TOKYO: Japan’s Seven &, i Holdings, operator of the 7-Eleven convenience store chain, has picked Bain Capital as its preferred buyer for a stake of its non-core assets, local media reported on Saturday ( Feb 22 ). Since late last year, Bain has been bidding for a significant interest inContinue Reading
CMR’s Rein predicts that the symposium’s signs will” cause the capital market to go up again”, bolstering trust in both China’s A-shares and Hong Kong stocks.
He noted that some foreign investors now view America as being” too frothy,” while India has “dropped 20 %” in the last few weeks. They now have to wonder,” Where are we going?” This put money back into China”, Rein said.  ,
Entrepreneurs can overcome” crippling” sanctions from the US and export bans, according to Rein, who believes that this shift is” creating excitement within China once more.”
In contrast, Guo cited DeepSeek, a technical success story that predated the symposium, as proof that main plans and personal development you go hand in hand, framing it as” a lot of work” from both the private sector and main plans over the past few years.
According to her, the event was intended to reassure business that “more support to the technology sector may come,” both on the supply side and the demand side.
Pointing to Xiaomi, Tencent, BYD, and Huawei, Guo underlined that “it’s use that provides income to these organizations and helps the Chinese firms to improve”.
Still, Zhang from UTS cautioned that state priorities around data security, antitrust enforcement, and digital assets remain.  ,
The government has recently loosened regulations affecting the tech sector, which could prompt a rebalancing of industrial policies that balance market incentives with national strategic objectives.
Analysts don’t anticipate any immediate changes to existing policies despite positive signs of a warming position.
Deeper collaboration between private firms and state-owned enterprises will take time, CMR’s Rein noted.
” What I hope is there’s gonna be collaboration between the private sector and state-owned enterprises, and that’ll be concrete”, he said.
” Second, I hope that there’s gonna be more money raised to be given to those sectors. I don’t think there’s concrete stuff. It’s more a signal to everybody to go out and invest, go out and innovate” . ,
He noted that the Chinese government had already acted to stop the tech industry’s crackdown a year prior and began enacting regulatory changes to support the sector.
” It’s just nobody believed it. That’s the problem … ( people ) needed a signal more than concrete actions”.
Analysts predict that Beijing’s upcoming meetings of its legislature and top advisory body in March, or lianghui, will likely give a better understanding of its strategy.
Lianghui would be more about stimulus size and sector examples, remarked Guo from Hutong Research.
Meanwhile, Rein expects “more concrete measures” to be announced during lianghui to bolster the tech sector as well as “incremental, targeted stimulus measures”.
Measures will help foster confidence among entrepreneurs, businesspeople, and investors that the government supports the tech and private sector as growth drivers because China has a confidence problem, not one related to money supply.
Scott Jalowayski is rejoining Morrison Foerster as a partner in the corporate group in its Singapore office.
Jalowayski arrives from Gibson, Dunn & Crutcher with over 20 years’ experience advising clients on complex international private equity and M&A transactions, and has practiced in New York, Hong Kong, Japan, and Singapore.
At Gibson, Dunn & Crutcher, Jalowayski was a founding partner of the firm’s Asia private equity practice and served most recently as co-chair of its global private equity practice group. Jalowayski previously practiced at Morrison Foerster, spending three years in the firm’s Japan office and five years in its Hong Kong office, where he made partner before leaving in May 2008.
Jalowayski advises private equity funds, their portfolio companies, and other global and regional investment managers on their investment and M&A transactions in Asia. He has experience across leveraged and unleveraged control acquisitions, minority investments, joint ventures, divestures, and restructurings, and sector, including life sciences and healthcare, interactive and digital media, and technology, alongside real asset and infrastructure enterprises, according to a media release.
“[Scott] strengthens our private equity and M&A capabilities on the ground in Singapore and brings significant, cross-industry experience to Morrison Foerster,” said Paul McKenzie Morrison Foerster mergers & acquisitions partner.
Tabitha Saw co-office managing partner, Singapore at Morrison Foerster, added: “Scott brings to the firm significant private equity and M&A credentials and core relationships in both Southeast Asia and Japan. His presence will deepen our bench in these regions and in industries that are strategic to the firm, including energy transition, renewables, technology, and digital infrastructure.”
In addition, Xiaoxi Lin has joined the firm as a partner in the corporate group based in Hong Kong, brings over 15 years’ experience to Morrison Foerster, with a private equity and M&A practice with established client relationships in the Greater China, Asia, and US markets.
Lin joins Morrison Foerster from Linklaters where he was a partner in its private equity and US public M&A practices. He previously practiced with Kirkland & Ellis and Davis Polk & Wardwell, with experience based in Hong Kong, New York, and Beijing
¬ Haymarket Media Limited. All rights reserved.
Readers in a hurry may wish to put this article aside for later. It is an important long-form exploration, not a quick read. – Editors
We are in the early days of a seismic shift in the global AI industry. DeepSeek, a previously little-known Chinese artificial intelligence company, has produced a “game changing”“ large language model that promises to reshape the AI landscape almost overnight.
But DeepSeek’s breakthrough also has wider implications for the technological arms race between the US and China, having apparently caught even the best-known US tech firms off guard. Its launch has been predicted to start a “slow unwinding of the AI bet” in the West, amid a new era of “AI efficiency wars.”
In fact, industry experts have been speculating for years about China’s rapid advancements in AI. While the supposedly free-market US has often prioritized proprietary models, China has built a thriving AI ecosystem by leveraging open-source technology, fostering collaboration between government-backed research institutions and major tech firms.
This strategy has enabled China to scale its AI innovation rapidly while the US – despite all the tub-thumping from Silicon Valley – remains limited by restrictive corporate structures. Companies such as Google and Meta, despite promoting open-source initiatives, still rely heavily on closed-source strategies that limit broader access and collaboration.
What makes DeepSeek particularly disruptive is its ability to achieve cutting-edge performance while reducing computing costs – an area where US firms have struggled due to their dependence on training models that demand very expensive processing hardware.
Where once Silicon Valley was the epicentre of global digital innovation, its corporate behemoths now appear vulnerable to more innovative, “scrappy” startup competitors – albeit ones enabled by major state investment in AI infrastructure. By leveraging China’s industrial approach to AI, DeepSeek has crystalized a reality that many in Silicon Valley have long ignored: AI’s center of power is shifting away from the US and the west.
It highlights the failure of US attempts to preserve its technological hegemony through tight export controls on cutting-edge AI chips to China. According to research fellow Dean Ball: “You can keep [computing resources] away from China, but you can’t export-control the ideas that everyone in the world is hunting for.”
DeepSeek’s success has forced Silicon Valley and large Western tech companies to “take stock,” realizing that their once-unquestioned dominance is suddenly at risk. Even the US president, Donald Trump, has proclaimed that this should be a “wake-up call for our industries that we need to be laser-focused on competing.”
But this story is not just about technological prowess – it could mark an important shift in global power. Former US secretary of state Mike Pompeo has framed DeepSeek’s emergence as a “shot across America’s bow,” urging US policymakers and tech executives to take immediate action.
DeepSeek’s rapid rise underscores a growing realization: Globally, we are entering a potentially new AI paradigm, one in which China’s model of open-source innovation and state-backed development is proving more effective than Silicon Valley’s corporate-driven approach.
I’ve spent much of my career analyzing the transformative role of AI on the global digital landscape – examining how AI shapes governance, market structures and public discourse while exploring its geopolitical and ethical dimensions, now and far into the future.
I also have personal connections with China, having lived there while teaching at Jiangsu University and then written my PhD thesis on the country’s state-led marketization program. Over the years I have studied China’s evolving tech landscape, observing firsthand how its unique blend of state-driven industrial policy and private-sector innovation has fueled rapid AI development.
I believe this moment may come to be seen as a turning point not just for AI but for the geopolitical order. If China’s AI dominance continues, what could this mean for the future of digital governance, democracy, and the global balance of power?
Even in the early days of China’s digital transformation, analysts predicted the country’s open-source focus could lead to a major AI breakthrough. In 2018, China was integrating open-source collaboration into its broader digitization strategy, recognizing that fostering shared development efforts could accelerate its AI capabilities.
Unlike the US, where proprietary AI models dominated, China embraced open-source ecosystems to bypass Western gatekeeping, to scale innovation faster and to embed itself in global AI collaboration.
