Flagship

Global economic woes worsen

The US and Iran appeared still willing to reach a peace deal despite American strikes and Tehran’s threats of reprisals — but the global economic fallout from the conflict deepened. Bangladesh pressed the IMF for new financial support, while the African Development Bank forecast slowing growth across the continent this year as a result of higher fuel prices, supply chain struggles, and worsening global financial conditions. Asian countries, meanwhile, are grappling with plummeting currencies that have depleted central banks’ foreign exchange reserves and threatened to accelerate already-high inflation. And in Latin America, two Atlantic Council experts projected slower growth and accelerating price rises. Things could yet worsen: “Downside risks to the outlook remain significant,” the AfDB warned.

Israel steps up Lebanon strikes

Israeli forces intensified strikes in Lebanon and killed the military chief of Hamas in Gaza, moves analysts said were driven by fears a potential US-Iran deal may curtail Israel’s ability to hit its enemies. The attacks in Lebanon killed at least 31 people; Israel says it is targeting Hezbollah, and the country’s leader has vowed to “deal them a crushing blow.” A Washington-Tehran agreement could, however, require Israel and Hezbollah to step back. “In light of that possibility, both sides are trying to improve their positions before the fighting ends,” Haaretz’s military analyst noted. But alongside continued tensions in Iran, the offensive has meant that “multiple silent humanitarian crises are deepening across the region,” the International Federation of Red Cross warned.

Europe bolsters military alliances

Mounting concern in Europe over Russia’s military ambitions — and a lack of confidence in US support — is driving new defense alliances across the continent. With Moscow’s war in Ukraine languishing, European leaders are worried that the Kremlin “will try next to reshuffle the cards by expanding the conflict,” The Wall Street Journal’s chief foreign-affairs correspondent wrote. Partly driven by those fears, Britain and Poland’s prime ministers are due to finalize a security agreement today, while France is reportedly looking to join a Germany-UK program to produce new long-range missiles, and a Britain-Italy-Japan fighter jet partnership could soon expand. “We need to be focused on strengthening our ability to deter and defend against the Russians,” Sweden’s defense minister told the Journal.

AI chipmakers see huge growth

South Korean memory chipmaker SK Hynix became the latest industry titan to top $1 trillion in market capitalization, as AI-driven demand propelled a sector-wide boom. Fellow Korean giant Samsung and semiconductor maker Micron also recently crossed the threshold, the latter just yesterday, while an exchange-traded fund of AI chipmakers has increased 87% in value in the seven weeks since it launched. Seemingly unyielding hunger for AI hardware has driven some analysts to predict a structural upswing in memory chip stocks, a major shift for an industry that has historically seen wild volatility in both demand and stock price. Not everyone is convinced, though: “A leopard does not often change its spots,” one fund manager told CNBC.

Samsung reaches deal with workers

Samsung, the South Korean tech behemoth, agreed to a profit-sharing deal with some workers, a landmark agreement that is among the first to confront the question of how the wealth generated by surging AI-related business is distributed. The deal — which may result in nearly 80,000 employees receiving bonuses in the realm of $370,000 each — could trigger a raft of new demands for pay renegotiations by the country’s unions, and as a result drive inflation. But by sparking debate over who reaps the benefits of AI-driven demand, the agreement may have even greater symbolic value, amounting to what an analyst characterized as “one of the most significant labor actions we have seen.”

WHO warns of Ebola spread

The World Health Organization said it was “playing catch-up” with the Ebola outbreak as authorities warned the epidemic could spread beyond central Africa. As many as 10 African countries have been listed as “high risk,” and in response, some governments have imposed a travel ban on visitors from the Democratic Republic of the Congo — where most cases have been confirmed — while the US has set up a facility in Kenya for at-risk Americans to quarantine before traveling home. Though foreign aid organizations have stepped up funding to help fight the virus, and vaccine development is making progress, misinformation may be hindering efforts: As many as a third of the people in the epicenter of the outbreak don’t believe Ebola is real.

