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Electrical equipment makers including ABB and Legrand are surging thanks to a pivot to data centre infrastructure

Four of Europe’s oldest industrial groups have added more than €150bn to their market caps on the back of soaring demand for data centres driven by the boom in artificial intelligence.

European makers of everything from switches to smart meters are providing the servers and infrastructure that power data centres for large language models and cloud computing, with traditional makers of electric equipment such as Legrand doubling their revenues thanks to data centres in recent years.

“We’re not putting $70 or $80bn on the table like Microsoft and Meta,” said Franck Lemery, chief financial officer of Legrand. “[But] we [provide] the components and our business is growing relative to that [spending].”

“The sexy part of AI is led by American companies,” said Alex Cordovil, an analyst at Dell’Oro. “But, with some exceptions, the nuts and bolts of the infrastructure are dominated by European players.”

Investors have spotted the potential. Since the launch of ChatGPT in November 2022, the market valuations of Schneider Electric, Siemens AG, ABB and Legrand — four of the leading European groups in the sector — have grown a combined €151bn, rising more than 60 per cent in the case of German-listed Siemens AG.

The groups continue to provide electrics to residential buildings and industrial groups. But data centres are their fastest-growing source of revenue, driven by the volume of computing power required by AI models, as well as gaming, cloud computing and streaming.

That focus has also exposed them to large share price swings, including during a market rout earlier this year triggered by the launch of Chinese large language model DeepSeek, which its makers say was developed with less processing power. Investors are also concerned about the constraints on grid systems and power supplies, according to Cordovil.

But groups including Legrand have brushed off concerns, pointing to the long-term trend of higher demand for data processing — Dell’Oro expects total capital expenditure on data centres to increase from almost $600bn in 2025 to more than $1tn by 2028.

“All the turbulence is relative. We’re very, very confident about the promise of our portfolio,” added Lemery. “We have to live with these ups and downs.”

Schneider Electric

Schneider Electric has been a leading provider in the data centre sector since the $6.1bn acquisition of American Power Conversion in 2006, putting it in pole position to benefit from soaring demand for electricity.

Data centres accounted for about 24 per cent of its orders in 2024, an increase from 23 per cent in 2023 and 19 per cent in 2022, according to the company.

The APC deal was initially judged expensive by investors but it enabled the group to move into the market for critical power services, which includes generators needed to ensure uninterrupted power supplies to data centres.

Schneider is valued at €127.9bn, overtaking French oil major TotalEnergies last year in a sign of the world’s shift from fossil fuels to electricity.

The company range from software to monitor data centre infrastructure, racks to store servers and cooling systems to prevent high-powered processing facilities from overheating. Last year, it acquired a 75 per cent controlling interest in Motivair, a specialist in liquid cooling, for $850mn.

This would help it serve customers such as Nvidia, whose servers for its most powerful AI chips would require the more efficient water cooling process rather than air, said Schneider chief executive Olivier Blum at the company’s annual general meeting.

AI had become a “fundamental change of paradigm for the IT and electric infrastructure required”, he added.

Legrand

Like Schneider and Siemens, French maker of sockets and cables Legrand dates back to the 19th century. In the 1900s, it started making light switches from porcelain and wood products, then the best-known insulators of electric currents.

Still based in its historic headquarters of Limoges, Legrand has in recent years pivoted towards data centres, orders for which made up 20 per cent of sales in 2024, double the rate in 2019.

“It could represent more, by 2030, between 20 and 25 per cent, we’ve not given a proper target. We’re very confident that it’s a vertical that is . . . going to continue to grow strongly in the next few years,” said Lemery.

The group has made 10 small acquisitions in the past year, six of which have been in the area of data centres.

But Legrand, like its industrial rivals, operates an export model with a high number of US clients that has left it exposed to Trump’s tariffs. This month, chief executive Benoît Coquart said 50-60 per cent US tariffs on Chinese goods could cost the company up to $200mn this year.

ABB

Swedish-Swiss electrical company ABB makes everything from robotics to power generators but in recent years its sales have skewed towards data centres.

Morten Wierod, the company’s chief executive, said that ABB was “working with many of the world’s largest data centre operators to ensure they have safe, reliable and energy efficient technologies to manage their increasing energy needs”.

In 2024, data centre orders made up 15 per cent of the $16.4bn in orders in ABB’s electrification unit, compared with about 9 per cent two years earlier. Electrification represents nearly half of ABB’s $33bn in annual revenue. Between 2019 and 2023, data centre orders grew at an average annual rate of 24 per cent, accelerating further in the past year as the AI race has intensified.

ABB’s offerings for data centre operators include ensuring availability and increasing energy efficiency as well as acting like backup batteries for entire facilities. Its systems providing reliable power are greener than traditional diesel generators, the company says.

But the company’s exposure to hyperscalers has led to stock market fluctuations, including after reports that Microsoft had cancelled some leasing contracts. The US is its largest market in terms of revenue for electrification, at about 50 per cent.

Siemens AG

German conglomerate Siemens has a smaller focus on data centres but it has increased spending on infrastructure for the technology as it seeks to catch up on competitors like Schneider Electric.

