China's Zhipu Raises $5 Billion in Two Months for AI Push

* Editor's note: AI PRISM (Personalized Report & Insight Summarizing Media) is an artificial intelligence-based personalized news recommendation and summary service developed with support from the Korea Press Foundation. It selects and provides six news items tailored to each reader type.

1. Zhipu Raises $5 Billion as China's AI Funding Race Escalates

- Key points: Chinese artificial intelligence company Zhipu has completed an additional funding round of about $5 billion, just two months after securing roughly $4 billion (about 5.3 trillion won) through a share sale in July. The proceeds will go toward developing its next-generation AI model GLM, building a proprietary training system and expanding computing infrastructure. Big tech firms have joined the race as well, with Alibaba raising 80 billion Hong Kong dollars on the Hong Kong exchange last month and Tencent raising $4.7 billion (about 6.5 trillion won) in bonds in June. ByteDance secured a syndicated loan of $29.6 billion (about 40 trillion won) from about 30 banks at home and abroad. The 21st Century Business Herald said commercialization revenue alone cannot cover the enormous computing and research costs, prompting leading companies to replenish funds in the capital markets.

2. A 23% Distribution Rate but a Negative 24% Return: Covered-Call Funds Diverge

- Key points: Net assets of covered-call exchange-traded funds in Korea surged 86.6% to 28.0582 trillion won as of the 10th of this month from 15.0373 trillion won at the end of last year. Among the 19 funds with the highest annual distribution rates, 14, or 73.7%, posted one-year total returns below their distribution rates. The PLUS High Dividend Weekly Covered Call fund had a distribution rate of 23.34% but its price fell 36.94%, leaving a total return of negative 23.88%. The ACE US Big Tech 7+ Daily Target Covered Call (synthetic) fund had a distribution rate of 24.67% but a total return of just 3.33%. Covered-call funds hold assets while selling call options to generate distributions, a structure in which option premiums cannot easily offset losses when asset prices fall, while gains are capped by the terms of the options sold when prices rise. Products using bonds face added price pressure as the U.S. 30-year Treasury yield tops 5.3%.

3. TSMC to Raise Advanced Chip Output 70%

- Key points: Monthly output of 3-nanometer products at Taiwan's TSMC, the world's largest foundry, or contract chipmaker, is expected to rise about 70% over 18 months. Taiwanese media, citing sources, reported that monthly 3-nanometer output will expand from 120,000 to 130,000 wafers at the end of last year to 180,000 by the end of this year and 210,000 by the middle of next year, while 2-nanometer output will rise from 90,000 at the end of this year to 110,000 by the middle of next year. At its second-quarter earnings briefing, TSMC said demand for AI chips using advanced nodes is very strong and that order visibility is already secured from 2029 through 2030, raising its annual capital spending forecast to between $60 billion and $64 billion (about 80.6 trillion to 86 trillion won). The company also plans to expand monthly output of its advanced CoWoS, or chip-on-wafer-on-substrate, packaging to 260,000 units by the end of 2028 to meet demand from customers including Nvidia.

4. Oil Prices Soar, but Refiners Are Not Smiling

- Key points: International oil prices jumped on supply jitters in the Middle East, but refining stocks, normally seen as beneficiaries, weakened instead. From the 4th to the 14th of this month, SK Innovation (096770) fell 1.16%, while S-Oil and GS (078930) dropped 5.53% and 6.05%, respectively. Spot Dubai crude climbed 21.3% from the 4th to $123.66 a barrel as of the 11th, inflating crude purchase costs, while the complex refining margin slipped for a sixth straight week to $26.4 a barrel from $33.6. Compounded by concerns over AI investment in the United States, the KOSPI closed 3.26% lower at 6,684.37, with foreign investors selling for a fourth consecutive session since the 9th.

5. Betting on U.S. Midterm Election Results Through ETFs

- Key points: With the U.S. midterm elections in November about 50 days away, Wall Street is moving to launch exchange-traded funds that bet directly on the election outcome. According to filings with the U.S. Securities and Exchange Commission, GraniteShares is seeking to list four ETFs covering scenarios such as a Democratic sweep of the Senate and House and a Republican sweep, while Roundhill Investments and Bitwise Asset Management are preparing similar products. The funds invest in event contracts tied to outcomes, settling at either $1 or $0 once an event is determined, prompting the filings to cite the risk of catastrophic losses as a separate risk factor. Amid controversy over the extreme product structure and investor protection concerns, however, many of the products remain at the filing and review stage.

6. Rerouted From Hormuz to the Red Sea: Double Bottleneck Feared for Ulsan Crude Supply

- Key points: Crude shipped to Ulsan port from Saudi Arabia's Red Sea port of Yanbu, rerouted to avoid security risks in the Strait of Hormuz, surged as much as 8.7-fold in the first half of this year. According to Ulsan Customs, crude loaded at Yanbu averaged about 256,000 tons a month last year, then climbed to 1.36 million tons in April and 2.218 million tons in June, holding near that peak at 2.206 million tons in July before falling 37.4% from the previous month to 1.382 million tons in August. Recently, however, the east-west pipeline leading to Yanbu was hit by a drone attack that disrupted operations, and navigation risks around the Bab el-Mandeb Strait, the exit from the Red Sea, have intensified as Yemen's Houthi forces widen their attacks. Ulsan Customs said it will closely monitor flows by loading port and maritime route to prepare for supply chain shocks.