TheChek News Flow

Special programming for young people at the late designer’s exhibition at the Grand Palais and a limited-edition T-shirt launch the tie-in.

KICK OFF: The Virgil Abloh Archive and Paris Saint-Germain soccer club, which was close to the designer’s heart, have officially launched their collaboration designed to create opportunities for young people.

It began on Saturday with special programming for students ages 11 to 15 taking part in PSG youth initiatives at “Virgil Abloh: The Codes.” It is the first major European exhibition dedicated to the late founder of Off-White, creative director of menswear at Louis Vuitton and all-around creative polymath, held at the Grand Palais.

Young people from PSG For Communities’ École Rouge & Bleu and Allez Les Filles program took part in workshops, and customized PSG shirts and footballs in honor of Abloh, who sought to expand access and opportunities for young people’s creativity. That mission is carried on today through his archive, which serves as a community-building platform and resource to create shared and public spaces for art.

Also kicking off the tie-in, starting Sunday, is a limited-edition PSG T-shirt designed by the Virgil Abloh Archive. This was inspired by PSG’s 2024-26 away uniform and nods to Abloh’s style. The T-shirt has on it a lynx, PSG’s official mascot, in the vein of a traditional sporting emblem in the U.S. “Away From Home” is written on the shirt, honoring the American designer’s creative heritage in Paris.

The shirt is now available at store.psg.fr, then starting Monday, it will be sold in official PSG shops and in the Colette pop-up in the Grand Palais through Thursday, when “Virgil Abloh: The Codes” ends there.

Proceeds from the shirt’s sale will go to PSG, for the École Rouge & Bleu program, through the Paris Saint-Germain Endowment Fund, and the Virgil Abloh Foundation.

“This partnership with PSG is deeply significant because it reflects everything Virgil believed in: community, creativity and encouraging young people to dream bigger and build their own future,” said Shannon Abloh, founder and president of the Virgil Abloh Foundation and president and chair of the Virgil Abloh Archive, who was the late designer’s wife, in a statement. “The Virgil Abloh Foundation makes a daily commitment to this mission, and we are proud to bring it to Paris, a city that inspired and thrilled Virgil so much.”

“For the last 25 years, PSG for Communities has provided guidance for young people through education, sport and social impact,” said Fabien Allègre, chief brand officer at Paris Saint-Germain and vice president of PSG for Communities. “Thanks to the mentorship, openness and access it provides to the creative industries, the Virgil Abloh Foundation perpetuates the late designer’s vision by offering opportunities to under-represented young creative talents.”

Carriers like Spirit and Frontier have lost customers to bigger competitors and seen their costs balloon. Some are in financial distress.

Discount airlines reshaped the U.S. aviation industry by offering cheap fares and charging extra for pretty much every service imaginable. And they made lots of money doing it.

Now, however, those companies are under intense pressure.

Aviation experts say the largest of the discount airlines, a diverse group of businesses known as ultra low-cost carriers, have become victims of their own success. They expanded rapidly, but may have grown too much. Today, they are struggling to manage rising costs and to compete with one another and giants like Delta Air Lines and United Airlines, which co-opted the strategies that made them so successful.

Those and other unique challenges pushed Spirit Airlines, a pioneer of the business model, to seek bankruptcy protection this summer, for the second time in less than 12 months. Other discount operators, such as Frontier Airlines, are in better financial shape, but are no longer consistently profitable, even as some of the nation’s biggest airlines thrive.

“The mainline carriers have effectively figured out how to compete — with higher costs and better service,” said Dan Akins, an economist with Flightpath Economics, an aviation consulting firm.

No-frills carriers have been around for decades and generally followed simple principles: Fly planes full and often. Cut costs as much as possible. Offer low fares but charge for extras.

Spirit helped to popularize the approach. The airline made no apologies for nickel-and-diming customers, which made it the subject of late-night jokes and viral videos.

It paid off. Spirit reported annual profits from 2007, the year after it switched to an ultra low-cost model, until 2020, when the pandemic brought the industry to its knees. Along the way, Frontier, Sun Country Airlines and newer start-ups like Breeze Airways and Avelo Airlines adopted variations of the model. Allegiant Air, another ultra low-cost carrier, adopted the model around when Spirit did.

Three of the four biggest U.S. airlines — American Airlines, Delta and United — were paying close attention and soon began adopting some budget airline tactics. The fourth, Southwest Airlines, is a low-cost pioneer that paved the way for the ultra low-cost carriers, but until very recently it eschewed most of the practices used by the likes of Spirit and Frontier.

Pretty much every U.S. airline now charges fees for checked bags, seat selection and other services once included in the price of a ticket.

