By Dawn Chmielewski and Krystal Hu

(Reuters) – Walt Disney has created a task force to study artificial intelligence and how it can be applied across the entertainment conglomerate, even as Hollywood writers and actors battle to limit the industry’s exploitation of the technology.

Launched earlier this year, before the Hollywood writers’ strike, the group is looking to develop AI applications in-house as well as form partnerships with startups, three sources told Reuters.

As evidence of its interest, Disney has 11 current job openings seeking candidates with expertise in artificial intelligence or machine learning.

The positions touch virtually every corner of the company – from Walt Disney Studios to the company’s theme parks and engineering group, Walt Disney Imagineering, to Disney-branded television and the advertising team, which is looking to build a “next-generation” AI-powered ad system, according to the job ad descriptions.

A Disney spokesperson declined to comment.

One of the sources, an internal advocate who spoke on condition of anonymity because of the sensitivity of the subject, said legacy media companies like Disney must either figure out AI or risk obsolescence.

This supporter sees AI as one tool to help control the soaring costs of movie and television production, which can swell to $300 million for a major film release like “Indiana Jones and the Dial of Destiny” or “The Little Mermaid.” Such budgets require equally massive box office returns simply to break even. Cost savings would be realized over time, the person said.

For its parks business, AI could enhance customer support or create novel interactions, said the second source as well as a former Disney Imagineer, who declined to be identified because he was not authorized to speak publicly.

The former Imagineer pointed to Project Kiwi, which used machine-learning techniques to create Baby Groot, a small, free-roaming robot that mimics the “Guardians of the Galaxy” character’s movements and personality.

Machine learning, the branch of AI that gives computers the ability to learn without being programmed, informs its vision systems, so it is able to recognize and navigate objects in its environment. Someday, Baby Groot will interact with guests, the former Imagineer said.

AI has become a powder keg in Hollywood, where writers and actors view it as an existential threat to jobs. It is a central issue in contract negotiations with the Screen Actors Guild and the Writers Guild of America, both of which are on strike.

Disney has been careful about how it discusses AI in public. The visual effects supervisors who worked on the latest “Indiana Jones” movie emphasized the painstaking labors of more than 100 artists who spent three years seeking to “de-age” Harrison Ford so that the octogenarian actor could appear as his younger self in the early minutes of the film.

‘STEAMBOAT WILLIE’

Disney has invested in technological innovation since its earliest days. In 1928 it debuted “Steamboat Willie”, the first cartoon to feature a synchronized soundtrack. It now holds more than 4,000 patents with applications in theme parks, films and merchandise, according to a search of the U.S. Patent and Trademark Office records.

Bob Iger, now in his second stint as Disney’s chief executive, made the embrace of technology one of his three priorities when he was first named CEO in 2005.

Three years later, the company announced a major research and development initiative with top technology universities around the world, funding labs at the Swiss Federal Institute of Technology in Zurich and Carnegie Mellon University in Pittsburgh, Pennsylvania. It closed the Pittsburgh lab in 2018.

Disney’s U.S. research group has developed a mixed-reality technology called “Magic Bench” that allows people to share a space with a virtual character on screen, without need for special glasses.

In Switzerland, Disney Research has been exploring AI, machine learning and visual computing, according to its website. It has spent the last decade creating “digital humans” that it describes as “indistinguishable” from their corporeal counterparts, or fantasy characters “puppeteered” by actors.

This technology is used to augment digital effects, not replace human actors, according to a source familiar with the matter.

Its Medusa performance capture system has been used to reconstruct actors’ faces without using traditional motion-capture techniques, and this technology has been used in more than 40 films, including Marvel Entertainment’s “Black Panther: Wakanda Forever.”

“AI research at Disney goes back a very long time and revolves around all the things you see being discussed today: Can we have something that helps us make movies, games, or conversational robots inside theme parks that people can talk to?” said one executive who has worked with Disney.

Hao Li, CEO and co-founder of Pinscreen, a Los Angeles-based company that creates AI-driven virtual avatars, said he worked on multiple research papers with Disney’s lab while studying in Zurich from 2006 to 2010.

“They basically do research on anything based on performance capture of humans, creating digital faces,” said Li, a former research lead at Disney-owned Industrial Light & Magic. “Some of these techniques will be adopted by Disney entities.”

Disney Imagineering last year unveiled the company’s first initiatives in an AI-driven character experience, the D3-09 cabin droid in the Star Wars Galactic Starcruiser hotel, which answered questions on a video screen and learned and changed based on conversations with guests.

“Not only is she a great character to interact with and always available in your cabin, which I think is very cool, behind the scenes, it’s a very cool piece of technology,” Imagineering executive Scott Trowbridge said at the time.

(Reporting by Dawn Chmielewski in Los Angeles and Krystal Hu in New York; Editing by Kenneth Li and Matthew Lewis)

LONDON (Reuters) – Britain said on Thursday it was weighing how to respond to a decision by U.S. President Joe Biden to prohibit some tech investments in China, adding it was continuing to assess potential national security risks.

