TheChek News Flow

Elon Musk-led companies plan to work with semiconductor manufacturer at Terafab project planned in Texas

Elon Musk is partnering with Intel INTC 2.89%increase; green up pointing triangle on his ambitious Terafab project, which aims to build specially designed chips for SpaceX and xAI as well as for Tesla TSLA -2.87%decrease; red down pointing triangle.

In an announcement Tuesday, Intel said it would work with the companies to “design, fabricate, and package ultra-high-performance chips at scale.” The company also shared a photo of Chief Executive Lip-Bu Tan shaking hands with Musk, CEO of SpaceX and Tesla.

The partnership is a win for Intel, which has struggled in recent years, leading the company to cut its production capacity when demand was surging for data-center chips and when competitors like Nvidia and AMD have thrived.

Last year the Trump administration reached a deal to acquire an equity stake in the company for around $9 billion to help secure the American chipmaker’s business.

The U.S. government held 8.4% of Intel’s shares outstanding as of March 20, according to securities filings. The figure doesn’t include warrants that could increase the government’s equity stake in Intel.

Shares in Intel gained more than 3% in Tuesday trading.

“Terafab represents a step change in how silicon logic, memory and packaging will get built in the future,” Tan said on X.

Tesla and SpaceX confirmed the partnership in posts on X.

In March, Musk unveiled the plans for a single facility in Austin, Texas, to make chips to be used by SpaceX and xAI, which merged in February, as well as by the publicly traded Tesla. He pitched the project as an opportunity to quickly experiment on chip design by designing and manufacturing the chips in one facility.

The fab will make chips for use in Tesla’s robotaxis and Optimus humanoid robot, two areas of priority for the electric-vehicle maker as it shifts its focus to artificial intelligence-enabled products.

It will also make chips optimized for use in space, where SpaceX is planning to deploy huge numbers of satellites capable of handling AI computing tasks.

Companies, including Tesla, often design their own semiconductors but then need a supplier to actually make them in a so-called chip fab.

Musk’s companies have sourced chips from a range of suppliers, including Nvidia, Samsung and Taiwan Semiconductor Manufacturing. Musk has said that Terafab is needed because his companies’ demand for chips is slated to far outstrip the supply it can get from partners.

Javokhir Sindarov is destroying the competition for a spot in the world championship match. Even Magnus Carlsen is stunned.

American grandmaster Hikaru Nakamura was sitting at a chess board in Cyprus last week feeling absolutely stumped. The world’s No. 2 rated player, famous for his talents in speed chess, spent 67 minutes on a single move.

His opponent was a 20-year-old prodigy from Uzbekistan named Javokhir Sindarov. And Nakamura, competing for a shot at the world title, had no idea what to do against the player suddenly rocking the chess world.

After what seemed like an eternity of tortured reflection, Nakamura stumbled right into Sindarov’s trap.

“He just thought one hour and played the wrong move,” Sindarov said. “And after this, I take this advantage and played very well in my opinion.”

The victory left Sindarov in a commanding position at the Candidates tournament, where the winner gets the chance to play for the World Chess Championship. And through eight games, Sindarov’s play has catapulted him into the game’s rarefied atmosphere. With five wins and three draws, he has already tied the record for the most ever victories at the Candidates—and he still has six games to play before the event ends next week.

But few in the chess community saw this performance coming. Three players in the eight-man tournament came in with higher ratings than Sindarov and, as the most pressure-packed tournament in chess, the Candidates tends to reward experience. Sindarov, however, has been on the fast track to greatness since he was a preteen. The kid from Tashkent who was once the second-youngest grandmaster in history is finally having his star turn.

After Sindarov had breezed through his first five games with four wins and a draw, even Magnus Carlsen was blown away.

“Nobody,” Carlsen said, “expects you to go 4.5 out of 5.”

Nobody, except perhaps Sindarov. Born in the Uzbek capital, he learned with his grandfather as his coach and soon became one of the fastest risers in chess history. Sindarov is one of only five players ever to earn the title of grandmaster before the age of 13.

And even though his home country doesn’t have a long history of producing the world’s pre-eminent chess minds, there has never been a better time to be a competitive chess player from Uzbekistan. Back in 2004, another Tashkent native named Rustam Kasimdzhanov was crowned FIDE world champion, sparking a national wave of interest. The government pushed the game into schools and sponsored new chess clubs. By 2021, the president of Uzbekistan had signed a national decree, “On measures for the further development and popularization of chess and enhancing the system of training chess players.”

In other words, the Uzbeks were coming.

Soon, it became impossible to ignore Uzbekistan’s outsize presence on the international stage. Seven years ago, the country had no one ranked in the top 100 for men’s classical chess. But now a golden generation has risen together. There are now four Uzbeks in the top 50, including world No. 4 Nodirbek Abdusattorov.