American, Delta and United went even further by selling “basic economy” tickets that cost less but have more restrictions. Because those three companies typically flew to more cities with more frequent flights, their basic tickets sometimes appealed more to customers than similar bare-bone tickets offered by the likes of Spirit.

“This is not a high-margin business,” said David Neeleman, an entrepreneur who founded JetBlue Airways, Breeze and other budget airlines. “Taking that share of the business away just kind of doomed” many ultra low-cost airlines.

United’s chief executive, Scott Kirby, last month described the discount-airline business model as a “failed” experiment in the United States. Executives at the discount airlines have said Mr. Kirby was wrong, even though they acknowledge that the their businesses face challenges right now.

Frontier and Spirit did not make executives available for interviews, but each has said it has suffered from an oversupply of flights on key routes in recent years. Frontier’s chief executive, Barry L. Biffle, has also criticized the largest airlines for practices that he says have limited the ability of smaller carriers to add flights at many major airports.

“You can have the planes, pilots, fuel and crews, but if you don’t have the gate, you don’t get to play,” he said this week at a congressional hearing about competition in the airline industry. “Too many of those gates are locked up by a handful of big airlines.”

Spirit said recently that it would furlough one-third of its flight attendants and is giving up some routes. On Friday, it asked a bankruptcy judge to approve a plan to slash its fleet by 40 percent, ending leases for 87 of its 214 jets. The airline has struggled since a federal judge blocked its plan last year to sell itself to JetBlue. Spirit also had other issues, including significant debt and engine problems that grounded many of its planes.

Frontier is doing better but has not made much money in recent years. It did report a modest profit last year, the first full year it has done so since 2019, but lost money in the first half of this year.

Discount carriers have also seen their costs increase. American, Delta and United awarded huge raises to pilots in recent years, forcing the rest of the industry to raise pay for pilots, who are in short supply and take many years to train. Pay for mechanics and other skilled workers has also increased.

By raising pay in parallel, the major airlines “altered the landscape forever,” said William Swelbar, an aviation consultant and economist.

Rising costs make it harder to offer the bargains that budget airlines are known for. Because of swelling airport fees and other costs, for example, Allegiant recently said it would move operations from Los Angeles International Airport, where it has flown for nearly 17 years, to nearby Hollywood Burbank Airport.

“It was becoming too high of a hurdle for us to stimulate enough demand at the right price,” Gregory Anderson, the airline’s chief executive, said in an interview with The New York Times.

Executives at Spirit and Frontier have also blamed a glut of flights on important routes for the problem. But experts say the airlines themselves bear some of the responsibility.

As they grew, the discount carriers bought larger planes and began flying to bigger airports, putting them in more direct competition with the big airlines and other budget carriers, experts said. In the decade through 2024, Spirit and Frontier each doubled their share of all U.S. flights, according to Cirium, an aviation data firm.

“I think they have no one to blame but themselves,” Mr. Swelbar said.

Despite their rapid rise, ultra low-cost carriers account for only about 11 percent of the seats on domestic flights, according to Cirium. American, Delta, United and Southwest control nearly 79 percent.

Those big airlines make billions of dollars in annual revenues from credit cards, and, in recent years, all but Southwest have profited from selling more premium seats and international tickets, which have been in high demand. Those advantages have helped them protect their dominance at many of the nation’s busiest airports.

But some discount airlines are still doing well.

Allegiant, which is based in Las Vegas, operates mostly on routes with no nonstop competition. Its parent company took a big loss last year, but reported profits in the previous three.

Allegiant flies on more than 575 routes, about 75 percent of which are not served by another airline. It also earns revenue from its airline credit card and by selling travel packages that include hotel rooms, ground transportation and other services. The airline is sharply focused on the preferences of leisure travelers, who are its target customers, Mr. Anderson said.

“When there’s no demand, we pull back our capacity significantly,” he said. “And when there is demand, that’s when we’re trying to put as much capacity out.”

Sun Country, a small carrier, has reported profits in each of the past few years. It primarily connects its home base of Minneapolis-St. Paul International Airport to other destinations, but the airline also earns about 20 percent of its revenue from charter flights and half as much from operating cargo flights for Amazon.

Breeze, which is privately held, has been flying only since 2021, but it reported its first quarterly operating profit last year. Mr. Neeleman said the airline ran efficiently and filled a niche by using a fleet of midsize planes larger than those flown by regional airlines but smaller than the jets typical of bigger carriers.

The airline has also found success in seeking profits at smaller airports that larger airlines ignore, he said. For example, it operates nonstop flights between Vero Beach, Fla., and New Haven, Conn., and between Raleigh, N.C., and Ogdensburg, N.Y., a city on the St. Lawrence River near the Canadian border.

