Tech, AI and Semiconductor Industry News: July Week 1

1. Trend: Malaysia Emerge as Data Centre Powerhouse in SEA

Johor, Malaysia’s southern state, has emerged as Southeast Asia’s (SEA) fastest-growing data centre market, with over 1.6 gigawatts of total supply. This growth is driven by significant tech investments from industry giants like Google, Nvidia, and Microsoft, and Singapore’s temporary halt on new data centres. The country is expected to become one of Asia’s largest data centre hubs if all planned projects are completed. The shift towards Malaysia is partly due to Singapore’s regulatory constraints on data centre growth since 2019, pushing investments across the border. Malaysia’s favourable policies, such as the Green Lane Pathway for streamlined power approvals, and cheaper resources also make it an attractive alternative.

Read the full paid article about Malaysia’s emergence as a data centre powerhouse.

2. Business Moves

i. Bilibili, miHoYo and SenseTime Jointly Set Up a Tech-Focused PE Fund

In the face of a surging wave of technological innovation, private equity funds focusing on tech investments are frequently established, becoming a significant highlight in the capital market. Another tech private equity fund was recently launched, spearheaded by Shanghai’s state-owned entities. It is also backed by several key tech industry players, such as SenseTime, Bilibili, and miHoYo, with the latter two known for their strong presence in the ACG sector. The fund primarily targets future digital industries and aims to foster innovationand strengthen and extend industry chains. It also seeks to support the development of advanced technologies, particularly the artificial intelligence and metaverse landscape in Shanghai.

The fund’s creation marks a significant step in Shanghai’s efforts to develop its three major industries and demonstrates its commitment to advancing hard tech. Shanghai has also been accelerating the integration and establishment of new industrial funds to streamline its numerous state-owned funds, enhancing their efficiency and impact.

Read the full Chinese article about SenseTime, Bilibili, and miHoYo’s PE fund.

ii. The Largest AI Fund is Established in Shanghai with 22.5b Yuan

Shanghai plans to establish three industrial guiding funds with a total scale of 89 billion yuan following Beijing’s recent launch of a 50 billion yuan industrial investment fund. These funds include:

• A 22.5 billion yuan AI fund targeting smart chips, software, autonomous driving, and robotics;
• A 21.5 billion yuan biopharmaceutical fund for innovative drugs, high-end medical devices, and biotechnology;
• A 45 billion yuan integrated circuit fund.

Major contributors include 16 state-owned entities, such as Shanghai’s two main brokerage firms, SAIC Motor, Lingang Group, Shanghai State-Owned Capital Investment.

This initiative is part of the 2024 “Invest in Shanghai” policy, which focuses on integrating circuits, biopharmaceuticals, and AI. The AI fund, the largest in China, aims to reinforce Shanghai’s leadership in AI development. Shanghai’s AI industry has grown significantly, with over 348 companies and a market size exceeding 380 billion yuan by 2023, making it a national leader.

Read the full Chinese article about Shanghai’s AI fund.

iii. Capital Today Dispels Rumours About Exiting Primary Market with Sand AI Investment

Renowned venture capitalist Kathy Xu refuted rumours about her firm, Capital Today, exiting the primary market to become a secondary market fund with the announcement of a recent early-stage investment in Sand AI. Xu’s firm, a significant shareholder in companies like Meituan, has been investing in AI-driven ventures, including Sand AI and the early-stage AI startup Moonshot, with the latter now valued at around $3 billion. While Capital Today has reduced its primary market activities recently, likely due to a downturn in the consumer sector and a shift in Xu’s interests, it remains involved in AI and tech investments. This change in strategy reflects broader trends in the venture capital industry, with many funds adapting to current market conditions.

Read the full Chinese article about Xu’s investment in Sand AI.

iv. Baidu Sees Bullish Options Surge Amid Rising Robotaxi Orders

Apollo Go Robotaxi, Baidu’s autonomous ride-hailing service, is gaining traction in Wuhan, Hubei Province, with predictions it could pave the way for commercial services. Passengers find it cheaper and more convenient than traditional taxis, with rides costing between 4 and 16 yuan compared to 18 to 30 yuan for regular taxis. Baidu operates 300 fully driverless taxis in Wuhan, and bookings for these accounted for 55% of all ride-hailing services in Q1 2024, rising to over 70% in April. Baidu plans to introduce its sixth-generation robotaxi, RT6, to reduce costs further. Other companies like AutoNavi, WeRide, and Didi Chuxing are also testing autonomous ride-hailing services across China.

Read the full article about Baidu’s robotaxi.

v. Alibaba’s AI Model Ranks Third Behind OpenAI and Anthropic

Alibaba’s advanced AI model, Qwen2-72B-Instruct, outperformed other Chinese AI developers’ models and ranks third globally, just behind OpenAI’s GPT-4o and Anthropic’s Claude 3.5 Sonnet. The results are determined based on metrics such as coding and text comprehension provided by SuperClue, a benchmarking platform. Five Chinese models, including Alibaba’s, have surpassed GPT-4 Turbo, indicating that the gap between Chinese and US AI models is narrowing. The model also topped Hugging Face’s ranking of open-source models. However, closed-source models from OpenAI, Anthropic, and Google dominate in other benchmarks.

Read the full paid Chinese article about the performance of Alibaba’s Qwen2-72B-Instruct.

vi. SoftBank Acquires AI Chipmaker Graphcore

SoftBank Group acquired AI chipmaker Graphcore for an undisclosed amount. Despite being valued at $2.77 billion in 2020, Graphcore has faced financial struggles and reduced its workforce by a fifth. The acquisition by SoftBank is expected to provide the necessary resources for Graphcore to compete globally. CEO Nigel Toon highlighted the unexpected speed and scale of AI investment challenges and the lack of UK investment in startups as a growth barrier, noting that most of Graphcore’s funding came from outside the UK. Toon also indicated potential collaborations within SoftBank’s portfolio, including with Arm Holdings.

Read the full article about SoftBank’s acquisition of Graphcore.

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Image Source:

• Reuters
• KRAsia