Welcome back,
This week we lead with how governments in Southeast Asia are taking measures to crack down on scams on social media and messaging apps in the world’s most social region. That’s no easy feat and, as ever, there’s concern that frameworks and rules could be used to quash critical voices.
Elsewhere there’s been a lull in Chinese tech IPOs in the US, but that’s set to change with an upcoming autonomous car listing on the Nasdaq. Amazon is sniffing around for a piece of soon-to-IPO food delivery service Swiggy, and India has rolled back some rules that will make tech companies and startups happy. It’s hard to avoid TikTok these days and the US government claims it has found evidence that would justify the law that bans the app from American soil.
All that and more in this week’s issue.
Best regards from the UK where the summer weather has been kind to me… so far.
Jon
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Social media scammers face stricter regulations from Southeast Asian authorities
Malaysia and Singapore are bringing social platforms and messaging apps under tighter control to battle online scams and harm against minors.
Malaysia will begin licensing Facebook, X, TikTok, WhatsApp and other social media and messaging apps before the end of next year. That will require them to register for a licence and renew it each year to avoid a fine of around $100,000.
Licences will be required for platforms that are used by at least 25% of the population, that’s around 8M people. The government wants to introduce a “kill switch” that could be activated to remove content that is deemed to be egregious, such as online scams or gambling. It remains to be seen how that would work in practice. Plus, the law would not apply to users based outside of Malaysia..
Singapore, meanwhile, recently began to require social media and online marketplaces to detect and take action against scams and malicious activities by verifying the identity of sellers.
The rules are part of a growing trend for governments in Southeast Asia looking to stamp out abuse and scams online in a region that’s known for being one of the most active on social media in the world.
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Amazon eyes a bite of Swiggy
Amazon isn’t renowned for its M&A deals in Asia, where it tends to hunt down fire sale or bargain deals (such as its recent purchase of fallen streaming service MX), but the US giant is said to be looking to buy a chunk of Indian delivery startup Swiggy, right before it goes public.
The Economic Times reports that Amazon has been in touch over a deal but it isn’t yet clear whether that would be taking a stake in the firm before it goes public—Swiggy is reported to have filed docs for an imminent domestic IPO–or to buy its quick commerce business Instamart. (Quick commerce is seeing real traction in India, as we’ve written before.)
Any deal is not for sure, however:
The early discussions may not lead to a transaction considering the complicated structure of the deal in its present form, these people said. “Swiggy is unlikely to sell only its quick commerce business and Amazon won’t be interested in the food delivery space where growth is starting to plateau,” said the person cited above.
This would be a rare example of Amazon paying up for a relatively hot property, if a deal is to be completed that is.
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US DOJ claims TikTok gathered and shared sensitive US data with ByteDance China
There’s been plenty of speculation as to whether ByteDance and TikTok have gathered and shared sensitive information on US-based users. Such security concerns, plus the suggestion that TikTok could manipulate content received by millions, form the core of the argument that the app should be banned from American soil.
That argument received a huge boost last week when the US DOJ claimed TikTok had gathered data on US users’ opinions around sensitive and censored content under the directive of ByteDance in China. The topics harvested for were said to include gun control, abortion and religion. Engineers reportedly shared the data with China-based ByteDance employees using the company’s own Lark internal communications tool. The DOJ said the data was then stored on ByteDance’s China-based servers and accessible to Chinese employees.
Beyond access to data the DOJ argued that content manipulation could be a reality:
“By directing ByteDance or TikTok to covertly manipulate that algorithm, China could for example further its existing malign influence operations and amplify its efforts to undermine trust in our democracy and exacerbate social divisions,” the brief states.
The DOJ filing came in response to ByteDances’ appeal of the Biden administration law that forces ByteDance to sell or close the TikTok US business.
TikTok is spending millions battling the law—Washington power brokers, $1,500-an-hour attorneys and a $4.8 million ad campaign are among its arsenal.
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India makes tech friendly policy changes
Good news for India’s startup and tech community comes in threes this week:
Finally, it looks like there may be another change with sources suggesting curbs on some Chinese investments in areas such as solar panels and battery manufacturing may be cut.
This is a very thorough essay on the State of Chinese AI—it is worth a full read but includes some insightful takeaways including:
US sanctions are likely harming some sections of the ecosystem, while the deepest pocketed players remain resilient. Chip manufacturers and infrastructure providers have demonstrated that they will do everything within their power that stops short of breaking the law to continue selling to a lucrative market.
If we are aware of this, then it is unlikely that the US Commerce Department and the country’s wider national security apparatus are unaware (we hope). Therefore, we can only conclude that they are stopping short of tougher action deliberately.
