TheChek News Flow

The Netherlands and seven other EU countries have called on the bloc to urgently improve its patchy civilian preparedness for man-made and natural disasters, in the wake of Russia’s invasion of Ukraine and Spain’s recent power blackout.

The European Commission earlier this spring urged capitals to draw up plans including advising citizens to stockpile food for three days, upgrading emergency shelters and establishing cross-border crisis hubs in the event of conflict or climate disasters.

The initiative comes after European intelligence agencies warned that Russia could attack an EU member state within three to five years, adding to climate change-related threats including floods and wildfires.

“We all know that the world is changing around us, that we’re in a new geopolitical environment where the risk of a crisis or even a war is realistic,” Dutch justice minister David van Weel told the Financial Times. “That requires us to do a lot of things.”

Van Weel and his colleagues from the Baltic states, Finland, Sweden, Belgium and Luxembourg met in Brussels to discuss how to make their countries more resilient at a time when the EU is pouring vast amounts of money into its defence sector to prepare for the eventuality of a full-blown conflict.

He said that the group of countries meeting in Brussels saw itself as “probably more advanced” on this issue than others that showed less willingness to follow suit, in part for fear of alarming their populations.

“Some countries have just installed sirens. Other countries told us that 25 years ago they stopped using their sirens. And so you can see that there’s different approaches to these issues,” van Weel said.

He argued that “if you prepare for the worst scenario — which is a military conflict crisis — then local disasters are easier to handle”.

Co-ordinating among capitals on issues such as stockpiling, alarm systems or creating sufficient shelters was also required for an efficient response, van Weel said.

The Netherlands was rolling out “emergency support points” across the country, where citizens in crisis situations such as a blackout could get information, charge their phones or report missing people. “I think these [support] points that we’re developing now can be a model that other nations can learn from,” he said.

The eight ministers urged the commission to accelerate its own work, including an analysis of the threats the continent faces. “We want them to work on this common threat assessment . . . If we’re not on the same page on what threat we face, then what are we preparing ourselves against?” said van Weel.

He said sharing information during crises was vital, and called for a strengthening of the EU’s so-called civil preparedness mechanism, which coordinates joint responses.

“We saw again, with the blackout in Spain and Portugal, that it takes a long time before we have a shared picture about what’s happened. To have a more Europe-wide co-ordination on that, I think can help,” van Weel said.

But in some countries, the EU’s preparedness plans have also stirred up panic and false claims that Europe was starting a war against Russia.

In Romania, viral online posts in recent months alleged that preparations for food rationing and exercises for reservists in case they needed to be called up were proof Bucharest was joining a war effort.

The Romanian government issued statements in March and earlier this month debunking such claims and insisting that any preparedness plans “do not mean our country is entering any [armed] conflict”.

Former Biden top adviser predicts jobs and projects in Republican states will sufferde

The gutting of the Biden-era green tech and energy tax credits programme in the US would hurt key Republican states, drive up prices for consumers, hit jobs and “hand[s] a victory” to China, a key architect of the Inflation Reduction Act has warned. 

The House of Representatives narrowly passed a sweeping budget bill on Thursday, which includes plans to end clean energy tax credits earlier than expected, undermining a central plank of the signature programme launched under former president Joe Biden.

Former top Biden climate and clean energy adviser John Podesta, who oversaw the development of the 2022 green credits and incentives plan, told the Financial Times Climate and Impact Summit that the Trump administration had “thrown in the towel” on turning the US into a key hub for clean tech and manufacturing.

“At a time where we saw record investment in the sector, record investment in manufacturing, the combination of tariffs, the high debt structure that the Senate has enacted and then the reversal of the Inflation Reduction Act is taking a very, very strong hand and essentially throwing [it away],” he said. 

Podesta argued that the IRA had helped drive investment into many Republican held states, citing examples of electric vehicle and battery manufacturing from Georgia to Michigan. He cited research showing $862bn in clean energy investments had been announced in the US since the IRA had passed.

