Business

Almost a decade ago, a price war broke out between petrostates in the Persian Gulf and the frackers in America, whose innovative drilling techniques gave rise to the shale revolution. In December 2014 The Economist put a picture on its cover of both antagonists standing back to back, frowns on their faces and petrol pumps at the ready. It called the new economics of oil “Sheikhs v shale”. Missing from that picture were two companies that until then had been the biggest stalwarts of America’s oil industry, ExxonMobil and Chevron. Had they been pictured, the two crusty supermajors would probably be standing awkwardly on the sidelines, struggling to make sense of what was going on. At last, they are moving back to centre stage. For much of the interim period the petrostates and the hardscrabble shale producers remained critical to this new oil order, though their tussle unfolded in strange ways. In 2016 the OPEC producers’ cartel joined forces with Russia to create OPEC+, which its autocratic masterminds hoped would let them control oil prices in order to benefit their regimes. Yet instead of responding by dousing the world in oil, the frackers unexpectedly developed OPEC-like self-restraint. Under pressure from investors to improve profits, they kept a tight rein on drilling activity even when crude surged above $100 a barrel.That unusual discipline continued until 2023, when American producers awoke from their chaste slumber. Record shale output allowed America to extract more oil than any country in history, offsetting desperate efforts by OPEC+ to curtail production in order to prop up prices. According to S&P Global, a consultancy, America and Canada together pumped more oil and gas in 2023 than the whole of the Middle East. The bonanza spread to South America, where producers in Brazil and Guyana also drilled unprecedented amounts of oil. Daniel Yergin, an energy historian, calls it “the great rebalancing”—a historic shift of oil production away from the Gulf and towards the western hemisphere.It is in this context that you should consider two recent megadeals: ExxonMobil’s $64.5bn merger with Pioneer Natural Resources, a fracking giant, and Chevron’s $60bn acquisition of Hess, an independent producer. Both acquisitions are aimed at regaining the clout in the oil industry that was once their birthright. Alone, neither is powerful enough to push around oil prices in the way OPEC+ tries to. But together, their ambitions to double down on production in the Americas represents a new challenge to the petrostates. Forget the scrappy frackers. It is the deep-pocketed and tech-savvy supermajors that the sheikhs should worry about.The two firms look like the shrewdest operators in today’s oil markets. One reason is their focus on oil that is cheap to produce. This is likely to leave them in a good position when demand for the stuff eventually wanes amid the shift to cleaner energy. The two acquisitions give the duo access to abundant fresh resources. The Pioneer deal is a big bet on the future of shale. Once completed by mid-2024, it aims to double ExxonMobil’s production capacity in the shale-rich Permian Basin of West Texas to 1.3m barrels a day. This will rise to 2m barrels by 2027. By buying Hess, Chevron, too, gets better access to some shale acreage where, like its bigger rival, it hopes to boost production by applying advanced technology and financial muscle. The company believes that an even bigger prize is Hess’s oil assets developed in partnership with ExxonMobil off the coast of Guyana, the extraction of which is, in keeping with the times, not very carbon-intensive. Taken together, the western-hemisphere wagers give the two companies options regardless of oil’s precise future. Shale is “short-cycle” production that can be quickly flexed depending on the near-term vagaries of demand. Guyana is a longer-term project.The second reason the supermajors are looking shrewd is being guided by the economics of oil rather than by energy geopolitics. Unlike OPEC+, their aim is not to rig prices. It is to turn a profit whatever happens in the markets. They can achieve this by integrating exploration and production with downstream operations such as refining and distribution. Contrast that with Saudi Aramco, the biggest oil firm of all. Like ExxonMobil and Chevron, it is a model of American-style efficiency. But when it comes to output management, it is also at the mercy of Crown Prince Muhammad bin Salman’s desire to walk tall on the world stage.Molecules v electrons A third reason for the American firms’ bright prospects has to do with their decarbonisation strategies. Both refused to take climate change seriously for too long. But once they did, they chose to back clean-energy technologies such as carbon capture and storage and hydrogen production that fit well with their engineering skills in oil and gas. The dabbling by their European counterparts, such as Shell and BP, in the provision of low-carbon electricity has meanwhile proved tougher than expected.Like everyone, the Americans remain hostages to fortune. Their shale exposure may deplete far sooner than they expect; forecasters already point to a decline in the number of drilling rigs as an ominous sign. In a worst-case (albeit unlikely) scenario, Venezuela may try to make good on its threat to seize oil-rich territory from Guyana, its neighbour, putting their assets there in jeopardy. Most serious, they may have disastrously miscalculated the speed of the energy transition, leaving them with oceans of stranded oil if demand collapses.For now, though, they look more like old pros in an industry in the grip of upheaval. They know the value of focusing on profitable growth, of keeping their long-term options open and of sticking to their free-market guns. The sheikhs have long insisted that, whatever oil’s future, their access to abundant reserves will ensure they will be the last oilmen standing. America’s supermajors will not let that happen without a fight. ■ More

