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Growth is slowing but the party ain't over for Southeast Asia
Internet companies face slowest growth since 2017, according to a new report co-authored by Google
This week we are out of the traps a little late, but that gives me a chance to remind you to read the SPH-Tech In Asia acquisition post from Thursday.
This week’s wrap-up email is short and sweet, which gives you more time to dive into Google, Temasek and Bain’s latest Southeast Asia internet report which goes much the way you’d expect. Things are tougher now post-Covid, but Southeast Asia’s internet economy is still growing, albeit not on track with past forecasts.
There are also details of Kai-Fu’s Lee’s new AI startup, which is already a unicorn within its first year of business, the latest on the US-China tech standoff and more.
Thanks again for reading and catch you next week, if not sooner…
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New in focus
Growth is slowing but the party ain't over for Southeast Asia
Google, Temasek and Bain’s latest report on Southeast Asia is out.
These reports are the longest running and arguably most prestigious out there, they don’t get everything right—some of the early reports were pretty optimistic on growth—but they help substantiate what is happening, and at least make it easy for outsiders to get up to speed with this region.
As is often the case, it is useful reading as an overview that tries to quantify what is happening as opposed to bursting with insight we didn’t know about.
This year the themes are really as you might expect, with a pretty big focus on investment—and it seems like almost every major VC in the region had some level of involvement in the report based on the credits:
Growth is generally going to be slower for e-commerce and other major online industries
But travel and transport has rebounded from Covid
SEA is weathering the global capital winter better than most regions
Private funding in SEA has declined to its lowest level in 6 years
There’s an increasing focus on investing in nascent sectors
VCs have the double quandary of plenty of dry powder to spend but an overall struggle to return funds
You can read the full report—which is over 120 pages—here
An offshoot of the report is that top firms such as Grab, Sea and GoTo will face the slowest internet growth in the region since 2017 as e-commerce expansion decelerates link
Total online spending in Southeast Asia will rise about 11 per cent this year to US$218 billion, reaching its lowest growth rate since at least 2017
The region’s internet economy is now on track to reach US$295 billion by 2025, down from a previous forecast of US$330 billion
Former Google China head’s AI company is now a unicorn
Kai-Fu Lee is one of those folks who has been involved in AI since before it was hyped up this year. Lee has also worn many hats, that of academic (he led Microsoft Research Asia), head of Google China (it’s been a long time since Google was in China), investor, author and more recently startup founder with 01.AI, his company which aims to be China’s OpenAI.
Lee just announced it hit a $1 billion valuation thanks to investment from his own fund Sinovation Ventures, Alibaba Cloud and other undisclosed investors. That’s not exactly hugely illuminating since Alibaba/Alibaba Cloud is a broad investor and Lee’s own fund is in there, but 01.AI did release its first product, as TechCrunch reports.
Seven months after its founding, the startup has released its first model, the open source Yi-34B. The decision to introduce an open LLM as its debut product is a way to “give back” to society, said Lee. For people who have felt LLaMA is a “godsend” to them, “we’ve provided a compelling alternative,” he added.
As of writing, Yi-34B, which is a bilingual (English and Chinese) base model trained with 34 billion parameters and significantly smaller than other open models like Falcon-180B and Meta LlaMa2-70B, came in first amongst pre-trained LLM models, according to a ranking by Hugging Face.
Lee is one of a number of veteran tech and startup figures aiming to fill China’s AI void, with a hefty valuation, 01.AI will be one to watch. First up could be an app, which Lee teased could be released before the end of this year.
“China’s not ahead of the U.S. in LLM, but there’s no doubt China can build better applications than American developers mostly because of the phenomenal mobile internet ecosystem that was built over the last 12 years or so,” he told TechCrunch.
China has been warned that bullying Apple suppliers like Foxconn, which it is investigating for land- and tax-related allegations, could backfire badly and accelerate their actions to diversify away from the country link
Alibaba upgraded its AI model Tongyi Qianwen, releasing industry-specific models and claiming that it is now one of the world’s most powerful AI models based on its hundred of billions of parameters, a notable AI benchmark link
Meanwhile, Baidu launched a paid version of its Ernie Bot as part of a general rush to make money from generative AI as US firms like OpenAI and others have done link
And Ant Group got the green light from Beijing to release new AI products, built on its own large language model, to the public link
Using government-backed funds, China invested US$5.4B into 2-year-old memory chip maker Changxin Xinqiao as the national drive for self-sufficiency in technology picks up link
It sure is an expensive business—YMTC, China’s biggest memory chipmaker, has had to raise billions of dollars in fresh capital, after burning through $7B over the past year trying to adapt to tough US restrictions on its business link
Yangtze Memory Technologies Corp, which last December was added to a trade blacklist and prohibited from procuring US equipment to manufacture chips, exceeded its target for a new round, according to four people familiar with the situation.
