Daily Tech Roundup: The Impact of U.S. Tariff Hikes, ByteDance Gets Into the AI Game

The Daily Tech Roundup highlights the significant technology news affecting China and the broader Asian region. Key developments are summarized below:

The U.S. government announced an increase in tariffs on $18 billion worth of Chinese imports, impacting various industries such as electric vehicles (EVs), semiconductors, lithium-ion batteries, and steel. The administration views this move as essential to protect American manufacturers and jobs from being undercut by Chinese competitors. This decision has caused tensions to rise between the U.S. and China, with China's Ministry of Commerce pledging to take robust measures to defend the interests of Chinese companies[para. 2].

Doubao, a generative artificial intelligence (AI) model developed by ByteDance Ltd., the parent company of TikTok, has entered the competitive AI arena in China. Doubao stands out as one of the first AI models in China to obtain algorithm registration in 2023 and offers services at a cost that is as much as 99.8% cheaper than OpenAI's GPT-4 model. According to Tan Dai, president of ByteDance’s cloud computing services unit, Doubao is rapidly becoming one of the most widely used AI models in China[para. 4].

Real estate mogul Frank McCourt, known for previously owning the Los Angeles Dodgers and now serving as executive chairman of McCourt Global LLC, has announced his intention to form a consortium to bid for TikTok’s U.S. operations. This move comes in light of President Joe Biden's policy that compels ByteDance to sell TikTok’s U.S. assets or face a ban, reflecting a more stringent American stance towards China. TikTok’s U.S. assets are estimated to be worth between $35 billion and $40 billion, as per Bloomberg Intelligence analysts[para. 5].

Tencent Holdings Ltd. reported a remarkable 62% increase in earnings, contrasting significantly with Alibaba Group Holding Ltd., whose net income fell by a staggering 86%. The decline in Alibaba's profits is attributed to an unexplained write-down related to losses in its publicly traded holdings, including AI firm SenseTime Group Inc., and increased expenditures to fend off rising competition. These financial results, announced simultaneously by Tencent and Alibaba, emphasize the diverging paths of China’s two leading internet giants in the post-Covid economic landscape[para. 6].

Stellantis NV has decided to collaborate with Chinese electric car manufacturer Zhejiang Leapmotor Technology Co. Ltd. rather than compete against the influx of Chinese EV makers in Europe. Starting in September, Stellantis will begin offering EVs co-developed with Zhejiang Leapmotor in nine European countries, including key markets such as Germany, France, and Italy. This strategic move follows a unique agreement between the two companies aimed at producing and selling EVs outside China. Stellantis CEO Carlos Tavares expressed that this partnership is a pragmatic response to the increasing market share held by Chinese EV manufacturers in Europe[para. 7].

These developments illustrate the dynamic and often contentious landscape of technology, trade, and economic strategies across China and Asia, highlighting significant moves by governments and major corporations in response to evolving market conditions and regulatory environments.