FT : German companies’ dependence on China will last decades, warns Siemens

German companies’ dependence on China will last decades, warns Siemens
Comments from group’s finance chief coincide with German chancellor leading a business delegation to China

It will take “decades” for Germany’s manufacturers to reduce their dependence on China, according to the chief financial officer of software technology group Siemens, highlighting the quandary facing western companies and their reliance on the country as a market as well as a supplier.

“Global value chains have been building up over the last 50 years. How naive do you need to be to believe that this can be changed within six or 12 months?” said Ralf Thomas. “This is about decades.”

His comments follow a report from the German Economic Institute that found that the country’s corporations had made little progress in “de-risking” their China exposure and reducing their critical import dependencies since 2022.

China is Germany’s single largest trading partner, with goods worth €254bn traded between the two countries in 2023, according to the German statistics agency. The relationship, which spans Germany’s largest groups including Volkswagen and BASF to small and medium-sized companies of the country’s Mittelstand, was long seen as a pillar of the country’s economic power and a model of globalisation.

That relationship is now considered a liability by many investors and politicians. The Bundesbank warned last year that an excessive dependence on China is why Germany’s “business model is in danger”. Last July, foreign minister Annalena Baerbock called on German companies to reduce their dependence on China.

The latest intervention by Siemens, which has previously defended its operations in China and declared its intention to expand its market share there, comes as Chancellor Olaf Scholz arrived in China on Sunday with a high-profile business delegation including the chief executive of Siemens and the incoming boss of BASF.

“It would be a gross misunderstanding to think that it was the intention of this government [to want to reduce trade with China]. We want to further expand trade with China, taking into account the need for de-risking and diversification,” said a German government official.

“Regarding critical dependencies, we have to tackle those. We don’t want to close ourselves off, but we want to have balanced partnerships.”

A separate report released this week by the Kiel Institute estimated that Beijing’s subsidies of its domestic industries including companies like BYD ranged between 3 and 9 times other OECD countries.

Thomas at Siemens said that the company had determined that it “cannot afford not to be [in China]”. He added that the rise of aggressive local competitors was a “challenge”, noting that “if you can stand the heat of the Chinese kitchen, you are successful in other places as well”.

An editorial last week from the state-owned Global Times on the visit by the German delegation accepted that the relationship between the two countries “faces some challenges, such as market access and fair competition”.

“However, these challenges should not be an excuse to derail bilateral collaboration from its positive trajectory,” it said.

FT : Serbia to buy French fighter jets in pivot away from Russia

Serbia to buy French fighter jets in pivot away from Russia
One of Moscow’s strongest allies in the Balkans is purchasing more European and US weapons

Serbia is expected to sign the largest weapons deal in its modern history with France, in a sign how Russia’s war in Ukraine is prompting one of Moscow’s closest allies to diversify its arms purchases.

Belgrade is planning a €3bn order for a dozen French Rafale fighter jets from Dassault Aviation, marking a long-term commitment to the west after decades of relying on Russian aircraft.

Since Russia’s full-scale invasion of Ukraine in 2022, Serbian president Aleksandar Vučić has frustrated European capitals by refusing to join western sanctions against the regime of Vladimir Putin and by keeping Serbia open for Russian business — while still maintaining its bid to join the EU.

But as pressure from Europe and the US increased, Vučić started to allow shipments of Serbian-made ammunition to Ukraine, and to buy western weapons in addition to Chinese and Russian systems currently in use by the Serbian armed forces.

“The contract is expected to be signed in the next two months and in the presence of the president of France,” Vučić said in Paris last week after meeting French President Emmanuel Macron. “We are determined to buy new aircraft that would significantly improve our combat capabilities.”

A Serbian defence official told the Financial Times that the deal was “negotiated more than 90 per cent” but that the two sides still had to agree on the financial terms.

The war in Ukraine has “hastened diversification for us”, the official said.

“We have relied on Soviet-type technology, and we have some long tails, a need to maintain that equipment,” the official said. “Due to geopolitical circumstances now it is not even feasible — even if you wish — to buy from Russia anyway.”

Macron has in recent months used increasingly hawkish rhetoric about the risk to European security if Russia is not defeated in Ukraine. He has also focused increasingly on countries that used to be in Russia’s sphere of influence, such as Moldova.

His outreach to Vučić and support for Serbia joining the EU are part of that strategy, with the two leaders also discussing the former Yugoslav country’s role in European ammunition production.

“Our economic relations have gotten a real boost . . . and we can go further,” said Macron after hosting Vučić in Paris. Discussions over defence contracts and energy projects “are a sign of political trust and a desire to expand our relations”.

The Elysée palace declined to comment.

Even as he lauded Vučić, Macron has also signalled he wants Serbia to take further steps towards the west, including by recognising Kosovo’s statehood. “It is important for Serbia to continue to make its European choices concrete, such as by aligning on our decisions on foreign policy.”

The Serbian official noted the change in tone: “Paris was not particularly interested in this part of Europe before. But that has changed.”

“The Rafale is an important milestone, but not the whole story,” the official said, adding that the Balkan country has also bought French radar and missile systems and placed orders for Airbus transport planes.

Serbia, whose Soviet MiG29s reach the end of their lifespan in the coming decade, wants to ensure uninterrupted air force prowess.

Neighbouring EU and Nato member Croatia, regarded as a yardstick by Serbia’s armed forces, also ordered 12 Rafale jets from France in 2021, although those planes are used and cost only €1bn.

In addition to the dozen planes, the Rafale deal will include auxiliary systems, training and maintenance.

“It is very important that air-to-air missiles, which will ensure control of the airspace, go in the set with the planes,” retired air force general Sreto Malinović told the FT. Serbia also needed aircraft radars and associated attack-navigation equipment to be part of the deal, he said.

