Latest news with #Qianfan
Yahoo
27-05-2025
- Business
- Yahoo
Baidu vs. Alibaba: Which Chinese AI Stock Is the Better Investment Now?
Baidu BIDU and Alibaba BABA are two of China's tech titans that have increasingly pivoted toward artificial intelligence (AI). Both companies dominate their respective fields – Baidu in online search and AI cloud services, Alibaba in e-commerce and cloud computing – yet they share notable similarities. Each is profitable, generates substantial cash, and has been pouring investments into cutting-edge AI research and fact, Chinese tech companies like Alibaba and Baidu have recently captured renewed investor attention thanks to a series of positive developments (including massive government stimulus and the rise of AI services) after a few challenging years. With China's AI sector booming, these two companies stand out as key players riding the dive deep and closely compare the fundamentals of the two stocks to determine which one is a better investment now. Baidu, often dubbed 'China's Google,' has successfully repositioned itself as an AI-first company, marking a significant shift toward cloud computing and AI services in recent years. The company's aggressive push into AI has yielded promising results, particularly in its first-quarter 2025 performance. Baidu Core's revenue growth was driven largely by its AI Cloud business, which surged 42% year over year. AI Cloud now represents 26% of Baidu Core's revenue, up from 20% in the same period the previous year, highlighting increasing recognition of Baidu's AI capabilities.A key driver behind Baidu's AI growth is its model-as-a-service platform, Qianfan, which offers an extensive model library and supports fine-tuning of multimodal and reasoning models. By reducing inference costs, Qianfan has made Baidu's cloud offerings especially attractive to enterprise clients, bolstering subscription-based revenue. (read more: Baidu's Q1 Earnings & Revenues Top Estimates, Margins Down Y/Y).Baidu further strengthened its AI leadership with the launch of ERNIE 4.5 and ERNIE X1, and their Turbo versions in April 2025. These models promise superior performance at lower costs, enabled by Baidu's unique four-layer AI architecture that optimizes infrastructure, frameworks, models, and applications. As part of its strategy to drive accessibility, Baidu plans to open-source ERNIE 4.5 by June 30, 2025, helping expand its challenges such as U.S. chip export restrictions, Baidu remains confident in its ability to maintain momentum, citing efficient GPU utilization and growing domestic chip capabilities. Additionally, Baidu's mobile search product is increasingly AI-driven, with 35% of mobile search results now featuring AI-generated content, up from 22% in terms of challenges, the company posted a negative free cash flow of RMB 8.9 billion in the first quarter, largely due to elevated AI investments despite a strong operating margin of 16% for Baidu Core and a non-GAAP margin of 19%. Management signaled further increases in capital outlays for AI Cloud, model development, autonomous driving, and AI search transformation in ongoing weakness in online advertising is a concern. Even in the latest quarter, Baidu's core online marketing revenues declined 6% year over year, extending the prior year's decline. Competition from rivals (e.g., ByteDance's TikTok/Douyin in advertising, Tencent in digital ads, etc.) and the shift of ad budgets to new platforms have made it harder for Baidu to grow its search ad business. In cloud computing and AI, Baidu faces competition from Alibaba Cloud and Tencent Holdings Limited's TCEHY cloud services. Alibaba, China's e-commerce behemoth, has staged a notable comeback in the past year. Alibaba's core strength is its diversified, powerhouse business model. The company operates a vast commerce ecosystem that spans Chinese consumer marketplaces (Taobao, Tmall), international retail platforms (AliExpress, Lazada), wholesale trade, logistics (Cainiao), local services, digital media, and more. These commerce-related segments collectively still account for over half of Alibaba's revenue.A major driver of Alibaba's latest fourth-quarter performance was the strong momentum in its Cloud and AI segments. Alibaba Cloud revenue accelerated 18% year over year, with public cloud services growing even faster. This surge was fueled by robust demand for AI infrastructure, particularly as enterprises—both digital-native and traditional—began migrating workloads to the cloud to deploy AI applications. Notably, AI-related product revenue maintained triple-digit growth for the seventh consecutive quarter, demonstrating sustained momentum. The company's open-sourced Qwen3 model series, spanning multiple sizes and use cases, added further weight to its leadership in AI technology. (read more: Alibaba Q4 Earnings Surpass Estimates, Revenues Increase Y/Y)In the domestic e-commerce segment, Alibaba made meaningful progress in monetization. Taobao and Tmall Group posted a 12% rise in customer management revenue, driven by increased take rates. Key contributors included the rollout of a 0.6% software service fee and deeper adoption of Quanzhantui (QZT), a self-service ad platform designed to boost