“Siemens and ABB have been focused on other areas and now they’re bringing their capabilities to bear over the past three years,” said William Mackie, an analyst at Kepler Cheuvreux.

The company’s overall data centre business, which has fuelled the German manufacturer’s recent growth, rose more than 45 per cent to about €1.3bn in the first half of the fiscal year.

But the Munich-based company has seen some hurdles to this growth, blaming a pause in data centre orders from one “hyperscaler customer” for a 16 per cent reduction in orders on electrical products such as microgrid controllers.

Prada Group’s Lorenzo Bertelli, Kering’s Francesca Bellettini and Tod’s Diego Della Valle shared their view on the future of fashion at the Zalando and Camera della Moda's Changemakers in Luxury Fashion event.

MILAN — Intuition and top-notch execution.

Those two ingredients were described as key in reigniting desirability for luxury and fashion at a time of market volatility and low consumer confidence.

Speaking Thursday evening at the third edition of Zalando’s “Changemakers in Luxury Fashion” conference organized in partnership with Camera Nazionale della Moda Italiana here, industry executives underscored the importance of jumpstarting a new paradigm for the sector.

Luxury has a new meaning, said Claudia D’Arpizio, global head fashion luxury at consultancy Bain & Co., now encompassing any tangible or non-tangible good that “fulfills the needs of the customer, [either a need for] indulgence, belonging, investment or self-actualization.”

The perimeter has changed, too. Fashion luxury companies now compete with experience providers, hospitality, food and beverage players, and even art dealers.

“I think that understanding this broader definition of luxury can provide a different meaning to the brands, [which will have to] see wherever they can expand, or wherever they can focus, and have a different horizon on the other brands,” D’Arpizio said.

Should one imagine a future when Balenciaga gets into automotive? Or Prada becomes a space company?

The latter is already a reality, to some extent.

Prada has collaborated with Axiom Space, the architect of the world’s first commercial space station, on NASA’s lunar space suits for the Artemis III mission.

Recognized with the Changemaker Award for Innovation, Lorenzo Bertelli, Prada Group chief marketing officer and head of corporate social responsibility, attributed the move to instinct, a guiding principle at the group, he said.

“I always say that this is a company that invested more than 1 billion euros in engineering R&D in the America’s Cup since the end of the ‘90s and when we started, we started just because my father liked sailing and had this kind of personal excitement,” Bertelli said.

He was the self-proclaimed “nerd” who triggered the company to leverage engineering, tailoring and composite material knowledge into something equally unexpected and outside the traditional perimeter of fashion and luxury as the America’s Cup venture.

“All those are instinctive decisions, so there is not much talk behind them, and we don’t know if it’s going to be successful, but what we have done more than 20 years ago now allowed us to embark on this journey. A simple, instinctive decision taken decades ago is affecting the opportunities, possibilities today, and maybe this is another instinctive decision that will bring us to nowhere, or maybe we become also a space company,” he said with a chuckle.

Without necessarily going as far as outer space, luxury brands need to win back customers.

Although consumer fatigue is a reality, in part because the price-value equation is no longer deemed fair, and consumer confidence is at the “lowest level,” as D’Arpizio put it, the prospects from a customer standpoint remain positive.

The industry will get to meet 300 million new luxury customers by 2035, the Gen Alpha middle class across the world, and Millennials are expected to inherit about 30 trillion euros of wealth from their Baby Boomer relatives, Bain & Co. forecast.

According to the consultancy’s research, willingness to spend has not yet contracted beyond tipping point.

“In theory, from a customer standpoint, the market is there,” D’Arpizio said. “I think it’s more in the hands of the brands to establish this connection,” she opined.

“The year 2025 will be one of big changes for many of the brands that are trying, for sure, to reignite growth across all levers — the creative, product and marketing levers — engaging the desire of the customer to reignite the love that probably now is a bit softening,” she said.

Case in point, a few brands in the French group Kering’s portfolio are off to new creative paths this year, with the debut collections of Demna at Gucci, Pierpaolo Piccioli at Balenciaga and Louise Trotter at Bottega Veneta coming this fall.

“Our goal is to make creativity shine and make it become a successful business,” said Francesca Bellettini, Kering’s deputy chief executive officer in charge of brand development. The recipient of this year’s Changemaker Award for Brand Vision, she described her management style as authoritative rather than authoritarian, always prone to listening and building bridges with her teams.

“You have to understand and comprehend the pressure creative people have, and this is why it is crucial to make sure that you choose the right creative talent for a certain brand, for a certain moment. It is absolutely not true that everybody can work for every brand. Some incredible creative people are not simply right for a certain brand or for a certain brand in a certain moment,” she said.

“So in the transitions and the changes that we made, that’s what we looked for. We simply expanded further, [understanding] where we wanted to take [the brands] and then we appointed the people that we think are going to be the best to take the brand desirability to the level [we want],” Bellettini said.

“The most important thing in a moment of crisis is to stay true to your brand position and also to recreate desirability. Some brands don’t perform because they’re not desirable anymore, even if they have beautiful products in their stores. And desirability can be injected only by the creative people in our industry,” she said.

