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  • Chip wars: How ‘chiplets’ are emerging as a core part of China’s tech strategy

    Chip wars: How ‘chiplets’ are emerging as a core part of China’s tech strategy

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    July 13 (Reuters) – The sale of struggling Silicon Valley startup zGlue’s patents in 2021 was unremarkable except for one detail: The technology it owned, designed to cut the time and cost for making chips, showed up 13 months later in the patent portfolio of Chipuller, a startup in China’s southern tech hub Shenzhen.

    Chipuller purchased what is referred to as chiplet technology, a cost efficient way to package groups of small semiconductors to form one powerful brain capable of powering everything from data centers to gadgets at home.

    The previously unreported technology transfer coincides with a push for chiplet technology in China that started about two years ago, according to a Reuters analysis of hundreds of patents in the U.S. and China and dozens of Chinese government procurement documents, research papers and grants, local and central government policy documents and interviews with Chinese chip executives.

    Industry experts say chiplet technology has become even more important to China since the U.S. barred it from accessing advanced machines and materials needed to make today’s most cutting edge chips, and now largely underpins the country’s plans for self-reliance in semiconductor manufacturing.

    “U.S.-China competition is on the same starting line,” Chipuller chairman Yang Meng said about chiplet technology in an interview with Reuters. “In other (chip technologies) there is a sizeable gap between China and the United States, Japan, South Korea, Taiwan.”

    Barely mentioned before 2021, Chinese authorities have highlighted chiplets more frequently in recent years, according to a Reuters review. At least 20 policy documents from local to central governments referred to it as part of a broader strategy to increase China’s capabilities in “key and cutting-edge technologies”.

    “Chiplets have a very special meaning for China given the restrictions on wafer fabrication equipment,” said Charles Shi, a chip analyst for brokerage Needham. “They can still develop 3D stacking or other chiplet technology to work around those restrictions. That’s the grand strategy, and I think it might even work.”

    Beijing is rapidly exploiting chiplet technology in applications as diverse as artificial intelligence to self-driving cars, with entities from tech giant Huawei Technologies to military institutions exploring its use.

    More major investments in the area are on the way, according to a review of corporate announcements.

    CHINA’S CHIPLET ADVANTAGE

    Chiplets, or small chips, can be the size of a grain of sand or bigger than a thumbnail and are brought together in a process called advanced packaging.

    It is a technology the global chip industry has increasingly embraced in recent years as chip manufacturing costs soar in the race to make transistors so small they are now measured in the number of atoms.

    Bonding chiplets tightly together can help make more powerful systems without shrinking the transistor size as the multiple chips can work like one brain.

    Apple’s high-end computer lines use chiplet technology, as do Intel and AMD’s more powerful chips.

    About a quarter of the global chip packaging and testing market sits in China, according to Dongguan Securities.

    While some say this gives China an advantage in leveraging chiplet technology, Chipuller chairman Yang cautioned the proportion of China’s packaging industry that could be considered advanced was “not very big”.

    Under the right conditions, chiplets that are personalised according to the needs of the customer can be completed quickly, in “three to four months, this is the unique advantage China holds,” according to Yang.

    Needham’s Shi said according to import data published by China’s customs agency, China’s purchase of chip packaging equipment soared to $3.3 billion in 2021 from its previous high of $1.7 billion in 2018, although last year it fell to $2.3 billion with the chip market downturn.

    Since early 2021 research papers on chiplets started surfacing by researchers of the Chinese military People’s Liberation Army and universities it runs, and state-run and PLA-affiliated laboratories are looking to use chips made using domestic chiplet technology according to six tenders published over the past three years.

    Public documents by the government also show millions of dollars worth of grants to researchers specializing in chiplet technology, while dozens of smaller companies have sprouted throughout China in recent years to meet domestic demand for advanced packaging solutions like chiplets.

    CHIPLETS ON THE TABLE

    Against the backdrop of escalating U.S.-China tension, Chinese company Chipuller acquired 28 patents either owned by zGlue or invented by people whose names are on zGlue’s patents, according to an analysis using IP management technology firm Anaqua’s Acclaim IP database.

    The acquisition was through a two-step transfer, first through British Virgin Islands-registered North Sea Investment Co Ltd, according to documents seen by Reuters and confirmed by Yang.

    The Committee on Foreign Investment in the United States (CFIUS), a powerful Treasury-led committee that reviews transactions for potential threats to U.S. security, did not respond to a Reuters request for comment about whether such sales would require their approval.

    CFIUS lawyers Laura Black at Akin’s Trade Group, Melissa Mannino at BakerHostetler and Perry Bechky at Berliner Corcoran & Rowe say patent sales alone would not necessarily give CFIUS authority over the deal, as it depends whether the assets purchased constitute a U.S. business.

    Representative Mike Gallagher, an influential lawmaker whose select committee on China has pressed the Biden administration to take tougher stances on China, told Reuters zGlue’s case highlights the “urgent need to reform CFIUS”.

    “(People’s Republic of China) entities should not be able to act with impunity to take advantage of distressed U.S. firms to transfer their IP to China,” he said in an emailed statement.

    Chipuller’s Yang said zGlue’s lawyer communicated with both CFIUS and the Department of Commerce to ensure the sale to North Sea would not fall foul of export controls.

    These discussions did not include mention of Chipuller or the possibility of a Chinese entity ending up in possession of the patents, according to a Chipuller spokesperson.

    “Everything was done very transparently and in accordance with (U.S.) law,” Yang said.

    Yang said he considered himself a founder of zGlue as he became an investor in the company in 2015, soon after its formation, and later became a director and chairman.

    CFIUS visited zGlue offices in 2018 to conduct an investigation because the company’s largest non-U.S. investor, Yang, was from China, the chairman said.

