Tech Roundup: IBM Pulls R&D Units Out of China, PDD Shares Plunge 18% After Temu’s Revenue Disappoints

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PDD Holdings’s shares dived 18% after the Temu owner posted disappointing revenue results and warned of declining growth.

Welcome to the Tech Roundup — a briefing of the top technology news making headlines in China and the rest of Asia.

IBM pulls R&D units out of China in latest withdrawal by U.S. firm

IBM Corp. is shutting down two major research and development (R&D) units in China, amid declining business in the country and mirroring a broader trend of U.S. tech firms scaling back their presence in China.

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Explore the story in 30 seconds

IBM is closing its China Development Lab and China Systems Lab, affecting over 1,600 employees.
PDD Holdings' shares fell 18% due to Temu's disappointing revenue and warnings of declining growth.
JD.com announced a $5 billion share buyback to restore investor confidence amid a Chinese consumer downturn.

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Who’s Who

IBM Corp.: IBM Corp. is shutting down its China Development Lab (CDL) and China Systems Lab (CSL), established in 1999, amidst declining business in China. The units focused on application software and mainframe database development. Employees found themselves locked out of company systems and received verbal layoff notices, with severance negotiations currently underway. This mirrors a broader trend of U.S. tech firms scaling back in China.

PDD Holdings Inc.: PDD Holdings Inc.'s shares plunged 18% after reporting lower-than-expected revenue of 97.1 billion yuan ($13.6 billion) for the June quarter, against an estimate of 100 billion yuan. The net income was 32 billion yuan, compared to a projected 27.5 billion yuan. Co-founder Chen Lei highlighted increasing competition in the global e-commerce market and warned that profitability will be affected as the company invests more in supporting its merchants.

JD.com Inc.: JD.com Inc. plans to buy back up to $5 billion of its shares from September to August 2027 to reassure investors amid concerns of a Chinese consumer downturn. This move follows Walmart Inc. selling its stake in JD.com, which had sparked worries about consumer spending in China. Shares climbed over 4% in pre-market trading in response.

BYD Co. Ltd.: BYD Co. Ltd., a Chinese electric vehicle giant, has partnered with Huawei Technologies to integrate Huawei's advanced autonomous driving system into its luxury SUV, the Fangchengbao. The Bao 8 SUV featuring this technology is set for release in the third quarter of this year. BYD plans to continue developing new models within the Fangchengbao series in collaboration with Huawei.

Huawei Technologies Co. Ltd.: Huawei Technologies Co. Ltd. has partnered with Chinese electric vehicle giant BYD Co. Ltd. to integrate its advanced Qiankun autonomous driving system into BYD's luxury SUV Fangchengbao. The SUV will be launched in the third quarter of this year, and BYD plans to develop more models in the Fangchengbao series with Huawei's technology.

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What Happened When

Friday, August 23, 2024：: Some China-based IBM colleagues found themselves locked out of the company’s intranet virtual private network and shared cloud drive, and subsequently received verbal layoff notices from their managers.

Friday, August 23, 2024：: Cao Wei, a partner at Lanchi Ventures, spoke during a group interview at the World Robot Conference in Beijing about the consolidation trend in China's humanoid robot industry.

Monday morning, August 26, 2024：: IBM held a brief online staff meeting to relay the news of the shutdown of its two major R&D units in China.

August 26, 2024：: Chen Lei, co-founder and co-chief executive officer of PDD Holdings Inc., highlighted growing competition in the global e-commerce market in a post-earnings call.

Tuesday, August 27, 2024：: JD.com Inc. outlined plans to buy back as much as $5 billion of its shares from September 2024 to August 2027.

Tuesday, August 27, 2024：: BYD Co. Ltd. and Huawei Technologies Co. Ltd. signed an agreement to use Huawei’s advanced autonomous driving system in BYD's luxury SUV Fangchengbao.

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