TRD Issue 65 - Briefing: Nvidia's Blackwell, Apple-Google AI Talks, Grok Goes Open, Temu Shifting from US, Alibaba v Coupang in Korea

Hello Subscribers,

This week, our spotlight is back on AI again.

At the recently concluded GTC (GPU Technology Conference), Nvidia's CEO Jensen Huang unveiled the new Blackwell graphics processing architecture. With 208 billion transistors, it's 2.6 times that of last year's H100 GPU, significantly boosting AI computational power. This means models with up to a trillion parameters can generate 3D videos by merely speaking to a computer. Companies like Amazon, Dell, Google, Meta, Microsoft, OpenAI, Oracle, and Tesla are set to adopt the Blackwell architecture, heralding more enterprise and consumer AI applications.

In other news, Apple, which has been absent in AI, reportedly discusses incorporating Google's Gemini AI into its 2.2B devices, primarily iPhones. This collaboration could fill the AI application gap in Apple devices over the past year, benefiting both tech giants facing new challenges.

AI applications in retail can be broadly categorized into two areas - shopping assistants or chatbots, and operations tools for sellers such as AI-generated product images and descriptions. Recently, Amazon introduced a new feature allowing stores to create product pages on Amazon by simply providing a link. This reduces the manual work for sellers who already have their own brand.com sites.

Finally, geopolitical risks and the recent potential US actions against ByteDance's TikTok could shift Chinese e-commerce Temu's focus from the US to Europe, the Middle East, and Asia. Meanwhile, Coupang in South Korea may face increased competition from Alibaba's AliExpress, which plans to invest $1.1 billion in South Korea over the next three years to build logistics centers.

It's been a busy week; see the rest of the article for more news highlights. See you in the next issue.

The Retail Direct

About 91APP

Founded in 2013, 91APP is the premier OMO (online-merge-offline) SaaS company, providing one-stop omnichannel retail solutions in Taiwan, Hong Kong, and Malaysia. It offers advanced Commerce Solutions and Marketing Solutions that enable retail brands to penetrate the D2C (Direct-to-Consumer) e-commerce market and drive operational benefits to their full potential. In 2021, 91APP became the first SaaS company to be listed in Taiwan and has been named one of Taiwan's "NEXT BIG" companies by Startup Island TAIWAN.

For more information about 91APP (TWO: 6741), visit www.91app.com.

AI

Nvidia's Latest AI Chip Packs More Than 200 Billion Transistors

Why it is important

• Nvidia has benefited the most among chipmakers from the growth of generative AI, but other companies are seeking a share of the market.

What happened

• At the GTC developer conference, Nvidia announced its Blackwell processors, capable of supporting AI models up to 27 trillion parameters, alongside expanding industry partnerships.
• Nvidia now offers paid software services and is exploring new areas, like robotics.
• Several tech firms announced new or expanded partnerships with Nvidia, including Google, Microsoft, Oracle, SAP, and HPE.

Source: AXIOS

Apple Is in Talks to Let Google’s Gemini Power iPhone Generative AI Features

Why it is important

• If Google could access Apple's 2.2 billion active devices, primarily iPhones, it could scale up in the race for artificial intelligence (AI).
• On the other hand, if Apple could integrate general AI features into their smartphones, it could potentially revive the demand for their devices.

What happened

• Apple is negotiating with Google to integrate Google's Gemini AI into iPhones for generative AI features amidst discussions with OpenAI and ongoing antitrust investigations.
• Google and Apple have a well-established partnership in which Google pays to be the default search engine for Apple's Safari browser and iPhone.

Source: Bloomberg

We’ve Hit ‘Peak Hype’ of the AI Revolution, Says DeepMind Co-Founder Mustafa Suleyman

Why it is important

• Microsoft plans to expand its leadership in generative AI through a partnership with OpenAI.

What happened

• Microsoft hired Mustafa Suleyman, co-founder of DeepMind and Inflection AI, to lead its Copilot AI initiatives, marking a significant leadership addition to its AI division.

Source: CNBC

Why Elon Musk’s AI Company ‘Open-Sourcing’ Grok Matters — and Why It Doesn’t

Why it is important

• Elon Musk’s xAI releasing Grok as "open source" challenges the AI development norms and sparks debate on the genuine openness in AI amidst broader discussions on AI accessibility and innovation.
• The billionaire wants his company to compete with OpenAI, a rival organization that, despite its name, is not very open.

