Business

ROME, June 26 (Reuters) – Italy’s antitrust authority said on Friday it had opened an investigation into Microsoft over alleged unfair commercial practices linked to the price hike of its “Microsoft 365” subscription.

The regulator said the Windows maker did not adequately inform consumers that its Microsoft 365 service had been integrated with artificial intelligence tools Copilot and Designer.

Consumers were automatically moved to a more expensive subscription plan unless they actively opted out, while receiving insufficient information to decide whether to renew their contracts, the watchdog added in its statement.

It added that the tech giant’s practice could be considered aggressive because it unduly limited consumers’ freedom of choice.

Microsoft was not immediately available for comment.

(Reporting by Giulia Segreti, editing by Alvise Armellini)

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By Amanda Cooper, Dhara Ranasinghe and Saqib Iqbal Ahmed

LONDON/NEW YORK, June 26 (Reuters) – The dollar heads into the second half of 2026 on a high, thanks to bets for higher U.S. interest rates and an unquenchable thirst for U.S. assets from investors chasing the “American exceptionalism” that may spell more pain for other currencies.

It is the best performing currency at the half-year point, up 3% and contrasts with a year ago, when it was nursing a fall of more than 10%, in its biggest first-half dive since the early 1970s, on U.S. tariff policy.

Now, even as the prospect of a lasting Iran war ceasefire reduces energy prices, and inflation risks, a strong U.S. economy powered by an AI boom means investors still anticipate the next move in rates to be up, not down.

This bolsters the dollar, already boosted by geopolitical tension.

A hawkish tone from new Federal Reserve Chair Kevin Warsh keeps the focus on inflation, which remains well above the Fed’s 2% target. Traders expect at least one rate hike this year and a 50/50 chance of a second, from no move a few weeks ago.

No surprise the dollar is at 40-year highs against the yen, alarming Japanese officials, and near year-highs versus the euro.

Buying American goods is more expensive, but that may not deter anyone, said Stephen Jen, chief executive and chief investment officer of Eurizon SLJ Asset Management.

“The strong dollar is not welcomed by anyone in the world, including the United States,” he said.

“But U.S. companies, and being in the U.S., are just too valuable (or) attractive. Foreign companies are investing heavily in the U.S. to have a foothold and that is also holding up the dollar.” 

Policymakers from Auckland to Zurich are contending with weaker currencies, which could raise national import bills. Energy prices are down, but the cost of food, travel and other goods and services have all soared.

South Korea’s won has hit record lows, fuelling a frothy stock market and troubling regulators. Emerging markets such as India have propped up their currencies, or jacked up rates to ward off dollar strength. 

BULLISH BUILDUP

Investors have loaded up on bets on continued dollar strength at their fastest pace on record for the first half of the year, Commodity Futures Trading Commission data shows.

Speculators hold a net long position worth around $30 billion, the largest since the start of Donald Trump’s second presidency.

The pace at which they have amassed these holdings, a net rise of $37 billion, is the fastest for the first half of the year since CFTC records began in 2012.

“I certainly think in the near term, the risk is that you get a stronger dollar because of this increase to real rates in the U.S.,” Neuberger portfolio manager Joseph Purtell said.

“Can we break out of this range that we sort of held over (the last) six- to nine-month period? I think it’s likely.”

His firm’s view was that over the longer term the dollar would weaken, given structural concerns such as the sustainability of U.S. government finances, he added.

RECORD INFLOWS

U.S. economic data has delivered almost non-stop positive surprises since April, while earnings growth has exceeded expectations.

Morgan Stanley said in a note the risk of the euro falling to $1.10 near-term could not be ignored, if markets continue to price in a hawkish Fed. It is trading around $1.135.

AI mania and trillion-dollar IPOs meanwhile, starting with SpaceX, have pulled in record amounts of cash.

BofA estimates an unprecedented $341 billion has flowed into U.S. equities so far this year, up from a year-to-date total of $134 billion this time last year.

The United States is home to the hyperscalers rushing to build data centres for the AI buildout, as well as some of the biggest quantum computing companies, bolstering the case for a stronger dollar for some investors.

A strong economy goes with a strong currency, said Mabrouk Chetouane, global head of market strategy at Natixis Investment Management.

