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Chapter 1: What is the main topic discussed in this episode?
Good morning from the Financial Times. Today is Thursday, June 25th, and this is your FT News Briefing. Anthropic is beefing with Alibaba, and European defense markets are in flux ahead of a major IPO. Plus, how long can America's debt problem go on?
Well, the public debt in America now exceeds 100% of GDP. So we're talking very large numbers indeed, which are quite hard to wrap one's head around.
I'm Mark Filippino, and here's the news you need to start your day. Anthropic is accusing the Chinese e-commerce giant Alibaba of illicitly using its Claude AI assistant to train cheaper and smaller models.
Chapter 2: What accusations did Anthropic make against Alibaba regarding AI?
In a letter to Congress, the U.S.-based AI company said Alibaba conducted the, quote, largest campaign to illicitly extract Claude's capabilities. Anthropic alleges that Alibaba did so by creating 25,000 fake accounts, which were used for tens of millions of interactions.
Anthropic does not offer Claude in China, and it's asking Congress to crack down further on Chinese labs accessing advanced AI chips, which are restricted by U.S. export controls. Meanwhile, Alibaba this week asked to be removed from a Pentagon blacklist of Chinese companies with alleged ties to China's military.
Last fall, the FT learned that the White House concluded that it had provided tech support for, quote, operations against unspecified U.S. targets. Alibaba has denied any connection to the People's Liberation Army. At the time of this recording, it had not responded to the accusations from Anthropic.
Tankmaker KNDS is planning to list its shares on the Paris and Frankfurt exchanges, and the Franco-German venture is set to have one of the largest European flotations in recent memory. But the initial public offering announcement comes at an uncertain time for Europe's defense sector. Aaron Kirchfeld is the FT's chief European business correspondent. He's been writing about this. Hi, Aaron. Hi.
So let's start with KNDS. Tell me about the company and the IPO that they're planning.
So Candace is one of the biggest defense companies in Europe. It's a crucial supplier to the war in Ukraine because they make the famous Leopard tank. And so this is kind of a pivotal moment for the company because until now it's been private, held between the French government and a German family.
But that now has come to a head because the German family wants to sell out after many years as its owner. And so they've agreed to do a listing after selling a big chunk to Germany to make sure that Germany and France remain the biggest and equal shareholders in the tank maker.
Now, why is this IPO something that people are talking about in the same breath as Rheinmetall, a different German defense manufacturer?
Yeah, that's because yesterday when KNDES finally got to the point where it was ready to announce the launch of its IPO, and this is after almost a year of planning and wrangling between politicians, the German government, unrelated, decided to cancel a huge warship order with Rheinmetall, one of the main KNDES peers.
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Chapter 3: What is the significance of KNDS's upcoming IPO in the defense sector?
The signs of the U.S. losing its economic primacy will be a collapsing dollar and a huge increase in yields in the U.S. Treasury market and thus a big decline in prices, an implosion in effect in the U.S. Treasury market. What that means is, first of all, there will be more inflation. inflation in America. Borrowing costs for ordinary households as well as the government will rise.
And we will probably be looking at a stagflationary situation, one where you have both high inflation and stagnation in the economy. Very low growth indeed, if any.
John Plunder is a senior editorial columnist for the FT. Thanks so much, John. Not at all. My pleasure. Just a friendly reminder that we want to hear from you. We're doing a survey this week and next on a potential Saturday version of the briefing, and your thoughts really matter to us. It'll take like five minutes and you'll be entered to win a pair of Bose headphones.
You can find that 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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That's Lloyd Blankfein, the former CEO of Goldman Sachs, on the leadership lesson it took him decades to learn. Every episode of Executive Decisions goes inside the moments that define a leader's career. Executive Decisions with me, Steve Sedgwick. Listen and watch now, wherever you get your podcasts.
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