TheChek News Flow

Trading giant Susquehanna uses Texas Hold ’em to teach its teams to make the most of risk. We asked some traders to play and walk us through their hands.

Young traders who join the trading giant Susquehanna International spend at least 100 hours playing cards during a 10-week training program. When the stock market closes at 4 p.m., they often head straight from the trading floor to a dedicated poker room at the firm’s headquarters in the Philadelphia suburbs.

Jeff Yass, Susquehanna’s co-founder, sometimes joins in, scrutinizing hands new hires play and gauging how effectively they bluff. Thousands of employees, from traders to technologists, participate in the firm’s annual poker tournament. At least three have notched wins at the World Series of Poker in Las Vegas.

No money changes hands in Susquehanna’s games, where employees often serve as volunteer dealers. Skill at the poker table translates to respect from colleagues and bosses. It also, according to the company’s top brass, improves performance on the trading floor.

Susquehanna’s founders—including Yass, who placed 12th at a 2013 World Series tournament—say the casino game teaches traders how to take risks and throttle the competition in markets from stocks to sports betting. Poker players need to take calculated risks, make decisions based on incomplete information and think clearly under pressure, often with thousands of dollars on the line. The same can be said of successful traders.

Steve Cohen of Point72, Carl Icahn of Icahn Enterprises and Greg Jensen of Bridgewater Associates are among the Wall Street titans who are known to play. Boaz Weinstein of Saba Capital Management is a skilled card counter in blackjack and a devotee of poker and chess.

Risk-takers

To get a close look at the affinities between financial trading and poker, The Wall Street Journal invited two of these pros to the newsroom for a game of no-limit Texas Hold ’em: Todd Simkin, an associate director at Susquehanna and Jeremy Wien, founder of Moo Point Capital Management.

Simkin, who has traded, launched new businesses and trained hundreds of rookie traders since joining Susquehanna in 1997, explained how its poker playbook has applied to a growing number of markets around the globe.

“It’s good to think about the world in probabilistic terms,” said Simkin, 49, before flashing a cursory glance at his cards.

It took Simkin a fraction of a second to calculate how likely his hand was to win and decide how much to wager: He would go on to raise another player’s bet. He splashed chips toward the middle of the table while midsentence with a Journal reporter, barely breaking eye contact, and was equally quick to fold when things seemed to turn against him as the last communal card, known as the river, was unveiled. It was a seven of hearts, potentially giving an opponent a flush.

A web of probabilities shapes the worldviews of players and traders alike. Both groups continuously assess the chance of a particular outcome, based on endless morsels of information. For traders, that could include economic data or share prices. For poker players, it could be cards they’ve seen played or body language. Calculating risk becomes second nature.

That might apply to measuring the odds that a pair of jacks will beat an opponent’s hand, pieced together from a stream of clues from other players and cards that have already been dealt. At times, Simkin watched an opponent’s eyes instead of cards on the poker table, hunting for microscopic reactions to the unfolding action that would give him an edge.

Or it could be used to gauge how likely the Federal Reserve is to trim interest rates, based on reams of data points stemming from Treasurys, the derivatives market, inflation data and comments from Fed officials.

“Our goal in trading is to have an active picture of forward-looking truth,” Simkin said. “As we get new information, we update our view of truth.”

In another hand, when an opponent made a risky bet to go all-in, he reflexively called, or matched the wager, to capture all her chips with a full house—sevens over threes.

“It’s a very good model for making decisions with imperfect information,” Simkin said of poker.

Taylor Swift trades

Susquehanna was founded in 1987 by Yass and friends from SUNY Binghamton who shared his love of poker. The firm is best known for quantitative trading and market-making, continually taking the other side of trades placed by investors while capturing the difference between the buying and selling prices. In the 1990s, it branched out to traditional investments and then set up a venture-capital unit, eventually hitting the jackpot with an early bet on TikTok. Today it has more than 3,000 employees in about a dozen offices around the world, and Yass, 66, is a billionaire.

Susquehanna, which exclusively invests its own funds, not clients’, has long been a behemoth. It handled more than 22% of all U.S. equity-derivatives trades in 2023, according to research firm Alphacution, and looms large in commodities and bonds. Lately, it’s veering into other corners of a rapidly changing market, capitalizing on a U.S. boom in retail trading and legal gambling.

One of those is sports betting, which has swelled since a 2018 Supreme Court decision that led to widespread legalization. The firm is currently providing odds to sportsbooks and making markets in sports where betting is legal in Europe and the U.S., crafting strategies tied to basketball, football and soccer wagers just as options traders would.

“We want to be in as many markets as we can be in,” Simkin said. “We think we’re making good decisions that transfer from the poker table to the world of finance.”

Earlier this year, Susquehanna launched a new trading desk for bets on Kalshi, a prediction-market startup. Traders can put money on yes-or-no wagers such as whether members of Congress will be banned from trading stocks this year, or if Taylor Swift will remain the top artist on Spotify. As soon as next week, Kalshi users could be able to place bets on whether Democrats will take control of the U.S. House of Representatives in November, thanks to a federal judge’s ruling late Friday. It would mark the first time people could legally place election bets in U.S. markets, and could open the door to broader political wagers in the future.

To set the prices tied to a Taylor Swift contract, for example, the firm researched factors that lead to artists’ longevity on Spotify and the platform’s ranking system. As in poker, Simkin says he’s dealing with a combination of unknown variables and publicly available information.

Simkin said trading in these markets comes down to pricing odds, whether it’s a basketball or golf win or a move by the Federal Reserve.

In 2021, he oversaw the launch of SIG Re., a venture through which Susquehanna is making insurance deals with leagues and lotteries, protecting against the financial downside if a big sporting event doesn’t produce the windfall expected, or a lottery has to pay a jackpot. It’s not that different from writing an options contract, Simkin said, in which someone might buy an option to hedge their portfolio.

Poker has long been woven into the fabric of Wall Street.

