12.7 AI Daily: Artificial Intelligence and Cryptocurrency Lead the Wave of Technological Innovation, Accelerating Changes in the Global Economic and Regulatory Landscape

I. Headlines

1. Breakthrough in Artificial Intelligence: Elon Musk Releases Grok, Sparks Heated Discussion

The field of artificial intelligence has once again stirred up waves. Tesla CEO Elon Musk recently released an open-source AI system called “Grok,” claiming it can accurately understand and interpret the world. This claim immediately attracted widespread attention and heated discussion in the tech community.

Musk stated that Grok is an AI system based on a large language model, capable of building a knowledge base by reading information on the internet and developing a deep understanding of the world. He emphasized that Grok can not only answer questions but also explain the underlying principles and logic.

Industry insiders are divided on Grok’s capabilities. Supporters believe that if Grok can truly achieve what Musk claims, it will be a milestone in AI development. However, critics question its credibility, believing that Musk may be exaggerating.

Regardless, the release of Grok will push the further development of AI technology. Analysts point out that if Grok can deliver on its promises, it will significantly enhance the understanding and explanatory capabilities of AI systems, representing a major breakthrough for AI application across industries.

2. Privacy Controversy Resurfaces: Social Media Giants Face Antitrust Investigation

Tech giants are once again caught in a public debate over privacy. The US Federal Trade Commission (FTC) recently announced it will launch an antitrust investigation into Meta ((formerly Facebook)), Twitter, and other major social media companies.

The FTC stated that this investigation will focus on these companies’ practices regarding the collection and use of user data. Social media companies have long been accused of excessively collecting user data and using it for targeted advertising and other commercial purposes, infringing on user privacy.

Meta and Twitter welcomed the investigation and promised full cooperation. However, some analysts believe the investigation may force tech giants to make significant changes, limiting their ability to access and use user data.

This controversy has once again sparked widespread concern about privacy protection. Supporters argue that user data should be better protected to prevent excessive commercialization. Others worry that overly restrictive measures could hinder innovation and growth in internet companies.

3. Intensifying Energy Shortage: AI Training Costs Surge, Causing Industry Anxiety

The rapid development of AI faces a new challenge: energy shortage. Recently, global energy supply shortages have intensified, causing a sharp rise in the cost of training large AI models and generating widespread concern within the industry.

It is estimated that training a large language model consumes as much energy as a medium-sized household uses in a year. As AI models grow larger, demands for computing power and energy continue to increase.

Energy shortages not only drive up training costs but may also slow the progress of AI technology development. Some companies have been forced to slow down their AI projects to control expenses. Industry insiders worry that if the situation worsens, it will impede AI applications in critical fields.

Analysts suggest the solution lies in improving energy efficiency and increasing investment in renewable energy. There are also calls for policies to ensure energy supply for AI training.

Undoubtedly, energy shortages present new challenges for AI development. Finding a balance between growth and environmental protection will be a major issue facing the entire industry.

4. Tighter Regulation: Multiple Countries Introduce New AI Governance Rules

To better manage the development of artificial intelligence technology, several countries and regions have recently introduced a series of new regulatory measures aimed at strengthening AI governance.

The European Union has proposed the milestone “Artificial Intelligence Act,” which will implement tiered management and review of AI systems. Once effective, this act will become the world’s first cross-sectoral AI regulatory framework.

Meanwhile, the US is also formulating comprehensive AI regulatory policies. The White House recently released the “Blueprint for an AI Bill of Rights,” outlining a series of principles and recommendations to protect citizens’ rights when using AI.

Additionally, countries such as China, Japan, and Singapore have also introduced relevant regulations to standardize AI research, development, and applications and prevent potential risks.

Analysts believe that stronger AI regulation is inevitable. As AI technology is widely applied across sectors, ensuring its safety, reliability, fairness, and justice is critical. However, some argue that excessive regulation may stifle innovation, so a balance between development and oversight is needed.

Undoubtedly, AI governance will be a major issue that governments and the industry must address together in the coming period.

5. Ongoing Ethical Controversy: AI Art Copyright Disputes Escalate

Should AI-generated artworks be granted copyright protection? This debate has recently intensified again.

The controversy began when an artist sued AI company Midjourney and several others, accusing their AI systems of using his works without authorization to generate art. The artist is seeking copyright compensation.