Business leaders then have the task of building long-lasting relevance, she said.

As consumers shift their behavior, key fashion trends are morphing.

A white paper study presented Thursday night and put together by Boston Consulting Group with Highsnobiety highlighted a transition from aspirational fantasy to relevance, with fashion offerings that fit into consumers’ real lives, and a general desire to be included in the brand’s universe rather than be talked at by their favorite labels.

Fashion as an insignia of belonging is at the forefront of the conversation.

According to Bain & Co.’s D’Arpizio, self-expression is being replaced by conformity. That means the brands are challenged to answer consumers’ desire “to feel unique and at the same time be part and belong to something that is bigger,” she said.

“I like to feed people with an experience, with a motive that is just coming from the inner side of you,” said GCDS founder and creative director Giuliano Calza, a recipient of the Changemaker Award for New Generation.

“I’m very able to get the attention of the people, but I think that’s not enough. You have to leave a mark on them and make them feel like they bought something that is making them happy,” he said.

He was joined onstage by fellow awardees Loris Messina and Simone Rizzo of Sunnei.

“The fashion show is not just about the collection in clothes, but it’s about creating a cultural moment,” Rizzo said. Reflecting on their 11-year Sunnei journey, the cofounder said that the pair has “created a bridge from Sunnei to the people, ignoring the system.”

Product-centricity is also paramount, at a time when the need for transparency is growing, spurred on by customers’ increased knowledge and sophistication, and focus on sustainability.

The Boston Consulting Group’s study identified quality and craftsmanship as the top drivers of brand desirability, more than hype, scarcity and even cool collaborations, which didn’t even make it to the ranking of the top 10 levers.

This year’s recipient of the Changemaker Award for Craftsmanship, Tod’s chairman Diego Della Valle offered his take, saying that it is the right time for “Italian companies to push our philosophy of handmade products. People know about this story, especially in some countries like the U.S., for example. People understand the Italian lifestyle and that the handmade [concept] is part of that lifestyle. I think today, with artificial intelligence, I think we’d better not forget about artisanal intelligence.”

To this end, luxury and fashion consumers are rejecting the new-for-new’s-sake cycle in favor of timeless icons, heritage designs and legacy over novelty, the Boston Consulting Group’s study highlighted.

D’Arpizio associated this taste shift with a resurgence of “minimalism,” which she describes not as an aesthetic attribute, but rather a more mindful consumption behavior.

“With all this uncertainty that this is growing, a lot of consumers feel detached, and feel like luxury can be linked to a negative meaning of consumerism,” D’Arpizio said.

“I think that this is a topic that brands should tackle to reignite that desire that is linked to culture and to more inclusive meanings, to a purpose that is larger than just consuming and buying products that last for a short period of time,” she said.

Zegna Unveils Multiyear Partnership With Art Basel to Champion Contemporary Art and Social Change

The collaboration reinforces Zegna's commitment to supporting artists and artistic institutions.

Zegna has revealed a global multiyear partnership with Art Basel, marking a significant new chapter in the Italian brand’s long-standing dedication to contemporary art and cultural dialogue.

The collaboration reinforces Zegna’s commitment to supporting artists and artistic institutions that explore the intersection of creativity, community and nature. Zegna has supported Art Basel before, but in a smaller capacity.

Art has always been an essential part of Zegna’s identity. The company’s relationship with art was first envisioned by its founder, Ermenegildo Zegna, who believed art and beauty should serve as daily sources of inspiration. As a way to give back to the territory that shaped him, in the 1920s, he began commissioning local artists, including Ettore Olivero Pistoletto and Otto Maraini to enrich the town of Trivero and the original wool mill at the heart of what is today known as Oasi Zegna, a territory in the Italian Alps. These weren’t just decorative gestures — they were expressions of a vision that industry could coexist with beauty, that a factory could become a place of culture. Monumental staircases, fountains, friezes and portraits quietly transformed the Oasi Zegna landscape into a living museum, according to the company.

Over the decades, this vision has evolved. Zegna continued to commission site-specific public artworks by artists such as Daniel Buren, Dan Graham and Roman Signer, each chosen not for their fame, but for their ability to interpret the Zegna world in an authentic way. Globally, Zegna has invited artists such as Graham Sutherland, Not Vital and Kiki Smith to create bespoke wool trophies, symbolizing the brand’s legacy in textile innovation.

Art is also present throughout Zegna’s spaces: in its Milan headquarters, the work “Woolen — the Reinstated Apple” by Michelangelo Pistoletto recognizes the authenticity of Zegna’s partners, and the sustainable roots of its wool installations by William Kentridge, Mimmo Jodie and Ettore Spalletti can be found in Zegna stores around the world.

The partnership with Art Basel marks a pivotal moment for the luxury brand, offering a global platform to celebrate art that resonates with Zegna’s values of environmental stewardship, cultural consciousness and social engagement.

As an official partner, Zegna will be present across all four Art Basel fairs — Basel, Miami Beach, Paris and Hong Kong — and will create curated experiences that spark dialogue between art, design and responsible entrepreneurship. At the center of this collaboration is “Visible,” a project initiated by Cittadellarte – Fondazione Pistoletto and Fondazione Zegna, which supports socially engaged artistic practices through a pioneering fellowship model.