A 2019 study by researchers at the universities of Central Florida and Alabama found that hedge-fund managers who shine in poker tournaments tend to report better investment returns.

Wien, 40, the derivatives trader who joined the Journal’s recent game, spent five weeks this summer in Las Vegas at the World Series of Poker, a pilgrimage he has made most years since 2005. This summer’s tournament drew a record 229,553 entrants.

He woke up early to trade. After the stock market’s closing bell, he headed to one of 99 World Series tournaments that take place throughout the summer at the Paris or Horseshoe casinos.

He stayed at the tables for hours, often in a hoodie from Georgetown University, his alma mater. He says he wears it to hide a prominent tell: his pulse throbbing against his neck, rising during stressful moments.

Tournaments require more patience and endurance than smaller games with friends, he said. They also offer the types of payouts he seeks as a derivatives trader. In exchange for a small payment, he gets the chance for a huge return.

Wien’s strategy entails folding an unusually large share of the hands he’s dealt and playing only plum cards that he thinks have the highest likelihood of paying out—an approach he appeared to take in our game. At a tournament, that can mean sitting for hours on end, watching other players add chips to their stacks.

What you don’t do is just as important as what you do, Wien says.

In 2018, the $5,000 he paid to enter one of the tournaments that make up the World Series of Poker morphed into more than $500,000 and a gold championship bracelet. He didn’t have the same fortune this year: He struck out on the first day of the main event.

Yet he says the patience learned playing poker has helped him endure one of the calmest stretches in financial markets of his career. Even before starting his own shop in 2021, Wien traded some of the most fickle instruments on Wall Street—derivatives tied to the Cboe Volatility Index—at Goldman Sachs and JPMorgan.

Those trades are often most profitable when swings across global markets are pronounced.

Wien’s fund, which oversees about $20 million, has been positioned for turbulence to pick up for much of this year. These trades can be painful when the stock market is steadily climbing upward, as it did for months to kick off 2024.

In August, when stocks turned south on worries about the health of the economy, he was glad he stuck with it.

“It’s worked out well,” Wien said.

Thinking in probabilities

When Tina Lindstrom joined Susquehanna out of college in 1998, she was surprised to see that it placed as big an emphasis on learning poker as it did on trading options.

Her team took long-weekend getaways to Las Vegas casinos and Boca Raton, Fla., where they played blackjack and poker, roamed resorts and sampled caviar. It was during these games that Lindstrom, now a senior derivatives trader at Marex, learned to think in probabilities.

Students in a trading class play in a poker tournament that runs throughout their 10-week training and their performance is rated based on the Sharpe ratio in their play, finance parlance for measuring the return on an investment relative to its risk. That means winning big by repeatedly going all-in isn’t as desirable as picking up chips with less risk. The trainee with the best ratio is crowned class champion.

After the training, employees are trusted with trading Susquehanna’s money.

Simkin says he frequently presses traders on actions at the poker table, as he did at the Journal’s game, in which no money changed hands. For example, he might ask why a player decided to bet based on the pair of cards in his hand. What persuaded him to bet big or small? Did she have a good hand, or was he just lucky?

In one training session, Lindstrom recalled, she and another player were the last remaining. Lindstrom studied the cards face-up in the middle of the table, rapidly deducing the permutations of those remaining undealt. After the last card was unveiled, her estimate of how likely she was to have the “nuts,” or best possible hand, skyrocketed.

But she had a hunch she could trap her opponent and decided to let her bet first before raising the wager—and winning.

The moment taught her the importance of adeptly sizing bets and going big when she had a strong hunch.

Her first year as a trader, her manager pointed out that she was being too cautious.

“They pulled me aside and said: ‘You never lose money. That means you’re not taking enough bets,’ ” Lindstrom said. “ ‘You need to bet more.’ ”

Those lessons paid off. After spotting mispricings in the commodities market ahead of the Covid-19 crash in early 2020, she picked up options that would profit if oil prices plunged over the following weeks. The contracts soared when the pandemic sent oil prices into negative territory for the first time, making the trade a big moneymaker for her investment firm at the time.

Poker, Lindstrom said, “taught me to be aggressive. It taught me to bet properly.”

Badly parked and abandoned vehicles cause frustration for local authorities

London has seen a surge in rented e-bikes this summer as private operators such as Lime and Forest expand their role in the city’s public transport network.

But the growing density of e-bikes on London’s streets has put operators on a crash course with Transport for London and local councils, which have complained about badly parked vehicles and the increasing fleet size.

The expanded coverage of e-bike schemes to London’s outer boroughs, along with improvements in cycling infrastructure, has helped shift the user base from wandering tourists to hurried commuters.

Charity CoMoUK reported in March 2024 that there were 37,694 rental e-bikes on the streets of London, compared with 27,694 in 2023.

Lime said it had seen 91 per cent growth to almost 11.5mn trips during peak commuting hours in London so far this year, from 6mn in the first three quarters of 2023.

Total monthly trips on Forest bikes have grown to more than 1mn in August, up over 200 per cent compared with the same month last year. The company said that 60 per cent of their riders are taking two trips a day. 

Wayne Ting, chief executive of San Francisco-based Lime, said London had become a template for the company’s business strategy in other cities. “If you ask Londoners, they see Lime as critical transportation infrastructure.” 

Lime operates in 230 cities including Manchester, San Francisco and Tel Aviv and has raised $1.56bn from investors including Uber and the Abu Dhabi Growth Fund since it was founded in 2017.

Forest, which was founded in London in 2019, raised $17mn in a Series A funding round last year. It claims to be breaking even and has announced plans to expand into continental Europe.

Rental e-bikes and scooters were initially considered a novelty product geared towards sightseers and casual users. But despite massive venture capital investment, many start-ups have struggled to get a foothold. Electric scooter rental company Bird, once seen as a leader in the crowded “micromobility” market, filed for bankruptcy last year.

London, however, has emerged as a viable city for e-bike operators. “They’ve become part of the transport fabric of London like black cabs and double decker buses,” said Matthew Clark, head of new mobility at Steer, a business consultancy that has worked with both private operators and TfL.

