Welcome back,
This newsletter tends to root out the less obvious stories wherever possible. But this week, we are leading with an obvious company: Nvidia, the chip-maker that has grown into the world’s most valuable company (with a $3 trillion-plus market cap) thanks to the rise of AI.
Nvidia is in a tricky spot. Like all US companies, China is potentially a game-changing market for its business but the US government has placed export restrictions around technology to prevent China from gaining the advantages of using US products. Nvidia was caught up in this fracas but it is tipped to do crazy business over the next year thanks to a new product it unveiled specifically for the Chinese market—one that fits with US restrictions on tech in China. It’s an incredible balance if the firm can pull it off.
But ATR is never just about one story, and elsewhere this week we have news of Shein’s impending launch in India, the closure of India-based social network Koo, the resignation of Indonesia’s IT minister following a devastating ransomware attack AND why the Japanese government will finally stop using floppy disks. Read on for all of this and more.
See you again next week,
Jon
PS: Follow the Asia Tech Review LinkedIn page for updates on posts published here and interesting things that come our way. If you’re a news junkie, the ATR Telegram news feed has you covered with news as-it-happens.
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Nvidia is still making bank in China
US export controls have made it tricky for American companies to do business in China, with the goal being to restrict the Chinese government and Chinese companies from gaining access to the best technology on the planet.
Yet, the Financial Times reports that Nvidia is on pace to sell $12B of AI chips in China this year:
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That’s double that of Chinese rival Huawei—which has seen demand skyrocket thanks to those US sanctions
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And it is more than the $10.3B that Nvidia’s entire business, including graphics cards for PC games, made last year
The incredible predictions are based on the release of one product alone, Nvidia’s new H20, a bespoke chip created to fall in line with US sanctions but also provide a superior experience to that of Huawei and others.
Nvidia did not respond to the forecast from chip-focused consultancy firm SemiAnalysis. However, CEO Jensen Huang has previously acknowledged that Nvidia’s Chinese business has significantly declined. The US faces a delicate balance between supporting a $3 trillion US firm that’s an industry leader and staying ahead in a broader technology competition with its adversary.
What are H20 chips, you ask? The FT has you on this one, from November 2023:
Nvidia is preparing to launch the new chips just weeks after the US restricted sales to China of high-performance chips that can be used to create AI systems, in the Biden administration’s latest salvo in a tit-for-tat tech war between the two superpowers. The three new Nvidia chips are named the H20, L20 and L2, according to a document distributed by the company to prospective customers that was obtained by the Financial Times.”
It seems inevitable that Huawei will become more competitive soon, but still big Chinese tech firms opt for Nvidia. Tencent just last week announced a 20% improvement with its LLM training thanks to adopting Nvidia tech, while a top Huawei exec has denied that a chip shortage will impact China’s AI development.
But it isn’t just about China-tailored chips, we’ve noted before that there are loopholes and the Wall Street Journal looked into the “underground network” that’s sneaking Nvidia chips into China—including using luggage from students returning home.
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Indonesia IT minister resigns following ransomware attack
We noted last week that an attack has crippled public systems and affected areas including airport immigration. Now Semuel Abrijani Pangerapan, director-general for applications and information at the Communications and Information Technology Ministry, has stepped down from his position and taken responsibility for the situation.
Indonesia has had plenty of cyber attacks but this one is particularly notable.
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Shein heads to India
Right in time for an IPO, Shein is launching in India with local partner: Reliance Retail. The pair formed a strategic partnership one year ago and now they’re coming to action with former Meta director Manish Chopra set to lead operations. Reliance Retail will host and control both the Shein India platform and its data.
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Indian social network Koo to shut down after failing to find a buyer
Twitter alternative Koo’s struggles were documented last month. In short, it made wide-ranging layoffs as its user numbers dwindled post-Covid, but now the inevitable is here with news it will close down after it reportedly failed to find an acquisition agreement with Dailyhunt, another India-based social platform.
Koo had raised $60M from investors and it claims to have hit 10 million monthly users, but it never really secured an audience at home and international expansion efforts didn’t bear fruit. The founders reflected on their journey claiming non-English social media remains important, but they couldn’t find the long-mind and patient venture capital they believe they need to make it work.
