02/08/2025

BIZ & FINANCE SATURDAY | AUG 2, 2025

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US tech giants ride AI wave amid rough economic waters

Star Entertainment’s Brisbane casino deal collapses, shares hit record low BENGALURU: Star Entertainment’s planned 50% stake sale in its A$3.6 billion (RM9.9 billion) Brisbane resort failed after its Hong Kong-based investors looking to exit the joint venture refused to extend talks, it said yesterday, sending its shares to a record low. The collapse of the Queen’s Wharf deal marks a major setback for the Australian casino operator, which is on the brink of bankruptcy following a string of regulatory probes over the past two years that drove patrons away and left it with a mounting debt pile. Star will now have to repay the investors, Far East Consortium and Chow Tai Fook Enterprises, A$41 million, which includes proceeds and equity contributions invested in the project, by Sept 5 after they failed to reach consensus on the stake sale. “The parties have been unable to reach agreement on a number of outstanding commercial issues,“ the casino operator said in a statement, adding that the partners refused a last-ditch effort to extend the negotiations by a week. That leaves Star responsible for future equity contributions to the project of about A$200 million, and may need to inject additional equity when the project’s debt facility of A$1.4 billion comes up for refinancing in December. Shares in the embattled Australian casino operator tanked more than 17% to their record low of 9.1 Australian cents per share earlier in the day. They were last trading at 9.4 cents apiece, as of 0417 GMT. “The A$1.4 billion debt refinancing of the DBC (Destination Brisbane Consortium, name of the JV) due in December looms as a make or-break moment for The Star, if it can survive that long,“ said John Lockton, head of investment strategy at MST Financial. – Reuters Hang Seng Index, which is up roughly 23%. Hong Kong’s de facto central bank cautioned the public last week against “growing frothiness” and “excessive exuberance” due to the recent hype around stablecoins. The crypto exuberance has also spilled into the private equity and startup markets. “Venture capitalists are very interested in this area, and many are actively looking at such projects,“ said Liu Honglin, a Shanghai based attorney at Man Kun Law Firm, who helped venture capital-backed digital payment service provider Kun raise more than US$50 million in Hong Kong last month. “There’s definitely a lot of excitement around stablecoin, but the sector is far from being frothy. It’s just the start of a trend.” JF SmartInvest Holdings raised HK$785 million last month to invest in Real World Assets (RWA), a term used for digital tokens that represent traditional assets such as stocks and commodities. Chinese AI giant SenseTime raised HK$2.5 billion and will use part of the proceeds to explore areas such as blockchain, RWA and stablecoins. Other companies that tapped the crypto craze include ZA Online, Crypto Flow Technology and Easou Tech. Traditional finance players, including custodians and investment managers, are eager to get involved, so “interest in these topics, and fintech applications more generally, is set to continue,“ said Kishore Bhindi, a Hong Kong-based partner at Linklaters. – Reuters

financial results Wednesday, with revenue jumping 22% year-over-year as the social media giant continues investing heavily in artificial intelligence. “We’ve had a strong quarter both in terms of our business and community,” said CEO Mark Zuckerberg. “I’m excited to build personal superintelligence for everyone in the world.” Zuckerberg has embarked on a major AI spending spree, poaching top researchers with expensive pay packages from rivals like OpenAI and Apple as he builds a team to pursue what he calls AI superintelligence. Hours before the earnings report, Zuckerberg insisted that the attainment of superintelligence – technology that would theoretically be more powerful than the human brain – is now “in sight.” Meanwhile Apple, which is seen as lagging in the AI race, beat expectations with earnings driven by strong iPhone sales despite US tariffs costing the company US$800 million in the recently-ended quarter. Apple expects Trump’s tariffs to cost the iPhone maker US$1.1 billion in the current quarter. “The results show that Apple’s iPhone strategy is working to offset the impact of looming challenges with AI development timelines, tariff pressures, and Google’s antitrust issues,” said Emarketer tech analyst Jacob Bourne. Apple CEO Tim Cook said on an earnings call that taking the most advanced technologies and making them easy to use is “at the heart of our AI strategy.” Cook said Apple has been rolling out Apple Intelligence AI features and is “making good progress on a more personalized Siri.” – AFP

