What Big Tech wants out of Trump’s China visit

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0:17Good morning from the Financial Times. Today is Friday, May 15th, and this is your FT News Briefing. The walls are closing in on Keir Starmer, and China says it's willing to play ball with U.S. tech companies. Plus, what can a small city in Pennsylvania tell us about American politics? Turns out, a lot. I've watched my members in the firehouse drift to either independents or even to Republicans. I think Democratic parties start to see that we need some working class people to get involved here. I'm Mark Filippino, and here's the news you need to start your day.

0:58Opponents are lining themselves up to challenge UK Prime Minister Keir Starmer. Starmer is under fire because of how badly his Labour Party performed in last week's local elections. Bookie favorite Andy Burnham looks poised to take on Starmer. That's because a Labour MP resigned yesterday, which potentially allows Burnham to get elected to Parliament and make a run for the premiership. Burnham currently serves as the mayor of Greater Manchester. Labor officials said No. 10 had indicated to the party's MPs that it would not seek to stop Burnham. Earlier in the day, West Streeting also resigned from his post as health secretary, but he didn't launch a challenge.

1:35Starmer's allies are claiming he did not have enough support yet.

1:44U.S. President Donald Trump is in Beijing this week, and he's brought some tech muscle along with him. Tesla's CEO Elon Musk, Apple's outgoing chief executive Tim Cook, and NVIDIA boss Jensen Wong all tagged along. Trump and his Chinese counterpart Xi Jinping are talking about geopolitical questions like U.S. support for Taiwan and the Iran war, but business is also a big topic. Ryan McMurrow is here with me to talk about what the tech leaders are after. He's our West Coast financial correspondent, but up until recently, he was in Beijing. Hey, Ryan. Hi there. Thanks for having me on, Mark. Good to have you.

2:19So why did Trump bring tech leaders on this trip? What did he and they hope to accomplish? So Trump is bringing along all of his friends in big tech who all have their own individual assets out of China. But basically, they're hoping to increase market access, hoping to do more business in China. And Xi Jinping was receptive to that tone. He said he welcomed the American business leaders. China is going to open up wider for business. But this is also the exact same thing that officials in China have been saying for the last 10 years with actually going in the opposite direction. So hard to say if these words coming out of Xi's mouth have any real substance behind them.

3:01Okay, but say that we can take China at its word. What are each of these companies looking for? Yeah, so Tesla has a huge manufacturing base in Shanghai, and they have a lot of car sales in China as well. And so they're desperate to get full self-driving into China. That's their autonomous driving program that really gives their cars an edge on competitors. And China hasn't yet approved that to be allowed for driving in China. So that's what Musk is after. Jensen Huang, the chief of NVIDIA, is desperate to get his H200s, which is one of their most advanced processors, sold into China. He successfully lobbied Trump to approve that.

3:45But then it's kind of been ricocheting back and forth between the U.S. and Chinese government as neither side is super keen for NVIDIA to actually sell these H200s. And then Tim Cook, you know, the Apple CEO, China has always been a huge market for Apple, and they're trying to get AI approved for their phones at the moment. There's a significant and lengthy approval process for any hardware company, any phone company to get AI uses approved on the phone. Tim Cook is keen to sell more smartphones in China. Right. I'm looking at stock prices as we're talking, and NVIDIA jumped on this news. Apple and Tesla are flat.

4:29Why are investors so psyched about developments for NVIDIA, but less enthused by the potential prospects for Apple and Tesla? Yeah, I mean, I think that makes sense. China was a huge market for NVIDIA at one point. And then under Biden and Trump, they've basically closed off the market with all the export controls that have stopped NVIDIA's advanced processors from flowing into China. And then that kind of led the Chinese to actually put up their own barriers and prevent any NVIDIA processors from coming into China as they try to focus on developing their own chip industry. So NVIDIA has the most to gain by getting some deals done.

5:10Business in China is relatively good for Tesla and Apple. So there's not any huge obstacle that either CEO really needs to tackle with this visit. Ryan, do you think these business talks between the U.S. and China could ultimately help repair their relationship? Yeah, I guess business has always been the ballast in the U.S.-China relationship. And so if business can get back on a steady path, then I guess it would probably help. But it seems like these two countries have so many issues between them that like Taiwan, China support for Iran, and tariffs. Hopefully this will steady the relationship, but anything better than that might be too much to hope for.

5:55Ryan McMurrow is our West Coast financial correspondent. Thanks, Ryan. Thanks for having me on, Mark.

