TheChek News Flow

As China ramps up its search for foreign tech expertise, a new generation of talent finds its perspectives on the country are changing

More than two years after stringent Covid-19 restrictions prompted an exodus of foreigners from China, there are emerging signs that Europeans are cautiously rekindling interest in pursuing opportunities in the country, despite challenges such as visa uncertainties, limited internet access and geopolitical tensions.

For many Europeans eyeing global opportunities, China brims with great potential in technology, entrepreneurship and other aspects.

“It’s not just about career growth but also about being part of a system where things are changing fast,” said Simon Wold, a Swedish student doing his master’s in European intellectual property (IP) law at Stockholm University.

According to Wold, working in China, a country where IP protection still has room to develop, is “far more exciting” than staying in the European Union (EU) where everything is already settled and rigid, although he admitted to being something of an an “outlier”, as most of his peers in the niche field of IP law were more keen on Germany, Britain, the United States or France.

There also seemed to be an age divide in outlook, Wold suggested.

“Among younger people I’ve spoken to, the idea [of working in China] is appealing. They see Shenzhen’s rise, Shanghai’s infrastructure and China’s pace of growth and are curious,” he said.

“Older people I’ve spoken to tend to warn me against it, saying China is polluted, poor and a developing country, but I think their image of China is stuck in the 1980s. When I’ve shown them what modern China actually looks like, they’re usually shocked to the core.”

Inspired by a polyglot YouTuber, Wold started to learn Mandarin in 2018, seeing Chinese “as the language of the future, especially when China is key in trade, technology and business”.

“Since I’m studying European intellectual property law, being able to combine that with Mandarin will give me an edge in bridging EU-China relations in this field,” he said.

The relationship between China and the European Union has evolved significantly since diplomatic ties were established in 1975, with annual trade surging by more than 300 per cent since then.

In recent years, however, the robust economic partnership has become increasingly strained by political tensions, trade imbalances and differing values.

Chinese President Xi Jinping has pledged wider opening up this year to boost cooperation with the 27-nation bloc, describing China and the EU as the two “constructive” powers in the world amid growing US-China tensions.

The effort has focused on traditional areas like automobiles, machinery manufacturing, energy, chemicals and aerospace, while expanding collaboration in emerging fields such as digital, green energy, biopharmaceutical, artificial intelligence (AI) and quantum technologies.

Many Europeans are excited about the opportunities, but factors such as restricted internet access, uncertainties over securing visas and concerns about the politicisation of business are significant considerations.

Alain Saas, a French national who founded a Canada-based AI start-up, expressed unwavering enthusiasm for working in China. “Yes, 1,000 per cent,” he said, when asked if he wanted to live in China to ride the tech wave.

However, Saas has chosen to relocate to Japan as he lived there before and it is close to China. He has also yet to find an opening in China and is concerned about issues such as internet restrictions there.

“The technology [in Japan] does not represent the future as much any more, unlike when I first moved there in 2010, and I would be much more excited by the future in China,” he said.

China has achieved remarkable progress in technology and innovation, transforming into a global powerhouse in areas like AI, robotics, quantum computing and renewable energy, thanks to years of massive state-funded research and development and a strong manufacturing ecosystem.

Still, Saas is bothered by Beijing’s Great Firewall, which blocks access to many foreign websites and apps and slows cross-border traffic, and the uncertainties for foreigners trying to obtain long-term visas or residency status.

It just took him three weeks from application to receiving a five-year highly skilled professional visa for Japan. After working there for one year, someone of his category can obtain permanent residency, with the same rights as a Japanese citizen, except for voting, he said.

“Paperwork costs nothing, is super easy and I get my residency card on arrival at the airport,” he said, adding these things could be more complicated in China, citing experiences shared by his friends.

According to China’s immigration regulations, foreigners who have held senior positions – such as deputy general manager or an equivalent role – for at least four consecutive years, and have lived in China for at least three years with a good tax record, are eligible to apply for permanent residency.

Those who have made significant and outstanding contributions to China or who are urgently needed by the country are also eligible.

But getting a visa to live in China as a foreign entrepreneur is not easy. The application process is complex, requiring navigation of local regulations and submission of extensive documentation, including employment contracts and proof of qualifications, all of which then undergo thorough scrutiny by the authorities.

In a bid to attract top global talent and strengthen its innovation ecosystem, China is introducing new measures aimed at easing entry for skilled professionals in science and technology.

Last month, Beijing announced a new category of K visas for young science and technology talent from overseas, taking effect on October 1.

Eligible applicants include STEM graduates from recognised universities or research institutions worldwide holding at least a bachelor’s degree, or young professionals engaged in relevant education or research work at such institutions.

There is no requirement for a Chinese employer or inviter at the application stage.

Holders of K visas can be engaged in education, research, cultural exchange, entrepreneurship or business in China.

While the detailed implementation guidelines have yet to be announced, Hong Kong-based business consultancy Dezan Shira & Associates expects the K visa to offer greater flexibility regarding the number of entries permitted, validity period and duration of stay.

Sean, an Irish national who asked that only his first name be used, said the K visa concept was good and fit well into China’s broader talent attraction strategy. However, he added that the success of the programme would depend on its practicality and implementation.

