Insurers Prudential, Manulife seal tech alliances amid Beijing’s tightened tax rules

Chinese AI models attract users with lower prices and open models, but generate far less revenue than U.S. rivals. OpenAI and Anthropic's combined ARR is ~$105B, while China's top models total ~$10.5B. DeepSeek, Moonshot, and Z.ai are preparing for IPOs. U.S. restrictions limit China's access to advanced AI hardware.

Alibaba (BABA) raised $10.2B for AI infrastructure, holding $30.7B in cash. Analysts reacted differently: Bernstein cut its target to $165, while BofA raised it to $175. Q1 revenue rose 8.6%, but EBITDA and net income fell. Management aims for 33% revenue growth to achieve positive cash flow. Institutional demand for the stock placement was high, but concerns about dilution persist.

Asian stocks rose Thursday after the Fed's first rate hike since 2023, with futures up 0.6-0.7%. The Fed raised rates to 3.75%-4%, projecting one more hike this year. Treasury yields fell slightly. Asian semiconductor shares were mixed, with SK Hynix down 0.9% and Samsung unchanged. Chinese tech stocks also saw mixed performance. Oil prices eased slightly.

BlackRock Inc. now holds 7.74% of Prudential plc's voting rights, including 7.19% through shares and 0.55% via financial instruments. This disclosure, made mid-September, indicates significant institutional interest in Prudential's equity, potentially impacting liquidity and governance.

China's state media criticized a proposal to slow AI development, calling it a 'Cold War' tactic. Z.AI is raising $5 billion to accelerate AI. Alibaba (BABA) is funding China's AI stack, while Nvidia (NVDA) faces export controls. Alibaba reported strong AI Cloud and Compute Services revenue growth. U.S. officials accused Chinese labs of illicit model distillation, which China denied.

China's local governments face financial crisis due to collapsed land sales, leading to a 20% tax on offshore trusts of tech billionaires. Tech firms are accused of AI distillation, while China revives old UN clauses against Japan. These actions stem from domestic financial pressures and geopolitical tensions.