    “So we have spent a lot of time communicating with CFIUS,” Yang said, adding that Chipuller currently does not supply any Chinese military or U.S.-sanctioned entities.

    Chipuller isn’t the only firm with chiplet technology.

    Huawei, China’s tech and chip design giant that has been put on the U.S.’s most restricted list, has been actively filing chiplet patents.

    Huawei published over 900 chiplet-related patent applications and grants last year in China, up from 30 in 2017, according to Anaqua’s director of analytics solutions Shayne Phillips.

    Huawei declined to comment.

    Reuters identified over a dozen announcements over the past two years for new factories or expansions of existing ones from companies using chiplet technology in manufacturing across China’s tech sector, representing an investment totalling over 40 billion yuan.

    They include domestic giants TongFu Microelectronics (002156.SZ) and JCET Group (600584.SS), as well as fast-growing startups such as Beijing ESWIN Technology Group, which spent 5.5 billion yuan on a factory for its chiplet-focused subsidiary that began operating in April.

    One article published in May by an outlet run by China’s Ministry of Industry and Information Technology (MIIT) urged big Chinese tech firms the use of domestic packaging companies such as TongFu to help build China’s self-sufficiency in computing power.

    “Use Chiplet technology to break through the United States’ siege of my country’s advanced process chips,” it said.

    MIIT did not respond to a request for comment.

    Chipuller chairman Yang puts it this way: “Chiplet technology is the core driving force for the development of the domestic semiconductor industry,” he said on the company’s official WeChat channel. “It is our mission and duty to bring it back to China.”

    ($1 = 7.2205 Chinese yuan renminbi)

    Reporting by Jane Lanhee Lee and Eduardo Baptista; Additional reporting by Echo Wang and Stephen Nellis; editing by Kenneth Li, Brenda Goh and Lincoln Feast.

    Our Standards: The Thomson Reuters Trust Principles.

    Reports on global trends in computing from covering semiconductors and tools to manufacture them to quantum computing. Has 27 years of experience reporting from South Korea, China, and the U.S. and previously worked at the Asian Wall Street Journal, Dow Jones Newswires and Reuters TV. In her free time, she studies math and physics with the goal …

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  • How Sweden and Finland could help NATO contain Russia

    How Sweden and Finland could help NATO contain Russia

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    TORNIO, Finland/KARLSKRONA, Sweden, July 3 (Reuters) – High above a railway bridge spanning a foaming river just outside the Arctic Circle, Finnish construction workers hammer away at a project that will smooth the connections from NATO’s Atlantic coastline in Norway to its new border with Russia.

    “We will be removing some 1,200 of these one by one,” says site manager Mika Hakkarainen, holding up a rivet.

    Until February 2022, the 37-million euro ($41 million) electrification of this short stretch of rail – the only rail link between Sweden and Finland – simply promised locals a chance to catch a night train down to the bright lights of Stockholm.

    After Russia invaded Ukraine, that changed.

    Now Finland is part of NATO, and Sweden hopes to join soon.

    As the alliance reshapes its strategy in response to Russia’s campaign, access to these new territories and their infrastructure opens ways for allies to watch and contain Moscow, and an unprecedented chance to treat the whole of northwest Europe as one bloc, nearly two dozen diplomats and military and security experts told Reuters.

    “PUT RUSSIA AT RISK”

    The Finnish rail improvements around Tornio on the Swedish border are one example. Due for completion next year, they will make it easier for allies to send reinforcements and equipment from across the Atlantic to Kemijarvi, an hour’s drive from the Russian border and seven hours from Russia’s nuclear bastion and military bases near Murmansk in the Kola peninsula.

    Among forces based there, Russia’s Northern Fleet includes 27 submarines, more than 40 warships, around 80 fighter planes and stocks of nuclear warheads and missiles, data collected by the Finnish Institute of International Affairs (FIIA) shows.

    In a military conflict with NATO, the Fleet’s main task would be to secure control of the Barents Sea and stop ships bringing reinforcements from North America to Europe through the waters between Greenland, Iceland and the UK.

    That’s something Finland can help NATO resist.

    “It’s all about containing those kinds of capabilities from the north,” retired U.S. Major General Gordon B. Davis Jr. told Reuters.

    Maps showing marine traffic through the Baltic

    Besides opening its territory, Helsinki is buying the right assets, particularly fighter jets, “to add value to (the) northeastern defence and, frankly, in a conflict put Russia at risk,” he said.

    Sweden’s contribution will, by 2028, include a new generation of submarines in the Baltic Sea that Fredrik Linden, Commander of Sweden’s First Submarine Flotilla, says will make a big difference in protecting vulnerable seabed infrastructure and preserving access – currently major security headaches, as the September 2022 destruction of the Nord Stream gas pipelines read more showed.

    “With five submarines we can close the Baltic Sea,” Linden told Reuters. “We will cover the parts that are interesting with our sensors and with our weapons.”

    Analysts say the change is not before time. Russia has been actively developing its military and hybrid capabilities in the Arctic against the West, partly under the cover of international environmental and economic cooperation, the FIIA’s Deputy Director Samu Paukkunen told Reuters. Russia’s defence ministry did not respond to a request for comment.

    Paukkunen’s institute estimates Western armed forces are militarily about 10 years behind Russia in the Arctic.

    Even with the losses that Russia has sustained in Ukraine, the naval component of the Northern Fleet and the strategic bombers remain intact, Paukkunen said.

    NATO-member Denmark phased out its submarine fleet in 2004, part of a move to scale back its military capabilities after the end of the Cold War, and it has yet to decide on future investments. Norway is also ordering four new submarines, with delivery of the first due in 2029.

    “It seems to me that we have some catching up to do, because we haven’t done it properly for the last 25 years,” said Sebastian Bruns, a senior researcher into maritime security at Kiel University’s Institute for Security Policy.

    Maps showing marine traffic through the Baltic

    “A WHOLE PIECE”

    Both developments show how the expanded alliance will reshape Europe’s security map. The region from the Baltic in the south to the high north may become almost an integrated operating area for NATO.

    “For NATO it’s quite important to have now the whole northern part, to see it as a whole piece,” Lieutenant Colonel Michael Maus from NATO’s Allied Command Transformation told Reuters. He chaired the working group which led Finland’s military integration into NATO.

    “With (existing) NATO nations Norway and Denmark, now we have a whole bloc. And thinking about potential defence plans, it’s for us a huge step forward, to consider it as a whole area now.”

    This became clear in May, when Finland hosted its first Arctic military exercise as a NATO member at one of Europe’s largest artillery training grounds 25 km above the Arctic Circle.

    The nearby town of Rovaniemi, known to tourists as the home of Santa Claus, is also the base of Finland’s Arctic air force and would serve as a military hub for the region in case of a conflict. Finland is investing some 150 million euros to renew the base to be able to host half a new fleet of 64 F-35 fighter jets, due to arrive from 2026.

    An undated artist’s rendition depicts divers and an unmanned vehicle exiting the A26 submarine. Saab AB/Handout via REUTERS

    For the May manoeuvres, nearly 1,000 allied forces from the United States, Britain, Norway and Sweden filled the sparse motorways as they joined some 6,500 Finnish troops and 1,000 vehicles.

    Captain Kurt Rossi, Field Artillery Officer of the U.S. Army, led a battery bringing in an M270 multiple rocket launcher.

    It was first shipped from Germany across the Baltic Sea, then trucked nearly 900 km to the north.

    “We haven’t been this close (to Russia) and been able to train up in Finland before,” Rossi said.

    If there was a conflict with Russia in the Baltic Sea area – where Russia has significant military capabilities at St. Petersburg and Kaliningrad – the shipping lane NATO used for that exercise would be vulnerable. Finland relies heavily on maritime freight for all its supplies – customs data shows almost 96% of its foreign trade is carried across the Baltic.

    The east-west railway link across the high north will open up an alternative, which could prove crucial.

    “I think the Russians can quite easily interrupt the cargo transportation by sea so basically this northern route is the only accessible route after that,” said Tuomo Lamberg, manager for cross border operations at Sweco, the Swedish company designing the electrification.

    Maps showing marine traffic through the Baltic

    “NOTHING BEATS THEM”

    But that risk, too, may recede when Sweden joins NATO.

    Down beneath the Baltic Sea waterline, the submarine commander Linden shows a reporter the captain’s quarters of the Gotland, one of four submarines currently in Sweden’s fleet, which will bring NATO’s total in the Baltic countries to 12 by 2028.

    The Kiel institute expects Russia to add one to three submarines in the coming years, to bring its Baltic submarine total to four, along with its fleet of around six modern warships. Its capabilities at Kaliningrad also include medium-range ballistic missiles.

    “This can be the loneliest place in the world,” says Linden, who captained the vessel for many years. On a typical mission, which lasts two to three weeks, there is no communication with headquarters, he said.

    The Gotlands, like Germany’s modern Type 212 submarines, will be among NATO’s most advanced non-nuclear submarines and can stay out of port for significantly longer than most other conventional models, the researcher Bruns said read more .

    “I would say, without a doubt, that the Gotland-class and the German Type 212 are the most capable non-nuclear submarines in the world,” said Bruns.

    “There is nothing that beats them, quite literally. In terms of how quiet they are, the engines they use, they are particularly quiet and very maneuverable.”

    In submarine warfare, Linden said, the primary question is where the adversary is. A careless crew member dropping a wrench or slamming a cupboard door can lead to detection.

    “We talk quietly on board,” Linden said. “You shouldn’t believe … films where orders are shouted.”

    The Gotland is based at Karlskrona, about 350 km across the Baltic from Kaliningrad. With an average of 1,500 vessels per day trafficking the Baltic according to the Commission on Security and Cooperation In Europe, it is one of the world’s busiest seaways – and there is really only one way out, the Kattegatt Sea between Denmark and Sweden.

    The shallow and crowded seaway can only be accessed through three narrow straits that submarines can’t pass through without being detected.

    LISTENING POWERS

    If any of the straits were to be closed, the sea freight traffic to Sweden and Finland would be hit hard and the Baltic states completely cut off. But with Sweden in the alliance, that becomes more preventable, because Sweden’s submarines will add to NATO’s listening powers.

    Linden says the Gotland’s crew can sometimes hear Russia’s vessels. The range of sound travel varies partly depending on the seasons. In winter, he said, you can hear as far as the island of Oeland – just a bit further than the distance between London and Birmingham in the UK.

    “You can lie outside Stockholm and hear the chain rattling on Oeland’s northern buoy,” Linden said. “In the summer you can hear maybe 3,000 meters.”

    By 2028, once Sweden takes delivery of a new design of vessel, this capacity will increase. The new design, known as A26, will allow submarine crews to deploy remotely operated vehicles (ROVs), combat divers or autonomous systems of some sort without putting the submarine or crew at risk, Bruns said.

    “Depending on the mission it could be an ROV that safeguards a pipeline or data cable, it could be combat divers that go ashore in the cover of darkness, it could be almost anything.”

    That capacity will increase Sweden’s scope to control comings and goings through the Baltic.

    “If you count all the forces, with Germany in the lead and Sweden and Finland coming on board, all those have really shifted the balance in the Baltic Sea quite significantly,” said Nick Childs, Senior Fellow for Naval Forces and Maritime Security at the International Institute for Strategic Studies.

    “It would make it very difficult for the Russian Baltic Sea fleet to operate in a free way,” he said. “But it could … still pose challenges for NATO.”

