The meetings behind the meeting
Thousands of global leaders have once again descended on snowy Davos, Switzerland, for the World Economic Forum’s annual meeting. The theme of this year’s event: “rebuilding trust.”
But there are the public meetings, and then there are the real ones behind closed doors that the attendees are talking about most. These include discussions touching on U.S.-China tensions, the war in Gaza, artificial intelligence and the future of Ukraine.
There is a kind of game that some C.E.O.s play with one another: How many public panels are you on, or how many times have you been in the Congress Center, the main hub for the forum’s big presentations? If the answer is zero, you’ve won.
Top U.S. officials are set to appear on the main stage, including Secretary of State Antony Blinken and Jake Sullivan, the national security adviser. But speculation abounds about whom they’re seeing behind the scenes.
One question: Will their meetings include anyone from the sizable China delegation, led by Li Qiang, the country’s premier? U.S.-China tensions are high after Lai Ching-te, a fierce defender of Taiwanese sovereignty who is despised by Beijing, was elected president of the self-governed island on Saturday.
Li has already met over lunch with the C.E.O.s of IBM, Intel, Walmart and others. (He also addressed the conference on Tuesday and revealed that China’s economy grew about 5.2 percent last year, a day ahead of the official data release.)
A lot of eyes are also on officials from the Middle East. Israel’s president, Isaac Herzog, is expected to take the stage on Thursday as his country’s war with Hamas threatens to further escalate into a broader regional conflict. Some attendees wonder whether he’ll meet with the Qatari prime minister, Mohammed bin Abdulrahman al-Thani, whose country has been a key go-between in negotiations over hostages and humanitarian aid in Gaza.
Also on hand is the delegation from Saudi Arabia, led by the foreign minister, Prince Faisal bin Farhan, as the kingdom flexes its growing economic and diplomatic power.
Another attendee: Jared Kushner, Donald Trump’s son-in-law who helped spearhead the Abraham Accords and now leads a private equity firm whose backers include Saudi Arabia’s sovereign wealth fund.
Volodymyr Zelensky is a keynote speaker, giving a public address this afternoon and participating in a Q. and A. that Andrew will moderate. And Ukraine’s president has met with top bankers, including JPMorgan Chase’s Jamie Dimon and Bank of America’s Brian Moynihan, as well as Bridgewater’s Ray Dalio.
Artificial intelligence is the talk of the town. DealBook has had more conversations about generative A.I. than any other topic at Davos. (There are over two dozen events on the schedule that directly reference A.I. in their titles.) So it’s unsurprising that among the most sought-after attendees are executives like Sam Altman, OpenAI’s C.E.O.; Mustafa Suleyman, the Google DeepMind co-founder who now leads Inflection AI; Lila Ibrahim, the C.O.O. of DeepMind; Aidan Gomez, the C.E.O. of Cohere; and Florian Bressand of France’s Mistral AI.
Penny Pritzker’s dilemma: She’s officially there in her role as the State Department’s special representative for Ukraine’s economic recovery. In most years, her other role, as head of Harvard’s governing board, would make her a hot ticket for the crowds of alumni in attendance.
But with controversy over Claudine Gay’s defenestration as Harvard’s president amid plagiarism accusations and antisemitism concerns on campus, is she more likely to get sharply questioned by worried donors?
HERE’S WHAT’S HAPPENING
Goldman Sachs tops estimates for fourth-quarter profits. Shares in the Wall Street giant rose nearly 2 percent in premarket trading after the bank reported a jump in revenues. But its annual profits sank to the lowest level in four years, hurt by losses tied to its retreat from consumer banking and a slowdown in investment banking.
Houthis militants in Yemen attack more ships in the Red Sea. The Iran-backed group hit an American-owned commercial ship with a missile on Monday, days after the U.S. and British militaries launched strikes against Houthi targets in Yemen. Traffic through the vital shipping route has plummeted in recent weeks. QatarEnergy, a big exporter of liquefied natural gas, is the latest company to order its ships to avoid the region.
Apple redesigns its smartwatch to get around an import ban. The company is removing a blood-oxygen sensor from the Apple Watch at the heart of a patent dispute with Masimo, a technology company that accused Apple of violating its intellectual property rights. The U.S. Customs and Border Protection agency approved the changes, according to Masimo.
Boeing will add more inspection requirements for the 737 Max and a key supplier. The plane maker will increase checks and send a team to check the work of Spirit AeroSystems after hundreds of its 737 Max 9 jets were grounded when a panel made by that company blew out in the sky over Oregon. The company also plans to open up its factories to customers to inspect processes.