merchant marketing efficiency. Additionally, the growth in 88VIP memberships (which surpassed 50 million) and rising average revenue per user (ARPU) suggested improving customer loyalty and higher monetization potential. The integration of AI into search, recommendations, and advertising further enhanced user experience and operational Alibaba's capital allocation strategy also underscored its underlying financial strength. The company returned $16.5 billion to shareholders via dividends and buybacks while selling non-core assets to sharpen its focus on AI and core commerce. These actions, combined with a strong net cash position, gave Alibaba the flexibility to continue investing in strategic growth areas such as instant commerce and AI company faces key challenges, including intense competition in China's e-commerce space, rising costs from strategic investments in instant commerce and AI infrastructure, and macroeconomic and geopolitical risks. In the cloud segment, despite robust AI-driven demand, Alibaba is grappling with increased infrastructure costs. The company reported a 76% decline in free cash flow, largely due to elevated capital expenditures related to AI and cloud capacity expansion. These factors are contributing to margin pressure despite strong revenue momentum, as seen in the quarter's 1.9 percentage point quarter-over-quarter decline in adjusted EBITDA margin. While profitability is under pressure in the short term, Alibaba remains focused on long-term growth by streamlining operations and investing in high-potential Alibaba must navigate macroeconomic and geopolitical risks, especially in its international commerce business. Global trade regulation uncertainties and regional economic headwinds present structural challenges that could affect cross-border performance and profitability. As you can see below, Baidu's shares have struggled to gain momentum year to date. Concerns about China's economy and U.S.–China tensions have weighed on sentiment for China-exposed stocks like Baidu. Unlike Baidu, Alibaba's shares have been on a bullish tear, climbing 42.4% so far this year. Image Source: Zacks Investment Research Meanwhile, Baidu's underperformance has left the stock looking quite cheap. At roughly the mid-$80s per share, Baidu trades at about 7.84X forward 12-month P/E ratio compared with BABA's 11.13X. Image Source: Zacks Investment Research Over the past 30 days, the Zacks Consensus Estimate for Baidu has remained unchanged, while that for Alibaba's current-year earnings per share (EPS) has decreased, as you can see contrast in growth rates is notable — for the current year, the analysts expect BIDU's revenues to rise 2.2% to $18.9 billion and EPS to decline 4.3% to $10.08. BABA is expected to witness its revenue grow 3.8% to $143.4 billion and EPS grow 17.9% to $10.62. Alibaba's growth momentum and profitability heading into 2025 look solid, giving it plenty of financial firepower to continue investing in AI and other growth areas. This justifies its premium valuation. For Baidu Stock Image Source: Zacks Investment Research For Alibaba Stock Image Source: Zacks Investment Research Both Baidu and Alibaba stocks currently carry a Zacks Rank #3 (Hold). Both Baidu and Alibaba are positioning themselves as leaders in the rapidly expanding AI space, but they do so in different ways. Baidu's focus on autonomous driving and AI-powered cloud services is a bold, high-risk, high-reward strategy. Its valuation is attractive, especially considering the long-term potential of its AI and autonomous driving businesses. However, the company is more dependent on regulatory outcomes in China, which adds some volatility to its prospects. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks the other hand, Alibaba benefits from a diversified business model that includes e-commerce, logistics, and cloud computing, giving it multiple revenue streams that can support AI investment initiatives. While Alibaba's AI investments are not as bold as Baidu's autonomous driving ventures, its integrated approach in e-commerce and logistics gives it a more secure foundation for growth. The company's international exposure also provides an edge, particularly in a growing market like Southeast Asia. In conclusion, both stocks have strong AI-driven growth stories, but the edge goes to Alibaba for its diversified business model, consistent revenue generation from e-commerce, and international growth opportunities. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Baidu, Inc. (BIDU) : Free Stock Analysis Report Tencent Holding Ltd. (TCEHY) : Free Stock Analysis Report Alibaba Group Holding Limited (BABA) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
WIRED
20-05-2025
- Business
- WIRED
China's Effort to Build a Competitor to Starlink Is Off to a Bumpy Start