    Anne Kauranen reported from Tornio, Johan Ahlander from Karlskrona; additional reporting from Gwladys Fouche in Oslo, Jacob Gronholt-Pedersen in Copenhagen and Sabine Siebold in Brussels; Edited by Sara Ledwith

    Our Standards: The Thomson Reuters Trust Principles.

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  • US colleges game out a possible end to race-conscious student admissions

    US colleges game out a possible end to race-conscious student admissions

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    [1/3] Members of the University of North Carolina’s diverse student body mingle and make their way across campus as the Supreme Court weighs the issue of race-conscious admissions to colleges, in Chapel Hill, North Carolina, U.S., March 28, 2023. REUTERS/Jonathan Drake/File Photo

    WASHINGTON, May 24 (Reuters) – In 1998, the year a voter-approved measure barring the use of race-conscious admissions policies for public colleges and universities in California took effect, the percentage of Black, Hispanic and Native American students admitted at two of the state’s elite public schools plummeted by more than 50%.

    Those figures for UCLA and the University of California, Berkeley offer a cautionary tale as administrators at schools around the United States await a Supreme Court decision due by the end of June that is expected to prohibit affirmative action student admissions policies nationwide.

    That potential outcome in cases involving Harvard University and the University of North Carolina has brought new urgency to efforts by schools to maintain or increase racial and ethnic diversity in their student populations, according to interviews with senior administrators at a dozen colleges and universities.

    “We cannot afford as a nation to regress on our goals to create an educated and equitable society,” said Seth Allen, head of admissions at Pomona College in California. “So it’s incumbent on higher education to figure out how to work collectively together to ensure that we’re not furthering the enrollment gap among different groups of students.”

    Many selective U.S. colleges and universities for decades have used some form of affirmative action to boost enrollment of minority students, seeing value in having a diverse student population not only to offer educational opportunity but to bring a range of perspectives onto campuses.

    Affirmative action refers to policies that favor people belonging to certain groups considered disadvantaged or subject to discrimination, in areas such as hiring and student admissions.

    Schools are exploring numerous options. Administrators said they are drafting strategies to expand their recruitment of diverse applicants, remove application barriers and increase the rate of minority students who accept their admissions offers.

    An official at Rice University in Houston said the school will lean on student essay responses to ensure it admits students from diverse backgrounds. The U.S. Air Force Academy will focus on recruiting more students from diverse congressional districts.

    The president of Skidmore College in New York said connecting with high school counselors will become “more important than ever” to broaden the school’s applicant pool.

    Many schools said they already have waived fees, made standardized testing optional and are looking to improve financial aid offers – steps that could help boost minority enrollment.

    All of the administrators said their plans could change to comply with the scope of the Supreme Court’s reasoning in the Harvard and UNC cases. Some acknowledged that whatever steps schools take to circumvent a ban on race-conscious admissions policies might face legal challenges of their own.

    “We’re likely to see a whole new generation of lawsuits arise from the new admission standards that will be adopted by colleges and universities,” said Danielle Holley, current dean of Howard University School of Law in Washington and incoming president of Mount Holyoke College in Massachusetts.

    Lawsuits backed by an anti-affirmative action activist accused Harvard and UNC of unlawful discrimination in student admissions either by violating the U.S. Constitution’s promise of equal protection under the law or a federal law barring discrimination based on race and other factors.

    UNC was accused of discriminating against white and Asian American applicants. Harvard was accused of bias against Asian American applicants. The schools denied these allegations.

    GOING LOCAL

    Many of the school administrators said they plan to focus resources on recruitment, a part of the admissions cycle they do not expect the court will restrict.

    Admissions officers said they were broadening their outreach to high schools and community-based organizations in neighborhoods with lower incomes and educational attainment – places often populated by racial minorities.

    Yvonne Berumen, vice president of admissions at Pitzer College in California, said her team might run essay workshops at high schools in those targeted zip codes – postal regions – in hopes of generating applications.

    Chris George, dean of admissions at St. Olaf College in Minnesota, said high school data from national organizations like the College Board, which offers information on neighborhood income and housing stability, will help guide which high schools the college sends representatives to visit and the recruitment events they attend.

    Community-based organizations that identify local students who show academic promise and help them apply to college will be crucial partners for identifying and recruiting potential applicants from diverse backgrounds, the administrators said.

    “They become extensions of our recruiting and admissions team in many ways, and we’re seeing each year a bigger and bigger percentage of our students come from those community-based organizations,” said Kent Devereaux, president of Goucher College in Maryland.

    Administrators at schools located in or near major cities, including Pomona College near Los Angeles and Sarah Lawrence College in New York, said they would hope to draw more students from racially diverse local high schools and take more transfer students from local community colleges.

    Colonel Arthur Primas Jr., the U.S. Air Force Academy’s admissions director, said his racially diverse recruiting team will continue to visit schools in U.S. congressional districts with heavy concentrations of minorities and will try to encourage more students to seek nominations to the academy from their local members of Congress.

    “The Air Force Academy has had a long tradition of actively recruiting diverse candidates,” Primas said. “But we’re going to have to really be expansive.”

    Reporting by Gabriella Borter; Additional reporting by Donna Bryson; Editing by Will Dunham and Colleen Jenkins

    Our Standards: The Thomson Reuters Trust Principles.

    Gabriella Borter

    Thomson Reuters

    Gabriella Borter is a reporter on the U.S. National Affairs team, covering cultural and political issues as well as breaking news. She has won two Front Page Awards from the Newswomen’s Club of New York – in 2020 for her beat reporting on healthcare workers during the COVID-19 pandemic, and in 2019 for her spot story on the firing of the police officer who killed Eric Garner. The latter was also a Deadline Club Awards finalist. She holds a B.A. in English from Yale University and joined Reuters in 2017.