To strengthen the artistic dimension of the initiative and reinforce the partnership with Art Basel, Vincenzo De Bellis, Art Basel director, fairs and exhibition platforms, will join the “Visible” steering committee.

“I’m honored to join the ‘Visible’ steering committee and deepen our shared commitment to art as a driver of social and environmental change. Through this partnership with Zegna and Cittadellarte — Fondazione Pistoletto, we’re supporting artists who use their practice to address today’s most urgent challenges and shape more resilient futures,” said De Bellis.

Gildo Zegna, chairman and chief executive officer of Ermenegildo Zegna Group, said, “For over a century, our family has believed in the power of art to elevate places, enrich lives and shape culture. This partnership with Art Basel and Cittadellare is a natural evolution of that belief — a way to honor our legacy while looking forward. At Zegna, we see art not as embellishment, but as an agent of change. By supporting socially engaged artists through the ‘Visible’ project, we’re reinforcing our commitment to a future where creativity, community and responsibility can thrive together.”

“Visible” is not a recent innovation, it is rooted in a deep generational bond. Michelangelo Pistoletto’s father, Ettore Olivero Pistoletto, was among the first artists commissioned by Ermenegildo Zegna. That early connection laid the foundation for a shared belief that art should not be confined to traditionally dedicated spaces, but embedded in places where life happens.

Next month during Art Basel in Basel, Zegna will present the recipients of the 2025 Visible Situated Fellowships, spotlighting artists and collectives across the world who use their work to address today’s most urgent environmental and social challenges. The evening will also serve as a tribute to Michelangelo Pistoletto and his nomination for the Nobel Peace Prize, celebrating a lifetime dedicated to art as a catalyst for societal transformation.

As part of the partnership, Zegna will distribute limited-edition tote bags to mark the occasion, bringing Zegna and “Visible” to a new audience.

UK warned it will fall short of 2030 wind target

Rising costs and poor returns hampering Labour pledge on clean energy

The UK is likely to fall significantly short of its five-year target for offshore wind power, as developers continue to delay or cancel projects because of rising costs and poor returns, according to a new analysis.

Sir Keir Starmer’s Labour government has made clean energy one of its key goals and said in December that it wanted at least 43 gigawatts of offshore wind generation to be built by 2030. 

But a report by energy research firm BNEF predicts that only 33GW will be in operation by then, and said there would be a “few years” of delays to achieving the goal. 

“It is hard to build major offshore wind projects. There are not even enough vessels,” said Arhnue Tan, one of the researchers behind the report.

Developers are increasingly concerned about the viability of offshore wind projects, with potential returns squeezed by elevated financing costs, supply chain problems, and expectations of a fall in long-term power prices.

The world’s largest offshore wind developer, Ørsted, earlier this month halted work on one of the biggest projects in the North Sea, a 2.5 gigawatt farm called Hornsea 4 that would have powered more than a million homes. 

Hornsea 4 won a contract from the government last year guaranteeing it a fixed electricity price of £58.87 per megawatt hour, but Ørsted said it could not make the economics work. 

Last week, SSE, the FTSE 100-listed energy company, said it would slow down its investment in Berwick Bank, a project to build the world’s largest offshore wind farm in the outer Firth of Forth, and in the second phase of Arklow Bank in the Irish Sea.

SSE blamed bottlenecks in the planning system for the decision to cut its investment. Chief executive Alistair Phillips-Davies told the FT that Berwick Bank, which could power as many as six million homes, “has been on ministers’ desks for about three years now”. 

While there are 16.6GW of offshore wind projects currently in the pipeline, current market conditions suggest that only a fraction of them will go ahead, and there could also be more cancellations of existing projects, according to BNEF.

A key moment for the industry will come this summer, as the government launches the seventh allocation round for offshore wind, where subsidies for projects will be awarded.  

Despite the challenges in offshore wind, BNEF said the UK is on track to easily meet its 47-50GW target for solar power.

Tan added it would still be possible to hit the overall goal of only 5 per cent of electricity generated by gas by 2030, despite the predicted shortfall in additional wind turbines, if there was “reasonably windy weather”. 

A spokesperson for the Department of Energy Security and Net Zero said the government “categorically rejects these claims”.

“We have a strong pipeline of projects to deliver 43-50GW offshore wind by 2030 and our mission-led approach ensures we can steer our way through global pressures and individual commercial decisions to reach our targets,” they added.

Now is the time to reopen the Eurozone bond debate

The EU now has a unique chance to capitalise on investor doubts about the US and promote the euro as a reserve currency

The dollar is losing its status as an all-purpose haven, highlighted by Moody’s recent downgrade of its last remaining triple A credit rating from one of the big three agencies. The EU now has a unique chance to capitalise on investor doubts and promote the euro as a reserve currency, a move that would yield significant economic benefits. It is time to break the taboo around issuing common debt by the EU backed by member states.