May 20, 2025 5:00 AM China has launched over 100 satellites for two broadband networks that could eventually rival the service from Elon Musk's SpaceX, but progress is hampered by launch bottlenecks and high failure rates. The Long March-8 Y6 carrier rocket carrying a group of 18 low Earth orbit satellites blasts off from the Hainan commercial spacecraft launch site on March 12, 2025, in Wenchang, China. Photograph: Getty Images If you gaze up at the night sky, there's a good chance you'll spot a trail of fast-moving, bright dots—newly launched Starlink satellites. But you might soon also see something else: spacecraft from Chinese projects building their own Starlink-like low Earth orbit satellite internet networks. More than 100 satellites have been launched from China since August—the first batches of two mega-constellations that are aiming to have about 28,000 satellites combined when they're completed. The two Chinese projects are officially called Guowang and Qianfan, but they each have a confusing set of alternative names in English due to their corporate structures and language differences. The former, which is also known as Xingwang or SatNet, is primarily focused on domestic telecommunications and national security use cases. The latter, which is also known as Spacesail or SSST, is more oriented toward providing service to foreign telecom companies. So far, Qianfan has signed deals with Brazil, Malaysia, and Thailand and has said it's eyeing dozens of other markets in Asia, Africa, and Latin America. Compared to Starlink, which operates more than 7,000 satellites, China is clearly still playing catch-up. But Guowang and Qianfan are joining a group of Starlink competitors around the world accelerating their operations, and they could give the market leader a run for its money in the end. The newcomers also stand to benefit as CEO Elon Musk's deepening entanglements in US politics raises reputational and security risks for SpaceX (Starlink's parent company) globally. '2023 and 2024 were the years of Starlink deployment. 2025 is the year of other actors getting into the game,' says Jonathan McDowell, an astronomer at the Smithsonian Astrophysical Observatory who has been tracking satellite constellations globally. 'In the West, we severely underreport the commercial side of the Chinese space industry.' But as Guowang and Qianfan launch their first batches of satellites, they are also running into troubles, including higher numbers of faulty satellites than SpaceX, bureaucratic hurdles, and limited rocket launch capacity. And if they don't launch enough satellites into space soon, they could be asked by the International Telecommunication Union (ITU), the United Nations body that coordinates space launches, to scale down the size of their planned constellations. Guowang and Qianfan couldn't be reached for comment. SpaceX didn't immediately reply to a request for comment. Faulty Satellites As of last month, Qianfan has launched 90 satellites that will provide broadband internet service for ground users, while Guowang has launched 29. The latter has also launched around a dozen experimental satellites since 2023, but it hasn't been transparent about their purpose, and it seemingly doesn't count them toward the numbers in its official constellation. While Qianfan is slightly ahead, it is also grappling with a significant issue: a concerningly high rate of possible faulty satellites compared to other, similar projects. Unlike Starlink, which publishes GPS information of its satellites in orbit, the Chinese companies have disclosed little about how their satellites are doing. Instead, researchers have relied on data collected by the US Space Force, which tracks all space objects by radar and releases public data about them. Jonathan McDowell, a researcher who maintains a website that analyzes information collected about low Earth orbit satellite networks, says that, of the 90 satellites that Qianfan has launched, 13 seem to have exhibited irregular behavior, namely they didn't rise up to their target orbit height along with their peers. Qianfan's second batch, which it launched in October 2024, contained only five satellites that reached their planned height out of 18, according to McDowell. McDowell says these satellites are not necessarily dead—some could be dormant, waiting for better positioning opportunities—but overall, Qianfan's satellites clearly underperform compared to others. While Starlink started with about a 3 percent failure rate, it has since gone down to less than 0.5 percent, according to McDowell's data. OneWeb, the British mega-constellation with over 600 satellites, contains only two failed ones that are stuck in space. According to the Shanghai local government, Qianfan's second batch of satellites are made by a different manufacturing supplier, Genesat, which could be related to why it performed worse than other batches. It was the first time Genesat delivered mass-produced satellites, a press release at launch time said. Another problem is that Qianfan and Guowang are literally aiming higher. Both projects have opted to put their satellites in higher orbits than Starlink, making their failed satellites harder to deorbit and more likely to become long-term space debris. Given the planned sizes of these mega-constellations, their higher failure rates could mean that space will be crowded with even more dead satellites. 