This Week in Asia #9: China AI dreams of Sora
In our 9th issue, Open AI's announcement of Sora has dampened China AI's aspirations to beat the US in the AI race and they are still playing catchup. TSMC's Morris Chang shares his enthusiasm for the potential revival of the Japanese semiconductors industry and Ant Group's acquisition of Credit Suisse Securities China. Of course, we document the heating up of the fintech scene in Southeast Asia and the fates of two crypto bad boys in Asia with our podcast being mentioned in New York Magazine recently.
What we are reading this week
Recommendations
- SO WHAT? A Web3 Digest for Executives by Jon Russell from Asia Tech Review and Gary Liu, CEO of Terminal 3 and former CEO of South China Morning Post. If you want to understand the crypto and web3 market and the current updates, it is highly recommended.
AI
- OpenAI’s Sora pours ‘cold water’ on China’s AI dreams, as text-to-video advancements prompt more soul-searching by Coco Feng and Ben Jiang from South China Morning Post. Our Take: OpenAI's recent development of the Sora text-to-video model has highlighted China's lag in the field of generative AI, emphasizing the country's struggles to keep pace with global AI advancements. China faces challenges due to restricted access to critical tools such as advanced GPUs from Nvidia, a result of escalating US export restrictions. This limitation, along with a governance model that may not be conducive to rapid AI development, puts China's leading AI players years behind their American counterparts. China's tech giants like Baidu, Tencent, and Alibaba with a few AI startups like Lee Kai-Fu's 01.ai have developed their own large language models, but none match the sophistication of Sora. You might want to read this ChinAI newsletter article to get a sense of how the Chinese LLMs compare against their US counterparts based on the SuperClue team's benchmarks.
China
- Ant Group Outbids Citadel Securities for Credit Suisse’s China JV by Yue Yue and Denise Jia from Caixin Global. Our Take: It is our view that the Chinese government will prefer Ant Group to purchase the Credit Suisse Securities (China) than Citadel Securities LLC which proposes their bid in the range of $210 to $280 million.
India
- Disney, Reliance said to ink binding India media merger pact by Anto Antony, Baiju Kalesh and Senjai P R from Bloomberg. Our Take: The decision from Bob Iger to make this move if happen, is to rely on a local partner, Reliance to help them to run their streaming business and other media properties and be focus on the main issues back in the US, for example, activist shareholder Nelson Peltz and Marvel's issues on movie quality.
Japan, Korea, Taiwan & Hong Kong
- TSMC founder Morris Chang predicts Japan 'chip renaissance' by Cheng Ting-Fang and Ryohtaroh Satoh from Nikkei Asia Review. Our Take: Morris Chang, the founder of Taiwan Semiconductor Manufacturing Co. (TSMC), predicts a "chip renaissance" in Japan, reflecting the country's ambition to reclaim its former semiconductor industry glory from the 1980s. Despite losing ground due to trade conflicts with the U.S., the PC revolution, and underinvestment, Japan still holds significant market shares in sectors like image sensors and power semiconductors for automotive applications. Chang, who played a pivotal role in Taiwan's semiconductor success, sees cultural and talent similarities between Taiwan and Japan as advantageous.
- SK Telecom partners with AI search startup Perplexity in Korea by Krystal Hu from Reuters followed by SoftBank to join SK Telekom-led global AI joint venture with Deutsche Telekom, SingTel and other telcos. Our Take: It is the Mobile World Congress week in Barcelona and of course, there will be announcements. Having telcos get into the AI business is the same with their unfulfilled promises of 5G rollouts that will solve everything. You should be disturbed by our lack of faith in the telcos.
Southeast Asia
- The fintech startups in Southeast Asia are having a field day in the past week with the following news:
- Julo hits breakeven, logs $120m in annual recurring revenue by Gabriel Budi Sutrisno in Tech In Asia
- Singapore's based B2B payments firm bags $5.2m in Insignia Ventures led-round by Jofie Yordan in Tech in Asia.
- Philippine digital bank player UnoAsia raises $32.1M by Backscoop
Crypto & Bad Boys in Asia
- HTX, formerly Huobi withdraws Hong Kong crypto licence application by Xinmei Shen from South China Morning Post. Our Take: It is too early to say that the regulators in Hong Kong are being too friendly to crypto exchanges. The Asian regulators are going to be tougher than usual given the blowout of crypto hedge funds and exchanges in 2022 and their aftermath in 2023.
- Terraform Labs co-founder Do Kwon to miss start of US SEC fraud trial from Channel News Asia. Our Take: The South Korean founder & his company Terraform Labs were sued by the Securities & Exchange Commission (SEC) in the United States for wiping out $40 billion of losses in crypto markets in 2022. Honestly, it does not matter whether he is extradited to the US or South Korea. Either way, he will be convicted. Of course, curve balls might happen given the world of crypto.
- 'They are very comfortable lying' How fallen crypto kingpins Su Zhu and Kyle Davies are dodging prison — and rebranding by Jen Wieczner from NY Magazine. Our Take: This is a follow-up article from the first article published last year, which explores the aftermath of the collapse. The article describes their controversial activities post-3AC collapse, including Zhu's shift towards Chinese communication and his framing of his prison experience as transformative, and Davies's claims of innocence despite widespread criticism and legal challenges. The duo has continued to be active in the crypto world, launching questionable ventures such as OPNX and OX.Fun, showing a lack of remorse and a persistent effort to rebrand themselves. The article suggests that Zhu and Davies's actions post-3AC collapse reflect a deeper problem within the crypto industry, where accountability and ethics are often overshadowed by quick wealth and fame. Just one more thing: Our podcast but not our host is mentioned as she watched the entire episode and she's right: our host BL is unconvinced that Kyle was not sorry about what happened. Of course, there was a Twittershowcases conversation between Bernard and the author of the article.
enjoyed the podcast! generally we cite the name of the podcast, not each individual host (none of the hosts of the several podcasts mentioned were included). just like we cite the publication of stories cited, not the author (ie an article in the New York Times)
— Jen Wieczner (@jenwieczner) February 24, 2024
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Image Credits:
The image is generated with DALLE-3 from OpenAI by the following prompt: "Generate an image of Open AI's Sora pour cold water on China's AI dreams" and the Gen ID is "TnJADvhNrRgCTPvD". The image showcases a symbolic representation of OpenAI's Sora in a high-tech environment, preparing to pour cold water on a metaphorical representation of China's AI dreams.