“To some degree the appeal of China has dropped due to China-US decoupling, foreigners’ experience during the Covid lockdown and a perceived lack of work-life balance,” the Dublin resident said.

Still, Sean said he would love to work in China, particularly in Shanghai – because of its vibrancy and quality of life.

“In my sector – biotech pharmaceuticals – the innovation coming out of China now is quite remarkable, a bit like AI but is less well known, and I like the people of China, so much great food and beautiful places,” Sean said.

According to the most recent official census data, around 1.4 million foreigners were living in China as of November 2020. Of these, 845,000 were in mainland China and the rest distributed among Hong Kong, Macau and Taiwan.

Most of China’s foreigners are drawn to the big cities. But between 2010 to 2020, the number of immigrants fell by more than 21 per cent in Shanghai and 41.5 per cent in Beijing, as many left the country during the stringent zero-Covid policies, which included strict travel restrictions and lockdowns.

Many of those who left did not return after China reopened its borders in early 2023. Shanghai was home to 72,000 foreign workers at the end of 2023, according to official data.

That was about one-third the number who were working in the Chinese financial hub in early 2019, according to a report by Jiefang Daily, a publication affiliated with the Communist Party.

Higher living costs and escalating geopolitical tensions between China and the West have also contributed to a decline in the number of Western expats working in major Chinese cities.

Ioana Kraft, human resources working group chair at the European Union Chamber of Commerce in China, welcomed the introduction of the K visa but cautioned about details still to be worked out in terms of education and work experience requirements, as well as age restrictions.

“We need more clarity about the permitted activities for K visa holders [and which] entrepreneurial business activities are suggested to be allowed. But we need to see if they [can] come in if a business has been started, or can they [only] come into the country on that visa and then start the business here?” Kraft said.

“So there are still lots of question marks. Although in principle, it’s always a step forward to attract foreign talent and make it easier for them to come.”

Kraft also expressed concerns about Europe’s deteriorating perception of China, partly due to the “politicisation of business”, as seen in the recent exit ban imposed on an American banker, she said.

China confirmed in July that it had barred a senior Wells Fargo executive from leaving the country because of a “criminal case” investigation.

Reports earlier said that Chenyue Mao, an Atlanta-based managing director at the American banking giant and a US citizen, had been prevented from leaving China. Wells Fargo has since suspended all business travel to China.

“Some CEOs are even reluctant to come into China for a short period because they are afraid if there is a legal dispute that involves their companies, they may not be able to leave the country,” said Kraft, who has lived in Shanghai for 22 years.

In addition to limited internet access and high living costs – as much as 400,000 yuan (US$11,000) for international school tuition, for instance – many companies now require fewer foreigners in China because the domestic workforce is just as capable of filling key roles, she added.

Cameron Johnson, a US citizen and senior partner at business consultancy Tidalwave Solutions in Shanghai, said that local talent had caught up in many ways.

“Having an expatriate here is incredibly expensive. Because the local talent gap has shrunk so much, you could actually hire two or three seasoned Chinese [staff instead],” Johnson said.

But he also emphasised the great career opportunities in China for expats, saying that this was because it was in many aspects the centre of the world for technology, manufacturing and supply chain integration, or for R&D.

“If you are in EVs [electric vehicles], semiconductors or rare earths or biotechnology, China is the leader, or No 2 in all those areas. You have to be here. If you are not here, then you will fail as a company,” he said.

“And so that is why China, in many ways, is still positive. Then there are of course many challenges, but the government is still very supportive of developing the industries of tomorrow and today.”

Government will be allowed to make some changes by executive ordinance rather than parliamentary process

Swiss lawmakers have rejected a plan to delay some bank capital reforms, paving the way for the government to introduce measures that could increase UBS’s capital requirements by $3bn without going through parliament.

The upper house on Monday voted against a proposal that would have delayed and bundled together measures around capital quality with the rest of a package of “too big to fail” rules set out by the government in June.

The result means that the Swiss government can now mandate the capital quality changes by executive order, while the larger part of the reform package goes through parliament as the country tries to guard against a repeat of the Credit Suisse debacle.

The government previously said that UBS might need as much as $26bn in extra capital to ensure Switzerland could withstand a crisis at its enlarged national champion, although the bank has put the figure closer to $24bn.

Analysts and investors have been betting on the proposals being diluted through trade-offs as they progress through Switzerland’s consensus-driven political system, helping lift UBS’s share price more than 20 per cent since the day before the too-big-to-fail reforms were announced.

The rally has come despite the proposals being far more stringent than those in other countries, particularly the requirement for UBS to bolster the capital of its foreign subsidiaries, which accounts for $23bn of the requirements.

The finance department said in June the overall reforms would become law at the start of 2028 “at the earliest”, while UBS would be given a transition period of “at least six to eight years” to implement the changes once the legislation comes into force.

The capital quality changes relate to how banks quantify items such as deferred tax assets, in-house software and others on their books. Although they would only increase UBS’s capital requirements by about $3bn, they are now likely to come into effect far sooner than the other reforms.

Switzerland’s wider package of reforms also envisages tighter liquidity rules and expanded powers for the financial regulator Finma, which was widely criticised for failing to prevent Credit Suisse’s downfall in 2023. Finance minister Karin Keller-Sutter has argued that rapid implementation is vital to strengthen financial stability, warning against further delays.

