Eurostar Group Ltd. plans to launch direct train services from London to Frankfurt and Geneva next decade, connecting the UK’s capital to two of Europe’s key financial centers.
The journeys would each take roughly five hours, a spokesperson for the operator said. As part of the new services, Eurostar, which is majority-owned by France’s state rail company SNCF, said it would invest approximately €2 billion ($2.3 billion) to increase its fleet by around 30%.
Eurostar’s plans come as it faces criticism over high prices and reliability. It could also face opposition from other operators pushing to launch rival services to end its 31-year monopoly on international trains from Britain. Richard Branson’s Virgin Group and FS Italiane Group are among the companies seeking to challenge Eurostar on its flagship route between London and Paris.
Offering direct trains from London to Frankfurt and Geneva would allow bankers and other finance professionals to continue their work and make calls during their journeys, unlike on planes.
Eurostar currently operates services in five countries: the UK, Belgium, France, the Netherlands and Germany. The most popular route, London to Paris, attracted more than 280,000 passengers last year.
The company behind St Pancras, the London train station where Eurostar operates, and Getlink SE, the Channel Tunnel operator, said earlier this year they wanted to open more services to France and new routes to Germany and Switzerland.
Last year, a report from campaign group Transport and Environment (T&E) rated Eurostar the worst-performing of 27 European rail services. The survey considered factors such as ticket prices, reliability and experience. Eurostar disputed the findings.
Offering direct trains from London to Frankfurt and Geneva would allow professionals to continue their work and make calls during their journeys, unlike on planes.
The UK’s FTSE 100 index was set to close at a record high for the first time since March, recouping its tariff-induced slump thanks to an improving economic outlook and easing trade tensions.
The export-heavy index rose as much as 0.4% to 8871.41 level, surpassing its March peak of 8,871.31points. The UK gauge is catching up to a global equities benchmark and a key European peer in Germany’s DAX index, which have both reclaimed their record highs after April’s rout.
The UK benchmark is still 0.4% below its intraday record of 8,908.82, and sentiment remains fragile as London faces an exodus of companies moving listings to the US and shelving initial public offerings. Defense contractors Babcock International Group Plc and BAE Systems Plc, as well as precious metals miner Fresnillo Plc, are among the biggest gainers in the index this year.
The FTSE 100 rebounded strongly after President Donald Trump paused some of the highest tariffs in a century in April and the UK secured a trade framework with the US. Economic data have also improved, with UK business confidence surging to a nine-month high in May.
“UK stocks are among the cheapest in Europe,” said Georges Debbas, head of European equity derivatives strategy at BNP Paribas Markets 360. “The country is also the most friendly to the US, as it’s the only one to have a firm trade agreement in place. That allows you to have a more constructive view on the market.”
Still, the gauge has trailed other European benchmarks, which benefited from lower interest rates and heavy fiscal stimulus plans led by Germany.The FTSE 100 has advanced 8.5% in 2025, far behind a 21% rally in the German benchmark. Meanwhile, Spain’s IBEX 35 Index is up 23%, while Italy’s FTSE MIB has jumped 18%.
The UK’s stock market has shrunk in recent years amid deal-related delistings, compounded by a lean flow of IPOs and some companies shifting their primary listings to the US in search of more trading liquidity.
A Chinese lender’s stunt to woo depositors with gifts including the wildly popular Labubu dolls has been barred by financial regulators, underscoring the increasingly fraught battle among banks for customers as interest rates and profit margins fall.
The Zhejiang branch of the National Financial Regulatory Administration has asked local banks to refrain from giving non-compliant perks to attract deposits, according to people familiar with the matter.
The guidance came in the wake of a promotion by Ping An Bank Co., which has been offering Labubu collectibles—blind box toys endorsed by celebrities including Lisa from the K-pop group Blackpink—in multiple cities for new depositors who can park in 50,000 yuan ($6,960) for three months.
Such a practice, which often involves offering free items like rice or small home appliances, as well as e-gifts such as memberships at Internet platforms, was seen as driving up costs at banks and hurting their margins, said the people, who asked not to be named discussing a private matter.
While Ping An Bank’s marketing campaign went viral on Chinese social media platform Xiaohongshu and sparked strong interest from potential savers, it also drew criticism from state media which said it was “not a long-term solution.”
Chinese lenders are walking a tightrope as they balance between deposit taking and protecting margins that are now at record-low levels across the sector. The nation’s big banks just conducted a new round of deposit rate cuts in May, with smaller peers following suit and pushing term deposit interests down to just a little above 1%.
