China's Big Tech is cooking up ChatGPT alternatives (and more)
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China's Big Tech is cooking up ChatGPT alternatives (and more)
Asia Tech Review: 6 March 2023
Welcome back,
This week’s newsletter is a little lighter than usual. The US-China chipwar continues to be the biggest theme but elsewhere we have stories on journalists being impersonated to go after activists in China; a huge new investment fund in India; and, in Indonesia, details of a TikTok trend that saw elderly women being paid to sit in stagnant mud for hours and cry… apparently so.
Hello and thank you to the new readers who signed up during February. Please do give your feedback on the newsletter and, of course, share with friends and folks who you think will enjoy it. There’s plenty more to come soon.
That’s all for now—see you again next week,
Jon
Stories in focus
Chinese big tech is cooking up its own ChatGPT alternatives
We’ve written in ATR in recent weeks that the Chinese government has taken a firm role in preventing its domestic tech firms from using ChatGPT due to concerns around information control and American misinformation. But progress is being made on homegrown alternatives.
ChatGPT is off limits in China—with services offering access blocked in China—but Chinese tech giants are pushing ahead with their own versions, SCMP reports. Initial products will be somewhat frivolous releases like art generators and chatbots but they’ll serve as “a warm-up for upcoming ChatGPT-style services.”
Baidu, ByteDance and Meituan each launched such products, while Alibaba and Tencent are among those that have committed to bigger ChatGPT-like launches, too.
The big question is, of course, how China’s stringent internet censorship systems will be baked into these services. It’s hard to imagine these AI services being given free reign on information and topics.
Smartphone suppliers are racing to move their production outside of China
What began as a trickle, is now gaining speed as electronics suppliers increasingly look for manufacturing production outside of China. The Economist reports that a combination of commercial and political pressure is pushing the firms that help develop products for Apple and others to look at “Altasia” — which to date is mostly India and Vietnam.
Apple’s suppliers, for example, are “racing” to move capacity from China, according to Bloomberg, which cites AirPod maker GoerTek and its plan to invest $280M into a new plant in Vietnam and expand its capacity in India. Meanwhile Foxconn, the famed Apple partner, just announced it will spend $700M on a new plant near Bengaluru airport to ramp up local production of iPhone parts… and possibly iPhones themselves in the future..
“Altasia” moves are said to be happening faster than first predicted but it will still take time, Bloomberg explains:
Behind the scenes, 9 out of 10 of Apple’s most important suppliers may be preparing large-scale moves to countries like India, which is dangling incentives to drive Narendra Modi’s Make in India initiative. Bloomberg Intelligence estimates it could take eight years to move just 10% of Apple’s capacity outside of China.
There’s also likely to be teething problems. As recently covered in ATR, Apple has had quality control issues in India with one report suggesting that just 50% of iPhone casings made in the country meet Apple's quality standards. Indeed, just last week, Apple supplier Foxlink halted production at an Indian facility after a fire.
Sequoia’s Surge accelerator programme has generated $2B in funding for its companies
When Sequoia first launched Surge in India and Southeast Asia, it was confusing. The storied VC firm is famous for growth investing, and spotting the occasional gem at Series A. It didn’t do seed-stage deals. In fact, it had friends and systems in place for finding promising early stage deals and joining when these startups hit a level of maturity.
Surge changed the game and, as I wrote for The Ken in 2019, it pitted Sequoia against those early-stage ‘friends’ it worked with, especially in the more nascent Southeast Asia ecosystem.
Now, four years after its launch, Surge appears to have found its place. TechCrunch reports that Surge participants have gone on to raise over $2 billion in follow-on funding. That’s impressive. Sources who spoke to TechCrunch’s Manish Singh seemed to accept Surge is delivering on its promise to be a high-quality programme and even standing out from Y Combinator, the hallowed programme that is seen as the world’s best startup accelerator.
Indeed, other Indian VCs are said to have tried to do their own versions—that’s perhaps the ultimate compliment.
