Also: Trillion-dollar club, a tech-funded university, the end of DEI?
Good morning, Peter Vanham here in Geneva, filling in for Alan.
Walking a tight rope is not without its risks. But for the right reward, anyone may give it a try.
The geopolitical high wire American business leaders are tiptoeing today runs between Hiroshima and Shanghai. In Hiroshima last week, G7 leaders gathered to agree on a China “de-risking and diversifying” strategy. Yet some of the U.S.’s most powerful business leaders are visiting Shanghai this week to protect and expand their Chinese business interests.
The case of Elon Musk visiting his Shanghai Tesla plant is the most straightforward: China is Tesla’s second largest market; its factory there is the electric carmaker’s largest production hub. Tesla already cut its prices this winter to protect its market share in China; letting China’s foreign minister politicize Musk’s visit is another price to pay.
Jamie Dimon, CEO of JPMorgan, has similar reasons to straddle Sino-American tensions. A few months ago, he was helping Washington contain a domestic banking crisis. Today, he is in Shanghai, convening a conference. That JPMorgan earned approval to fully own its Chinese mutual fund earlier this year—unlocking a multi-trillion dollar market in the process—is a likely reason to prominently gather there.
Then, there is perhaps an even more mundane factor in American business leaders deciding to overtly retrace Henry Kissinger’s China visit: it’s been a while since they were last there. (By the way, Kissinger, at 100, is one of the speakers at Dimon’s Shanghai conference today, albeit virtually.) This spring marks the first time in three and a half years that China is somewhat accessible to foreign visitors. Even my former employer, the World Economic Forum, is returning to China in less than a month for its annual China summit.
Such visits may not halt the “de-risking” on both sides, especially when it comes to sectors related to national security, like advanced semiconductors, and as relations between political leaders remain frigid. But the thaw that President Joe Biden alluded to in Hiroshima may indeed materialize for business leaders who can pull off the China-U.S. balancing act—with profits as a reward.
More news below.
Peter Vanham
peter.vanham@fortune.com
@petervanham
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$1 trillion club
Chip company Nvidia briefly breached $1 trillion in value on Tuesday, though fell just below that threshold by market close. Only six other U.S. companies have ever passed a 13-digit market cap: Apple, Alphabet, Microsoft, Amazon, Meta and Tesla. Nvidia is banking on A.I. for its future, with CEO Jensen Huang announcing a suite of new A.I.-powered services on Monday. Fortune
‘Forbidden courses’
Venture capitalists are pouring money into a new university that promises to teach “forbidden courses” suppressed by the current political and cultural climate. One-third of the University of Austin’s donations come from the tech sector, President Pano Kanelos tells Fortune’s Jessica Mathews. The university’s backers have courted controversy in their vocal criticisms of concepts like “cancel culture” and “wokeness.”
DEI worries
Diversity, equity and inclusion consultants are worried that an upcoming Supreme Court case on affirmative action could threaten their business, report Fortune’s Trey Williams and Paige McGlauflin. A court ruling that ends race-conscious admissions in universities could shift the conversation on DEI in general, encouraging companies to stop investing in such programs altogether. Some firms are already pausing their inclusion efforts after political pushback in states like Florida and Texas.
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Engaging consumers through TV, gaming and UGC The blended realities of younger generations are changing the media and entertainment landscape, according to Deloitte’s 2023 Digital media trends report. In fact, half of all Gen Zs and Millennials in the US consider online experiences to be meaningful replacements for in-person experiences. So, how might leaders evolve their business strategies to engage people across media and deliver more value? Read more.
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