AI roils the memory market and Japan’s startups level up

Hello from Tokyo, where Nikkei Asia recently hosted its live webinar on what to expect in Asia in 2026. (Subscribers can catch the recording here.)

The session covered predictions from Nikkei Asia editors (including yours truly) on everything from currencies and tariffs to elections and border clashes. The session ended with a Q&A segment, and one of the very last questions we took from viewers was about what the impact of AI will be on the job market next year.

The theme of the webinar was predictions, so naturally the question was phrased as what will happen, rather than what is happening already. Still, I think it underscores the tendency when talking about AI to always look to the horizon. Perhaps because so much of the impact currently is unclear or muddled — while AI is replacing some entry-level positions in some industries, for example, it is spurring hiring in others.

Apart from inspiring angst in the job market and fever on the stock market, the AI investment boom is sharply impacting parts of the tech supply chain not related, or only tangentially so, to artificial intelligence. This week’s Tech Asia feature looks at how the appetite for AI processors has thrown the entire memory chip market into turmoil.

Industry sources compare the unfolding supply crunch to the supply chain chaos of the Covid-era, which brought with it unprecedented shortages of chips and other components. It is amazing to think that, in some ways, a mere investment cycle could bring as much disruption as a pandemic.

I am particularly pleased to share this feature — a collaborative effort from four of our tech correspondents — as it reveals the hidden impacts of AI that are unfolding right now, as well as offering a glimpse at what is in store for the coming months.

In less disruptive news, the hunt for AI investment targets is also drawing renewed attention to Japan’s often overlooked start-up scene, as recent funding deals involving Sakana AI and Turing show.

Foggy memory

The voracious appetite for AI computing power has made Nvidia’s processors some of the most sought-after components in the world. To get the most out of these chips, however, requires advanced memory — and lots of it.

This sudden surge in demand has been a boon for memory chipmakers, especially smaller players, given their years-long struggle with oversupply and depressed prices.

But as this exclusive feature by Cheng Ting-Fang, Lauly Li, Tsubasa Suruga and Kim Jaewon shows, there is also a darker side to the boom. With chipmakers rushing to churn out advanced memory for AI applications, others in the tech supply chain are finding it increasingly difficult to secure enough memory for smartphones, PCs and other devices.

Industry sources are warning that the bottleneck in memory chip supplies could lead to higher prices for consumer electronics and even delayed product launches as early as next year.

“It is a bit like during Covid,” said an executive with a Japanese component supplier. “Even if you have the money, you can’t get the supplies.”

Cloud concerns

Alibaba provides tech support for Chinese military “operations” against targets in the US, according to intelligence cited in a White House national security memo raising concerns about the technology giant, writes the Financial Times’ Demetri Sevastopulo.

The official memo, provided to the FT, includes declassified “top secret” intelligence on how the Chinese group supplies the People’s Liberation Army with capabilities that the White House believes threaten US security.

The claims, which the FT cannot independently verify, reflect growing US concerns about Chinese cloud services, artificial intelligence and Beijing’s ability to access and exploit sensitive data in the US.

The allegations against Alibaba are just the latest concerns raised by US officials and lawmakers over Chinese tech companies with purported links to the PLA.

According to the White House memo, Alibaba also provides the Chinese government and PLA with access to customer data that includes IP addresses, WiFi information and payment records, as well as different AI-related services. It said employees had transferred knowledge about “zero-day” exploits — previously unknown software vulnerabilities that developers had no opportunity to patch — to the PLA.

Alibaba rejected the claims, saying: “The claims purportedly based on US intelligence that was leaked by your source are complete nonsense. This is plainly an attempt to manipulate public opinion and malign Alibaba.”

Asked about the memo, a US official said the administration “takes these threats very seriously and is working day and night to mitigate the ongoing and potential risks and effects from [cyber] intrusions that use untrusted vendors”.

The White House and CIA both declined to comment.

More smoke than fire?

Talk of a potential merger between south-east Asia’s leading ride-hailing players, GoTo and Grab, is once again in the air, this time coming from the Indonesian government itself.

But as Nikkei Asia’s Lien Hoang writes, there is at least one prominent source of scepticism: Grab President and COO Alex Hungate.

Speaking at a forum in Ho Chi Minh City, Hungate said the bar for such a deal would be “very high”, as Grab’s organic growth at the moment was going well.

“That story has come and it’s gone away, maybe three or four times in the last six years,” he told the forum’s moderator.

GoTo operates a ride-hailing service in Indonesia and Singapore through subsidiary Gojek, while Nasdaq-listed Grab is based in Singapore and operates in eight south-east Asian nations. A combination of the two would create a dominant player in the region, though this has in turn sparked concerns of a monopoly in Indonesia.

Startups level up

Two of Japan’s most prominent artificial intelligence start-ups have secured fresh funding, underscoring the appetite for AI investments even as concerns over lofty valuations grow.

Self-driving start-up Turing is in talks with several major automakers to jointly develop fully autonomous vehicles, after securing ¥9.77bn ($63mn) in fresh equity funding, its CEO told Nikkei Asia’s Tsubasa Suruga.

Founded in 2021, Turing is taking the “end-to-end” approach to self-driving in which generative AI handles everything from taking in information from camera images to issuing driving commands.

Large language model developer Sakana AI, meanwhile, has become Japan’s most valuable start-up after completing a funding round that pushed its value to approximately ¥400bn ($2.63bn). The latest round roughly doubles Sakana AI’s valuation from the Series A funding round in September last year. The new funds will be allocated to AI model development.

Suggested reads

1. Taiwan prosecutors probe ex-TSMC exec over possible security law breach (Nikkei Asia)

2. Indonesia in ‘golden share’ talks as rivals seek to create $29bn ride-hailer (FT)

3. India boosts homegrown WhatsApp rival in tech nationalism drive (FT)

4. MAGA politicians demand transparency on AI job losses (Nikkei Asia)

5. Taiwan plans to spend $3bn to pursue ‘AI island’ ambitions (Nikkei Asia)

6. Mukesh Ambani’s Reliance battles mom-and-pop stores for India’s shoppers (FT)

7. ASEAN’s 2025 IPO proceeds soar over 50%, led by Singapore, Vietnam (Nikkei Asia)

8. Baidu swings to unexpected quarterly loss as China’s AI race heats up (Nikkei Asia)

9. Google sues Chinese group selling software behind text message scams (FT)

10. Europe’s carmakers face ‘devastating’ chip crisis as Nexperia supply crunch continues (FT)

#techAsia is co-ordinated by Nikkei Asia’s Katherine Creel in Tokyo, with assistance from the FT tech desk in London. 

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