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The Guardian
11 minutes ago
- The Guardian
SoftBank invests $2bn in Intel; proposed new UK property tax ‘could cut cost of buying expensive homes'
Update: Date: 2025-08-19T06:46:18.000Z Title: Introduction: SoftBank invests $2bn in Intel; proposed new UK property tax 'could cut cost of buying expensive homes' Content: Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy. Japan's SoftBank has agreed to invest $2bn (£1.48bn) in Intel, the struggling US chip company, while the Trump administration is reportedly considering a 10% stake in the business by converting Chips Act subsidies into equity. That would make Washington Intel's largest shareholder. The Japanese technology investor announced its multi-billion dollar deal, amounting to a 2% stake in Intel, on Tuesday, describing Intel as a 'trusted leader in innovation'. Intel shares fell by 5% while SoftBank shares were down 4%, retreating from all-time highs. Masayoshi Son, SoftBank's chairman and chief executive, said: Semiconductors are the foundation of every industry. For more than 50 years, Intel has been a trusted leader in innovation. This strategic investment reflects our belief that advanced semiconductor manufacturing and supply will further expand in the United States, with Intel playing a critical role. All eyes were on Washington yesterday, where Donald Trump met with Volodymyr Zelenskyy and seven European leaders to discuss a peace deal in Ukraine. According to Trump, Vladimir Putin wants to do face-to-face talks with the Ukrainian president, although Moscow has not confirmed the meeting. (Trump called Putin during his meeting with the Europeans, but some experts are sceptical.) Traders are cautious, with most Asian stock markets slightly lower. Japan's Nikkei fell by 0.4% while Hong Kong's Hang Seng dropped by 0.3%. Here's some reaction to our scoop yesterday that the UK Treasury is considering a new tax on the sale of homes worth more than £500,000 as a step towards a radical overhaul of stamp duty and council tax. David Fell from Hamptons told the Times: Who is better off will come down to how closely the government chooses to follow any recommendations. But I think in response to the general principle, the shift would probably cut the cost of buying the most expensive homes, but add to the annual cost of ownership, particularly given the artificially low levels of council tax charged by many places that have the most expensive house prices. The impact of a change to the system would probably depend on the level at which the rates were set, and the length of time it takes for the higher ownership charges to outweigh existing stamp duty and council tax bills. The Agenda 1.30pm BST: Canada inflation for July 1.30pm BST: US Housing starts for July
Reuters
41 minutes ago
- Reuters
AI will replace most humans, but then what?
LONDON, August 19 (Reuters) - Is technology more job augmenting or job replacing? This has been a long-standing debate. But recent academic work suggests that technology has been a net destroyer of jobs for decades. Artificial intelligence and robotics could rapidly accelerate this trend, with significant implications for inflation, the size of government and U.S.-China relations. Over the long arc of history, technological advances have enabled industries to emerge, as workers, released from "older" jobs by machines, have been able to transition into newer ones. Indeed, 60% of workers today are employed in occupations that did not exist in 1940, or 74 percent if we consider just the professional category, which added the most workers during the past eight decades. However, recent academic research, opens new tab suggests we may have reached an inflection point in the U.S., whereby technology is now destroying more jobs than it is creating. David Autor, an economist at MIT and winner of the 2005 John Clark Bates Medal, argues that since 1980, the jobs replaced by automation have not been fully offset by new jobs created. This reflects the pace of technological change and the fact that advancements are now increasingly focused on 'professional, technical, and managerial occupations,' Autor notes, rather than lower-skilled work. He finds that machines that are more powerful than an average human (e.g., a tractor) are typically labour-augmenting and productivity-enhancing, while machines that are also smarter than the average human tend to be labour-substituting. And AI is on pace to be a lot smarter than most humans. While forms of AI have been around since the 1940s, the immense computing power resulting from advances in semiconductor technologies has now allowed machines to attain multidimensional intelligence. It is therefore reasonable to assume that many workers are going to be replaced by automation in the coming decades, even if the best AI is never as creative or imaginative as the smartest humans. In fact, a 2019 OECE report and a 2018 paper by PriceWaterhouseCoopers argue that some 15-30% of all jobs in developed markets are at risk of being automated. If AI does turn out to be a net job