Midjourney and other companies argue that AI-generated works are a new form of creation and should not be subject to traditional copyright law. They believe that the creator of an AI artwork should be the person providing the input prompt, not the provider of the training data.

This dispute has reignited widespread discussion over the copyright of AI-generated art. Supporters argue that AI systems use a large number of existing works to generate new pieces and should pay royalties. Opponents worry that including AI art under copyright protection would significantly hinder the growth of this emerging field.

Analysts point out that as AI art becomes more popular, relevant laws and regulations urgently need improvement to clarify rights ownership. There are also calls to establish a new copyright system to address this emerging issue in a timely manner.

II. Industry News

1. Bitcoin Price Dips Short Term, Long-Term Outlook Remains Bullish

Bitcoin prices experienced a brief pullback in the past 24 hours, currently trading near $87,500. Analysts believe the correction is mainly due to hawkish remarks by Bank of Japan Governor Kazuo Ueda, which raised market expectations of a rate hike in Japan and pushed two-year government bond yields to 1%. Meanwhile, China’s November non-manufacturing PMI showed activity shrinking for the first time in nearly three years, increasing investor concerns about regional economic growth.

Despite short-term pressure, Bitcoin’s long-term outlook remains bullish. First, the US Federal Reserve is expected to signal a slowdown in rate hikes at this week’s meeting, which would ease concerns about rising interest rates. Second, institutional demand for crypto assets continues to grow. Data shows that last week, digital asset exchange-traded products (ETP) recorded $1.07 billion in inflows. In addition, the Bitcoin spot ETF is expected to launch this week, likely to further drive institutional capital inflows.

Analyst Michael van de Poppe said, “Bitcoin is currently testing the key support level at $88,000. As long as it remains above this level, Bitcoin is still expected to return above $90,000 by year-end.” Overall, despite heightened short-term volatility, Bitcoin’s long-term investment value persists, and investors can use the current pullback as an opportunity for strategic positioning.

2. Ethereum Faces Sell-Off, DeFi Sector Leads Decline

Ethereum has dropped sharply in the past 24 hours, currently trading near $2,800, down more than 5%. Analysts point out that the sell-off is mainly due to risk asset selling triggered by the Bank of Japan’s hawkish comments, as well as negative impacts from DeFi ecosystem hacks.

Specifically, the DeFi protocol Yearn was hacked, with about $3 million in yETH tokens stolen. The news sparked investor concerns about DeFi security, causing the overall DeFi sector to fall nearly 7% and dragging Ethereum down.

However, analysts believe Ethereum’s long-term outlook remains promising. First, after the Shanghai upgrade, the Ethereum network will gain greater scalability and security. Second, the Ethereum ecosystem is rapidly developing, with numerous innovative applications emerging. Third, institutional demand for Ethereum continues to grow. According to CoinShares data, Ethereum investment products recorded $380 million in inflows last week.

Therefore, despite short-term selling pressure, Ethereum retains long-term investment value. Investors can use the current pullback for strategic positioning while closely monitoring developments in DeFi security.

3. Solana Ecosystem Shows Divergence, HumidiFi Accounts for Over 35% of Daily Trading Volume

Divergence is intensifying within the Solana ecosystem, with the HumidiFi protocol’s daily trading volume exceeding $1 billion, accounting for about 35% of all spot activity on Solana. Meanwhile, other trading volumes continue to decline, further concentrating liquidity within the ecosystem.

Analysts point out that HumidiFi’s dominance in the Solana ecosystem is mainly due to its innovative “active liquidity” model. This model combines on-chain settlement with off-chain prediction to address traditional AMM inefficiencies and excessive price spreads, laying the foundation liquidity layer for Solana’s “internet capital market.”

Meanwhile, HumidiFi continues to advance transparency. Its core modules include verifiable open-source reserves, multi-party management of permissions, and restrictions on asset transfers from core contracts, ensuring the system runs autonomously with all data presented on-chain, without manual intervention.

However, some analysts question HumidiFi’s high concentration. They believe excessive concentration could increase systemic risk in the Solana ecosystem, and if HumidiFi encounters problems, it could have a huge impact on the entire ecosystem. Therefore, the long-term health of the Solana ecosystem relies on diversification to avoid over-concentration.

