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China moved on Thursday to curb a fierce price war among automakers that has caused massive losses for the industry, after passenger car sales dropped nearly 20% in January from the year before, the fastest pace in almost two years. The State Administration for Market Regulation released guidelines for manufacturers, dealers, and parts suppliers aimed at preventing a race-to-the-bottom price war. They ban automakers from setting prices below the cost of production to squeeze out competitors or monopolize the market. Violators may face significant legal risks,” the regulator warned. The rules also target deceptive pricing strategies and price fixing between parts suppliers and auto manufacturers. Passenger car sales in China fell 19.5% in January from a year earlier, according to the China Association of Automobile Manufacturers. That was the biggest percentage drop since February 2024. The 1.4 million passenger cars sold in January compared with 2.2 million units sold in December, CAAM said. Weakening demand reflects a reluctance of cash-strapped buyers to splash out on big purchases. Sales also have suffered from a cut in tax exemptions for EV purchases, coupled with uncertainties over whether trade-in subsidies for EV purchases will continue after some regions phased them out, auto analysts said. The aggressive price war in Chinas auto sector has caused an estimated loss of 471 billion yuan ($68 billion) in output value across the whole industry in the past three years, Li Yanwei, a member of the China Automobile Dealers Association, wrote recently. Analysts expect domestic demand to dip this year. S&P has forecast sales of light vehicles, including passenger cars, in China will fall up to 3% in 2026. However, Chinese automakers are gaining ground in global markets. China’s exports of passenger cars jumped 49% year-on-year to 589,000 in January. We dont foresee a loss in momentum for the Chinese auto industry this year, said Claire Yuan, director of corporate ratings for China autos at S&P Global Ratings. Chinese automakers such as BYD the country’s largest and one that overtook Tesla as the worlds top electric vehicle maker are targeting markets in Europe and Latin America as they confront intense competition in both prices and lineups at home due to oversupply. Analysts at Citi expect Chinas car exports could jump 19% this year driven by exports of electric vehicles and plug-in hybrids. BYD is targetings around 1.3 million of overseas car sales in 2026, up from the 1.05 million last year. Other major Chinese automakers have also set ambitious sales targets with a focus on exports. Last month, Canada agreed to cut its hefty 100% tariff on China-made EV imports in a move welcomed by Chinese carmakers. China also recently reached a deal with the European Union that could allow more of its EVs to enter the European market. Earlier this week, the European Commission accepted a request by the German auto group Volkswagen to exempt import tariffs for one of its China-built EV models under the CUPRA brand as long as those vehicles are sold at or above an agreed minimum import price in a first of such exemptions. Chinas commerce ministry said Thursday that it welcomed the move and that it hopes to see more such exemptions. Chan Ho-Him, AP business writer
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Adam Mosseri, the head of Meta’s Instagram, testified Wednesday during a landmark social media trial in Los Angeles that he disagrees with the idea that people can be clinically addicted to social media platforms.The question of addiction is a key pillar of the case, where plaintiffs seek to hold social media companies responsible for harms to children who use their platforms. Meta Platforms and Google’s YouTube are the two remaining defendants in the case, which TikTok and Snap have settled.At the core of the Los Angeles case is a 20-year-old identified only by the initials “KGM,” whose lawsuit could determine how thousands of similar lawsuits against social media companies would play out. She and two other plaintiffs have been selected for bellwether trials essentially test cases for both sides to see how their arguments play out before a jury.Mosseri, who’s headed Instagram since 2018 said it’s important to differentiate between clinical addiction and what he called problematic use. The plaintiff’s lawyer, however, presented quotes directly from Mosseri in a podcast interview a few years ago where he used the term addiction in relation to social media use, but he clarified that he was probably using the term “too casually,” as people tend to do.Mosseri said he was not claiming to be a medical expert when questioned about his qualifications to comment on the legitimacy of social media addiction, but said someone “very close” to him has experienced serious clinical addiction, which is why he said he was “being careful with my words.”He said he and his colleagues use the term “problematic use” to refer to “someone spending more time on Instagram than they feel good about, and that definitely happens.”It’s “not good for the company, over the long run, to make decisions that profit for us but are poor for people’s well-being,” Mosseri said.Mosseri and the plaintiff’s lawyer, Mark Lanier, engaged in a lengthy back-and-forth about cosmetic filters on Instagram that changed people’s appearance in a way that seemed to promote plastic surgery.