Wed. Jan 26th, 2022

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Hello, this is Kenji from Hong Kong. We kick off the new year with a fascinating future technology project that connects computer chips to human brain cells (The Big Story). Pulling ourselves back to the present, Boyu, a star Chinese technology investor, seems to be struggling to find a balance under President Xi Jinping’s “common prosperity” policy (Mercedes’ top-10). In Shanghai, China Mobile made a homecoming listing after being removed from the New York Stock Exchange last year and branded as part of China’s military-industrial complex (Our view). Electric vehicles are so hot this year that the price of lithium is hissing (Smart data). Watch out and see you next week.

The Big Story

Human brain cells recorded in a computer chip have learned to play an arcade game. According to an Australian company, evidence is showing that neuron-silicon hybrid computer chips could pave the way for smarter, more efficient artificial intelligence systems, according to this article in Nikkei Asia.

Key development: When connected to a computer, the human brain cells on a slide – called DishBrain, from Cortical Labs in Melbourne – learned to play Pong, a game that simulates table tennis. What’s more, the neurons improved their performance after receiving feedback on their game.

“DishBrain is a breakthrough technology that enables us to investigate the intelligent properties of living neurons outside a body and in a Petri dish,” Hon Weng Chong, co-founder of Cortical Labs, told Nikkei Asia.

Such devices can also help scientists understand the secrets of the brain and develop drugs to treat neurological diseases.

Results: Brain-on-a-chip has “attractions on many levels,” says Karl Friston, a theoretical neurophysicist at University College London who works with Cortical Labs. “In the broader context of the human journey of discovery, creating artificial feelings is clearly a challenge that many people cannot resist.”

Mercedes’s top 10

  1. Exclusive: Japan’s Toyota develops its own car software operating system to compete with Tesla, Volkswagen and others. (Nikkei Asia)

  2. USA scholars suggest that Taiwan’s chip giant TSMC is destroyed in case of a Chinese invasion to make the island “undesirable”. (Nikkei Asia)

  3. A Japanese breakthrough predict bugs’ flight paths to zap them with lasers. (Nikkei Asia)

  4. Star China Technical investment firm Boyu is figuring out how to navigate Xi Jinping’s Suppression of the Sector. (FT)

  5. Telenor, which Norwegian telecommunications operator, is to sell its stake in Wave Money, one of Myanmar’s largest mobile payment services. (Nikkei Asia)

  6. Shares of SenseTime, China’s leading AI company, rose on his debut despite a USA blacklist, confusing observers. (Nikkei Asia)

  7. Meanwhile, losses to Didi Chuxing, the New York-listed Chinese driving company, increases as the company suffers regulatory pressure. (FT)

  8. China’s Tencent it taken a share in Monzo, to join an international funding round highlighting the value of the UK digital bank at $ 4.5 billion. (FT)

  9. A multitude of Southeast Asia technology companies, including Those of Indonesia Bukalapak en Singapore-based Influenza, is set to invest in Allo Bank, which marks the sector’s latest embrace of finance. (Nikkei Asia)

  10. That of Cambodia digital currency reached almost half of the population. (Nikkei Asia)

SenseTime's office in Shanghai

SenseTime shares up 113% since investors’ cool welcome at its twice-delayed initial public offering © Aly Song / Reuters

Our assumption

China Mobile, the largest telecommunications operator in the world according to subscribers, made its debut on the Shanghai Stock Exchange and raised $ 7.6 billion in one of the biggest deals ever on mainland markets.

Apart from its size, the significance of the listing lies in the fact that it represents another “homecoming” A-share listing. The company, like its counterpart China Telecom, was forcibly delisted from the New York Stock Exchange in May, after being designated by Washington as part of Beijing’s military-industrial complex.

The main purpose of the new listing is not so much fundraising – China Mobile has put $ 43 billion in cash reserves since June – but to provide a new trading platform.

“The homecoming to A-shares is to implement a national strategy, and an important awareness of political responsibility, to fulfill an economic responsibility and implement social responsibility,” said Wang Sheng, head of investment banking at China International Capital Corporation.

On top of that, China Mobile apparently learned some hard lessons from China Telecom’s wallet in August. The latter’s share price rose 44 percent during the first day of trading, a limit set by mainland stock exchanges, but collapsed from the next day and has since traded mostly below its listing price.

China Mobile’s price was set at 12 times its net profit in 2020, compared to Telecom’s 20 times, while the size of the new share issue was reduced to 4.5 percent of the expanded shareholder base, compared to more than 11 percent for Telecom. The security regulator also made sure that no other shares would be listed ahead of China Mobile in Shanghai and Shenzhen this week. The stage is ready for success, but let’s see if it materializes.

– Kenji

Slim data

Battery demand sends lithium price to record

It looks like the price of batteries for electric vehicles will rise in 2022 after a decade of declines if lithium supplies and other raw materials do not keep pace with increasing demand.

Standard prices of lithium carbonate ended 2021 on records. In China, the largest battery-producing country, the price was Rmb261 500 ($ 41 000) per tonne, more than five times higher than last January.

Global electric car sales are estimated to reach 5.6 million vehicles in 2021, up from 3.1 million in 2020, thanks to strong sales in China. Further demand growth in 2022 will lead to a lithium shortage this year, as the use of the material exceeds production and depletes inventory, according to a December report by S&P Global.


Dan Schulman

Dan Schulman is on a mission in Asia. The PayPal CEO leads US cashless payment company to expand its footprint in Japan and beyond.

In an interview with Nikkei, Schulman alluded to future deals similar to last year’s acquisition of Japanese “buy now, pay later” start Pay for about $ 2.7 billion.

For markets in which PayPal wants to “double and play an important role,” Schulman said, “it will have to invest organically. We have to invest through partnerships, and we also have to keep an open mind for acquisitions.”

PayPal, founded in 1998, is used by websites, smartphone applications and brick-and-mortar stores in markets such as the US and the UK. Its total payment volume doubled over two years to about $ 1.25 billion in 2021, with growth accelerating dramatically from the 20 years it took for the platform to reach its first $ 600 billion.

It has a market capitalization of about $ 225 billion, which banks such as Citigroup and Wells Fargo. Coronavirus has accelerated the global transition to a digital economy “with anywhere between three and five years,” Schulman said.

When sages speak

  • This report from the Harvard Kennedy School entitled “The Great Tech Rivalry: China vs the US” is an amazing resource, full of important context and focus on various aspects. Authors are Graham Allison, Kevin Klyman, Karina Barbesino and Hugo Yen.

  • African governments are among the top clients for Chinese surveillance instruments, from “smart cities” to media monitoring. Jili Bulelani, a fellow at Merics, looks in detail at what’s happening in this podcast.

  • Also from the team at Merics, this report on “Recalibration of the EU’s research and innovation engagement with China” addresses an important topic that may emerge strongly in 2022. Rebecca Arcesati, Irene Af and Sylvia Schwaag Serger are the authors.

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