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Good morning and welcome to FirstFT. Here’s what we’ll be covering today:
DeepSeek’s setback
Bessent’s swipe at Ueda
Zelenskyy’s darkest hour
And a small moment in football history
Chinese artificial intelligence company DeepSeek delayed the release of its new model after persistent technical issues with Huawei’s chips, underlining the challenges for Beijing as it tries to wean itself off US technology.
Authorities encouraged DeepSeek to adopt Huawei’s Ascend processor over Nvidia’s systems, but the company could not conduct a successful training run with the Chinese chip, people familiar with the matter told the Financial Times. This prompted the company to use Nvidia chips for training and Huawei’s for inference, the people said.
Why it matters: This week, Beijing ordered its tech giants to justify their orders of Nvidia chips on national security concerns. But industry insiders have said that China-made chips suffer from stability issues, slower inter-chip connectivity and inferior software compared with Nvidia’s products, which could cause Chinese companies to lose ground in the artificial intelligence race.
Here’s what else we’re keeping tabs on today:
Trade disputes: China’s preliminary 75.8 per cent duty on Canadian canola seed goes into effect, in an escalation of trade tensions between Beijing and Ottawa that has pushed down futures prices on fears of a supply glut.
Results: Admiral, Applied Materials, Aviva, Carlsberg, Deere & Co, Hapag-Lloyd, RWE, Savills, Standard Bank, Swiss Re and Thyssenkrupp report earnings. See our Week Ahead newsletter for the full list.
Five more top stories
1. Donald Trump promised “very severe consequences” for Russia if its leader Vladimir Putin refused to agree to end the war with Ukraine at tomorrow’s summit in Alaska. The US president issued the threat after holding talks with European leaders that alleviated concerns about territorial concessions. Read the rundown of yesterday’s meeting.
2. Bitcoin hit a record high today, powered by scores of companies racing to buy the digital asset and the Trump administration’s steadfast support for cryptocurrency. It rose 1.3 per cent in early trading to $124,480
3. US Treasury secretary Scott Bessent has said that Japan’s central bank is falling “behind the curve” on inflation and will probably have to raise interest rates. The sentiment stands in contrast to the position of the Bank of Japan, which held rates at its last meeting and did not offer any indication on the timing of a future increase.
Federal Reserve: Austan Goolsbee, Chicago Fed president, has warned rate-setters against “lurching” towards new cuts before inflation is under control.
Fed chair race: Trump said he had narrowed his list of contenders to head the central bank to “three or four” candidates, and left the door open to naming a shadow successor before Jay Powell departs.
4. Former Peruvian president Martín Vizcarra has been ordered to pre-trial detention on corruption charges, bringing the number of jailed former leaders of the country to four. The allegations relate to the construction of public works during his term as governor of Moquegua, a southern province. Vizcarra has denied the allegations, calling them politically motivated.
5. France’s long-term borrowing costs are closing in on Italy’s for the first time since the global financial crisis, as bond investors become increasingly concerned at levels of French public borrowing and impressed by Italian Prime Minister Giorgia Meloni’s fiscal prudence.
UBS headcount: The Swiss lender is on track to miss an internal target to cut its workforce to 85,000 by the time it completes its integration of Credit Suisse next year.
The Big Read
Diminished at home by a political crisis, Volodymyr Zelenskyy is trying to shape this week’s Alaska summit between Trump and Putin. Confined outside the room where his country’s fate will be decided while losses on the frontline pile up, he faces his darkest hour yet.
We’re also reading . . .
PIF writedown: Saudi Arabia’s sovereign wealth fund has cut $8bn from the value of its holdings in the kingdom’s gigaprojects.
Fur parents: With fewer children and grandchildren to fawn over, Italians are channelling more of their emotional energy to pets, writes Amy Kazmin.
What trade war? Gregory Meyer reports from Cincinnati, where experts’ dire warnings about the consequences of Trump’s tariffs have so far failed to materialise.
The art of persuasion: Research shows top AI chatbots can make people change their political views after less than 10 minutes of conversation.
Map of the day
The Marshall Islands, a remote nation in the Pacific with fewer than 40,000 inhabitants, is the “only country on earth” to have never played an international football match. That changes today when the national team plays the US Virgin Islands on a high school pitch in Arkansas.
Take a break from the news . . .
The hot weather has forced Robert Armstrong to make the case for a professional faux pas: wearing shorts in the office.