China’s open-source activity surged dramatically in 2020, laying the foundation for the kind of innovation seen today. By actively fostering an open-source culture, China ensured that a broad range of developers had access to AI tools, rather than restricting them to a handful of dominant companies.
The trend has continued in recent years, with China even launching its own state-backed open-source operating systems and platforms, in 2023, to further reduce its dependence on western technology. This move was widely seen as an effort to cement its AI leadership and create an independent, self-sustaining digital ecosystem. .
While China has been steadily positioning itself as a leader in open-source AI, Silicon Valley firms remained focused on closed, proprietary models – allowing China to catch up fast. While companies like Google and Meta promoted open-source initiatives in name, they still locked key AI capabilities behind paywalls and restrictive licenses.
In contrast, China’s government-backed initiatives have treated open-source AI as a national resource, rather than a corporate asset. This has resulted in China becoming one of the world’s largest contributors to open-source AI development, surpassing many western firms in collaborative projects. Chinese tech giants such as Huawei, Alibaba and Tencent are driving open-source AI forward with frameworks like PaddlePaddle, X-Deep Learning (X-DL) and MindSpore — all now core to China’s machine learning ecosystem.
But they’re also making major contributions to global AI projects, from Alibaba’s Dragonfly, which streamlines large-scale data distribution, to Baidu’s Apollo, an open-source platform accelerating autonomous vehicle development. These efforts don’t just strengthen China’s AI industry, they embed it deeper into the global AI landscape.
This shift had been years in the making, as Chinese firms (with state backing) pushed open-source AI forward and made their models publicly available, creating a feedback loop that western companies have also – quietly – tapped into.
A year ago, for example, US firm Abicus.AI released Smaug-72B, an AI model designed for enterprises that built directly upon Alibaba’s Qwen-72B and outperformed proprietary models like OpenAI’s GPT-3.5 and Mistral’s Medium.
But the potential for US companies to further build on Chinese open-source technology may be limited by political as well as corporate barriers.
In 2023, US lawmakers highlighted growing concerns that China’s aggressive investment in open-source AI and semiconductor technologies would eventually erode western leadership in AI. Some policymakers called for bans on certain open-source chip technologies, due to fears they could further accelerate China’s AI advancements.
By then, however, China’s AI horse had already bolted.
DeepSeek’s rise should have been obvious to anyone familiar with management theory and the history of technological breakthroughs linked to “disruptive innovation.” Latecomers to an industry rarely compete by playing the same game as incumbents – they have to be disruptive.
China, facing restrictions on cutting-edge western AI chips and lagging behind in proprietary AI infrastructure, had no choice but to innovate differently. Open-source AI provided the perfect vehicle: a way to scale innovation rapidly, lower costs and tap into global research while bypassing Silicon Valley’s resource-heavy, closed-source model.
From a Western and traditional human rights perspective, China’s embrace of open-source AI may appear paradoxical, given the country’s strict information controls. Its AI development strategy prioritizes both technological advancement and strict alignment with the Chinese Communist party’s ideological framework, ensuring AI models adhere to “core socialist values” and state-approved narratives.
AI research in China has thrived not only despite these constraints but, in many ways, because of them.
China’s success goes beyond traditional authoritarianism; it embodies what Harvard economist David Yang calls “Autocracy 2.0.” Rather than relying solely on fear-based control, it uses economic incentives, bureaucratic efficiency and technology to manage information and maintain regime stability.
The Chinese government has strategically encouraged open-source development while maintaining tight control over AI’s domestic applications, particularly in surveillance and censorship.
Indeed, authoritarian regimes may have a significant advantage in developing facial-recognition technology due to their extensive surveillance systems. The vast amounts of data collected through these networks enable private AI companies to create advanced algorithms, which can then be adapted for commercial uses, potentially accelerating economic growth.
China’s AI strategy is built on a dual foundation of state-led initiatives and private-sector innovation. The country’s AI roadmap, first outlined in the 2017 new generation artificial intelligence development plan, follows a three-phase timeline: achieving global competitiveness by 2020, making major AI breakthroughs by 2025, and securing world leadership in AI by 2030. In parallel, the government has emphasised data governance, regulatory frameworks and ethical oversight to guide AI development “responsibly.”
A defining feature of China’s AI expansion has been the massive infusion of state-backed investment. Over the past decade, government venture capital funds have injected approximately US$912 billion into early-stage firms, with 23% of that funding directed toward AI-related companies. A significant portion has targeted China’s less-developed regions, following local investment mandates.
Compared with private venture capital, government-backed firms often lag in software development but demonstrate rapid growth post-investment. Moreover, state funding often serves as a signal for subsequent private-sector investment, reinforcing the country’s AI ecosystem.
China’s AI strategy represents a departure from its traditional industrial policies, which historically emphasized self-sufficiency, support for a handful of national champions and military-driven research.
Instead, the government has embraced a more flexible and collaborative approach that encourages open-source software adoption, a diverse network of AI firms and public-private partnerships to accelerate innovation. This model prioritizes research funding, state-backed AI laboratories, and AI integration across key industries including security, healthcare and infrastructure.
Despite strong state involvement, China’s AI boom is equally driven by private-sector innovation. The country is home to an estimated 4,500 AI companies, accounting for 15% of the world’s total.
As economist Liu Gang told the Chinese Communist Party’s Global Times newspaper: “The development of AI is fast in China – for example, for AI-empowered large language models. Aided with government spending, private capital is flowing to the new sector. Increased capital inflow is anticipated to further enhance the sector in 2025.”
China’s tech giants including Baidu, Alibaba, Tencent and SenseTime have all benefited from substantial government support while remaining competitive on the global stage. But unlike in the US, China’s AI ecosystem thrives on a complex interplay between state support, corporate investment and academic collaboration.
Recognizing the potential of open-source AI early on, Tsinghua University in Beijing has emerged as a key innovation hub, producing leading AI startups such as Zhipu AI, Baichuan AI, Moonshot AI and MiniMax — all founded by its faculty and alumni.
The Chinese Academy of Sciences has similarly played a crucial role in advancing research in deep learning and natural language processing.
Unlike the West, where companies like Google and Meta promote open-source models for strategic business gains, China sees them as a means of national technological self-sufficiency. To this end, the National AI Team, composed of 23 leading private enterprises, has developed the National AI Open Innovation Platform, which provides open access to AI datasets, toolkits, libraries and other computing resources.
DeepSeek is a prime example of China’s AI strategy in action. The company’s rise embodies the government’s push for open-source collaboration while remaining deeply embedded within a state-guided AI ecosystem. Chinese developers have long been major contributors to open-source platforms, ranking as the second-largest group on GitHub by 2021.
Founded by Chinese entrepreneur Liang Wenfeng in 2023, DeepSeek has positioned itself as an AI leader while benefiting from China’s state-driven AI ecosystem. Liang, who also established the hedge fund High-Flyer, has maintained full ownership of DeepSeek and avoided external venture capital funding.
Though there is no direct evidence of government financial backing, DeepSeek has reaped the rewards of China’s AI talent pipeline, state-sponsored education programs and research funding. Liang has engaged with top government officials including China’s premier, Li Qiang, reflecting the company’s strategic importance to the country’s broader AI ambitions.
In this way, DeepSeek perfectly encapsulates “AI with Chinese characteristics” – a fusion of state guidance, private-sector ingenuity and open-source collaboration, all carefully managed to serve the country’s long-term technological and geopolitical objectives.
Recognizing the strategic value of open-source innovation, the government has actively promoted domestic open-source code platforms like Gitee to foster self-reliance and insulate China’s AI ecosystem from external disruptions. However, this also exposes the limits of China’s open-source ambitions. The government pushes collaboration, but only within a tightly controlled system where state-backed firms and tech giants call the shots.
Reports of censorship on Gitee reveal how Beijing carefully manages innovation, ensuring AI advances stay in line with national priorities. Independent developers can contribute, but the real power remains concentrated in companies that operate within the government’s strategic framework.
DeepSeek’s emergence has sparked intense debate across the AI industry, drawing a range of reactions from leading Silicon Valley executives, policymakers and researchers. While some view it as an expected evolution of open-source AI, others see it as a direct challenge to western AI leadership.