The dollar’s decline is partly due to President Donald Trump’s trade and budget policies, but there is a structural shift too: foreign holdings of US debt dropped from 50 per cent of the outstanding debt pile in 2014 to only a third by 2024. Meanwhile, foreign interest in European bonds, especially German Bunds, is rising: over the years 2023 and 2024, foreign holders increased their holdings by about €160bn, the equivalent of 8 per cent of currently outstanding Bunds.  

The EU should accelerate this trend for two reasons. First, greater demand for euros means cheaper borrowing costs for the bloc’s governments, corporations and homeowners. The Bank for International Settlements found that $100bn in foreign purchases of US Treasuries lowered interest rates by 0.20 percentage points using conservative estimates, illustrating the substantial beneficial impact of having increased foreign holdings.

Second, positioning the euro as an alternative haven brings stability during downturns. In times of economic stress, a flight to euro assets would lower financing costs for European governments, giving them more fiscal ammunition to stabilise their economies. At moments such as that, European banks would also receive a boost in the value of their government debt assets, breaking the bank-sovereign “doom loop” that spooked markets during the Eurozone crisis of the early 2010s when sell-offs in national debt weakened bank securities and vice versa. More resilience in a crisis would allow lenders to continue to support the real economy, rather than break it at the worst possible moments.

To capitalise on this singular historical moment, Europe needs to act fast. Playing a stronger role as a haven requires increased availability of safe assets. This includes both highly rated national government bonds but also Eurozone bonds backed by member states and issued at a predictable rate.

For some governments, particularly those with lower debt-GDP ratios, Eurozone bonds are rife with moral hazard: they fear that backing common debt would merely encourage more profligate peers to freeload and keep spending. That is a fair criticism — but opposing Eurozone bonds outright would mean missing out on a much bigger opportunity that would benefit frugal countries.

One way to mitigate improvidence is to make Eurozone bonds conditional. For example, they could replace national debt, rather than add to the overall stock. As Hélène Rey, professor of economics at London Business School, has argued: there is no need to run very high government deficits to be the world’s reserve currency. It is about a sufficiently large stock of debt being available. As it happens, here in Europe there is a bountiful stock at our hands that common bonds could replace. A stronger restriction on breaking the EU rule that government deficits should not exceed 3 per cent deficit to GDP as part of the plan would lower the moral hazard risks.

Even with conditionalities, there may be concerns among stakeholders in Finland, the Netherlands and Germany that issuing debt together with, say, Italy and Greece, would increase their individual government borrowing costs. However, this perspective is unduly pessimistic. European institutions already issue debt with a triple A rating, which is superior to the median government rating of low double A.

Furthermore, if European governments jointly finance a small portion of their debt — for example, the first 10 per cent — this implies risk pooling. Consequently, this would reduce the overall risk associated with European sovereign debt, and potentially lead to improved ratings for all national governments. In addition, increased liquidity and regular issuance of Eurozone bonds can result in their inclusion in sovereign indices and help grow a futures market.

This brings us back to the overall impact on financing costs. For context, the EU at present pays a premium of 0.15 to 0.20 percentage points to finance itself for seven to 10 years versus the Dutch government. The increased popularity at home and abroad could easily bring future common financing costs below the current price paid by a relatively frugal country such as the Netherlands. Needless to say that the southern EU countries may benefit more — an impact that would indirectly also benefit the rest as the internal market would grow faster.

The economic case is clear for the EU to begin to design acceptable frameworks for issuing Eurozone bonds if it wishes to capitalise on US weakness.

Greenland says it will turn to China if US and EU shun its mining sector

Business minister suggests Arctic territory may look elsewhere for help exploiting minerals

US and European mining companies need to hurry up and invest in Greenland otherwise it will have to look elsewhere for help exploiting its minerals, including from China, a minister for the vast Arctic territory has warned.

“We want to develop our business sector and diversify it, and that requires investments from outside,’’ Naaja Nathanielsen, Greenland’s minister for business and mineral resources, told the Financial Times.

When asked about turning to China, she replied: ‘‘We do want to partner up with European and American partners. But if they don’t show up I think we need to look elsewhere.”

The comments demonstrate Greenland’s desire to get western help to expand its economy in mining and tourism, with United Airlines due to start flying from New York to the capital Nuuk from next month.

Greenland is home to large but fairly inaccessible deposits of minerals including gold and copper, and is located in a geopolitically crucial area in the Arctic.

Nathanielsen said a current memorandum of understanding on mineral development with the US — signed during Donald Trump’s first presidency — was coming to an end and that Greenland tried unsuccessfully during the Biden administration to see if Washington wanted to renew it.

Trump has repeatedly insisted that the US will take over Greenland, a semi-autonomous territory of Denmark, potentially by force.

“We sort of hoped that the Trump administration would be more willing to engage in dialogue with Greenland about the mineral sector development. We got a bit more than we asked for, because we have no wish to be American,” she added.

Nathanielsen told the FT that she found Trump’s threats to take control of Greenland “disrespectful and distasteful”. Her comments underscore the increasing anger felt by Greenlanders at Trump’s aggressive approach to the island of 57,000 people.