But he warned this investment was now at risk, and compounded the uncertainty faced by businesses dealing with tariffs.

Shares of clean energy companies plummeted on Thursday, after the new spending bill passed with much bigger hits to clean energy incentives than an initial draft that was released on May 12.

The bill will head to the Senate next, where lawmakers could water down its more hardline provisions. 

“I think a lot of the members that voted for this bill . . . will have to go back and . . . explain to their constituents that ‘I voted to kill your jobs. I voted to raise your prices’,” as a result of the removal of the support for clean energy, Podesta said. “You know, I think they’re going to have a lot of hard explaining to do.”

The Trump administration launch of tariffs and cuts to green subsidies meant the US had “handed a victory” to China, he said, which was “trying to dominate these industries”. 

There was “bipartisan consensus” in the US and in Europe of the need to respond to Chinese dominance of green tech, he added.

“There is an economic security dimension to letting China be completely dominant in these industries. Right now, I think we’ve just thrown in the towel.”

Although China still continues to roll out coal power to meet its growing energy needs, it has also transformed its energy system over the past decade by rolling out renewables and electrifying vast swaths of its economy through cars, battery storage and railways.

It also wields vast power over the markets for the resources and materials that underpin technologies of the future.

The role of China in the global energy shift was also highlighted by Ana Toni, chief executive of the upcoming UN COP30 climate summit in Brazil.

Speaking at the FT Live conference, she said China was a “critical, critical player”, adding that many developing countries had already had “fruitful discussions and trade agreements” with Beijing.  

“China has shown that they have a commitment to go faster and go forward despite the geopolitics,” she said. “China has been doing a lot in their own country, but also helping many other developing countries to transition.”

An increased focus on ethics and local procurement may dent the allure of cheap Chinese panels

There has been little light relief for European manufacturers of solar panels over the past few years. A glut of cheap Chinese solar panels triggered a flurry of factory closures, bankruptcies and downsizing as the bloc’s domestic companies struggled to compete.

But now, an increased focus on ethics and local procurement in the solar industry has sparked hopes that price may no longer be the defining factor when solar developers choose suppliers.

UK ministers said in April that Britain’s state-owned energy company would be forced to make sure it doesn’t use any solar panels linked to Chinese forced labour. In 2024, about a fifth of the world’s polysilicon was produced in China’s Xinjiang region, where western governments have alleged human rights abuses of the Uyghur community. Such initiatives might force some European project developers to consider sourcing from domestic solar panel manufacturers.

Further help should come courtesy of the EU Net Zero Industry Act. Formally cleared last year, this will require public authorities to consider other criteria, such as supply chain resilience, when procuring clean technologies through auctions and the like. There are also calls for authorities to ‘buy European’ when sourcing, say, rooftop panels for hospitals and public buildings.

Domestic clean technology companies struggle to compete on price. But when other factors are introduced, they have a fighting chance. In solar, the regulations could potentially create a market for products that meet resilience requirements of up 9 gigawatts of capacity as early as 2026, reckons trade body SolarPower Europe. On top of that, solar installations on public rooftops will grow over time.

Of course this all smacks of stable doors and horses already having bolted. The EU was the world’s biggest solar power manufacturer in the early 2000s but long ago lost its edge to China. In 2023, Chinese-headquartered companies produced 84 per cent of the world’s solar modules and 92 per cent of solar cells, according to BloombergNEF.

As things stand, the ‘resilience market’ created by new EU regulations would represent less than 14 per cent of the solar capacity added in the bloc last year. There are no guarantees that all of that will go to domestic suppliers. Panels made in countries such as India could potentially also qualify as they would not be sourced from the overwhelming global market leader.

Meanwhile, Chinese-made panels are still dirt cheap at about $0.09 per watt, on BloombergNEF data, down from $1/watt at the start of 2012. A focus on ethics and resilience will not a bright summer make. It may, though, take the edge off the Europeans’ ghoulish pallor.

