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Forbes
2 days ago
- Business
- Forbes
Trump's Historic EU Trade Deal: Energy Dominance Doctrine In Action
The EU and the US agree on a trade-tariff deal with a 15% tariff for the vast majority of EU ... More products, as seen in this photo illustration in Brussels, Belgium, on July 28, 2025. (Photo by Jonathan Raa/NurPhoto via Getty Images) In line with the energy dominance paradigm, the Trump administration has struck a deal with European Commission President Ursula von der Leyen that calls for the EU to purchase $750 billion worth of American energy exports and invest $600 billion in the U.S. economy by 2028. In exchange, Washington will cap import tariffs at 15% on most EU goods starting August 1st, including cars, pharmaceuticals, and semiconductors. Certain products - aircraft, semiconductor equipment, select agricultural exports, and some chemicals - will be exempt from tariffs altogether. This arrangement brings partial relief from the trade tensions but remains far from free trade. The 15% ceiling adds predictability while preserving protectionism. Sensitive European goods like steel and aluminum will be managed under tariff-rate quotas, where fixed volumes enter at lower tariffs and excess imports face higher rates. A Political Understanding, Not a Binding Treaty For all its ambitious terms, no formal treaty has been signed. This remains a political handshake that now needs to be written down and implemented. Hammering out the details will be the real test, as both sides are already offering different interpretations of the same pledges. The White House insists the EU's $600 billion investment will be entirely "new" money, 'in addition to the over $100 billion EU companies already invest in the United States'. Brussels has been more cautious, saying companies have only "expressed interest" in future investment by 2029. Moreover, these sweeping targets depend on private decisions, not state control. No one can compel private EU companies to buy $750 billion in U.S. fuels or invest $600 billion in American infrastructure. The enforcement mechanism relies on Trump's own judgment. As long as he perceives progress and can claim wins, the pact may hold. But perceived shortfalls might spark new demands or punitive measures. The Numbers Don't Add Up The Trump administration's goal is to boost U.S. fossil and nuclear exports while narrowing the goods trade deficit with the European Union, which stood at $236 billion in 2024. That year, total U.S.-EU goods trade reached $976 billion. The U.S. exported $370 billion worth of goods to the EU and imported $605 billion. The aim is not only to close the existing deficit, but to create a significant trade surplus. The EU imported 51 bcm of U.S. LNG in 2024, worth $12.2 billion (if we assume an average LNG price of $6.59 per mmBtu). Scaling that to $250 billion annually would require increasing LNG trade more than twentyfold—a leap that is logistically impossible under current infrastructure and market conditions. U.S. LNG export terminals are near capacity, and building new infrastructure takes years. Reaching $250 billion in sales just to the EU would require Europe to purchase a very large portion of total U.S. oil and gas exports. The $600 billion EU investment target faces similar constraints. This exceeds roughly €498 billion ($540 billion) what the EU invested in major priority sectors like climate, energy, transport, and clean technology in 2023. Brussels is essentially committing to send more investment abroad than it spends at home on the green transition. In GDP terms, the annual investment flow of $200 billion is comparable to the combined GDPs of Portugal and Slovakia. Why set these impossible targets? Because they work politically. The Trump administration wants big goals to frame the EU relationship in transactional terms. Europe wants stable energy supply and tariff relief. The figures may be unattainable, but they send a clear message about economic alignment and reduced exposure to Russia and China. There is precedent for inflated purchase pledges in Trump-brokered deals. The 2019 Phase One trade agreement with China set ambitious quotas for Chinese purchases of U.S. goods. China never came close to hitting them. To be fair, former President Biden also liked aspirational targets, such as 30 GW of offshore wind capacity to be