“We are trying to be as safe as possible but also censor as little as possible,” Mosseri said.In the courtroom, bereaved parents of children who have had social media struggles seemed visibly upset during a discussion around body dysmorphia and cosmetic filters. Meta shut down all third-party augmented reality filters in January 2025. The judge made an announcement to members of the public on Wednesday after the displays of emotion, reminding them not to make any indication of agreement or disagreement with testimony, saying that it would be “improper to indicate some position.”During cross examination, Mosseri and Meta lawyer Phyllis Jones tried to reframe the idea that Lanier was suggesting in his questioning that the company is looking to profit off of teens specifically.Mosseri said Instagram makes “less money from teens than from any other demographic on the app,” noting that teens don’t tend to click on ads and many don’t have disposable income that they spend on products from ads they receive. During his opportunity to question Mosseri for a second time, Lanier was quick to point to research that shows people who join social media platforms at a young age are more likely to stay on the platforms longer, which he said makes teen users prime for meaningful long-term profit.“Often people try to frame things as you either prioritize safety or you prioritize revenue,” Mosseri said. “It’s really hard to imagine any instance where prioritizing safety isn’t good for revenue.”Meta CEO Mark Zuckerberg is expected to take the stand next week.In recent years, Instagram has added a slew of features and tools it says have made the platform safer for young people. But this does not always work. A report last year, for instance, found that teen accounts researchers created were recommended age-inappropriate sexual content, including “graphic sexual descriptions, the use of cartoons to describe demeaning sexual acts, and brief displays of nudity.”In addition, Instagram also recommended a “range of self-harm, self-injury, and body image content” on teen accounts that the report says “would be reasonably likely to result in adverse impacts for young people, including teenagers experiencing poor mental health, or self-harm and suicidal ideation and behaviors.” Meta called the report “misleading, dangerously speculative” and said it misrepresents its efforts on teen safety.Meta is also facing a separate trial in New Mexico that began this week. By Kaitlyn Huamani and Barbara Ortutay, AP Technology Writers
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Welcome to AI Decoded, Fast Companys weekly newsletter that breaks down the most important news in the world of AI. You can sign up to receive this newsletter every week via email here. Is AI slop code here to stay? A few months ago I wrote about the dark side of vibe coding tools: they often generate code that introduces bugs or security vulnerabilities that surface later. They can solve an immediate problem while making a codebase harder to maintain over time. Its true that more developers are using AI coding assistants, and using them more frequently and for more tasks. But many seem to be weighing the time saved today against the cleanup they may face tomorrow. When human engineers build projects with lots of moving parts and dependencies, they have to hold a vast amount of information in their heads and then find the simplest, most elegant way to execute their plan. AI models face a similar challenge. Developers have told me candidly that AI coding tools, including Claude Code and Codex, still struggle when they need to account for large amounts of context in complex projects. The models can lose track of key details, misinterpret the meaning or implications of project data, or make planning mistakes that lead to inconsistencies in the codeall things that an experienced software engineer would catch. The most advanced AI coding tools are only now beginning to add testing and validation features that can proactively surface problematic code. When I asked OpenAI CEO Sam Altman during a recent press call whether Codex is improving at testing and validating generated code, he became visibly excited. Altman said OpenAI likes the idea of deploying agents to work behind developers, validating code and sniffing out potential problems. Indeed, Codex can run tests on code it generates or modifies, executing test suites in a sandboxed environment and iterating until the code passes or meets acceptance criteria defined by the developer. Claude