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  • Ukraine’s tech entrepreneurs fight war on a different front

    Ukraine’s tech entrepreneurs fight war on a different front

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    PRAGUE, April 4 (Reuters) – Eugene Nayshtetik and his five co-workers shuttered their company developing medical and biotech startups to join the defense forces days after Russia invaded Ukraine. Within two months, their commanders agreed it would be more useful if they swapped their military gear for computers.

    With the government’s blessing, Nayshtetik and his team of engineers moved to neighboring Poland where they raised initial funding from a Polish company, Air Res Aviation, to develop a new drone for the Ukrainian military.

    Jerzy Nowak, president and co-owner of Air Res Aviation, said his company’s initial investment in the drone project amounted to around $200,000.

    The Defender drone, now ready for testing, is designed to withstand strong winds to enable surveillance in bad weather, can fly vertically and carry big payloads. It’s an example of how some startups in Ukraine’s dynamic tech sector are switching to pursue military projects.

    “We had our own portfolio of medical and biotechnology civilian projects before the war,” Nayshtetik told Reuters. “We never dreamt of killing people. We wanted to heal people but the situation changed.”

    Reuters spoke to more than a dozen entrepreneurs, as well as Ukrainian and Western officials who said the shift to military innovation in Ukraine’s once-thriving technology sector has bolstered the country’s out-manned and out-gunned armed forces.

    Military experts and Ukrainian officials told Reuters that innovations developed by these startups are making a difference on the battlefield, ranging from software applications that can target enemy positions more quickly to civilian drones adapted for military use, and systems that integrate data to give commanders more detailed battlefield views.

    “The Ukrainians are outmatched by every numerical scale: in terms of numbers of forces; in terms of numbers when it comes to equipment. And yet they’re holding their own,” said a senior NATO official, who spoke on condition of anonymity. “One of the reasons they’re holding their own is that they have, in a very innovative way, integrated technology into warfighting.”

    Before Russia’s invasion, Ukraine represented one of the fastest growing tech hubs in central and eastern Europe. The enterprise value of startups soared more than 9-fold between 2017 and 2022 to reach 23 billion euros, according to data from Dealroom.com.

    Ukraine offered a host of advantages for emerging technology businesses, including a tradition of producing graduates strong in math and computer science. A low cost base also allowed entrepreneurs to do more with less.

    The country boasted 285,000 software developers in 2021 with an additional 25,000 graduating from tech universities annually, according to software development outsourcing company Softjourn.

    But with most emerging companies in Ukraine focused on the domestic market, many startups suffered a collapse in demand following the war – which has killed tens of thousands of people, reduced cities to rubble and wreaked havoc on infrastructure.

    Pavlo Kartashov, director of the Ukrainian Startup Fund (USF), a government-backed organization that seeds technology startups, told Reuters his group resumed funding in October. It hopes to finance around five to 10 emerging companies a month with grants of up to $35,000.

    Most will focus on military technology, he said.

    The fund also aims to unveil in April a new platform to connect emerging companies more closely with the military to identify the needs on the battlefield and to speed the transformation of ideas into tools that can be used in the conflict.

    “If you have something innovative and efficient it will definitely be used by the army,” he told Reuters. “We need new technology to fight the enemy and can try different approaches in real time.”

    PLOUGHSHARES INTO SWORDS

    Since the war, Western venture capital firms often have required strict term sheets that include having at least one founder and other key parts of the business located outside Ukraine. So the government has become the sole source within the country of early stage funding – the lifeblood of the technology sector – more than half a dozen founders and venture capitalists said.

    Demand from the government has driven the shift to military technology, but most of the entrepreneurs who spoke to Reuters said that patriotic duty also played a role.

    Take Kiev-based efarm.pro, a startup founded in 2016 whose GPS technology attached to tractors helps farmers more precisely monitor how fertilizer has penetrated the ground. Many of its customers are located in parts of Ukraine that became too dangerous to farm after the Russian invasion so the company adapted its product to detect mines.

    The self-driving technology is only aimed at farmers for now but could also work for military vehicles, the company’s founder Alexander Prykhodchenko told Reuters.

    “Clients were calling us in the first days of the war saying they don’t know how they can work in the field,” Prykhodchenko said. “The war started on February 24 and on February 26 we started work on the new project.”

    Currently, only three of the tractors are in use as the autonomous technology remains in the testing and development phase, Prykhodchenko said.

    Ukraine’s Minister of Digital Transformation Mykhailo Fedorov said the intensity of the fighting has meant that some concepts can flow from the drawing board to the battlefield in months, if not days.

    While acknowledging the critical role of weapons supplied by Western nations in helping to fight the Russians, he added that the ability to utilize the know-how of tech-savvy Ukrainians at home and abroad has proved invaluable.

    “One of the few areas where Ukraine has managed to stay consistently ahead of Russia is in the use of innovative military technologies,” he wrote in a February article for the Atlantic Council.

    Russia says its own weapons industry is increasing production and introducing new technology fast to meet the demands of military operations in Ukraine.

    Gregory Allen, a senior fellow at the Center for Strategic & International Studies in Washington DC, highlighted the so-called “Uber for Artillery” application developed by a network of Ukrainian programmers before the Russian invasion that networks together infantry, reconnaissance and artillery units to spot and land an artillery strike more quickly.

    He also said that a pair of anonymous Ukrainian software developers had rapidly created a program in mid-2022 that used machine learning to analyze video feeds from drones to detect more effectively military vehicles camouflaged in forests. Reuters was not able to confirm independently the details of the software.

    “I used to work in the Defense Department, and I have almost never seen high quality military machine learning systems go from an idea in someone’s head to a real system being used in war in a matter of weeks,” Allen told Reuters. “The value of the Ukrainian software systems is impressive but the speed is astonishing.”

    The Pentagon’s chief weapons buyer Bill LaPlante has described Ukraine’s use of technology in the war as a “wake up call.”

