09/01/2026

BIZ & FINANCE FRIDAY | JAN 9, 2026

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Startups go public in litmus test for Chinese AI

Indonesia’s 2025 budget deficit widens to 2.92% of GDP JAKARTA: Indonesia’s unaudited budget deficit for the 2025 fiscal year was 695.1 trillion rupiah (RM168 billion) or equivalent to 2.92% of GDP, among the widest in over two decades and above the Finance Ministry’s 2.78% forecast, official data showed yesterday. Finance Minister Purbaya Yudhi Sadewa told reporters the wider deficit last year was to maintain the expansion of the economy and said the 2026 deficit could be smaller with better economic prospects. “I’m sure in 2026 with the betterment of economic foundations ... the deficit can be pushed to the level that’s lower than 2025,” he said. According to Finance Ministry data, the deficit is the widest in more than two decades, excluding those of 2020 and 2021 when the country was dealing with the Covid-19 pandemic. In the 1999-2000 fiscal year, Indonesia’s budget deficit reached 3.9% of the GDP. Revenue collection was weak last year due to falling commodity prices, the government has said, but spending was higher than the previous year as the new administration paid for new programmes like its free school meal scheme. State revenue only reached 91.7% of a midyear estimate at 2,756.3 trillion rupiah, while spending reached 95.3% of total outlook at 3,451.4 trillion rupiah, data showed. This year, the free school meals budget was increased more than three times to 335 trillion rupiah, with the government aiming to increase recipients to 83 million. Tax collection was also hit last year by high refunds and glitches in the new “core tax” administration software, which disrupted tax filing process. Purbaya has pledged to repair the software and collect unpaid taxes from major debtors to improve tax collection. Financial markets have been closely monitoring Indonesia’s fiscal situation, especially after the dismissal of respected finance minister Sri Mulyani Indrawati in September. To calm investors, the government has since said it will not cross the legal deficit ceiling of 3% of GDP. – Reuters sentiment in Japan and in China, Fast Retailing said operating profit climbed 34% to ¥205.6 billion (RM5.3 billion) during the September-November period on a 15% increase in revenue. That easily beat an LSEG consensus estimate of ¥177 billion. Profit from its domestic business grew 20.6% from a year earlier thanks to buoyant demand for sweatshirts and warm innerwear. Many overseas markets saw double-digit growth in revenue and profit. Autumn sales in China were strong and the launch of a collaborative business with e-commerce giant JD.com brought in new customers. Overall, its international segment posted profit growth of 41.6%. – Reuters

HONG KONG: Leading Chinese artificial intelligence startup Zhipu AI soared as it went public in Hong Kong yesterday, a day before rival MiniMax also makes its market debut in a litmus test for the country’s rapidly developing sector. Shares in Zhipu AI, which runs the Z.ai tool, rose more than 12% yesterday after its oversubscribed initial public offering raised HK$4.35 billion (RM2.3 billion). This week’s flotations come before any IPO announcements from top US startups OpenAI, the maker of ChatGPT, and Anthropic, known for its Claude chatbot. But analysts said profits were unlikely any time soon from either company – the first two IPOs among China’s so-called “six tigers”, generative AI providers competing with tech giants such as Alibaba and ByteDance. “Zhipu is honoured to stand at this historic juncture as a representative of China’s large model sector,” company chairman Liu Debing said at yesterday’s listing ceremony. Zhipu AI was founded in 2019 and is a major provider of large language model (LLM) services to businesses and government clients in the world’s second-largest economy. Proceeds from the IPO will go towards developing general-purpose large AI models, including key algorithms and system infrastructure, the firm said. MiniMax, established in 2022, targets the consumer market, particularly outside China, with its generative AI tools for speech, music and video, as well as text. “Once the market matures through full competition, more people will understand the capabilities, performance and pricing of these models reaching a state of equilibrium,” Liu told Bloomberg Television yesterday.

