The weak point — where the EU can hit back

April 4, 2025
by Björn Jeffery
SvD Näringsliv

This analysis was first published in SvD Näringsliv, in Swedish, on April 4th, 2025. This piece was translated from Swedish by Claude. Some phrasing may differ from a human translation.

Stock markets are deep in the red as the world tries to understand how the new tariffs will hit. Caught in the middle are the American tech giants — whose global operations are now under threat.

With a combined market capitalisation of well over 120,000 billion kronor, the chiefs of the largest American tech companies had gathered to watch Donald Trump be sworn in as president again. It was late January 2025, and it would be hard to find a clearer image of the twenty-first century’s new economy.

Little did those executives realise that less than three months later, the country would have a trade policy more reminiscent of the late nineteenth century.

Rarely has such a sharp contrast arisen between the way tech giants conduct their global operations and the protectionism that Trump is now introducing with his trade tariffs.

Apple is an American company headquartered in the small city of Cupertino, about an hour south of San Francisco in California. More than half of all its sales take place outside North and South America, with 25 percent coming from Europe. Its products are manufactured to a very large extent by partners in China, and it has in recent times expanded significantly in both India and Vietnam.

Such is the complex global reality and market of this American company. And it is far from alone.

Virtually the entire world — countries, pension savers, and companies — is now trying to understand how the new tariffs will affect them. And they have very little time to prepare. The first tariffs start this weekend, and the rest follow in the middle of next week. The globalisation that placed the US at the centre of the world economy suddenly looks shakier than ever.

Once the initial shock settles, plans for retaliation will be drawn up. The EU immediately came out and stated that it would need to “support our manufacturing industry” — but also that by the end of April it would be targeting “all goods and services.”

The word “services” is particularly significant. When Trump and the US calculate what they perceive as an imbalance in trade, they have only looked at goods. This is, as noted, a very classical view of economics — one that would fit rather more comfortably a couple of centuries ago. For while a typical car sold might carry a profit margin of around 5 to 10 percent, the services company Meta — which owns Facebook and Instagram — had a profit margin of over 43 percent in its most recent quarter. But none of these services are counted in Trump’s model that dictates the tariffs.

This is almost certainly where the EU will strike back hardest. And virtually all of the tech executives who stood on Trump’s stage in January will be affected. Operations such as Amazon’s AWS, Google’s advertising, and Netflix are likely to find themselves directly in the crosshairs. Virtually all of Europe’s digital infrastructure for work and leisure runs on American services. We watch videos on Instagram, chat with colleagues on Slack, and hold meetings on Microsoft Teams. Americans, for their part, use very few European services. They may listen to music on Spotify — but further examples are hard to find. The asymmetry makes this an especially well-suited area for the EU to exploit.

Even if Trump’s rhetoric suggests otherwise, it is often difficult to find clear winners in a trade war. If the EU imposes punitive tariffs on digital services, the profit margins of American tech companies will take a hit. But the price of your Netflix subscription will likely increase too. Your pension savings — heavily influenced by American tech stocks — will be negatively affected. And this has only just begun.

The mere prospect of where this could lead has sent stock markets into a tailspin. On Thursday, over 3,000 billion kronor was wiped from Apple’s market capitalisation as American Nasdaq had its worst day in five years. The last time things were this bad, the world had just begun to grasp the effects of COVID-19. Investment bank JP Morgan raised its assessment of the risk of a global recession to 60 percent — up 20 percentage points from before Trump’s tariff announcement. China responded on Friday with 34 percent tariffs against the US.

The United States wants to drive investment at home through re-industrialisation and a focus on domestic production. But a large part of the country’s economy is locked into a globalised world that cannot be restructured quickly — or perhaps at all. You cannot move factories halfway around the globe. And even if you could, the result would be sharply higher costs for identical products.

Even patriotic business leaders in the United States have now been given serious pause for thought. One can be in principle supportive of the idea of a strong domestic market that takes care of itself. But the reality is that many American companies are locked into a globalised world that has made them both extraordinarily successful — and dependent on the rest of the world. And the tech executives in particular must be wondering what on earth they have got themselves into.

