Inflection

The essential guide to a sector that’s now attracting one out of every four startup investment dollars.

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This startup may be young and under the radar to many, but it’s not to be underestimated. It has a heavy-hitting founding team, including Google DeepMind cofounder Mustafa Suleyman, former DeepMind principal scientist Karén Simonyan, and LinkedIn cofounder and venture capitalist Reid Hoffman, Inflection has raised more than $1.5 billion in funding so far from investors like Microsoft and Nvidia. The company released conversational generative AI chatbot Pi, which is designed to be an emotionally supportive conversationalist and can be integrated into iMessage and other communication platforms. “Pi is a new kind of AI, one that isn’t just smart but also has a good EQ. We think of Pi as a digital companion on hand whenever you want to learn something new, when you need a sounding board to talk about your day, or just pass the time with a curious and kind counterpart,” said Suleyman when the chatbot launched. What is notable about Pi though is what is under the hood, Inflection's Inflection-1 LLM, which can rival those created by OpenAI and Anthropic on some tasks. And Suleyman has long hinted that he sees the future of the company in the race to create not just an EQ-enabled chatbot, but an AI-powered, personal "chief of staff" that will help users organize their work and personal lives and perform myriad tasks on their behalf. In July, the company joined Amazon, Microsoft, OpenAI, Meta, and other AI labs alongside the White House to commit to establishing safe AI measures.

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American agriculture is the backbone of the U.S. economy, yet the average farmer earns only 5 cents of every dollar spent on food. With an almost 50% spike in bankruptcies of U.S. farms and margins thinner than ever due to falling revenues and rising production costs, the agricultural economy is facing an inflection point.

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Tech

U.S. tariffs on Chinese imports are forcing a rethink of global trade routes—and triggering a wave of economic repositioning. Countries like India, Vietnam, Brazil, and Malaysia are emerging as alternative production hubs, while Japan and South Korea deepen trade talks with China and the Gulf States channel investment into Southeast Asia. This moment isn't just about shifting geopolitics—it's a strategic inflection point for companies under pressure to diversify, de-risk, and move fast. How can agile firms navigate this fragmented landscape to discover new opportunities for long-term growth?