destroyer, what are some of the biggest implications? First, it's likely to be deflationary. High and rising unemployment resulting from ever cheaper and more capable machines should, in theory, lead to structural deflation, as technologies that can rapidly augment the supply of goods and services should reduce demand if they cause massive job losses. Next, the U.S government will probably get even bigger. In a mass unemployment scenario, the government would likely be compelled to step in to facilitate income and wealth transfers from the owners of robots and tech businesses to the unemployed workers. And which countries will come out on top? The economic winners and losers in the years ahead will likely be determined by who can best create and utilize technology. The U.S. and China, both dominant in cerebral technologies, therefore appear well positioned to thrive in this environment. These economic and technology superpowers have adopted muscular industrial policies, while Europe – the other big regional power – has not yet done so. What this also suggests is that, even if the trade war between the U.S. and China is short, the tech war between these two countries could be protracted – and ultimately much more consequential. The tech war, unlike the trade war, is dynamic, meaning it's not about challenging the static comparative advantages of nations, but rather continually evolving and advancing. Investors would be wise to keep this distinction in mind, as the dynamic aspect of the tech war is apt to become much more important than, say, whether Vietnam is allowed to sell cheap running shoes in the U.S. My views here are admittedly speculative. But the arguments for why AI and robotics could ultimately be labour-creating are as well. Furthermore, these arguments are often obscured by sloppy references to labour productivity, which is a simple ratio between output and labour input. When calculating this, there is often little explanation of what part of the output should be attributed to the labour input. For example, should subway train drivers account for the value of the entire subway system? Projections based on such questionable assumptions should be viewed cautiously. Finally, it's also true that populations in many developed markets are aging, so the heavy use of automation could simply offset the shrinkage in the labour force, something we're already seeing in Japan and South Korea. But aging, like natural evolution in general, is gradual, while computational and technological evolution accelerates at an exponential pace. Because of the convexity in technological advances, it's hard not to bet on technology rather than workers. (The views expressed here are those of Stephen Jen, the CEO and co-CIO of Eurizon SLJ asset management). Enjoying this column? Check out Reuters Open Interest (ROI),, opens new tab your essential new source for global financial commentary. ROI delivers thought-provoking, data-driven analysis of everything from swap rates to soybeans. Markets are moving faster than ever. ROI,, opens new tab can help you keep up. Follow ROI on LinkedIn,, opens new tab and X., opens new tab
The Independent
2 hours ago
- The Independent
Japan's SoftBank to take $2 billion stake in computer chip maker Intel
Japanese technology giant SoftBank Group plans to take a $2 billion stake in computer chip maker Intel as it deepens its involvement in U.S. semiconductor manufacturing and other advanced technology in the United States, the companies said Monday. Shares in both companies fell Tuesday after the announcement, which coincided with unconfirmed reports that President Donald Trump is considering having the U.S. government buy a stake in the chip maker. SoftBank invests in an array of companies that it sees as holding long-term potential. It has been stepping up investments in the United States since Trump returned to the White House. In February, its chairman Masayoshi Son joined Trump, Sam Altman of OpenAI and Larry Ellison of Oracle in announcing a major investment of up to $500 billion in a project to develop artificial intelligence called Stargate. SoftBank plans to buy $2 billion of Intel's common stock, paying $23 per share. 'Semiconductors are the foundation of every industry, Son said in a statement. 'This strategic investment reflects our belief that advanced semiconductor manufacturing and supply will further expand in the United States, with Intel playing a critical role." Intel helped launch Silicon Valley but has fallen behind rivals like Nvidia Corp. and Advanced Micro Devices Inc. and is shedding thousands of workers and slashing costs under its new CEO, Lip-Bu Tan. Intel plans to end the year with 75,000 'core' workers excluding subsidiaries, through layoffs and attrition, down from 99,500 core employees at the end of 2024. The company previously announced a 15% workforce reduction. Trump recently said Tan, who was made CEO in March, should resign but after meeting with him last week said he had an 'amazing story.' SoftBank's shares were down 2.2% Tuesday in Tokyo, while Intel's dropped 3.7% on Monday in New York.