'What can happen is that you will have so many satellites operating in the same orbital shell that you're constantly having to move your satellite out of concerns of close approach,' says Victoria Samson, chief director of space security and stability at Secure World Foundation, a nonprofit organization focusing on outer space sustainability. That will create logistical burdens and extra costs for other satellite operators, and Samson says there's an urgent need to establish coordination mechanisms between nations to avoid space collisions as mega-constellation projects pick up their pace. 'Right now, there's no real space traffic control system,' she explains. The Clock Is Ticking While the Chinese projects are ahead of some competitors—Amazon, for instance, launched its first batch of 27 Project Kuiper internet satellites in April—they are very far behind Starlink as well as their own ambitious goals. Before companies can send a satellite into space, they need to register their road map with the ITU and reserve the radio frequency spectrum for their spacecraft to communicate with the ground. According to ITU filings, Guowang wants to have nearly 13,000 satellites in total, while Qianfan plans to have more than 15,000. It's not unusual for companies to make overly aspirational satellite plans but never achieve them, but the ITU requires firms to launch their first satellite within seven years of reserving the spectrum, then steadily make progress toward completing their launches within seven years after that. If they don't, they may have to scale back their intentions. Those requirements could soon become a serious problem for both Guowang and Qianfan. Since they began launching their non-experimental satellites last year, the clock is now ticking, and the ITU rules state they will need to have sent 10 percent of their spacecraft into the sky by 2026. Compared to Starlink, both constellations appear to be slow in making progress. Starlink launched its first batch of satellites in May 2019, and the company got into a steady rhythm the following year, reaching almost 2,000 satellites in about two years, says McDowell. Guowang in particular has been moving slower than many observers expected since it first registered with the ITU in 2020. 'Everybody, myself included, was expecting there to be a pretty quick ramp up, because they had a lot of money, they had a lot of support, and they had this government mandate' to become the Chinese Starlink, says Blaine Curcio, founder of Orbital Gateway Consulting, a market research firm that focuses on the Chinese space industry. Guowang, or SatNet, as some have come to call it, was one of the first satellite companies that made a high-profile move into Xiong'an, a development near Beijing that the Chinese government has been promoting as a high-tech city of the future. But its ties to the government may have also led to bureaucratic hurdles, Curcio says. The company is led by executives from large state-owned enterprises, who likely bring with them a more traditional, top-down style of management. 'They're just not going to move fast and break things,' he explains. Although Qianfan also has state backing from Shanghai's municipal government, experts say it operates more like a modern business and has hired experienced executives from the finance and business sectors, which may be why it's been moving faster than Guowang. But there's one serious bottleneck that's plaguing both projects right now: rocket availability. While China launches a large number of rockets annually, they have to be shared among various projects, including satellites for navigation and remote sensing. More importantly, China still doesn't have any operable reusable rockets yet, which have been essential for Starlink to maintain its fast and economical launch cadence. Qianfan has put out two public procurement requests this year for rocket suppliers but declared them both failures because they didn't receive enough bidders. While there are several Chinese commercial companies working on developing reusable rockets, none are ready for prime time. 'It's possible that in the next couple of years we'll start to see that that bottleneck get resolved, but it's also possible that it remains a pretty substantial bottleneck,' Curcios says. Starlink Alternative Guowang and Qianfan appear to have avoided directly competing with one another so far by targeting different markets. Guowang, which has more central government support, could be tasked with use cases that have a national security element. Taiwan has reportedly received intelligence that China's military drills around the island have been seeking to validate whether Guowang works in the area and can direct Chinese missiles for potential strikes in the West Pacific, according to a report published by The Atlantic Council last month. Qianfan, on the other hand, is positioning itself as a competitor to Starlink for the international market. A map Qianfan representatives presented at a space industry conference in China last year showed it's already working in six markets: Brazil, Kazakhstan, Malaysia, Oman, Pakistan, and Uzbekistan. The map also says it's planning to go into two dozen more in 2025, including countries like India, Saudi Arabia, Iran, Argentina, and many across Africa. Qianfan may have an easier time winning over international markets as some countries become increasingly wary of Musk's political activities and influence over Starlink. In 2023, for instance, Musk made the decision to restrict Starlink service to Ukraine amid its war with Russia. Starlink's newer satellites are equipped with the ability to provide service to users without their data passing through any local internet gateways, which could also deter some countries who want more control of local internet data. 