Trump joins tech and energy executives amid AI push
Top economic rivals, the U.S. and China, are locked in a technological arms race over who can dominate AI as the technology takes on increasing importance everywhere from corporate boardrooms to the battlefield.
The Energy and Innovation Summit at Carnegie Mellon University is expected to bring tech executives and officials from top energy and tech firms, including Meta, Microsoft, Alphabet and Exxon Mobil, to discuss how to position the U.S. as a leader in AI.
Trump will use the summit, arranged by U.S. Senator Dave McCormick, a Republican ally from Pennsylvania, to announce about $90 billion in artificial intelligence and energy investments in the state. McCormick said in his introductory remarks "the stakes couldn't be higher," even as Nvidia and AMD prepared to resume selling their chips to U.S. rival China.
'If the United States does not lead this revolution on our own terms, we will hand control of our infrastructure, our data, our leadership and our way of life to the Chinese Communist Party,' he said.
Big Tech is scrambling to secure enough electricity to power the energy-guzzling data centers needed for its rapid expansion of artificial intelligence. Companies began announcing their plans early on Tuesday, with Google inking a $3 billion electricity deal and CoreWeave touting a $6 billion AI data center.
Google said it secured as much as 3 gigawatts of U.S. hydropower in a deal between the tech firm and Brookfield Asset Management that includes initial 20-year power purchase agreements, for electricity generated from two facilities in Pennsylvania.
Asset management firm Blackstone's President Jon Gray also said they will announce on Tuesday a $25 billion investment in data centers and energy infrastructure in Pennsylvania.
The CEOs expected to attend include Khaldoon Al-Mubarak of Abu Dhabi investment company Mubadala, Rene Haas of Arm, Larry Fink of BlackRock, Darren Woods of Exxon Mobil, Brendan Bechtel of Bechtel and Dario Amodei of Anthropic.
The White House is considering executive actions in the coming weeks to make it easier for power-generating projects to connect to the grid and also provide federal land on which to build the data centers needed to expand AI technology, Reuters previously reported.
The administration is also weighing streamlining permitting for data centers by creating a nationwide Clean Water Act permit, rather than requiring companies to seek permits on a state-by-state basis. Trump ordered his administration in January to produce an AI Action Plan that would make "America the world capital in artificial intelligence" and reduce regulatory barriers to its rapid expansion.
That report, which includes input from the National Security Council, is due by July 23.
Trump is set to mark that deadline with a major speech as part of an event titled 'Winning the AI Race,' organised by White House AI and crypto czar David Sacks and his co-hosts on the All-In podcast, a White House official told Reuters.
U.S. power demand is hitting record highs this year after nearly two decades of stagnation as AI and cloud computing data centers balloon in numbers and size across the country. The demand is also leading to unprecedented deals between the power industry and technology companies, including the attempted restart of the Three Mile Island nuclear power plant in Pennsylvania between Constellation Energy and Microsoft.
The surge has led to concerns about power shortages that threaten to raise electricity bills and increase the risk of blackouts, while slowing Big Tech in its global race against countries like China to dominate AI.
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Mint
19 minutes ago
- Mint
Why it has never been better to be a big company
For all the unwieldiness it entails, scale has always brought enormous benefits in business. Fixed costs are set against more revenue, raising profits and supporting investment. Heft brings greater bargaining power with suppliers and financiers. From the early 2000s, the advantages of scale became even more pronounced. Intangible assets, including software and intellectual property, gave the upper hand to companies that could afford to invest in them. Globalisation provided big companies with more room to grow, as well as access to larger—and cheaper—pools of labour. In America, the gap in profitability between big and small firms widened (see chart 1). Economists began to speak of 'superstar" firms racing ahead of the competition. Now size is conferring advantages in new ways. Artificial intelligence (AI) is reinforcing the dominance of big firms over small ones. So is the presidency of Donald Trump, which has raised the importance of resilience and political sway. Yet these same disruptions could spell danger for America's corporate giants. Already companies from Apple to Walmart are discovering how their size can make them a target of Mr Trump's wrath. Start with AI. You might imagine that lumbering leviathans would be too tied up in bureaucracy to make use of the technology. In fact, their scale allows them to invest far more in it than smaller rivals. According to a survey in December by Bain, a consultancy, American companies with more than $5bn in revenue had an average annual budget for generative-AI projects of $27m, five times the level in the preceding February. Those with between $500m and $5bn in revenue, by contrast, had set aside $9m, up by two-thirds over the same period (see chart 2). JPMorgan