The collaboration will be presented as a success

April 2, 2025
by Björn Jeffery
SvD Näringsliv

This analysis was first published in SvD Näringsliv, in Swedish, on April 2nd, 2025. This piece was translated from Swedish by Claude. Some phrasing may differ from a human translation.

Elon Musk may be on his way out from Donald Trump’s side, but both will want to present the collaboration as a success. Going forward, Musk can be deployed — or sidelined — in whatever measure is deemed most useful to Trump.

Most people have seen it as only a matter of time before one of two things would happen: either Elon Musk would end up on a collision course with Donald Trump and come to be seen as a problem, or Musk’s companies would be hit so hard that he would be forced to focus on them.

Both of these things appear to have happened simultaneously.

The extremely expensive judicial election in Wisconsin — in which Musk handed out cheques of one million dollars to selected voters — did not go his way. The Republican candidate lost. One way to interpret this is that Musk’s popularity is not as great as Trump may have hoped. Having very large amounts of money to spend on American elections is certainly helpful, but it is evidently not always sufficient.

The other thing that happened was that Tesla reported its sales figures. The number of cars it delivered to customers was the lowest since 2022 — well below analysts’ estimates. The share price has also fallen around 30 percent since the start of the year. Elon Musk is accustomed to doing largely what he wants, but these are numbers that even he should be reacting to — especially since Tesla’s difficulties are to a significant extent bound up with Musk himself and his political involvement.

Musk is the single largest shareholder in Tesla, but he is not the only one. The company is publicly listed and several voices have been raised asking why a company with such obvious problems does not have a CEO who devotes all his time to solving them. Any other CEO would have been dismissed by the board long ago. But not Musk. He is not entirely immune, however. The majority of his wealth consists of Tesla shares, so his interests are closely tied to the company.

Beyond the Wisconsin election and Tesla’s difficulties, the DOGE project has also progressed some distance. Units have been scrapped, thousands of employees dismissed, and entire operations wound down. At some point, it becomes impossible to cut further without shutting down every department entirely. Being able to point to some form of partial victory is likely an incentive for Musk, even if the cuts fall far short of what he promised before the election. Such a partial victory is something he can now claim.

Another factor is that Musk holds the status of “special government employee,” which means he is temporarily exempt from rules on conflicts of interest and the like. This status will expire in May or June, according to Politico — which would in any case need to mark some form of change in his assignment.

Both Trump and Musk will be keen to make the collaboration look like a success. A fairly safe prediction is that they will both declare victory on the spending cuts, after which Musk will transition into a more advisory role. There he can be deployed — or sidelined — in whatever measure is judged to be most advantageous to Trump and his objectives.

Elon Musk will need to work hard to restore the trust of the market and consumers in Tesla. The electric vehicle market is undergoing enormous change and is on the verge of becoming extremely competitive, with major Chinese players pressing forward. And that was before Musk threw himself into politics and alienated prospective Tesla buyers. He faces — to put it mildly — a significant challenge ahead, and is unlikely to have any trouble filling his days once his formal political assignment comes to an end.

It’s starting to show that Musk is in debt

April 1, 2025
by Björn Jeffery
SvD Näringsliv

This analysis was first published in SvD Näringsliv, in Swedish, on April 1st, 2025. This piece was translated from Swedish by Claude. Some phrasing may differ from a human translation.

When Elon Musk merges companies X and xAI, it is said to be about strategy. It looks more like a way to manage the companies’ — and the billionaire’s own — increasingly troublesome debt burden.

The world’s foremost billionaire is having a tough time right now.

Tesla is falling heavily on the stock exchange and major protests are taking place against both Elon Musk and buyers of his cars. Critics argue that he is devoting too much time to political assignments and too little to his companies.

Storm clouds have gathered in his personal finances too. The world’s richest man is most likely also one of the most heavily leveraged. And now Musk is restructuring his empire in an attempt to secure his position.

