BEIJING — For Chinese companies wary of U.S. tariffs, the big difference between President Donald Trump’s first and second terms is the emergence of generative artificial intelligence.
Chinese companies are hard at work. Nearly every day in the last two weeks, a Chinese firm has announced a new AI product — or how they’re making money with the tech.
To name a few:
Short-video company Kuaishou said Tuesday its AI tool for generating videos, Kling, has raked in more than 100 million yuan ($13.78 million) since its launch last summer.
Tencent last week updated its AI model for generating 3D visuals — which can be used in games or for 3D printing — and released the full version of its Hunyuan T1 reasoning model. A few weeks earlier, Tencent had integrated T1 with its Yuanbao chatbot app that also lets users tap DeepSeek’s R1.
Daily active Yuanbao users surged by 20 times in just a month, Tencent said last week. The company also shared how some farmers have used the AI app to analyze soil conditions for planting.
Baidu on Monday launched tools for people to build websites and simple games with conversational prompts instead of having to write code. Kunlun Tech, parent of browser Opera, on Wednesday upgraded its Mureka app for using AI to generate music.
As a manufacturing hub, China has “great advantages in terms of ‘physical’ AI” since the country has lots of machines that can collect valuable data for training industry-specific models, Maxwell Zhou, CEO of autonomous-driving software company DeepRoute.ai, told CNBC on Friday in Mandarin, translated by CNBC.
DeepRoute.ai, launched in 2019, announced last week it was building a system for autonomous-delivery vehicles to send parcels with simple voice commands such as “pick up coffee from this store and send it to the apartment.”
Zhou said he hopes the system to be operational in China by early next year.
While it’s unclear which AI companies will ultimately succeed, analysts expect Chinese businesses stand a better chance at excelling with the help of AI applications. AI tools could cut costs for companies and offset some of the impact of an economic slowdown.
The combined impact of the tech is lifting expectations for Chinese corporate earnings growth in the year ahead, said Ding Wenjie, investment strategist for global capital investment at China Asset Management.
Earnings will signal whether the economy is really turning around, especially under the pressure of tariffs and other trade restrictions.
Goldman Sachs in early February estimated a 20% increase in U.S. tariffs on Chinese goods could shave off 5% in Chinese corporate earnings, in Hong Kong dollar terms.
The greater question for the U.S. and China, however, stretches beyond tariffs.
After a visit to China this week for a conference, New York Times columnist Thomas Friedman concluded that it was not tariffs or Taiwan that the U.S. and Chinese presidents needed to discuss immediately — but rather AI that’s as smart as humans and pervades the world.
The author of “The World is Flat” likened a possible U.S.-China collaboration on AI to the Soviet-U.S. nuclear arms control deal.
FILE PHOTO: Office of Management and Budget (OMB) Acting Director Russell Vought testifies before House Budget Committee on 2020 Budget on Capitol Hill in Washington, U.S., March 12, 2019.
Yuri Gripas | Reuters
A federal judge on Friday ordered the Consumer Financial Protection Bureau’s leadership, appointed by President Donald Trump, to halt its campaign to hobble the agency.
In a filing, Judge Amy Berman Jackson sided with the CFPB employee union which sued acting CFPB director Russell Vought last month to prevent him from laying off nearly all of the regulator’s staff. Operatives from Elon Musk’s Department of Government Efficiency have also been involved in efforts to dismantle the bureau.
Berman ordered Vought to reinstate “all probationary and term employees terminated” after Vought took over at the CFPB, and said that he shouldn’t “delete, destroy, remove, or impair agency data.”
“This order shall bind the defendants, their officers, agents, servants, employees, and attorneys, and any other persons who are in active concert or participation with them, such as personnel from the Department of Government Efficiency (“DOGE”),” Berman wrote.
This story is developing. Please check back for updates.
Charlie Javice, who is charged with defrauding JPMorgan Chase & Co into buying her now-shuttered college financial aid startup Frank for $175 million in 2021, arrives at United States Court in Manhattan in New York City, June 6, 2023.
Mike Segar | Reuters
Charlie Javice, founder of a startup purchased by JPMorgan Chase in 2021, was convicted in federal court Friday of defrauding the bank by vastly overstating the company’s customer list.
The jury decision comes after weeks of testimony in New York over who was to blame for the flameout of a once-promising startup. JPMorgan accused Javice, 32, of duping the bank into paying $175 million for a company that had more than 4 million customers, when in reality it had fewer than 300,000.
A spokesperson for JPMorgan declined to comment.
This story is developing. Please check back for updates.
Joel Greenblatt, a longtime bargain hunter, doesn’t think value investing deserves its bad rap. The 67-year-old investor, now running Gotham Asset Management, believes that traditional criteria that define “value,” such as price-to-book and price-to-sales ratios, don’t necessarily represent the essence of the philosophy. “We’re very cash flow oriented … the way Morningstar or Russell classified value is not the way we look at value,” Greenblatt said Wednesday at Value Invest conference in New York. “We’re literally valuing businesses, like we’re private equity investors buying the whole business.” By the most commonly used measure, value stocks have been crushed by their growth counterparts over the past two decades. The Russell 1000 Value Index, including stocks with low price-to-book ratios and low sales-per-share growth, is up 189% over the past 20 years, compared to a near 700% rise in its growth stock counterpart. In the recovery after the financial crisis in 2008, growth stocks took over market leadership and enjoyed uninterrupted expansion in the decade-long bull run that followed. The great transition into passive investing using index funds and ETFs only further fueled growth names’ meteoric rise. Many traditional value investors found themselves in a desperate spot as cheap shares suffered massive underperformance. Still, Greenblatt, who taught a value investing class at Columbia University for more than 20 years, said seasoned players with an eye for hidden gems are still able to perform better than the broader market. “We all are familiar with the history that beating the market … is difficult for active managers and I would argue for a second that it’s not difficult,” he said. “I do think markets are emotional, and if you are [a] very disciplined value investor, which means … trying to figure out what a business is worth and paying a reasonable or low price for it because the market sometimes gives you that gift, to buy the little bit cheaper than it’s worth, disciplined investors can still do that.” Gotham Asset, which runs hedge funds as well as long-only mutual funds, has produced positive spreads for the past three years, Greenblatt said. The investor, who holds an MBA from the Wharton School at the University of Pennsylvania, says it’s “abnormal” for the largest stocks to significantly outperform the rest of the market as they did for the past 10 to 15 years, hinting that the pendulum could be swinging in a different direction sooner rather than later. “If you think you’re good at valuing businesses and can do a good job about being a disciplined portfolio manager,” he said. “We feel we can add value.”