Technology

Zoho’s Chipmaking Ambitions Halted Amid Technology Concerns and Industry Setbacks

A significant development in India’s ambitions to become a global semiconductor hub has been observed, as it was confirmed that Zoho Corporation had decided to suspend its \$700 million plan to enter the chip manufacturing industry. The move, which had been pursued for over a year, was halted due to the company’s inability to secure a suitable technology partner to guide its entry into the complex and capital-intensive semiconductor sector. This decision, which was publicly confirmed by Zoho’s co-founder Sridhar Vembu, was seen as a further setback for the Indian government’s broader efforts to develop a domestic chipmaking ecosystem.

The confirmation of the decision had followed a detailed report by Reuters, which had disclosed that the Chennai-based software company had encountered difficulties in identifying a strategic partner capable of advising on the intricate processes required for semiconductor fabrication. According to individuals familiar with the matter, who spoke on condition of anonymity, the technical hurdles and lack of clarity regarding the most viable technological path had played a major role in the project’s suspension.

Zoho, a firm valued at approximately \$12 billion, is known primarily for offering affordable alternatives to software products developed by larger global competitors such as Microsoft. The company, under the leadership of Vembu, has often garnered attention for its unique approach to corporate operations, including the decision to run much of its business from rural parts of India, with a focus on decentralization and regional development.

After the story was released, Vembu acknowledged in a public social media post that a lack of confidence in the technology had ultimately influenced the company’s decision to pull back. He further explained that due to the high capital requirements associated with chipmaking—an industry dependent on substantial government support—it had been decided that the use of taxpayer money could only be justified if a clear and reliable technological route had been established. In the absence of such certainty, a cautious approach was deemed necessary.

Originally, Zoho had planned to allocate \$400 million of its intended investment toward setting up a semiconductor facility in the southern Indian state of Karnataka. The plan was regarded as a major step toward diversification, one that aligned with the Indian government’s push for self-reliance in critical technologies. However, representatives of the Karnataka government, which had been expected to support the project, did not issue any comments regarding the development.

The suspension of the chipmaking venture was also seen within the context of a broader trend, with another major Indian conglomerate—Gautam Adani’s group—having also recently paused its own semiconductor plans. Discussions between the Adani group and Israel’s Tower Semiconductor regarding a \$10 billion chip project had reportedly been stalled following an internal evaluation. Both Zoho’s and Adani’s decisions are now being interpreted as indicative of deeper structural challenges within India’s fledgling semiconductor sector.

India’s Prime Minister Narendra Modi had made chip manufacturing a central part of his industrial development agenda. Several initiatives had been launched with the intention of attracting international and domestic investment into the semiconductor space. These efforts had included the announcement of substantial government subsidies and policy reforms aimed at creating a conducive environment for advanced manufacturing. However, the withdrawal of major private players like Zoho could be seen as reflective of persistent gaps—especially in terms of access to global technology partners and the availability of skilled expertise.

Although the government’s semiconductor push remains ongoing, industry analysts have noted that successful entry into chip fabrication requires not only capital but also long-term collaboration with seasoned players, access to advanced manufacturing technology, and a robust supply chain infrastructure. Without these elements, companies like Zoho may find it difficult to proceed confidently.

The halted plan was originally reported in May 2024, with high expectations having been attached to it as an example of India’s growing ambitions in high-tech manufacturing. The news of its suspension, however, now casts a shadow on the pace at which the country can scale its semiconductor capabilities.

Despite this setback, Zoho continues to operate strongly in the software sector, with no indication that its core business model has been affected. The company’s leadership remains vocal about the importance of technological sovereignty but has emphasized the need for deliberate and informed investments, particularly when public funds are involved.

As of now, the future of Zoho’s involvement in semiconductor production remains uncertain. Industry observers believe that while the suspension does not rule out a potential revival, any such move would likely depend on stronger partnerships, clearer government frameworks, and greater confidence in the technological direction.

Technology

AI Investment Boom Raises Financial Stability Concerns, BIS Chief Warns

The rapid expansion of artificial intelligence is creating emerging risks for global financial stability, Bank for International Settlements (BIS) General Manager Pablo Hernandez de Cos said on September 10, 2026, warning that the scale of investment in AI infrastructure is becoming large enough to influence broader economic conditions.

Speaking at a conference hosted by India’s central bank, Hernandez de Cos said AI was transforming demand, supply and financial markets at the same time. While the technology does not alter the mandates of central banks, its effects could make economic conditions more difficult for policymakers to assess.

The BIS estimates that the world’s five largest technology companies will spend more than $1 trillion on AI during 2025 and 2026. Industry forecasts indicate that worldwide AI investment could rise from roughly $500 billion currently to as much as $4 trillion by 2030.