“If we think that growth tomorrow is a combination of calculation capacities, energy, and to some extent, labour, which country and which geography is in the best position to benefit from this environment?” he said.

“It’s the United States – the winner takes it all.”

(Reporting by Amanda Cooper and Dhara Ranasinghe in London and Saqib Iqbal Ahmed in New York; Editing by Clarence Fernandez)

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LOS ANGELES (AP) — While much of Hollywood was consumed by the streaming wars, Issa Rae was studying a different mode of entertainment thousands of miles away: microdramas.

No stranger to creating a successful online series, the Emmy-nominated actor and producer became intrigued by China’s booming market for the short, mobile-first soap operas, seeing its potential to build audiences and intellectual property.

In May, Rae’s Hoorae Media released the thriller “Screen Time,” one of the first major studio-quality microdrama projects developed by an established Hollywood production company. The TikTok-backed series drew nearly 75 million views during its first week.

Rae believes the format offers advantages traditional media often cannot.

“Because the price point is lower than TV and film, there’s an opportunity to take risks,” she told The Associated Press. “The turnaround time is also a lot quicker than TV and film, which allows us the opportunity to be more topical and relevant.”

With vertically shot episodes often running one to three minutes, microdramas have emerged as one of entertainment’s fastest-growing formats. That’s drawing interest from celebrities, creators and major media companies looking for new ways to reach audiences who increasingly consume stories on their phones.

Beyond speed and cost, Rae said microdramas foster a more interactive viewing experience between creators and audiences.

“The communal experience is also amazing,” said Rae, whose web series “The Misadventures of Awkward Black Girl” helped launch her career. “You can see what other viewers think and engage with their commentary in real time.”

At first glance, the formula seems deceptively simple: smartphone-friendly bingeable miniepisodes featuring tales of romance, betrayal and redemption with titles like “The Double Life of My Billionaire Husband.” The first few episodes are generally free and viewers have to pay to unlock more.

The model that first emerged in China during the pandemic has exploded — global microdrama revenues will hit $14 billion by the end of 2026, technology research and advisory group Omdia estimates — and the U.S. entertainment industry is taking note.

Peacock recently launched a dedicated microdrama hub. Fox Entertainment invested in microdrama producer Holywater and committed to producing hundreds of vertical titles, while TelevisaUnivision is producing serialized short-form dramas for ViX.

Kevin Hart’s HartBeat has expanded into vertical comedy, Kim Kardashian is backing scripted mobile-first content through her investment in microdrama platform ReelShort, Taye Diggs has starred in vertical series aimed at the growing audience consuming serialized stories on smartphones, and filmmaker Deon Taylor is developing the sports-focused vertical series “I Am Hoop.”

At this year’s MIP London television market, executives said some of the largest microdrama platforms are spending as much as 90% of their budgets on marketing as competition for audiences intensifies.

Hoorae Media spent more than two years researching the format before launching “Screen Time.” The company became convinced microdramas represented more than a passing trend after studying how audiences were consuming entertainment on their phones.

“The connective tissue being the phone, and how much time people are already spending on their phone,” said Dzifa Yador, head of digital at Hoorae Media. “We’re meeting audiences where they are.”

Yador believes the format gives creators something increasingly difficult to find in traditional Hollywood: Instead of waiting years for a studio decision, creators can test ideas, build an audience and retain ownership.

“You definitely get rid of the gatekeepers,” she said. “You can greenlight your own show.”

Long before Hollywood began paying attention, creators were already proving audiences would spend hours following serialized stories online.

Among the most successful is Kountry Wayne, who transitioned from the comedy sketches that made him famous to a universe of interconnected relationship dramas after noting those had a longer shelf life.

The Georgia native, whose Amazon Prime Video stand-up special “Kountry Wayne: Nostalgia” debuted this year, said he now releases 50 episodes a day.

Wayne recently posted that his content generated about 1.4 billion views on Facebook and another 100 million on YouTube over the previous month. Meta and YouTube declined to independently verify those figures.

As Hollywood’s interest in vertical storytelling accelerated, the comedian said, he turned down eight-figure deals to license or acquire his content, choosing instead to keep ownership as his audience grew.

“If they get in, they’re going try to control it,” he said. “I knew it was growing.”

The American Black Film Festival, one of the nation’s leading showcases for Black film and television, is giving the next generation of storytellers an entry point through the format.