6:05Saudi Arabia is thinking about what regional alliances might look like after the Iran war ends. Diplomats tell the FT that Riyadh is considering a non-aggression pact between Gulf countries and Tehran. Saudi Arabia, the UAE, and other Gulf states have been hit by a barrage of Iranian strikes during the conflict, and they're worried the new hardline Supreme Leader could mean a more hawkish Islamic regime right next door. Many European countries support the Saudi idea of a non-aggression pact, and they're even urging other Gulf countries to get on board. They see it as a way to avoid future conflict and guarantee Tehran a level of safety from being attacked.

6:49U.S. midterm elections are coming up this fall, and both houses of Congress are up for grabs. Now, these elections are going to be about two big things, politics and the economy. And the briefing will be going on a road trip to a great place to understand that intersection, the former steel town of Bethlehem in the quintessential swing state of Pennsylvania. It's a special series called The Bethlehem Project, and it's hosted by Sonia Hudson, who you're going to recognize from hosting the briefing sometimes. Sonia is here with me now to talk about it. Hey, Sonia. Hey, Mark. Sonia, can you explain the basics of this series?

7:23Yeah, so we're going to be diving into big national issues as they show up in Bethlehem. Think things like affordability, immigration, swing voters. And Bethlehem, in many ways, is a really good microcosm of U.S. political dynamics and economic trends and also the ways in which those intersect, which I personally find really fascinating. We really want the listener to get to know Bethlehem through this series and explore these pretty intellectual debates and wonky policy issues through the lived experiences of real people that live there. Yeah. Tell me a little bit more about why this city in particular, because there's so many places that you could have gone for this series.

8:07Well, first off, like you mentioned, it is in a swing state, Pennsylvania. So it's really in play for Democrats and Republicans. And Pennsylvania is often a bellwether for the rest of the country. So it's a really good place to kind of get a pulse on national politics. Secondly, Bethlehem itself is a former steel town, and it's also full of new immigrants. So it really does encapsulate a lot of stories that American politicians are telling about the U.S. and who it's for. You know, we've got trends like declining blue-collar jobs. We've seen impacts of tariffs there. We have seen immigration enforcement activity there and just really hotly contested party politics.

8:51So we should mention that we've published a few episodes of this series already, but now we're bringing it to the briefing starting Sunday. What's the next episode about? It is about an upcoming Democratic primary for a critical swing congressional district. And the primary is really interesting because it represents a national debate within the party over how to win over swing voters. There's two frontrunners in the race, and they both represent different strategies for how to do that. The first is Bob Brooks. He is a former firefighter and a progressive. Here's a clip from our interview. We became known as the party of elites.

9:32That's why I've watched my members in the firehouse drift to either independents or even to Republicans. I think Democratic Party started to see that we need some working class people to get involved here. And the other frontrunner is Ryan Crosswell. He's a little bit more centrist than Brooks. He's also a former Republican and used to be a federal prosecutor investigating government corruption. I think that the American people believe that there's no one who's either willing or has the capability to stand up to these very powerful forces in the world. But there are. I worked with them. I was one of them.

10:08Now, the primary is on Tuesday, and I think whoever wins will tell us a lot about what kind of candidates Democratic voters think can win in the fall. We'll be keeping an eye on that for sure. But is there anything else you want to share about the show? Yeah, I will say something that I'm really excited about is how these episodes sound. We really are going to take you to Bethlehem, into union offices and people's homes and schools. and you're going to hear what this town is like and get to know the people that live there. The other thing that I wanted to mention is, as you said earlier, we have published a few episodes already.

10:48We're now bringing it to the FT News Briefing feed. This primary election episode is the first one we're publishing here. But if you want to hear more episodes, we've got a link to all of them in the show notes. That's the FT's Sonia Hudson, host of The Bethlehem Project. You the FT News briefing feed on Sunday. Thanks so much, Sonia. Thanks, Mark.

11:16Before we go, there's one AI chipmaker whose stock is rocketing out of the gate. It's called Cerebris Systems. It's not super well-known outside of Silicon Valley, but its share surged 100 % at one point after the company went public yesterday. Its$5.5 billion initial public offering is the biggest one of the year so far. It wasn't too long ago that the tech industry was writing off Cerebrus as losing out to chip giant NVIDIA, but its blockbuster debut shows just how much investor demand there is for AI stocks.

11:51You 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 Safiya Ahmed, Katya Kumkova, Sonia Hudson, Victoria Craig, and me, Mark Filippino. Our show is mixed by Alex Higgins and Sam Giovinco. We had help this week from Peter Barber, Michael Lello, David Da Silva, and Gavin Kullman. Our executive producer is Topher Forges. The FT's global head of audio is Cheryl Brumley. And our theme song is by Metaphor Music.

13:00We'll see you next time. You can turn pilots into performance.