Zelenskyy goes back to the White House

0:03Good morning from the Financial Times. Today is Monday, August 18th, and this is your FT News Briefing. Ukraine's President Zelenskyy will head back to the White House today to press for a ceasefire, and the UK's solar output is breaking new records. Plus, AI data centres may be soaking up too much capital. The minute we start to see some pullback, then that will damage confidence and we'll see a potential fall correction. I'm Lulu Smith, and here's the news you need to start your day.

0:44US President Donald Trump will host his Ukrainian counterpart Volodymyr Zelensky at the White House today. It comes just days after Trump met Russia's President Vladimir Putin in Alaska. Zelensky will be joined by several key European leaders seeking a ceasefire to the war in Ukraine. On Friday, the Alaska summit with Putin ended without any major news. No ceasefire agreements, no peace frameworks, but it might still have changed the dynamics for diplomacy. My FT colleague Amy McKinnon was just in Alaska for the meeting, and she joins us now to explain. Hey, Amy. Hi, Lulu. Okay, so before we look ahead to today's meeting, can you tell me a bit more about the Trump-Putin summit on Friday?

1:28What, if anything, actually came out of it? So Trump went into this meeting last week sounding really quite resolute. He promised that there would be severe consequences if Russia did not agree to a ceasefire at the summit in Alaska on Friday. But on the day itself, you know, the optics were very striking from the minute that Putin's plane touched down. There were images of U.S. troops rolling the red carpet out in front of his plane. Trump applauded Putin. And then they went into the meeting, which lasted, I think it was around three hours. And then they hurried the press in to hear some remarks from the two leaders.

2:06And there wasn't a lot said in those remarks. But in statements since from the president, he really seems to have pulled away from this idea of a ceasefire. We really haven't heard any mention of that. Certainly no mention of consequences. for Russia for not agreeing to a ceasefire. And Trump seems to have been persuaded by Putin that the way forward here is to negotiate a full settlement, a full deal. But this talk now of a full peace deal, I think, has set nerves on edge, certainly in Ukraine, but also in Europe, about a peace deal on whose terms. Right. So let's talk about the White House meeting today.

2:43What are Zelensky and his European partners hoping to get out of it? Well, I think they're hoping to get a more detailed readout from Trump about his conversations with Vladimir Putin in Alaska and also to discuss, you know, next steps and where to take things forward. Because I think the Alaska summit is a little bit of a hinge moment in that it has really changed the conversation. And as I said earlier, in a way that I think is making a lot of people nervous in the U.S. and Europe. And so I think the European leaders are also here to kind of back Zelensky, but also to kind of smooth things out with Trump as well.

3:18Right. Yeah, there are a lot of key European leaders planning to join the meeting today. Is this a sort of break glass moment for Ukraine's European backers? Yes, I think this is a break glass moment for Europe's leaders. I think there is a lot of alarm about the speed at which Trump is trying to bring an end to this conflict. And one thing that has been encouraging for European officials is that Trump does seem to be committed to the U.S. playing some kind of a role in a future security arrangement for Ukraine. It's highly unlikely that that's going to be boots on the ground. But Trump's special envoy, Steve Witkoff, did say on CNN on Sunday that at the summit in Alaska, that Putin had actually agreed to allow the U.S.

3:58and European allies to offer Ukraine a security guarantee. There's still a lot to be hashed out, I think, on what the detail of those security guarantees is going to look like, though. OK, so it seems like the Trump administration is coming round to the idea of security guarantees. But why have they struggled so much to resolve this conflict so far? What other issues are there ahead? I think the one word answer to why this war has been so difficult to resolve is Putin. It's the Russian leader. But there also seems to be some misunderstanding, I think, also in the Trump administration as to what this war is really about.

