Qualcomm reportedly eyeing Intel for record-breaking deal

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

1.

Chip merger: Chipmaker Qualcomm has in recent days approached rival Intel for a potential acquisition, The Wall Street Journal reported citing unnamed sources. The San Diego-based chipmaker has proposed a friendly takeover of the struggling Intel, though it's unclear if an agreement will be reached, the Journal said. A deal could face significant antitrust challenges. But if it proceeds, it could become the biggest US takeover approach since Singapore-based Broadcom sought to buy Qualcomm for USD142 billion ($208 million) in 2018. Qualcomm is engaging with US regulators to address potential concerns, presenting the deal as an all-American combination, sources told Bloomberg. Qualcomm CEO Cristiano Amon has been actively involved in the talks, examining various options including acquiring both the entire company and specific parts, Reuters reported. After a 37% share price drop in the past year, Intel is valued at around USD93 billion. (Capital Brief)

2.

Auto ban: The US plans to propose a ban on Chinese and Russian software and hardware in autonomous and connected vehicles due to cybersecurity risks and national security concerns, according to media reports. The ban, prompted by an investigation by President Biden earlier this year, would target Chinese technology used for vehicle communications, automated driving and infotainment systems, in a move to prevent the hacking or tracking of US vehicles, Bloomberg reported citing sources who added the planned ban extends to other adversaries, like Russia. The measures, coming amid escalating US tariffs on Chinese imports, include phase-in periods for software from 2027 and hardware from 2029, with a final rule expected by January 2025. Reuters cited sources saying the move would prohibit imports and sales of vehicles with key communication or automated driving systems. (Capital Brief)(Reuters)

3.

Quad push: The Quad leaders from Australia, India, Japan and the US reaffirmed their commitment to Indo-Pacific regional security and expanded maritime cooperation at their meeting in Wilmington, Delaware. The group plans joint coast guard operations in 2025, increased military logistics collaboration, and launched the Maritime Initiative for Training in the Indo-Pacific (MAITRI). At the meeting, US President Joe Biden was caught by a hot mic telling allies he believes China’s increasing military assertiveness is an effort to test the region at a turbulent time for Beijing. “China continues to behave aggressively, testing us all across the region,” he said. “We believe Xi Jinping is looking to focus on domestic economic challenges and minimise the turbulence in China’s diplomatic relationships, and he’s also looking to buy himself some diplomatic space, in my view, to aggressively pursue China’s interest.” On the sidelines of the meeting, Albanese pressed Biden on classifying Australian critical minerals as “American made” to access US subsidies, the AFR reported. (Capital Brief)(Joint Quad statement)

4.

Chipmaking giant: TSMC and Samsung are exploring building major chip-making complexes in the UAE, which could become key for artificial-intelligence investments in the Middle East and transform the semiconductor industry, The Wall Street Journal reported citing unnamed sources. TSMC and Samsung executives recently visited the UAE to discuss potential projects worth over USD100 billion ($146 billion), with funding primarily from Abu Dhabi’s sovereign investment vehicle, Mubadala, the Journal said. The megafactories would target advanced AI chip production, but there are technical difficulties like water purity and finding engineering talent, the report said. TSMC and Samsung have discussed potential UAE projects with US officials, who are concerned about advanced AI chip shipments to China, the paper added. They’re exploring giving the US oversight on chip production and exports from UAE factories. (WSJ)

5.

Tiktok watch: The Australian government is monitoring TikTok's lawsuit against the US government over a law that could force Chinese parent ByteDance to sell TikTok or face a ban, as the platform’s Australian subsidiary quietly reshuffles its board of directors. TikTok has argued the law is unconstitutional. In Australia, TikTok has 8.5 million monthly active users and has faced scrutiny, including a ban on government devices and a security review led by former Home Affairs Minister Clare O’Neil. Capital Brief reported TikTok has made local board changes, with Simon Bates replacing Brent Thomas on TikTok Australia's board. TikTok declined to comment on the reshuffle. Home Affairs Minister Tony Burke said the government is alert to developments in the US.. (Capital Brief)

6.

War warning: The US urged Israel to pursue diplomatic solutions instead of escalating its conflict with Hezbollah, as fierce clashes erupted between the Iran-backed militant group and Israeli forces, in some of the most intense fighting since October. John Kirby, the US National Security Council spokesperson, warned Israel there were “better ways” to ensure Israeli citizens could return to their evacuated homes in the north “than a war, than an escalation, than opening up a second front”. “We’re saying this directly to our Israeli counterparts . . . we don’t believe that escalating this military conflict is in their best interest,” he said. Benjamin Netanyahu vowed to continue military pressure, saying Hezbollah would "get the message." Tensions rose after Israel’s heaviest bombardment in southern Lebanon in years, with Hezbollah responding by firing rockets deep into northern Israel. Lebanese authorities reported 45 deaths. Israel shut down Al Jazeera’s office in Ramallah, accusing the network of pro-militant bias, which Al Jazeera denied. (ABC)(Reuters)(Bloomberg)

7.

Musk capitulates: Elon Musk's social platform X, started to comply with Brazilian Supreme Court orders after a monthslong standoff led to its ban in the country over non-compliance with hate speech moderation requirements. On Friday, X appointed Rachel de Oliveira Conceição as its legal representative in Brazil, addressing a court-mandated condition to resume operations. The court also ordered X to block specific accounts involved in hate speech and pay over USD3 million ($4.41 million) in fines. X had refused to comply, but lawyers now say the platform will pay the fines it owes and that it had started to block the ordered accounts. The Court, led by Justice Alexandre de Moraes, granted X five days to provide formal documentation. X briefly became accessible last Wednesday despite the ban, due to a technical change, but was blocked again, with the court imposing fines of 5 million reais per day for non-compliance. (Bloomberg)(Reuters)

8.

Sri Lanka’s elections: Marxist lawmaker Anura Kumara Dissanayake won Sri Lanka's presidential election, defeating incumbent President Ranil Wickremesinghe and opposition leader Sajith Premadasa, according to the Election Commission. Dissanayake received 5.74 million votes against Premadasa's 4.53 million, The Associated Press reported citing the commission. He campaigned on a pro-working-class, anti-elite platform, gaining popularity among youth. The election served as a referendum on Wickremesinghe's handling of the country’s recovery from an economic meltdown. Dissanayake pledged to renegotiate terms of a IMF bailout and balance austerity with social needs. Outgoing President Wickremesinghe congratulated him, warning changes to the IMF deal might delay a critical USD3 billion ($4 billion) tranche. Dissanayake's victory follows his modest 3% vote share in 2019. The election was Sri Lanka's first since ousting President Gotabaya Rajapaksa in 2022 following mass protests over economic mismanagement.(AP)