Huawei and Seres sign another five years, Tencent-backed AI cloud company files for Hong Kong IPO, and memory shortage to drag on two more years.
ITHome reported on October 1 that HarmonyOS Smart Mobility announced Huawei and Seres reached a new five-year partnership to continue upgrading the AITO business. AITO users have now surpassed 1.2 million. The signing was held in Shenzhen on September 30, with Huawei's Yu Chengdong and Seres Group Chairman Zhang Xinghai both present. Extending the partnership another five years shows the AITO line will keep getting money. For car buyers, AITO's models and service network will follow Huawei's rhythm, so before committing, check the new model schedule for the coming year. For those watching auto stocks, who funds R&D and who carries production capacity in the deal terms determines how profits get split.
Bloomberg reported on October 1 that a Tencent-backed AI cloud unicorn has submitted a Hong Kong listing application. The company rents out compute (the machine resources needed to run AI) to enterprises. Over the past year, Hong Kong has become the main destination for domestic AI companies to list, with a smoother process than going to US markets. Tencent is both a shareholder and potentially its customer and channel. For IPO subscribers, whether AI cloud revenue can persist depends on whether customers sign long-term — start by flipping through its prospectus to check customer concentration. For investors, valuation swings in the early listing period for these companies are usually bigger than on the main board.
Ars Technica reported on October 1 that Micron CEO Mehrotra told investors the memory crunch will last at least two more years, with demand exceeding available supply. Micron mainly sells high-bandwidth memory and server memory for AI servers. He gave two numbers: 75% of Micron's 2027 memory output is already booked, and current talks are mostly about 2028 orders. Rival Samsung's executives also said high-bandwidth memory will take nearly 30% of memory makers' capacity in 2027, up from 20% this year. New fabs won't come online until 2028, and shipments will have to ramp up slowly. Memory for phones and PCs will give way to servers. For those building PCs, next year's new products may be more expensive; for those watching storage stocks, keep an eye on long-term contract prices and new fab progress — these two reflect the market earlier than quarterly revenue.
The Bank for International Settlements released a report on October 1 tallying circular investment among AI companies: one AI company gets money, then goes and invests in another AI company. The report says that from 2021 to 2025, by deal value, 28.7% of AI investment deals had the invested party also being an investor. Mutual investment pushes valuations up faster than actual business. For those buying AI concept stocks, this structure means faster losses when the market drops — one company's cash crunch connects to another's. To gauge risk, first look at how much of a company's revenue comes from peers rather than end customers.
TechCrunch reported on October 2 that cybersecurity entrepreneur Kevin Mandia's new company Armadin raised $255.5 million at a $2.5 billion valuation. Mandia previously founded Mandiant, which Google acquired for $5.4 billion in 2022. The new company has a group of AI programs divide up the work of watching for vulnerabilities, replacing part of manual security defense. The security industry has always been short-staffed, and using automated programs to fill the gap is this round's selling point. Companies doing security procurement can put it on their candidate list; for investors, the valuation is already at $2.5 billion, so next watch whether it can sign big customers.
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