State media reports meeting between US investment bank chief and senior officials

JPMorgan chief executive Jamie Dimon has vowed to “deepen” the bank’s engagement with China, according to a state media account of a meeting between the banker and senior Chinese officials that included Beijing’s top trade negotiator.

The meetings came weeks after Beijing and Washington agreed to cut respective tariffs by 115 percentage points for 90 days, a marked de-escalation of trade tensions. Dimon’s comments can be seen as a further sign of the rapprochement in tensions between the US and China.

In a meeting with trade negotiator and vice-premier He Lifeng, Dimon said the US bank would “deepen its engagement” with China’s capital markets as well as helping multinationals in the mainland and Chinese companies in their overseas development, according to the Xinhua news agency.

The vice-premier, a close ally of President Xi Jinping, said China wants US companies to “continue contributing to the healthy, stable and sustainable development of China-US economic and trade relations,” according to the Xinhua readout.

On Friday, Dimon, whose bank is holding an annual conference in Shanghai this week, met Ren Hongbin, president of the China Council for the Promotion of International Trade.

Both sides exchanged views “on promoting exchanges between the business communities of China and the US and deepening co-operation in the financial investment field”, state media said.

Beijing has consistently sought to court top US business leaders throughout a period of worsening political relations with Washington. Apple chief executive Tim Cook and investor Ray Dalio attended a conference in the Chinese capital in March. Both also met He Lifeng.

US companies have had to tread carefully in China as tariffs have mounted and tensions worsened during US President Donald Trump’s second term.

PVH, the owner of Calvin Klein and Tommy Hilfiger, was added to a special entity list in the mainland earlier this year — the first such addition for a company with major operations on the ground — while Walmart was summoned by authorities over reports that it was pressuring suppliers to cut prices.

US financial firms have struggled in the mainland, despite a trade agreement in 2020 that allows them to fully own their businesses rather than operate through joint ventures. 

As well as a securities business in China, JPMorgan in 2020 became the first foreign company to own its own futures business on the mainland and in 2023 took full ownership of its asset management joint venture.

At a closed-door speech at the same conference in Shanghai last year, Dimon said parts of his bank’s business had “fallen off a cliff” in China. New listings have fallen dramatically under a new regulatory approach, while cross-border mergers and acquisitions have also dried up.

One person who attended the conference this year said Dimon’s tone on China was “bullish”, with references to the country’s tech developments.

JPMorgan declined to comment.

The Flaw in Altman’s Thesis for AI Devices

One of the problems with this guessing game is that it may well prove irrelevant, because the arguments about our need for AI-specific devices don’t hold water. OpenAI CEO Sam Altman, talking with Ive in a slick video explaining the io deal, seemed to deliberately obfuscate how people currently use AI chatbots. He described how asking ChatGPT currently requires someone to get out their laptop, launch a browser and start typing. Come on! At the most basic level, you can already talk to ChatGPT and ask it questions. Even more convenient is the option to talk to a locked phone—such as Google’s Pixel—and ask the Gemini chatbot a question (which it answers!). You can do the same with Meta Platforms’ Ray-Bans smart glasses—no need for laptop, browser or typing. Whatever OpenAI is planning, can it really be simpler than using a device we already carry with us? (Bloomberg reported Thursday that Apple is also planning to get into the smart glasses market).

Now, Altman obviously knows all this. The real reason he is talking up the value of new devices is surely strategic: OpenAI, like Meta, doesn’t want to be dependent on smartphone makers—such as Apple—for distribution of its apps. The company has tried unsuccessfully to strike deals to preload its ChatGPT app onto phones, an executive testified at a Google antitrust trial recently, in an attempt to replicate Google’s strategy of expanding availability of its search app by getting it preloaded onto smartphones and browsers. Altman likely thinks OpenAI needs to control its destiny by developing its own hardware.

