’ four rivals said they would decrease the nation’s reliance on nuclear energy.

“We’re not all trying to gang up on you, we’re not trying to say you’re wrong all the time,” Nebraska Sen. Bob Kerrey said to Tsongas at one point. “But on this particular issue I think you are. . . . Nuclear power, it seems to me, is fatally flawed.”

The focus on nuclear power–an issue that until recently has played virtually no role in the campaign–underlined the shift in Tsongas’ position from a long-shot who had been gently patronized to a front-runner worthy of pummeling. But other than the criticism of his energy policy–an issue that has not been high on the list of voter concerns here in recent years–Tsongas ran this last gantlet before the vote virtually unscathed.

Early in the debate, former California Gov. Edmund G. (Jerry) Brown Jr.–who later grilled Tsongas most aggressively on his support for nuclear power–even embraced him as a fellow outsider committed to “the politics of the future” as compared to the three current officeholders in the race.

Brown then mildly distanced himself from Tsongas, saying the former senator “represents a more conservative, business-oriented view of the future.”

In fact, the tone of the debate was strikingly low-key, with all of the candidates focusing more of their fire on President Bush than their rivals. Tsongas took the lead, employing the front-runner strategy used earlier by Arkansas Gov. Bill Clinton. At every opportunity Tsongas stressed his agreements with his rivals and his differences with Bush.

In the debate, sponsored by Cable News Network and the League of Women Voters, the candidates were hampered by a format so disjointed and at times unstructured that twice Clinton felt compelled to suggest questions to moderator Bernard Shaw.

After weeks of focusing on the bread-and-butter concerns of voters in this economically ravaged state, the candidates Sunday found themselves exploring international population control, the destruction of the rain forests, utility pricing reform and whether the nation needs a better class of light bulb.

In this alternately esoteric and disengaged atmosphere, the only energy was generated by the issue of nuclear power.

One by one, each of Tsongas’ rivals insisted they would reduce reliance on nuclear power. Harkin declared that a program “of developing solar . . . for the future” would allow the nation to avoid “going to the nuclear option that Paul Tsongas wants to move to.”

Brown said he would move to phase out all nuclear power plants over the next decade.

Clinton said: “I do not favor anything that will accelerate the building of nuclear power plants. If you have major incentives to the utilities to engage in conservation, if you have a major attempt to convert to natural gas wherever you can. . . . I do not think you are going to see a need for new nuclear power plants.”

Tsongas–after characterizing nuclear power as part of “the third tier” of his preferred energy options for the country–argued in response to the persistent jabs that a reduction in reliance on nuclear power would require greater use of fossil fuels, raising the threat of global warming through the greenhouse effect.

“If you take out all of your nuclear power plants by definition, you are going to have more fossil fuel burning and add to the greenhouse effect,” Tsongas said. “I take the position that the threat long term is global warming.”

Though Tsongas forcefully held his ground, he bristled under the attacks–which were among the most pointed he has endured. “If I could, I would like . . . to characterize my positions myself and not have others do it,” he said.

After the debate, aides to the other candidates maintained that Tsongas had been weakened by the focus on an issue. “I don’t think his position has been laid out before as it was here tonight, so I think it will hurt him,” said Frank Greer, Clinton’s media adviser.

Thaleia Schlesinger, Tsongas’ sister, countered: “People understand his position was based on his fear of global warming.”

When not arguing over whether to split atoms for energy, the candidates managed to make some points about the economy. To a greater degree than usual, Tsongas declared that his approach–which relies heavily on increasing capital incentives for business and rejects a tax cut for the middle class–offered struggle as well as reward.

“There are two roads,” he said in closing remarks. “One is easy, one is comfortable, but it is downhill. The other is the road to economic prosperity. . . . That road is steeper and it’s harder, but it’s more noble and it’s more worthy.”

Harkin reiterated his support for cutting the defense budget in half over 10 years to support infrastructure investments and other programs at home. And he took a harsh line on trade issues, promising to stand up to Japan and prevent former government trade negotiators from lobbying for foreign governments. “I’m saying trade has to be a two-way street, not a one-way bridge,” he said.

As he has in recent days, Clinton sought to differentiate himself from Tsongas by emphasizing his experience as chief executive in Arkansas and his plans to reform government. “I think we have to have a more activist government,” he said, “but it also has to be more community-based, less bureaucratic and provide more citizen choice.”

Like Harkin, Kerrey insisted that America needed to get tougher with Japan on trade. But he called for the establishment of “new trading structures so that we can expand trade into the rest of the world, trying to convert . . . old enemies into new customers.”

Tsongas, who has taken the strongest free-trade position, urged voluntary protectionism, saying that as President he would ask Americans to shun Japanese imports if Japan doesn’t open its markets. “If the Japanese are not willing to be reasonable,” he said, “you have to play hardball.”

For most of this encounter, though, hardball was apparently the last thing on the minds of the five Democrats chasing the White House. With Tuesday’s pivotal vote in sight, they seemed less like contenders stepping into the ring than weary fighters embracing at the end of a bruising match.

Times political writer Robert Shogan contributed to this story.

Nov. 25 (UPI) — The Bureau of Labor Statistics on Tuesday released September data from its producer price index, showing modest increases in core wholesale prices that came in lower than experts had predicted.

The PPI for final demand products — what producers and manufacturers get paid for their goods and services sold to consumer businesses — in September increased 0.3%. But when excluding food, energy and trade services, BLS reported that final demand wholesale prices increased just 0.1% — half the expected 0.2% increase.

September’s data release was delayed by “the lapse in federal appropriations” caused by the 43-day federal government shutdown, the longest in U.S. history, which the agency noted in its data report.

“While BLS completed data collection prior to the lapse, BLS could not complete data processing and review until appropriations resumed,” the agency said. “Subsequent PPI data releases will also be delayed.”

Overall, BLS reported that final demand increased by a seasonally adjusted 0.3% in September, following a 0.1% decline in August and 0.8% increase in July. On an unadjusted basis, PPI final demand increased 2.7% for the 12-month period that ended in September.

Broken down, the index for final demand on goods increased by 0.9%, the largest increase since a 0.9% jump in February 2024. Two-thirds of this increase can be blamed on energy prices leaping by 3.5%, while food prices increased 1.1%.

