Nasdaq-listed Chinese electric carmaker Li Auto to raise up to $1.93 billion from Hong Kong listing
GUANGZHOU, China — Chinese electric vehicle start-up Li Auto plans to raise around $1.93 billion in a Hong Kong secondary listing.
The Nasdaq-listed company said it will offer 100 million class A ordinary shares to investors at a price of no more than 150 Hong Kong dollars or $19.29. Final pricing will be announced by Aug. 6.
At 150 Hong Kong dollars per share, Li Auto would raise 15 billion Hong Kong dollars or $1.93 billion.
Li Auto is pushing ahead with the listing despite a recent sell-off in Chinese technology stocks that was triggered by regulatory crackdowns hitting everything from food delivery to ride hailing.
Chinese electric vehicle makers are trying to take advantage of the excitement around the industry to raise money.
Last month, Li Auto rival Xpeng raised around $1.8 billion in a Hong Kong listing.
But Li Auto is also tapping into a trend of U.S.-listed Chinese companies looking to raise money closer to home. Alibaba, NetEase and JD.com are among China’s technology giants that have carried out secondary listings.
Doing a secondary listing in Hong Kong also helps to hedge against some of the geopolitical risk that has spilled over into financial market regulation.
Earlier this year, the U.S. Securities and Exchange Commission adopted rules that impose stricter auditing requirements for foreign firms listed in the U.S. Those requirements carry the threat of delisting for companies that run afoul of the rules.
And last month, the SEC also said it will require additional disclosures from Chinese companies looking to list on U.S. exchanges.
Li Auto said that it plans to use the proceeds of its share offering for research and development into technologies and future models, as well as expanding production capacity and its retail store footprint.
Competition in the Chinese electric vehicle market is getting intense. Start-ups like Li Auto, Xpeng and Nio are competing against established players like BYD and Tesla as well as traditional automakers.
Li Auto said Sunday it delivered 8,589 Li One vehicles in July, a monthly record. The Li One SUV is the company’s only model on the market. It’s a hybrid vehicle that comes with a fuel tank for charging the battery, extending the 180-kilometer driving range by about 620 km (385.35 miles).
Tesla issues recall on Semi over defective brake module, rollaway risk
Tesla has issued a voluntary recall on the Semi, a first since the company began deliveries of the heavy-duty electric trucks to customers in December 2022.
According to recall filings posted on the website of the National Highway Traffic Safety Administration, 35 Semi trucks were affected. The trucks were built with an electronic parking brake valve module found to contain a defect by supplier Bendix in February 2023.
The defect left drivers vulnerable to “rollaway” incidents and increased the likelihood of a crash. According to a recall notice, the defective modules may “fail to move into the park position when the parking brake is activated” leaving drivers unaware their Semi could roll away. The parking brake component defect has not resulted in a crash or any damages, according to the filings.
While Tesla showed off the design of the Semi in late 2017, it only began producing the trucks in Nevada last year and began deliveries to early customer Pepsi at a marketing event late last year.
In filings on the NHTSA site, Tesla said it will “replace the parking brake valve module with a revised part with improved internals that prevent air leakage and allow the driver to engage and disengage parking brakes.”
Elon Musk‘s electric vehicle maker is expected to issue its first-quarter 2023 vehicle production and deliveries report this weekend. Tesla has not previously broken out Semi production and delivery numbers in its quarterly updates.
Signal President Meredith Whittaker learned what not to do from working at Google
Meredith Whittaker, a former Google Manager who is now president at Signal.(Florian Hetz for The Washington Post via Getty Images)
Florian Hetzt | The Washington Post | Getty Images
Meredith Whittaker took a top role at the Signal Foundation last year, moving into the nonprofit world after a career in academia, government work and the tech industry.
She’s now president of an organization that operates one of the world’s most popular encrypted messaging apps, with tens of millions of people using it to keep their chats private and out of the purview of big tech companies.
Whittaker has real-world reasons to be skeptical of for-profit companies and their use of data — she previously spent 13 years at Google.
