And why it's time you take China's AI seriously |
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Hi John, here's what you need to know for June 5th in 3:09 minutes.

  1. Chinese AI startup Manus launched a text-to-video tool to rival OpenAI’s one, betting that speed, access, and strategy will outplay spendier rivals
  2. Meet CHAD-10: a basket of stocks that bet on China’s AI deployment, where the tech is scaling fast – Read Now
  3. US carmakers are considering moving some auto parts production to China, with export bans threatening to shut down their assembly lines

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And, Scene
And, Scene

What’s going on here?

Chinese AI startup Manus launched a text-to-video tool that turns simple text prompts into mini-movies, aiming to bring the curtain down on OpenAI and other expensive rivals.

What does this mean?

Manus’s new tool zips through scene-setting, animation, and editing to spit out a full video from a single prompt in a matter of minutes. The service is paywalled for now, but Manus is planning to make it free to use. That’s a serious plot twist for the firm’s subscription-based competitors – including OpenAI and Google, who charge a pretty penny for similar features. And it’s not just the tech that’s drawing attention here: Manus stands out as one of the only Chinese AI startups to be backed by a major US venture capital firm. In today’s tense geopolitical climate, that’s a big distinction.

Why should I care?

Zooming in: There are no small parts.

Chinese AI firms are moving fast – partly because they can. With lower development costs and fewer rules to follow compared to the US, they’re iterating quickly and churning out useful, real-world tools at hyperspeed. And let’s be clear, Manus’s plan to offer the tech for free isn’t generosity: it’s strategy. The idea’s to grab users and grab ’em early – before its competitors do.

The bigger picture: Call my (AI) agent.

As AI agents grow smarter, they’re also becoming harder to control. Some divas are already demonstrating untoward behavior, like bending the truth and resisting shutdown. Good thing, then, that a new AI safety nonprofit has just launched. LawZero will focus on truth-first oversight tools – free from commercial interests – to try to keep these agents in check. It’s a timely reminder: snazzy new tools often come with even snazzier new risks.

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FROM OUR RESEARCH DESK

It’s Time You Take Chinese AI Seriously

Stéphane Revenier, CFA

It’s Time You Take Chinese AI Seriously

China’s AI strategy isn’t about catching up to the West – it’s about out-deploying it.

While the US chases open-ended research and cloud-based APIs, China’s wiring AI directly into the real economy: across consumer platforms, supply chains, and public services.

That real-world focus is already paying off – and it could power the country’s next growth wave, long after exports and property cool down.

Valuations are cheap. Risks are well known. And if even one macro domino falls the right way – a policy shift, a demand recovery, a geopolitics thaw – the upside could be substantial.

So I built the China AI Deployment 10 (CHAD-10) investing basket as a targeted way to express that view.

That’s today’s Research: it’s time you take Chinese AI seriously.

Read or listen to the Research here

* SPONSORED BY STATE STREET

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* Bloomberg Finance L.P. & State Street Global Advisors, data as of May 28, 2025. GLD commenced operations on November 18, 2004. Note GLD AUM is $98.2 billion and 180-day average dollar volume over 2.3 billion. Note: 180-day average dollar volume is based on 180 trading days.

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Road To Nowhere
Road To Nowhere

What’s going on here?

US automakers are considering moving some of their manufacturing to China, in a long-way-around swerve to avoid the country’s export bans on certain key metals.

What does this mean?

China controls about 90% of the world’s “rare earth minerals”: specific kinds of metals – including dysprosium and terbium – that go into the high-powered magnets found in EVs (and AI chips and robots, for that matter). Two months ago, the Chinese government blocked exports of the magnets as part of its tit-for-tat trade feud with the US. And that’s left American carmakers in a bind. They’re having to toss up between backtracking to clunkier old tech, scrapping some modern features, or detouring their US-made motors through China to get the magnets installed. The export ban targets magnets rather than finished auto parts, see – at least for now.

Why should I care?

Zooming in: Slow-motion car crash.

Rare earth magnets don’t just drive EVs: they're essential in today's headlight systems and windshield wipers, too. So it’d throw a serious wrench in the gears to remove them from production entirely. And while the ship-it-all-through-China workaround would be slow and pricey, some automakers still see it as the best possible option – better than retooling production to go back to the previous tech. Unless new rare earth mining projects in the US, Australia, or Angola can ramp up in a hurry, that is. (Spoiler: they can’t – but they could be a solution in the future).

The bigger picture: Shut up and drive.

China knows this road like the back of its hand. It went the same route in 2010, blocking rare earth exports to Japan after a maritime spat. In fact, China’s been calling the metals “strategic assets” since at least the early 1990s. The US, meanwhile, let its own rare earth magnet industry shut up shop 20 years ago to move production abroad (mostly to China). Now, as America talks tough on trade, China’s holding a winning card – and it’s magnetic.

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QUOTE OF THE DAY

"I believe that if life gives you lemons, you should make lemonade... And try to find somebody whose life has given them vodka, and have a party."

– Ron White (an American stand-up comedian and actor)

Benjamin Franklin said that death and taxes are life’s only two certainties.

Well, tech entrepreneur Bryan Johnson is spending millions of dollars a year to dodge death.

And if you invest wisely, using the right tools and funds, you could protect your earnings from tax. (Our free guide shows you how.)

Time for a new catchphrase, Benny.

🎯 On Our Radar

The Biggest Loser. The modern weight-loss competition is pharma’s pricing strategy.

Maybe AI is on our side, after all. Bots can track and stop Reddit extremists.

Below Deck, this is not. Three years, freezing Norwegian waters, and only Viking tech to get you through.

🌏 Finimize Live

MIS2025

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