Among individual products, the cost for gasoline increased 11.8%, with increases also seen among meats, residential electric service, cars and ethanol. Prices for fresh and dry vegetables, however, dropped by 1.8%, and decreases were also seen in prices for metal ores and residual fuels.

BLS reported that the index for final demand services in September was unchanged, following a 0.3% decrease in August. Price increases of 0.8% were seen among transportation and warehousing services.

Among services, airline passenger service prices increased by 4%, and food wholesaling, chemicals and related products and furniture, among others, also saw prices rise. The margins for machinery and equipment wholesaling dropped 3.5% percent, while apparel, jewelry, footwear and portfolio management also saw price decreases.

The administration of United States President Donald Trump has announced new oil drilling off the California and Florida coasts for the first time in decades, advancing a project that critics say could harm coastal communities and ecosystems, as Trump seeks to expand US oil production.

The White House announced the news on Thursday.

The oil industry has been seeking access to new offshore areas, including Southern California and off the coast of Florida, as a way to boost US energy security and jobs.

What’s in the plan?

The administration’s plan proposes six offshore lease sales through 2030 in areas along the California coast.

It also calls for new drilling off the coast of Florida in areas at least 160km (100 miles) from that state’s shore. The area targeted for leasing is adjacent to an area in the Central Gulf of Mexico that already contains thousands of wells and hundreds of drilling platforms.

The five-year plan also would compel more than 20 lease sales off the coast of Alaska, including a newly designated area known as the High Arctic, more than 320km (200 miles) offshore in the Arctic Ocean.

Interior Secretary Doug Burgum said in announcing the sales that it would take years for the oil from those parcels to get to market.

“By moving forward with the development of a robust, forward-thinking leasing plan, we are ensuring that America’s offshore industry stays strong, our workers stay employed, and our nation remains energy dominant for decades to come,” Burgum said in a statement.

The American Petroleum Institute said in response that the announced plan was a “historic step” towards unleashing vast offshore resources. Industry groups have pointed to California’s history as an oil-producing state and say it already has infrastructure to support more production.

Political pushback

Leaders in both California and Florida have pushed back on the deal.

Last week, Florida Republican Senator Ashley Moody and Rick Scott co-sponsored a bill to maintain a moratorium on offshore drilling in the state that Trump signed in his first term.

“As Floridians, we know how vital our beautiful beaches and coastal waters are to our state’s economy, environment and way of life,” Scott said in a statement. “I will always work to keep Florida’s shores pristine and protect our natural treasures for generations to come.”

A spokesman for California Governor Gavin Newsom said Trump officials had not formally shared the plan, but said “expensive and riskier offshore drilling would put our communities at risk and undermine the economic stability of our coastal economies”.

California has been a leader in restricting offshore oil drilling since the infamous 1969 Santa Barbara spill that helped launch the modern environmental movement. While there have been no new federal leases offered since the mid-1980s, drilling from existing platforms continues.

Newsom expressed support for greater offshore controls after a 2021 spill off Huntington Beach and has backed a congressional effort to ban new offshore drilling on the West Coast.

A Texas-based company, with support from the Trump administration, is seeking to restart production in waters off Santa Barbara damaged by a 2015 oil spill. The administration has hailed the plan by Houston-based Sable Offshore Corp as the kind of project Trump wants to increase US energy production as the federal government removes regulatory barriers.

The announcement comes as Governor Newsom attended the COP30 climate conference in Brazil.

“He [Trump] intentionally aligned that to the opening of COP,” Newsom said.

Even before it was released, the offshore drilling plan met strong opposition from Newsom, a Democrat who is eyeing a 2028 presidential run and has emerged as a leading Trump critic.

Newsom pronounced the idea “dead on arrival” in a social media post. The proposal is also likely to draw bipartisan opposition in Florida. Tourism and access to clean beaches are key parts of the economy in both states.

Democratic lawmakers, including California Senator Alex Padilla and Representative Jared Huffman, the top Democrat on the House Natural Resources Committee, warned that opening vast coastlines to new offshore drilling would hurt coastal economies, jeopardise national security, ravage coastal ecosystems, and put the health and safety of millions of people at risk.

“With this draft plan, Donald Trump and his Administration are trying to destroy one of the most valuable, most protected coastlines in the world and hand it over to the fossil fuel industry,” Padilla and Huffman said in a joint statement.

The federal government has not allowed drilling in federal waters in the eastern Gulf of Mexico, which includes offshore Florida and part of offshore Alabama, since 1995, because of concerns about oil spills. California has some offshore oil rigs, but there has been no new leasing in federal waters since the mid-1980s.

Since taking office for a second time in January, Trump has systematically reversed former President Joe Biden’s focus on slowing climate change to pursue what the Republican calls US “energy dominance” in the global market.

Trump, who recently called climate change “the greatest con job ever perpetrated on the world,” created a National Energy Dominance Council and directed it to move quickly to drive up already record-high US energy production, particularly fossil fuels such as oil, coal and natural gas.

Meanwhile, Trump’s administration has blocked renewable energy sources such as offshore wind and cancelled billions of dollars in grants that supported hundreds of clean energy projects across the country.

San Francisco, United States – Just weeks ago, Brandon Praileau, a pastor from Norfolk, Virginia, was speaking to families in his community about a federally funded programme that would help them install rooftop solar units in their homes. The government funds would take care of their installation costs, and once installed, lower the burden of rising electricity costs, a pressing concern.

Then, Praileau heard the federal government had scrapped the $7bn Solar For All programme through which his project and other solar projects across the country were to be funded, leaving them stranded.

It is one of several federally funded renewable energy projects that have been scrapped or will end early, veering off the country’s planned shift to renewable energy, also making it harder to meet climate goals.

Praileau, Virginia programme director for Solar United Neighbors, had been helping roll out the project that received $156m in federal funds to support 7,500 low- and middle-income families with solar installation. Praileau say he was “mind blown” by the sudden withdrawal.

The federal government will also end the 30 percent tax credit for solar rooftop installation in homes this December. For businesses, these tax credits will only be available if they start construction of factories, malls or other businesses, for which the solar installations are meant, by June 2026.