The Zhejiang banking regulator has urged the immediate suspension of any products involved in non-compliant deposit-gathering practices, along with the removal of related promotional materials, the people said. It remains unclear whether the regulator’s other local divisions have issued similar guidance.
The regulator didn’t immediately respond to a request for comment. Ping An Bank said the initiative started off as a small-scale project launched by a local branch, declining to comment further.
China said in a 2018 rule that commercial banks shouldn’t attract deposits through “inappropriate means” such as giving away physical gifts or returning cash.
Ping An Bank offered Labubu collectibles—blind box toys endorsed by celebrities including Lisa from the K-pop group Blackpink—for new depositors who could park in 50,000 yuan ($6,960) for three months.
China is inviting American influencers to join a 10-day, all-expense paid trip through the country this July, as part of Beijing’s efforts to boost people-to-people exchanges and showcase the “real China.”
The initiative, titled “China-Global Youth Influencer Exchange Program,” seeks to enlist young social media influencers with at least 300,000 followers to collaborate with Chinese content creators, according to recruitment posts by Chinese state-affiliated media outlets, including the China Youth Daily.
While relations between China and the U.S. have deteriorated in recent months over issues including geopolitics, technology and trade, the program marks an effort to boost cultural exchanges. Last year, President Xi Jinping had called for more exchanges between Chinese and American universities, after previously announcing a plan to welcome 50,000 American students to China.
Another post in College Daily, a publication particularly targeting Chinese students in North America, specified that applicants for the exchange program based in the U.S., should be active on platforms such as Instagram, YouTube, TikTok and X, and should “love Chinese culture” and “have no history of bad behaviors.”
It called on Chinese students overseas to encourage influencers in their circle to apply, and said the successful candidates will get China’s official invite as well as special assistance from the state to process their visas.
The trip intends to take the participants across five Chinese cities—Suzhou, Shanghai, Shenzhen, Handan and Beijing, and will cover China’s e-commerce hubs, the headquarter of companies such as Xiaohongshu Technology Co. and BYD Co.
The influencers will also partake in cultural activities such as Taichi and be able to live-stream their trip to the Great Wall, according to the posts. Working with Chinese social media influencers on ideas, and getting their content promoted by China’s state media will be part of the deal.
Social media content from western influencers traveling through China post-Covid have won praise from the state media for their authentic portrayal of everyday life in the country. In April, American streamer IShowSpeed’s visit to China sparked widespread curiosity among fans about advancements in Chinese technology.
Authorities have tapped social media influencers to check negative information and promote positive contents. In 2023, think-tank Australian Strategic Policy Institute analyzed over 120 foreign influencers, mostly active on Chinese social media, received the state’s help to grow their influence in return for content that praises and spreads Beijing’s narrative.
As Elon Musk’s fortune plunged by $36 billion last week and Tesla Inc.’s stock suffered a brutal drubbing, his most ardent backers rushed in to buy the dip — with leverage.
Investors poured $651 million into the Direxion Daily TSLA Bull 2X Shares (ticker TSLL), marking the largest weekly inflow since the fund’s 2022 debut, according to data compiled by Bloomberg. The biggest chunks came in on Thursday and Friday.
The buying spree into TSLL—which is designed to deliver twice Tesla’s daily return—reflects a now-familiar reflex: doubling down on Musk during selloffs, a strategy that’s worked spectacularly in the past. What’s different now is that the trade faces an unprecedented risk after last week’s clash between the tech executive and President Donald Trump over a signature tax bill, with the fallout exposing big cracks in Musk’s political capital.
Beyond the personal drama, Tesla faces intensifying business pressures from competition in China and cooling demand in developed markets. Broader questions also linger around the electric-vehicle maker’s valuation after years of trading at rich multiples relative to traditional automakers.
All that wasn’t enough to stop the unwavering faith — or speculative fervor — still driving retail traders who have repeatedly profited betting on Musk’s comebacks.
“The retail investor has done very well buying Elon Musk on weakness in the past, so they see the recent drop as a buying opportunity once again,” said Matt Maley, chief market strategist at Miller Tabak + Co. “They seem to be a little early this time given the uphill climb Tesla is facing.”
The president and Musk last week exchanged public barbs following a break in their notorious friendship that developed as the Tesla CEO campaigned for Trump and put money toward his 2024 re-election campaign. But their views appeared to diverge in recent days — and boiled over on Thursday — over Trump’s “Big, Beautiful” tax bill, which Musk criticized, prompting the president to say that he was “disappointed with Elon.”
The fallout continued throughout the day, with Trump calling the billionaire CEO “crazy” and threatening to end his government contracts. Musk, in turn, said the president wouldn’t have won the election without him.
