Thirteen such companies listed in the first half of this year, against eight in the previous three years put together. Between them, A+H and specialist technology deals accounted for more than 70% of everything raised.

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Three of the most expensive private companies in the world are about to go public, all at once. SpaceX, Anthropic, and OpenAI are preparing to list on the stock market at a combined target value of roughly USD 3.6 trillion. To put that in perspective, that figure matches the entire yearly economic output of France, the world’s seventh-largest economy.

The biggest US-listed IPO in history was Alibaba in 2014, which raised USD 21.8 billion when it listed. SpaceX alone is targeting a raise of USD 75 billion, more than three times that record. This is not simply a big week on Wall Street. It represents a fundamental change in how risk is priced, who bears it, and who profits.

Valuations with No Comparison
For any company about to list on the stock market, investors need a way to decide whether the asking price is fair. The standard method is to look at how much revenue a company earns, and compare the listing price to that figure.

This gives you a price-to-sales multiple. A profitable, well-run software company typically trades at seven to eight times its annual sales. Even fast-growing tech startups at their peak rarely exceed 40 times sales.

SpaceX is asking to be valued at roughly 94 to 107 times its annual sales. OpenAI is asking for over 75 times. These numbers have no real precedent among large companies. The justification offered by the investment banks shepherding these listings is the speed at which revenues are growing.

OpenAI, for instance, went from USD 2 billion in annual recurring revenue at the end of 2023 to USD 25 billion by early 2026, a 12-fold increase in just over two years, a pace several times faster than Google or Amazon ever grew.

But here is the problem. Unlike a traditional software company, where serving one more customer costs almost nothing, these AI companies must pay a real, significant cost every single time someone uses their product. Every prompt typed into ChatGPT requires processing on expensive computer chips. The more users ChatGPT gets, the larger that bill becomes. This is structurally much closer to manufacturing than software.

Three Very Different Companies, Three Very Different Problems
Anthropic, the company behind the Claude AI system, is the most financially coherent of the three. It has built its business around large corporations rather than individual users. Its revenue has been growing rapidly, from roughly USD 10 billion annually at the end of 2025 to a reported USD 47 billion run rate by May 2026.

More than a thousand large companies now spend over a million dollars a year on Claude. Critically, Anthropic has been improving the ratio of computing costs to revenue. For every dollar of revenue earned, the compute cost has fallen from 71 cents to 56 cents in recent months. The company is projecting its first profitable quarter for June 2026.

None of this comes cheaply. Anthropic has raised tens of billions in private funding over the past two years, culminating in a USD 65 billion round in May 2026 that valued the company at USD 965 billion. At 21 times its annualised revenue, Anthropic’s asking price is aggressive, but not obviously unreasonable if the profitability trend continues.

OpenAI is in a far more precarious position. The company behind ChatGPT has 900 million weekly users, and revenue growing quickly. But it is burning cash on a scale that is genuinely alarming. For 2026, OpenAI is projected to lose somewhere between USD 14 billion and USD 26 billion depending on how the accounting is done, the difference being whether you count stock-based compensation and other standard costs.

The company’s computing bills alone are expected to hit USD 14 billion this year, and its gross margin is only 33 cents on the dollar. Under conventional accounting, the company will not break even until 2029 or 2030, and the total cash it will burn between now and then is projected at USD 665 billion.

In March 2026, OpenAI raised USD 122 billion in a private round. Just six weeks later, the company’s own chief financial officer privately acknowledged that this runway might not be enough to reach the IPO. The company is going public not as a triumphant success story, but because it has to. If it does not raise capital in public markets, it may run out of money by mid-2027.

SpaceX is the most complex of the three. Its core rocket and satellite internet business, the Starlink division with 10 million subscribers, is genuinely profitable, generating billions in cash each year. But SpaceX merged with Elon Musk’s AI company xAI in February 2026, absorbing a business that was haemorrhaging money, and had taken on USD 16 billion in high-cost debt to fund its AI computer infrastructure.

SpaceX refinanced that debt at a cheaper rate using a USD 20 billion loan, but the effect was to move xAI’s debt onto SpaceX’s balance sheet, bringing its total debt to roughly USD 29 billion. In just the first three months of 2026, SpaceX spent over USD 10 billion in capital expenditure, with more than three-quarters of that going toward AI infrastructure and chip procurement. Its cash reserves dropped by nearly USD 9 billion in a single quarter. The company posted a net loss of USD 4.28 billion in Q1 2026 alone.

Nicolas Owens, a lead equity analyst at Morningstar who published a valuation note on SpaceX ahead of its listing, put it plainly: “We think the company has been significantly overvalued, and investors will have opportunities to buy the stock at more attractive levels after the IPO.”

Morningstar’s discounted cash flow model values SpaceX at USD 780 billion, roughly 55% below its USD 1.75 trillion target.

Contracts That May End Up Looking Different
To justify SpaceX’s valuation to investors, the company’s IPO filing presents a series of large, long-term revenue contracts. In one deal, Anthropic agreed to pay SpaceX USD 1.25 billion per month to use its AI computing facilities. In another, Google agreed to pay USD 920 million per month from late 2026 through mid-2029. Together, these deals would represent tens of billions in committed future revenue.

But both deals contain important catches. Elon Musk himself publicly clarified that the Anthropic arrangement is structured as a 180-day lease, followed by a 90-day cancellation window. Either party can walk away with 90 days’ notice. This means the deal that SpaceX’s filing presents as worth USD 44 billion could in practice be terminated after delivering just USD 7.5 billion.

The Google contract, which the search engine giant described publicly as a short-term bridging arrangement, is listed in SpaceX’s filing as stable recurring revenue. Google also holds a 5% stake in SpaceX worth over USD 100 billion after the IPO, giving it a direct financial interest in making SpaceX’s revenue look as large as possible before the listing.

The gap between how these contracts are described in the filing and what they actually guarantee is a significant problem for anyone trying to assess what SpaceX is genuinely worth.

The Index Trap
Here is where things become uncomfortable for ordinary savers and retirees. Over USD 30 trillion in retirement savings and pension funds around the world is invested in passive index funds – funds that simply buy and hold every company in a major stock market index like the S&P 500 or the Nasdaq-100.

