Good morning from the Financial Times.
Today is Friday, August 14th, and this is your FT News Briefing.
American AI is trying a new strategy to compete with China, and Venezuela wants its gold bars back from the UK.
Plus, Zambia's presidential election is a referendum on the country's mining sector.
I'm Sonia Hudson in for Mark Filippino, and here's the news you need to start your day.
Leading American AI companies are releasing cheaper models in order to compete with Chinese rivals.
That's because customers are switching from platforms made by the likes of OpenAI and Anthropic, and they're moving to less expensive ones made by Chinese developers, including Moonshot and DeepSeek.
Since mid-July, prices for U.S. models have fallen by about a quarter.
That's according to figures from Silicon Data.
The latest releases from Chinese AI labs are catching up with the performance capabilities of their U.S. competitors.
And that is sparking concern in the American tech industry.
It all comes as OpenAI and Anthropic are planning blockbuster initial public offerings.
Investors want to see evidence that vast spending on AI can generate returns for the companies.
OpenAI and Anthropic declined to comment.
Venezuela wants its gold back from the UK.
The South American country has $4 billion in gold reserves in the Bank of England.
The UK has refused to return the gold because it didn't recognize the country's previous leadership under Nicolas Maduro.
But as you'll remember, he was captured by U.S. forces at the beginning of the year.
And now, for the first time, Venezuela's government and its opposition are jointly demanding the gold's return.
This comes as the country is trying to shore up its finances after a pair of devastating earthquakes that hit in June.
I'm joined now by the FT's Joe Daniels, who's been covering this.
Hi, Joe.
Hello.
Okay, so there's a lot of backstory here.
Tell me what has happened leading up to this demand.
Certainly.
So this traces back to around 2018 when the UK blocked the Venezuelan government's access to some of the gold it had stored at the Bank of England on the grounds that at the time it did not recognise the country's revolutionary socialist leadership.
Of Nicolas Maduro, alleging that he had stolen the election at the time.
The Venezuelan opposition had long supported that stance.
But what has changed this week is that the...
Venezuelan government, now led by Delcy Rodriguez and the opposition, have begun US-backed talks.
That yielded a joint statement on Wednesday in which both parties call for the first time for the Bank of England to release the gold to Venezuela so it can use that money to fund earthquake recovery.
How significant is this joint statement now?
This represents a breakthrough, really, in that the two sides that can't agree on very much have agreed on something.
Often, the two sides are talking across each other amid a climate of absolute suspicion.
This feels like something that the Venezuelan public can look at and say, okay, these two sides are debating in our interest.
But these talks are controversial.
The Maduro government previously had used negotiations to play for time while ultimately staying in power.
And so this round of negotiations is viewed somewhat sceptically by the public.
And
Opposition figures that are a part of these talks are also somewhat sceptical.
One of them told us that regarding the gold, there would need to be transparency mechanisms on the efforts to recover it so that it doesn't get stolen by Rodriguez's government.
Now, this is a big switch up for the opposition that, as you said, has for years backed the Bank of England's decision to restrict the gold.
What changed?
I think the opposition changed its mind on this partly because the severity of the earthquakes is so great that they simply need the money.
This is a country that had runaway six-figure hyperinflation in the last decade.
A third of the population migrated abroad and a double earthquake that hit in late June has completely ravaged what were already collapsed finances.
So this $4 billion in gold would be very useful.
They desperately need the money to fund recovery.
We should mention that we have not gotten any comment from the Bank of England or from the UK government.
But what does this demand tell you about Venezuela's relationship with the UK and also with the US, which is backing these talks?
Well, what it tells us is that we are very far from a kind of clearly marked system of who recognises who and under what terms.
It was already confusing before Maduro was arrested, then he was arrested, and now we're so far from Venezuela's constitution, from the accepted rule book on...
International sovereignty.
So all these debates have been opened by the US arresting Maduro, one of which is who is the legitimate government of Venezuela.
In the case of the gold, it's something similar.
Who is the legal owner of that gold?
Who can exercise rights over that gold?
Joe Daniels is the FT's Andean correspondent.
Thanks, Joe.
Thank you.
Big tech groups have issued a flood of foreign currency bonds, and it's shaking up the world's smaller credit markets.
The debt issuance is pushing borrowing costs higher and sometimes crowding out local companies.
This is all according to investors and analysts.
The so-called hyperscalers like Amazon and Alphabet have started issuing debt this year in the Swiss franc and the British pound.
They're trying to find new funding sources in the race for AI dominance.
Voters in Zambia went to the polls yesterday to pick their next president, and the results are expected on Monday.
The race has become a battle over the country's copper mining boom.
President Hakande Hichilema is seeking a second term.
He's helped turn the country's economy around, partly by promoting copper mining.
But many young people say they have not yet felt the effects of that windfall.
Here to discuss is the FT's Monica Mark.
Hi, Monica.
Hi.
Okay, so set the stage for us.
Who is Hakande Hichilema and what has his record been economically?
So Hakande Hichilema came to power.
He was voted in a wave of optimism in 2021, promising he would deal with
The key issues at the time, which were that Zambia had just defaulted on a almost 14 billion external debt.
So the economy was a mess.
There were very low jobs.
He's been in power for five years.
And during that time, the economy has grown very well.
The IMF is expecting about four and a half percent growth this year.
And in particular, Zambia has benefited from a copper windfall.
It's Africa's second largest copper producer.
Copper prices have hit record highs over the last year.
Well, Monica, what are his opponents saying about his record, though?
The incumbent's weakest flank is that he hasn't been able to provide jobs for young people.
His opponents are saying that he could have done a better job of making sure that Zambia benefited from these record high copper prices, that it could have translated into more jobs.
There is also an argument that the stage has been set where there is now the stability, there is now the investments.
And so the next stage will be to start, for example, processing copper within Zambia.
And that will create more jobs and create more benefits for the country and its citizens.
And the president has spoken about wanting to do that going ahead.
How do you think this will all play out in the election?
You know, voters went to the polls yesterday.
We're still waiting for results.
What are you looking out for here?
So as is typical in most countries and in African countries in particular, the incumbent is in the strongest position.
Zambians have
However, voted out incumbents previously, so it's not unheard of.
If a lot of young people turn out, and as mentioned, Zambia has a very young population, so if those voters come out in big numbers, they tend to be the ones that enable change to happen.
Results will be expected on Monday, and it really just depends on who turns out to vote.
Does Zambia's election tell us anything more broadly about the political reality of having these large, very profitable mining operations in several countries across Africa?
Absolutely.
Africa has got a very young population, broadly speaking, and it also...
Is a country that has enormous natural wealth.
Copper is an example with Zambia and copper.
But in West Africa, for example, over the last decade, we have seen a lot of older aging rulers have been kicked out through young people getting out on the streets.
And essentially demanding to see more of the benefits of these critical minerals or this natural wealth.
And in a couple of these countries, we've actually had young military rulers return to power.
Because they have promised to kick out big multinational companies or foreign powers that they accuse of kind of soaking up all the benefits without ordinary citizens benefiting from it.
Monica Mark is the FT's Southern Africa Bureau Chief.
Thanks, Monica.
Thank you.
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