The recent announcement was that Musk is merging his companies X and xAI. Given the man’s preference for a particular letter, and the fact that Grok — xAI’s chatbot — is already integrated into X, one might assume the companies were already essentially one. According to Musk himself, the purpose of the deal is to “unlock tremendous potential” by combining the reach of X with the AI capabilities of xAI.

That integration, however, is already happening today. More likely, the deal is about something else entirely: namely Musk’s debt — and more specifically the collateral he holds against it.

Billionaires like Elon Musk are usually rich through their assets, rather than through what is available in their bank account. In Musk’s case it is his shares in companies such as SpaceX and Tesla that have made him the world’s richest person.

But from time to time, real cash is needed to cover day-to-day expenditure or new business acquisitions — such as when he bought Twitter for 44 billion dollars in 2022. The solution is typically to borrow against one’s shares to free up funds, without having to sell anything. In the case of Twitter, subsequently renamed X, the company itself was also leveraged: 12 billion dollars in loans therefore came along with the newly formed acquisition.

A further 25 billion dollars came from Musk himself, largely financed through Tesla share sales in 2022. Half of Musk’s current Tesla shares are pledged as collateral for personal loans of up to around 3.5 billion dollars. There is still headroom for Musk to borrow more against the remaining shares — but after Tesla’s share price has fallen around 30 percent so far this year, the situation has begun to look rather shakier.

One does not need to speculate about the risks of Musk’s Tesla share pledging — the company has itself acknowledged them on several occasions. In a document Tesla submitted to the American financial regulator under the heading “risks related to ownership of our shares,” one can read the following:

“If the price of our common stock were to decline significantly, Mr. Musk could be forced by one or more of the banking institutions to sell shares of Tesla to meet his loan obligations if he cannot do so through other means. Any such sales could cause the price of our common stock to decline further.”

To provide some protection against this outcome, Tesla has a policy that its most senior executives may only pledge 25 percent of their share value. But with a volatile share price, things can move quickly. Hundreds of billions of dollars in market capitalisation have been wiped from Tesla since the start of the year alone.

One might, however, wonder which bank would in practice dare to force a sale of Musk’s shares. He is not merely wealthy — he is also one of the most powerful people in the world.

The X and xAI deal looks more like something driven by Elon Musk’s personal finances than by any corporate strategy. By linking X to his fast-growing AI company, future fundraising becomes considerably simpler, and managing the companies’ and his own personal debt load becomes easier too. Should Tesla’s share price continue to fall, Musk now has a more stable asset to rely on.

Investing in one of Musk’s many companies has previously come with a premium — you get Elon Musk thrown in. That has been a partial explanation for the often high valuations. That premium — for all his companies, and perhaps most of all for Tesla — is now in the process of becoming a cost rather than a benefit for investors. Because there are other shareholders in both X and xAI. They are now being pressed into new corporate combinations backed by weak strategic arguments — for the simple reason that Musk needs to restructure and shore up his own personal finances.

Klarna’s move is bold to say the least

March 15, 2025
by Björn Jeffery
SvD Näringsliv

This analysis was first published in SvD Näringsliv, in Swedish, on March 15th, 2025. This piece was translated from Swedish by Claude. Some phrasing may differ from a human translation.

Klarna is venturing into unknown waters by applying for a stock market listing in a turbulent market. Has the company bitten off more than it can chew?

Wearing race bib number 749, Briton Derek Redmond stands in the starting blocks. It is the 1992 Olympics in Barcelona, and he is about to run the 400-metre semifinal.

Just over halfway around the track, Redmond suddenly stops and grabs the back of his thigh. He has clearly injured himself and his race appears to be over. But then he begins to hobble forward. In the final bend, his father comes onto the track and helps him across the finish line, his arm around his son’s shoulder.

The scene is legendary. Redmond becomes a hero for finishing the race in spite of extraordinarily difficult circumstances. Preparing for a potential Olympic final is the pinnacle of any track athlete’s career. You cannot give up when you have come so close.