The festival launched its first microdrama showcase this year, selecting eight finalists from hundreds of submissions.

Festival programmer Bobbi Broome said the response underscored how quickly creators are embracing the format.

“At least two or three of them said that they decided to try doing a microdrama because they saw the ABFF competition start,” Broome told AP.

For many filmmakers, she said, the showcase was more than producing short-form content. It gave them an opportunity to test ideas that could eventually evolve into larger projects.

“I spoke with a couple of filmmakers who said that this was kind of like their proof of concept for a feature,” Broome said. “The industry is changing day in and day out.”

Rae believes microdramas are only beginning to reveal their potential.

“We knew audiences will appreciate premium content that is free and easily accessible,” she said. “If the story is engaging, the acting is good and it generally feels made with them in mind, they will engage.”

For Wayne, the future of the format is rooted in the same device that helped him build his audience. He said his videos are filmed on cellphones, with little traditional editing, which allows him and his team to move quickly while getting his stories to the audience with high quality visuals.

“The eyeballs are on the phone,” he said. “We still go to the theater. We still watch TV. But we’re on this phone.”

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TOKYO, June 26 (Reuters) – Shares of Japanese chipmaker Kioxia slid 12% on Friday after a report that ChatGPT maker OpenAI was considering delaying its initial public offering sparked a selloff in AI-related shares.

Kioxia, previously called Toshiba Memory and carved out of Toshiba in 2018, is a major producer of memory chips. Its shares have surged as AI investment has boosted the chip industry, making it the most valuable company on the Nikkei 225 index.

But on Friday it was hit by a broader selloff after the New York Times reported that OpenAI is considering holding off on its IPO until next year as CEO Sam Altman seeks a $1 trillion valuation.

Kioxia said on Thursday it is considering a stock split and aims to list American depositary shares on a U.S. exchange at the beginning of the next financial year, which runs until March 2028. 

“Whether it’s April, May, or June is not yet clear, but we’re hoping to list… around that time,” Chief Financial Officer Yoshihiko Kawamura said at Kioxia’s annual general meeting.  

Asian tech firms are looking to expand their investor base in the U.S., with chipmaker SK Hynix saying this week it plans to raise up to $29.4 billion through a U.S. listing. 

“The timeframe to complete this offering suggests that (Kioxia) is highly confident of its ability to continue to produce outstanding results in the next 9-12 months,” analyst Douglas Kim wrote on the Smartkarma platform. 

(Reporting by Sam Nussey; Editing by David Dolan)

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TOKYO, June 26 (Reuters) – Honda Motor Chief Executive Toshihiro Mibe secured support for his reappointment to the Japanese automaker’s board at its annual meeting on Friday after apologising to shareholders for the company’s poor financial performance.

Honda is seeking to recover from costly strategic missteps after posting its first annual loss in seven decades last month, hurt by more than $9 billion in restructuring costs for its electric-vehicle business and competition from Chinese rivals.

“I would like to express my deepest apologies to our shareholders for the significant concern and inconvenience caused by the net loss recorded in the previous fiscal year’s financial results,” Mibe told shareholders at the start of the meeting.

Aside from backing Mibe, Honda shareholders approved the company’s 10 other board nominees, including nine who were up for reappointment and one new director. The vote was in line with advice from proxy advisers Glass Lewis and ISS, which had recommended supporting all directors.

Amid an EV subsidy rollback, Honda decided on its EV-linked writedown with market share of battery-powered cars in the U.S. sharply below the company’s forecasts, meaning sales of its planned models would have required big incentives, Mibe said.

If it would have gone ahead with selling its planned EVs, “it would mean the automotive business itself staying in the red for at least five years, possibly as long as seven,” Mibe said, adding that it would have created an extremely critical situation at the company.

RESIGNATION CALLS

In recent months, Mibe has drawn scorn from retired Honda executives over the mishaps, with former chief executive Nobuhiko Kawamoto visiting Tokyo headquarters in April to urge him to resign, people familiar with the matter have told Reuters.

The former executives have criticised Mibe for neglecting China, the world’s biggest auto market, and for the company’s failed bet on EVs that caused Honda’s loss and highlighted a growing dependence on its profitable motorcycle division.