Top social media players including Tencent to ByteDance are asking their most popular influencers to display their real identities as part of a new government push to lessen online anonymity link
New US export controls may compel Nvidia to cancel billions of dollars in next-year orders for its advanced chips to China, a move that could deprive Chinese tech companies of crucial AI resources. link
Hesai Group, a Shanghai-based maker of laser sensors used for next-generation vehicles, went public in a US IPO in February that heralded as a comeback from Chinese listings in the US—but now it is the latest example of a business hampered by the US-China tech battle link
Another is Chinese AI chip start-up Moore Threads which will reportedly cut jobs after US sanctions link
China tells Micron’s president Beijing would welcome the US semiconductor company deepening its footprint in the Chinese market, a move that some are optimistically taking as a further thaw in relations between the world's top two economies link
Remember when Singles Day numbers were always on the up? Now Alibaba is said to be pressuring merchants to offer rock-bottom prices on its marketplaces to boost sales and stem an overall drop in market share link
China said it attended a top-level ministerial meeting at the UK AI Safety Summit on Thursday, despite not being listed by Britain among the "like-minded" participants and not featuring in official handshakes or the ‘family’ photograph link
Apple warned more than a half dozen opposition lawmakers in India that their iPhones are targets of state-sponsored attacks link
Peak XV, formerly Sequoia India and Southeast Asia, enjoyed IPO success this week after reportedly netting a 10X return from the IPO of beauty brand Mamaearth, while it also is said to have fully exited its Zomato stake link
Flipkart co-founder Binny Bansal is doing a Kai-Fu Lee with plans to launch an AI-as-a-service startup that will target global customers link
India has reportedly authorised Apple, Dell, Lenovo and others to import laptop and tablets link
Apple iPhone shipments just had their best quarter in India link
Apple just saw its highest-ever quarterly shipments in India in Q3. The numbers come as the country’s overall numbers remain flat. Between July and September, the Cupertino firm shipped more than 2.5 million iPhone units in India, analyst firm Counterpoint said on Wednesday. The record shipments marked a 34% year-on-year increase.
And, because no week is complete with a Byju’s drama… Byju’s missed revenue projection in its delayed financial account, according to partial information that it released last week link
The edtech startup is also said to be in advanced talks to sell its US-based kids’ digital reading platform Epic for about $400M to buy-out fund Joffre Capital link
In keeping with learner businesses for ride-hailing companies, GoTo reported 942B rupiah ($59.30M) in underlying losses for the third quarter, a significant drop from last year's 3.7T rupiah loss link
Thai bank KBank acquired crypto exchange Satang for $103M as it looks to get onto offering crypto services link
Vietnam is holding talks with chip companies with the aim of boosting investment in the country and possibly building its first chipmaking plant, despite warnings from the US of the high cost involved link
Singapore public health services hit by DDoS attacks link
Japan’s NTT will invest 10B yen ($66.9M) in May Mobility, a US startup backed by Toyota Motor, which aims to develop driverless buses and taxis as early as 2025 link
South Korea’s Kakao faces growing regulatory heat after the country's president urged a review into its taxi app amid complaints about monopolistic practices, which comes on the heels of a probe into suspected stock market manipulation link
Samsung says its chip business and the industry will recover in 2024 after it posted its best quarterly profit this year link
Taiwan police busted a 324.2 million USDT money laundering operation link
Hong Kong crypto exchange HashKey launches an app as it begins to targets retail users link
Hong Kong plans to target tokenization with new regulatory requirements, officials say link
Rest of Asia
Hackers linked to North Korea are targeting blockchain engineers’ Apple devices with new, advanced malware, researchers have found. The tactics and techniques used in the campaign overlap with the activity of the North Korean state-sponsored hacker group Lazarus, as reported by cybersecurity firm Elastic Security Labs. link
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