Riders are frequently turning to Lime and Forest for “first and last mile” journeys — trips to and from tube and train stations. Just under half of Londoners aged 18 to 34 hired an e-bike at least once a week, according to a survey conducted by Opinium for Lime in April. Pricing for e-bike rides varies, but Hackney council states that the average journey on a Lime bike in the borough costs between £3.50 and £4.50.

The strong uptake in shared e-bikes has led to frustration for London’s local authorities, particularly on the topic of bike parking.

Westminster city councillor Paul Dimoldenberg told the Financial Times that while there had been an agreement with Lime to allow a maximum of 2,000 e-bikes to operate within the borough, it was frequently letting in 3,000 e-bikes a day. 

“Bikes are parked in the most amazingly stupid places,” Dimoldenberg said. He added that while Lime issued fines to users who parked bikes inappropriately, the fines were pocketed by Lime itself rather than being passed on to the council.

Lime told the FT that although users may bring bikes into Westminster due to the popularity of the borough, the company does not actively deploy more than 2,000 e-bikes in the area. It confirmed that its agreement with Westminster allowed Lime to keep revenue from bike parking fines.

Tensions with councils have been on the rise. Earlier this month Brent council alerted Lime that it would begin removing bikes unless the company addressed the “havoc” it caused.

Other local authorities, including Camden Council, have raised the issue of “hacked” e-bikes being used without being paid for. Ting said Lime had addressed the problem of hijacked vehicles last year with “a fix to our hardware that solved the stolen trips issue”.

Rachel Blake, MP for Cities of London and Westminster, has called on the government to give new powers to local authorities to oversee bike and scooter hire.

TfL has also signalled that it is considering London-wide regulation to harmonise the fragmented agreements with councils. 

TfL told the FT that it was “explor[ing] a co-ordinated scheme to manage dockless e-bikes and e-scooters, and additional enforcement mechanisms for poorly parked e-bikes”.

Both Lime and Forest noted that they were working closely with TfL but remained concerned that a tightening of rules for e-bike rental, such as mandatory parking bays, would reduce active travel in the city.

TfL also recently announced it would be adding 2,000 e-bikes to its Santander shared cycle scheme. However, the Santander cycle programme, which is limited to central London, has struggled to compete with the dockless, well-funded private operators.

Tech giant pushing to bring generative artificial intelligence features to its smartphones

Apple’s iPhone 16 will launch on Monday with a next-generation chip based on Arm’s newest design architecture, marking the latest step in the Cupertino tech giant’s push to bring generative artificial intelligence features to its smartphones. 

Apple will reveal the A18 chip at its event on Monday, with the company embracing SoftBank-owned Arm’s newest V9 chip design in its smartphones, sources familiar with the matter told the Financial Times.

Apple’s adoption of V9 for the iPhone — which makes up close to half of its total revenues — represents a boost for Arm, which has a multiyear licensing agreement with Apple. Arm chief executive Rene Haas has previously said V9 brings in twice the royalties of the previous generation V8.

Arm’s chip architecture refers to a set of instructions that provide the building blocks for the chip, with the UK-based, US-listed company securing revenue through both licensing and royalties. Arm launched V9 in 2021.

Apple is already using Arm’s V9 architecture for its newest line of M4 MacBook chips, which it announced in May. It said the M4 brought a “giant leap” in performance for the next generation of its PCs, expected to be announced in the coming months.

Apple and Arm declined to comment. Apple is in the process of recasting itself as an AI-focused company, announcing a number of features in June that it collectively calls “Apple Intelligence”. 

These include a smarter Siri, custom emoji generation and photo editing capabilities using its own in-house AI models, as well as a partnership giving users free access to OpenAI’s ChatGPT and a new “Private Cloud Compute” infrastructure aimed at securing user data if it leaves their phone to tap Apple’s models.

But the increased computer demands that come from running AI models on a pocket-sized device make advances in chip technology essential. Apple Intelligence can only work on the company’s most advanced iPhone 15 Pro and Pro Max devices that have its A17 Pro chip, which uses Arm’s previous generation of architecture, the V8.

After a blockbuster IPO in September last year, Arm shares are up about 70 per cent since the start of 2024 as the company benefits from diversifying into PC, automotive and industrial chips and rides a wave of investment in AI chips. 

Investors will be watching the iPhone 16 launch closely for any further detail that Apple might give on when the features will land in front of consumers. The company has signalled that it will use a staggered approach, introducing some features first and adding other languages and regions later. 

A developer beta test of iOS 18.1, the update to iOS18 that will bring Apple Intelligence to the iPhone, is ongoing.

Toyota revealed plans to cut EV production by a third to its suppliers. The new plans include building roughly 500,000 fewer electric cars by 2026 than initially planned.

Toyota tells suppliers it plans to cut global EV production

According to Nikkei, Toyota notified suppliers of the changes on Friday, citing a slowing global EV market.

Japan’s largest automaker is lowering its global EV production goal to 1 million by 2026. The update comes after Toyota announced plans last May to sell 1.5 million EVs by 2026.

The new plans call for building 400,000 electric cars in 2025, doubling that number to 1 million by the following year.

Although Toyota is cutting EV production, it still expects a big jump in sales from the 104,018 electric cars sold in 2023. Through the first seven months of 2024, Toyota has sold about 80,000 EVs.

Toyota is notorious for its focus on hybrids. The Prius was the first mass-produced hybrid, going on sale back in 1997.

The decision mirrors similar announcements from legacy rivals, including Ford, GM, Volkswagen, and, most recently, Volvo. Several automakers now plan to use hybrids as a bridge to their next-gen electric models.

Meanwhile, Japanese rival Honda has stood by its goal of building only all-electric or fuel-cell vehicles by 2040. In May, Honda doubled its EV investments to $65 billion (10 trillion yen) through 2030 to secure a spot as the industry shifts to electric.

