South Korean authorities have arrested Kim Beom-su, the billionaire founder of technology giant Kakao Corp, on allegations of stock manipulation. The charges relate to the acquisition of a K-Pop agency last year. Prosecutors claim Kim manipulated the stock price of SM Entertainment in order to hinder a competitor, Hybe, from acquiring it. Kim, also known as Brian Kim, denies the accusations and maintains he never ordered or tolerated any illegal activity.
Kakao Corp, which operates South Korea‘s largest messaging app, expressed regret over the situation. Chief Executive Shina Chung is leading efforts to manage the company during Kim’s absence. The Seoul Southern District Court approved the arrest warrant, citing potential evidence destruction and flight risk as reasons for detaining Kim. He is currently held at the Seoul Nambu Detention Centre for up to 20 days while prosecutors continue their investigation.
The case against Kim poses significant risks to Kakao’s future, potentially impacting investments in artificial intelligence and overseas expansion plans. Industry experts warn that regulatory scrutiny could complicate major business decisions. Kim is the largest shareholder of Kakao Corp, controlling a 24% stake, and any conviction could affect the company’s control over its online banking arm, KakaoBank Corp, due to financial crime restrictions.
Following the news of Kim’s arrest, Kakao Corp shares fell by 5.4%, marking their largest daily drop since December 2022. Affiliates Kakaopay and Kakao Games also hit record lows, dropping by 7.8% and 5.2% respectively, while Kakaobank shares fell by 3.8%. The ongoing legal troubles could further strain the company’s market performance and strategic initiatives.
The movement of illicit semiconductor chips to Russia has seen a notable decrease, according to the US Department of Commerce, driven by intensified efforts from Western nations to curb the flow of technology that could support Moscow’s military capabilities. However, China and Hong Kong continue to serve as significant transhipment hubs, enabling the ongoing, albeit reduced, supply of these critical components.
Western governments have ramped up measures to control the export of semiconductor chips and other sensitive technologies to Russia. These actions are part of broader sanctions aimed at restricting Russia’s access to advanced technology that could be used in military applications. Enhanced scrutiny and stricter enforcement of export controls have been pivotal in reducing the volume of chips reaching Russia.
According to the Semiconductor Industry Association (SIA), the volume of semiconductor chips illicitly reaching Russia has fallen by approximately 20% over the past six months. Despite the slowdown, China and Hong Kong remain key transhipment hubs for semiconductor chips destined for Russia. Playing a crucial role in the supply chain, they often serve as intermediary points where chips are re-exported to avoid detection.
China and Hong Kong are employing sophisticated methods to circumvent sanctions and export controls, including re-routing shipments, re-labelling products, using shell companies, misdeclaring goods, and complex supply chains.
Why does this matter?
Industry experts highlight that while the reduction in chip flows is a positive development, the continued role of China and Hong Kong as transhipment hubs poses ongoing challenges. The complex nature of global supply chains and the high demand for semiconductors make it challenging to eliminate illicit flows entirely.
Nigeria’s Federal Competition and Consumer Protection Commission (FCCPC) has imposed a fine of $220 million on Meta Platforms Inc., the parent company of Facebook, for ‘multiple and repeated’ breaches of local consumer data protection laws in a move to enforce data privacy regulations.
The FCCPC’s investigation into Meta began last year following Nigerian consumers’ complaints regarding personal data mishandling. The investigation revealed that Meta had failed to comply with several provisions of Nigeria’s data protection regulations, including obtaining proper consent from users before collecting their data and ensuring the security of the information gathered, a direct violation of the Nigeria Data Protection Regulation (NDPR), following a 38 months investigation. The NDPR, enacted in 2019, mandates that organisations must seek explicit consent from individuals before collecting their personal information, aiming to safeguard the privacy of their citizens.
The fine is one of the largest penalties imposed by an African regulator on a global tech company. It signals a growing trend among nations to assert digital sovereignty and enforce stringent data protection measures. The action against Meta is expected to have far-reaching implications, prompting other multinational companies to reassess their data practices in Nigeria and potentially other African markets.
