TheChek News Flow

The bloc struggles to keep up with US spending on high-tech equipment and facilities

Business investment in the US is on track to rise more than three times faster than in Europe in the six years since the pandemic, according to forecasts that highlight the AI-driven gulf opening between the two economies. 

Corporate spending on new equipment and facilities in the US is projected to increase 40 per cent in real terms between 2021 and the end of next year, according to forecasts from Oxford Economics.

The consultancy said surging outlays on AI equipment were key drivers in its forecasts. The US surge compared with a real-terms increase of just 12 per cent in the euro area, while German business investment is expected to have all but stagnated over the same period.

The figures underscore the challenge facing Europe as it struggles to keep up with the explosion in American spending on high-tech equipment and facilities. The continent was lagging behind the US’s booming IT investment even before the rise of large language models that started with the launch of ChatGPT in late 2022. 

But they also raise questions for the US itself as it bets heavily on AI when the Bank for International Settlements and other institutions are warning of the rising risk of a costly “investment bust”. Google, Meta, Microsoft and Amazon are on track to invest more than $725bn in 2026 alone as they dash to build more AI infrastructure. 

The Oxford Economics forecasts show that Europe has made little, if any, progress in closing its investment gap since former European Central Bank president Mario Draghi published a landmark report on competitiveness in September 2024. 

Draghi warned that digitalisation, decarbonisation and higher defence spending required an “unprecedented” surge in investment to levels “last seen in the 1960s and 70s”. The increase needed was bigger than the investment push from the Marshall Plan after the end of the second world war, he said.

“The US is a more dynamic economy, more entrepreneurial, so it is moving faster and there are more rewards with the AI race,” said Daniel Harenberg, an economist at Oxford Economics. “Europe is much slower.” 

Europe also faces a large and growing productivity gap with the US. “The United States has recently pulled further ahead of Europe,” Bart van Ark, a professor at the University of Manchester, told ECB policymakers at the ECB Forum in Sintra this summer.

According to van Ark’s analysis, GDP per hour worked increased $14 in the US between 2018 and 2025, compared with just $2 in Europe. “The gap is not only a digital sector story,” added van Ark, stressing that the US outperformance also extended to other sectors, including wholesale and retail as well as professional services. 

But van Ark argued that higher investment in itself was unlikely to fix Europe’s productivity woes. Europe’s “deeper problem” was that innovation is “not properly connected” to the adoption of new ideas and tools by businesses in different sectors.

ECB president Christine Lagarde warned in a speech last year that the region’s manufacturing-dependent growth was “geared towards a world that is gradually disappearing”.

Europe has been one of the first jurisdictions globally to enact strict laws regulating the use of AI, with its 2024 AI Act becoming “the first-ever legal framework” on the technology, according to the European Commission.

Critics have warned that stringent rules can stifle innovation and discourage AI investments. “We are out of step with a shifting world,” said French President Emmanuel Macron in a speech two years ago, warning that Europe was “over-regulating” and “underinvesting”. 

Karsten Junius, chief economist at Bank J Safra Sarasin, said that “Europe has missed out on the latest wave of cutting-edge technology”.

The US investment boom is hugely reliant on continued spending on AI, however, leaving it vulnerable to a correction if returns fail to meet expectations. The Bank for International Settlements, which advises central banks, in June warned of a prolonged “investment bust” if returns from AI spending fail to match expectations. 

Junius said he was confident that Europe’s vast investment gap with the US was at least partly a temporary phenomenon. 

“AI investment in the US is not going to continue at this scale indefinitely,” he said, adding that investment cycles in IT and semiconductor technology existed in the past, “and we’ll continue to have them”.

But the problem was made worse by less innovation and agility in Europe, which Junius said he partly attributed to ossified labour markets.

“If Europe fails to catch up in cutting-edge technology, our relative standard of living compared with the US will continue to erode,” he said.

Ties between Swiss bank and Record soured but UK partner remains as manager, according to insiders

UBS has discussed overhauling the management of a $1bn sustainable finance fund that works with development agencies such as the World Bank amid concerns about UK investment partner Record’s push into private markets.

The Swiss bank has in recent months held discussions about whether it needs to find an alternative manager for the fund, according to people familiar with the matter, despite obstacles to moving a fund with illiquid investments that could affect development projects in emerging economies.

