Key Takeaways
- A growing consensus among economists and former officials in the U.S. and Europe is urging Beijing to strengthen the yuan due to its significant undervaluation, which is seen as an impediment to China's economic rebalancing and a contributor to global trade tensions.
- Elon Musk faces a federal jury trial in March 2026 after a judge denied his bid to dismiss OpenAI's claims of a "years-long harassment campaign" against the AI company he co-founded.
- Concurrently, Musk has escalated antitrust pressure on Apple (AAPL), alleging the tech giant manipulates its App Store rankings to favor OpenAI's (OPENAI) ChatGPT over his xAI's (XAI) Grok (GROK) chatbot.
- Despite his ongoing legal battles and competitive rhetoric, Musk reportedly believes Google (GOOG, GOOGL) possesses the strongest potential to dominate the artificial intelligence space.
China's Yuan Under Global Scrutiny Amid Economic Shifts
A chorus of economists and former officials from the United States and Europe is intensifying calls for Beijing to allow a substantial appreciation of the yuan, or renminbi. They argue that the Chinese currency is "woefully undervalued," hindering China's efforts to rebalance its economy towards domestic consumption and exacerbating global trade imbalances. A stronger yuan is seen as crucial for boosting domestic demand and increasing real incomes within China.
Despite these external pressures, China's central bank has primarily focused on maintaining the yuan's stability, working to prevent significant depreciation. The yuan has largely stabilized, trading between 7.15 and 7.25 per U.S. dollar since May 2025, even after earlier depreciation following U.S. tariff impositions. This delicate balancing act reflects a "Catch-22" for Beijing: while a stronger yuan could alleviate trade tensions, it might also sacrifice China's export competitiveness, a vital lifeline for its economy amidst sluggish domestic spending.
In a move to stimulate internal demand, China recently announced interest subsidies for qualifying personal consumption loans, effective from September 1, 2025, to August 31, 2026. Additionally, Beijing has allocated 188 billion yuan (approximately $25.9 billion) from its 2025 ultra-long special treasury bond funds to propel equipment upgrades across various economic sectors, aiming to leverage over 1 trillion yuan in total investment. These efforts come as China's foreign trade showed steady growth, with total goods imports and exports rising 3.5% year-on-year to 25.7 trillion yuan (about $3.6 trillion) in the first seven months of 2025. Concurrently, the U.S. and China extended their trade truce by 90 days on August 12, maintaining existing 10% tariffs on most goods, though higher duties up to 55% remain on certain Chinese exports.
Elon Musk's Dual AI Battles: OpenAI Lawsuit and Apple Antitrust Claims
Elon Musk is embroiled in significant legal challenges concerning his involvement in the artificial intelligence sector. A U.S. federal judge has rejected Musk's attempt to dismiss OpenAI's "years-long harassment campaign" claims, setting the stage for a jury trial in March 2026. OpenAI alleges that Musk, a co-founder of the company, engaged in efforts to undermine its operations through social media posts, press statements, legal actions, and even a "sham bid" to acquire its assets. This legal dispute stems from Musk's initial lawsuit in March 2024, where he accused OpenAI and CEO Sam Altman (SAMALTMAN) of abandoning their original non-profit mission, to which OpenAI responded with a countersuit in April, alleging fraudulent business practices by Musk.
Adding to his legal pressures, Musk has publicly threatened legal action against Apple (AAPL), accusing the iPhone maker of "unequivocal antitrust violations." He claims that Apple is unfairly favoring OpenAI's (OPENAI) ChatGPT by manipulating App Store rankings and deeply integrating it into the iOS ecosystem, thereby making it "impossible for any AI company besides OpenAI to reach #1 in the App Store." Apple's partnership with OpenAI, formalized in June 2024, allows for ChatGPT integration into its core experiences, including Siri and Writing Tools. Sam Altman has retorted, hinting at Musk's own alleged manipulation of X's (X) algorithms to benefit his companies. Apple maintains that its App Store operates fairly and without bias. This potential lawsuit from Musk's AI venture, xAI (XAI), comes amidst broader regulatory scrutiny of Apple's App Store policies from both U.S. and E.U. authorities.
The Broader AI Landscape: Musk's View on Google's Potential
Amidst these high-profile legal and competitive skirmishes, Elon Musk has reportedly stated that Google (GOOG, GOOGL) possesses the strongest potential to dominate the artificial intelligence space. This observation comes even as Musk actively positions his xAI (XAI) company and its Grok (GROK) chatbot as a direct competitor to OpenAI's (OPENAI) offerings, and despite his public warnings that OpenAI could "eat Microsoft (MSFT) alive" following the integration of GPT-5 across Microsoft's platforms. The tech industry continues to witness intense competition and strategic maneuvers as major players vie for leadership in the rapidly evolving AI landscape.
Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications.