Malaysia clips Network School’s nomad ambitions
Experimental digital nomad community may be forced to move after running into Malaysian politics
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Today we look at why Network School, US investor Balaji Srinivasan’s ambitious project to bring online communities together, is likely to move from Malaysia to Kazakhstan after running into the realities of doing business in Southeast Asia.
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Balaji’s Network School looks set to swap Malaysia for Kazakhstan
Balaji Srinivasan, the former Coinbase CTO and long-time tech investor, had a lesson on how politics in Southeast Asia works. Network School, his experimental community for digital nomads, ran into trouble in Malaysia, where it has been ordered to stop operating after nearly two years in the country.
The school is designed to bring online communities together offline to help talent build new businesses, new ways of learning and living together. It has occupied Malaysia’s Forest City, an ambitious project in Johor that was created in the last decade on reclaimed land but is mostly unbuilt.
The deal to place Network School there looked like a win-win, with Srinivasan keen to find a location to test his theory on communities and authorities keen to breathe new life into an area that never reached its potential. But that’s come undone as Network School has been ordered to cease activities after its local licence was revoked.
Johor Chief Minister Onn Hafiz Ghazi claimed one of the company’s premises was operating illegally without a licence. He said that both Malaysia’s King (who is also the Sultan of Johor) and the Johor Crown Prince consented to shutting Network School down.
“The State Government wishes to emphasise that Johor always welcomes high-quality investments that benefit the economy, create employment opportunities, and drive state development. However, no investor, company, or organisation can be placed above the sovereignty of the country’s laws,” Onn Hafiz wrote on X. He encouraged federal agencies to investigate possible immigration and digital-status violations, more on that later.
Srinivasan, however, played down the situation as an administrative error regarding signage. “We have multiple buildings. For one of them we need to change the text of a sign and the status of a license,” he wrote on X.
Immigration controversy
Srinivasan and Network School just got knocked by the local authority in Johor, the strategic Malaysian state bordering Singapore. It looks fairly consequential and might signal an end to the project in Malaysia at least.
Network School has been investigated over possible immigration violations.
Its premises were visited by authorities checking passports and visas of its students last week in response to concerns that Israeli nationals had entered the country on second passports. Srinivasan said the checks had not unearthed any issues, but Malaysian media reported that 19 foreign nationals (of Network School’s 430 registered participants) remain unaccounted for.
Srinivasan said anonymous social media accounts are trying to undermine his project, and he came out swinging on X with a post that questioned whether the global tech community should continue investing in Malaysia.
He claimed Network School has helped bring $25 million in investment to Malaysia so far, connecting global companies and bringing talent to the country. He addressed Prime Minister Anwar Ibrahim directly, but it is Johor political leaders (and royal family) who hold the real power here.
Network School was targeted by the activist group MP4P, Malaysian Protest 4 Palestine, which raised concern that Israeli nationals entered Malaysia to take part in Network School. Israel is a complicated topic in Southeast Asia, neither Malaysia nor neighbouring Indonesia recognise it as a nation. Both are majority Muslim countries.
In terms of technology, Israel is a hotbed for major companies and startup founders. But they can’t travel easily in Southeast Asia.
Indonesia doesn’t allow tourist visas for Israeli passport holders, while Malaysia goes further in not allowing Israelis to enter without government permission. They can only do so using a second passport. That’s an issue MP4P raised about Network School and it looks like the real topic that mobilised Onn Hafiz Ghazi. Srinivasan maintains that Network School adheres to all rules and laws.
But the issue is already a national one. Anwar said last week that Israeli nations found in the country via Network School would be deported.
Now to Kazakhstan
The situation looks harsh on Srinivasan, but he is already moving on. Network School signed an MOU with the government of Kazakhstan, which has been pushing into technology and blockchain in recent years and might be the project’s next home.
Network School may live on, but Srinivasan will be frustrated since Johor looked like an ideal fit.
It symbolically offers potential in a location in need of regeneration. It is close to the global hub of Singapore. And it appeared to have the backing of Malaysia’s pro-tech leadership and brought positive attention to the country. It didn’t reckon on the politics of Malaysia getting in the way, however.