The following development highlights the regulatory pressure on technology companies to prioritise data protection. As digital services expand globally, enforcing stringent data privacy laws is becoming more critical. For Nigeria, the fine against Meta expresses the country’s commitment to holding multinational companies accountable and protecting the rights of its citizens in the digital landscape.
LinkedIn is introducing AI-powered career advice and interactive games in an effort to encourage daily visits and drive growth. The Financial Times reported that this initiative is part of a broader overhaul aimed at increasing user engagement on the Microsoft-owned platform, which currently lags behind entertainment-focused social media sites like Facebook and TikTok.
With slowing revenue growth, analysts have suggested that LinkedIn must diversify its income streams beyond subscriptions and make the platform more engaging. Editor in Chief Daniel Roth emphasised the goal of building a daily habit for users to share knowledge, get information, and interact with content on the site. The efforts reflect LinkedIn’s push to enhance the user experience, such as unveiling AI-driven job hunting features and detecting fake accounts, as well as disabling targeted ads.
In June, LinkedIn recorded 1.5 million content interactions per minute, though it did not disclose site traffic or active user figures. Data from Similarweb showed that visits reached 1.8 billion in June, but the growth rate has slowed significantly since early 2024. For continued growth, media analyst Kelsey Chickering noted that LinkedIn needs to become ‘stickier’ and offer more than just job listings and applications.
Moreover, LinkedIn is becoming a significant platform for consumer engagement, with companies like Amazon and Nike attracting millions of followers. The platform’s fastest-growing demographic is Generation Z, many of whom shop via social media. The trend highlights LinkedIn’s potential as a robust avenue for retailers to reach a sophisticated and influential audience.
A South Korean court is reviewing a prosecution request to arrest Brian Kim, the billionaire founder of Kakao Corp, for alleged stock manipulation during a 2023 acquisition. The development follows a hearing last year involving Kakao and an executive over similar accusations. Prosecutors claim Kim manipulated the stock price of SM Entertainment to obstruct Hybe’s acquisition attempt. Kim, not formally charged, denies any wrongdoing.
Kim, the largest shareholder of Kakao Corp, holds a 24% stake through his entities. The court’s decision, expected late Monday or early Tuesday, will determine the necessity of a warrant without ruling on the allegations. Analysts warn that a conviction could jeopardise Kakao group’s control over KakaoBank Corp, as financial crime rules restrict ownership stakes in banks.
Regulatory and social scrutiny might impact Kakao’s bold investment decisions, including plans for AI services and fundraising through IPOs. Kim chairs a council coordinating Kakao group’s 128 affiliates, guiding their business focus. The outcome of the case could influence the company’s strategic moves in the near future.
Kakao plans to launch new AI services this year, amid growing challenges from legal and regulatory pressures. The decision on Kim’s arrest warrant will be crucial for the future direction of the tech giant and its numerous affiliates.
The United States is the undisputed global leader in AI startups and private-sector investment, according to a report by S&P Global. Between 2013 and 2023, 5,509 AI companies were founded in the US, eclipsing all other countries combined. China, the runner-up, saw 1,446 AI startups during the same period. The United Kingdom, Israel, and Canada followed with 727, 442, and 397 startups, respectively.
Investment in AI also heavily favours the US, with $335.2 billion poured into the sector over the past decade. China’s private-sector investment totalled $103.7 billion, while the UK, Israel, and Canada saw investments of $22.3 billion, $12.8 billion, and $10.6 billion, respectively. The report noted, however, that government investment, particularly in China, is significant and less transparent.
China’s approach to AI is shaped by its government’s ideological demands. The Cyberspace Administration of China (CAC) tests AI models to ensure they align with ‘core socialist values.’ AI companies must monitor content to avoid sensitive topics, including political dissent and references to historical events like the Tiananmen Square massacre.
S&P Global anticipates that private investments in AI startups could reach up to $900 billion globally by 2027, reflecting an annual growth rate of at least 70%. Meanwhile, China’s stringent regulatory environment continues to influence the development and deployment of AI technologies within its borders.