UBS recently completed a review of the fund, deciding to stick with the strategy and retain Record as manager, according to people familiar with the matter. But discussions about Record’s role are “likely to continue”, one of the people said.

“They’re looking for a new home but this needs time . . . to find a new manager and a new vehicle,” said another person familiar with the fund.

The $1bn fund is one of UBS’s largest sustainable investment strategies and one of the few of its kind operated by a private institution, allowing agencies such as the World Bank and African Development Bank to hedge currency risks on development loans. The capital to take on this risk is provided by wealthy UBS clients.

The relationship between UBS and Record has soured following a change of direction at the UK-listed company, which has recently moved beyond its core currency hedging business towards higher-fee areas such as managing private equity, infrastructure and private debt assets, according to people familiar with the matter.

Record has attempted over the past three years to expand into private markets through initiatives that include a sharia-compliant supply chain finance fund, as well as a $2.2bn agreement to finance a potash mine operation in the Democratic Republic of Congo. People familiar with the projects say neither has progressed.

Options discussed by UBS have included replacing Record as manager of the fund, which has delivered 5.7 per cent in annualised returns in the five years to July 2026, according to people familiar with the matter. The bank has also weighed less dramatic changes, including bringing in different managers to perform some functions currently handled by Record, the people said.

Record, a Windsor-headquartered specialist in currency hedging, was founded by Neil Record, a UK Conservative party donor who backed Kemi Badenoch’s bid for the party’s leadership and also chairs climate action-sceptical group Net Zero Watch.

Its failure to attract more assets to the UBS fund beyond the money initially raised by UBS was also a factor in the discussions, the people said, adding that UBS wealth clients still account for about 95 per cent of the total assets.

UBS said: “We recently completed a review of the Emerging Market Sustainable Finance Fund as part of our regular oversight process. The review confirmed our continued conviction in the fund, its portfolio managers and the strategy, which has exceeded expectations since launch.”

Record declined to comment on its relationship with UBS, but said its private markets projects had “no impact on the resourcing or focus” of the team running the emerging markets finance fund, which had shown “strong performance”.

The discussions highlight the challenges for large banks in overseeing specialist external managers as they expand into private markets such as private equity, infrastructure and private credit, where investments tend to be more complex and illiquid.

UBS in 2022 also helped launch a technology-focused fund with private credit firm Blue Owl, which has suffered significant withdrawals after the bank told some clients to cut exposure to the sector, the FT previously reported.

In June, Record reported a 23 per cent fall in profit after tax for the 12 months to March 2026 and cut its final dividend. It has said private markets will drive revenue and earnings growth over the medium term but its shares are down about a fifth this year.

Neil Record stepped down from his eponymous firm in 2023 but remains its largest shareholder.

US supermajor and LyondellBasell among suitors as UK group looks to shed underperforming plants and refocus on oil and gas

Shell has drawn interest from potential bidders including ExxonMobil and LyondellBasell for its multibillion-dollar US chemicals assets, as the UK oil major looks to offload underperforming parts of its operations.

Shell’s US chemicals plants are located across four sites in Louisiana, Texas and Pennsylvania, producing a wide range of chemicals for use in plastics, detergents and pharmaceuticals.

The sites include the vast Monaca, Pennsylvania, complex, which started operations in 2022 and in which Shell has invested $14bn of capital, and which produces up to 1.6mn tonnes of polymers a year.

Bidders including Exxon, Lyondell, private equity group Apollo and the chemicals arm of state-owned Kuwait Petroleum Corporation have expressed interest in the assets, according to people familiar with the matter.

The interested parties submitted non-binding indicative offers for the assets last month, the people said, with the approaches including proposed acquisitions of both the whole business and parts of it. Cumulatively, the assets could fetch as much as $8bn, the people added, noting that there was no guarantee the sale process would result in a transaction.

That price would represent a steep discount to the amount of capital Shell has invested in its US chemical facilities. The energy major is also working with advisers to market its chemical assets in Europe, although those are likely to be worth far less, according to some of the people.

Wael Sawan, chief executive, said last year that Shell had deployed $45bn of capital “that is underperforming for us”, split between its chemicals business and its renewable energy arm.

The company said in March last year that it did not feel it was the “natural owner” of its chemicals portfolio and said it wanted to reduce its exposure by 2030.

