China is set to become a major player in the “highly lucrative” satellite navigation market, as it seeks to compete with the U.S. government-owned Global Positioning System (GPS), an analyst said Monday.
But China’s homegrown Beidou system is not likely to overtake the GPS system for now, said Craig Singleton, adjunct fellow at the hawkish Foundation for Defense of Democracies.
“China has marked a major step in its race to increase market share in this highly lucrative sector,” Singleton told CNBC’s “Squawk Box Asia.”
“The completion of the system also reaffirms China’s status as a world power. It represents a major declaration about its technical independence from the West, which carries wide-ranging geopolitical implications,” said Singleton.
Flags of the U.S. and China fly along Pennsylvania Avenue in Washington, D.C., on Jan. 17, 2011.
Andrew Harrer | Bloomberg | Getty Images
More than 120 countries — including Pakistan and Thailand — are using China’s Beidou system for purposes such as monitoring traffic at ports or guiding rescue operations, the analyst said.
And Beijing is counting on its massive Belt and Road Initiative to “convince” more countries to use Beidou, he added.
Singleton said Beidou’s completion has rekindled concerns among some in the West about the privacy and security of Chinese technology. He explained that some people fear Beijing could use its technology to track individuals, such as dissidents or democracy activists.
Such concerns have come as U.S.-China competition heats up in the technology space. The U.S. under former President Donald Trump introduced export controls on several Chinese tech companies, including telecommunications equipment maker Huawei and top chipmaker SMIC, or Semiconductor Manufacturing International Corp.
President Joe Biden has kept many Trump-era restrictions on Chinese companies. Biden is seeking to boost investments in U.S. research and development so that his country can build tech capabilities to compete with China.
For now, China’s Beidou system doesn’t appear to threaten the dominance of GPS, said Singleton.
“At this point, it doesn’t look as if Beidou is going to overcome GPS, but it’s certainly possible that we will see a bifurcated system, bifurcated world between GPS and Beidou in the future,” the analyst said.
— CNBC’s Arjun Kharpal contributed to this report.
The Starling Bank app displayed on a person’s phone.
Adrian Dennis | AFP via Getty Images
LONDON — British online lender Starling Bank on Wednesday reported a sharp drop in annual profit, citing an issue with Covid-era business loan fraud and a regulatory fine over financial crime failings.
Starling, which offers fee-free current accounts and lending services via a mobile app, posted profit before tax for the year ending March 31, 2025 of £223.4 million ($301.9 million), down nearly 26% year-over-year.
Revenue at the bank totalled £714 million, up about 5% from £682 million a year ago. However, that marked a slowdown from the more than 50% revenue growth Starling saw in its 2024 fiscal year.
Profits for the year were impacted by a £29 million fine by the U.K.’s Financial Conduct Authority over failings related to Starling’s financial crime prevention systems.
Starling also flagged an issue with the Bounce Back Loan Scheme (BBLS) that was designed to provide firms with access to cash during the coronavirus pandemic.
Starling was one of several banks that were approved to lend cash to firms during the Covid-19 outbreak in 2020. The scheme provided a 100% guarantee to lenders, making the government responsible for covering the full outstanding loan amount if a borrower defaulted.
However, Starling said it has since “identified a group of BBLS loans which potentially did not comply with a guarantee requirement” due to weaknesses in its historic fraud checks. After flagging this to the state-owned British Business Bank, the firm subsequently “volunteered to remove the government guarantee on those loans.”
“As a result, we have taken a £28.2m provision in this year’s accounts,” the bank said, referring to both the FCA fine and BBLS issue.
However, Starling said it held an Expected Credit Loss provision of £800,000 as of March 31 in relation to certain BBLS loans “where the guarantee provided under the BBLS guarantee agreement may no longer be available to the Company.”
“This is a legacy issue which we dealt with transparently and in full cooperation with the British Business Bank,” Declan Ferguson, Starling’s chief financial officer, said on a media call Wednesday.
Starling has operated as a licensed bank in the U.K. since 2018. It counts the likes of Goldman Sachs, Fidelity Investments and the Qatar Investment Authority as shareholders.
The firm, which was last privately valued in 2022 at £2.5 billion, faces hefty competition from both incumbent banks and rival fintechs like Monzo and Revolut.
An icon of ASML is displayed on a smartphone, with an ASML chip visible in the background.
Nurphoto | Nurphoto | Getty Images
More than $130 billion of value has been wiped off of ASML in under a year amid restrictions on exports to China and U.S. tariff uncertainty
Shares of ASML, which is seen as a critical cog in the semiconductor supply chain, hit a record high of over 1,000 euros a piece in July last year for a market capitalization of $429.5 billion, according to data from S&P Capital IQ. That fell to just under $297 billion at the Tuesday close price.