It’s expected be a franchise frenzy this year, as Warner Bros., Disney, Universal and Paramount lean on familiar titles to entice audiences back into theaters.
But moviegoers may be tiring of these IP-driven films, and there’s some ground to make up.
Even before Hollywood was disrupted by strikes, halting production and delaying releases, 2024 was expected to be a tumultuous year.

Timothee Chalamet stars in Warner Bros.’ “Dune.”
Warner Bros.

Mean girls, Spider-Women and sandworms will headline the 2024 box office — and they’ll have to do some heavy lifting.
The March 1 release of “Dune: Part Two,” the delayed and much-anticipated follow-up to Denis Villeneuve’s 2021 science fiction epic is expected to attract hordes of moviegoers.

It’s arguably the most notable release in what’s slated to be a franchise frenzy this year, as studios such as Warner Bros., Disney, Universal and Paramount lean on familiar titles to entice audiences back into theaters. But moviegoers may be tiring of these IP-driven films. Some of 2023’s standouts had fresh ideas and unique appeal.
“Dune: Part Two” is followed by a slew of sequels, prequels and spinoffs from franchises such as Ghostbusters, Gladiator, Bad Boys, A Quiet Place, Planet of the Apes, Transformers, Alien, Sonic the Hedgehog and Saw. Yet, it’s unclear if a return to these stories will lure audiences in the new year.
Even before Hollywood was disrupted by writers’ and an actors’ strikes, halting production and delaying some releases, 2024 was expected to be a tumultuous year. After the Covid-19 pandemic, the domestic box office has struggled to fully regain audiences even with tempting titles from major franchises. 
For many entertainment experts, 2025 was the flag on the recovery horizon, a time when moviegoers would be back in the habit and there’d be enough film product to keep them coming back. Now, they aren’t so sure.
“Sometimes an industry has to take two steps backwards before going forward again,” said Jeff Bock, senior box office analyst at Exhibitor Relations. “[This] year could certainly surprise. However, the odds are it will be an off year.”

IP fatigue

Studios are hoping the upcoming franchise offerings will be more like the successes of “Spider-Man: Across the Spider-Verse” or “Guardians of the Galaxy Vol. 3” and less like flops including “Shazam! Fury of the Gods” and “The Marvels.”
Audiences don’t mind new content from their favorite brands, but studios have learned a tough lesson in recent years — less is more.
DC Studios and Marvel have inundated fans with a slew of content, much of which wasn’t up to the standard of previous iterations. This led to diminishing box office returns. Yet, when new entrants are carefully crafted, audiences respond with their wallets.
After all, Matt Reeves’ “The Batman,” a stand-alone film starring Robert Pattinson as the Dark Knight, generated more than $750 million in ticket sales globally back in 2022. James Gunn’s last Marvel film, “Guardians of the Galaxy Vol. 3,” secured about $845 million worldwide this past year.
“People just want to be entertained; to see compelling stories told in a masterful way,” said Michael O’Leary, CEO of the National Association of Theatre Owners. “People, having been deprived of those kinds of public experiences, are seeking them more and more. And, candidly, their expectations are higher than ever.”
This year, eyes are on Warner Bros.’ Mad Max prequel, which centers on the warrior Furiosa from 2015’s “Fury Road,” and the long-awaited sequel to 1988’s “Beetlejuice,” which is also coming from the studio.
There’s also the hotly anticipated “Deadpool 3,” the first R-rated Disney-Marvel film to be released in theaters and a collection of new entries from popular animated franchises.
“While movies set for release in 2024 represent a staggering array of sequels, franchises and known IP, this lineup of films includes venerable movie brands,” said Paul Dergarabedian, senior media analyst at Comscore. “If executed properly, [they] could find favor with audiences.”