    “We are seeing true innovation on the battlefield: new combinations of technologies and concepts being developed and implemented, and the cycle from idea to prototype to a warfighter’s hands collapsed to months, if not weeks,” LaPlante told a U.S. Congressional committee last month.

    ISRAELI MODEL

    While Ukraine’s government and tech founders are focused on war-time innovation to aid the military now, they say these emerging start ups can also underpin Ukraine’s post-war economy — pointing to Israel as an example of how military technology laid the foundation for a booming technology sector.

    Government support and experience working on military projects transformed Israel into a global tech hub and propelled the nation into a leader in cybersecurity and autonomous driving vehicles — a path Ukraine officials and tech leaders like Valery Krasovsky hope to emulate for a country with a pre-war population nearly five times that of Israel.

    “There are much more ideas in military technology,” said Krasovsky, the founder and chief executive of Swedish-Ukrainian Sigma Software Group.

    For now, the scarcity of seed funding in Ukraine has forced some companies to flee to places like to neighboring Poland. Groups like the Polish-Ukrainian Start Up Bridge – a Polish-government backed venture – offer emerging Ukrainian tech companies small grants to fund basic business needs and a co-working space in Warsaw.

    “Startups have had the past year to teach themselves how to survive and adapt to the new reality,” Mykhailo Khaletskyi, an advisor for the Startup Bridge and Ukrainian government, told Reuters.

    Additional Reporting by Andrew Gray and Sabine Siebold in Brussels, Elizabeth Piper in London and Mike Stone in Washington, Editing by Daniel Flynn

    Our Standards: The Thomson Reuters Trust Principles.

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  • Sex, lies and video cams: Andrew Tate turned women into slaves, prosecutors say

    Sex, lies and video cams: Andrew Tate turned women into slaves, prosecutors say

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    BUCHAREST, Feb 2 (Reuters) – The woman from Moldova thought it was love. Internet celebrity Andrew Tate had offered her a new life. They’d even discussed marriage. He asked for only one thing: absolute loyalty.

    “You must understand that once you are mine, you will be mine forever,” Tate told her on Feb. 4 last year in one of dozens of WhatsApp messages cited by Romanian prosecutors who allege he trafficked and sexually exploited several women.

    Tate, an influencer with millions of online followers, urged the Moldovan woman to join him in Romania. “Nothing bad will happen,” he reassured her on Feb. 9. “But you have to be on my side.”

    The following month, Romanian prosecutors say, Tate raped the woman twice in the country while seeking to enlist her in a human-trafficking operation focused on making pornography for the online platform OnlyFans, a site that allows people to sell explicit videos of themselves.

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    The allegations and messages are included in a previously unpublished court document, dated Dec. 30 and reviewed by Reuters, which paints the most detailed picture yet of the illicit business allegedly run by Tate, a former kickboxing world champion, and his brother Tristan.

    They came to light following the arrest of the brothers on Dec. 29 on charges of forming a criminal gang to sexually exploit women.

    British-American Andrew Tate, 36, who’s been based mainly in Romania since 2017, and his 34-year-old brother have denied all the allegations against them. Reuters was unable to reach them in police detention for comment.

    In response to questions, their attorney Eugen Vidineac said he couldn’t publicly confirm or deny information about the case while the investigation was ongoing. Romania’s anti-organized crime unit also said its prosecutors couldn’t comment on the probe.

    Reuters translated the WhatsApp exchanges with the Moldovan women – which appear in Romanian in the court document – back into English, their original language. While accurate, the translation of the Romanian version provided by prosecutors may not be identical to the initial wording.

    The brothers used deception and intimidation to bring six women under their control and “transform them into slaves”, prosecutors said in the document. The 61-page file, produced by Bucharest court officials, comprises minutes of a hearing when a judge extended the Tates’ detention plus evidence submitted by the prosecution.

    Attorney Vidineac said the brothers’ alleged victims weren’t mistreated, but “lived off the backs of the famous Tates”, according to the court document. “They were joyful and nobody was forcing them to do these things,” he added.

    Vidineac acknowledged in the document that Andrew Tate and the Moldovan woman had sex but he said it was consensual and accused her of fabricating the rape claims.

    Reuters couldn’t independently corroborate the version of events provided by prosecutors or the defence lawyer, and was unable to reach the six women named in the document for comment. The news organization does not typically identify alleged victims of sexual crimes unless they have chosen to release their names.

    Two of the women told Romanian TV station Antena3 on Jan. 11 that they’re not victims and the Tates are innocent. The station identified them only by first names, Beatrice and Iasmina.

    “You cannot list me as a victim if I say I am not one,” Beatrice told the station. The four other women, including the Moldovan woman, haven’t publicly commented.

    ONLYFANS: WE’VE MONITORED TATE

    The allegations facing Tate have put intense focus on a self-described misogynist who has built an online fanbase, particularly among young men, by promoting a lavish, hyper-macho image of driving fast cars and dating beautiful women.

    In 2022, he was the world’s eighth-most Googled person, outranked only by figures such as Johnny Depp, Will Smith and Vladimir Putin, according to Google’s analysis.

    Prosecutors say the Tates controlled the victims’ OnlyFans’ accounts and earnings amounting to tens of thousands of euros, underlining concerns among some human rights groups about the potential for the exploitation of women on such platforms.

    Reuters couldn’t verify the existence of the alleged victims’ OnlyFans accounts.

    UK-based OnlyFans has 150 million users who pay “creators” monthly fees of varying amounts for their content, much of it erotic or pornographic, but also in areas such as fitness training and music.

    The company, whose 1.5 million creators can earn anything from hundreds of dollars to tens of thousands a month, says on its website it’s “the safest digital media platform”. It was founded in 2016 and grew rapidly during COVID-19 lockdowns.