Tesla shares declined, leading to one of the biggest-ever wipeouts in Musk’s net worth, with $34 billion erased on Thursday alone. Tesla shares dropped 15% for the week to around $295 by end-of-day Friday.
Yet, buying when Tesla shares are in free-fall has tended to work out in the past for investors. The company’s stock declined to $60 apiece during the pandemic, before recovering. In 2022, the year TSLL started trading, it notched a $300 million inflow even as the company’s shares plunged 65%. The following year, Tesla’s stock surged 102%.
Judging by flows into TSLL, it looks like Tesla bulls are undaunted by the Musk-Trump fallout. Investors have added more than $3.5 billion into the ETF so far this year, even as Tesla’s stock has tanked more than 26% year to date. The amount the fund garnered is also more than triple what it saw during all of 2024, a span during which Tesla’s shares surged more than 60%.
As Elon Musk’s fortune plunged by $36 billion last week and Tesla Inc.’s stock suffered a brutal drubbing, his most ardent backers rushed in to buy the dip — with leverage.
Tools for Humanity, a startup co-founded by OpenAI’s Sam Altman, is rolling out its eyeball-scanning Orb devices to the UK as part of a global expansion of the company’s novel identification services.
Starting this week, people in London will be able to scan their eyes using Tools for Humanity’s proprietary Orb device, the company said in a statement on Monday. The service will roll out to Manchester, Birmingham, Cardiff, Belfast and Glasgow in the coming months.
The spherical Orbs will be at dedicated premises in shopping malls and on high streets, said Damien Kieran, chief legal and privacy officer at Tools for Humanity. Later, the company plans to partner with major retailers to provide self-serve Orbs that people can use as they would an ATM, Kieran added.
The company, led by co-founder and Chief Executive Officer Alex Blania, has presented its eye-scanning technology as a way for people to prove they are human at a time when artificial intelligence systems are becoming more adept at mimicking people. AI bots and deepfakes, including those enabled by generative AI tools created by Altman’s OpenAI, pose a range of security threats, including identity theft, misinformation and social engineering.
The Orb scan creates a digital credential, called World ID, based on the unique properties of a person’s iris. Those who agree to the scan can also receive a cryptocurrency token called Worldcoin through the company.
Tools for Humanity has faced regulatory scrutiny over privacy concerns about its technology in several markets, including investigations in Germany and Argentina, as well as bans in Spain and Hong Kong. The company said it doesn’t store any personal information or biometric data and that the verification information remains on the World ID holder’s mobile phone.
Kieran said Tools for Humanity had been meeting with data regulators including the UK’s Information Commissioner’s Office and privacy advocates ahead of the planned expansion.
So far, about 13 million people in countries including Mexico, Germany, Japan, Korea, Portugal and Thailand have verified their identities using Tools for Humanity’s technology, the company said. In April, the company announced plans to expand to six US cities.
There are 1,500 Orbs in circulation, Kieran said, but the company plans to ramp up production to ship 12,000 more over the next 12 months.
The UK’s finance industry kept its lead over the rest of Europe in attracting foreign investment last year, although activity across the region slowed, according to professional services firm EY.
The country attracted foreign investment for 73 finance projects last year, down by 32% on the prior year, while in second-place Germany, deal volumes fell 16% to 32. Throughout Europe, volumes fell 11%, EY found.
Global investors also saw London as the most attractive European city for financial services foreign investment over the coming year, beating out Frankfurt and Paris, although at a national level, Germany was the preferred choice for the future.
With Donald Trump’s tariff announcements clouding the outlook, the poll found just 32% were likely to invest in the US, compared to 39% in the EU and 44% for the UK.
“The strength and depth of the UK’s financial services sector continues to capture global investor confidence – particularly as they navigate challenging market conditions,” said Martina Keane, managing partner at EY UK and Ireland financial services. However, she said competition remained fierce for available financing.
Hennes & Mauritz AB, the fast-fashion retailer that’s been listed on the Swedish stock market since 1974, is steadily moving back toward private ownership.
The founding family has stepped up purchases of H&M shares, spending more than 63 billion kronor ($6.6 billion) since 2016 to amass nearly two-thirds control and fueling speculation it could take the Stockholm-based company back into private hands — despite denials from family members.
The Perssons, one of Sweden’s wealthiest families, have built up a growing stake through holding company Ramsbury Invest, saying little about their intentions other than that they “believe” in H&M, which was founded in 1947 by Erling Persson. The media-shy clan is now getting within striking distance of full control of the retailer, which in recent years has been losing ground among shoppers to its main rival Zara and “ultra-fast fashion” upstarts like Shein.