But UBS has lobbied intensely against the scale and speed of the changes, saying the measures go further than those required of global peers and would reduce its ability to compete internationally.

UBS executives have also been pushing the idea in private that the bank could move its headquarters outside of Switzerland if the proposals were not watered down, according to people familiar with the matter.

While some senior Swiss bankers are taking such a threat seriously, others see it as a negotiating tactic and say it is very unlikely to happen.

Many lawmakers share concerns that rushing through such a complex overhaul could have unintended consequences.

One parliamentarian with knowledge of the discussions between MPs said ahead of the vote that the outcome was “more negative for UBS” than if the reforms had been bundled together.

Another Swiss lawmaker speaking on condition of anonymity ahead of the vote said they still expected there to ultimately be compromise. “There is still a long way to go on this legislation. I do not expect every reform to be implemented,” the person said. “The point is that there is more open discussion happening about the economic consequences of the legislation.”

Even so, uncertainty continues to weigh on UBS, and investors remain wary of the long-term costs of the reforms. Most continental lenders outperformed UBS during the first five months of the year and the Swiss bank remains a laggard.

Shares in UBS closed up 2.35 per cent on Monday.

In this guide to the biggest iPhone software change in years, here is what’s new, what you can undo, and what you’ll need to live with

Good. We’re calm now—calm enough to face the reality that your iPhone is about to look like a digital fish tank, permanently full of water. Sorry, not water…Liquid Glass.

It’s iOS 26, where Apple AAPL 0.79%increase; green up pointing triangle has draped your icons and menus in a translucent, shimmery look. On Monday, the company rolled out the biggest software overhaul in a decade, and everyone with an iPhone 11 or newer model can get it.

And no, you didn’t miss seven versions: Apple jumped from iOS 18 to 26 to match the year. How very Windows 95.

There are parts of the new look I like. But while Apple set out to streamline the design and make it easier on the eyes, the plans sometimes backfired. Core tools and familiar elements are moved, and in some places text is harder to read. Mercifully, some of it can be adjusted.

There are also plenty of practical new features that make life better, including a built-in assistant that waits on hold for you, spam text filtering and helpful messaging tricks.

As always, my annual advice holds—maybe now more than ever: If you’re concerned about bugs or battery life, wait a bit before you update. When you’re feeling ready, head to Settings > General > Software Update.

Maybe you think you’ll never be ready for such a big change? Keep breathing. We’ll paddle the Liquid Glass rapids together. In keeping with tradition, I’ve gone for another iOS tip world record: 26 tips for iOS 26 in my video. Watch that for the deep dive.

Lessen the Liquid Glass

When I started living with the new aesthetic this summer, my reaction was somewhere between “This is bad” and “This is really bad.” But that was the beta software. Over time, Apple softened some of the worst of it. Also? I resigned myself to living in a glass house.

You’ll see it immediately: Menus are see-through, giving everything a layered look. Sometimes it’s a neat effect. Other times, especially with light backgrounds, it can be a mess. Text vanishes into whatever’s behind it.

You can turn most of it off. Go to Settings > Accessibility > Display & Text Size > Reduce Transparency. Or, if you just want it toned down, toggle on Increase Contrast in the same menu. Try both and see what your eyes prefer.

If you decide to embrace the look, choose darker wallpapers and try Apple’s new, resizable frosted-glass clock on the Lock Screen.

Relearn the apps

In the redesign, Apple has also reshuffled some of the essentials:

• Phone: The bottom bar has lost the Favorites and Voicemail tabs. To bring them back, head to the Calls tab, tap the three lines in the top right, and choose Classic.

• Camera: The bottom of the app is stripped down to just Photo and Video buttons. Want Portrait or other shooting modes? Press and slide. Need timers or flash? Swipe up on those same buttons. Because nothing says simplicity like a hidden menu.

• Search: The search bar has packed its bags and moved to the bottom of the screen—everywhere. Messages, Notes, Podcasts, you name it, it’s now hanging out at the bottom. And no, you can’t put it back on top (unless you’re in Safari). Two months in, though, I believe it’s actually better: easier thumb access.

Try the new tricks

Some updated features have real utility. Ironically, my two favorites are for us dinosaurs who still make phone calls.

• Call Screening: Instead of letting calls from unknown numbers go to voicemail, you can turn on call screening. “Record your name and reason for calling, I’ll see if this person is available,” the software asks callers who aren’t saved in your Contacts. Then it shows the transcription on your phone so you can decide if you want to pick up. To turn this on go to Settings > Apps > Phone > Screen Unknown Callers > Ask Reason for Calling.

• Hold Assist: No more 1990s smooth jazz loops repeated over and over and over on your customer-service call. When you’re on hold, tap the call screen’s More button and select Hold Assist. The call will be muted and run silently in the background. A live transcript will appear on the call screen, and when a representative finally picks up, your phone will ring you back in.

• Screenshot smarts: If you’ve got an iPhone 15 Pro or newer, you get a few Apple Intelligence screenshot tricks. Take your screenshot then tap the Search button to look up whatever’s in the image—say, a product page in a shopping app. Circle an object to focus the search. Hit the chat button to ask ChatGPT directly. If you don’t love the interface, you can go to Settings > General > Screen Capture > Turn off Full-Screen Previews. Another bonus if you’ve got Apple Intelligence: live translation during phone calls.