installed in the U.S. by 2030. So such strategies straddle political party line. Europe's Strategic Calculations Why would Europe accept what appears to be a lopsided arrangement? The motivations are threefold: energy security, economic pressure, and geopolitical insurance. First, the EU gains assurances on U.S. energy supply. With Russia largely sidelined as an energy partner, Europe needs reliable alternatives. The United States, now the world's top producer of both oil and natural gas, is a leading candidate. U.S. nuclear technologies are under active consideration in several EU member states, including Poland, Bulgaria, Romania, and the Czech Republic. Plans range from large-scale reactors, such as the Westinghouse AP1000, to small modular reactors (SMRs) from companies like NuScale, GE Hitachi, and Holtec. In addition to securing U.S. reactor designs and engineering, these projects will require a reliable fuel supply, much of which was historically provided by Russia. Second, the deal heads off a trade war. Trump had threatened 25-30% tariffs on EU cars and other goods, which would have hit Germany particularly hard. By accepting the 15% cap and making purchase commitments, Brussels avoids confrontation and buys time. Finally, there's the temporal calculus. The commitments stretch to 2028-2029, potentially beyond the current U.S. presidential term. With potential new leadership in Washington, the more onerous aspects could be renegotiated or quietly dropped. Aspirational Targets as Policy Tools This agreement reflects Trump's long-held energy dominance doctrine, which prioritizes U.S. fossil and nuclear exports while ignoring renewables. The deal fits this framework perfectly: it locks in fossil fuel exports and aims to close the trade gap. For the EU, it provides energy security, tariff relief, and stability in an uncertain geopolitical environment. The $750 billion energy goal is not feasible, and the $600 billion investment figure is soft, at best. Yet the agreement serves both parties' strategic objectives. This is a historically significant deal not because the numbers are realistic, but because it demonstrates how both sides want to manage their economic relationship going forward. The aspirational targets are the feature, not the bug, of this approach.
CNET
7 days ago
- CNET
Starlink Restored After Hours-Long Outage Took Down Elon Musk's Satellite Internet Service
Photo illustration by Jonathan Raa/NurPhoto via Getty Images Starlink experienced an outage Thursday afternoon that went for 2.5 hours, taking down at least tens of thousands of people's satellite internet service. "Starlink is currently in a network outage and we are actively implementing a solution. We appreciate your patience, we'll share an update once this issue is resolved," Starlink posted on X at 1:05 p.m. PT/4:05 p.m. ET. While Starlink has yet to confirm that services are fully up and running again, Downdetectorshowed reports of issues down to just 1,600 as of 4:30 p.m PT after they spiked to around 60,000 at about 1 p.m. PT. (Disclosure: Downdetector is owned by the same parent company as CNET, Ziff Davis.) Starlink VP of engineering Michael Nicolls tweeted that the service was "mostly restored." Starlink, owned by Elon Musk, has changed the game in terms of internet accessibility in rural and other under-served areas lacking high-speed broadband infrastructure. It has 2 million US subscribers, and more than 6 million globally. Read more on what happened below.
CNET
7 days ago
- Business
- CNET
Starlink Outage Takes Down Elon Musk's Satellite Internet Service
Photo illustration by Jonathan Raa/NurPhoto via Getty Images Starlink is experiencing an outage Thursday afternoon that's been ongoing for hours, taking down tens of thousands of people's satellite internet service. "Starlink is currently in a network outage and we are actively implementing a solution. We appreciate your patience, we'll share an update once this issue is resolved," Starlink posted on X at 1:05 p.m. PT/4:05 p.m. ET. DownDetector shows reports of issues spiking to around 60,000 at about 1 p.m. PT. (Disclosure: Downdetector is owned by the same parent company as CNET, Ziff Davis.) Starlink has changed the game in terms of internet accessibility in rural and other under-served areas lacking high-speed broadband infrastructure. It has 2 million US subscribers, and more than 6 million globally.
