Barron’s (December 19)
“Tencent Holdings has secured access to high-end Nvidia artificial-intelligence chips that remain restricted to Chinese buyers even after President Donald Trump’s recent semiconductor agreement with the country.” The arrangement exploits a loophole. Tencent will not own the chips outright, but instead access them “through a cloud service operated by Tokyo-based Datasection, which recently announced a deal to buy Nvidia’s flagship Blackwell chips” for use in its data centers. The loophole “undermines a recent assurance by Trump that Nvidia’s top technology would remain off limits to China.”
Tags: Access, AI chips, Assurance, Blackwell chips, Buyers, China, Cloud service, Data centers, Datasection, Loophole, Nvidia, Off limits, Restricted, Semiconductor, Tencent, Tokyo, Trump, Undermine
The Economist (September 17)
“Investors outside China have about $1trn invested in firms that use” variable interest entities (VIEs). These include Alibaba and Tencent. Yet, it remains “unclear if VIEs are even legal in China,” exposing investors to two risks. “First, the VIEs could be ruled illegal, potentially forcing the firms to wind up or sell vital licences and intellectual property in China. The second danger is that VIE owners seek to grab the profits or assets held within. If they refuse to co-operate, die, or fall out of political favour, it is far from clear that firms can enforce VIE contracts in Chinese courts.”
Tags: Alibaba, Assets, China, Contracts, Courts, Illegal, Investors, IP, Profits, Risks, Tencent, VIEs