Late on Friday evening, Klarna announced that it was formally applying for a stock market listing on the New York Stock Exchange, NYSE. The ticker will be “KLAR.” In the opening CEO letter of the prospectus, Sebastian Siemiatkowski writes that those who choose to invest in Klarna are not merely investing in a company — but in “a new era of finance.”

A lack of self-confidence has never been Klarna’s problem, or Siemiatkowski’s. But it is impossible not to think of Derek Redmond when you know what a long journey it has been for Klarna to reach this listing. And when they are finally ready to complete it — the market is the most volatile and difficult it has been in many years. One can understand how it feels too late to turn back.

The tech-heavy Nasdaq 100 index has fallen around six percent so far this year. Affirm and PayPal — two other payment companies with some resemblance to Klarna — have fallen substantially more, around 20 percent each.

Even companies like Apple — long looking almost immune to outside forces — have fallen by twelve percent. Threats of trade tariffs and a somewhat chaotic period of new economic announcements have created exactly what markets dislike most: uncertainty and unpredictability.

Klarna likes to be a challenger and to go against conventional wisdom. Its arch-enemies are the big banks and the credit cards — the entire financial establishment, really. The company is used to being questioned and criticised. The underdog role is almost embraced. Klarna does not want to be like everyone else, and thrives on that.

Running your own race is, however, considerably easier as a private company than as a publicly listed one.

Klarna is also not an underdog in the traditional sense, with 28 billion kronor in revenues and around 675,000 retail merchant partners.

Yes, the company is substantially smaller than the major American banks. But Klarna has grown. It has become extraordinarily successful since being founded in 2005. Now customers, employees, and investors depend on it directly. Just because you feel like an underdog does not mean you need to act like one.

If you have been a success in the private market, you may need to get used to becoming one among many on the exchange. And also to following the rules — formal and informal — that apply there. Macroeconomic factors carry greater weight. You are priced as a company every single day.

When market sentiment turns sour, it will affect Klarna directly — even if it has nothing whatsoever to do with them or their business.

And sour is exactly what the market is right now. Going public in the middle of this is bold, to put it mildly.

One possible explanation is that the volatile environment may persist for a long time. Trump will be president for many more years. Will he suddenly return to conventional free trade and reverse everything he has done so far? Who knows, but probably not. Waiting for more predictable times could therefore be pointless.

If Klarna intends to be a listed company for a long time, this is precisely the kind of situation it will need to navigate sooner or later anyway.

But I keep thinking of Derek Redmond nonetheless. The determination to complete your race at all costs — even when stopping might have been the wiser choice. Redmond did indeed become a hero. But he never recovered from the injury either. Two years after that famous race, he was forced to retire prematurely.

Klarna has had an extraordinarily successful journey to reach this point. One must hope they are not risking too much simply in order to complete this particular stage exactly as originally planned.

One big question about the collapse remains unanswered

March 12, 2025
by Björn Jeffery
SvD Näringsliv

This analysis was first published in SvD Näringsliv, in Swedish, on March 12th, 2025. This piece was translated from Swedish by Claude. Some phrasing may differ from a human translation.

Why Northvolt could not be saved is no mystery. A larger — and more important — question is why the company chose to grow so aggressively rather than first building a sustainable production operation. That question remains unanswered.

Northvolt AB’s board describes the past few months as “an exhaustive effort” to find “a viable economic and operational future.”

One might wonder if the company has ever done anything other than exactly that.

The story of Northvolt has been at least as much about financing as about batteries. And perhaps most of all about the absence of both.

Companies facing challenges with raising capital is nothing unusual in itself. Northvolt had a stock market listing in its sights and viewed it as the company’s natural long-term home. But market conditions around the world deteriorated and the company did not deliver as it should have. You cannot list a company whose factories have not even reached a fraction of their intended capacity.

The absence of batteries created an absence of financing.

To attempt to address this, Northvolt applied for restructuring in the United States in November 2024 — a so-called Chapter 11 process. That process has now failed. At the press conference, interim chair Tom Johnstone said he did not want to look backwards on this occasion but instead focus on the bankruptcy process here and now.