Microsoft’s CEO, Satya Nadella, emphasized its technical efficiency. “It’s super-impressive in terms of both how they have really effectively done an open-source model that does this inference-time compute, and is super-compute efficient,” Nadella told CNBC. “We should take the developments out of China very, very seriously.”
Silicon Valley venture capitalist Marc Andreessen, a prominent advisor to Trump, was similarly effusive. “DeepSeek R1 is one of the most amazing and impressive breakthroughs I’ve ever seen – and, as open source, a profound gift to the world,” he wrote on X.
For Yann LeCun, Meta’s chief AI scientist, DeepSeek is less about China’s AI capabilities and more about the broader power of open-source innovation. He argued that the situation should be read not as China’s AI surpassing the US, but rather as open-source models surpassing proprietary ones. “DeepSeek has profited from open research and open source (e.g. PyTorch and Llama from Meta),” he wrote on Threads. “They came up with new ideas and built them on top of other people’s work. Because their work is published and open source, everyone can profit from it. That is the power of open research and open source.”
Not all responses were so measured. Alexander Wang, CEO of Scale AI – a US firm specializing in AI data labeling and model training – framed DeepSeek as a competitive threat that demands an aggressive response. He wrote on X: “DeepSeek is a wake-up call for America, but it doesn’t change the strategy: USA must out-innovate & race faster, as we have done in the entire history of AI. Tighten export controls on chips so that we can maintain future leads. Every major breakthrough in AI has been American.”
Elon Musk added fuel to speculation about DeepSeek’s hardware access when he responded with a simple “obviously” to Wang’s earlier claims on CNBC that DeepSeek had secretly acquired 50,000 Nvidia H100 GPUs, despite US export restrictions.
Beyond the tech world, US policymakers have taken a more adversarial stance. House speaker Mike Johnson accused China of leveraging DeepSeek to erode American AI leadership. “They abuse the system, they steal our intellectual property. They’re now trying to get a leg up on us in AI.”
For his part, Trump took a more pragmatic view, seeing DeepSeek’s efficiency as a validation of cost-cutting approaches. “I view that as a positive, as an asset …. You won’t be spending as much, and you’ll get the same result, hopefully.”
The rise of DeepSeek may have helped jolt the Trump administration into action, leading to sweeping policy shifts aimed at securing US dominance in AI. In his first week back in the White House, the US president announced a series of aggressive measures, including massive federal investments in AI research, closer partnerships between the government and private tech firms and the rollback of regulations seen as slowing US innovation.
The administration’s framing of AI as a critical national interest reflects a broader urgency sparked by China’s rapid advancements, particularly DeepSeek’s ability to produce cutting-edge models at a fraction of the cost traditionally associated with AI development. But this response is not just about national competitiveness – it is also deeply entangled with private industry.
Musk’s growing closeness to Trump, for example, can be viewed as a calculated move to protect his own dominance at home and abroad. By aligning with the administration, Musk ensures that US policy tilts in favour of his AI ventures, securing access to government backing, computing power,and regulatory control over AI exports.
At the same time, Musk’s public criticism of Trump’s US$500 billion AI infrastructure plan – claiming the companies involved lack the necessary funding – was as much a warning as a dismissal, signaling his intent to shape policy in a way that benefits his empire while keeping potential challengers at bay.
Not unrelated, Musk and a group of investors have just launched a US$97.4 billion bid for OpenAI’s nonprofit arm, a move that escalates his feud with OpenAI CEO Sam Altman and seeks to strengthen his grip on the AI industry. Altman has dismissed the bid as a “desperate power grab”, insisting that OpenAI will not be swayed by Musk’s attempts to reclaim control. The spat reflects how DeepSeek’s emergence has thrown US tech giants into what could be all-out war, fuelling bitter corporate rivalries and reshaping the fight for AI dominance.
And while the US and China escalate their AI competition, other global leaders are pushing for a coordinated response. The Paris AI Action Summit, held on February 10 and 11, has become a focal point for efforts to prevent AI from descending into an uncontrolled power struggle.
France’s president, Emmanuel Macron, warned delegates that without international oversight, AI risks becoming “the wild west,” where unchecked technological development creates instability rather than progress.
But at the end of the two-day summit, the UK and US refused to sign an international commitment to “ensuring AI is open, inclusive, transparent, ethical, safe, secure and trustworthy … making AI sustainable for people and the planet.” China was among the 61 countries to sign this declaration.
Concerns have also been raised at the summit about how AI-powered surveillance and control are enabling authoritarian regimes to strengthen repression and reshape the citizen-state relationship. This highlights the fast-growing global industry of digital repression, driven by an emerging “authoritarian-financial complex” that may exacerbate China’s strategic advancement in AI.
Equally, DeepSeek’s cost-effective AI solutions have created an opening for European firms to challenge the traditional AI hierarchy. As AI development shifts from being solely about compute power to strategic efficiency and accessibility, European firms now have an opportunity to compete more aggressively against their US and Chinese counterparts.
Whether this marks a true rebalancing of the AI landscape remains to be seen. But DeepSeek’s emergence has certainly upended traditional assumptions about who will lead the next wave of AI innovation – and how global powers will respond to it.
DeepSeek’s emergence has forced US tech leaders to confront an uncomfortable reality: They underestimated China’s AI capabilities. Confident in their perceived lead, companies like Google, Meta, and OpenAI prioritized incremental improvements over anticipating disruptive competition, leaving them vulnerable to a rapidly evolving global AI landscape.
In response, the US tech giants are now scrambling to defend their dominance, pledging over US$400 billion in AI investment. DeepSeek’s rise, fuelled by open-source collaboration, has reignited fierce debates over innovation versus security, while its energy-efficient model has intensified scrutiny on AI’s sustainability.
Yet Silicon Valley continues to cling to what many view as outdated economic theories such as the Jevons paradox to downplay China’s AI surge, insisting that greater efficiency will only fuel demand for computing power and reinforce their dominance. Companies like Meta, OpenAI and Microsoft remain fixated on scaling computational power, betting that expensive hardware will secure their lead. But this assumption blinds them to a shifting reality.
DeepSeek’s rise as the potential “Walmart of AI” is shaking Silicon Valley’s foundation, proving that high-quality AI models can be built at a fraction of the cost. By prioritizing efficiency over brute-force computing power, DeepSeek is challenging the US tech industry’s reliance on expensive hardware like Nvidia’s high-end chips.
This shift has already rattled markets, driving down the stock prices of major US firms and forcing a reassessment of AI dominance. Nvidia, whose business depends on supplying high-performance processors, appears particularly vulnerable as DeepSeek’s cost-effective approach threatens to reduce demand for premium chips.
The growing divide between the US and China in AI, however, is more than just competition – it’s a clash of governance models. While US firms remain fixated on protecting market dominance, China is accelerating AI innovation with a model that is proving more adaptable to global competition.
If Silicon Valley resists structural change, it risks falling farther behind. We may witness the unraveling of the “Silicon Valley effect”, through which tech giants have long manipulated AI regulations to entrench their dominance. For years, Google, Meta,and OpenAI shaped policies that favored proprietary models and costly infrastructure, ensuring AI development remained under their control.
DeepSeek is redefining AI with breakthroughs in code intelligence, vision-language models and efficient architectures that challenge Silicon Valley’s dominance. By optimizing computation and embracing open-source collaboration, DeepSeek shows the potential of China to deliver cutting-edge models at a fraction of the cost, outperforming proprietary alternatives in programming, reasoning and real-world applications.
More than a policy-driven rise, China’s AI surge reflects a fundamentally different innovation model – fast, collaborative and market-driven – while Silicon Valley holds on to expensive infrastructure and rigid proprietary control. If US firms refuse to adapt, they risk losing the future of AI to a more agile and cost-efficient competitor.
But China is not just disrupting Silicon Valley. It is expanding “geotechnopolitics”, where AI is a battleground for global power. With AI projected to add US$15.7 trillion to the global economy by 2030, China and the US are racing to control the technology that will define economic, military and political dominance.
DeepSeek’s advancement has raised national security concerns in the US. Trump’s government is considering stricter export controls on AI-related technologies to prevent them from bolstering China’s military and intelligence capabilities.
As AI-driven defence systems, intelligence operations and cyber warfare redefine national security, governments must confront a new reality: AI leadership is not just about technological superiority, but about who controls the intelligence that will shape the next era of global power.
