Monday 11/08/25

So Trump and Putin are due to meet in Alaska on Friday and Europe urges Trump to use sanctions pressure ahead of Putin summit (Financial Times, Anne-Sylvaine Chassany, Paola Tamma and Christopher Miller) shows that European countries want the American president to impose more economic sanctions on Russia to put pressure on Putin to end the war while Trump, Putin and the future of Ukraine (Financial Times, Gideon Rachman) suggests a few different outcomes for the talks. The worst case scenario for Ukraine and Europe is if Trump and Putin agree some kind of territory carve-up that then gets presented to Ukraine as a fait accompli. If that happens and Ukraine rejects it, the Americans then just cut off support to Kyiv. A more positive outcome would involve a ceasefire with additional sanctions to force Russia to stick to it, particularly as it seems that Ukraine is losing momentum. Looking at the wider picture, though, it could be that negotiations will have to take into account independence, sovereignty and territory – not just territory. A balance between the three could give Ukraine an acceptable outcome, particularly in light of Finland’s experience of fighting two wars against the Russians in the 1940s. As part of its peace treaties, Finland had to give up about 10% of its territory and become a neutral state. However, Finland also managed to keep its independence and democracy – and it has become a prosperous country as a result. Whether or not the Alaska talks will prove to be the start of the peace process rather than the end of it remains to be seen…

In other Trump-related developments, Companies aiding Trump’s immigration crackdown see ‘extraordinary’ revenues (The Guardian, Johan Bhuiyan and Jose Olivares) shows that companies involved in Trump’s crackdown on illegal immigrants – such as Palantir, Geo Group and CoreCivic – are make huge amounts of money. Palantir is making a ton of money from the Department of Defense, the Department of Homeland Security and the Immigration and Customs Enforcement agency. Private prison operators GeoGroup and CoreCivic are making a ton from detaining illegal immigrants. The party is likely to keep going as well because the BBB gave ICE $45bn to expand its detention network! What a way to make money…

I said last week that Trump had called for the CEO of Intel to resign because of his links to China. Well Intel boss hits back at ‘misinformation’ after Trump attacks China links (Daily Telegraph, Matthew Field) shows that Lip-Bu Tan isn’t going down without a fight, saying that he had “always operated within the highest legal and ethical standards” and Intel CEO Singled Out by Trump to Visit White House on Monday (Wall Street Journal, Lauren Thomas) shows that he’s been summoned to the White House to explain more about his personal and professional background. It’s also possible that the CEO could use the opportunity to discuss ways that the government and Intel could work together.

I also highlighted Trump’s big move last week to give retail investors access to crypto and private private equity investments for their 401k retirement plans and Donald Trump exposes US retirees to new world of risk with 401k order (Financial Times, Antoine Gara, Jamie John and Eric Platt) emphasises both the heightened risks for retail investors and huge money-making opportunities for asset managers and digital currency groups that will result. The newly-available assets may be more difficult to sell than traditional stocks and bonds but advocates say that this move will give ordinary Americans access to assets that have previously only been available to wealthy clients. Asset managers are now falling over themselves to get 401k products ready for guidance from the Department of Labor, which is due in the next six months. A number of partnerships are now emerging between specialist asset managers. For example, Blackstone has a “strategic alliance” with Vanguard and Wellington Management and KKR and Capital Group are also exploring options. * SO WHAT? * This really is a monumental development but it’ll be interesting to see how the fees work because high fees can really eat into performance. Access to these new assets will surely be more expensive than trading in the more “boring” assets.

In energy news, Nuclear reactor groups tap into Spac revival to fuel atomic energy boom (Financial Times, Jamie Smyth and George Steer) highlights the efforts of three nuclear energy developers to raise over $500m via mergers with SPACs as investors seek out ways to be a part of the atomic energy boom. Terra Innovatum, Terrestrial Energy and Eagle Energy Metals all need

the money to accelerate the development of their SMRs. Other companies in the space – such as Holtec International and Quantum Leap Energy – are looking at potential flotations. * SO WHAT? * The world (particularly developed countries) is going to need more and more energy as time goes on to power data centres and EV uptake, among other things. As things stand currently, there aren’t all that many options for investors to park their cash to jump on the nuclear power bandwagon so having more options should be a good thing. The major caveat with this, though, is that nuclear is notorious for cost overruns and financial problems generally. However, I guess the urgency of need for power should hopefully underpin longer term commitment from all sides. The difficulty is probably going to be in sorting out the companies that actually having something concrete to offer rather than those who are all shiny brochures and promises!