Beijing has reportedly been encouraging tech firms to use homegrown microchips owing to Washington’s on-and-off restrictions on top-end Nvidia chips, used to train and run AI systems. Investor faith in the potential of China’s chip industry to challenge US powerhouse Nvidia last month sent shares in semiconductor companies Moore Threads and MetaX skyrocketing on their market debuts. Earlier this month, Baidu, the operator of China’s top search engine, said its AI chip unit Kunlunxin has filed a listing application in Hong Kong. For chatbot providers, the picture is nuanced, said Shengyun Lu, founder of LSY Consulting. “To run a foundational model company, it costs a lot and takes a lot of time,” he cautioned. “IPOs allow the companies to raise money for financing their future research activities, but on the other hand, the initial investors are seeking an exit.” – AFP

o Loss-making Zhipu and MiniMax make market debut in Hong Kong this week

founder of the Hello China Tech newsletter, told AFP that the two IPOs “demonstrate both the revenue potential and the fundamental challenges facing this new generation of LLM companies”. “The high demand definitely reflects broader optimism about Chinese AI,” he said. An AI boom has helped push tech stocks to record highs in recent months, but they are also volatile as global investors watch intently for any signs of a bubble. “Do I think there’s a bubble? Yes. But I want to distinguish between ‘bubble’ and ‘bubble risk’. These companies need capital intensity,” Zhao said. The LLM market in China is estimated to grow to 101.1 billion yuan (RM59 billion) by 2030, according to consultancy Frost and Sullivan.

In January 2025, Chinese startup DeepSeek shook the tech world with a low-cost, high-performance reasoning model that upended assumptions of US dominance in the sensitive sector. A year ago, Washington put Zhipu, backed by conglomerate Tencent, on its export control blacklist over national security concerns. And Disney along with other US entertainment outfits including Universal is suing MiniMax for copyright infringement. Zhao said he did not expect Zhipu or MiniMax to be profitable “any time soon”. “That depends on two industry-wide shifts: significantly lower computing costs and much larger AI demand to spread those costs across,” he explained.

Executives from Zhipu AI, semiconductor company Shanghai Iluvatar CoreX and surgical robotics company Shenzhen Edge Medical attend a listing ceremony at

the Hong Kong Stock Exchange yesterday. – REUTERSPIC

He added that Zhipu AI has seen a trend of computing costs for AI development “gradually decreasing”. China tech analyst Poe Zhao, Samsung Electronics forecasts record Q4 profit as high-end chip demand soars

Uniqlo owner Fast Retailing hikes annual outlook on robust global sales

TOKYO: The operator of the Uniqlo clothing brand, Japan’s Fast Retailing, said quarterly operating profit surged by a third and it bumped up its annual outlook, citing robust sales growth globally that helped it absorb US tariffs. On track for its fifth consecutive year of profit, the company has benefited from a pickup in sales in China – its largest overseas market – as well as an aggressive expansion strategy in North America and Europe. It opened up major stores in Antwerp, Birmingham and Munich during the quarter. In the US, it is planning a string of new flagship stores in Chicago, New York and Boston. Known for durable basic items and considered a bellwether for consumer

SEOUL: South Korean tech giant Samsung Electronics said yesterday it expected its fourth-quarter profit to reach a record 20 trillion won (RM56 billion). The firm is one of the world’s top memory chip makers, providing crucial components for artificial intelligence (AI) and the infrastructure it relies on. Its strong forecast comes on the back of soaring demand for high-performance memory chips used in data centres and other infrastructure supporting the AI industry. Samsung said yesterday it expected operating profit to range between “19.8 trillion and 20.1

hynix, another key player in the global semiconductor market. Fuelled by strong semiconductor sales, Samsung Electronics’ shares have risen more than 120% over the past six months, a trend shared by other South Korean chip makers. “With the AI sector at the centre, demand for semiconductors is rising ... with the chip industry entering a super-cycle,” said Chung Hae-chang, an analyst at Daishin Securities. South Korean President Lee Jae Myung has vowed to triple spending on AI this year, a move aimed at propelling the country into the ranks of the world’s top three AI powers behind the United States and China. – AFP

trillion won”, which would surpass its record quarterly profit of 17.6 trillion won set in the third quarter of 2018. If confirmed in its final earnings report, due to be released later this month, the figure would mark an increase of around 200% year on year. Sales are expected to range between 92 trillion and 94 trillion won, which would also break the record of 86 trillion won set in the third quarter of 2025. Soaring global demand for semiconductors fuelled by an AI boom sent South Korea’s exports to their highest-ever level in 2025, official data showed last week. South Korea is also home to SK