Nvidia throws rival Intel a lifeline

0:29Good morning from the Financial Times. Filipino, and here's the news you need to start your day.

0:39Deutsche Bank's chief executive, Christian Saving, will be named as one of the defendants in an upcoming multi-million dollar lawsuit. That's according to people familiar with the matter. The lawsuit from five ex-employees is likely to say that Saving oversaw a flawed internal audit. That led, in part, to a 2019 conviction of those former employees. They were sentenced to more than four years in prison for a scandal involving an Italian bank around the audit. The former employees didn't serve jail time, though, and their convictions were overturned in 2022. Deutsche Bank said the claims were without merit.

1:14The FT sources caution, though, that details of the suit are still subject to change until the claims are formally filed.

1:27U.S. President Donald Trump's second state visit to the U.K. has been, well, eventful. There's been a historic reception with the king, a U.S.-U.K. tech deal, geopolitical wranglings, and a tense press conference that featured some big issues. We have to remember October 7th, one of the worst, most violent days in the history of the world. And it comes at a particularly turbulent time for the UK Prime Minister Sir Keir Starmer. So what does Trump's visit mean for the UK government? Here to talk about it is the FT's Deputy Political Editor, Jim Pickard. Hey, Jim. Hi. So Jim, Starmer has been polling pretty poorly recently.

2:07His Deputy Prime Minister resigned earlier this month. He really needed a win here. was this Trump visit a win? It was not a defeat. There was no mortification. There was no humiliation. The thing to bear in mind here is that Keir Starmer is a pretty unpopular prime minister, possibly one of the most unpopular prime ministers in recent years, and there have been quite a few. But if there's one politician in Britain who is even more unpopular than Keir Starmer, it's Donald Trump. The fact that only something like 16 % of British people approve of the US president. It means that Keir Starmer is treading a very difficult path because if he looks too craven towards Donald Trump, there's always the potential for that to backfire.

2:52So it's very much a delicate balancing act for Starmer. You know, it did seem like Starmer managed to walk that line in at least one aspect of their meeting, which was this AI investment. Would you agree with that, Jim? Yeah, so the British government has come out of the Trump visit, clutching some very large number of investments, some of which are more solid than others. The one that does look a bit more solid is a promise by some of the US tech giants, including Microsoft, Nvidia, Google, and OpenAI to invest tens of billions of pounds to build computing infrastructure in the UK. And the largest commitment came from Microsoft, which is planning to invest 30 billion in artificial intelligence over four years.

3:33And to have some of these big figures in London making these promises is something that Keir Starmer, of course, is very grateful for. The big disagreement going into the visit was the war in Gaza. How did Starmer manage that with Trump? The reason that one is a tricky one for the British government is that Starmer has plans to imminently recognize a Palestinian state. And it's something where Donald Trump clearly disagrees. He said during the press conference that it was one of our few disagreements. And the two leaders come at that Middle East crisis from very, very different perspectives. Keir Starman was talking about the humanitarian catastrophe unfolding in the region.

4:21Donald Trump didn't refer once to the plight of the Palestinian people, He talks solely about wanting to put pressure on Hamas to release the final Israeli hostages. You could just see in the way that the two men spoke about that conflict that they are seeing it from very much different ends of the telescope. All right. So taking all of this into account, Jim, how has the visit been received in the UK? And what does that reception tell us about the stability of the Starmer government? In terms of whether more sweepingly this is a visit which helps Starmer politically, I mean the one way in which it's helped him a little bit is that he's been under huge political pressure over the last fortnight.

5:03firstly by allegations about tax avoidance by the former Deputy Prime Minister Angela Rayner, who was forced to resign as a result. And then just days later, Keir Starmer sacked Peter Mandelson, who had been the UK ambassador to Washington, over his connections to Jeffrey Epstein, the disgraced financier. Basically, Downing Street has been consumed by political chaos for a couple of weeks, and therefore for Starmer to be able to attend the state banquet, But talking about geopolitics across the world, I guess at least it gives him a bit of a break from the domestic political chaos that he's been enduring of late.

5:40That's the FT's Jim Pickard. Thanks, Jim. Thank you.

5:49The Bank of England is responding to growing worries about the UK economy. The BOE announced yesterday that it's holding its key interest rate steady at 4%, but it It is also slowing its bond selling program. Both decisions were in line with market expectations. The BOE's slowdown in its quantitative tightening program implies 21 billion pounds of active bond sales this year. The bank said it would not hurry to cut interest rates again.

6:21NVIDIA just threw its rival Intel a lifeline. The U.S. chipmaker agreed to invest$5 billion in the struggling company. Intel shares closed up 23 % yesterday after the news. NVIDIA ended the day 3.5 % higher. Now, the deal comes a month after the U.S. government said it was taking a 10 % stake in Intel. The company is seen as vital to U.S. technological sovereignty. Here to tell us what this means for the future of Intel and NVIDIA is the FT's Tim Bradshaw. Hey, Tim. Hey, Mon. So tell me more about this deal between NVIDIA and Intel. What do we know about it so far? I mean, this deal really came out of nowhere for me.