That’s fine, but consumers may have other ideas. Aside from the difficulty of persuading people they need another device, there’s the time it will take OpenAI to get to market with its new device. According to The Wall Street Journal today, Altman told OpenAI staff on Wednesday evening that he hopes to ship the first new AI device by late next year. Eighteen months is a long time in the fast-evolving AI world. By the time OpenAI’s devices finally make it to market, people may be talking to AI assistants on their phones or smart glasses as freely as they upload videos to TikTok or Instagram.

Datadog Invents New Language

If there’s a guaranteed way to produce impenetrable jargon, it’s by combining AI and open-source technology. Check out this blog post from Datadog on Wednesday about—according to our grizzled enterprise software reporter Kevin McLaughlin—its new open-source AI model and an accompanying new benchmark to measure how accurate the AI model is at forecasting server and app performance issues.

The blog post, however, takes our monthly award for incomprehensible jargon. Even Kevin couldn’t translate this sentence: “Observability time series have challenging distributional properties, including sparsity, spikes and noisiness; anomaly contamination; and contain high-cardinality multivariate series, with complex relationship among variates.”

Translated by ChatGPT, that means: “This kind of data is messy. It has missing parts, random ups and downs, weird spikes and lots of things happening all at once that are connected in confusing ways.”

Waymo’s gross bookings, or the amount customers pay to take the robotaxi service, will almost triple this year to $230 million and rise another 61% next year to $370.4 million as the robotaxis expand to more cities, TD Cowen analysts predicted in a report published Thursday.

This surge in paying customers could make the Alphabet-owned unit worth as much as $75 billion next year, up from a valuation of $45 billion when the unit last year raised money from investors including Andreessen Horowitz and Fidelity.

The analysts also estimated a Waymo robotaxi will have to cost $98,000 before an individual car breaks even, or equals the cost of the car, assuming a $16 ride booked on a ridesharing network. For robotaxis on Waymo’s own network, a car that costs $98,000 would generate a profit of 35 cents per trip. The firm estimates that one Waymo robotaxi currently costs $160,000 to build.

The firm’s autonomous vehicles report also predicts that Waymo will command 5% of the robotaxi market in the U.S. by 2034, with Uber and Lyft’s shares, currently at 71% and 28% respectively, decreasing slightly over time, before factoring in partnerships between the ridesharing companies and Waymo.

Elad Gil, the prolific investor known for placing early bets on Airbnb and Stripe, says he’s been backing ventures buying mature businesses and incorporating artificial intelligence into their work. Now we know the identity of one of them.

Gil recently led a funding round in Enam Co., a one-year-old AI startup focusing on worker productivity, according to a person familiar with the deal. The investment valued it at more than $300 million, said that person and another person. Andreessen Horowitz and OpenAI’s Startup Fund are also investors in the company, according to their representatives.

Enam Co.’s website gives little indication of what it’s actually working on, but people familiar with its approach said it’s looking to buy companies and make them more efficient using AI. Zayd Enam, the startup’s eponymous founder, was previously CEO of customer service company Cresta. He indicated six months ago on Linkedin that his startup already had at least $10 million in revenue.

A spokesperson for Gil declined to comment. Enam also declined to comment on the fundraising, saying the company is “heads down right now building.”

Venture capitalists have been looking more like private equity investors of late, scouting for opportunities to refurbish relatively boring businesses such as accounting firms with the latest AI advances, as my colleague Natasha recently wrote. In that vein, Thrive Capital said last month it was starting a vehicle to buy and hold companies that can benefit from new technologies. General Catalyst and 8VC have pursued similar strategies.

Gil, who a few years back became the face of the solo venture capitalist movement, is often early to big trends in Silicon Valley. His interest in buyouts could be a signal for others to begin taking the concept more seriously.

Asked on a podcast last year about his interest in AI-driven buyouts, Gil said he had invested in two already and thought it could be the right approach in industries that are slow to adopt new software products or for which AI could bring down costs.