These funds do not make judgements about whether a stock is overvalued. They are legally and contractually required to own whatever is in the index.

Index providers have historically made companies wait before admitting them. The S&P 500 required one year of trading and four consecutive quarters of profit. Nasdaq required three months. But in the months preceding these IPOs, the major index providers quietly changed their rules. Nasdaq cut its waiting period to 15 trading days. FTSE Russell and CRSP cut theirs to five trading days. MSCI reduced it to 10. The S&P 500 is now debating dropping its profitability requirement entirely.

These changes mean that within days of listing, SpaceX, OpenAI, and Anthropic could be added to the world’s major indexes. Once they are, every passive retirement fund that tracks those indexes will be forced to buy their shares, regardless of price, regardless of losses, regardless of governance structure. Bloomberg Intelligence estimates that passive S&P 500 funds alone may be required to absorb nearly 20% of SpaceX’s public float within six months.

Selling Into the Wave
SpaceX shares are expected to start trading on the stock market on June 12.

But the company is floating only 5% of its total shares, around USD 75 billion worth. That means a very small number of shares will be available to buy. If passive index funds are forced to purchase hundreds of billions of dollars’ worth of a stock with limited supply, the price will go up mechanically, not because the company is worth more, but simply because the demand is forced.

SpaceX’s pre-IPO investors, venture capital firms, early backers, and insiders who bought in when the company was worth a fraction of its current price, have arranged a sophisticated schedule for selling their shares into exactly this wave of forced buying.

Rather than the traditional six-month lockup, which prevents insiders from selling immediately after an IPO, SpaceX has set up a rolling system that releases insider shares in tranches timed to coincide with the peaks of passive fund buying. The net effect is a direct compelled retirement savings buy in at the top, as private investors cash out.

Chad Anderson, founder of the venture capital firm Space Capital and an early SpaceX investor, gave a candid indication of intent when asked on CNBC whether his firm would sell shares at the first lockup expiration. “We’ve been invested for almost 10 years,” he said, before adding, “it’s our business to return capital to investors.”

Who Controls What
Even after buying shares, public investors will have almost no say in how these companies are run. SpaceX plans to issue two classes of shares. Ordinary public investors receive one vote per share. Elon Musk and a small circle of insiders will hold shares carrying 10 votes each. The result is that Musk, despite owning roughly 42% of the company’s equity, will control between 79% and 85% of the votes. He can only be removed as CEO by himself.

Under Nasdaq rules, this concentration of control qualifies SpaceX as a ‘controlled company’, which legally exempts it from requirements to have an independent board, independent compensation committee, or independent director nominations.

Professors Lucian Bebchuk of Harvard Law School and Kobi Kastiel of Tel Aviv University, writing on the Harvard Law School Forum on Corporate Governance in May 2026, acknowledged the commercial appeal while flagging the structural risk to ordinary shareholders: “SpaceX could well have assets with very high value and exceptional growth prospects, and investor enthusiasm about it might thus be fully understandable. However, SpaceX also has poor governance arrangements, which would have considerable adverse effects on public investors.”

Additionally, SpaceX’s charter requires disputes to go to private arbitration rather than the courts, making class-action shareholder lawsuits impossible. Under Texas corporate law, where SpaceX is now incorporated, any shareholder wishing to bring a lawsuit on behalf of the company must first own at least 3% of its voting shares. At a USD 1.75 trillion valuation, 3% of SpaceX is worth over USD 50 billion. No pension fund in the world holds that much. In practice, only Musk himself could sue Musk.

The Transfer of Risk
What is being marketed as the democratisation of access to transformative technology is, in financial reality, the offloading of venture capital risk onto public pension funds. The private investors who funded these companies over the past decade face a capital treadmill they can no longer sustain on their own. AI infrastructure is too expensive, the losses too large. The public markets, equipped with trillions in forced buying power, are the exit ramp.

For patient investors willing to wait out the post-IPO frenzy, Morningstar’s Owens offered a measured note of possibility in his published analysis. “We think long-term investors eager to participate in SpaceX’s future endeavours and potential success will have opportunities to do so with more margin of safety than the initial offering is likely to provide.” The best entry point may come precisely when insiders are selling, and the forced buying has run its course.

The rules have been changed to speed up their entry. The governance protections have been stripped to prevent accountability. The contracts have been packaged to look more durable than they are. What ordinary savers are being offered is the bill, dressed up as an opportunity.

The post IF Insights: Is Wall Street engineering stock market’s biggest risk transfer? appeared first on International Finance.

UK’s Technology Minister Ian Murray said data of all members of the database was found listed for sale on the website Alibaba. The charity that runs UK Biobank informed the government about the breach, he said. The information did not include names, addresses, contact details or telephone numbers.

He said it could include gender, age, month and year of birth, socio-economic status, lifestyle habits, and measures from biological samples.

The Biobank, which has gathered the intimate details, including whole body scans, DNA sequence and medical records, from hundreds of thousands of volunteers over two decades, has resulted in over 18,000 scientific publications, and has been used to improve the detection and treatment of dementia, certain cancers, and Parkinson’s.

They were recruited between 2006 and 2010 and were between 40 and 69 years old.

UK Biobank said it was investigating the incident and thanked the UK and Chinese governments, as well as Alibaba, for support and cooperation.

“We understand that the existence of these listings, even temporarily, will be concerning to you. We want to reassure you that all the data are de-identified; they do not contain any personally identifying information (such as names, addresses, dates of birth, and NHS numbers),” Chief Executive Professor Sir Rory Collins said in a message to participants, BBC reported.

In a letter to volunteers, Sir Rory said the data that was the subject of the incident had been shared with researchers at three institutions, but was ’quickly’ taken down by Alibaba after the UK and Chinese governments intervened, and appeared to be a ’blatant breach of the contract signed by these academic institutions’. He added that they, along with the individuals, had their access suspended.

Alibaba has not officially issued a statement regarding this matter.

Professor Naomi Allen, the chief scientist of UK Biobank, said, “Ultimately, it is the fault of these rogue researchers. They are giving the global scientific community a bad name, and we are extremely cross about it. We are very sorry to all of our half a million participants that this has occurred, and we appreciate their concerns.”