Together, Abdusattorov and Sindarov were part of Team Uzbekistan when it won the 2022 Chess Olympiad, the most prestigious international competition. Their coach was none other than Kasimdzhanov, the former world champion.

“They have grandmaster training at an age, where at the corresponding age I didn’t know what a grandmaster was,” Kasimdzhanov said in 2024.

That Sindarov is now in a position to dream of a world title at all is due in large part to the vacuum at the pinnacle of chess since Carlsen’s withdrawal in 2022. The five-time champion from Norway had dominated the classical game for nearly a decade, before electing not to defend his title.

His exit cleared the way for a new generation of super grandmasters, including Ding Liren, the first world champion from China, and Gukesh Dommaraju, the youngest undisputed champion in history.

Now Dommaraju looks set to face one of the most creative players around. At the Candidates, one opponent tried to lead Sindarov away from the common lines that grandmasters tend to study, hoping that he could outwit the 20-year-old in a battle of instinct and intellect, not memorization.

But Wei Yi, the world No. 8, soon found himself scrambling. Through brilliant improvisation, Sindarov pulled out a victory—despite the disadvantage of having the black pieces.

“If I get a chance to play a dynamic position from either side,” Sindarov said, “I will always be very happy.”

Short positions rise sharply as traders eye economic fallout from Iran war

Hedge funds have amassed a record number of short positions against European stocks, in a bet that the region will be hard hit by the economic fallout from the Iran war.

The number of short disclosures against stocks listed in Europe increased to nearly 12,000 in the first three months of this year, according to figures from data provider Breakout Point. That is the highest level since short disclosure rules were introduced in 2012.

Short positions are required to be disclosed when they reach 0.5 per cent of a company’s issued share capital. The figures do not equate to 12,000 individual short positions as they could include funds adjusting positions multiple times, but they are a proxy for short-selling activity.

Europe “looks shortable in a time of crisis,” said Andreas Bruckner, a European equity strategist at Bank of America, pointing to the ongoing war in Iran. The region’s stocks — previously the “key beneficiary” in “a trade of global growth” — were now “most exposed to the energy crisis that is brewing”, he added.

Hedge funds AQR Capital Management and Two Sigma Investments are among those that have raised their bets against the continent’s equities, as the war against Iran sends shockwaves through global financial markets.

AQR Capital Management currently has 128 disclosed shorts in European-listed stocks, compared with 54 a year ago, while Two Sigma Investments’ disclosed shorts have risen from three to 85 over the same period, according to Breakout Point. The rise in short positions does not necessarily imply a negative view of the European market as a whole, as some funds balance their bearish bets with long positions in other stocks.

Brent crude has surged 50 per cent to around $110 a barrel since the start of the war, while TTF, the European natural gas benchmark, is up more than 50 per cent, prompting fears of an energy shock that could fuel inflation and damage economic growth. As a net energy importer, Europe is viewed as much more vulnerable than the US, a net exporter.

The continent-wide Stoxx Europe 600 index has fallen more than 5 per cent since the start of the war, erasing most of its gains for the year.

London-listed Wizz Air became Europe’s most shorted stock last month, after warning that the war in Iran would wipe out its profits this year due to the impact of plane disruption and higher fuel prices.

Short interest in the budget airline has nearly doubled since the start of the war to 15 per cent, while its shares have tumbled by more than a quarter over the same period. Rival airline easyJet has also become a short target.

Some funds see companies exposed to the health of the UK economy as vulnerable.

Citadel is among the hedge funds that have increased bets against British brickmaker Ibstock — a longstanding short target due to the UK’s low rate of housebuilding — in recent weeks, while DE Shaw has disclosed a short position in the company, taking total short interest to more than 12 per cent. The Iran war has intensified the sector’s woes, given its exposure to interest rate volatility.

“The UK seems to be a pretty easy target for short sellers,” said Emmanuel Cau, head of European equity strategy at Barclays. It is “always an area of scepticism and negativity for investors”, he said, adding that the war’s impact on energy prices and interest rates had “revived concerns about the UK consumer and cost of living crisis”.

AI disruption fears have also hit some European equities, as short sellers target those viewed as likely losers from the technology.

UbiSoft Entertainment, the video game maker behind Assassin’s Creed, became one of the region’s most shorted stocks after it announced a restructuring and cancelled or delayed upcoming games.

Commerzbank held talks with UniCredit over potential deal

German bank hits back after Italian lender accused it of failing to engage

Italy’s UniCredit and Commerzbank held talks about a potential takeover in recent weeks, but the German lender rejected the approach saying a deal did not offer sufficient upside for investors.

