Flagship

Republicans underperform in US midterms

The widely anticipated Republican “red wave” in the U.S. midterms did not materialize. They will likely take control of the House of Representatives, but the Senate remains too close to call. Republicans thought they would capitalize on high inflation and President Joe Biden’s unpopularity. But concerns over abortion rights drove a big Democratic turnout. John Fetterman, a Democrat, won the key Pennsylvania Senate race, defeating celebrity doctor Mehmet Oz despite suffering a stroke six months ago. On the other hand, Republican Ron DeSantis comfortably won re-election as governor of Florida, paving the way for him to challenge Donald Trump for the party’s 2024 presidential nomination.

What happens now

The Republicans nonetheless probably won enough seats to shift American policy. On the domestic front, they could unravel the committee investigating the Jan. 6 riot on Capitol Hill, start their own inquiries into the 2020 election results — many Republican legislators falsely deny Biden’s victory — and trigger a standoff over whether to raise the U.S.’s debt ceiling. Abroad, American policy towards China is likely to harden, and its commitment to supporting Ukraine could soften, as polls have shown Republican voters say the U.S. is doing too much for Kyiv.

Rocket from the Crypto

Binance, the world’s largest cryptocurrency exchange, is set to buy major rival FTX. The value of FTX collapsed after Binance said it would sell $2 billion of FTX’s FTT token, crashing its price. FTX owner Sam Bankman-Fried (a Semafor investor) was forced to seek a buyer and is likely to sell at a steep discount. Bankman-Fried’s wealth fell by 94% over the course of the day, Bloomberg estimated. He is still worth about $1 billion, but because he is also one of the largest donors to the “Effective Altruism” movement, concerns about a funding shortfall are growing.

Job cuts loom at Meta

Meta is expected to fire thousands of people this week — possibly as soon as today — in the first major job cuts in the company’s history. Twitter and Stripe have announced layoffs recently, but Meta’s are likely to be the industry’s largest. The company’s stock price has tumbled around 70% this year as investors have been turned off by its heavy bet on virtual reality. Ultimately, Meta will follow one of two paths, The Information writes: It could end up like Microsoft, which in 2014 cut thousands only to later grow and expand, or like Twitter, with limited profitability and a too-large staff.

The internet with Chinese characteristics

China opens its annual World Internet Conference, a tech summit whose shifting focus highlights Beijing’s own change in priorities under Xi Jinping. Earlier meetings attracted Apple’s Tim Cook and Google’s Sundar Pichai, with Alibaba’s Jack Ma a fixture. In recent years, China has cracked down on its domestic tech giants, and its zero-COVID strategy has restricted trade. Ma, meanwhile, is out of favor for his criticism of the leadership. The U.S. has also applied wide-ranging sanctions choking off China’s access to cutting-edge semiconductor technology. So this year’s conference will have “less Big Tech fanfare and more emphasis on policy,” the South China Morning Post reports.

Beijing’s growing Latin America ties

Chinese state-owned companies are now Latin America’s biggest investors in infrastructure, energy, and aerospace, El Pais reports. The shift points to Beijing’s fast-growing ties to the region: In 2000, the Chinese market accounted for just 2% of Latin America’s exports. Today, China is Latin America’s second-biggest trading partner, Chinese state banks are among the region’s biggest lenders, and six Latin American countries are members of Beijing’s Asian Infrastructure Investment Bank. Xi Jinping has visited 11 times since he became China’s leader. Among Beijing’s priorities is isolating Taiwan. Both Nicaragua and the Dominican Republic severed diplomatic relations with Taipei after being offered financial incentives by China.

Poland enters the atomic age

Poland hired a U.S. firm to build a new $20 billion nuclear plant to provide 3.75 gigawatts of electricity, about 15% of national demand. It will be Poland’s first nuclear plant, although a second has already been proposed. Poland is fossil-fuel-dependent: less than 10% of its energy is renewable, and as it weans itself off coal, it has become reliant on Russian gas and oil. Although the announcement came during COP27, the Polish energy minister’s statement focused on energy security. Nuclear power, which does not emit carbon, has not seen exponential growth in uptake or drops in price like solar and wind. But it provides reliable, constant energy, without fossil fuels’ reliance on unstable petrostates.