One Biobank volunteer, Guardian columnist Polly Toynbee, said she was not concerned by the data leak.

“Biobank volunteers passionately believe that what they’re doing is incredibly valuable, that having this huge bank of information and data helps cure diseases, helps find causes of diseases. I don’t think many people will be very worried because that information is anonymised. Maybe they could sell details of particular cases, but it won’t be with names or addresses or anything that leads back to particular people,” she said.

‘China Data Theft Scandal’

Following the incident, Sir Rory said several measures had been put in place, including temporarily suspending access to its research platform while a ’strict limit’ was introduced to the size of files that could be extracted. The organisation will also monitor file exports ’on a daily basis for any suspicious activity’.

He added that there would be a ’full and forensic board-led investigation into this incident’.

Liberal Democrats technology spokeswoman Victoria Collins called it a ’profound betrayal’, and asked the government to demand answers from UK Biobank in response to Ian

Murray’s statement in the House of Commons. But Murray said the data being put online had not come about as a result of a ’leak or cyber-attack’.

“This was a legitimate download by a legitimately accredited organisation,” he said.

That is the problem that has been identified.

Deputy leader of Reform UK, Richard Tice, called it a ’China data theft scandal’.

Tice said, “The UK taxpayer funded approximately £200m into this UK Biobank, which was created by the UK taxpayer, and now it has been stolen by China. Can the minister confirm that our generosity actually will not be abused by those Chinese researchers, and that UK Biobank should preclude and exclude them for the future, in order to ensure that this state of theft comes with sanctions?”

Breach May Undermine Trust In UK Biobank

Professor Elena Simperl, from the department for informatics at King’s College London, said the data breach was ’not a moment to point fingers, but to take seriously what it tells us about national data infrastructure’, adding that initiatives such as the UK Biobank are ’absolutely essential’ for driving innovation in health and life sciences.

Simperl said the costs of maintaining infrastructure for flagship data stewardship projects like this are too often an afterthought, but that the data breach might have a ’wider consequence’ in damaging the confidence of people taking part in initiatives such as the Biobank.

Graeme Stewart, head of public sector at cybersecurity firm Check Point Software, said, “It only takes a relatively small drop in participation to start affecting the quality and reliability of research at scale.”

An Information Commissioner’s Office spokesman said, “Medical data is some of the most sensitive information that people have, and people expect it to be handled carefully and securely, but organisations also have a responsibility under the law. UK Biobank has informed us of an incident, and we are investigating.”

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The decision, which surprised many customers and even suppliers, marked a dramatic turning point for one of China’s hottest pandemic-era shopping trends. Just a few months earlier, in March, Alibaba Group had quietly closed its own community group-buying arm, Taocaicai.

Xingsheng Youxuan, a startup that pioneered the model nationally, scaled back to operating in only three provinces, down from 18, a startling fall for a company valued at $5 billion at its funding peak in early 2021. Today, Pinduoduo’s Duoduo Maicai is the last major platform still offering group-buy grocery deals across China.

This wave of exits by heavyweights like Meituan and Alibaba underlines the rapid rise and fall of community group buying. During the height of the COVID-19 pandemic, a unique kind of online shopping emerged as the darling of China’s tech industry.

Dubbed “community group buying,” the model was essentially Groupon-meets-Instacart, where neighbours or friends pooled their orders for everything from apples to iPhones to get bulk discounts and cheaper delivery.

By consolidating dozens of grocery orders and dropping them at a single pickup point, platforms hoped to crack the conundrum of low-margin online grocery sales. The approach proved especially popular for daily necessities like produce and rice, allowing bargain-hungry consumers to save a few yuan on each item.

At its peak, community group buying attracted billions in investment and millions of users, promising to revolutionise how less-affluent communities shopped. However, now these platforms are vanishing one by one, casualties of shifting consumer habits, intense competition, and unsustainable economics.

From lifeline to obsolete model

The COVID-19 pandemic was the crucible in which community group buying truly took off. Starting in 2020, as Chinese cities cycled through strict lockdowns, going to the local wet market or supermarket became impossible for weeks at a time.

Tech companies seized the opportunity to digitise everyday necessities. In metropolises, well-heeled residents could pay for on-demand grocery delivery to their doorstep. But in less-developed regions and smaller cities, millions found a lifeline in pooling grocery orders with neighbours for next-day pickup.

Joining a WeChat group chat run by a local “tuanzhang” (group leader), residents could browse daily deals on vegetables, eggs, or even toys, place orders collectively, and then wait for a bulk delivery to arrive at a nearby garage or convenience store. It was a socially driven solution to last-mile logistics: cheaper than standard delivery and a convenient alternative when venturing out was risky.

Rather than dispatching individual couriers to thousands of scattered homes, companies could deliver in bulk to one location, cutting costs to a fraction of normal last-mile fees. In early 2020, as interest surged, nearly every tech titan piled in.

Meituan launched Meituan Youxuan (Select) and rapidly expanded to hundreds of cities. The Meituan Select app offered discounted groceries for next-day pickup. Pinduoduo shifted a sixth of its employees into its new Duoduo Maicai division to fend off upstart rivals. Didi Chuxing, the ride-hailing firm, tried its hand with Chengxin Youxuan, and JD.com spun up Jingxi Pinpin to chase the trend.

By late 2020, recruitment ads for group-buying operations were everywhere, and venture capital flowed freely into the sector. One leading platform, Hunan-based Xingsheng Youxuan, even attracted investments from Tencent and others, reaching a valuation of about $5 billion amid the frenzy.

Yet the very forces that enabled this boom sowed the seeds of its decline. By 2023, China’s pandemic restrictions had lifted, and daily life was reverting to normal. At the same time, the major players had built dense courier networks and “instant delivery” services that promised groceries at your door in under 30 minutes.

Meituan, for instance, leveraged its army of scooter drivers to offer near-immediate delivery from local warehouses and supermarkets. Once consumers got a taste of that convenience, the idea of waiting until the next day and walking to a pickup point lost its appeal.

“Now, instant retail is also coming to the lower-tier cities. People could get groceries for maybe the same price as community group-buying, but within an hour, instead of waiting a day and having to pick them up from a community group leader. We have arrived at a time when it is almost an old model,” observes Ed Sander, a China tech analyst at Tech Buzz China.

