Features

Big Tech farms out AI power build, keeps the risk

3 Oct 2024

Microsoft’s 10.5 GW electricity deal with Brookfield typifies a trend towards mega supply pacts. Given the huge capex bill for data centres, third-party power makes sense. But if artificial intelligence flops, so-called hyperscalers may be left with a lot of electrons to flog.

Drink giants’ risky new plan: quantity not quality

1 Oct 2024

Liquor makers like $80 bln Diageo until recently focused on ‘premiumisation’, where customers consume less alcohol but pay up for fancy brands. With punters feeling the pinch, that strategy looks dicey. Yet flogging more cheap booze is optically awkward and financially painful.

Commerzbank fight is stress test for EU bank union

27 Sep 2024

Regulators spent years trying to level the playing field for euro zone banks. That should clear the way for UniCredit CEO Andrea Orcel’s mooted bid for the $20 bln German lender. If Chancellor Olaf Scholz thwarts the Italian group, new barriers may soon spring up elsewhere.

OpenAI pushes limits of tech pivoting

26 Sep 2024

As part of a fundraising at a $150 bln valuation, ChatGPT’s maker may weaken its humanity-protecting nonprofit board and instead focus on profit. Boss Sam Altman also would get a big stake, in a rare case of equity misaligning incentives. Unless, that is, AI doomsayers are wrong.

China’s march to strong yuan is long and perilous

26 Sep 2024

President Xi Jinping wants a more powerful currency. This means increased usage of the renminbi in global payments and central bank reserves, rather than replacing the dollar. But Beijing’s desires for bigger forex heft clash with its need to keep a tight grip on the economy.

Skimpy financial disclosures leave plenty exposed

25 Sep 2024

Few rules require detailed reporting from public companies, leading to variations that frustrate investors. Consider Temu owner PDD’s scant info versus $390 bln Home Depot’s extra granularity. Corporate bosses may fear accountability from openness, but opacity often stings worse.

EU deforestation ban creates a hazy trade future

23 Sep 2024

The European Union wants to ban agricultural imports from deforested land. The rules have laudable aims but will impact $400 bln worth of goods. Developing nations are already exporting elsewhere. To avoid losing vital supplies, Brussels can compensate farmers or lower standards.

China-EU trade spat’s next swipe may hit LVMH

23 Sep 2024

Beijing is weighing up retaliating against EU tariffs on electric cars. Targeting the French luxury giant and its rivals would cause minimal strategic pain and hit Paris rather than Berlin. Higher consumption taxes, rather than import duties, could also fit with domestic reforms.

India’s open for business push has local quirks

20 Sep 2024

Prime Minister Narendra Modi’s government lowered barriers to foreign investment. Yet BlackRock, BMW and others are choosing to expand in partnership with powerful families. It tightens tycoons’ grip on the world’s fifth-largest economy, and sets them up as future global rivals.

Larry Fink’s private index dream may be holy grail

19 Sep 2024

The boss of $137 bln BlackRock wants to create benchmarks and passive investment products for alternative assets like buyouts and direct lending. Packaging up illiquid funds will be tricky, and data quality is patchy. A repeat of Fink’s success with public markets seems unlikely.