And yes, Android has long had all of this. But hey, better late than never.

Uncover the treats

Finally, my favorite part of the annual release: The buried new tools that actually make the day-to-day easier.

• Messages: You can now add polls to Messages, which means no more 45-text debates about sushi vs. Thai for dinner. Just tap the + button in a chat and select Polls. At long last, group texts finally have typing indicators. There’s also a built-in spam filter, which corrals political texts and other junk to their own section without needing a third-party app.

• Clock: In Appleland, snoozing always lasted nine minutes. Now you can choose one to 15 minutes. Apple’s gift to people who want to be exactly seven minutes late.

• More fun: You can now select only a part of a long text message or chunk of text, just tap and hold, then tap Select.

In the new Preview app, migrated from the Mac, you can scan documents and handle PDFs much easier.

And if you have Apple Intelligence, you can now combine two emojis into one. I went with “exhaling” + “iPhone” to capture my reaction to iOS 26: Keep Calm and Liquid Glass On…or Off. Whatever you decide.

As inflation and tariffs bite, consumers turn to resale platforms for more affordable luxury bags.

PARIS – U.S. tariffs of 15 percent on imports from the European Union are bad news for beleaguered luxury brands already struggling with softening demand. But they’re proving a goldmine for the secondhand market, which is booming as shoppers seek out more affordable alternatives.

They are increasingly migrating to resale platforms, not only for the savings but also for greater access, authenticity and sustainability. With price increases compounding across categories — often driven by brands like Hermès, Louis Vuitton and Chanel, which often raise prices — pre-owned luxury now represents a more accessible path to luxury brands.

“The sector is relatively healthy,” said UBS analyst Jay Sole, who follows The RealReal. “It’s not a question of demand, it’s a question of supply. If there are legitimate, authenticated luxury goods available, consumers will buy.”

The new tariffs are adding to the inflationary pressures and post-pandemic buoyancy that have already driven retail prices sky-high. But for resale platforms, the result has been a growing pricing gap between full-price and pre-owned items — a difference that benefits platforms that maintain stable average selling prices.

“Despite the new 15 percent tariffs, average selling prices on the resale market have remained stable — including handbags — making secondhand an even more affordable alternative as firsthand prices continue to climb,” said Maximilian Bittner, chief executive officer of Vestiaire Collective.

Recommerce platform Fashionphile is also seeing that shift play out.

Demand ticked up even before the tariff rate was finalized. “We’ve seen some early activity — people buying before price hikes, and increased listings by owners anticipating higher retail replacement costs,” said Fashionphile founder and president Sarah Davis. “Shoppers are very responsive around those changes. They are buying or selling according to the market and pricing announcements.”

Brand price hikes, including Hermès and Louis Vuitton’s earlier this year, also created a pre-emptive panic among buyers. “This always brings out ‘buy-before-it-gets-more-expensive’ behavior,” she added, while sellers have had a more wait-and-see approach in hopes that offers will increase.

While some price-sensitive consumers are pulling back from new retail purchases, they aren’t necessarily leaving the luxury market. “There are some buyers who have said they shop from us because they’ve been pushed to their limits,” said Davis. “We know that many of those same consumers are migrating to pre-owned rather than exiting the category entirely.”

As tariffs tighten pressure on retail pricing, resale platforms are well-positioned to capture the shift.

Even with economic uncertainty and seasonal slowdowns, resale platforms say consumer interest has remained stable.

“Demand has remained steady month-over-month, highlighting the resilience and attractiveness of the secondhand market,” Bittner said, noting that order volumes from June to August did not see the typical seasonal dip.

In the current climate, the pressure is pushing sellers to list more and buyers to act faster — particularly as new prices continue to climb.

The most sought-after brands on the resale market remain consistent across platforms. Chanel, Hermès, Louis Vuitton, Dior and Gucci top both demand and gross merchandise value.

According to Davis, even amid macroeconomic caution and viral criticism of pricing — particularly following an investigation by Italian prosecutors which alleged Dior paid a supplier 53 euros to assemble a handbag that would sold for upward of 2,600 euros in its boutiques, which amplified on TikTok earlier this year — resale prices have held strong.

“Pricing for Dior has not taken a hit, even on the book tote,” she said.

At the same time, more under-the-radar but in-the-know like U.S. luxury brands like The Row and Khaite are gaining traction. They’re some of Fashionphile’s hottest selling styles.

Recent high-profile creative director shifts at major houses such as Demna to Gucci, Pierpaolo Piccioli to Balenciaga and Matthieu Blazy to Chanel have yet to significantly impact resale demand. Davis noted that designers have not yet launched collections under their new roles, limiting opportunities for renewed consumer interest or, conversely, nostalgia.

“Designer ‘chess moves’ have not yet generated a measurable impact on resale demand or brand awareness,” said Bittner.

However, history suggests that once new collections debut on the runway, resale interest often spikes.

“A designer really can make all the difference and we’ve seen new designers pump up the resale value of even discontinued, older styles. When Daniel Lee breathed new life into Bottega [Veneta], it not only helped with current resale brands but prices for older bags benefited,” said Davis.

