The main conclusions of Davos

Panel discussions, back-to-back private meetings, negotiations to get to the best parties: The World Economic Forum in Davos, Switzerland, returned to its pre-pandemic form this year, as leaders gathered to discuss the state of the world.

It was the first Davos meeting since 2020 without Covid-related restrictions, as fears about the pandemic almost completely subsided. But there were many things on the minds of those in attendance. These are some of the main takeaways from the five-day conference, which ended on Friday.

There was talk of artificial intelligence everywhere. Many of the meeting spaces on Davos’ main street were advertised as places to learn about AI; dozens of official panels focused on the technology (including “Generative AI: Steam Engine of the Fourth Industrial Revolution?”); and the rock stars of the meeting were AI leaders like Sam Altman of OpenAI, Mustafa Suleyman of Inflection AI, and Aidan Gomez of Cohere. While the official theme may have been “rebuild trust,” the unofficial theme was almost certainly “artificial intelligence will reshape everything.”

At times, the enthusiasm for discussing the potential uses of AI surpassed the current reality of the technology, with many admitting that it was too early to accurately forecast its future. Attendees also discussed the potential risks of AI, including job losses, increasing social inequality and the rapid spread of misinformation. One industrial executive mused in a private discussion about whether the cost of retraining workers whose jobs were altered by AI would eat up much of the savings created by the efficiencies enabled by the technology, although others said they had always planned to reinvest those. savings in your businesses. business.

ESG may be on the back burner, but it’s still on the stove. As DealBook’s sister newsletter Climate Forward wrote this week, climate change wasn’t a big focus of discussion at Davos even though 2023 was the hottest year on record.

Still, executives in both finance and industry spoke positively about financial opportunities in the climate transition, including electric vehicles and loans for decarbonization projects.

Optimism prevailed, although cautiously. While attendees were quick to note geopolitical risks such as the rise of populist politics and two wars, the outlook in Davos seemed quite positive.

Executives noted that the macroeconomic outlook for much of the world looked promising, as the Federal Reserve and other central banks appeared poised to cut interest rates and inflation appeared largely under control. While some admitted that emboldened regulators could put the brakes on deals, nearly all said the companies were ready to get to work, through mergers and acquisitions, initial public offerings and more.

That said, many – perhaps chastened by Davos’ collective coronavirus blind spot in the 2020 conspiracy – said companies had to be prepared for potential challenges, including an expansion of the war between Israel and Gaza, a deepening of tensions between the United States and China over issues such as Taiwan and surprise shocks to the economy.

And here’s a final round of what was seen and heard at Davos this year:

  • At an annual luncheon hosted by Lally Weymouth, senior associate editor at The Washington Post, attendees had time to talk, but some went on so long that OpenAI’s Altman, arguably the business celebrity of this year’s event, only had a few moments. To talk, DealBook listens. (Blackstone’s Steve Schwarzman offered to give his time to Altman.)

  • A parlor game among attendees was to compare the scores generated by their Oura Ring health trackers, which were generally low given back-to-back meetings during the day and partying well into the night. (Andrew’s “readiness score,” Oura’s measure of whether “you’re ready to take on greater challenges or need some recovery and rest,” ranged between 50 and 60, out of 100.) Forum attendees less hypercompetitives said they were too afraid. to see your scores. —Michael J. de la Merced

Shares hit a new high. The S&P 500 index closed at a record high on Friday, surpassing its old high set in early 2022. Investors have focused on signs that the Federal Reserve is done raising interest rates and are betting that will help expand corporate profits.

Apple lost a patent fight. The company is removing a blood oxygen sensor from its Apple Watch Series 9 and Watch Ultra 2 after the International Trade Commission ruled that the company had infringed patents held by Masimo, a medical technology company. Apple this week lost an appeal to delay the device import ban imposed by the ITC

Donald Trump won the Iowa caucuses by a landslide, and now all eyes are on Tuesday’s New Hampshire primary, when she is expected to face a strong challenge from Nikki Haley in a state where independent voters can also cast their ballots. Trump’s victory came as he faces 91 felony charges and four criminal trials.