“It’s not like we’re going right into their breadbasket offering fares that they have to match,” Mr. Neeleman said. “We’re basically flying between two points that they look at and they go, ‘Good luck with that.’”

Luxury options and brand collaborations abound for parents looking to project wealth and luxury while out for a walk.

In the spring of 2020, when Savannah Egan was seven months pregnant, she came across a baby gear listing that she could not resist.

Her taste had always been classic — she’s a historian by trade and has a penchant for heirloom sewing and hand embroidery — and she wanted to purchase a stroller that fit that aesthetic. So when she found a woman selling a limited edition vintage Balmoral pram from the British brand Silver Cross, she knew she had to have it.

Ms. Egan drove to Los Angeles from her home in San Diego and loaded the 80-pound stroller into the back of her car. She paid $900, which could be seen as a bargain, since Balmorals — one of the most exclusive and expensive strollers on the resale market — regularly retail for upward of $3,000.

“They call it the Rolls-Royce of strollers, and they’re not kidding — it’s massive,” Ms. Egan, who now lives in North Carolina, said in a recent phone interview. “And it’s definitely not user-friendly, but it’s beautiful.”

Silver Cross Balmoral-style strollers, which have long been a favorite of the British royal family, crossed over to influencers and luxury fans in the United States with the help of social media. When the podcaster Jackie Oshry had a baby two years ago, she posted a photo of the status stroller in her living room. And on TikTok, some users frequently post videos showing off their Balmorals.

Restored Balmorals are on the high end of a booming market for luxury strollers that includes offerings from the typical baby gear powerhouses, but also from collaborations with fashion houses, car companies and more.

The Balmoral is its own animal, as it is no longer manufactured by Silver Cross, meaning that interested buyers need to consult someone like Scott Frew, the manager of Prams With Pizazz, a vintage stroller restoration business based in Britain that is owned by his wife, Carolyn. The business started 10 years ago when the Frews customized a miniature Balmoral, hand-painting the hood to look like a ladybug. Since then, Mr. Frew said he had restored “thousands” of prams, including a six-figure family heirloom stroller for one client so private they required an N.D.A.

Mr. Frew said that he kept a stock of about 300 in his warehouse in Scotland and that he shipped internationally, including to the United States. Prices start at around $3,300 (2,500 pounds), but Mr. Frew said their durability made the price worth it. “You get a lot more use out of them,” he said. “They look a lot nicer than the strollers that you get nowadays that, if you’re lucky, last for one baby.”

For those looking for high-end options without the complications of having one restored, fashion houses like Dior and Fendi are capitalizing on the status stroller moment by collaborating with companies on their own designs. Loro Piana sells a “thermoregulating” stroller in a not very baby friendly cream color for around $5,800 (5,000 euros).

Silver Cross recently partnered with Lamborghini to create a $5,500 stroller, while the British brand Egg announced last month that it was collaborating with Aston Martin on a bespoke stroller that would hit the market later this year. Cybex, a brand best known for its stylish collaborations, currently offers a 1950s nostalgia-inspired stroller designed by Jeremy Scott for $2,499.95.

Rebekah Kimminau, a baby gear expert and professional registry consultant, said that beyond imports like Silver Cross, many of the popular luxury stroller brands in the United States remained the same as they did two decades ago, when “Sex and the City” helped put the Bugaboo Frog on the map. She often recommends a Bugaboo, like the $1,500 Kangaroo, or a Cybex, like the $2,250 e-Priam, which includes a built-in motor to make pushing uphill easier, both of which have proved to be both luxurious and durable.

Ms. Kimminau added that many of her clients wanted a luxury option that could be easily converted and customized with different fabrics and accessories. The Uppababy Vista V3, a favorite of luxury influencers like Campbell Puckett (better known as Pookie), offers more than 30 configurations as well as extra canopy and seat fabric kits in different colors, so you can change your stroller’s aesthetic any time.

Those options may be more practical than a Balmoral, no matter how classic its design is.

After purchasing her Silver Cross, Ms. Egan said she had used it only once or twice. It does not fold up, and its weight makes it difficult to transport in a car. Instead, like most of her friends, she uses a Vista for her everyday stroller. But she does not regret buying the Balmoral.

“We ended up just kind of having it in the house and we used it for photos and I keep my kids’ stuffed animals in it, and they like to climb up in there and play with it,” she said. “But, yeah, I just think they’re beautiful.”

There are good reasons to think that simply throwing more computing power at the current models won’t do it

The basic principle of venture capital is to put a dollar in each of 10 companies, accept that three will go to zero, one or two to $10 or more, and the rest kind of meh. The winner more than makes up for the losers, but you spread your money around in the hope of securing ten-baggers.