She said that despite Trump’s rhetoric, there was little interest from China in mining deals — right now there are only two Chinese mining companies in Greenland, but both are minority shareholders in inactive projects. She speculated that Chinese investors might be holding back because they don’t want “to provoke anything”.

Her comments come as the country hailed the awarding of its first licence under a new mining code to a Danish-French group to extract anorthosite, a mineral used in the fibreglass industry.

The €150mn mining project in Western Greenland aims to start construction as soon as next year, according to Claus Stoltenborg, chief executive of Greenland Anorthosite Mining.

The company’s backers include a Greenlandic state pension fund, Danish bank Arbejdernes Landsbank, and Jean Boulle, a French mining group.

Greenland has only two operating mines, producing gold and anorthosite, while production has not started at a further two mines that have received a mining licence.

Nathanielsen said the new four-party coalition government in Nuuk was ‘‘first and foremost committed to creating development for Greenland and Greenlanders” and would prefer to work with “allies and like-minded partners”.

But she added that Greenland was “having a difficult time finding our footing” in the changing nature of the western alliance.

“We are trying to figure out, what does the new world order look like? In those terms, Chinese investment is of course problematic, but so, to some extent, is American,” she said. “Because what are the purpose of [the US investments]?”

The EU is a “good fit” for Greenland as it had few of the minerals it needs itself, Nathanielsen added, as well as being aligned on environmental metrics.

Shareholders back 7-Eleven owner’s management amid $50bn takeover battle

Seven & i’s annual meeting approves all board members and proposals to clear way for new CEO’s appointment

Seven & i shareholders have backed its new chief executive as the 7-Eleven store owner faces a record-breaking $50bn takeover offer and tries to prove to increasingly divided investors that the Japanese retailer can stand alone.

At the company’s annual meeting on Tuesday, shareholders voted through all board members and proposals, including the nomination of Stephen Dacus as a director. A failure to win convincingly could have thrown into jeopardy Dacus’s ascendancy to the CEO role, which will be confirmed by the new board.

The show of support comes as Dacus walks a fine line of trying to raise Seven & i’s valuation while keeping the door open to Canada’s Alimentation Couche-Tard and what would be the biggest foreign takeover of a Japanese company.

Akira Fukuchi, a 77-year-old who has held Seven & i shares for more than 20 years, said on the sidelines of the meeting that the company needed to hold out for a higher bid price and that it was in this situation due to “sloppy management”, which he was not yet convinced Dacus could rectify.

Another investor who has held Seven & i shares for two years and wished to remain anonymous said he was “despondent” at “ineffective” management and was supportive of the Couche-Tard takeover proposal.

That was echoed by Minoru Masuda, a 66-year-old former 7-Eleven employee, who said the need for the company to “globalise” would be better served by Couche-Tard.

Since announcing in March that Dacus would take the top job, the company has agreed to sell its general merchandise stores in Japan to private equity, launched large-scale share buybacks, unveiled plans to list its US business and vowed to revamp 7-Eleven stores in Japan with fresh food offerings.

The moves have failed to boost the company’s share price. Instead, it has fallen more than 11 per cent this year, and some shareholders at the meeting expressed frustration.

However, the vote on Tuesday appeared to signal that investors were willing to give Dacus time to prove that his pledges to counter the takeover bid from the Canadian operator of Circle K stores would create more value.

Masahiko Shuchida, who invests for Osaka-based Life Up and has held Seven shares for 40 years, said on the sidelines that he opposed the takeover for cultural reasons, citing a distinctive Japanese “duty, loyalty and sentimentality” management style. It was not a matter of price, he added.

“We should spread the Japanese convenience store around the world. But if it’s a takeover, then that’s going to be hard for us,” he said.

However, people familiar with the initial vote count said that Junro Ito, a member of Seven & i’s founding family, who failed in his attempts to muster a rival $58bn take-private bid, is expected to receive a lower vote for his appointment as executive chair. The vote counts will not be released until later this week.

Several people familiar with Couche-Tard said the company was frustrated that no shareholders lodged proposals ahead of the meeting that provided a greater challenge to management.

One person familiar with Couche-Tard’s thinking said that what happens next in the deal, assuming it continues to be rejected by Seven & i, would be determined by any shareholder agitation in the coming months and whether they were happy to give Dacus extended time to turn around the business and raise the share price.

The takeover attempt by Couche-Tard, owner of the Circle K convenience store chain, was made public last year but has been consistently rebuffed by Seven & i. It has cited the difficulties of competition issues in the US, where a combined group would have significant market share.

The two groups are working together to identify a potential buyer for the US stores that would need to be sold to address competition concerns. Both sides expect a private equity buyer to emerge as the best candidate, but there are disagreements about how viable such an option would be in the eyes of the US regulator.

In a significant step earlier this month, the two groups also signed a non-disclosure agreement to “progress transaction discussions, facilitate due diligence, and collaborate on plans to engage with regulators”.