New Corridors for Growth

Conferences

We'll now turn to a shift that many companies are feeling firsthand the search for new corridors of growth. Supply chains are being reconfigured. Companies are reassessing where their products are designed, built, and shipped from, and market access now depends on making the right call about where to invest, build, and bet next. This section looks at what's driving those moves and how companies can position themselves early. Before the next wave of competition arrives, please join me in welcoming Nick Nash, co-founder and managing partner at Asia Partners, and Dato Cu Haiwang, president of the Malaysia Semiconductor Industry Association. They will be in conversation with Fortune's Nick Gordon. So great to have both of you on our stage. Um, SH Wong, I wanna, I wanna start with you because you work in semiconductors, chips, probably one of the world's most important industries right now, strategic commodity. You know, um, like super important for things like not just AI but also electric vehicles, but also it's an industry that's definitely been hit by, you know, tariffs, industrial policy, subsidies in some countries. Kind of give us your big picture view of how the chip industry and Malaysia's chip industry is kind of looking at this more complicated world. OK, thank you very much. Um, as you know, the, uh, Semiconductor is now the new oil or the data, whatever you want to call it, uh, it is ubiquitous and it is everywhere all around the world in every gadget anything you can see it here, there is a semi-reductor inside. Um, as you know, last year, the global semiconductor, uh, revenue was $600 billion US dollars. It's projected to grow to $1 trillion by 2030. And in fact, the latest report was out and SIA thinks that it will reach 1 trillion by 2027. So for Malaysia, we are exporting 601 billion ringgit last year. And in order for us to stay where we are today, we are ranked number 6 in the world, 13th in the assembly test capacity. We need to ship 1.2 trillion by 2030. So that's the challenge. So as a result of this growth, you know, uh, driven mainly by data centers, AI, EVs and cloud, and so on, computing and so on, we're going to see tremendous growth in this area. So, however, now with the geopolitical tension, And with the uh tariffs and earlier was uh the COVID. A lot of interruptions happened to the supply chain and you can see that there is what I call um probably the companies need to now navigate through all this uh no China, no Taiwan and China plus one US plus one Europe plus one. All the company has to navigate through all these uh disruptions. So as you can see, Uh, the ASEAN and Malaysia benefited from this China plus one strategy because China could not ship to the US and therefore they need to find a way what to do and so you start looking outside of China and they, a lot of them look at Malaysia. So Malaysia basically benefited from this. I'm sure uh Vietnam and so on. And, and then because of this tremendous growth, we have many countries. India is one of them, very aggressively pursuing semiconductor, and we have many other countries around the world are looking at what can they contribute to the semiconductor growth, either in technology or in volume or in the design development. So everybody is after this spider. It's going to be a competitive race right now? Yeah, and I do want to get back to kind of what how you think Malaysia's progress towards putting itself into the supply chain is going, but before I do that, Nick, you know, from your vantage point at Asia Partners, kind of how are you looking at this kind of new, more, more complicated world? Well, I think one of the most interesting statistics that's bubbled up over the last 6 months is that China's exports to America have fallen by 20%. And its exports to ASEAN have grown by 20%, and that symmetry is fascinating to us. We feel that in this, shall we call it, dual circulation world, actually China and ASEAN grow ever more close together, and it will be fascinating to find opportunities as we are actively trying to Asia partners, not just to see goods leave China and come to Southeast Asia, which has all sorts of political ramifications, but goods leave South. Asia and going to China, for example, one of our portfolio companies called Khyber specializes in exporting from ASEAN into China. How often do you hear about that? But what I would tell you is this is an extraordinarily interesting moment for China and Southeast Asia to do more business together because they're both confronting the US trade war simultaneously. And and what are some of the kind of new corridors that you're seeing in terms of trade or investment, you know, not just China. but say ASEA Latin America. I know you were at sea in a previous life and C keeps on talking about how Shope is surprisingly big in Latin America, but also, you know, Gulf in Southeast Asia, maybe South Asia and Southeast Asia. What are these new corridors that you're seeing growing from Southeast Asia to other parts of the quote unquote global South? Well I think there's always a tendency to think in geographic terms, but I think sometimes it's helpful to change the dimensions on the chart, you know, electrical. Engineers are very, very comfortable with going from time space to frequency space, so to speak, with the Fourier transform in a similar way. Let's think about it through two different lenses. Yes, of course you can have ASEAN in Latin America and that's done very well for Shopee and for C Money, but let me give you two other lenses. The first is the income tier. We like to think about the world in the give or take 2000 to 4000 income range, the 4000 to 8000. The 8000 to 16 and so on and so forth, we tend to find that if you're in one of those slices. 