Until this year, when the war in the Middle East triggered a surge in prices, the company’s chemicals unit was lossmaking despite Sawan’s efforts to trim costs. However, he said in February that Shell would “be patient” because it did “not want to be selling at bottom-of-cycle conditions”.

Shell’s exit from chemicals comes as other oil companies, including Chevron, the Abu Dhabi National Oil Company (Adnoc) and Saudi Aramco have expanded or considered expanding their investments in the sector in an effort to own more of the oil value chain, from pumping crude to eventually producing plastics and other chemicals.

While demand for road fuels is expected to decline in the future as more consumers switch to electric vehicles, that for chemicals is projected to continue to grow, with chemicals plants likely to absorb an increasing share of the world’s oil and gas.

The mooted asset sales come as Shell aims to refocus its business on its core oil and gas operations. Shell this year agreed to buy Canadian shale producer ARC Resources for $16.4bn in its largest acquisition for a decade.

The company reported its second-highest quarterly profit ever in the second quarter of this year, as the war in the Middle East continued to create opportunities for its traders despite falling gas production.

Shell, Exxon and Apollo declined to comment. Lyondell and the Kuwait Petroleum Corporation did not respond to requests for comment.

Prices for some of Nvidia’s flagship AI server chip systems are set to rise about 17%, according to two people whose firms were notified by server makers that provide such systems.

The price hikes generally apply to Grace Blackwell 300 and Vera Rubin 200 chip systems that are due to be delivered next year, these people said. The changes could increase the cost of a 1 gigawatt data center by at least $5 billion, based on the current price of chip systems for such a facility.

Memory and other component price hikes are driving some of the Nvidia price increases, these people said. The price jump adds to a growing array of cost surprises for cloud providers and other data center developers, including unexpected power delays, political fights, the revocation of state tax incentives, and other technical challenges facing new facilities.

It isn’t clear whether cloud providers that buy Nvidia chips will eat some of the price hikes or pass the costs to customers that rent the chips. One person with knowledge of the price hikes said cloud providers will almost certainly need to pass on the increases to their customers.

Other companies such as Meta and OpenAI are obtaining chips for their own AI computing. (Nvidia plans to provide around $100 billion in credit support to OpenAI for a large Nvidia server facility planned for Ohio.)

The expected price increases mean that a 72-GPU Vera Rubin rack would cost around $8 million.

Companies that develop their own AI server chips, including Nvidia and OpenAI, have raced to strike long term memory supply agreements with providers this year to avoid shortages or major price increases down the line. However, Nvidia’s memory needs dwarf those of other AI chip developers.

Nvidia recently struck investments and partnerships with three key providers of land and power connections for AI data centers to gain more influence over new, planned facilities. That could help it avoid scenarios in which facilities aren’t ready to bring its chips online even when the chips are delivered.

Spokespeople for Nvidia did not immediately respond to a request for comment. Bloomberg earlier reported on the price increase.

Personalized mRNA shots may prove neither as wide-reaching nor as lucrative as hoped

Moderna MRNA 8.86%increase; up pointing triangle has always been a stock driven by narrative extremes.

During the pandemic, it traded as if mRNA would transform medicine overnight, with its market capitalization peaking near $200 billion. Then came the hangover: Vaccine sales cratered, and investors questioned the company’s pipeline.

Now the pendulum is swinging back, and perhaps overshooting reality once again.

Shares exploded 177% in a single session on Wednesday—the largest one-day surge for an S&P 500 company in over two decades—after Moderna and partner Merck reported successful late-stage trial results for their personalized mRNA melanoma vaccine.

By week’s end, Moderna’s market value sat near $60 billion, up from about $25 billion pre-announcement. Together with Merck MRK 2.39%increase; up pointing triangle and BioNTech, which is testing a personalized mRNA cancer vaccine of its own, the trio added about $80 billion in market capitalization in days, implying a sweeping new era for cancer care.

The announcement marks a major leap in personalized oncology. While the trial data will be shared at a coming conference, the companies said patients given the personalized vaccine alongside Merck’s Keytruda were significantly less likely to experience melanoma recurrence than those on Keytruda alone.

As the first late-stage validation of an mRNA cancer vaccine, it provides encouraging evidence for the potential of Moderna’s broader cancer-vaccine platform.

