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Chinese big tech firms double AI spending despite US restrictions

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China’s tech giants have doubled their investment in AI infrastructure this year, despite US sanctions aimed at limiting the country’s progress in the vital technology, the Financial Times (FT) reports.

Alibaba, Tencent and Baidu spent 50 billion renminbi ($7 billion) on capital expenditure in the first half of the year, compared with 23 billion renminbi a year ago. The groups said they focused on buying processors and infrastructure related to powering the training of large language models for artificial intelligence, both their own models and those of others.

TikTok’s parent company ByteDance has also increased its AI-related spending, with an investment of more than $50 billion, according to two people familiar with the matter.

“We will continue to invest in R&D and AI to drive the growth of our AI-driven cloud business. This is because we see a lot of unmet demand from many customers,’ Alibaba chairman Eddie Wu told investors this month.

Alibaba buys processors to train its Tongyi series of AI models, and then leases the computing power to others. The Chinese tech giant’s first-half capital expenditure reached 23 billion renminbi, up 123 per cent year-on-year.

Nvidia not selling its high-tech AI processors

What we’ve seen when we make these kinds of investments is that as soon as we put a server online, it’s immediately running at full capacity,’ Wu said. We can expect a very high ROI [return on investment] in the coming quarters,’ Wu said.

Revenue from the group’s cloud business accelerated in the second quarter, rising 6 per cent year-on-year. Alibaba said revenue from AI-related products more than doubled year-on-year.

The increase was partly due to investments made to attract customers to Chinese artificial intelligence startups. Just under half of the $800m it invested in AI startup Moonshot in February came in the form of vouchers to buy cloud services.

While US export controls cut off access to Nvidia’s leading AI processors, such as the H100 and the forthcoming Blackwell series, China’s tech giants can buy less powerful processors, such as Nvidia’s H20, which is designed not to exceed the computing power thresholds set by Washington.

ByteDance is one of Nvidia’s biggest customers

Analysts expect Nvidia to ship more than a million processors to Chinese technology groups in the coming months at $12,000 to $13,000 each. ByteDance is also an important customer, according to two people familiar with the matter.

Dylan Patel of chip research group SemiAnalysis estimates that TikTok’s parent company has bought hundreds of thousands of H20s for data centres in China, while also spending heavily on working with partners and setting up computing infrastructure in Johor, Malaysia.

ByteDance is China’s biggest AI buyer because they are investing heavily in China and Malaysia and buying from US clouds,” Patel said.

Social media and gaming giant Tencent also said its capital expenditure rose 176 per cent year-on-year to 23 billion renminbi in the first six months, partly ‘driven by investment in GPU and CPU servers’.

Chinese investment still far behind US

James Mitchell, head of strategy, said the cloud business was benefiting from the growing need to rent GPUs, but on a smaller scale than the boom experienced by its US rivals.

There are not a lot of extremely well-funded startups in China trying to build large speech models on their own. There are a lot of small companies, but their capital is $1 billion, $2 billion. They don’t have $10 billion or $90 billion of capital like in the US,” he said.

A person familiar with Tencent’s investment strategy said it was writing smaller cheques for AI groups because of lingering concerns about Beijing’s regulatory stance.

Baidu, China’s long-time AI leader, was the most restrained in its investment spending, spending 4.2 billion renminbi in the first half, up 4 per cent from a year earlier.

Overall, China’s big tech investment still lags far behind its American counterparts. Alphabet, Amazon, Meta and Microsoft spent $106 billion in the first half and have pledged to invest more in the coming months.

ASIA

Syria will not follow Afghanistan’s Taliban model of governance

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In an astonishing statement, Ahmed Shará, also known as Abu Mohamad Jolani, the leader of the Hayat Tahrir al-Sham (HTS) said that he will allow the girls to go to schools and will not turn Syria like Afghanistan under the rule of the Taliban.

Jolani, the de facto ruler of Syria, said that he will distance himself from the Taliban’s strict policies on women’s rights, and said that Syria will not follow the Taliban’s mode of governance.  

Jolani, who brought down the government of Bashar al-Assad and also widely welcomed by the Taliban, said that he believes in the education of women and girls and will not make Syria like Afghanistan.

“Syria is a diverse society with various ideas, unlike Afghanistan, which is more tribal. The Afghan model cannot be applied here,” Jolani told a BBC reporter.

Jolani says that Syria is a diverse society with various ideas, unlike Afghanistan, which is more tribal.

Jolani’s comment came when the Taliban congratulated the HTS-led victory by Jolani over Assad’s regime after years of fighting. The Afghan Foreign Ministry celebrated Jolani’s victory through a statement and hoped Jolani can bring peace and stability in the country.

