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Happy Friday and a happy start to the UEFA Euro 2024 tournament! It's best to wrap up any work you have with European colleagues before they disappear to the pub for the next few weeks.
In today's big story, we're looking at how Saudi Arabia is courting Chinese investors for help with its massive, futuristic city facing financial issues.
What's on deck:
- Markets: A 31-year-old investor just got backing from Millennium Management.
- Tech: Leaked audio reveals Oracle execs' plans to exit the ad business.
- Business: An NYC luxury developer went on a $3 billion real-estate buying spree. Now his empire is showing cracks.
But first, a city on the brink.
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The big story
Saudi Arabia needs backup
Saudi Arabia's dreams of a futuristic city are turning into a financial nightmare, and one of its solutions could spell trouble for the US.
Since 2017, the Kingdom has touted big plans for the desert megacity Neom. The project is the centerpiece of Crown Prince Mohammed bin Salman's Vision 2030, which hopes to reduce the economy's reliance on fossil fuels.
Neom's planned features are eye-popping, to say the least. There's the world's longest infinity pool, a year-round ski resort, and a mixed-reality theme park. And The Line — a city built between two massive, mirrored skyscrapers — looks straight out of a sci-fi movie.
But all these fancy things don't come cheap. Some estimates for Neom have ballooned up to $1.5 trillion. And while the Kingdom was initially confident foreign investment would help foot the bill, that hasn't been the case.
Now Saudi Arabia is turning to another country with economic headaches: China. The Kingdom hopes China will invest billions in the project, which could deepen ties between the two countries. That's a troubling potential future for the US, Business Insider's Tom Porter writes.
China's interest in Neom could be from multiple angles.
The city plans to heavily use renewable energy, a key area of focus for China as it digs itself out of its economic hole.
But other opportunities for China in Neom are more troubling.
While Neom is being pitched as a "smart city" that collects data on residents, experts previously told BI it could really be part of a massive surveillance program powered by Chinese technology.
China has already been clear that its AI strategy is to shape reality and enforce its power. That type of authoritarian vision is something it shares with Saudi Arabia.
That poses a risk for the US, which needs all the allies it can get in the Middle East as it navigates the war in Gaza.
Still, the Kingdom is running out of options. Saudi Arabia has reportedly already started borrowing to cover costs. And the Crown Prince is also reportedly ready to start having "tough conversations" about the project.
3 things in markets
- The US dollar is losing its status among the world's central banks. The dollar is still king among central banks' forex reserves. However, its market share has dropped from 70% in 2000 to 55% in the last quarter of 2023, according to data from the International Monetary Fund.
- A Coatue rising star got a big endorsement from a massive hedge fund. Aaron Weiner's new fund is being seeded by the $68 billion multistrategy giant with a multibillion-dollar check, according to people familiar with the matter. Weiner is Coatue's head of tactical solutions and is set to leave the firm at the end of the year.
- Another stock could join the trillion-dollar club soon. Broadcom's stock is surging after it posted estimate-beating earnings and announced a 10-to-1 stock split. And Bank of America predicts even greater potential: hitting trillion-dollar market capitalization.
3 things in tech
- Apple has an AI secret weapon. Although it's not an AI frontrunner, Apple's vast user reach has made it extremely attractive to the leading AI companies who all want to tap into that base. The tech giant's recent deal with OpenAI illustrates just how much power Apple wields.
- Oracle execs detail plans to exit the ad business. In a leaked recording, executives said the transition will happen in phases, but that there's no "catch-all date" for the move. Another said they'd try to find roles elsewhere in the company for affected employees.
- Amazon's secret workaround for AI training data. Amazon told employees to sign up for Microsoft's GitHub platform and share their accounts so it could scrape AI training data faster, BI has learned. Account limitations mean collecting data with normal methods would take too long, per the leaked memo.
3 things in business
- Three layoffs, 200 job apps, no dice. After being laid off from three consecutive corporate jobs, Giovanna Ventola applied to 180 similar roles and 18 minimum-wage "bridge jobs" — but didn't land a single one. She says the experience "completely changed" her outlook on the job market.
- NYC luxury developer Michael Shvo is facing some challenges. Shvo made a name for himself first as a broker, then as a developer of glitzy projects. But a soft real estate market and a trail of angry business partners and customers are threatening to thwart his big plans.
- It's official: Musk's pay package is approved. After it was voided by a judge in January, Tesla investors sealed the deal on Musk's $55 billion pay plan (here's how it compares to other CEOs'). But he isn't out of the woods just yet — Tesla must now take it back to court.
In other news
- AI is set to take over advertising's biggest event of the year — and perhaps the industry itself.
- Millennials think Gen Z is lazy — but secretly wish they could say 'no' too.
- Exclusive: 20VC podcast host and investor Harry Stebbings is raising a massive new fund targeting tech startups.
- Scientists share one easy swap you can start doing today that could help you live longer.
- Disney's feud with DeSantis is over — and it's donating to Republicans again.
What's happening today
- Bonnaroo Music and Arts Festival begins, with Post Malone headlining.
- Sentencing for Jose Uribe, a businessman who pleaded guilty to bribing Sen. Bob Menendez.
Dan DeFrancesco, deputy editor and anchor, in New York. Jordan Parker Erb, editor, in New York. Hallam Bullock, senior editor, in London. George Glover, reporter, in London. Annie Smith, associate producer, in London. Amanda Yen, fellow, in New York.