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Alibaba and Ant’s rectification reckoning

Alibaba suffered a record Rmb18.2bn ($2.8bn) fine at the weekend, yet its shares reacted by rising sharply on Monday.

The jump is explained by the ecommerce company’s assertion that the fine represented the end of its antitrust travails, and by investors’ views that $2.8bn was not particularly damaging as a final price to pay.

If Ant Financial, the other major company founded by Jack Ma, had investors, they may not have reacted so well to its own competition decision from Chinese regulators on Monday.

Its expected $37bn IPO last November never happened due to the authorities and on Monday they made public a “rectification programme”, whereby the payments provider will have to separate itself from its lending services.

With only 36 per cent of Ant’s revenues coming from payment services now, that could prove a body blow, while its Huabei and Jiebei credit operations would suffer from the ending of their preferential promotion on Alipay and Alibaba.

Lex says that in order to remain in Beijing’s good books, Alibaba will have to boost spending on corporate good deeds and services that support small businesses in rural regions, such as Taobao Deals. Profit growth, already slowing, will fall back.

Alibaba’s contemporaries, including Baidu, Tencent and Meituan, fear they will be next to come under scrutiny. They have smaller pockets than Alibaba and would be hit harder by large fines.

The Internet of (Five) Things

1. Microsoft’s nuanced voice deal
Microsoft has agreed to buy voice recognition pioneer Nuance Communications in an all-cash transaction that gives the company an equity value of $16bn. The deal, the second-largest acquisition by Microsoft, comes almost two years after the two companies partnered to roll out artificial intelligence systems that help doctors with administrative tasks.

2. Nvidia attacks Intel’s core business
The Gartner research firm reported today that global chip revenues grew 10.4 per cent last year, led by Intel’s, but Nvidia experienced the greatest revenue growth, of 45 per cent. It’s now attacking Intel’s heartland with the announcement today of its first general-purpose data centre chip, for use in the most advanced AI systems.

3. Darktrace London IPO, Trustly’s Stockholm listing
Cyber security company Darktrace plans to float in London, in a vote of confidence for the exchange despite the disastrous debut of Deliveroo last month. The IPO could value the company, founded in 2013, at up to £3bn, according to a person close to the deal. Swedish payments company Trustly said on Monday it was seeking a valuation of about $9bn when it lists on Nasdaq in Stockholm in the coming weeks.

4. Dubai orders 4,000 Cruise robotaxis
Dubai has become the first city to sign a contract with an autonomous taxi manufacturer, ordering up to 4,000 vehicles from the US driverless car group Cruise with a view to deploying them from 2023. Dubai is also pushing to become the first city to host flying taxi services and has set a target of a quarter of the city’s transportation being fully autonomous by 2030.

5. Groceries in an online jiffy
Apps such as DoorDash and Deliveroo, focused on restaurants and takeaway meals, have proven consumer appetite for deliveries that are ordered online and arrive in as little as 30 minutes. But the new generation of start-ups eyeing the far greater market of groceries — estimated at $1tn in the US and more than €2tn in Europe — promise to deliver a basket of essentials in just 10 minutes. Tim Bradshaw and Dave Lee have been looking at the rapid growth of rapid delivery apps for The Big Read.

Column chart of Global deal value ($bn) showing Venture capital investment in rapid delivery apps so far this year has already surpassed 2020 levels

Tech week ahead

Tuesday: Nasdaq-listed Chinese travel website Trip.com will set the price for its Hong Kong secondary listing. The offer, which seeks to raise as much as HK$10.5bn ($1.4bn), comes after recent “homecoming” listings have seen disappointing debuts.

Wednesday: Cryptocurrency exchange Coinbase is expected to complete its direct listing. Indian software and services company Infosys will report its fourth-quarter earnings before the market opens in New York.

Thursday: Chip foundry Taiwan Semiconductor Manufacturing Co. will post quarterly earnings. Applovin, the mobile ad tech company that is also a video game publisher, is set to IPO.

Tech tools — Wooden standing desks

Jonathan Margolis has been perching his laptop on three wooden standing desks. Harmoni’s (£179) is inspired by the Japanese art of kanawa tsugi — joinery without nails — and feels a bit like standing at a pulpit. The HumbleWorks desk (£199) comes with two taut steel “guy ropes” at the back to nullify any slight bounce. DeskStand (£150) is made in Cape Town by a small social enterprise and has the same simplicity as the Harmoni.

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