    An OnlyFans spokesperson told Reuters that Andrew Tate “has never had” a creator account or received payments. They said OnlyFans had been monitoring him since early 2022 and taken “proactive measures” to stop him posting or monetizing content, without elaborating on the reasons for the scrutiny or the steps taken.

    The spokesperson added that creators as a whole underwent extensive identification checks and that all content was reviewed by the platform, which worked closely with law enforcement. Vidineac declined to comment about the measures taken by OnlyFans against Tate.

    HOW I GET WOMEN TO LOVE ME

    Andrew Tate’s image has been stoked by a series of contentious comments. He’s compared women to dogs and said they bear some responsibility for being raped. His remarks got him banned from Facebook, Instagram and other leading social media platforms last year.

    A spokesperson for Meta said Tate was banned in August 2022 from its Facebook and Instagram platforms for violating its policies, which forbid “gender-based hate, any threats of sexual violence, or threats to share non-consensual intimate imagery”.

    Tate said on a podcast in 2021 that he had started a webcam business in Britain that had peaked with 75 women working for him earning $600,000 a month – a sum Reuters was unable to independently verify. He didn’t elaborate in the podcast on what the women did.

    Up until last month, his website offered a course costing more than $400 that promised to teach “every step to building a girl who is submissive, loyal and in love with you”.

    “THAT IS MY SKILL. To extremely efficiently get women in love with me,” he said on the website. The pages about the course, reviewed by Reuters, were removed in January.

    In a separate YouTube video aimed at men who want to make money by putting women on OnlyFans, Tate called the platform “the greatest hustle in the world”. The original date of the video, which was uploaded multiple times, is unclear.

    In the court document, lawyer Vidineac said Tate’s online persona was a “virtual character” constructed to gain followers and make money, and had “nothing to do with the real man”.

    Tate’s Twitter account, reinstated in November, one month after billionaire Elon Musk bought the platform, protests his innocence to his 4.8 million followers. “They have arrested me to ‘look’ for evidence … which they will not find because it doesn’t exist,” said a Jan. 15 post.

    AMERICAN WOMAN ‘VERY AFRAID’

    Tate first met the Moldovan woman virtually on Instagram in January 2022 before they met in person in London the following month, and by March she was in Romania, prosecutors said in the court document, which includes WhatsApp exchanges between Feb. 4 and Apr. 8.

    Authorities moved on the brothers on Apr. 11, when police raided one of their properties in Bucharest on suspicion that an American woman was being held there against her will.

    According to prosecutors, the American woman – another of the alleged six victims – met Tristan Tate online in November 2021, then in person in Miami the following month. They said he lured her to Romania by expressing “false feelings” for her and promising a serious relationship, paid for her plane ticket and said he could help her earn “100K a month” on OnlyFans.

    Tristan Tate picked her up at Bucharest airport in a Rolls-Royce on April 5 2022, and took her back to his house, which had two armed guards, the court document said.

    He told her she wasn’t a prisoner but said the guards wouldn’t let her outside without his permission, it added. He said it was dangerous for her to leave “because he had enemies”.

    There were cameras all over the house, which Tristan Tate monitored remotely, prosecutors said in the document. He once messaged the American to say he could see where she was and what she was doing, they said.

    When she moved to another house with four of Andrew Tate’s “girlfriends” she was allowed outside but only if accompanied by other women, said the prosecutors, adding that she was “very afraid” of the brothers.

    In the document, Tate’s lawyer said the American woman had a mobile phone, internet access and the freedom to leave the house as she pleased.

    The woman has not spoken publicly about the Tates or the prosecutors’ allegations.

    Romanian prosecutors said on Jan. 15 that as part of their probe into the suspects they had seized assets worth almost $4 million, including a fleet of luxury cars from Andrew Tate’s compound on the outskirts of Bucharest.

    ‘SEXUALLY EXPLOITATIVE CONTENT’

    The detention of the Tates, along with two Romanian women accused of working for them, has been extended to Feb. 27. Their appeal against that detention was rejected by a court on Wednesday. A judge can order their detention for up to 180 days while the investigation is ongoing, which means it could stretch into late June.

    The suspected accomplices, Georgiana Naghel and Luana Radu, controlled the six victims’ OnlyFans and TikTok accounts on behalf of the Tates, skimming off half the revenue and fining women for being late or sniffling on camera, said prosecutors.

    The pair threatened to beat the women up if they did not do their job, according to the court document.

    Naghel and Radu have denied all the allegations against them. Vidineac, who also represents Naghel, and Radu’s lawyer said they couldn’t comment on the case.

    The Tates’ operation put women on TikTok to drive traffic to OnlyFans because of its lucrative subscriptions, prosecutors said. Reuters couldn’t independently verify the existence of the TikTok accounts in question.

    TikTok said in a statement that Andrew Tate was banned from its platform, and that it had been taking action against videos and accounts related to him that violated its prohibition against “sexually exploitative content”.

    The company declined to comment further, citing Romania’s ongoing investigation.

    Reporting by Luiza Ilie, Octav Ganea and Andrew R.C. Marshall. Editing by Jason Szep and Pravin Char

    Our Standards: The Thomson Reuters Trust Principles.

    Luiza Ilie

    Thomson Reuters

    Bucharest-based general news reporter covering a wide range of Romanian topics from elections and economics to climate change and festivals.

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  • Weapons industry booms as Eastern Europe arms Ukraine

    Weapons industry booms as Eastern Europe arms Ukraine

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    • E.Europe arms companies step up production for Ukraine
    • Hope to find new markets as defence spends rise
    • Can produce and service Soviet-era and NATO-standard weaponry Poland, Czechs among big suppliers of military aid to Kyiv
    • Industry’s history stretches from 1800s and through Cold War

    PRAGUE/WARSAW, Nov 24 (Reuters) – Eastern Europe’s arms industry is churning out guns, artillery shells and other military supplies at a pace not seen since the Cold War as governments in the region lead efforts to aid Ukraine in its fight against Russia.

