Market Information Tuesday 29 July 2025

Chinese AI firms are accelerating innovation with cheaper, more efficient models, echoing the disruptive impact of DeepSeek. Startup Z.ai unveiled its open-source GLM 4.5 model, which uses “agentic AI” to break tasks into subtasks for greater accuracy. The model is half the size of DeepSeek’s and runs on just eight Nvidia H20 chips—hardware designed for China amid U.S. export controls. Z.ai aims to undercut competitors, charging just $0.11 per million input tokens and $0.28 per million output tokens, far below DeepSeek’s rates. Backed by Alibaba and Tencent, Z.ai has raised over $1.5 billion and is reportedly eyeing an IPO in Greater China. Its launch follows similar moves by Alibaba and Tencent, highlighting the rapid growth of China’s open-source AI ecosystem despite U.S. restrictions.

India has overtaken China as the largest exporter of smartphones to the U.S., according to Canalys, as supply chains shift away from Beijing amid tariff uncertainty. In Q2, India accounted for 44% of U.S. smartphone imports—up from just 13% a year earlier—while China’s share plunged to 25% from 61%. The surge is largely driven by Apple, which is accelerating iPhone production in India, aiming to manufacture about a quarter of all iPhones there in coming years. Other brands like Samsung and Motorola are also moving some assembly to India, though on a smaller scale. The shift highlights growing “last mile” assembly in India as manufacturers diversify away from China, despite Apple still relying on China’s mature infrastructure for its premium models.

The EU is investing billions to build “gigawatt” AI factories, aiming to close the gap with the U.S. and China in artificial intelligence. With €10 billion already committed for 13 AI factories and a further €20 billion earmarked for gigafactories, Brussels hopes to boost computing power, data access and research capacity in one integrated ecosystem. Nvidia CEO Jensen Huang has called these facilities a cornerstone of a new “industrial revolution.” The first EU AI factory will go live in the coming weeks, with a major project launching in Munich in September. Each gigafactory could cost €3–5 billion and require up to a gigawatt of power, raising questions about grid capacity and private sector funding. Officials say the goal is to enhance Europe’s technological sovereignty, though analysts warn success will depend on sustained investment and viable business models.

The 6M Euribor increased with 1 basis point to 2.05% compared to previous business day. The 10Y Swap decreased with 2 basis points to 2.66% compared to previous business da

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In the attachment, today’s market data on money and capital market rates as well as other rates are presented.