Blackstone to buy AirTrunk for AI power push

Good morning. Here's what happened overnight and what you need to know today.

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1.

Data-centre obsessed: Blackstone and the Canada Pension Plan Investment Board are set to acquire AirTrunk for over $20 billion in Australia’s largest corporate deal this year, according to multiple media reports. The transaction would see AirTrunk founder Robin Khuda retaining a stake worth about $500 million, and Macquarie and PSP Investments sell their shares entirely, the Australian Financial Review reported. Blackstone is aggressively investing in AI-driven data centres, projecting USD2 trillion ($2.98 trillion) in capital expenditures globally over the next five years, with CEO Stephen Schwarzman likening the AI boom to the advent of the electric grid. The consortium outbid a rival group formed by IFM Investors, Silver Lake, DigitalBridge and Global Infrastructure Partners. AirTrunk has 11 data centres across Asia-Pacific, with plans for more in Sydney, Hong Kong and Osaka. (Capital Brief)(Bloomberg)(FT)(AFR)

2.

Stocks slide: US stocks plunged the most since the August meltdown as manufacturing activity contracted for the fifth month in a row and traders braced for the upcoming August jobs report. The S&P 500 fell 2.1% on Tuesday, the first day of trading in September after the Labor Day holiday, led by the technology sector, including a 9.5% plunge in Nvidia shares, while energy and mining stocks also fell following a report from Goldman Sachs raising concerns about slowing demand for commodities. The Russell 2000 and Nasdaq 100 also saw big losses, with the Dow Jones down 1.5%. Treasury yields fell as traders speculated on the Federal Reserve’s potential rate cuts and blue-chip firms rushed into the bond market, setting a record for the busiest day of issuance. (Bloomberg)

3.

Beijing’s NY pawn: Linda Sun, a former senior aide to two New York governors, was charged with acting as an illegal Chinese agent accused of using her position to advance Beijing's agenda in the US, including blocking Taiwanese officials from accessing the governor’s office. Federal prosecutors in Brooklyn charged Sun with conspiring to act as an illegal foreign agent, visa fraud and money laundering. Her husband was also charged. Sun held various roles in the administrations of former Governor Andrew Cuomo and his successor, Kathy Hochul, including as her deputy chief of staff, until being dismissed in 2023. Sun is also accused of forging Hochul's signature on letters to Chinese officials and intervening to alter messages on sensitive issues like the Uyghur detentions. In exchange, the couple allegedly received millions of dollars used to purchase luxury properties and vehicles. (Capital Brief) (DOJ)

4.

Embassy push: Latvia’s Foreign Minister Baiba Braže urged Australia to reopen its embassy in Kyiv, calling it “a necessity” in the face of the global threat posed by Russia’s invasion of Ukraine. During her visit to Australia, Braže met with Foreign Minister Penny Wong. In an interview with Capital Brief, Braže said she would argue global security requires supporting Ukraine, warning that if Russia succeeds, the international order is at risk. While Wong has said the embassy would reopen when safe, the Coalition has promised to do so if elected. Despite concerns over Donald Trump’s potential return to power and its implications for NATO, Braže, a former official at the organisation, said his previous presidency had led to increased European defence spending. (Capital Brief)

5.

Weak data: US manufacturing activity in August rose slightly from an eight-month low but fell short of expectations, remaining in contraction for a fifth consecutive month. The Institute for Supply Management (ISM) reported the PMI increased to 47.2, up from July’s 46.8, with a reading below 50 indicating a contraction. New orders and production continued to decline, while input costs rose. Employment showed a slower pace of contraction, however, with manufacturing employment coming in at 46, up from 43.4 in July. US stocks tumbled as the data revived fears of an economic slowdown, pushing the S&P 500 and Nasdaq to their worst day since early August. Chip stocks led the Nasdaq's decline, while Treasury yields dipped and oil prices slumped amid concerns over Chinese demand for commodities, hitting mining and energy stocks. (Capital Brief)(ISM)

6.

Dragon drags: Goldman Sachs revised down its copper price forecast for 2025 to USD10,100 per tonne, a big downgrade from its previous estimate of USD15,000, citing weakening Chinese demand. In the report, Goldman analysts said summer data from China indicated a general weakening in commodity demand, especially for oil and copper. Copper prices fell around 3%, with shares of producers like Freeport-McMoRan dropping 7% and Antofagasta and Glencore both falling over 3% in London. Oil prices slid too, with the US benchmark crude trading below USD71 a barrel and approaching its lowest level this year. Adding to the pressure on oil prices were expectations that OPEC+ might increase supply, especially after disruptions in Libya's production. (Wall Street Journal)

7.

Pride pushback: Australia's ambassador to Iran, Ian McConville, was summoned by Tehran's Foreign Ministry following an Instagram post from the Australian embassy celebrating "Wear it Purple Day," a day dedicated to supporting LGBTQIA+ youth. The post, which remains online and features McConville and his colleagues wearing purple accessories, sparked controversy in Iran. The Iranian government, through state-run and semi-official media, labelled the post as "norm-breaking" and "promoting homosexuality," contrary to Islamic and Iranian cultural norms. The state-run IRNA news agency said McConville had responded, saying it was not meant to offend the Iranian people or their values. While Iran allows gender transition surgeries under a religious decree, homosexual acts remain illegal and can be punishable by death. (Capital Brief)

8.

Dow exile: Intel, a long-standing member of the Dow Jones Industrial Average, faces possible removal due to a severe decline in its share price, according to a Reuters report citing analysts and investors. Intel's 60% drop in shares this year makes it the worst-performing stock in the index, largely driven by missed opportunities in the AI sector, declining semiconductor sales and underperformance in its contract manufacturing unit. Intel's dividend suspension and layoff plans have been insufficient to stop the decline. Shares fell over 7% on Tuesday. Bloomberg recently reported the company is considering a split of its product design and manufacturing businesses. Nvidia or Texas Instruments are speculated to be replacement candidates, though Nvidia's volatility is a concern. S&P Dow Jones Indices did not comment on whether Intel will be removed. (Reuters)