China’s AI ambitions extend beyond technology, driving a broader strategy for economic and geopolitical dominance. But with over 50 state-backed companies developing large-scale AI models, its rapid expansion faces growing challenges, including soaring energy demands and US semiconductor restrictions.
China’s president, Xi Jinping, remains resolute, stating: “Whoever can grasp the opportunities of new economic development such as big data and artificial intelligence will have the pulse of our times.” He sees AI driving “new quality productivity” and modernizing China’s manufacturing base, calling its “head goose effect” a catalyst for broader innovation.
To counter western containment, China has embraced a “guerrilla” economic strategy, bypassing restrictions through alternative trade networks, deepening ties with the global south, and exploiting weaknesses in global supply chains. Instead of direct confrontation, this decentralized approach uses economic coercion to weaken adversaries while securing China’s own industrial base.
China is also leveraging open-source AI as an ideological tool, presenting its model as more collaborative and accessible than western alternatives. This narrative strengthens its global influence, aligning with nations seeking alternatives to western digital control. While strict state oversight remains, China’s embrace of open-source AI reinforces its claim to a future where innovation is driven not by corporate interests but through shared collaboration and global cooperation.
But while DeepSeek claims to be open access, its secrecy tells a different story. Key details on training data and fine-tuning remain hidden, and its compliance with China’s AI laws has sparked global scrutiny. Italy has banned the platform over data-transfer risks, while Belgium and Ireland launched privacy probes.
Under Chinese regulations, DeepSeek’s outputs must align with state-approved narratives, clashing with the EU’s AI Act, which demands transparency and protects political speech. Such “controlled openness” raises many red flags, casting doubt on China’s place in markets that value data security and free expression.
Many western commentators are seizing on reports of Chinese AI censorship to frame other models as freer and more politically open. The revelation that a leading Chinese chatbot actively modifies or censors responses in real time has fueled a broader narrative that western AI operates without such restrictions, reinforcing the idea that democratic systems produce more transparent and unbiased technology. This framing serves to bolster the argument that free societies will ultimately lead the global AI race.
But, at its heart, the “AI arms race” is driven by technological dominance. The US, China, and the EU are charting different paths, weighing security risks against the need for global collaboration. How this competition is framed will shape policy: lock AI behind restrictions, or push for open innovation.
DeepSeek, for all its transformational qualities, continues to exemplify a model of AI where innovation prioritizes scale, speed and efficiency over societal impact. This drive to optimize computation and expand capabilities overshadows the need to design AI as a truly public good.
In doing so, it eclipses this technology’s genuine potential to transform governance, public services and social institutions in ways that prioritize collective wellbeing, equity and sustainability over corporate and state control.
A truly global AI framework requires more than political or technological openness. It demands structured cooperation that prioritizes shared governance, equitable access, and responsible development.
Following a workshop in Shanghai hosted by the Chinese government last September, the UN’s general secretary, António Guterres, outlined his vision for AI beyond corporate or state control: “We must seize this historic opportunity to lay the foundations for inclusive governance of AI – for the benefit of all humanity. As we build AI capacity, we must also develop shared knowledge and digital public goods.”
Both the west and China frame their AI ambitions through competing notions of “openness” – aligned in both cases with their strategic interests and reinforcing existing power structures.
Western tech giants claim AI drives democratization, yet they often dominate digital infrastructure in parts of Africa, Asia and Latin America, exporting models based on “corporate imperialism” that extract value while disregarding local needs.
China, by contrast, positions itself as a technological partner for the rest of the Global South. However, its AI remains tightly controlled, reinforcing state ideology.
China’s proclaimed view on international AI collaboration emphasizes that AI should not be “a game of rich countries,”as President Xi stated during the 2024 G20 summit.
By advocating for inclusive global AI development, China positions itself as a leader in shaping international AI governance, especially via initiatives like the UN AI resolution and its AI capacity-building action plan. These efforts help promote a more balanced technological landscape while allowing China to strengthen its influence in global AI standards and frameworks.
However, beneath all these narratives, both China and the US share a strategy of AI expansion that relies on exploited human labor, from data annotation to moderation, exposing a system driven less by innovation than by economic and political control.
Peter Bloom is a professor of management at the University of Essex.
This article is republished from The Conversation under a Creative Commons license. Read the original article.
The first close of East Ventures ‘ joint fund, known as the” East Ventures South Korea Fund in Partnership with SV Investment,” has been announced by SV Investment, a publicly listed venture capital and private equity firm with a headquarters in Seoul, South Korea.
Both events stated in a joint statement that this first final is supported by leading buyers from Korea and Indonesia. The bank is committed to expanding on the track record and enormous effectiveness delivered by both East Ventures and SV Investment to time, they added, adding that with anchor funds from the Korea Development Bank, Korea’s state-owned development bank, and a corporate commitment from one of the world’s leading neobanks.
The bank is prepared to build its capital in collaboration with the leading venture capital firms in both countries. East Ventures and SV Investment are constantly working to identify high-potential software companies in Southeast Asia and South Korea that want to level their firms across both areas. The fund expects to invest in revenue-generating startups, ideally raising Series A to B funding, with cheque sizes ranging from US$ 1million ( RM4.4 million ) to US$ 3 million ( RM13.4 million ) as the lead investor in high-conviction opportunities driven by exceptional founders.
This second nearby is a major step in our shared responsibility to encouraging investment and cross-border cooperation between Southeast Asia and South Korea. Our first Albums gave us a lot of encouragement, and we’re looking forward to new possibilities. Along with SV Investment, we are committed to forging a productive and healthy Southeast Asia for today, tomorrow, and for years to come”, said Roderick Purwana, Managing Partner at East Ventures.
The bank may be crucial in bridging the gap between Southeast Asia and South Korea by promoting friendship and building bridges. According to David Junghun Bang, Managing Partner at SV Investment, we are firmly committed to creating important collaboration for both regions because South Korea may include increased opportunities to develop into one of the fastest-growing and largest markets and Southeast Asia will benefit from the implementation of innovative technology from South Korea, which will help propel its economy to the next level.
The account is on record to close by the middle of 2025 and continues to engage with buyers.
Founded in 2009 in Indonesia, East Ventures has raised nine money focusing on Southeast Asia. The company has made investments in over 300 early- and late-stage technology companies, resulting in positive social and environmental effects and powerful financial results. Additionally, it has maintained a top-tier VC status in Southeast Asia, having been named by Preqin as the most consistently top-performing account worldwide and the most effective investment in Southeast Asia by numerous media stores.
With departments in Shanghai and Shenzhen in China and Boston in Singapore, SV Investment makes investments worldwide. One of the most effective separate Asian venture capital firms in Southeast Asia has been SV Investment.
Amid the military posturing, economic sanctions, and political power struggles shaping the US-China rivalry, intellectual property ( IP ) disputes remain a major battleground.
In January 2025, Chinese firm DeepSeek’s latest AI design helped sweep US$ 1 trillion off the US property market by demonstrating how open-sourced collaboration—refining officially available AI technology—can rival proprietary models without huge investment.
DeepSeek, a major US AI firm, joined the chorus of US officials and businesses that have lengthy accused China of Internet fraud across various sectors.
Despite the fact that OpenAI itself claims to be protected by the fair use doctrine, it has been accused of using another copyrighted material without authorization to create its relational AI model.
The computer and newer technologies like AI and 3D printers allow creators to make, spread, and sell their work without conventional gatekeepers. However, these exact equipment expose these works to constant copyright and diminished power.
With scattered enforcement and tensions over protecting development and public access, globalization has further exacerbated Internet protection.
IP has withstanded previous modern hiccups, but today’s fast innovation in a multinational environment is tearing down outdated protections more quickly than policymakers may adapt.
The World Intellectual Property Organization ( WIPO ) has positioned itself as the key mediator to address 21st-century IP disputes involving countries, corporations, and individuals, but faces growing obstacles in keeping pace with the fast-moving changes.
Solid IP laws, according to advocates, promote innovation by allowing others to use existing work, protecting creators, and encouraging collaboration in a good system. Critics counter that these laws often favor big corporations and owners over customers and developing countries, prevent engagement, create monopolies, and limit access to important goods.
