Good morning. ChatGPT and other forms of generative artificial intelligence have experienced meteoric growth, reports Risk & Compliance Journal's Richard Vanderford, but many businesses are hesitant to rush headlong into the technology.

• Cautionary approach: Tobacco company Reynolds American, for instance, is taking a go-slow approach, testing gen AI in a limited capacity. It is experimenting with using AI to improve analysis of large data sets, but not in high-risk finance applications or in customer-facing roles, said Chief Information Officer Aaron Gwinner.
   
• Keeping it real: “There’s some inherent risks with gen AI,” Gwinner said. “Before we run off and we just start doing AI projects, we need to get the foundations and the basics in place.”
   
• Not leaping in, just yet: Broad surveys of business sentiment show many, like Reynolds, are proceeding with caution. U.S. Census Bureau data released in March found only an estimated 5.4% of businesses use AI of any type to produce goods or services. Businesses in the information sector and large businesses use AI more than others, the bureau’s data show.

Also see: OpenAI’s Not-So-Secret Weapon in Winning Business Customers? ChatGPT

U.S. to crack down on trade ‘loophole’ used for China apparel shipments.

The U.S. will crack down on an import method, favored by e-commerce giants such as Temu and Shein, which has allowed cheap clothes from China to flow stateside with no duties and little scrutiny.

What's the issue? De minimis shipments—low value packages often sent directly to U.S. consumers—will receive heightened scrutiny, including into whether goods are being imported in defiance of a U.S. forced-labor ban, the U.S. Department of Homeland Security said Friday.

What's the motivation? The move, part of a broader push against illicit apparel imports, comes after U.S. industry groups, unions and lawmakers from both parties have urged a clampdown.

Do Kwon lost to the SEC. The U.S. is piling up other crypto wins, too.

Crypto’s fight with U.S. regulators is starting to pay dividends—for the government. The Securities and Exchange Commission on Friday notched a court victory against brash crypto entrepreneur Do Kwon. His TerraUSD and Luna tokens collapsed in 2022, wiping out $40 billion in value and causing huge losses for investors around the world.

The decision was the latest in a series of federal court wins bolstering regulators’ efforts to force the freewheeling industry to comply with the same laws that govern the stock and bond markets. Crypto firms have pushed back against the SEC’s campaign, saying it would hamper innovation if they were forced to comply with securities laws that date to the 1930s.

• The collapse of FTX is still a source of anger and frustration for many onetime customers, more than a year later.
   
• A biotech executive committed insider trading when he bet on a competitor’s stock, believing the shares would rise when news about his own company hit the market, a jury found Friday.
   
• Two of the most senior executives at Trafigura Group plan to retire, marking a major shakeup at the commodities trading giant. The company last month pleaded guilty and agreed to pay over $126 million to resolve a U.S. Justice Department investigation into alleged bribery in Brazil.
   
• Elon Musk vowed to fight an order by Brazil’s Supreme Court to remove several X accounts, calling for the removal of one of the country’s most powerful judges in an increasingly tense showdown over free speech in Latin America’s biggest nation.
   
• The U.S. isn’t the first country to attempt a ban on TikTok, the Chinese-owned app used by millions of Americans daily. WSJ breaks down TikTok bans and how they work in practice.

China shock 2.0 sparks global backlash against flood of cheap goods.

To revive its economic fortunes, China is flooding the world with cheap goods, a multitrillion-dollar sequel to the China shock that hit global manufacturing more than two decades ago.

This time around, the world is fighting back.

Red Sea shipping diversions are boosting airfreight volumes and rates.

Retailers and manufacturers are flying more goods around the shipping crisis in the Red Sea, industry experts say, helping boost international airfreight operators after a long period of sagging cargo volumes.

Changing routes. The strategy, the latest sign of how companies are adjusting their supply chains in response to geopolitical shock waves and disruptions, comes as European importers are seeking to avoid delays caused by longer voyages around Africa by containerships that usually travel through the Suez Canal.

• Talks for a cease-fire in Gaza and for the release of hostages held by Hamas resumed Sunday, as Israel allowed a significant increase in humanitarian aid into the enclave and international pressure built to reduce the civilian toll of the fighting.
   
• Jobs grew at a brisk pace in March, but wage growth was contained, confirming a belief among economists that the U.S. can continue to expand employment without fanning inflation.
   
• Several ships over the past few years have experienced blackouts or engine failures at and near ports around the world. One culprit: contaminated fuel.
   
• A coalition of California companies is going to war with Gov. Gavin Newsom and his Democratic allies over taxes it says have grown out of control in the Golden State.
   
• A magnitude-4.8 earthquake struck the Northeast on Friday morning, according to a preliminary estimate from the U.S. Geological Survey, the strongest to hit the densely populated region since 2011.

China is targeting U.S. voters and Taiwan with AI-powered disinformation.

Online actors linked to the Chinese government are increasingly leveraging artificial intelligence to target voters in the U.S., Taiwan and elsewhere with disinformation, according to new cybersecurity research and U.S. officials.

The Chinese-linked campaigns laundered false information through fake accounts on social-media platforms, seeking to identify divisive domestic political issues and potentially influence elections.

The tactics identified in a new cyber-threat report published Friday by Microsoft are among the first uncovered that directly tie the use of generative AI tools to a covert state-sponsored online influence operation against foreign voters. They also demonstrate more-advanced methods than previously seen.

• On Oct. 6, Israel appeared on the cusp of a new era of recognition from the Muslim world, close to a peace deal with Saudi Arabia that would move it to the center of a realigned Middle East after years on its fringes. It all changed on Oct. 7.
   
• The embattled House speaker has pledged to bring up Ukraine aid for a vote in the House soon after Congress returns from Easter recess in coming days. But what the bill will look like—and who will support it—remains unsettled.
   
• Nippon Steel is pitching new investment in aging plants to help win the United Steelworkers support for planned deal, but union leaders remain unconvinced.
   
• Red Rooster Coffee is among a growing number of businesses in high-turnover industries that are turning to child care as a solution for staffing problems.
   
• A senior U.S. official said that the administration is preparing a new proposal to Moscow to secure the release of Wall Street Journal reporter Evan Gershkovich and Paul Whelan, Americans held in Russia.

Follow us on X at @WSJRisk. Follow Risk & Compliance editor David Smagalla @DSmagalla_DJ and reporters Mengqi Sun @_MengqiSun, Dylan Tokar @dgtokar and Richard Vanderford @VanderfordRich.

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