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Taiwanese contract manufacturer says it would consider a deal only as part of co-operation on electric vehicles

Foxconn will consider acquiring Renault’s stake in Nissan if it is a condition for working with either carmaker on electric vehicles, the Taiwanese contract electronics manufacturer said on Wednesday.

“We did have talks about acquiring a stake in [Nissan],” Foxconn chair Young Liu told reporters on Wednesday in the company’s first confirmation of the talks. “If [taking a stake] is necessary for co-operation, we will consider it, but buying shares is not our main goal. Our main goal is co-operation.”

Liu’s comments clarify Foxconn’s rationale for negotiating an investment in Nissan after the breakdown of takeover talks between Honda and Nissan revived the possibility of a deal with the Taiwanese group.

Best known for its role as the main contract manufacturer of Apple’s iPhone, Foxconn is building a business designing and manufacturing EVs for other companies to sell under their own brands.

While it has signed up some EV start-ups as customers, contract orders from either Renault or Nissan would be its first partnership with a traditional carmaker outside its home market of Taiwan.

Liu said he expected to announce such a co-operation deal within one or two months, and Renault, Nissan and Honda were among carmakers in talks with Foxconn about contract orders.

Nissan did not immediately respond to a request for comment. Its shares had fallen 6.3 per cent by the early afternoon in Tokyo on the news and are down almost 13 per cent so far this year.

The company has come under fierce pressure due to competition from China and after failing to capture the hybrid boom in the US. As part of a turnaround plan, it intends to cut 9,000 jobs and a fifth of its production capacity.

The failed talks with Honda — which would have created the world’s fourth-largest automotive group — were precipitated by Foxconn’s interest in Nissan, according to people familiar with the matter.

Renault has been reducing its holding in Nissan ever since a drastic restructuring of their long-standing alliance in 2023. It has a 36 per cent stake in the Japanese company and wants to offload 18.7 per cent currently held in a French trust.

Jun Seki, chief strategy officer for Foxconn’s EV division and a former Nissan executive, was reported to have met Renault chief Luca De Meo in December for talks about acquiring shares held in the trust, triggering panic within Nissan and the frantic negotiations with rival Honda.

The Financial Times reported last week that Renault had reactivated talks with Foxconn. However, Nissan has the first right of refusal if the French group does decide to sell its shares.

Nissan is also conducting its own search for a strategic partner in the tech industry following the collapse of merger talks with Honda.

Eric Schmidt warns west to focus on open-source AI in competition with China

Former Google chief’s caution comes following Chinese start-up DeepSeek’s breakthrough

Former Google chief Eric Schmidt has warned that western countries need to focus on building open-source artificial intelligence models or risk losing out to China in the global race to develop the cutting-edge technology.

The warning comes after Chinese start-up DeepSeek shocked the world last month with the launch of R1, its powerful-reasoning open large language model, which was built in a more efficient way than its US rivals such as OpenAI.

Schmidt, who has become a significant tech investor and philanthropist, said the majority of the top US LLMs are closed — meaning not freely accessible to all — which includes Google’s Gemini, Anthropic’s Claude and OpenAI’s GPT-4, with the exception being Meta’s Llama.

“If we don’t do something about that, China will ultimately become the open-source leader and the rest of the world will become closed-source,” Schmidt told the Financial Times.

The billionaire said a failure to invest in open-source technologies would prevent scientific discovery from happening in western universities, which might not be able to afford costly closed models.

Schmidt was speaking at the AI Action Summit in Paris this week, which also saw US vice-president JD Vance vow that the US would remain the dominant force in the technology.

OpenAI chief Sam Altman said last month he had been on the “wrong side of history” when it came to open-source models, suggesting the company needed to develop a new strategy that moved away from expensive closed models.

However, the group has taken early strides in developing the technology, leading to the start-up holding talks with SoftBank over a huge funding round at a $260bn pre-money valuation. Other US Big Tech giants, including Google and Amazon, have also invested billions on closed models, believing it will be the best way to secure returns on significant investment.

“I think that [Altman] was being a little too quick,” said Schmidt, adding that the future of AI dominance lay in combining both open- and closed- source AI models.