The Department of Energy also withdrew $13bn in funding from a range of other renewable energy projects, including upgrading power grids, carbon-neutral cement production, and battery energy storage. The administration also ended several funding initiatives for wind energy.

President Trump has said, “We’re not going to be approving windmills unless something happens that’s an emergency.”

This could lead to a $114bn loss in delays or cancellation of wind energy projects, according to an April 2025 report by BloombergNEF.

In Florida, intake forms for 10,000 low- and middle-income households to enrol for federal subsidies to get solar units installed on their rooftops were ready when the $156m project was scrapped in August.

A resident of Miami-Dade County had told volunteers who were helping her fill in the forms to enrol for the grant that she was “scared to use power. I am scared to put on air conditioning”, because the steep rise in power costs in the state had put it out of reach for her.

Power costs in the state are up 60 percent for some residents since 2019, Heaven Campbell, Florida programme director of Solar United Neighbors, which was working on implementing the project, told Al Jazeera.

Other states have also seen varying power cost hikes due to hurricanes and the war in Ukraine, which made Russian natural gas more expensive.

Florida Power and Light, the utilities provider, has also currently made a case to increase rates further to raise nearly $10bn over the next four years, according to Florida’s Office of Public Counsel.

Solar United’s staff has tried to educate residents that not using power could get them disconnected, and reconnecting comes with a fee.

Early ending of the tax credit will mean “consumers are stuck at the mercy of utilities”, and their rising rates, says Bernadette Del Chiaro, senior vice president for California at the Environmental Working Group.

‘Rain shadow impact’

With the solar rooftop tax credits set to expire in December, there has been a scramble to install, and some solar installers say they are having to turn away customers.

“We will see the rain shadow impact of this in 2026,” Del Chiaro says, referring to a sharp drop in business and jobs that the industry is steeling itself for next year.

“This is a big plunge on the solar coaster,” says Barry Cinnamon, chief executive of Cinnamon Energy Systems, a San Francisco-based solar installation company.

Ed Murray, president of the California Solar and Storage Association, told Al Jazeera he expects the elimination of tax credits to double the payback time for installation and other costs associated with the solar units to up to 12 years.

It would also lead to job losses for thousands of skilled workers in the sector, Murray said, even as the air quality is likely to worsen and the state is expected to fail to meet its climate goals.

In its announcement withdrawing from these projects, the Department of Energy notification said the projects “advance the previous Administration’s wasteful Green New Scam agenda”.

In the statement, Energy Secretary Chris Wright said that, “By returning these funds to the American taxpayer, the Trump administration is affirming its commitment to advancing more affordable, reliable and secure American energy and being more responsible stewards of taxpayer dollars.”

Critics of solar projects have said they drive up costs for households still on the power grid because solar customers pay less to utilities but still use that power when needed.

The Trump administration has, instead, supported oil and gas production through several measures, including plans to open up the entire Arctic National Wildlife Refuge (ANWR) for oil and gas leasing recently. It has also eased permitting for drilling on federal lands.

Rising costs

The Biden administration had funded renewable energy projects under what it called the Green New Deal, a programme to accelerate economic growth and job creation while having a positive climate impact.

But even as these projects began rolling out, power costs have risen sharply in many states, including Virginia.

A recent study by the Lawrence Berkeley National Laboratory found that the rise in power costs had outpaced inflation in 26 states and listed a range of factors for it, including the Ukraine war and extreme weather factors such as wildfires and hurricanes that have damaged an already ageing electric poles and grid.

For instance, prices in California have risen more than 34 percent since 2019, the study says, in part because the record-breaking wildfires forced utilities to replace and strengthen their power lines. Federal funding of $630m to strengthen grids in California was among the projects scrapped by the Department of Energy.

“A majority of the projects that were scrapped were mid-implementation,” says Ryan Schleeter, communications director of The Climate Center, a California-based think tank.

Federal incentives also meant that more than 20 percent of the cars sold in the state over the last two years had been electric vehicles (EVs). These allowed middle-income families to buy EVs, Schleeter says. With incentives having ended on September 30, “the central challenge will be how to be equitable,” he says.

Susan Stephenson, executive director of California Power and Light, which supports places of worship to have renewable energy, says several places of worship that had planned to move to solar energy or install EV charging stations are now struggling to find installers and have seen costs going up beyond their initial budget due to federal cuts.

In Virginia, Praileau says power costs came up as one of the greatest concerns in his interactions with his congregants. The state has among the most data centres in the country, and Praileau believes that could be a reason for rising costs.

Voter dissatisfaction over rising power costs has been among the top issues in the governor’s elections in the state that went to the polls on November 4. One of the promises that Abigail Spanberger, the Democrat candidate who won, had made was to reduce power costs by increasing energy production and getting data centres to pay a higher share of power costs.

Praileau hopes the solar project, the cuts to which are already being litigated, can also be revived by the new governor. In Florida, too, there is ongoing litigation on the federal funding cuts.

Several states, including California, have announced their own rollbacks on renewable energy incentives.

But with funding withdrawals hurting residents, Steve Larson, a former executive director of the California Public Utilities Commission, expects more litigation to restore programmes and mastering “techniques of delay”, for federal cuts in grants and to allow renewable energy projects to keep going.

Nov. 15 (UPI) — Iran’s Islamic Revolutionary Guard Corps confirmed Saturday that it has seized a fuel tanker bound for Singapore from the United Arab Emirates.

The IRGC Navy said in a statement the Talara was carrying 30,000 tons of petrochemicals and had been monitoring it after a court ordered the ship’s seizure on Friday morning, according to IRNA, Iran’s official government news agency.

The “unauthorized cargo” — high-sulphur gas oil, which is used to fuel ships and other marine vessels — led three small surface vessels to intercept the Talara has it sailed south through the Strait of Hormuz, Al Jazeera and the BBC reported.

“This operation was carried out successfully in accordance with legal duties and for the purpose of safeguarding the national interests and resources of the Islamic Republic of Iran and under the orders of judicial authorities,” the IRGC Navy said.

