Philippa Kaur

CHINA’S HUNGER for homemade chips is insatiable. In May it was revealed that the government had launched the third iteration of its “Big Fund”, an investment vehicle designed to shore up the domestic semiconductor industry. The $48bn cash infusion is aimed at expanding the manufacture of microprocessors. Its generosity roughly matches similar packages from America ($53bn) and the EU ($49bn), both of which are also trying to encourage the expansion of local chipmaking.Chinese chipmakers are in a tough spot. In October 2022 America’s government restricted the export to China of advanced chips and chipmaking gear made using American intellectual property—which is to say virtually all such devices. This makes it near-impossible for Chinese firms to produce leading-edge microprocessors, the kind whose transistors measure a few nanometres (billionths of a metre) across and which power the latest artificial-intelligence models. But it does not stop them cranking out less advanced chips, with transistor sizes measured in tens of nanometres, of the sort that are needed in everything from televisions and thermostats to refrigerators and cars. More

Chart: The EconomistHow much is Elon Musk, the mercurial multibillionaire, worth to Tesla, the carmaker he runs? In 2018 the company’s board put in place a plan to award Mr Musk shares over ten years worth $46bn, at their current price, provided the business cleared a series of hurdles. In January a Delaware judge struck down the package, calling it “unfathomable”, after a shareholder sued to have it rescinded. The company has asked its investors to reaffirm their support for the award ahead of an annual general meeting on June 13th. Mr Musk’s monster pay package is worth nearly 300 times what America’s best-paid chief executive, Hock Tan of Broadcom, a chipmaker, made last year. It is also equivalent to 8% of Tesla’s current market value—which is down by roughly a fifth over the past year.■ More

WESTERN CHAINS used to dominate casual dining and drinking in China. The arrival of a Kentucky Fried Chicken in a Chinese city was once regarded as a developmental milestone. Today China is home to 10,000 KFCs (whose owner, Yum China, was spun off from its American parent in 2016), more than twice the number in America. Starbucks has 7,000 coffee shops and McDonald’s boasts 6,000 burger joints. The foreigners’ cash and cachet made it hard for locals to compete.Now the tables are turning. Starbucks’s Chinese sales fell by 8% in the first quarter, year on year, and Yum China reported a drop of 3%. Yet even as they lose their appetite for foreign chains, Chinese consumers cannot get enough of domestic ones. Tastien, which fills hamburgers with local delicacies such as Peking duck or mapo tofu rather than beef, has opened 1,600 new shops in the past six months, bringing its total to 7,000. Wallace, another burger-flipper, now has more than 20,000. Cotti, a two-year-old coffee-shop chain, plans to have that many by the end of 2025, up from 6,000 last October. An older caffeine-pedlar, Luckin, opened 8,000 in 2023, doubling its network. Mixue hawks its bubble tea through 36,000 outlets. More

THE MIDDLE EAST is something of a tech desert. One company trying to change this is G42, founded six years ago in the United Arab Emirates (UAE). More recently the state-backed firm has turned into the nerve centre of Emirati ambitions to become an AI powerhouse—and to spread the country’s broader influence in its neighbourhood and beyond. But rather than creating its own large language models (LLMs) of the sort that underpin AIs like ChatGPT, G42 wants to achieve this goal by developing the infrastructure of the AI economy and the real-world applications of the technology in industries such as health care and energy.Even by AI’s frenetic standards G42 has had a busy couple of years. It has struck deals with OpenAI, creator of ChatGPT, and with Cerebras, a chipmaking upstart, to construct a new supercomputer. It is erecting data centres to accommodate vast cloud-computing workloads. It has teamed up with AstraZeneca, a European drugmaker (to manufacture “innovative” medicines in the UAE), and with the Mercedes Formula One racing team (for reasons that are vaguer still). Through investment vehicles co-founded with Mubadala and ADQ, two Emirati sovereign-wealth funds, it is also placing multibillion-dollar bets on startups around the world. And in April it found itself on the receiving end of a $1.5bn investment from Microsoft, the $3trn software behemoth whose own partnership with OpenAI has put it at the sharp end of the AI revolution. More