Yet the financial math is sobering. Daina Graybosch, an analyst at Leerink Partners, models the therapy generating low-single-digit billions in annual sales by 2032. Even in a bull case where the vaccine peaks at $10 billion in annual sales for the partnership, that could support roughly $40 billion in added market value for the two companies combined, she says. That is less than the market added in a single afternoon.

The key reason for the skepticism is that success in melanoma is far from proof that the approach will work elsewhere. Every tumor is different, and melanoma is unusually well-suited for this therapy.

The vaccine analyzes a patient’s tumor, selects up to 34 mutations as targets and trains the immune system to recognize them. Yet typically only two or three generate a meaningful immune response, Graybosch explains. In melanoma, the abundance of mutations gives the vaccine more targets to work with, while the tumor’s relative sensitivity to immunotherapy gives those targets a better chance of producing an immune response.

The cancers Merck and Moderna are pursuing next are less forgiving. Kidney cancer has fewer mutations to target, while bladder cancer has a more suppressive tumor environment. And some of the hardest tumors, such as pancreatic cancer, are notoriously resistant to immune-based treatments.

Then there are the drug’s economics. Traditional drugs are made in bulk. This vaccine is different: A surgeon removes the tumor and sends it to a lab, where its mutations are sequenced and an algorithm identifies the targets for a personalized mRNA vaccine. Like other personalized therapies, it is a vastly more expensive way to manufacture a drug.

The obvious fix is to charge more. The companies haven’t said how much, but based on comparable therapies, the full treatment could cost somewhere in the ballpark of $300,000. Yet as you go up in price you run into problems in Europe, where health systems negotiate aggressively. And the companies may have less room to charge American patients more than Europeans as the Trump administration pushes policies that tie U.S. drug prices more closely to those paid in other wealthy countries.

The result could be substantially lower margins than those of conventional drugs, which can be higher than 90%. At least initially, gross margins could land somewhere between 50% and 80%, says Graybosch.

That leaves Moderna investors with a hard equation. As RBC Capital Markets analyst Luca Issi explains, the market is pricing in the possibility that the vaccine could become something like the next Keytruda or Opdivo, drugs that helped usher in the checkpoint-immunotherapy revolution and proved effective across a range of cancers. But the vaccine could instead prove effective in a much narrower set of tumors.

The bigger promise of mRNA may be using it to prevent cancer in people at high risk, before the disease takes hold. A vaccine in the truest sense of the word, as Graybosch puts it. That could be transformative. But that frontier is nowhere close.

For now, this week’s excitement is likely to run into the cold realities of tumors and economics

Exercises gauge military’s ability to absorb mass of new recruits; no decision yet from the Kremlin

Last month Russian military officers flew from St. Petersburg to the country’s Kaliningrad exclave nestled between two NATO countries and the Baltic Sea. There the officers oversaw readiness planning and procedures for a mobilization of the region’s residents, with details on how to house, feed and arm them, said Western intelligence officials.

The planning exercise in Kaliningrad is just one of many being carried out nationwide, said the officials, in case the call is made.

The Kremlin hasn’t yet made a decision to follow through on any such move, those officials say, and likely won’t until after parliamentary elections in late September. But Russian leader Vladimir Putin’s determination to take all of eastern Ukraine’s Donbas region, despite tiny and costly advances, may force his hand.

In recent months, Moscow has failed to recruit enough new soldiers to make up for those killed and injured on the battlefield, while Ukrainian drone advances have reduced the average Russian soldier’s lifespan on the front to a matter of minutes, days or weeks. Those problems in manpower may leave Putin with no choice other than to order a fresh wave of mobilization not seen in years, U.S. and European officials said.

Neither the Kremlin nor the Russian Defense Ministry responded to requests for comment.

Kaliningrad, the site of the mobilization test exercise last month, has come under increased scrutiny recently as Western intelligence officials have warned that it could potentially play a role in Moscow’s military planning. Russia, they say, in a potential escalation with the West could seize part of the adjacent Suwalki Gap, a strip of land that runs from Kaliningrad to Belarus, Russia’s ally, through neighboring Poland and Lithuania.