Talara’s Cyprus-based owner, Columbia Shipmanagement Ltd. operates the tanker, and its cargo and that it has lost contact with the vessel, according to Al Jazeera.

U.S. Central Command officials on Friday said they are aware of the ship’s seizure and are “actively monitoring” the matter, the New York Times reported.

“Commercial vessels are entitled to largely unimpeded rights of navigation,” the Central Command officials added.

Iran has seized other tankers while often accusing them of carrying illicit cargo, intruding in Iranian waters or in retaliation for the seizure of an Iranian vessel.

Iranian officials have threatened to close shipping in the Strait of Hormuz, which is a narrow strait extending for 90 miles and connecting the Gulf of Oman and the Persian Gulf.

A fourth of the world’s oil and a fifth of its liquefied natural gas are shipped through the waterway.

The U.S. Navy’s Fifth Fleet patrols the area to help protect commercial shipping.

China’s major stock indexes rose on Thursday, buoyed by strong gains in the new energy sector, as investors positioned ahead of a fresh batch of economic data due Friday.

At the midday break, the Shanghai Composite Index (.SSEC) gained 0.4% to 4,017.94, while the blue-chip CSI300 (.CSI300) advanced 1%, recovering earlier losses.

Sector Highlights

New energy stocks led the rally. The CSI New Energy Vehicle Index (.CSI399976) surged 6.9% to a three-year high, and the CSI New Energy Index (.CSI399808) climbed 5.5%, marking its strongest session in two weeks.

Key players posted sharp gains:

CATL (300750.SZ) jumped 8.2%, nearing record highs last seen in October.

Tianqi Lithium (002466.SZ) rose 9.9%.

The rally followed comments from a senior Ministry of Industry and Information Technology official, who said Beijing would soon unveil a comprehensive plan to boost the new energy battery industry and its supporting infrastructure.

Investor Moves

Zhikai Chen, head of Asian equities at BNP Paribas Asset Management, said domestic institutional investors may be shifting portfolios as their November fiscal year-end approaches.

Meanwhile, the artificial intelligence (.CSI930713) and semiconductor (.CSI931865) sectors edged higher, gaining 0.5% and 0.9%, respectively, after recent declines.

“There’s been a move toward booking strong year-to-date returns and rotating into dividend-paying sectors,” Chen noted, adding that the trend could continue into December.

Hong Kong Markets and Outlook

In Hong Kong, the Hang Seng Index (.HSI) slipped 0.6% to 26,766.71, while the Hang Seng China Enterprises Index (.HSCE) also fell 0.6%, following Wednesday’s one-month high.

Investors now await October credit data along with retail sales, industrial output, and fixed-asset investment figures due Friday, which are expected to provide clearer signals on China’s economic recovery and potential policy adjustments.

With information from Reuters.

Iran’s near-bomb-grade uranium stockpile ‘a matter of serious concern’ after 12-day war with Israel, watchdog says.

The International Atomic Energy Agency (IAEA) has not been able to verify Iran’s stockpile of highly enriched uranium since Israel and the United States struck the country’s nuclear sites back in June, according to a new report.

The watchdog circulated a confidential report to member states, claiming it had been unable to carry out “long overdue” inspections of seven of the sites targeted in the so-called 12-day war, including major facilities Fordo and Natanz.

The report, seen by several news agencies, said the watchdog needed to verify “inventories of previously declared nuclear material” to settle concerns over “the possible diversion of declared nuclear material from peaceful use”.

While the report criticised Iran’s lack of cooperation, it did say that IAEA inspectors would be visiting the country on Wednesday to conduct inspections at the Isfahan Nuclear Technology Centre site, located some 350km (215 miles) southeast of Tehran

During the war, Israel struck buildings at the Isfahan site, among them a uranium conversion facility. The US also struck Isfahan with missiles.

Iran suspended all cooperation with the IAEA after the war with Israel, but went on to reach an agreement in Cairo at the beginning of September to resume inspections.

But later that same month, the United Nations reimposed crushing sanctions on Iran, drawing an angry response from Tehran and leading the country to halt implementation of the Cairo agreement.

In August, European powers had reimposed the UN sanctions after Iran failed to enter into direct talks with the US and clarify the status of its near weapons-grade uranium stockpile.

‘A matter of serious concern’

The US and Israel claimed they attacked Iran because it was getting too close to being able to produce a nuclear weapon.

Iran says its aims are entirely peaceful, and the IAEA has said it has no credible indication of a coordinated weapons programme there.

Ever since the 12-day war, the agency has been calling on Iran to say what happened to its stock, which is enriched to up to 60 percent purity, a short step from weapons-grade levels of 90 percent.

Iran’s near-bomb-grade uranium stockpile was “a matter of serious concern”, said the report. In theory, the stockpile would be enough to produce about 10 nuclear bombs.

While some enriched uranium will have been destroyed in the attacks, diplomats say much of the stock was likely stored at a deeply buried facility at Isfahan where the entrance tunnels were hit, but damage appears limited.

The agency has so far only inspected some of the 13 nuclear facilities that were “unaffected” by Israeli and US attacks. It said that re-establishing a full picture of stocks would be arduous.

Justice Minister German Galushchenko allegedly took part in the scheme involving state nuclear power firm Energoatom.

Ukraine has suspended Justice Minister German Galushchenko for his alleged involvement in a corruption scandal involving the state-run nuclear power company, Energoatom, during his tenure as the country’s energy minister.

Prime Minister Yulia Svyrydenko announced on Wednesday that Galushchenko had been suspended from his duties, which will be carried out by Deputy Justice Minister for European Integration Lyudmyla Sugak.

Galushchenko, who served as energy minister for four years before taking over the justice portfolio in July, is accused of profiting from a scheme that laundered money from Energoatom.

Ukraine’s Pravda news outlet reported that anticorruption authorities raided Galushchenko’s offices on Monday.

‘I will defend myself in court’

In a statement, Galushchenko said he had spoken with the prime minister and agreed his suspension is appropriate while he defends his case.

“A political decision must be made, and only then can all the details be sorted out,” said Galushchenko. “I believe that suspension for the duration of the investigation is a civilised and correct scenario. I will defend myself in court and prove my position.”

