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China’s artificial intelligence boom might help mitigate some tariff pain

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Computer chip with Chinese flag, 3d conceptual illustration.

Steven Mcdowell/science Photo Library | Science Photo Library | Getty Images

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.

Apple's plan to roll out AI in China: It needs to 'revitalize,' IDC researcher says

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.

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Finance

Judge orders CFPB to reinstate fired employees, preserve records and get back to work

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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.

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Founder Charlie Javice found guilty of defrauding JPMorgan Chase

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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.

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It’s not difficult to beat the market

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