While Serbia resented Nato after the US-led military alliance bombed Belgrade in 1999, it now had a “long list of things we wish to buy from the US”, the Serbian official said — though Washington has so far only approved the sale of Humvee military vehicles.

Russia’s full-scale invasion of Ukraine has led European countries to boost defence spending and helped France become the second-biggest arms exporter after the United States last year.

Given the renewed popularity of the Rafale, its maker Dassault Aviation faces a challenge to produce the aircraft at a faster rate given its existing backlog: last year it delivered only 13 jets from its factory near Bordeaux, short of the 15 targeted. It aims to make 20 this year, and then eventually ramp up to 36 annually.

“We are capable of it, I am confident,” said chief executive Éric Trappier in an interview with Boursorama in March. “It takes about 400 suppliers to help make a single Rafale . . . so we have to bring them along and resolve labour shortages.” 

Dassault declined to comment about the Serbian order.

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TechCrunch : Google goes all in on generative AI at Google Cloud Next

Google goes all in on generative AI at Google Cloud Next
There was barely a mention of core cloud tech

This week in Las Vegas, 30,000 folks came together to hear the latest and greatest from Google Cloud. What they heard was all generative AI, all the time. Google Cloud is first and foremost a cloud infrastructure and platform vendor. If you didn’t know that, you might have missed it in the onslaught of AI news.

Not to minimize what Google had on display, but much like Salesforce last year at its New York City traveling road show, the company failed to give all but a passing nod to its core business — except in the context of generative AI, of course.

Google announced a slew of AI enhancements designed to help customers take advantage of the Gemini large language model (LLM) and improve productivity across the platform. It’s a worthy goal, of course, and throughout the main keynote on Day 1 and the Developer Keynote the following day, Google peppered the announcements with a healthy number of demos to illustrate the power of these solutions.

But many seemed a little too simplistic, even taking into account they needed to be squeezed into a keynote with a limited amount of time. They relied mostly on examples inside the Google ecosystem, when almost every company has much of their data in repositories outside of Google.

Some of the examples actually felt like they could have been done without AI. During an e-commerce demo, for example, the presenter called the vendor to complete an online transaction. It was designed to show off the communications capabilities of a sales bot, but in reality, the step could have been easily completed by the buyer on the website.

That’s not to say that generative AI doesn’t have some powerful use cases, whether creating code, analyzing a corpus of content and being able to query it, or being able to ask questions of the log data to understand why a website went down. What’s more, the task and role-based agents the company introduced to help individual developers, creative folks, employees and others, have the potential to take advantage of generative AI in tangible ways.

Google Cloud Next 2024: Everything announced so far

But when it comes to building AI tools based on Google’s models, as opposed to consuming the ones Google and other vendors are building for its customers, I couldn’t help feeling that they were glossing over a lot of the obstacles that could stand in the way of a successful generative AI implementation. While they tried to make it sound easy, in reality, it’s a huge challenge to implement any advanced technology inside large organizations.

Big change ain’t easy
Much like other technological leaps over the last 15 years — whether mobile, cloud, containerization, marketing automation, you name it — it’s been delivered with lots of promises of potential gains. Yet these advancements each introduce their own level of complexity, and large companies move more cautiously than we imagine. AI feels like a much bigger lift than Google, or frankly any of the large vendors, is letting on.

What we’ve learned with these previous technology shifts is that they come with a lot of hype and lead to a ton of disillusionment. Even after a number of years, we’ve seen large companies that perhaps should be taking advantage of these advanced technologies still only dabbling or even sitting out altogether, years after they have been introduced.

There are lots of reasons companies may fail to take advantage of technological innovation, including organizational inertia; a brittle technology stack that makes it hard to adopt newer solutions; or a group of corporate naysayers shutting down even the most well-intentioned initiatives, whether legal, HR, IT or other groups that, for a variety of reasons, including internal politics, continue to just say no to substantive change.

Vineet Jain, CEO at Egnyte, a company that concentrates on storage, governance and security, sees two types of companies: those that have made a significant shift to the cloud already and that will have an easier time when it comes to adopting generative AI, and those that have been slow movers and will likely struggle.

AWS is sick of waiting for your company to move to the cloud

He talks to plenty of companies that still have a majority of their tech on-prem and have a long way to go before they start thinking about how AI can help them. “We talk to many ‘late’ cloud adopters who have not started or are very early in their quest for digital transformation,” Jain told TechCrunch.

AI could force these companies to think hard about making a run at digital transformation, but they could struggle starting from so far behind, he said. “These companies will need to solve those problems first and then consume AI once they have a mature data security and governance model,” he said.

It was always the data
The big vendors like Google make implementing these solutions sound simple, but like all sophisticated technology, looking simple on the front end doesn’t necessarily mean it’s uncomplicated on the back end. As I heard often this week, when it comes to the data used to train Gemini and other large language models, it’s still a case of “garbage in, garbage out,” and that’s even more applicable when it comes to generative AI.

It starts with data. If you don’t have your data house in order, it’s going to be very difficult to get it into shape to train the LLMs on your use case. Kashif Rahamatullah, a Deloitte principal who is in charge of the Google Cloud practice at his firm, was mostly impressed by Google’s announcements this week, but still acknowledged that some companies that lack clean data will have problems implementing generative AI solutions. “These conversations can start with an AI conversation, but that quickly turns into: ‘I need to fix my data, and I need to get it clean, and I need to have it all in one place, or almost one place, before I start getting the true benefit out of generative AI,” Rahamatullah said.

From Google’s perspective, the company has built generative AI tools to more easily help data engineers build data pipelines to connect to data sources inside and outside of the Google ecosystem. “It’s really meant to speed up the data engineering teams, by automating many of the very labor-intensive tasks involved in moving data and getting it ready for these models,” Gerrit Kazmaier, vice president and general manager for database, data analytics and Looker at Google, told TechCrunch.