But a look backwards is appropriate, because the question now being asked is the same one many have been asking for many months: who was supposed to save Northvolt, exactly? Who was going to step forward and take responsibility for the long-term operations?

Johnstone gave an indirect answer to SvD: “no buyer has been interested in the entire unit.”

That is easy to understand. The operations consist of factories and factory projects around the world that are not functioning as intended. Rather than getting the factory in Skellefteå to reach its desired capacity — and only then expanding — Northvolt’s expansion plans appear to have been driven by opportunism. The green transition beckoned, and regions around the world saw an opportunity for a new wave of industrialisation: new, green jobs in a sector with its future ahead of it. Which local politician would turn that down? Northvolt struck while the iron was hot.

The warmth, however, was never greater than around the promises of what was to come.

The Northvolt Drei factory in Heide, Germany is now a construction site with an uncertain future. The 3,000 promised jobs will in all likelihood not materialise. Northvolt Six in Montreal is in a similar situation, even if those two subsidiaries are not currently in bankruptcy.

Finding a buyer willing to take on this mess always seemed improbable. There was no saviour — in the time of need or before it either.

Even if the opportunistic expansion complicated the business, there was always a clear solution to Northvolt’s problems. They needed to produce more batteries. Many, many more batteries. Their failure to do so is the simple core of what became the company’s downfall.

The difficulty of setting up this type of industrial operation in Sweden should not be underestimated. But precisely because it is so complex — why was more focus not given to solving that first? Why were operations, and their costs, scaled up so far before there was certainty about how to proceed?

Even today, we have no good answers to those questions. Acting opportunistically when the world shows great interest in your planned business is part of the explanation. But it is not sufficient as a complete one. One of Sweden’s largest ever corporate bankruptcies is now a fact, and thousands of employees have lost their jobs — staff who relocated from around the world and now sit in Skellefteå facing a deeply uncertain future. Over one hundred billion kronor in investments has been incinerated.

The responsibility rests heavily on both the company’s management and its board. The expansion was too fast, costs too high, productivity too low. Decisions about restructuring took too long — even though the need had been plainly visible for a considerable period. Whether there were grounds to believe a sustainable solution was within reach, we do not know today. Hope, as the saying goes, is the last thing to abandon us. Now even that has run out for Northvolt.

The EV giant held hostage by its own CEO

March 10, 2025
by Björn Jeffery
SvD Näringsliv

This analysis was first published in SvD Näringsliv, in Swedish, on March 10th, 2025. This piece was translated from Swedish by Claude. Some phrasing may differ from a human translation.

Around 8,000 billion kronor in market value has been erased from Tesla in recent weeks. Meanwhile, the company’s CEO Elon Musk is busy with politics that is driving away customers. No other listed company would be allowed to be run like this.

For seven consecutive weeks, Tesla’s share price has fallen. That is the longest such decline the company has experienced since it was listed on the stock exchange in June 2010. Since the start of the year, almost 45 percent of the company’s market value has gone up in smoke.

In normal circumstances, the head of such a company would be working day and night to restore market confidence. But nothing is normal when it comes to Tesla.

Having a well-known and admired figurehead is a familiar strategy. Steve Jobs was long synonymous with Apple, Warren Buffett with Berkshire Hathaway, and Richard Branson with Virgin. The more exciting the person in question, the greater the interest in the company too.

But the risk of this strategy is precisely what Tesla is experiencing right now. As a business leader, one probably still has to consider Elon Musk “exciting” — just perhaps not in the way Tesla’s shareholders appreciate. While he stands alongside Donald Trump in the Oval Office, or at a political event with a chainsaw in his hand, there is an electric vehicle company whose share price is suffering.

Yes, there are executives at Tesla who can manage the business without Musk — who also runs the companies SpaceX, xAI, X, and Neuralink. But appearances matter. You cannot simply take the positive associations of a CEO. Now that public opinion has turned against him in several markets, not least in Europe, Musk has become a liability for Tesla.

