Hello everyone, this is Cissy from Hong Kong.
It’s been an exciting week for tech news in Asia, and one of the most talked-about stories has been the ChatGPT frenzy. After its launch, the artificial intelligence chatbot has quickly become wildly popular with its users. The chatbot’s success has sparked a heated debate about the potential of AI and machine learning for the future.
How does the opening of this week’s newsletter look? It was written by ChatGPT, which does not seem shy about talking up its own importance.
Although the app isn’t directly accessible in Hong Kong and mainland China, many Chinese developers have paid its American developer, OpenAI, for access to some of its features. They then integrate these features into their own mini-programs on WeChat, where users can pay to get a taste of ChatGPT themselves.
I’m one of them. After forking over about $5 for a mini program, I asked ChatGPT, “Why aren’t you available in mainland China and Hong Kong?” Its answer was quite natural sounding: “due to government regulations on services like ChatGPT that involve artificial intelligence and natural language processing technologies”.
The real reason might not be quite so straightforward, but it wasn’t a bad attempt.
More surprising was its sense of humor, and the apparent lack of censorship of its content (ChatGPT told me some great political jokes in Chinese!). I’m absolutely amazed by this breakthrough in AI-human communication. There are still factual errors if you ask the chatbot questions in a complicated way, but I’m starting to worry that some day parts of my job — though certainly not all — might be replaced by AI.
The AI race heats up
Over the past decade, China’s AI development has surpassed that of the US by many measures, including in fundamental research. But the arrival of ChatGPT — which can generate articles, essays, jokes and even poetry — has left Chinese players scrambling to catch up, write Nikkei Asia’s Yifan Yu and Cissy Zhou.
Soon after Microsoft announced it would integrate ChatGPT into its search engine Bing, and Google unveiled its own chatbot, Bard AI, Chinese tech players announced their own plans to introduce ChatGPT-like services. Baidu, Tencent and Alibaba, and even online retailer JD.com and gaming company NetEase, are all eager to show that their AI research efforts are just as ready for prime time as those of their US counterparts.
But commercialisation remains a challenge for Chinese and American companies alike, and some observers argue that there is more hype than solid business opportunity at this point.
Another challenge for Chinese players specifically is chips. Fearing further US sanctions, big tech players in China have stocked up on advanced semiconductors over the past few years, but further development in AI could be severely hindered if they can’t access next-generation chips.
Kinks in the supply chain
Apple is hitting snags as it tries to replicate its China operations playbook in India, amid pressure to diversify its manufacturing, writes the Financial Times’ Patrick McGee.
The iPhone maker has in recent months been sending engineers from the US and China to southern India, where they help coach locals with the aim of “building the factory of the future,” as one Apple job advert puts it.
But people familiar with the matter say logistics, tariffs and infrastructure are making the expansion to India less smooth compared to Apple’s diversification efforts in south-east Asia. One person briefed on the matter said: “There just isn’t a sense of urgency.”
Indian conglomerate Tata has ambitious aims to supply Apple with components, but at one of its factories producing iPhone casings, only about 50 per cent are in good enough shape to be sent off for assembly, according to a person with knowledge of the situation.
Meanwhile, some of the US engineers are frustrated that their hotel is two hours from the factories, requiring four hours of commute time.
Still, the opportunity in India is considered vast. Apple CEO Tim Cook recently called India “a major focus” and consultants at Bain reckon the country can grow electronics exports by up to 40 per cent a year through 2028.
3, 2, 1 . . .

Commercial satellite launches are on the rise, and Japan wants a bigger piece of the action.
To that end, Jaxa, the country’s space agency, and Mitsubishi Heavy Industries are preparing to test launch the next-generation H3 rocket, writes Nikkei Asia’s Mitsuru Obe.
The first major upgrade to the country’s rocket program in over 20 years, the H3 is scheduled to blast off from Jaxa’s Tanegashima Space Center on Friday. It is designed to be a more powerful, cheaper and safer alternative to the H2A currently in use. In addition to winning contracts for commercial launches of satellites, it is also expected to play a role in the construction later this decade of a new space station that will orbit the moon.
Mitsubishi Heavy, the main contractor, says the simpler design of the new rocket compared to its predecessor makes it less prone to explosions. It is also cheaper — an H3 launch will cost about 50 per cent less than an H2 launch, according to the company.
But to win business the H3 must first establish a successful track record. And that, its developers hope, starts with Friday’s lift-off.
A shift to south-east Asia
Key American chip equipment suppliers are shifting operations to south-east Asia after US export controls enacted in October limited their ability to serve the Chinese market, writes Nikkei Asia’s Lauly Li.
Three American toolmakers — Applied Materials, Lam Research and KLA — control around 35 per cent of the global market for chip production tools and China has been a major source of sales for each of them for years.
While all three are maintaining a presence in the country, they have been relocating non-Chinese staff from China to Singapore and Malaysia, or increasing production capacity in south-east Asia to deal with the latest restrictions.
Shifting idled personnel from China to south-east Asia was a “natural move” for these companies, sources said, as they all have an existing presence in the region. When the US chip industry first started to offshore manufacturing capacity to Asia in the 1960s to lower costs, Singapore and Malaysia became choice destinations. Today, they have semiconductor manufacturing, packaging and testing clusters. Chipmakers like Intel, GlobalFoundries and United Microelectronics all have facilities in south-east Asia and plan to expand further there.
Suggested reads
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US sanctions derail China chipmakers’ expansion plans (Nikkei Asia)
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Thailand’s big corporations scramble for virtual bank licenses (Nikkei Asia)
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Vietnam IT companies join forces to secure more orders from Japan (Nikkei Asia)
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Lex: Toshiba: earnings shock increases the chances of a buyout deal (FT)
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ChatGPT fever reaches Vietnam, from Vingroup to AI start-ups (Nikkei Asia)
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Toshiba’s profits fall 90 per cent as top executive resigns (FT)
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India’s tech investors struggle to cash out as funding falls (FT)
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Grab shifts Singapore lawmaker to new job after conflict criticism (Nikkei Asia)
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China pulls back from global subsea cable project as US tensions mount (FT)
#techAsia is co-ordinated by Nikkei Asia’s Katherine Creel in Tokyo, with assistance from the FT tech desk in London.
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