Deals
01.ai, the Chinese AI startup founded by ex-Google executive Kai-Fu Lee, is reportedly seeking pre-IPO funding before a planned Hong Kong listing in 2027 [Bloomberg]
Blackstone agreed to invest in South Korea’s Futronic, a supplier of high-precision actuators for industrial robotics and autos, in a deal valuing the company at about 1 trillion won ($675 million) [Bloomberg]
Hyderabad-based Raghu Vamsi Aerospace Group raised $40 million from Norwest and Skegen Asset Management to expand facilities in India, the UK and the US [Economic Times]
Moonshot AI reportedly plans to launch a final funding round in August at a $31.5 billion valuation ahead of its Hong Kong listing, aiming to capitalise on buzz around its newest model to reach a valuation of up to $50 billion [Bloomberg]
Tencent is said to be in talks to acquire mobile gaming studio SuperPlay from Playtika in a deal that could value the business at $1 billion to $1.5 billion [CTech]
Japan’s T2 raised about 5 billion yen ($30.7 million) from 11 investors, including the venture arms of Mitsui O.S.K. Lines, Sumitomo Warehouse and Mitsubishi Logistics, as the self-driving truck startup develops autonomous freight services [Nikkei Asia]
Ant International, the Singapore-based overseas arm of Ant Group, raised $1.2 billion backed by Ant Group and Alibaba to expand merchant payments and enterprise financial services worldwide [Reuters]
Markets
Thailand’s Finnomena filed to list on the Stock Exchange of Thailand, with plans to sell up to 300,000,838 shares, or 15% of post-IPO capital, to fund wealthtech platform expansion [LinkedIn]
China’s Zhongji Innolight started gauging investor demand for a Hong Kong listing that could raise as much as $8 billion, putting the optical transceiver maker on track for the city’s biggest first-time share sale since Alibaba’s 2019 listing [Bloomberg]
Beijing-based GigaAI, also known as Jijia Vision, is weighing a Hong Kong IPO as soon as this year and is nearing a new funding round at a $3 billion valuation [Bloomberg]
South Korea’s exports in the first 20 days of July jumped 52.3% from a year earlier to a record for the period as AI-led demand lifted semiconductor and technology shipments [Bloomberg]
Paytm parent One 97 Communications reported a 79% year-on-year jump in quarterly profit to 2.2 billion rupees ($25.6 million) as it continued its turnaround from last year’s regulatory hit [Bloomberg]
BlackRock, Hillhouse Investment and Temasek are set to be among cornerstone investors in Zhongji Innolight’s potential $8 billion Hong Kong listing, alongside Aspex, JPMorgan Asset Management, Wellington and Jack Ma-backed Yunfeng Capital [Bloomberg]
AI and Chips
US Treasury Secretary Scott Bessent said Washington will scrutinise overseas open-source AI models, including from China, and may act if it finds evidence they used stolen US intellectual property [Bloomberg]
US investor Bill Gurley argued that open AI models are a competition force against closed-model incumbents such as Anthropic and OpenAI, pointing to China’s Moonshot, DeepSeek and Zhipu as part of a wider open-model push [Washington Post]
China is said to be considering tighter export controls on AI and semiconductor technologies as Beijing tries to keep advanced domestic AI capabilities at home and mirror US treatment of AI as a strategic asset [Financial Times]
Z.AI completed construction of a 1-gigawatt data centre using only Chinese-made chips and has begun partial operations to develop its GLM AI platforms [Bloomberg]
Hugging Face said an autonomous AI agent breached its production infrastructure the week of July 13, with defenders switching to Z.ai’s open-source GLM 5.2 model on their own infrastructure after unnamed US frontier LLMs blocked incident-response work [The Stack]
SK Group chairman Chey Tae-won said the global AI memory-chip shortage is severe enough that foreign governments are intervening for domestic industries, urging SK hynix to accelerate capacity expansion at home and abroad [Korea Herald]
Taiwanese prosecutors indicted a former TSMC deputy manager for allegedly stealing trade secrets involving national core technologies with the intent of helping China advance its chip ambitions [Nikkei Asia]
South Korea’s Seoul Semiconductor is assessing plans to set up a manufacturing plant in India and is in talks with Tamil Nadu, Karnataka and Gujarat, with the company potentially applying for incentives under India’s $13 billion Semiconductor Mission 2.0 programme [Economic Times]
TSMC is set to raise prices for advanced and mature chip production services by up to 10% in 2027, reflecting higher material, equipment and overseas fab construction costs [Nikkei Asia]
South Korea plans to launch a free homegrown AI chatbot this year as part of an AI for All push to reduce reliance on foreign platforms and make AI services available without monthly subscription fees [CNA]
In other news:
South Korea’s Financial Supervisory Service began sanction procedures against Dunamu, the operator of crypto exchange Upbit, over the roughly $30 million hack the platform suffered last November [The Block]
China’s market regulator could announce the outcome of its months-long antitrust probe into Trip.com Group as soon as this week, with the online travel platform facing a possible fine of 2 billion yuan to 6 billion yuan ($280 million to $840 million) [SCMP]
Alibaba’s AliExpress was fined €550 million ($640 million) by the EU in the largest penalty under the bloc’s Digital Services Act, with regulators saying the platform failed to assess unsafe or counterfeit products properly and penalise repeat-offending vendors [Bloomberg]
Singapore’s IMDA said the Personal Data Protection Commission launched a guide on federated learning and updated its synthetic-data guidance to help organisations adopt privacy-enhancing technologies for AI development [TNGlobal]
Japan’s AZ-COM Maruwa Holdings, a logistics services company that counts Amazon Japan as a client, will use the yen-denominated JPYC stablecoin to pay outsourcing fees and salaries to around 2,300 business partners [Nikkei Asia]
Hollywood trade groups are urging Vietnam to impose tougher penalties and faster action against piracy operators and copycat sites as a USTR Section 301 investigation raises the prospect of trade sanctions over anti-piracy enforcement [TorrentFreak]
Vietnam introduced fines of up to $7,600 for unlicenced crypto service providers and advertisers as five exchange applicants await review and the first licences are expected in the third quarter [The Block]
Samsung is setting up a robotics division called RX that will report directly to the CEO as the company pushes to make robotics a core growth business [Reuters]
South Korea suffered a data leak that could affect nearly all current and retired diplomats after a government-run training academy database with about 10,000 records was breached [Bloomberg]
Bybit launched a locally regulated platform in Indonesia after taking majority ownership of PT Enkripsi Teknologi Handal, formerly NOBI, with the new Bybit Indonesia operating under OJK supervision [PR Newswire]
Samsung debuted an AI-powered health assistant as it pushes deeper into personalised digital health and joins a crowded market for AI wellness tools [Bloomberg]