Ukraine’s ‘drone war’ hastens development of autonomous weapons

Artificial intelligence means machines can operate even when communications are blocked, but there are ethical concerns

Earlier this month, the Ukrainian military claimed to have shot down a Russian fighter jet with missiles fired from an unmanned naval drone. The development was emblematic of a conflict in which the battlefield has become a testing ground for new technologies, including drones and artificial intelligence. And those advances are hastening the day where machines that can kill people operate entirely autonomously.

Artificial intelligence can allow drones to operate with greater autonomy and is playing a growing role in the Ukraine conflict, which is frequently referred to as a drone war. Of the almost 2mn drones that Ukraine acquired in 2024, 10,000 were AI-enabled, according to a recent report by Kateryna Bondar, a fellow at the Center for Strategic and International Studies who previously worked as an adviser to the Ukrainian government.

The AI-enabled drones in Ukraine range hugely in appearance, capability, price and size. They span cheap consumer drones embedded with a chip and software based on open-source AI and constructed in underground workshops, to sophisticated models manufactured by western companies such as US-based Anduril and Shield AI, or German start-up Helsing. But the basic principle is the same.

“In its simplest definition, an AI-enabled drone is a drone where certain core functionalities have been replaced by artificial intelligence, taking over from a human always having to have control over it”, explains Ned Baker, UK managing director and head of Ukraine operations at Helsing. The AI specialist and defence tech start-up — valued at €4.95bn in 2024, three years after being founded — announced in February the sale of 6,000 of its new AI-enabled HX-2 attack drones to Ukraine, following a previous order of 4,000 HF-1 drones.

AI has become particularly important in Ukraine due to the prevalence of electronic warfare systems that can block communications with a drone’s operator as well as GPS.

Faced with this, AI “can replace the functionality that is made impossible”, enabling drones to navigate, target, and communicate with other drones when “the link between operator and drone has become disrupted”, Helsing’s Baker says. 

AI-enabled drones can use computer vision — the same technology that has been available in commercial drones for a decade for purposes such as skiers filming clips of themselves — to navigate and identify targets autonomously, Bondar explains. The array of various AI technologies available can “make a drone a fully autonomous weapon system”, she says — although, as she stresses, no drones are yet being operated fully autonomously in Ukraine, with humans always kept “in the loop” to approve actions.

Certain weapons such as missiles have for decades had autonomous elements — but the difference with AI-enabled drones is “decision-making capabilities”, says Bondar. Whereas missiles follow “preprogrammed paths” and an “algorithm which was created by a human”, AI allows a drone to “actually fly and see and analyse and orientate . . . without any preprogrammed pathway”.

The technology comes with practical and ethical challenges. For one, while “defence manufacturers promise a lot”, the reality in battle is often very different, says Nick Reynolds, a research fellow at British defence think-tank RUSI. Real-world data is important, but data from the war in Ukraine is not publicly available — although some suppliers, such as Helsing, have some access through their government contracts. “If you don’t have the battlefield data, as a company, you’re going to really struggle”, he adds. 

Another obstacle is the cost and complexity of AI technology, including the chips required, combined with the inherently disposable nature of military drones, explains Reynolds. Bondar cites the use of “primitive” tethered drones — which are attached to a long fibre-optic cable, to bypass signal-jamming systems — as “proof that AI software is really hard”, requiring resources, time and expert knowledge. 

The changing needs of those on the battlefield — as well as the constant innovations in AI — pose a further challenge. “Things change on the front line every two weeks”, Baker says. To help with this, Helsing releases fortnightly software updates that allow drone users to “access a new capability in the existing system” — Baker says “it’s the iPhone thing, but on the battlefield”.

The semi-autonomous use of AI drones in Ukraine — with a human always in the loop — is partly due to a high error rate, says Bondar. “People don’t trust machines yet,” she explains. Helsing’s Baker says it is more about “policy and ethical considerations”. “We’re going through a transitionary period on the battlefield at the moment”, Baker adds: “a combination of the AI and the human working in tandem . . . rather than it being 100 per cent human, which it would be two years ago, or 100 per cent AI, which it might be in two years' time”.

The prospect of weapons acting with full autonomy, with no human oversight, has “very serious ethical implications”, Reynolds acknowledges, with a need for regulation to consider “how we mitigate unnecessary harm”, among other things. He fears, however, that the technology has already advanced beyond such considerations. Bondar agrees, describing regulation as “really hard”, given both the rapidly developing technology and the necessity-driven nature of warfare. 

Regulatory debates are yet to fully materialise. In the meantime, AI-enabled drones will continue to be “on every major and non-major military power’s agenda”, says Baker. “AI on the battlefield will be easily as important as the advent of gunpowder, advent of machine guns, advent of tanks — but in completely unknown ways as of yet.”

Move likely to raise concerns among hedge funds and private credit groups of greater regulatory scrutiny

EU regulators are planning their first stress test to look for vulnerabilities in the financial system outside of banks, reflecting fears about the rapid growth of less regulated groups such as hedge funds and private equity.

The plans by European authorities to examine the impact on the wider financial system of a potential market crisis, which would also include pension funds and insurers, follows a similar debut exercise by the Bank of England last year.

Officials at the EU’s main financial watchdogs are still discussing the details of such a system-wide stress test of non-bank institutions, but they are optimistic that it could be launched next year, according to two people involved in the talks.