Code, meanwhile, has its own set of validation and security features. Anthropic has built testing and validation routines into its Claude Code product, too. Some developers say Claude is stronger at higher-level planning and understanding intent, while Codex is better at following specific instructions and matching an existing codebase. The real question may be what developers should expect from these AI coding tools. Should they be held to the standard of a junior engineer whose work may contain errors and requires careful review? Or should the bar be higher? Perhaps the goal should be not only to avoid generating slop code but also to act as a kind of internal auditor, catching and fixing bad code written by humans. Altman likes that idea. But judging by comments from another OpenAI executive, Greg Brockman, its not clear the company believes that standard is fully attainable. Brockman, OpenAIs president, suggests in a recently posted set of AI coding guidelines that AI slop code isnt something to eliminate so much as a reality to manage. Managing AI generated code at scale is an emerging problem, and will require new processes and conventions to keep code quality high, Brockman wrote on X. Saas stocks still smarting from last weeks SaaSpocalypse Last week, shares of several major software companies tumbled amid growing anxiety about AI. The share prices of ServiceNow, Oracle, Salesforce, AppLovin, Workday, Intuit, CrowdStrike, Factset Research, and Thompson Reuters fell so sharply that Wall Street types began to refer to the event as the SaaSpocalypse. The stocks fell sharply on two pieces of news. First, late in the day on Friday, January 30, Anthropic announced a slate of new AI plugins for its Cowork AI tool aimed at information workers, including capabilities for legal, product management, marketing, and other functions. Then, on February 4, the company unveiled its most powerful model yet, Claude Opus 4.6, which now powers the Claude chatbot, Claude Code, and Cowork. For investors, Anthropics releases raised a scary question: How will old-school SaaS companies survive when their products are already being challenged by AI-native tools? Although software shares rebounded somewhat later in the week, as analysts circulated reassurances that many of these companies are integrating new AI capabilities into their products, the unease lingers. In fact, many of the stocks mentioned above have yet to recover to their late-January levels. (Some SaaS players, like ServiceNow, are now even using Anthropics models to power their AI features.) But its a sign of the times, and investors will continue to watch carefully for signs that enterprises are moving on from traditional SaaS solutions to newer AI apps or autonomous agents. China is flexing its video models This week, some new entrants in the race for best model are very hard to miss. X is awash with posts showcasing video generated by new Chinese video generation modelsSeedance 2.0 from ByteDance and Kling 3.0 from Kuaishou. The video is impressive. Many of the clips are difficult to distinguish from traditionally shot footage, and both tools make it easier to edit and steer the look and feel of a scene. AI-generated video is getting scary-good, its main limitation being that the generated videos are still pretty short. Sample videos from Kling 3.0, which range from 3 seconds to 15 seconds, feature smooth scene transitions and a variety of camera angles. The characters and objects look consistent from scene to scene, a quality that video models have struggled with. The improvements are owed in part to the models ability to glean the creators intent from the prompts, which can include reference images and videos. Kling also includes native audio generation, meaning it can generate speech, sound effects, ambient audio, lip-sync, and multi-character dialogue in a number of languages, dialects, and accents. ByteDances Seedance 2.0, like Kling 3.0, generates video with multiple scenes and multiple camera angles, even from a single prompt. One video featured a shot from within a Learjet in flight to a shot from outside the aircraft. The video motion looks smooth and realistic, with good character consistency across frames and scenes, so that it can handle complex high-motion scenes like fights, dances, and action sequences. Seedance can be prompted with text, images, reference videos, and audio. And like Kling, Seedance can generate synchronized audio including voices, sound effects, and lip-sync in multiple languages. More AI coverage from Fast Company: Were entering the era of AI unless proven otherwise A Palantir cofounder is backing a group attacking Alex Bores over his work with . . . Palantir Why a Korean film exec is betting big on AI Mozillas new AI strategy marks a return to its rebel alliance roots Want exclusive reporting and trend analysis on technology, business innovation, future of work, and design? Sign up for Fast Company Premium.
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