Category: Politica

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Tech stocks propel market rally amid Trump’s tariff pause

Stocks move back up

On Monday 14th April 2025, the stock market experienced a notable mini rally, driven by the tech sector’s resurgence following a weekend announcement of a temporary tariff pause.

President Trump’s decision to exempt smartphones, computers, and other electronics from steep tariffs provided a much-needed reprieve for the industry, sparking optimism among investors.

Major tech companies like Apple, Nvidia, and Amazon saw significant gains, with Apple shares surging by 7.5%. The Nasdaq Composite, heavily weighted with tech stocks, climbed 1.9%, while the S&P 500 rose 1.5%.

This rally marked a stark contrast to the volatility of the previous week, where tariff uncertainties had sent shockwaves through the market.

The tariff pause, although temporary and restricted to 20%, helped to alleviate immediate concerns about rising costs for consumers and businesses.

Importers were spared from choosing between absorbing higher expenses or passing them on to customers. This relief was particularly impactful for companies reliant on Chinese manufacturing, as the exemptions covered a wide range of tech products.

Market analysts noted that the rally was not just a reaction to the tariff news but also a reflection of the tech sector’s resilience.

Despite facing challenges earlier in the year, tech companies have continued to innovate and adapt, maintaining their position as a driving force in the U.S. and world economies.

However, the rally’s sustainability remains uncertain. The administration’s mixed messages about future tariffs have left investors cautious.

While Monday’s gains were encouraging, the broader market continues to grapple with the unpredictability of trade policies.

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Trump takes wrecking ball to global trade – sets stock markets on fire and plays golf – all in one week

Reckless tariffs

Is this a fair ‘take’ on the last weeks tariff turmoil?

President Trump’s tariffs have left a significant mark on global trade and financial markets, creating waves that continue to shape global economic dynamics.

The tariffs, initially aimed at reducing the U.S. trade deficit and protecting domestic industries, triggered a rollercoaster ride for stock markets and strained international relations.

Highs to lows

The Dow Jones Industrial Average, Nasdaq Composite, and S&P 500 experienced sharp declines following the announcement of sweeping tariffs. At their lowest points, the Dow fell to 37226, the Nasdaq dropped to 15266, and the S&P 500 sank to 4956.

These figures marked significant losses, with trillions of dollars wiped off the market in just a few days.

The volatility was exacerbated by fears of a global trade war and the uncertainty surrounding the tariffs’ implementation.

Tariff turmoil and 90 day pause

In response to the market turmoil, President Trump announced a 90-day pause on most tariffs, providing temporary relief to investors and businesses. This decision led to a rebound in stock markets, with indices recovering some of their losses.

However, the relief was short-lived, as tensions with China escalated. While tariffs on many trading partners were paused, China’s tariff rate was increased to a staggering 125%.

This move further strained U.S.-China relations and added pressure on industries reliant on Chinese imports.

Tech garners favour

The tech sector, heavily dependent on global supply chains, was among the hardest hit. Tariffs on components like microchips and finished products such as smartphones and computers disrupted production and increased costs.

Companies faced challenges in maintaining profitability and passing on the increased costs to consumers. The eventual reduction and cancellation of some tariffs provided a lifeline to the tech industry, allowing businesses to stabilize operations and reduce prices.

However, the uncertainty surrounding trade policies continued to pose challenges for the sector.

Market turmoil?

Was this the ultimate in market ‘management’ as President Trump posted on his social media platform, Truth Social, that it was a ‘great time to buy’ just hours before announcing the 90-day tariff pause.?

This statement, made at 9:37 am., came shortly before the announcement, which caused stock markets to surge significantly. The timing of his post raised eyebrows and sparked discussions about potential insider trading concerns

China retaliates

China’s response to the tariffs was swift and retaliatory. Beijing imposed its own tariffs on U.S. imports, raising rates to 125%. This retaliation targeted key U.S. industries, including agriculture and technology, further escalating the trade conflict.

The Chinese yuan also hit its lowest level against the dollar since the global financial crisis. These measures highlighted the deepening economic rift between the world’s two largest economies.

The effects of President Trump’s tariffs underscore the complexities of modern trade policies. While intended to protect domestic industries, the tariffs created significant economic disruptions, both domestically and globally.

The stock market volatility, strained international relations, and challenges faced by industries like technology illustrate the far-reaching consequences of such policies.

As the world continues to navigate the aftermath of these tariffs, the importance of balanced and strategic trade policies becomes increasingly evident.

Markets moved up, unsurprisingly, after Trump announced the tech tariff adjustment

Over the weekend, President Trump reportedly made several statements about tariffs on tech products, creating some confusion.

Initially, it was announced that smartphones, computers, and other electronics would be temporarily excluded from the steep tariffs.

However, Trump later clarified that these products were not entirely exempt but had been moved to a different ‘tariff bucket.’ He reportedly stated that they would still face a 20% tariff as part of broader measures targeting Chinese goods.

Trump also hinted at upcoming tariffs on semiconductors and the entire electronics supply chain, emphasising the need for the U.S. to produce more of these components domestically.

President Trump reportedly described this as part of a ‘National Security Tariff Investigation’. These announcements have left tech companies and investors uncertain about the long-term implications for the industry.

Tariffs are like a spider’s web cast over the world with the spider, crawling around collecting from its prey.

Trump’s tariffs continue to ‘infect’ world trade, and they will be here for a while yet.

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The end of globalisation or a fresh start with a new world order?

Global trade

Globalisation is a process that has woven the world together, creating interconnected networks of trade, culture, technology, and governance.

At its core, globalisation refers to the increased interaction and integration between people, companies, and governments across the globe.

This phenomenon has profound economic, political, and cultural implications, shaping the way we live and think.

Historically speaking

Historically, globalisation is not a recent occurrence; it has been evolving for centuries. The roots of globalisation can be traced back to ancient civilizations when trade routes like the Silk Road emerged around 130 BCE during the Han Dynasty of China.

The Silk Road connected Asia, the Middle East, Europe, and North Africa, facilitating the exchange of goods, ideas, religions, and innovations. While it was primarily a trade route, it also marked the first notable instances of cross-cultural interaction on a global scale.

However, the modern wave of globalisation began much later. Many historians point to the Age of Exploration in the late 15th and early 16th centuries as a pivotal moment.

European explorers like Christopher Columbus and Vasco da Gama sought new trade routes to Asia and the Americas, leading to the establishment of colonial empires.

These explorations were driven by ambitions of trade, wealth, and power, further intertwining economies and cultures.

Adam Smith, the 18th-century economist and philosopher, can also be credited with significantly influencing globalisation through his ideas. His seminal work, The Wealth of Nations (1776), laid the foundation for modern economics and advocated for free-market trade.

His philosophies supported the idea of open international markets, which became a cornerstone of globalisation in later years.

Industrial revolution

Fast forward to the 19th and 20th centuries, the Industrial Revolution and advancements in technology supercharged globalisation.

Railroads, steamships, telegraphs, and later airplanes and the internet, reduced distances and enhanced global connectivity.

This period also saw the establishment of international organisations such as the United Nations and the World Trade Organisation, further embedding globalisation into global policies.

Evolution

Today, globalisation continues to evolve. While it has brought unparalleled access to goods, services, and information, it has also sparked debates about its impact on inequality, environmental sustainability, and cultural homogenisation.

As nations and individuals grapple with its implications, globalisation remains a defining characteristic of our interconnected world. Its history is a testament to humanity’s constant quest to connect, collaborate, and innovate.

Tariffs

The introduction of ‘protectionist’ policies and ideals will likely lead back to globalisation in the end. Are Trump’s protectionist tariff ideals about protectionism or more about a drive to level the imbalance of global trade differences? Gobal trade will not end!

The tariffs are more about aiming to settle trade imbalances, at least according to U.S. President Trump.

Trump’s tariffs have had a significant impact on globalisation, challenging its trajectory. By imposing sweeping tariffs on imports, including a baseline 10% on goods from various countries, Trump aimed to reduce the U.S. trade deficit and reshore U.S. manufacturing.