Russia has long seen Kaliningrad’s geographic location and tiny population as a vulnerability as well as a useful foothold in Europe. Captured by the Soviet Union from Germany in 1945, it long served as Russia’s only ice-free port on the Baltic. Moscow has at times carried out outsize military exercises there as a deterrent to the North Atlantic Treaty Organization. Allied countries have also responded and in the past week carried out a planned air exercise near the Russian exclave, using U.S. and Norwegian fighter aircraft and Polish ground forces.

Putin’s last mobilization, called in September 2022 to stabilize Moscow’s buckling front line, triggered chaos across the country. Hundreds of thousands of men left Russia, leading to a rush on airline tickets and hourslong lines to cross the border into neighboring countries such as Georgia and Kazakhstan.

Now, rumors of an impending mobilization in recent weeks and months have caused jitters inside Russia, with men looking online for ways to exit the country in a pinch. Some Russians who have the money to travel have already scoped out destinations for the next few months where they can wait out a potential mobilization.

Moscow’s Customs Service said last week that the flow of traffic between Russia and Georgia at the Verkhny Lars border checkpoint, which sits on an old Russian imperial military road, had broken a record with more than 20,000 people crossing in one day. Georgia’s Interior Ministry disputed those figures.

Property prices have also gone up in recent weeks in places like Georgia and Armenia, partly in anticipation of another wave of Russian emigrants, say real-estate agents in both countries.

A call to mobilize could help buttress the Russian front line and accelerate Putin’s advance on Kramatorsk and Sloviansk, the last two major Ukrainian-controlled cities in Donbas. But should it be carried out so late in the year before winter slows fighting, it’s unclear what effect the move may have in practical terms.

“I don’t think it’ll prove decisive for Russia and it’s actually too late this year, but it could be a factor for 2027,” said Michael Kofman, senior fellow at the Carnegie Endowment think tank in Washington. “If they have concrete timetables for objectives they want to accomplish this year, like seizing the rest of the Donbas, then they should have mobilized several months ago.”

Most Russians publicly support the war, and any mass mobilization is unlikely to be met with meaningful unrest. Nonetheless, enthusiasm for it has waned in recent months, according to Russian polling agencies, causing new political strains inside the country.

A mass mobilization would also put an enormous financial burden on Russia’s already fragile economy.

“Russia would be further mortgaging its future for the sake of military gains,” said Alexander Kolyandr, a director at the consulting firm Eurasia Group. “You need to feed, house, arm, and pay these people, and you take them off the already tight labor market. This would put the budget under immense pressure.”

Russia’s recruitment is still officially voluntary, though authorities are increasingly using strong-arm tactics, manipulation and even violence to boost numbers at the front. But changes in the way Russia keeps data on its citizens may give the Kremlin the tools to mobilize men more gradually and forgo moves that would trigger mass panic.

Over the past several years, Russia has compiled a database of all men of military age eligible to serve, and has started alerting those who have to appear at the recruitment office. Russian authorities could boost those alerts to men across the country, raising the number in stages.

“It’s easier for them to cook the frog slowly, calling people up in small numbers,” said Alexey Yusupov, Russian analyst at the Friedrich Ebert Foundation, a German political think tank tied to the Social Democratic Party. “There would be nothing compared to 2022.”

“Since the last mobilization, the Kremlin has tried to convince Russians that it is waging this war responsibly,” he said. “Upending that sentiment would be dangerous.”

It is the retailer’s latest attempt to become a fashion destination for a wider swath of the American public—and reclaim ground lost to Amazon

Walmart WMT 0.10%increase; up pointing triangle wants even its inexpensive women’s clothing to feel trendier.

The retailer, which has been facing slowing growth lately, this week plans to introduce a new store brand of women’s clothing, bags and other accessories as part of its push to appeal to younger, trendier shoppers. Most of the new line, called Scenario, will cost less than $25, a price that aims to appeal to the discount shoppers who are the foundation of Walmart’s business.

It is part of Walmart’s latest attempt to become a fashion destination for more Americans. Right now many Walmart customers buy their groceries at the chain, but buy clothing elsewhere. Those who do buy clothes are often purchasing basics at low prices—simple T-shirts or leggings—and the women who shop its largest brands tend to skew older. Increasing fashion sales may help the company reclaim ground it has lost to Amazon over the past several years.

