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Viktor Orbán's world tour irks the EU

Your browser does not support playing this file but you can still download the MP3 file to play locally. Chip stocks dipped yesterday after Trump's comments rattled investors, the EU spoke up against Viktor Orbán's recent travels, and a bid to force Amazon to recognise a union failed in the UK. Plus, the FT's Madhumita Murgia explains what Yandex's move into Europe signifies. Mentioned in this podcast: Chip stocks tumble as Trump comments rattle investors Donald Trump has 'well-founded plans' for Russia-Ukraine peace talks, Viktor Orbán claims Amazon beats back union bid for UK recognition Yandex founder to build AI business in Europe after Russia exit The FT News Briefing is produced by Fiona Symon, Sonja Hutson, Kasia Broussalian and Marc Filippino. Additional help from Breen Turner, Sam Giovinco, Peter Barber, Michael Lello, David da Silva and Gavin Kallmann. Our engineer is Monica Lopez. Our intern is Prakriti Panwar. Topher Forhecz is the FT's executive producer. The FT's global head of audio is Cheryl Brumley. The show's theme song is by Metaphor Music.

Transcript: Viktor Orbán's world tour irks the EU

Marc Filippino Good morning for the Financial Times. Today is Thursday, July 18th. This is your FT News Briefing. Chip stocks took a huge tumble yesterday, and the prime minister of Hungary is trying to punch above his weight. Plus, can one of Russia's tech champions reinvent itself in Europe as an AI powerhouse? I'm Marc Filippino and here's the news you need to start your day. [MUSIC PLAYING] Yesterday was a total mess for chip stocks. US chipmaker Nvidia was down 6.5 per cent, Taiwan's TSMC was down nearly 8 per cent and the Dutch chipmaker ASML was down almost 11 per cent. Why, you might ask? Well, you could point to Donald Trump. The Republican presidential nominee, spooked investors by saying that Taiwan should pay for its own defence. The island makes a lot of these chips, but China wants to claim Taiwan for its own by force if necessary. It also doesn't help that US President Joe Biden is considering tougher restrictions on trading chips with China. It's kind of a 1-2 punch. And this all matters because these chips are a core part of artificial intelligence companies and semiconductor stocks are propping up major indices. So when the chips were down yesterday, pardon the pun, the Nasdaq dropped nearly 3 per cent, its worst day since 2022. [MUSIC PLAYING] Hungary's Prime Minister Viktor Orbán has been very busy these past few weeks. He met with Vladimir Putin in Russia. Then he went to China to meet with President Xi Jinping. And then he travelled all the way to Mar a Lago, Florida, to say hello to Donald Trump. And on Tuesday, the EU basically said, stop that and stop it right now. To find out why Orbán got under the bloc's skin. I've called up my colleague Henry Foy, who's our Brussels bureau chief. Hey, Henry. Henry Foy Hey, Marc. Marc Filippino All right, so can you just recap all these visits for me? What exactly was Orbán talking about when he went to Russia and China and when he was speaking with the former president of the United States? Henry Foy So, preceding all that, he went to Kyiv, to see Volodymyr Zelenskyy for actually the first time since the full scale invasion of Ukraine in February 2022. That's important, because Orbán hadn't been there during the conflict and has been the most pro Russian leader in the EU, and so him going to Ukraine made a lot of his allies in the EU think, OK, he gets the message we need to support Ukraine. However, he then dashed all of those hopes by, as you say, going to Moscow, then going to Beijing and really pushing what he called a peace mission. He said it was the Orbán plan to solve the conflict by sort of talking to the major players that he thought the rest of the EU were ignoring. He then, of course, went to Florida to see Trump about the need to have peace talks. That's important, Marc, because Ukraine has been saying all along, we are not going to have peace talks with Russia while Russia still occupies parts of our country, because that means effectively granting Russia control over those territories. Marc Filippino OK, so forgive me if I missed a step here, but why does Hungarys president feel so emboldened right now? Henry Foy That's a great question. Normally, he wouldn't really matter if you like, but on July 1st, he inherited what is known as the presidency of the Council of the EU. It's slightly jargonistic and is a little bit inside baseball, but all you need to know is that every six months, a different country in the EU gets to run the meetings of the EU's ministerial gatherings. Hungary is in charge of those meetings from now until the end of the year. That gives him a sort of ceremonial post, which typically people don't use for foreign policy. In fact, they're not really supposed to. Orbán has said, OK, I'm going to use this title to try to give my peace mission some kind of credibility. Marc Filippino And how has the EU responded to Orbán taking up this role in all of his visits? Henry Foy Very, very badly. They initially were very upset. Rhetorically, they sort of said some strongly worded comments, but it sort of snapped if you like the patience this week with the release of a letter where Orbán sort of summed up all the things he learned and said that Trump is going to win. And when he does win, he's going to push for a peace deal. So therefore, we need to get ahead of that. And as Europe, we need to talk to Russia, we need to talk to China. And we need to force Ukraine into some kind of negotiations. The EU responded. The president of the European Council, this is a man who's actually employed to speak on behalf of the EU, said, you need to stop this now. Marc Filippino Sounds like he's getting a little too big for his britches. What exactly is Orbán's angle here? Henry Foy So Orbán definitely feels like the wind is starting to blow in his favour come November with a potential Trump win. And then, of course, inauguration in January. He will be Trump's man in