While this approach sought to protect domestic industries, it disrupted global trade networks and raised concerns about inflation and economic instability.

These tariffs marked a shift away from decades of free trade policies that had fostered globalisation. Critics argue that such measures could lead to higher consumer prices and strained international relations.

On the other hand, proponents believe they might encourage self-reliance and industrial growth within the U.S.

The long-term effects on globalisation remain uncertain. While some see this as a step toward de-globalisation, others view it as a recalibration of trade dynamics.

The future will likely depend on how nations adapt to these changes and whether they seek collaboration or confrontation in global trade.

Globalisation is too big for it to simply… stop!

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What’s a tariff?

Trump's tariffs

Some of the strangest locations affected by Trump’s tariffs include an uninhabited island near Antarctica?

U.S. President Donald Trump’s ‘reciprocal tariffs‘ hit major trading partners around the world, but some tiny islands and remote locations were also unlikely targets.

These ‘odd’ choices have cast doubt on the validity of the calculation used to fire off these tariff salvos.

President Donald Trump set a baseline tariff rate of 10% across the board, with a raft of levies affecting over 180 countries.

Meanwhile global markets, but especially U.S. stocks continue to tumble in a freefall rout!

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Dow drops 2200 points Friday 4th April 2025 – S&P 500 loses 10% in 2 days as Trump’s tariff rout deepens – just two days after ‘Liberation Day!’

Stocks down

The stock market was smashed for a second day Friday 4th April 2025 after China retaliated with new tariffs on U.S. goods, sparking fears President Donald Trump has ignited a global trade war that will lead to a global recession.

Stock market damage

The Dow Jones Industrial Average dropped 2,231.07 points, or 5.5%, to 38,314.86 on Friday 4th April 2025, the biggest decline since June 2020 during the Covid-19 pandemic.

This follows a 1,679-point decline on Thursday 3rd April 2025 and marks the first time ever that it has shed more than 1,500 points on consecutive days.

The S&P 500 collapsed 5.97% to 5,074.08, the biggest decline since March 2020. The benchmark shed 4.84% on Thursday 3rd April 2025 and is now down more than 17% off its recent high.

The Nasdaq Composite, home to many well-known tech companies that sell to China and manufacture there as well, dropped 5.8%, to 15,587.79.

This follows a nearly 6% drop on Thursday 3rd April 2025 and takes the index down by 22% from its December 2024 record – pushing it into a bear market.

The selling was wide ranging with only 14 members of the S&P 500 higher on the day. Major market indexes closed at their lows of the session.

China’s commerce ministry said the country will impose a 34% levy on all U.S. products, disappointing investors who had hoped countries would negotiate with Trump before retaliating.

Technology stocks led the massive rout Friday

Apple shares slumped 7%, bringing its loss for the week to 13%.

Nvidia dropped 7% during the session.

Tesla fell 10%.

All three companies have large exposure to China and are among the hardest hit from Beijing’s retaliatory tariffs.

The bull market is dead, and it was destroyed by self-inflicted wounds!

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Dow dives 1600 points after Trump’s tariff attack – S&P 500 and Nasdaq drop the most since 2020

Stocks markets fall

The U.S. stock market experienced a dramatic plunge following President Donald Trump’s announcement of sweeping tariffs, marking one of the most significant market downturns since 2020.

On 3rd April 2025, the Dow Jones Industrial Average plummeted by 1,600 points, a staggering 4% drop, closing at 40,546.

Dow Jones one day chart

The S&P 500 fell by 4.8%, while the tech-heavy Nasdaq Composite suffered a 6% decline, reflecting widespread investor anxiety.

S&P 500 one day chart

Trump’s tariffs, which include a baseline 10% levy on imports from all trading partners and higher rates for specific countries, have sparked fears of a global trade war.

The effective tariff rate for China, for instance, has risen to 54%, raising concerns about supply chain disruptions and inflation. Major industries, including technology, retail, and manufacturing, were hit hard.

Apple shares dropped nearly 10%, while companies like Nike and Nvidia saw significant losses.

Apple one day chart

The market reaction underscores the uncertainty surrounding the economic impact of these tariffs. Analysts warn that the measures could dampen consumer spending, increase inflation, and slow economic growth.

The ripple effects were felt globally, with European and Asian markets also experiencing declines. The Nikkei index declined a further 3%.

Nikkei Index five-day chart

Despite the turmoil, Trump defended the tariffs, likening them to a necessary ‘operation’ for the economy. He expressed confidence that the markets would eventually rebound, emphasising the long-term benefits of reshoring manufacturing and generating federal revenue.

As investors grapple with the implications of these policies, the focus remains on potential retaliatory measures from affected countries and the broader impact on global trade dynamics.

The sharp market sell-off serves as a stark reminder of the delicate balance between protectionist policies and economic stability in an interconnected world.

The coming weeks will be crucial in determining whether these tariffs lead to lasting economic shifts or temporary market volatility.

U.S. companies are experiencing more harm from Trump’s tariffs. He wants manufacturing to come back to America – but after decades of globalization fine tuning – that is no easy task.

Are markets underestimating the impact of the tariffs on inflation?

Are markets pricing in the fact that Trump’s tariff policy will not be fully followed through?

The U.S. would be lucky to see a single rate cut from the Federal Reserve this year – and that will unsettle investors.

The U.S. economy could now only expand by between 1% and 1.5% this year – this would be a significant change in the growth outlook when compared with the International Monetary Fund’s (IMF) projection of 2.7% U.S. growth made earlier this year.

If we get close to 1%, we get close to ‘stall’ speed and then it could just stop – and that will mean recession or worse for the U.S.

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U.S. so-called Liberation Day arrives – It’s tariff time baby! Do you like my chart?

Trumps tariffs

Tariffs are terrific, according to Trump – it’s his most favourite word.

Donald Trump’s ‘Liberation Day’ tariffs have sent shockwaves through global trade, marking a dramatic escalation in his tariff trade war strategy. The day of economic independence.

The President of the United States proudly showed off his tariff agenda neatly displayed on a chart akin to a ‘pub quiz scoreboard’.

In the White House Rose Garden on 2nd April 2025 Trump happily unleashed tariff turmoil on a global scale.

Announced with his usual characteristic bravado, these tariffs were ‘calculated’ to impose ‘reciprocal’ charges on imports from over 180 countries, including allies like the UK, the European Union and Canada.

It’s not fair

Trump claims this move will restore fairness in global trade and bolster American manufacturing, but critics warn of dire economic consequences.

The tariffs vary by country, with the UK facing a 10% levy on all exports to the U.S., while the EU faces a 20% tariff. China, already subject to existing tariffs, now faces a combined rate of 54%.

The automotive industry has been hit particularly hard, with a 25% tariff on foreign-made vehicles, threatening thousands of jobs around the world.

Trump’s announcement, delivered in the White House Rose Garden, was accompanied by a chart comparing tariffs imposed by other countries on U.S. goods.

He argued that these measures are necessary to counter years of unfair trade practices and to ‘make America wealthy again’.

However, economists and analysts have expressed concerns that these tariffs could plunge the global economy into a downturn, disrupt decades-old trade alliances, and spark retaliatory measures from affected nations.

Keep calm and carry on

The UK government, led by Prime Minister Keir Starmer, has reportedly vowed to take a calm and pragmatic approach, emphasizing the importance of securing a wider economic prosperity deal with the U.S.

Chancellor Rachel Reeves acknowledged that the UK would not be ‘out of the woods’ even if exemptions are secured, citing the broader impact of global tariffs.

As nations brace for the fallout, Trump’s Liberation Day tariffs may well redefine the landscape of international trade, for better or worse. The world watches as the ripple effects unfold.

Understandably stock markets reacted badly as futures tumbled. The Dow Jones was down 1000 points. Nikkei down 4%. S&P 500 down 3%.