According to Ukraine’s Specialised Anti-Corruption Prosecutor’s Office (SAPO), the alleged $100m scheme was orchestrated by businessman Timur Mindich, a close ally of President Volodymyr Zelenskyy.

SAPO’s investigators say Galushchenko helped Mindich manage illicit financial flows in the energy sector, while contractors working with Energoatom were forced to pay bribes of 10 to 15 percent to avoid losing contracts or facing payment delays.

Accusations of kickbacks in the energy sector are particularly sensitive in Ukraine, much of which is facing lengthy daily blackouts as it fends off massive Russian attacks on its infrastructure.

The scandal also highlights a potential challenge to Ukraine’s European Union membership bid, for which eradicating corruption remains a key condition.

Addressing the country on Monday, Zelenskyy urged full cooperation with the anticorruption inquiry and said anyone implicated should be held to account.

Zelenskyy’s comments come just months after he was forced to reverse plans to curb the independence of the country’s key anticorruption watchdogs – SAPO and the National Anti-Corruption Bureau of Ukraine – following widespread protests.

Ukranian president promises accountability after anticorruption bureau announces probe into alleged Energoatom scheme.

Ukraine’s anticorruption agency has launched an investigation into an alleged $100m kickback scheme involving Energoatom, the state-run nuclear power company that supplies more than half of the country’s electricity.

The National Anti-Corruption Bureau of Ukraine (NABU), which operates independently of the government, announced the probe on Monday as the country faces another harsh winter under daily Russian bombardment.

In a statement posted on social media, NABU said that a “high-level criminal organisation” orchestrated the alleged scheme, led by a businessman and involving a former adviser to the energy minister, Energoatom’s head of security, and four other employees.

“In total, approximately 100 million USD passed through this so-called laundromat,” NABU said, without naming the suspects.

“The minister’s adviser and the director of security at Energoatom took control of all the company’s purchases and created conditions under which all contractors had to pay illegal benefits,” according to NABU chief detective Oleksandr Abakumov.

He said the group discussed increasing the kickback rate during work on protective structures at the Khmelnytskyi nuclear plant last October.

Investigators said Energoatom’s contractors were forced to pay bribes of 10 to 15 percent to avoid losing contracts or facing payment delays.

“A strategic enterprise with annual income exceeding 200 billion hryvnias [$4.7bn] was managed not by authorised officials but by individuals with no formal authority,” NABU said.

Zelenskyy calls for ‘criminal verdicts’

President Volodymyr Zelenskyy, addressing the nation on Monday evening, urged full cooperation with the investigation. “Everyone who has been involved in corruption schemes must receive a clear legal response. There must be criminal verdicts,” he said.

Zelenskyy’s comments come just months after he was forced to reverse plans to curb the agency’s independence following widespread protests. Eradicating corruption remains a crucial condition for Ukraine’s European Union membership bid, a goal Kyiv views as central to its post-war future.

Energoatom confirmed on social media that its offices were being searched and said it was cooperating with investigators.

Deputy Minister of Energy of Ukraine Svitlana Grynchuk told reporters she was not yet familiar with the case details, but promised a “transparent process” and accountability for anyone found guilty. “I hope that the transparency of the investigation will reassure our international partners,” she said.

Ukraine’s power infrastructure has suffered extensive damage from Russia’s air strikes this autumn, leaving large parts of the country without electricity. Although Moscow has not targeted nuclear reactors directly, Ukrainian authorities say substations linked to them have been repeatedly hit.

NABU released photographs showing stacks of cash, Ukrainian hryvnias, US dollars and euros, stuffed into bags and piled on tables. The agency did not disclose the owners of the seized money.

The agency conducted 70 searches, reviewed more than 1,000 hours of audio recordings, and deployed its entire detective staff over 15 months.

Opposition lawmaker Yaroslav Zheleznyak, a strong supporter of anticorruption reform, said he would introduce a parliamentary motion to dismiss Grynchuk and her predecessor, German Galushchenko, now serving as justice minister. Hrynchuk declined to comment on the proposal, while Galushchenko did not respond to requests for comment.

As Ukraine continues to battle both corruption and Russia’s war, Kyiv’s ability to convince its international partners of reform may prove as critical to its future as the fighting on the front lines.

Ukraine says European allies can give up some of their Patriot missile systems now and get future deliveries.

Most regions of Ukraine are undergoing scheduled power outages amid a new wave of attacks on energy sites by Russian drones and missiles.

Ukrenergo, the state-run electricity transmission systems operator in Ukraine, said the blackouts will last at least until the end of Monday as repairs are conducted on infrastructure damaged over the weekend and demand remains high as the onset of winter approaches.

The Poltava and Kharkiv regions are suffering from a deficit of high-voltage capacity after damage to their power transmission lines while the areas of Dnipropetrovsk, Zaporizhia, Kyiv and other central and northern regions have been affected as well.

According to Ukraine’s military, Russian forces used two air-launched ballistic missiles, five surface-to-air guided missiles and 67 drones, including those of Iranian design, during their attacks overnight into Monday.

The Ukrainian army did not report shooting down any of the missiles, but it said 52 of the drones were intercepted and the remaining 15 conducted strikes on nine locations.

Russia has maintained its attacks on Ukrainian energy infrastructure as United States-led diplomatic efforts to end the war make little progress. Ukraine has also been hitting Russian oil and fuel infrastructure in a stated effort to disrupt resources going to the front lines.

An explosion rocked Russia’s port town of Tuapse on the Black Sea overnight after Ukrainian forces launched sea drones towards the major oil terminal and refinery in the town. No casualties were reported.

Russia’s Ministry of Defence announced on Monday that four naval drones were destroyed near the port in the northeastern Black Sea.

It added that its air defences shot down six US-made HIMARS rockets and 124 fixed-wing unmanned aerial vehicles.

Ukraine wants Patriots from Europe

While calling for tougher sanctions and asset freezes to punish Russia, Ukraine is also looking to buy more arms.

President Volodymyr Zelenskyy said on Monday that Ukraine would like to order 25 Patriot air defence systems from US weapons makers as it tries to fend off Russian attacks at the brink of winter.