'As I understand, Qianfan has chosen to not do this, as a way of giving countries more peace of mind with regard to landing traffic locally,' Curcio says. Many telecom firms have also been frustrated with Starlink's decision to work with multiple competing local resellers at the same time. Measat, the Malaysia satellite communications company that signed a preliminary deal with Qianfan in February, was also one of Starlink's first resellers in the country, Curcio says. But Starlink later onboarded more of its competitors and also began offering its products to customers directly, which could have cut into Measat's profits. Qianfan has not announced any direct-to-customer services and is instead providing only local telecom companies with satellite internet capabilities. 'From a commercial angle, if you make a deal with Starlink, it's like making a deal with the devil. Eventually Starlink is going to go behind your back and try to take your customers from you and sell to them directly,' Curcio says.
Business Wire
22-04-2025
- Business
- Business Wire
BitradeX Secures £12 Million Series A to Accelerate Global Expansion of AI-Powered Trading Infrastructure
LONDON--(BUSINESS WIRE)--BitradeX, a next-generation AI-powered digital asset trading platform, has announced the successful completion of its £12 million Series A funding round, led by Bain Capital. The capital will support BitradeX's global compliance expansion, the development of its AI Strategy Labs, and continued investment in its core technology stack. Founded in 2022, BitradeX is committed to redefining the digital asset trading experience through intelligent automation, rigorous compliance, and a user-first design. Share Founded in 2022, BitradeX is committed to redefining the digital asset trading experience through intelligent automation, rigorous compliance, and a user-first design. The platform is best known for its proprietary ARK Trading Model, an AI-native engine built on trillion-parameter architectures that integrates advanced techniques from DeepSeek and Qianfan for high-frequency crypto trading. The ARK model currently achieves over 90% short-term trend prediction accuracy and has delivered annualized returns of 120%–180% in live market conditions. By combining real-time on-chain activity, macro data, sentiment indicators, and market volatility, ARK executes trades with millisecond latency and dynamic risk calibration. In a major innovation, BitradeX introduced the industry's first AI-yield-powered Protection Pool, a dual-layer mechanism that autonomously absorbs losses and redistributes excess yields to ensure principal and fixed-income coverage. Unlike traditional insurance-based exchanges, BitradeX embeds capital protection directly into its reward model. The Protection Pool is publicly auditable and seeded with 100 BTC in reserve capital. On the compliance front, BitradeX holds both a UK FCA crypto license and a US MSB license, operating under institutional-grade custody frameworks, a five-tier risk control system, and a $20 million contingency reserve. These measures enable BitradeX to offer transparent, secure, and compliant services to retail and professional users alike. Looking ahead, the platform plans to launch AI Strategy Labs in key markets including London, Hong Kong, and Singapore within the next 6 months. These hubs will allow developers and institutions to access and customize the ARK model through open APIs under a 'Strategy-as-a-Service' framework — opening the door to fully modular and programmable crypto trading systems. BitradeX is positioning itself as the infrastructure layer for the next generation of AI-native finance, delivering predictable performance, automated execution, and built-in protection — all on a globally compliant foundation. If you're interested in collaborating or communicating with Bitradex, please contact us at support@
Yahoo
12-04-2025
- Science
- Yahoo
China's Starlink-rival satellite megaconstellations could litter orbit for 100+ years
China's satellite megaconstellation plans could clog low Earth orbit with large spent rocket stages, analysts warn. Those rocket stages could stay in orbit, increasing the risk of collisions, for over a hundred years. The government's Guowang and the commercial Qianfan (Thousand Sails) internet constellations will each consist of 10,000 satellites. The first launches for these constellations started last year. Over a thousand launches will be required to finish lifting the constellations to space. Scientists have already warned that SpaceX's Starlink constellation can obstruct important scientific observations. It could also lead to a devastating scenario known as Kessler Syndrome. Now, China's new constellations will add to this problem. Unlike Starlink, the rockets lifting the satellites may also leave a large, long-lasting debris footprint in