That should be helpful in connecting and cleaning data, especially in companies that are further along the digital transformation journey. But for those companies like the ones Jain referenced — those that haven’t taken meaningful steps toward digital transformation — it could present more difficulties, even with these tools Google has created.

All of that doesn’t even take into account that AI comes with its own set of challenges beyond pure implementation, whether it’s an app based on an existing model, or especially when trying to build a custom model, says Andy Thurai, an analyst at Constellation Research. “While implementing either solution, companies need to think about governance, liability, security, privacy, ethical and responsible use and compliance of such implementations,” Thurai said. And none of that is trivial.

Executives, IT pros, developers and others who went to GCN this week might have gone looking for what’s coming next from Google Cloud. But if they didn’t go looking for AI, or they are simply not ready as an organization, they may have come away from Sin City a little shell-shocked by Google’s full concentration on AI. It could be a long time before organizations lacking digital sophistication can take full advantage of these technologies, beyond the more-packaged solutions being offered by Google and other vendors.

>>> Weekend Papers Summary

Weekend Papers Summary

FINANCIAL TIMES
-Iran's Revolutionary Guards have seized an Israeli-linked container ship in the latest escalation of hostilities between the Islamic republic and Israel. The capture comes as Tehran vows to respond to a suspected Israeli air strike on Iran's consular building in Damascus that killed seven guards members, including two senior commanders. The vessel is operated by the Mediterranean Shipping Company and is owned by Gortal Shipping, a finance company affiliated with Zodiac Maritime, a company controlled by Israel's Ofer family. Israel's foreign minister, Israel Katz, accused Iran of conducting a "pirate operation." Iran's state news agency, IRNA, reported that the guards' naval forces captured the ship after boarding it using a helicopter. Tensions also soared in the occupied West Bank, with Jewish settlers torching Palestinian houses and cars after a 14-year-old Israeli went missing.
-Iran has warned its allies and western nations to retaliate against a suspected Israeli air strike on its Damascus consulate in a "calibrated" manner to prevent a regional conflict. Officials from talks between Iran and Oman suggest that Iran is unlikely to target Israeli diplomatic facilities in the region. US intelligence on the impending attack is detailed and specific, giving Israel a window to prepare its defenses. President Joe Biden has warned Israel not to attack Iran and emphasized the importance of supporting Israel. The April 1 air strike on Iran's diplomatic compound in Syria has raised tensions with Israel, potentially turning a shadow war into a direct confrontation.
-Japan's native population is falling at a rate of almost 100 people an hour, despite government efforts to raise fertility rates. Official data shows a significant drop of 837,000 Japanese nationals in the 12 months to October 1, 2023, representing a daily drop of 2,293 people or just under 96 per hour. Japan's overall population was 124.3 million in October, down 595,000 from the previous year when adjusted for rising levels of migrant workers, overseas students, and foreign permanent residents. The number of foreign nationals living in Japan reached a record high of 3.2M at the end of June 2023, driven by expansion in a visa program for skilled workers and technical internships.
-The US dollar experienced its strongest weekly performance since 2022 due to higher than expected US inflation figures. The dollar strengthened by 1.7% against six currencies, its best performance since September 2022. The euro and sterling fell to their weakest levels against the dollar since November, while the yen sank to a 34-year low. Sterling's decline also contributed to a 0.9% rise in UK stocks, as the FTSE 100 ended the day just short of a record close.
-The US has accused China of providing Russia with cruise missile and drone engines and machine tools for ballistic missiles. The US is urging Europe to increase diplomatic and economic pressure on Beijing to stop the sales. Senior US officials disclosed that Chinese and Russian groups were working together to jointly produce drones inside Russia. China supplied 90% of chips imported by Russia last year, used to make tanks, missiles, and aircraft. China was also helping Russia improve its satellite and space-based capabilities to help prosecute its war in Ukraine. Dennis Wilder, a former top China military analyst at the CIA, said the disclosure shows a concerted program by China's leaders to help Moscow prosecute the war in Ukraine.
-House Speaker Johnson has refused to accept a Senate-approved supplemental aid package for Ukraine, citing a balance between isolationist interests and traditional Republicans. He promised to introduce a new package after Congress returned from the break, but a draft bill has not been circulated. Johnson also faces issues with a surveillance law, which nearly 20 Republican lawmakers blocked reauthorization. The bill passed the House on Friday, but Johnson declined a meeting with UK foreign minister David Cameron. The issue of Ukraine is not the only one Johnson faces.
-Argentina's libertarian president Javier Milei and Tesla CEO Elon Musk met for the first time on Friday, cementing a social media friendship between the two proponents of free-market economics. The pair discussed the need to liberate markets and eliminate bureaucratic obstacles that keep investors away. Argentina's ambassador to the US, Gerardo Werthein, also attended the meeting. The pair also discussed investment opportunities for Tesla in lithium, the metal crucial to electric vehicle batteries. Milei, a libertarian economist and former television pundit, won an election victory in November on a pledge to slash spending and lower inflation. He has courted a diverse range of figures aligned with the global right, including Tesla, former US president Donald Trump, and Brazil's far-right former leader Jair Bolsonaro.
-The Biden administration has increased the cost of oil and gas drilling on public lands, raising royalty rates for the first time in a century. The Bureau of Land Management has finalized a rule to raise the royalties drillers must pay to the government for the first time since 1920 and the bonds needed to cover the cost of clean-ups for the first time since 1960. The rule comes as President Joe Biden toughens his stance on fossil fuel producers in a bid to mobilize progressive voters in the run-up to the presidential election. The rule also comes as crude oil prices increase amid fears of supply disruptions due to Middle East turmoil, which have already pushed up US petrol prices and boosted inflation.
-Artificial intelligence (AI) has seen significant breakthroughs in the past year, raising expectations for machines that can outperform expert humans in various tasks. Elon Musk, the Tesla and SpaceX billionaire, has stated that artificial general intelligence (AGI) could be achieved as soon as next year. AGI is an amorphous concept, often used as a shorthand for machines whose intelligence exceeds that of humans. However, rival researchers, including Yann LeCun, argue that AGI is decades away. As the race to achieve AGI intensifies, top figures in the field are placing their bets on when and how it might arrive, with the technology forecasting to create trillions of dollars in value.