“This is something we’ve been talking about for years, and few would doubt that’s the direction things are headed,” said Sverre Linton, chief legal officer and spokesperson for the Swedish Shareholders’ Association, which represents small stock investors. If the family doesn’t plan to take H&M private, it should communicate that more clearly and stop buying shares, he added.
The family has ramped up insider buying by reinvesting dividends, boosting its H&M stake to almost 64% from 35.5% over the past nine years via Ramsbury, a vehicle named after billionaire Stefan Persson’s sprawling estate, one of the largest private landholdings in southern England. Including extended family holdings, the Perssons now control roughly 70% of the capital and some 85% of voting rights, according to H&M’s website.
In an interview last year with Bloomberg, H&M Chairman Karl-Johan Persson — grandson of the founder — dismissed talk that the family intended to take the company private. “There are no plans,” he said. “We just buy because we believe in the company.”
Representatives at Ramsbury Invest and H&M declined to comment.
Analysts including Niklas Ekman at DNB Carnegie say the regular purchases could be more than a show of confidence in the retailer. In a note to clients last month, he estimated that if the family keeps acquiring shares at the same pace a buyout could come as early as two years from now. If the family’s holding reached 90%, it could request a de-listing of the shares.
A take-private would be “based on emotional rather than financial motives,” Ekman wrote, given that the family already has a controlling stake and has long managed the company with little regard for minority shareholders.
He attributed the push to patriarch Stefan Persson, 77, who built H&M into one of the world’s largest fast-fashion retailers during his 16 years as chief executive officer and more than two decades as chairman. He remains deeply invested in the company’s future.
Stefan’s fortune amounts to $18.6 billion, mostly in H&M stock, making him the richest person in Sweden, according to the Bloomberg Billionaires Index. He bought the 3,000-acre Ramsbury estate in 1997 and has since expanded it to 19,000 acres, building a brewery, distillery and oil press on the property.
His son Karl-Johan, who took over as H&M chairman in 2020 after serving as CEO, also holds an active role at Ramsbury Invest. He has voiced frustration in interviews with the stock market’s short-term focus on maximizing profits.
“They’ve never, at least in modern times, expressed a strong desire to remain public,” said Daniel Schmidt, an analyst at Danske Bank. “I would say that transparency has always been a part of it.”
H&M’s shares reached an all-time high about a decade ago, and have since fallen by around 60%, valuing the group at 220 billion kronor. Zara owner Inditex SA, by contrast, has climbed about 60% over that period.
For the Perssons, the sagging stock price is no doubt a frustration, but also presents an opportunity by making full control more attainable. At the current price it would cost the family at least 70 billion kronor to buy the remaining outstanding shares, according to Ekman. That would likely require them to take on debt.
A delisting would probably also require a premium, according to Bloomberg Intelligence analyst Charles Allen.
“If the bid were financed by debt then it may reduce the company’s operating flexibility,” Allen said. “It wouldn’t really matter if the debt was in the company or the family as either way cash flow would have to be diverted from investment to pay interest and then repay.”
Operationally, the fast-fashion retailer appears stuck in the slow lane, facing tepid demand for its apparel, fierce competition and now US tariffs. The first-quarter results were weaker than analysts had expected and showed that efforts to claw back customers through higher marketing spending hadn’t brought a rebound.
CEO Daniel Erver, an H&M veteran who took the top job last January, was involved in setting the current strategy and has yet to reverse market share losses in countries including Germany, France and the UK. Attempts to reconnect with younger audiences through collaborations, such as with pop artist Charli XCX, haven’t significantly boosted growth.
“With the share price as subdued as it is currently, offering a small premium today, could potentially be cheaper if the share price recovers at some point in the future,” said Mads Lindegaard Rosendal, a senior analyst at Danske Bank. He said the potential risk of a take private is one of the reasons why Danske Bank has an ‘underweight’ rating on H&M, which is a “company that is also struggling somewhat with their ongoing operational turnaround.”
As one of the most shorted stocks in Europe, a buyout could force short sellers to unwind their negative bets on H&M and send the shares soaring. Shares out on loan, an indication of short interest, were at 21% of H&M’s free float as of June 4, according to data from S&P Global Market Intelligence.
H&M has been criticized for a lack of transparency over sudden management changes and being the only company in Stockholm’s benchmark index not to disclose the shareholdings of its top executive team.
“Obviously, being a listed company puts management under more scrutiny than if they were private, but it also presumably offers some incentives to management and other employees that would not be available if it were private,” BI’s Allen said.
Anders Oscarsson, the head of equities at AMF, one of Sweden’s biggest pension managers and the largest non-family shareholder, said he hasn’t heard the family say anything about taking H&M private, and that such a move would be a big loss for investors.