Investing in artificial intelligence increasingly has the same mindset—but without the diversification. This leaves investors exposed to all the many risks as they chase one big bet: artificial general intelligence, an AI that can match or surpass humans. This isn’t a chatbot, but a truly capable alternative to the human brain: Think Terminator, Hal, Blade Runner.

If what’s known as AGI ever worked, it would deliver massive societal change, as well as potentially huge productivity gains and, barring state seizure, profits on a literally science-fiction scale. This is the better-than-ten-bagger bet that AI luminaries talk up as they set out plans for trillions of dollars to be sunk into data centers.

Along the way, there’s “agentic AI” and other propositions that could still produce decent productivity gains and make lots of money if widely adopted. The problem: The entry cost is increasingly high because of the race to AGI, and even the prospects for take-up of the less exciting propositions remain uncertain.

Excluded from the VC world, ordinary investors are mostly invested in AI via funds that have a slice of their money in private companies such as OpenAI, or through Big Tech companies that are dedicating more of their cash piles to AI research and holdings in private AI firms.

Here are the risks:

It never works. Clearly, if AGI proves impossible, those betting the farm-converted-into-a-data-center on it working will lose. Will it work? I have no idea. But there are good reasons to think that simply throwing more computing power at the current models won’t do it, and every past AI boom has come with similar excitement about AGI.

AI pioneer Marvin Minsky told Life magazine that true AGI was three to eight years away—in 1970. Less widely known is that the magazine canvassed skeptics who cautioned that AGI was more likely to take 15 years. It’s always been the technology of the future, and it might stay that way.

It takes too long. Maybe we do get AGI eventually. But how long will investors stay hopeful? The chips being bought today to fill the data centers will be redundant in four or five years, so need to generate significant revenue quickly. It’s highly unlikely they can be paid for with AGI, so they need either investors to keep on funding heavy losses, or customers to be willing to pay for other AI applications created along the way: video editing, fake digital friends, short online answers to replace search.

It costs too much. Here we get to the problem of the other AI applications. Staff at OpenAI, creator of ChatGPT, just sold shares at a valuation of $500 billion. It is on track to meet its forecast of $13 billion in sales this year, almost all from the chatbot, valuing it at 38 times revenue. That multiple is a little more than dot-com poster child Cisco Systems at the peak of the tech bubble in 2000.

Even if everything goes well, the high entry cost lowers the return prospects, barring AGI. Plus, investors have to continue to believe it will go right and keep funding losses until it does.

You pick a loser. Back in the browser wars of the late 1990s, Netscape fought Microsoft’s Internet Explorer for dominance of the web interface. Netscape had the better product in my view, but it didn’t matter because the eventual winner was…neither of them.

Google, now Alphabet, came up with Chrome and dominates use. All the big tech companies are competing to develop AI, along with startups in Europe and China. If you could somehow invest in all of them, you could hope to get the VC-type returns, even if all but one go to zero. But the winner might be someone else entirely.

Investors have already repeatedly missed when trying to pick winners among smaller AI stocks. Super Micro Computer shares are worth a bit more than a third of last year’s peak after a wild run-up. SoundHound AI shares lost three-quarters of their value this spring after rising more than 12-fold in a year, before a rebound. C3.AI shares are worth less than half their 2023 high, and have lost almost 90% of where they briefly traded at after the 2020 IPO.

Competition is stronger. Investors are betting that AI is a winner-takes-most market with fat profit margins. It could be that usage speeds design improvements, creating a network effect where more customers mean the product gets better, so attracts more customers. Or it could be, as today, that there are a ton of different chatbot companies offering very similar products—and margins are driven down both by competition and by the need to keep up heavy spending on research.

It’s easier than you think. AI stocks wobbled earlier this year when China’s DeepSeek AI released a chatbot that was easier to train. Academics in China just released a paper on their “SpikingBrain” model that claims a new approach allows powerful AI development on low-cost microchips. If someone comes up with a way to provide cheap AI, it might speed up the path to AGI—but it will hurt chip maker Nvidia and companies that filled data centers with its expensive, high-powered chips.

The rest of the economy suffers. The scale of data-center expansion is stretching the ability of the U.S. to provide enough electricity, backup generators and other equipment, as it is now measured most effectively in percentages of GDP. The spending helps spread money from AI investment more broadly across the economy. But it also makes it harder for old industries that have to compete for power and equipment with companies flush with the gusher of AI cash. With the U.S. operating at or close to full capacity, this means either inflation or a reallocation of resources—both painful options.