4:36You know, Trump administration officials have spoken about land swaps, about territory swaps. But that's not what really is at core here in this conflict. I mean, Russia is the largest country in the world. It doesn't really need much more territory. But what Putin really wants to see, and he said this in his remarks to us on Friday, is the quote unquote root causes of this war to be resolved. And when Putin talks about root causes, he's talking about Ukraine's sovereignty and independence. He's also talking about rolling back NATO's eastward expansion. And that, I think, is something that makes European leaders very uneasy and is something that they really, really do not want to deliver.

5:13Amy McKinnon is the FT's US European foreign affairs correspondent. Thanks, Amy. Thanks for having me.

5:25solar power is soaring in britain so far this year's solar power output in the uk has already surged past the total for 2024 that's according to an ft analysis generation this year alone has been enough to power more than 5 million homes for a year or to power the london underground for a decade. And that rise is thanks to an unusual amount of British sunshine and a record build-out for solar farms. But it may be hard to keep up the momentum. Developers have warned of grid bottlenecks, local opposition to huge solar farms, and international competition for skilled workers and equipment.

6:10you've all heard about the race to dominate artificial intelligence open ai meta google grok all of these companies have put themselves in the running but what about the race to fund the data centers that will power ai that field is also full of hopefuls as funders prepare for one of the biggest movements of capital in modern history tabby kinder is our west coast financial editor and she's been following this story. Hey Tabby. Hi Lulu. So bring us up to speed. What's going on behind the scenes to prepare for the AI boom? So you really can't exaggerate the level of building and spending that's going on behind the scenes to create the infrastructure that AI companies need to build their large language models and to train them.

6:56We're seeing $100 billion plus projects from all of the big tech companies and also from a kind of new and growing tier of big AI data center companies that are building these, you know, mammoth real estate projects all over the US and all over the world. So who are the big players in this space now and how is it going to work going forward? The big tech companies, so the companies that provide all of the big cloud services like Google Cloud, Amazon Web Services, Microsoft Azure, have traditionally been the really big operators and builders of data centers. And that's what data centers in tech have really existed to provide.

7:45It's kind of all the ways we use the Internet. But now we have this new generation of computing need, which is artificial intelligence. So the big tech companies, they are still the biggest operators. What we're also seeing, though, because the cost of building is so high, because the power needed is so high, the computing chips are so advanced, we're seeing more private capital going into the space and bigger data center companies that are going out to get funding to build kind of ever bigger and more extravagant projects. Yeah, so tell me a bit more about those. Who's doing the lending and who's doing the borrowing?

8:27So, so far, we've seen a lot of the big private equity companies and the big private credit companies lending to companies that build data centers. Companies like Crusoe, CoreWeave, Lambda Labs have all raised loads of money in debt to go out and acquire sites, get them powered, get them ready to be tenanted by a tech company that will use that compute power to build or run an LLM. What we're also seeing is companies like Blackstone, the big private equity giants, acquire their own data center companies that are now increasingly building big AI infrastructure. What we're seeing that's really new, though, is the big tech companies themselves, which have always historically self-funded their own cloud data center build outs, are in some cases borrowing money either against their own balance sheets or through a kind of more complicated structure to provide some of the upfront capital that's needed to build these projects because the costs are so extreme.

9:38Tabby, I have to ask, what are the risks of all of this? It sounds like the promise of AI is creating a bit of a bubble. The risks are like any phenomenon where we're seeing huge amounts of cash all go towards something that is very new, very kind of unproven in terms of the profits that it can make long term. I mean, we're only three years-ish into the AI cycle. You know, ChatGPT was released in 2022. So the risk is that all of this spending is just overdone and that the profits just won't come anywhere close to justifying this level of spend. There's also a risk that this is where all the kind of cash is going.

10:23But the minute we start to see some pullback, maybe a big tech company decides that, you know, it's spent enough, then that will damage confidence. and we'll see a big drop down and potential for correction. Tabby Kinder is our West Coast Financial Editor. Thanks, Tabby. Thanks so much. You can read more on all of 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.

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