THE NEW YORK TIMES
-Speaker Mike Johnson is facing a revolt from a conservative caucus member that could potentially cost him his job. The House has been unable to renew a warrantless surveillance bill and has faced opposition to providing additional aid to Ukraine. Former President Donald Trump has endorsed Johnson, stating "I stand with the speaker." This comes at a time when Johnson faces the threat from Representative Marjorie Taylor Greene, who is threatening to oust him. Trump acknowledges that Johnson is doing a good job under tough circumstances and has helped undermine his legislative agenda by voicing opposition to some of his efforts. Trump called the threat of a move to oust Johnson "unfortunate" and said that Majorie understands that.
-Congressman Speaker Johnson has vowed to ensure the House will move to assist Ukraine, despite opposition from many members of his party. Johnson, who is in a standoff with ultraconservatives, has been attempting to win votes to push through Ukraine aid. He is battling stiff resistance among House Republicans and mounting opposition among Democrats to sending unfettered military aid to Israel due to the escalating civilian death toll and humanitarian catastrophe in Gaza.
-President Biden has canceled $7.4B in student loan debt to boost support for young voters affected by rising education costs. The move is part of a strategy by the White House to take targeted actions for specific borrowers. The Supreme Court rejected a more ambitious plan to wipe out $400B in debt last year. Biden plans to make another attempt at large-scale debt forgiveness for 30M people, but has been streamlining existing programs to reduce student debt. The latest move affects around 277,000 people.
-Donald Trump has urged his House allies to kill a bill that would extend an expiring surveillance law, citing the intelligence community's suspicions of spying on his 2016 campaign. The House approved the legislation after Republicans revised it to allow Trump to shape it further if he wins the presidency again. Trump has also used his anger in legal arguments, arguing that intelligence agencies have shown bias against him since his first impeachment and promising a fight if officials testify that his actions put the country at risk.
-Representative Alexandria Ocasio-Cortez has donated $260,000 to the Democratic Congressional Campaign Committee, marking her first-ever contribution to the party's campaign arm. The $260,000 donation is a significant milestone in Ocasio-Cortez's relationship with her party's political establishment. She cited the threat of Republicans staying in power as the main reason for her donation, citing the January 2021 terrorist attack on the US Capitol as a potential dress rehearsal for the upcoming 2025 presidential election.
-Stocks experienced a second consecutive weekly loss on Friday due to intensifying Middle East tensions and concerns about inflation. The S&P 500 fell 1.5%, its worst day since January, and ended the week with a 1.6% drop, its worst weekly decline of the year. Other major indexes, including the Nasdaq Composite and Russell 2000, also fell. The drop began after an inflation report showed persistent increases in consumer prices, raising doubts about the Federal Reserve's intention to cut interest rates.
-American intelligence analysts predict Iran will strike multiple targets inside Israel in retaliation for an Israeli bombing in Syria that killed several Iranian commanders. The US, Israel's ally, has military forces in the Middle East, but Iran is not expected to target them to avoid a direct conflict with the US. Any Iranian strike inside Israel would be a watershed moment in decades of hostilities and open a volatile new chapter in the region. The lack of direct communication between Israel and Iran increases the risk of a wider conflict that could drag in multiple countries, including the US.
-European capitals have rebuffed Kiev's demands to send air defense systems to Ukraine following a week of Russian missile and drone bombardments that have destroyed critical energy plants in the war-torn country. Ukraine has long warned that it needs urgent air defense supplies to protect itself against an overwhelming number of Russian rockets targeting the country's power and heating infrastructure. President Volodymyr Zelenskyy stepped up pleas for US-made Patriot batteries and criticized Kiev's western partners for "turning a blind eye" as the capital region saw the destruction of its largest power plant. Zelenskyy said Ukraine had fallen into a "routine" in which it suffers Russian air attacks and then pleads for more air defenses from western partners who promise to provide them but have failed to deliver.

THE NEW YORK POST
-The US Border Patrol has over twice as many migrants as they can hold in the San Diego area of the southern border, with 1,812 migrants being detained in facilities normally meant to hold 750. With the influx and the 72-hour limit for migrants, over 125,000 migrants have been released onto the streets of San Diego since September. Migrants from a diverse array of countries, including China, India, Egypt, Jordan, Mauritania, and Colombia, have expressed gratitude for President Biden's allowing them in. The agency's processing centers in the region are 245% capacity.
-Elon Musk and Argentina's President Javier Milei have agreed to collaborate on promoting free markets and lithium projects after meeting in Texas. The two discussed topics such as boosting birthrates and pursuing technological development while defending "liberty." Musk admires Milei's embrace of private enterprise and disdain for socialist excesses.

FT : Who can run Disney? The four insiders competing for Bob Iger’s job

Who can run Disney? The four insiders competing for Bob Iger’s job
Magic Kingdom’s unhappy record on succession means the candidates for its throne face intense investor scrutiny

In the multimillion-dollar proxy clash between Disney and activists led by Nelson Peltz, the biggest battle was over the process to find a successor to Bob Iger, the CEO who has run the entertainment empire for most of the past 18 years.

Iger saw off Peltz definitively earlier this month. But with the proxy battle out of the way, the unresolved question of who will take over from him has risen to the top of investors’ agendas.

As the activists poured scorn on Disney’s succession planning, members of its board said last month that they were reviewing “internal and external candidates with the help of a well-regarded national search firm”. 