For example, following Céline’s reintroduction of the Phantom bag in July, searches for the style increased tenfold compared to the previous month, Bittner noted.

Vintage in particular has emerged as a breakout category, representing legacy and original-era items more than 20 years old.

Bittner said that vintage listings have grown 220 percent in the past five years, while searches for vintage items have increased fivefold. With some vintage handbags from big brands can be priced as low as $100, they hold significant appeal for aspirational buyers facing sticker shock over new goods.

On Sept. 4, Vestiaire launched its “Vintage Pieces at Vintage Prices” campaign, offering heritage handbags at their original price points — a move designed to attract those value-driven aspirational buyers.

“Vintage icons carry the same timeless appeal as modern re-editions, at up to 70 percent less,” Bittner said. “That makes resale not only desirable, but strategic.”

Still, price sensitivity remains a key theme. “There are some buyers who have said that they shop from us because they’ve been pushed to their limits. Economically sensitive consumers pull back on big discretionary new buys,” Davis added. “We know that many of those same consumers are migrating to pre-owned rather than exiting the category entirely.”

According to Sole, the UBS analyst, resale’s ongoing challenge is not moving inventory — it’s acquiring it. “Demand is there. It’s about supply,” he said. By some estimates, there is $200 billion worth of potential inventory in U.S. closets, and it’s a matter of making them available to the eager resale buyer.

The current economic environment, he suggested, could help change that. “If consumers who own luxury goods, who have a bunch of handbags sitting in their closet, feel like they want to turn that inventory into cash, that would be really compelling. That would be a catalyst for growth,” he said.

Ørsted’s bankers take out Trump insurance

Political unpredictability has led to unprecedented turbulence in the renewable energy industry

No listed Nordic company has ever raised more capital in one go than Ørsted, which on Monday launched a DKr60bn ($9.4bn) rights issue. What’s more, Ørsted is doing so at a time of unprecedented turbulence in the renewable energy industry. Its bankers will want to make sure that they’re not left holding the bag.

The Danish power group is raising money equivalent to more than 70 per cent of its current market capitalisation, printing new shares at a huge discount. The price of DKr66.6 per share is 38 per cent below where, all else being equal, the stock should settle after the capital raising is complete. That’s known as the “theoretical ex-rights price”.

Rights issues like Ørsted’s are supposed to compensate investors for dilution when a company issues new stock at a discount to the prevailing market price. Investors can put in more cash at the offer price, or sell their entitlement to buy new shares. Without these “tradeable rights”, they would lose out to new entrants. This arrangement is common in the UK and Europe, and rare in the US.

Financial textbooks teach that when a company issues tradeable rights, the discount for the new shares doesn’t really matter. The proceeds from selling rights should fully compensate those who decide not to take part. While the real world doesn’t totally hew to the model, and can leave some investors slightly out of pocket, it is a close enough description.

But the discount does matter in one way. If the shares fall below where the company priced its new stock, the rights become worthless, leaving banks that underwrote the issue on the hook. That miserable situation befell UK lender Bradford & Bingley in 2008. Its rights issue was reset three times, before the bank failed.

A 38 per cent discount leaves plenty of room for error, surely? Perhaps not for a company with as choppy a recent history as Ørsted. Its stock fell by a third on August 11th when it said it needed extra money to carry out its business plan. It later fell by 16 per cent when Donald Trump’s US government forced it to stop work on a US wind farm. A bigger project, Sunrise Wind, is still in progress, but in light of Trump’s unpredictability, that can’t be taken for granted.

Given the uncertainty, underwriters — which include Morgan Stanley, BNP Paribas, Danske Bank, JPMorgan and others — will welcome the buffer. There’s a psychological balancing act too: at too deep a discount, there’s the risk that investors perceive the company is in deep distress.

Ørsted and its financiers seem to have got the balance right. The shares barely moved as details of the rights issue were disclosed. Granted, even once it has its funds, Ørsted has plenty of uncertainty ahead. But at least the company is planning for the worst, and hedging Trump risk as best it can.

SEC allows Exxon plan to limit shareholder activism

Opt-in proxy system would automate retail investor votes to support board positions

Wall Street’s top regulator has awarded ExxonMobil a powerful tool to short-circuit shareholder activism proposals, in the wake of campaigns targeting the oil major over climate change, governance and executive pay.

The Securities and Exchange Commission on Monday issued a “no action” letter indicating its staff would not block a plan by Exxon to build a system before next year’s proxy season that will automate voting by retail shareholders in line with board of director positions.

Under Exxon’s proposal, retail investors who opt into the system would have their votes counted in favour of management unless they choose to opt out. The move comes four years after the company’s stunning defeat in a proxy battle at the hands of a tiny hedge fund seeking to reduce its carbon footprint.

Governance experts said this would provide Exxon management with a strong base of shareholder support at annual meetings, which would make it more difficult for activists to win votes on their proposals. The SEC’s guidance is likely to encourage other US companies to establish similar platforms, a trend that could reduce the influence of proxy advisers and activists to exert influence over votes, they said.  

Exxon said this would allow the 40 per cent of its shareholder base who are retail investors “to be heard, and be counted”, noting that three-quarters of them typically do not vote due to the time it takes to read all shareholder proposals.