Europe. And so he is leveraging that. He wants to carve out a very, very specific niche so that he can say, look, I've been the guy who for this entire time has been saying, we need peace. It doesn't really matter whether Russia controls parts of Ukraine or not. Trump, I've always believed in your plan, and I want to be your guy here that you turn to first. Marc Filippino So what does Orbán's performance say about the future of support for Ukraine, given that it's kind of splitting off from what the EU is doing itself? Henry Foy Well, there's two ways to look at it. The first is the glass half full and to say, well, the way in which the other countries come out very, very strongly against Orbán saying this is not right. So in a way, he's catalysed and tested the level of support for Ukraine, and it still remains very, very strong in opposition to him. And for Ukraine, of course, the glass half empty way of looking at this is that Orban is finally saying things that have been taboo in the EU and inside Nato since February 2022, to say we're not going to support Ukraine, it's better to have peace. There are some who are nervous that effectively what he's doing is offering the alternative, which up until now has not been offered by Brussels and indeed by NATO. Marc Filippino Remember a few days ago we talked about an Amazon warehouse in England. Workers in Coventry were voting to get their union recognised, and it would have been a first for Amazon in the UK. But results from the ballot came out yesterday and the bid just barely failed. Not sure the vote could have gotten any closer. 49.5 per cent of voting workers wanted a union. It's a narrow miss, and it means that they'll have to wait three years before they can try again. So I guess Jeff Bezos wins this round. [MUSIC PLAYING] Yandex is Russia's version of Google. It once had a valuation of $30bn, and it wanted to be a global internet giant. But after the war in Ukraine started, it had to hit the brakes. And now its founder wants to pivot to artificial intelligence. Madhumita Murgia is the FT's artificial intelligence editor, and she joins me now to talk about it. Hey Madhu. Madhumita Murgia Hey, Marc. Marc Filippino So can you just tell us a little bit more about Yandex and the drama that it's gone through since Russias full scale invasion of Ukraine? Madhumita Murgia Yeah. So Yandex, as you said, is Russia's Google. It's one of the few companies that, in its own market has managed to claw market share away from Google. But after the invasion, thousands of its staff fled Russia, fled the country, and foreign investors and lots of their partners started to distance themselves from the Russian company, making it very difficult for it to operate as a global company. They finally agreed to sell the operations in the country, and its founder and CEO, Arkady Volozh, will head up a completely new company, which is called the Nebius Group. Marc Filippino Yeah. Tell me a little bit about the group. What is it supposed to do, and how is it supposed to get Yandex back into the game? Madhumita Murgia Yeah, so essentially, Arkady Volozh was one of the possibly only two prominent Russian businessmen who have condemned the invasion of Ukraine by Moscow. But he's also kind of one of the best known technologists in the country because of his founding of Yandex. And so he has seen the internet wave of over the last few years. And now he believes that AI is the next kind of inflection point. And he has more than a thousand engineers that have worked together before, that know how to build large scale infrastructure and are just ready to work on something new. So they decided to look at the infrastructure required to support AI software, cloud computing models, and the fundamental sort of fabric that allows AI to run. And him and his team of a thousand engineers is going to build infrastructure that Start-Ups can use and can pay for to run their AI software. Marc Filippino OK, so if that's the route that Nebius is going to take, how big of a player could it be in the European market? Madhumita Murgia So they are the first to be looking at this. So it's not completely new idea. So you have sort of other infrastructure companies but there's space for this. Right. Because there's going to be a huge explosion of applications here. And it's in the interest of the chip designers like Nvidia, right, to have alternatives to just big tech, and also for customers in Europe who don't just want to be linked up with American big tech companies. This is a great alternative to have, particularly if they trust the engineering that underpins this. And they're already working with some of the best known French and German AI companies. Marc Filippino So, Madhu, all this movement in the European market that you've been describing. Do you think that the continent is now facing a moment where it could potentially compete with American big tech? Madhumita Murgia So this has been a decades-long question here in Europe. You know, why haven't we built Google or a Meta or a Microsoft? But, you know, steadily Europe has improved in terms of its entrepreneurial output, in terms of the amount of money being invested. It's a really, really capital intensive technology. But I think, you know, there have been some really interesting upstarts that have come out of Europe just in the last year or so. We have Mistral from France, Aleph Alpha in Germany. And so I think this is an inflection point, I think globally for technology. And even though US tech companies seem to be dominating on making the new AI models, the jury's still out on who's going to win when it comes to applications, hardware and so on. And so I think Europe can really play a part there with its engineering talent and the increasing focus on AI. Marc Filippino Madhumita Murgia is the FT's artificial intelligence editor. Thanks, Madhu. Madhumita Murgia Thank you. Marc Filippino You can read more on all of these stories for free when you click the links in our show notes. This has been your daily FT News Briefing. Make sure you check back tomorrow for the latest business news.