In other words, the very audience that group buying brought online, including older shoppers who prized thrift, was being lured away by faster, easier options. The day it announced its group-buy drawdown, Meituan pointedly stated it would double down on its 30-minute instant delivery grocery business. In just a few years, an innovation born out of lockdown necessity became largely obsolete, replaced by a more convenient evolution in online retail.

Online grocery’s rise & fall

One of the most intriguing aspects of the group-buying craze was the rise of the community group leaders, or tuanzhang. These were the on-the-ground organisers who made the whole system work. Often a neighbourhood busybody, a small shop owner, or a stay-at-home mom looking for extra income, the tuanzhang acted as the human bridge between tech platforms and residents. The term literally means “regimental commander,” a tongue-in-cheek reference to marshalling one’s neighbours for collective action.

Companies recruited thousands of such community leaders, enticing them with small commissions and flexible hours to promote group buys in their area. Armed with a smartphone app and plenty of personal connections, a tuanzhang would rally residents to place orders, often by posting daily deals in WeChat groups or handing out flyers. In exchange, they earned a cut of the sales, usually a few per cent, and sometimes perks like free produce for hitting volume targets.

Beyond the political and social critiques, the lack of financial sustainability was the fundamental challenge that doomed community group buying. Even on paper, selling produce and staples is a low-margin game; add the costs of handling and delivery, and margins slim down further. Group-buying promised to solve this by aggregating orders, but in practice, it introduced a host of new costs and complications. For one, relying on thousands of loosely affiliated community leaders made it hard to control service quality or standardise operations. Vegetables sometimes spoiled in the summer heat, waiting on a volunteer’s porch; orders got mixed up by overworked group leaders; customer complaints piled up.

Moreover, to grab market share, companies engaged in a subsidy arms race, pouring money into discounts for customers and generous commissions for group leaders, effectively trading short-term losses for user growth.

By late 2021, the combined gross merchandise value (GMV) of Meituan Select, Duoduo Maicai, and Taocaicai had reached an impressive ¥220 billion. Yet that amounted to less than 0.5% of China’s total retail sales, a tiny slice of the market considering the scale of investment. The truth was that group buying, while popular in pockets, never became a dominant mode of shopping, and the costs to run it far outweighed the revenues.

Even deep-pocketed tech titans found these economics untenable. Startups in this sector burned cash at a blistering pace, and many fizzled out despite backing from big-name investors. Didi’s Chengxin Youxuan folded after failing to turn a profit. JD.com’s Jingxi Pinpin was drastically scaled back by 2022. Alibaba’s Taocaicai and Meituan’s Youxuan each reportedly lost billions of yuan attempting to conquer the grocery scene.

Meituan never broke out the separate financials for its group-buying unit, instead folding it under the ‘New Initiatives’ category in earnings reports. But that segment alone swallowed nearly $1 billion in losses in 2024. Ultimately, no amount of volume could make ultra-cheap cabbage and eggs profitable when layered with delivery costs and commissions, at least not under the model of the past few years.

For the frontline tuanzhang who hustled to make group buying work, the downturn has been palpable.

“Our customer pool has gotten so much smaller, and the commissions just aren’t what they used to be,” says Lingluo, who runs a small print shop in Guangdong province and has been moonlighting as a community group leader since 2022.

At the peak of the craze in 2022- 2023, she had nearly 500 neighbours actively ordering through her, earning about ¥4,000 a month (around $600) in extra income. But now, in mid-2025, her WeChat ordering group has only 280 members left, and on a typical day, merely 10 or so place orders. The real blow came in May 2025 when Meituan slashed the commission structure for group leaders in an effort to stem losses.

Disheartened by the meagre pay, Lingluo has largely stopped promoting orders and keeps her store closed most of the time, choosing to conserve her energy.

The only reason she hasn’t quit being a group leader entirely, she admits, is to maintain access to cheap groceries for her own household, a motivation many remaining tuanzhang share. As long as she stays registered, she can buy staple foods at the platform’s low prices even if customer demand has dried up.

In the meantime, China’s digital retail landscape has evolved. Meituan and other tech firms have pivoted their attention to premium on-demand grocery delivery, pouring funds into coupons and promotions to entice customers into using their 30-minute services.

Why wait until tomorrow for a bulk order, they argue, when you can have fresh produce on your doorstep by the time you finish watching an episode of TV? The bet is that once consumers grow accustomed to the instant gratification of near-immediate delivery, few will want to return to the old ways.

It’s a bet that seems to be paying off in the post-pandemic era. China’s shoppers, even those in smaller cities, are rapidly coming to expect convenience alongside low prices. And the tech companies, after the bruising price wars of group buying, are now in a race to win on service and speed.

In fact, the habit of buying daily necessities online has only deepened. Consumers who first learnt to shop for food via group purchases during lockdowns have moved on to other digital grocery channels rather than reverting to traditional markets.

Even elderly shoppers, once intimidated by e-commerce, have embraced the convenience. Some now order groceries on on-demand apps three times a day so that each meal’s ingredients are fresh. It’s a remarkable shift in consumer behaviour that few could have imagined pre-pandemic.

The post China’s group-buying boom faces a bust appeared first on International Finance.

The dollar tranche included 30-year, 10-year, and 5-year bonds. A term sheet obtained by Reuters showed that the final pricing was 25 basis points lower than what was initially announced to investors.

There were three different coupon rates on the dollar bonds: 4.875% for the five-year bond, 5.25% for the 10-year bond, and 5.625% for the longer-dated bond.

Additionally, the pricing of offshore yuan bonds was much tighter for the three-year, five-year, 10-year, and 20-year tranches.

Alibaba plans to use the notes’ net proceeds for share repurchases and other general business uses, such as paying off its offshore debt.

The deal is the largest corporate bond in Asia-Pacific in 2024 and the first time the company has entered the dollar bond market since 2021, according to data compiled by LSEG.

After finalising the deal, book-runners reported that global investor demand for the dollar bonds reached USD 14.06 billion.

According to the message, investors from Asia-Pacific purchased the majority of the dollar bonds in each tranche.

