Good morning, happy Friday and welcome to FirstFT. In today’s newsletter:
-
The largest-ever US listing by a foreign company
-
OpenAI and Google sell AI models to blacklisted China groups
-
Apollo buys European low-cost airline easyJet for nearly $8bn
-
A profile of Trump’s ‘enforcer’ Todd Blanche
You can listen to today’s top news stories in the FT News Briefing podcast.
South Korean memory chips group SK Hynix has raised $26.5bn in the largest-ever US initial public offering by a foreign company and today its shares will begin trading on the Nasdaq exchange.
What does SK Hynix do? It makes high-bandwidth memory chips, which allow the massive volumes of data required for AI to flow at high speeds and have captured more than half of the global HBM market. It is the primary HBM supplier to Nvidia and was recently selected by Microsoft for its own proprietary AI chips. It was founded in 1983 as Hyundai Electronics but merged with LG Semicon in 1999 and was rebranded Hynix Semiconductor in 2001. A decade later it agreed a sale to SK Telecom for $3bn and was renamed SK Hynix.
How is it performing? Rising prices for SK Hynix’s memory chips helped its first-quarter revenue nearly triple year on year to Won52.6tn ($34.5bn). Its shares are up more than 600 per cent over the past year on the Kospi in Seoul, its main listing. Last month it overtook Samsung to become South Korea’s largest company as it joined the trillion-dollar club of companies with a market value of more than $1tn.
Its Seoul-listed shares closed slightly lower today and have now dropped by a quarter from their record high two weeks ago. SK Hynix’s American depositary receipts will begin trading at $149 each later following high demand for the IPO.
Share sale adds to Wall Street’s bumper summer. The SK Hynix IPO adds to a record summer for Wall Street share sales. Last month SpaceX pulled off the biggest IPO in history, raising $75bn. Alphabet raised $85bn from a share sale in early June to fund AI infrastructure development and the FT has reported Meta is considering a similar move as part of plans to spend up to $145bn for AI-related projects this year. Anthropic and OpenAI also plan massive Wall Street debuts.
But investors are increasingly questioning the vast AI spending plans of the so-called hyperscalers, in particular Meta, Amazon, Microsoft and Alphabet, and whether it will translate into sufficient profits to justify their huge share price gains of recent years.
But for now the suppliers of the AI boom’s picks and shovels, like SK Hynix, continue to see record demand for their products.
Here’s what else I’m keeping tabs on today and over the weekend:
-
Economic data: Brazil‘s statistics agency, IBGE, is scheduled to release its IPCA inflation index for June. Mexican industrial output for May is also due.
-
Companies: Delta Air Lines publishes second-quarter results and investors will be watching out for the impact of high fuel costs linked to the Iran war.
-
Sport: It’s men’s semi-final day at Wimbledon and tomorrow sees an all-Czech match-up in the women’s final before the men compete for the title on Sunday. At the World Cup, Spain and Belgium play in the second of the quarter-finals later today, with the remaining matches at this stage happening over the weekend.
Five more top stories
1. Exclusive: OpenAI and Google are selling their advanced AI models to Chinese tech giants blacklisted by the Pentagon, exposing a gap in Washington’s efforts to slow Beijing’s AI development. Although the sales are legal, they have reignited calls for tighter US regulation of AI models similar to its restrictions on exports of the chips used to train powerful models.
2. US private equity group Apollo has agreed to buy easyJet, one of Europe’s largest low-cost airlines, in a £5.7bn ($7.64bn) deal. Apollo gatecrashed a previously agreed £5.5bn deal between easyJet and the US private credit group Castlelake. Apollo has previously invested in Aeromexico, the low-cost carrier Sun Country Airlines and cargo group Atlas Air. It has also provided financing to Air France-KLM and Virgin Atlantic.
3. Kevin Warsh has unveiled big names from business and academia to lead his efforts to modernise the Federal Reserve. Those picked by the Fed chair to head five new task forces include former Bank of England governor Mervyn King and tech boss Marc Andreessen to “sharpen” the world’s most important financial institution.
4. Goldman Sachs has warned employees to limit their betting on prediction markets to sports and entertainment categories, as it confronts compliance risks posed by wagers on everything from elections to interest rates. The Wall Street bank warned employees that multiple breaches of the policy could cost an employee their job, according to a person familiar with the matter.
-
More banking news: HSBC has begun to market risky loans made by Hang Seng Bank to investors, in an early sign of how Europe’s largest lender intends to overhaul the Hong Kong bank it took private this year.
5. At least 12 people have died and 19 are missing in a wildfire in southern Spain as a heatwave across Europe sparks alarm about a summer of dangerous blazes. The deaths come as Europe grapples with the consequences of a series of sustained heatwaves that have led directly or indirectly to thousands of deaths.
‘Underdog’ turned Trump enforcer
Three years ago US attorney-general nominee Todd Blanche was a fixture of New York’s white-collar legal establishment. Today he is the face of Donald Trump’s retribution agenda. This is the story of how Blanche, who is due to appear for confirmation hearings as US attorney-general next week, went from being a partner at the elite New York firm Cadwalader, Wickersham & Taft to the president’s personal lawyer and the US government’s top lawyer.
We’re also reading and listening to . . .
-
Tech Tonic 🎧: The FT’s sports editor Josh Noble looks at the impact of video-assistant refereeing, one of the most controversial pieces of technology ever introduced in sports.
-
Cleaning up policy ‘sludge’: One use case for AI is slashing financial services red tape to the benefit of both regulators and consumers, writes Gillian Tett.
-
FT Investigation: Dozens of shadowy freighters operating around Taiwan are linked to international networks that have been implicated in smuggling to North Korea.
-
Two very different views of faith, Republicanism — and Trump: JD Vance and Mike Pence, vice-presidents past and present, take opposing sides in the battle for the soul of their party.
Chart of the day
For decades, London has been one of the most attractive places in the world for foreign buyers to pour their wealth into bricks and mortar. Yet over the past year the city’s high-end properties have struggled.
Take a break from the news . . .
Helen Brown pays tribute to “Total Eclipse of the Heart” singer Bonnie Tyler who has died aged 75.