In a situation like this, one should look at the board’s responsibility. In an ordinary listed company, they could have fired the CEO by now.

Chair Robyn Denholm has taken action, but not through public statements. She has, however, sold Tesla shares worth around 1.17 billion kronor since the start of the year. Elon Musk is Tesla’s largest shareholder with around 20 percent of the shares. The remaining shares are owned by others — pension funds and the like. Tesla is, for example, one of both the Fourth and Seventh AP Funds’ largest holdings. The Tesla board has a responsibility to represent their interests as well as those of its major shareholder. So why is nothing happening?

One answer comes when you look at the board’s composition. There you find JB Straubel, one of Tesla’s co-founders who served as the company’s chief technology officer for 15 years. Straubel is likely to be unusually knowledgeable, but has been a direct colleague of Musk for more than a decade.

Another name is James Murdoch, one of media mogul Rupert’s sons, who is a personal friend of Musk. A third has a familiar ring — Kimbal Musk, Elon’s brother. And in true American fashion, Elon Musk himself also sits on the board. In total there are eight members, but their independence is open to question.

Tesla therefore finds itself in a difficult position. The electric vehicle company is being held hostage, in effect, by a chief executive and major shareholder who has historically been its single greatest driver of success. It is Musk’s visions that have meant the stock has long since stopped being traded as a car company on the exchange.

Statements such as “there is a path for Tesla to become more valuable than the next five largest companies in the world combined” — something he said at the most recent quarterly report — are spectacular and conjure images of robots, self-driving cars and AI instead. The approach, whether he is right or wrong, has been successful.

But as much attention as Musk has received for his visions, he is now receiving for other things — such as, for example, suggesting that the US should leave NATO and the United Nations.

Sales of Tesla cars are falling sharply in several European countries. In a private company, his room for manoeuvre would have been greater. But Tesla is a listed company. His freedom depends on the remaining shareholders concluding that Tesla is worth more with Musk than without him. That equation has until now been extraordinarily straightforward. If the share price keeps falling in the same way, it will become considerably more complicated.

Out of the corner of shame — into the ‘strategic reserve’

March 3, 2025
by Björn Jeffery
SvD Näringsliv

This analysis was first published in SvD Näringsliv, in Swedish, on March 3rd, 2025. This piece was translated from Swedish by Claude. Some phrasing may differ from a human translation.

While Musk searches through the machinery of state looking for waste, Trump has found a new way to spend Americans’ tax money — on cryptocurrencies. This creates a new problem for those who believe in bitcoin.

“Many Americans don’t realise that the US government is one of the largest holders of bitcoin. Does anyone know this?”

Donald Trump is standing before an energised crowd at a bitcoin conference in Nashville in July 2024. He has just announced that he intends to fire Gary Gensler, a critic of cryptocurrencies at the country’s financial regulator. Jubilation erupts. He floats the idea of a strategic cryptocurrency reserve.

Fast forward to last weekend, and the shift is here. Trump announces he is going ahead with the strategic reserve. Yet the bitcoin enthusiasts are not happy. Why?

The reason the US already owns so much bitcoin is not strategic at all — it is simply the result of seizures and forfeitures in various criminal cases that have made the country a major holder of the cryptocurrency. The message that the US government would now accumulate even more bitcoin is one that lands well with bitcoin fans. It is the other cryptocurrencies they take issue with.

Over the weekend Trump posted on his social network Truth Social that he had asked a working group to proceed with the idea of a strategic reserve for cryptocurrencies. The currencies named were Solana, XRP, and Cardano. Trump then quickly followed up by adding that Bitcoin and Ethereum would also be included.

Outsiders tend to lump all of this together under the label “cryptocurrencies,” but within the industry the perspective is entirely different. Bitcoin — long claimed to be capable of functioning as an actual currency — has in recent years been repositioned as a kind of digital gold: an asset, rather than a currency. At the other end of the scale is the category more dismissively known as “shitcoins” — speculative projects that are neither asset nor currency, but something more akin to a lottery ticket with crypto technology at its core.