2 to 44 to 88 to 16, you have a significantly easier time doing business in other parts of the world that are similar to that. I don't know if you're earning 8 $800,000 a year as an AI engineer in Silicon Valley if you have much socioeconomic empathy for the consumer need in a 6000 per year country like many in Southeast Asia. That's a big part of what's made Shopee and see. Successful, they're going after somewhat similar economies affluence wise, but the second quarter that doesn't get enough conversation as well, and again it's very different than the usual sort of headlines, is temporal trade, meaning what was a good idea 10 years ago that we can apply now here. It's a really neat little bit of history and it's almost too cute to be believable, but Amazon, everyone's heard of that, went public in 1997. Alibaba.com. The first major e-commerce platform from China went public exactly 10 years later in 2007, and Shope went public exactly 10 years later in 2017. So as much as we talk about here to there and tariff from here, tariff to there, let's not lose sight of that socioeconomic trade and also the temporal trade in terms of taking an idea from the past that might work very well in a new soil in the present. Um, SH Wong, I want to go back to you. You know, one of my favorite like historical tidbits is that Penang was the home of Intel's first non-US plant. Malaysia's had a long history in the chip supply chain, but now it's, you know, now Malaysia kind of wants to, you know, move more into higher value services or higher value parts of this chain, whether it's design or it be advanced packaging. And there's a lot of kind of money being put behind that, but kind of what's your sense of the progress that's being made in terms of taking on more of the chip supply chain in Malaysia and kind of what still needs to be done? OK, I think maybe I can just have a quick tutorial on history. Um, in 1972, uh, we have this so-called 8 samura with this Intel, AMD, Hewlett Packard, and HP and a few others. Uh, set up the the companies in Penang, OK, and since then, They they started because of uh low cost and so on. But since then, um, the whole industry has moved all the way from assembly to test automation to EMS. In fact, now we have everything, right? We have also uh IC design and the wafer fab and so on. However, we are more concentrated in assembly test. So that's why I said we grew at that time in 1972, about 230 million to now 600 billion last year and this year we until September, the growth is 16.7% over 2024. So last year, The government announced the national semiconductor strategy and to me that is the best news that we have got from the government when they announced that strategy because it is really setting and they spelling out their ambition, their aspiration for the country. What do you want to be after all this growth? What should we be? And so they came up with two key things I would say. One is to have 10 companies. Uh, create 10 companies or at least grow 10 companies in advanced packaging and IC design. That's number 1. And number 2 is to uh have 100 companies who have revenue of 1 billion over the next 5 to 10 years. So that is what is stated. At the same time, we are talking about now made in Malaysia to made by Malaysia because we are trying to tell all the companies that we are good users of technology. We are not involved in innovation and developing new technologies, and we want to move our Malaysian companies into doing that. So today in the automation environment of precision engineering environment, we have a few, a handful, which in Malaysia, we call it big, probably in the world we will be very small, but we want it to be big so that they can become global champions and we are trying to build that and Malaysia has this ambition to build that. So getting on to uh IC design, today we have one company who is capable of doing IC product, product level instead of services and uh I think they have more than 40 IPs already, so we show that we have the talent who can do it, but of course if you want to accelerate and try to get on into many types of innovation, we need more our world's best talent to help us to do that. But, can I ask you a follow-up question? If you look at semiconductors and what a magnificent sector it is, uh, Dal and I both share a great fondness for the late Andy Grove, who was one of the great pioneers of the industry. The biggest company in the world that everybody knows is Nvidia. It's run by a Taiwanese. The second biggest company is Broadcom. It's run by a Malaysian. Intel is now run by a Singaporean, Malaysian Malaysian, Malaysian born in Malaysia, studied in Singapore. Success has many fathers, as they say. But may I ask a simple question? Whenever the topic of semiconductors arises, inevitably the topic arises. Ah, it's capital intensive. Ah, the paybacks are long, and yet. I looked at this recently. Nvidia's CapE, their PP&E, is far less than 1% of their market cap. Broadcom is likewise very asset light, fabulous. Why don't we have more fabulous high ROIC semi companies in ASEAN when the guys in California who run them are from ASEAN? So I, OK, this is one strategy to go fabulous, because the other strategy is to go vertically integrated. That's more traditional. OK. Uh, so AMD in the early days just could not catch up with Intel because Intel was investing heavily, OK, and always ahead of the power curves. Every time there is a ramp. Intel take all the market share because they have the capacity, whereas AMD do not have. And so AMD decided to go fabulous and now you have Nvidia, you have Broadcom all going fabulous. There's one strategy, OK, but the other strategy is to take control of your own destiny. So I think it's up to the company to decide. So Malaysia can't do the vertically integrated. We can do the fabulous one. So we can do the design and development and then we let Others to do the foundry so to speak. Now, Malaysia has to Uh, for FA has to attract FDI because FAT investment is very high. You're talking about billions of dollars depending on what kind of fat, very high-end fat will be more than 10 to $20 billion. Even higher than that will be 30 to $40 billion US dollars, but let's say you're talking about the mid-level could be somewhere about $5 billion US dollars, but then you must think about how I'm going to recover all this money. So, uh, my, our advice to the government is not to get involved with this. Let the let the foreign companies who are rich enough to do this. So we focus on the development side and get. All this done in the foundry. However, in assembly test we can participate in the EMS we can participate. So that's where our positioning is for the time being. I, I want to ask about a couple other cor I mean I mean we talk a lot about trade corridors, but there are also new investment corridors and they kind of where are