“It would be sad if the company disappears from the stock exchange,” he said. “If we’re to generate returns from the stock market, we need strong companies listed.”
Yet if the family’s purchases lead to a marked deterioration in the stock’s liquidity, that wouldn’t be a good outcome either. “It might become a bit like Hotel California — where you can neither check in nor check out.”
WPP Plc Chief Executive Officer Mark Read is set to retire at the end of the year, kicking off a search for a successor at one of the world’s largest advertising agency groups as it grapples with slowing sales.
Read, 58, has helmed the British company for about seven years and has been with the company for more than 30 years, the company said in a statement on Monday.
WPP, once the largest ad agency globally, has been working on ways to reignite growth and streamline its operations to address softening sales and a gloomy outlook. The global economic downturn has hit client spending, especially in Asia, and the rise of artificial intelligence capabilities to automate ad creation and distribution is raising doubts across the ad industry.
In February, WPP shares dropped after the group forecast sales would remain flat or shrink this year, missing analysts’ estimates, while rival group Publicis Groupe SA said it expects organic growth of between 4% and 5% this year.
The company had previously restructured its stable of brands to cut costs and announced a plan to spend hundreds of millions of pounds on new technologies, including building out AI capabilities.
Read’s retirement highlights “the challenge his successor faces to overcome years of financial and share-price underperformance against rivals, and opens the prospect of strategic and structural shifts,” said Matthew Bloxham, senior industry analyst at Bloomberg Intelligence. “The new leader will need to double down on simplification, cost-cutting and technology investment.”
Former BT Group Plc head Philip Jansen was appointed chairman of the ad group in January.
South Korea’s small investors are trying to shake up the country’s creaky corporate landscape.
Amateur stock-pickers across the country are gathering on social media platform KakaoTalk and dedicated shareholder apps such as Act, which has racked up more than 110,000 users in the two years since it launched. Their aim: to give a jolt to Korea’s $1.9 trillion stock market, which has for years traded at cheaper multiples than regional rivals like Japan and Taiwan.
“Korea’s financial system lags global standards and companies need to be held accountable,” said Younghee Won, a 66-year-old art instructor and amateur investor. “Online platforms allow our anger to translate into action.”
This wave of grass-roots activism means Korea’s listed companies are now being pressured from all sides, as politicians, regulators and foreign investment funds push for better governance. That may finally force local companies to address the long-standing “Korea discount”—adding fuel to a stock market that is already one of the world’s best performers so far this year.
It has also turned small investors into a surprising political force. Lee Jae-myung, the left-leaning politician who won the country’s presidential election last week, tried to position himself as a champion for shareholders, promising to lift corporate governance standards, curb stock manipulation and set the Kospi index on the path to 5,000—almost 80% higher than its current level.
The Kospi entered a bull market after Lee’s election win and was around 1.7% higher in early Asian trading on Monday.
The market is getting a boost from foreign funds loading up on stocks, and rising optimism from Wall Street. Goldman Sachs Group Inc. strategists said in a weekend note they were upgrading Korean stocks to overweight from neutral, pointing to the increased likelihood of capital market reforms.
Growing clout
Retail investors in Korea now represent almost 30% of the overall population, according to Goldman Sachs. A boom in stock trading during the COVID-19 pandemic led to millions of new account openings, fueling the rise of online communities where they could learn about stock picking—and hatch plans.
Shareholders of Korean companies filed 168 proposals in the most recent round of annual general meetings, a jump of more than 80% from 2021, according to figures from the AJU Research Institute of Corporate Management. That included 78 proposals directly targeting management, calling for the appointment or removal of executives.
“Minority shareholders are seeking a more active role in corporate governance,” said Nameun Kim, deputy director at the AJU. “If previously the focus was solely on returns, now they want their preferred directors on the board so they can participate in management decisions.”
So far, small investors’ successes have come at small companies, those with a market value of $1 billion or less. During the recent round of annual general meetings in March, medical company Oscotec Inc. scrapped plans to reappoint its chief executive after pushback from investors, while biotechnology firm Amicogen Inc and textile company DI Dong Il Corp. appointed new auditors after small investors pushed for it.
Oscotec, Amicogen and DI Dong Il Corp. didn’t respond to requests for comment.
Unsurprisingly, many companies do their best to resist—or simply ignore—these mini activists. Kim, a schoolteacher who asked to be identified only by his surname, became so frustrated with one Korean company whose stock he holds that he sent 400 letters to fellow investors he found in the company’s shareholder registry, asking them to join him in a KakaoTalk group to discuss possible action. More than 120 of them signed up.