Reuters had earlier reported that the US dollar tranche would consist of 5.5-year, 10.5-year and 30-year bonds, citing a term sheet. The report said Alibaba was also working on a 3.5-year, five-year, 10-year and 20-year offshore yuan tranche.

Despite a 2% decline in Hong Kong trading, the company’s shares are up 11.4% so far this year.

Meanwhile, Alibaba unveiled an artificial intelligence-powered search engine for small businesses in Europe and the Americas to source supplies.

The latest innovation is seen by investors as an attempt to leverage ChatGPT-like tech to increase sales. Initial tests showed businesses’ purchase intent using the new tool increased by 40% versus traditional search engines, according to Kuo Zhang, president of Alibaba.com and vice president of Alibaba International.

“The product is called Accio, after the spell used in the Harry Potter fantasy series for summoning objects. The initial version is web-based and supports English, German, French, Portuguese and Spanish,” the Chinese tech conglomerate informed the media further.

“With a few text or image prompts, businesses can use Accio to find wholesale products — including analysis on their popularity with consumers and projected profit,” reported CNBC which was present during the product demonstration.

Some examples shown during the Beijing event included helping a sports entrepreneur build a line of pickleball products. The AI-powered search tool also listed several procurement options for the business to discuss directly with each supplier. The tech reportedly uses generative AI from Alibaba’s Tongyi Qianwen large language model.

Accio uses data from 50 million businesses on Alibaba International’s platform, and publicly available industry information, apart from incorporating one billion product listings and documents covering industries across more than 100 markets from Alibaba.com, the company’s business-to-business platform which sells to companies outside China.

Alibaba’s international arm in October 2024 announced an updated version of an AI translation tool to help merchants reach customers in other countries, while claiming the tech’s translation capabilities beat that of Google and ChatGPT.

Going all guns blazing on the AI front, Alibaba also played a crucial role behind Chinese augmented reality (AR) start-up Rokid launching its latest product: a new pair of lightweight smart glasses, as the tool reportedly employs the tech conglomerate’s large language model (LLM).

The start-up, founded by former Alibaba employee Misa Zhu Mingming, announced the LLM-equipped AR glasses on November 18. The company has chosen Alibaba’s LLM as it has recently been ranked highly in global performance benchmarks. The glasses aim to compete with Meta head-on, eyeing profitability in 2025.

The post Alibaba makes biggest corporate bond offering in Asia-Pacific appeared first on International Finance.

PIF bought 153,500 shares in Alibaba in the first quarter of 2024, increasing its stake in the Chinese company by 11%, the South China Morning Post (SCMP) reported based on the Form 13F filing with the United States Securities and Exchange Commission.

PIF’s holdings in two other Chinese American depositary receipts, Pinduoduo and BeiGene, were unchanged from the previous quarter, the news report stated further.

According to the reports, PIF has boosted its position in Alibaba for the second time in less than a year. At the end of the quarter, the sovereign wealth fund held 1.61 million shares in the e-commerce giant, nearly tripling its stake since it initiated a position during the September quarter of 2021, the filings showed.

PIF held a total of 38 stocks worth USD 20.5 billion at the end of the 2024 first quarter. The same 13F filing revealed that PIF had also cut down on its United States stocks in the first quarter of the year, slashing the value of the direct holdings in those equities by nearly half. PIF, which held United States-traded stocks with a value of USD 35 billion by year-end 2023, saw its holdings down to USD 18 billion as of March 31, according to a Bloomberg report.

The Bloomberg analysis of the 13F revealed the Kingdom has cut down on its various tech stocks, which included stakes of USD 600 million or more in each of Amazon, Microsoft, and Salesforce. The direct holdings were replaced with call options on a lesser number of shares.

The news agency further stated about PIF dropping a USD 602 million stake in BlackRock, a USD 942 million investment in Carnival Corporation and a USD 757 million position in Booking Holdings.

As per the analysts, PIF increasing its holdings in Chinese stocks can be seen as a move marked with perfection, as the stock market in the world’s second largest economy has reportedly gained momentum. The MSCI China Index has surged nearly 28% since January 2024, restoring over USD 2 trillion of value to Chinese companies listed on the mainland, in Hong Kong and New York. Alibaba has rallied 24% during the period.

“Investors have relinquished the wait-and-watch approach [for Chinese equities] in favour of building exposure on incremental signs of easing and wiped out the underweight allocation from prior months,” Bank of America strategists including Ritesh Samadhiya said in a market note, citing a survey of 134 regional fund managers who oversee USD 301 billion of assets.

Beijing’s policy support in recent weeks has provided another “shot in the arm,” boosting risk appetite in China’s markets, analysts noted further.

The post Saudi wealth fund increases holdings in Chinese stocks, gains from Alibaba windfall appeared first on International Finance.

The SoftBank Vision Fund, the largest technology investment fund in history, was established in 2017 with an astounding USD 100 billion capital commitment, making it one of SoftBank’s most noteworthy projects. The Vision Fund seeks to invest in high-potential technology companies, with a focus on those operating in fields like biotechnology, robotics, Internet of Things (IoT), artificial intelligence, and robotics. SoftBank has made large investments in well-known tech firms like Uber, WeWork, Slack, and Alibaba through this fund.

As part of its investment strategy, SoftBank frequently places audacious and calculated wagers on cutting-edge trends and disruptive technologies, which can occasionally result in both notable failures and spectacular wins. The company’s investment strategy is distinguished by its readiness to assume sizable risks in the interest of sustained innovation and growth.

Through its subsidiary SoftBank Corp, SoftBank engages in business outside of investments in the telecommunications sector. SoftBank Corp is a prominent mobile network operator in Japan, offering a comprehensive range of fixed-line, broadband, and mobile telecommunication services.

SoftBank has encountered difficulties despite its achievements, most notably concerning its investment in WeWork, which ran into serious problems with corporate governance and finances. SoftBank has also had to re-evaluate its investment strategies and portfolio management as a result of the COVID-19 pandemic’s effects on a few of the companies in its portfolio.

SoftBank Group continues to be a powerful force in the global business scene. It does this by using its financial resources, strategic vision, and technological know-how to influence many industries and spur global innovation.

The brain behind this successful venture is Masayoshi Son, a Japanese billionaire technology entrepreneur, investor and philanthropist. He is also the founder, representative director, and corporate officer of the company.

