Wednesday 13/08/25

France, Germany and UK willing to reimpose sanctions on Iran (Financial Times, Demetri Sevastopulo, Amy Mackinnon and Andrew England) shows that the three countries (aka the “E3”) have informed the UN that they are prepared to reimpose sanctions on Iran (aka “the snapback mechanism”) unless the country engages in negotiations with the US and the international community about its nuclear programme by the end of August 2025. Tehran says it’s still open to talks with the US but wants assurances from the US that it wouldn’t be attacked during future talks.

Closer to home, Europe builds for war as arms factories expand at triple speed (Financial Times, Laura Dubois and Chris Cook) is a really interesting article which used satellite images to show a huge increase in the expansion of defence equipment manufacturing facilities financed by the huge uptick in defence spending. None of this has been officially confirmed but FT research shows that building activity at European arms sites has skyrocketed. Rheinmetall chief says tanks to get cheaper as defence spending surges (Financial Times, Laura Pitel) seems to back this up as the German defence company’s boss said that the cost of tanks, armoured vehicles and artillery would drop in the years to come because the boom in defence spending would lead to economies of scale. There had been fears that booming demand would lead to higher prices but, as an example, the cost of ammo has already fallen thanks to Rheinmetall’s tenfold ammo production capacity increase over the last three years! Economies of scale for tanks and armoured vehicles have been more difficult to extract but the CEO reckons it’s only a matter of time.

Then in Beijing demands Chinese tech giants justify purchases of Nvidia’s H20 chips (Financial Times, Zijing Wu and Eleanor Olcott) we see that Chinese regulators are forcing companies like Alibaba and ByteDance to justify why they’re using Nvidia chips and not domestic alternatives. Some companies are already considering downgrading their Nvidia orders as a result. * SO WHAT? * This is a bit awkward considering that Nvidia’s just got the go-ahead to resume sales in China but it goes to show how serious Beijing is about pushing domestic makers for the longer term.

Meanwhile, across The Pond, US on a high as inflation holds steady in July (The Times, Jack Barnett) highlights the positive reaction to news that inflation remained unchanged at 2.7% in

July. If you combine that with all the pressure that the White House is putting on the Fed at the moment, it’s not surprising that many are more inclined to think that the central bank will cut interest rates at its next meeting. * SO WHAT? * This sounds quite surprising given that there seems to be a lot of comment about companies absorbing costs. Trump maintains that “for the most part, consumers aren’t even paying these tariffs, it is mostly companies and governments, many of them foreign picking up the tabs”. 

What if Trump picks an inflation nutter for Fed chair? (Financial Times, Chris Giles) speculates as to the consequences of Trump installing a new Fed chief who will just concentrate on cutting interest rates to the lowest possible level. Given that Trump told reporters in June that “If I think someone is going to keep rates where they are, I’m not going to put them in”, the chances of this happening are high! The main risks of installing someone who is focused on cutting interest rates to please the president include higher inflation and weakening confidence in dollar strength.

Then in Trump administration takes next step to open US retirement pots to investing in private equity (Financial Times, Eric Platt and Jamie John) we see that the US labor department yesterday rescinded 2021 guidance issued under the Biden administration that had prevented 401k plan sponsors from investing in the leveraged buyout industry. This brings private investment firms closer to being able to gain access to 410k retirement savings accounts. * SO WHAT? * This is great in that it gives savers more options, but with greater reward comes greater risk. As long as people KNOW that – and that stellar returns are not guaranteed, then I guess it’s fair. Expectations will need to be managed!

In Higher gambling taxes risk driving punters to UK’s black market, warns Entain chief (Financial Times, Marianna Giusti) we see that the CEO of gambling company Entain is, funnily enough, warning against increased taxes on online gambling. What a surprise! * SO WHAT? * The best the CEO can come up with is that it will drive gamblers to the (unprotected) black market to continue their activities, meaning that the government’s tax take will go down, not up. It is widely expected that the autumn Budget will involve a load of tax rises – and the one that’s widely believed to be “nailed on” is a tax rise on online gambling, hence the defensiveness. 