Commerzbank on Tuesday disclosed that the two European lenders had held talks to explore a potential tie-up before UniCredit accused the German bank of failing to engage in discussions about a transaction.

The announcement is the first time either side has disclosed talks about a possible deal, 18 months after UniCredit first revealed its stakebuilding in Commerzbank.

UniCredit last month launched a €35bn takeover bid for Commerzbank, stepping up its drawn-out pursuit of the German lender in the face of fierce opposition from Berlin.

However, the Italian bank’s chief executive Andrea Orcel said it did not expect to gain control of Commerzbank through the offer, which came with a meagre 4 per cent premium at the time of the announcement.

“Several interactions took place in recent weeks — the last one shortly before the aforementioned publications by UniCredit — to constructively explore the fundamentals and potential of the takeover offer that UniCredit had presented to Commerzbank shareholders,” the German lender said on Tuesday.

The broadside from the German bank comes after UniCredit last week accused it of failing to engage in talks about a potential transaction, arguing in investor documents that its bid was triggered by Commerzbank’s “a priori refusal to engage”.

Commerzbank said that interactions between the two sides had “not demonstrated sufficient value upside potential for its shareholders” beyond the bank’s current strategy as a standalone entity.

It added that UniCredit had shown “no willingness” to offer Commerzbank shareholders a “necessary adequate premium”. “Commerzbank currently sees no possibility of an amicable solution,” it said.

The Italian bank has amassed a 29 per cent holding in Commerzbank through a combination of share purchases and derivative transactions. Crossing the 30 per cent threshold would have triggered a mandatory takeover offer under German law, which precipitated last month’s offer.

Commerzbank’s board and Berlin have both voiced their opposition to UniCredit’s overtures, with the government, which still holds more than 12 per cent of the German bank, stating a desire for Commerzbank to remain independent.

The Italian lender is currently seeking approval from its shareholders for a capital increase to help finance the takeover offer.

Commerzbank on Tuesday also argued that it could deliver improved returns for shareholders independently, without the risks associated with a cross-border merger.

It will publish upgraded financial targets alongside its quarterly results on May 8, in a move aimed at reinforcing its standalone strategy and fending off the bid.

“A significant part of the potential outlined by UniCredit is not based on a combination of the two institutions and can therefore also be realised by Commerzbank independently, without the significant execution risks associated with a transaction,” the German bank said.

Shares in UniCredit were trading 0.8 per cent lower in afternoon trading in Milan, while Commerzbank’s share price was down 0.3 per cent in Frankfurt.

Commerzbank said it “remains open to discussions and proposals that create concrete value for its shareholders and stakeholders”.

UniCredit did not immediately respond to a request for comment.

Short positions rise sharply as traders eye economic fallout from Iran war

Hedge funds have amassed a record number of short positions against European stocks, in a bet that the region will be hard hit by the economic fallout from the Iran war.

The number of short disclosures against stocks listed in Europe increased to nearly 12,000 in the first three months of this year, according to figures from data provider Breakout Point. That is the highest level since short disclosure rules were introduced in 2012.

Short positions are required to be disclosed when they reach 0.5 per cent of a company’s issued share capital. The figures do not equate to 12,000 individual short positions as they could include funds adjusting positions multiple times, but they are a proxy for short-selling activity.

Europe “looks shortable in a time of crisis,” said Andreas Bruckner, a European equity strategist at Bank of America, pointing to the ongoing war in Iran. The region’s stocks — previously the “key beneficiary” in “a trade of global growth” — were now “most exposed to the energy crisis that is brewing”, he added.

Hedge funds AQR Capital Management and Two Sigma Investments are among those that have raised their bets against the continent’s equities, as the war against Iran sends shockwaves through global financial markets.

AQR Capital Management currently has 128 disclosed shorts in European-listed stocks, compared with 54 a year ago, while Two Sigma Investments’ disclosed shorts have risen from three to 85 over the same period, according to Breakout Point. The rise in short positions does not necessarily imply a negative view of the European market as a whole, as some funds balance their bearish bets with long positions in other stocks.

Brent crude has surged 50 per cent to around $110 a barrel since the start of the war, while TTF, the European natural gas benchmark, is up more than 50 per cent, prompting fears of an energy shock that could fuel inflation and damage economic growth. As a net energy importer, Europe is viewed as much more vulnerable than the US, a net exporter.

The continent-wide Stoxx Europe 600 index has fallen more than 5 per cent since the start of the war, erasing most of its gains for the year.

London-listed Wizz Air became Europe’s most shorted stock last month, after warning that the war in Iran would wipe out its profits this year due to the impact of plane disruption and higher fuel prices.