Zelenskyy acknowledged that the missile systems are expensive and such a large order could take years to manufacture. But he suggested that European countries could give their Patriots to Ukraine and await replacements, stressing that “we would not like to wait.”

Ukraine is also advancing with an internal drive with a stated aim of weeding out corruption in the energy sector.

The National Anti-Corruption Bureau announced on Monday that it was conducting searches in cooperation with a specialised anticorruption judicial office in premises connected to Tymur Mindich, a former business partner of the president.

Mindich, who reportedly fled before the searches, is coowner of Zelenskyy’s Kvartal 95 production company. The Anti-Corruption Bureau said the searches are in relation to a “high-level criminal organisation in the energy and defence sectors” that engaged in money laundering and illegal enrichment.

Foreign minister says Budapest ‘obtained an indefinite exemption from the sanctions’ on Russian oil and gas shipments.

Hungary’s foreign minister says Budapest has secured an indefinite waiver from US sanctions on Russian oil and gas imports, as a White House official reiterated that the exemption was for only a period of one year.

Hungarian Prime Minister Viktor Orban met President Donald Trump at the White House on Friday to press for a reprieve after the US last month imposed sanctions on Russian oil companies Lukoil and Rosneft.

After the meeting, Orban told Hungarian media that Budapest had “been granted a complete exemption from sanctions” affecting Russian gas delivered to Hungary from the TurkStream pipeline, and oil from the Druzhba pipeline.

But a White House official later told the Reuters news agency that Hungary had been granted a one-year exemption from sanctions connected to using Russian energy.

On Saturday, Foreign Minister Peter Szijjarto said there would be no sanctions for “an indefinite period”.

“The prime minister was clear. He has agreed with the US President [Donald Trump] that we have obtained an indefinite exemption from the sanctions,” Szijjarto wrote on Facebook.

“There are no sanctions on oil and gas shipments to Hungary for an indefinite period.”

However, a White House official repeated in an email to the Reuters news agency on Saturday that the exemption is for one year.

Hungary expected to buy US LNG

The White House official who spoke to Reuters added that Hungary would also diversify its energy purchases and had committed to buying US liquefied natural gas with contracts valued at some $600m.

Orban has maintained close ties with both Moscow and Washington, while often bucking the rest of the EU on pressuring Russia over its invasion of Ukraine.

The Hungarian leader offered to host a summit in Budapest between Trump and Putin, although the US leader called it off in October and hit Moscow with sanctions for the first time in his presidency.

Budapest relies heavily on Russian energy, and Orban, 15 years in power, faces a close election next year.

International Monetary Fund figures show Hungary bought 74 percent of its gas and 86 percent of its oil from Russia in 2024, warning that an EU-wide cutoff of Russian natural gas alone could cost Hungary more than 4 percent of its GDP.

Orban said that, without the agreement, energy costs would have surged, hitting the wider economy, pushing up unemployment and generating “unbearable” price rises for households and firms.

Nov. 8 (UPI) — U.S. President Donald Trump has exempted Hungary from sanctions over the nation’s purchase of Russian gas and oil for one year after meeting with Prime Minister Viktor Orban.

Trump is a close ally of the far-right populist and authoritarian, who came into power in 1998 but was out of office from 2002 to 2010.

On Friday at the White House, Trump said he was considering the exemption because “it’s very difficult for him to get the oil and gas from other areas.”

After the meeting, Orban posted on X with a video: “Decision reached: President Donald Trump has guaranteed full sanction exemptions for the TurkStream and Friendship pipelines, allowing Hungary to continue providing families with the lowest energy prices in Europe. Thank you, Mr. President!”

The BBC confirmed the exemption was for one year.

Hungary’s dependence on Russian crude oil was 61% before Russia invaded Ukraine in 2022, then rose to 86% in 2024 and 92% this year.

On Oct. 22, the U.S. added sanctions against Russia, including blacklisting two of Russia’s largest oil companies: Open Joint Stock Company Rosneft Oil Company and Lukoil OAO.

Russia has been the world’s third-largest oil exporter, generating $120 billion in 2024 behind No. 1 Saudi Arabia at $225 billion and No. 2 Canada. $121billion. The United States is No. 4 at $117 billion.

Extensive sanctions were imposed after Russia’s full-scale invasion of neighboring Ukraine in February 2022. Initially, they were imposed in March 2014 after Russia annexed Crimea.

The Trump administration is attempting to use tariffs to halt third-country access, including by India.

But Trump said he understands Hungary’s situation of being a landlocked nation with limited access to gas and oil.

The U.S. State Department said Hungary has agreed to purchase U.S. liquefied gas worth about $600 million, NBC News reported.

Also, Hungary agreed to purchase American nuclear fuel, which it currently buys from Russia.

Despite similar policies as Trump, Orban said the pipelines are not “ideological” or “political” and instead a “physical reality.”

Orban had blamed U.S. President Joe Biden for “politically motivated sanctions,” including his top aid Antal Rogaan with allegations of corruption.

“Now we are quite a good position to open up a new chapter – let’s say a golden age – between the United States and Hungary,” Orban said.

Trump has used the term “golden age of America,” declaring it began with his second inauguration on Jan. 20.

The exemption was criticized by an analyst.

“The U.S. decision is a terrible and unnecessary mistake that will allow over 1 billion euros [$1.2 billion] to flow into the Kremlin’s war chest,” Isaac Levi, with the Center for Research on Energy and Clean Air, told CNN. “By carving out special treatment for Hungary, Washington is telling other buyers that they can keep handling Russian oil and still expect to be let off the hook.”

Levi noted the Czech Republic is another country with a port that manages without Russian crude oil and has lower fuel prices at the pump than Hungary.

“This clearly shows that the oil flows that continue to finance Putin’s war in Ukraine are entirely unnecessary,” he said.

Trump said he is “very disturbed” by other European countries that still buy Russian commodities despite not being landlocked.

Hungary and neighboring Slovakia are the only EU countries still getting Russian oil from the Druzhba pipeline.

EU countries’ gas comes via Turkey through the TurkStream pipeline. Russia’s share of EU gas imports fell from 40% pre-invasion to 11% in 2024.

But Slovakia is “almost 100% dependent” on Russian crude oil, according to a report from the Center for Research and Energy and Clean Air and the Center for the Study of Democracy.