Global IP protections are still a relatively recent idea. They date back to ancient Greek recipe safeguards, but they have exploded in popularity since. The printing press revolutionized content distribution in the 15th century, and the Industrial Revolution later fueled invention, mass production, and transportation advances—alongside rampant IP theft. Post-independence, US entities frequently copied British industrial designs, accelerating industrial growth.
Pivotal agreements—like the Paris Convention ( 1883 ) for industrial property, the Berne Convention ( 1886 ) for literary and artistic works, and the Madrid Agreement ( 1891 ) for international registration—laid the foundation for today’s global IP framework.
WIPO, created in 1967, and the World Trade Organization ( WTO ), created in 1995, later emerged alongside other bodies to oversee the four main types of IP—patents ( inventions ), trademarks ( brand identity ), copyrights ( creative works ), and trade secrets ( like customer data and algorithms ).
In response to the accelerating globalization in the 1990s, the WTO sought to harmonize trade regulations. The Trade-Related Aspects of Intellectual Property Rights ( TRIPS) Agreement had a goal to standardize global IP protections, but it hasn’t succeeded in doing so.
Only WTO members can participate in the agreement, excluding some African, Middle Eastern, and Central Asian countries, and private actors. The WTO’s processes can be slow, with only a few disputes coming to an end. The majority of them are either stalled or resolved on terms agreed to by more powerful members.
TRIPS’s compulsory licensing allows third parties to produce patented inventions without the owner’s consent under specific conditions, but such measures often provoke retaliation. While pharmaceutical giant Abbott responded by withholding some of its products from the Thai market when Thailand issued a license for an HIV medication in 2007, the U.S. and the EU pressured it to backtrack.
Additionally, Free Trade Agreements (FTAs ) have sidestepped TRIPS enforcement. The North American Free Trade Agreement ( NAFTA ), for instance, curbed IP violations more effectively than WTO.
The United States’s unilateral actions, including “blocking the reappointment of Appellate Body members who were seen as not having’ served’ US interests sufficiently” ,—especially since 2019—have further weakened the system.
Domestic agencies like the US International Trade Commission ( USITC ) and the U. S. Patent and Trademark Office ( USPTO ), meanwhile, enforce their own IP standards, undermining TRIPS rules. China, with its newfound economic power, is following suit.
Perhaps TRIPS’s greatest challenge is keeping pace with emerging technologies. During WTO’s inception in 1995, the public internet was in its infancy. Today, digital piracy is widespread, with AI and 3D printing further disrupting traditional IP frameworks, causing TRIPS’s rigid structure to buckle under the weight of a rapidly evolving digital world.
Individual members have taken different approaches to their domestic legislation, from complete protection of AI-generated works to a requirement of human creativity that effectively leaves such works unprotected, as per the TRIPS agreement.
This patchwork will likely get worse as the share of cross-border intellectual property, including copyrights, is increasing, according to a 2023 article in the International Institute for Sustainable Development.
WIPO, which became a UN-specialized agency in 1974, has positioned itself as the leading force in global IP protection. Unlike TRIPS, which enforces trade-based IP rules, WIPO oversees 27 broad IP treaties, including the Patent Cooperation Treaty (PCT) for international patent applications and the Madrid System for trademark registration.
Rather than imposing strict enforcement, WIPO provides guidelines, training, and resources to strengthen IP laws and institutions. It collaborates with businesses and organizations like the USPTO and works with organizations like the African Regional Intellectual Property Organization to promote capacity-building in developing nations. It also adopts a cooperative approach to dispute resolution and harmonization.
Largely self-funded, WIPO derives most of its revenue from IP services and registrations, reducing reliance on member contributions and limiting external influence.
WIPO’s ability to navigate modern IP problems remains under scrutiny, with Covid-19 serving as a major test. Expanding the Access to Research for Development and Innovation ( ARDI) program, which provides developing nations with free or low-cost access to scientific journals, it also strengthened its PATENTSCOPE database for Covid-related patents. WIPO also sought to represent the WTO, which is supported by pharmaceutical companies and Western nations that favor stronger IP protections, and the WHO, which is led by India and South Africa, who are pushing for greater access to vaccines.
The 2022 waiver agreement, providing a” waiver of intellectual property ( IP ) protections for Covid-19 vaccine patents, “was widely seen as too limited and delayed, reinforcing perceptions that WIPO favored corporate and Western interests, even for generic medicines.
” Evergreening,” for example, where pharmaceutical companies make minor modifications to extend patent life and block generic competition, has been a consistent controversy within WIPO. This practice has also raised questions about how to balance IP law with human rights goals, particularly those that benefit poorer nations.
In 2013, WIPO launched its Green Marketplace to connect companies, researchers, and NGOs for green technology collaboration. This initiative followed the 2008 Eco-Patent Commons, an IBM-led effort offering free public patents that struggled due to patent limitations, narrow scope and low engagement.
WIPO’s marketplace saw greater success by more effectively building connections, tracking results, and providing funding, mediation, and other resources for long-term impact. Ongoing digitization remains a key WIPO challenge, requiring constant updates.
Online copyright issues are addressed by the 1996 WIPO Internet Copyright Treaties, and the 2009 introduction of the Digital Access Service ( DAS ) speeds up the secure exchange of documents internationally. WIPO PROOF, a 2020 digital timestamping service for IP protection, was discontinued in 2022 due to” poor demand, “reflecting WIPO’s willingness to experiment despite occasional setbacks.
WIPO has used an immutable, transparent ledger to track and verify asset ownership and changes in real-time to explore the potential for securing IP rights more than the WTO. In 2018, it launched a Blockchain Task Force, followed by a 2020 white paper outlining blockchain’s role in the entire IP lifecycle and smart contracts —self-executing agreements that enforce terms automatically when conditions are met.
The expansion of corporate and copyright control over the creation of digital IP laws has raised objections, with some critics claiming that it prioritizes profits over public benefits. The length of a copyright can be too long, which gives the user unnecessarily control over how to use it.
Although the majority of IP revenue is generated in the initial years, access can be revoked for roughly a century. For instance, Spotify, one of the fastest streaming services, generates a lot of money quickly, but long-term copyright frequently undercuts artists, as WIPO noted in its 2021 report on the expansion of Spotify’s copyright law.
However, WIPO has a limited amount of influence, and its slow progress toward more complex copyright issues has opened up room for other models promoted by organizations like Creative Commons and the Open Knowledge Foundation to develop alternative licensing strategies. These models frequently include free licensing, with the aim of allowing creators to have some control over how their work is used while allowing them to gain more access to IP-protected works.
Concerns also exist regarding 3D printing and AI. The ease of replicating physical objects with 3D printing complicates IP enforcement, and WIPO offers Alternative Dispute Resolution ( ADR) services, including mediation and arbitration, to help bring resolution. Experts concur that additional efforts are required despite the more than ten years of WIPO’s efforts to clarify and regulate 3D printing.
By obfuscating ownership and originality, AI poses a similar threat to IP. The 2020 convention of WIPO with stakeholders in AI and the 2024 Patent Landscape Report on AI aim to assist nations and businesses in developing policies for AI-related inventions. However, as with 3D printing, WIPO struggles to keep pace with technological advances.
The internet, as a global distributor, only accelerates unauthorized sharing, undermining the potential for effective oversight.
Additionally, WIPO has trouble resolving disputes between China and the US. The rise in the number of Chinese tech companies and research institutions is revealed in its Patent Landscape Report. In 2023, global patent filings reached about 3.6 million, utility models were at 3.1 million, and industrial designs were at 1.5 million. China dominated most categories, with the US following.
However, while China submitted 1.46 million patent applications in 2022, less than 800, 000 were granted, indicating many were superficial or served limited purposes. Additionally, while China leads in patent applications, most are for domestic use. Less than a fifth of invention patents were filed in 2016 to protect novel, cutting-edge inventions, with the majority being brief-term utility or design patents that covered minor changes and were primarily intended for domestic use.
China still led in PCT ( international ) patents in 2023, filing roughly 70, 000 compared to more than 55, 000 from the US. However, with more than 242,000 filings of direct and PCT applications to foreign IP offices in 2023, China is in third place, behind Japan, with roughly 120, 000 filings.
Nonetheless, China is surging ahead in other areas. China filed 38, 000 GenAI patents between 2014 and 2023, surpassing all others combined ( the US was second at 6, 000 ). Additionally, according to WIPO data, China held more than half of all blockchain patents up to 2017.