Semiconductor stocks have been volatile since last year due to tightening U.S. chip export restrictions to China and U.S. President Donald Trump’s threat of tariffs on the sector since he took office. ASML and other European semiconductor firms have felt the heat.
“All the equipment manufacturers in the space have come down because they are concentrating all the fears around … the U.S. restrictions to China,” Stephane Houri, head of equity research at ODDO BHF, told CNBC’s “Europe Early Edition” on Wednesday.
Houri also said tariff discussions and debate over whether companies are over-investing in artificial intelligence, bringing up questions over whether “demand is not at the level that many people expect.”
ASML is one of the most important companies in the semiconductor supply chain. It designs tools, known as extreme ultraviolet lithography (EUV) machines, that are purchased by manufacturers like TSMC and are required to make the world’s most advanced chips.
ASML is widely seen as the only company in the world that can produce these EUV machines, giving it a wide moat.
But ASML has never been able to ship its most advanced machines to China, which has cut off potential sales for the Dutch firm. ASML CEO Christophe Fouquet told CNBC in January that, in 2025, he expects the “ratio of our business in China to be lower than what it has been” in 2023 and 2024.
ASML is not alone in facing challenges from tariffs and China. Chip stocks across the world have felt pressure from the uncertainty in global markets linked to China and tariffs.
ASML upside?
A trade and tariffs deal between the U.S. and Europe could remove some uncertainty for investors.
“If there is an agreement in the end with President Trump and … Europe and many other countries, they probably will benefit from the relief in the market, and notably in the sector,” Houri added.
Despite the external pressures weighing on ASML, analysts are still relatively bullish on the stock. ASML has a target price of just over 779 euros, according to a average of analyst calls collated by LSEG. That implies around 17% upside from the Tuesday closing price.
This month, Wells Fargo published a note to clients after a meeting with ASML management. The analysts at the investment bank said ASML “remains positive on growth opportunities” in 2025 and 2026, highlighting companies such as Samsung and Intel who are spending on next-generation chipmaking tools.
UAE President Sheikh Mohamed bin Zayed Al Nahyan (R) welcomes his US counterpart Donald Trump upon arrival at the presidential terminal in Abu Dhabi on May 15, 2025.
Giuseppe Cacace | Afp | Getty Images
DUBAI, United Arab Emirates — Deep in the oil-rich deserts of the Middle East, the United Arab Emirates is on a mission to establish supremacy in the field of artificial intelligence.
Seven thousand miles across the planet, the United States, led by President Donald Trump, wants American firms to dominate the global AI race.
While their goals may be separated by continents, their ambitions are strikingly aligned.
The U.S. currently makes the world’s most advanced semiconductor chips, while the UAE and neighboring Gulf countries have the abundant, cheap energy needed to power enormous AI data centers. The two countries have been allies for half a century, and Abu Dhabi embraced Trump during the U.S. president’s visit this month with unprecedented fanfare and investment pledges, many of which focused on tech and AI.
In the eyes of many investors, financial leaders, and political powers players from Silicon Valley and Washington to Abu Dhabi and Dubai, the two countries’ ever-strengthening AI alliance — to which hundreds of billions of dollars have already been committed — is a match made in heaven.
“Energy‑rich Gulf nations join the roster of trusted partners just as U.S. data‑center grids hit their physical limits,” Myron Xie, an analyst at SemiAnalysis, told CNBC.
At the same time, “the UAE gains access to advanced compute and talent, helping it pursue its own sovereign AI goals,” Xie said. “The Middle East, flush with cheap energy and capital, is poised to become the next regional AI hub.”
In the UAE, the developments are part of a long-term strategy by the Gulf sheikhdom to position itself as a global leader in AI. This, the country’s leadership holds, will enhance its geopolitical influence, diversify its economy beyond crude oil dependency, and assert itself as a technological powerhouse.
The goal for Washington is clear: to ensure American companies lead the global AI race with China and spread American tech around the world.
Trump’s Middle East visit in mid-May — which featured stops in Riyadh, Doha, and Abu Dhabi — saw the announcement of over $200 billion in commercial deals between the U.S. and the UAE. This brought the total of investment agreements in the Gulf region, including those from Saudi Arabia and Qatar, to over $2 trillion.
As part of the Abu Dhabi deals, OpenAI, Oracle, Nvidia and Cisco Systems announced that they will help build Stargate UAE AI campus launching in 2026. The Stargate Project is a $500 billion private sector AI-focused investment vehicle, announced by OpenAI in January in partnership with Abu Dhabi investment firm MGX and Japan’s SoftBank.
It’s the kind of agreement that would have faced restrictions under the previous U.S. administration, but Trump has looked to change the way is approaching tech export restrictions.