“This is a gap we want to close . . . Activist groups often exploit this gap to push political goals at the expense of shareholder value,” Exxon said in a statement, adding that its system would be “an important step forward for American shareholder democracy”.

Activist investors have proposed numerous shareholder proposals urging Exxon management to do more to tackle climate change in recent years, prompting the company to seek ways to blunt their influence.

In 2021 Exxon suffered a bruising defeat at the hands of Engine No. 1, a hedge fund that won three seats on the company’s board following a campaign arguing the oil major faced an “existential business risk” by pinning its future to fossil fuels.

Last year the oil major sued activist investors Follow This and Arjuna Capital in a high-profile legal case that green groups and some shareholders say was an attempt to “silence them”. 

The lawsuit against Follow This was dismissed by a Texas judge on jurisdictional grounds, as the activist group is based in the Netherlands. The judge later dismissed the case against Arjuna when the fund agreed not to refile climate shareholder petitions at the company.

Institutional investors such as Vanguard already offer their clients automated voting systems with choices, including a “vote with the board” option. Some activist groups offer similar services that recruit shareholders and vote their shares in alignment with their progressive agenda. 

Until now the SEC has not granted companies the right to set up this type of automated pro-management voting system over concerns it would concentrate too much power in the hands of board directors and reduce scrutiny.

Exxon’s push to establish a pro-management retail voting platform could dilute activist investor power, according to corporate governance experts, who noted the plan coincided with a push by Republican lawmakers to limit environmental, social and governance activism.   

“[This move] could have a significant effect on the influence that the big indexers and proxy advisers have,” said Lawrence Cunningham, director of the Weinberg Center for Corporate Governance at the University of Delaware. “A movement like this could reduce the power that they have been exercising.”

“Retail tends to vote with management, so if there are challengers or dissidents, retail participation is likely to skew in your favour,” said Ann Lipton, a law professor at the University of Colorado, adding that retail shareholders’ voting turnout was typically low.

In its letter, the SEC said it noted shareholders participating in Exxon’s “retail voting programme” would pay no additional costs and receive an annual reminder of their ability to opt out and cancel their standing voting instruction.

Davis Polk, the law firm which advised Exxon on the voting platform, said the US proxy voting system had long been in need of updating, especially to promote retail shareholder participation, and the current administration was prepared to allow creative solutions to bring retail shareholders into the voting system.

“This could be very impactful for Exxon and other companies with a lot of retail shareholders because if they can attract enough investors to sign up to the platform, then they have higher retail participation for future shareholder meetings unless they later choose to opt out or override the management vote at a meeting,” said Louis Goldberg, a partner at Davis Polk.

The participation of individual investors has been crucial in large proxy contests in recent years as an activist defence tactic.

Disney last year faced a challenge to its board from activist investor Nelson Peltz. The company mobilised its large retail shareholder base, including releasing a video with Disney’s animated characters that urged individual investors to vote with management. In the end, three-quarters of its retail shareholders voted for Disney’s nominees.

Follow This said Exxon’s new voting platform appeared to be another attempt to “suppress the voices of critical investors”, in the aftermath of the oil group’s lawsuit against shareholders in 2024.   

“Obviously, the goal is to suppress votes for change as Exxon wants to continue with fossil fuels for as long as possible. This will not go down well with institutional investors who will lose influence as owners of the company,” said Mark van Baal, founder of the Dutch activist investor. 

The bid comes only weeks after Skydance inked a deal to buy Paramount

The best movies have an abundance of plot twists. The M&A mania sweeping US media is not far off.

Paramount Skydance, backed by the deep pockets of Oracle co-founder Larry Ellison and headed by his son David, is preparing a bid to acquire Warner Bros Discovery. That’s only weeks after Skydance inked a deal to buy Paramount.

This would be a colossal transaction. Warner Bros’s market capitalisation duly shot up from $31bn on Wednesday to $47bn by Friday’s close. Throw in net debt and that takes its enterprise value to about $71bn. Paramount Skydance’s EV is less than half of that. A deal would be on par with Disney’s 2019 acquisition of 21st Century Fox assets for $85bn, including debt.

A combination makes plenty of strategic sense. Combining TV networks, streaming services and content libraries would give the companies scale to better compete against the likes of Netflix and Disney. But the obstacles to a successful marriage are numerous.

For starters, Paramount Skydance will need to convince the target’s shareholders that selling their shares beats a previous plan to break Warner Bros into two publicly traded companies. One was set to house streaming assets like HBO Max and the and film studio businesses. The other, likely to trade at a more meagre valuation, would house the struggling cable and linear television networks.

While the value of a broken-up Warner Bros — which Morgan Stanley puts at $33bn — is far below its current equity value, its shareholders may have been hoping those parts might later attract their own separate bids at premium prices. Ellison, here, may be hoping to pre-empt a bidding war. Bank of America thinks a take-out price could be at least $30 a share, or $74bn in equity value.

Meanwhile, Paramount Skydance carries about $11bn of net debt, equivalent to about 4 times its ebitda. An acquisition could lead to its ratings getting downgraded to junk and its borrowing costs being pushed up. The risks are heightened by the execution difficulties in merging not two — but three — of the biggest media companies in the US.