China’s growing political influence in WIPO has become more evident. It prohibited several, largely European Wikimedia affiliates from becoming official observers at the WIPO’s Standing Committee on Copyright and Related Rights in 2023, likely as a result of tensions over Taiwan. These growing rivalries are made worse by WIPO’s non-binding framework and reliance on voluntary cooperation, which limits its enforcement authority.
As global powers compete over IP protections, the high costs of filing, maintaining, and enforcing IP rights can be beyond the reach of smaller, less wealthy countries. Issues such as litigation, patent trolling, and overly broad patents can further overwhelm the matter. By failing to comprehend IP rules, vulnerable businesses can miss out on opportunities while also putting themselves at risk of legal action.
The WIPO’s Development Agenda, which was introduced in 2007, has so far had a mixed success in strengthening IP frameworks in developing nations. In Liberia, little progress has been made despite decades of WIPO involvement. At the 2024 WIPO Assemblies of member states, African countries renewed calls for greater technology transfers, knowledge sharing, and capacity-building programs.
WIPO faces significant obstacles in enforcing IP rights, maneuvering rapid technological advancements, and addressing issues over the access, equity, and politicization of global IP infrastructure. These obstacles are likely to increase as a result of intensified geopolitical rivalries.
Despite this, WIPO can point to its success in expanding global IP frameworks, dispute resolution, and record-high patent filings. Despite the fact that IP theft will continue to be a problem, WIPO’s adaptability and inclusive approach have helped it maintain its relevance and effectiveness in a constantly changing environment.
Its ability to strike a balance between promoting access to knowledge, technology, and essential goods while maintaining a balance in the future of global IP governance will determine its contribution.
John P Ruehl is an Australian-American journalist living in Washington, DC, and a world affairs correspondent for the Independent Media Institute. He is a contributor to several foreign affairs publications, and his book”, Budget Superpower: How Russia Challenges the West With an Economy Smaller Than Texas ‘”, was published in December 2022.
This article was produced by Economy for All, a project of the Independent Media Institute, and is republished with permission.
SEEDS Capital ( SEEDS ), the investment arm of Enterprise Singapore ( EnterpriseSG), has appointed 20 new local and global partners to co-invest in innovative Singapore-based deep tech startups under the Startup SG Equity scheme. SEEDS will allocate US$ 110 million ( RM668 million ) over the next three years, aiming to catalyse an additional US$ 219.5 million ( RM977.5 million ) through private sector partnerships in areas such as advanced manufacturing, pharmbio/medtech, agrifood tech, sustainability ( including energy, circular economy, urban mobility, and water ), spacetech, and quantum tech.
]RM1 = US$ 0.22]
With these innovative appointments, SEEDS today has 52 co-investors offering complex and domain expertise, professional knowledge, global networks, and early-growth investment capabilities to enable startups level properly.
enabling companies ‘ international goals through global network
According to EnterpriseSG, new partners such as East Ventures ( Indonesia ), Global Brain ( Japan ), HIVEN ( South Korea ), Paspalis Capital ( Australia ), and Valuence Ventures ( USA/South Korea ) will provide resources and networks to help startups expand into new markets for customer acquisition or supply chain diversification. For instance, Paspalis ‘ solid presence in Australia’s Northern Territory has enabled SEEDS ‘ spacetech investee Equatorial Space Systems to test-bed its options. In addition, East Ventures ‘ systems in Indonesia have assisted AMILI in expanding operations there and helped Mesh Bio secure its first Indonesian client.
” Expanding into Japan presents problems such as social distinctions, communication obstacles, and sophisticated corporate environments. Some startups in Singapore struggle to understand Japan’s complex decision-making procedures and direct communication methods. We assist our investment companies in localizing their strategies and developing their value propositions for the Asian market, according to Global Brain partner Tatsuya Matsumoto.
” We also guide them in relationship-building and integrating their answers into the broader strategic objectives of Chinese corporates, ensuring smoother market access and long-term partnerships”, he added.
Driving progress through specialized knowledge
The new sessions even include local investors familiar with Singapore’s business environment, who can guide startups on rules and weighting. These resources will promote the implementation of native investment and the development of the ecosystem. Significant owners include Vickers Venture Partners, iGlobe Associates, K3 Ventures, Antares Ventures, Monk’s Hill Ventures, and Tin Men Capital.
” While Singapore’s deep software environment is still maturing compared to more established business ecosystems, it has reached a critical tone level, thanks largely to various government initiatives”, said Arun Pai, main at Monk’s Hill Ventures.
” Previously, we made selective deep tech investments, but our current pipeline includes a significantly higher proportion of deep tech startups. These founders are targeting diverse areas such as material science in agritech, advanced robotics, AI for healthcare diagnostics, and next-generation semiconductor technologies across Southeast Asia”, he added.
Deep tech startups need a lot of support because their development cycles for technology and products are long, as well as the need for significant capital at the growth stage, particularly for production lines, industrial scaling, or clinical trials. New partner funds such as healthcare VCs Kurma Partners, 22Health Ventures, and Trinity Innovation Biosciences Singapore, sustainability VCs Eurazeo and Shift4Good, and hard tech VCs Xora, Matter Venture Partners, and ST Engineering Ventures bring industry and technical expertise to support these startups effectively.
Julien Mialaret, operating partner, and Ernest Xue, director of Eurazeo, commented:” In 2025, we expect investment activity to accelerate due to the maturity of key technologies and their increasing economic viability, driving broader adoption. Investment momentum will be further fueled by efforts in Europe and Asia to support green technologies and low-carbon economies. Our main goal is to assist founders in successfully scaling solutions across their target markets.
Strengthening Singapore’s deep tech ecosystem
” We are pleased to see strong interest from the venture capital community, from well-established Singapore-based funds to international funds with deep expertise in backing deep tech leaders, as well as corporate venture funds looking to support startups with synergistic technologies and business models,” said SEEDS Capital Chairman Cindy Khoo.
Singapore’s startup ecosystem is underpinned by a strong core of deep tech startups, and SEEDS will continue to do so. We look forward to working with our new co-investment partners to develop and scale the next generation of innovative, impactful technologies”, she added.
To date, nearly US$ 2.2 billion has been invested in over 330 startups under the Startup SG Equity scheme. To further support early to early-growth stage deep tech startups, SEEDS has also raised its co-investment cap from US$ 5.8 million to US$ 8.9 million per startup.
Learn more about SEEDS Capital here:  , https: //www. seedscapital. sg
By selling technology companies to immigrants, America has financed a current account deficit that soared to US$ 1.2 trillion in 2024. Tech stocks, however, are trading at valuations not seen since 2000, when the NASDAQ Composite began a descent that wiped out 75 % of its market capitalization by 2002.
If expectations deteriorate regarding synthetic intelligence’s ability to generate revenue, was a technology crash lead to a financing crisis for the United States? The question of the January 27 collision in AI-related stocks in response to less expensive and more effective Chinese rivals still lingers. Every capital investment in the world pays close attention to these issues.
Europeans stopped buying US debts of all kinds – Treasury, loan, and business – after the post-Covid prices of 2021 and the Federal Reserve’s subsequent rise in interest rates. That signaled the end of a 40-year bulls industry in US securities. From a 1981 peak of 15 %, the US 30-year bond yield fell in a nearly straight line to an August 2020 low of just 1.41 %.
The inflationary wave of 2021-2022 put an end to this bull work. In March 2022, moreover, the US and its allies seized half of Russia’s$ 600 billion in foreign exchange reserves, prompting other central banks to shift away from US Treasury securities to gold and other assets.
However, the world’s appetite for American tech stocks has been stagnant for the past ten years, which was rekindled by the development of Large Language Models ( LLMs) last year. Are raised valuations for AI-related shares justified? Which two aspects affect how quickly and which industries are most likely to make money from AI?
China’s DeepSeek R1 type appears to have made a model performance discovery: tale layout and related improvements reduce the amount of processing required by one or two orders of magnitude.
DeepSeek, also, offers its unit at a small fraction of the price that its US competitors then charge. That is not always detrimental to the overall US tech sector. If China has a better systems, US companies may choose it speedily, and lower costs for AI simulation does benefit the users of AI models.
US and China compete in seven distinct subcategories of AI uses. China leads most of them, and its Artificial skills are likely to strengthen it. They are
The big question is about LLM’s timing. Although the payoff might be significant, it may not be as quick as anticipated.