7:01NVIDIA and Intel have been at each other's throats for decades. And Intel, it has to be said, somewhat near death. And so NVIDIA has come to its rescue in a rather unlikely deal that invests$5 billion in the company and is going to work together to develop new chips for PCs and AI data centers. So Intel's CPUs, the sort of general purpose chips that Intel is best at making, will sit next to NVIDIA's GPUs, the AI workhorses that are powering the creation of large language models like those that sit behind ChatGPT. It not only brings it capital, but credibility, because NVIDIA is the world's leading chip company.

7:44And it's not, it should be said, an agreement to use Intel to produce NVIDIA's chips, which is business that Intel really, really needs. But nonetheless, it keeps Intel in the AI race, which it looked like it might be about to fall out of altogether. them. Yeah, and this is the part that really interests me because this rivalry that you mentioned isn't, you know, it's technically a rival in the same way that Mike Tyson is a boxing rival with a 10-year-old. But, you know, NVIDIA is the most valuable company in the world and Intel is struggling. I mean, it's synonymous with struggle. Why is this deal happening now?

8:18I mean, this is quite an odd move by NVIDIA. Intel is not a natural ally, to say the least, and nvidia has its own partnership with arm the uk-based chip designer to build cpus to run alongside its own gpus that are the main ai chips in a data center there are many businesses and nvidia customers that still would prefer to use intel's chips rather than the arm processor that Nvidia builds. And so this is probably just about expanding its market. But the fact that they've taken a$5 billion stake in the company to do that, I do think kind of shows that Nvidia recognizes the strategic significance of keeping Intel going to the Trump administration.

9:08And Donald Trump and Jensen Huang, the Nvidia CEO, have formed a pretty tight alliance over the last few months that seems to be yielding benefits for both parties so far, and now also Intel. I want to hone in on the geopolitical part of this story, too. I want to focus on NVIDIA. It's had a lot of problems selling its chips in China because of export controls and now a ban from Beijing that happened this week. And Intel is seen as a key to U.S. tech dominance. What does this deal with NVIDIA tell you about where the U.S. chip industry is headed? This week's edict from the Chinese internet regulator that China's tech companies should stop using NVIDIA's chips altogether, China is obviously feeling more confident that it can stand up its own chip champion.

9:55And so I think that in turn just makes the U.S. even more determined to ensure that its own domestic champions, who do still include Intel because there is no other American company that manufactures leading edge chips. And so this deal between NVIDIA and Intel makes all the sense in the world from a U.S. geopolitical strategy perspective. I guess the big question that I have, Tim, is do the deals with NVIDIA and the U.S. government mean that Intel actually has a shot at becoming a big player again? I think there is still another big deal that Intel really needs to make its comeback complete, which is some big customers for its manufacturing business.

10:39The company has warned that if it can't land a big new customer for its next leading edge product, it may abandon that manufacturing capability altogether. Many of its investors on Wall Street would actually like that to happen because the chip design side of the business could then just outsource to TSMC. It would probably be more profitable. But I don't think that aligns with what the Trump administration's interests are here. And so there is a fine line between U.S. strategic interests and big tech companies' commercial interests here. Tim Bradshaw is the FT's global tech correspondent. Thanks, Tim.

11:18Thank you. You can read more on all these stories for free when you click the links in our show notes. This has been your daily FT News Briefing. Check back next week for the latest business news. The FT News Briefing was produced this week by Sonia Hudson, Katya Kumkova, Josh Gabor-Toyan, Victoria Craig, Fiona Simon, Ethan Plotkin, and me, Mark Filipino. Our show was mixed by Alex Higgins, Blake Maples, Kelly Gary, and Ken Millitzer. We had help this week from Michael Lello, Peter Barber, David DaSilva, and Gavin Kallman. Our acting co-head of audio is Topher Forges, and our theme song is by Metaphor Music.

12:16tilt markets overnight, how can companies stay on course? Strategic Alternatives, the RBC Capital Markets podcast, explores how corporates and investors are navigating new pathways to raise capital, create value, and drive growth. When conditions change, alternatives matter. Listen to Strategic Alternatives, available wherever you get your podcasts. Healthcare can feel complicated. That's why Optum uses technology to connect the people and processes that make healthcare easier, more affordable, and more effective. We're making it clearer for you to know exactly what your benefits cover. And to help you better manage your health, we're coordinating care between your doctors and your technology.

12:58We believe better, simpler healthcare is always possible. That's healthy optimism. That's Optum. Visit Optum.com to learn more.