A life-saving program

Deworming programs in Kenya reduce child mortality by a quarter, according to new research, from 76 deaths per 1,000 under-fives down to 58. Worm infestations are endemic across much of Africa and elsewhere. Earlier research found that deworming improves educational outcomes and lifetime earnings, but those findings have been disputed. The latest study seems to confirm the improvements, but it also shows that deworming is an extremely cost-effective way to save lives.

FIFA’s Qatar ‘mistake’

Hosting the World Cup in Qatar is a “mistake,” Sepp Blatter, president of FIFA in 2010 when the decision was made, told a Swiss newspaper. “It’s too small a country. Football and the World Cup are too big,” he said. According to Blatter, then-French president Nicolas Sarkozy lobbied for Doha ahead of the energy-rich emirate awarding Paris a $14 billion arms deal. Qatar has a smaller population than Los Angeles and a patchy human rights record, highlighted this week when a Qatari World Cup ambassador called homosexuality, which is illegal in his country, “damage in the mind” on German TV. An aide promptly stopped the interview.

France fixes the roof while the sun is shining

All large car parks in France will soon have to be covered with solar panels. The move is expected to bring in 11 gigawatts of power on sunny days — about 10% of the nation’s current electricity output, equivalent to 10 nuclear reactors and enough to power three million homes. It’s part of President Emmanuel Macron’s renewables investment plan. The country wants to increase solar output tenfold, and is also building 50 additional wind farms.

• Macron will announce an official end to France’s years-long anti-jihadist effort in Africa’s Sahel region.
• Christie’s and Sotheby’s hold auctions for the billionaire Paul Allen’s art collection and the car Michael Schumacher drove to win his sixth Formula One World Championship.
• Netflix releases Season 5 of The Crown, its hit series on the British monarchy which has received criticism over its portrayal of the royals.

Chaining the creators

Ryan Broderick writes about web culture in Garbage Day.

At the height of the pandemic it felt like every social platform wanted to help creators make money. Twitter rolled out a tip jar, Substack was throwing cushy deals at writers, and OnlyFans got so big that credit companies tried (unsuccessfully) to pressure it into becoming safe for work.

It has not gone well. At least 20 creator-economy-focused platforms have gone through some kind of layoff recently, Business Insider reports. At the same time, something else has been happening: The creator is growing beyond the platform.

When you empower creators it’s hard to keep them penned in. Both Twitch and TikTok have seen creator strikes. And the younger creators who grew up watching YouTube ad-pocalypses know that the first thing you do when you blow up on a platform is move to another so you can’t be disappeared by a finicky algorithm. But Silicon Valley is still operating under a 2010s mindset where there were only a few platforms and the creators didn’t have options. You can see this with Elon Musk’s Twitter fever dream.

Musk sees a world where creators need a single platform so badly that they’re willing to pay $8 a month to be verified on it. But the internet is decentralizing fast. Imagine telling a 19-year-old making six-figures on TikTok that they need to pay almost $100 a year so their content can be seen by a bunch of weird middle-aged venture capitalists sharing Nazi memes and NFT scams on Twitter. It’s just not going to happen!

The Pakistani film making waves

Joyland — a taboo-breaking love story starring transgender actress Alina Khan — has won plaudits worldwide, including in neighboring India. The movie, Pakistan’s entry for the 2023 Oscars, counts Nobel Peace Prize laureate Malala Yousafzai as an executive producer. It got rave reviews at its recent premiere in India, with Pakistani newspaper The Express Tribune calling the screening itself a “huge feat” given the challenges of artistic collaborations between the two nations with ongoing political tensions. Joyland hits screens in Pakistan next week.

If you enjoyed Flagship, please share it with your family, friends, and colleagues — it makes a big difference to our mission to cover the world with intelligence and insight.

To make sure Flagship hits your inbox every day, add flagship@semafor.com to your contacts. In Gmail, drag our newsletter to your “Primary” tab.

You can always reach us on that address, or by replying to this email. We’d love to hear from you!

Thanks for reading, and see you tomorrow.

— Tom, Prashant Rao, Preeti Jha, and Jeronimo Gonzalez

Want more Semafor? Explore all our newsletters at semafor.com/newsletters