There’s been a dearth of Chinese IPOs in the US but there’s light in the tunnel after WeRide, an autonomous driving startup based in Guangzhou, announced plans to raise $500M after it filed to list on the Nasdaq—it is early days and there’ll be more details in the coming weeks but this would be the largest Chinese tech IPO in America since Didi’s ill fated outing.
China is getting secretive about its supercomputers—that includes withdrawing from a key international supercomputing forum which marked the end of an era, creating a divide that Western scientists warn will hinder AI and technological advancements as nations pursue separate paths link
Nvidia is working on a version of its new flagship AI chips for the China market that would be compatible with current US export controls link
Alibaba was part of a new $691M round for AI startup Baichuan, its third major AI deal this year and one that values Baichaun at $2.8B link
Kling, a highly-rated new video-generating AI model developed by Kuaishou, appears to censor topics deemed politically sensitive by the Chinese government link
Talkie, a breakout chatbot that offers AI-generated conversations with famous people that’s become popular in the US, can be traced back to Chinese AI startup MiniMax, one of China’s “Four Little AI Dragons” link
Zhipu—another of those dragons—just launched its video generation model in a sign that local tech firms are gaining ground in the AI video arena link
The US National Counterintelligence and Security Center has warned technology startups that foreign adversaries, including China, are using investments to acquire sensitive data and threaten national security link
China drops sanctions on Viasat, a rare reversal after it targeted the US communications company over proposed arms sales to Taiwan link
Temu has opened up its platform to European sellers, as the Chinese bargain-shopping site ramps up offering of locally shipped products in an intensifying rivalry against Amazon link
Meanwhile TikTok Shop will launch in Spain and Ireland as early as October, restarting a stalled campaign to expand its fastest-growing business in Europe link
Foxconn plans to invest 1B yuan ($137.5M) on a new business HQ in Zhengzhou, China link
China has relaxed its notoriously strict video gaming rules as video game studios based in the southern state of Guangdong can now test games before they get a licence from the National Press and Publication Administration (NPPA) link
More IPOs could be on their way with lending startup Kreditbee (Singapore) and fintech Khatabook (US) redomiciling to india as part of plans to eventually go public at home—although it isn’t clear when either startup might look to list link
Google is adding a slew of new features to Google Maps in India as it seeks to attract more users by customising its service to serve the country’s unique needs link
Jio partnered with Taiwanese semiconductor giant MediaTek to launch 4G smart dashboards for electric two-wheelers link
SoftBank-backed Ola Electric suspended its car project to focus on the opportunity with scooters and bikes link
Foxconn is evaluating plans to assemble Apple’s iPad in India, marking a significant expansion of its current operations focused on making iPhones link
Crypto exchange WazirX’s plan to recover from a $230M hack involves making its users lock nearly half of any funds they held on the platform up for an unknown period that could potential be years—unsurprisingly, this approach has upset customers and vocalised critics who are advising users to withdraw their funds, if they can link
Grab announced the undisclosed acquisition of restaurant reservation platform Chope link
But at the same time it called time on its planned acquisition of Trans-cab due to concerns at satisfying Singapore’s competition watchdog link
Franklin Templeton led a $11M investment into Singapore-based Bitlayer’s bid to scale the Bitcoin network link
Singapore data centre upstart Sustainable Metal Cloud is raising about $950M as it looks to increasing AI demand to fuel growth link
Singaporean e-commerce firm Qoo10 could be in trouble after its Korean units—TMON and WeMakePrice—were revealed to face a probe due to payment delays to merchants link
Kakao founder Brian Kim was arrested over allegations of violating capital market laws following his company’s takeover of K-pop agency SM Entertainment earlier this year—Kakao had expanded from messaging into a range of services including music, shopping, ride-hailing and food but now he could become the latest high-profile tech name to be jailed link
Aramco’s venture arm invested $15M in chipmaker Rebellions as part of a push to accelerate the AI industry in Saudi Arabia link
SK Hynix posts highest profit in 6 years on AI boom link
Japan is becoming a magnet for tech companies drawn by its lenient copyright laws, which critics claim enable the widespread use of copyrighted materials for commercial AI training without permission link
Masayoshi Son is trying to rally automakers around the world to join forces on autonomous-driving technologies link
Rim Jong Hyok, a North Korean military intelligence operative, has been indicted for hacking American health care providers, NASA, U.S. military bases, and international entities—he remains at large, however link
KnowBe4, a US-based security vendor, revealed that it unwittingly hired a North Korean hacker who attempted to load malware into the company’s network link