Highly anticipated film openings of 2024

January

“Night Swim” (Jan. 5) 
“The Beekeeper” (Jan. 12) 
“Mean Girls” (Jan. 12)

February

“Argylle” (Feb. 2)
“Bob Marley: One Love” (Feb. 14)
“Madame Web” (Feb. 14)

March

“Dune: Part Two” (March 1)
“Imaginary” (March 8) 
“Kung Fu Panda 4” (March 8)
“Ghostbusters: Frozen Empire” (March 29)

April

“The First Omen” (April 5)
“Godzilla x Kong: The New Empire (April 12)

May

“The Fall Guy” (May 3)
“Imaginary Friends” (May 17)
“Furiosa: A Mad Max Saga” (May 24)
“The Garfield Movie” (May 24)
“Kingdom of the Planet of the Apes” (May 24)

June

“Bad Boys 4” (June 14)
“Inside Out 2” (June 14)
“A Quiet Place: Day One” (June 28)

July

“Despicable Me 4” (July 3)
“Twisters” (July 19)
“Deadpool 3” (July 26)

August

“Harold and the Purple Crayon” (Aug. 2)
“Trap” (Aug. 2)
“Borderlands” (Aug. 9)
“Alien: Romulus” (Aug. 16)
“Kraven the Hunter” (Aug. 30)

September

“Beetlejuice 2” (Sept. 6)
“Transformers One” (Sept. 13)
“Saw XI” (Sept. 27)

October

“Joker: Folie à Deux” (Oct. 4)
“Smile 2” (Oct. 18)

November

“Venom 3” (Nov. 8)
“Gladiator 2” (Nov. 22)
“Wicked: Part One” (Nov. 27)

December

“Karate Kid” (Dec. 13)
“The Lord of the Rings: The War of the Rohirrim” (Dec. 13)
“Mufasa: The Lion King” (Dec. 20)
“Sonic the Hedgehog 3” (Dec. 20)

Disclosure: Comcast is the parent company of NBCUniversal and CNBC.Don’t miss these stories from CNBC PRO: More

State of Freight

Maersk’s decision to pause Red Sea transits until further notice underscores the difficulty for the U.S.-led Operation Prosperity Guardian.
To achieve results, the task force will need a great deal of naval coordination, according to retired Rear Admiral Mark Montgomery.
Shippers are making decisions case-by-case, which can lead to equipment imbalances and possible shortages in Asia as transit times increase.

A cargo ship crosses the Suez Canal, one of the most critical human-made waterways, in Ismailia, Egypt on December 29, 2023. (Photo by Fareed Kotb/Anadolu via Getty Images)
Anadolu | Getty Images

The threat to global trade in the Red Sea remains high, even with efforts to protect commercial vessels from attacks by Iranian-backed Houthi militants based in Yemen.
Danish shipping giant Maersk’s decision on Tuesday to pause Red Sea and Gulf of Aden transits until further notice underscores the difficulty for the U.S.-led initiative, called Operation Prosperity Guardian. U.S. Navy helicopters, returning fire, sank three of the four Houthi boats that attacked the Maersk Hanzghou over the weekend, the U.S. military said.

Due to the threat, more commercial ships are moving away from the Red Sea and instead going around the Cape of Good Hope on the southern tip of Africa, analytics provider MarineTraffic told CNBC. That’s triggered an increase in container rates from Shanghai.
So far, the situation has affected $225 billion in trade, according to calculations. Overall, freight carrier Kuehne+Nagel said, it’s impacted 330 vessels. The total capacity is estimated at 4.5 million containers, or 20-foot equivalent units (TEUs). The value of a container bound for the Suez is $50,000, according to freight consultancy MDS Transmodal. 
Global trade data provider Kpler said the number of ships doing that jumped to 124 this week from 55 last week, and from 18 a month ago. To be sure, though, there’s been a modest increase in container ships in the Red Sea, with 21 on Tuesday, up from 16 on Dec. 26.
“Simultaneously, our analysis of traffic through the Bab al-Mandeb Strait for all vessels combined reveals a consistent downward trend in crossings for both northbound and southbound vessels,” said Jean-Charles Gordon, ship tracking director at Kpler. (The strait connects the Red Sea to the Gulf of Aden, which opens into the Arabian Sea in the Indian Ocean.)
That raises the stakes for Operation Prosperity Guardian. To achieve results, the task force will need a great deal of naval coordination, according to U.S. Navy Rear Admiral (Ret.) Mark Montgomery, a senior fellow at the nonpartisan Foundation for Defense of Democracies who served as policy director for the Senate Armed Services Committee under Sen. John McCain.

“You will need to group them in loose convoys, naval coordination of shipping, and you have to be out forward with helicopters to prevent the small vessels from coming at the chokepoints,” said Montgomery, who noted the outsized expense of shooting numerous missiles that cost millions of dollars each.

