Good morning from Davos.
Put hundreds of CEOs from around the world into a small ski village for a week, and some clear themes usually emerge. A few from this year:
– The global economy is slowing, yet few of the business leaders here see clear signs of imminent recession.
– There is general agreement that AI is transforming business, but also that the hype remains far ahead of reality.
– The backlash against tech, and concern for data privacy, remains strong. Japanese Prime Minister Shinzo Abe told the group he wants “data governance” to be a focus of his chairmanship of the G20 this year.
– Plastic waste and its effects on the oceans have risen as a top concern of the Davos crowd. The CEOs of Dow, Coca-Cola and Pepsi were among those announcing new plans to control plastic waste. Salesforce CEO Marc Benioff said plastic “has become the nuclear waste of our generation.”
The undercurrent of many of the conversations here is a continuing sense that global capitalism may face an existential threat from the populist political forces roiling the world. Fortune assembled 35 CEOs at a dinner last night, for an off-the-record discussion of how business can better serve the needs of society. The conversation was clear evidence that a growing group of well-intentioned leaders are eager to demonstrate the power of business to address the problems fuelling economic unrest. But as one CEO put it, they face an urgent need to translate that intent into action and results.
More news below.
Following the sudden endorsement of Venezuelan opposition leader Juan Guaidó as the country’s new president by the U.S., Canada and many Latin American countries, the Venezuelan military says it’s backing President Maduro and viewing Guaidó’s actions as an attempted coup. Russia (a major creditor of Venezuela’s) is also lining up behind Maduro and warning the U.S. not to intervene in the country. The U.S. has now ordered non-emergency government employees to leave Venezuela. New York Times
Walmart has quietly withdrawn from Google’s Shopping Actions ordering service and Express delivery service. It’s a big blow for Google’s hopes of taking on Amazon in the e-commerce sphere. For Walmart, it signals a shift towards relying on in-house capabilities to do battle with Jeff Bezos. Bloomberg
Carlos Ghosn’s successor as chair of Renault is Jean-Dominique Senard, who is kind of the anti-Ghosn: far from being an outsider, he’s so elite that he’s actually a Roman count. The former Michelin boss is very likely to more strongly support Renault’s interests in the French carmaker’s alliance with Nissan and Mitsubishi. Financial Times
Goldman on Brexit
Goldman Sachs is the latest big firm to warn that a “difficult” Brexit will lead it to invest less in the U.K. The bank has already frozen its hiring in the country while stepping it up in the EU. CEO David Solomon: “If this [Brexit] is resolved in a difficult way, or in a hard way, I do think it’ll have an impact on where we invest in where we put people. All these things ultimately have an impact on the investment decisions and the business decisions that all of us as business leaders make.” BBC
Around the Water Cooler
Soros vs Xi
George Soros has described China’s algorithmically-enhanced President Xi Jinping as the “most dangerous” opponent to open societies. Soros: “I want to call attention to the mortal danger facing open societies from the instruments of control that machine learning and artificial intelligence can put in the hands of repressive regimes… The social credit system is not yet fully operational, but it’s clear where it’s heading. It will subordinate the fate of the individual to the interests of the one-party state in ways unprecedented in history.” CNBC
The U.S. and China have both made unfriendly moves around Taiwan. The Americans sent two warships through the Taiwan Strait, and China flew military jets near the island’s southern tip. Oh, and Japanese fighters have noticed an uptick in Chinese spy planes nearing their airspace. South China Morning Post
Commerce Secretary Wilbur Ross on unpaid federal workers visiting homeless shelters for food: “Well I know they are and I don’t really quite understand why.” Ross, who is worth an estimated $700 million, said they should be able to get loans, adding, “True, the people might have to pay a little bit of interest.” (Do watch this clip of his words dubbed over The Simpsons‘ Mr. Burns): NPR
Mark Zuckerberg wrote an op-ed for the Wall Street Journal, railing against those who criticize Facebook over its data-slurping ways. His argument in a nutshell: users can control whether the data is used for ad-targeting, but Facebook won’t stop collecting the data and it won’t “let them control how we use it for security or operating our services.” WSJ