    Allies have been supplying Kyiv with weapons and military equipment since Russia invaded its neighbour on Feb. 24, depleting their own inventories along the way.

    The United States and Britain committed the most direct military aid to Ukraine between Jan. 24 and Oct. 3, a Kiel Institute for the World Economy tracker shows, with Poland in third place and the Czech Republic ninth.

    Still wary of Russia, their Soviet-era master, some former Warsaw Pact countries see helping Ukraine as a matter of regional security.

    But nearly a dozen government and company officials and analysts who spoke to Reuters said the conflict also presented new opportunities for the region’s arms industry.

    “Taking into account the realities of the ongoing war in Ukraine and the visible attitude of many countries aimed at increased spending in the field of defence budgets, there is a real chance to enter new markets and increase export revenues in the coming years,” said Sebastian Chwalek, CEO of Poland’s PGZ.

    State-owned PGZ controls more than 50 companies making weapons and ammunition – from armoured transporters to unmanned air systems – and holds stakes in dozens more.

    It now plans to invest up to 8 billion zlotys ($1.8 billion)over the next decade, more than double its pre-war target, Chwalek told Reuters. That includes new facilities located further from the border with Russia’s ally Belarus for security reasons, he said.

    Other manufacturers too are increasing production capacity and racing to hire workers, companies and government officials from Poland, Slovakia and the Czech Republic said.

    Immediately after Russia’s attack some eastern European militaries and manufacturers began emptying their warehouses of Soviet-era weapons and ammunition that Ukrainians were familiar with, as Kyiv waited for NATO-standard equipment from the West.

    As those stocks have dwindled, arms makers have cranked up production of both older and modern equipment to keep supplies flowing. The stream of weapons has helped Ukraine push back Russian forces and reclaim swathes of territory.

    Chwalek said PGZ would now produce 1,000 portable Piorun manpad air-defence systems in 2023 – not all for Ukraine -compared to 600 in 2022 and 300 to 350 in previous years.

    The company, which he said has also delivered artillery and mortar systems, howitzers, bulletproof vests, small arms and ammunition to Ukraine, is likely to surpass a pre-war 2022 revenue target of 6.74 billion zlotys.

    Companies and officials who spoke to Reuters declined to give specific details of military supplies to Ukraine, and some did not want to be identified, citing security and commercial sensitivities.

    HISTORIC INDUSTRY

    Eastern Europe’s arms industry dates back to the 19th Century, when Czech Emil Skoda began manufacturing weapons for the Austro-Hungarian Empire.

    Under Communism, huge factories in Czechoslovakia, the Warsaw Pact’s second-largest weapons producer, Poland and elsewhere in the region kept people employed, turning out weapons for Cold War conflicts Moscow stoked around the world.

    [1/6] GROT C16 FB-M1, modular assault rifles system is seen at PGZ (Polska Grupa Zbrojna) arms factory Fabryka Broni Lucznikin Radom Poland, November 7, 2022. REUTERS/Kacper Pempel

    “The Czech Republic was one of the powerhouses of weapons exporters and we have the personnel, material base and production lines needed to increase capacity,” its NATO Ambassador Jakub Landovsky told Reuters.

    “This is a great chance for the Czechs to increase what we need after giving the Ukrainians the old Soviet-era stocks. This can show other countries we can be a reliable partner in the arms industry.”

    The 1991 collapse of the Soviet Union and NATO’s expansion into the region pushed companies to modernise, but “they can still quickly produce things like ammunition that fits the Soviet systems”, said Siemon Wezeman, a researcher at the Stockholm International Peace Research Institute.

    Deliveries to Ukraine have included artillery rounds of “Eastern” calibres, such as 152mm howitzer rounds and 122mm rockets not produced by Western companies, officials and companies said.

    They said Ukraine had acquired weapons and equipment via donations from governments and direct commercial contracts between Kyiv and the manufacturers.

    NOT JUST BUSINESS

    “Eastern European countries support Ukraine substantially,” Christoph Trebesch, a professor at the Kiel Institute, said. “At the same time it’s an opportunity for them to build up their military production industry.”

    Ukraine has received nearly 50 billion crowns ($2.1 billion) of weapons and equipment from Czech companies, about 95% of which were commercial deliveries, Czech Deputy Defence Minister Tomas Kopecny told Reuters. Czech arms exports this year will be the highest since 1989, he said, with many companies in the sector adding jobs and capacity.

    “For the Czech defence industry, the conflict in Ukraine, and the assistance it provides is clearly a boost that we have not seen in the last 30 years,” Kopecny said.

    David Hac, chief executive of Czech STV Group, outlined to Reuters plans to add new production lines for small-calibre ammunition and said it is considering expanding its large-calibre capability. In a tight labour market, the company is trying to poach workers from a slowing car industry, he said.

    Defence sales helped the Czechoslovak Group, which owns companies including Excalibur Army, Tatra Trucks and Tatra Defence, nearly double its first-half revenues from a year earlier, to 13.8 billion crowns.

    The company is increasing production of both 155mm NATO and 152mm Eastern calibre rounds and refurbishing infantry fighting vehicles and Soviet-era T-72 tanks, spokesman Andrej Cirtek told Reuters.

    He said supplying Ukraine was more than just good business.

    “After the Russian aggression started, our deliveries for Ukrainian army multiplied,” Cirtek said.

    “The majority of the Czech population still remember times of a Russian occupation of our country before 1990 and we don´t want to have Russian troops closer to our borders.”

    ($1 = 4.5165 zlotys)

    ($1 = 23.3850 Czech crowns)

    Reporting by Michael Kahn and Robert Muller in Prague and Anna Koper in Warsaw; Editing by Catherine Evans

    Our Standards: The Thomson Reuters Trust Principles.

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