The underlying technology can therefore be used in different ways for different purposes. But the association between them contributes to the negative image many people have of cryptocurrencies as a whole. Enthusiasts had therefore hoped that Trump’s promised reserve would consist exclusively of Bitcoin — to distinguish it from the rest. Instead, it turned out to be the exact opposite.

How were the chosen currencies selected? Take XRP as an example. By the equivalent of market capitalisation it is one of the largest on the market, but the company behind it — Ripple — was investigated by the US financial regulator and paid over 1.3 billion kronor in fines. One possible explanation: Ripple spent over half a billion kronor on lobbying ahead of the presidential election.

In terms of money, the crypto industry as a whole was the second-largest lobbying force in the election cycle (after oil and gas companies). The industry saw an opportunity with Donald Trump as president — and now they are being paid for that investment.

A great deal of money has been invested in these cryptocurrencies and in the companies that work with them. Having the US government as a buyer is enormously positive for the entire ecosystem. This was visible immediately, as the price of several jumped by more than 20 percent in a single day. It amounts to a form of legitimisation for an industry that has had to stand in the corner for many years.

The biggest question of all is, of course, what the actual purpose of this reserve is. The executive order Trump signed claims that “the digital asset industry plays a crucial role in innovation and economic development in the United States.” There is very little to support that claim. If Cardano disappeared tomorrow, how many Americans would even notice? Nor is it a central part of the country’s innovation. None of the largest US tech companies deal in cryptocurrency at all — with the exception of Tesla, which holds a small amount of bitcoin.

The purpose most closely resembles a favour to an industry that gave Trump a great deal of support. And while Elon Musk tries to identify waste in the American state, tax money will now flow directly to buying cryptocurrencies — assets largely owned by a small number of people and companies. Beyond those specific beneficiaries, few can reasonably see any value in this reserve — strategic or otherwise.

Relief — but the threat from China remains

February 27, 2025
by Björn Jeffery
SvD Näringsliv

This analysis was first published in SvD Näringsliv, in Swedish, on February 27th, 2025. This piece was translated from Swedish by Claude. Some phrasing may differ from a human translation.

Nvidia’s strong results show that AI investment continues to grow. But the pressure mounts with each quarter, while concern over China’s DeepSeek lingers. And the key question remains.

This was probably not how Jensen Huang, Nvidia’s CEO, had envisioned his career.

In 1993 he founded a company called Nvision together with a few friends. They were going to make graphics chips for computers. The name had to be changed quickly, however, when it turned out to belong to a manufacturer of toilet paper. The new name — Nvidia — was borrowed from the Latin word “invidia,” meaning envy.

An enviable situation is, however, not exactly what either Nvidia or Huang finds itself in right now.

After spending some 20 years in relative obscurity on the stock market, interest in the company has now exploded. When Nvidia reported its quarterly results late on Wednesday evening, Swedish time, the world’s stock markets sat on tenterhooks with a single question in mind: do we have an AI bubble? And it was Huang’s job to give them the answer.

For virtually any other company, the numbers would have been compelling. Nvidia grew its revenues by 78 percent compared with the previous year, and beat market expectations on both revenue and profit. Over the full year, revenues grew by an astonishing 114 percent — a barely comprehensible achievement at these levels.

For Nvidia, however, that apparently was only to be expected. The stock market reacted with a yawn. The share price in after-hours trading barely moved.

The results were strong — but not strong enough to make markets forget the anxiety that has characterised the AI market for a couple of months now. Nvidia’s explosive share price growth has stabilised — admittedly at a very high level, but stabilised nonetheless. When we are talking about the world’s second-most highly valued company by market capitalisation, every such signal carries weight.

One source of that concern is spelled DeepSeek — the Chinese AI model that has taken the world by storm in recent months. The interest in DeepSeek has not been because it is better than other AI models, but because of how surprisingly capable it is given the limited resources used to create it. China faces trade restrictions on what type of chips it is permitted to buy. To work around them, it has had to develop differently.