This isn’t a huge surprise but it does quantify the trend: Chinese investment funds are focusing on areas the government is prioritising, chiefly AI and semiconductors—key segments where China is battling/playing catch up with the US link
Not only that, but China is dominating the numbers in key areas too:
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The country contributed 90% of global venture capital investments in the chip sector last year, totalling $22.2B and more than doubling the $9.5B invested in 2022, research firm Preqin said in a report
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Half of the semiconductor venture investments came from three “mega deals” led by partnerships between municipal authorities and Sino IC Capital, the asset manager of the state-backed China Integrated Circuit Industry Investment Fund, known also as the Big Fund
China is seeking to establish at least 50 sets of AI standards by 2026, according to a new draft policy from Beijing link
The country also says it plans to task a committee with drafting standards to guide the use of brain-computer interfaces — a sign it intends to step up its own development of the emerging technology link
Huawei and foundry Wuhan Xinxin will reportedly develop high-bandwidth memory chips to cover US restrictions link
The EU is drawing up plans to impose customs duties on cheap goods bought from Chinese online retailers including AliExpress, Temu and Shein in an effort to stem a surge in what the EU says are substandard items coming from China—it plans to propose a current €150 threshold under which items can be bought duty free link
GPU startup Moore Threads completed a significant upgrade of its AI data centre in another tech leapfrog from a Chinese firm as a result of US sanctions link
But not all the new players succeed: Beijing Zuojiang Technology, once touted its potential to rival Nvidia, will delist from the Shenzhen Stock Exchange this month link
Foreigners might face having devices checked after Chinese officials began inspecting smartphones and devices as part of a new espionage law link
Ant Group is throwing big money behind its blockchain businesses, which include software development, hardware and computing services link
Ant also spun off its database business OceanBase, which develops the infrastructure for Alipay among others things—Alibaba is one of the many shareholders link
JD.com is said to be among possible bidders for British parcel company Evri, which is selling for around $2.5B link
Tencent is closing its online education service Tencent Ketang (meaning classroom) as part of cutbacks among non-core business units link
384,000 sites pull code from sketchy code library recently bought by Chinese firm link
Half a dozen or so apps that gamify stock trading are shutting down in India after the Securities and Exchange Board of India (SEBI) banned live stock price data being share with third-parties in a move aimed at protecting consumers link
Edtech Unacademy is slashing 250 jobs in the latest round of layoffs as it deals with apparent lower demand following a Covid boom—Unacademy is said to have let go of around 2,000 staff since the second half of 2022 and TechCrunch reports it has fielded merger discussions with K12 Techno, which owns school chain Orchid International link
Crypto exchange CoinDCX acquires BitOasis to expand into the Middle East link
Temasek is said to be supporting M&A by local Singaporean companies it has invested in. as it aims to help the companies become more intentional and provide return on investment for the state-backed fund link
Singapore is finding joy attracting Taiwan companies that are shunning China’s investors link
Thailand’s Open ThaiGPT, a project which aims to develop a generative AI tool based on the local language, is said to be showing progress as the country aims to foster its own technology and enable local services link
Foxconn just got a key licence to allow it to invest $551M more in Vietnam, according to local media reports link
Hyundai and LG Energy Solution opened a $1.1B battery cell plant in Indonesia in a move made to develop an EV ecosystem link
Samsung posted its fastest pace of sales and profit growth in a year thanks to strong memory chip demand on account of the AI boom link
The South Korean government unveiled a real-time monitoring system for tracking crypto fraud link
SmartHR, a cloud-based human resources and labour management software startup, raised $140M at a valuation of $1.6B led by KKR and Teachers’ Ventures Growth link
Sony is preparing to launch a crypto exchange in Japan using acquired platform Amber link
Japan’s government has finally eliminated the use of floppy disks in all its systems, two decades since their heyday, reaching a long-awaited milestone in a campaign to modernise the bureaucracy link
SoftBank has recently talked with banks about borrowing money to fund investment of up to $10B in energy-related projects, where AI is driving an enormous increase in demand link
Bangladesh has millions of e-rickshaws, but only now are they finally becoming legal link
