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CNBC
28 minutes ago
- CNBC
China's tech talent are making big strides — they're creating apps for the world
BEIJING — Chinese developers are powering some of the latest artificial intelligence tools aimed at a global market. Melvin Chen moved to San Francisco from China to co-found AI design startup Lovart, which officially launched Wednesday — after claiming "800,000 users across 70 countries" for its test version. "We will focus on North America as the first step," Chen said in Mandarin, translated by CNBC. He previously led China operations for CapCut, a popular video-editing app from ByteDance that still ranks first in the photo and video category in Apple's U.S. App Store. Lovart uses AI to generate logos, stickers and other branding visuals based on text prompts. The new version launching Wednesday includes a "ChatCanvas" feature that claims to make specific edits easier — a client might ask a professional designer to switch two icons, a task difficult to explain only with words but simple when visuals are included, Chen said. He expects Lovart to surpass 1 million users in the week after its launch. But he said the app isn't coming to China soon, mostly because it's based on Anthropic's Claude 4 AI model and others from OpenAI — both of which aren't officially available in China. Beijing has to give generative AI models the green light for public use and operates a stringent firewall that blocks sites such as Google and Facebook. Companies also have their own rules about where their services can be used. While most of Lovart's team is based in San Francisco with the aim of better localizing the product, Chen said part of the production team is in China. He declined to share operating costs, and said the startup would seek investor funding after securing sufficient user growth. Lovart has a free-to-use option, with monthly subscription fees of up to $90 for wider usage. In a global AI race, the U.S. government has in the last several years ramped up its restrictions on American companies selling advanced semiconductors to China. San Francisco-based OpenAI launched its ChatGPT chatbot in late 2022, and it wasn't until January this year that China produced a clear rival with DeepSeek's breakthrough. But analysts have long expected China's AI advantage would likely lie in applications rather than models, especially given that internet-based Chinese companies were able to build massive food delivery and short-video apps for the large local consumer market. Already in AI video generation, Kuaishou's Kling and Shengshu's Vidu have gained global users in the last 18 months. In the realm of AI agents that can automatically perform a series of complex tasks, Manus has caught international attention. "China-affiliated teams are increasingly influential, driven by concentrated technical talent, agile development culture, and policy support for AI commercialization," said Charlie Dai, vice president and principal analyst at Forrester. "They excel in cost-efficient model training and rapid consumer app iteration, often prioritizing open-source accessibility." "Chinese models now compete globally, challenging U.S. dominance while lowering AI costs," he said. Another advantage is that China models such as DeepSeek and several others are open source, meaning they are free for developers to download and use. Hugging Face, an online platform that allows people to try out open source AI models, regularly show that China models are among the top trending ones for users. As of Wednesday, the Kimi K2 coding-focused model that was launched this month ranked first on the site, followed by Alibaba's Qwen3 coding-focused modes that launched earlier in the day. In image-to-3D models, Tencent's Hunyuan ranks first, while France-based Mistral's Voxtral ranks first in audio-text-to-text. Chen said Lovart will focus on AI for generating images and videos rather than 3D models. "AI is the new camera ... [for] capturing human imagination," he said. He said the startup aims to build traction by holding events with the design community, including in New York, Tokyo and Europe. ChatGPT is by far the most popular AI app in the West, with 70 million monthly users on average in the U.S. and 144.6 million in Europe as of July, according to Sensor Tower. Google's Gemini was a distant second in both markets, but while Microsoft Copilot ranked third in the U.S., DeepSeek held the third spot in Europe, the data showed. During a visit to Beijing last week, Nvidia CEO Jensen Huang said nearly all of DeepSeek's users had downloaded the model to run it locally in countries around the world. He also emphasized that priorities for AI development are shifting. "I think over time it will be increasingly less important which one of the models are the smartest," he said. "It's going to be which one of the models are the most useful."
CNBC
2 hours ago
- CNBC
Europe's most valuable firm SAP flags U.S. trade slowdown but says Japan deal gives 'hope'
German software giant SAP said Wednesday that U.S. tariff tensions were slowing down its customers' decision-making, but that the Japan trade deal announced Tuesday was cause for cautious optimism. "In some sectors which are most affected by these [policy] decisions, like public sector U.S. and also the very big manufacturing industrial companies with complicated global supply chains, there was the one or other large transaction which has slipped over the turn of the last quarter," SAP Chief Financial Officer Dominik Asam told CNBC's "Europe Early Edition." Deals were not disappearing entirely, but approvals were being passed higher up the chain of command and holding up processes due to uncertainty, he noted. "Now we have to see how quickly we can catch up. That is very much a question of how the overall environment will evolve. I mean, obviously the most recent developments in Japan give us some hope, but too early to speculate on that," Asam said. "The faster the uncertainty abates, the more confidence we have in the outcome for the full year," he added. SAP in March became Europe's biggest listed company, overtaking French luxury group LVMH and Ozempic-maker Novo Nordisk in market capitalization, after pivoting the business firstly toward cloud computing and then toward opportunities in artificial intelligence. SAP now brings in the majority of its revenue from cloud services, and has focused on how AI can tap into its huge set of finance, sales and supply chain data to make efficiencies for businesses. The U.S. is one of its core markets, and investors have been questioning how SAP would be impacted by a potential pullback in spending as the administration of President Donald Trump engages in tense trade disputes and tariff negotiations with much of the world. The status of any framework deal with the European Union remained mired in uncertainty as of Wednesday, but global stock markets were buoyed by the announcement Tuesday of an agreement with Japan setting tariffs on its exports to the U.S. at 15%. SAP reported late on Tuesday a 9% year-on-year revenue rise to 9.03 billion euros ($10.6 billion) in the second quarter, just shy of an LSEG-compiled consensus forecast of 9.08 billion euros. Operating profit was just ahead of estimates at 2.57 billion euros. The company reiterated its full-year 2025 outlook, despite noting that the "prevailing dynamic environment implies elevated levels of uncertainty and reduced visibility." On an analyst call Tuesday, CEO Christian Klein said SAP was seeing "strong momentum" from the recent national security spending push in Europe, which has driven massive gains in defense stocks this year, some of which are SAP customers. Its current cloud backlog, a key metric for the firm, was up 28% on a constant currency basis to 18.05 billion, which analysts at Deutsche Bank said were "strong" in a Wednesday note. "Overall, we see SAP continuing to execute very well in a challenging environment, helped by its strong product offerings, AI roadmap and structural long-term Cloud migration projects. New wins included landmark customers such as Alibaba in Q2," the Deutsche Bank analysts said. However, other reactions were less positive, with analysts at TD Cowen and Piper Sandler trimming their target prices on the stock. One drag on the results came from fluctuations in foreign exchange rates, particularly weakness in the U.S. dollar against the euro, in which SAP reports. The firm forecast a 5 percentage-point drag on cloud revenue growth figures in the third quarter, assuming exchange rates as of June 30. SAP's Frankfurt-listed shares were 3.5% lower in early deals on Wednesday.
CNBC
4 hours ago
- CNBC
How much investment does Syria need to rebuild?
Billions of dollars in deals are expected to be signed at a Syrian-Saudi Investment Forum in Damascus on Wednesday. Carla Slim, MENA Economist at Standard Chartered, speaks to CNBC's Dan Murphy about the GCC's investments in Syria and lower oil price impact on growth throughout the region.