THE MANAGERS of Saudi Aramco could have the cushiest jobs in the energy business. The state-run oil colossus produces 9m barrels of oil a day, more than any other firm and nearly a tenth of the world’s total (see chart 1). It boasts by far the largest remaining proven reserves of the stuff, which would last into second half of the century at current pumping rates. Its piddling production costs of $3 a barrel, a tenth of what many Western private-sector rivals must content themselves with, allowed it to generate an eye-watering $282bn in total net profit over the past two years. And though its oil burns as dirtily as any other, Aramco emits less carbon liberating it from geological formations than competitors do. That makes the company’s product appealing in a world increasingly concerned about global warming but still hooked on hydrocarbons.As less generously endowed rivals fall by the wayside, Aramco’s market share would, in other words, be almost certain to rise with a few modest investments in maintaining reservoirs. Yet the company’s employees are busier than ever. That is because Aramco is the linchpin of the strategy of Muhammad bin Salman, Saudi Arabia’s crown prince and de facto ruler, to end his country’s reliance on oil, diversify its economy and decarbonise its energy production. More

IT WAS A bitter farewell. On May 25th Luciano Benetton, the 89-year-old eponymous co-founder, with his three siblings, of the maker of colourful jumpers, told Corriere della Sera, an Italian daily, that he would step down as chairman. Signor Luciano, as he is known, explained that he felt “betrayed” by Massimo Renon, the firm’s chief executive. Mr Renon was, in Mr Benetton’s telling, insufficiently transparent about a pre-tax “hole” of some €100m ($108m). That lack of transparency, and Benetton’s threadbare results, provoked the near-nonagenarian to throw in the towel. For the first time since its creation in 1965, Benetton will have to make do without a Benetton. The company says that Mr Renon did not break any rules or laws. On May 28th its board approved the financial statement for 2023. Revenue was €1.1 bn, with a net loss of €230m. Still, on the same day it said that Mr Renon would be replaced by Claudio Sforza, a restructuring expert with no experience in fashion but plenty in the turnaround of struggling firms. More

IMAGINE MEETING a stranger at a party. What makes for a successful encounter? Lesson one is to heed the wisdom of a shampoo commercial from the 1980s: you never get a second chance to make a first impression. Lesson two is to remember that you do not need to wear a beret or a fur stole in order to stand out. Lesson three is not to forget that what you leave out matters as much as what you say.These same principles, it turns out, apply to writing a CV. A resumé is not a list of every job you ever had. It is not your autobiography. It is, like that hair-care advert, a marketing tool. Your audience is made up of recruiters and hiring managers. Like cocktail-party guests, they do not take a long time to decide if they want to keep talking. According to one study, such professionals spend an average of 7.4 seconds skimming a job application. Your guest Bartleby has a few tips on how best to ensure that these seconds count. More

There is a wry sense of seen-it-all-before in the crucible of the world’s semiconductor industry. When your columnist took the bullet train to Hsinchu Science Park, home to Taiwan Semiconductor Manufacturing Company (TSMC), the world’s biggest chip producer, on May 24th, China was simulating a military encirclement of Taiwan in waters not far over the horizon. An invasion would be cataclysmic. A blockade could starve the island of vital energy resources. Even cyber-attacks could be crippling. Yet after decades of belligerence, many Taiwanese greet such threats with a shrug. “It’s nothing new to me,” chuckles one seasoned chip executive. “Since 1996 China has been throwing missiles.”Semiconductor executives to whom Schumpeter spoke on a tour of Taiwan, South Korea and Japan are not nearly as relaxed about America’s economic manoeuvres against China, though. They say sanctions, subsidies, tariffs and other blunt instruments of geopolitical rivalry and industrial policy may have strategic logic. But they jeopardise one of the miracles of modern technology: the fragile semiconductor supply chain that stretches from East Asia to America and Europe, with Taiwan at its crux. Along it silicon wafers are made and polished, etched with billions of nanometre-size transistors, sliced into microchips and packaged into the brain cells of the digital age. It is a process masterfully honed to combine government support with the invisible hand of the free market. The chip war threatens to bludgeon it. More