Honda’s first electric SUV in the US, the Prologue, just had its best sales month in the US after topping 5,000 units sold.

Electrek’s Take

Despite cutting production plans, Toyota still expects EV sales to climb significantly over the next few years.

Toyota is among several Japanese companies investing up to $7 billion (1 trillion yen) to boost domestic battery production. The move comes as Japan looks to secure a stable EV battery supply chain and move away from China or South Korea.

Toyota is expected to invest around $1.7 billion to ramp up battery output at two subsidiaries. It’s also planning a new EV battery plant in Japan to supply future Lexus electric models. The plant is slated to open by the end of 2028.

Japan’s largest automaker outlined its EV battery roadmap last year, revealing several next-gen batteries due out over the next few years.

With lower production plans, will Toyota push back battery development (again)? Toyota has been promising to launch solid-state EV batteries for years. They were first expected to hit the market in 2021, then 2022, and now it’s looking more like 2030.

As I’ve argued before, legacy automakers delaying major EV initiatives are opening the door for pure EV players like Tesla, Rivian, and Lucid to gain market share.

Even South Korea’s Hyundai and Kia are outpacing legacy rivals with affordable, long-range, fast-charging EVs covering most segments.

With many automakers adjusting their EV plans, it will be interesting to see how the market plays out over the next few years. I wouldn’t bet against those doubling down on EVs and the supporting tech.

Although most have cited a slowing market for the adjustments, EV adoption is still expected to climb rapidly over the next few years.

Pavel Durov may not be the last internet billionaire to run afoul of European authorities.

To be sure, the Telegram CEO was arrested by French police, not the European Union. But the EU has jumped ahead of the global regulatory curve with two sweeping pieces of legislation: the Digital Services Act, or DSA, which took effect for a dozen “very large online platforms” a year ago, and the AI Act, which just hit the books in August.

With a market of 450 million customers and annual gross domestic product around $15 trillion at stake, the titans of global tech will have to take notice. “I think becoming global regulator by default is part of the EU’s plan,” says Jacob Mchangama, founder of Denmark-based free speech advocate Justitia.

European Commission enforcers have hit the ground running, relatively, on DSA. They are investigating Meta Platforms’ Facebook and Instagram for deceptive ads and “visibility of political content,” online marketplace AliExpress for permitting illegal content, and TikTok for “addictive design.” (No. Really?)

The subject of the most advanced probe is—no surprise here—Elon Musk’s renamed X. In July, Brussels handed down a preliminary finding that the “blue check mark” that X awards to supposedly verified users is deceptive.

The DSA doesn’t empower regulators to censor social media directly. The commission would have to “jump through many hoops” before enacting the sort of summary shutdown that Brazil lately ordered for X, says Jan Penfrat, senior policy advisor at European Digital Rights.

The platforms themselves need to formalize guidelines and report on how they are moderating “systemic risks.” Some of these sound pretty slippery slope-ish, though, like “negative effects on civic discourse.”

“There is a threat of creeping unintentional stifling in the DSA,” says Julian Jaursch, lead for platform regulation at Berlin-based NGO Interface.

The conduct of Thierry Breton, who has overseen the DSA rollout as the EC internal markets commissioner, has exacerbated that threat, says Daphne Keller, director of the program on platform regulation at Stanford University’s Cyber Policy Center.

Breton publicly warned Musk, hours before the X owner’s recent live interview with Donald Trump, to ensure “that all effective mitigation measures are put in place regarding the amplification of harmful content.” After Hamas’ Oct. 7 attack on Israel, he urged a number of these large online platforms to be “very vigilant” about complying with EU content guidelines.

“Breton’s letters are a catastrophic example of the DSA working badly,” Keller remarks.

At the very least, the EU’s superregulations will be a costly pain in the neck for Big Tech. The DSA, among much other paperwork, requires the platforms to conduct an annual external compliance audit. “This is an exhaustive look at platform operations that is extremely expensive,” Keller says.

The law’s true Pandora’s box is a right for any user whose content has been removed, or whose complaint about someone else’s content is ignored, to appeal to an “out of court dispute settlement” body, at the platform’s expense. The large online platforms have logged more than nine billion such decisions within the EU since the DSA took effect, Keller reports. No data yet on the number of appeals.

Compliance won’t come cheap with the AI Act, either, which requires robust documentation on the data sets used to “train” artificial-intelligence systems, says Florence G’sell, leader of the digital governance and sovereignty chair at France’s Sciences Po. “You have to have a very good legal team even to understand the regulations,” she observes.

Get Ready for the New Nuclear Age. It Could Help Solve America’s Electricity Problems.

Artificial intelligence and electric vehicles are devouring enormous amounts of electricity. Constellation Energy and Vistra could benefit.

Just south of Harrisburg, Pa., on a narrow island in the Susquehanna River, something extraordinary is taking place. The Three Mile Island nuclear plant, scene of a historic radioactive meltdown in 1979, is quietly getting prepped for a second chance. Within three or four years, the plant’s one undamaged reactor may start up again, heralding a new era in American energy.

Just south of Harrisburg, Pa., on a narrow island in the Susquehanna River, something extraordinary is taking place. The Three Mile Island nuclear plant, scene of a historic radioactive meltdown in 1979, is quietly getting prepped for a second chance. Within three or four years, the plant’s one undamaged reactor may start up again, heralding a new era in American energy.

“It would be incredibly symbolic,” says Joe Dominguez, CEO of Baltimore-based Constellation Energy, which owns the Three Mile Island reactor. The 1979 accident taught the industry “hard lessons” about how to make nuclear power safer. Now, Dominguez says, it can “also be the birthplace for this renewed interest in nuclear power.”

The stars are aligning for a nuclear power revival in the U.S. The government is funneling billions of dollars into the industry, tech luminaries like Bill Gates and OpenAI’s Sam Altman are backing new companies, and public support for nuclear power is firmly on the rise.