Chase, America's biggest bank, says it has rolled out AI tools to most of its 320,000 employees. UnitedHealth, the country's biggest health insurer, claims to have 1,000 different applications for the technology. Sanjin Bicanic of Bain notes that getting AI to work well is proving more expensive than for other types of digital technology, as it requires companies to organise their data and tinker with models. Big firms have the added advantage of larger data sets that can be used to refine the AI systems they build. It is not only technology, but politics, too, that is making it even better to be big. Although many of Mr Trump's tariffs now face legal uncertainty, those that remain will hammer sales and profits for businesses. Big firms, though, tend to be more resilient to such shocks. Among listed American firms, those in the top quintile by revenue have fatter operating margins and a healthier ratio of debt to operating profits (before depreciation and amortisation) than the average, and hold a lot more cash, too. That means they are less likely to get into financial trouble during a downturn. It also allows them to bounce back more quickly, as happened following the covid-19 pandemic. We examined the profitability of listed American companies, as measured by their return on invested capital, in nine non-financial sectors before and after the pandemic. For seven of the nine, the biggest firms—those in the top quintile by revenue—were, on average, more profitable across 2023 and 2024 than they were across 2018 and 2019. The bottom quintile, by contrast, became less profitable in the same number of sectors. Bigness tends also to bring increased supply-chain resilience—just as important in a trade war as it was amid covid-19. 'During the pandemic, I kept getting calls from small and medium-sized businesses saying that they could not get shipping capacity. The big companies were, by and large, at the front of the queue," says Philip Damas of Drewry, a shipping consultancy. Such prioritisation pays when companies are rushing to import products into America before tariff deadlines. It helps, in addition, that big companies tend to have more suppliers in more places. A study by the World Economic Forum and Kearney, a consultancy, found that firms which grew their market share in the wake of the pandemic were more likely to have back-up suppliers in a variety of countries for a significant share of the products they procured. Last, with scale comes an increasingly valuable asset: political capital. We examined data from OpenSecrets, a non-profit organisation, on the lobbying activities of American firms in the S&P 500 index. The median company in the smallest half of the index by revenue spent nothing on lobbying in 2024, relying solely on groups such as the US Chamber of Commerce to champion its interests. The median firm in the top quartile, by contrast, spent $3.3m on lobbying, five times as much as for the next quartile and twice as much as a share of operating expenses (see chart 3). It also hired a greater number of lobbyists relative to its number of employees. Mr Trump likes to talk directly with the bosses of many of America's largest companies. In April those of Home Depot, Target and Walmart, three retail giants, met the president to discuss their concerns over tariffs. Smaller retailers have received no such attention. Mr Trump seems particularly receptive to firms that promise to invest large amounts in America. 'So many companies want to come to the White House...[They offer] $10bn or more and I am there," he said in a speech in February. Such direct access is even more important than usual, notes Jorge Guajardo of DGA, a political-advisory firm, because many mid-level positions in the administration have still not been filled. All this helps explain why, since Mr Trump's inauguration, the Russell 2000 index of America's smallest listed companies is down by 11%, compared with a drop of only 3% in the S&P 100 index of America's largest firms. Yet the shifting business landscape also presents dangers for corporate giants. As with all new technologies, incumbents that are too timid in using AI will be exposed to newcomers that have built themselves around it. Then there is the risk that Mr Trump's tariffs result in a lasting reversal of globalisation which limits companies' access to foreign markets. That scenario would hit big companies harder than small ones. America's top quintile of listed non-financial firms by revenue derive 23% of their combined sales abroad, compared with just 7% for the bottom quintile. More attention from politicians may not always be welcome, either. Walmart recently angered Mr Trump by suggesting on an earnings call that it would need to raise prices in response to higher tariffs. Or consider Apple. In April the iPhone-maker won a partial reprieve from tariffs on Chinese-made smartphones. Two weeks later it said that it would shift the production of its America-bound iPhones to India. Mr Trump was not pleased. On May 23rd he threatened a tariff of 'at least 25%" on iPhones sold in America but made elsewhere. Even if the courts make Mr Trump's tariff threats toothless, he has plenty of other means at his disposal to make life difficult for companies. America's corporate giants have enjoyed super-sized advantages. They should be prepared for some super-sized headaches, too. To stay on top of the biggest stories in business and technology, sign up to the Bottom Line, our weekly subscriber-only newsletter.