If you think an AGI would generate multitrillion-dollar profits, even a tiny chance that it happens is worth a lot. Investors merely hoping for profits from intermediate AI products should be bothered about financing a sector increasingly priced for AGI.

The Latest Controversy in Chess Is the Cupcake Gambit

World No. 2 Hikaru Nakamura needed to hit a minimum number of games for a shot at the world championship. He sparked a firestorm by beating up on lower-ranked players to get there.

Chess grandmaster Hikaru Nakamura played in low-stakes tournaments to meet FIDE’s 40 classical games requirement for the Candidates tournament.

Nakamura’s strategy exploited a 400-point rating cap, allowing him to play weaker opponents with minimal risk to his high rating.

FIDE responded by eliminating the 400-point limit for players rated above 2,650, a change that has sparked controversy in the chess world.

Pawn pushers at a couple of low-stakes chess tournaments in Iowa and Louisiana recently sat down at their boards only to discover a surprising competitor: one of the highest rated chess players ever to live.

Hikaru Nakamura, the No. 2 player in the world and five-time U.S. champion, had flown in as a last-minute entrant, making him far and away the top player in the building. Not only was he rated several hundred points higher than anyone else in the fields, he was also exponentially more famous, as the planet’s leading chess influencer.

It was the chess equivalent of Aaron Judge showing up to play Little League.

Nakamura wasn’t there to tee off on inferior opponents—or for a few thousand bucks in prize money. He was exploiting an arcane loophole on a much larger mission to become the next chess world champion. But Nakamura’s maneuver hasn’t gone unnoticed. In the process, his tactics have sparked a rule change from FIDE, instant backlash to the change, and sent the chess world into a full-blown freakout.

It began with Nakamura needing to qualify for the most prestigious tournament in chess, known as the Candidates, where eight players compete for the right to challenge the defending world champion. The Candidates reserves one spot for the player with the highest rating, which would be Nakamura because world No. 1 Magnus Carlsen has withdrawn from contention.

Only FIDE, the game’s international governing body, requires that players have at least 40 classical games under their belts before the cycle is up. The problem is that Nakamura, who spends most of his time streaming to millions of followers and favors shorter formats in competition, keeps a light tournament schedule. As of June 1, he had played only 18 classical games this year.

That left him scrambling to rack up games anywhere he could—with little risk of letting his rating drop. Even he dubbed the exercise a “Mickey Mouse” tour.

At the Louisiana State Championship and the Iowa Open Championship, he played a combined 11 games, winning all of them. And his opponents were simply in awe. They found themselves in the rare position of meeting a genuine chess celebrity, while also being manhandled by him on the board.

“I was paired against an absolute icon, got a nice chat, pictures, a signed sheet, and now a recap of my mistakes,” one of his opponents in Louisiana, Nahum Jose Vilamil, wrote on social media. “What else can you ask for?”

Not everyone in chess was so thrilled.

Last week, FIDE adjusted its bylaws, with its president specifically saying that Nakamura’s activities had triggered the change.

The controversy boils down to the esoteric rules that govern the game’s rating system. When a player wins or loses a match, their rating change depends on the relative strength of their opponent—a system devised by Hungarian physicist Arpad Elo more than 50 years ago. So if someone beats a stronger opponent, their rating will go up more than it would if they beat a weaker one. The same logic applies to losing.

Yet the calculations are capped at a difference of 400 rating points—a nuance that played right into Nakamura’s hands when his opponents in these tournaments were sometimes far more than 400 points beneath him. In other words, he could grind through them with minimal risk to his own standing.

The practice is dismissively referred to as “rating farming.” And everyone in chess seemed to agree that Nakamura was taking advantage of it.

“I kind of admire the way he’s going about it because it’s so shameless,” Carlsen said on the Take Take Take podcast. “It’s pragmatic and probably the right thing to do.”

So last week, FIDE got rid of the 400-point limit for games involving super-elite players with ratings above 2,650, of which there are currently 70 in the world.

“No more farming,” FIDE president Emil Sutovsky wrote on X. “If you are a 2,650+ player, do prove your skill vs. opponents of comparable strength.”

Top players soon pointed out wonky flaws, such as how the measure could inadvertently hurt lower ranked players. Which is why many feel the attempted solution might be more problematic than Nakamura’s cupcake tour.

“FIDE has definitely made mistakes,” Nakamura wrote in an email. “I think my general view is that they are failing to balance perceived criticism on the internet from a very loud minority as opposed to the actual reality.”

Still, Nakamura has no choice but to keep hunting for games before the year is out. He remains 11 short.

