The $60m question about this Thai AI firm

This week’s On the Rise looks at the AI chatbot of Amity Solutions and whether the AI bubble has finally burst. [Read from your browser]( On the Rise 🚀 Welcome to On the Rise! Delivered every Tuesday via email and through the Tech in Asia website, this free newsletter breaks down the biggest stories and trends in emerging tech. If you’re not a subscriber, get access by [registering here](. --------------------------------------------------------------- IN FOCUS In today's newsletter, we look at: - [Is CP Group scion's AI startup worth the $60m it raised?]( - What does the bursting AI bubble mean for the Magnificent Seven? Hello {NAME} I once asked an economist why markets often seem to crash on Mondays. The question isn’t as idiotic as it might seem. The US markets have seen 10 [Black Mondays]( over the last 95 years. Eleven, if you include last week’s sell-off. The answer, the [economist]( said, had nothing to do with Mondays or markets. The real issue is that investors, when spooked by something big affecting equity markets, spend their Saturdays and Sundays thinking about potential losses. When Monday morning arrives, they have worked themselves into a frenzy and begin panic selling. Last week, a US labor report spooked investors and sparked a sell-off on a Monday. Analysts began pointing the finger at tech stocks in general and AI in particular, which could mean problems for some startups. In Southeast Asia, there’s been a rush to attract investor funding, and many AI companies here are promoting their plans to build large language models. In this week’s Big Story, my colleague Elyssa takes a look at Thailand-based enterprise chatbot platform Amity Solutions, which raised US$60 million last month. [Is CP Group scion's AI startup worth the $60m it raised?]( Amity Solutions has moved into developing genAI for its [SaaS]( products. The firm isn’t developing an LLM, but it does plan to go public sometime next year. Its next step, according to a consultant for the Boston Consulting Group, was to see how well the company could compete in the global market. The timing is unfortunate, because following last week’s sell-off, the fight for funding just got tougher. There is little question that hundreds of billions in investments have been flowing into AI. Vox reports that in the US, [AI startups raised]( US$23 billion in capital in 2023. But whether that investment will see any return is the key concern for many investors, [according]( to Morgan Stanley analyst Keith Weiss, speaking on a Microsoft earnings call. “Right now, there's an industry debate ranging around the capital expenditure requirements around generative AI and whether the monetization is actually going to match with that,” he said. Even before last week’s market slump, the answer to Weiss’s question appeared to be “no,” with Alphabet, Tesla, and Microsoft all [seeing significant drops]( in valuations following the release of their earnings reports. Those concerns snowballed when, by Wednesday, the so-called Magnificent Seven (Alphabet, Amazon, Meta Platforms, Microsoft, Tesla, Apple, and Nvidia) had a total of over [US$1 trillion]( wiped out from their market values. But perhaps nowhere was scrutiny more intense than the industry’s GPU provider of choice: Nvidia. The company’s precarious reliance on the other six first hit its stock price about six weeks ago. After reaching a US$3 trillion market capitalization on July 2, its stock has [fallen 26%](. Hedge fund Elliott Management told investors it was skeptical that “Big Tech companies would keep buying the chip maker’s graphics processing units in such high volumes,” [according to the Financial Times](. It added that many of the use cases in development were “never going to be cost-efficient, are never going to actually work right, will take up too much energy, or will prove to be untrustworthy.” So is AI done like dinner? No. Gary Marcus, an AI skeptic, perhaps [put it best]( “Generative AI itself won’t disappear. But investors may well stop forking out money at the rates they have, enthusiasm may diminish, and a lot of people may lose their shirts.” Don’t let the stock market fool you either. The post-crash [rally]( is just traders looking for bargains. The real test for AI comes when investors are asked to open up their wallets. – Scott  --------------------------------------------------------------- DEEP READS Also check out Tech in Asia’s coverage of the emerging tech scene [here](. 1️⃣ [Reforged Labs revs up gaming with AI]( An Axie Infinity creator and a Candy Crush co-founder are teaming up to find ways to use AI to speed the development of ads in mobile games. 2️⃣ [National interests trump AI transparency in Asia]( Today’s developers, drawing predictive insights from vast data pools, have created systems that resist straightforward explanations. Taming AI’s far-reaching implications is tricky. 3️⃣ [Women are less interested in AI than men, but using it would help them advance at work]( Studies show that women are less likely to adopt genAI tools than men, a trend that has some worried, as 90% of jobs will be affected by generative AI by 2032. ---------------------------------------------------------------  EVENTS HAPPENING You can also check out a curated list of trending tech events [over here]( and Tech in Asia’s signature events [here](. [Tech in Asia Conference Jakarta on October 23 - 24]( Want to know what's next for Southeast Asia’s startup scene? Join us at TIA Conference Jakarta to hear from top VCs like Jefrey Joe of Alpha JWC Ventures, the founder-turned-investor Achmad Zaky and Agung Bezharie. They'll share insights on which market is still the hotbed for investment, the challenges and opportunities of transitioning from founder to investor, and many more. Join thousands of founders and investors at TIA Conference Jakarta. Tickets are now on sale for 50% off until August 11th. [Get tickets.]( [Investor Hour at Tech in Asia Conference Jakarta]( Ready to make your startup dream a reality? Investor Hour is your golden ticket. This exclusive one-on-one networking session brings together brilliant founders and seasoned investors in an intimate setting. Whether you're seeking funding or looking to sharpen your pitch, Investor Hour is your platform to build lasting relationships. Don't miss this chance to connect with the industry's top minds. Secure your spot at TIA Conference Jakarta now! [Get tickets.]( [Gemini Day for Startups: Singapore on August 22]( Everyone's talking about AI, but how many of the solutions in the space actually deliver? Get hands-on with cutting-edge tech as Google Cloud experts showcase genAI solutions built for real-world impact. You’ll walk away with actionable strategies and leave ready to transform your business with AI - [apply for a seat now!]( [Tech in Asia’s Founders Meetup: Thailand on September 11]( For one-night only, we’re offering entrepreneurs the opportunity to spend one-on-one time with seasoned investors. In our all-new VC office hour, founders can discuss funding prospects and more with VCs - no pitch decks required. [Get your early bird pass at 20% off now.]( Hurry, promo ends August 26! [SYNC 2024 on October 2024]( Remember last year's SYNC? Tech in Asia handpicked 100 attendees for a day of learning, sharing, and networking, all aimed at addressing climate tech’s challenges and mapping the future of the sector. This year, we're focusing on another exciting industry, and we’re turning up the dial with even more thought-provoking sessions, inspiring speakers, and rising stars ready to disrupt. Ready to be in the know? [Register your interest today]( for the latest on SYNC 2024. Stay tuned. ---------------------------------------------------------------  That’s it for this edition - we hope you liked it! Do also check out previous issues of the newsletter [here](. Not your cup of tea? You can unsubscribe from this newsletter by going to your “edit profile” page and choosing that option in our preference center. See you soon! [ADVERTISE]( | [SUBSCRIBE]( | [HIRE]( | [FIND JOBS]( P.S. Don't miss out on the biggest tech news and analysis. Add newsletter@techinasia.com to your address book, contacts, or safe sender list. Or simply move us into your inbox. Too many emails? Switch to a different frequency or get new content through our [preference center]( or [unsubscribe](. You can also break our hearts and remove yourself from all Tech in Asia emails over [here](  Copyright © 2024 Tech in Asia, All rights reserved. 63 Robinson Road, Singapore 068894