Good morning from the Financial Times.
Today is Wednesday, February 12th, and this is your FT News Briefing.
Hong Kong's tech stocks are soaring right now, and Elon Musk is throwing a wrench in OpenAI's plans to restructure.
Plus, Sudan's two -year civil war has entered a new phase.
I'm Mark Filippino, and here's the news you need to start your day.
tech companies are having a stellar week on the hong kong stock exchange chinese tech stocks listed there have entered bull market territory the index that tracks the 30 largest companies is up 27 percent since about a month ago investors are excited because of a chinese ai startup that we've been talking
about a lot lately, DeepSeek.
Its model uses way less computing power than its U .S.
counterparts. And on top of that, the world's largest electric vehicle battery maker, CATL, applied for a secondary listing there this week.
It could be the city's largest stock offering in years.
Elon Musk wants to take control of the non -profit that governs Open AI.
He led a consortium of investors this week to make a nearly $100 billion offer for it.
That could complicate an already complicated restructuring at Open AI.
So why would Musk offer an absurd amount of money for a nonprofit?
Well, there's some history there.
I'm joined now by the FT's venture capital correspondent, George Hammond.
Hi, George. Hey. All right.
So can you break down for us what OpenAI's structure is, what exactly Musk and this group of investors offered?
So OpenAI has a really complex structure, and that's a legacy of its foundation as a nonprofit research organization in 2015.
The company then launched a capped for -profit subsidiary in 2019, so it could start taking in outside investment.
So it has this slightly Frankenstein structure of a nonprofit, which has a controlling stake in a for -profit entity.
And what OpenAI is trying to do is to streamline its structure and make itself into a more traditional for -profit structure.
So Musk is offering $97 .4 billion with a consortium of other investors to take control of those assets held by the non -profit, which include control over the for -profit.
So do we think this bid is going anywhere, George?
OpenAI have made it pretty clear they're not interested in this bid.
Chief Executive Sam Altman has said publicly that OpenAI is not for sale and OpenAI's mission is not for sale.
According to our sources, the board of OpenAI has not received a formal bid, and they've been pretty unequivocal that they would not consider selling to an external investor.
Just out of curiosity, why is Musk doing this?
Why even float this kind of offer?
I think there's a few ways to look at this.
Musk was a co -founder of OpenAI.
He left OpenAI's board in 2018 after clashing with Altman about the direction of the company.
And since then, he's become a competitor to OpenAI.
He's launched his own AI startup, XAI.
So there is a competitive dynamic here and a business dynamic.
You could also take him at his word and think that he is committed to OpenAI's mission and he thinks Sam Altman and co.
are reneging on that mission.
And so he thinks he'd be a better steward of these assets than they would.
How much of a wrench could this throw into Altman's plan to convert OpenAI to a for -profit company?
I have to imagine that there would be several hurdles there.
So Altman is trying to do something phenomenally complicated.
In turning this company, which was founded as a non -profit, into a form of for -profit.
And as part of that restructuring, it has to put a value on the assets held by the non -profit.
Internally, OpenAI is talking about a valuation of around $30 billion.
Musk's bid pushes up the potential valuation of these assets to closer to $100 billion.
And that puts OpenAI in a position where they may have to pay more to complete this deal, which would give them less to invest in pursuing the technology.
So it creates a complication for OpenAI.
And I think that's one motivation for Musk's bid.
George Hammond covers venture capital for the FT from San Francisco.
Thanks, George. Thanks, Mark.
The European Union isn't going to take Donald Trump's tariffs lying down.
European Commission President Ursula von der Leyen said on Tuesday that the bloc would retaliate against U .S.
levies on steel and aluminum imports.
EU member states have already approved tariffs of up to 50 % on nearly 5 billion euros worth of U .S.
imports. They would only need a quick final vote to impose them, and then boom, products like bourbon, motorcycles, and steel would all get hit.
There's still some time for a deal to shake out, though.
Von der Leyen will meet with U .S.
Vice President J .D.
Vance today. Trump's tariffs on the EU aren't set to take effect until March 12.
Sudan's army is getting closer to making a major breakthrough in the country's civil war.
For two years now, the Sudanese armed forces have been locked in a brutal battle with the paramilitary rapid support forces.
Ten million people have been displaced, thousands killed, and many more are at risk of starving.
But now the army is closing in on Sudan's capital, Khartoum.
Here to explain the conflict is the FT's William Wallace.
Hey, William. Hi there.
Okay, so William, the way I understand it is that there are two factions here.
You have the Sudanese army, which is the SAF, and then this militia that came out of the Darfur conflict.
They're called the Rapid Support Forces.
What's happening on the ground with this major offensive from the SAF?
Well, first of all, this is a very vast country, And they only began to have some military successes towards the autumn last year.
But this does seem to be some very significant momentum now, which means that they've taken a large part of the capital and they're now within about two kilometers from the presidential palace.
That's not to say they've won the battle for Khartoum yet, but they're just a lot closer to what would be a very symbolic victory for them in the last two years.
William, what has the fighting done to the people of Sudan?
I think that most humanitarian organizations would say that it's provoked the most serious humanitarian crisis in the world today, superseding what's happened in the Middle East and superseding what has happened in Ukraine in terms of the number of people it's displaced.
But probably most worryingly now, after nearly two years of fighting, a very large proportion of the population is now threatened with starvation.
Secondly, both sides in this brutal battle have committed appalling atrocities.
So ethnic cleansing, rape being used as a weapon of war, it's hard to underestimate the impact it's had on the Sudanese population.
Wow. So if the Sudanese army is able to capture the capital, Is there a plan for Sudan to rebuild or a way for them to start to heal from this conflict?
Should they take the capital?
And they do seem to be confident at this stage.
General Abdul -Fattah al -Burhan, the de facto president, is suggesting he'll name a prime minister and a technocratic government of some sort that would prosecute the war to its, what they would hope is its logical conclusion.
defeating the RSF and retaking the whole Sudanese territory.
However, if they take Khartoum, the country is effectively going to be split between the army in the east of the country and the RSF forces in the west of the country.
So the war as such would be far from over.
It could, however, lead to greater international support for the Sudanese army, given that they've prove they're able to retake some of the territory, which would allow Sudan to rebuild and would allow greater humanitarian access to all those people who are suffering.
Yeah, I'm glad that you brought that up.
I'm curious about what it would take to solve the humanitarian crisis in Sudan.
Well, even in the best of times, that's a difficult problem.
This is not the best of times because the whole humanitarian landscape in this region has been slightly upended by U .S.
President Donald Trump's decision to freeze U .S.
aid, and that has had big impact on some of the U .S.
agencies and others.
So I'm told even that some U .S.
food aid is rotting at ports because there's been such a holdup just in the last two, three weeks.
It's a very uncertain time, given what's happening in the world at large.
William Wallace is the FT's East and Central Africa correspondent.
Thanks so much, William.
Thank you so much, too.
You can read more on all of these stories for free when you click the links in our show notes.
This has been your daily FT News Briefing.
Check back tomorrow for the latest business news.
