Concerns rise over starvation in Gaza

0:28Good morning from the Financial Times.

0:36The U.S. and China could extend their tariff truce. The current pause is set to expire on August 12th. The two countries met yesterday to work on a solution, and the Chinese delegation said both sides agreed to pause tariffs on each other for an additional 90 days. But during the U.S. press conference, Treasury Secretary Scott Besson had a different take. Nothing is agreed until we speak with President Trump. Besant did say, however, the negotiations were very constructive. I think we had great momentum going into the meeting thanks to the president's trade deals. I think the Chinese were, they're never compliant, but I believe that they were in more of a mood for a wide-ranging discussion.

1:25U.S. President Donald Trump told reporters later that Besant would brief him today about the meeting, and then he'd make a decision about extending the tariff pause.

1:41A U.N.-backed panel said yesterday that a famine is unfolding across Gaza. Meanwhile, Israel is being blamed for stopping the U.N. from moving enough food to the Strip. And now world leaders are weighing in on the situation. Here to talk to me about this is the FT's Mihul Srivastava in Tel Aviv. Hey, Mihul. Hi, guys. So this distinction of famine, where is this panel drawing that distinction, and how are they measuring that? So there's a panel called IPC, which is basically a UN-backed panel made up of all large number experts that does data collection around the Gaza Strip. They showed an alert yesterday saying that they understood that the worst case scenario, which is that famine is unfolding in the Gaza Strip, is currently underway.

2:25When you dig through the data, it's really alarming. It basically says there's widespread starvation. There's lots of adults who are going two, three days without a meal. There are one in three children in Gaza City, which before the war was the largest population center in the Gaza Strip, who are severely malnourished. In many ways, this meets the threshold for what they would theoretically consider to be a famine. But the formal declaration of famine is yet to come. So the situation is dire, it sounds like, whether or not it's formally a famine or not. It's really bad for people living in Gaza.

2:59Why has it been so difficult to get food to Palestinians in Gaza? So the most important thing to remember is that the Gaza Strip is besieged by Israel. Israel has had a blockade on Gaza for many years. But since the war began, it has controlled almost all the entry points, including from the Egyptian side. The Israeli government decides what goes in. In mid-March, the Israeli government this year decided to once again institute a full siege. Almost no food, no water, except from a small pipeline. And then later on, it's tried to replace these aid agencies with a foundation called the Gaza Emitarian Foundation, which has its own problems, including the fact that in southern Gaza, people have to travel large distances to get there, including soldiers who have shot at or around the crowds, killing as many as a thousand people, according to local officials.

3:50That's left very little food for civilians. How have other countries, you know, the U.S., European countries, and also, you know, Israel responded to the starvation in Gaza? It's been an evolving political battle. In the beginning, the United States backed the Gaza-Mantrian Foundation. But images have started emerging of how bad the situation is. Even President Trump pointed out that you can't hide the fact that these children are starving. The pressure upon the Israeli government to resolve the situation as quickly as possible is significantly higher now than it was just 10 days ago. One of the things to remember over here is that the Israeli government denies that any of this is happening, that any of this is by design.

4:31On Monday night, Prime Minister Netanyahu issued a late-night statement saying that they're going to ensure that large amounts of humanitarian aid flow to the Gaza Strip, that they're pausing IDF operations in order to create secure routes and continue to claim that they allow significant amounts of humanitarian aid into Gaza every single day. This has been Israel's claim since the beginning of the war. And this is one that the UN and independent agencies have consistently contested. And the evidence is now on the ground where you see how hungry people are. Now, going back to the report from the IPC, the designation that a famine is unfolding, the situation isn't officially there yet.

5:09If it does get designated a famine, would that change anything? The fact that people are starving in Gaza today is undeniable. As the World Food Program, Cindy McCain, said on Tuesday, to wait for the label in order to flood Gaza with aid is a mistake. The fact that people are starving in Gaza today is a topic of conversation both in Israel and internationally. And yet, if you go by what the international agencies say, it hasn't resulted in a large amount of food entering Gaza, at least not since this weekend. That's the FT's Mihul Srivastava in Tel Aviv.