The coalition needs to use “deterrence by denial,” which is a strategy that aims to thwart an action by making it unlikely to succeed. An example would be missiles shooting down Houthi missiles or drones, he said. The operation also requires “deterrence by punishment,” Montgomery added. The U.S. helicopters’ actions over the weekend are an example.
He acknowledged the Biden administration’s concern about escalation, “but a failure to deter could also lead to escalation by the adversary,” Montgomery said.
“The United States has been the sole guarantor of free and open trade and has always done something about it,” he said.

The U.S. leadership has led to some tension, however. Ami Daniel, CEO of data firm Windward and a former officer in Israel’s navy, told CNBC that the branding of the U.S.-led coalition led France to only want to protect companies that are headquartered in their country. CMA CGM, a French ocean carrier, is being escorted by that country’s navy.
“Countries are protecting their interests. What I see is a lack of understanding of how shipping works and how global trade works,” Daniel said. “Trade is more than a flag a vessel is associated with. 130 vessels are owned and operated by US-domiciled companies but not U.S.-flagged. When you expand the flag association, there are nuances.”
But Montgomery pushed back on this notion, saying the U.S. has been branding coalition task forces like this for 30 years.
“This is an excuse, not a legitimate gripe,” Montgomery said.
Still, operators are making decisions case-by-case about whether to go through the Red Sea and Egypt’s Suez Canal, which can lead to equipment imbalances and possible shortages in Asia as transit times increase, according to Goetz Alebrand, head of ocean freight at DHL Global Forwarding. 
“In light of current challenges in the Suez Canal, many carriers are opting for the longer route around the Cape of Good Hope to ensure the safety of crews and cargo,” he said.
–Graphics by CNBC’s Gabriel Cortés. More

Shares of Moderna jumped after Oppenheimer upgraded the stock, saying the Covid vaccine maker could market five products by 2026.
The upgrade follows a dismal 2023 for Moderna, whose only commercially available product is its Covid shot.
Oppenheimer analyst Hartaj Singh was upbeat about Moderna’s pipeline potential, highlighting potential product launches over the next 12 to 18 months that could boost sales in 2025. 

Artur Widak | Nurphoto | Getty Images

Shares of Moderna closed more than 13% higher on Tuesday after Oppenheimer upgraded the stock to “outperform,” saying the Covid vaccine maker could market five products by 2026.
The upgrade follows a dismal 2023 for Moderna, whose only commercially available product is its Covid shot. The company’s stock has long been tied to its vaccine, and its shares fell nearly 45% last year as demand for Covid products plummeted worldwide. 

Oppenheimer analyst Hartaj Singh said the company’s Covid sales could hit a low point in 2024 due to factors such as vaccine fatigue. But the firm expects Covid vaccine sales to rise in 2025 and beyond as education about Covid and spending on awareness about the disease increase.
Singh was even more upbeat about Moderna’s pipeline potential, highlighting a handful of possible product launches over the next 12 to 18 months that could boost sales in 2025. 
That includes a potential approval this year for Moderna’s experimental vaccine that aims to protect older adults from respiratory syncytial virus, which typically causes mild, cold-like symptoms but more severe cases in seniors and children.
The company has said that the Food and Drug Administration will make a decision on its RSV vaccine in April. 
Moderna’s experimental flu vaccine could also win approval in 2024 or 2025, Singh said. In September, the company said its shot produced a stronger immune response against four strains of the virus than a currently available flu vaccine in a late-stage trial. 

Singh also said Moderna could file for FDA approval of its experimental personalized cancer vaccine in 2024 or 2025. The company may apply under the FDA’s accelerated approval pathway, which allows for expedited approval of drugs that treat serious conditions and fill what the agency calls an “unmet medical need” based on a specific clinical trial metric.
Moderna and its partner Merck are currently studying the shot in combination with Merck’s blockbuster therapy Keytruda for the treatment of patients with a deadly skin cancer called melanoma and other cancers. 

More CNBC health coverage

Also on Tuesday, Moderna reiterated in a shareholder letter that it expects to see sales growth in 2025. The company highlighted its RSV vaccine and the possible approval for its combination shot targeting Covid and the flu, which could come “as early as 2025.”
Moderna in its third-quarter earnings release in November said it expects revenue to fall to $4 billion in 2024 before it grows again in 2025. The company expects to “break even” in 2026. The company also said in November that it would only hit the low end of its sales forecast of $6 billion to $8 billion for 2023, reflecting weaker demand for Covid vaccines.
Moderna has also said it plans to launch up to 15 products in the next five years — a goal it first outlined during its annual research and development day in September.
Don’t miss these stories from CNBC PRO:

Correction: Moderna shares fell nearly 45% last year. An earlier version misstated the percentage. More

Shares of Rivian fell after the company reported increased vehicle production during the fourth quarter but fewer deliveries than the previous period.
The company said it delivered 13,972 vehicles from October through December, down 10.2% from the third quarter of 2023 but in line with Wall Street’s expectations.
Rivian will announce its fourth-quarter earnings result after markets close on Feb. 21.

