Identifying investment targets in a complex global political and financial landscape

On Thursday, global investment leaders gathered at BEYOND EXPO’s Global Investment Summit in Macao, offering a comprehensive exploration of pivotal themes, shaping the future of investment amid the current complex and evolving financial landscape.

Artificial Intelligence is undoubtedly the star of this summit. Investors shared how the buzz around the promising technology is revolutionizing investment paradigms, and how geopolitical tensions are impacting the expansion of AI companies and global data governance.

David Beckham, Sands Global Ambassador, also joined the Summit to share his business insights. “I’ve always thought that the best businesses that we have are the authentic ones,” he said, adding that he would never get into something that he didn’t believe in.

Attract users with market-fit AI products

Creating a product that fits the market is the ultimate goal that any entrepreneur or company must achieve, and this also applies to companies focused on building a sustainable AI business.

When talking about the shift in investment strategies in the AI era, Harry Man from Matrix Partners China, and Lu Zhang, founder and managing partner of Fusion Fund both mentioned that while they acknowledge mergers and acquisitions as a viable exit strategy, they still aim to invest in companies with unicorn potential to achieve greater returns through IPOs.

“I guess all of us are early stage venture capitalists, right? We all like to shoot for the moon. We want to invest in the biggest idea that eventually goes on to an IPO. And that’s how we make money,” said Harry.

However, many AI application companies are currently being overvalued amid the hype, which was the consensus among guests at the Summit.

De-risking or global collaboration? 

There’s no doubt that geopolitical tensions are exacerbating the technology decoupling between China and the US markets. However, most startups remain focused on the local market, limiting the impact of these geopolitical issues.

The US is in the process of restricting China’s access to American companies’ AI cloud services from overseas and advanced chips. But according to Esther Wong, the founder and CIO of 3Capital, while China may lag behind the US in cutting-edge AI models and algorithms, it can leverage its market size for operational excellence.

Panelists agreed that AI startups aiming for the global market may need to choose between the Chinese and US markets in the future.

Despite tensions, global collaboration is still ongoing in areas like open-source AI models and data governance. “Regulation of data and data flow is beyond the control of any single entity. It requires global collaboration to implement proper data control and regulation,” Wong noted.

What to evaluate when investing in emerging markets?

Investing in emerging markets was also a hot topic on Thursday’s panels. Betting on these markets requires multifaceted considerations, as factors such as political stability, regulations, and investor protections are crucial risks to evaluate.

“So there are actually factors that are more at a political and regulatory level. And then there are also more local cultural practices,” said Akio Tanaka, a Partner at the global venture capital firm Headline.

Roderick Purwana, who serves as a Managing Partner at East Ventures, mentioned during the Summit that Indonesia is set to have a new president in October. “I think the government has been relatively supportive, I guess, of the tech ecosystem in Indonesia, making it easier to anticipate their plans and actions.”

Meanwhile, investment organizations are increasingly focusing on ESG issues. However, emerging markets often lack strict environmental regulations. William Mimassi Pedroso, a Partner at Latin America’s Monashees, emphasized that gender diversity and data protection, including personal data protection, are important and substantial elements, because if these are not addressed, investors will raise questions later in the growth phase.

Overall, based on investors’ experiences and views, a nuanced approach balancing risks and opportunities is needed for investing successfully in emerging markets.