UK and EU markets opened down too

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Global markets slide into chaos as Trump pushes his ‘America First Agenda’

U.S. tariffs

Global markets have been thrown into turmoil following the announcement of sweeping tariffs by U.S. President Donald Trump

U.S. tariffs, which include a 25% levy on imports from Canada and Mexico and a 10% increase on Chinese goods, have sparked fears of a global trade war. Retaliatory measures from Canada and China have only added to the uncertainty, sending shockwaves through financial markets worldwide.

The FTSE 100, London’s blue-chip index, fell by 1.3%, marking its steepest decline since October last year. Across the Atlantic, Wall Street saw significant losses, with the S&P 500 dropping 1.6% and the Dow Jones Industrial Average falling 1.7%. European markets were not spared, as Germany’s DAX and France’s CAC 40 plunged by 3.5% and 2.1%.

Investors are increasingly concerned about the long-term implications of these tariffs. The measures threaten to disrupt global supply chains, inflate costs, and dampen economic growth. Analysts warn that prolonged trade tensions could push the global economy closer to a recession.

The tariffs have also had a notable impact on currency markets. The U.S. dollar weakened against major currencies, with the pound rising to a six-week high of $1.27. Meanwhile, safe-haven assets like gold saw a surge in demand, with prices climbing above $2,900 per ounce.

Oil markets were not immune to the fallout, as Brent crude futures dropped to a three-month low of $70.65 per barrel. The decline reflects growing concerns over reduced demand amid escalating trade tensions.

As the world braces for further economic uncertainty, the focus now shifts to how global leaders will navigate these turbulent waters.

The stakes are high, and the path forward remains uncertain.

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Trump’s tariffs tumble markets!

Stocks go red!

Trump’s tariffs have created fresh concern and new volatility in the markets forcing a stock market reversal.

The tariffs, which include a 25% duty on imports from Mexico and Canada, as well as a 10% levy on Chinese goods, have led to significant market volatility.

Investors remain cautious as they assess the long-term implications of these trade restrictions. The tariffs are expected to raise inflation in the U.S. and could potentially lead to a severe market correction.

It’s a complex situation with far-reaching consequences for global trade and the economy.

The S&P 500 retreated on Monday, extending February’s rout and turning red for the year after President Donald Trump’s confirmation of forthcoming tariffs.

The S&P 500 index fell to end at 5849, marking its worst day since December 2024 and bringing its year-to-date performance to a loss of about 0.5%.

The Dow Jones Industrial Average dropped 649 points to finish at 43191. The Nasdaq Composite slid to close at 18350, weighed down by Nvidia’s decline of more than 8%.

Stocks took a notable leg down in the afternoon following President Trump’s reiteration that 25% levies on imports from Mexico and Canada would go into effect on Tuesday 5th March 2025, dashing investors’ hopes of a last-minute deal to avert the full tariffs on the two U.S. allies.

All three indexes traded in positive territory earlier in the day, with the Dow rising nearly 200 points at session highs.

China retaliated with reciprocal tariffs of 15% on some U.S. goods due to take effect 10th. March 2025.

Is the world order being dramatically upended?

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China’s AI vs U.S. AI – competition heats up – and that’s good for business – isn’t it?

DeepSeek AI

The escalating AI competition between the U.S. and China has taken a new turn with the emergence of DeepSeek, a Chinese AI startup that has introduced a low-cost AI model capable of rivaling the performance of OpenAI’s models.

This development has significant implications for data centres and the broader technology sector.

The rise of DeepSeek

DeepSeek’s recent breakthrough involves the development of two AI models, V3 and R1, which have been created at a fraction of the cost compared to their Western counterparts.

The total training cost for these models is estimated at around $6 million, significantly lower than the billions spent by major U.S. tech firms. This has challenged the prevailing assumption that developing large AI models requires massive financial investments and access to cutting-edge hardware.

Impact on data centres

The introduction of cost-effective AI models like those developed by DeepSeek could lead to a shift in how data centers operate.

Traditional AI models require substantial computational power and energy, leading to high operational costs for data centers. DeepSeek’s models, which are less energy-intensive, could reduce these costs and make AI technology more accessible to a wider range of businesses and organizations.

Technological advancements

DeepSeek’s success also highlights the potential for innovation in AI without relying on the most advanced hardware.

This could encourage other companies to explore alternative approaches to AI development, fostering a more diverse and competitive landscape. Additionally, the open-source nature of DeepSeek’s models promotes collaborative innovation, allowing developers worldwide to customise and improve upon these models2.

Competitive dynamics

The competition between DeepSeek and OpenAI underscores the broader U.S.-China rivalry in the AI space. While DeepSeek’s models pose a limited immediate threat to well-funded U.S. AI labs, they demonstrate China’s growing capabilities in AI innovation.

This competition could drive both countries to invest more in AI research and development, leading to faster technological advancements and more robust AI applications.

Broader implications

The rise of DeepSeek and similar Chinese and other AI startups could have far-reaching implications for the global technology sector.

As AI becomes increasingly integrated into various industries, the ability to develop and deploy AI models efficiently will be crucial.

Data centres will need to adapt to these changes, potentially investing in more energy-efficient infrastructure and exploring new ways to support AI workloads.

Where from here?

DeepSeek’s emergence as a significant player in the AI race highlights the dynamic nature of technological competition between the U.S. and China.

While the immediate impact on data centres and technology may be limited, the long-term implications could be profound.

As AI continues to evolve, the ability to innovate cost-effectively and collaborate across borders will be key to driving progress and maintaining competitiveness in the global technology landscape.

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‘Unimaginable’ billionaire wealth surged in 2024 as Oxfam predicts the emergence of five trillionaires within the next 10 years

Wealthiest and poorest

In 2024, billionaire wealth surged to unprecedented levels, with a staggering $2 trillion increase in just one year, according to an Oxfam report.

This rapid growth has led to predictions that the world could see at least five trillionaires within the next decade.

To place this in some context it is has been calculated that there are approximately 150 countries with a GDP of less than $1 trillion. This includes many smaller economies and developing nations.

So, 5 single human beings will likely hold more wealth ‘individually’ than approximately 150 separate countries. One person will be worth more than an entire country!

Oxfam report

The Oxfam report highlights the stark contrast between the wealth of the world’s richest individuals and the persistent poverty faced by millions.

The report reveals that the wealth of billionaires grew three times faster in 2024 compared to the previous year.

This surge in wealth has been attributed to various factors, including booming stock markets, lucrative investments, and favorable economic policies.

However, this concentration of wealth in the hands of a few has raised concerns about growing inequality and its impact on society.

Oxfam‘s findings emphasize the urgent need for bold economic reforms to address this disparity. The report calls for higher taxes on the super-rich and the abolition of tax havens to ensure a fairer distribution of wealth.

It also highlights the importance of investing in public services, such as healthcare and education, to improve the quality of life for all citizens.

Out of whack wealth

The growing concentration of wealth among billionaires has significant implications for global inequality. While the number of people living in poverty has remained largely unchanged since 1990, the wealth of the richest individuals has skyrocketed.

This disparity underscores the need for policies that promote economic fairness and reduce inequality.

The surge in billionaire wealth in 2024 serves as a stark reminder of the growing concentration of wealth and the urgent need for economic reforms.

By implementing policies that promote a fairer distribution of wealth and investing in public services, we can work towards a more equitable society. The emergence of trillionaires within the next decade should be a wake-up call for policymakers to address the root causes of inequality and ensure a better future for all.

World’s most wealthy climbed from $13 trillion to $15 trillion in just 12 months

The combined wealth of the world’s most wealthy rose from $13 trillion to $15 trillion in just 12 months, the global charity said Sunday. It marks the second largest annual increase in billionaire wealth since Oxfam records started.

Meanwhile, the number of people living in poverty has barely changed since 1990, the charity said, citing World Bank Data.

1% of people own nearly 45% of all wealth

The richest 1% of people own nearly 45% of all wealth, while 44% of humanity are living below the World Bank poverty line of $6.85 per day, the data showed.