Near the end of the meeting, a shareholder proposed filing a motion that called for Mibe’s dismissal, but the chief executive declined to put it to a vote, saying the issue was not on the agenda and the proposal could therefore not be considered.

Mibe said talks with Nissan Motor and Mitsubishi Motors about cooperation on next-generation vehicle technologies, ongoing since mid-2024, were at an advanced stage.

(Reporting by Daniel Leussink; Editing by Thomas Derpinghaus and Kevin Buckland)

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WASHINGTON (AP) — The Supreme Court sided with the maker of Roundup weedkiller Thursday in a ruling expected to block thousands of lawsuits alleging it failed to warn people the product could cause cancer.

The case came before the justices after a tidal wave of litigation that included some multibillion-dollar verdicts against the global agrochemical manufacturer Bayer, a Germany-based company that acquired Roundup when it bought its original producer Monsanto in 2018.

The decision is a victory for President Donald Trump’s administration, but one that could be tricky politically since allies in the “ Make America Healthy Again” movement want to rein in pesticide use.

The high court, in a 7-2 ruling, found that the company cannot face failure-to-warn lawsuits in state courts because federal regulations have found a cancer link unlikely and do not require a warning label.

The decision “is good for science, farmers, and industries that depend on regulatory clarity for innovation,” Bayer said in a statement. “It should help significantly contain the Roundup litigation after nearly a decade of legal battles.”

Though Bayer said the ruling should result in the dismissal of pending lawsuits containing failure-to-warn allegations, the company said it plans to proceed with a proposed $7.25 billion class-action settlement intended to resolve many of the remaining claims.

The ruling was denounced by environmental groups and lawyers representing people who believe they were harmed by Roundup.

“This Supreme Court ruling wrongly slams the courthouse door on Americans sickened by pesticides,” said attorney Christopher Seeger, who is proposed as a claimants’ representative in the settlement. But he said a settlement still would allow some people to receive compensation.

The decision “is a tragic setback for public and environmental health,” said Jay Feldman, executive director of Beyond Pesticides, a health and environmental group.

The case before the Supreme Court was filed by Missouri resident John Durnell. He developed a cancer called non-Hodgkin’s lymphoma after more than 20 years of serving as the neighborhood association’s “spray guy,” using Roundup on parks in his historic St. Louis community.

A jury agreed that the company failed to warn him about possible cancer dangers and awarded him $1.25 million. It’s one of thousands of similar cases, including some multibillion-dollar damage awards.

There’s still fierce debate about cancer and Roundup’s key ingredient, glyphosate. The World Health Organization’s International Agency for Research on Cancer classified the chemical as “probably carcinogenic” in 2015. The Environmental Protection Agency has determined that it’s not likely to cause cancer in humans when used as directed.

The agency approved a label without a cancer warning, and Bayer argues that it’s required to follow those federal standards — not the state laws that Durnell and others have sued under. The ruling still could allow other suits alleging problems with the way the product was designed, his attorney Ashley Keller has said.

Bayer disputes the cancer claims but previously set aside $16 billion to settle cases, and earlier this year proposed a $7.25 billion class-action settlement. A federal judge recently ruled that the proposed settlement will be heard in a Missouri state court, where many of the lawsuits have been filed.

At the same time, the company has tried to persuade states to pass laws shielding it from liability in failure-to-warn lawsuits, and three states have agreed.

About 200,000 Roundup-related claims have been made against Bayer, mostly from home users. It has stopped using glyphosate in Roundup sold in the U.S. residential lawn and garden market.

The company had said it might have to consider pulling glyphosate from U.S. agricultural markets if it keeps getting sued. Agricultural industry groups have said Roundup is important for a strong food supply.

“Today’s decision protects our access to the tools that let us care for our soil, protect our crops, and keep food affordable for your family and mine,” said Blake Hurst, a corn and soybean farmer who is a former president of the Missouri Farm Bureau.

Pesticides have created a rift between the administration and members of Health Secretary Robert F. Kennedy’s MAHA movement, who were frustrated by an executive order aimed at boosting glyphosate’s production.

Kennedy as said repeatedly that glyphosate causes cancer even as he says he recognizes the executive order was necessary for food supply and national security reasons.

Some health advocates contend the Environmental Protection Agency’s approval of glyphosate-based weedkillers was based on limited information and that lawsuits in state courts have turned up additional evidence against it.