Production of electric Rivian R1T pickup trucks on April 11, 2022 at the company’s plant in Normal, Ill.
Michael Wayland | CNBC

Shares of Rivian Automotive declined about 10% on Tuesday after the company reported increased vehicle production during the fourth quarter but fewer deliveries than the previous period.
The electric vehicle company said it delivered 13,972 vehicles from October through December, down 10.2% from the third quarter of 2023 but in line with Wall Street’s expectations. Analysts surveyed by FactSet had expected Rivian to deliver about 14,000 vehicles during the quarter.

Rivian’s stock closed Tuesday at $21.10 per share, down by 10.1%. The stock increased about 27% last year.
Rivian produced 17,541 EVs during the fourth quarter, an increase over the 16,304 it produced during the third quarter.
It produced 57,232 vehicles for the full year, all at its factory in Normal, Illinois. That topped the company’s full-year 2023 production guidance of 54,000 vehicles.
Rivian will announce its fourth-quarter earnings result after markets close on Feb. 21.
Rivian’s results come on the same day U.S. EV leader Tesla easily topped Wall Street’s expectations for fourth-quarter deliveries.
Tesla on Tuesday said it delivered 484,507 vehicles, compared with expectations of 477,000 vehicles according to a consensus of estimates compiled by StreetAccount as of Dec. 28.

Read more CNBC auto news More

Dear friends and colleagues,Happy New Year! This time last year, for the ninth year in a row, I warned you that there had never been a more uncertain outlook for our business. My message this year is exactly the same, only more so. The fog of unpredictability is again playing havoc with the clear skies of planning.We all know the term “permacrisis”. We have all heard of the acronym “VUCA”, which stands for volatility, uncertainty, complexity and ambiguity. We all understand that the fourth industrial revolution is upon us. But my belief is that these three great forces have come together in an age of what I am christening “permavucalution”.It is my contention that three big permavucalutionary trends are at work. One is artificial intelligence. This technology will turbocharge the pace of change. Don’t just take my word for it. The World Economic Forum thinks so, too. AI is so disruptive that it may end up disrupting disruption itself. If you are struggling to make sense of that sentence, don’t worry: you are not alone.I have appointed Denise Laplange to head up our new Project for Rapid AI peRformance Improvement and Enhancement. I know you will make Denise feel very welcome. She and the PRAIRIE team will give us a full update on their plans for our use of AI later in January. For now, though, I urge you to embrace this technology in your own work. I often use ChatGPT to say “no” to conference invitations, for example, or to give generic responses to really unimportant emails. I want you to follow my example. Let’s Experiment. Let’s Explore. Let’s Tinker. Let’s EET. We need to get our arms around AI or we risk reaping a whirlwind of chickens coming home to roost.I know some of you are worried by what AI might mean for your own futures. I say to you: you cannot make an omelette without breaking some eggs. What if you don’t like omelettes, you reply? That’s just ridiculous: who doesn’t like omelettes? Anyway I want to reassure you: AI is a way to make us all better at what we do. It is not likely to be the precursor to immediate large-scale lay-offs.The second permavucalutionary trend is climate change. At COP28, I had a chance to speak to some actual people who are living with the consequences of global warming. That experience was humbling and inspiring: it made me realise we have to do more in this area. As a company we are making every effort to reduce our own carbon footprint, but action is never enough. We also need to be part of the conversation. That’s why I’m so pleased today to announce the launch of our new #whatdoyousee? marketing campaign.When I look in the mirror, I don’t just see a highly successful executive, someone who is driven to make the most of himself every day. I also see a father, an ex-husband, a brother, a Peloton rider, a vintage-car collector and a citizen of Earth. What do you see? Please post your own reflections—pun very much intended—on social media. You can also send me an email (and see how I incorporate ChatGPT into my work).The third manifestation of the permavucalution is a shortage of talent. By talent, I’m not talking about employees in general. I’m talking about the right type of employees—people who are willing to take big bets, who go the extra mile, who see opportunity where others see nothing but extreme danger. I’m talking about some of you.I have mentioned how uncertain and volatile everything is. That means we have to sprint to stand still. But that’s not all. To respond to constant changes we also need the agility of a mountain goat. And to spot those changes coming, we require the radar of a bat. Now just ask yourself this question: have you ever seen a sprinting goat-bat? That tells you something about the scale of the challenge that we all face.I know that this level of uncertainty can be disorientating, even frightening. But if we do not think outside the box and push the envelope, we will never be able to capture lightning in a bottle.Finally, my usual plea: be humble. I have coined a brand new term in this message but I am not doing so for fame or recognition as a deep thinker. I know I don’t have all the answers. If I have a great idea, I don’t just plough ahead with it. I ask my direct reports whether they think it is a great idea first, and only when they agree that it is do I act. Have the humility to follow my example and this company will not just survive the age of permavucalution. It will thrive.Here’s to 2024! Stew Pidd, CEO. ■ More