Forbes
29-05-2025
- Business
- Forbes
Prepare For The AI Fraud Wave Coming To A Device Near And Dear To You
Hacked displayed on a mobile with binary code with in the background Anonymous mask. (Photo by ... More Jonathan Raa/NurPhoto via Getty Images) Do you find it exhausting to combat the increasing number of fraud scams lurking in your email inbox? You are not alone. Sophisticated AI enabled organizations are becoming cleverer by the day. Many of us don't notice threats, because some messages seemingly are coming from people we know—until we click on it or download the latest scam—like a party invitation. Yeah, I did. We may not think or care much about the differences between online fraud and cybersecurity attacks until we experience one firsthand. There are very real distinctions. E.g. fraud typically aims to deceive individuals for financial gain via psychological tactics, while cyber attackers exploit system vulnerabilities. If you walked with me, around the cyber security vendor booths at this years' RSA Show in San Francisco and saw the billions of dollars being invested to keep people and organizations safe, you may think—oh I'm safe! Sadly, you're not. And now more than ever, there are two types of people, those who have been hit and those who will be. Cyber attacks tend to dominate the news more, but the fact is that fraud is growing faster. It may go under-reported, and hence it is more insidious (well, fraud's easier to sweep under the rug, since it usually doesn't involve mass exploits of large companies or system infrastructure). But news about fraudsters targeting surfers phones, a global payments coordinated attack, and a personal experience that tried to take me down recently, all made me wonder about the state of this kind of crime, and a better way to fight it. Given all this uncertainty, let's look at this in light of the growing number and types of incidents, with the prospect of AI making it even worse for any of us. Fraud is a massive problem that I believe will be accelerating more with AI. The Global Anti-Scam Alliance (GASA) estimates scammers cost consumers over $1.3 Trillion in fraud last year. In 2024 U.S. consumers reported losing over $12.5 billion due to this kind of crime, a 25% increase from the previous year, that seems low. Scam-related fraud incidents surged by 56%, with financial losses increasing by a whopping 121% in 2024, according to PYMNTS. In comparison, cyber-attacks rose by 30% last year. Several factors have contributed to its rise besides AI. The COVID-driven growth of e-commerce and digital businesses of all kinds have increased our poorly secured digital footprints, opening them to exploitation. And where are fraudsters naturally drawn to? Like Deep Throat said in the Watergate era, 'follow the money.' Willie Sutton famously advised robbing banks, because that's where the money is. And hence it is banking and finance that are particularly vulnerable. New fintech apps and real-time payment methods create opportunities to defraud. In fact, McKinsey & Company projects losses, just from payment card fraud to reach $400B globally over the next decade. It will likely be higher. Part of this will be authorized push payment (APP) fraud which is expected to grow at an 11% CAGR from 2023 to 2027, according to the same report. Fraud exploits can have wonky names. Perhaps some explanation will help. E.g. the APP fraud referenced above entices victims to part with their money under false pretenses, leaving them on the hook for liability since they authorized the payment. Synthetic ID fraud combines real and fake information to open accounts and build credit profiles. This kind of 'Frankenstein fraud' is hard to detect because the resulting ID technically doesn't exist but behaves like a real person. Grandparents beware. AI deepfakes impersonate people via voice, images or video, and can be used to generate synthetic IDs too. According to Raiinmaker CEO, J.D. Seraphine, 'voice-cloning software tricks elderly people out of millions by finding their grandchildren's voices on TikTok and using these sounds to call their 'grandparents' claiming they've been arrested or are hurt and urgently need bail money or medical funds.' Can you hear me now? Fraudsters Targets: 80 year old using her smartphone to check in with friends and family and share ... More photos on various social networks. As the name implies, mule account fraud involves recruiting people to move illicit funds through their bank accounts, knowingly or unknowingly. With friendly or first-party fraud, the user intentionally commits the act, e.g., by disputing a legitimate transaction for a refund (chargeback fraud). It's growing fast in e-commerce and fintech and is hard to detect because it comes from legitimate users. The bad actors are constantly evolving their tactics, growing increasingly more sophisticated using AI, deepfakes, and social engineering to bypass traditional security measures. There are fraud rings coordinating large-scale attacks that employ bots and rapid-fire automated scripts. AI, the Dark Web and other tools drive down costs and make it easier to scale their fraud organizations. 