One sign of the industry’s rebound is Constellation’s stock price. The nation’s largest owner of nuclear power plants was begging state regulators for bailouts just a few years ago; now it’s thriving, and its stock is up 70% in the past year. There’s reason to believe that shares of Constellation and peers like Texas-based power producer Vistra will keep rising as government support increases and utilities boost payments to nuclear plant owners. Other publicly traded nuclear players, such as Canadian mining and nuclear-tech company Cameco, could also benefit as demand for uranium rises.

The rebound has come just as the nuclear age looked to be in its twilight. America’s 94 nuclear reactors generate 18.6% of U.S. electricity, enough to power 72 million homes. They’re the largest single source of carbon-free energy in the country. But nuclear’s share of total electricity generation has been ebbing for years, after peaking above 20% in the 1990s. A dozen U.S. reactors shut down from 2012 to 2021.

The tide is turning. Six reactors slated to close from 2021 to 2025 have been saved through state and federal action. And three reactors that were closed and decommissioned may be restarted, which has never happened before. Gates’ nuclear company, TerraPower, is preparing the site of a retired coal plant in Wyoming for a new reactor with more than $2 billion in government financing, and two Altman-backed companies are testing nuclear technologies. The Biden administration has announced a goal to triple the nation’s nuclear capacity by 2050.

The biggest reason for nuclear power’s resurgence is that U.S. electricity demand is growing after more than a decade of flat power consumption. In some areas, demand is exploding. Electric vehicles, data centers powering artificial intelligence, and new factories fueling a “Made in the U.S.A.” industrial boom all need enormous amounts of electricity. Utilities are scrambling to secure reliable power, and they’re willing to pay up for it. The electric grid operator covering the mid-Atlantic and Midwest agreed in July to boost capacity payments to power plant owners ninefold, a multibillion-dollar windfall.

In past centuries, that new power might have come from coal. But America’s climate goals favor sources that don’t emit carbon dioxide, and that points to nuclear, solar, and wind. Among those, nuclear stands out as a clean source that can run whether the sun shines or the wind blows.

“We need hundreds of Hoover Dams’ worth of firm power if we’re going to make this energy transition, and we’re not in dam-building mode anymore,” says Katy Huff, a University of Illinois professor who was the highest-ranking nuclear power official at the Department of Energy until she left in May.

Huff’s time in government was remarkably fruitful for nuclear energy policy, with plant closures stemmed and older facilities upgraded to improve performance.

Still, there’s a large caveat to this story of a nuclear renaissance. Even as the Biden administration and state governments have saved plants from closing, and urged owners of defunct sites to start them up again, the country’s larger targets look daunting. Tripling nuclear capacity would necessitate building about 200 large-scale reactors. Yet not a single new one is under construction today. Even if a project were to be announced before the end of the year, it would probably take a decade to plan and build.

The most important players in the industry—utilities with the heft and expertise to build reactors—aren’t ready to commit to big projects, despite increasingly generous federal and state subsidies. The DOE acknowledged in one report that the industry is “stuck in a stalemate” that may not break without more taxpayer backing or innovative funding models.

The U.S., which has more reactors than any other nation, is on the verge of falling behind. Around the world, 64 reactors are being constructed. China is building about 30 of them and has lately been approving new reactors at a rate of 10 or more a year. France, Russia, and South Korea have ambitious government-supported plans of their own.

Taking a Cue From Eisenhower

For most of the history of nuclear power, the U.S. led the development and deployment of the technology. The commercial nuclear reactor industry grew from the Department of Defense’s World War II era atomic weapons program, and its basic components haven’t changed dramatically. Inside nuclear reactors, uranium-filled tubes power a process called fission, where neutrons collide with uranium atoms, releasing energy and spurring more reactions. U.S. reactors use water to help control temperatures. And heat produced by reactors turns water into steam, which spins turbines and generates electricity.

President Dwight Eisenhower dedicated the first nuclear plant in Shippingport, Pa., in 1958 with a speech celebrating America’s ability to “put the atom to work for the good of mankind, not his destruction.” By the 1960s, the U.S. was building dozens of plants capable of keeping lights on at millions of homes.

The rollout wasn’t always smooth. Nuclear energy has long been controversial because it’s inextricably connected to nuclear weapons in the public imagination. Safety processes have improved but have not fully quashed fears of radioactive leaks. Some of those fears were realized in 1979 when one Three Mile Island reactor partially melted down. The incident forced evacuations and raised health concerns, though the Nuclear Regulatory Commission said the accident’s “small radioactive releases had no detectable health effects on plant workers or the public.” The Chernobyl and Fukushima accidents in 1986 and 2011, respectively, were more devastating, and slowed the rollout of new plants.

There have been other problems, too. The government hasn’t figured out where to store nuclear waste generated by the plants. Americans don’t want it in their neighborhoods or trucked through them, and much of it sits encased in concrete near to the reactors. Concerns about radiation and radioactive waste were among the reasons the rollout of new reactors slowed in the late 1970s. The total number of reactors peaked at 112 in 1990 and has declined since.

In recent years, economic pressure has been the biggest factor forcing nuclear plants to close. Natural gas grew into the largest source of electricity-generation in the country. Cheap gas and growing renewable power drove down wholesale electricity prices, making it difficult for nuclear plants to compete at auctions where utilities buy electricity. The Three Mile Island reactor not involved in the meltdown closed in 2019 for financial reasons. At the time, it was losing over $100 million a year, Dominguez says.

The biggest shift since then has been the change in government support for nuclear power. The Inflation Reduction Act included nuclear tax credits that rival support for wind and solar. Those credits essentially create a floor for power prices paid to nuclear plants, which is well above operating costs. The DOE has also directly funded reactors that were on the brink of extinction. Diablo Canyon, California’s last nuclear plant and the source of 9% of the state’s electricity, was slated to close its two reactors this year and next, but $1.1 billion worth of federal funding will help keep it open for several more years.

Government leaders may be following public opinion. Pew Research Center found that 57% of Americans supported adding more nuclear plants in 2023, up from 43% in 2020. Support is higher among Republicans, but Democrats are increasingly warming to the industry.

