Trump shrugs off AI regulation

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0:32Good morning from the Financial Times. Today is Wednesday, September 30th, and this is your FT News Briefing. UK businesses react to Andy Burnham's big speech, and a White House plan to keep diesel prices down could go up in smoke. Plus, some AI leaders want more regulation, but the Trump administration isn't convinced. I'm Mark Filippino, and here's the news you need to start your day.

1:07Andy Burnham gave his long-awaited speech at the Labour Party conference yesterday, and the UK Prime Minister made some far-reaching policy announcements. But are businesses buying it? Here to discuss is the FT's Ashley Armstrong. She's speaking to us from the conference in Liverpool. Hi, Ashley. Hello. Hi. It's been quite the day. I can imagine. So now that the dust has settled, what were the biggest takeaways from Burnham's speech? Yeah, it was a speech that he said deliberately it wasn't going to be the normal speech. He wanted it to be a meaningful speech. And so actually, you know, for a prime minister that has been relying heavily on good vibes up until now, there were a number of key lines.

1:45It's like, most importantly, kind of looking at reopening Britain's Brexit deal, the ending of a pensions triple lock, which really is like one of the major battlegrounds that has been kind of raging for debate. And increasingly, businesses and his own economists have said, go for it. That was one of the major takeaways, I think. And people are talking about it all around. And for our friends at home who don't know what the triple lock is, it determines how much the pension increase will be each year. And Ashley, I think the really interesting thing is that there's not expected to be any real traction on any of these plans until after the next general election, which is in three years.

2:25Yes. Yeah. So basically for all of the big projects, including this idea that he wants to set up a national social care unit, also the talk of launching a grid, they're going to take time and not until the 2030s at the earliest. So he said that he was willing to take a political gamble to rip the plaster off and take these painful decisions. But it's a big bet. Ashley, you cover businesses. What are you hearing from executives in response to this speech? I think it was important that Burnham was out front and center with business green because there's been hardly any engagement with him in the run up to being prime minister and after prime minister.

3:01So for many of them, they really needed to hear from the horse's mouth what he was thinking, what he was about. And they got the good vibes. He's willing to make difficult decisions. And the previous regime really struggled to win over its party when it tried to change welfare spending. And so this does have a changing tone. They got a bit of a message on spending, but they are still very cautious that next month budget could be another surprise tax hike for them. And they were burnt before really badly in 2024. And they're nervous that that might happen again. Ashley, it's worth noting that the bond market, which everybody is watching right now, didn't react very much to Burnham's speech, which suggests there's nothing really immediately blowing investors out of the water.

3:46Why is that? I think that the government would be delighted by the fact that the bond market has barely moved. That is exactly what they want. They don't want to do anything that's going to make their debt interest costs even more expensive and squeeze their finances further. that bond investors reacted fairly calmly because, you know, the triple lock will go down well with them. It shows that there is a really missed attack with spending, but also the fact that there wasn't anything particularly spooky in terms of the maybe populist messages on nationalization that might make the UK look like a riskier place to invest.

4:20Okay, so the Labour Party conference is in the books. Next up is the Conservative Party conference, which kicks off on Sunday. What are business leaders watching there? So it'll be interesting because the years of chaos, whether it was the endless revolving door of prime ministers, there was Liz Truss mini budget. It really had lost its way with the business community. I think the business will be going back. And in fact, the Tories are making a real effort because they're doing two business days. One for big business, but they're undoubtedly going to kind of raise alarm about Labour's tax rises and fiscal discipline and whether there's enough headroom.

4:58But they're also doing a second day for small business, which is a direct challenge to the Populist Reform Party, which is trying to kind of win over self-made people and kind of entrepreneurs. And they're going to really say that they're the party for both. It sounds like you'll be on top of all that. Yes, I'll be making another trip up to Birmingham for both days. Well, thanks for your time, Ashley. Ashley Armstrong is the FT's chief UK business correspondent. Lovely to talk.

5:28The diesel market is a mess right now. Prices are high and U.S. President Donald Trump is under pressure to stop the bleeding before the midterms. He's considering a ban on diesel exports to do that, but it could backfire. Joining us now is the FT's Miles McCormick. Hey, Miles. Hey, Mark. So what do we know about how the White House is thinking about this crisis in the diesel market? it. So the White House is under huge pressure at the moment to tackle the high prices of diesel, which have just surged this year as the war in the Middle East has added to strains created by the war in Ukraine, both of which combined have just curbed global supplies of diesel, which is a key fuel for industry, for agriculture.

6:13So the White House has been looking at various options to try and tackle the price of diesel in the U.S., which smashed through records in recent weeks. And one move they are under particular pressure from farmers and rural politicians to implement is a diesel export ban, which would have sweeping consequences for the global economy. Okay, so just to summarize, diesel prices are high. That impacts a lot of Donald Trump's base. He wants to make them happy before the midterm elections in a couple of weeks. And this diesel export ban is one of the things he's considering. What would actually happen, though, if that ban went into place?

6:55So it would probably reduce prices of diesel within the U.S. in the near term. There'd be less diesel leaving the country, more availability, and therefore prices would go down. But it would send global prices significantly higher. And that would be very bad news for European countries, which import a lot of diesel from the U.S. and Latin American countries as well. So bad news for the rest of the world, potentially good news for the U.S. Why is the Trump administration hesitating to pull the trigger? Because in a nutshell, there would be ramifications that could hurt the U.S. as well. So the U.S.