LLM deployment in the enterprise still has little to do with organizational performance and human adaptation ( management buy-in, workflow adjustments, etc. ). seems to be years away. Cost savings for specific categories of expenses, such as call centers or repetitive coding tasks, may be easily realized. However, the development of AI for higher-skill work is still in its infancy.
What does this mean for Nvidia’s chipmakers? On the assumption that Nvidia GPUs will provide a lot of this activity, one could argue a bullish case for Nvidia based on all of the AI sectors listed above. However, this hypothesis requires closer scrutiny of Nvidia’s competitive advantages.
Nvidia has a greater advantage in computation when training language and vision models, but less so when inference ( running the resulting models to get useful results ) is at its disposal. Notably, Huawei’s Ascend AI chips already perform fairly well with the new DeepSeek models, with comparable or even better cost performance than the weakened Nvidia H800s ( the weakened Nvidia chip that was cleared for export to China )  .
Additionally, the case that the top US tech companies ( the so-called Magnificent Seven ) will control equity returns going forward is much weaker than the market is currently perceptive of it. If we are right, and tech market valuations shrink to some significant extent, what are the macroeconomic implications? Key capital flows are more dependent on a small number of very large companies than at any other time in US history.
Let’s say foreigners reduced their purchases of tech stocks as the value of the stocks declines. The United States would need to sell more bonds to both domestic and foreign investors to pay off its current account deficit and federal budget deficit. The chart below shows the amount of new Treasury debt bought by US banks, US households, foreign official institutions, and foreign private investors, respectively.
Banks stepped in and reabsorbed the$ 4 trillion in Covid subsidies that were funded by the Treasury debt, but by 2023 they had exhausted their savings deposits. Households, who were drawn to the higher interest rates on Treasuries, saw the biggest increase in new investment in Treasury securities. Additionally, foreign private investors decreased their Treasury holdings.  ,
A full-blown financial crisis is most unlikely. The cash-burning dotcoms of 2000 have been replaced by cash-rich monopolies like Microsoft, Google, Apple, Amazon and Meta. By offering higher bond yields to domestic and international investors, the United States can adjust to an air-pocket in the demand for its tech stocks.
However, the DeepSeek shock exposes flaws in Big Tech’s core strategies as well as in the stratospheric valuation of its best-performing stocks. The outcome is likely to be a combination of persistently higher interest rates, slower growth, a decline in wealth, and strong economic headwinds.
The S&, P’s technology sector, correspondingly, trades at a P/E of 37, compared to an overall P/E for the S&, P 500 of 26. That accounts for the largest portion of the difference between the lofty valuations of American stocks and those of European, Japanese, and Chinese stocks.
A brass-tacks gauge of equity valuation is the free cash flow (FCF ) yield, namely the ratio of cash income to market price. Investors accept less current income because they anticipate higher income in the future, the higher the FCF is expected to be. For the S&, P 500 as a whole, FCF is below 3, a level not seen since the eve of the tech stock crash of 2000.
For a monopoly like Microsoft, the free cash flow yield has fallen to just 2, the lowest on record.
Between 2020 and 2024, Big Tech invested more than double in capital expenditures, and it is still investing heavily in AI-supporting data centers. The DeepSeek shock raises questions about the viability of these plans economically: If Chinese developers can create cutting-edge models using innovative model architecture designs, the raw computing power under development could be significantly overvalued.
To entice price-sensitive buyers into the Treasury market, the US government—still running a record peacetime non-recession deficit of 6 % to 7 % of GDP—probably will have to offer higher yields. That’s a problem for the economy and also a problem for the Treasury, which is already paying$ 1 trillion a year in interest, nearly quadruple the service cost of America’s national debt in 2020.
It also puts a headwind in front of the US economy for interest-sensitive activity, particularly housing. Longer-term, the US runs the risk of an Italian-style spiral, in which the rising cost of debt service eats away at the budget and limits what the federal government can do to support the economy.
Steve Hsu is professor of theoretical physics and of computational mathematics, science, and engineering at Michigan State University, and the founder of several AI startups. Follow him on X at @hsu_steve. David P. Goldman serves as Asia Times ‘ deputy editor. Follow him on X at @davidpgoldman
The first SuperReturn Saudi Arabia conference took place in Riyadh on January 27 to 28th, 2025, and Riyadh was brimming with enthusiasm. This premier private investment event brought together executives in private capital, venture capital, and family offices for two days of in-depth discussions, effective networking, and proper collaborations.
Kicked-off by Abdulmuhsen Alkhalaf ( pic, below ), the Saudi vice minister of finance, who emphasised that the contribution of private investment to Saudi’s GDP had increased from 14.6 % in 2016 to 23.4 % in Q3 of 2024. This reflects a market-friendly and energetic environment that encourages investment in important and appealing sectors of the nation.
His open remarks were followed by precise speeches, which resembled five-minute floor innings, setting the tone for the panels that followed. From general partners ( GPs ) and limited partners ( LPs ) to family office executives and venture capitalists, all of whom were interested in opportunities in Saudi Arabia and the broader MENA ( Middle East North Africa ) region.
Saudi’s aspirations and dreams are encapsulated in its Vision 2030 plan and progress has been rapid since the plan’s introduction with non-oil activities accounting for 52 % of GDP in 2024 versus 4.9 % ( in 2015 ) before the plan was introduced. Its talent pool has been expanded, and there is more women’s workforce participation than expected ( 36 % ). It was below 10 % before Vision 2030, as women were disallowed to drive ( before September 2017 ) and work ( before 2008 without seeking a guardian’s permission )! SMEs have likewise doubled since 2016, with 45 % owned by Saudis, underscoring a vibrant entrepreneurial habitat.
Key elements and restaurants
The” People Business” of investment: Investors emphasized the long-term, large-scale commitment required to develop the Kingdom’s economy. Co-investment and collaboration positioning came into play as necessary components for success.
Problems in secret markets: Valuation, fee structures, and achievement persistence were recurring themes, with calls for discipline and clear effectiveness monitoring to create buyer trust.
Tech, AI, and companies: The rollout of AI in Saudi Arabia remains emerging at 2.5 %, creating significant opportunities for VC opportunities. Panelists emphasized the need for localized innovation and unusual talent to promote growth in startups and technology.
Family practices as game-changers: Panel featuring top managers like Fares Al Balwi,  , Chairman of Saudi based Al Blagha Holding Company for Investment, and Raied Alseif, CEO of Saudi based Sultan Holding Company, who shed light on Saudi family offices ‘ important roles in transforming private markets, focusing on long-term strategies, world co-investments, and concentrated excellent investments.
Opportunities in technology
Nearly every panel focused on the potential for growth, with almost every panel focusing on technology and AI. While an estimated 40 % of VC deployment globally is in AI related startups, only 2.5 % occurs in Saudi Arabia. Soumaya Ben Beya Dridje, Partner at Rasmal Ventures, the first VC firm established in Doha, Qatar, stressed the need for resilience. ” Investments are not for the faint-hearted. GPs must be passionate, patient, and committed to adding real value”.
Gaming and startup industries also took center stage. Abdullah Altamami, founder &, CEO of Merak Capital, a Saudi-based VC, highlighted the Kingdom’s cultural alignment with gaming. ” With 50 game studios and a young, tech-savvy population, Saudi Arabia is perfectly positioned to create and export local IPs globally”.
Ibrahim Sagna, Executive Chairman of Silverback Holdings, a Mauritius-based private investments firm, echoed this sentiment. ” Startups are emerging as local champions, scaling to the UAE, India, and beyond. Saudi Arabia has the resources and talent to accomplish all of this and more.
Family Offices: Driving private market transformation
A powerful panel involving Fares Al Balwi and Raied Alseif discussed how family offices are revolutionizing private markets, with Raied urging attendees to embrace co-investments:” Partnerships, whether local or global, thrive on trust and alignment. A long-term view is key to success”.
Hamdi Al Zaim, the managing partner of Saudi-based Alma Limited, described how his holding company, which oversees both an international and local portfolio of investments, has changed its investing strategy. ” Concentration in quality is better than quantity”, he said. ” We’ve shifted from making 6–8 deals annually to focusing on 3–4 high-quality investments. This ensures sustainable returns”.