Hernandez de Cos said the potential benefits of AI were substantial, but stressed that its longer-term economic impact would depend on government policies, investment in infrastructure and skills, and how broadly the gains from the technology are distributed.

At the same time, he called for closer examination of how the AI expansion is being financed. Increasingly, AI-related investment is being supported by debt and private credit rather than corporate earnings. Hernandez de Cos said this was a concern because significant portions of the financing network remain “opaque and interconnected.”

Such financial structures could become more vulnerable if companies fail to generate the profits investors currently expect.

## AI Reshapes Global Trade and Productivity

The AI boom is also affecting international trade. Countries with strong links to the technology supply chain, including South Korea, Singapore, Malaysia and Taiwan, have benefited from higher export prices for AI chips and related equipment.

Beyond trade, AI has demonstrated the potential to improve productivity. Hernandez de Cos cited studies showing that generative AI can increase productivity by between 10% and 65% for particular tasks. The strongest gains have been reported in areas such as coding, consulting and professional writing.

However, the BIS chief said the more important economic question was whether these improvements at the individual task level would translate into stronger productivity across entire economies.

Current estimates indicate that AI could increase total factor productivity growth by around half a percentage point annually. The eventual impact will depend on how quickly businesses adopt the technology and how effectively workers and capital are shifted toward more productive uses.

Advanced economies are expected to see benefits earlier because they have larger service sectors and are generally better prepared to deploy AI technologies. Emerging economies face more diverse outcomes.

India, however, could be positioned to benefit significantly. Hernandez de Cos said the country had a “genuine opportunity” to reduce the productivity gap with more advanced economies, supported in part by its digital public infrastructure.

## Employment Risks and Market Vulnerabilities

The economic effects of AI are not limited to productivity gains. Hernandez de Cos also warned that the technology could replace workers performing routine cognitive tasks.

So far, job losses linked directly to AI have remained limited, but early signs of disruption are appearing in customer service, programming and administrative work. This increases the importance of retraining and reskilling workers as businesses adopt AI more widely.

Financial markets present another area of concern. Hernandez de Cos highlighted elevated valuations, concentration among major technology companies and complex financing arrangements as potential sources of vulnerability.

If corporate profits fail to meet the expectations built into current valuations, those weaknesses could become more pronounced. He cautioned that the outcome was not predetermined, but said the scale and speed of today’s AI investment cycle justified careful attention.

Hernandez de Cos compared the situation with earlier periods of rapid economic expansion, including the railway boom and the dotcom surge. The comparison was not intended to suggest that AI would necessarily produce the same outcome, but rather to underline the risks that can emerge when investment grows rapidly alongside expectations of large future commercial returns.

“The promise of AI is real,” Hernandez de Cos said, while emphasizing that policymakers and investors must remain alert to the financial risks accompanying its extraordinary expansion.

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Technology

Amazon Drone Delivery Expansion Is Planned Across About 500 US Locales

Amazon is preparing for a major expansion of its Prime Air drone delivery service, with the company planning to make the service available across about 500 U.S. cities and towns by the end of 2026. The move would represent a significant increase from the 11 locations where Amazon currently operates drone deliveries, serving several nearby communities from each location.

The expansion marks a major step forward for a program first presented more than a decade ago. In 2013, Amazon founder Jeff Bezos unveiled the concept of using unmanned drones, which he described as octocopters, to deliver packages directly to customers. At the time, Bezos predicted that the service could become available within four to five years. The rollout, however, has taken considerably longer.

Amazon currently operates its drone delivery service from 11 locations, including Papillion, Nebraska, and Ruskin, Florida. The company is also preparing to launch the service in Syracuse, New York, and in an area near Cleveland, among other communities. From a single delivery hub, drones can serve several towns located within approximately a 7.5-mile radius. With the planned expansion, Amazon expects its overall coverage to reach roughly 500 locales.

The company has redesigned its Prime Air drones several times since the program was introduced. Earlier versions were designed to land before releasing packages, while the latest model, known as the MK30, uses a different approach. The drone hovers several feet above the ground and releases the package before departing.

Customers are charged $4.99 for a drone delivery under the current pricing structure. Amazon Prime members receive a $2 discount, bringing the charge to $2.99. The delivery fee is waived for orders valued at $50 or more.

The expansion was announced after Reuters contacted Amazon on Tuesday about the status of its drone delivery program. While Amazon has received approval from the Federal Aviation Administration to operate drones in most areas of the United States, additional approval is generally required from individual communities before the service can begin.