you seeing kind of investment, new investment flowing from? Where are the new sources of capital for for Asia for ASEAN? Well, first of all, I think we should just call it what it is private. Innovation capital in ASEAN is not currently at an all-time low, but it has reverted at least a dozen years. We quantify this just in the nature of our work as entrepreneurs and investors. We look at how much money is coming into the ecosystem country by country as a region, and I'll tell you something very sobering. Apart from the spike of capital that happened in 2021 and 2022, we all remember that kind of bubble, and every country got a big chunk of it. Our region is underfunded. In fact, the amount of capital coming into ASEAN today, which of course includes Malaysia. Relative to the size of ASEAN's GDP has not been this low since approximately 2012. So as much as we can talk about trade flows, let's hit the nail on the head with the fact in the room, capital flows are low. The only positive of that. Is that investors who come into ASEAN now have less competition, have lower entry prices, and much more humble and hungry entrepreneurs. So that isn't a selling point for ASEAN. I don't know what is. This is probably the best time for capital to be coming into ASEAN. The other corridor that's on my mind is talent, you know, where is talent moving? Where are, where are kind of the world's best employees, the world's best engineers, the world's best founders, where are they going? And I want to, you know, ask SH Wong this question. Like, where do you see kind of the new corridors of talent going? If you are a young, eager engineer in Malaysia, where do you go to school? OK, before I answer that question, can I, oh yes, I talk about the uh investment. Three years ago, uh, a lot of announcements were made in Malaysia. Intel announced a $7.1 billion investment. Uh, Infinion announced a €7 billion investment. AT&S and now €1.7 billion euro investment, TI 15 billion and so on. So we have all these announcements, right, with all these theories, with all this confusion. All these investments are all taking place. So we are getting that through, OK, so that's really good news. It means that they have confidence in the way Malaysia is managed and the stability and so on, the neutral and non-aligned uh position we are taking. Coming to talent, you know, first of all, I must say we have good talent, right? Uh, Malaysia's top talent in the local public inities, they are really good. OK, the company I spoke to that created that developed 40 IPs are all Malaysian engineers, studied locally, not from overseas, but we also have, you know, Engineers who go out last time to England and then to Australia and then to US, I think now back to probably Australia more than other countries, but they also have good talents. However, we are also having so-called uh attraction by other countries on the talent. So Singapore gives ASEAN scholarship and then our people just go there. And if you don't go there with the ASEAN scholarship, they will still hire you and take the our Malaysian talent. Now today it is not just Singapore, we have China, we have Taiwan, we have the rest of the world trying to take our talent. He's telling me that we have the talent. Now, the the the situation is how do we create this Ameri uh this uh Malaysian dream like the American dream and the path that we are going to take to create this uh. Environment whereby you can get all these opportunities in Malaysia, OK, and I want to tell you why all these investments happening and why I think uh with the ambition and the aspiration Malaysia is having, we should be able to attract some of the engineers back because it since 1972 to now, you know, the Malaysians have delivered. Whatever the corporate, whether it is US or other countries have in their performance, OK, and they, all these companies put their latest technology in Malaysia to debug and get it all stabilized before they go high volume. Today it is still happening the same way and why? Because of performance. So I think Malaysia has that capability. So now is to just give that uh narrative and the uh aspiration that people will appreciate and then we can go on hopefully with the help of uh funding that we can move forward. Nick, I want to give you the last word on this talent. Oh no, no, no, I give it to that. But, but you know, people, you know, obviously the US used to be kind of a very a prime attractor for all this talent, but now people talk about, you know, Hong Kong. is rising, for example, Tsinghua is rising, for example, in prominence in terms of developing new talent. What are you seeing in terms of these new corridors of talent around the region? Well, there's no question that Asia is producing extraordinarily talented engineers, scientists, business people, but I want to just leave a parting message for the room. Nick, what's the market cap of Nvidia? We had this, you want be ready, it's 4.6 trillion 4.6 trillion with a T. Would you divide it by 10 for me? For 60 $60 billion. Would you divide that by 10? OK, so 1% of Nvidia's market cap is $46 billion. You can count on fewer than two hands. The number of public companies in Southeast Asia with a $46 billion market cap or greater C is one of them, DBS is one of them. A handful of the nickel producers in Indonesia are getting up there, but this is the point. You may go and get your bachelor's and PhD at Tsinghua, but would you rather attach your career, the short life spans we have, to a company that could become a 3 or $4 trillion dollar company or a company that could become a 2 or $3 billion company? The issue here is that we're not thinking big enough. If Southeast Asian talent can be attached to companies that can scale beyond 4050 $100 billion of market cap, they will stay. But the only way to do that is to consolidate industries across national borders because no one of our countries in ASEAN is big enough to produce a multi-billion dollar company. But together we can do something very remarkable. Well, with that call to action, that's a great place to end our conversation on new corridors for growth. I want to thank SH Wong. I want to thank Nick for a great conversation today, and I will hand over to the next speaker to introduce our closing session.

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