Who is Masayoshi Son?
• Born in 1957 on the island of Kyushu, Japan, Masayoshi Son studied computer science and economics at the University of California, Berkeley
• At the age of 19, he was inspired by a microchip he saw in a magazine and became convinced that computer technology would start the next industrial revolution
• Masayoshi Son, while still in college, initiated his first business venture by developing an electronic translator with faculty assistance, ultimately selling it to Sharp Corporation for USD 1.77 million
• After completing his degree in 1980, he started a video game company called Unison World in Oakland, CA.
• Masayoshi Son later sold the company to an associate for close to USD 2 million, and the company was eventually acquired by Kyocera
• In 1981, he founded SoftBank Group, which focused on advancing disruption and technological innovation
• Masayoshi Son promised to help the victims of the 2011 Tohoku earthquake and tsunami by donating 10 billion yen (USD 120 million) and his remaining salary until retirement in 2011
• In 2013, he was placed 45th on the Forbes magazine’s list of the World’s Most Powerful People, and in the 2018 ranking, he was placed in the 55th position
• As of 2023, Masayoshi Son ranks 69th on Forbes’s list of The World’s Billionaires and is at 239 on the Bloomberg Billionaires Index
• According to Forbes, as of 2024, Masayoshi Son’s net worth is around 2,870 crores USD

Leveraging AI

SoftBank, Nvidia, Microsoft, and other tech sector stakeholders announced that they have joined forces to create an alliance focused on leveraging artificial intelligence to optimise the use of mobile base stations.

The AI-Ran Alliance’s members want to collaborate to avoid network bottlenecks and encourage the usage of generative AI-powered smartphone apps.

The initiative was introduced in Spain during the Mobile World Congress, an international trade show for the telecom sector. The team will use artificial intelligence (AI) to process data at mobile base stations instead of in the cloud, which will help save energy and reduce latency in communications.

SoftBank President and CEO Junichi Miyakawa stated in a statement that the alliance “has been formed with the vision to spearhead the advancement of society through AI innovations, particularly from the telecom industry.”

The post Business Leader of the Week: Meet Masayoshi Son, founder of SoftBank Group appeared first on International Finance.

Jack Ma used these constant rejections to forge a stronger foundation for Alibaba Group Holding, which he co-founded in 1999. Additionally, it gave him the desire to think strategically and unconventionally, enabling him to transform Alibaba into a Chinese tech conglomerate with a market capitalization of $284.35 billion as of January 2023.

Market observers were not surprised by Jack Ma’s announcement that he would relinquish control of Ant Group, a unit of Alibaba. This action will appease Chinese authorities, who have been increasing their pressure on the corporation to reorganize its intricate organizational structure as per the requirements of the People’s Bank of China.

The business claimed it was changing its ownership structure to guarantee that “no shareholder, alone or jointly with other parties, will have control over Ant Group.” To “further enhance the stability of our corporate structure and sustainability of our long-term development,” the statement stated Jack Ma will now only control 6.2% of the voting rights.

After dealing with opposition from Chinese regulatory officials for over two years, the billionaire had debated separating the fintech from Alibaba for some time.

The situation reached a breaking point in November 2022 when officials abruptly stopped Ant Group’s first public offering (IPO), valued at over $200 billion. This was put on hold after China’s financial watchdogs cracked down on Chinese stocks listed on US exchanges.

So how did China’s most well-known and flamboyant corporate icon lose favour and end up on the government’s bad books?

A tale of rags to riches
Jack Ma, born in 1964 in Zhejiang, China, was an inquisitive child from an early age. However, when he was a teenager and eager to study English, he worked as a tour guide for foreign tourists to improve his command of the language since he believed this was a more effective method than memorizing words from a book.

Later, he attempted to enrol at Hangzhou Teachers College by taking the entrance exam but failed twice. However, Jack Ma didn’t give up, and in 1984 he was accepted into the college. He received his English degree four years later, and from then, he taught English at Hangzhou Dianzi University until 1993.

It is nearly impossible to hold a self-starter down for an extended time. So by starting Haibo Translation Agency in 1994, Jack Ma used his English proficiency to offer translation and interpreting services.

A year later, while on an official trip to the US on behalf of the city of Hangzhou, he observed Americans using the internet to fulfil most of their demands, including communication, shopping, informational needs, and entertainment.

Jack Ma came home and established China Pages in 1995, an online directory for local businesses looking for international clients, after being astounded by how technology could change lives, livelihoods, lifestyles, and the economy. Many referred to it as China’s first indigenous Internet start-up. He, however, departed it after only two years and went on to lead a government-backed Internet business until 1999.

He created Alibaba Group Holding in 1999 as a B2B website to aid in transactions between small firms when the impulse to go it alone won out. Jack Ma upset Applecart business by charging users a small cost to become verified as trustworthy vendors on the network and an additional fee for selling to consumers overseas.

When he once visited a bank, the employees refused to process an online transaction because they claimed it was a financial product. This caused the former teacher to become a technocrat, and he subsequently stated in a lecture, “If a Chinese company didn’t go into payments, some overseas company would come to do it, and we’d end up the victims. So I went to hear Clinton speak about the importance of leadership when I was at Davos. That meant doing something brave that you believe in, which won’t harm your country or your consumers. Then I had my realization, and decided to give it my all.”

As a result, Alipay began operating as a third party in online transactions in 2003. With 1.3 billion users as of 2013, it had eclipsed Paypal’s 377 million users to take the top spot among mobile payment platforms worldwide, ahead of Apple Pay’s 507 million users and Google Pay’s 421 million.

Contrary to trend
Jack Ma focused on the 2003-launched consumer-focused platform Taobao after seeing the success of Alibaba’s B2B website. Severe Acute Respiratory Syndrome (SARS) broke out in China that year, almost decimating the nation’s economy, as the government had to put lockdown to stop the spread of the disease.

His never-say-die attitude showed itself once more. Despite challenges faced by China, he and a core group of techies launched the site after finishing its development at his apartment. This decision turned the company’s fortunes around.

As more Chinese people shifted to online purchasing due to the self-imposed quarantine, Taobao established a solid foothold in the e-commerce industry. By 2006, it had surpassed eBay as the most popular e-commerce site in the nation, and by 2020, it was generating $56 billion in yearly revenue from over 600 million members.