Four people have emerged as the most likely internal candidates: Josh D’Amaro, who runs Disney’s theme parks; Alan Bergman, co-chair of Disney Entertainment; Jimmy Pitaro, chair of the ESPN sports division; and Dana Walden, co-chair of Disney Entertainment. 

Iger’s contract ends in 2026, so any internal vetting process will be protracted, and it will be hard for investors to determine how it is progressing. But it is likely to be closely watched, given Disney’s unhappy record on succession planning. 

Iger first intended to retire by 2015, but he extended his contract multiple times before stepping aside in 2020. His replacement, Bob Chapek, only lasted 33 months, after which Iger returned. 

“Succession is absolutely critical for Disney and one of Iger’s most important tasks will be to find his replacement,” said Disney shareholder Chris Rossbach, managing partner at J Stern & Co, a private investment office. “We’d like to see a clear process and a deep bench of management talent.”

David Larcker, director of the Corporate Governance Research Initiative at Stanford, cautioned that “bake-off” processes among internal candidates can be fraught, as Disney demonstrated in a previous succession plan that led key executives to leave.

“It makes it a political process, where people are allying internally with different candidates,” Larcker said. “From a board perspective, they don’t want this to be a spectacle.” 

Given Iger’s previous contract extensions, some openly wonder whether he will leave in 2026. But Rossbach believes he will.

“Our expectation is that Iger will conclude his term in 2026, although the exact way he does so will depend on who his successor is.” 

Since his return in late 2022, Iger’s job has become one of slashing costs, fending off activists and fixing a laundry list of problems. Some of the thorniest of those challenges have been handed to the four people who are considered best placed to succeed him. How they perform may well determine who claims the throne in the Magic Kingdom.

Dana Walden, co-chair of Disney Entertainment

Dana Walden: In her 25 years at Fox, the studios she oversaw racked up 184 Emmy awards © Emma McIntyre/Getty Images

At Disney, where many executives have worked for decades, Walden counts as a relative newcomer. 

Walden, 59, arrived in 2019 following Disney’s acquisition of 21st Century Fox, where she was chief executive of the company’s television group. She came with deep connections in Hollywood, including hitmaking showrunners such as Ryan Murphy (Glee) and Elizabeth Meriwether (New Girl). She has a reputation for having an eye for talent. 

If she were to be named chief executive, she would be the first woman to run Disney. 

In her 25 years at Fox, the studios she oversaw racked up 184 Emmy awards — and she took the Fox Broadcast group from fourth place to first during her four years running the business. 

At Disney, she oversees an array of TV businesses including ABC and ABC News, Disney’s TV studios, FX and National Geographic — all of which are in decline thanks to cord-cutting viewers ditching cable subscriptions and the rise of streaming.

To deal with this problem, Walden — who is also responsible for the streaming business with co-chair Alan Bergman — wants to make every new show a streaming show. This will mean that programmes running on traditional TV networks will also feed into Disney’s streaming services, helping to satisfy the insatiable demand for new content on the Hulu and Disney+ platforms. In theory, this should also lead to less “churn” or streaming cancellations. 

The model is ABC’s hit sitcom Abbott Elementary, which also appears on Hulu — and reaches a broader audience. 

Walden is also credited with revitalising kids’ programming at Disney by championing shows such as Percy Jackson & The Olympians — and for bringing The Kardashians to Hulu, where it has become a breakout hit for the streamer. 

Alan Bergman, co-chair of Disney Entertainment

Alan Bergman is said to have gained the respect of the heads of the various studios © Kevin Winter/Getty Images for CinemaCon

Bergman is a rare creature in Hollywood: a studio chief who appears to shun the spotlight. 

But despite keeping a low profile, Bergman, 58, is immensely powerful in Hollywood thanks to his oversight of Disney’s movie studios — a portfolio that includes Marvel, Pixar, Lucasfilm, Searchlight, 20th Century and the classic Disney studios. 

Since becoming president of the studios in 2005, he has overseen remarkable success: Disney has produced four films that grossed more than $2bn at the box office and 22 others that topped the $1bn mark.

Recently, however, Bergman’s division has been attracting attention for a number of disappointments, leading Iger to announce that the company was scaling back its release slate in order to refocus on quality.

Recent lacklustre box office performance became one of the talking points for Peltz in his unsuccessful bid for a seat on Disney’s board. Upcoming releases including Kingdom of the Planet of the Apes, Inside Out 2 and Deadpool & Wolverine could help change the narrative, but many analysts expect a full turnaround to take time.

Bergman’s brief also includes Disney’s streaming business, a responsibility he shares with Walden. The pair are overseeing an aggressive push for profitability in streaming, which the company expects to reach later this year. Ending the losses in streaming is a top priority for Iger.

Since Bergman joined Disney in 1996, he has gained a reputation as a savvy businessman, having served as the studio’s chief financial officer. And he is said to have gained the respect of the heads of the various studios, including Marvel’s Kevin Feige and Lucasfilm’s Kathleen Kennedy — both of whom are recalibrating after stretching too far to feed the Disney+ streaming service during its early push for subscribers.

A return to hitmaking form would be a boon to Bergman’s standing. 

Jimmy Pitaro, ESPN chair 

James Pitaro is preparing to launch ESPN as a ‘flagship’ streaming service that will carry programming that appears on the TV network © Chip Somodevilla/Getty Images

Pitaro began his business career during the 1990s dotcom boom and had a long stint at Yahoo before joining Disney’s interactive division in 2010. As chair of ESPN, the sports network, he will need to draw heavily on his experience in digital media as he shifts the cable TV giant into a full streaming service next year. 

ESPN, a pioneering cable sports network, was a chief growth engine for Disney for decades — drawing in advertising as well as hefty carriage fees from cable providers. As cord-cutting siphoned off cable subscribers in 2018, Pitaro launched ESPN+, an online service that offers documentaries and other sports content that does not appear on the TV channel. 