Overall, the Solana ecosystem is undergoing a reshuffling, and HumidiFi’s rise is noteworthy. However, it is also important to be cautious of risks from over-concentration and to maintain diversified ecosystem development.

III. Project News

1. Sui Blockchain Mainnet Launches, Leading a New Wave in the Move Ecosystem

Sui is a brand-new Layer 1 blockchain developed by Mysten Labs and built on the Move programming language. After more than two years of development and testing, the Sui mainnet officially launched on December 1, 2025.

The launch of the Sui mainnet marks a new stage of development for the Move ecosystem. As the first public chain based on Move, Sui offers developers a high-performance, scalable, and secure infrastructure to support the flourishing growth of the Move ecosystem. The Sui mainnet adopts a brand-new underlying architecture, capable of processing tens of thousands of transactions per second, and achieves unlimited scalability through sharding technology. Sui also introduces a new data model that effectively addresses the long-standing data silo problem in blockchain.

The Sui mainnet launch will greatly boost the Move ecosystem. On one hand, Sui provides robust infrastructure support, attracting numerous developers and projects. On the other hand, Sui’s innovative design brings new opportunities for the Move ecosystem, such as sharding technology enabling high-performance support for DApps, and its data model potentially solving interoperability issues.

Industry insiders generally believe the Sui mainnet launch is an important milestone for the Move ecosystem. With Sui’s support, the Move ecosystem is expected to grow rapidly and eventually become a major public chain ecosystem after Ethereum. Meanwhile, Sui’s innovative design will also point to new directions for the entire blockchain industry.

2. Aptos Launches UpgradeV2, Enhances Network Performance and Security

Aptos is an emerging public chain created by former Meta employees and built using the Move programming language. Recently, Aptos announced the launch of the UpgradeV2 network upgrade, aimed at further improving network performance and security.

UpgradeV2 is the first major network upgrade since Aptos’s mainnet launch. The upgrade mainly includes three improvements: first, upgrading the consensus protocol and node architecture to boost network throughput and response speed; second, optimizing the virtual machine and execution engine to improve smart contract efficiency; and third, enhancing network security by patching known vulnerabilities.

The Aptos team states that UpgradeV2 will take Aptos’s performance and security to new heights. Test data shows the upgraded Aptos network can reach 100,000 transactions per second, with response times under 100 milliseconds. Smart contract execution efficiency is also greatly improved. This provides strong infrastructure support for DApps in the Aptos ecosystem.

Industry insiders believe UpgradeV2 marks Aptos entering a phase of rapid development. As an emerging public chain, Aptos has been highly anticipated to play an important role in the Move ecosystem. This upgrade will undoubtedly further strengthen Aptos’s competitiveness and lay the foundation for its place in the Move ecosystem.

3. Gensyn Launches AI-Powered Smart Contract Development Platform

Gensyn is an innovative company focused on the integration of AI and blockchain. Recently, it launched an AI-based smart contract development platform designed to simplify development processes and lower the entry barrier.

Gensyn’s platform uses advanced AI technology to automatically generate smart contract code based on developers’ natural language descriptions. Developers simply describe the required function, and the platform generates the corresponding code. This not only greatly streamlines development but also lowers the entry barrier, enabling more non-professional developers to participate in smart contract development.

In addition to code generation, Gensyn’s platform integrates auditing, testing, and deployment functions, providing a complete smart contract development solution. The platform supports multiple mainstream blockchains, such as Ethereum, Polkadot, and Sui, allowing developers to easily create cross-chain smart contracts.

The launch of the Gensyn platform is seen as an important attempt at AI-blockchain integration. Industry insiders believe that introducing AI technology will greatly improve the efficiency of smart contract development and is likely to spur more innovative applications. At the same time, the Gensyn platform opens new doors for AI applications in the blockchain space.

4. Hyperbolic Releases AI-Powered Decentralized Computing Network

Hyperbolic is an innovative company focused on distributed computing. Recently, it released an AI-driven decentralized computing network designed to provide high-performance, privacy-protecting computing services.

Hyperbolic’s decentralized computing network features a novel architecture that decentralizes the traditional centralized computing model. The network is composed of numerous distributed nodes, each providing computing resources. When a computing task arrives, the network automatically splits and distributes the task to various nodes, then aggregates the results.