Investors stream in
The expansion of Alibaba was not unnoticed. The year 2005 saw Yahoo investing $1 billion in the business, acquiring a 40% interest, while Softbank acquired another 30% interest. This gave the two firms a place at the table of the internet behemoth that was now well-known throughout China. Jack Ma had finally made it to the big leagues, thanks to this coalition, earning him the title of “China’s New Internet King” in the New York Times.

With the help of these favourable conditions, the e-commerce business raised $1.5 billion when it went public in 2007 on the Hong Kong stock exchange. However, the Chinese central bank published new third-party Internet payment provider regulations in 2010. It stated that these entities needed to apply for and obtain licenses from the People’s Bank of China to continue operating.

Jack Ma kept a 46% share in the financial services company and split off Alipay into a separate company. This led to a protracted dispute with Yahoo, which asserted that his decision to divide the company without informing it beforehand resulted in a sharp decline in the value of Yahoo’s stock.

Despite these developments, visionary entrepreneur-backed Alibaba applied for a $25 billion IPO in the US in 2014. However, there needed to be more clarity regarding the connection between Alibaba and Alipay, and concerns surfaced on how the parent firm would profit from the public offering.

Later, the Chinese conglomerate clarified in its revised draft prospectus that Alibaba no longer had “an ownership interest in or control over Alipay or its current parent company.” In addition, it acknowledged that Jack Ma still owned 46% of Small and Micro Financial Services firm (SMFSC), the parent firm of Alipay.

The Ant continues to march
Jack Ma gained recognition over time as the person who built a tech behemoth and the best brand representative for contemporary China. From former German Chancellor Angela Merkel to twice-elected American President Barack Obama, he embodied the nation’s significant technological advancements and economic prosperity.

The administration at home, though, was keeping a close eye on his expanding political views. Jack Ma attended the Bund Summit in October 2020, and things started going awry for him. In his address, he attacked the Chinese regulatory market, saying, “Good innovation is not afraid of regulation, but is afraid of being subjected to yesterday’s way to regulate.”

The Chinese billionaire may have been attempting to be humorous when he compared the nation to a “pawn market” and accused it of adhering to outdated business practices. But the dictatorial government was anything but amused.

Jack Ma’s comments were an outright rebuke of Chinese President Xi Jinping’s determination to end monopolistic activities to “prevent the disorderly expansion of capital.”

In retaliation, the Chinese antitrust authorities investigated Alibaba’s practice of pressuring vendors to sell exclusively through its platform. Ant Group representatives were called in for a meeting to discuss consumer rights and competition. Additionally, Alibaba found itself in the crossfire of the ongoing geopolitical verbal battle between China and the US, which has been more heated after COVID’s breakout, as US officials began closely scrutinizing Chinese businesses’ listings on their bourses.

To reach investors in mainland China for Ant Group’s initial public offering (IPO), the e-commerce giant said it would add a primary listing in Hong Kong to its New York presence. This came after the e-commerce behemoth paid a massive $2.8 billion fine due to regulatory scrutiny in China.

Jack Ma stayed out of the spotlight after the reaction from the administration and disappeared for a while. Then, according to Reuters, the Chinese financial authorities cautiously approved Ant Group’s request to resume its dual public listing in July 2022.

The man, the prophet
Jack Ma continues to be a visionary in the business realm, and players in the industry and politicians hold him in high regard despite his blunders in the political sphere.

He talked more about wanting to do more than manage a business as he met more fellow thinkers from diverse streams. He had a strong love for philanthropy and innovation, focusing on education in rural China as a nod to his earlier career as a teacher.

“In the future, there will be a competition for creativity, imagination, learning, and independent thought rather than for information. If you think like a machine, trouble will eventually arise,” Jack Ma said.

He also stated in one of his talks that after 20 years of making people more like machines, robots will resemble people in the next 20 years.

Jack Ma formally resigned from his position as Alibaba’s executive chairman in 2019. In an open statement announcing his departure, he said, “I still have many goals to pursue. Those who know me well understand that I dislike being idle. As I am still young and the world is vast, I want to experience new things.”

His decision to relinquish control of Ant Group is just another step in his departure from the vast empire he has created, leaving behind a lasting legacy.

The post Jack Ma: China’s visionary entrepreneur appeared first on International Finance.

The use of digital banking is growing enormously. Does it mean this is the end of traditional banking?

The answer is Yes, and these financial institutions need to be proactive, to ensure their survival. Every industry experiences the standard life cycle phases of growth, maturity, and decline, and the traditional banks, after reaching their maturity phase till the early 2000s, are standing at the declining stage. Every Industry should think of delaying the decline stage and in the case of traditional banking it has become crucial to take immediate action. In order to maintain relevance in the tech-driven 21st century, they must rethink and reshape their entire ecosystem.

Digital Transformation & Service Innovation Need To Be Quickened Up

Legacy banks are often known for their slow production and reform/transformational measures and this applies to the aspect of going digital too. Their online presence has mostly been restricted to providing the most fundamental services like bill payments, transfers, deposits, and credit applications.

As a result, banks are unable to fully benefit from next-generation IT technologies. In order to cope with the digital era, traditional banks need to come up with more innovative and customer-friendly solutions and personalised services like providing short-term and long-term loans, mortgage services, automobile financing etc. These financial institutions need to walk those extra steps, rather than just deploying fintech solutions like AI-powered chatbots, virtual assistants, data and threat analytics.

Yes, a report from the Massachusetts Institute of Technology (MIT) states that going digital can reduce the banks’ operational costs by a massive 60–80%, but things like data analytics should be stretched to their limits, in order to understand the customers’ financial priorities and offering them personalised products/services as per their requirements. It’s not like the banks are not doing the above-mentioned things, but they have to accelerate their efforts, given the current economic headwinds the world is in.

A recent Moody’s report has found that the banks in Southeast Asia have progressed significantly in their digital transformation journey and are now better placed against fintech. While the report mentioned a sharp spike in digital adoption of customers from these banks, new customer acquisitions across retail and small and medium businesses products have also increased significantly.