“You’re seeing a generational shift—from people who grew up when nuclear energy was conflated with nuclear weapons programs, to younger people who don’t have that kind of history,” says John Wagner, director of the Idaho National Laboratory, a government-run facility that was the birthplace of nuclear-powered electricity 75 years ago. It’s now hosting experiments for new nuclear-power technologies.

The new generation has its own existential fear—climate change—and it increasingly sees nuclear power as a solution. While solar and wind power production is growing, it’s intermittent, and most lithium batteries operate for just four hours at a time—not enough to get Americans through the night.

Politicians around the world are embracing nuclear power. At the COP28 climate conference in Dubai last December, more than 20 countries, including the U.S., agreed to try to triple nuclear capacity by 2050. The signatories included Japan, which had suspended all of its nuclear plants after Fukushima.

Sizing Up the Winners

“It has been a fascinating time, probably the best supply/demand fundamentals I’ve seen in 40 years in this business,” says Cameco CEO Tim Gitzel. Cameco is now reopening uranium mines it shut after the Fukushima disaster. The company’s stock has risen with uranium prices. Analysts see earnings roughly doubling next year. That scorching growth rate isn’t fully reflected in shares, which trade at 29 times their estimates.

The other big winners in the nuclear revival are owners of existing reactors; they’re poised to benefit from rising power prices. Constellation and Vistra are in particularly good shape because they operate as independent power producers whose profits aren’t regulated like traditional utilities. Their reactors are becoming more profitable, and their stocks trade at multiples below the market average.

They also may have the potential to increase their nuclear capacity without going into debt to build new reactors. Constellation’s Dominguez thinks his company can add 1.5 to two gigawatts worth of capacity—about as much as the Hoover Dam—by modernizing existing plants and restarting mothballed ones.

The first test case of whether an old reactor can be restarted is unfolding in Michigan. Holtec International, a company that normally makes money from decommissioning nuclear plants, is now planning to reopen a shuttered reactor at a site known as Palisades, on the banks of Lake Michigan.

Patrick O’Brien, Holtec’s director of government affairs and communications, says the company had not expected to reopen the reactor when it took over the site from utility Entergy in 2022. But Michigan Gov. Gretchen Whitmer’s office insisted they consider it, and the state was willing to put up part of the money to make it happen. Michigan has committed to decarbonizing its electricity grid by 2040. Officials there realized that leaving out Palisades, which can serve 800,000 customers, would be a major setback. Achieving the state’s climate goals “would be really hard without bringing this facility back on-line,” says Kara Cook, the state’s chief climate and energy strategist.

The state has pledged $300 million to support Palisades, and the federal government has conditionally approved a $1.5 billion loan guarantee. Depending on the speed of permitting, Palisades could come back on-line by October 2025. The company is also applying to build two small reactors, potentially generating enough power for about 500,000 additional people.

Not everyone is cheering. The Sierra Club argues that reopening Palisades means that more dangerous nuclear waste will be stored along the Lake Michigan shore. The environmental organization also says the state is wasting money that could be spent on better options, including a speedier rollout of solar and wind.

Three Mile Island could be the next decommissioned site to reopen. A recent engineering assessment yielded good news. “The equipment was in just as good a shape as when we prematurely shut it down in 2019,” Dominguez says.

If the company moves ahead, the restart could take 36 to 48 months, he adds. NextEra CEO John Ketchum told investors recently that his company is “looking at” reopening a decommissioned Iowa reactor.

Upgrading and restarting existing plants might add 5% or so to nuclear capacity over the coming decade. To meet the government’s goal of tripling capacity, America would have to embark on an effort several times as big as the Manhattan Project and sustain it for decades. It would cost hundreds of billions of dollars and require training as many as 375,000 workers.

Recent history doesn’t bode well for that. In the past 28 years, the U.S. has built just three nuclear reactors. Two of them—located near Augusta, Ga.—started operating in 2023 and 2024, respectively. At their opening, DOE Secretary Jennifer Granholm declared hopefully, “Two down, 198 to go!”

Lessons From Georgia

The next 198 won’t come easily. The Georgia reactors, known as Vogtle 3 and 4, offer a cautionary tale. Originally expected to open in 2016 and 2017, they faced extensive delays and cost overruns that were estimated to be as high as $20 billion. Westinghouse, which designed the reactors, filed for bankruptcy protection midway through the project. Sometimes, reactor parts that had been shipped to the site wouldn’t fit together correctly, says Joe Klecha, who oversaw part of the construction process for owner Southern Co.

SO Klecha says the basic problem is that building the first version of a new industrial facility is always difficult, and tends to be plagued by delays and cost overruns. Cost savings start to kick in after enough nuclear reactors have been built that the construction teams have ironed out the problems. He now works for a start-up called The Nuclear Company that’s looking to seed development of several large standardized reactors.

Much of the cost overruns in Georgia will have to be paid by ratepayers, who already have been facing rising electricity prices. That leaves Georgia regulators with a dilemma. New data centers and factories are causing electricity demand to spike beyond their previous projections, but they’re wary of approving new plants without protections for customers. “We have the experience to build more [large nuclear] units, and we need the capacity,” wrote Tim Echols, vice-chair of the Georgia Public Service Commission, in an email to Barron’s. “But we cannot do it like we did before—we need assurances.”

The question now is who will provide that assurance. In countries with the most aggressive nuclear programs, such as China, the government has bankrolled programs that pay for teams of workers to travel from site to site, building identical reactors quickly and efficiently. They can now build reactors in seven years or less at a fraction of the cost as in the U.S.

The U.S. has done things differently, offering grants and loan guarantees to private companies. The DOE’s Loan Programs Office is reviewing $65 billion worth of loan applications for various kinds of nuclear power projects.