“I had to print and mail each one by hand,” he said. “I did it all on my own, outside of work hours, while maintaining a full-time job. Shareholder activism is exhausting, frustrating and frankly overwhelming.”
The company didn’t respond to Kim’s numerous requests for clarity on their business performance, and he ended up selling most of his stake. He held on to a few shares out of a sense of obligation to his fellow activists.
The rise of small investors in Korea differs from the meme-stock mania in the U.S., where anonymous users on Reddit’s WallStreetBets forum banded together to drive up the price of GameStop Corp. and other shares. Korean platforms such as Act and Hey Holder require users to confirm they actually hold shares before they can join any dedicated group, meaning those weighing into discussions already have skin in the game.
Act’s CEO Sangmok Lee said that users on his platform often act more like “fans” of the companies they hold. “Fans engage in shareholder activism out of love for the company, much like how parents use discipline out of love,” Lee said.
Powerful allies
Korea’s stock market has for years been cheaper than close rivals Japan and Taiwan when it comes to metrics such as the price-to-book ratio, a popular measure of how much a stock is worth compared to the value of a company’s assets. The “Korea discount” doesn’t have a single cause but analysts point to worries about how companies invest, a convoluted series of cross shareholdings and a sense that the interests of company executives aren’t always in line with their shareholders.
Small investors won’t be enough on their own to turn things around, but they have some powerful allies. Local activist funds like Align Partners Capital Management Inc. are on the rise, adding professional savvy to the efforts of amateur investors. Foreign funds are also getting in on the act, expanding their operations in Korea in the hopes that the market is finally ready to turn a corner.
“We’re optimistic that the presidential elections will bring even more substantial changes in South Korea,” said Seth Fischer, founder and chief investment officer of activist fund Oasis Management in a recent Bloomberg Television interview. He added a note of caution, saying there was still a “long, long way to go” in reforming Korea’s corporate sector.
But small investors’ greatest source of support may come from the very top. In a Facebook post before his election win, Lee Jae-myung promised to protect investors’ interests, promote transparency and push companies to appoint directors representing minority shareholders.
His goal? Turning the “Korea discount” into a “Korea premium.”
Lee Jae-myung, the left-leaning politician who won the country’s presidential election last week, tried to position himself as a champion for shareholders.
China’s most popular AI chatbots like Alibaba’s Qwen have temporarily disabled functions including picture recognition, to prevent students from cheating during the country’s annual “gaokao” college entrance examinations.
Apps including Tencent Holdings Ltd.’s Yuanbao and Moonshot’s Kimi suspended photo-recognition services during the hours when the multi-day exams take place across the country. Asked to explain, the chatbots responded: “To ensure the fairness of the college entrance examinations, this function cannot be used during the test period.”
China’s infamously rigorous “gaokao” is a rite of passage for teenagers across the nation, thought to shape the futures of millions of aspiring graduates. Students—and their parents—pull out the stops for any edge they can get, from extensive private tuition to, on occasion, attempts to cheat. To minimize disruption, examiners outlaw the use of devices during the hours-long tests.
Alibaba Group Holding Ltd.’s Qwen and ByteDance Ltd.’s Doubao still offered photo recognition as of Monday. But when asked to answer questions about a photo of a test paper, Qwen responded that the service was temporarily frozen during exam hours from June 7 to 10. Doubao said the picture uploaded was “not in compliance with rules.”
China lacks a widely adopted university application process like in the U.S., where students prove their qualifications through years of academic records, along with standardized tests and personal essays. For Chinese high-school seniors, the gaokao, held in June each year, is often the only way they can impress admissions officials. About 13.4 million students are taking part in this year’s exams.
The test is considered the most significant in the nation, especially for those from smaller cities and lower-income families that lack resources. A misstep may require another year in high school, or completely alter a teenager’s future.
The exam is also one of the most strictly controlled in China, to prevent cheating and ensure fairness. But fast-developing AI has posed new challenges for schools and regulators. The education ministry last month released a set of regulations stating that, while schools should start cultivating artificial intelligence talent at a young age, students should not use AI-generated content as answers in homework and tests.
The price war engulfing China’s electric vehicle industry has sent share prices tumbling and prompted an unusual level of intervention from Beijing. The shakeout may just be getting started.
For all the Chinese government’s efforts to prevent price cuts by market leader BYD Co. from turning into a vicious spiral, analysts say a combination of weaker demand and extreme overcapacity will slice into profits at the strongest brands and force feebler competitors to fold. Even after the number of EV makers starting shrinking for the first time last year, the industry is still using less than half its production capacity.