“The fact that EPA approved a pesticide label does not mean a product is safe, and it should not become a shield for companies that fail to warn about cancer risks, neurological harm, and other serious dangers,” said Patti Goldman, senior attorney at Earthjustice, an environmental legal organization.

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Lieb reported from Jefferson City, Missouri.

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WASHINGTON (AP) — The Supreme Court struck down a Hawaii law requiring people to get permission to carry guns into stores and hotels on Thursday, in its latest opinion backing Second Amendment rights.

The high court’s 6-3 decision means people can carry guns onto privately owned property like shopping malls and gas stations, unless the owners specifically say guns are banned at their establishments. It comes shortly after the court found that marijuana users can’t be completely banned from owning firearms.

It’s a win for President Donald Trump’s Republican administration, which argued the law violates the Second Amendment. The measure was sometimes referred to as a “vampire rule” because it required people with guns get permission to enter, like vampire lore says bloodsuckers need an invitation to enter a home.

Hawaii argued that the 2023 measure ensured private owners could decide whether they wanted firearms on their property. The state passed the law as thousands more people got legal permission to carry guns in the wake of a 2022 Supreme Court ruling that found the Second Amendment gives most people the right to have guns in public.

About four other states have enacted similar laws, though presumptive restrictions for guns on private property open to the public have also been blocked elsewhere.

Hawaii also restricts guns in places like parks, beaches and restaurants that serve alcohol, but those rules weren’t before the court. They are being challenged in lower courts, however.

The suit before the Supreme Court was filed by a gun rights group, the Hawaii Firearms Coalition, and three people from Maui. A judge originally blocked the measure, but an appeals court allowed it to be enforced. Trump’s Republican administration backed the Supreme Court appeal.

The Second Amendment Foundation applauded the ruling. “This law was nothing more than a thinly veiled attempt to disarm peaceable citizens, and we’re grateful the Supreme Court saw through the ruse,” said Alan Gottlieb, its founder and executive vice president.

The gun-control group Everytown Law called the decision disappointing but pointed out that business owners can still post signs forbidding firearms on their properties. “The Supreme Court may have changed the default rule, but it cannot take away a private property owner’s authority over their own land,” said Janet Carter, managing director of Second Amendment Litigation

The two Second Amendment decisions this term are the latest in a series of gun cases that have come before the Supreme Court in the wake of its 2022 ruling that led to a flood of challenges to firearm restrictions around the country. The justices have since struck down a ban on bump stocks, gun accessories that enable rapid firing, but upheld a federal gun law intended to protect domestic violence victims as well as strict regulations on firearms known as ghost guns, which are nearly impossible to trace.

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Follow the AP’s coverage of the U.S. Supreme Court at https://apnews.com/hub/us-supreme-court.

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WASHINGTON, June 25 (Reuters) – The U.S. economy has seen solid growth momentum and inflation was expected to reach the Federal Reserve’s 2% target by the end of 2027, the International Monetary Fund said on Thursday.

IMF spokeswoman Julie Kozack told a regular news briefing that the Fed last week appropriately decided to hold its key policy interest rate, and welcomed the strong commitment of the new chair, Kevin Warsh, to delivering price stability.

“Growth momentum in the U.S. economy has been solid,” Kozack told reporters, citing Thursday’s data, which revised first-quarter GDP growth to a 2.1% annualized rate, up from a 1.6% rate reported previously.

She noted that government consumption had bounced back, investment in the U.S. was strong, and labor productivity remained high, making the U.S. a bit of an outlier in the world.

Inflation remained higher than the Fed’s target, but was expected to ease, she said.

“Because of this dynamic, we think the Fed appropriately decided to keep the policy rate on hold. Any further policy actions by the Fed will need to proceed with caution and they would need to be carefully calibrated to the incoming data,” she added.

(Reporting by Andrea Shalal, David Lawder and Rodrigo Campos)

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By Takaya Yamaguchi and Leika Kihara

TOKYO, June 25 (Reuters) – Japan’s government will call for monetary policy that bolsters private demand, a draft of its long-term economic blueprint seen by Reuters showed, signalling a preference for keeping borrowing costs low and setting up potential policy tensions with the central bank.

