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Equinor.co.uk Good morning from the Financial Times. Today is Wednesday, March 5th, and this is your FT News Briefing. Ukraine's president says his country is ready to talk about peace. And private equity has taken a hit. Plus, Taiwan thinks it has a bargaining chip with Donald Trump.
So TSMC is also known in Taiwan as the holy mountain that protects the nation. Now, these days, people are discussing whether the mountain is being moved. I'm Mark Filippino, and here's the news you need to start your day. Volodymyr Zelensky is working hard to repair his relationship with U.S. President Donald Trump. That comes after a tense meeting with the White House last week. On Monday, the U.S. said it was suspending all military aid to Kiev.
The move stunned Ukrainians and European allies. A pause would really limit Ukraine's ability to hold the front line in the war with Russia. Zelensky said on Tuesday that the Oval Office meeting was, quote, regrettable. He said that his country is still willing to sign a minerals deal with the U.S. at any time.
TSMC is Taiwan's technological crown jewel. But in recent months, the company has faced a lot of pressure to cozy up to the US. That's because Trump has accused Taiwan of stealing America's semiconductor business. But on Monday, TSMC made an effort to get on Trump's good side. So we are now very happy to announce we are going to invest additional $100 billion in Arizona. And being on Trump's good side is really important right now.
Ukraine learned the hard way what happens if you get on Trump's bad side. And like Ukraine, Taiwan can't lose America's military support. My colleague Catherine Hilla is based in Taipei, and she's been reporting on TSMC. Hey, Catherine. Hello. Okay, so explain the situation here for Taiwan. How can it relate to Ukraine? Well, the biggest similarity is that both countries sit next to a very large, powerful, and not necessarily very peaceful.
neighbor. China has for more than 70 years had a standing threat to annex Taiwan. China claims that Taiwan is part of its territory since ancient times, but the US has a commitment under US law to help Taiwan defend itself. So there is a certain... security support there, although no explicit pledge to come and intervene on Taiwan's behalf if China were to attack. Now, we've seen the relationship between Ukraine and the US deteriorate dramatically.
since Trump retook office. How has the relationship between the U.S. and Taiwan historically been under Trump? The interesting point is that the first Trump administration was actually good for Taiwan. The first thing Trump did after his first election was taking a call from Taiwan's then president. That was a big unprecedented.
Also, during his first term, he had several people in his administration who were pro-Taiwan. But then there are now significant concerns that this time may be very different. So Trump has since repeatedly made quite disparaging remarks regarding Taiwan in public. He has also indicated that the U.S. had been protecting Taiwan for free and he would make Taiwan pay for it. So what has Taiwan's government been doing to kind of stay on Trump's good side?
I think Taiwan is very conscious that Trump is a transactional leader and that it needs to prove its value. And Taiwanese government officials understand that in Trump's case, that would have to be in terms of money. So Taiwan's President Leitingde has pledged to increase investment in the U.S., but also procurement from the U.S. And that's squarely targeted at the fact that Taiwan has a large and growing trade surplus. with the US. And we're also seeing this.
latest big investment from an important company, TSMC, Taiwan Semiconductor Manufacturing Company. Do you think these moves are enough to maintain a U.S. security commitment? Well, that's a very sensitive issue in terms of public opinion here. And that's because TSMC has been viewed as somewhat of a guarantee of keeping democratic partners on side. So the logic of that is that as long as other countries remain highly dependent on chip supplies from Taiwan, they would have...
a higher interest in helping defend Taiwan. So TSMC is also known in Taiwan as the holy mountain that protects the nation. Now, these days, people are discussing whether the mountain is being moved. And on the political side... I think the same logic applies as in the Ukraine conflict. The moment that your great power supporter, in this case the US, publicly withdraws support, that...
would be a failure in deterrence, right? So the adversary, in the Ukraine case, Russia, or in the Taiwan case, China, would be almost encouraged to believe that the threshold to an attack would probably be... Catherine Hillow writes about Taiwan for the FT from Taipei. Thanks, Catherine. Thank you. The private equity industry shrunk last year. Buyout firms managed $4.7 trillion in assets as of June. The consultancy Bain & Company said that's down 2% from 2023.
It's the first time assets declined since the consultancy started tracking them in 2005. And the problems hitting P.E. aren't exactly going to ease up quickly. Bain says this could be a three or four year problem. Big businesses are stepping in to buy power from new wind and solar farms. They're filling a gap left by governments that pull the plug on subsidies for renewables. Here to tell me how much of a boost this is for the clean energy sector is the FT's Malcolm Moore. Hi, Malcolm.
Hi there. All right, Malcolm. So which companies are we mostly talking about here and just how much renewable power are they buying? So the answer is a lot. There was a 35%. jump in the amount of renewable power sold under these long term agreements last year. And the total amount of renewable power like communatively sold under these agreements is now I think somewhere around 270. gigawatts which is the equivalent of all of the power in Germany.
That increase has basically been entirely driven by tech companies. Amazon is the biggest. And then all of the others are in there, Google, Meta, Apple, so on. And the reason they're doing this is because they're promised that they're... Data centers that they're using to train AI and all those other things are going to be powered by green energy. So they are looking for the power as they build out those data centers. Can you explain the sort of commitments that these companies are making?
Yeah, so the best way to explain it is that these are long-term deals. directly between the people who are building the wind farms or the solar farms and the companies themselves. And it just stretches over a set period of time. So you'll say, I'll take this percentage and I'll pay this much for this many years.
And for banks, that's a really big deal these days. They want to be able to see or have some certainty over the long-term future of these projects. Now, as we've been talking about this... is helping to fill the gap left by governments in clean energy. What happened there? What we've seen is that there was a lot of enthusiasm pre-COVID from governments.
to really make the energy transition happen and to plow a lot of public money into renewable electricity. But now there are just lots of other spending concerns. They need to spend more money on defense. They need to spend more money on other things.
And so there isn't really quite as much money around. Now, on top of that, of course, there's been a lot of inflation. And that's also hit the people building wind farms and solar farms. And then, of course, interest rates are higher. So like with all of these things. layered on top of each other, it's become really a lot more uncertain for people who want to build these things. And so although we're still seeing record amounts of solar
being installed and record amounts of wind being built, the growth has really started to slow down and the picture is much less rosy. So to what extent can these contracts from big businesses offset some of these problems? Well, so it goes back to what I was saying before about certainty. So I was sitting with a very senior energy banker, and he was saying to me, look, there's still money. from banks to back these projects, but it's not open ended money anymore. And actually
What we have to see is that people want the electricity. And that demand, it can obviously come from consumers, but it should be coming from companies too. And he said increasingly companies are waking up to that and they can see that they need to drive these things.
But there are advantages for them as well, right? Because for the companies, they also get to predict what their power prices are going to be over the next 10 years. So if you are someone who uses a lot of power, and all of those tech companies do use a lot of power.
do they really want to be exposed to the fluctuations in the market? Or would they prefer just to take a price now and say, look, the economics of our project work on this basis over this period of time? Malcolm Moore is the FT's energy editor. Thanks, Malcolm. Thanks, Mark. You can read more on all these stories for free when you click the links in our show notes. This has been your daily FT News briefing. Check back tomorrow for the latest business news.