First trillionaire by 2027 is predicted

Elon Musk, CEO of Tesla and now close ally of Trump, is on track to become the world’s first trillionaire by 2027, according to a report from Informa Connect Academy.

Musk is currently worth about around $440 billion according to the Bloomberg Billionaires Index.

Biden warning

Outgoing U.S. President Joe Biden warned of the rise of an “oligarchy taking shape in America of extreme wealth, power and influence.”

“People should be able to make as much as they can, but pay – play by the same rules, pay their fair share in taxes,” Biden said in his farewell address.

Oxfam

Oxfam is trying to urge governments to commit to ensuring that the incomes of the top 10% are no higher than the bottom 40% worldwide.

Global economic rules should be adjusted to allow for the break-up of monopolies, and more corporate regulation and global tax policies should be adapted to ensure that the rich pay their fair share, according to the charity.

Money that is flowing to the bank accounts of the super-rich instead of much-needed investment in teachers and medicines is “not just bad for the economy — it’s bad for humanity,” said Oxfam’s Behar.

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Musk is everywhere!

Elon Musk

Elon Musk is the world’s richest person and the leader of Tesla, SpaceX, X, The Boring Company, x.AI, and Neuralink.

He is also the co-founder of PayPal and Zip2 and now the co-leader of DOGE – of U.S. Department of Government Efficiency and also recently led a group of investors in a bid to acquire OpenAI.

From a business perspective, Musk’s achievements are undeniable and even astonishing. The companies he leads are not only market leaders but also pioneers in their respective fields – consider how Tesla initiated the electric vehicle industry or how SpaceX successfully commercialised spaceflight.

Paradoxically, achieving success on a broad scale can have adverse effects. Investors appear to be increasingly concerned that Musk, despite his business acumen, is becoming distracted.

Tesla shares have declined over the past five trading days, dropping more than 6% on Tuesday 11th February 2025 as Chinese competitor BYD seems to be surpassing the company in AI-enabled autonomous driving.

If hands-free driving becomes a reality at Tesla, it could allow Musk to engage in other ventures without negatively impacting the company’s shares.

What you need to know today

BYD is a Tesla threat – but this is Elon Musk we’re talking about

Tesla shares fell 6.3% Tuesday 11th February 2025 after Chinese EV maker BYD said it will integrate DeepSeek into its autonomous driving technology and offer it in nearly all its vehicles.

There are also concerns over Musk’s distractions, such as his bid for OpenAI and his role at the ‘DOGE’ – Department of Government Efficiency in the White House.

Tesla’s stock price has fallen over 16% in the past five trading days

Tesla’s stock price has fallen over 16% in the past five trading days (5-day chart as of 11th February 2025)
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Apple and Google shares fall after China reportedly launches probes into Apple App Store practices and Google’s anti-trust issues

Google and Apple probed

China Launches Probes into Google and Apple Over Antitrust Concerns

China has recently initiated investigations into both Google and Apple, raising concerns over potential antitrust violations.

The State Administration for Market Regulation (SAMR) is considering whether to formally investigate Apple’s App Store practices, particularly focusing on the fees Apple charges and its policies that block third-party payment providers. This move has already caused Apple’s shares to fall.

In addition to the probe into Apple, China has also opened a separate investigation into Google, although details about the focus of this investigation have not been disclosed. These probes come at a time when trade tensions between the U.S. and China are escalating under President Donald Trump’s administration.

Apple’s app store under scrutiny

Apple’s App Store has been under scrutiny globally, with regulators in Europe recently forcing the company to open up its App Store under the Digital Markets Act, allowing non-Apple companies to offer app stores and app developers to use third-party payment systems.

If the China probe goes ahead, it would pose further challenges for Apple in one of its largest markets, where it is already facing stiff competition from local companies such as Huawei.

Google

Google, on the other hand, has not yet commented on the specifics of the investigation, but the move highlights the increasing regulatory pressures faced by U.S. tech giants in China.

Both companies will need to navigate these investigations carefully as they continue to operate in a highly competitive and regulated environment.

The outcome of these probes could have significant implications for the tech industry, potentially leading to changes in how these companies operate in China and other markets.

As the investigations unfold, the world will be watching closely to see how Google and Apple respond to these regulatory challenges.

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Trumps tariffs impact – what a difference a day makes!

U.S. tariff war

Trump pauses tariffs on Mexico and Canada amid China’s retaliatory measures

In a surprising turn of events, President Donald Trump announced a 30-day pause on tariffs targeting Mexico and Canada, just as China introduced retaliatory tariffs on a range of U.S. goods. This move comes amidst escalating trade tensions and a looming threat of a global trade war.

The decision to pause tariffs on Mexico and Canada was announced following discussions with the leaders of both countries.

Border security

Trump cited the need to address border security and drug trafficking concerns, particularly the flow of fentanyl into the United States. In response, Mexico committed to deploying 10,000 National Guard officers to the U.S. border, while Canada agreed to appoint a ‘Fentanyl Czar’ and launch a joint strike force to combat organised crime

However, while Trump’s administration has temporarily halted tariffs on Mexico and Canada, the situation with China remains tense. China swiftly introduced retaliatory tariffs on U.S. imports, including a 15% levy on coal and liquefied natural gas (LNG), and a 10% tariff on crude oil and farm equipment.

These measures are seen as a direct response to the U.S.’s 10% tariff on Chinese goods, which took effect earlier this week.

Global impact

The global economic impact of these trade disputes is significant. Analysts warn that prolonged trade tensions could lead to higher prices, disrupted supply chains, and slower economic growth.

Businesses and consumers alike are bracing for the potential fallout, with many expressing concerns about the uncertainty and instability these tariffs bring.

Despite the temporary 30-day reprieve for Mexico and Canada, Trump has indicated that tariffs could be reinstated if the countries do not meet his demands for increased border security and drug control measures.

The administration is also considering imposing tariffs on imports from the European Union, further complicating the global trade landscape.

As negotiations continue, the world watches closely to see if a resolution can be reached or if Trumps self-imposed trade war will escalate further.

The coming weeks will be crucial in determining the future of international trade relations and the economic stability of nations involved.

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Tariff Man – Trumps tariffs take affect – markets fall!

U.S. Tariffs

U.S. President Donald Trump’s tariffs have moved from threat to reality.

U.S. President Donald Trump launched a series of tariffs on Saturday. U.S. imports from Mexico and Canada will face a 25% duty, while those from China will be subject to a 10% tariff. Energy resources from Canada will face a lower 10% tariff.

Canada’s Prime Minister Justin Trudeau announced on the same day retaliatory tariffs of 25% against $155 billion in U.S. goods. Industry leaders in the U.S. have expressed concern over those tariffs.

They cap off a wild start to the new year during which a new U.S. president entered the White House and a new Chinese artificial intelligence player, DeepSeek upended the industry.

Indices at new highs

Something else that was new in January: the highest-ever closing level for the S&P 500, Dow Jones and new FTSE 100 highs were enjoyed too.

With tariffs now in effect and the possibility of a trade war looming markets may struggle to new heights in the short term.

Even Big Tech earnings and the jobs numbers coming out this week, typically market-moving reports, are likely to play second fiddle to policy developments.

Markets react

Markets are already responding to the news. Prices of oil and gold, which typically rise during periods of volatility, have increased, but Bitcoin is trading lower. It remains uncertain whether these will be a temporary shock or a sustained trend.

China’s factory activity experienced slower growth in January 2025 compared to December 2024 and is expected to be adversely affected as U.S. companies seek to reduce their dependence on Chinese imports.

Trump’s current tariffs may be targeted, but it’s hard to see any country or sector escaping the tariff turmoil.

The EU is also in line for a tariff attack and maybe the UK after.

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Recent surprise rise in UK borrowing – deals yet another disappointment for the chancellor

UK borrowing

The latest UK borrowing figures, reveal a significant increase in public sector net borrowing. In December 2024, the UK government borrowed £17.8 billion, which is the highest figure for the month for four years.

This amount was reportedly £10.1 billion higher than the same month last year and exceeded the £14.1 billion forecast by most economists.

