China’s Unicorns: Galloping Into the Sunset?—Data Sheet

I’m in Utah this morning, in transit from Brainstorm Tech and the brilliant blue skies of the Rockies, back to Hong Kong, where summer swelter is in full swing—and the government has just issued an ominous air pollution warning.

RBC Capital Markets’ Mark Mahaney’s top 10 tech trends list is a perennial favorite at the conference and, this year, he delighted just about everyone with one teensy negative (regulatory risk for tech may be rising), a slew of positives, and an ebullient conclusion that “everything is going over the top” for U.S. tech stocks. (The full presentation, if you haven’t watched it already, is well worth your 11 minutes.)

As Asia Editor, I was equally keen to hear from GGV Capital managing director Hans Tung, who led us on a whirlwind tour of emerging tech markets that, in tone at least, matched Mark’s for optimism. Hans, who was born in Taiwan and trained as engineer at Stanford, is one of the smartest venture investors in the business. Over an 18-year career in investment banking and tech, he’s bagged 15 unicorns, including Airbnb, Beijing Bytedance, Slack, and Xiaomi. Menlo Park, Calif.-based GGV was an early investor in Alibaba, and last year raised $1.88 billion in new funding to bring total assets under management to $6.2 billion.

Hans’ presentation extolled the promise of three major regions—India, Latin American (especially Brazil), and Southeast Asia (especially Indonesia)—that he deems the next hotspots for online growth. “Emerging markets,” he declared, are “where the next billion users are coming from” and “they’re still underinvested.”

That’s a list with which I enthusiastically concur. But one market was conspicuous for its absence: China.

In fairness, while China technically counts as an emerging market, its Internet companies are well-developed; in many ways, they are more sophisticated than U.S. ones. Hans (and a lot of other people) have already made a pile of money betting on them.

Even so, I was struck by the shift in focus. What to make of the fact that one of Silicon Valley’s savviest China investors now seems to be chasing unicorns in markets other than China?

Had Hans compiled a “top 10 tech trend list” specifically for China, it might have included a lot more negatives than’s Mark’s U.S. equivalent. This dour assessment in The Diplomat offers a few candidates: widespread layoffs and hiring freezes; faltering sales at Alibaba; net income declines at Tencent and JD.com; a sudden dearth of venture and private equity capital.

The Diplomat acknowledges these travails are partly due to ongoing tech tensions between the United States and China (which don’t show any sign of easing). But even in the absence of the U.S.-China conflict, odds are China’s Internet champions would still have to struggle against a slowing economy. Nor is it obvious (to me, at least) how Xi Jinping’s vow to shore up China’s state-owned enterprises and kick China’s dependence on U.S. tech by channeling massive government subsidies to domestic firms will revive the fortunes of China’s start-ups.

All of which should make for lively discussion when we convene the Fortune Global Technology Forum November 7-8 in Guangzhou, China.

Clay Chandler

On Twitter: @claychandler

Email: clay.chandler@fortune.com

NEWSWORTHY

Money on my mind. As the real estate/hip temp office play WeWork hurtles towards an initial public offering, co-founder Adam Neumann may be less nervous than others. He's already netted over $700 million via stock sales and borrowings against stock, The Wall Street Journal reports. The history of such large pre-IPO sales is not so good. Zynga CEO Mark Pincus and Groupon co-founder Eric Lefkofsky each took over $100 million off the table, the largest comparable examples the paper could find. Their IPOs were disasters for investors.

I’ll sell water to a well. After finally emerging from a thicket of litigation, the Pentagon still may not be able to award its $10 billion cloud services contract for what's known as the Joint Enterprise Defense Infrastructure, or JEDI, soon. President Trump on Thursday said he's been "getting tremendous complaints from other companies,” name dropping Microsoft, Oracle, and IBM. This could be another outlet for Trump to attack Jeff Bezos and Amazon, at least rhetorically. In a less publicized loss, the city of Orlando, Fl., is ending a trial of Amazon's facial recognition app Rekognition. Among other problems, the city lacked the bandwidth to send images from cameras to servers.

