Good morning from the Financial Times, today is Wednesday June 18th and this is your FT News Briefing.
US President Donald Trump said his patience is wearing thin with Iran and the European Union wants to make it easier to invest in defense companies.
Plus Meta sees a blank canvas in WhatsApp and wants to paint it with ads.
I'm Mark Filippino and here's the news you need to start your day.
An unconditional surrender—that's what Donald Trump wants from Iran.
The U .S. president posted the demand on social media yesterday.
Trump went to Truth Social a few times to talk about the conflict between Iran and Israel that started last week.
He said that Iran's supreme leader, Ayatollah Ali Khamenei, was, quote, an easy target but clarified that the U .S. would not kill him for now.
Trump is ordering more of a US military presence in the Middle East. The big concern on everyone's mind is that this could spill over into a wider conflict.
Things have ratcheted up so much between Israel and Iran that Trump made an early exit from the G7 summit in Canada.
The US is a key player in these types of multilateral meetings, so what does its absence mean for the group?
Here to explain is the F .T.'s Lauren Fedor.
She's our deputy Washington bureau chief.
Hey Lauren. Hi Mark.
So, how did the other G7 leaders react to Trump's departure?
Well, look, it was a little awkward. The news broke pretty late in the day on Monday and all the leaders were gathered for what's often called a family photo.
And it's exactly what it sounds like.
They're all standing with the Rocky Mountains behind them in this idyllic setting.
And then the reporters who are gathered there start peppering Trump with questions about why he's leaving.
And you could see all of the other kind of allies maybe shifting a little bit nervously in their shoes, as he said he had somewhere more important to be, that he wanted to be back in Washington to deal with this conflict between Israel and Iran.
Lauren, is this a signal that Trump would rather engage in foreign policy on his own?
Well, look, he did engage with them on the issue to some degree.
And in fact, there was a joint statement from the allies.
Now, it was extremely measured compared to some of the truth social posts that we've seen from the president, but he did sign on to this statement that said that Iran could never have a nuclear weapon, and the leaders also in concert called for a de -escalation of conflict in the Middle East. Now, Trump, I wouldn't say contradicted that but he certainly went out on his own then with much more bellicose kind of statements on social media, whether that be on Monday night into Tuesday morning on his way back to Washington, or then throughout the day yesterday.
Now what else did Trump miss out on by leaving early?
Well, I think it's actually more interesting who he snubbed that wasn't in the G7.
So the G7 is the group of these Western allies, but then there are a couple of other key foreign leaders who were coming to have meetings on the sidelines, and Trump basically snubbed all of them.
So he snubbed India's Narendra Modi, but then most importantly, arguably, he snubbed Ukrainian leader Volodymyr Zelensky.
He and Trump have been expected to meet on the sidelines on Tuesday.
That meeting never happened.
And this comes at a really critical time as the conflict continues in Ukraine.
Trump has tried and failed thus far to broker some sort of deal between the Russians and the Ukrainians.
And I think from the perspective of Kiev, the snub was, was kind of a double insult because it came off the back of several comments that Trump had made at the G7 that seemed to be siding with Russia.
You know, he started the day Monday morning standing next to Mark Carney, the Canadian later, and basically laid into the G7 and the US allies for kicking Russia out of the alliance in the first place.
What does this all mean for international cooperation with the US going forward?
It's already kind of on thin ice?
Yeah, I think that's a fair characterization.
I mean, look, on one hand, we have known for a long time now that President Trump doesn't have much time or respect for these international alliances.
That said, this is a pretty dramatic way of basically saying, I don't need you guys.
You know, it's important to remember, later this month will be the NATO summit at The Hague in the Netherlands, that is you know, and has long been a really important forum for the Western Alliance.
And there have long been concerns that Trump would pull out of NATO.
It's something he's threatened to do in the past. And I think his behavior at the G7 has already raised some alarm bells in Europe.
People are concerned.
Is he going to skip that meeting?
Is he going to do something else dramatic that could threaten that institution?
I think we'll have to wait and see.
Let's see if he's Lauren Fedor.
Thanks, Lauren. Thanks, Mark.
The EU wants to loosen merger rules for defense companies.
