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Good morning from The Financial Times.
Today is Tuesday, March 25th, and this is your FT News Briefing.
China is considering even more economic subsidies, and there's a new corporate top dog in Europe.
Plus, Starlink is doing really well.
But are Elon Musk's ties to the government jeopardizing its success?
Starlink effectively has become the sort of golden goose for Musk, it's the strongest source of his net worth.
I'm Mark Filipino and here's the news you need to start your day.
Beijing is considering billions of dollars in subsidies on China's services sector.
The subsidies would make things like travel, tourism and sports cheaper and encourage people to spend more money on them.
Beijing has tried this before to boost consumer spending, but economists say it mostly helps producers to sell goods instead of getting consumers to open their wallets.
A source said the program could launch in the second half of the year if consumption continues to lag.
SAP has become Europe's most valuable company, on Monday the German software giant leapfrogged Danish drugmaker Novo Nordisk to take the top spot.
Here with me is the FT's Florian Mueller, who's been covering this.
Hey Florian. Hi, thanks for having me.
So first off, tell me about SAP, who are they exactly?
Sure. So if you, for example, claim expenses, the large share of companies worldwide is using their software.
the most valuable company in Europe.
How did they do it?
intelligence applications, and they have lower costs which overall investors really like.
And that's why their share price is soaring right now, and it has increased more than 40 % over the course of the last year.
Now let's compare this to Novo Nordisk.
Is this a story of SAP doing really, really well recently, or just Novo Nordisk sliding?
Or is it both? So I guess it is a story of both.
So overall, SAP, shares have performed really well.
Whereas for Novo Nordisk, they used to be super successful with their anti obesity drugs, but they're now fighting with more competition in that field and at the same time have struggled to find a follow -up to this blockbuster.
So that's why their shares have come down.
What do analysts predict for SAP going forward?
So analysts predict that SAP will continue to reap the benefits of the shift to the Cloud business.
Overall, the cloud business is projected to grow more than double than their overall revenues, but the overall revenue is also supposed to grow more than 10 % this year, and so going forward they also think that the boom surrounding artificial intelligence will also benefit the company, because SAP essentially has not developed their own AI model, but what they want to do is use different models from different companies, companies, and then use the data and become the best platform for companies to analyze their own data but also third -party data using third -party artificial intelligence models.
Florian Mueller is the FT's Frankfurt correspondent.
Thanks so much, Florian.
Thank you. Bye -bye.
BYD had itself a stellar 2024.
Yesterday China's electric vehicle darling said that its annual sales hit a new record of $107 billion, blowing past analyst expectations.
That's more than Tesla which hit $98 billion for a score.
BYD's results put a feather in the cap of a remarkable year.
The Shenzhen -based car maker recently introduced new driver technologies and an aggressive international expansion.
Plus, it now claims that its batteries can charge in five minutes.
Shares of BYD have soared more than 50 % this year.
SpaceX, the company founded by Elon Musk, is riding high in the extraterrestrial race.
The best example of that might be Starlink.
A big chunk of the world relies on the satellite internet service, but there are growing concerns over Musk's closeness to US President Donald Trump and whether that's now a liability for Starlink.
The FT's Rafe Uden has been looking into this and he joins me now.
Hi Rafe. Hi Mark. Let's hear the good news first, just how well has Starlink been doing in recent years?
So I mean effectively Starlink is the dominant provider for what we call low Earth orbit These sort of satellite networks that provide broadband to hard -to -reach areas.
The company has about 7 ,000 satellites up in space at the moment, and then beyond that it has a raft of federal or government contracts, and then you get a span of private contracts.
So number of telecom providers, major airlines.
it also plays a critical role in Ukraine on the front lines.
So really it's the leading player in this space.
Now, Starlink has been around for a bit, but Musk's relationship with Trump is kind of new.
How has the business benefited from that relationship?
Yeah, so a good way to think about this is how was Starlink impacted by the previous administration.
So under the Democrats, the Federal Communications Commission chair Jessica Rosenforsen had raised concerns about Starlink's dominant position in the market when she was asked about why Starlink had been sort of blocked from a major sort of rural broadband contract.
Now, what we're seeing under Trump is that narrative around Starlink is shifting.
The FCC is making overtures, and we reported last week that the head of that rural broadband program had been told to consider Starlink.
So what we're seeing is that effectively under Trump, Starlink could start to play a more prominent role in terms of U .S. federal contracts that had previously been barred or excluded from.
Now how big of a boon is this for Musk personally?
Like how much of his wealth is tied to Starlink and SpaceX?
So what we've been seeing is that amid all of the protests and uproar about Musk, he's been impacted most at Tesla, the EV carmaker.
Sales have slumped in Europe and during this period, what's left is that SpaceX, the rocket maker that operates Starlink and owns Starlink, effectively has become the sort of golden goose for Musk.
It's the strongest source of his net worth.
roughly half of his net worth is now tied to SpaceX. And so, as it goes from strength to strength in the US, more of his wealth is going to be tied to this one company.
So then what are the downsides that you're seeing from Musk's relationship to Trump?
So Starlink's role in a number of European countries means that it's seen as an easy target it, given Musk's proximity to Trump.
There are also fears about a peace settlement between Russia and Ukraine that could see Stalin either turned off or pulled back and that could impact services there.
And so we've seen a number of European providers, primarily UTASat OneWeb, looking to basically replace Stalin on the front line.
And so, what we might see is that rivals in Europe start to leverage this proximity that Musk has to Trump to try and gain contracts and wins.
In the end, do you think that Musk is worried enough about Starlink to distance himself from Trump?
I think, ultimately, the benefits tied to being close to Trump far outweigh the negatives here.
So we've seen in recent weeks that Starlink has been able to negotiate contracts or reach deals in places like India, and I'm told by officials in Bangladesh that they're also close to licenses there.
That has nothing to do with his proximity to Trump, but there doesn't seem to be any concerns there.
And then we've spoken about how, you know, the US administration is considering making some overtures.
So that's a commercial boom for SpaceX and Starlink, and it's one that's tied to Trump and only Trump.
reefudin covers tech for the FT. He's based in San Francisco.
Thanks reef. Thanks, Mark.
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When you click the links in our show notes, this has been your daily FT news briefing.
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