Indian Express
21 minutes ago
- Indian Express
With Aug 1 deadline looming, India's faces a trade predicament: to accommodate Trump's hardball tactics while maintaining tariff advantage
With less than a couple of days left for the August 1 deadline that the Donald Trump administration set itself to thrash out deals with its trading partners, the American President said he is planning tariffs for 'the rest of the world' at 'somewhere in the 15 to 20 per cent range'. That would mean a significant increase on the 10 per cent 'baseline' tariff that currently applies to most trading partners. India's talks with the US for an interim deal are in a limbo of sorts, given the lack of a significant breakthrough so far. As things stand, three things are clear: the US is pushing for zero duty access to the Indian markets, like the deals it has got with Vietnam and Indonesia. That would, however, be a tough demand for India to accommodate. Secondly, from its perspective, New Delhi is pushing for a headline tariff number of around 15 per cent for its goods going into the US, like what was offered by the Americans to the EU and Japan, with the comparative tariff advantage starting to diminish if the tariff starts to go over figure and inch up closer towards the 20 per cent mark, or even higher. Also, going by the deals signed by the US so far, the tariff scenario for each country seems to be dependent on multiple external factors as well. This includes investment commitments and promises on directional shifts in trade in goods that America is keen to peddle. The Trump administration is learnt to be pushing for India to commit to specific purchases and investments, of the sort that it got the EU and Japan to sign up for. The commitment for purchases should not be a big issue for India, given that Trump is ostensibly focused on extracting a big figure that runs into billions of dollars, without even bothering to specify the time-frame for achieving these targets. The full texts of the deals for both Japan and the EU are not out, and are unlikely to be out anytime soon. India has comminated its openness to purchasing three big-ticket items from America: defence equipment, natural gas imports and nuclear reactors. Cobbling together a big number might not be a difficult task. Agri and dairy, two contentious issues, are likely off the table for now, which is positive for New Delhi. Also, with the UK deals, India has shown a willingness to be flexible on segments such as opening up public procurement. That gives some headroom for Indian negotiators for the final push. Indications are that a sixth round of talks between the two negotiating teams is expected to take discussions forward mid next month. What could be instructive is the limited takeaway from the Japan deal: how the Japanese negotiators managed to upstage their American counterparts by getting an immensely favourable deal on automobiles, even as they dangled the agri market access concessions and Tokyo's investment pledges as distraction the entire time. While India's trade deal with the US is likely to be less focused on sectors and more focused on the headline number unlike its UK deal, New Delhi is likely to push for market access in labour-intensive sectors, while trying to ensure a significant tariff differential compared to its Asian peers. Now, if the final headline tariff offered to India by Washington DC is between 10 per cent and 15 per cent, the tariff points offered to the UK and Japan, New Delhi should have reasons to be satisfied. The advantage starts to taper off once the tariff goes over 15 per cent and inches up closer to 20 per cent, as was offered by the US to Vietnam. A transshipment clause, of the kind slapped on Vietnam, could be a problem for India, given that a lot of Indian exports have inputs and intermediate goods in sectors such as pharma, engineering goods and electronics coming in from outside, including China. Also, clarity on the final American duty offer on China is a number that negotiators will be looking at, given the implicit assumption in New Delhi that the Trump administration will maintain a tariff differential. For Indian negotiators, other tariffs, over and above the baseline tariffs and the sectoral ones on steel and aluminum, is an added complication. Sectoral tariffs such as the 50 per cent on steel, aluminum and copper are already impacting India's exports to the US, and Trump's threat of steep tariffs on BRICS countries over them buying Russian oil is a looming concern. Will that be neutralised in the agreement is a question. 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The higher tariffs that the US has imposed on China means a number of Chinese manufacturers are now rerouting shipments to Europe at throwaway prices, which is impacting India's exports to the EU as well. India, like other countries, had frontloaded a lot of shipments ahead of the reciprocal tariff deadline for the ongoing Spring-Summer season, but a big question mark looms over the Fall-Winter season spanning October-March. Once the official level discussions wrap up by mid next month, there is a sense that a final call on the deal could come down to a conversation between the two leaders, Prime Minister Narendra Modi and President Trump. This is especially so since the American President is the trade negotiator-in-chief in this entire tariff rationalisation exercise. A firm commitment from India to purchasing American defence equipment, natural gas and nuclear reactors, alongside some kind of guidance on India cutting its purchases of fossil fuels from Russia could be part of the final offer from New Delhi. Trump needs to be convinced of a deal that he can hard sell as a victory to his base. The best case scenario for India would be to get a deal of some sort now, and then build on that in the future negotiations that could run into 2026. For Trump, another growing consideration could be the fact that higher tariffs are making it nearly certain that American households will pay higher prices for the everyday goods that are made overseas and imported into the US. Inflation is a looming reality. A Yale estimate from July 23 found that the tariffs will result in as much as $2,700 in 'lost annual income' per household, though the taxes collected would potentially help narrow the long-running federal deficit. The tariffs that have kicked in so far are bringing in some money into the US Treasury, with tariff revenue pegged at $27.2 billion in June and $22.8 billion in May, according to the Treasury Department's monthly statements, a sharp increase from earlier years. Anil Sasi is National Business Editor with the Indian Express and writes on business and finance issues. He has worked with The Hindu Business Line and Business Standard and is an alumnus of Delhi University. ... Read More
