Wednesday! Here at CO HQ, not one, but two very small children are sick. More experienced parents are invited to send in their notes on how to survive the germpocalypse. We soldier on! — Alex
📈 Trending Up: Domestic seizure of political dissidents … Hugging Face … precious metals … the legacy of Bob Ross … hearing and sanity … AI leverage, xAI edition … AI models that can use computers … EU-US tech relations? … robotic consolidation … shade
📉 Trending Down: DoJ abuses … Microsoft’s ability to juice gamers … GDP growth sans AI … US-ASML relations …
Things That Matter
Everyone’s feeling the protectionism: One of my favorite questions to ponder today is what path Europe will take in the next decade. Declining manufacturing capacity, demographic woes, and a bit too much regulation of technology has left the continent stuck in low-growth mode.
Putting aside the chat control issue (well done, Germany), it seems that Europe is headed towards protectionism. New plans to further disincentivize steel imports have brought down the value of EU-based car companies, which protest that they already source some 90% of their steel from the bloc.
The promised “strong and permanent protection to the EU steel industry, with a view to safeguarding EU jobs, and supporting the sector in its decarbonisation efforts” will likely lead to higher prices for critical manufacturing inputs inside the EU. I simply do not understand how making it more expensive and difficult to manufacture cars inside the EU will help it fend off low-cost, high-quality Chinese EVs and similar. What would you rather have: A coddled steel industry, or more production of higher-value goods?
Here’s hoping that European tech companies — some of which are doing very well — can dodge this domestic sclerosis and kickstart some real GDP expansion. I am tired of reading Europoor jokes. (Also, hello, Canada.)
Adventures in state capitalism: After taking stakes in MP Materials, Intel, Lithium Americas, and a golden share in US Steel, the American government is hungry for more. Now it intends to take a 10% stake in Trilogy Metals, investing $35.6 million and permitting it to build a road (the ‘Ambler Road Project’) to a mineral deposit (the ‘Ambler Mining District’). The White House says the road will “enable access to large deposits of copper, cobalt, gallium, germanium, and more.”
Losing track of the government’s dealmaking? Don’t forget that Critical Metals is also reportedly a potential target for the state, and USA Rare Earths may be too.
It’s a weird time to be a free-market guy; it feels like I am a free-floating radical sans a political home. On the other hand, instead of simply auctioning off the country’s natural wealth in exchange for political donations, we’re at least doing something here.
Still, even with that tin-lining, having the state choose our national champions won’t generate more competitive companies, nor a more strident economy. Spending by the country’s purse may meet some short-term goals, but central planning is less efficient than market-based investment decisions over any meaningful timeline.
I’m starting to feel like Mitt Romney, sans the hair and such.
Beam me up, baby: How many satellite-based Internet connectivity systems can you name? Just Starlink? It’s the market leader, so don’t feel bad if that was your only answer. Amazon’s competing Project Kuiper has only managed a handful of launches, and after its planned launch tomorrow, it will have deployed some 153 satellites. Starlink has nearly 8,500 in orbit today, for reference. China’s Guowang project just launched its tenth batch of satellites, and the EU has plans for its own, too.