The reported rise in borrowing was driven by several factors, including increased spending on public services, benefits, debt interest, and capital transfers. The interest payable on central government debt alone was £8.3 billion, nearly £4 billion higher than the previous year.

Additionally, a reduction in National Insurance contributions following rate cuts earlier in 2024 partially offset the increase in tax receipts.

Chancellor Rachel Reeves faces a challenging fiscal environment, with borrowing costs rising due to lower economic growth, higher public sector wages, and increased benefits payments. The unexpected jump in December 2024’s borrowing highlights the difficulties in balancing the budget and maintaining economic stability. The Chancellor’s budget was one of growth, but employer NI hikes have unravelled her ‘growth’ plan.

Despite the rise in borrowing, government bond prices remained relatively stable, suggesting that traders were not overly concerned by the surge. However, the overall fiscal position remains precarious, with public sector net debt estimated at 97.2% of GDP, the highest level since the early 1960s.

The government has pledged to take a hard line on unnecessary spending and to ensure that every penny of taxpayer money is spent productively.

As the fiscal year progresses, the Chancellor will need to navigate these financial challenges carefully to maintain economic stability and growth.

However, it is anticipated next month, following the January tax income boost, figures will appear favourable for the government, albeit temporarily.

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The aftermath from the arrival of Deepseek

Deepseek AI

Nvidia, the renowned American technology company, recently experienced the largest one-day loss in U.S. history. On January 27, 2025, Nvidia’s stock plummeted by 17%, resulting in a staggering market cap loss of nearly $600 billion.

This unprecedented drop was primarily triggered by the emergence of DeepSeek, a Chinese artificial intelligence startup that has been making waves in the tech industry.

DeepSeek, founded in 2023 by Liang Wenfeng, has developed open-source large language models that rival some of the best AI models in the world. The company’s latest model, DeepSeek-V3, has demonstrated impressive performance at a fraction of the cost of its competitors.

This has raised concerns among investors about the sustainability of Nvidia’s dominance in the AI chip market.

The release of DeepSeek’s latest technology has caused significant anxiety among U.S. tech giants, leading to a massive sell-off in the stock market. Companies that rely heavily on Nvidia’s GPUs, such as Dell, Oracle, and Super Micro Computer, also saw their stock prices plummet.

The ripple effect of Nvidia’s loss was felt across the tech-heavy Nasdaq, which dropped by 3.1% on the same day.

Nvidia one-month chart 27th January 2025

In response to this market upheaval, former President Donald Trump commented on the situation, stating that DeepSeek’s emergence should serve as a ‘wake-up call’ for American companies.

Trump emphasised the need for U.S. industries to remain competitive and innovative in the face of rising competition from Chinese tech firms. He acknowledged the impressive advancements made by DeepSeek and suggested that American companies could benefit from adopting more cost-effective methods in their AI development.

Trump’s remarks highlight the growing concern among U.S. policymakers and industry leaders about the rapid advancements in AI technology coming from China.

The success of DeepSeek has demonstrated that significant breakthroughs can be achieved with relatively modest investments, challenging the notion that massive capital expenditure is necessary for top-tier AI performance.

As the AI race continues to heat up, it is clear that companies like Nvidia will need to adapt and innovate to maintain their competitive edge. The emergence of DeepSeek has not only disrupted the market but also underscored the importance of staying ahead in the rapidly evolving field of artificial intelligence.

For American tech giants, this wake-up call serves as a reminder that the global AI landscape is becoming increasingly competitive, and complacency is not an option.

Has the U.S. spent wisely on AI development?

The emergence of DeepSeek has indeed raised questions about the spending strategies of U.S. tech companies on AI development. DeepSeek’s ability to develop high-performing AI models at a fraction of the cost has led to concerns about the necessity of the massive capital expenditures by large U.S. tech firms.

For instance, companies like Microsoft, Alphabet, Meta, and Amazon have collectively spent over $1 trillion on AI investments in recent years. This significant spending has been driven by the belief that larger models and more computing power would lead to better performance.

However, DeepSeek’s success with more cost-effective methods challenges this notion and suggests that efficient innovation might be more important than sheer scale.

The impressive performance and lower costs of DeepSeek’s models have prompted some analysts to question whether the billions of dollars spent by U.S. tech companies on AI development are justified. This has led to a re-evaluation of AI spending strategies and a push for more efficient and innovative approaches to AI development.

In summary, while U.S. tech companies have invested heavily in AI, the success of DeepSeek highlights the potential for achieving cutting-edge results with fewer resources. This has sparked a broader discussion about the most effective and efficient ways to advance AI technology.

Asking ChatGPT – ‘Do you see Deepseek as a competitor or a threat?’

The reply:

As an AI, I don’t have personal opinions or feelings. However, I can share that DeepSeek’s rapid rise and impressive performance in the AI field are noteworthy. Their ability to develop high-performing models at a lower cost is a significant achievement and has certainly shaken up the industry. It’s a reminder of the dynamic and competitive nature of the AI landscape, where innovation can come from unexpected places.

Asking ChatGPT – ‘What do you think of Deepseek?’

The reply:

DeepSeek is a fascinating and disruptive player in the AI landscape. Founded in 2023 by Liang Wenfeng, this Chinese startup has quickly gained attention for its open-source large language models, which rival some of the best AI models in the world at a fraction of the cost. Their latest models, DeepSeek-V3 and DeepSeek-R1, have demonstrated impressive performance and efficiency, challenging the dominance of established tech giants2.

DeepSeek’s emergence has caused significant market upheaval, leading to substantial drops in the stock prices of major AI-related firms, including Nvidia. The company’s success highlights the potential for innovation and cost-effectiveness in AI development, which has prompted industry leaders and policymakers to re-evaluate their strategies.

Overall, DeepSeek’s rapid rise and impact on the AI industry underscore the importance of staying competitive and innovative in this fast-evolving field. It’s a reminder that breakthroughs can come from unexpected places and that the AI landscape is becoming increasingly dynamic and competitive.

It would not be drawn on these questions but, one thing is for sure the U.S. has spent billions developing their systems and charge fortunes for using it.

This is about to change.

And further…

The Deepseek website reportedly crashed on 27th January 2025 due to heavy global demand. There were also reports of unrelenting cyberattacks on its systems…?

Curious. From minnow to centre stage in just one day!

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Why is Trump so fixated with Greenland?

The island of Greenalnd

Donald Trump’s fascination with Greenland has been a topic of intrigue and speculation since his first term in office.

His renewed interest in acquiring the world’s largest island has raised eyebrows and sparked debates about the underlying motivations and implications of such a move.

Greenland, a semi-autonomous territory of Denmark, holds significant strategic and economic value. Its location in the Arctic makes it a key player in global geopolitics, especially as ‘climate change’ could potentially open up new shipping routes and access to untapped natural resources.

The island is rich in rare earth minerals, oil, and natural gas, which are becoming increasingly accessible due to the melting ice caps. These resources are crucial for advanced technologies and the clean energy economy, making Greenland a highly coveted asset.

Critical minerals

Critical minerals refer to a subset of materials considered essential to the energy transition. These minerals, which tend to have a high risk of supply chain disruption, include metals such as copper, lithium, nickel, cobalt and rare earth elements.

Critical minerals and rare earth elements are vital components in emerging green technologies, such as wind turbines and electric vehicles, energy storage technologies and national security applications.

China is the undisputed leader of the critical minerals supply chain, accounting for roughly 60% of the world’s production of rare earth minerals and materials. U.S. officials have previously warned that this poses a strategic challenge amid the pivot to low-carbon energy sources

Jakob Kløve Keiding, senior consultant at the Geological Survey of Denmark and Greenland (GEUS), reportedly said a 2023 survey of Greenland’s resource potential evaluated a total of some 38 raw materials on the island, the vast majority of which have a relatively high or moderate potential.

These materials include the rare earth metals graphite, niobium, platinum group metals, molybdenum, tantalum and titanium.