The draft urges the Bank of Japan (BOJ) to align its decisions with Prime Minister Sanae Takaichi’s drive to reflate growth, citing legal provisions requiring the central bank to coordinate policy with the government.

The unusually explicit language underscores the Takaichi administration’s growing unease with further rate hikes as the BOJ exits years of ultra-loose policy, and signals a stronger push for coordination that could shape the timing and pace of tightening in the months ahead.

It also pledges the government will take “nimble and sufficient” steps to prevent a return to deflation while lifting long-term growth.

“As the government seeks to achieve strong growth under its economic and fiscal policy, appropriate monetary policy that supports private demand through stable price rises is extremely important,” according to the draft seen by Reuters on Wednesday.

It has long been customary for administrations to include a paragraph on monetary policy in the blueprint, though most have kept the language deliberately vague, typically urging the BOJ only to guide policy appropriately to achieve price stability.

The draft of Takaichi’s blueprint breaks from that practice, explicitly calling for policy to support private demand and invoking the legal requirement for the BOJ to align with government policy.

It also echoes Abenomics-style stimulus while recognising a changed environment of inflation hovering around the 2% target, driven in part by the Iran-linked energy shock.

Takaichi is known as a fan of “Abenomics,” a mix of big fiscal spending and bold monetary easing deployed by former premier Shinzo Abe to pull Japan out of prolonged deflation.

“While the phrasing is indirect, the language appears to push back against rate hikes and underscores the government’s caution against downside risks to the economy associated with any premature rate increases,” said former BOJ board member Takahide Kiuchi.

BOJ INDEPENDENCE IN FOCUS

The blueprint, to be finalised in July, will be the first to be compiled by Takaichi, who has in the past voiced reservations over the BOJ’s efforts to wean the economy off deflation-era stimulus.

While Japanese law guarantees BOJ independence, it also mandates close coordination with the government to ensure policy alignment.

Citing that requirement, the draft urges the BOJ to “work closely with the government to sustainably and stably achieve its 2% inflation target”, while monitoring progress towards a “positive cycle” of wage and price gains.

The benchmark 10-year government bond yield slid to 2.625% as the report offset hawkish remarks from BOJ board member Naoki Tamura.

The yen hovered near a four-decade low, trading at 161.73 per dollar, while Japan’s Nikkei share average jumped more than 3.5%.

POLITICAL PRESSURE COMPLICATES BOJ’S JOB

The BOJ next meets on July 30-31, when it is widely expected to hold rates steady but will update quarterly forecasts that markets will parse for signals on the timing of the next hike.

Since taking office in October last year, Takaichi has emphasised fiscal spending to revive growth, a stance that has pushed up bond yields amid concerns about Japan’s worsening finances.

Takaichi’s new growth strategy targets more than 370 trillion yen ($2.3 trillion) in investment through fiscal 2040 across 17 strategic sectors such as AI and chips.

Such ambitious spending would benefit from low rates, but mounting inflationary pressures have pushed the BOJ to exit ultra-loose policy and lift borrowing costs.

The BOJ raised its policy rate to a 31-year high of 1% this month and has signalled readiness to tighten further as higher fuel costs linked to the Iran war keep inflation near its target for almost four years.

But political pressure could complicate further tightening.

A government representative who attended the June meeting said the BOJ must take “proactive and appropriate action” if the economy worsens, a summary of opinions showed, in a sign of the administration’s displeasure over rate hikes.

“The Takaichi administration has been refraining from making explicit comments pushing back against rate hikes so far this year. But the language of this draft offers a glimpse of its true feelings,” Kiuchi said.

($1 = 161.7300 yen)

(Reporting by Takaya Yamaguchi and Leika KiharaEditing by Shri Navaratnam)

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By Casey Hall, Samuel Shen and Kane Wu

SHANGHAI/HONG KONG, June 25 (Reuters) – Just two days after SpaceX made its historic market debut, a Chinese space startup held an investor roadshow for its maiden fundraising round by touting a mission to help China catch up with the U.S. in the race to the heavens.

The mission for Tectronic Maritime Space Systems, a Shanghai-based company that focuses on launching rockets from the sea, is to “build the Maersk of global commercial space flight,” finance manager Gu Mei told roughly 50 venture capital investors.