Chinese authorities are trying to minimize the fallout, chiding the sector for “rat race competition” and summoning heads of major brands to Beijing last week. Yet previous attempts to intervene have had little success. For the short term at least, investors are betting few automakers will escape unscathed: BYD, arguably the biggest winner from industry consolidation, has lost $21.5 billion in market value since its shares peaked in late May.
“What you’re seeing in China is disturbing, because there’s a lack of demand and extreme price cutting,” said John Murphy, a senior automotive analyst at Bank of America Corp. Eventually there will be “massive consolidation” to soak up the excess capacity, Murphy said.
For automakers, relentless discounting erodes profit margins, undermines brand value and forces even well-capitalized companies into unsustainable financial positions. Low-priced and low-quality products can seriously damage the international reputation of “Made-in-China” cars, the People’s Daily, an outlet controlled by the Communist Party, said. And that knock would come just as models from BYD to Geely, Zeekr and Xpeng start to collect accolades on the world stage.
For consumers, price drops may seem beneficial but they mask deeper risks. Unpredictable pricing discourages long-term trust — already people are complaining on China’s social media, wondering why they should buy a car now when it may be cheaper next week — while there’s a chance automakers, as they cut costs to stay afloat, may reduce investment in quality, safety and after-sales service.
Auto CEOs were told last week they must “self-regulate” and shouldn’t sell cars below cost or offer unreasonable price cuts, according to people familiar with the matter. The issue of zero-mileage cars also came up — where vehicles with no distance on their odometers are sold by dealers into the second-hand market, seen widely as a way for automakers to artificially inflate sales and clear inventory.
Chinese automakers have been discounting a lot more aggressively than their foreign counterparts.
Murphy said US automakers should just get out. “Tesla probably needs to be there to compete with those companies and understand what’s going on, but there’s a lot of risk there for them.”
Others leave no room for doubt that BYD, China’s No. 1 selling car brand, is the culprit.
“It’s obvious to everyone that the biggest player is doing this,” Jochen Siebert, managing director at auto consultancy JSC Automotive, said. “They want a monopoly where everybody else gives up.” BYD’s aggressive tactics are raising concerns over the potential dumping of cars, dealership management issues and “squeezing out suppliers,” he said.
The pricing turmoil is also unfolding against a backdrop of significant overcapacity. The average production utilization rate in China’s automotive industry was mere 49.5% in 2024, data compiled by Shanghai-based Gasgoo Automotive Research Institute show.
An April report by AlixPartners meanwhile highlights the intense competition that’s starting to emerge among new energy vehicle makers, or companies that produce pure battery cars and plug-in hybrids. In 2024, the market saw its first ever consolidation among NEV-dedicated brands, with 16 exiting and 13 launching.
“The Chinese automotive market, despite its substantial scale, is growing at a slower speed. Automakers have to put top priority now on grabbing more market share,” Ron Zheng, a partner at global consultancy Roland Berger GmbH, said.
Jiyue Auto shows how quickly things can change. A little over a year after launching its first car, the automaker jointly backed by big names Zhejiang Geely Holding Group Co. and technology giant Baidu Inc., began to scale down production and seek fresh funds.
It’s a dilemma for all carmakers, but especially smaller ones. “If you don’t follow suit once a leading company makes a price move, you might lose the chance to stay at the table,” AlixPartners consultant Zhang Yichao said. He added that China’s low capacity utilization rate, which is “fundamentally fueling” the competition, is now even under more pressure from export uncertainties.
While the push to find an outlet for excess production is thrusting more Chinese brands to export, international markets can only offer some relief.
“The US market is completely closed and Japan and Korea may close very soon if they see an invasion of Chinese carmakers,” Siebert said. “Russia, which was the biggest export market last year, is now becoming very difficult. I also don’t see Southeast Asia as an opportunity anymore.”
A price cut demand by BYD to one of its suppliers late last year attracted scrutiny around how the car giant may be using supply chain financing to mask its ballooning debt. A report by accounting consultancy GMT Research put BYD’s true net debt at closer to 323 billion yuan ($45 billion), compared with the 27.7 billion yuan officially on its books as of the end of June 2024.
The pain is also bleeding into China’s dealdership network. Dealership groups in two provinces have gone out of business since April, both of them ones that were selling BYD cars.
Beijing’s meeting with automakers last week wasn’t the first attempt at a ceasefire. Two years ago, in mid 2023, 16 major automakers, including Tesla Inc., BYD and Geely signed a pact, witnessed by the China Association of Automobile Manufacturers, to avoid “abnormal pricing.”
Within days though, CAAM deleted one of the four commitments, saying that a reference to pricing in the pledge was inappropriate and in breach of a principle enshrined in the nation’s antitrust laws.