Shell says Trump administration’s attacks on wind projects harm investment

Energy company’s American head also says Shell will not ‘step away’ from diversity, equity and inclusion policy

Shell’s top executive in the US has said the Trump administration’s decision to halt fully permitted offshore wind energy projects is “very damaging” to investment and called for more predictable regulation.

Colette Hirstius, president of Shell USA, told the Financial Times that energy projects with proper permits should be allowed to proceed, warning the political pendulum in the US could eventually swing back against the oil and gas sector.

“I think uncertainty in the regulatory environment is very damaging. However far the pendulum swings one way, it’s likely that it’s going to swing just as far the other way,” she said when asked about the administration’s stop-work orders on offshore wind farms.  

“I certainly would like to see those projects that have been permitted in the past continue to be developed. Similarly, if you think of the business I run offshore [Gulf of Mexico], that type of permitting uncertainty has been utilised to undermine the permits that we have in the past — and that’s equally as damaging.”

Hirstius took over as Shell USA president in August and has retained her previous role of executive vice-president of the Gulf of America, a region that produces about 15 per cent of US oil. US President Donald Trump issued an executive order in January renaming the Gulf of Mexico the Gulf of America, prompting most oil companies to follow suit.

In that position, Hirstius was forced to adapt to former president Joe Biden’s stringent restrictions on offshore lease sales, which posed a threat to the oil and gas industry.

“Predictability about lease sales, predictability about permitting — these are really important elements that contribute to the confidence that we have in this basin . . . I think the Gulf as a whole did suffer from that [Biden lease restrictions],” she said.

Shell is the largest oil producer in the Gulf with 11 offshore facilities and has been present in the region since 1947. It employs more than 11,000 people in the US and invests about $10bn a year — the largest capital outlay in any country.

Hirstius said the Trump administration’s decision to reinstate annual lease sales was a “big step forward” that would encourage investment. A reduction in royalty rates on offshore production and a relaxation of some rules on drilling in the Gulf would also encourage production, she said.

Hirstius said Shell was planning to bid for new leases in a sale in December, the first held under a new annual schedule set by Trump that stretches to 2040.  

But she said tariffs were another area of concern, as they affect projects that were greenlit by Shell and other companies years ago.

“Much of the steel that we use, the fabrication, the welding techniques, you can’t fabricate it in the US. It’s not an option,” said Hirstius, adding that Shell is exploring whether it can obtain relief from the administration.

“It’s about the predictability. What I will say is that I have found the current administration and many of the secretaries very willing to listen . . . We haven’t gotten any relief yet.”

Shell has weakened some of its climate and energy transition targets under chief executive Wael Sawan, who took the helm in January 2023 following a surge in oil prices following Russia’s full-scale invasion of Ukraine. Last year the company dropped its 2035 target of a 45 per cent reduction in net carbon intensity, citing the “uncertainty in the pace of change in the energy transition”.

Asked if Shell had misjudged the timing of the energy transition, Hirstius said the company wanted to fully participate in the shift to low-carbon energy but it had to make sure the things it invested in were “economically viable”.

In January Shell exited the Atlantic Shores wind project off the coast of New Jersey, taking an almost $1bn write-off just days after Trump posted on Truth Social that “hopefully the project is dead and gone”. But the company continues to selectively develop renewable generation projects in the US and elsewhere when it can generate financial returns.

Hirstius said Shell’s stable output policy did not restrict it from exploiting hydrocarbon resources in the US, which is the world’s biggest oil and gas producer. “It takes multibillion-dollar investments every year to stay flat,” she said, noting that annual production rates in Gulf oilfield decline by as much as 15-20 per cent every year.    

Shell sold its onshore shale oil assets in the Permian basin, the US’s largest oil basin, in 2021 for $9.5bn shortly before oil prices surged. Hirstius said any decision to move back into US shale would have to reflect an “incredible value proposition”.

Hirstius, who is one of the most senior women in the US oil industry, said Shell had no plans to back away from its commitment to diversity, equity and inclusion despite an effort by the Trump administration to dismantle initiatives in the public sector.

“When we talk about the culture within Shell and the performance culture. I think one of the aspects that is in every fibre — and it’s not just in the US, its globally — is the idea of diversity, inclusion in order to unlock business opportunity,” she said.

“It’s hard to step away from that. We wouldn’t want to.”

Europeans need to learn to love risk

A culture of financial caution stymies innovation and prevents the continent from competing with the US and China

At the heart of Europe’s panic about “competitiveness” is an inferiority complex vis-à-vis the US and China. Such panics arise on a regular basis: since 2022, Europeans have sounded the alarm over the US Inflation Reduction Act, Chinese electric vehicle sales and artificial intelligence training.