'More and more business is happening online,' said Jay Chaudhry, CEO of cloud security vendor Zscaler, in a recent interview with me. 'We're all getting interconnected. And as more and more commerce and business happens online, bad guys want a piece of the action without working hard.' Unfortunately, you can't effectively fight it with brute force technology and tactics alone. New exploits are constantly being introduced, making it hard to predict where fraud will hit next. Businesses and use cases are unique, adding to the challenges of measuring and fighting fraud. All these things mean that the threat landscape is rapidly evolving, the challenges growing—and individuals are paying the price. Fraud prevention and cybersecurity are plagued by some of the same issues, including evolving threats, automation, and the need for real-time defense. Having the right technology can help in both cases. There is a rich ecosystem of cyber vendors, in fact it's a crowded and mature market. The anti-fraud technology market is growing too, and is segmented by factors including fraud type, deployment mode, enterprise type, and industry. E.g. Socure provides AI-powered digital identity verification as part of their fraud prevention solutions, typically for large enterprises. Sift specializes in digital trust and safety, offering an AI-powered platform to protect e-businesses from fraud and abuse. Kount has a similar profile, but emphasizes comprehensive protection across the entire customer journey, while Sift focuses on automating fraud decisioning for growth-oriented businesses. But it's not just about the latest whiz-bang technology. Enterprise leaders need an overarching strategy involving tech and best practices that can keep customers safe and brand reputations pristine, and in compliance with relevant regulations. The goal is to arrive at a comprehensive anti-fraud approach that proactively defends against existing threats and the 'unknown unknowns.' And perhaps it is here that fraud fighters can learn a thing or two from the cybersecurity crowd. Another anti-fraud vendor that's getting attention is DataVisor. They are redefining fraud prevention with an AI-powered platform that proactively detects and stops everything from payment fraud to complex financial crimes in real time. Leveraging unsupervised machine learning, advanced link analysis, and a real-time decision engine, DataVisor's cloud-native solution scales effortlessly to billions of events per day—empowering businesses to uncover emerging threats before damage is done. So, AI doesn't just make it worse after all. Forrester recently named the company a leader in their anti-money-laundering (AML) Wave report. Also, Forbes profiled their top execs and the company made our Fintech 50 List. I had heard their CEO Yinglian Xie speak about the rising fraud threat, and the need for greater industry cooperation; and wanted to find out more. So, we discussed what the company is doing to make a bigger impact in this growing sector—and what we should do next. Yinglian also championed the need for a comprehensive Fraud Prevention Framework, that could be modeled after the National Institute of Standards and Technology's (NIST's) Cybersecurity Framework. She explained that NIST takes a very proactive approach to cybersecurity, while fraud response is often reactive. CSF is a voluntary framework (rather than a mandate) that helps organizations manage and reduce cybersecurity risks. It focuses on six core functions: Govern, Identify, Protect, Detect, Respond, and Recover. Yinglian said: 'True resilience requires defending against evolving threats. Conceiving and implementing a framework would help rally the industry against fraud and to stay ahead of these challenges.' The components could mirror the core functions recommended by NIST CSF. Author and management guru Peter Drucker famously said, 'You can't manage what you don't measure.' This occurred to me when Yinglian explained that improving the measurement of anti-fraud capabilities using benchmarks is critical for identifying gaps and focusing efforts and budgets accordingly. Also, the industry should strive for improvements in information sharing, collaboration, threat intelligence, and post-mortem analysis. She is asking the industry to join her and the company in shaping the future of anti-fraud efforts. Datavisor will be forming a working group and invites early adopters to participate in sharing ideas for building fraud benchmarks and a framework for 2025 and beyond. My company, Reboot Partners, will be volunteering to help advance these initiatives with governments and the private sector. Achieving comprehensive anti-fraud capabilities is important for many reasons. It can keep our money safer and protect businesses against reputational impact and large fines. Better fraud-fighting through technology and industry cooperation will accelerate new use cases, reduce financial-related launch delays and strengthen defenses. Keep an eye on this explosive area for your organization, yourself, friends, family—and your email accounts—more threats arrived in your inbox while you were reading this.
Forbes
29-05-2025
- Business
- Forbes
What's Behind The 3x Rise In SOFI Stock?
