Hey you,
This week, Uber revealed just how much money it’s prepared to spend on replacing your driver with a robot, Xbox prices became genuinely outrageous and Sainsbury’s sold Argos for less than one-tenth of what it originally paid.
AstraZeneca has also reportedly discussed a $400bn merger, America has returned around $100bn of unlawful tariffs to businesses and Chinese investors are raising billions to challenge US dominance in AI.
It seems companies are spending enormous sums trying to own the future, while customers and employees are being asked to absorb the cost.
Let’s get into it.
Would you get into an Uber without a driver?
Uber plans to invest more than $10bn to introduce around 120,000 autonomous vehicles, with its first UK robotaxi service expected in London using the British company Wayve’s technology.
The financial logic is obvious… take away the driver and Uber keeps more of each fare, but somebody still has to buy, insure, charge and rescue the cars when they inevitably become confused by temporary traffic lights.
The biggest question is whether passengers will actually receive cheaper journeys or whether Uber just receives a bigger margin.
Then there are the tens of thousands of UK drivers who rely on this work, Robotaxis may be exciting, but they’re also designed to remove someone’s income. Governments need a better answer than telling displaced workers to “retrain”, as though a new career can be downloaded over lunch.
Not to mention the cleaning upkeep, what happens when someones had too much to drink on a night out and is sick in the cab… who’s cleaning up that up?!
AI is making your Xbox more expensive
Microsoft has increased the Xbox Series X from £500 to £670, while the supposedly ‘affordable’ Series S has jumped from £300 to £430 (a 43% increase).
Microsoft is blaming soaring memory and storage costs, partly driven by AI companies buying huge quantities of components for data centres. This is where the AI boom stops being an abstract conversation about share prices and starts making products we actually buy more expensive.
Technology normally becomes cheaper as it ages, yet a years-old Xbox now costs £170 more? Microsoft is itself spending billions on AI, so customers are effectively helping to fund the demand pushing up its hardware costs.
AI may eventually make our lives cheaper and more productive, but for now, we seem to be receiving the bill before the benefits.
A $400bn pharmaceutical company?
AstraZeneca has apparently discussed a merger with US drugmaker Bristol Myers Squibb., together, they’d be worth close to $400bn and form one of the world’s largest pharmaceutical companies.
The benefit is scale, developing medicines is expensive and risky, while combining their major cancer-treatment operations could accelerate research.
However… bigger does not automatically mean better, overlapping teams usually create “efficiencies” (corporate language for office closures and job losses) while reduced competition will most likely affect prices, choice and future investment.
For shareholders, the focus will be the deal’s value. For everyone else, the important question is what it would mean for patients, employees and Britain’s control over one of its largest companies.
America is returning $100bn of tariffs
The US government has refunded approximately $100bn to businesses after Donald Trump’s “Liberation Day” tariffs were ruled unlawful (shocker). Amazon alone received around $600m, with another $29bn of claims reportedly under review.
Tariffs are paid by importers, which often pass the cost on through higher prices. This creates an awkward question… if customers ultimately paid the tariff, should businesses keep the refund? I know my opinion… but I’d love to know yours!
Amazon says it will return some money to eligible customers, but I guess we’ll just have to see how much actually reaches them.
The government collected billions, prices rose and businesses navigated expensive new rules, only for much of the money to be returned. That is less an economic strategy and more an extremely costly administrative circle.
BP’s profits doubled and guess who’s paying for it
BP’s quarterly profit more than doubled to $5.73bn (£4.26bn), its highest since 2022, after the conflict with Iran pushed oil above $100 a barrel.
That is how the energy market works, the same oil-price surge making fuel, flights and deliveries more expensive for everyone else can produce an enormous payday for oil companies.
Now I know BP didn’t cause the conflict and companies obviously exist to make money, but there is something deeply uncomfortable about households being warned to prepare for higher bills while an energy giant reports billions in additional profit.
BP is also shifting its strategy back towards oil and gas while selling renewable assets. Financially, the decision is understandable, environmentally, it feels like short-term profit has won the argument… again.
Quick-fire round
✈️ Cathay Pacific’s profits rose 71% to HK$6.2bn, or approximately $795m. More passengers travelled through Hong Kong to avoid disruption in the Middle East, helping the airline offset sharply higher fuel costs
🍺 Diageo plans to cut costs by $1bn as new chief executive Dave Lewis tries to revive sales and profit growth
🚲 Raleigh’s owner has entered insolvency proceedings after struggling with losses and weak demand
🧴 Procter & Gamble is buying supplement company Thorne for $3.8bn.
🎬 Spider-Man: Brand New Day generated $927m globally during its opening weekend, comfortably exceeding its estimated production budget
🇨🇳 Chinese venture-capital firms are reportedly trying to raise approximately $35bn across more than 60 funds
That’s all from me this week and I have to say, I’m getting slightly tired of every billion-pound investment being presented as progress purely because it involves AI or promises “efficiency”.
I know Robotaxis may be clever, but replacing drivers is still replacing people’s incomes and that’s the part that I’m not loving. Whenever billions are being spent, ignore the shiny announcement and let’s ask the real questions… who pays, who profits and who gets pushed out?
Have a wonderful weekend, it seems the sunshine is coming back out!
Abi x
Ps. I was lucky enough to visit No.10 on Monday, in my YouTube I go through who Andy Burnham is and what he’s done in his first two weeks of being PM… (don’t forget to like and subscribe!)
Abi - great news letter and like that it is useful even if not Englan etc focused From NZ. :)
Love this!