While the US had dominated the first phase of AI development by building powerful AI models such as GPT-4, Europe had a chance to reap economic gains by thinking about how to apply AI to businesses through building “applications” on top of the technology, said Schmidt.

“Europe’s got to get its act together,” he said. “The application layer is profoundly powerful, and it will make your Europe more efficient.”

On Wednesday, Schmidt announced he was investing $10mn to create a new AI Safety Science programme through Schmidt Sciences, a non-profit he set up with his wife, Wendy.

The programme will include 27 projects working on fundamental research into safety problems in AI. The awardees include Yoshua Bengio, a Turing prizewinning computer scientist, who will develop a risk mitigation technology for AI systems, and Zico Kolter, an OpenAI board member and professor at Carnegie Mellon University, who will explore AI attacks.

Schmidt called for the west to collaborate with the Chinese on AI safety, as the country would face the same issues around the powerful technology. He compared this to the kind of information sharing done between militaries when they test rockets, for example.

“How could it possibly be bad for us to give them information that they could use to make their models more safe?” he said.

Will a private tech company reach a $1 trillion valuation in the coming years?

It’s not a ridiculous question. A couple of companies seem like potential candidates. OpenAI is closing in on $300 billion in its financing with SoftBank, and SpaceX recently shot to $350 billion.

Other private tech heavyweights are reaching impressive fresh new valuations, without going public. My colleague Sri Muppidi broke the news Monday that Stripe is talking to investors about an employee share sale that would value the company at $85 billion, more than Capital One or Barclays. Waymo’s $45 billion valuation last year put it above Ford and Honda.

What’s more, there are few rumblings that any of these companies are going to go public anytime soon. Top-tier private companies have plenty of access to capital. Even Goldman Sachs’s CEO says delaying an IPO seems logical for big private companies. It’s becoming more likely that name-brand Silicon Valley firms might end up like other privately held, globally important conglomerates like Koch Industries, Bloomberg or Hearst.

A handful of tech companies are expected to go public in the first half of this year. Most will have strong businesses, but they are not seen as industry defining. Investors aren’t as excited about Chime or Klarna as they would be about Stripe. Data center operator CoreWeave is sure to get plenty of hype, but it isn’t OpenAI or Anthropic.

Another question I’ve been mulling: Is this a problem?

One obvious downside is that everyday stock market investors can’t invest in the most successful recent crop of startups without resorting to sketchier investment vehicles.

Another issue is more esoteric—the potential costs to society when some of its most valuable companies keep a tight lid on their financials, governance structures and risks. Reporting on these companies, as well as disclosures to investors during private fundraising events, only go so far. Companies have to open up a lot more as they prepare to go public.

Jeff Nykun, a former senior analyst at the asset manager Artisan Partners, put it to me this way: “If the world stays the way it is, wouldn’t it be weird if we didn’t know what’s going on with the biggest companies in the world? I don’t know if that’s good for anybody.”

Nykun is one of the many tech investors optimistic that the IPO drought has to end within the next year or two. It’s crucial to the venture capital industry that the dam breaks. He is a general partner at tech investment firm WndrCo, which has invested in private software companies like Databricks, Deel and Figma—hot companies that IPO watchers expect to begin marching to public listings by next year.

He thought what might finally push top startups over the edge comes down to brass tacks—that they will be able to sell stock for a higher price in the public markets than to private investors. Private software companies that are growing faster than 30% a year, a quicker pace than nearly all their publicly traded peers, are in high demand, he added. “I think people will be shocked how well they trade,” he said.

That could drive another classic tech-industry phenomenon: fear of missing out.

Right now, tech founders appear to be taking cues from the same elite crew that have proven allergic to going public, like Elon Musk at SpaceX or Patrick Collison at Stripe. Cool kids just don’t IPO. Their companies are too precious for public hands.

Another crop of celebrity founders, at least by Silicon Valley standards, might make IPOs trendy again. I’d bet Dylan Field of Figma or Ali Ghodsi of Databricks will ring the IPO bell at Nasdaq or NYSE by sometime next year. They might be in for a wild ride but their employees, investors and customers will thank them for their new transparency.