A major innovation is the integration of AI technology. The AI system intelligently schedules and optimizes computing tasks, improving resource utilization. AI also verifies computing results to ensure accuracy. Additionally, privacy computing technology enables tasks to be executed without data leakage, effectively protecting user privacy.

The release of the Hyperbolic computing network is seen as a major innovation in decentralized computing. Industry insiders believe the network not only provides high-performance computing services but also effectively solves privacy protection challenges faced by traditional computing models, offering reliable support for numerous privacy computing scenarios.

IV. Economic Developments

1. Fed Slows Pace of Rate Hikes, Inflation Pressure Persists

The US economy faced a challenging period in 2025. Despite a 2.1% year-on-year GDP growth in Q3, inflation remained high, with the core PCE price index up 5.6% year-on-year in October, far above the Fed’s 2% target. The job market remained strong, with a 3.7% unemployment rate in November, but wage growth slowed, raising recession concerns.

At the November monetary policy meeting, the Fed raised rates by 50 basis points, increasing the federal funds target range to 4.25%-4.5%. This was the first time since the rate hike cycle began in March 2022 that the Fed slowed the pace from 75 to 50 basis points. Chairman Powell said that while inflation persists, a slower pace is appropriate due to the lagged effects of monetary policy.

Market reactions were mixed. On the one hand, investors welcomed the slower pace, as it reduced the risk of a hard landing. On the other hand, persistent high inflation raised concerns about a dovish shift in Fed policy. Stock and crypto markets saw sharp volatility after the meeting.

Economists are divided on the Fed’s next moves. Goldman Sachs expects the Fed to end the rate hike cycle in early 2026 and start cutting rates in the second half. Morgan Stanley, however, believes stubborn inflation may force the Fed to raise rates to 5.25%-5.5%. Overall, experts agree that 2026 will be a challenging year, and the Fed needs to balance curbing inflation with avoiding a hard landing.

2. China’s Economic Recovery Accelerates, Policy Support Remains Strong

In 2025, China’s economy showed signs of recovery as the impact of the pandemic gradually diminished. Full-year GDP grew 5.1% year-on-year, higher than 3% in 2024. Although the growth rate is still below pre-pandemic levels, it shows continued economic vitality.

On the policy front, the Chinese government continued proactive fiscal policy and prudent monetary policy to support recovery. Fiscal spending focused on infrastructure and technological innovation, with increased tax cuts and fee reductions to ease corporate burdens. Monetary policy remained accommodative, with the PBOC cutting rates and reserve requirements several times to release long-term funds for the real economy.

Exports and manufacturing were the main drivers of growth. Benefiting from global recovery and revived international demand, exports rose 8.7% year-on-year. Manufacturing investment grew 6.2%, the highest in five years. Consumption recovered more slowly but is expected to play a bigger role as employment improves and incomes rise.

Experts believe that China’s recovery foundation still needs strengthening. More policy efforts are needed to boost domestic demand and consumption. There are also risks from inflation and geopolitics. Overall, China’s economy is expected to stabilize and rebound further in 2026, contributing to global recovery.

3. Europe’s Energy Crisis Deepens, Economic Outlook Gloomy

In 2025, Europe’s economy was mired in an energy crisis. The ongoing Russia-Ukraine conflict disrupted gas and electricity supplies, sending energy prices soaring. This dealt a heavy blow to the European economy, pushing up manufacturing costs, eroding corporate profits, and raising unemployment.

Eurostat data shows that in Q4 2025, the eurozone economy shrank by 1.4% year-on-year, with inflation at 8.1%. Major economies such as Germany, France, and Italy all fell into recession. The European Central Bank kept raising rates to curb inflation expectations, but this also increased the risk of economic slowdown.

Energy shortages and high living costs triggered large-scale protests across Europe. Citizens took to the streets demanding government action to address their worsening situation. Some countries had to introduce temporary subsidies to ease the crisis for the public.

Looking ahead to 2026, Europe’s economic outlook remains bleak. The IMF expects the eurozone to fall into a mild recession, with full-year GDP contracting 0.3%. Ongoing energy shortages, geopolitical tensions, and high inflation will continue to drag on recovery.

