FirstFT: Chinese tech groups seek to build AI footprints in Silicon Valley

In today’s newsletter: 

• Chinese tech groups expand into Silicon Valley

• Singapore oil trader sentenced to lengthy jail term

• Vietnam’s vulnerability to potential Trump tariffs

Good morning. China’s biggest tech groups are building artificial intelligence teams in Silicon Valley, hoping to poach staff from US rivals who could help them make up ground in the race to profit from generative AI.

Alibaba, ByteDance and Meituan have been expanding their offices in California in recent months, in a push that comes despite Washington’s efforts to stymie their work by restricting exports of the highest-end Nvidia AI chips.

Alibaba is recruiting an AI team in California’s San Francisco Bay Area and has approached engineers, product managers and AI researchers who have worked at the biggest US tech groups, according to three people familiar with the matter.

One former researcher at OpenAI said they had been bombarded with messages from Chinese tech companies — including approaches from food delivery platform Meituan and Alibaba — trying to learn more information about their experience at the company as well as offering job opportunities.

Read more on the efforts of Chinese tech groups to establish a footprint in Silicon Valley.

• US-China relations: The US will bear the brunt of any attempt by president-elect Donald Trump to decouple economically from China, a senior Beijing adviser has warned, citing the American defence industry’s reliance on low-cost Chinese parts.

Here’s what else we’re keeping tabs on today:

• Economic data: Malaysia reports October external trade statistics.

• Hong Kong: A court is due to sentence 45 people convicted under Beijing’s national security law for holding unofficial primaries ahead of an election.

Five more top stories

1. An octogenarian oil trader has been given a 17-and-a-half-year jail sentence in Singapore for defrauding HSBC. Lim Oon Kuin, once one of Singapore’s richest men, was accused of encouraging a company executive to forge documents that tricked the bank into disbursing nearly $112mn.

2. Exclusive: Nippon Steel’s top executives are meeting local officials and workers of US Steel in Pennsylvania this week as the Japanese steelmaker races to build support for a $15bn takeover that has faced bipartisan opposition in Washington. The deal faced steep resistance during the general election, but Nippon is angling to secure regulatory approval now that Pennsylvania’s political mania has subsided.

• Japan M&A: A clash between KKR and Bain Capital over a $4bn buyout of Fuji Soft has entered a new phase of confrontation, creating what bankers and activist funds believe will become a template for corporate takeovers in Japan.

3. Exclusive: Donald Trump’s social media company is in advanced talks to buy Bakkt, a cryptocurrency trading venue owned by Intercontinental Exchange. Trump Media and Technology Group is closing in on an all-share purchase of Bakkt, said two people with knowledge of the talks, in a deal that would deepen the US president-elect’s push into the cryptocurrency market.

4. Keir Starmer has declined to rule out allowing Ukraine to use UK-made Storm Shadow cruise missiles for strikes inside Russia, after President Joe Biden authorised the use of US-supplied long-range weapons. The British prime minister called on allies to “double down” on support for Kyiv as he arrived at a G20 summit in Brazil.

• UK-China ties: Starmer promised better relations with China after meeting with President Xi Jinping yesterday at the G20 summit.

5. Israel struck a “specific component” related to Iran’s nuclear programme last month, Prime Minister Benjamin Netanyahu said yesterday, despite pleas from the US to contain its retaliatory air strikes on the Islamic republic. Netanyahu told parliament he had acted against the White House’s advice, playing into his political persona as the only Israeli leader able to defy a US administration.

News in-depth

Vietnam was one of the biggest beneficiaries of Donald Trump’s trade war with China during his first term in office. But Hanoi could become a victim of its own good fortune, business groups and analysts have warned, if the president-elect follows through on threats of blanket tariffs when he returns to the White House.

We’re also reading . . . 

• Chinese economy: Beijing’s attempts to suppress negative commentary about the economy have intensified scepticism about China’s official statistics, writes Jingzhou Tao.

• Stealth sackings: Small-scale dismissals — over seemingly minor violations — are prompting questions about whether cost savings are being disguised.

• Bitcoin’s identity crisis: The cryptocurrency’s shift towards “respectability” should concern us all, Stephen Diehl, author of Popping the Crypto Bubble.

Chart of the day

Years after one of the worst spills in history in the Gulf of Mexico, oil companies are drilling even deeper into the seabed in search of discoveries. But while the industry heralds a new era in offshore drilling, the increase in activity — and the plumbing of new depths — has raised concerns.

Take a break from the news

Senior business writer Andrew Hill reviews the best business books of the year, including a biography of SoftBank’s Masayoshi Son and the truth behind Donald Trump’s finances.