DeepSeek ‘Started a Revolution' for AI and Investors
Blue Whale Manager Stephen Yiu joins Merryn Talks Money to discuss the Big Tech selloff, his outlook for AI and where he's investing now.
Subscribe to Merryn Talks Money on Apple Podcasts
The artificial intelligence landscape appears to have changed. Nvidia's dominance has been disrupted by Chinese startup DeepSeek, whose surge in popularity is raising questions about the valuations of US tech giants. That this new rival to ChatGPT comes at a fraction of the latter's cost has poked holes in the justification for massive AI budgets.
'They have started a revolution,' says Stephen Yiu, chief investment officer of Blue Whale Growth Fund, who joins this week's Merryn Talks Money. Now anyone 'can start to work on some AI application.'
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CNBC
15 minutes ago
- CNBC
Involution or evolution? China wants to stop the EV price war, but analysts are doubtful
BEIJING — Chinese regulators aren't pleased about the price war brewing in its automotive sector, but industry players and analysts only see the competition heating up. "A certain automaker has taken the lead in launching significant price cuts and many companies have followed suit, triggering a new round of 'price war' panic," the China Association of Automobile Manufacturers said in a Chinese-language statement Saturday, translated by CNBC. The government-linked body was taking shots at electric vehicle giant BYD, which sparked the latest round of discounts on May 23, including a more than 30% price cut on one of its car models. "Disorderly 'price wars' intensify vicious competition," the association said, warning of further pressure on profit margins and consumer safety risks. It called for companies to abide by fair competition and not monopolize the market or "dump" goods at prices below the cost of production. "'Price wars' have no winners, much less a future," People's Daily, the official newspaper of the ruling Chinese Communist Party, subsequently said in an article, citing the Ministry of Industry and Information Technology. That's according to a CNBC translation of the Chinese. The ministry will increase regulation of non-productive competition and cooperate with other departments to enforce laws promoting fair competition, the report said. The ministry did not immediately respond to a request for comment. BYD referred CNBC to its comment to China's state media, in which the automaker said it firmly supports the manufacturing association's calls for fair competition and creating a healthy market. There's even a buzzword in China to describe such excessive competition, in a race to the bottom: , or "involution." China's top leaders have in the last several months increasingly called for efforts to address involution. The term was mentioned in Chinese Premier Li Qiang's annual work report in March. The market regulator's meeting last month also called for "comprehensively rectifying 'involutionary' competition." Analysts noted that BYD's latest markdowns are actually formalizing discounts that consumers would have likely received previously under China's trade-in subsidy program, which aimed to boost consumption. Despite nearly a 30% market share, BYD faces competitive pressure as well, Nomura analysts pointed out in a report Monday. The automaker, which counted Warren Buffett as an early investor, reported 14% growth in sales last month, a slowdown from 19% year-on-year growth in April. "Given the current oversupply situation in the China auto market, we believe the most intense competitive phase is yet to come, until if we can see a meaningful market consolidation in the future," the Nomura analysts said. Despite the rhetoric, there isn't much that can be done about market competition, Zhong Shi, an analyst with the China Automobile Dealers Association, said last week. He added that other countries are also watching the intense competition in China's car market and what it could mean for their local auto industries. The average price of a car exported from China has fallen since 2023, reversing an upward trend previously, according to figures published on social media by the China Passenger Car Association's Secretary-General Cui Dongshu. For China auto sales to Germany, the average export price per vehicle has fallen to $21,000 as of this year, down from $30,000 in 2023, the data showed. In Mexico, the top destination for Chinese car exports, was an exception, with the average price rising to $13,000, up from $12,000 two years ago. In China, the average car retail price has fallen by around 19% over the past two years to around 165,000 yuan ($22,900), according to Nomura, citing industry data from Autohome Research Institute. There are other signals that the rush into electric cars has created oversupply. A "strange phenomenon" of secondhand cars being sold with zero mileage has emerged, Great Wall Motor Chairman Wei Jianjun said in a Sina Finance interview conducted in Mandarin on May 23. He added that around 3,000 to 4,000 vendors on Chinese used car platforms were selling such cars. Vehicles were registered as sales or deliveries for automakers, only to be sold on the secondhand market almost immediately, which inflated sales volumes. But this created "too much chaos", prompting Wei to call for better regulation within the industry. China's fast-growing market of battery-only and hybrid-powered cars has seen several price cuts over the last two years. The price war has yet to reach its peak, and "competition will become more intense in the next five years,' EV startup 's CEO He Xiaopeng told Chinese media last week, which the company verified with CNBC. "This is just an 'appetizer' of what is to come," he added. He said that rather than competing on price, Xpeng would compete on technology and expand beyond China to the rest of the world. The startup has focused on making its driver-assist system a selling point and has delivered more than 30,000 cars a month for the past seven months. Last week, Xpeng released the Max version of its Mona 03 at 129,800 ($18,020), nearly 17% cheaper than when the lower-priced model was initially revealed in August. Like most electric car startups, Xpeng reported losses attributable to shareholders in the first quarter of around $90 million. Nio, which has focused on more premium vehicles, on Tuesday reported a loss of $949.6 million in the first quarter. 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The Descartes Systems Group Inc (DSGX) Q1 2026 Earnings Call Highlights: Strong Revenue Growth ...
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The Global Trade Intelligence business saw significant growth due to increased demand for tariff and duty information amid changing trade environments. The broader macro environment remains challenging, with shipment volumes down in various transportation modes, particularly in US-China trade. The company had to undertake a restructuring, impacting about 7% of its workforce, to prepare for potential future economic challenges. Cash flow from operations decreased to $53.6 million, down from $63.7 million in the same quarter last year, partly due to acquisition-related charges. The US's removal of the de minimis tariff exemption for Chinese imports led to temporary disruptions in the company's small package import business. Uncertainty in global trade and economic conditions is causing decision-making paralysis among customers, impacting transaction volumes and growth. Q: Can you provide more details on the workforce reduction and its impact on the business? A: Edward Ryan, CEO: The reduction was across the board, affecting various functional areas and geographies, totaling just under 200 people. This decision was made to maintain healthy margins and prepare for market uncertainties. AI advancements have facilitated some of these cuts. Q: What were the headwinds affecting organic services growth this quarter? A: Edward Ryan, CEO: Uncertainty in the market led to fluctuations in transaction volumes, particularly in customs and security filings. Ocean and truck volumes were down, influenced by tariff uncertainties, causing customers to hesitate in decision-making. Q: Have you observed any changes in renewal rates or sales pipeline conversion? A: Edward Ryan, CEO: There hasn't been a significant change in renewal rates or sales pipeline conversion. Sales momentum remains strong, and there have been no major customer defections or contract renegotiations. The future depends on economic developments and tariff negotiations. Q: How does the current downturn compare to previous ones like 2022 or 2023? A: Edward Ryan, CEO: The current situation feels less severe but is marked by greater uncertainty. Unlike past downturns, it's unclear if we're in a recession. The uncertainty stems from unresolved tariff negotiations and geopolitical tensions. Q: What is the status of the 3GTMS acquisition and its integration? A: Allan Brett, CFO: The 3GTMS acquisition is reflected in the baseline calibration. The integration process is ongoing, with efforts to align cost structures and leverage cross-selling opportunities. The acquisition is expected to enhance Descartes' transportation management offerings. Q: How is the competitive environment evolving, especially with recent industry consolidations? A: Edward Ryan, CEO: The competitive landscape is shifting, with prices coming down and private equity firms less active. 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BARK Inc (BARK) Q4 2025 Earnings Call Highlights: Record EBITDA and Strategic Shifts Amid ...
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