Now Pitaro is preparing to launch ESPN as a “flagship” streaming service in August 2025 that will carry programming that appears on the TV network as well as gaming, shopping and other interactive content. A lot is riding on the launch. Iger said recently that he wants it to become the “pre-eminent digital sports platform”.

Before that big step, ESPN is also launching a sports streaming joint venture with Fox and Warner Bros this autumn. Iger has called the new service, which is aimed at younger people who have never had a cable subscription, a “significant moment for Disney”.

Investors are concerned that ESPN will have difficulty generating enough revenue growth to keep up with the rising costs of sports rights as it makes the transition to streaming, according to Wells Fargo analysts. But they also note that ESPN’s traditional TV business is nearing a “floor” of households who will never switch to streaming — making the timing right to launch its new streaming ventures.

Josh D’Amaro, chair of Disney Experiences 

Josh D’Amaro is credited with using the pandemic shutdowns to refresh the parks and introduce new technology such as contactless entry © Vernon Yuen/NurPhoto via Reuters

As the head of Disney’s theme parks, D’Amaro has overseen a remarkable rebound since the pandemic restrictions began to lift in 2021. 

After being completely shut down during the Covid-19 outbreak, the division has become the largest source of earnings at Disney, with operating income jumping 16 per cent last year on $32.5bn in revenue. D’Amaro, 53, is credited with using the shutdowns to refresh the parks and introduce new technology such as contactless entry.

“This [parks and experiences] business remains the earnings growth anchor for the company,” Morgan Stanley says. “We are bullish on its global growth potential in the near and long term.”

Iger is bullish, too. He announced a $60bn investment in the parks and experiences division over the next decade — in effect doubling the previous spending plan. 

D’Amaro’s division, officially known as Disney Experiences, also includes its cruise lines and a consumer products division that ranges from Mickey Mouse sweatshirts to Buzz Lightyear figures. He was central to the decision-making behind Disney’s recent $1.5bn investment in Epic Games, which will see the two companies create a new version of Fortnite built around the company’s characters.

D’Amaro joined the company in 1998 as an employee at Disneyland and has worked his way up; today he oversees roughly 180,000 people. 

Though the parks business is immensely important to Disney’s film business — theme park attractions deepen fans’ connections to characters and franchises — it is viewed as a separate universe from the movie, TV and animation divisions that form the company’s creative core. 

This weighed heavily on Chapek, D’Amaro’s predecessor as parks chief, whose brief, stormy tenure as CEO was marked by tensions with talent and executives on the creative side of Disney. 

But inside the company, D’Amaro is seen as a more natural communicator than Chapek, who some dismissively labelled “a parks guy”. D’Amaro has also worked with film executives including Marvel Studios head Feige as the parks have developed attractions around their characters.

“He’s not just a parks guy,” noted one associate.

WSJ : The New, More-Hopeful Face of Alzheimer’s Disease

The New, More-Hopeful Face of Alzheimer’s Disease
Advances in early detection and management of the disease have changed the way patients view an Alzheimer’s diagnosis—and how they live with it

For as long as I’ve been practicing medicine, Alzheimer’s disease has been, essentially, a death sentence. You give the diagnosis, and you prepare the patient and the family for the worst.

Until now.

Consider one of my patients at the memory-disorder clinic that I run. She’s 68 years old and not ready to retire. She has been a hairstylist for the past 40 years and revels in the steady flow of compliments she gets from her clients at the salon where she still works three days a week.

She has slowed down a little since I diagnosed her two years ago with early-stage Alzheimer’s disease, but she is determined to maintain as active a lifestyle as possible.

“I want to show my clients a different face of this disease,” she says.

That different face is increasingly the face of Alzheimer’s—the result of a quiet revolution in the way doctors treat the disease, as well as the way patients live with it. Thanks to new developments in the early detection and management of Alzheimer’s, as well as new medications, many patients can slow the course of the disease and boost their well-being. The result is that more Alzheimer’s patients are able to live relatively normal lives for much longer than previously—several years, at least, and often longer.

Lifestyle interventions
Until just a few years ago, the typical work-up for Alzheimer’s disease began when someone walked into my office with noticeable symptoms. The advice: Get your affairs in order, and fairly quickly.

By contrast, many work-ups now begin with patients seeking to improve their lives by either preventing or lessening mild symptoms, prompted by a host of new findings about the cognitive benefits of lifestyle interventions, as well as conditions that can exacerbate decline. I encourage patients to stop smoking, moderate their drinking, eat better, exercise, deal with their depression and keep their brain active, among other things.

I am also on the alert to potentially harmful conditions such as hearing loss in middle age, sleep apnea, negative attitudes toward aging, and chronic exposure to certain medications, environmental pollutants and toxic metals. Addressing any of those conditions can potentially lessen a person’s risk of getting the disease or delay its onset.

My message to patients is that preventing or ameliorating mild symptoms isn’t a race but a marathon over decades, and it requires consistent, longstanding lifestyle changes starting as early as possible in adulthood.

What’s more, thanks to our newfound ability to detect the disease early, we can start that marathon far sooner than in the past.

The hairdresser, for instance, noticed cognitive changes for over a year, but like many people she initially shrugged them off as a normal part of aging (which they often are). In the salon, however, she was having a more difficult time covering up her mistakes when scheduling clients, and realized she needed to get help. If someone in her situation had come to me at the start of my career, there wasn’t much I could do at such an early stage other than speculate on the diagnosis and monitor symptoms as they unfolded.

Now there are tests for several physical indicators of Alzheimer’s, called biomarkers, that can reveal whether there are the telltale toxic proteins of beta-amyloid and tau in the brain. When combined with other information, these results can provide a relatively definitive diagnosis of early-stage Alzheimer’s disease and enable the person to make lifestyle changes, as well as start new treatments or clinical trials right away to attempt to alter its course.

