03/03/2025

BIZ & FINANCE MONDAY | MAR 3, 2025

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Beijing tells its AI leaders to avoid travel to America

DeepSeek claims theoretical cost-profit ratio of 545% per day BEIJING: Chinese AI startup DeepSeek on Saturday disclosed some cost and revenue data related to its hit V3 and R1 models, claiming a theoretical cost-profit ratio of up to 545% per day, though it cautioned that actual revenue would be significantly lower. This marks the first time the Hangzhou-based firm has revealed any information about its profit margins from less computationally intensive “inference” tasks, the stage after training that involves trained AI models making predictions or performing tasks, such as through chatbots. The revelation could further rattle AI stocks outside China that plunged in January after web and app chatbots powered by its R1 and V3 models surged in popularity worldwide. The sell-off was partly caused by DeepSeek’s claims that it spent less than US$6 million on chips used to train the model, much less than what US rivals like OpenAI have spent. The chips DeepSeek claims it used, Nvidia’s H800, are also much less powerful than what OpenAI and other US AI firms have access to, making investors question even further American AI firms’ pledges to spend billions of dollars on cutting-edge chips. DeepSeek said in a GitHub post on Saturday that assuming the cost of renting one H800 chip is US$2 per hour, the total daily inference cost for its V3 and R1 models is US$87,072. In contrast, the theoretical daily revenue generated by these models is US$562,027, leading to a cost-profit ratio of 545%. In a year this would add up to just over US$200 million in revenue. However, the firm added that its “actual revenue is substantially lower” because the cost of using its V3 model is lower than the R1 model, only some services are monetised as web and app access remain free, and developers pay less during off-peak hours. – Reuters Australia govt pledges temporary beer tax freeze SYDNEY: Australian Prime Minister Anthony Albanese said on Saturday that his government would temporarily halt tax hikes on draught beer, amid sagging popularity for the governing Labor Party ahead of a general election due by May. Australia is one of the world’s wealthiest countries per capita and one of its highest-spending on alcohol per capita. Its centre-left government, lagging the main conservative political opposition in recent polling, levies inflation-indexed tax hikes on alcohol producers twice a year. “The Albanese Labor Government will freeze the indexation on draught beer excise for two years, in a win for beer drinkers, brewers and hospitality businesses,” Albanese said in a statement. The measure, to start in August, would take pressure off beer prices at the nation’s pubs and clubs as well as support local businesses and regional tourism, he said. Speaking to media at a brewery in Sydney, the capital of New South Wales, Australia’s most populous state, Albanese said that attending pubs was “part of who we are as Australians”. “This is something that has been requested for a long time,” he said, referring to the tax relief, in remarks televised by the Australian Broadcasting Corp. Alcohol is infused in the social life and identity of many Australians, but researchers expect a trend towards abstinence from alcohol to grow in coming years driven by health concerns and rising prices. – Reuters

US-China negotiations, the Journal said, drawing parallels to the detention of a Huawei executive in Canada at Washington’s request during the first Donald Trump administration. The US and China are locked in a global AI race, with Chinese startup DeepSeek recently launching AI models that it claims rival or surpass US industry leaders such as OpenAI and Alphabet Inc’s Google, at significantly lower cost. The White House and China’s State Council Information Office, which handles media enquiries on behalf of the government, did not immediately respond to requests from Reuters for comment. Chinese President Xi Jinping told a meeting of top Communist Party officials on Friday to improve China’s overall security, including in the realms of cybersecurity and artificial intelligence, China’s state broadcaster reported on Saturday.

“We should give top priority to defending the country’s political security,” Xi was quoted as having told other members of the governing Politburo. Last month, Xi held a rare meeting with some of the biggest names in the world’s second largest economy’s technology sector, urging them to “show their talent” and be confident in the power of China’s model and market. Chinese executives who choose to travel are instructed to report their plans before leaving and, upon returning, to brief authorities on what they did and whom they met, the Journal report said. DeepSeek founder Liang Wenfeng declined an invitation to attend an AI summit in Paris in February, according to the report. Another founder of a major Chinese AI startup cancelled a planned US trip last year following instructions from Beijing, the Journal added. – Reuters

o Authorities fear executives could be detained and used as bargaining chips

BEIJING: Chinese authorities are instructing the country’s top artificial intelligence entrepreneurs and researchers to avoid travel to the United States, the Wall Street Journal reported, citing people familiar with the matter. The authorities are concerned that Chinese AI experts traveling abroad could divulge confidential information about the nation’s progress, the newspaper said. Authorities also fear that executives could be detained and used as a bargaining chip in

Currency dealers in a foreign exchange dealing room at the Hana Bank headquarters in Seoul. – AFPPIC South Korea exports barely grew in February

SEOUL: South Korea’s exports barely grew in February, missing market expectations, with demand in key markets hurt amid a global trade war triggered by US President Donald Trump’s tariffs. Outbound shipments from Asia’s fourth-largest economy stood at US$52.60 billion (RM235 billion), up 1% from a year earlier, preliminary trade data showed, weaker than a median 3.8% increase forecast in a Reuters poll of economists. The return to growth, after falling in January for the first time in 16 months with a decline of 10.2%, was largely due to the timing difference in the Lunar New Year holidays. On a working day-adjusted basis, exports fell 5.9% in February. By country, shipments to China, South

Trump also plans to introduce in April reciprocal tariffs on every trading partner, and more tariffs likely sooner on products such as chips and autos. South Korean Industry Minister Ahn Duk geun in talks with US Commerce Secretary Howard Lutnick last week, requested a tariff exemption, the ministry said. By product, exports of semiconductors fell 3% in February, snapping 15 months of gains on a decline in memory-chip prices, but automobiles jumped by a 13-month high of 17.8% on a boost from sales of hybrid vehicles. Steel products fell 4.4%. Imports rose 0.2% to US$48.30 billion, bringing the country’s monthly trade balance to a surplus of US$4.30 billion. – Reuters

Korea’s biggest export market, fell 1.4%, while those to the United States rose 1%. Exports to the European Union also dropped 8.1%. South Korea is the first major exporting economy to report trade figures each month, providing an early glimpse into the health of global demand. It was also the first monthly trade data released since Trump started to roll out various tariffs. Trump said on Thursday a fresh 10% tariff would be imposed on imports from China starting this week, in addition to the 10% tariff levied from last month, which prompted Beijing to take countermeasures. This month, US tariffs on imports from Mexico and Canada, as well as steel and aluminium imports, are set to come into force.