After more than a decade at the search giant, she learned from a friend in 2017 that Google’s cloud computing unit was working on a controversial contract with the Department of Defense known as Project Maven. She and other workers saw it as hypocritical for Google to work on artificial intelligence technology that could potentially be used for drone warfare. They started discussing taking collective action against the company.
“People were meeting each week, talking about organizing,” Whittaker said in an interview with CNBC, with Women’s History Month as a backdrop. “There was already sort of a consciousness in the company that hadn’t existed before.”
With tensions high, Google workers then learned that the company reportedly paid former executive Andy Rubin a $90 million exit package despite credible sexual misconduct claims against the Android founder.
Whittaker helped organize a massive walkout against the company, bringing along thousands of Google workers to demand greater transparency and an end to forced arbitration for employees. The walkout represented a historic moment in the tech industry, which until then, had few high-profile instances of employee activism.
“Give me a break,” Whittaker said of the Rubin revelations and ensuing walkout. “Everyone knew; the whisper network was not whispering anymore.”
Google did not immediately respond to a request for comment.
Whittaker left Google in 2019 to return full time to the AI Now Institute at New York University, an organization she co-founded in 2017 that says its mission is to “help ensure that AI systems are accountable to the communities and contexts in which they’re applied.”
Whittaker never intended on pursuing a career in tech. She studied rhetoric at the University of California, Berkeley. She said she was broke and needed a gig when she joined Google in 2006, after submitting a resume on Monster.com. She eventually landed a temp job in customer support.
“I remember the moment when someone kind of explained to me that a server was a different kind of computer,” Whittaker said. “We weren’t living in a world at that point where every kid learned to code — that knowledge wasn’t saturated.”
‘Why do we get free juice?’
Beyond learning about technology, Whittaker had to adjust to the culture of the industry. At companies like Google at the time, that meant lavish perks and a lot of pampering.
“Part of it was trying to figure out, why do we get free juice?” Whittaker said. “It was so foreign to me because I didn’t grow up rich.”
Whittaker said she would “osmotically learn” more about the tech sector and Google’s role in it by observing and asking questions. When she was told about Google’s mission to index the world’s information, she remembers it sounding relatively simple even though it involved numerous complexities, touching on political, economic and societal concerns.
“Why is Google so gung-ho over net neutrality?” Whittaker said, referring to the company’s battle to ensure that internet service providers offer equal access to content distribution.
Several European telecommunications providers are now urging regulators to require tech companies to pay them “fair share” fees, while the tech industry says such costs represent an “internet tax” that unfairly burdens them.
“The technological sort of nuance and the political and economic stuff, I think I learned at the same time,” Whittaker said. “Now I understand the difference between what we’re saying publicly and how that might work internally.”
At Signal, Whittaker gets to focus on the mission without worrying about sales. Signal has become popular among journalists, researchers and activists for its ability to scramble messages so that third parties are unable to intercept the communications.
As a nonprofit, Whittaker said that Signal is “existentially important” for society and that there’s no underlying financial motivation for the app to deviate from its stated position of protecting private communication.
“We go out of our way in sometimes spending a lot more money and a lot more time to ensure that we have as little data as possible,” Whittaker said. “We know nothing about who’s talking to whom, we don’t know who you are, we don’t know your profile photo or who is in the groups that you talk to.”
Tesla and Twitter CEO Elon Musk has praised Signal as a direct messaging tool, and tweeted in November that “the goal of Twitter DMs is to superset Signal.”
Musk and Whittaker share some concerns about companies profiting off AI technologies. Musk was an early backer of ChatGPT creator OpenAI, which was founded as a nonprofit. But he said in a recent tweet that it’s become a “maximum-profit company effectively controlled by Microsoft.” In January, Microsoft announced a multibillion-dollar investment in OpenAI, which calls itself a “capped-profit” company.
Beyond just the confusing structure of OpenAI, Whittaker is out on the ChatGPT hype. Google recently jumped into the generative AI market, debuting its chatbot dubbed Bard.