Trump marches on
Donald Trump coasted to a record victory in the Republican Iowa caucuses last night, crushing his opponents and demonstrating his dominance over the party as he seeks a rematch against President Biden.
Frigid temperature put the chill on turnout. But with most of the votes counted, Trump still managed to win all but one county and was expected to sweep nearly every voter demographic: men, women, young people, college graduates, evangelicals, political moderates and conservatives.
Biden called Trump “the clear front runner” for the Republicans, and used his predecessor’s win as a fund-raising pitch. (The president’s re-election campaign says its war chest stands at roughly $117 million after pulling in over $97 million last quarter.) And world leaders are already warning about Trump’s potential return to power. “It is clearly a threat,” Christine Lagarde, the president of the European Central Bank, said last week.
Iowa was about as good as Trump could have expected. Gov. Ron DeSantis of Florida finished in a distant second place, despite investing heavily in the state. His campaign is now running low on cash, but he tried to spin the result as giving him some momentum.
Nikki Haley, who has been gaining in national polls and winning over big-name donors, was third, with about 95 percent of the votes counted as of press time.
The duo spent big on advertising, part of a record splash of more than $123 million by all the candidates, and still lost to Trump by huge margins.
The race has slimmed. Vivek Ramaswamy, the wealthy entrepreneur who ran a largely self-funded campaign, finished a distant fourth, dropped out of the race and endorsed Trump. Ramaswamy had clashed frequently with Haley and DeSantis on the campaign trail, and he was a vocal defender of the former president, vowing to support him in the face of myriad legal challenges.
Next up on Jan. 23 is New Hampshire, where Haley has focused a lot of her efforts and is doing better in polls. The state is home to more moderate Republicans and independent voters than Iowa, and has a larger anti-Trump voting bloc. Still, the former president holds a double-digit lead in polls there.
Europe’s big bet on batteries
Northvolt, one of Europe’s biggest green start-ups, is raising $3.4 billion in debt from the European Union and a consortium of banks, including JPMorgan Chase, to expand battery production locally and support the continent’s fledgling electric vehicle sector.
The financing and subsidies arrangement is a bet by Europe to keep battery production closer to home, and to limit the march of Chinese and U.S. players that are beginning to dominate the market, The Wall Street Journal reports.
The funding is one of the largest transactions for a clean-energy company in recent years. It highlights a push from investors and policymakers to channel billions of dollars into making batteries that can power electric cars and store energy when the wind isn’t blowing and sun isn’t shining to speed the shift away from fossil fuels.
China controls swaths of the battery supply chain from metals processing to cell assembly, a concern for Western countries that are throwing billions of dollars in tax credits, loans and grants at companies to kick-start their own supply chains. The 2022 U.S. climate law has driven other countries to bolster their own subsidies to attract clean-energy investments.
“It’s an existential threat to the food industry and certainly an existential threat to the processed food industry.”
— Marion Nestle, an emeritus professor of nutrition, food studies and public health at New York University, on how popular weight loss drugs like Ozempic could upend the marketing of snack foods in America.
The week ahead
After markets were closed on Monday for Martin Luther King’s Birthday, a bevy of earnings, economic data and central bankers’ speeches will all be released this week. Here’s what to watch for.
Wednesday: China will officially release fourth-quarter G.D.P. data and population data, with questions swirling about the health of the world’s second-biggest economy and the scale of its demographic crisis.
The United States will publish retail sales data for December, and the Fed will release its latest “beige book” report, detailing economic activity across 12 regions.
In earnings, Charles Schwab, Alcoa and Citizens Financial report results.
Thursday: Central bankers take the spotlight, with Christine Lagarde, the European Central Bank president, and Raphael Bostic, the head of the Atlanta Fed, due to speak at separate events. Expect plenty of questions about stubbornly high inflation and the timing for the first round of interest rate cuts.
TSMC, the Taiwanese chip giant, reports fourth quarter earnings.
Friday: State Street, Comerica and Burberry report results, and the University of Michigan publishes its latest consumer sentiment report.
THE SPEED READ
Elon Musk threatened he would spin a company out of Tesla focused on A.I. and robotics if the car maker’s board does not give him greater voting control and a big performance award. (Bloomberg)
Thomson Reuters is in talks with generative A.I. companies to license its news and data in deals that could be modeled on OpenAI’s arrangement with Axel Springer. (Bloomberg)
Best of the rest
We’d like your feedback! Please email thoughts and suggestions to [email protected].