Dear friends and colleagues, Happy New Year! This time last year, for the ninth year in a row, I warned you that there had never been a more uncertain outlook for our business. My message this year is exactly the same, only more so. The fog of unpredictability is again playing havoc with the clear skies of planning.We all know the term “permacrisis”. We have all heard of the acronym “VUCA”, which stands for volatility, uncertainty, complexity and ambiguity. We all understand that the fourth industrial revolution is upon us. But my belief is that these three great forces have come together in an age of what I am christening “permavucalution”.It is my contention that three big permavucalutionary trends are at work. One is artificial intelligence. This technology will turbocharge the pace of change. Don’t just take my word for it. The World Economic Forum thinks so, too. AI is so disruptive that it may end up disrupting disruption itself. If you are struggling to make sense of that sentence, don’t worry: you are not alone.I have appointed Denise Laplange to head up our new Project for Rapid AI peRformance Improvement and Enhancement. I know you will make Denise feel very welcome. She and the PRAIRIE team will give us a full update on their plans for our use of AI later in January. For now, though, I urge you to embrace this technology in your own work. I often use ChatGPT to say “no” to conference invitations, for example, or to give generic responses to really unimportant emails. I want you to follow my example. Let’s Experiment. Let’s Explore. Let’s Tinker. Let’s EET. We need to get our arms around AI or we risk reaping a whirlwind of chickens coming home to roost.I know some of you are worried by what AI might mean for your own futures. I say to you: you cannot make an omelette without breaking some eggs. What if you don’t like omelettes, you reply? That’s just ridiculous: who doesn’t like omelettes? Anyway, I want to reassure you: AI is a way to make us all better at what we do. It is not likely to be the precursor to immediate large-scale lay-offs.The second permavucalutionary trend is climate change. At COP28, I had a chance to speak to some actual people who are living with the consequences of global warming. That experience was humbling and inspiring: it made me realise we have to do more in this area. As a company we are making every effort to reduce our own carbon footprint, but action is never enough. We also need to be part of the conversation. That’s why I’m so pleased today to announce the launch of our new #whatdoyousee? marketing campaign.When I look in the mirror, I don’t just see a highly successful executive, someone who is driven to make the most of himself every day. I also see a father, an ex-husband, a brother, a Peloton rider, a vintage-car collector and a citizen of Earth. What do you see? Please post your own reflections—pun very much intended—on social media. You can also send me an email (and see how I incorporate ChatGPT into my work).The third manifestation of the permavucalution is a shortage of talent. By talent, I’m not talking about employees in general. I’m talking about the right type of employees—people who are willing to take big bets, who go the extra mile, who see opportunity where others see nothing but extreme danger. I’m talking about some of you.I have mentioned how uncertain and volatile everything is. That means we have to sprint to stand still. But that’s not all. To respond to constant changes we also need the agility of a mountain goat. And to spot those changes coming, we require the radar of a bat. Now just ask yourself this question: have you ever seen a sprinting goat-bat? That tells you something about the scale of the challenge that we all face.I know that this level of uncertainty can be disorientating, even frightening. But if we do not think outside the box and push the envelope, we will never be able to capture lightning in a bottle.Finally, my usual plea: be humble. I have coined a brand new term in this message but I am not doing so for fame or recognition as a deep thinker. I know I don’t have all the answers. If I have a great idea, I don’t just plough ahead with it. I ask my direct reports whether they think it is a great idea first, and only when they agree that it is do I act. Have the humility to follow my example and this company will not just survive the age of permavucalution. It will thrive.Here’s to 2024! Stew Pidd, CEO.Read more from Bartleby, our columnist on management and work:The return of The Economist’s agony uncle (Dec 20th)How to master the art of delegation (Dec 14th)Why Monday is the most misunderstood day (Dec 7th)Also: How the Bartleby column got its name More