7:36oil industry has been lobbying hard against the administration going down this route. The case they make is that in the kind of global market that we live in today, there's a lot of parts of the US that actually import diesel from other parts of the world. So while a lot of parts of the US would end up paying less, parts of the country could end up paying more. And it would just create this kind of chaos in the global diesel market that could ultimately blow back and hurt the U.S., force refiners to dial back refining runs, and in the long run, just undermine the reliability and security of supply from the U.S.

8:19and make it a much less reliable trading partner. Yeah, well, what happens if the administration can't bring down the price of diesel? The consequences are pretty simply the potential for sweeping political defeats, particularly in agriculturally focused parts of the country. And these voters that Trump is trying to keep happy will show their frustration at the ballot box and could ultimately hand out big losses to Republicans that would lose Trump control of Congress for the second half of his presidency and make things a lot more tricky for him to get things done. Miles McCormick is the FT's U.S.

8:57economics correspondent. Thanks so much, Miles. Thanks, Mark.

9:06Now it's time for what seems like a recurring segment on our show, just how bad is the bond market? The big update from yesterday is on the 30-year U.S. Treasury. The yield jumped to levels that we haven't seen since the Lord of the Rings was in theaters, specifically 2002. When yields go up, prices fall. But the asset manager Vanguard is worried about a different bond market right now. It's a warning that France's creditworthiness is, quote, degrading. That'll likely drive up the government's borrowing costs even higher. French bonds have suffered much more than other European debt markets in this year's sell-off.

9:39That's because the government's been struggling to bring down its budget deficit, and investors are losing faith that it can make that happen. Vanguard also said that the presidential election in April might just make things worse, especially if the leading candidates refuse to make spending cuts that would help relieve public finances.

10:02tech leaders met with u.s president donald trump yesterday they want the white house to increase federal regulation of artificial intelligence there's growing concern about the damage ai could do but trump is dismissing their requests for tighter oversight instead he endorsed quote tremendous self-regulation of the sector the president said the tech bosses had signed a quote, morally binding accord between the major AI companies in attendance that would voluntarily manage the tech's risks. The FT's Joe Miller covers the intersection between AI and politics, and he joins me now. Hi, Joe. Hi, Mark.

10:35So what do we know so far about what these AI bosses want from the president? Well, in some ways, that depends on which AI bosses we're talking about. We know that at least three of them, that's Anthropics, Dario Amadei, OpenAI's Sam Altman, and ex-AI's Elon Musk. And we've seen really, in particular, Darryam O'Day go on the offensive this week. He is here in Washington at a meeting with all of the major AI executives at the White House at lunch with President Trump. They want to so-called pace the frontier, which is to slow down the development of the most advanced models that safety researchers can catch up.

11:15So at least as far as that trio is concerned, we know broadly what they want. And then on the other end of the spectrum, we've got people like NVIDIA's Jensen Wang, who doesn't really want there to be very much new regulation at all. He thinks that companies should police themselves. So it seems like there's a wide variety of opinions from AI leaders on how this technology should be regulated. Still, it's a little surprising that some leaders want regulation at all. Why would Trump be so vocally against it? Well, there are multiple theories. One of them is that the people around Donald Trump, including NVIDIA's Jensen Wong, they are telling him not to do anything that would restrain American AI's growth and give China the upper hand in this race for AI dominance.

12:03We're leading now over China and everyone else. And I want to keep it that way. I want to keep it that way. The only way you can keep it that way is to do exactly what we're doing right now. We don't want to stifle growth. And the other is that Donald Trump simply recognizes that AI growth is underpinning the U.S. economy at the moment, and he's worried about doing anything that could pull the rug from underneath that in an economy that's already struggling with high inflation because of the Iran war. Joe, this might be a silly question, but what's stopping these companies from regulating themselves?

12:37Why do they need the government? That is perhaps the most perplexing question in this whole debate. The companies themselves would say, well, they think that they all have to work together to slow down the development of models. They need to share information about security risks. And they think doing so under current law might be an antitrust violation. And they're looking for a so-called carve out to allow them to do that. But also, you know, there's this concern that no company alone can really regulate this because you need a third party. You need an independent body that is able to look at AI development across the piece and make informed decisions about what is safe and what isn't and, you know, what is necessary and what isn't.

13:19So that's why they would say that they need help from global bodies, from governments, from third party organizations. Joe Miller is a senior enterprise correspondent for the FT. Thanks, Joe. Thank you, Mark.

13:36you 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 tomorrow for the latest business news Thank you.

14:14It looked like a race to write the rulebook and not just a race to build the most powerful technology. And Ali Usten at McKinsey. Sovereignty. Anchors, data centers, engineering, and AI talent in the country. Listen to The Next Five wherever you get your podcasts. Enjoy. Decisions made in Washington can affect your portfolio every day. But what policy changes should investors be watching? Washington Wise is an original podcast from Charles Schwab that unpacks the stories making news in Washington right now and how they may affect your finances and portfolio. Listen at Schwab.com slash Washington Wise.