The funding already has sparked a flurry of innovation and competition. Some companies are working on new designs for reactors that use novel methods to produce and store nuclear power, and can be built rapidly in modular segments. The new companies include TerraPower, founded by Gates in 2008, and Oklo, a public company chaired by OpenAI’s Altman. The companies say they can operate more efficiently and safely than most existing players, but they are years away from producing reactors. Neither has received approval for their designs from the Nuclear Regulatory Commission.

The U.S. may have erred by lending money to several competing companies rather than directly funding a massive buildout of cookie-cutter reactors, some argue.

“I think their heart was in the right place,” says Seth Grae, chairman of the American Nuclear Society’s International Council and CEO of nuclear tech company Lightbridge. “But in terms of cold reality, the other countries made a better decision. The U.S. can catch up and can do well, but we’re kind of in a rush, because we needed the energy yesterday.”

The DOE didn’t respond to Grae’s criticisms. Huff says the department recognizes that direct funding is a “much more reliable strategy” to build nuclear quickly, but the approach is limited by congressional appropriations.

Nonetheless, Huff and other officials see a way forward for nuclear that may involve some unusual players. Big tech companies have gotten particularly interested in nuclear power for data centers and other applications. Nuclear reactors can support huge power needs, including the most demanding AI applications, without adding to carbon emissions. All of the big tech firms have goals to emit less carbon but are finding that challenging as they invest in power-hungry AI. To control their emissions, the tech giants have found they can no longer be passive electricity consumers.

Microsoft has been hiring nuclear experts, and seems willing to experiment. The company agreed to buy nuclear energy as soon as 2028 from an Altman-backed start-up called Helion that’s working on nuclear fusion—a technology most experts think is many years from commercialization. And earlier this year, Amazon.com agreed to a deal with power producer Talen Energy to connect its data centers directly to an existing Pennsylvania nuclear plant, bypassing the grid. That agreement won’t add to the country’s nuclear fleet—in fact, critics argue that it will reduce power available to other customers—but it shows that nuclear is on the radar.

Other agreements could lead to new reactors being built. Alphabet, Microsoft, Amazon, and steel maker Nucor are partnering with North Carolina–based utility Duke Energy to explore new financing mechanisms “designed specifically to lower the long-term costs” of nuclear power and other clean sources. That could include committing to “tariffs” that would provide some of the money for the new plants. Duke hasn’t yet announced new plants, but the utility may need nuclear to cover its escalating power needs. Duke added more customers than ever last year, and its expectations for new electricity demand by 2030 are eight times as high as they were just two years ago. “New nuclear undoubtedly will play a role in Duke Energy’s clean energy future,” says Kelvin Henderson, Duke’s chief nuclear officer, in a statement to Barron’s.

The tech companies declined interviews about their strategies. Some nuclear experts are skeptical they’ll foot enough of the bill to jump-start nuclear construction without more government help. Nonetheless, economic and environmental imperatives have come together to put nuclear energy back in the spotlight. The next couple of years will determine whether the technology is once again ready to shine.

Farmers fear for livelihoods as government struggles to stem worst outbreak of virus in decades

Italian pig farmers have warned swine fever is threatening the country’s €8.2bn prosciutto, sausage and pork delicacies industry and their own livelihoods, as Giorgia Meloni’s government battles to stamp out the country’s worst outbreak since the 1960s.

Health authorities last month banned the transport of live pigs within a 21,000 sq km containment zone in northern Italy’s pig-producing heartland. The tough restrictions have left hundreds of farmers with about 700,000 unwanted animals, accounting for roughly 7 per cent to 8 per cent of Italy’s annual pig production.

“There is only one word that can describe the mood of the farmers now: terrified,” said Rudy Milani, president of Confagricoltura Swine Producers, a farmers’ association. “We are in a big sea with a strong wind, that is for sure. We have to survive the storm.”

Italy is home to about 8.7mn domestic pigs, and nearly 50,000 people are employed in the pork products industry. Sales of prosciutto, cured sausages and other foods generate about €8.2.bn in revenues a year, according to official statistics.

More than 50,000 pigs have been culled in Italy since mid-July, with the highly contagious African swine fever virus detected on more than 25 farms in the northern regions of Lombardia and Emilia-Romagna.

About 180 Italian soldiers, supported by drones equipped with thermal imaging cameras, have been deployed to help track movements of wild boar in the buffer zone between the affected region and areas where the virus has not been detected.

Italian agribusiness association Confagricoltura, which estimates the outbreak has cost farmers €40mn in direct losses and €75mn in indirect losses, has appealed for government compensation to assist those affected. But Rome has yet to make any commitment.

Swine fever does not affect human health but is nearly always lethal in pigs. The virus is highly resilient and can spread not just via infected animals but also on shoes, car tyres and even in cooked meats.

“All the farmers and colleagues looking inside the affected area are worried that what has happened there could happen to us,” said Milani, whose farm is not within the containment zone. “It takes very simple mistakes to spread the problem.”

Giovanni Filippini, Italy’s newly appointed extraordinary commissioner for swine fever, has sought to calm the panic, insisting the tough new restrictions on swine movements should stop the outbreak.

“The situation is complex, but it is certainly under control,” Filippini told reporters this week. “We are very determined in our application of preventive measures with the objective of limiting the circulation of the virus.

“We are asking great sacrifices of the [pig] breeders . . . the veterinary system, the regions involved, but we are determined to reach our goals,” he added.

But Filippini said Italy urgently needed to reduce its huge population of wild boar, which have been the main reservoirs of a virus first detected on the Italian mainland in January 2022.

Boar were nearly extinct in Italy at the end of the 19th century but were reintroduced in the 1950s to meet demand from sports hunters and now number an estimated 1mn-1.5mn. Filippini told Italian radio this week the country needed to cull more of the animals.

In May, the government approved a plan for 177 Italian soldiers to hunt the animals as part of a plan to reduce their population by 80 per cent over the next five years. But the proposed mass cull has encountered strong resistance from the hunting lobby — keen to maintain the lure of Italy as a destination for wealthy foreign sports hunters — and environmentalists.