5:50The International Monetary Fund says the global economy is doing better than it thought. The IMF upgraded its global growth forecast yesterday. There are signs that U.S. President Donald Trump's trade war is going to do less damage to the global economy than anticipated. You see, the dollar is weakening, which should cushion the impact of U.S. tariffs on its trading partners. The U.S. also got some of its own encouraging economic news yesterday. Job openings last month came in just slightly below expectations, so it looks like the labor market is in pretty good shape. And American consumer confidence is up 2 % in July compared to June.

6:36China absolutely rattled the artificial intelligence industry earlier this year. Remember DeepSeq? The startup released a powerful model that appeared much cheaper to make than U.S. rivals. China is trying to piggyback off DeepSeq's success to get to global AI dominance. That was on full display at the World Artificial Intelligence Conference in Shanghai this week. The FT's Eleanor Olcott was there, and she joins me now to talk about it. Hey, Eleanor. Hi. So how big of an impact in China has the DeepSeq model made? So six months ago, DeepSeq released this R1 model, which was a reasoning model.

7:13And this was a bit of a breakthrough moment because it really brought the world's attention to the progress that China had been making on AI. So a lot has changed since then. We've had a whole bunch of other models from rival companies. But the lingering impact of that moment is still clear. Firstly, it set China on the path of open source. So all of the other companies were forced to adopt DeepSeq's open source model approach, which also means that the pace of innovation has been faster as everyone's been learning from each other. It also created this impetus to experiment with AI and deploy it in all sorts of new circumstances.

7:52And thirdly, it's given the overall ecosystem a real boost. It was clear this year that there was a real sense of optimism that the funding environment had improved somewhat, especially for companies in hot areas like AI and robotics. Okay, so it sounds like DeepSeek has given the country's AI industry a boost. But, you know, how does it fit in with China's overall AI strategy? What did you hear about it at the Wake conference? So there wasn't a whole lot about DeepSeek specifically. They've been very low key and they're not really a kind of very public company in contrast to some of the other LLM companies.

8:30But DeepSeek has turned into a useful marketing tool for Beijing's messaging on AI. And that message is that China is developing AI for the common good by adopting an open source strategy. Now, of course, this is just messaging. There's plenty of reason to be skeptical about this. But this week, the message from Beijing, at a bare minimum, stands in sharp contrast to the one coming from the White House. Just days before Wake, the White House released their own version of an AI action plan, which was all about this American first strategy, how to create American dominance in AI, and how to beat China.

9:11Okay, so the Chinese government really wants to challenge US dominance and artificial intelligence. How is it going about doing that? So there's a few different things that both the central government and the local governments have been doing, right? On the funding side, we've seen a bunch of government funds funneling money specifically into the AI industry. The regulators have also made it easier for some of these AI companies to go public, which also creates more incentive for the private sector to invest in this industry. We've also on the local government level seen this massive construction of AI data centers across China and specifically kind of in the Western regions where there's cheap electricity.

10:01Okay, so given all this, Eleanor, is China a serious threat to the US dominance in AI? I think it's important to remember here that there's still a very, very big question over Chinese computing power. The US is really strong in AI in part because it has a monopoly over the chips powering AI development. NVIDIA's AI chips are still the industry standard for training models. Chinese companies have been trying really hard to break NVIDIA's stranglehold, but haven't really been successful thus far. And so when we're talking about the competition or the threat that China poses to the U.S., it's important to remember that China remains very, very dependent on U.S.

10:49technology to develop and deploy AI. Eleanor Olcott is the FT's China technology correspondent. Thanks so much, Eleanor. Thank you. You can read more on all these stories for free when you click the links in our show notes. This has been your daily FT News Briefing. Check back tomorrow for the latest business news.

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