Scottish wind farms paid not to generate nearly 40% of potential electricity (Financial Times, Rachel Millard and Simeon Kerr) is a pretty shocking article which cites research from energy analytics firm Montel (sorry, I think of this song when I hear that name) that shows that Scottish wind farms were paid not to produce 37% of their output over the first half of this year because of grid constraints. Amazingly, the government’s National Energy System Operator (NESO), which controls the balance between producing enough electricity and ensuring that it doesn’t overload the system, is frequently having to pay wind farms in remote areas to switch off while gas-fired generators in other parts of the country have to increase their output. * SO WHAT? * I think that this just goes to highlight not only the current deficiencies of our power network as it stands today but also the importance of power storage where we can keep more of the power that IS generated for longer – and therefore be efficient. I think that our power needs are going to increase exponentially over time as data centres eat up more and more power and the shift to EVs continues. At the moment, it seems that the pace of infrastructure development is lagging that of AI and EV developments. UK data centres at risk without faster planning and grid overhaul (The Times, Emma Powell) cites warnings from Digital Realty, the world’s biggest developer of AI data centres, that Britain could be missing out on major investment unless it accelerates its overhauls of the energy grid and planning system.

Then in Elon Musk’s Tesla applies to supply electricity to households in Great Britain (The Guardian, Julia Kollewe) we see that Tesla is preparing to launch a household electricity supplier in GB sometime in the next few months as it has formally applied to Ofgem for an electricity supply licence. If granted, Tesla would be able to provide electricity to domestic and business premises in England, Scotland and Wales next year! It is expected to be branded Tesla Electric. * SO WHAT? * It really does seem to me that Musk is losing interest in Tesla as an EV maker. No properly new models are on the horizon and his political shenanigans have killed his brand and he continues to emphasise the future as being robots and robotaxis. If he DOES walk away from making his S3XY cars, where will that leave current owners? If he just lets the cars go to seed it would presumably be disastrous for used prices and it would also damage his brand even further. Will he sell the cars brand on the cheap to another car company so that he can focus on what he’s REALLY interested in and perhaps provide some kind of maintenance support to keep the cars division from imploding? It’s too early to tell yet, but I think that this could be an option…

Then in commodities news, Big Oil heeds call to ‘drill, baby, drill’ as green transition slows (Financial Times, Malcolm Moore and Jamie Smyth) shows that the world’s biggest oil companies are now putting more effort into seeking out new oil and gas reserves as momentum for the clean energy transition wavers while momentum for fossil fuels gathers pace. BP, Chevron, ExxonMobil, TotalEnergies and Shell are all moving back to doing what they do best.

Meanwhile, Record butter prices leave bakers with indigestion (Financial Times, Lex) highlights butter prices at all time highs thanks to huge demand and not enough supply. This is down to falling milk supplies and the tendency for dairy processors to prioritise cheese-making (because the by-product is whey protein, for which there is huge and rising demand!). This is further bad news for people who like breakfasts that involve croissants, chocolate and coffee…

In Nvidia and AMD to pay 15% of China chip sale revenues to US government (Financial Times, Demetri Sevastopulo and Michael Acton) we see that the two American chip companies have agreed to sign away 15% of their chip revenues from chip sales in China as part of the deal for them to keep selling into the China market. A deal like this has never been done before where companies have effectively paid for the privilege of getting export licences! This certainly sounds like a victory for China…