The SoFi logo is being displayed on a smartphone in this photo illustration in Brussels, Belgium, on ... More May 28, 2024. (Photo by Jonathan Raa/NurPhoto via Getty Images) SoFi Technologies stock (NASDAQ: SOFI) has seen an increase of over 30% from its lows of below $10 in early April this year to its current value of $13. This rise can mainly be credited to the company's strong Q1 results and an upward adjustment to its annual forecast. Our analysis of SoFi's Q1 performance provides additional insights. Following this recent increase, SOFI stock is trading 190% higher when viewed over a longer duration starting from early 2023. This can largely be attributed to: We will examine the specifics of these factors. While SOFI stock has performed exceptionally well, if you're looking for potential growth with a smoother experience than investing in a single stock, consider the High Quality portfolio, which has surpassed the S&P and achieved >91% returns since inception. Separately, see – GE Stock To $150? SoFi's strong revenue growth is driven by its expansion beyond its primary lending business to establish itself as a 'one-stop shop' for financial services. This diversification includes offerings such as SoFi Money (banking), SoFi Invest (investing), and SoFi Relay (financial insights), in addition to its traditional lending services (personal loans, student loan refinancing, and home loans). This approach has resulted in considerable growth in its membership base and product usage. For context, the company's membership base grew from 5.2 million in 2022 to 10.9 million currently. SoFi's 2022 acquisition of Technisys – a cloud-based core banking solution – has been vital for the company. Furthermore, the company acquired a banking charter in 2022, which allows it to hold loans for investment and significantly enhance its deposit base. Among its segments, Financial Services has exhibited remarkable growth, increasing fivefold from $168 million in 2022 to $822 million last year. This increase is credited to the strong uptake of products like SoFi Money, Relay, and Invest, as well as the swift growth of its Loan Platform Business. The company's Lending segment has also performed well, increasing by 30% over the same period. Although student loan refinancing has traditionally been a substantial revenue source for SoFi, personal loans have become a significant contributor to growth in recent years. The company has secured significant commitments from institutional investors, including Fortress Investment Group and Blue Owl Capital, to purchase its loans, aiding in diversifying its revenue sources and lowering capital intensity. SoFi's Financial Services segment has been a key factor in the company's financial overhaul, greatly boosting overall profitability. Since 2022, SoFi's operating margin has dramatically improved from -20.4% to 17.2% (for the last twelve months) — an impressive increase. The 2022 banking charter granted to SoFi was a significant landmark, enabling the company to leverage low-cost deposits from its members, especially those with direct deposits, as a reliable funding source for loans. This transition away from pricier financing methods directly benefited SoFi's net interest income and overall profitability. This enhanced financial performance, combined with robust sales growth and commitments from institutional investors, has transformed investor sentiment. The company's price-to-sales valuation multiple has doubled during this time, rising from 2.6x in 2022 to 5.3x in 2024, which reflects renewed investor optimism. This shift occurred amidst a challenging market backdrop, particularly influenced by the inflation surge of 2022 that triggered a significant stock market downturn. During this tumultuous period, SOFI stock saw a steep decline, plummeting 83% from its February 2021 peak of $26 down to $4 by December 2022 – a more considerable drop than the S&P 500's 25.4% peak-to-trough decline. The stock has yet to reclaim its pre-Crisis peak. At its current price of $13, SOFI stock is trading at a price-to-sales (P/S) ratio of 5.3x, which is closely aligned with its four-year average of 5.5x. However, there are strong indicators suggesting that the valuation multiple could see further expansion. Firstly, the company's strategic shift toward higher-margin revenue avenues through its Technology Platform (Galileo and Technisys) and Financial Services segments is attracting investor interest. This transition from a mainly lending-focused model to a more varied, technology-driven approach may prompt the market to assign higher multiples, recognizing the more stable, fee-based income. Secondly, SoFi's persistent member growth and successful cross-selling are proving to be essential. As the company continues to expand its membership and efficiently cross-sells banking, investing, insurance, and lending products within its integrated ecosystem, investors might attribute a premium to its valuation. Lastly, and most importantly, SoFi's trajectory toward consistent profitability could serve as a significant catalyst. Maintaining profitability, supported by increased operational efficiency and economies of scale, could lead to a vital inflection point, as financially successful companies in the services sector typically command higher valuations. While these factors strongly favor SoFi, investors should also weigh the risks involved. SoFi's stock previously declined over 80% during a significant market downturn, highlighting its vulnerability to macroeconomic challenges. With interest rates remaining high and ongoing trade tensions, there exists a risk of a further decline in the stock price. Certainly, there is always a substantial risk when investing in a single stock, or a limited number of stocks. Consider the Trefis High Quality (HQ) Portfolio which, encompassing a selection of 30 stocks, has a history of successfully outperforming the S&P 500 over the past four years. What accounts for this? Collectively, HQ Portfolio stocks have delivered superior returns with lower risk compared to the benchmark index; providing less volatile experiences, as illustrated in HQ Portfolio performance metrics.