Local authorization can involve planning meetings, council hearings and opportunities for residents to raise concerns. Issues such as noise, safety, logistics and the potential effect on wildlife have emerged during discussions over the technology.

In Nampa, Idaho, for example, Amazon executive Sam Bailey faced about an hour of questions from a planning and zoning board in May. Residents raised concerns involving noise, safety and drone operations, while some also expressed worries about the impact on birds. Despite the objections, the board unanimously approved the company’s rollout.

Bailey said the drones would typically be audible for around 20 seconds as they descend and then leave the area. According to him, their noise level is lower than that of a lawnmower. He characterized the disruption as brief and compared the experience with having a delivery truck arrive on a residential street.

Amazon has also highlighted potential benefits for certain customers. Bailey said drone deliveries could be particularly useful for older adults, parents dealing with children who suddenly develop a fever, and people who discover they are missing an ingredient while preparing a meal at home.

Noise remains a concern for some residents, however. Videos of successful deliveries shared on social media suggest that the drones can produce a sound comparable to a leaf blower, although the noise does not continue for as long. Amazon has also sought to address privacy concerns by saying that cameras installed on its drones are used only for navigation.

Safety incidents have also occurred. In October, two Amazon delivery drones collided with a crane in suburban Arizona. It remains under an investigation by the National Transportation Safety Board.

During a March hearing in Richardson, Texas, one resident complained about the noise created by drones flying overhead, saying it had become a source of irritation and disrupted the peacefulness of the area.

Amazon has made adjustments in response to community concerns. Bailey said the company had altered the average height at which its drones fly and modified routes so that the aircraft pass over commercial areas more consistently.

Despite continued concerns, some local officials appear to view the technology as unavoidable. One council member said the focus should be on finding ways to accommodate the new technology and making adjustments as it develops.

With the planned expansion, Amazon is seeking to move drone delivery from a limited service into a much broader part of its U.S. delivery network.

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Technology

Non-Binding Acquisition Proposal Submitted by Sony Group to Optical Manufacturer Tamron

A formal non-binding acquisition proposal aimed at converting optical lens manufacturer Tamron into a wholly owned subsidiary was received from Sony Group, as announced on Thursday by the Japanese optical component producer. Following the receipt of the acquisition offer, an independent review committee was established by Tamron’s corporate leadership to evaluate potential strategic options and assess the transaction terms. Specific financial parameters and valuation metrics associated with the proposed series of transactions were omitted from the official public statements released by Tamron.

Market reactions across the Tokyo Stock Exchange were immediately observed following the corporate disclosure. Prior to the trading halt, a total market capitalization of approximately $1.18 billion was recorded for Tamron as of Wednesday’s market close. Conversely, a minor share price decline of 0.3 percent was experienced by Sony Group during the same trading period.

The underlying strategic rationale for the consolidation was addressed by a spokesperson for Sony Group, by whom it was affirmed that the proposed acquisition was expected to enhance overall corporate value for Tamron, advance the long-term interests of key corporate stakeholders, and contribute directly to the ongoing expansion and technological development of Sony’s global imaging business.

Within the optical and consumer hardware landscape, a dominant market position in digital cameras and image sensors is maintained by Sony, whereas interchangeable camera lenses, industrial optics, and specialized components are manufactured and supplied by Tamron for both Sony and competing camera makers, including Nikon and Canon. Prior to the submission of the acquisition proposal, an existing equity stake of 14.7 percent in Tamron was already held by Sony, according to financial repository data. The largest single equity holding in the optical manufacturer, amounting to a 17.4 percent stake, was held by Singapore-based investment entity Effissimo Capital.

The acquisition target, which was originally established in 1950, previously reported a 13 percent contraction in annual operating profit to 16.7 billion yen (approximately $102.15 million) for the fiscal year ended December 2025. The earnings decline reflected broader operational pressures and shifting consumer demand patterns within the global optical hardware market over recent reporting periods.

Concurrently, corporate equity valuations for Sony Group have experienced sustained downward pressure in recent months as institutional investor concerns were heightened regarding persistent global supply chain disruptions and potential structural headwinds facing its broader entertainment divisions from artificial intelligence technologies. Although substantial revenue generation is anticipated by market analysts for Sony’s interactive entertainment unit following the scheduled November launch of the highly anticipated video game title Grand Theft Auto VI, operational margins across its hardware units continue to be impacted by elevated component costs, particularly rising prices for memory microchips.

The creation of an independent evaluation committee by Tamron underscores the fiduciary protocols governing major corporate transactions in Japan. As the review process unfolds, the prospective integration of Tamron’s optical design capabilities into Sony’s broader hardware ecosystem represents a strategic move toward vertical integration within the high-end imaging and industrial optics sectors.

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