On top of that, there is the political uncertainty. Although President Donald Trump is friendly with the Ellisons, a merger would be an opportunity for the administration to insist on conditions. Skydance only got regulatory approval to merge with Paramount after agreeing to eliminate diversity programmes and appoint an ombudsman for CBS News.

The elder Ellison, who briefly became the world’s richest man last week after a jump in the shares of Oracle, presumably has some sway when it comes to arguing Paramount Skydance’s case. Whichever scenario ultimately unfolds, the media and entertainment industry is about to undergo another round of upheaval.

Salesforce’s CEO said this would be the ‘absolute year of Agentforce,’ the name of his company’s AI product. It hasn’t turned out that way, as the enterprise software pioneer faces skeptical customers and greater competition from its peers as well as AI startups.

Salesforce CEO Marc Benioff was upset.

Last fall, one of his technical teams told large Salesforce customers that using Agentforce, the software firm’s new artificial intelligence for automating customer service and other functions, would require extensive planning. The product information the Salesforce team shared with those customers acknowledged the complexity of making the AI perform well.

That message contradicted Benioff, a charismatic salesman who had been telling customers that using the AI was a cinch and they could set up AI agents to handle customer service discussions and other tasks in minutes.

A senior Salesforce leader said that when Benioff noticed the disconnect, he complained to colleagues that the technical team advising large customers, known as Well-Architected, was acting “crazy” and should be fired.

Two months later, after Agentforce became available to all customers, the Well-Architected team was quietly disbanded, with some members taking severance packages and others finding new roles in the company, a former Salesforce manager said. But the team’s insistence that setting up agents was harder than it looked ended up being right, and Benioff was proven wrong: The company has struggled to sell Agentforce in the past year, in part because of the extensive prep work customers need to do to make it work right. And Salesforce in August said it would relaunch the Well-Architected program.

“Many of you told us, clearly and passionately, that it was a mistake” to end the team, two Salesforce executives wrote in a post to customers last month. “You were right.”

Last week, Salesforce issued a less-than-stellar revenue forecast for its current fiscal quarter, raising questions about the quality of Agentforce as well as what kind of money enterprises are willing to spend on it.

The result came despite Benioff’s comments to investors in February that Salesforce was “excited to be…in that kind of rarefied air of delivering a multi-billion dollar AI product line.” Besides customer service, Agentforce also aims to automate sales outreach and responses to IT helpdesk requests.

Benioff isn’t sitting still. When customers found the initial price of Agentforce too high, Salesforce earlier this year lowered the cost per task that the AI handled and also allowed customers to pay in bulk at a discount. After agents created using Agentforce gave inaccurate responses to questions, Salesforce made several acquisitions—including $8 billion for a corporate database firm—and other investments to give the agents better data to work with.

Benioff has found a way out of numerous tough spots since co-founding Salesforce more than a quarter-century ago, but his current circumstances are especially challenging. In turning the entire company’s focus to selling AI agents, Benioff is betting that Salesforce’s deep ties with many of the world’s largest companies, and the fact that these customers are already storing their data in its applications, will make Salesforce the logical choice when those firms decide to adopt AI.

The strategies Salesforce and other software providers have used in the past to drum up interest in new products aren’t working as well for AI products. Those strategies typically include letting customers try out products for free and explaining the business challenges they can help solve.

But this approach hasn’t worked well with AI. While many corporate employees love generalized chatbots like ChatGPT for their own productivity, businesses are taking a more skeptical view of paying for AI after early experiments with the technology. CEOs are increasingly scrutinizing how much money they’re saving by using AI services geared toward enterprises.

“Many of the customers we’re working with are now saying, ‘Let’s pause on the Agentforce conversations,’” said Adam Mansfield, a practice leader at UpperEdge, which helps customers negotiate deals with Salesforce and other software providers. “They’re kind of fatigued by it and they want to talk about getting more out of what they already have.”

Generational Gap

A generational gap could be part of the problem, with tech startups and other young companies incorporating AI into their business operations faster than larger companies.

This is a challenge not just for Salesforce but for rivals such as ServiceNow, SAP, IBM, Oracle, Amazon Web Services and Microsoft, each of which have a large base of enterprise app customers. (The latter three firms have cloud-server businesses that cater to tech startups and other large AI developers, which more than makes up for the challenge involving selling AI apps.)

Further complicating things, these firms are now competing head-on with each other in selling AI agents in ways they didn’t used to. That raises questions about how many of their dueling products will get traction, as customers won’t buy the same type of product from multiple providers.

“The good news for enterprises is that there are so many companies bringing AI products to the table and so they are going to have lots of choices,” said Matt Carbonara, a startup investor who previously worked for Citigroup’s venture arm. “At the same time, being inundated with choices can slow down the process of deciding what to buy.”

Salesforce also finds itself battling startups like Sierra and Decagon that are zeroing in on its largest businesses: customer service and sales management.

Instead of being an “add-on sale” to the products Salesforce already has, Agentforce is “just another competitor” selling agents, said another consultant who works for numerous large Salesforce customers. (And Agentforce has been powered in part by OpenAI technology, likely adding to Salesforce’s costs.)