Last week, Walmart reported its weakest quarterly comparable sales growth in over six years. Categories such as fashion have become one way executives see potential to grow sales faster. Sales of nonfood items—throw pillows, kitchen gadgets and apparel—tend to garner higher margins and aren’t categories where Walmart already dominates.

Previous efforts by Walmart to increase clothing sales by offering more fashionable items have proved costly and unsuccessful. The launch of the new line comes as Walmart’s clothing and accessories sales have grown for seven consecutive quarters, and it is taking market share from department stores and specialty apparel retailers, executives said. Still, its biggest competitor, Amazon is growing its overall share of apparel sales faster, according to some third-party data.

Walmart’s new Scenario brand is launching with hundreds of items, including blouses with embroidered sleeves, pintuck denim shirts and faux leather bags. The items will take up space in its stores that had been filled with its existing low-price women’s store brand, Time and Tru, which sells slightly elevated basic items like cardigans and jeans and does over $2 billion in sales annually.

Time and Tru, which tends to appeal to shoppers 55-years or older, will continue with a smaller selection, paired down to the most popular items such as classic T-shirts and dresses.

Walmart has traditionally been known for selling low-price jeans and bins of bulk socks. But over the past decade it has gradually added slightly higher-priced, style-forward items in an effort to appeal to more customers who might also shop at Gap, J.Crew or Nordstrom.

“We knew we weren’t servicing all their closet needs,” said Denise Incandela, who became executive vice president of fashion for Walmart U.S. in 2021. Data showed that “while our customer gave us credit for extraordinary value, they weren’t giving us credit for style and quality,” she said.

Walmart’s fashion push under Incandela began nearly a decade ago, when Walmart’s top executives gathered in a conference room inside their Bentonville, Ark., headquarters to hear from her. At the time, Incandela was a newly hired executive in the e-commerce division who had been tasked with improving the company’s online fashion assortment and sales. She had previously spent years as an executive at Saks Fifth Avenue and Ralph Lauren and earlier in her career was a McKinsey consultant.

Walmart could become a larger fashion destination beyond basics, she told the room, which included then-Chief Executive Doug McMillon and U.S. store leadership, recalls Scott Hilton, a former Walmart e-commerce executive who was Incandela’s manager at the time.

She flashed a slide with a data point that would become an organizing thought in Walmart’s effort to sell more fashion: 80% of the money existing Walmart shoppers spent on apparel was at higher-priced retailers, not Walmart. She told those in the room that this meant shoppers were willing to spend more on fashion, but they didn’t do it at Walmart.

As its efforts have started to bear fruit, the company is attracting more high-income shoppers, executives have said. Compared with 2021, more of the money Walmart customers spend on apparel there is for items priced $25 or higher, according to internal documents viewed by The Wall Street Journal. Customers also see it as more stylish.

The recent push isn’t the first time Walmart has tried to sell more fashionable clothing. Earlier attempts to move upscale left memorable scars.

In the 2000s, the company vacillated between a fashion-forward and a basics-focused approach—neither of which helped sales much. Walmart executives concluded that customers wanted “high-quality basics and fashion basics at great prices,” said an internal memo near the end of that era.

It returned to those roots to try to steady the business. That meant ensuring the bulk of the assortment were basics, and some were slightly more fashionable items—but still “something you would see on seven out of 10 women,” said a person familiar with the strategy. The team focused on improving quality and pairing down some assortment to tidy stores, said this person. Business improved.

But as Walmart worked to grow online to fend off Amazon, leaders focused again on expanding the retailer’s appeal.

Walmart introduced the Time and Tru women’s apparel brand in 2018, along with new children’s and men’s brands. That was a cautious toe-dip into slightly more modern, trendy apparel.

Walmart also introduced more fashion-brand partnerships with celebrities like Ellen DeGeneres and Sofía Vergara. At first, those items sold mostly online. But Walmart started testing more trendy items at higher price points in stores. In 2019, it introduced Scoop as a trendy women’s fashion brand exclusive to Walmart. The following year it introduced another, Free Assembly. It aimed to appeal to young adult shoppers.

It started calling the category “fashion,” not “apparel” internally. It is adding the word “fashion” to the signage on the front of newly renovated stores. The word-change is important, said Incandela, because its meaning goes beyond clothing. And “it’s getting us internally to think of ourselves as credible in fashion,” she said.