The hottest technology of 2023 had a busy last few weeks of the year. On November 28th Abu Dhabi launched a new state-backed artificial-intelligence firm, AI71, that will commercialise its leading “large language model” (LLM), Falcon. On December 11th Mistral, a seven-month-old French model-builder, announced a blockbuster $400m funding round, which insiders say will value the firm at over $2bn. Four days later Krutrim, a new Indian startup, unveiled India’s first multilingual LLM, barely a week after Sarvam, a five-month old one, raised $41m to build similar Indian-language models.Ever since OpenAI, an American firm, launched ChatGPT, its human-like conversationalist, in November 2022, just about every month has brought a flurry of similar news. Against that backdrop, the three latest announcements might look unexceptional. Look closer, though, and they hint at something more profound. The three companies are, in their own distinct ways, vying to become AI national champions. “We want AI71 to compete globally with the likes of OpenAI”, says Faisal al-Bannai of Abu Dhabi’s Advanced Technology Research Council, the state agency behind the Emirati startup. “Bravo to Mistral, that’s French genius,” crowed Emmanuel Macron, the president of France, recently. ChatGPT and other English-first LLMs “cannot capture our culture, language and ethos”, declared Krutrim’s founder, Bhavish Aggarwal. Sarvam started with Indian languages because, in the words of its co-founder, Vivek Raghavan, “We’re building an Indian company.”AI is already at the heart of the intensifying technological contest between America and China. Over the past year they have pledged $40bn-50bn apiece for AI investments. Other countries do not want to be left behind—or stuck with a foreign critical technology over which they have little control. In the past year another six particularly AI-ambitious governments around the world—Britain, France, Germany, India, Saudi Arabia and the United Arab Emirates (UAE)—have promised to bankroll AI to the collective tune of around $40bn. Most of this will go towards purchases of graphics-processing units (GPUs, the type of chips that makes AI intelligent) and factories to make such chips, as well as, to a lesser extent, support for AI firms. The nature and degree of state involvement varies from one wannabe AI superpower to another. It is early days, but the contours of new AI-industrial complexes are emerging.Start with America, whose tech firms give everyone else AI envy. Its vibrant private sector is innovating furiously without direct support from Uncle Sam. Instead, the federal government is spending around $50bn over five years to increase domestic chipmaking capacity. The idea is to reduce America’s reliance on Taiwanese semiconductor manufacturers such as TSMC, the world’s biggest and most sophisticated such company. Supplies from Taiwan could, fear security hawks in Washington, be imperilled should China decide to invade the island, which it considers part of its territory.Another way America intends to stay ahead of the pack is by nobbling rivals. President Joe Biden’s administration has enacted brutal export controls that ban the sale of cutting-edge AI technology, including chips and chipmaking equipment, to adversaries such as China and Russia. It has also barred Americans from sharing their AI expertise with those countries.It is now coercing those on the geopolitical fence to fall in line. In October the American government started requiring companies in third countries, including Saudi Arabia and the UAE, to secure a licence in order to buy AI chips from Nvidia, an American company that sells most of them. The rules have a “presumption of approval”. That means the government will “probably allow” sales to such firms, says Gregory Allen, who used to work on AI policy at the Department of Defence—as long, that is, as they do not have close ties to China. On December 6th Peng Xiao, who runs a state-backed AI startup in Abu Dhabi called G42, announced that the company would be cutting ties with Chinese hardware suppliers like Huawei, a Chinese electronics company. “We cannot work with both sides,” he told the Financial Times.China’s AI strategy is in large part a response to American techno-containment. According to data from JW Insights, a research firm, between 2021 and 2022 the Chinese state has spent nearly $300bn to recreate the chip supply chain (for AI and other semiconductors) at home, where it would be immune from Western sanctions. A lot of that money is probably wasted. But it almost certainly helped Huawei and SMIC, China’s biggest chipmaker, design and manufacture a surprisingly sophisticated GPU last year.The central and local authorities also channel capital into AI firms via state-backed “guidance funds”, nearly 2,000 of which around the country invest in all manner of technologies deemed to be strategically important. The Communist Party is guiding private money, too, towards its technological priorities. Often it does so by cracking down on certain sectors—most recently, in December, video-gaming—while dropping heavy hints about which industries investors should be eyeing instead. The government is also promoting data exchanges, where businesses can trade commercial data on everything from sales to production, allowing small firms with AI ambitions to compete where previously only large data-rich firms could. There are now 50 such exchanges in China.Elements of this state-led approach are now