Trump tightens GOP sway

Texas’ attorney general defeated a long-term incumbent to win a Republican Senate primary, solidifying US President Donald Trump’s hold over the party but potentially hindering the GOP’s chances of retaining its majority in the chamber. Trump’s backing of Ken Paxton — who faces widespread corruption accusations, including from members of his own party — helped him secure almost two-thirds of the vote. But Paxton, who has a negative approval rating in the state, may require tens of millions of dollars in funding to beat his Democratic rival, diverting resources from other races. “Trump has pulled another intra-GOP flex,” The Wall Street Journal argued. “But he may help to elect a Democratic Senate for the third time.”

On Wednesday, June 10, Charina Chou, chief operating officer of Google Quantum AI, will join Semafor Tech in San Francisco to unpack the tech breakthroughs that are leading to new economic and geopolitical consequences.

Understanding innovation requires first-principles thinking — breaking complex problems down to their core inputs, constraints, and incentives — then rebuilding from the ground up to see what comes next.

Semafor will host conversations with Aaron Levie, co-founder & CEO, Box; Jeetu Patel, president and chief product officer, Cisco; Qasar Younis, co-founder and CEO, Applied Intuition; Max Hodak, co-founder and CEO, Science Corporation; Pete Shadbolt, co-founder and chief scientific officer, PsiQuantum; Glenn Fogel, CEO, Booking Holdings Inc.; and Daphne Koller, founder & CEO, Insitro; to unpack how innovation is reshaping industries, redefining competitive advantage, and transforming the global economy.

Bolsonaro’s son seeks US support

Brazil’s right-wing presidential candidate Flávio Bolsonaro met with US President Donald Trump in Washington to seek support for his fledgling election bid amid mounting graft allegations. The son of former Brazilian president and close Trump ally Jair Bolsonaro, Flávio has seen his ratings plummet since Intercept Brasil disclosed his ties to a disgraced financier accused of corruption. A recent poll showed Bolsonaro trailing incumbent President Luiz Inácio Lula da Silva by 4%; they were nearly tied before the scandal surfaced. The meeting with Trump has fed accusations that the US leader may be trying to interfere in the election, having already played a decisive role in recent votes in Argentina and Honduras.

China sees industrial rebound

China’s industrial profits last month grew at their fastest pace in more than two years, easing fears that the Iran war would upend the sector. The new figures still pointed to signs of China’s economic divergence: While exports remained strong, domestic consumption was paltry. Experts, meanwhile, noted that China’s so-called mastery of modularity — where firms focus on building blocks designed to be modular from conception, as in the case of cells in a solar panel — was propelling the country’s global industrial dominance. “China invented the largest and fastest production and construction machine in history,” Oxford University researchers wrote.

China fails to curb smoking

China’s powerful tobacco monopoly has hindered Beijing’s attempts to curb smoking rates in the country, which remain among the world’s highest. Chinese leader Xi Jinping — himself a former smoker who quit in a symbolic gesture — has made lowering the smoking rate a priority as the population ages and health expenditures soar, but to little effect: Consumption in the country increased by almost 40% in the two decades to 2023, and China now smokes almost half of the world’s cigarettes. But the national tobacco corporation generated about 7% of national government revenue last year, a key source of income in a sluggish economy where growth has slowed and property bust has dragged on spending.

• Poland’s president travels to Switzerland for a state visit.
• Russia’s president arrives in Kazakhstan for the Eurasian Economic Union summit.
• Muslim pilgrims gather for the ‘stoning of the devil’ ritual during the Hajj in Saudi Arabia.

Colony, directed by Yeon Sang-ho. This South Korean film — in which a Seoul office tower transforms from the site of a biotech conference into a battle between zombies and survivors of a mutating virus — injects much-needed originality into the genre, Le Monde’s film critic argues: Yeon “demonstrates remarkable skill” not only as he “sketches a whole group of characters,” but in his “depiction of the zombie.” Watch the trailer for Colony, which releases in the US on Aug. 28.