Then in South Korea’s Upstage enters global AI race (Financial Times, Christian Davies and Song Jung-a) we see that a South Korean start-up called Upstage has produced an LLM that performs on a par with more advanced and expensive LLMs made in the US and China. South Korea has fallen behind in AI over the years because of its conservative approach so Upstage is closing the gap! It has become the only Korean LLM to be classified as a leading edge “frontier model” by the benchmarking analysis provider Artificial Analysis. Upstage’s LLM, Solar Pro 2, beat Anthropic’s Claude 3.7, DeepSeek’s V3 and Open AI’s GPT 4.1 across a number of categories and has done it using only 30bn “parameters” (variables used to train an AI system and form its output). Frontier models tend to contain between 100bn and 200bn parameters, which require more computing power. xAI’s Grok 4 contains 1.7tn parameters. That being said, Upstage is planning on developing a new model with 100bn parameters within the next year. Solar Pro 2

specialises on working through complex calculations for companies in the financial, legal and medical sectors. * SO WHAT? * This is a huge boon for South Korea, whose main contribution to AI thus far has been in the form of memory chips and data centre components. The country’s new president recently stated his ambition for South Korea to become a “top three AI powerhouse” behind the US and China. At the moment, it’s lagging other countries in terms of investment and has suffered a bit of a brain drain.

Then in TikTok to replace trust and safety team in Germany with AI and outsourced labor (The Guardian, Dara Kerr) we see that the social media platform is planning to shut down its Berlin moderation team and replace them with contract workers and AI. Workers are now, understandably, striking. * SO WHAT? * TBH, I think that it’s unsurprising that AI is starting to replace human moderators. TikTok isn’t the only one to do this either – Snap, X and Meta have all been trimming their trust and safety teams over the last few years. FWIW, although AI probably isn’t going to be perfect at filtering harmful content, I actually think that getting AI to do this tricky job is not a bad thing. I’ve often thought what an awful job content moderation must be from a psychological point of view, particularly when you are forced to watch some of the worst acts of humanity. It remains to be seen as to whether AI will be better than humans at filtering. I would have thought it won’t be as good – but that it will get better over time.

UK manufacturers’ confidence rises to a nine-month high (The Times, Jessica Newman) cites the latest monthly manufacturing optimism index from BDO which shows, surprisingly, that confidence in this sector hit a nine-month high in July in reaction to Trump’s tariffs not being as bad as manufacturers had originally thought. * SO WHAT? * This is all well and good but manufacturers are still facing uncertain economic and geopolitical issues in addition to higher labour and energy costs. Also, tariffs are still higher than they were before so I wonder whether this optimism will wear off as reality sets in.

Meanwhile, Falling demand for workers hits starting salaries (The Times, Mehreen Khan) cites the latest KPMG-REC monthly survey which highlights the impact of higher payroll taxes and wavering confidence – that earnings and hiring activity are slowing down. Vacancies also fell at the fastest pace since April last month. Tricky times…

In a quick scoot around some of today’s other interesting stories, HSBC reverses plan to completely quit Canary Wharf (Financial Times, Ortenca Aliaj and Julie Steinberg) heralds more – and surprising – good news for Canary Wharf as it turns out that the bank has just signed a 15-year lease for an office that’s a short walk away from its current global HQ, which it will leave in 2027 to relocate to the City. Last week I said that Visa is looking to move to Canary Wharf! This is good news for the area as everyone has been tearing their hair out about a mass-exodus of tenants.

Then in retail news, River Island avoids collapse as judge approves rescue plan (The Times, Isabella Fish and Tom Howard) shows that River Island has been given a lifeline by a High Court

judge who approved a restructuring plan that involved shop closures and big rent cuts, going against the wishes of landlords. The restructuring will save about 4,000 jobs but put over 1,000 at risk. It lives to fight another day!

Then in Topshop sets stage for high street return – but can it go beyond nostalgia? (The Guardian, Lauren Cochrane) we see that the once-beloved brand may be making a comeback after years of being in the wilderness. Asos bought it in 2021 and it looks like there are plans for physical stores to return to the high streets.

This video asks a question which sounds like it should be easy – but before you watch it all, have a go at answering it! I would be willing to bet that you won’t get 100%!