Meanwhile: Sequoia China expects to see 30 Chinese entrepreneurs to take part in the second batch of its accelerator programme, which offers a minimum of $1M in investment and will include a major focus on AI link
China
A look at how Temu, a gamified shopping app boasting low cost products, became a success in the Us—even topping the app store charts link
It emerged that high-profile investor Fan Bao, who went missing last month, has been detained by authorities in mainland China in connection with a corruption investigation targeting a former senior executive at his China Renaissance firm link
China is holding up Arm’s plan to offload its troubled joint venture in the country. Sources say Chinese officials have declined to process the paperwork confirming Arm China’s transfer to a new Vision Fund entity since the documents were submitted to business regulators around May last year link
Meanwhile, Arm Ltd has reportedly decided against selling shares on the London Stock Exchange for now, dealing a blow to UK politicians who lobbied the British tech giant for a domestic IPO link (that’s apparently due to onerous rules it would need to deal with to go public in the UK)
Two Reuters journalists had their identities faked in a months-long scheme that used sham social media accounts to engage with Chinese activists across several platforms link
Xiaomi unveiled a new set of lightweight AR glasses which it claims also have a ‘retina-level’ display link
China plans to double down on 5G, IOT and supercomputing as part of a renewed digitalization push detailed in a new roadmap issued by the government link
A Washington-led semiconductor alliance, called “Chip 4” which includes Taiwan, Japan and South Korea, will set up an early warning system to prevent future supply chain disruptions—in a bit to avoid the chaos that has made key components scare since the Covid outbreak link
China’s top memory chip maker YMTC landed a US$7B investment from state-backed investors link
T-Head, the chip unit of Alibaba, will increase its focus on RISC-V chips (which use open source architecture) as a way to help China develop increased self-sufficiency in its semiconductor battle with the US and global sanctions link
Not to be outdone, Xiaomi has set up a fund to invest in China’s chip industry link
Huawei used Mobile World Congress, the mobile industry’s largest trade show, to show off its technology and products despite US sanctions—the firm apparently booked up “almost an entire vast exhibition hall” to ensure a strong presence, and other Chinese peers did the same link
Related: the US is said to be considering revoking export licenses issued to suppliers for sales to Huawei link
US chipmakers must agree not to expand capacity in China for a decade to qualify for money from a $39B federal fund designed to build the domestic semiconductor industry, according to new commerce department rules link (that policy is already raising concern in South Korea)
Regulators have eased deadlines for multinational companies struggling to comply with rules requiring approval to export user data link
Hong Kong
Web3 firm Animoca Brands is planning a major push into the Middle East, following the Hong Kong government’s efforts to forge closer ties to the region link
Streaming firm Viu, which offers ad-support and subscription services across Asia, disclosed it had 66.4M monthly active users in 2022, an increase of 13% year-on-year. It said its paying subscriber base grew by 45% to reach 12.2M last year link
India
CRED, the fintech that provides services for India’s 1%, has added buy now, pay later and tap to pay for customers link
Nexus Venture closed a new $700M fund for India and US-based startups—the fund, its 7th, will look at areas such as AI, saas, fintech and commerce link
India’s central bank has slapped Amazon Pay’s India unit with a fine of over $373,300 for non-compliance with local guidelines surrounding know your customer and prepaid payment instruments norms link
Legaltech startup SpotDraft raised $26M link
Southeast Asia
E-commerce aggregator Una Brands raised $30M in pre-Series C financing link
People on TikTok are paying elderly women to sit in stagnant mud for hours and cry… yes, it’s true but then the government stepped in and banned the videos link
Creative residents in Bali are coming up with unique solutions to the island’s constant stream of rubbish link
Japan
Japanese marketing tech firm Geniee, part of the SoftBank Group, has acquired AdPushup-operator Zelto for $70 million link
South Korea
Coupang reported lower sales than analysts estimated, marring another profitable quarter for the company. Revenue gained 4.9% to $5.33B in the October-December period, the US-listed company said in a statement. That compared with an average estimate of $5.45B. Coupang’s active customers grew just 1% to 18.1M, also missing projections. Link
Across Asia Pacific
Australian lender Zip has retrenched massively, ending its presence in 10 of its 14 markets it had expanded to, including India, Philippines and Singapore—it will remain in the US, Canada, New Zealand and Australia as it plans to win back investors following a 95% share slump in the last two years link
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