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Chapter 1: What investigation reveals about China supplying drone factories to Russia and Iran?
A journal investigation finds China is supplying Russia and Iran with drone factories, circumventing U.S. sanctions. Plus, Samsung joins the trillion-dollar club amid relentless demand for AI memory chips. And weight-loss drug giant Novo Nordisk surprises with strong sales even as competition continues to weigh on growth.
For now, we have to remember that the pill from Lilly is just launched, but they are off to a very strong start, and Lilly have to be on their toes to keep up.
It's Wednesday, May 6th. I'm Daniel Bach for The Wall Street Journal, filling in for Luke Vargas. And here is the AM edition of What's News, the top headlines and business stories moving your world today. President Trump has scored decisive victories in a handful of Indiana state Senate primaries, and a sign his grip on the Republican Party base remains firm.
Chapter 2: How has Samsung achieved a $1 trillion valuation amid AI demand?
President Trump had warned that a group of Indiana Republican state senators would face retribution for opposing his redistricting plan in the state. Tuesday's primaries showed that Trump largely made good on that threat. Five of the seven Trump-backed Republican challengers won their primaries for state Senate.
That's Journal of National Political reporter Ken Thomas.
Now, all of this stemmed from Trump's push last year for Indiana to conduct a mid-decade redistricting plan, similar to those approved in Texas and North Carolina. But that ran into opposition from a group of Indiana state senators, which led to the president engineering primary challenges against the Republican incumbents.
Chapter 3: What challenges does Novo Nordisk face in the weight-loss drug market?
In the short term, this is good news for the White House. Trump will still need to overcome slumping approval ratings and and concerns from voters over inflation and rising gas prices. Those will be key to the November midterm elections, when Republicans won't have Trump on the ballot, but will be defending majorities in both the House and the Senate.
But Tuesday's primaries show that despite these headwinds, Trump is still in command of his Republican base, and Republican lawmakers who oppose him run the risk of seeing an end to their political careers.
At the same time in Ohio, stalwart Trump backer Vivek Ramaswamy advanced in the state's Republican primary for governor. He would face Democrat Amy Acton, a former Ohio health director. The state will also see a special election in November to fill the last two years of J.D. Vance's term.
Former Senator Sherrod Brown won the Democratic nomination yesterday and will face Republican Senator John Husted, who was appointed last year when Vance became vice president. And while the White House may be focused on retaining the House and Senate in November's primaries, Marco Rubio's growing list of responsibilities has some starting to talk about 2028.
Yesterday, the Secretary of State and National Security Advisor held court for almost an hour in the White House briefing room as a temporary stand-in for Press Secretary Caroline Leavitt, who is now on maternity leave. According to some pundits, Rubio delivered a more direct explanation of the administration's goals in Iran after weeks of mixed messaging.
He urged Tehran to negotiate with the U.S.
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Chapter 4: What strategies are Chinese companies using to circumvent U.S. sanctions?
to end the war, and he did so by quoting Ice Cube.
But look, the message to Iran, these guys are facing, they are facing real catastrophic consequences. destruction to their economy, generational destruction to their economy, generational destruction to the wealth of their country, imposed on themselves by the actions that they're taking. They should check themselves before they wreck themselves in the direction that they're going.
We report that Trump has been polling advisers and friends in recent months on Rubio's political strengths compared with Vice President J.D. Benz, who has positioned himself to inherit the president's political movement.
Chapter 5: How is President Trump's influence seen in Indiana's Republican primaries?
As Rubio spoke with reporters in Washington, Vance was on his way back from a GOP fundraiser in Des Moines, his first appearance in Iowa since becoming vice president. He didn't take questions from reporters, but his appearance has added fuel to speculation that he will run for president. Meanwhile, President Trump has said the U.S.
would pause its operation to guide commercial ships through the Strait of Hormuz. Project Freedom, as it's being called, began on Monday, prompting Iran to fire at ships in the waterway and target energy facilities in the United Arab Emirates.
Trump said, quote, great progress had been made toward a peace agreement with Tehran, though he also said that a pre-existing effort to blockade Iranian ports will continue. Coming up, Novo Nordisk tops analyst expectations, managing to deal with competition in the GLP-1 space. That story and more after the break. Well, if you're going to skirt sanctions to sell parts under the radar to a U.S.
Chapter 6: How is AI impacting the demand for memory chips?
adversary to make weapons, it's perhaps best not to send your marketing emails to an Iran nuclear watchdog. That's how The Wall Street Journal's senior global correspondent, Josh Chin, learned about Chinese drone parts being sold to both Iran and Russia. Josh, tell us more about how this was uncovered.
Yeah, right. Well, so when the Iran war broke out, we knew that Iran was burning through a bunch of drones. And we know from previous reporting that China was a major supplier of those drone parts.
Chapter 7: What are the implications of Novo Nordisk's sales performance for the obesity drug market?
We started digging around. And in the process, we contacted this group named Iran Watch that tracks weapons procurement to Iran. And they told us about an email that they had gotten accidentally from a company calling itself Shaman Victory Technology, which was a company based in China that was
openly selling a sort of German-designed engine that has been used in the Shahed drone, which is the main sort of one-way attack drone that Iran and Russia both have been using. And it was a completely open sales pitch that ended up in their inbox, apparently because the sales rep for Xiamen Victory Technology later told us he was using AI to target potential clients.
And so these engines are considered dual use goods. They're subject to sanctions by the US and EU. But this company was happy to sell them without without really hiding it.
How is this actually happening then against sanctions?
Chapter 8: What trends are shaping the live entertainment market in 2023?
What have you learned about how they are able to so openly sell these drone parts?
Right. So this engine was originally designed by a German company called Limbach, which was purchased a few years ago by a Chinese company. And what it comes down to ultimately is that these are smaller factories. This particular company said they started only selling these engines earlier this year, which is coincidentally when the tensions between Iran and the U.S. started to pick up.
It's such a small company, it just doesn't really deal in dollars. And so the way that sanctions work is by essentially cutting off a company's access to the U.S. financial system. For a company that doesn't deal in dollars, isn't planning to travel to the U.S. anytime soon, they just don't worry about it as much.
So how is this turning up in the current conflict then? And what is the concern there for the U.S. ?
Yeah, you know, I think the big general concern for the U.S. right now is that warfare is kind of moving to these sorts of cheap, disposable weapon systems like the Shahed drone. And that the parts used in those weapon systems are very common. I mean, the engine we're talking about is kind of like a motorcycle engine or a scooter engine.
And so these things are really easy to hide in the flow of global trade, unlike, say, a nuclear weapon or a ballistic missile, which use these very unique parts that are easy for nonproliferation officials to sort of spot and stop the trade of. So we're sort of going into this new era where the U.S. is just not going to be able to control the spread of weapons the way it used to.
Are there any mechanisms that the U.S. does have to do anything about this?
Yeah, so we talked to the Treasury Department and what they told us is that they are, you know, they recognize that they can't really stop this. And so their ultimate aim is to just disrupt it as much as possible. And the way they're trying to do that is by cutting off funding sources. So Iran funds a lot of its weapon purchases through the sale of oil to China. The U.S.
is basically trying to disrupt the ability of those oil revenues to be used by Iran. You know, they have succeeded in some ways in sort of forcing the, you know, Iranian and Russian drone programs to rely more on Chinese parts rather than other sort of more sophisticated Western parts that they were buying earlier. And the Chinese parts are not, you know, they're not as good.
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