Tech, AI and Semiconductor Industry News: Aug Week 2

1. Trends

i. Global Banks’ Raise Tech Spending

The global banking sector is reviving tech investments after a period of cautious spending, driven by the collapse of Silicon Valley Bank. Top banks like JPMorgan and Bank of America are leading the way, increasing technology budgets to enhance regulatory compliance, customer experience, and cybersecurity. This shift is offering a hopeful outlook for India’s $254 billion IT industry, which derives a significant portion of its revenue from banking, financial services, and insurance (BFSI) clients. Major IT firms like Infosys, Wipro and TCS are witnessing early signs of recovery in client demand..

Takeaway: The resurgence in tech investments by global banks not only signals a recovery in the BFSI sector but could also catalyse growth across the broader IT services industry, particularly as other sectors traditionally follow banking’s lead in technology spending. Factors such as anticipated interest rate cuts and reduced political uncertainty are also expected to further boost confidence and lower borrowing costs to accelerate spending.

Read the full article about global banks’ interest in tech.

2. Business Expansions

i. Infineon Sets Up €7b Plant in Malaysia

Malaysia is solidifying its position in the global semiconductor supply chain with Infineon Technologies’ new €7 billion manufacturing complex in Kulim. The new facility will become the world’s largest silicon carbide power semiconductor site, which is crucial for decarbonisation in the automotive, industrial, and data centre fields. As competition for semiconductor investments intensifies, Malaysia is implementing policies and incentives to enhance its appeal, aiming to move up the value chain in semiconductor production.

Takeaway: Malaysia’s proactive approach is part of its strategy to shift towards a higher-value tech manufacturing. It also highlights the nation’s potential as an alternative to China and Taiwan amidst global geopolitical tensions.

Read the full article about Infineon’s factory in Malaysia.

ii. Equinix to Launch its Sixth Data Centre in Hong Kong

Equinix is investing US$124 million to build its sixth data centre in Hong Kong to target the growing digital infrastructure demands in the Greater Bay Area. This is Equinix’s biggest investment in Hong Kong in the past decade. The facility is expected to be operational by early 2026 and will eventually house 3,550 cabinets that offer enhanced energy efficiency.

Takeaway: The expansion of Equinix’s data centre operations can help businesses, particularly AI service providers, scale their operations. Meanwhile, Equinix’s substantial investment also signals its confidence in Hong Kong as a stable hub for digital operations.

Read the full article about Equinix’s data centre in Hong Kong.

iii. IBM and NUS Partner for New AI Research Centre

IBM and the National University of Singapore (NUS) are collaborating to establish an AI research and innovation centre at the NUS School of Computing by 2025. This initiative focuses on green computing and AI safety and marks the first installation of IBM’s full-stack AI infrastructure at a university in the Asia Pacific region. The centre will leverage IBM’s Watsonx AI and Red Hat hybrid cloud platforms to advance AI research, with participation from government agencies, companies, and academic institutions. The open innovation model will prioritise sustainability and aim to develop AI systems that address complex challenges.

Takeaway: The partnership is expected to support the growth of deep-tech startups in Singapore through access to advanced tools and resources. Meanwhile, the centre’s emphasis on sustainable AI and green computing also reflects the industry’s progress toward environmentally responsible tech development.

Read the full article about NUS and IBM’s AI research centre.

iv. Chinese Robotaxi Firm WeRide Bags Approval to Conduct Trials in US

WeRide, a Chinese autonomous driving startup, has secured approval from California regulators to test its driverless vehicles with passengers. This three-year permit allows WeRide to conduct trials in San Jose and nearby areas, with or without a driver present. However, they cannot charge fares or offer rides to the public. As WeRide eyes a $5 billion valuation in its New York IPO, it faces challenges like regulatory complexities and competition in the US robotaxi space. Despite these hurdles, WeRide has been expanding its operations globally, with similar permits in Singapore and the UAE.

Takeaway: The development and commercialisation of robotaxis in the US has proven more challenging than anticipated due to regulatory obstacles, resistance from local authorities, and public backlash. If WeRide successfully penetrates the market, it could pave the way for other autonomous vehicle companies.

Read the full article about California’s approval of China’s robotaxis.

3. Business Deals

i. Tencent Considers Sharing WeChat Games Revenue with Apple

Tencent Holdings is in talks with Apple about sharing revenue from WeChat mini games, a potential game-changer for China’s mobile development landscape. Tencent is considering allowing in-app transactions via Apple’s iOS payment system, enabling Apple to collect a commission on these transactions. This comes amid Apple’s push to close loopholes that let Chinese apps like WeChat and TikTok bypass its 30% fee by directing users to external payment systems. Tencent does not currently monetise WeChat mini games via in-app purchases on iOS. If a deal is reached, it could boost revenue streams for Tencent as it leans more on WeChat’s ecosystem for growth due to slower performance in other areas like cloud services.

Takeaway: Integrating with Apple’s payment system may reduce friction in transactions and can help app and game companies enhance conversion rates. This negotiation could set a precedent that opens up future opportunities for developers within the Chinese market.

Read the full article about the monetisation of WeChat mini games.

ii. Sahara Secures New Funding in a Round Backed by Samsung NEXT

Sahara AI, a startup that combines blockchain and AI, recently secured $43 million in Series A funding led by prominent venture capital firms like Pantera Capital and Binance Labs. Additional investors include Samsung NEXT and Matrix Partners. The funds will support Sahara AI in creating a decentralised platform that rewards users, data sources, and AI trainers for their contributions. This contrasts with current models that largely benefit the platform owners. Founded in April 2023, the company has already partnered with major tech firms like Microsoft, Snap and Amazon.

Takeaway: Sahara AI’s decentralised approach could reshape how value and rewards are distributed in the AI space, addressing growing concerns over the fair use of data use, privacy and copyright.

Read the full article about Sahara’s fundraising.

iii. Mercedes Partners ByteDance for In-Car AI System

Mercedes-Benz partnered with ByteDance to integrate advanced AI technologies into its in-car systems in China. This collaboration focuses on enhancing virtual assistants through large language models (LLMs) for better intent understanding, logical reasoning, faster response times in voice interactions and to enhance navigation and entertainment. This partnership builds on previous collaborations and is part of a broader AI strategy by ByteDance, which seeks to expand its influence in the automotive sector.

Takeaway: Mercedes’s move of by increasing R&D investments and deepening relationships with Chinese tech giants comes amidst a trend of Western tech firms reducing their China operations, reflecting Mercedes-Benz’s confidence in the Chinese market.

Read the full article about Mercedes’s partnership with Bytedance.

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