The European Commission granted an exemption to Hungary, Slovakia and the Czech Republic – three countries heavily reliant on Russian imports – for time to reduce reliance.

Other nations don’t have close relations with Russian President Vladimir Putin.

For other products, Trump has imposed a baseline 15% tariff as part of a trade agreement with the European Union.

That includes Hungary’s car industry.

On Oct. 21, Trump canceled his planned summit with Putin in Budapest, Hungary, after Putin’s demands on ending the war in Ukraine remained.

In July, one of Brazil’s last coal plants in Candiota resumed operations after significant investment from Ambar, owned by billionaires Wesley and Joesley Batista. They believe that Brazil will continue to use coal despite having over 80% of its electricity from renewable sources. As Brazil prepares to host the UN climate summit COP30, President Luiz Inacio Lula da Silva expressed concern that the war in Ukraine has revived coal mining.

Coal plants, including Candiota, still supply 3% of Brazil’s electricity, highlighting the influence of special interest groups and the absence of a proper transition plan away from coal. Experts like Christine Shearer from Global Energy Monitor argue that Brazil has the resources to phase out coal, but the strong coal lobby in mining regions keeps these plants running.

The Candiota plant lost its government contract last year, leading to local economic downturns and outmigration. It now sells energy on the spot market during peak hours when solar and wind energy are less available. Nevertheless, Brazil’s Congress recently passed a bill allowing coal plants to operate until 2040, which Lula could potentially veto. The government also made coal eligible for a capacity auction aimed at improving energy security by using thermal plants during low renewable output.

Critics note that including coal in these plans contradicts the goal of energy flexibility, as coal plants cannot start quickly. They argue that poor long-term planning allows coal to persist, despite a surplus of clean energy that goes underutilized due to inadequate demand and transmission infrastructure. This situation makes the government susceptible to coal and natural gas lobbying, leading to higher financial and environmental costs.

Ambar asserts that coal from the Candiota plant is reliable and necessary for power supply, denying claims of relying on political influence. They also argue that critics prioritize the interests of large energy consumers over those of smaller entities and the broader public. Keeping coal operational aligns Brazil with countries like India and South Africa, where strong lobby groups impede efforts to transition away from coal, which is crucial to local economies.

Shutting down Candiota could result in around 10,000 job losses in the region. Local coal miner Jose Adolfo de Carvalho asserts that eliminating the plant won’t significantly impact global carbon issues. The future of the plant causes anxiety among residents, with former employee Graca dos Santos emphasizing the need for a just energy transition to avoid leaving the community jobless.

Lula’s administration lacks a transition plan for Candiota, and little progress has been made in strategizing for other coal facilities. Some suggest diversifying into sectors like beef, wine, and olive oil, which could provide new jobs for former coal workers. Local union leader Hermelindo Ferreira highlights the potential job losses from shutting down Candiota while recognizing that faith in the coal industry is wavering. Ferreira encourages workers to gain new skills, such as maintenance for wind energy, as a way to adapt to future opportunities.

With information from Reuters

Ukraine is calling for more sanctions and asset freezes on Russia as it fends off intensified attacks, with another harsh winter of war looming.

At least 10 people have been killed, and more parts of Ukraine have been plunged into darkness, after another night of intense Russian attacks across the country, local authorities said, as diplomatic momentum to end the nearly four-year war falters.

Ukraine’s military announced on Saturday morning that hundreds of Russian drones, as well as missiles launched from the air, ground and sea, targeted critical infrastructure, a frequent Kremlin target as another harsh winter of war looms.

Ukraine said its air force detected 503 air attacks, including 45 missiles and 458 drones, launched by Russian forces overnight. Most of the missiles went through defences, with only nine successfully shot down, but 406 of the drones were intercepted.

The Russian attacks concentrated mostly on gas and power infrastructure, leading to power cuts in several regions.

In the front-line Zaporizhzhia region, Governor Ivan Fedorov said three people were killed and six wounded in overnight Russian attacks on several districts, which hit a residential building, among other targets.

Two more people were reported killed in two districts of Donetsk, according to local authorities. Oleksandr Prokudin, governor of Kherson, reported another two people killed and 10 wounded after several multistorey buildings, private homes and vehicles were hit.

Kyiv Governor Mykola Kalashnyk said an attack in the Vyshhorod district injured a woman and hit civilian areas and energy infrastructure.

At least two people were killed and 11 others, including children, wounded after a Russian strike hit a building in the eastern region of Dnipro, local authorities said.

A “massive” strike was reported by Governor Volodymyr Kohut in the Poltava region, where another person was injured and rolling blackouts are in place to compensate for damaged power infrastructure.

‘More pressure is needed’

Ukrainian President Volodymyr Zelenskyy renewed a call for further sanctions on Russia and freezing its assets in the European Union before winter, saying “Russian strikes show that the pressure must be stronger.

“Russian nuclear energy is still not under sanctions, Russian military-industrial complex still receives Western microelectronics, more pressure is needed on oil and gas trade as well,” he said in a statement.

Russia’s Ministry of Defence confirmed in its latest combat report overnight that it launched a “massive strike with high-precision long-range weapons from air, land and sea platforms”, including hypersonic ballistic missiles.

It said Russian air defences brought down two guided aerial bombs and 178 unmanned aerial vehicles launched by Ukrainian forces. Another eight drones were reportedly shot down before noon on Saturday.

Fierce house-to-house fighting also continues to rage in Pokrovsk, the city in Donetsk where tens of thousands of Russian troops have converged to push for control of more territory and to “liberate” buildings held for more than a year by Ukrainian soldiers, in intense close-range clashes.

Ukraine’s top general Oleksandr Syrskii said Kyiv’s troops were stepping up assaults on Russian forces around the eastern Ukrainian town of Dobropillia to ease pressure on Pokrovsk.

WASHINGTON — President Trump said on Friday he’s considering granting Hungary an exemption from U.S. sanctions on Russian energy as he sat down with Hungarian Prime Minister Viktor Orbán at the White House. “We’re looking at it because its very difficult for him to get the oil and gas from other areas,” Trump said.

