Good morning. Jeremy Hunt has said the UK can create a $1tn homegrown tech giant to rival Microsoft or Google as he shrugged off foreign bids for London-listed companies as “part of how capitalism works”.
The chancellor has been leading a regulatory overhaul to make it easier for start-ups to access funds to fuel growth and stem the outflow of investment capital from UK equity funds.
“What’s my yardstick of success? I’d like to see a British Alphabet, I’d like to see a British Microsoft,” Hunt told the Financial Times.
“It might not be for a decade. But I’d like to see a homegrown company with a trillion-dollar [market] cap, with a big global position,” he said. “That would reflect my ambition for the UK to be the world’s next Silicon Valley. It’s a big dream, but we can definitely get there.”
A $1tn (£800bn) company would dwarf London’s most valuable businesses. Apple’s $2.9tn valuation alone is bigger than that of the entire FTSE 100, at £2tn. Read the full interview.
And here’s what I’m keeping tabs on today:
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Central banks: US Federal Reserve chair Jay Powell and Dutch central bank chief Klaas Knot speak at the annual meeting of the Foreign Bankers’ Association in Amsterdam.
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Economic data: Germany publishes April inflation data, while the UK releases monthly labour market statistics. Opec publishes its monthly oil market report.
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Earnings: Alcon, Bayer, DCC, Ferrovial, Flutter, Home Depot, Martson’s, Treatt, Veolia Environnement and Vodafone report.
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Cannes: The 77th edition of the French film festival opens and runs until May 25.
Five more top stories
1. BlackRock is closing in on the crown of running the world’s largest bitcoin fund as the asset manager’s initial scepticism over cryptocurrencies gives way to ambitions to become a significant player in the digital asset market. The US group’s spot bitcoin exchange traded fund has garnered $16.7bn of assets since it launched four months ago, putting it less than $1bn behind market leader Grayscale, which enjoyed a 10-year and $28bn head start. Read more about what’s driving the sharp change.
2. Several investors have placed a record £300mn bet against BT, as new chief executive Allison Kirkby comes under pressure to reverse the UK telecoms group’s declining share price. Their aggregate short position of 2.79 per cent of the company’s shares is the biggest publicly disclosed bet against BT in percentage terms since records began, according to data provider Breakout Point. Here are the investors betting against the FTSE 100 company.
3. OpenAI has unveiled advances to its flagship artificial intelligence model, intensifying the competition with Google and other Big Tech groups. The San Francisco start-up demonstrated a series of improvements to its GPT-4 model at an event yesterday, including the ability to interpret voice, video, images and code in a single interface — though it stopped short of revealing a much-anticipated new model. Read more on the update’s new features.
4. Saudi Arabia’s crown prince “might be finally ready to have some tough conversations” about his ambitious Vision 2030 plan, said a person familiar with the thinking at the Public Investment Fund. Mohammed bin Salman’s sweeping economic diversification plan, which includes a “horizontal city” called The Line, is facing a reality check as it reaches its midway point, with the kingdom’s leaders reconsidering priorities and how best to fund their investments as self-imposed deadlines approach.
5. A senior executive at one of China’s biggest privately owned carmakers has called overcapacity in the Chinese car industry a “fake concept”, joining officials and state media in hitting back at western criticism of Beijing’s industrial policy. The remarks come ahead of the Biden administration’s expected announcement today to raise tariffs on Chinese electric vehicle imports from 25 per cent to 100 per cent. Read the full interview with Great Wall Motor’s international operations head.
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China investment: The head of Danish biotech Genmab said companies needed to tap China’s “impressive innovation” and should not let “anti-Chinese sentiment” deter dealmaking.
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Putin in China: The Russian president’s trip may show US threats to cut the flow of Chinese dual-use goods are wishful thinking, writes Alexandra Prokopenko of the Carnegie Russia Eurasia Center.
The Big Read
Ayatollah Ali Khamenei has exercised extraordinary religious authority over Iran for more than three decades as the Islamic republic’s foremost spiritual and political leader. The question of who will succeed him is coming into sharper focus after he turned 85 in April. The regime’s power-brokers are quietly mapping out the post-Khamenei handover, a succession that will be a moment of existential risk as the Revolutionary Guards assert dominance over state affairs and the space for other political and religious groups shrinks.
We’re also reading . . .
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UK Green party: The environmentalists are enjoying dramatic success with voters in rural Conservative areas, writes Miranda Green.
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Greensill saga: The fight to recover funds owed to Credit Suisse clients has landed on a small community bank and West Virginia’s governor.
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War in Ukraine: The surprise Kremlin shake-up this weekend indicates Vladimir Putin is gearing up the Russian war machine for the long haul.
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Nigeria: The new central bank chief has said the country has returned to “orthodox policy” and indicated interest rates will stay high for as long as necessary.
Chart of the day
Germany is looking at tax breaks and welfare reforms to encourage people to work more, joining the UK and the Netherlands on a quest to tackle Europe’s economic malaise by reversing a big drop in average working hours. The country has the shortest average working hours of any advanced economy, according to OECD data from 2022, reflecting a relatively high share of German women who are employed part-time and a growing preference for more leisure time.
Take a break from the news
Manderley Press is known for reprinting forgotten books on memorable landmarks and locations. It began in 2021 when independent book publisher Rebeka Russell launched it from her home, a charming yellow-brick gabled house in south London that is a story on its own.
Additional contributions from Benjamin Wilhelm and Gordon Smith
Read the full article here