Short interest in the budget airline has nearly doubled since the start of the war to 15 per cent, while its shares have tumbled by more than a quarter over the same period. Rival airline easyJet has also become a short target.

Some funds see companies exposed to the health of the UK economy as vulnerable.

Citadel is among the hedge funds that have increased bets against British brickmaker Ibstock — a longstanding short target due to the UK’s low rate of housebuilding — in recent weeks, while DE Shaw has disclosed a short position in the company, taking total short interest to more than 12 per cent. The Iran war has intensified the sector’s woes, given its exposure to interest rate volatility.

“The UK seems to be a pretty easy target for short sellers,” said Emmanuel Cau, head of European equity strategy at Barclays. It is “always an area of scepticism and negativity for investors”, he said, adding that the war’s impact on energy prices and interest rates had “revived concerns about the UK consumer and cost of living crisis”.

AI disruption fears have also hit some European equities, as short sellers target those viewed as likely losers from the technology.

UbiSoft Entertainment, the video game maker behind Assassin’s Creed, became one of the region’s most shorted stocks after it announced a restructuring and cancelled or delayed upcoming games.

How the Iran war will reshape our energy future

Fatih Birol, head of the International Energy Agency, has six predictions

Over the Easter weekend, columnist Ruchir Sharma noted that this oil crisis has hit just as governments are too broke to bail out consumers while Saudi Arabia posted the latest premium it charges for its crude — breaking all records. Of course, some traders suggested Riyadh could have asked for even more, considering the circumstances.

I spoke with Fatih Birol, the 68-year-old Turkish head of the International Energy Agency, which was founded after the 1973 Middle East oil crisis in order to manage future shocks.

In the interview, Birol urged countries not to hoard oil and fuel, since resource nationalism is only likely to make shortages worse.

He also spoke at length about how the twin oil crises of the 1970s had reshaped the world, as countries decided to build huge numbers of nuclear power plants and introduced fuel-efficiency standards for cars. Birol remembered how the UK fast-tracked new licences for the oil and gasfields in the North Sea, allowing the basin to go from “virtually nothing” to 6mn barrels per day of production in just 20 years.

I asked Birol if today’s energy crisis would also change our behaviour, and here were his six predictions:

Countries will pour money into nuclear power again

“There will be the acceleration of nuclear power through small modular reactors. We were expecting SMRs to come to market [in the] mid-2030s. It can be even faster.”

Renewables get another push

“I would like to give you one number in Europe. In the last three years, after Russia’s invasion of Ukraine, annual renewable installation increased by a factor of three.”

Consumers weigh up their next petrol or diesel car

“I expect a big push for electric cars, both for new and second-hand electric cars, including in Asia, which is the main driver of global oil demand growth.” 

Countries think twice about relying on natural gas

“The gas industry presented natural gas as a secure, reliable and affordable fuel. But what happened in 2022, after Russia’s invasion of Ukraine, and what is happening now is likely to cast a long shadow over the outlook for gas, particularly in gas-importing developing countries where the gas industry expected to import even larger volumes of gas. I think the natural gas industry will need to work hard to regain its reputation.”

Trade relationships get re-examined

“The geopolitical risk premium for energy products is going to be higher than before the conflict. Importers will look not just at the product and the price, but also assess carefully who is selling — in terms of energy security. And that can affect what fuels and technologies they prioritise and which exporters they buy them from.”

Coal is the big winner

“The oil shocks in the 1970s set off a wave of investment in coal-fired power generation. In the 10 years after 1973, coal power capacity around the world rose by 50 per cent. This time, we may well see some countries increasing the use of coal again, at least temporarily, especially in emerging economies in Asia but also in Europe and North America.”

Commerzbank Doesn’t See Basis For Deal With UniCredit Following Talks

‘An agreed solution is currently not evident,’ Commerzbank says

Germany’s Commerzbank CBK 0.19%increase; green up pointing triangle said that its interactions with UniCredit UCG 0.35%increase; green up pointing triangle haven’t convinced it to do a deal as they haven’t shown enough value upside potential.

The Italian lender, which is Commerzbank’s largest shareholder, last month ratcheted up pressure by launching a takeover offer to force management to the negotiating table.

Commerzbank on Tuesday reiterated the value-creation potential of its business strategy as a standalone entity and said it would upgrade its financial targets when it publishes its first-quarter results in May.

The banks have met several times to discuss the basis and benefits of a tie-up. “An agreed solution is currently not evident,” Commerzbank said.

Most of the potential outlined by UniCredit isn’t based on a combination and can also be realized by Commerzbank independently, without execution risks linked to doing a deal, the German group added.

UniCredit wasn’t immediately available for comment.