“It is hoped that the power transition process is advanced in a manner that lays the foundation of a sovereign and serve-oriented Islamic government in the line with the aspiration of the Syrian people; that unifies the entire population without discrimination and retribution through adoption of a general assembly; and a positive foreign policy with world countries the safeguard Syria from a threat of negative rivalries of foreign actors and creates conditions for the return of millions of refugees,” the statement by Taliban Foreign Ministry.

However, Jolan’s position on the rights of women and girls is in great contrast with the current view of the Taliban leadership. Women and girls have been banned from education and work since the return of the Taliban in August 2021, following the collapse of the Republic System and withdrawal of the US troops from Afghanistan. Girls and women are even banned from medical institutions and visiting public spaces.

Jolani says he has a plan to create a government based institution and a council chosen by the people. 

The situation got worse when the Taliban’s Ministry for the Promotion of Virtue and Prevention of Vice called women’s voices “immodest” compounding their exclusion from public life. This year, it has been marked as three years since girls were banned from pursuing education over sixth grade. Besides that, on December 20, 2022, the Taliban’s Ministry of Higher Education announced that women would be barred from attending public and private universities.    

In an interview with CNN, Jolani said that he has a plan to create a government based on institutions and a “council chosen by the people.”

“When we talk about objectives, the goal of the revolution remains the overthrow of this regime. It is our right to use all available means to achieve that goal,” said Jolani.

“The seeds of the regime’s defeat have always been within it… the Iranians attempted to revive the regime, buying it time, and later the Russians also tried to prop it up. But the truth remains: this regime is dead.”

Moreover, he also said the Syrian people are the “rightful owners” of the country after the ouster of Assad, and declared a “new history” has been written for the entire Middle East.

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Yoon summoned again for questioning on treason charges

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A joint law enforcement team investigating South Korea’s martial law case announced on Friday that it has issued a second summons to ousted President Yoon Suk Yeol, requesting his presence for questioning next week. The inquiry concerns his alleged involvement in the failed implementation of martial law.

The team has scheduled the questioning for 10:00 a.m. next Wednesday at the Corruption Investigation Office for Senior Officials (CIO) headquarters in Gwacheon, located just south of Seoul. This marks the second summons after Yoon refused to cooperate with the initial notice earlier this week.

The decision to hold the questioning on a public holiday appears to be a strategic move by the CIO, likely aimed at addressing security concerns. The office confirmed that the summonses were delivered via express mail and electronically to both Yoon’s residence and the presidential office in Yongsan. Notably, after Yoon’s team refused to accept the first subpoena, the CIO opted against delivering the documents in person for this round.

The investigation focuses on Yoon’s role in the December 3 martial law declaration, which he revoked following a vote in the National Assembly. If Yoon continues to disregard the summons without valid justification, the CIO may seek a court order to detain him for up to 48 hours.

Yoon faces allegations of sedition and abuse of office, charges that have gained traction since his dismissal by parliament last Saturday. His suspension from office remains in effect pending a decision by the Constitutional Court, which will determine whether he is permanently removed or reinstated.

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ASIA

Xi Jinping champions economic diversification during Macau visit

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During a three-day visit to Macau commemorating the 25th anniversary of its return to Chinese sovereignty from Portugal, President Xi Jinping emphasized the importance of economic diversification and maintaining the “one country, two systems” framework.

Speaking at the swearing-in ceremony for Macau’s new Chief Executive Officer, Sam Hou-fai, Xi urged the administration to make economic diversification the city’s primary focus. Sam, the fourth leader since the 1999 handover and the first mainland-born Chinese official to hold the position, is expected to align closely with Beijing’s objectives to reduce Macau’s reliance on gambling. The gambling industry, which accounts for approximately 80% of Macau’s tax revenue, has been the cornerstone of its rapid economic growth in recent years.

“Macau should prioritize proper economic diversification,” Xi stated, calling for enhanced policy support and investment in emerging sectors. He also reiterated the significance of the “one country, two systems” principle, stressing its role in ensuring the city’s “prosperity and stability” for the long term.

Xi’s visit included stops at the Macau University of Science and Technology, where he explored laboratories focusing on traditional Chinese medicine and planetary science. He also attended a cultural performance at the Macau Dome and met with local stakeholders, according to Chinese state media. His trip marked a shift in tone, with Anthony Lawrence, founder of Intelligence Macau, noting that it was the first time Xi publicly praised Macau for its progress rather than delivering critiques or instructions.

Since the liberalization of Macau’s gaming monopoly in 2002, the city has attracted significant foreign investment, including from prominent US casino operators such as Las Vegas Sands, MGM, and Wynn Resorts. However, the economy struggled during the COVID-19 pandemic due to travel restrictions, and recovery has only recently begun.

On Friday, Macau’s casinos were bustling with visitors, while non-gaming initiatives like a stamp exhibition co-organized by MGM China and Beijing’s Palace Museum showcased the city’s efforts to diversify its offerings.

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