space. China's space administration has faced heavy criticism in the past for its space practices. In 2022, several launches for its Tiangong space station ended with a dangerous, uncontrolled rocket reentry. One of these forced Spain to close its northern airspace for a short period. Controlled reentry burns require more fuel and financial resources to operate, but they ensure no one is harmed and no property is damaged on the ground. Now, amid rising concerns regarding orbital sustainability, China is leaving the upper stages of rockets in low Earth orbit (LEO). To be precise, it is leaving spent rocket boosters in persistent orbits, meaning they could remain there for over a century. This is according to space and orbital debris awareness consultant Jim Shell, owner of Novarum Tech LLC. In a thread on social media platform X, Shell explained that "there will be some 1,000+ PRC [People's Republic of China] launches over the next several years deploying these constellations." 'I have not yet completed the calculations but the orbital debris mass in LEO will be dominated by PRC upper stages in short order unless something changes (sigh),' he continued. 'For both constellations, the rocket upper stages are being left in high altitude orbits — generally with orbital lifetimes greater than 100 years.' To be precise, China's Long March 6A and 8 rockets are leaving their upper stages in orbits between 447 and 484 miles (720 and 780 kilometers). This is according to data from the US Space Force. As reported by SpaceNews, this is much higher than the roughly 372 mile (600 km) threshold aligned with global best practices. At such high altitudes, the lower atmospheric density results in less atmospheric drag, meaning space debris can stay in orbit for many decades. The reason for this is that the Guowang and Qianfan satellites orbit at almost double the altitude of Starlink, meaning they fly roughly 621 miles (1,000 km) above Earth. It is worth noting that the first Guowang launch in December 2024 did use a Yuanzheng-2 upper stage, which is capable of deorbiting itself. Older models were responsible for the uncontrolled reentries. China is also developing a range of reusable medium-lift rockets. These will likely compete for Guowang and Qianfan launch contracts. However, how these handle reentries is not yet known. As SpaceNews points out, China is still looking to ramp up production of its Long March 5B and Long March 8 rockets. Though China has the Yuanzheng-2 at its disposal, it is unclear whether these will be used for the majority of Guowang and Qianfan launches. The nation has a track record of ignoring established best practices in space in recent years. Following one of China's uncontrolled rocket reentries in 2022, former NASA Administrator Bill Nelson said: "the People's Republic of China did not share specific trajectory information as their Long March 5B rocket fell back to Earth. All spacefaring nations should follow established best practices and do their part to share this type of information in advance to allow reliable predictions of potential debris impact risk, especially for heavy-lift vehicles, like the Long March 5B, which carry a significant risk of loss of life and property." Chinese government officials have been known to wave away the criticism, putting it down to anti-Chinese propaganda. In an interview with IE in 2022, Harvard astronomer and astrophysicist Jonathan McDowell said China's 'reentries are objectively worse than what other countries are doing. I praise China's space program when it does good things, as it often does. And I criticize them when they are bad. This is bad.' Of course, China isn't the only nation lifting megaconstellations to orbit. Elon Musk and SpaceX have also faced criticism for their practices. The company currently has more than 6,700 Starlink satellites in orbit. It plans to eventually lift 30,000. While SpaceX's Falcon 9 rockets do perform a controlled reentry burn, the satellites themselves cause problems for the global scientific community. Starlink satellites have reflective surfaces that obstruct observations by ground-based telescopes. Though SpaceX does control its rocket reentries, it does still leave large parts in orbit. These have, on occasion, crashed down onto rural areas. Last year, University of Regina astronomer and space debris awareness advocate Samantha Lawler told IE, she went to see "terrifyingly large" chunks of a SpaceX Crew Dragon capsule that had fallen not far from her home. "I hate to say this, but I really do think it will take a death before government regulators pay attention to the problem of space debris," she continued. Lawler believes Starlink satellites have us on the verge of Kessler Syndrome, a scenario whereby one collision dramatically increases the probability of more collisions in a destructive, cascading effect. In an interview with IE in 2022, Meredith Rawls, an astronomer at the University of Washington, said the Starlink problem is 'unsustainable'. What's more, 'If SpaceX were the only company poised to launch (tens of!) thousands of satellites, we'd be staring down a very different situation,' she continued. 'As it is, we have only seen the tip of the iceberg.'