A lot of independent state surveys are pointing to Greenland and its natural shelf boundaries as potentially hosting 20% to 25% of the last remaining extractable resources on the planet. Now, if that’s right, that’s an enormous opportunity for Greenland.”

Not just about money, it’s also about strategic benefits and ‘national’ security

Trump’s interest in Greenland is not solely driven by its natural resources. The island’s strategic military importance cannot be overlooked. Greenland hosts the U.S.’ northernmost military base, the Pituffik Space Base, which plays a critical role in ballistic missile early warning systems and space operations.

Control over Greenland would enhance the U.S.’ ability to monitor and respond to potential threats from adversaries, solidifying its position in the Arctic region.

And… it’s personal too

Beyond the strategic and economic factors, there are also personal and political motivations behind Trump’s fixation with Greenland.

Some experts suggest that Trump’s desire to acquire Greenland is fueled by his ambition to leave a lasting legacy and be remembered as a transformative leader. The idea of adding a vast, resource-rich territory to the United States’ portfolio aligns with his ‘America First’ agenda and his penchant for grandiose projects.

However, Trump’s pursuit of Greenland has not been without controversy. The Danish government and Greenland’s leadership have firmly rejected the idea of selling the island.

Greenland’s Prime Minister Múte Egede has emphasised the island’s desire for independence and self-determination, stating that Greenland is not for sale and that its future should be decided by its people. This stance reflects the broader sentiment among Greenlanders, who are wary of foreign exploitation and committed to preserving their unique cultural and environmental heritage.

Donald Trump’s fixation with Greenland is a complex interplay of strategic, economic, and personal factors.

While the island’s vast natural resources and strategic military importance make it an attractive target, the political and ethical implications of such a move cannot be ignored. As the debate continues, it remains to be seen whether Trump’s ambitions will materialize or if Greenland will maintain its autonomy and chart its own path in the Arctic region.

Rare earth minerals

Greenland is home to a variety of rare earth minerals, which are crucial for many modern technologies. Some of the key rare earth minerals found in Greenland include:

  • Yttrium
  • Scandium
  • Neodymium
  • Dysprosium
  • Terbium
  • Europium
  • Gadolinium
  • Holmium
  • Erbium
  • Thulium
  • Ytterbium
  • Lutetium
  • Copper
  • Gold
  • Zinc
  • Titanium
  • Lead
  • Silver
  • Platinum
  • Palladium
  • Rhodium
  • Nickel
  • Cobalt
  • Lithium

Some of these minerals are essential for the production of permanent magnets used in electric vehicles (EVs) and wind turbines. Others are more obvious.

Greenland’s rich mineral resources make it a significant player in the global supply of rare earth elements.

Greenland ‘mini’ history lesson

Greenland history of ownership is a captivating narrative of exploration colonization, and strategic significance. The island, the largest has been inhabited for millennia, with the known settlers arriving around 2500 BC. These early inhabitants were succeeded by several other groups migrating from continental North America.

The first formal claim Greenland can be traced to the late10th century when Erik the Red, a Norse, settled on the island after being banished from Iceland. He named it ‘Greenland’ to attract settlers, and small Norse communities established themselves along the coast. These settlements endured for centuries, despite the Arctic conditions and the encroaching cold of the Little Ice Age.

In the 18th century, Denmark-Norway began to reassert its influence over. In 1721, a missionary expedition led by Hans Egede marked the beginning of Denmark colonisation efforts. Greenland was formally incorporated into the Danish Kingdom in 1953, transitioning a colony to overseas county.

During World, Greenland became more closely connected to the U.S. due to Denmark’s occupation by Nazi Germany. After the war, Denmark reasserted its control, and in 1979 Greenland was granted home rule, allowing it to govern its affairs. Denmark retained control over defence and foreign policy.

Today, an autonomous territory within the Kingdom of Denmark, with increasing self-governance. It manages its domestic matters, including education health, natural resources, while Denmark oversees defense and foreign affairs.

Greenland’s strategic importance has it as a subject of interest for various global powers throughout history, and its unique position continues to shape its political and economic landscape.

Though a part of the continent of North America, Greenland has been politically and culturally associated with Europe (specifically Denmark and Norway)

See Wikipedia for more information.

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The UK is planning to build a homegrown artificial intelligence rival to OpenAI

UK AI

In a bold move to establish as a global leader in artificial intelligence, the United Kingdom is undertaking an ambitious initiative to develop a homegrown competitor to OpenAI.

This initiative is part of a broader strategy to enhance the nation’s computing infrastructure and foster innovation in AI technology.

Prime Minister Keir Starmer’s administration has committed to increasing the UK’s ‘sovereign’ computing capacity by twentyfold by 2030. This significant investment aims to support the development of powerful AI models that rely on high-performance computing equipment.

The government plans to expand data centre capacity across the country, providing the necessary infrastructure for AI developers to train and run their systems effectively.

AI Opportunities Action Plan

Central to this initiative is the AI Opportunities Action Plan, spearheaded by tech investor Matt Clifford. The plan outlines a comprehensive approach to harnessing the potential of AI, including the establishment of AI growth zones where planning permission rules will be relaxed to facilitate the creation of new data centers.

These zones are expected to become hubs of innovation, attracting both domestic and international talent to the UK.

The government is also set to launch the AI Research Resource, an initiative aimed at bolstering the UK’s computing infrastructure. This resource will provide access to high-performance computing facilities, enabling researchers and developers to work on cutting-edge AI projects.

Additionally, the establishment of a National Data Library will connect public institutions, such as universities, to enhance the country’s ability to create sovereign AI models.

Funding challenge

One of the key challenges facing the UK in its bid to rival OpenAI is funding. While the government has pledged substantial investments, many entrepreneurs and venture capitalists in the country have highlighted the difficulties in raising the kind of capital available to AI startups in the U.S. To address this, the government has secured commitments from leading tech firms, which have pledged £14 billion towards various AI projects.

This includes significant investments in data centers and the creation of thousands of AI-related jobs across the country.

UK AI sovereignty

The UK’s focus on AI sovereignty is driven by the belief that technologies critical to economic growth and national security should be developed within the country. This approach aims to reduce reliance on foreign tech giants and ensure that AI advancements align with national interests and ethical standards.

The government is also exploring the role of renewable and low-carbon energy sources, such as nuclear, to power the data centers that will support AI development.

Despite the ambitious plans, the UK faces several hurdles in its quest to become a global AI leader. The country’s risk-averse investment culture and the competitive landscape of AI development pose significant challenges.

However, the government’s proactive approach and the support of industry leaders provide a strong foundation for success.

Initiative and challenge

The UK’s initiative to build a homegrown rival to OpenAI represents a significant step towards establishing itself as a global leader in artificial intelligence.

By investing in computing infrastructure, fostering innovation, and securing industry support, the UK aims to create a thriving AI ecosystem that can compete on the world stage. While challenges remain, the commitment to AI sovereignty and the strategic vision outlined in the AI Opportunities Action Plan offer a promising path forward for the nation’s AI ambitions.

Sold – the UK needs to protect its future and not sell the silver… again

Over the years, the UK has seen several of its tech companies sold off to foreign investors.

  1. ARM Holdings: Perhaps the most famous example, ARM Holdings, a leading semiconductor and software design company, was acquired by Japan’s SoftBank Group in 2016 for £24.3 billion. ARM’s technology is used in the majority of smartphones worldwide.
  2. DeepMind: In 2014, Google acquired DeepMind, a UK-based AI company known for its advancements in machine learning and neural networks, for around £400 million. DeepMind has since become a key part of Google’s AI research efforts.
  3. Imagination Technologies: This British GPU and AI processing company was sold to Canyon Bridge Capital Partners, a private equity fund backed by Chinese state-owned China Reform Fund Management, in 2017 for £550 million. Recently, Imagination Technologies has been put up for sale again.
  4. Autonomy Corporation: Acquired by Hewlett-Packard (HP) in 2011 for $11.7 billion. The deal later became controversial due to allegations of financial mismanagement
  5. Powa Technologies: This mobile payments company faced financial difficulties and was sold off in parts after going into administration in 2016. PowaTag was sold to a consortium led by businessman Ben White, while Powa Web was sold in a management buyout backed by Greenlight Digital.