It opened a fashion design office in New York City that now employs around 165 designers, brand managers and digital merchants. It plans to start selling its first store-brand cashmere sweaters this fall.

Its new inexpensive store brand, Scenario, helps round out its more affordable options, executives said. Scenario is designed to attract women around 35 years old who want more trendy details in their outfits than Time and Tru traditionally offers, said Marcus Brown, a lead designer for the Scenario line. It will have a modern bohemian—or “boho”—aesthetic, and items are mostly made of natural fabrics like cotton and include more embroidery and pleating details, he said. Most items will be sold under $25, what Walmart considers an “opening price point” for its customers, he said.

Still, Walmart isn’t moving away from the sale of inexpensive basics, the bulk of its apparel revenue, said Incandela. “This is an ‘and’ strategy,” she said. “We’re still going to cover those big-volume driving socks and underwear and denim and Ts,” to serve budget shoppers, she said.

Italian group widening investments in technology that promises much but is yet to be commercially proven

Italian oil major Eni is widening its bet on nuclear fusion, arguing the technology could become its “next refinery” and aiming to be among the first energy companies to commercialise fusion in Europe.

Francesca Ferrazza, head of magnetic fusion initiatives at Eni, told the FT that “competition is growing” in the fusion industry, after the technology and expectations had changed significantly in the past five to six years. “It was always considered research. Now we are considering it as an industry.”

Ferrazza said Eni aimed to open a commercial fusion plant in Europe by the early 2040s or even sooner.

The plant would be developed by US start-up Commonwealth Fusion Systems (CFS), in which Eni is an investor. CFS has raised about $3bn to date and aims to bring its first commercial plant online in the US by the early 2030s.

Ferrazza said that successfully starting the US plant would “open a number of other opportunities” for CFS, with Eni hoping to open a second plant in Europe.

Her comments came as major energy companies, including Shell, Chevron and Germany’s RWE, enter the race for fusion, placing early bets on what some call the “holy grail” of energy, with the technology holding out the promise of abundant, low-carbon electricity.

Fusion aims to generate electricity by recreating the nuclear reaction that powers the sun, fusing atomic nuclei in a superheated plasma. It is far more difficult than splitting atoms, the process known as fission that powers conventional nuclear plants.

While laboratory experiments have demonstrated potential, no company has yet proved that the technology can be turned into a commercial power plant.

Eni has been especially interested in the process of extracting and purifying the used fusion fuel to be injected back into the reactor, the so-called fuel cycle. The company has recently formed a joint venture with the UK Atomic Energy Authority, the UK’s national fusion laboratory, to provide consulting services for the process.

The process involves recovering unburned fuel from the fusion reactor and separating tritium and deuterium — the hydrogen isotopes commonly used as fusion fuel — so they can be purified and reused. Eni thinks its decades of experience handling hydrogen and processing hydrocarbons could give it an engineering advantage in developing the technology.

The fusion fuel was “the next refinery point for us, [and] for the world. And why not have it in our basket?” said Ferrazza.

Eni’s strategy reflects growing interest among energy and utility companies in fusion after an initial wave of investment led by big technology groups seeking clean energy for artificial intelligence data centres.

Chevron and Shell have invested in US fusion group Zap Energy, while the Tennessee Valley Authority, a federally owned utilities operator, has backed Type One Energy.

Eni’s core vehicle for its fusion ambition is a collaboration with CFS, which is one of the best-funded fusion companies, with Eni already agreeing to buy electricity from CFS’s first US plant under a power purchase agreement valued at about $1bn.

Ferrazza said that forming the right partnerships, and potentially winning government support, had become essential because the competition was heating up. Fusion companies would probably need “billions” of dollars to put their commercial power plants on the grid, she added. “It’s too big a game to fail.”

However, Chris Gadomski of BloombergNEF said recent investments by tech giants such as Google in both fusion and fission companies suggested that even some of the sector’s most experienced backers were not yet confident of success.

They were “spreading their bets”, he said, reflecting a view that “we’re not sure which one of these will happen, so we’re going to cover a variety of them.”

“There’s a history in the nuclear industry of misrepresentation or underestimating how long it’s going to take to build and how much it’s going to cost,” Gadomski said. “And that’s a very significant challenge that has to be overcome.”