This was despite a stellar second quarter that exceeded analyst expectations, much like it did for its AI-focused rivals Google, Microsoft and Meta, which posted bumper results for the period. Amazon’s net sales climbed 13%, signaling that the company was so far surviving impacts of the high-tariff trade policy under US President Donald Trump. Amazon Web Services (AWS), the company’s world-leading cloud computing division, led the charge with sales jumping 17.5% to US$30.9 billion (RM132 billion) . Its strong performance reflects surging demand for cloud infrastructure to power AI applications, a trend that has benefited major cloud providers as companies race to adopt generative AI technologies. Shares of Microsoft spiked Thursday following blowout quarterly results, lifting the tech giant into the previously unprecedented US$4 trillion club along with Nvidia, another AI standout. The landmark valuation is the latest sign of growing bullishness about an AI investment boom that market watchers believe is still in the early stages – even as companies like Microsoft plan US$100 billion or more in annual capital spending to add new capacity. “Cloud and AI is the driving force of business transformation across every industry and sector,“ said Microsoft CEO Satya Nadella. At the heart of the results was a stunning surge in Azure, the company’s cloud computing platform, which is getting “supercharged” with AI, said Angelo Zino, technology analyst at CFRA Research. Zino attributed “just about all of” Microsoft’s recent climb in valuation to AI. Meta reported robust second-quarter

At least 10 Hong Kong-listed companies raised a total of more than US$1.5 billion (RM6.4 billion) from share placements in July to be invested in areas including stablecoins, digital assets and blockchain-based payments, according to a Reuters calculation based on exchange filings. They include digital asset platform OSL Group, China’s biggest retail cloud solution provider Dmall Inc and artificial intelligence giant SenseTime Group . The equity offerings had been snapped up by investors upbeat about stablecoins, which are cryptocurrencies pegged to assets such as the US dollar. Hong Kong’s stablecoin bill passed in May took effect yesterday as the Asian financial hub races the US in setting up a regulated market for such tokens, seen as a key lubricant in the burgeoning digital economy. Before the bill passed, raising funds for stablecoin development in Hong Kong held less appeal for investors. “We’re seeing a notable increase in fundraising activity linked to stablecoins and digital assets,“ said Anthony Pang at international law firm Baker McKenzie, which advised on Dmall’s HK$388 million (RM210 million) share placement last month. “The momentum in this space is real, and SAN FRANCISCO: Tech giants Amazon, Apple, Meta and Microsoft this week eclipsed earnings expectations, cashing in on artificial intelligence (AI) while navigating economic waters roiled by US tariffs. “Massive results seen by Microsoft and Meta further validate the use cases and unprecedented spending trajectory for the AI Revolution on both the enterprise and consumer fronts,” Wedbush tech analyst Dan Ives said in a note to investors. “We have barely scratched the surface of this 4th Industrial Revolution now playing out around the world led by the Big Tech stalwarts such as Nvidia, Microsoft, Palantir, Meta, Alphabet, and Amazon,” Ives added. Amazon reported a 35% jump in quarterly profits as the e-commerce giant said major investments in AI technology are paying off. “Our conviction that AI will change every customer experience is starting to play out,” said CEO Andy Jassy, pointing to the company’s expanded Alexa+ service and new AI shopping agents. But the Seattle-based company’s profit outlook for the current quarter came in lower than hoped for, with investors worried that the cost of AI was weighing on the bottom line. o Amazon, Apple, and others post strong results, balancing solid sales with mounting costs from tariffs and next-gen tools

Fintech firms rush to raise equity in HK to tap crypto frenzy HONG KONG: Fintech companies are rushing to raise equity in Hong Kong to fund expansions in cryptocurrencies, capitalising on investor fervour as the city started accepting applications for stablecoin issuer licences yesterday.

Over US$1.5b raised in July as stablecoin bill fuels cryptocurrency rush; regulator warns of market froth. – UNSPLASH PIX

funds and major hedge funds, was efficiently completed in less than three hours, demonstrating strong demand from institutional investors. “Investor zeal toward cryptocurrencies and stablecoins was palpable,“ OSL chief financial officer Ivan Wong said. An index tracking Hong Kong-listed stablecoin concept stocks has surged 65% this year, far outperforming the benchmark

it’s accelerating.” In late July, OSL raised US$300 million to support global initiatives, including the development of stablecoins and a digital payment network. The equity raising was completed within just three days after the company appointed Macquarie to assist with the offering. The bookbuilding process, which attracted significant interest from sovereign wealth