MEF BUSINESS NEWS 13 FEB 2025 The UK economy grew by 0.1% in the October-December period, exceeding economists’ expectations of a 0.1% decline. This growth, following no change in Q3, means the country has avoided a recession, providing relief for Chancellor Rachel Reeves. ——————————— The euro strengthened and European stocks are expected to climb as U.S.-Russia peace talks on Ukraine fueled optimism for a resolution. Despite hotter-than-expected U.S. inflation data, markets focused on Trump’s unexpected negotiations, which upended U.S. policy and caught European allies off guard. Asian equities also rallied, driven by China’s AI boom, with Alibaba surging. Meanwhile, oil fell on speculation that Russian supply risks may ease, and U.S. Treasury yields edged lower as traders reassessed Fed rate cut expectations. ——————————- US inflation unexpectedly rose to 3% in January, surpassing economist forecasts and reinforcing the Federal Reserve’s cautious stance on rate cuts. The month-on-month increase of 0.5% exceeded expectations, with egg prices surging 15.2% due to avian flu. Investors now anticipate just one rate cut this year, delaying expectations for monetary easing. Fed Chair Jay Powell emphasized that while progress has been made, inflation remains a concern. The central bank will get a better sense of price pressures when the producer price index came out today, he said. The inflation data fuels concerns that Trump’s trade and fiscal policies, including tariffs and tax cuts, could further heat up the economy. ————————————————- Elon Musk has secured backing from key allies, including entertainment mogul Ari Emanuel and Tesla investor Ron Baron, for his $97.4 billion hostile takeover bid for OpenAI, Bloomberg reports. Oracle’s Larry Ellison—who previously supported Musk’s Twitter acquisition—has aligned with OpenAI CEO Sam Altman on the rival Stargate project. Musk, who co-founded OpenAI but later clashed with Altman, claims he wants to restore the company’s open-source mission. His AI startup, xAI, could merge with OpenAI if the bid succeeds. ——————————————- Meanwhile, Musk’s X has agreed to pay about $10 million to settle a lawsuit brought by Donald Trump against the company and its former CEO, Jack Dorsey. The lawsuit, filed in 2021 after Trump was banned over his role in the January 6 riot, makes X the second social media platform to settle with him. Musk reinstated Trump in November 2022. ——————————— Honda and Nissan abandoned their planned merger after Honda sought to make Nissan a subsidiary, angering Nissan’s board. This leaves Nissan, already struggling with job cuts and capacity reductions, seeking new partnerships, potentially with companies outside the auto industry. Taiwanese electronics giant Foxconn has expressed interest in collaborating but not acquiring Nissan. The two automakers will continue their collaboration on auto technology. ——————————- Commerzbank unveiled a plan to boost profitability and fend off a potential UniCredit takeover, aiming for a 15% return on tangible equity by 2028, up from a previous 12.3% target for 2027. The bank expects net income to reach €4.2 billion by then, despite a forecasted drop to €2.4 billion this year due to €700 million in cost-cutting measures, including 3,900 job cuts. CEO Bettina Orlopp, seeking to maintain Commerzbank’s independence, emphasized fee income growth, strict cost discipline, and shareholder returns through buybacks and rising dividends. UniCredit CEO Andrea Orcel remains skeptical of the plan’s optimism. ———————————— Chevron plans to cut up to 20% of its global workforce by 2026 as part of a cost-saving initiative to streamline operations and boost growth. The reductions, starting in 2025, aim to optimize its portfolio and improve productivity. This follows disappointing Q4 results and the company’s recent headquarters move from California to Texas. Chevron had about 46,000 employees at the end of 2023. —— —— MEF MOBILE NEWS 13 FEB 2025 Apple will use Alibaba’s artificial intelligence technology in its iPhones sold in China, according to Alibaba’s president Joe Tsai. In an interview with Bloomberg at the World Government Summit in Dubai, Tsai revealed that Apple had considered several companies in China before selecting Alibaba to power its phones with AI. The news led to a 9.2% rise in Alibaba’s shares in Hong Kong. The collaboration marks a significant win for Alibaba as it competes in China’s AI market. Tsai also explained that Apple has not yet provided its full range of AI features in China due to local regulations requiring partnerships with accredited companies. ————————————— Apple has expanded its TV+ video service to Android phones for the first time, aiming to attract more streaming subscribers. The TV+ app is now available on the Google Play Store for free download. Previously exclusive to Apple’s own operating system and platforms like Roku, the move signals a rare instance of Apple offering services on Google’s Android. The company, which typically keeps users within its ecosystem, is now directly competing with major streaming services like Netflix and Disney+, though it remains behind in viewership. Launched in 2019 at $4.99 per month, Apple TV+ now costs $9.99 monthly. The company has never disclosed subscriber figures for TV+. Additionally, users will be able to access Apple’s MLS Season Pass on the new Android TV+ app. ——————————- Telecom Italia (TIM) has approved the €700 million ($726 million) sale of its submarine cable unit, Sparkle, to an Italy Treasury-led