A goal is just a dream with a deadline. The cloud keeps expanding for Microsoft, as revenue increased 12% to $33.7 billion, almost $1 billion more than analysts expected. It was also the first time ever that quarterly revenue from the company's cloud unit exceeded all other divisions, including the Windows-based Personal Computing division. Microsoft shares, already up 35% this year, gained 4% in premarket trading on Friday. Cybersecurity firm CrowdStrike, the one that caught the Russians hacking during the 2016 election, reported its first results since going public last month. Revenue doubled to $96 million, while its adjusted loss per share declined 36% to 47 cents. The stock price, which had already more than doubled from the IPO price, gained 18%.

Mo money, mo problems. Great quote from Washington Post tech columnist Geoffrey Fowler's investigative piece on browser extensions: "People install them assuming that any software offered in a store run by Chrome or Firefox has got to be legit. Not. At. All." Read more to learn how these innocent mini apps are covertly sucking up tons of your personal data and sending it off to advertisers.

FOR YOUR WEEKEND READING PLEASURE

A few longer reads that I came across this week that may be appealing for your weekend reading pleasure:

Why Strava Is Getting More Social Than Ever (Outside)
The company is growing fast, adding roughly a million users a month, and it has lofty goals to expand far beyond its old identity as a platform for logging rides and runs. Can it succeed?

Peter Saville Wrote the Source Code (SSENSE)
How the English graphic designer set the course for contemporary visual culture.

Grindr Had Dreams Of Making The World Better For Queer People. Then A Chinese Gaming Company Bought It. (Buzzfeed)
Over the last 18 months, Grindr has faced a federal investigation, layoffs, mismanagement, and internal turmoil. Now the popular gay dating and hookup app is looking for a new owner.

‘I am my dog’s emotional support animal’ (The Boston Globe)
She saw the note as soon as she opened the front door. On the mat, a piece of lined paper, folded. It was about her dog. “To Brisket’s mother,” it read. Marilyn Pratt knelt. Panic rising, she felt she might vomit.

The Rise of Coffee Shaming (The Atlantic)
Personal-finance gurus really hate coffee.

FOOD FOR THOUGHT

The laws governing space may be woefully out of date. Most were written with the assumption that only nation states would be launching and carrying out missions beyond the Earth. That's obviously no longer the case. In a useful review of several potential legal quagmires, an un-bylined piece in The Economist looks at the rules (or lack thereof) for the commercial extraction or mining of resources on the moon by private industry:

Instead, the high-seas model is the one that looks likely to prevail. Both America and Luxembourg, which has long punched above its weight in the satellite and aerospace industries, have passed legislation that explicitly allow firms incorporated on their territories to carry out space mining; the United Arab Emirates is about to follow suit. Proponents of the high-seas approach like the fact that it allows commercial firms to act fast. But unbridled competition for resources is also a recipe for trouble. If a Chinese miner and an American one were to set up shop next door to each other on the lunar surface, say, domestic laws would be no help in resolving any conflict that might result.

IN CASE YOU MISSED IT

Tech Insiders Offer Top Advice on How to Get More Women on Corporate Boards By Beth Kowitt

Cloud Gaming Is Big Tech’s New Street Fight
By Jonathan Vanian

FaceApp Reacts to Privacy Concerns, Warns Users When It Uploads a Photo By Chris Morris

Netflix Investors Should Focus on This Alarming Number—Not Subscriber Growth By Shawn Tully

Audi Shows Tesla Isn’t the Only Automaker That Can Build An Electric Vehicle** By Jaclyn Trop

Trump Outspent Every Other Political Campaign on Facebook. Here’s Who Those Ads Targeted By Natasha Bach

Facebook’s Libra Currency Could Threaten the Global Financial System. Here’s How By David Z. Morris

BEFORE YOU GO

HBO set some kind of record for Emmy nominations, largely on the strength of the 32 potential winners nominated for Game of Thrones, alone. But some of the nominees may have come as a surprise even to the network itself. It seems HBO didn't fork over the $225 fee to nominate actors Gwendoline Christie, who plays Brienne of Tarth, and Carice van Houten, depicting Melisandre. The two had to enter themselves! But the Academy of Television Arts and Sciences was still impressed and they're up for Emmys. Winners will be announced on on September 22.

This edition of Data Sheet was curated by Aaron Pressman. Find past issues, and sign up for other Fortune newsletters.