Samsung is reportedly exploring new phone designs tailored for generative AI applications. Roh Tae-moon, president of Samsung’s Mobile Experience unit, stated that upcoming ‘AI phones’ will look ‘radically different’ from current models. These new devices are expected to be more mobile, incorporating additional sensors and larger screens.
Roh revealed that a significant portion of Samsung’s mobile phone research and development is now focused on these AI-driven phones. Although specific designs were not disclosed, the goal is to move beyond the traditional slim rectangular form that has dominated the market since the iPhone’s debut.
The shift towards AI integration in phones follows Samsung’s introduction of the ‘Galaxy AI’ system, enhancing existing features and adding new tools for users. This move is part of a broader industry trend, with major players like Apple and Google also incorporating AI into their devices.
Competitors have tried to launch AI-specific devices with unique designs, but these have not gained mainstream success. Products like the Rabbit R1 and Humane AI were criticised for poor performance and battery life, highlighting the challenges in creating functional AI-driven smartphones.
Asia’s first inverse bitcoin exchange-traded fund (ETF), designed to allow investors to profit from a decline in cryptocurrency values, will launch in Hong Kong on Tuesday. The CSOP Bitcoin Futures Daily (-1x) Inverse Product, introduced by CSOP Asset Management, will debut on the Hong Kong Stock Exchange.
The new ETF aims to capitalise on the increasing demand for investment opportunities linked to volatile cryptocurrencies. After a batch of spot crypto ETFs launched in Hong Kong in April, bitcoin experienced a turbulent second quarter, falling over 12%. The inverse ETF allows investors to benefit from bitcoin’s price drops.
Bitcoin has been notably volatile, with its fluctuations in 2023 surpassing those of crude oil and the Nasdaq 100. Recent weeks saw a rebound in bitcoin’s value, trading around $67.400 following political developments in the US.
CSOP’s inverse bitcoin product will track the daily inverse performance of the S&P Bitcoin Futures Index. CSOP, which introduced Asia’s first bitcoin futures ETF in 2022, saw its market value rise to over $100 million earlier this year but has since decreased to approximately $58 million.
According to sources, Nvidia is developing a version of its flagship AI chips for the Chinese market to comply with US export controls. The new chip, part of the ‘Blackwell’ series unveiled in March, is expected to be produced later this year. The ‘B200’ model in this series significantly outperforms its predecessor in tasks like chatbot responses. Nvidia is collaborating with its major Chinese distributor, Inspur, to launch this chip, tentatively named the ‘B20.’
In response to tighter US export controls introduced in 2023 to prevent advancements in Chinese supercomputing, Nvidia has created three chips specifically for China. Despite initial setbacks with the H20 chip, sales have surged, with projections of over 1 million units sold in China this year, amounting to over $12 billion. These developments highlight Nvidia’s strategic efforts to maintain its market presence amidst growing competition from Chinese firms like Huawei.
As the US continues to enforce and potentially expand semiconductor-related export restrictions, Nvidia’s actions reflect the broader impact on the global chip industry. The Biden administration’s plans to implement stricter controls on AI technology and efforts to influence policies in other major tech-producing countries underscore the ongoing geopolitical tensions in the semiconductor sector.
OpenAI, the maker of ChatGPT, is in discussions with Broadcom and other chip designers about developing a new AI chip. This move aims to address the shortage of expensive graphic processing units required for developing its AI models, such as ChatGPT, GPT-4, and DALL-E3.
The Microsoft-backed company is hiring former Google employees who developed the tech giant’s own AI chip and plans to create an AI server chip. OpenAI is exploring the idea of making its own AI chips to ensure a more stable supply of essential components.
OpenAI CEO Sam Altman has ambitious plans to raise billions of dollars to establish semiconductor manufacturing facilities. Potential partners for this venture include Intel, Taiwan Semiconductor Manufacturing Co, and Samsung Electronics.
A spokesperson for OpenAI mentioned that the company is having ongoing conversations with industry and government stakeholders to enhance access to the infrastructure needed for making AI benefits widely accessible.