To achieve that goal, Tectronic, established just three months ago, needs to raise 150 million yuan ($22 million) at a valuation of 1.5 billion yuan, according to its investor presentation.

It plans three additional funding rounds totaling 3 billion yuan over five years before targeting a 2032 listing at a valuation of about 50 billion yuan – more than 30 times its current level, the presentation showed.

“Demand is inelastic, supply is limited and the clock is ticking,” Gu said at the event on June 14. “Investors participating in this round of financing are expected to get returns of 26.7 times.”

The aggressive fundraising pitch highlights a scramble among what Beijing refers to as China’s “strategic emerging and future industries,” which include startups focusing on space, quantum technology, nuclear fusion and brain-machine interfacing.

While the rush to raise funds by companies like Tectronic is creating potentially lucrative opportunities for local venture firms – struggling to recover from a years-long downturn – the fever is also inflating startup valuations and stirring fears of a forming bubble.

In China, venture capital and private equity investments in the first five months of this year totaled 620 billion yuan ($91.6 billion), jumping nearly 60% from a year earlier, according to ChinaVenture Investment Consulting.

Newly registered venture capital funds in the world’s second-largest economy totaled 154 billion yuan during the first five months of 2026, already in excess of last year’s total, according to China’s fund industry association.

“The level of frenzy (in China) is something I have never seen in my entire career,” said Yan Kai, a veteran venture capitalist and partner at Ivy Capital in Shanghai.

A startup with no revenue can raise billions in a first funding round and before that deal is completed, investors line up for the second while talks have already started for the third, said Yan, whose firm makes tech-focused investments.

‘PULLING THE TRIGGERS’

A pickup in venture capital investments comes as Beijing has highlighted the need to bolster its “future industries,” a grouping that also includes biomanufacturing and hydrogen energy, in its next five-year plan, published in March.

The development blueprint also identified sectors like robotics and aerospace as strategic emerging industries earmarked for priority development.

China also published rules this month to support domestic stock market listings of “future industry” startups, typically firms working on frontier technologies that have no profit or revenue.

“Our strategy is to move with the trend – follow guidance of national strategy, while selecting investment targets using a market approach,” said Huang Yan, co-founder of Shanghai-based Lantern Capital.

Huang, who expects a return of nearly 100 times from his decade-old investment in LandSpace – China’s closest answer to SpaceX – said “the key is to marry what that state wants with what the market needs.”

Raymond Feng, a partner at Atom Ventures, said competition among venture funds to invest is fierce in the areas of nuclear fusion, quantum tech and embodied AI, as “everyone is throwing money at future industries.”

Ni Zhengdong, chairman of Beijing-based venture capital consultancy Zero2IPO Holdings, said there is a strong sense of FOMO – a fear of missing out – among early-stage investors in China, with some funds “pulling the triggers more often.”

NARROWING TECH GAP WITH U.S.

While most venture capital deals involve local, yuan-denominated funds amid the intensifying Sino-American tech rivalry, five China-focused dollar-denominated funds raised a combined $4 billion as of June 12, Preqin data showed.

That already exceeds the annual total for each of the past two years.

Venture funds including ZhenFund, Qiming Ventures and Capital Today are back in the market raising new funds, people familiar with their plans said, riding the surge of recovering global investor interest in China tech.

The sources were not authorized to speak to the media. The three firms did not reply to Reuters requests for comment.

Some industry participants, however, say the industry’s present trajectory is too fast and furious.

“A photonic chip project was worth 1 billion yuan last year, and is now worth 10 billion,” said Yu Tiecheng, head of Guanghui M&A, a think tank. “A rocket satellite project was valued at 5 billion at the start of the year and is now worth 20 billion.”

If a hoped-for listing at an even higher valuation fails to materialise, “such investments would look extremely dicey,” he said.

But for now, the representatives of the so-called “emerging and future industries,” like Tectronic, are capitalising on the Chinese government’s push to narrow the country’s gap with the U.S. in areas including AI and space.

There is heated competition for orbital space globally, “so there’s strong government support for private capital to participate” in companies like Tectronic, said Chief Financial Officer Wu Qunhui.

(Reporting by Casey Hall and Samuel Shen in Shanghai; Kane Wu in Hong Kong; Editing by Sumeet Chatterjee and Thomas Derpinghaus)

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