A lot of eye-opening charts here about China's tech slowdown and saturation. It would appear every company was pushing as aggressively in marketing as ByteDance. Revenue is now negatively correlated with operating income 😬
Tencent reported a big slow down in ad revenue, and I agree that Alibaba is likely to follow — with an even larger hit. This will be a really interesting period for Chinese tech. The NFL-like AI salaries & VC deals have slowed. Will talent head back to SV?
Social matured, growth became tapped-out w/ WeChat teetering around 1B users as marketing proved futile, & apps like Douyin are now heavily focussed on commerce revenue models. The Ofos & lenders fell loudly. Where will we see talent investment during a slowdown like this?
This trade war will worsen. China's growth will continue to stall. Debts will only swell and catchup within years. We will soon call this a recession. In 2008, the iPhone proved recession-tolerant, and the talent and foundations that built the Ubers came out of this period.
Most interesting to me in China right now is the platform and hardware investments that have coincided this trade war. Heavier focus on chip independence, mini-program standards, the emergence of Harmony OS, & a focus on new paradigms and hardware lines.
As things slow, it's tough to say which of these broad investments will hit the chopping block. Building the mobile successor with glasses will be a multi-decade, expansive investment. As will the car projects. MIC 2025-like polices soon to emerge would invest in the latter.
So much about this growth period consolidated power in the big Chinese tech companies, who all heavily competed each other — to the extent where the operating graphs are terrifying. A slowdown will slow the heavily centralized ecosystem; WeChat raised the floor, now it stalls it.
This growth period has displayed a boom of AI implementation in China. It was a rising tide for engineers & research publication pertaining to AI. Broad institutional raising of the floor to squeeze more out of less. We saw this in the astonishing capability of P30 Pro SuperZoom.
China's central bank has again said a Bitcoin-like digital currency will appear soon. This sparks questions about whether we will see this first adoptive force into uncentralized (albeit China hybrid) protocols draw a similar AI push across the ecosystem.
While current-generation tools are spreading, there remains non-linear step-changes in research. It was a lonewolf Google intern that brought GANs into the world. With a lot of higher caliper talent in the midst of a slowdown, will the next lonewolf research emerge from China?
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