Experts call for Europe to accelerate its energy transition, reduce dependence on fossil fuels, and increase investment to improve competitiveness and resilience. Only then can Europe truly emerge from the gloom and regain growth momentum.

V. Regulation & Policy

1. US Senate Passes Comprehensive Crypto Regulatory Bill

The US Senate overwhelmingly passed the “Responsible Financial Innovation Act” with 69 votes in favor and 30 against, aiming to establish a comprehensive regulatory framework for the cryptocurrency industry.

The bill, co-sponsored by Senators Lugin and Thiels, brings cryptocurrencies under banking regulation, requiring crypto companies to obtain federal licenses and comply with bank-like regulations. Key points include:

• Bringing cryptocurrencies under banking regulation, jointly overseen by the US Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC).
• Requiring crypto companies to hold federal licenses and comply with capital requirements, anti-money laundering, and consumer protection rules.
• Establishing regulatory rules for stablecoins, requiring issuers to hold equivalent US dollar reserves.
• Clarifying tax and accounting treatment for cryptocurrencies.

The bill aims to create a favorable regulatory environment for the crypto industry while protecting investors and preventing systemic risks. Its passage signals the formal establishment of the US crypto regulatory framework, injecting new momentum into the industry.

The crypto industry has generally welcomed the bill. Coinbase CEO Brian Armstrong (Brian Armstrong) called it an important milestone that will provide needed regulatory clarity. Some experts, however, worry that excessive regulation could stifle innovation.

Fintech analyst Jane Wincowski (Jane Wincowski) believes the bill seeks a balance between regulation and innovation but leaves room for improvement. She suggests further clarifying crypto classification standards and creating more inclusive rules for decentralized projects.

2. Hong Kong SFC Issues Regulatory Guidelines for Virtual Asset Trading Platforms

The Hong Kong Securities and Futures Commission (SFC) released the “Regulatory Framework for Virtual Asset Trading Platforms,” setting regulatory rules for such platforms. The framework takes effect on June 1, 2024.

Key points include:

• Virtual asset trading platforms must obtain an SFC license to operate in Hong Kong.
• Platforms must meet strict capital requirements, safeguard investor funds, and comply with anti-money laundering and counter-terrorism financing rules.
• The SFC will conduct ongoing supervision, including reviewing platform systems, controls, and operations.
• Platforms must fully disclose relevant risks to investors and take appropriate measures to protect investor rights.

The framework aims to create a favorable regulatory environment for Hong Kong’s virtual asset industry, attract quality companies, protect investors, and maintain market order.

Hong Kong Fintech Association Chairman Chan Shou-yan said this is a key step toward making Hong Kong a blockchain and virtual asset hub. He believes reasonable regulation will increase transparency and enhance public confidence.

However, some in the industry worry that overly strict rules could raise compliance costs and affect Hong Kong’s competitiveness. Fintech lawyer Zhang Weiqiang urges regulators to maintain close communication with industry and set practical rules.

3. EU Approves Regulatory Framework for Crypto Asset Service Providers

The European Commission, Council, and Parliament have finalized an agreement on the Markets in Crypto-Assets Regulation (MiCA), setting unified rules for crypto asset service providers. The regulation is expected to take effect in 2024.

Key points of MiCA include:

• Requiring crypto asset issuers and service providers to obtain licenses valid across the EU.
• Mandating issuers to disclose detailed information, including white papers and audit reports.
• Setting reserve requirements for stablecoins, with issuers holding equivalent fiat currency or other high-quality liquid assets.
• Strengthening anti-money laundering and anti-terrorism financing rules.
• Regulating marketing and advertising, banning misleading promotions.

The regulation aims to establish a unified regulatory framework for the EU crypto asset market, enhance investor protection, and leave room for innovation. Its passage is viewed as a major step forward for EU crypto regulation.

European Commission Executive Vice President Valdis Dombrovskis said MiCA will make the EU the first region in the world with comprehensive crypto asset regulations, ensuring full consumer protection.

However, some in the industry have concerns about certain provisions. Deutsche Bank’s head of digital assets, Max Ross (Max Ross), believes the reserve requirements for stablecoins are too strict and may affect their use in payments and settlements.

Overall, MiCA creates a clearer regulatory environment for the EU crypto asset industry, helps attract quality companies, protects investors, and promotes long-term healthy industry development.