One to keep

Raspberry Pi Holdings plc, the parent company behind the iconic Raspberry Pi computer series, is a British technology business focused on designing and manufacturing single-board computers and modules. The company was founded by Eben Upton and is headquartered in Cambridge, England1.

As of the latest information, the largest shareholder of Raspberry Pi Holdings is the Raspberry Pi Foundation, which holds around 49% of the company. Other notable shareholders include Arm Holdings plc, Lansdowne Partners (UK) LLP, and the Raspberry Pi Employee Benefit Trust. The company went public on the London Stock Exchange in June 2024.

Raspberry Pi Holdings continues to innovate and expand its product offerings, maintaining its mission to make computing accessible and affordable for everyone.

These sales reflect the global interest in UK tech companies and the challenges they face in securing domestic investment to remain independent. The UK’s tech sector continues to be a hotbed of innovation, attracting significant attention from international investors.

The UK needs to nurture and keep its upcoming new tech discoveries, AI or otherwise – to protect the future of Britain.

We have the knowhow – we just need to keep it!

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U.S. introduces more restrictions on AI chip sales across the world

U.S. AI tech

In a significant move to maintain its technological edge and ‘national security’, the United States has announced new restrictions on the sale of advanced AI chips to most countries around the world

This decision, unveiled in the final days of President Joe Biden’s administration, aims to limit the global distribution of AI technology while ensuring that America’s closest allies continue to have access to these critical resources.

Regulation

The new regulations will cap the number of AI chips that can be exported to most countries, while allowing unlimited access to U.S. AI technology for America’s closest allies, including Japan, UK, South Korea, and the Netherlands.

This approach is designed to prevent adversaries like China, Russia, Iran, and North Korea from acquiring advanced computing power that could enhance their military capabilities.

Commerce Secretary Gina Raimondo emphasised the importance of maintaining U.S. leadership in AI development and chip design. ‘The U.S. leads AI now – both AI development and AI chip design, and it’s critical that we keep it that way,’ she reportedly said.

The regulations are part of a broader effort to close loopholes and add new guardrails to control the flow of AI chips and the global development of AI.

AI rules

The new rules will place limits on the export of advanced graphics processing units (GPUs), which are essential for powering data centers needed to train AI models. Companies like Nvidia and Advanced Micro Devices, which produce these chips, will be significantly impacted by the new regulations.

Major cloud service providers, such as Microsoft, Google, and Amazon, will be able to seek global authorisations to build data centres, exempting their projects from the country quotas on AI chips.

The Biden administration’s decision has faced criticism from industry leaders. Nvidia, a leading producer of AI chips, called the new rules “sweeping overreach” and argued that the restrictions would clamp down on technology already available in mainstream gaming PCs and consumer hardware.

Oracle, a major data center provider, expressed concerns that the rules would hand over a significant portion of the global AI and GPU market to Chinese competitors.

Despite the opposition, the U.S. government remains steadfast in its commitment to protecting national security and maintaining its technological dominance. The new regulations are set to take effect in 120 days, giving the incoming administration of President-elect Donald Trump time to weigh in on the implementation and enforcement of the rules.

Restrictions

The U.S. restrictions on AI chip sales represent a strategic effort to safeguard ‘national security’ and maintain leadership in AI technology.

While the new regulations have sparked controversy and criticism from industry leaders, the government’s focus on controlling the global distribution of AI chips underscores the importance of technological sovereignty in an increasingly competitive world

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UK wants to control its own AI direction – suggesting a divergence from the EU and U.S.

UK tech

The UK is charting its own course when it comes to regulating artificial intelligence, signaling a potential divergence from the approaches taken by the United States and the European Union. This move is part of a broader strategy to establish the UK as a global leader in AI technology.

UK AI framework

Britain’s minister for AI and digital government, Feryal Clark, emphasised the importance of the UK developing its own regulatory framework for AI.

She highlighted the government’s strong relationships with AI companies like OpenAI and Google DeepMind, which have voluntarily opened their models for safety testing. Prime Minister Keir Starmer echoed these sentiments, stating that the UK now has the freedom to regulate AI in a way that best suits its national interests following Brexit.

Unlike the EU, which has introduced comprehensive, pan-European legislation aimed at harmonising

AI rules across the bloc, the UK has so far refrained from enacting formal laws to regulate AI.

Instead, it has deferred to individual regulatory bodies to enforce existing rules on businesses developing and using AI. This approach contrasts with the EU’s risk-based regulation and the U.S.’s patchwork of state and local frameworks.

Labour Party Plan

During the Labour Party’s election campaign, there was a commitment to introducing regulations focusing on ‘frontier’ AI models, such as large language models like OpenAI’s GPT. However, the UK government has yet to confirm the details of proposed AI safety legislation, opting instead to consult with the industry before formalising any rules.

The UK’s AI Opportunities Action Plan, endorsed by tech entrepreneur Matt Clifford, outlines a comprehensive strategy to harness AI for economic growth.

The plan includes recommendations for scaling up AI capabilities, establishing AI growth zones, and creating a National Data Library to support AI research and innovation. The government has committed to implementing these recommendations, aiming to build a robust AI infrastructure and foster a pro-innovation regulatory environment.

Despite the ambitious plans, some industry leaders have expressed concerns about the lack of clear rules. Sachin Dev Duggal, CEO of AI startup Builder.ai, reportedly warned that proceeding without clear regulations could be ‘borderline reckless’.

He reportedly highlighted the need for the UK to leverage its data to build sovereign AI capabilities and create British success stories.

The UK’s decision to ‘do its own thing’ on AI regulation reflects its desire to tailor its approach to national interests and foster innovation.

While this strategy offers flexibility, it also presents challenges in terms of providing clear guidance and ensuring regulatory certainty for businesses. As the UK continues to develop its AI regulatory framework, it will be crucial to balance innovation with safety and public trust

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Has ‘Rachel from accounts’ messed up the UK economy?

UK budget

The pound has continued to fall after UK government borrowing costs rose and concerns grew about public finances

Sterling dropped as UK 10-year borrowing costs surged to their highest level since the 2008 financial crisis when bank borrowing virtually ground to a halt.

Economists have warned the rising costs could lead to further tax rises or cuts to spending plans as the government tries to meet its self-imposed borrowing target.

The UK government creates its own financial crisis as it messes up its ‘go for growth’ policy

The UK economy is currently grappling with a series of financial challenges that have led to a significant fall in the value of the pound, soaring treasury yields, and high borrowing costs.

These developments have been largely influenced by the recent budget announced by Chancellor Rachel Reeves, which has sparked concerns among investors and economists alike.

Downward trajectory

The pound has been on a downward trajectory, recently hitting its lowest level since November 2023. Traders are betting on further declines, with some predicting the pound could fall as low as $1.12

This decline is partly due to the rising cost of government borrowing, which has surged to levels not seen since the 2008 financial crisis. The yield on 10-year gilts has climbed to 4.8%, while the yield on 30-year gilts has reached 5.34%, the highest in 27 years.

Recent UK budget

The recent budget has played a crucial role in these developments. Announced in October 2024, the budget included significant tax hikes and increased spending, leading to a substantial rise in government borrowing.

The budget deficit is expected to reach 4.5% of GDP this fiscal year, pushing the overall government debt close to 100% of GDP. This increase in borrowing has led to a higher supply of government debt, which in turn has driven down the price of bonds and pushed up yields.

Higher yields

Higher yields mean that the government has to pay more to borrow money, which has significant implications for its fiscal policy. The rising cost of servicing government debt could force the government to either raise taxes further or cut spending to meet its fiscal rules.

This situation is reminiscent of the market turmoil following Liz Truss’s mini budget in 2022, which also led to a sharp rise in borrowing costs and a fall in the value of the pound.