The EU’s Veterinary Emergency Team — which carried out a mission to northern Italy in early July — also warned that hunting wild boar in regions where the virus was in circulation could backfire by frightening the animals into migrating elsewhere, carrying the virus with them.

“Hunting measures can have a counterproductive effect . . . and lead to the spread of the disease if not co-ordinated,” the EU team warned in its report last month. “It is recommended to hunt only in areas where the virus has not arrived . . . Hunting is just a tool and not the solution.”

Instead of trying to hunt infected animals, the EU experts advised Italy to urgently allocate more money and personnel to build fences to stop infected boar from moving into new areas, such as Tuscany.

“The epidemic seems to be moving faster than the fencing,” the report warned. “Fencing is behind schedule and may not have the desired effect of stopping the spread of swine fever to uninfected areas.”

China’s foreign-exchange reserves rose last month, boosted by a valuation gain from a weaker U.S. dollar amid prospects for rate cuts by the U.S. Federal Reserve.

Data released Saturday by the People’s Bank of China showed that the FX reserves rose by $31.8 billion last month to $3.288 trillion at the end of August, marking a second monthly gain for the world’s largest hoard of foreign exchanges and hitting the highest level since December 2015. That undershot the $3.298 trillion expected by economists in a Wall Street Journal poll.

The U.S. Dollar Index fell and global financial asset prices rose in August thanks to factors including macroeconomic data and monetary-policy expectations in major economies, China’s foreign-exchange regulator said in a statement on Saturday. Due to the combined effects of changes in exchange rate and asset price, the scale of China’s foreign-exchange reserves increased that month, the regulator said.

Against the backdrop of a weaker dollar, the Chinese yuan’s strong performance since late July has stoked fears that Chinese exporters might rush to unload their huge stockpile of dollars for the Chinese currency, a move that economists say could result in wild swings in the foreign exchange market and aid the yuan’s further appreciation against the greenback.

The Chinese yuan gained 1.9% against the dollar in August, marking its biggest monthly rise since November. USD/CNY has fallen below the key 7.10 threshold in recent days, reaching year-to-date lows.

While calculations vary, economists widely expect Chinese exporters to have amassed hundreds of billions of dollars since 2022 amid booming Chinese exports and rate hikes in the U.S. Some analysts say concerns of massive dollar unloading are overblown, shrugging off the possibility of a “tsunami” of dollar sales in the near term given the still-large U.S.-China interest-rate gap and China’s muted economic growth.

“The higher volatility of USD/CNY in the near term reflects greater uncertainty around Fed views and the U.S. election, which may discourage CNY shorts despite the still-elevated carry return,” said economists at Goldman Sachs in a recent note. While carry unwinds and potential USD selling by exporters could potentially lead to an overshoot in CNY strength in the short term, Goldman Sachs’s economists expect the Chinese currency to underperform currencies of major trading partners over the medium term, due to weak fundamentals and still-downbeat sentiment in China.

While the Fed’s soon-to-start easing circle is set to offer China more policy rooms, economists say Chinese authorities have little appetite for an overly strengthened yuan which could bite exports, a key growth driver for the world’s second-largest economy this year amid faltering domestic demand.

“Chinese policymakers are likely to allow for more CNY depreciation, in the event of significant tariff hikes and escalated trade tensions,” said economists at Goldman Sachs.

Meanwhile, Saturday’s data shows China’s central bank also paused its purchase of bullion for the fourth straight month in August, with an unchanged holding of 72.8 million troy ounces at the end of last month. The PBOC in May put an end to its 18-month buying spree that had helped boost the strength in bullion. The precious metal’s price hit a record high during the summer amid rising bets on monetary easing from the Federal Reserve and persisting haven demand driven by geopolitical tensions and economic uncertainties, with global central banks among some of the most enthusiastic buyers.

Meta on Friday published an update on how it plans to comply with the Digital Markets Act (DMA), the European law that aims to promote competition in digital marketplaces, where the law concerns the company’s messaging apps, Messenger and WhatsApp.

As Meta notes in a blog post, the DMA requires that it provide an option in WhatsApp and Messenger to connect with interoperable third-party messaging services and apps. Meta says it’s building notifications into WhatsApp and Messenger to inform users about these third-party integrations and alert them when a newly compatible third-party messaging app comes online.

The company also says it’s introducing an onboarding flow in WhatsApp and Messenger where users can learn more about third-party chats and switch them on. From the flow, users will be able to set up a designated folder for third-party messages or, alternatively, opt for a combined inbox.

In 2025, Meta will roll out group functionality for third-party chats, and, in 2027, it’ll launch voice and video calling in accordance with the DMA.

And at some unspecified point in the future, Meta will bring “rich messaging” features for third-party chats to WhatsApp and Messenger, like reactions, direct replies, typing indicators and read receipts, the company says.

“We will keep collaborating with third-party messaging services in order to provide the safest and best experience,” Meta wrote in the post. “Users will start to see the third-party chat option when a third-party messaging service has built, tested and launched the necessary technology to make the feature a positive and secure user experience.”

The upcoming WhatsApp and Messenger interoperability features aren’t a slam dunk necessarily. As we’ve reported previously, it’s not clear whether other major messaging operators, such as Viber and Telegram, will support them. WhatsApp will require end-to-end encryption to enable interoperability, which could also present technical roadblocks. Plus, Meta requires that companies sign an agreement — the details of which haven’t been made public — to integrate with any of its systems.

Open source messaging protocol Matrix’s founder Matthew Hodgson, for one, noted in a talk this year that Matrix will work with WhatsApp, end-to-end encryption intact, “on an experimental basis.”

Meta is attempting to meet its obligations under the DMA’s messaging-related clauses, but the company has come under fire for allegedly violating other components of the legislation.

This summer, the European Commission said that Meta’s “pay or consent” ad model, which offers EU users of Facebook and Instagram a choice between a paid, ad-free experience or a free, ad-supported version, failed to comply with the DMA.