Hey team: Weaker hiring means back to the office 8 Oct 2024 About 100 mln people in North America and Europe now work remotely at least some days. More CEOs, like Amazon’s Andy Jassy, want to end the practice altogether. The tension is upsetting staff and spurring defections, but a rise in joblessness would shift power back to employers.
Neither precedent nor Trump can save Big Tech 8 Oct 2024 Epic Games’ victory in a suit against Google means the search giant must open up its app store. Tech honchos may be hopeful for a change of administration. But even if a new president softens stance, the past four years and lawsuits elsewhere will do permanent damage.
Qualcomm’s Apple threat explains interest in Intel 8 Oct 2024 Most of the $190 bln wireless firm's revenue comes from designing chips for phones, and Apple chafes at hefty royalties. Acquiring bits or all of Intel would offer diversification and make Qualcomm a more “American” company. Mulling such a risky deal shows the company’s weakness.
Decoding the puzzle of SoftBank’s Masayoshi Son 8 Oct 2024 The Japanese tycoon shaped global technology while building and losing vast fortunes. How does he keep going? In the first episode of Breakingviews’ new podcast, The Big View, former FT editor Lionel Barber discusses what he uncovered in his biography of Son, ‘Gambling Man’.
Ireland spins global tax mess into $28 bln of gold 8 Oct 2024 Dublin expects a 2024 budget surplus worth 8% of gross national income, thanks to the presence of US companies lured by low levies. It’s evidence that profit shifting lives on despite a landmark OECD deal. The good news for Ireland is that there’s little chance of that changing.
Pfizer’s M&A disease brings activist cure 7 Oct 2024 The pharma giant generated over $30 bln of extra cash during the pandemic, then spent over twice as much on questionable deals. With shareholders sitting on a loss under CEO Albert Bourla, Starboard will push for a return to former CEO Ian Read’s parsimony.
AI sparks only dim odds of nuclear chain reaction 7 Oct 2024 Plans to reopen a Three Mile Island plant have created buzz about an atomic energy comeback. For $1.6 bln, however, Constellation’s site would power just one big data center. The economics may someday compete with solar, but it will take coordination as hard to manage as fission.
Debt feast helps buyout firms through IPO gloom 7 Oct 2024 Dividend recaps, where private equity managers pile debt onto a company to give themselves a payday, are booming, with $17 bln in the US last month. Since public offerings look tough, it’s a handy cash-raising alternative. The trend will continue, if the economy plays ball.
Union flaws run amok on both sides of picket line 4 Oct 2024 Port workers on the US East Coast have negotiated a 62% pay rise over six years. The resolution seems fair. But the process has highlighted gross inefficiencies – from overpaid union leaders to a nebulous counterparty. A revamp of unions, in the absence of politics, is necessary.
Capital woes are no rebuttal to merger foes 4 Oct 2024 Budget airline Spirit may file for bankruptcy after competition cops grounded a merger with rival JetBlue. A judge ignored pleas that the firm is failing – but even now, Spirit doesn’t meet a legal test that’s strict for good reason. The market has ways to fix bad businesses.
Filmmaker’s SPAC deal stages Oscar-worthy horror 4 Oct 2024 Angel Studios is going public at a $1.6 bln valuation with scary self-dealing and bitcoin featured. It also lost its biggest show, owes damages to Disney and courted controversy with child-trafficking movie “Sound of Freedom.” Even seasoned blank-check pros will be spooked.
OpenAI’s $157 bln valuation requires hand waving 3 Oct 2024 Assuming new investors want a 20% return in the artificial intelligence company, it needs a $1 trln price tag in a decade. That’s conceivable, based on other tech giants’ history. Founder Sam Altman just needs to beat rivals, turn a profit, and update its business model.
Middle East turmoil edges closer to global economy 3 Oct 2024 Military escalation between Iran and Israel may at some point affect the price of oil. In this Viewsroom podcast, Breakingviews columnists debate how the conflict may prompt a fresh inflationary headache for central banks – and how Saudi Arabia might offset that risk.
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.
Beware hallucinations in AI chipmaker IPO 2 Oct 2024 Cerebras, a wannabe Nvidia challenger, may seek a valuation as high as $8 bln, or some 29 times sales. ChatGPT hype and Arm’s success will help, but the company’s growth hinges on one customer, Abu Dhabi’s G42. Their broader circular relationship also warrants sober scrutiny.
Gulf turmoil will leave ratesetters on edge 2 Oct 2024 Israel’s riposte to Iran’s missile strike may see oil prices spike. The Fed, the ECB and peers struggled to contain inflation in 2022. A new energy crisis, along with a US docker strike, would force central banks to rethink rate cuts just as markets price them in.
Bain jets towards first-class lounge Down Under 2 Oct 2024 The private equity firm is selling 25% of Virgin Australia to Qatar Airways for an undisclosed sum ahead of an IPO. Fold in last year’s dividend recap and assume it’s growing like larger rival Qantas, and the airline is en route to delivering Bain a sky-high 40%-plus return.
AI’s next feat will be its descent from the cloud 2 Oct 2024 Tech giants hoping to spend $1 trln on data centres are struggling to secure power supplies and space. That bolsters the case for smaller artificial intelligence models that can run on devices, not a remote platform. Phone and laptop makers from Apple to Lenovo stand to benefit.
CVS surgery would provide little if any relief 1 Oct 2024 As part of a strategic shakeup, the healthcare supermarket may try amputation. A $90 bln acquisition binge has left it indebted and worth less than $80 bln. The breakup math is flimsy, meaning the prescription for boss Karen Lynch is to stop buying and nurse the existing parts.
Dockworkers unpack lasting weak trade links 1 Oct 2024 An extended strike by 45,000 US longshoremen threatens to cost the economy $5 bln daily and snarl supply chains. Government intervention would rattle relations with unions just ahead of the election. The clash illustrates the limits of onshoring, nearshoring and friendshoring.