US negotiators will aim to restore the flow of critical minerals when they meet their Chinese counterparts for a new round of trade negotiations Monday in London, a top economic aide to President Donald Trump said.
“Those exports of critical minerals have been getting released at a rate that is, you know, higher than it was but not as high as we believe we agreed to in Geneva,” Kevin Hassett, director of the National Economic Council, said Sunday during an interview on CBS News’ Face the Nation with Margaret Brennan.
Rare earth flows became a new flashpoint in the testy bilateral relations in recent weeks. Top US officials including Trade Representative Jamieson Greer accused Beijing of failing to comply with the elements of the trade agreement brokered last month in Geneva by slowing down and choking off critical minerals needed for cutting-edge electronics.
Trump on Friday described talks with China as “very far advanced” and said that Xi Jinping agreed to speed shipments of the critical rare-earth minerals. China said on Saturday it approved some applications for rare earth exports but didn’t elaborate on the products’ applications or destinations.
“I’m very comfortable that this deal is about to be closed,” Hassett told CBS, without elaborating on the exact terms to be negotiated by the two sides during the London talks.
“We want the rare earths, the magnets that are crucial for cellphones and everything else, to flow just as they did before the beginning of April,” he said. “We don’t want any technical details slowing that down.”
Meta Platforms Inc. is in talks to make a multibillion-dollar investment into artificial intelligence startup Scale AI, according to people familiar with the matter.
The financing could exceed $10 billion in value, some of the people said, making it one of the largest private company funding events of all time.
The terms of the deal are not finalized and could still change, according to the people, who asked not to be identified discussing private information.
A representative for Scale did not immediately respond to requests for comment. Meta declined to comment.
Scale AI, whose customers include Microsoft Corp. and OpenAI, provides data labeling services to help companies train machine-learning models and has become a key beneficiary of the generative AI boom. The startup was last valued at about $14 billion in 2024, in a funding round that included backing from Meta and Microsoft. Earlier this year, Bloomberg reported that Scale was in talks for a tender offer that would value it at $25 billion.
This would be Meta’s biggest ever external AI investment, and a rare move for the company. The social media giant has before now mostly depended on its in-house research, plus a more open development strategy, to make improvements in its AI technology. Meanwhile, Big Tech peers have invested heavily: Microsoft has put more than $13 billion into OpenAI while both Amazon.com Inc. and Alphabet Inc. have putbillions into rival Anthropic.
Part of those companies’ investments have been through credits to use their computing power. Meta doesn’t have a cloud business, and it’s unclear what format Meta’s investment will take.
Chief Executive Officer Mark Zuckerberg has made AI Meta’s top priority, and said in January that the company would spend as much as $65 billion on related projects this year.
The company’s push includes an effort to make Llama the industry standard worldwide. Meta’s AI chatbot — already available on Facebook, Instagram and WhatsApp — is used by 1 billion people per month.
Scale, co-founded in 2016 by CEO Alexandr Wang, has been growing quickly: The startup generated revenue of $870 million last year and expects sales to more than double to $2 billion in 2025, Bloomberg previously reported.
Scale plays a key role in making AI data available for companies. Because AI is only as good as the data that goes into it, Scale uses scads of contract workers to tidy up and tag images, text and other data that can then be used for AI training.
Scale and Meta share an interest in defense tech. Last week, Meta announced a new partnership with defense contractor Anduril Industries Inc. to develop products for the US military, including an AI-powered helmet with virtual and augmented reality features. Meta has also granted approval for US government agencies and defense contractors to use its AI models.
The company is already partnering with Scale on a program called Defense Llama — a version of Meta’s Llama large language model intended for military use.
Scale has increasingly been working with the US government to develop AI for defense purposes. Earlier this year the startup said it won a contract with the Defense Department to work on AI agent technology. The company called the contract “a significant milestone in military advancement.”
Beijing says it granted approval to some applications for the export of rare earths, a move that could ease tensions before trade negotiations between the US and China next week.
The Chinese commerce ministry confirmed the approval of the applications without specifying which countries or industries were covered, even as it noted growing demand for the minerals in robotics and electric vehicles. The ministry will continue to review and approve compliant export applications, according to a statement on Saturday.
The confirmation comes days after the US and Chinese presidents spoke, following which Donald Trump said that there “should no longer be any questions respecting the complexity of Rare Earth products.” Delegations from Beijing and Washington are scheduled to meet in the UK to conduct trade negotiations on Monday.
China granted temporary export licenses to rare-earth suppliers of the top three US automakers, Reuters reported on Friday. The commerce ministry also said earlier Saturday it will speed up approvals for qualified rare earth exporters to Europe.
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