Anthropic offers Claude chatbot to US lawmakers for $1 (Financial Times, Joe Miller and Cristina Criddle) highlights Anthropic’s eagerness to get in with the administration as it will offer its enterprise tools to US lawmakers for a nominal fee. It’s thought that this will encourage the wider adoption of AI tools in the federal government. OpenAI already has such an arrangement in place and it’s thought that Google is also looking to do something similar. * SO WHAT? * Although the tech companies won’t get much in monetary terms from these deals, they WILL be able to learn which applications are most popular at different agencies. All this could help future development and sales.

In Perplexity AI makes $34.5bn offer for Google Chrome browser (The Times, Katie Prescott) we see that AI start-up Perplexity has made a cheeky bid to buy Google’s Chrome browser for a hefty sum. This is particularly punchy given that Perplexity itself is only worth half that! It did say that it had lined up investors to back the total cost of the deal. * SO WHAT? * Google is potentially going to have to offload Chrome as a consequence of an antitrust case which argues that Google has too much power in the search market. If this has to happen anyway, Google may as well sell to a much smaller rival in AI but you do wonder how serious this bid really is. It might draw other interested parties out though…

Sam Altman challenges Elon Musk with plans for Neuralink rival (Financial Times, Ivan Levingston, George Hammond and James Fontanella-Khan) highlights more potential rivalry between Sam Altman and Elon Musk because Altman and OpenAI are going to invest in a venture called Merge Labs that will connect human brains with computers, in competition with Musk’s Neuralink. Altman will co-found the company but won’t be involved in its day-to-day running. * SO WHAT? * Clearly, this is an interesting development. At the moment, Neuralink is at the cutting edge of the brain-computer interface movement but a number of start-ups including Precision Neurosciences and Synchron are catching up. Brain implants aren’t a new thing – but advances in AI mean that they are going to have more practical uses.

Musk threatens to sue Apple over AI snub (Daily Telegraph, James Titcomb) shows that Musk is getting all tetchy about Apple, saying that it is unfairly putting ChatGPT ahead of Grok on its download charts – and is threatening to sue. That being said, Musk had, less than 24 hours prior to saying this, celebrated Grok hitting #1 in Apple’s download charts in Singapore. It seems to me that this is just Musk sabre-rattling to get a bit of publicity…

In a quick scoot around some of today’s other interesting stories, UK employers cut back on bonuses and hiring as economic slowdown hits jobs market (The Guardian, Phillip Inman) cites the latest data from the ONS which shows that employers have cut annual pay increases and reined in hiring over the last few months thanks to economic uncertainty and Profit plunges at recruiting giant as gloomy outlook persists (The Times, Tom Howard), which highlights more weakness from agency recruiter PageGroup backs this up. The recruiter saw profits fall by an eye-watering 99% in the first half of the year thanks to the ongoing downturn in hiring. PageGroup and companies like it are being hit by the double-whammy of employers being more reluctant about bringing in new staff and fewer workers looking to jump ship.

Meanwhile, T-shirt maker Gildan nears deal to acquire US underwear group Hanesbrands (Financial Times, Sujeet Indap and Oliver Barnes) highlights a bit more M&A going on as Canada’s Gildan Activewear is on the cusp of buying Hanesbrands that could value the US underwear-maker at almost $5bn including debt. Hanesbrands has suffered with Trump’s tariffs but Gildan hasn’t because it uses more US cotton and yarn, meaning that it was less exposed. A deal could be announced by the end of this week. The M&A momentum continues to build…

Picture the scene. You’re feeling good, spirits are high and you want to keep the party going by knocking out “Gangnam Style” in karaoke. Just one tiny weeny thing. You don’t speak Korean. Gaaaadammit. Not to worry – these guys have your back 🤣!