consortium. The deal is expected to close by Q1 2025. CEO Pietro Labriola previously indicated that proceeds from the sale could support the resumption of dividend payments, which TIM suspended in 2022. ——————————- And the company plans to resume shareholder returns between 2026 and 2028 after meeting 2024 earnings expectations and forecasting a 7% rise in core profit this year. The company is undergoing a major turnaround following its €18.8 billion ($19.5 billion) sale of its fixed-line network, a deal contested in court by top shareholder Vivendi. —— —— MEF TECH NEWS 13 FEB 2025 Siemens AG’s revenue rose 3% in its first fiscal quarter, driven by strong demand for electrification products, offsetting weak factory-automation sales. The company maintained its forecast of up to 7% growth this year. CEO Roland Busch cited signs of recovery in automation, with rising demand from semiconductors and aerospace. Siemens is shifting toward higher-margin software products and plans a $10 billion acquisition of Altair Engineering Inc. —————————— Orange reported a Q4 revenue decline to €10.43 billion, missing expectations, but achieved full-year growth of 1.2% to €40.26 billion. Strong 13% revenue growth in Africa and the Middle East offset a 2.3% drop in Europe and a 0.6% decline in France. Ebitdaal rose 3.2% to €3.25 billion, with France returning to growth. For 2025, Orange forecasts around 3% Ebitdaal growth and at least €3.6 billion in organic cash flow. ——————————- Baidu shares surged up to 12% in Hong Kong after announcing its Ernie AI chatbot will be free starting April 1, amid intensifying competition in China’s AI market. The company also unveiled a free deep search function to enhance reasoning capabilities. Baidu, China’s first to launch a ChatGPT-style bot, has 430 million users but faces rising competition from DeepSeek’s low-cost AI models. Analysts see the move as a strategy to attract more users and boost enterprise adoption, with potential long-term benefits for Baidu’s cash flow. ——————————- Former Google CEO Eric Schmidt has warned that Western nations must invest in open-source AI or risk falling behind China. His comments follow the launch of DeepSeek’s R1, a powerful open-source language model developed more efficiently than US rivals like OpenAI. In ana interview with the Financial Times, Schmidt noted that most top US models—Google’s Gemini, Anthropic’s Claude, and OpenAI’s GPT-4—are closed-source, with Meta’s Llama as an exception. He argued that failing to support open AI development could hinder scientific progress in Western universities unable to afford proprietary models. Speaking at the AI Action Summit in Paris, Schmidt’s warning coincided with US Vice President JD Vance’s pledge to maintain US leadership in AI. —— ——
MEF BUSINESS NEWS 13 FEB 2025 The UK economy grew by 0.1% in the October-December period, exceeding economists’ expectations of a 0.1% decline. This growth, following no change in Q3, means the country has avoided a recession, providing relief for Chancellor Rachel Reeves. ——————————— The euro strengthened and European stocks are expected to climb as U.S.-Russia peace talks on Ukraine fueled optimism for a resolution. Despite hotter-than-expected U.S. inflation data, markets focused on Trump’s unexpected negotiations, which upended U.S. policy and caught European allies off guard. Asian equities also rallied, driven by China’s AI boom, with Alibaba surging. Meanwhile, oil fell on speculation that Russian supply risks may ease, and U.S. Treasury yields edged lower as traders reassessed Fed rate cut expectations. ——————————- US inflation unexpectedly rose to 3% in January, surpassing economist forecasts and reinforcing the Federal Reserve’s cautious stance on rate cuts. The month-on-month increase of 0.5% exceeded expectations, with egg prices surging 15.2% due to avian flu. Investors now anticipate just one rate cut this year, delaying expectations for monetary easing. Fed Chair Jay Powell emphasized that while progress has been made, inflation remains a concern. The central bank will get a better sense of price pressures when the producer price index came out today, he said. The inflation data fuels concerns that Trump’s trade and fiscal policies, including tariffs and tax cuts, could further heat up the economy. ————————————————- Elon Musk has secured backing from key allies, including entertainment mogul Ari Emanuel and Tesla investor Ron Baron, for his $97.4 billion hostile takeover bid for OpenAI, Bloomberg reports. Oracle’s Larry Ellison—who previously supported Musk’s Twitter acquisition—has aligned with OpenAI CEO Sam Altman on the rival Stargate project. Musk, who co-founded OpenAI but later clashed with Altman, claims he wants to restore the company’s open-source mission. His AI startup, xAI, could merge with OpenAI if the bid succeeds. ——————————————- Meanwhile, Musk’s X has agreed to pay about $10 million to settle a lawsuit brought by Donald Trump against the company and its former CEO, Jack Dorsey. The lawsuit, filed in 2021 after Trump was banned over his role in the January 6 riot, makes X the second social media platform to settle with him. Musk reinstated Trump in November 2022. ——————————— Honda and Nissan abandoned their planned merger after Honda sought to make Nissan a subsidiary, angering Nissan’s board. This leaves Nissan, already struggling with job cuts and capacity reductions, seeking new partnerships, potentially with companies outside the auto industry. Taiwanese electronics giant Foxconn has expressed