What happened

• xAI released its Grok model “Grok-1” as open source, offering developers a large, functional LLM.
• Grok-1 has 314B parameters, available for download and modification, and requires extensive high-speed RAM to run effectively. While valuable for experimentation, its size limits practical use without significant resources.
• This move raises questions about the practicality and implications of open-source AI.

Source: TechCrunch

Amazon Now Lets Sellers Create Listings Through a URL by Using AI

Why it is important

• Amazon's AI tool enhances efficiency and the quality of online product presentations, potentially transforming e-commerce operations.
• Amazon announced that over 100,000 sellers have used generative AI tools, with an 80% acceptance rate for the tool's suggestions.

What happened

• Amazon introduced an AI tool allowing sellers to generate product listings by providing a URL, further simplifying listing creation and enhancing the use of AI in e-commerce.
• The feature is currently being offered in English to sellers in the US.

Source: TechCrunch

Retail

America’s Dollar Stores are Struggling

Why it is important

• Dollar Tree's struggle reflects broader economic pressures on low-income Americans, highlighting the impact of inflation and the reduction of pandemic-era aid on consumer spending habits.

What happened

• Dollar Tree plans to close 1,000, or 12% of Family Dollar stores, facing losses from a challenging bargain retail market and high inflation, underscoring the difficulties in the discount retail sector.
• Dollar Tree had to take a $2 billion charge, wiping out its earnings for the year. Over the past five years, Dollar Tree has taken $5 billion in charges due to Family Dollar's poor performance.

Source: FT

e-Commerce

Temu Aims to Lessen Reliance on U.S. Shoppers

Why it is important

• Temu's strategy shift reflects growing geopolitical tensions and regulatory pressures on Chinese companies in the US, highlighting the volatile nature of international e-commerce markets.

What happened

• Temu plans to reduce its American market dependency from 60% to 30% and expand in Europe, the Middle East, Japan, and South Korea amid US policies and competition challenges.
• Temu is being scrutinized by US lawmakers over its supply chain and trade practices, which poses future risks in the US following a proposed bill to force TikTok to cut ties with ByteDance.
• US lawmakers want to end the exemption for duty-free shipments under $800 from China to the US, which has been heavily relied upon by sellers like Temu.

Source: The Information

Asia

ZOZO's Stock Price Rises, Performance Solid but Concerns over Logistics Labor Shortage

Why it is important

• ZOZO's rising stock amidst solid performance faces challenges from increasing logistics costs and labor shortages.
• It will be interesting to see how ZOZOTOWN shifts its focus from fashion e-commerce to new ventures that utilize extensive user data due to the difficulty of increasing the average order volume.

What happened

• ZOZO achieved a historic profit increase and expanded dividend payouts but faces new logistics costs and labor shortage challenges, necessitating strategic shifts and automation.
• The financial results for 2023 showed a record-high net profit of 32.4B JPY, up 4%. "Yahoo! Shopping" sales rose 13%, reaching 40.2B JPY due to a successful point redemption strategy.

Source: NIKKEI

QR Payments to be Interoperable Between Japan and ASEAN by Fiscal Year 2025

Why it is important

• This initiative enhances convenience for travelers, streamlines transactions without currency exchange, and bolsters Japan's economic influence in Southeast Asia amid competition.

What happened

• Japan and ASEAN countries are working to make QR code payments interoperable across borders by FY2025, aiming for seamless transactions and increased economic security.
• JPQR, Japan's QR code standard, plans to achieve international connection by 2024, promoting interoperability between different payment providers in Japan.
• ASEAN countries have established their QR payment standards, led by the central banks of Thailand and Indonesia, mandating compliance from payment operators.

Source: NIKKEI

Coupang in South Korea Targets High-Value Goods, Achieves First Annual Profit

Why it is important

• Coupang's focus on high-value items after its first annual profit signals strategic expansion and intensifies competition, potentially reshaping South Korea's e-commerce landscape.
• With Naver recently launching its marketplace model, there are rumors that Shinsegae Group may also enter the market. If they do, it would intensify competition and lead to market reorganization, similar to what was seen with the entry of Alibaba.

What happened

• According to the report, Alibaba plans to invest $1.1B in South Korea over three years for logistics to compete with Coupang, which has recently targeted high-value goods and achieved profitability.
• Alibaba entered Korea in 2018 with its AliExpress, and By 2024, they plan to establish a 180,000 square meter logistics center in the Seoul metropolitan area for next-day delivery.
• They're also setting up a 300-person call center and aim to support 50,000 small businesses in exporting Korean goods over three years.

Source: NIKKEI