- In today’s CEO Daily: Diane Brady talks to USA Rare Earth CEO Barbara Humpton.
- The big story: Trump calls for the execution of six Democrats.
- The markets: Down, down, and down.
- Plus: All the news and watercooler chat from Fortune.
Good morning. Ronald Reagan once joked that the nine most terrifying words in the English language are ‘I’m from the government and I’m here to help.’
There may be an exception to that saying: helping U.S. companies compete in rare earths, a realm where China now dominates mining, refining, and manufacturing.
That commitment certainly matters to Barbara Humpton, who last month left the top job at Siemens USA to become CEO of USA Rare Earth. Founded in Oklahoma in 2019, the company’s mission is to develop a domestic supply chain for magnets made with rare-earth elements, which are critical in everything from electric vehicles and computers to renewable energy and advanced manufacturing. “I’m delighted that I’ve arrived to find that the Trump administration is laser-focused on this,” she told me. “In the case of semiconductors, the U.S. holds some really important cards, but in rare earths, it’s rather the opposite, right?”
Washington has not yet bought a stake in USA Rare Earth (market cap: $1.62 billion), but Humpton said she has been in close communication with the Administration. As MP Materials CEO James Litinsky, whose mining company is now one of several partly owned by the U.S. government, recently told my colleague Jordan Blum: “This is really a Manhattan Project-style effort with all-out intensity.”
What’s surprised Humpton most during her first weeks on the job is that, as an industry, “we have not yet begun to operate as a healthy market outside of China.”
Her plan: Go to the most fragile parts of the supply chain, invest, and scale to fix any bottlenecks in supply and production. As a first step, the company recently announced the acquisition of Less Common Metals, a U.K.-based company that Humpton describes as “the only scaled metal and alloy maker outside of China, so we can dramatically scale that weakest link in the supply chain.”
As for Reagan’s warning: “I think government engagement matters right now,” said Humpton. “Once the flywheel gets going and we have robust capabilities outside of China, I believe the market will sustain itself, but we have to be on a sharp lookout for dumping.”
Then again, as we’ve seen with renewables, what one President giveth, another can taketh away. But, as she argues, “this is probably the most bipartisan issue in our government right now, to make sure that we are not dependent on China.”
Contact CEO Daily via Diane Brady at diane.brady@fortune.com
Top news
Trump calls for the execution of six Democratic members of Congress
The Democratic lawmakers, concerned over Trump’s use of troops against Americans on U.S. soil, had made a video urging members of the military to refuse illegal orders. Trump responded by demanding their arrest, trial, and the death penalty. “SEDITIOUS BEHAVIOR, punishable by DEATH!” he said on social media. The White House said it had not issued any illegal orders, and the Democrats did not cite any examples of such orders.
Nevada congresswoman cites Fortune reporting in letter calling for accountability from Elon Musk’s Boring Company
Congresswoman Dina Titus (D—NV) sent a letter on Wednesday to Nevada Governor Joe Lombardo demanding transparency and accountability over rescinded safety citations and environmental violations involving the Boring Company, Elon Musk’s tunneling operation, Fortune exclusively reported. Titus has called for a public hearing and federal investigation into the company’s Vegas Loop project and the safety concerns that Fortune has consistently reported on over the past two years. Gov. Lombardo’s press secretary did not immediately respond to a request for comment.
Zelensky says he is ready to talk about U.S. peace plan
The president of Ukraine said he is ready to discuss “their vision” for peace, referring to Washington’s 28-point peace plan to end the war between Russia and Ukraine. Although the plan contains some military security guarantees from NATO and the U.S., it is unlikely to be acceptable to Zelensky because it requires Ukraine to cede territory to Russia and reduce the size of its military, leaving it vulnerable to further incursion from Moscow.
Rise in ‘Bad PIKs’ shows ‘cracks’ in private credit market
The number of private credit deals that are changed after the initial deal is signed to include more risky terms for the lender is on the rise, according to Brian Garfield, Lincoln International’s managing director and head of U.S. portfolio valuations. 10.6% of all deals now feature a “payment-in-kind” (PIK), and of those a majority, 57.2%, are “bad PIKs,” where the original deal was changed prior to maturity.
Trump’s tariff rollback takes a chunk out of projected deficit reductions
New budget projections from the Congressional Budget Office indicate that Trump’s recent rollbacks of his tariffs have negated nearly $800 billion in expected reductions from U.S. deficits. In August, the agency projected that the tariff policy at that point could reduce the deficit by $3.3 trillion through 2035.
DOJ announces arrest of semiconductor smugglers
The Department of Justice announced on Thursday the arrest of four men alleged to have run a smuggling operation moving Nvidia chips from Alabama through Malaysia and Thailand into China. The DOJ’s indictment accuses the Chinese military of seeking these chips for “weapons design and testing, including for weapons of mass destruction as well as in connection with the PRC’s development and deployment of advanced AI surveillance tools.”
Jefferies’ Chris Wood warns of ‘AI capex arms race’
Wood has a track record of spotting speculative bubbles. He called the dotcom boom, Japan’s credit bubble and the U.S. housing bubble before many of his contemporaries. So when he warned of an “AI capex arms race” at the Fortune Innovation Forum in Kuala Lumpur, Malaysia on Tuesday, the audience paid attention.
Clifford Chance to cut 10% of London employees, citing AI
The international law firm told its staff that the job losses were happening due to a greater use of AI and “the creation of new roles, changes to the scope of roles, revised team structures and in some cases a reduction in roles,” the FT reports.
The markets
S&P 500 futures were flat this morning. The last session closed down 1.56%. STOXX Europe 600 was down 0.8% in early trading. The U.K.’s FTSE 100 was down 0.49% in early trading. Japan’s Nikkei 225 was down 2.4%. China’s CSI 300 was down 2.44%. The South Korea KOSPI was down 3.79%. India’s NIFTY 50 is down 0.52%. Bitcoin was down at $82K.
Around the watercooler
Unemployment could hit 25% among recent grads and trigger ‘unprecedented’ social disruption thanks to AI, U.S. senator warns by Preston Fore
Crypto’s Q4 wipeout is among worst in memory–but better times may be ahead, says analyst by Carlos Garcia
Elon Musk says that in 10 to 20 years, work will be optional and money will be irrelevant thanks to AI and robotics by Sasha Rogelberg
Gen Z men are flocking to quarter-zip pullovers—they’re trying to fake it until they make it in a job market stacked against them by Nick Lichtenberg
CEO Daily is compiled and edited by Joey Abrams and Claire Zillman.