Express Tribune
13-02-2025
- Business
- Express Tribune
The Digital Cold War: AI, Blockchain, Fintech, and the US-China Battle for Financial Dominance Pt 2
The world is splitting into two digital ecosystems as the U.S. and China race for financial supremacy. From AI-driven fintech and stablecoins fueling U.S. Treasury demand to the rise of CBDCs and the Splinternet, global finance is entering a new era of geopolitical competition. The Acceleration of Change In The World is Changing Faster Than You Think, I highlighted how exponential technologies and macroeconomic shifts are disrupting industries at an unprecedented pace. But this is just the beginning. The real question now is: how do we prepare for what's next? We are entering an era where technological acceleration will reshape power structures, redefine economies, and challenge long-held assumptions about how the world operates. While some will struggle to keep up, others will capitalize on the opportunities ahead. The difference between the two will be determined by how well they understand the forces at play. AI, Quantum Computing, and the New Arms Race The next Cold War won't be fought with aircraft carriers or missile silos — it will be fought with artificial intelligence, quantum computing, and cyberwarfare. • AI is the new nuclear weapon. The nations and corporations that achieve AI supremacy will dominate global finance, military strategy, and economic power structures. • Quantum computing will break existing encryption models. Blockchain networks, traditional cybersecurity methods, and even financial transaction security will be reshaped once quantum supremacy is reached. • The race for AI-driven autonomous systems is escalating. Governments and enterprises alike are pushing for AI-controlled decision-making, reducing reliance on human operators. Just like the nuclear arms race of the 20th century, the nations and institutions that fail to keep up will find themselves at a permanent technological disadvantage. The Splinternet and the U.S.-China Race for Global Digital Dominance The world is no longer operating on a single, unified internet — it is splitting into two competing ecosystems, mirroring the growing geopolitical divide between the U.S. and China. • Satellite internet is becoming a tool for financial control. • Countries that adopt one side's satellite infrastructure will be tied to that financial and payment system. • U.S.-led networks will ensure that only applications complying with its standards operate within its system. • China-led networks will push for apps that align with its geopolitical and financial standards. • The fragmentation of financial services • Digital wallets, stablecoins, and AI-powered fintech will all operate within specific influence zones. • Payments, e-commerce, and lending models will be determined by which digital system a country adopts. This is not just about financial services — it's a race for control over the global economic infrastructure. The battle for who controls digital payments, credit, and AI-driven finance will define the next era of financial power. Starlink vs. Qianfan: The Satellite Internet Race The global satellite internet race is heating up as China's Qianfan (G60 Starlink) and SpaceX's Starlink compete for dominance. Starlink, operational since 2019, has over 7,000 satellites in low Earth orbit (LEO) and aims to deploy up to 34,400 for worldwide broadband coverage. In contrast, Qianfan, led by Shanghai Spacecom Satellite Technology, plans to launch 15,000+ satellites by 2030 to rival Starlink's network. While Starlink already provides global services, Qianfan is in early deployment stages, aiming for full coverage by 2027. Both constellations are key components of the U.S.-China digital infrastructure battle, with each nation expanding its satellite internet to strengthen financial, technological, and geopolitical influence worldwide. Countries adopting one of these systems will be tied to that ecosystem, reinforcing the Splinternet divide in global finance, communication, and cybersecurity. The battle for digital dominance is shifting to space, determining which financial and technological systems will define the future. AI, Blockchain, and the Evolution of Finance Artificial intelligence and blockchain are no longer fringe technologies; they are becoming the new financial infrastructure. AI-powered financial models are reshaping traditional risk assessment, underwriting, and trading strategies. Institutions that rely on legacy systems will need to adapt. Blockchain is ushering in a new era of finance where decentralized applications, tokenization, and e-money layers are emerging as consumer-facing