Panic can be salutary. Policymakers’ attention has increasingly converged on a real inferiority: European economies invest less in cutting-edge technology than America’s or China’s. Europe certainly needs to invest more in innovation, but it will only succeed by finding its own way to do so, not by duplicating Silicon Valley or Chinese planning.

Consider why the US is so good at producing innovation, and China so good at sometimes leapfrogging it. Extreme inequality in the US creates numerous billionaires who are willing to throw money at anything exciting, in the knowledge that many projects will fail. But they have the drive to find the ones that will change the world. It is a casino economy — and the one thing casinos reliably supply is risk-taking capital, just what Europe lacks.

China displays a similar recklessness within state structures. Beijing shares with US billionaire-entrepreneurs a combination of huge scale and scant accountability for how resources are deployed. Like American billionaires, the Chinese government takes big bets that cause bubbles and busts. “Involution” — subsidised capacity expansion so fierce that it drives entire sectors into the red — is China’s equivalent of US venture capitalists’ many failed projects. In both cases, rapid innovation has emerged amid the waste.

Europe is different. It has fewer extremely rich people and more of its wealth is managed with greater caution and conservatism. Its social model and cultural history is simply less conducive to recklessness. Moreover, the incomplete integration of the European economy and the fragmented regulations and labour protections of its many nations shrink the rewards to risk-takers and raise the costs of failure.

Still, Europe urgently needs to find a way to increase risk capital, or it will continue to see innovative work move across the Atlantic just as it is on the cusp of successful scaling. Despite the good work done by founders of EU companies, from Spotify to Skype, Europe will not change its social and economic model to create a Silicon Valley-style billionaire class. Nor will its democratic publics allow China’s enormous redirection of public resources at the say-so of top leaders — and rightly so. Europe must find its own way to make capital more risk-loving.

The problem is not a shortage of seed funding for new ideas; the environment for start-ups keeps improving. Nor is there an overall lack of capital; the EU sends €300bn-€400bn worth of net savings to other economies every year. But these large pools of savings are not offered up as the risk-tolerant capital innovative companies need to grow fast.

This is what economists call a market failure. European savers are more risk-averse than what would most benefit the economy and society as a whole. And the answer to market failures are corrections through policy interventions. If Europeans are too risk averse for their own good, governments must seek out more risk for them. This will require policies that convert the safety Europeans savers crave into equity or equity-like investments. Europe is known for being bank- and credit-dominated. But there is a long pedigree for public policies to turn savings into venture-like capital in Europe, from France’s “Livret A”, which has financed public infrastructure for 200 years, to Sweden’s equity-heavy pension funds.

This is the tradition that needs to come to the fore. It will require scaling up to boost risk-capital schemes where they exist, introducing them where they don’t, and supplementing them with mechanisms to generate risk capital between and not just within EU countries. Some of this is happening, but much more ambition is needed to bridge Europe’s innovation gap.

One game-changer would be an EU debt-funded sovereign wealth fund investing in venture funds for innovative companies ready to scale up across Europe. This would not be “eurobonds” for EU expenses or transfers to poor members, but for giving European innovators the risk capital they need. Nearly as bold would be to tilt the incentives for existing financial institutions to devote more of their balance sheets towards risk capital — or invert most tax systems’ bias in favour of debt finance over equity. Some will object that this exposes the public sector to risk. But that’s the point. If there is anything Europe does best, surely it is to pool individual risks for the common good?

The political triumph of a rightwing billionaire Eurosceptic

Andrej Babiš’s Czech election victory boosts central Europe’s disruptive potential, but he will struggle to shift EU policy

Andrej Babiš pulled off a remarkable political comeback on Saturday with a decisive victory in Czech parliamentary elections. The billionaire entrepreneur who served as prime minister from 2017 to 2021 joins the swelling ranks of rightwing Eurosceptics taking or threatening to take power in Europe.

His return to office will embolden central European populists led by Hungary’s Viktor Orbán, potentially further constraining the EU from acting more decisively to help Ukraine or tackle climate change. The Hungarian leader said Babiš’s victory was “good news for Europe”.

The former Czech premier has ridden the same Trumpian wave that propelled ultra-conservative Karol Nawrocki to the Polish presidency in June and carried George Simion, a far-right former football hooligan, to a close second in Romania’s presidential election in May.

Babiš has long cultivated comparisons with Donald Trump, a fellow billionaire politician. His election campaign also sold familiar-looking red caps, in this case emblazoned with the words “Strong Czechia”.

But Babiš’s victory was part of a decade-long pattern in central Europe where power has swung back and forth like a “pendulum” between centrist, liberal forces and illiberal populist ones, said Daniel Hegedüs, an expert on the region at the German Marshall Fund think-tank.