Brussels says the bloc needs to quickly scale up weapons manufacturing given the ongoing war in Ukraine.
The European Commission announced the proposal yesterday.
It would make it easier for companies dealing in defense to get their mergers and acquisitions approved and to make it easier to invest in Europe's arms industry.
The proposal isn't quite a lock, though.
It still needs to be approved by EU governments and the European Parliament.
Metta is introducing paid advertising on WhatsApp.
It's a bit of a reversal for the tech giant.
Up until this point, they've held back on adding ads to the popular messaging app.
But the move is part of Metta's larger strategy to bring in new revenue and to double down on artificial intelligence.
My colleague, Christina Criddle covers AI for the FT And she joins me now.
Hey Christina. Hi Marc.
So just tell me about this latest change coming to WhatsApp.
Am I going to start suddenly getting hit with a bunch of ads in my messages?
So, Meta has decided to place the ads away from your conversation.
So, it's actually in WhatsApp statuses, which is a little tab that you can click on the left of the app.
And it's where people can post status updates which are very similar to stories on Instagram.
I think what's really interesting about this is it's the first time that we've seen ads in WhatsApp and it is a break from previous commitments.
When I first reported that WhatsApp was exploring how to introduce ads, the head of the app basically said, we're not doing this.
That's so interesting.
As far as you can tell, do we know why they did this 180?
Meta told me that it had been a longtime request from businesses that were already interacting with consumers in WhatsApp.
And so they wanted to be able to reach out to consumers further in the app.
And obviously for Meta, it's a great way for them to monetize as well.
It's one of the last holdouts of Meta's platforms from advertising.
Obviously, we have advertising on Instagram and Facebook already.
So WhatsApp, which is a hugely popular communications platform, the most popular in the world.
Having ads in that and being able to surface ads to billions of users is going to be a huge boon for Meta which really needs to drum up some cash.
Yeah, how is the company doing these days?
It's doing well. Its revenues beat expectations, but it's going to have to invest a huge amount of money in artificial intelligence, and it's a really competitive sector at the moment.
So it needs to generate revenues elsewhere to be able to fully compete with other AI developers out there.
The company has its own models, but these models have been seen to be a little bit behind some of the leading ones.
So there's pressure on Meta to really prove that its models can be as good and really compete with the other ones on the market.
Yeah, tell me more about its commitment to AI.
What does it look like?
So if I was talking to you a few years ago, I was probably chatting to you about the Metaverse, which is when Facebook rebranded to become Meta and it said its big focus was these virtual worlds where we were all going to interact.
And that seems to have basically been downgraded for AI, and the company is investing a huge amount in AI.
It seems like that's their primary focus.
Every briefing I go to, it's brought up.
It said that it's going to invest $72 billion of capital expenditure into data center investments and service.
We've seen it investing huge amounts into Talon as well.
Some of the figures at Meta are sort of in the seven figures for a single AI hire.
And very recently we saw Meta invest $15 billion in scale AI, which was largely to ensure that it could have its CEO Alexander Wang join its team.
So these are the developmental hurdles that Meta has to jump.
What could trip it up?
Well, I don't even know where to start there.
We have tariffs, obviously, impacting the industry and really being able to get your hands on hardware and some of those chips that underlie a lot of these AI models.
And you have regulatory hurdles potentially to pass.
We have the EUAI Act in Europe, which is coming into force, and potential regulation elsewhere around the world as well.
So as Meta begins to deploy these products in front of consumers, it needs to make sure that it's compliant with local regulations, and it's not necessarily clear what those regulations are going to be.
Christina Crittle is the FT's Tech Correspondent, thanks Christina.
Thank you. Before we go I want to give a quick plug for an upcoming FT webinar.
It's called reindustrializing America.
Investors are watching closely as the U .S. redefines its industrial future and they want to know which U .S. cities could benefit from this change the most. The webinar is packed with a great line of guests that also have the unveiling of the FT Nikkei Investing in America index where we rank the top cities.
That's all coming up on Monday, June 23rd. You can register for free, I might add, through the link in the show notes.
This has been your daily FT News Briefing.
Check back tomorrow for the latest business news.
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