interest in collaborating but not acquiring Nissan. The two automakers will continue their collaboration on auto technology. ——————————- Commerzbank unveiled a plan to boost profitability and fend off a potential UniCredit takeover, aiming for a 15% return on tangible equity by 2028, up from a previous 12.3% target for 2027. The bank expects net income to reach €4.2 billion by then, despite a forecasted drop to €2.4 billion this year due to €700 million in cost-cutting measures, including 3,900 job cuts. CEO Bettina Orlopp, seeking to maintain Commerzbank’s independence, emphasized fee income growth, strict cost discipline, and shareholder returns through buybacks and rising dividends. UniCredit CEO Andrea Orcel remains skeptical of the plan’s optimism. ———————————— Chevron plans to cut up to 20% of its global workforce by 2026 as part of a cost-saving initiative to streamline operations and boost growth. The reductions, starting in 2025, aim to optimize its portfolio and improve productivity. This follows disappointing Q4 results and the company’s recent headquarters move from California to Texas. Chevron had about 46,000 employees at the end of 2023. —— —— MEF MOBILE NEWS 13 FEB 2025 Apple will use Alibaba’s artificial intelligence technology in its iPhones sold in China, according to Alibaba’s president Joe Tsai. In an interview with Bloomberg at the World Government Summit in Dubai, Tsai revealed that Apple had considered several companies in China before selecting Alibaba to power its phones with AI. The news led to a 9.2% rise in Alibaba’s shares in Hong Kong. The collaboration marks a significant win for Alibaba as it competes in China’s AI market. Tsai also explained that Apple has not yet provided its full range of AI features in China due to local regulations requiring partnerships with accredited companies. ————————————— Apple has expanded its TV+ video service to Android phones for the first time, aiming to attract more streaming subscribers. The TV+ app is now available on the Google Play Store for free download. Previously exclusive to Apple’s own operating system and platforms like Roku, the move signals a rare instance of Apple offering services on Google’s Android. The company, which typically keeps users within its ecosystem, is now directly competing with major streaming services like Netflix and Disney+, though it remains behind in viewership. Launched in 2019 at $4.99 per month, Apple TV+ now costs $9.99 monthly. The company has never disclosed subscriber figures for TV+. Additionally, users will be able to access Apple’s MLS Season Pass on the new Android TV+ app. ——————————- Telecom Italia (TIM) has approved the €700 million ($726 million) sale of its submarine cable unit, Sparkle, to an Italy Treasury-led consortium. The deal is expected to close by Q1 2025. CEO Pietro Labriola previously indicated that proceeds from the sale could support the resumption of dividend payments, which TIM suspended in 2022. ——————————- And the company plans to resume shareholder returns between 2026 and 2028 after meeting 2024 earnings expectations and forecasting a 7% rise in core profit this year. The company is undergoing a major turnaround following its €18.8 billion ($19.5 billion) sale of its fixed-line network, a deal contested in court by top shareholder Vivendi. —— —— MEF TECH NEWS 13 FEB 2025 Siemens AG’s revenue rose 3% in its first fiscal quarter, driven by strong demand for electrification products, offsetting weak factory-automation sales. The company maintained its forecast of up to 7% growth this year. CEO Roland Busch cited signs of recovery in automation, with rising demand from semiconductors and aerospace. Siemens is shifting toward higher-margin software products and plans a $10 billion acquisition of Altair Engineering Inc. —————————— Orange reported a Q4 revenue decline to €10.43 billion, missing expectations, but achieved full-year growth of 1.2% to €40.26 billion. Strong 13% revenue growth in Africa and the Middle East offset a 2.3% drop in Europe and a 0.6% decline in France. Ebitdaal rose 3.2% to €3.25 billion, with France returning to growth. For 2025, Orange forecasts around 3% Ebitdaal growth and at least €3.6 billion in organic cash flow. ——————————- Baidu shares surged up to 12% in Hong Kong after announcing its Ernie AI chatbot will be free starting April 1, amid intensifying competition in China’s AI market. The company also unveiled a free deep search function to enhance reasoning capabilities. Baidu, China’s first to launch a ChatGPT-style bot, has 430 million users but faces rising competition from DeepSeek’s low-cost AI models. Analysts see the move as a strategy to attract more users and boost enterprise adoption, with potential long-term benefits for Baidu’s cash flow. ——————————- Former Google CEO Eric Schmidt has warned that Western nations must invest in open-source AI or risk falling behind China. His comments follow the launch of DeepSeek’s R1, a powerful open-source language model developed more efficiently than US rivals like OpenAI. In ana interview with the Financial Times, Schmidt noted that most top US models—Google’s Gemini, Anthropic’s Claude, and OpenAI’s GPT-4—are closed-source, with Meta’s Llama as an exception. He argued that failing to support open AI development could hinder scientific progress in Western universities unable to afford proprietary models. Speaking at the AI Action Summit in Paris, Schmidt’s warning coincided with US Vice President JD Vance’s pledge to maintain US leadership in AI. —— ——