Panasonic’s jaw-dropping gigafactory upgrade funded by chilled-out partnership in Southeast Asia

Hi everyone, I’m Cissy from Hong Kong.

Last week, Chinese social media was taken over by Elon Musk. Tesla CEO first visit to China in three years, his private jet and dinner menu at a Beijing restaurant have all been trending on social media. One of his tweets, consisting of a single letter “X” that he posted after returning to the United States, also sparked speculation that he was insinuating something about his visit to China.

Musk spent approximately 44 hours in China, on a tight schedule and in full confidentiality. Only a small amount of information has been disclosed through official channels: he has met with China’s foreign, industry and trade ministers; he had dinner with Robin Zeng, founder of CATL, one of Tesla’s battery suppliers, but no details were provided. The foreign minister’s welcome to Musk has been interpreted as a sign that the CEO is not only seen as a major foreign investor, but also as a significant political figure and a friend of Beijing.

But Musk is just one of several top Western executives who have come to China since the country fully reopened to visitors in March. Jamie Dimon, the chief executive of JPMorgan Chase, paid a visit in May, and LVMH chairman Bernard Arnault is expected to do so this month after the world’s largest luxury firm reported a 17% year-on-year rise in revenue of the first quarter, largely driven by a recovering Chinese luxury market.

Against the backdrop of intensifying geopolitical tensions and the US-China technology war, it is interesting to see that Western companies cannot ignore Asia’s largest economy, both as a major market and as a vital supplier. Chinese businesses, for their part, remain interested in building links with their Western counterparts despite the political headwinds they may face.

More juice for Tesla

Tesla is working to protect batteries in the increasingly competitive electric vehicle industry. The American manufacturer of electric vehicles he recently told Panasonic that it would “buy” as much EV battery power as the Japanese electronics giant can produce at its Nevada factory, writes Nikkei Asia’s Ryotaroh Satoh.

Panasonic Energy, a subsidiary of Panasonic Holdings, is adding another production line — its 15th overall — at the Nevada gigafactory, with plans to start operating within the next year or two. This move is expected to increase the factory’s annual production capacity by about 10 percent, up from its current capacity of 38 to 39 gigawatt hours. That’s enough to power 500,000 to 700,000 Tesla Model 3s.

Tesla is Panasonic’s biggest customer, but even as the EV maker calls for more power, the Japanese company is wary of expanding production capacity in Nevada. That’s because the gigafactory is partially owned by Tesla and Panasonic can’t sell batteries made there to other customers.

The EV market in the US is getting pretty crowded. Big names like General Motors and Ford Motor, as well as new players like Rivian, have all said they want to ramp up their production in the US. These competing companies could potentially dent Tesla’s huge market share.

Cloud versus console

Sony’s chief executive has warned that cloud gaming is still technically “very complicated”, downplaying the risk of the sector quickly converting to a technology its rival Microsoft has bet heavily on, writes the Financial Times Cana Inagaki AND Leo Lewis.

In an interview, Kenichiro Yoshida said that the creator of PlayStation would do it again study “various options” for streaming games over the Internet, adding that it could use GT Sophy, its AI agent, to enhance cloud gaming.

“The cloud itself is an amazing business model but, when it comes to games, the technical challenges are high,” said Yoshida, citing latency – the fast response times required by gamers – as the biggest problem. “So there will be challenges for cloud gaming, but we want to address those challenges.”

He declined to comment on the impact Sony expects from Microsoft’s $75 billion purchase of game publisher Activision, the company behind the Call of Duty and World of Warcraft franchises, saying regulatory reviews are continuing. .

Industry and regulatory concerns have focused on Microsoft making Activision’s games exclusive to its cloud gaming service, a move that could potentially accelerate the switch from consoles.

A shiver in the air

Funding for start-ups in Southeast Asia is well on its way to having its own worst six months since before the pandemic, as venture capitalists lower their valuations of fledgling companies, writes Nikkei Asia’s Tsubasa Suruga.

For the first five months of this year, venture capital funding in Southeast Asia reached just $4 billion. That’s a whopping 65% drop from the first half of 2022 and the lowest level since the second half of 2019, according to investment data firm Preqin. Indonesia and Singapore were hit particularly hard, with funding plummeting by 70% and 65% respectively.

The underperformance of regional rock star tech companies like Grab and GoTo has dented the willingness of VCs to fund start-ups in ASEAN countries. Venture capitalists also told Nikkei that given the tougher economic outlook, many of them have shifted their focus from financing new deals to portfolio management.

Investors are also keeping an eye on the financial viability of startups from a much earlier stage and are spending more time on due diligence as they become more cautious about where and how much they invest.

A boom of its own

The AI ​​frenzy continues to sweep China. Over the past three months, more than 30 Chinese entities, from tech giants to state institutions to entrepreneurs, have announced they are developing their own large-scale language models, the technology behind chatbots like Google’s ChatGPT and Bard.

Using algorithms, advanced computing power, and large amounts of data, developing large language models is not for the faint of heart or the faint of pocket.

But the vast commercial potential of AI in the country and the attractiveness of large language models as a new approach to the field are nonetheless attract investors big and small, writes Nikkei Asia’s Cissy Zhou.

Unlike in the United States, where AI models tend to be released early to the wider public for further training and development, Chinese companies tend to tie their generative AI models to their own narrowly focused verticals, or target market. , and to use their tax data to more quickly develop applications that will generate revenue.

Some are critical of the money poured into AI, with one scholar even comparing it to Mao Zedong’s disastrous economic policy, the Great Leap Forward. Investors believe that only a few tech giants will ultimately win in the great language model war.

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