The Hindu
21 minutes ago
- The Hindu
Palantir, the AI giant that preaches U.S. dominance
Palantir, an American data analysis and artificial intelligence company, has emerged as Silicon Valley's latest tech darling: one that makes no secret of its macho, America-first ethos now ascendant in Trump-era tech culture. The company's reach spans the global economy, with banks, hospitals, the U.S. government, and the Israeli military among its ever-expanding client roster. "We want and need this country to be the strongest, most important country in the world," Alex Karp, Palantir's CEO, recently declared at a client conference in Palo Alto, California, where AFP was the only media outlet present. In armed conflicts, most notably in Ukraine, Palantir's tools help evaluate potential targets in real-time, using multiple sources, including biometric data and intercepted phone calls. "I'm super proud of... what we do to protect our soldiers... (using our AI) to kill our enemies and scare them, because they know they will be killed," the graying, curly-haired billionaire continued, wearing a tight white T-shirt. Washington has been filling Palantir's coffers. In the first quarter, the company received $373 million from the U.S. government: a 45% jump from the previous year, and it's not all military spending. This spring, federal immigration authorities (ICE) awarded the company a $30 million contract to develop a new platform for tracking deportations and visa overstays. The company then secured an investment of nearly $800 million from the US military, adding to the $480 million contract signed in May 2024 for its AI platform supporting the Pentagon's "Project Maven" target identification program. This marked Palantir's first billion-dollar contract, elevating it alongside government contracting stalwarts like Microsoft and Amazon's AWS. However, financial results "are not and will never be the ultimate measure of the value, broadly defined, of our business," Karp wrote in his letter to shareholders in early May, where he tossed in quotes from Saint Augustine, the Bible and Richard Nixon. "We have grander and more idiosyncratic aims." Palantir was founded in 2003 by Peter Thiel, Silicon Valley's preeminent conservative, Karp, and others with CIA backing. The company takes its name from the magical seeing stones in Tolkien's "Lord of the Rings." 'Young people would say we're like pure drugs: very expensive, highly sought after... that make you stronger and better,' Karp boasted on stage. Palantir's expanding footprint at the highest levels of government has raised eyebrows. Several members of the Trump administration's "DOGE" cost-cutting commission, originally headed by Elon Musk, came from the company. Recent reports from The New York Times, Wired, and CNN have detailed secret government projects to create, with Palantir's help, a central database combining data from different federal agencies. This development has created "a lot of concerns about how that information might be used," warned Elizabeth Laird from the Center for Democracy & Technology. Palantir maintains it isn't building "surveillance technology" or a "central database on Americans." Unlike most traditional Silicon Valley companies that have kept military projects discreet, Palantir now embraces its defence work openly. Sasha Spivak, director of strategy, said that when she joined Palantir ten years ago, the company kept its sense of purpose behind closed doors. "Today we're not ashamed, we're not afraid, and we're deeply proud of what we do and our clients," said Spivak. Some employee groups are pushing back. In early May, 13 former Palantir employees published a letter accusing tech giants of helping to "normalize authoritarianism under the cover of a 'revolution' led by oligarchs." They argue that by supporting the Trump administration and DOGE, Palantir has betrayed its stated values of ethics, transparency, and defending democracy. "When I joined the company... there were many smart, motivated people; that's pretty rare," said one of the letter's signatories, who wishes to remain anonymous, for fear of reprisal. After months of seeking management explanations about Palantir's collaboration with Israel and ICE, several of these employees resigned. "They said, 'We're a company that's very responsive to employees,' but people asking about Israel were quickly shut down and told, 'That's what we do; if you don't like it, you can leave,'" the former staffer recalled. Jeremy David, co-director of the Health division, plays down the controversies. "My daily life is more about nurses and doctors who often hate us at first and are very grateful at the end," he told AFP at the conference. On stage, Joe Bonanno, head of data analysis at Citibank, celebrated how one operation that previously required "nine days and sometimes 50 people" now "takes just a few minutes for one person." "Like I said, and like Alex said, I came to dominate, crush and annihilate. So if you're JPMorgan, Merrill Lynch, Morgan Stanley, sorry," he concluded with a broad smile. Some potential clients quietly admit they don't appreciate the war-like rhetoric, but they see no alternative to Palantir's capabilities.
