Military spending rose 30% in the first quarter, despite Moscow’s intention to rein it in this year. And the slump in the civilian sector, worsened by Ukrainian drone attacks on Russian infrastructure, confirms that Vladimir Putin’s war is making his country poorer.
Tag: Breakingviews
The departing Keir Starmer’s decision to bind himself with manifesto tax pledges and budget rules was informed by overly optimistic forecasts. These showed GDP growth going from 0.3% to almost 2%. His successor needs to avoid a similar temptation as the Iran war ebbs.
The US president’s war brought hardship and raised dangers from the Middle East to China and Russia. But the failure of US and Israeli power shows aggression does not always pay. With Europe a surprising winner from the conflict, a better global balance of power is just possible.
China’s tighter curbs on cross-border flows threaten insurers like AIA which gets 40% of new business in the city. Officials appear more keen for the hub to serve China Inc going global. That will be a less lucrative opportunity for banks including HSBC and Standard Chartered.
Releasing a model based on a hacking super-weapon raised alarm in Washington, which responded with fatal export controls. Nervy allies have new reason to build non-US rivals and fret over chokepoint tech. The $965 bln lab’s IPO hopes risk falling into a regulatory Pandora’s box.
OpenAI saw off Elon Musk’s legal challenge to its pivot from non-profit to private company. Yet its original open-source philosophy still threatens the $852 bln firm. Data security and high costs may topple proprietary AI models – with bad consequences for sky-high valuations.
The Iran war has pushed up fuel prices and hit demand for local short-haul flights, threatening carriers’ profits. Yet resilient US stock markets and commentary from Delta suggest wealthy stateside travellers will keep splashing out. It’s a tailwind for the likes of $25 bln IAG.
A 60-day ceasefire extension, including a reopening of Hormuz, may be awaiting President Donald Trump’s approval. Yet as April showed, declaring shipping routes clear doesn’t make it so. As reserves dwindle, Iran’s leverage rises. Oil at $92 per barrel could easily surge again.
Donald Trump says a pending $14 bln arms deal with the island is a “very good negotiating chip” with Beijing, even as Xi Jinping ramps up military and diplomatic pressure on Taipei. Taiwan’s safest hedge may be to double down on its AI supply chains and boost defence spending.
The ChatGPT maker faces key hurdles, rising competition and apparent strategic missteps. With $600 bln in computing power to fund and arch-rival Anthropic perhaps edging ahead, its CEO’s decisions — and controversies — invite fresh scrutiny ahead of a listing.