The move is likely to raise serious concerns among hedge funds, private credit groups and money market funds that they could be subjected to greater scrutiny and restrictions by European regulators in the future.

Since the 2008 financial crisis, the provision of loans has shifted from banks’ balance sheets towards other firms that behave like traditional lenders but are more lightly regulated. 

Non-banks accounted for about a quarter of the total €19tn stock of loans in the Eurozone at the end of 2023, according to the European Central Bank, which said “more and more loans are being provided by insurance corporations and pension funds”.

Supervisors are growing increasingly concerned about the opacity and potential risks these firms could present, as well as links back to the banking system. Lending by Eurozone banks to such non-bank firms has tripled since 1999 to reach €6tn by the end of 2023.

Non-banks have been central to several episodes of market turmoil in recent years, including a dash-for-cash in bond markets after the pandemic hit, the collapse of family office Archegos Capital Management three years ago, and a liquidity crunch at energy traders after Russia invaded Ukraine.

“We’ve seen some crisis episodes . . . where liquidity risk spillovers came from the NBFI, non-bank financial intermediation space,” Claudia Buch, chair of the ECB’s supervisory board, told the European parliament in a recent hearing.

“So, it’s important that this is also well understood and well regulated,” Buch said. “So not all NBFIs are more risky than banks or other financial institutions, but we need to address the risks there in the right way and also the regulation needs to be targeted to those risks.”

EU regulators also worry that the region has been slow to tighten rules for money market funds, which are an important source of funding for banks, leaving them with lower minimum liquidity requirements than those in the US and UK.

Some national authorities in Europe have already announced they are planning to launch a similar stress test of so-called non-bank financial intermediaries (NBFI), including those in France.

The EU exercise would build on the specific sector-focused stress tests already carried out regularly for banks, insurance companies, money market funds and clearing houses in the 27-country bloc.

The aim is to examine how a crisis would spread between different parts of the financial system and whether this could magnify the shock rather than absorbing it. 

Discussions have included the European Banking Authority, the European Securities and Markets Authority, the European Insurance and Occupational Pensions Authority and the ECB, as well as the European Commission and the European Systemic Risk Board. The regulators and the commission all declined to comment.

The commission said on Friday it would delay the implementation of tougher capital requirements for banks’ securities trading businesses by a year until early 2027. The delay will allow Brussels to wait for clarity on whether the US will go ahead with the rules agreed by global regulators on the Basel Committee on Banking Supervision.

The BoE involved more than 50 City of London institutions in its so-called system-wide exploratory scenario — which included the theoretical default of a hedge fund — to model how a period of stress would ripple through non-bank firms.

City firms were relieved when the BoE said resilience was “comparatively high” in liability-driven investment funds in pensions schemes, which had caused a crisis in gilt markets two years earlier.

But it also warned that fire sales of assets by pension funds, hedge funds and other investors could magnify a market crisis, especially as many had “mismatched expectations” about their ability to raise cash in a meltdown.

The Danes set an example for timorous American politicians who refuse to reform unaffordable entitlements.

Liberals have long argued the U.S. should be more like Europe. If they mean Denmark, then yes, Washington can learn a thing or two about Social Security reform, given that neither political party in the U.S. has a serious plan to avoid a 21% cut to retiree benefits in less than a decade.

Copenhagen raised its retirement age last week to 70 for Danes born in 1971 or later. Workers currently become eligible for the Danish equivalent of Social Security at age 67, which will go up steadily in coming years.

This is the result of a reform passed in 2006 that ties the retirement age to average life expectancy at age 60. The typical longevity of retirees in developed economies long ago surpassed the estimates that were baked into government retirement programs when those entitlements were created. That’s a blessing for individuals and families but a curse for government finances. Denmark is trying to ensure it can fund its program and keep the system solvent without imposing an ever-increasing fiscal burden on younger workers.

Note that the latest bump in the retirement age was pushed through parliament by a center-left government, under Prime Minister Mette Frederiksen of the Social Democratic party. These changes always are controversial, and Ms. Frederiksen has suggested Denmark may eventually need to slow the pace of increases.

There aren’t politically easy answers, and people in physically demanding professions might struggle to work additional years in those same jobs. Yet there appears to be a cross-party agreement in Copenhagen that leaving the retirement age unchanged is reckless.

Similar debates have become the norm in Europe in recent years. Sometimes governments move in reverse, as when Germany under Angela Merkel lowered the retirement age to 63 from 67 for some workers. But the general trend is that the age of eligibility rises alongside life expectancy. Even France raised its retirement to 64 from 62 under a reform pushed through by President Emmanuel Macron.

As a reminder, the U.S. system of Social Security is projected to be insolvent in 2033, at which point the checks to retirees will suddenly be 21% smaller. Nobody wants this to happen, but nobody wants to take the heat for proposing real reform, so the U.S. keeps barreling toward a cliff while pretending not to notice.

Denmark is a model by comparison. This is what it looks like when politicians are honest about a fiscally responsible retirement age in an era of modern medicine—and then have the courage to do something about it.