China's Zhipu Jolts AI Race as 'Scare Trade' Grips US | The China Show 2/12/2026
Watch on YouTube ↗  |  February 12, 2026 at 06:51 UTC  |  1:31:27  |  Bloomberg Markets
Speakers
Annabelle Droulers — Anchor, Bloomberg TV
David Ingles — Anchor, Bloomberg TV
Paul Dobson — Executive Editor for Asia Markets, Bloomberg
Min Min Low — China Correspondent, Bloomberg
Laura Davison — Washington Deputy Bureau Chief, Bloomberg
Andrew Janes — Energy and Commodities Editor, Bloomberg
St. John — Senior Portfolio Manager, Lincoln Investment
Stephanie Aliaga — Global Market Strategist, JPMorgan Asset Management
Kirk Boodry — Analyst, Bloomberg Intelligence (SoftBank)
Richard Teng — Co-CEO, Binance
Tekedra Mawakana — Co-CEO, Waymo (Alphabet)

Summary

  • The "AI Scare Trade" Divergence: While US markets are selling off software, biotech, and services due to fears of AI displacement (the "Scare Trade"), Asian markets are rallying on the "picks and shovels" thesis. The narrative is shifting from AI software to AI infrastructure, specifically memory chips, which are identified as the critical bottleneck for AI agents.
  • Nickel Supply Shock: Indonesia, controlling 2/3 of global nickel supply, is slashing production quotas from 42M tons to 12M tons to force prices higher. This is a massive supply-side intervention intended to floor the market.
  • Consumer Weakness in Alcohol: A broad "sobriety" or cost-cutting trend is hitting global brewers (Heineken, Asahi, Budweiser APAC), with volumes dropping significantly (e.g., Asahi Japan sales down 11% in Jan).
  • Crypto Institutional Floor: Despite retail volatility and "flash crash" events, institutional accumulation of Bitcoin remains robust, with 1.3M BTC held by institutions and continued inflows, suggesting a divergence between retail panic and institutional accumulation.
Trade Ideas
Ticker Direction Speaker Thesis Time
LONG Stephanie Aliaga
Global Market Strategist, JPMorgan Asset Management
Aliaga states that while the "AI Scare Trade" hurts software, the "nuts and bolts" of AI are still in high demand. She explicitly notes, "Memory is really the bottleneck here, not just the raw intelligence... these agents require memory." As AI shifts from simple chatbots to "Agentic AI" (complex tasks), the computational load on memory chips increases exponentially. Pricing power for memory manufacturers (Samsung, SK Hynix, Micron) is surging because demand outstrips supply, and they have "real moats." LONG Memory manufacturers as the primary beneficiaries of the next phase of AI capex. Hyperscalers (Microsoft, Google, Meta) cutting capex spending due to lack of immediate ROI. 49:43
SHORT David Ingles
Anchor, Bloomberg
Budweiser APAC earnings missed; Asahi reported Japan sales down 11% in Jan; Heineken announced job cuts (7% of workforce) due to slumping demand. Multiple major global brewers are reporting the same data point simultaneously: consumers are drinking less alcohol. This signals a structural shift (health/sobriety) or a cyclical crunch (inflation), leading to revenue contraction across the sector. SHORT/AVOID the Alcohol/Brewing sector. A sudden rebound in consumer discretionary spending or successful price hikes offsetting volume declines. 22:20
LONG Tekedra Mawakana
CEO, Waymo
Waymo (Alphabet sub-unit) just raised capital at a $26B valuation and is launching in London and Tokyo. Regulatory hurdles are clearing, and the business is moving from "R&D project" to "Commercial Expansion." This validates Alphabet's "Other Bets" valuation and provides a growth engine beyond Search. LONG Alphabet on Waymo execution. Regulatory bans on robotaxis or a high-profile safety incident. 38:36
LONG Richard Teng
Co-CEO, Binance
Despite retail volatility and liquidation events, institutions added 43,000 BTC to portfolios in January. Total institutional holding is ~1.3M BTC. The "crash" narrative is driven by retail panic and leverage flushes (liquidations), but the "smart money" (institutions) is buying the dip. This divergence usually signals a local bottom. LONG Bitcoin following institutional flows. Regulatory crackdowns or a broader macro liquidity freeze strengthening the USD. 43:39
LONG Kirk Boodry
Analyst, Bloomberg Intelligence (SoftBank)
SoftBank is expected to book ~$6.5B in valuation gains from its OpenAI stake. The stock is trading as a proxy for OpenAI sentiment. With OpenAI expected to raise funding at a $100B+ valuation, SoftBank's asset value reprices higher. SoftBank is effectively the only public, liquid way to get exposure to OpenAI's valuation markup (outside of MSFT). LONG SoftBank as an OpenAI valuation proxy. OpenAI valuation collapses or SoftBank is forced to sell assets to fund further investments. 62:41
SHORT Min Min Low
China Correspondent, Bloomberg
NetEase Q4 gaming revenue missed estimates (down 4%). Net income declined nearly 30%. The company is missing on fundamental metrics despite "AI integration" narratives. The core business (gaming revenue) is shrinking, and the "AI Scare Trade" is negatively impacting sentiment around Chinese tech/gaming names. SHORT NetEase on fundamental deterioration. A hit new game release revitalizes revenue or aggressive share buybacks. 9:24
LONG Andrew Janes
Energy and Commodities Editor, Bloomberg
Indonesia is cutting its nickel production quota for the year from ~42 million tons down to 12 million tons. Indonesia accounts for two-thirds of global production. This is a massive, state-directed supply shock designed to squeeze the market. A ~70% reduction in approved quota from the dominant global supplier mathematically forces prices higher to clear demand. LONG Nickel futures or miners with exposure outside of Indonesia (or those with secured quotas). Indonesia reverses policy mid-year or demand for EVs/batteries collapses further. 18:36
LONG St. John
Senior Portfolio Manager, Lincoln Investment
Lincoln Investment (Quant fund) returned 70% last year. The manager states small caps offer "maximized return" due to higher volatility and inefficiency compared to large caps. In the Chinese market, large caps are "defensive/beta," but alpha generation is concentrated in small caps where information asymmetry exists. Quants are aggressively exploiting this. LONG Chinese Small Caps (via Quant strategies or ETFs). Regulatory crackdowns on quant trading or small-cap liquidity drying up. 0:05