India’s tech juggernaut hits a wall

Plus: Back-and-forth in Beijing over US AI chip exports

Welcome to Computing’s weekly roundup of tech news in Asia. This time we look at the woes afflicting India’s mighty technology sector, inconclusive outcomes at the Trump-Xi meeting over AI chips and rare earths, and SK Hynix’s expectations of joining the trillion-dollar club.

Only a few months ago, India’s tech advance seemed unstoppable. Home to some of the world’s largest outsourcing companies and with startup IPOs attracting a steady stream of foreign capital. Indian tech was on the up.

However, recent weeks have seen a reversal, with foreign investors pulling around $21 billion from Indian equities in just two months, setting the country on course for its worst capital outflow year since it opened to global markets in 1993.

Thanks to geopolitical shocks, tariffs and the AI boom, investors seem to be looking for what they perceive perceived to be safer assets. Others are moving into AI-intensive markets including Taiwan, South Korea, China and the US. A weak rupee, reducing returns for dollar-based investors, has not helped India’s case either.

At the same time India’s IT giants appear to be faltering. The Nifty IT index had dropped to its lowest point in three years, dragged down by weak earnings outlooks.

It’s a sign of changing priorities. Money that once flowed into application maintenance and outsourcing are being diverted into AI, with analysts at HSBC warning that the AI boom is “crowding out” the traditional IT services that have been the mainstay of Indian tech.

The change may well be cyclical, particularly if/when the AI bubble bursts, but at present the Indian technology sector is being squeezed by events that are largely out of its control.

Australia

• Developer Stockland has filed plans to develop a 250MW data centre campus in Melbourne. Source
• Australia’s financial watchdog reports that money launderers are increasingly using AI to carry out sophisticated scams, rendering current detection systems less effective. Source

China

• Washington is considering expanded sales of Nvidia H200 AI chips to ten Chinese firms, raising concerns that US technology could accelerate China’s progress in frontier AI and military-linked projects. Source
• Security researchers have linked the Chinese nation-state group Mustang Panda to a new modular backdoor, FDMTP, used in cyberespionage campaigns targeting Asia-Pacific governments. Source
• The Trump administration is implementing measures such as price floors, equity investments and federal stockpiling to address the US’s reliance on China for rare earths. Source
• Rare earths and technology were on the agenda in Beijing, with Nvidia CEO Jensen Huang among tech bosses joining Trump’s delegation, hoping for a breakthrough on AI chip sales to China. Source
  
• Nvidia’s H200 chips are set to launch in China, but licensing and regulatory hurdles remain. Source
• Alibaba has fully integrated its Qwen AI model with Taobao, aiming to create a comprehensive AI-powered shopping ecosystem and further strengthen its position in China’s e-commerce sector. Source
  
• China’s pet care industry is undergoing a new round of upgrades, with AI-driven products showcased at a Shanghai expo. Source
  
• Chinese startup CAS Cold Atom Technology has unveiled Hanyuan-2, a 200-qubit neutral atom quantum computer claimed to be the world’s first dual-core quantum system, featuring two independent atom arrays that can operate in parallel or together for improved stability and scalability. Source
• In a case being heard in London’s High Court, online fast-fashion platform Shein accused rival Temu of copyright infringement “on an industrial scale”, while Temu countered that Shein is using ‌litigation to stifle competition. Source
• China has expanded its dominance in global clean technology, outpacing other nations in sectors such as solar panels, batteries and electric vehicles. Source

India

• Foreign investors have pulled $21 billion out of Indian stocks in the last two months, with 2026 likely to be the worst year for outflows since India opened its markets in 1993. Source
• India’s IT index has dropped to its lowest point in three years, as weak earnings forecasts and ongoing demand concerns weigh heavily on the sector. Source
• India is pushing for sovereign control over advanced AI and cybersecurity systems, following concerns about Anthropic’s Claude Mythos model and its potential to exploit software vulnerabilities. Source
• Spotify has discontinued its Premium Lite plan in India and reduced prices for other subscription tiers, aiming to boost user growth amid fierce competition in the streaming market. Source
• Indian chemists plan a nationwide strike on 20th May to protest against e-pharmacies and the use of AI-generated prescriptions. Source
• India’s nascent semiconductor sector is struggling to compete with China’s push in older chip technologies as Chinese manufacturers ramp up production . Source
• With a population of 1.4 billion, India is placing technological fluency at the centre of its education system. Source
  

Japan

• Chipmaker Kioxia forecasts a 17-fold surge in quarterly net profit, driven by soaring AI-related demand for memory chips and a global shortage. The company is accelerating production of advanced NAND flash and partnering with NVIDIA to develop next-generation AI storage solutions. Source
  
• Alphabet is launching its first yen-denominated bond sale in Japan, expected to raise several hundred billion yen to fund its expanding AI infrastructure. Source
• Shimizu Corporation has unveiled plans for an 11,000-kilometre solar ring around the Moon, aiming to generate up to 13,000 terawatts of clean energy and beam it back to Earth using microwaves and lasers. Source
• Nintendo shares dropped sharply after the company announced price hikes and a shortage of new games, causing concern among investors about future growth. Source
  
• SoftBank is investing in large-scale battery production to support the energy needs of its expanding datacentre operations. Source
• SoftBank reported a record quarterly profit, driven by substantial valuation gains from its investment in OpenAI. Source

North Korea

• Two Americans received 18-month prison sentences for helping North Korean IT workers pose as remote employees for US firms, generating $1.2 million for Pyongyang through a sophisticated laptop hosting scam. Source
• North Korean hacker group ScarCruft (APT37) has deployed a new Android variant of its BirdCall spyware via a video game platform, targeting Koreans in China’s Yanbian region. Source

South Korea

• SK Hynix is on the verge of a trillion dollar rally in the HBM (High Bandwidth Memory) market, driven by surging demand for AI chips and advanced memory solutions. Source
• South Korea is considering a citizen dividend funded by profits from AI, aiming to distribute the benefits of AI-driven economic growth more broadly. Source
  
• Singer Dua Lipa has filed a lawsuit against Samsung, alleging unauthorised use of her image to sell televisions in South Korea. Source
• Samsung has urged its union to resume talks as the threat of a strike looms, following a breakdown in wage negotiations that could disrupt production. Source
• South Korea’s largest manufacturers have invested in Config, a startup positioning itself as the “TSMC of robot data,” to standardise and scale the collection and processing of industrial robot information. This backing is expected to accelerate the development of a unified platform for robot data management in the country. Source
• The Iran-linked MuddyWater hacking group targeted a major South Korean electronics maker in a broad cyber-espionage campaign, affecting at least nine organisations across multiple sectors. Source

Taiwan

• TSMC forecasts the global chip market will reach $1.5 trillion by 2030, with AI driving much of the growth and reshaping demand for advanced semiconductors. Source
• Foxconn has confirmed a cyberattack after a ransomware group claimed to have stolen confidential files related to Apple and Nvidia; affected factories are now back online. Source
• A college student hacked Taiwan’s high-speed rail line, stopping four trains and revealing the operators went 19 years without rotating their cryptographic keys. Source
  

Elsewhere in Asia

• Indonesia: ZTE and Telkom Indonesia have signed a strategic memorandum of understanding to accelerate the development of digital solutions and infrastructure. Source
• Malaysia: Malaysia is working to improve enterprise AI readiness, with Databricks supporting local businesses in adopting advanced analytics and machine learning. Source
• Thailand: Startup SiamAI has denied allegations of exporting US-made AI servers to China. Source
• Vietnam: Vietnam’s government plans to develop a domestic cloud platform to replace overseas operators for government workloads by 2035. Source