Japan’s 30-year yield piercing 3.28 % – its highest on record – is not an isolated tremor; it is the latest after-shock of a global bond quake that has already lifted U.S. 10-year Treasuries toward 5 % and Italian 10-year BTPs above 5 %. Investors are dumping long-duration debt in every major market, pricing in heavier fiscal deficits and waning central-bank appetite for rescue buying. (ft.com, reuters.com)

The speed matters. Yields on long JGBs have added one full percentage point in just six months—half the climb seen in 1998’s Asian crisis but in an economy now carrying a debt-to-GDP ratio above 260 %. London and Paris feel the heat too: 30-year gilts now match levels last seen during the 2022 “mini-budget” panic, while French OAT spreads are widening on deficit doubts. (theguardian.com)

History suggests such synchronised spikes precede regime shifts rather than mere corrections; 1994’s “Great Bond Massacre” foreshadowed a decade of fiscal consolidation, and 2011’s euro-periphery panic birthed radical ECB activism. Today, however, fiscal space is thinner and populist politics thicker. Unless governments deliver credible medium-term fixes, the market may keep voting with the sell button. As philosopher Byung-Chul Han warns, “When trust evaporates, control rushes in to fill the void.”

The Gist AI Editor

AI’s Insatiable Chip Appetite

The generative AI market is on a blistering growth trajectory, with projections showing its value swelling from approximately $23 billion in 2025 to over $109 billion by 2030, a compound annual growth rate of 37.6% (Grand View Research). This explosion is fueling unprecedented demand for high-performance semiconductors. The semiconductor industry itself is forecast to reach nearly $700 billion in 2025, a significant portion driven by chips powering AI data centers and applications (Deloitte, Infosys Knowledge Institute). This capital-intensive race sees tech giants like OpenAI and Microsoft making multi-billion dollar investments in AI infrastructure, including massive data centers requiring millions of advanced chips, underscoring a strategic pivot towards in-house development and diversified supply chains to mitigate geopolitical risks (Investing News Network).

The New Geopolitics of Silicon

Washington’s strategy of limiting China’s access to advanced semiconductor technology is prompting a global realignment. In response, Beijing is aggressively fostering its domestic chip industry (WSJ). Concurrently, nations like the UAE are positioning themselves as neutral AI hubs, with Abu Dhabi’s G42 actively courting US tech giants and alternative chipmakers like AMD and Qualcomm to reduce reliance on single suppliers (Semafor). This strategic maneuvering highlights the growing importance of “techno-nationalism,” where control over critical technologies like semiconductors becomes a primary instrument of state power and economic security.

Microsoft’s Independent Streak

In a significant move, Microsoft has unveiled its own in-house AI models, MAI-1-preview for text and MAI-Voice-1 for speech, signaling a strategic desire to reduce its dependence on partner OpenAI. While presented as a complementary effort, this positions Microsoft as a direct competitor in the foundational model space. This pursuit of sovereign capability reflects a broader industry trend where major players are vertically integrating their AI stacks, from chip design to model development, to optimize performance and secure their competitive edge. Our view is that such competition is a healthy market signal, likely to accelerate innovation and ultimately benefit consumers through better, more diverse products.

Innovation Beyond the Hype

Beyond the large language model arms race, significant innovation is occurring in specialized AI. The market for AI-driven code-generation tools, for instance, is projected to grow at a staggering 53% compound annual growth rate through 2029, reflecting strong enterprise adoption due to measurable productivity gains (S&P Global). This highlights a pragmatic, value-driven adoption curve running parallel to the more speculative, headline-grabbing advancements. The quiet integration of AI into specific enterprise workflows may prove to be the most disruptive and economically significant facet of the current technological wave.

Stay tuned for the next Gist—your edge in a shifting world.

Global bond sell-off hits Japanese government debt
— Financial Times

Aon in talks to return wealth unit to Madison Dearborn after a year
— Financial Times

JPMorgan Hires Hedge Fund Manager for China Health-Care Banking
— Bloomberg

Unwinding a decade of bad MA
— Financial Times

ANZ Starts Cutting Jobs in Institutional Banking Division
— Bloomberg

What if Macron resigned? Even the nuclear option won’t save France.
— Politico.Eu

Google’s Regulatory Reprieve

A US court has handed Google a significant victory, rejecting the Justice Department’s demand to sell its dominant Chrome browser. This ruling pushes back against the narrative that breaking up big tech is the only solution to market concentration, a welcome development for those skeptical of heavy-handed state intervention. While sparing Chrome from a forced divestiture—a move the judge deemed “incredibly messy and highly risky”—the court did not give Google a completely clean bill of health (ZDF). The company is now barred from certain exclusive contracts tied to search distribution and must share some search data with rivals to foster competition, representing a more targeted regulatory approach than a structural breakup (LA Times). This outcome reinforces that a firm’s integrated ecosystem, while dominant, is not inherently illegal.

Fast Fashion’s Circular Solution

Spanish retail giant Inditex is betting on market-led innovation to tackle textile waste. The parent company of Zara has inked a three-year, €70 million deal to purchase recycled polyester from Ambercycle, a California-based startup. This partnership will help scale Ambercycle’s technology, which regenerates polyester from post-consumer textiles, and supports the construction of its first commercial factory (El Pais). For Inditex, this secures a supply chain for its goal to have 25% of its textile fibers made from next-generation materials by 2030. It’s a pragmatic example of transatlantic cooperation and private enterprise driving the circular economy forward, sidestepping the need for cumbersome government mandates and showcasing innovation as the superior path to sustainability.

Catch the next Gist for the continent’s moving pieces.

USA: “Drogenboot” aus Venezuela ausgeschaltet
— ZDF

Trump, se perdiamo ricorso sui dazi è disastro economico
— Ansa

Jair Bolsonaro absent from trial on coup charges, citing health issues
— El Pais

Google muss Webbrowser Chrome nicht verkaufen
— ZDF

La fórmula de Inditex para reciclar el odiado poliéster de sus prendas
— El Pais

Söder fordert Dienstpflicht
— ZDF