Turbulence kills passenger, injures dozens on Singapore Airlines flight

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

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Severe turbulence: One person has died and 53 are injured after a London to Singapore flight hit turbulence on Tuesday. 10 hours into the flight from London Heathrow to Singapore, the Singapore Airlines flight hit unexpected turbulence and descended 1,800 metres in the span of around three minutes. The flight was diverted and made an emergency landing in Bangkok where the injured are receiving medical care. A 73-year-old British man has been named as the passenger who died of a suspected heart attack. The route is popular for those travelling between Australia and the UK, and had 56 and 47 passengers of those nationalities respectively on board. A statement from Singapore Airlines says the flight from Singapore to London encountered "sudden extreme turbulence" over the Irrawaddy Basin (Myanmar) at 11,300 metres. (BBC)(Bloomberg)

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War games: World-leading chipmakers ASML and Taiwan Semiconductor Manufacturing Co (TSMC), can disable their chipmaking machines remotely should China invade Taiwan, according to sources cited by Bloomberg. US government officials expressed their concerns to both chipmakers about a potential Chinese invasion of Taiwan, where around 90% of the world’s most advanced chips are currently made. China claims that Taiwan is its territory, and Chinese President Xi Jinping has long been pushing for unification while refusing to rule out a military intervention. Dutch manufacturer ASML assured officials it would be able to switch off its chip making machines remotely in the event of a Chinese invasion, and has also run simulations on the scenario. In January, US officials pressured ASML to cancel shipments of its chips to China, weeks before the Netherlands own import bans were set to take effect. In addition to banning the export of US chips to China, the Biden administration increased its tariffs on imports of Chinese chips from 25% to 50% by 2025 last week. (Bloomberg)(Capital Brief)

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Keeping mum: Donald Trump opted out of testifying in his hush-money trial as his legal defence team rested its case on Tuesday. Whether or not Trump would testify has been a key point of interest for those following the trial, and the presidential candidate has previously asserted that he would testify, while on other occasions been more circumspect about taking the stand. If Trump had decided to testify, he would have been exposed to cross-examination by the prosecution. Trump has denied all of the 34 counts of falsifying business records to hide a payment to p*rn actor Stormy Daniels to buy her silence ahead of the 2016 elections. In damning witness testimony during the trial, Trump’s former fixer Michael Cohen said that the former president directed the coverup of the hush-money payment. The jury has been dismissed for the remainder of the week and will return next Tuesday to hear closing arguments. (Wall Street Journal)

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Air pocket: Amazon Web Services has paused its orders of Nvidia’s ‘superchip,’ as it waits for the release of a more powerful model. Nvidia unveiled its new ‘Blackwell’ generation of processors in March, just one year after its predecessor ‘Hopper’ was shipped to customers. AWS has fully transitioned its orders of the ‘Grace Hopper (GH)’ superchip to the ‘Grace Blackwell (GB)’ superchip in the new generation. Neither Amazon nor Nvidia confirmed the value of the order to the Financial Times. Analysts at HSBC have estimated that a GB200 chip, which includes two B100 chips, will cost as much as USD70,000 ($105,000), with the price of an entire server carrying the new technology running up to USD3 million. The FT reports that the pause may indicate a “potential air pocket” in demand for AI chips, until the GB superchips are delivered in the fourth quarter. Nvidia is due to release its earnings report at 7:00am AEST on Thursday. (Financial Times)

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Legal lags: In an SEC filing on Tuesday, Hess Corporation disclosed that it is facing three lawsuits tied to disclosures around its proposed sale to Chevron. In October last year, energy giant Chevron agreed to buy smaller rival Hess Corporation for around USD171 per share, or USD53 billion, in an all-stock deal. The SEC filing explains that the lawsuits challenge the sufficiency of the disclosures around the proposed transaction, and seek to delay or block the proposed sale. The filing states that in addition to the three lawsuits, several purported stockholders of Hess have sent demand letters alleging similar deficiencies regarding the disclosures made in its Proxy Statement. Hess added that all defendants named in the claims view that the matters are “without merit,” however, given the inherent uncertainty of litigation and to “moot plaintiffs’ disclosure claims and to avoid nuisance, potential expense and delay,” Hess has voluntarily supplemented the Proxy Statement with a number of disclosures. Hess shareholders are set to vote on the deal on 28 May. (Hess SEC filing)(Reuters)

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Risk-based regulation: The European Council has approved a new law which aims to harmonise AI rules across the European Union. The Artificial Intelligence (AI) Act is the first in the world to take a ‘risk based’ approach, whereby the higher the risk to cause harm to society, the stricter the rules will be. The Council said that as the first of its kind, the AI Act can set the global standard for AI regulation. The classification of AI systems will be carried out according to risk, with limited risk systems being subject to “very light transparency obligations” while high-risk systems would be authorised but subject to more onerous obligations in order to access the EU market. The rules will enter into force next month, and fines for violations range from €7.5 million or 1.5% of turnover to €35 million , or, 7% of global turnover. EU countries endorsed the AI Act on Tuesday, two months after lawmakers backed the legislation first proposed by the European Commission in 2021. (European Council press release)(Reuters)

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Typical arrogant socialist: Spain has permanently recalled its ambassador to Argentina, as a row escalates in government following comments made by the Argentine President, Javier Milei. At a rally in Madrid over the weekend, the South American leader called the wife of Spanish Prime Minister Pedro Sánchez “corrupt.” Milei referred to Sánchez’ decision in April to question whether he would remain in leadership after his wife, Begoña Gómez, became the target of a corruption probe. Milei railed against the potential abuses of power that stem from socialism, saying: “He has a corrupt wife, he gets dirty, and takes five days to think about what to do.” Spain’s foreign minister José Manuel Albares, said on Tuesday that “Argentina will have to continue without a Spanish ambassador.” Milei responded that the decision on Tuesday was “a typical crazy [decision] for an arrogant socialist.” (Financial Times)

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Attractive Aussie debt: Recent debt raisings by Australian banks have been heavily oversubscribed, driven largely by the same forces driving their elevated share prices: a shift in capital flows away from China. ANZ, National Australia Bank, Westpac and Bendigo & Adelaide Bank have raised debt funding of various tenors and in each case demand has exceeded the initial amount sought. The most notable recent raising was last week with ANZ’s Euro-denominated senior unsecured deal, the largest in over a decade, according to NAB’s credit weekly. Although difficult to measure, increasing uncertainty around China, economically and geopolitically, over the last year or more has led investors, both debt and equity, to lighten their exposure. Japan has been the biggest beneficiary, as the second largest Asian economy and third largest in the world, but Australia has also benefited as a safe haven, mature economy. (Capital Brief)