Dick Bove said he would retire after a 50-year career. A banking analyst whose contrarian and often bearish calls earned him few followers in Wall Street’s executive suites, the 83-year-old remained a media fixture until the last possible moment; He was quoted Thursday on Bloomberg discussing Trump’s impact on stock prices.

A federal judge threw JetBlue Airlines into confusion this week by blocking its $3.8 billion deal to acquire Spirit Airlines. Overseeing the appeal of that decision will be the first of several urgent challenges that await JetBlue’s new CEO, Joanna Geraghty, when she takes over next month.

Geraghty, 51, a longtime JetBlue executive, will succeed Robin Hayes, who cited health concerns and the “extraordinary challenges and pressures of this job” when he announced this month that he planned to resign.

Geraghty has been with JetBlue for nearly two decades, holding roles spanning legal, operations and human resources, and has served as chief operating officer since 2018. A lawyer by training, she worked at the law firm Holland & Knight prior to JetBlue. She will be the first woman to run a major US airline.

And he’ll have a tough mess to sort out when he takes over.

The first big task: oversee the appeal. JetBlue and Spirit said Friday that they had filed a notice of appeal with the U.S. Court of Appeals for the First Circuit. Such a measure is risky because it increases both costs and uncertainty.

The Justice Department had argued the existence of a “Spirit effect,” whereby Spirit’s existence forced other low-cost airlines to reduce fares. Paul Denis, who represented US Airways in its merger with American Airlines a decade ago, said he thought the judge who blocked the merger had wrongly assumed that Spirit would remain as strong a competitor as it had been. The airline, which has not made a profit since before the pandemic, has been cutting routes and is grappling with a heavy debt load. Spirit said about fridaand that it was evaluating options to refinance maturities due in 2025.

“It is not clear whether the Spirit effect will persist two years from now,” Denis said.

Still, the judge rejected the idea that Spirit was so weak that it needed to settle (the “bankruptcy defense”), arguing that the airlines “failed to present evidence that Spirit was in such a dire financial situation.” that he had no hope of recovering.” the future.” And as long as Spirit is in business, it will go after low-cost travelers, said George Hay, an economics professor at Cornell University who previously worked at the Justice Department.

“The only thing they have to offer is low cost,” Hay said. “Until they literally go bankrupt, they will continue to be a competitive force.”

Losing an appeal would likely mean JetBlue would have to compete on its own with the big four airlines. all four have a combined share of 66 percent of the domestic market. Making a deal with Spirit would have given JetBlue additional power in planes, airport gates and personnel. Other attempts to expand the company have also been thwarted: A previous partnership with American Airlines was blocked by its own antitrust concerns. And the airline lost its attempt to buy Virgin America to Alaska Airlines.

JetBlue also continues to struggle with post-pandemic changes. More air travelers are travel internationally, and a shortage of air traffic controllers persists, contributing to a clogged system. On Friday, the airline said that cut more routes to improve profitability and reliability. (The airline told CNBC that plans were already in the works before the judge’s ruling.)

We may soon learn how Geraghty looks to address these challenges: JetBlue will report earnings next week.


China released a series of bad news this week, but one fact stood out: the population declined for the second year in a row, according to government statistics. The country’s demographic crisis is not improving. The rapidly aging population is already putting pressure on health and pension systems, while making it much more difficult for President Xi Jinping to boost domestic consumption and reshape the economy. The lower birth rate of future workers also threatens growth in the medium and long term.

Some hope the Chinese lunar calendar can offer some help. The year of the dragon, which begins next month and occurs every 12 years, has historically seen a rise in so-called baby dragons. One reason is that some Chinese have traditionally believed that children born in a dragon year are more luck and more likely to be successful.

But experts warn there’s a problem: Women of childbearing age in China, who have fewer, if any, children than their fathers, are less likely to believe in old superstitions. “In the past there have been a greater number of births in auspicious years of the zodiac,” Wang Feng, an expert on Chinese demography at the University of California, Irvine, told The Financial Times. “But given the gloomy economic outlook and pessimism among young people, I doubt we will see a notable recovery this year.”

Thank you for reading! See you on Monday.

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