The exception is Orbán’s long rule in Hungary. But even that could end with election defeat next year, if the opinion polls prove to be correct and the contest is free and fair.

Babiš, whose ANO party once belonged to the European liberal family, has moved sharply to the right in recent years. He co-founded the pan-EU far-right Patriots for Europe group alongside not just Orbán but also Herbert Kickl, a far-right ideologue who heads Austria’s Freedom party.

Babiš campaigned inveighing against immigration, EU climate policies and over-reach by Brussels. He has promised to end Czech bilateral military aid to Ukraine. To govern he will need the support of the pro-Russia Freedom and Direct Democracy party (SPD) and a hard-right populist party representing motorists.

Babiš, together with Orbán and Slovakia’s Prime Minister Robert Fico, will try to revitalise the Visegrád regional alliance, albeit without the help of Poland’s pro-EU government, as a way to promote a Eurosceptic political agenda for Europe.

But there are policy differences between them, including on Russia and on Ukraine’s EU membership path. And sloganeering is one thing, blocking critical EU decisions is another. EU partners have learnt to “differentiate when a dog is barking and when a dog is biting”, Hegedüs said.

The European Council, which brings together the EU’s 27 heads of government, will soon have two far-right Patriots for Europe members in Orbán and Babiš and potentially a third if Fico joins the group. That would create a “critical mass of disruptive potential” in the EU’s highest decision-making body, said Hegedüs. 

Babiš is no ideologue. He is probably more like Silvio Berlusconi than a second-term Donald Trump — although like both of them he faces claims of conflicts of interests between his business empire and government responsibilities.

Analysts expect Babiš to be more pragmatic and less obstructive than his two regional allies. It would be surprising if he ends the Czech Republic’s role in supplying ammunition to Ukraine even when that would be bad for Czech business.

Domestically, Babiš faces stronger domestic checks and balances than his counterparts, in particular from Petr Pavel, the former Nato commander who beat him to the presidency in 2023. And Ukraine and other allies can also draw comfort from the worse than expected election performance of pro-Russian parties, with the hard-left alliance failing to make it into parliament at all.

Prague has always tended be a somewhat Eurosceptic voice. And the EU is already watering down its green ambitions and toughening its stance on migration. So Babiš’s return to power may not move the dial much on EU policymaking.

It will allow three central European leaders to project a common front and claim they are the political future of Europe. But with the pendulum swinging the other way in Hungary, the Babiš-Orbán-Fico show may not last long.

Oil producer group says it will raise production by a further 137,000 b/d in November

Opec+ has agreed to raise oil production from November by 137,000 barrels a day, opting for a relatively modest increase after reports of a much larger move unsettled markets. 

Ahead of the meeting there were reports of a potential 500,000 b/d increase by the producer group, which Opec+ described as “inaccurate and misleading”. The price of benchmark Brent crude nevertheless fell more than 8 per cent, its biggest weekly decline in three months, to close below $65 a barrel.

“Today’s decision wasn’t about barrels, it was about signalling. Opec+ stepped carefully after witnessing how nervous the market has become,” said Jorge León, head of geopolitical analysis at Rystad Energy and a former Opec employee.

The more modest increase is nevertheless likely to please US President Donald Trump. He has repeatedly urged Opec+ to increase supply in an effort to cool prices, ease inflation and squeeze Russia’s energy revenues, as part of the west’s efforts to bring Moscow to the negotiating table over Ukraine. Saudi crown prince Mohammed bin Salman is expected to visit Washington in November.

In March, Opec+ abandoned its previous strategy of withholding millions of barrels a day from the market to support prices. November’s production increase is the same size as the one announced by the group for October.

Despite forecasts that global demand could not absorb much additional oil, the market has remained resilient, bolstered in part by China’s strategic stockpiling.

While Opec+ members have raised their collective production ceiling by 2.67mn b/d since April, Brent crude has recovered from the low of $58 a barrel it hit that month and traded for much of the summer between $67 and $70. There have also been few signs that oil is being diverted into storage in the US or Europe, which is the usual indicator of oversupply. 

​The actual output of the group, which manages about 40 per cent of the world’s oil production, has been significantly lower than the headline quotas, however, because of penalties being paid by some members for previous overpumping and the inability of some members to meet their quotas. 

In August, for example, Saudi Arabia, Iraq, Kuwait, Oman and the United Arab Emirates together lifted exports by only about 540,000 b/d — roughly one-third of their combined quota increase.

Rystad Energy’s Leon said production since March had only risen by about 60 per cent of the announced targets.

“Going forward, production increases are likely to be less, as some countries might not be able to keep increasing production,” he said.