The impact of these developments extends beyond the government. Higher borrowing costs are likely to affect households and businesses as well.

Economic growth at risk

Mortgage rates, which are influenced by government bond yields, are expected to remain high, putting additional pressure on homeowners. Businesses, on the other hand, may face higher costs of borrowing, which could lead to reduced investment and slower economic growth.

The UK is facing a challenging economic environment characterized by a falling pound, high treasury yields, and rising borrowing costs.

The recent budget has exacerbated these issues, leading to increased government borrowing and higher debt levels. As the government navigates these challenges, it will need to carefully balance its fiscal policies to avoid further economic instability and ensure sustainable growth and not more ‘unfunded’ debt.

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Meta boss bows to Trump re-aligning with their ‘free speech’ mandate

AI

Mark Zuckerberg’s recent actions seem to be driven by a mix of strategic business decisions and political pragmatism.

As Trump prepares to retake the White House, Zuckerberg has made several changes at Meta, including scaling back content moderation and fact-checking, and moving safety teams to Texas. These moves appear to align with Trump’s stance on free expression and reducing censorship.

Additionally, Zuckerberg and other tech leaders are likely seeking to build a favorable relationship with the incoming administration to navigate potential regulatory challenges and maintain their business interests. It’s a complex dance of power and influence, with both sides looking to benefit from the alliance.

Recalibrating for Trump

Zuckerberg, who has been summoned to Washington eight times to testify before congressional committees during the last two administrations, wants to be perceived as someone who can work with Trump and the Republican Party, it would appear.

Though Meta’s content-policy updates caught many of its employees and fact-checking partners off-guard, a small group of executives were formulating the plans in the aftermath of the U.S. election results. By the New Year – managers had reportedly begun planning the public announcements of its policy change.

It has been noted that Meta typically undergoes major ‘recalibrations’ after power changes hand. Meta adjusts its policies to best suit its business model and reputational needs based on the political landscape.

Does the company remain true to its original founding principles, whatever they are – or does it ‘cozy up’ with power to re-position itself to benefit politically? Let’s put some more money in the Trump inauguration pot.

Nothing new here then – but go watch the video of Zuckerberg’s announcement.

Does it may you cringe – or is it just me?

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How is AI regulation likely to affect stock markets in 2025?

AI regulation

As we head into 2025, the landscape of artificial intelligence (AI) regulation is poised to undergo significant changes, and these shifts are likely to have a profound impact on the stock markets.

The introduction of new regulations, particularly in regions like the European Union and the United States, will create both challenges and opportunities for investors.

One of the most anticipated regulatory developments is the European Union’s AI Act, which aims to set a global standard for AI regulation. This act is expected to impose stringent requirements on AI systems, particularly those used in high-risk sectors such as healthcare, finance, and law enforcement.

Companies operating in these sectors will need to invest heavily in compliance, which could lead to increased operational costs and potentially affect their profitability. As a result, stocks of companies heavily reliant on AI technologies may experience volatility as investors react to these new regulations.

In the United States, the political landscape is also shifting, with the incoming administration expected to take a more hands-on approach to AI regulation. President-elect Donald Trump has appointed Elon Musk to co-lead a new ‘Department of Government Efficiency – DOGE‘, which will focus on nascent technologies like AI. Musk’s influence and experience in the AI field could lead to more favourable policies for AI development, but it could also result in increased scrutiny and regulation of AI applications. Musk’s AI vision differs to that of Mark Zuckerberg’s for instance.

This dual approach of promoting innovation while ensuring safety and ethical use of AI could create a dynamic and unpredictable market environment.

The impact of AI regulation on the stock markets will not be uniform across all sectors. While companies in high-risk sectors may face challenges, those in industries like healthcare and finance could benefit from AI’s transformative potential.

For example, AI-driven innovations in healthcare, such as predictive diagnostics and personalised treatment plans, have the potential to revolutionize patient care and reduce costs. Companies that successfully integrate AI into their operations and comply with regulatory requirements could see their stock prices rise as investors recognize the long-term value of these advancements.

However, the regulatory landscape is not without its risks. Companies that fail to adapt to new regulations or face compliance issues may see their stock prices suffer. Additionally, the rapid pace of technological change means that regulations may struggle to keep up, leading to potential legal and financial uncertainties for companies operating in the AI arena.

AI regulation in 2025 is likely to create a complex and dynamic environment for the stock markets. While new regulations will pose challenges for some companies, they will also open up opportunities for those that can navigate the regulatory landscape successfully.

Investors will need to stay informed and agile, as the impact of AI regulation on the stock markets will be both significant and multifaceted.

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China initiates investigation into Nvidia as the microchip battle rumbles on

Tech tug 'o' war

China has reportedly initiated a probe into Nvidia, the US computer chip manufacturer, over purported breaches of anti-monopoly regulations.

The company’s shares fell by over 3% following the announcement, signalling the latest development in the ongoing tech conflict between the U.S. and China over the profitable semiconductor market.

Over recent weeks, the U.S. imposed stricter restrictions on the sale of certain exports to Chinese firms, and the dispute over the industry is anticipated to persist as Donald Trump returns to the White House.

Established in 1993, the company initially gained recognition for producing computer chips designed to process graphics, especially for video games.

Today, the tech giant leads in developing chips that drive artificial intelligence (AI), boasting a market value exceeding $3 trillion.

Its increasing control over the market has drawn scrutiny from competition regulators in the U.S. and internationally. Recently, the firm confirmed that it had been approached by regulatory bodies globally, including those in the U.S., UK, European Union, South Korea, and China.

The business finds itself at the centre of escalating geopolitical and economic tensions between the U.S. and China, with both nations vying for supremacy in advanced chip technology.

Nvidia disclosed last month that sales to China, including Hong Kong, represented approximately 13% of this year’s revenue to date.

However, this figure has declined following Americas enhancement of restrictions on sophisticated technology exports to Chinese companies, citing national security concerns. Chinese state media reported that Beijing had initiated an investigation.

The inquiry alleges that Nvidia breached commitments established during its 2020 acquisition of Mellanox Technologies, a smaller entity.

This development follows the U.S.’s recent intensification of restrictions, affecting sales to 140 entities, including Chinese chip companies such as Piotech and SiCarrier, barring special authorisation.

In retaliation, China reportedly imposed stringent new regulations on the export of crucial minerals to the U.S., such as antimony, gallium, and germanium. Observers have highlighted the significance of these measures, noting they specifically target the U.S rather than imposing general restrictions.

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UK business confidence falls to lowest level in almost two years after Labour budget

In November 2024, business confidence in the U.K. dropped to its lowest point since January 2023, as reported by BDO, a business advisory and accountancy firm.

Concurrently, KPMG noted that UK job vacancies decreased at the quickest pace since the pandemic began. This downturn coincides with warnings from businesses that the Labour Party’s ‘pro-growth’ budget could exacerbate inflation and decelerate hiring.

Tax increases do not fit well with a ‘pro-growth’ agenda. Also, GDP predictions made by the UK chancellor for 2025 through 2027 are lame.

The Labour budget has notably affected U.K. business confidence for a variety of critical reasons:

  • Tax Increases: The budget introduced a substantial hike in National Insurance contributions for employers, raising the rate to 15% on salaries above £5,000. This increase has led to concerns about higher operational costs, which many businesses fear will result in job cuts and reduced investment.
  • Minimum Wage Hike: The budget also included an inflation-busting increase in the minimum wage. While this aims to improve living standards, it has added financial pressure on businesses, particularly those in sectors with tight margins like retail and hospitality.
  • Economic Uncertainty: The combination of these measures has created a sense of economic uncertainty. Businesses are worried about their ability to absorb these additional costs, leading to a decline in overall optimism.
  • Investment Concerns: The increased costs have forced many businesses to reconsider their investment plans. Some have already announced cuts to expansion projects and other growth initiatives.
  • Next Increase: in public workers pay looms nigh.

These factors have collectively contributed to a significant drop in business confidence, with many firms bracing for a challenging economic environment ahead