Drug breakthroughs
I recently began working with a 59-year-old attorney with early Alzheimer’s disease who, ironically, I met several years ago not as a patient but as a caregiver for his mother, who I am also treating for Alzheimer’s.

Even as his symptoms have become more noticeable over the past few years, he has remained an active and invaluable partner at his firm. At the same time, he devised a reduced work schedule and began taking more time off to vacation with his wife and two adolescent children.

It is obviously incredibly painful for this robust and involved father and attorney to receive a diagnosis of Alzheimer’s disease. It is painful as a doctor to convey such a diagnosis, knowing that there is no cure.

With the advent of new immunotherapies to remove amyloid plaques from the brain, however, I can now offer a better course to him and many others with early-stage disease. He is hoping that the twice-monthly infusions of the recently approved drug lecanemab (sold under the brand name Leqembi by Eisai and Biogen) can significantly slow the progression of his cognitive decline; studies indicate that subjects on active medication versus a placebo had up to 27% less decline over the initial 18-month course of treatment. He is also hoping not to experience the potential side effects of brain edema or small bleeds that, while often asymptomatic, have been seen in around one-quarter of subjects and warrant close monitoring.


Along with lecanemab, there are a host of other immunotherapies and novel treatment approaches in clinical trials that show promise in modifying the course of the disease.

As this early detection and new therapies become more refined and widely known, I am seeing more people come to me in their 50s and 60s—much younger than the average patient I saw when I first started our memory clinic over 20 years ago.

The discussion we have about what a diagnosis of Alzheimer’s means in such an early stage is shaped by the fact that many affected individuals are still working, traveling, parenting and even taking care of their own aging parents, and they want to continue engaging in all of these roles and activities as long as possible.

I now tell my patients that by slowing the course of an already slow-moving disease, these new treatments could extend their current quality of life even longer. This hopeful message often prompts a more engaged and happier partnership with the patient and family, since we are shifting from an era of passively watching the disease’s inexorable decline to one in which we are actively altering its course until, we hope, something better comes along.

For these people, I’m a coach and counselor as much as a doctor, encouraging them to maintain an active and normal lifestyle. They need reassurance and practical tips on how to keep engaged on a level that is as meaningful, safe and joyful as possible.

A new language
These advances have even changed the actual words I use when I talk to patients about Alzheimer’s, which in turn further shape our attitudes and approaches. I no longer say that someone with Alzheimer’s disease is “suffering from a disease”; instead, I tell them they are “living with neurocognitive changes.”

I go on to explain how these changes are challenging in many but not all settings, and we can help them to actively engage and elevate their strengths while circumventing and compensating for the bumps.

“I have difficult days,” confessed one patient—a 75-year-old retired orthodontist, describing how short-term memory lapses and loss of words and names can be frustrating and embarrassing. I have encouraged him to take these moments in stride and move on, letting his gregarious personality and well-preserved gift of gab carry the day.

He and his wife have internalized this approach and continue to socialize with friends and spend time on their boat as if nothing has changed. This gives them both a welcome sense of normalcy. Similarly, the hairdresser keeps her mind active by continuing to work, but has engaged a supportive co-worker to jump in when she needs help scheduling a client or adding up the bill. The attorney is still an avid weightlifter but uses a trainer to organize his workouts. He has learned to reduce stress and improve his sleep through relaxation strategies.

In every case, I am spending time in discussions I rarely had in the days before the ability to provide early diagnosis and disease modification. In those days, the typical patient was already quite impaired, often abandoned by friends and surrounded by too many caregivers and clinicians with nihilistic and pessimistic attitudes.

In contrast, the science of what we now call “neurocognitive disorders” is conferring a new era of more effective and optimistic management. In this sense, the medical advances—the early detections, the recognition of the importance of lifestyle changes, the drug interventions—have allowed us to adopt a new approach to Alzheimer’s, and that new approach, in turn, has given patients permission to figure out ways to continue to live fuller lives.

Strategies for success
I would be remiss at this point not to talk about some of the key strategies that my most successful patients employ in their efforts to avoid, or slow down, the progression of Alzheimer’s. Among the most important:

• Prevention is key: Know your risk factors for brain damage as you age, especially from high blood pressure, diabetes, depression, tobacco use, excess alcohol, hearing loss, obesity, a sedentary lifestyle, social isolation, brain injury from falls and other risky activities, and negative attitudes toward aging. Attending to these issues as soon as possible, combined with a brain-healthy lifestyle, can reduce risk and improve wellness.

• Watch your cognitive vital signs: As you age, consider your short-term memory skills, word-finding ability and other brain powers to be cognitive vital signs that need to be measured and monitored, just like blood pressure and other important physical vital signs. While it’s normal to have age-related changes in these skills, they might also reflect problems with stress, sleep, anxiety, depression, medications or medical factors that can be identified and reversed. When they persist and progress, it might be the harbinger of early Alzheimer’s.

• Work with experts: Alzheimer’s disease and other neurocognitive disorders are complex, and diagnosis can be elusive, even with all of the technology and biomarkers at our fingertips. Don’t ignore early signs or wait until symptoms get too bad to ignore. Be proactive and see an expert such as a geriatric psychiatrist or neurologist for a comprehensive evaluation at the first sign of cognitive change.

• Active coping: Keep active and find ways to enjoy life. You don’t need to automatically give up anything unless it’s posing a risk of danger to you or others, which isn’t typically the case in early stages. My patients who thrive continue to travel, socialize with friends and family and engage in the interests they have always enjoyed, but with minor adjustments.

• Stay vigilant to factors that make your conditions worse: Anxiety, depression, pain, active medical issues and social isolation can make life miserable at any stage, but are particularly problematic during early stages of neurocognitive change, since they may reflect or cause changes in brain function that can worsen the course. The good news is that they are treatable. Get regular medical checkups and don’t hesitate to seek counseling with a mental-health specialist who has experience working with neurocognitive disorders.

