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Tesla is reducing its car offering due to AI as annual sales fall for the first time
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Keir Starmer tells Xi Jinping UK wants more ‘sophisticated’ ties with China
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Prada is cutting ties with more than 200 suppliers after an audit of labor abuse
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How shopping chatbots can transform online retail
We’ll start with US earnings, as Tesla says it will ditch some car lines and focus on AI, while reactions to Meta and Microsoft’s AI spending plans have been mixed.
Tesla switches: Tesla said yesterday it will scrap its Model S and Shares of Tesla rose as much as 4.8 percent after the market, but pared their gains as Musk and senior executives spoke to analysts later on Wednesday.
Meta and Microsoft: The social media company’s share price rose as much as 10 percent in after-hours trading after reporting record revenues, despite saying capital spending could nearly double to $135 billion this year as part of its AI spending plans.
However, Microsoft shares moved in the opposite direction as investors were spooked by a 66 percent increase in data center spending and slower-than-expected cloud growth, despite strong demand for AI services that boosted profits by almost a quarter.
Shares of the software group fell 6 percent in after-hours trading on Wednesday, after another big jump in AI-related spending soured the market’s reaction to record profit and revenue figures.
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More US news: The Federal Reserve kept interest rates unchanged for the first time since July, as Chairman Jay Powell said the central bank was in no rush to cut rates.
Here’s what else we’re keeping an eye on today:
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Bilateral conversations: Russian President Vladimir Putin holds talks with the President of the United Arab Emirates, Sheikh Mohammed bin Zayed al-Nahyan in Moscow. German Chancellor Friedrich Merz receives Lithuanian Prime Minister Inga Ruginienė in Berlin.
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Results: Apple, Blackstone, Deutsche Bank, ING, Mastercard, Nasdaq, Nokia, Roche and SAP report profits. See The Week Ahead for a more complete list.
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Five more top stories
1. British Prime Minister Sir Keir Starmer met Chinese President Xi Jinping today, as leaders sought to strengthen trade ties after years of strained ties. The two are expected to sign a border security pact to share intelligence to tackle human trafficking rings. Read the full report.
2. The EU and the United Kingdom would both pay a higher price than the US Research shows that there will be a tit-for-tat trade war if US President Donald Trump revives his tariff threat against Europe over Greenland. The study highlights the economic risks if European leaders choose to retaliate.
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European security: Germany plans to develop its own space-based missile detection capability as the continent seeks to reduce its dependence on the US for defense.
3. Russian energy revenues fell by about a fifth last year from 2024, when increasing discounts collided with weak global prices, adding to the pressure on the Kremlin’s wartime economy. The shift highlights how the Trump administration’s sanctions are impacting the country’s oil sector.
4. Exclusive: Prada has ended the relationship with more than 200 suppliers over compliance violations over the past five years, as the luxury brand conducts a “zero tolerance” audit in response to allegations of labor abuse in the industry’s supply chain. Silvia Sciorilli Borrelli has more of Milan.
5. The largest mining companies in the world have added nearly half a trillion dollars to their valuations this year, fueled by a surge in precious and base metal prices caused by heightened geopolitical tensions. Read the full report.
The great reading
The American retail groups Walmart and Amazon approach shopping chatbots in different ways. While the technology promises greater speed and convenience for online shoppers, it also threatens some existing revenue streams.
We are also reading. . .
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Uncontrolled drugs: Chinese sellers of untested injectable therapies – marketed as a miracle cure for everything from sleep to anti-aging – are using e-commerce platforms to reach foreign customers.
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Markets and morality: New research sheds light on how commerce can shape the culture of communities, writes Soumaya Keynes.
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Tequila hit: An immigration crackdown is hurting sales for the Jose Cuervo maker as Spanish-speaking consumers in the U.S. stay home.
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Military threat: The US is building a “magnificent armada” in the Middle East as Trump weighs his attacks on Iran. Read the visual story.
Chart of the day
Partner profits at the UK’s mid-market accountancy firms have risen to record levels, overtaking the Big Four, underscoring the pressure on the sector’s top players to retain senior professionals. According to FT analysis, profits per equity partner averaged £565,000 in 2024 at the top five mid-market firms reporting similar figures.
Take a break from the news. . .
In the first of an FT Globetrotter series on world libraries, novelist Charlotte Mendelson explores a London institution. The British Library not only contains the history of humanity, but also represents a remarkable cross-section of the British capital.
