Top stories today:

1. Baidu releases Ernie X1 reasoning AI model to counter DeepSeek R1
2. iPhone 17 “Air” said to pave way for “portless” iPhones
3. China’s consumption picks up, with retail sales +4% YoY in Jan.-Feb.
4. South Korea’s chip exports to China -31.8% YoY in Feb.
5. Big Tech stocks hit monthly lows but fail to attract cautious buyers

0. Data and calendar

Listen to our AI-generated podcast summarizing today’s newsletter (beware of hallucinations):

1. Baidu releases Ernie X1 reasoning AI model to counter DeepSeek R1

• $0.28/M token input and $1.10/M token output price, vs. R1’s $0.55/M token input and $2.19/M token output price.

• Will “soon” be available on the Qianfan platform.

• Accessible through the Ernie chatbot.

Baidu has also released Ernie 4.5, which they say is on par with DeepSeek V3, GPT-4o, and GPT-4.5

• Ernie 4.5 will also be open-sourced from Jun. 30, Baidu announced.

• Baidu plans to integrate Ernie 4.5 and X1 into its search, Wenxiaoyan app, and other services.

• $0.55/M token input and $2.2/M output token price, vs. GPT-4o’s $2.5/M token input and $10/M output token price.

3. iPhone 17 “Air” said to pave way for “portless” iPhones

• ~6.6” Dynamic Island-style display with slim, iPhone 16 Pro-like borders and ProMotion support.

• Completely port-free iPhone was the original idea but dropped to avoid EU regulations.

• A19 chip with redesigned silicon components, reducing the phone’s depth by ~2mm.

• Apple’s C1 modem, first introduced on the iPhone 16e.

• 6.9” display was initially tested but dropped over “Bendgate” fears.

• 2026-27: “More meaningful changes” in the iPhone design are expected.

4. China’s consumption picks up, with retail sales +4% YoY in Jan.-Feb.

• The retail sales growth exceeded economist forecasts in the best reading since Oct.

• +5.9% YoY in the industrial output.

The consumption growth was boosted from the trade-in drive in the country

Fixed-asset investment growth was +4.1%, the fastest since the gain in the 1st 4 months of 2024

• However, property investment was -9.8%.

5. South Korea’s chip exports to China -31.8% YoY in Feb. as U.S. controls tighten

• Jan: -22.5% YoY in South Korea’s chip exports to China.

• South Korea’s total chip exports -3% YoY in Feb.

• 2024 rally in chip exports to China helped fuel South Korea’s economic growth.

• China received ~2/3rd of South Korea’s entire tech exports as of 2024-end.

• SK Hynix and Samsung operate semiconductor plants in China.

6. Big Tech stocks hit monthly lows but fail to attract cautious buyers

• Magnificent7 index trades at 26x expected 12-month profits.

• Valuations are still far from the 2018/2022 lows.

• 2025E earnings growth fell to +22% from 24% in mid-Jan.

• +34% earnings growth posted by the group in 2024.

• +12% in the entire S&P 500 is projected for this year from the 10% last year.

The Nasdaq 100 has rebounded 6 times since its record close 17 sessions ago, but gains have been short-lived

7. UK to crack down on illegal content across online platforms

• Online Safety Act’s illegal content codes are now effective.

• Sun.: Tech firms had the deadline to assess user risk of encountering illegal content.

• Fine of £18M or 10% of global revenue, whichever is higher, for non-compliance.

• Mar. 31: tech companies need to submit risk assessments on harms to Ofcom.

8. DeepSeek reportedly forbidding some employees from traveling abroad

• Zhejiang government is said to be screening investors before in-person meetings.

• Some staff has been asked to surrender passports by DeepSeek and parent High-Flyer Capital.

• Those employees had access to confidential or state secrets, the company said.

• The sudden changes raise questions about DeepSeek’s future success.

9. Y Combinator startups fastest growing, with whole batch 10%+ WoW, thanks to AI

• “That’s never happened before in early-stage venture,” Y Combinator CEO Garry Tan said.

• 95% of the code was AI-generated in 25% of the current cohort.

• 80% of the YC companies presented this time were AI focused.

• Robotics and semiconductor startups were among the few remaining.

10. Klarna files for IPO, showing +24% YoY in revenue

• 93M active consumers and has 675K+ merchants.

• In talks with banks and a payment network for new products and services.

• Seeking to raise at least $1B in the IPO.

• Targeting $15B+ valuation in the listing.

11. Interesting videos, posts, and memes

12. Other headlines

AI

• Crusoe, startup behind Stargate data center, strikes 4.5GW energy deal.

• “Open-source” AI model licenses often carry concerning restrictions.

Tech

• Alphabet spins off Taara laser-based internet project from ‘moonshot’ hub.

• DocuSign shares +14% on strong earnings, AI boost.

• Telegram’s Durov departed France temporarily: report.

Tech & Law

• House GOP subpoenas Big Tech for evidence that Biden made AI woke.

• Delaware lawmakers weigh bill to overhaul corporate law after Elon’s exit.

• EU firms urge lawmakers to push “Euro stack” over Big Tech reliance.

Biotech

• NIH officials urged to scrub mRNA references on grants, scientists say.

• Cellino’s regenerative medicine ties up with Matricelf to take longevity ahead.

• Founders Longevity Forum London reveals first wave of speakers.

Business

• Reciprocal, sectoral tariffs both coming Apr. 2: Trump.

Crypto

• FTX faces $1.5B claim expansion from 3AC as U.S. court allows.

• OKX suspends DeFi service after EU scrutiny.

• David Sacks sold $200M in crypto-related holdings before taking WH job.

U.S. politics

• Trump says will speak with Putin on Tue. to discuss ending Ukraine war.

• Palestinian activist, Mahmoud Khalil, should stay detained in Louisiana: judge.

• Voice of America, other agencies gutted by Trump order.

• Biden pardons “void” because of autopen usage: Trump.

• White House reportedly ignored judge’s order to turn back deportation flights.

World

• Houthi fighters in Yemen targeted by wave of Trump strikes.

• Russia overpowers bold Ukrainian military venture in Kursk.

• Ukraine allies agree to step up economic pressure on Russia.

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