• Be positive: Yes, it can be hard to be positive when confronted with a diagnosis of Alzheimer’s. But according to scientific studies, having a good attitude and a sense of confidence and purpose can make all the difference in reducing the risk of Alzheimer’s disease and improving wellness after diagnosis. Caregivers can help to bolster attitudes by providing empathy and encouraging a sense of normalcy. Focus on what you can do rather than succumbing to what you can’t.

Ultimately, we all travel down the same pathway of brain aging that brings neurocognitive changes—including both strengths such as wisdom and challenges such as memory decline. For those facing a diagnosis of Alzheimer’s disease or any other neurocognitive disorder, we are well ahead of where we were just a few years ago. And science promises to give us further advances in the years ahead.

But the key thing to remember is this: Merely surviving is no longer the only option. Now, thriving is available to us as well.

WSJ : Two Brothers, a Big Biotech Bet and an $8 Billion Payout

Two Brothers, a Big Biotech Bet and an $8 Billion Payout
Investors in a hedge fund from Baker Bros. Advisors recently received one of the largest windfalls ever following Pfizer’s purchase of Seagen

A two-decade bet on a biotechnology company turned into a roughly $8 billion windfall for investors in a New York hedge fund earlier this year.

Baker Bros. Advisors, a hedge-fund firm run by brothers Felix and Julian Baker, had in 2003 invested in Seagen, a developer of next-generation cancer treatments. Pfizer PFE -1.82%decrease; red down pointing triangle bought the company for $43 billion last year.

The firm held a nearly 25% stake in Seagen and reaped about $10 billion in proceeds when the acquisition closed in December. It gave back most of that to its investors earlier this year, people familiar with the matter said, in what was one of the industry’s largest ever returns of capital.

Big-ticket takeovers and scientific advances like gene-editing helped make biotech investing a hot hedge-fund strategy last year. A healthcare stock-picking index gained 13.3% in 2023, according to hedge-fund research firm PivotalPath, outpacing the 7.6% rise in a broader industry index. Baker Bros.’s flagship fund gained roughly 19% in 2023, some of the people said.


The Bakers, known for being intensely private, are a throwback to a leaner, freewheeling style of hedge-fund investing. While today’s most sought-after hedge funds divvy money up across battalions of traders, Baker Bros. employed around 18 investment professionals to manage about $22 billion in assets at the end of 2023, regulatory filings show.

Other hedge-fund chiefs minimize risk by avoiding concentrated bets. At Baker Bros., Seagen accounted for about half of the value of its publicly disclosed stockholdings at the end of September.

That approach often comes with volatility, especially in a boom-or-bust sector like biotech. Baker Bros.’s flagship fund was down about 19% in 2022 and down about 25% in 2021, the people said. The share price of Kodiak Sciences, a maker of eye drugs in which the Bakers have a sizable stake, went from $10 at its 2018 IPO to a record high of $164 in 2021. It has recently been trading under $5.

A 20-year bet
Felix and Julian Baker, both in their mid-50s, are the sons of two professors. Early in their careers, Felix briefly attended medical school and earned a Ph.D. in immunology, while Julian made private-equity investments at Credit Suisse. They teamed up in 1994 to make biotech investments for members of the Tisch family and launched Baker Bros. in 2000.

Today, their firm’s Manhattan headquarters abuts the High Line aerial park. Many employees relocate to a satellite office in the Hamptons during the summer.

Each of the Baker brothers are estimated to have net worths of $2.8 billion, according to Forbes. Felix, who is on Stanford’s board of trustees, purchased a $45 million building in Manhattan’s West Village from a children’s nonprofit in 2014 and renovated it into a single-family home.

Seagen, previously known as Seattle Genetics, went public a year after Baker Bros.’s founding. The company pioneered a kind of next-generation chemotherapy called antibody drug conjugates, or ADCs. Chemotherapy patients usually endure brutal side effects because the drug kills both cancer and healthy cells. ADCs promised a more targeted attack.

In 2003, Baker Bros. bought around $16 million of Seagen preferred stock, which helped fund clinical trials. That stock was convertible into 10 times as many common shares at a price of $2.50 apiece. Felix joined the company’s board. The firm loaded up on Seagen stock in the ensuing years, at one point owning almost one-third of the company.

Baker Bros. stuck with Seagen as it worked out the ADC technology kinks. It also stuck around in 2022 when prosecutors investigated Seagen co-founder Clay Siegall for domestic violence, allegations which he denied. (Prosecutors declined to charge him.) Felix assumed the role of board chairman upon Siegall’s resignation.

By then, ADCs were becoming one of the hottest new categories in the cancer-drugs market. The drugs will account for $31 billion of the $375 billion market in 2028, pharmaceutical-market research firm Evaluate has estimated.

Felix was soon leading negotiations to sell Seagen, a person familiar with the matter said. Discussions with Merck about a sale in 2022 broke down. Pfizer Chief Executive Albert Bourla sent Felix a note asking to talk after the J.P. Morgan Healthcare Conference in January 2023. A few months later, the companies unveiled their $43 billion deal.

Investors including Baker Bros. received $229 in cash for each Seagen share. The firm gave most of its haul back to investors because it didn’t see enough opportunities to deploy all that money at once, a person familiar with its thinking said.

It is rare for a hedge fund that isn’t winding down to volunteer to shrink itself so much, said Jon Caplis, PivotalPath’s CEO. Other recent examples come from much larger firms: Citadel distributed about $8.5 billion to investors after a record 2022, and Viking Global Investors gave back $8 billion in 2017.

aker Bros.’s investors have included college endowments like those of Yale and Princeton and pension funds like the Teacher Retirement System of Texas. At a gathering after the deal closed, Felix joked with Bourla about receiving a call from an Ivy League university president who thanked him for identifying and investing in Seagen, a person familiar with the matter said.

“Glad to be of help,” Bourla said.