“Maybe what you do is you just buy some assets and roll them up and go after it,” Gil said. In addition to backing Enam Co., Gil helped start AI evaluations company Braintrust and in 2023 co-led an investment in legal AI startup Harvey that valued the company at $715 million.

For its part, Enam Co. says on its website it’s “on a mission to accelerate the future of work,” drawing inspiration from Ford’s innovation in assembly lines and Toyota’s production system. It has set up offices in the San Francisco Bay Area and Berlin, where it’s looking to hire technical staff. The company also has a side hustle selling hats bearing the slogan “Make AI Great Again.”

And while Enam Co.’s website doesn’t say much about its strategy, it does take a jab at another corner of the financial world: “We don’t wake up excited to make the world a harsher place—we are not private equity,” it says.

Loan means giant data center project involving Oracle and Crusoe is fully funded.

JPMorgan Chase has agreed to lend more than $7 billion to the firms building OpenAI’s giant artificial intelligence data center campus in Abilene, Tex., according to two people with direct knowledge of the deal.

The deal with JPMorgan, which has not been previously reported, reflects continued interest from lenders and investors in backing the physical infrastructure needed to develop advanced AI software.

The bank already lent $2.3 billion to the companies developing the Abilene data center, which funded the initial phase of the project. The new $7 billion loan will round out the funding for the construction of the data center, which would be one of the largest in the world, with eight buildings that cost $1.4 billion each. The data centers can hold a total of 400,000 Nvidia chips.

The project is being developed by a group of companies and will be used by OpenAI. The actual project is being built by data center developer Crusoe, and it is partly owned by asset manager Blue Owl and Primary Digital Infrastructure, an investment fund. Oracle has agreed to lease it for 15 years. Oracle will then rent the chips to OpenAI. At full capacity, the site is expected to have more than 1 gigawatt of power for AI chips.

JPMorgan, Crusoe and Primary Digital declined to comment. Oracle and Blue Owl did not respond to requests for comment.

OpenAI plans to use the campus to train its AI models. OpenAI used to exclusively rely on Microsoft, a major backer of OpenAI, for data center capacity. But the startup grew impatient with the tech giant last year because it wasn’t getting chips fast enough. The Abilene site was the first example of OpenAI deciding to work with another cloud provider—Oracle—to get Nvidia GPUs.

The developers of the data center have already moved to expand the joint venture that owns the project to build additional AI data centers. Crusoe, Blue Owl and Primary Digital said Tuesday they had raised another $11.6 billion for the expansion. The funding primarily comes from Blue Owl, according to someone involved in the deal.

The lending and fundraising signal that there is little fear among investors about overspending on AI. On Wednesday, data center builder CoreWeave raised $2 billion in a high-yield bond offering.

Lenders seem particularly hungry for projects that have a long-term, credit worthy tenant, in this case Oracle. The company signed the initial lease for two buildings last year and expanded to the entire site in January.

OpenAI CEO Sam Altman, SoftBank’s Masayoshi Son and Oracle’s Larry Ellison have said the Abilene campus is a part of their $500 billion data center effort, called Stargate. But so far none of the funding has come from SoftBank. The loan from JPM does not cover the cost of the GPUs. The details of SoftBank’s involvement in the Abilene project is still being worked out, according to someone with direct knowledge.

The massive Abilene project was started by Crusoe, which later formed a $3.4 billion joint venture with Blue Owl and Primary Digital Infrastructure to fund the OpenAI data center last fall. The joint venture later raised $2.3 billion in construction debt from JPMorgan, enough money to fund the initial build out of two data centers for Oracle that could hold 100,000 GPUs for OpenAI.

The project grew in January when Crusoe signed an larger lease agreement with Oracle for 6 more data centers, covering the entire 1.2 gigawatt site, The Information first reported. The deal quadrupled the amount of capacity Oracle could provide to OpenAI, adding an additional 300,000 GPUs. The original joint venture with Blue Owl did not cover the expansion.