To Salesforce’s credit, it is one of the few companies to indicate how its agent software is selling, which is a reason Agentforce’s weak sales are garnering attention. And despite chatter sparked by Klarna and other firms last year that said they would use AI to build their own versions of Salesforce apps, that hasn’t happened.

But Benioff may nevertheless have to contend with activist investors, who have watched as Salesforce’s shares have significantly underperformed those of enterprise software peers over the past couple of years.

While many large companies have moved slowly to adopt agents due to data security and privacy concerns, Salesforce bears some responsibility for raising investors’ expectations for Agentforce, said Rishi Jaluria, an equity analyst at RBC Capital Markets.

“It’s really important when companies are coming out with all these new AI features and products that they under-promise and over-deliver,” he said.

Benioff said at one point on the call with analysts that Salesforce “is not a company in crisis,” even though none of the analysts had suggested that.

Benioff has done the opposite. On the earnings call in February, he lauded Agentforce’s “incredible accuracy” and claimed that “customers are really telling us that we’re light years ahead of other providers.”

Benioff Grumbles

Meanwhile, Benioff has to contend with a scrappy new wave of agent startups, one of which is run by someone he knows well.

Bret Taylor, the former Salesforce co-CEO who left in 2022 to co-found Sierra, said recently on TITV that customers are willing to pay higher costs for AI as long as it helps their business.

“You’re seeing this surge of startups right now just because our products are better, candidly, and they work better, and that’s what matters right now,” he said.

For now, Sierra is likely generating less than $100 million in annualized sales, a drop in the bucket for a firm the size of Salesforce. Taylor said he is racing to win deals because it’s a matter of time before customers shift back to buying their software from a provider like Salesforce that offers a suite of enterprise products.

In some internal discussions, Benioff has grumbled about a handful of his employees leaving to join Sierra and taking their customer relationships with them, according to a person who heard the comments. But he and his senior staff are confident that corporate chief information officers will eventually stop flirting with AI startups like Sierra and go back to trusted vendors, said the person.

Benioff has frequently referenced the path of Equinox, which operates a chain of luxury fitness clubs, as a case study for the effectiveness of Agentforce. About eight months ago, Equinox began using Salesforce’s AI agents to help customers find specific types of information on its website and mobile application, such as what time a particular location opens and closes, said Eswar Veluri, the company’s chief technology officer.

Since Equinox doesn’t have a huge volume of customer inquiries, it doesn’t plan to reduce the size of its 20-person “concierge” team, which still handles things like membership cancellations and billing questions, he said. While Equinox uses agents to let customers ask questions and get information about the various classes it offers, customers get routed to human staff when they ask follow-up questions.

Equinox also evaluated agents from Sierra before choosing Agentforce. Veluri said the company was already using Salesforce in other parts of its business, like tracking customer sales leads, and therefore felt it could scale its agent usage faster on Salesforce than it could by using Sierra, which would have required custom software to integrate with its systems, he said. (An Equinox spokesperson declined to comment on how much the company spends on Agentforce and other Salesforce products.)

Agentforce Awakens

As Benioff disbanded the Well-Architected team in late October, Agentforce seemed to get off to a fast start, with 3,000 paying customers by February. That prompted Benioff to declare on an earnings call that month that this would be the “absolute year of Agentforce.”

But on the same call, Amy Weaver, Salesforce’s chief financial officer at the time, cautioned that because Agentforce was still new to many customers, Salesforce expected it to see only “modest” sales in its fiscal year ending in January next year.

It was around this time that some customers began seeing Agentforce give incorrect answers, known as AI hallucinations, as they tested how the software handled customer service inquiries. Another issue was Salesforce’s initial model of charging $2 for every conversation its AI agents handled with customers, which was double the price of some of its rivals.

In May, Robin Washington, the new chief financial officer, said Agentforce had passed $100 million in annual order value, a metric that combines new contracts and renewals. A Salesforce spokesperson said AOV is the same as annual recurring revenue, the value of contracts over the next 12 months.

The spokesperson wouldn’t elaborate on how Salesforce calculated the figure. Agentforce is often bundled with other services such as databases, making it difficult to break out revenue from just that product, according to a consultant who works with Salesforce customers.

While Salesforce has improved the accuracy of Agentforce and the company disclosed 6,000 customers are paying for it, some Salesforce customers are still wary of using it for critical business functions. One Salesforce consultant said that none of the dozen or so consumer retail product companies he works with are using Agentforce for customer service interactions because they aren’t confident that the software can accurately handle tasks such as changing orders to a different shipping location.

Sales Leads Ignored?

Earlier this month, the pressure on Benioff seemed to elicit some memorable comments from him on the conference call with stock analysts.

He said Salesforce was using agents to respond to the 20 million to 100 million people who have reached out to the company over its 26-year history but were ignored because Salesforce didn’t have enough salespeople to respond. (A former senior Salesforce sales executive said Benioff’s comment about the number of customers or potential customers that were ignored wasn’t true.)

Despite Benioff making numerous references to customers using Agentforce, such as DirecTV and Williams Sonoma, he spent more time talking about how Salesforce internally is using the tech to automate more roles. That made some analysts wonder if he was trying to distract from a lack of customer adoption.

Benioff said at one point on the call with analysts that Salesforce “is not a company in crisis,” even though none of the analysts had suggested that.

Major AI chatbots were happy to help.

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