Biden signed an executive order on Wednesday that authorizes the U.S. Treasury secretary to prohibit or restrict U.S. investments in Chinese entities in three sectors: semiconductors and microelectronics, quantum information technologies and certain artificial intelligence systems.

The U.S. government has said the measures are designed to address national security risks. China said on Thursday it was gravely concerned by the move.

A spokesperson for Prime Minister Rishi Sunak’s government said the executive order gave important clarity on the U.S. approach: “The UK will consider these new measures closely as we continue to assess potential national security risks attached to some investments.”

London has recently sought to stabilise its relationship with Beijing following a period of turbulence over issues such as security rules in Hong Kong and alleged human rights abuses against Uyghur Muslims in Xinjiang.

Foreign Secretary James Cleverly set out Britain’s new approach in April, saying it would seek to protect itself by limiting national security threats posed by China while engaging in areas such as trade, investment and climate change.

Sunak and Biden signed a new agreement to strengthen the historical security alliance between their two countries in June, vowing to deepen economic ties in areas such as advanced technologies, clean energy and critical minerals.

Official data shows that China is not a significant destination for British foreign investment, with the figure standing at 10.7 billion pounds ($13.6 billion) at the end of 2021, compared with 461.4 billion pounds in the United States. British investment in Hong Kong stood at 77.6 billion pounds.

($1 = 0.7857 pounds)

(Reporting by Kate Holton; Editing by William Schomberg and Sharon Singleton)

By Anton Bridge

TOKYO (Reuters) -Japan’s Rakuten Group will fold its payments and points businesses into its credit card unit, it said on Thursday, a move that could set up the struggling e-commerce company to eventually list the card business.

Despite strong revenue from its core e-commerce offerings, Rakuten has lost money for 12 straight quarters, hit by the costly build-out of its mobile phone business, which has failed to gain traction in Japan.

It has turned to listing some of its units – including its popular internet banking business, Rakuten Bank, to generate cash.

The company said on Thursday it plans to consolidate its payments and points businesses and fold them into Rakuten Card, its credit card and loans unit.

Rakuten Card will become the “driving force” behind its integrated payments business and may form strategic partnerships with other companies as well as “raising its own capital as necessary”, Rakuten said in a statement.

Public broadcaster NHK earlier reported the plan to combine the businesses.

Points and payments are at the heart of Rakuten’s ecosystem, which is designed to draw customers into its broad spectrum of offerings. Users accumulate points by using Rakuten credit cards, shopping and insurance services. The points can be used to buy groceries, pay bills or book travel.

At its quarterly earnings briefing later on Thursday, Rakuten committed to taking on no additional gross debt, instead using equity-related financing to reduce its debt burden.

The group has a total 1.9 trillion yen ($13.22 billion) in debt, with 406 billion yen due in 2024 and a further 430 billion yen in 2025, according to Refinitiv data.

In the April-June period, Rakuten posted an operating loss of 48.9 billion yen ($340.13 million), narrowly better than expectations of a loss of 51.2 billion yen, based on the average of six analysts polled by Refinitiv.

Losses at the mobile segment narrowed to 82.4 billion yen on higher average revenue per user and increasing subscriptions. On Monday, Rakuten announced the departure of mobile chief executive Tareq Amin, who had headed the unit since March 2022.

($1 = 143.7700 yen)

(Reporting by Anton Bridge; Editing by Jamie Freed, David Dolan, Gerry Doyle and Raju Gopalakrishnan)

By Tetsushi Kajimoto

TOKYO (Reuters) -Japan’s wholesale inflation eased for a seventh month in July as pressure from high global commodity prices eased, a development economists say is likely to encourage the central bank to keep its monetary stimulus in place.

The 3.6% rise in the corporate goods price index (CGPI), which measures the price companies charge each other for their goods and services, is slightly above the median market forecast for a 3.5% annual increase and follows a 4.3% annual increase in June.

It was the slowest wholesale inflation since March 2021 when prices turned positive to mark 1.0% growth, Bank of Japan (BOJ) data showed.

After peaking at 10.6% in December, wholesale inflation has decelerated for seven months in a row. On the month, wholesale prices rose 0.1%, up for the first time in three months.

The data confirmed that import pressures on inflation have eased, which in turn affects the cost of corporate goods, while commodity prices have also stabilised.

“Given that the input cost runs its course, price-hike pressures will gradually wane. As domestic corporate goods prices continue to slow, consumer prices will also slow from autumn,” said Takeshi Minami, chief economist at the Norinchukin Research Institute.

“As such, the current large-scale stimulus will remain in place for the time being,” he added.

Government subsidies to mitigate the impact of the spike in utility bills — which shaved 0.6 percentage points off the overall wholesale increase — had also curbed price hikes, he added.

A breakdown of the data showed yen-based import prices fell 14.1% in July from a year earlier and contract basis prices slid 15.6%, falling for a fourth straight month and easing concerns about elevated import bills for companies reliant on imports.

At its July meeting, the BOJ kept its yield curve control (YCC) targets unchanged but took steps to allow long-term interest rates to rise more freely in line with increasing inflation and growth.