The two-day event concluded each day with rich cultural showcases, including traditional Saudi coffee, sweet dates, and live performances, providing an authentic glimpse into Saudi Arabia’s heritage. These informal settings facilitated further discussions, turning business connections into meaningful relationships.
Saudi Arabia’s significant influence on the MENA region’s and beyond-related private capital dynamics was highlighted in SuperReturn Saudi Arabia 2025.
Saudi Arabia is quickly emerging as the epicenter of transformative investments, a vibrant and sustainable investment landscape, with SuperReturn acting as a platform to catalyze this evolution, from regulatory milestones to burgeoning industries like gaming, AI, and fintech.
Final Reflections: A global perspective on Saudi Arabia’s ambitions
Participants in SuperReturn Saudi Arabia 2025 reflected on the insights gained and their wider impact on global markets as the curtain came to a close. A senior executive from a major investment firm stated that” Saudi Arabia’s private capital ecosystem is maturing rapidly. The Kingdom has successfully created a climate in which foreign investors are open to competition and who can co-invest in deals and co-invest with family offices and venture capitalists. Those who have been in the Kingdom for the past 20 years, building relationships, connections and trust, see real real long-term potential” . ,
Strong government support has also made a difference, he added,” The commitment to regulatory transparency, co-investment opportunities, and emerging sectors like circular renewable energy, AI, manufacturing and gaming makes it an attractive destination”.
Looking beyond the Kingdom, the event also sparked discussions on what other nations, including Malaysia, could learn from Saudi Arabia’s transformation. Malaysia can take inspiration from Saudi Arabia’s approach to investment reform because it needs more private equity firms. By aligning policies with long-term investments— such as food security, desalination, hydrogen economy, healthtech, and gaming — Malaysia can attract Saudi’s family offices and scale its own startups to regional, MENA and international markets”, a Norwegian consultant shared.
SuperReturn Saudi Arabia 2025 was more than just a conference; it was also a gathering of the best global PE firms where GPs met LPs to network, exchange ideas, and network with local Saudi pension fund managers and chief investment officers ( CIOs ) from the richest Saudi Family Offices. Countries that want to grow their private markets and become potential future investment hubs could benefit from the Kingdom.
At DNA, Muhammad Adrian Wong serves as a contributing editor.
They’re again. After a break earlier in the new millennium, American private equity firms are increasingly , targeting Japan for their Eastern investment techniques. And the Chinese government and regulators have taken bold steps to welcome them and help make Tokyo Tokyo the world’s first global financial hub.
Back in the late 1990s and early , 2000s , Japan was a favored destination for European alternative property managers. In 1999, for example, Newbridge Capital, co-founded by Texas Pacific Group ( then TPG), took a lot interest in , the online service provider , Livedoor.  ,
And, in 2000, J. Christopher Flowers and Ripplewood Holdings organized a consortium of investors to purchase Japan’s distressed Long Term Credit Bank, renaming it Shinsei ( translation:  , “rebirth” ). After Shinsei went public in 2004, the bargain was commonly regarded as one of the most successful private equity investments ever, both in Asia and in the early days of private equity investment.  ,
But by the time of the Great Financial Crisis, American businesses began to find other Asian nations,  , most notably , China and South Korea,  , more open and welcoming –countries , where owners could achieve greater financial returns with fewer regulation roadblocks.
While American investors retreated, Eastern PE money continued to undertake to Japan. The Eastern PE large PAG continued to build its staff and , investments , in Tokyo. The company bought Universal Studios Japan in 2015 and reportedly exited three years later with , a , five-times , return , on , their purchase.  , PAG ‘s , most significant investment of late , is , the , largest theme park by physical size, Nagasaki’s Huis Ten Bosch.
One industry observer , told Asia Times , that , while, about a decade ago,  , there were a few , of , what he calls , one-off “predecessor transactions”  , by mega , global , funds  , including KKR and Bain,  , Western PE firms , had , largely , remained circumspect , about Japan , – at least  , until recently , when , the country  , made a conscientious effort to win them back by committing to a series of sweeping , regulatory initiatives. These included:
• , Implementation of the Corporate Governance Code ( 2015, revisions in 2018 and 2021 ):  , Introduced to improve transparency, accountability, and decision-making in Japanese corporations, which aligns with international standards, the , code encourages companies to have more independent directors , to provide companies , an outside perspective , and , commitment to shareholder , rights, making Japanese companies more attractive to foreign investors, including PE firms.
The Stewardship Code’s implementation ( 2014, revised 2020 ): This code encourages institutional investors to work with the companies they invest in more, putting an emphasis on shareholder returns and sustainable growth. American PE firms discover working with shareholders that promote the implementation of value-adding techniques.
• , Tokyo Stock Exchange , market restructure ( 2022 ):  , This initiative simplified and restructured the TSE into three new segments: Prime, Standard, and Growth Markets. By highlighting encouraging growth sectors, the restructuring aims to define market dynamics, boost market visibility, and draw in foreign investors.
• , Guidelines for Corporate Takeovers , ( 2023 ):  , This bold action by The Ministry of Economy, Trade and Industry ( METI )  , is designed , to facilitate mergers and acquisitions ( including hostile takeovers ), recognizing them as critical to business revitalization and growth. The 2023 Guidelines aim to improve Chinese people M&, A practices by incorporating principles like shareholders ‘ intentions and the union’s fiduciary responsibility to make the Asian business manage business more visible to international clients.  , This directly benefits private equity firms, which , are a major driver of email M&, A , and as a” white hero” alternative to hostile protesters.
Business observers , today , say the governmental change toward , encouraging , greater foreign investment is also aided by a poor yen and persistently low interest rates.
The , effect on , offer growth has been , remarkable.  , The , Japanese , Private Equity Association and the Japanese Venture Capital Association  , track the number of , private equity , offers in the country as well as the price of , those , purchases. In 2020,  , there were 96 personal equity , deals valued at , 1.2 , trillion renminbi. By 2023,  , the , deal , figures and length had jumped to 125 private equity deals valued at 5.9 , trillion renminbi.
Expediting the re-entry of , western , secret equity , firms , has fallen mostly to FinCity Tokyo, founded in 2019. FinCity Tokyo,  , a public-private , engagement,  , was created to support  , owners understand and improve value in the novel regulatory environment.  , Its , stated aim is , making , Japan’s capital , an “international monetary centre”.
To do so,  , FinCity Tokyo , coordinates with the government of Japan, the Tokyo Metropolitan Government , and 57 , part companies including business associations, major financial institutions, international investors , and , service , services. The , organization , also , provides proper assistance to , financial , firms , seeking to , enter and , operate smoothly , in Japan. Since 2022, it has helped nine global companies, with goods of almost$ 1.3 trillion,  , to successfully activate and engage in Japan.  ,  ,
FinCity Tokyo ‘s , Executive Director Keiichi Aritomo , says one of its tasks is helping international investors secure workers in a tight labour market. The company even covers the costs of hiring new PE investors in search of qualified workers.
The failure of , Japanese business owners , to establish family succession , plans , used to strike Western investors as a stigma,  , but owners now , have come to , welcome , external ownership and professional management by Western buyers. Or, as Aritomo of FinCity Tokyo writes, “private equity firms provide the experience to offset labor shortage with skilled management and productivity gains.”
Bain &, Company, in a report published last spring,  , said , that Japan was the leading deal market in Asia-Pacific in 2023 , with private deals as the dominant strategy, noting “more companies are preferring to go private”. And , the , capital , needed , to complete deals via limited partnerships is plentiful. ” There is increasing LP appetite for Japan”, noted Sebastien Lamy, co-head of Bain &, Company’s Tokyo-based Asia Pacific PE practice.
PE firm , Carlyle, based in Washinton, DC, with investments and operations , globally,  , is , also focused on , Japan.  , In a report last September, the firm pointed to the positive regulatory changes, the attractive valuations, the stable political climate and the continued investment opportunities. ” We are seeing many overseas GPs]general partners ] establish offices in Japan for the first time” , , the firm said.
And, in an analysis last year,  , the management consulting firm,  , McKinsey , &, Company,  , noted that,  , while , Japanese , private equity , is , a growing presence in the financial landscape, the industry still has  , more room , to grow.
Increasingly, western private equity players , have gotten , the message.
Owen Blicksilver is a private equity-focused public relations executive in New York.