solutions. Banks Are Here to Stay — But They Will Evolve Despite the rise of fintech applications, DeFi, and e-money layers, banks are not going away — they will evolve into custodians, compliance hubs, and backend infrastructure providers in the new financial system. • Consumer Finance Moves to Fintech, but Banks Provide the Foundation • E-money platforms and alternative lending apps are taking over consumer-facing financial interactions. • However, banks will still control regulatory compliance, custodianship of digital assets, and large-scale capital flows. • Banks Will Act as Custodians of Digital Finance • As CBDCs, stablecoins, and tokenized assets gain adoption, banks will serve as compliance enforcers and custody providers. • Instead of being replaced, banks will consolidate, absorbing smaller institutions and integrating fintech innovations. The Role of Fintech in Credit Access: Building Alternative Credit Models One of the biggest structural challenges in developing markets is the lack of formal credit scoring mechanisms. • No FICO Credit Score Equivalent — Unlike developed economies, many emerging markets do not have centralized credit bureaus or decades of consumer lending data. • Traditional Banks Aren't Lending — Banks in these markets have historically avoided extending credit to SMEs and individuals without formal banking histories. • Collateral-Based Lending is the Norm — Due to the lack of data, traditional institutions rely on collateral-based lending, which excludes a large portion of the population from accessing capital. How Fintech and E-Money Layers are Solving the Problem Fintechs, non-bank financial institutions (NBFIs), and e-money platforms are now filling the gap by leveraging alternative data models: • Transactional Data — Digital payments, mobile top-ups, and bill payments are being used as a proxy for creditworthiness. • AI-Based Risk Scoring — Fintechs are using machine learning models to analyze consumer spending behavior, cash flow patterns, and repayment history to predict risk. •Gradual Credit Building — Small initial loans (such as payroll advances or buy-now-pay-later financing) allow borrowers to build financial identities over time. Stablecoins: The Silent Force Behind U.S. Treasuries and Global Liquidity Stablecoins have become integral to digital finance, facilitating billions of dollars in daily transactions while being backed by reserves that include U.S. treasuries. This mechanism has reinforced demand for U.S. treasuries, as stablecoin issuers must hold liquid reserves to maintain their peg. Even policymakers have taken notice. Federal Reserve Governor Christopher Waller has acknowledged the role of stablecoins, describing them as effectively 'synthetic' dollars that could enhance the financial system by eliminating inefficiencies (Reuters). The Rise of Central Bank Digital Currencies (CBDCs): Pros & Cons As the financial landscape evolves, central banks worldwide are launching Central Bank Digital Currencies (CBDCs) — a digital form of fiat money aimed at modernizing financial systems. Advantages of CBDCs: • Programmable Money: Governments can program CBDCs to stimulate specific sectors, ensure targeted aid distribution, or manage inflation dynamically. • Financial Inclusion: CBDCs could expand financial services to unbanked populations, reducing reliance on cash-based economies. • Reduced Transaction Costs: A state-backed digital currency could make financial transactions cheaper and more efficient. Potential Risks of CBDCs: • Privacy Concerns: Unlike cash, CBDCs are fully traceable, raising concerns over financial surveillance and personal privacy. • Increased Government Control: Central banks could directly influence spending behavior, which, if misused, could become a tool for financial overreach. • Individual Sanctions and Financial Control: CBDCs could allow governments to freeze funds, block transactions, or impose spending limits on individuals, extending financial blacklisting beyond national sanctions. • Risk of Overreach: In politically unstable regions, CBDCs could be used as a tool to suppress dissent by restricting financial access. While CBDCs have the potential to increase efficiency and financial inclusion, their implementation must be balanced with safeguards to prevent misuse. What Comes Next? In Part 3, I'll explore how AI, digital finance, and automation will force radical transparency and eliminate inefficiencies in economies like Pakistan. The digitization of everything — finance, payments, trade, mobility — will fundamentally reshape economic structures. Technology will make everyone honest — it's the ultimate form of documentation. Stay tuned for Part 3.