being emulated in other parts of the world, most notably in the Gulf’s petrostates. Being autocracies, Saudi Arabia and the UAE can move faster than democratic governments, which must heed voters’ concerns about AI’s impact on things like privacy and jobs. Being wealthy, they afford to buy both the necessary GPUs (on which the two countries have together so far splurged around $500m) and the energy needed to run the power-hungry chips.They can also plough money into developing human capital. Their richly endowed universities are quickly climbing up global rankings. The AI programme at King Abdullah University of Science and Technology, a Saudi institution, and the Mohamed bin Zayed University of Artificial Intelligence (MBZUAI) in Abu Dhabi, the world’s first AI-focused school, have poached star professors from illustrious institutions such as University of California, Berkeley, and Carnegie Mellon University in Pittsburgh. And nearly all of MBZUAI’s graduates, who number a couple of hundred, stay in the region to work at local firms and labs, says its provost, Timothy Baldwin (himself lured to the Middle East from the University of Melbourne).The Gulf approach is producing results. The capabilities of the Falcon model, first built by a team of 20 or so engineers, rival those of Llama 2, the most widely used “open-source” model devised by Meta, an American tech giant. AI71 plans to improve its open-source models using national data sets from fields including health, education and, some day, perhaps oil. “In the last 50 years, oil drove the country…now data is the new oil,” says Mr al-Bannai.A third group of governments is combining elements of America’s approach with those of the Chinese and Emiratis. The EU has its version of America’s incentives for domestic chipmaking. So do some member states: Germany is footing a third of the €30bn ($33bn) bill for a new chip factory to be built there by Intel, an American chipmaker. Outside the bloc, Britain has promised to funnel £1bn ($1.3bn) over five years to AI and supercomputing (albeit without going into detail about how exactly the money will be spent). India’s government is promoting manufacturing, including of semiconductors, with generous “production-linked incentives”, encouraging big cloud-computing providers to build more Indian data centres, where AI models are trained, and thinking about buying $1.2bn-worth of GPUs.Like China and the Gulf but unlike America, where federal and state governments are reluctant to part with public data, India and some European countries are keener on making such data available to companies. France’s government “has been very supportive” in that regard, says Arthur Mensch, Mistral’s boss. Britain’s is considering allowing firms to tap rich data belonging to the National Health Service. India’s government has enormous amounts of data from its array of digital public services, known as the “India Stack”. Insiders expect it eventually to integrate Indian AI models into those digital services.In contrast to China, which regulates consumer-facing AI with a heavy hand, at least for now Britain, France, Germany and India favour light-touch rules for AI or, in India’s case, none at all. The French and German governments have soured on the EU’s AI Act, the final details of which are currently being hotly debated in Brussels—no doubt because it could undermine Mistral and Aleph Alpha, Germany’s most successful model-builder, which raised €460m in November.It is natural for countries to want some control over what may prove to be a transformational technology. Especially in sensitive and highly regulated sectors such as defence, banking or health care, many governments would rather not rely on imported AI. Yet each flavour of AI nationalism also carries risk.America’s beggar-thy-neighbour approach is likely to antagonise not just its adversaries but also some of its allies. China’s heavy regulation may offset some of the potential gains from its heavy spending. Building models for local languages, as Krutrim and Sarvam in India plan to do, may prove futile if foreign models continue to improve their multilingual capabilities.The Gulf’s bet on open-source models may misfire if other governments limit their use, as Mr Biden has hinted at in a recent executive order and the EU could do through its AI Act, out of fear that open LLMs could too easily get into the hands of mischief-makers. Saudi and Emirati institutions may struggle to hold on to talent; a developer who worked on Falcon admits it benefited greatly from a partnership with a French team of engineers who have since been poached by Hugging Face, a high-flying Silicon Valley AI startup. As one sceptical investor notes, it is not yet clear how vast or useful public Emirati data actually is.Handing companies sensitive data on things like citizens’ health could spark a public backlash even in autocratic places, let alone Britain, France or Germany. As for industrial policy, it has a lousy record of spurring innovation and economic growth when the industry in question is mature, which AI is not. Picking winners in a fast-changing field verges on the foolhardy.As Nathan Benaich of Air Street Capital, a venture-capital firm, sums it up, most efforts to create national models “are probably a waste of money”. This warning will not dissuade AI-curious governments, mindful of the rewards should they succeed, from meddling. Mr Macron will not be the only leader to greet it with a Gallic shrug. ■ More