His administration plans to rescind a Biden era “AI diffusion rule,” which imposed strict export controls on advanced AI chips even to U.S.-friendly nations. that doing away with these limits could open the door for the sensitive American technology to end up in the hands of rivals like China — a topic of ongoing debate among U.S. lawmakers and security professionals.
‘Compute, not crude’
Once known primarily as a partnership centered around oil exports and weapons purchases, the pillars of the U.S.-Gulf relationship are changing, says Mohammed Soliman, senior fellow at the Middle East Institute in Washington DC.
“Compute, not crude, is going to be the central pillar of the U.S.-Gulf relationship,” Soliman said. “Moving forward, it’s no longer going to be only about energy policy; it is going to be about compute and how we and the Gulf are building an AI ecosystem that’s able to service third markets, emerging markets.”
Compute, in the context of AI, refers to the computational resources, like hardware and processing power, needed to train and run AI models.
“And this is a huge inflection point for the relationship [compared to] where we were a few years ago,” Soliman said, speaking on a Middle East Institute podcast recorded on May 19. “Moving forward, the relationship is going to be much more impactful on technical questions around AI, data centers, and chips than ever before.”
Notably, the UAE has bet fully on a U.S.-led AI future — a particularly salient point within the context of U.S.-China competition.
Emirati AI company G42, which has major partnerships with OpenAI, Nvidia and Microsoft, to name a few, has fully divested from Chinese companies — including an estimated $100 million stake in TikTok owner ByteDance — to avert U.S. Commerce Department sanctions and retain access to Nvidia chips and other U.S. technology that powers AI applications.
“So far right now, we are racing to have the best large language model and ultimately to have AGI (artificial general intelligence),” said Baghdad Gherras, a UAE-based venture partner at Antler, which invests in early-stage AI ventures.
AGI generally refers to artificial intelligence that is smarter than humans, though definitions vary.
“For the UAE, if they want to be a leader in the AI race, the first thing that they have to secure is compute. If you don’t have compute, you won’t have a seat in terms of AI leadership,” Gherras told CNBC.
He added that the UAE “decided to re-shift the geo-economic focus from China to the U.S., because they understood that Nvidia makes by far the best chips for AI, but also the entire semiconductor supply chain is mostly in Taiwan.”
Still, Gherras noted, China “is catching up really fast, crazy fast.”
‘Tremendous level of influence’
The UAE’s development of its own large language model (LLM), Falcon AI, represents a major step for the region in AI development — but it also provides the foundation for the country’s geopolitical and economic ambitions to dominate the AI market within the next decade.
Such a position would also enhance the Emirates’ diplomatic leverage, allowing it to play a more influential role in global tech governance and policy discussions.
“If those ambitions become reality, you might see the Gulf acting as a region that offers compute as a service for the rest of emerging markets,” the Middle East Institute’s Soliman said.
“Think about the Gulf as a place that houses large language models in Swahili, in Hindi, in these languages, and they are able to offer housing data, training data, inference for all these economies, because they have the infrastructure,” he added. “So they become their AI leader for the emerging markets.”
“And this is a tremendous, tremendous level of influence, tremendous level of development,” Soliman emphasized. “Where they used to serve as energy producers, to become a back-end for AI applications — this is really, really massive.”
U.S. pushes American AI
Part of the U.S.’s push in the UAE and the broader region comes down to a desire for American technology to establish supremacy globally and push back the advances of China.
On the one hand, U.S. export curbs have restricted access for companies like Nvidia to sell advanced technology to China. It has also stopped China access some technology to advance its own development in areas like semiconductors and AI.
At the same time, Washington is opening up new markets, like the Middle East, to its biggest tech companies.
“The move has a political angle, as it bolsters the U.S. compute supply chains while constraining China. It grants the U.S. an edge in the AI arms race, positioning the country for continued leadership,” David Meier, economist at Julius Baer, said in note earlier this month.
Beijing and Chinese companies have been trying to access new markets to push their technology across the globe, especially in areas like AI. But the U.S. has been working to entrench itself first and strike partnerships with governments to do so.
“The race is on to diffuse U.S.-based AI into every part of the world,” Daniel Newman, CEO of Futurum Group, told CNBC on Tuesday.
American companies have taken up the call. OpenAI, which struck a deal with the UAE last week to build AI infrastructure and roll out ChatGPT nationwide, has positioned itself as a countermeasure to China and as the business able to deliver U.S. artificial intelligence to countries around the world.
In February, OpenAI’s chief global affairs officer Chris Lehane told CNBC that the company sees a world in which there are two major AI models — one led by China’s Communist Party and a U.S.-led “small ‘d’ democratic” AI.
“If you’re a country and you’re looking to build your own AI ecosystem, your own AI hub, you’re building developers in your country which are going to be some version of the companies of the future, I think you would prefer to be seeing that built on a democratic AI system because it is going to facilitate your country being able to use this technology for your own nation building purposes,” Lehane said.