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China set up a multibillion-dollar state-backed investment chip fund last week — and one observer says it will likely focus on advanced chips for AI and establishing the entire supply chain.

“Fund 3 will focus on [establishing] the total supply chain. Now, for Fund 1 and 2, they put a lot of focus on the equipment and materials related areas,” Winston Ma, adjunct professor at NYU School of Law said Wednesday.

“And now, because [Fund 3] is established in the middle of the AI boom, I believe they will put more effort, emphasis on advanced computing chips and memory chips for future AI,” Ma told told CNBC’s “Squawk Box Asia.”

China's new chip fund to focus on establishing the total semiconductor supply chain: Analyst

China has piled 344 billion Chinese yuan ($47.5 billion) into a third investment fund that aims to boost its domestic semiconductor industry amid an escalating technology war with the U.S.

The China Integrated Circuit Industry Investment Fund, also known as the National Integrated Circuit Industry Investment Fund and the Big Fund, is part of China’s efforts to reduce foreign reliance in its domestic chip industry. It comes as countries in the West, such as the U.S. and the Netherlands, limit its access to advanced technology. 

The new fund will be the largest of three funds so far. The first two funds raised 138.7 billion yuan and 204 billion yuan in 2014 and 2019 respectively.

China expands state chip funding

“You could say this capital is so critical to the Chinese semiconductor sector. It is indispensable because these companies are struggling with the global capital markets,” said Ma, citing the reverse Committee on Foreign Investment in the United States executive order from the Biden administration in August, which “limits foreign capital into China’s critical technology sectors, including semiconductor.”

“So this is not something that China wants to do, it is almost a must-to-do,” he added.

In a blow to U.S. sanctions, an analysis of Huawei’s Mate 60 Pro smartphone by TechInsights revealed an advanced chip made by China’s top chip maker, SMIC. The smartphone is also said to be equipped with 5G connectivity – U.S. sanctions had aimed to block Huawei from accessing this technology.

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Dogecoin surges 20% after Trump announces a Department of Government Efficiency — DOGE

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Dogecoin surges 20% after Trump announces a Department of Government Efficiency — DOGE

Chesnot | Getty Images

Dogecoin shot higher on Tuesday night, extending its postelection surge after President-elect Donald Trump formally announced the creation of the Department of Government Efficiency, which he referred to as “DOGE” in his statement.

Tesla CEO Elon Musk and Vivek Ramaswamy, former Republican presidential candidate and Strive Asset Management co-founder, will lead the department, Trump said in a statement. Together, they “will pave the way for my Administration to dismantle Government Bureaucracy, slash excess regulations, cut wasteful expenditures, and restructure Federal Agencies.”

Dogecoin was last up nearly 20%. It has been one of the biggest winners in the postelection rally, gaining 153% since election day compared to bitcoin’s 30% rise in the same period. It also shot past XRP this week to become the sixth largest cryptocurrency by market cap.

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Dogecoin jumped after President-elect Donald Trump announced the creation of the Department of Government Efficiency, or “DOGE.”

Memecoins are seen as a gauge of retail interest and risk appetite in crypto. When memecoin activity ramps up, it usually indicates that retail investors are participating and have an appetite to speculate further out on the risk curve.

Trump initially floated the idea of an efficiency commission in September. Since then, Musk — who has called himself the “Dogefather” in the past and has been known to make public comments about the memecoin that influence its price — has posted on his social media platform X, referring to the commission as the “Department of Government Efficiency” or “D.O.G.E.”

Dogecoin gained relevance in 2021 following Musk’s endorsement and continuous hype on social media, which has since become a big catalyst for the coin. In May that year, Musk’s posts fueled dogecoin’s rally to its all-time high of 67 cents, per Coin Metrics. Though his appearance at the time on SNL, in which he called dogecoin “a hustle,” sent its price crashing down.

The rest of the crypto market was on pause from its postelection rally. Bitcoin was trading flat at about $87,000, after briefly touching $90,000 in late afternoon trading. Crypto stocks Coinbase and MicroStrategy were lower by 1% and 2%, respectively, in extended trading.

Don’t miss these cryptocurrency insights from CNBC PRO:

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Trump says Musk and Ramaswamy will lead government efficiency group

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Trump says Musk and Ramaswamy will lead government efficiency group

Elon Musk embraces Donald Trump during a campaign rally in Butler, Pennsylvania on Oct. 5, 2024.

Anna Moneymaker | Getty Images

President-elect Donald Trump said Tuesday that Elon Musk and former Republican presidential hopeful Vivek Ramaswamy will lead an efficiency group when his second term begins in January.

Trump wrote in a post that the Department of Government Efficiency, or DOGE, will “become, potentially, ‘The Manhattan Project’ of our time.” He also said the group would, “pave the way” for his next administration to “dismantle Government Bureaucracy, slash excess regulations, cut wasteful expenditures, and restructure Federal Agencies.”

Trump didn’t specify where cuts will take place or when the department may be formed. Congress hasn’t created or funded such an office. He said the group’s “work will conclude no later than July 4, 2026.”

Musk’s involvement in the envisioned group was previously promised by Trump and touted by the Tesla CEO, who spent an estimated $200 million backing the Republican nominee’s 2024 campaign, as a reason to put the former president back in the White House. Musk, who also runs defense contractor SpaceX, has reportedly been stationed at Trump’s Mar-a-Lago resort in Florida since Election Night.

Ramaswamy, who challenged Trump in the Republican primary, is co-founder of investment firm Strive Asset Management. He has opposed the widespread adoption of environmental, social and governance, or ESG, principles by companies.

Trump announced a number of other appointments Tuesday, including naming Fox News host Pete Hegseth as his pick for defense secretary and John Ratcliffe as CIA director.

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Spotify shares pop on better-than-expected profit forecast

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Spotify shares pop on better-than-expected profit forecast

The Spotify logo is displayed on a screen on the floor of the New York Stock Exchange on Dec. 4, 2023.

Brendan Mcdermid | Reuters

Spotify shares rose in extended trading Tuesday after the Swedish music streaming company issued a profit forecast for the fourth quarter that topped estimates.

Here’s how the company did, compared with what analysts expected:

  • Earnings per share: 1.45 euros vs. 1.72 euros expected by LSEG
  • Revenue: 3.99 billion euros vs. 4.02 billion euros expected by LSEG
  • Monthly active users (MAUs): 640 million vs. 639 million expected by StreetAccount

While the company’s earnings and revenue for the third quarter trailed estimates, investors focused instead on guidance for the current period.

Spotify said operating income in the fourth quarter will come in at 481 million euros, exceeding the average analyst estimate of 432.7 million euros, according to StreetAccount. MAUs will increase to 665 million, while analysts were expecting 659.3 million, based on a StreetAccount estimate.

Still, revenue guidance trailed estimates. The company said sales will reach 4.1 billion euros, below the average analyst estimate of 4.26 billion euros, according to LSEG.

Subscribers to Spotify Premium, the company’s ad-free membership service that allows users to select songs on an unlimited basis, increased 12% year over year to 252 million, slightly ahead of estimates.

Spotify shares rose about 8% after the report to $452.35 after rising 2.2% in regular trading. The stock has more than doubled in value this year.

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Spotify is the platform for artists who want to break globally, says Evercore ISI's Mark Mahaney

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