(Reporting by Tetsushi Kajimoto. Editing by Sam Holmes and Shron Singleton)

By Swati Bhat and Sudipto Ganguly

MUMBAI (Reuters) -The Reserve Bank of India held its key lending rate steady on Thursday as expected but moved to reduce the amount of cash in banking system as inflation concerns resurfaced following higher-than-usual seasonal spikes in food prices in recent weeks.

The monetary policy committee (MPC), which has three members from the central bank and three external members, kept the repo rate unchanged at 6.50% in an unanimous decision. It was the third consecutive time that the committee decided to maintain rates.

India has raised rates by 250 basis points (bps) since May 2022 in a bid to cool surging prices.

The central bank, however, temporarily raised the cash buffer that banks are required to hold, which is expected to push up short-term rates in the market.

“Liquidity plays a major role with regards to inflation – both in pushing up inflation and controlling inflation,” RBI Governor Shaktikanta Das said, explaining the decision.

“While inflation has moderated, the job is still not done,” he said.

The central bank raised its inflation forecast for the current financial year to 5.4% from 5.1% earlier, citing pressures from food prices. In the July-September quarter, it now sees inflation at 6.2%, significantly higher than the 5.2% earlier forecast.

The benchmark 7.26% 2033 bond yield was trading at 7.166% as of 1:00 p.m. IST, down marginally, while the rupee was flat at 82.81 against the dollar.

The BSE Sensex was down 0.26%, while the broader NSE stock index was down 0.23% for the day.

The RBI maintained its policy stance of “withdrawal of accommodation” to ensure inflation progressively aligns with the committee’s target while remaining supportive of economic growth, Das said. Five of six committee members voted in favour of the stance.

Monetary policy can look through food price shocks for some time, Das said.

“We do look through idiosyncratic shocks but if it shows signs of persistence, we have to act.”

Food price spikes in India, typical at the onset of the monsoon, drove up headline inflation in June, snapping a four-month downward trend. Analysts expect inflation to have reached 6.4% in July, moving out of the RBI’s 2%-6% comfort band.

The central bank took comfort in the fact that core inflation, which excludes volatile food and energy prices, has softened.

“We believe the seasonal uptick along with erratic weather conditions will continue to keep the hawkish bias of the MPC intact in the upcoming meetings as well,” said Upasana Bhardwaj, chief economist at Kotak Mahindra Bank. “However, we expect rates to remain unchanged through the rest of the year.”

Growth in the Indian economy is seen at 6.5%, unchanged from the RBI’s previous forecast.

“Demand in the economy remains bouyant,” said Das.

The expected rise in inflation and steady growth had prompted swap markets to price in the probability of one more rate hike from the central bank.

“We doubt that further hikes will materialise,” said Capital Economics.

“But with the El Nino threat lurking … there is a growing risk that the RBI delays the (policy) loosening that we currently expect to begin in early 2024 even as other major emerging economies kick off their easing cycles,” Shilan Shah, deputy chief emerging markets economist at the research house, said in the note.

(Reporting by Swati Bhat and Sudipto Ganguly; Writing by Ira Dugal; Editing by Savio D’Souza, Miral Fahmy and Kim Coghill)

By Vera Eckert

FRANKFURT (Reuters) -German container shipper Hapag-Lloyd on Thursday posted net profit of 2.9 billion euros ($3.18 billion) for the first half of 2023, down by 67% from a year earlier, but maintained its full year earnings forecast.

The net profit compared with 8.7 billion euros in 2022 when shipping, a proxy for global trade, enjoyed a boom as economic growth rebounded following the end of pandemic lockdowns and as logistics disruptions raised freight rates for customers.

Rates have since fallen as logjams have eased and the economy is slowing. Cheaper freight has also hit the results of Hapag-Lloyd’s rivals Maersk and CMA CGM.

Chief Executive Rolf Habben Jansen said there were signs of recovery in spot freight rates and loadings.

“If you look at the last 10 or 12 weeks and how much volume we load, then we are slightly above year-ago,” he told Reuters.

Shares in Hapag-Lloyd, the world’s fifth-largest shipping line, were 2.9% down at 187.5 euros in early trade.

Its first half revenues were 41% lower at 10.0 billion euros.

Transport volumes fell 3.4% to 5.8 million 20-foot equivalent units (TEU) year-on-year, as demand for transport fell on the Asian and European trade routes to North America, and freight rates were down 38% at $1,761 per TEU.

Lower costs provided some relief. In the first half, tanker fuel prices fell by 11% to $625 per tonne. Oil prices have since begun to rise on international markets, supported by producer output cuts.

Hapag-Lloyd upheld its May guidance – in turn a repetition of March guidance – for its 2023 full-year earnings before interest and taxes (EBIT) to be in a 2-4 billion euros range.

EBITDA is expected to be between 4 billion and 6 billion euros.

However, the war in Ukraine, geopolitical uncertainties, persistent inflationary pressures and high inventory levels are creating risks that could negatively impact the forecast, Hapag-Lloyd said.

($1 = 0.9107 euros)

(Reporting by Vera Eckert, editing by Friederike Heine, Kim Coghill and Barbara Lewis)