Orbán said it’s a “vital” issue for his landlocked country, and said he planned to discuss with Trump the “consequences for the Hungarian people” if the sanctions took effect.

In comments on Friday, Orbán said he would present Trump with several “suggestions” for implementing an exemption.

“I’m not asking for some kind of gift from the Americans or some kind of unusual thing. I am simply asking for the realization that the sanctions recently imposed on Russian energy puts certain countries like Hungary, which do not have access to the sea, in an impossible situation,” Orbán said on state radio. “I’m going to ask the president to acknowledge that.”

A large delegation of cabinet members, business leaders and numerous right-wing political influencers with close connections to Hungary’s government accompanied Orbán to Washington. The delegation rented a 220-passenger commercial jet from Hungarian carrier Wizz Air for the journey.

Prior to Orbán’s arrival on Thursday, a bipartisan group of U.S. senators introduced a resolution calling on Hungary to end its dependence on Russian energy.

The resolution was co-signed by 10 senators including Republicans Mitch McConnell of Kentucky, Thom Tillis of North Carolina and Chuck Grassley of Iowa, as well as Democrats Jeanne Shaheen of New Hampshire and Chris Coons of Delaware. It “expresses concern that Hungary has shown no sign of reducing its dependence on Russian fossil fuels,” and urges Budapest to adhere to a European Union plan to cease all Russian energy imports into the bloc by the end of 2027.

“Europe has made extraordinary progress cutting its energy ties with Moscow, but Hungary’s actions continue to undermine collective security and embolden the Kremlin,” Shaheen wrote in a statement. The resolution, she continued, “sends a clear message that when it comes to buying Russian energy, all allies should be held to the same standard, and that includes Hungary.”

On Friday, Hungarian Foreign Minister Péter Szijjártó said in Washington that he will sign a bilateral nuclear energy cooperation agreement with U.S. Secretary of State Marco Rubio, according to Hungarian state news agency MTI.

The deal will involve Hungary’s first-ever purchases of American nuclear fuel, which it currently buys from Russia, and introduce U.S. technology for the on-site storage of spent fuel at Hungary’s Paks nuclear plant. The agreement will also include cooperation on small modular reactors.

After arriving in Washington, Orbán and some of his top officials met with Eduardo Bolsonaro, the son of former Brazilian President Jair Bolsonaro, who in September was sentenced to 27 years in prison for plotting a coup after an election loss. Orbán posted on social media: “We stand firmly with the Bolsonaros in these challenging times — friends and allies who never give up. Keep fighting: political witch-hunts have no place in democracy, truth and justice must prevail!”

Megerian and Spike write for the Associated Press. Spike reported from Budapest

The announcement comes less than week after Amazon laid off 14,000 people.

OpenAI has signed a new deal valued at $38bn with Amazon that will allow the artificial intelligence giant to run AI workloads across Amazon Web Services (AWS) cloud infrastructure.

The seven-year deal announced on Monday is the first big AI push for the e-commerce giant after a restructuring last week.

The new deal will give the ChatGPT maker access to thousands of Nvidia graphics processors to train and run its artificial intelligence models.

Experts say this does not mean that it will allow OpenAI to train its model on websites hosted by AWS – which includes the websites of The New York Times, Reddit and United Airlines.

“Running OpenAI training inside AWS doesn’t change their ability to scrape content from AWS-hosted websites [which they could already do for anything publicly readable]. This is strictly speaking about the economics of rent vs buy for GPU [graphics processing unit] capacity,” Joshua McKenty, CEO of the AI detection company PolyguardAI, told Al Jazeera.

The deal is also a major vote of confidence for the e-commerce giant’s cloud unit, AWS, which some investors feared had fallen behind rivals Microsoft and Google in the artificial intelligence (AI) race. Those fears were somewhat eased by the strong growth the business reported in the September quarter.

OpenAI will begin using AWS immediately, with all planned capacity set to come online by the end of 2026 and room to expand further in 2027 and beyond.

Amazon plans to roll out hundreds of thousands of chips, including Nvidia’s GB200 and GB300 AI accelerators, in data clusters built to power ChatGPT’s responses and train OpenAI’s next wave of models, the companies said.

Amazon already offers OpenAI models on Amazon Bedrock, which offers multiple AI models for businesses using AWS.

OpenAI’s sweeping restructuring last week moved it further away from its non-profit roots and also removed Microsoft’s first right to refusal to supply services in the new arrangement.

Image hurdles

Amazon’s announcement about an investment in AI comes only days after the company laid off 14,000 people despite CEO Andy Jassy’s comment in an earnings call on Thursday saying the layoffs were not driven by AI.

“The announcement that we made a few days ago was not really financially driven, and it’s not even really AI-driven, not right now at least,” Jassy said.

OpenAI CEO Sam Altman has said the startup is committed to spending $1.4 trillion to develop 30 gigawatts of computing resources – enough to roughly power 25 million United States homes.

“Scaling frontier AI requires massive, reliable compute,” said Altman. “Our partnership with AWS strengthens the broad compute ecosystem that will power this next era and bring advanced AI to everyone.”

This comes amid growing concerns about the sheer amount of energy demand that AI data centres need to operate. The Lawrence Berkeley National Laboratory estimates that AI data centres will use up to 12 percent of US electricity by 2028.

An AP/NORC poll from October found that 41 percent of Americans are extremely concerned about AI’s impact on the environment, while another 30 percent say they are somewhat concerned as the industry increases its data centre footprint around the US.

Signs of a bubble

Surging valuations of AI companies and their massive spending commitments, which total more than $1 trillion for OpenAI, have raised fears that the AI boom may be turning into a bubble.

OpenAI has already tapped Alphabet’s Google to supply it with cloud services, as Reuters reported in June. It also reportedly struck a deal to buy $300bn in computing power for about five years.

While OpenAI’s relationship with Microsoft, which the two forged in 2019, has helped push Microsoft to the top spot among its Big Tech peers in the AI race, both companies have been making moves recently to reduce reliance on each other.

Neither OpenAI nor Amazon were immediately available for comment.

On Wall Street, Amazon’s stock is surging on the news of the new deal. As of 11:15am in New York (16:15 GMT), it is up by 4.7 percent.