Remember, fintech became popular with SMEs as the latter used to face rejections from legacy lenders, in terms of acquiring capital. This report can show the roadmap for the banks in other parts of the world on how to onboard customers from specific socio-economic segments, understand their requirements and offer products/services based on those needs.

Diversity Still Matters

Yes, 21st-century customers do not want to stand in long queues, submit tedious documents or deal with complex systems and they prefer simple ‘register and get the services’ kind of mechanisms. These customers are now flocking to third-party applications (Fintech companies like Paytm, and Google Pay) which provide enriching customer experiences at the click of a single button.

While the legacy banks need to re-evaluate their strategy, they also need to maintain the factor called ‘diversity’ in their customer services.

A 2018 study from tech giant Samsung found that while 75% of consumers aged 18-29 use mobile banking, it decreases to 29% for the ones above 60. The bank visits range from 74% (18-29 years) to 85% (60-plus years).

The fact is that still in some corners of the world, senior citizens lack the technological access required for mobile banking and no financial institution can ignore this segment. These senior citizens still prefer branch visits to get things like updating account passbooks, renewing recurring deposits after maturity, withdrawing pension money etc. The bank branches need to transform and simplify their operational procedures to give hassle-free experiences to these senior citizens. While running physical offices in the digital age can be an expensive affair for a financial institution, a revolutionary idea like having ‘Smart Branches’ only for senior citizens will improve their brand diversity further.

Tech Giants Taking Over

Similar to its Fintech counterparts, a number of tech giants have started to encroach on the banking industry. These tech companies are gradually changing how individuals typically invest, save, borrow, and pay by providing rapid, effective, and user-friendly services. With the use of cutting-edge technology, companies like Google, Facebook, Microsoft, Alibaba, Apple, and Amazon have brought banking to the doorstep of their customers. The inclusive, open, and reachable ‘Neobanks’ (banks without any physical location, present entirely online) also have support in this effort.

What I think is traditional banks are left with no choice except to attempt to use the strength of digital partnerships to combat this technological invasion.

The Way Forward

The only realistic way for traditional banks to deal with any of the aforementioned problems is to quickly modernize. Banks need to embrace new technology wholeheartedly in addition to redesigning their current innovation strategy, as challenges galore.

This adoption shouldn’t be limited to service provision alone. Instead, it needs to be present on all major fronts, including those involving consumer perception, resource use, routine operations, and business models. Additionally, collaborating with Fintech companies and Neobanks can be a smart move. Such partnerships often result in win-win outcomes for all participants in the ecosystem, and they can arm banks with the tools they need to kick-start a better digital transformation.

The best way to assist traditional banks in maintaining their strengths and overcoming their flaws without fear or favour is to use both of these solutions and use them to navigate during this uncertain time.

The post IF Insights: Existential crisis for traditional banks as technology takes over appeared first on International Finance.

Beijing has taken “golden shares” in privately held online media and content enterprises for more than five years. In recent years, these agreements have expanded to include businesses with enormous data holdings.

The first investments made public by the e-commerce company were those made over the past four months in the Alibaba businesses. One of the most visible targets of China’s two-year-long regulatory onslaught on tech companies has been Alibaba.

These “golden shares,” typically constitute 1% of a company, are purchased by funds or businesses with government backing in exchange for board seats and the ability to reject critical corporate decisions.

Publicly available business registration records revealed that in September of last year, a state-owned Zhejiang Media Group investment vehicle purchased a 1% share in Shanghai-based Alibaba’s Youku Film and Television division.

According to the records, Jin Jun, the general manager of one of Zhejiang Media Group’s companies, has also been named to the board of the Alibaba division.

Separate business registration records revealed that in December 2022, WangTouSuiCheng (Beijing), a unit of the Cyberspace Administration of China (CAC)-established China Internet Investment Fund (CIIF), purchased a 1% stake in Alibaba subsidiary Guangzhou Lujiao, whose primary focus is “research and experimentation.”

The WangTouSuiCheng investment was initially reported on by The Financial Times. The investment is intended to help Beijing maintain tighter control over the material of the e-commerce giant’s streaming video division Youku and web browser UCWeb.

Additionally, according to unnamed sources, negotiations are ongoing for the government to purchase golden shares in gaming giant Tencent Holdings, including a stake in one of the group’s primary subsidiaries.

According to a previous investigation by Reuters, other companies with these golden share agreements include Full Truck Alliance Co., the mainland subsidiaries of TikTok owner ByteDance, Kuaishou Technology, and Weibo.

According to sources, having such golden shares can benefit companies attempting to obtain licenses to distribute online news and broadcast online video and audio programs.

Beijing’s move marks a shift away from imposing hefty fines and sanctions in its tech crackdown, which was launched in 2020 after Alibaba founder, Jack Ma, criticised regulators.

The crackdown has proved tumultuous for Chinese tech firms. While these businesses witnessed capital bloodbaths due to their share prices going down. The regulators even attempted to block the flotation of Jack Ma’s financial services firm, Ant Group, which would have been the world’s biggest IPO.

Recently, the fintech company announced that Jack Ma, once China’s richest man, is now living in a self-imposed exile in Japan. He would cede control over his company soon.

These moves have reportedly weakened foreign investment and the competitiveness of the Chinese tech market, resulting in a softening and change of tactical approach to keeping its big tech in check.

Beijing’s State Control Over China’s Tech Sector
The government has taken a small equity stake in Twitter-like Weibo and in ByteDance, the privately owned parent of TikTok, which is known as Douyin in China.

On 4 January 2023, a division under the state investment fund established by the regulator Cyberspace Administration of China acquired 1% of an Alibaba subsidiary, Guangzhou Lujiao Information Technology.

Alibaba owns social media entities including Youku, dubbed China’s YouTube, and the web browser UCWeb.

The state will take a similar approach to Tencent, which operates China’s most popular streaming service, Tencent Video, and an array of other offerings including WhatsApp-like WeChat, music streaming and gaming.

Beijing also has a stake in a local entity owned by Kuaishou, a smaller rival to ByteDance’s Douyin, through the state-owned Beijing Radio and Television Station.

The streaming service Bilibili, the Nasdaq-listed business that began as a subculture destination for anime, gaming and comic fans, is pushing for a state entity in Shanghai to take shares in one of its subsidiaries.

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