Whittaker said she finds little value in the technology and struggles to see any game-changing uses. Eventually the excitement will decline, though “maybe not as precipitously as like Web3 or something,” she said.
“It has no understanding of anything,” Whittaker said of ChatGPT and similar tools. “It predicts what is likely to be the next word in a sentence.”
OpenAI did not immediately respond to a request for comment.
She fears that companies could use generative AI software to “justify the degradation of people’s jobs,” resulting in writers, editors and content makers losing their careers. And she definitely wants people to know that Signal has absolutely no plans to incorporate ChatGPT into its service.
“On the record, loudly as possible, no!” Whittaker said.
WATCH: AI hype is real
China’s chip industry will be ‘reborn’ under U.S. sanctions, Huawei says, confirming breakthrough
The U.S. has placed major chip export restrictions on Huawei and Chinese firms over the past few years. This has cut off companies’ access to critical semiconductors.
Jaap Arriens | Nurphoto | Getty Images
China’s chip industry will be “reborn” as a result of U.S. sanctions, a top boss at Huawei said Friday, as the Chinese telecommunications giant confirmed a breakthrough in semiconductor design technology.
Eric Xu, rotating chairman at Huawei, issued fighting words against Washington’s tech export restrictions on China.
“I believe China’s semiconductor industry will not sit idly by, but take efforts around … self-strengthening and self reliance,” according to an official translation of Xu’s comments during a press conference.
“For Huawei, we will render our support to all such self-saving, self-strengthening and self reliance efforts of the Chinese semiconductor industry.”
Semiconductors have been a flash point in the broader U.S.-China battle for tech supremacy. Over the past few years, Washington has attempted to cut China and Chinese firms off through sanctions and export restrictions.
In 2019, Huawei was put on a U.S. black list called the Entity List, which barred American firms from selling technology to the Chinese company. This included chips for 5G products — where 5G refers to super-fast next-generation mobile networks. Chip restrictions against Huawei were tightened in 2020 and effectively separated it from the latest cutting-edge chips it required for its smartphones.
Washington then introduced broader chip restrictions last year, aiming to deprive Chinese firms of critical semiconductors that could serve artificial intelligence and more advanced applications.
The U.S. is concerned that China could use advanced semiconductors for military purposes.
Huawei’s Xu said these developments could boost, rather than hamper China’s domestic semiconductor industry.
“I believe China’s semiconductor industry will get reborn under such sanctions and realize a very strong and self-reliant industry,” Xu said.
Experts previously told CNBC that the latest round of U.S. restrictions are likely to hurt China’s semiconductor industry. Under the current rules, certain tools or chips that are made using American technology are not allowed to be exported to China.
The nature of the chip supply chain makes this very effective. U.S. tools are used across the chip production process, even if a semiconductor is manufactured in another country.
China’s domestic chip industry relies heavily on foreign technology, and it lacks companies that can match firms in the U.S., Taiwan, Japan and South Korea.
China has made self-reliance a big priority amid the tech battle with the U.S., but experts agree this will prove an extremely difficult feat.
Chinese firms are now trying to develop tools required for semiconductors domestically.
Last week, Chinese media reported that Xu in a speech said that Huawei and other domestic firms jointly created electronic chip design tools needed to make semiconductors sized at 14 nanometers and above. Xu said those tools will be verified this year, which would allow them to be put into use.
The rotating chairman confirmed that he made this speech, but added those tools will “mean very little” for the Huawei business. It only means that Chinese firms have the design tools required domestically, he said.
The 14 nanometer figure refers to the size of each individual transistor on a chip. The smaller the transistor, the more of them can be packed onto a single semiconductor. Typically, a reduction in nanometer size can yield more powerful and efficient chips.
But Huawei ideally needs chips of a much smaller nanometer size for more advanced applications, which they are currently finding it difficult to obtain. The company is still reeling from the effects of U.S. sanctions — on Friday, it said net profit dropped 69% year-on-year in 2022, marking the biggest decline on record.
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