This potential technical innovation could be seen as a positive development for AI, since it demands fewer resources. If you are Nvidia — essentially the only seller of those resources — it could instead become a problem.

“DeepSeek made us understand that Nvidia is not invincible,” said Shana Sissel, chief investment officer at fund Banrion Capital, to Bloomberg.

The quote says it all. No company is really invincible — but looking at Nvidia’s share price since January 2023, one might be forgiven for thinking otherwise. The increase is around 560 percent. The market capitalisation stands at over 32,000 billion kronor — roughly three times the entire Stockholm Stock Exchange combined.

Another potential concern is the trade barriers and tariffs that may be introduced in the United States. It is already forbidden for Nvidia to sell its best chips to China. But the company has developed an entire product line sitting right at the edge of what is permitted — and sells a great deal of it. China is a very important market for Nvidia, and if further tariffs or restrictions are imposed the impact could be severe. The US is also investigating whether China has managed to circumvent the ban in some way — for example by using data centres in Singapore, another of Nvidia’s major markets.

Nvidia’s quarterly results make clear that these clouds of concern have not significantly dampened AI investment appetite — not yet, at any rate. Even Nvidia’s forecasts for the coming quarter came in higher than analysts had expected.

In practice this means that tech companies continue to place large orders for Nvidia’s chips and services. And even if markets have wondered whether new, cheaper ways of building AI services might exist, nobody seems quite ready to cut back on investment pace just yet.

The world’s stock markets breathed a collective sigh of relief. Nvidia and Jensen Huang delivered yet another strong quarter. But the pressure is unlikely to ease. In three months’ time, the market will ask the same question it is asking now: can Nvidia really do it again?

Swedish media’s worst-kept secret

February 25, 2025
by Björn Jeffery
SvD Näringsliv

This analysis was first published in SvD Näringsliv, in Swedish, on February 25th, 2025. This piece was translated from Swedish by Claude. Some phrasing may differ from a human translation.

After the catastrophic Viaplay deal, media group Schibsted is getting its revenge. It is buying TV4 from Telia for 6.55 billion kronor. Schibsted Media’s transformation can now begin in earnest.

It has been Swedish media’s worst-kept secret.

Just over a year ago, Schibsted Media’s CEO Siv Juvik Tveitnes said the following to Dagens Media:

“If we are going to remain relevant — especially among younger users — we need to broaden out and invest more in both sport and entertainment.”

Breadth. Sport. Entertainment. In other contexts she mentioned moving images and geographical expansion to Finland. Given the shape of the Nordic media market, it was virtually impossible to achieve this vision without buying TV4 and Finnish MTV.

The negotiations were most likely primarily about what price Telia could accept. 6.55 billion kronor was the midpoint at which Telia CEO Patrik Hofbauer could justify refocusing the company on communications services once again.

Six years ago, Telia bought what was then Bonnier Broadcasting — TV4 and MTV — for around 10 billion kronor. That deal was two CEOs ago — an eternity in these contexts. Johan Dennelind signed the agreement and Alison Kirkby inherited it when she took over. It was clear even then that she was not convinced Telia should be in the content business — she had separated the two sides at her previous telecoms job. Now Hofbauer — who inherited the Schibsted negotiations when he took over a year ago — can finally close the TV chapter and move on.

For Telia’s part, the deal is fairly undramatic. The share price barely moved on the announcement. For Schibsted, it is a minor revolution — albeit a widely anticipated one, as noted.

Schibsted is a Norwegian media group that primarily operates newspapers, including Svenska Dagbladet and Aftonbladet in Sweden and titles such as Aftenposten and VG in Norway. Unlike virtually every other media company in the world, however, it became most known for the business that had nothing to do with media. By building successful marketplaces such as Blocket and Finn, the group became unevenly balanced: the marketplaces provided growth and at times high profitability; the media operations often provided the opposite. Schibsted — then listed on the Oslo Stock Exchange — had a difficult job explaining to the market why anyone should ever invest money in the media side.

The result was a split. The international marketplaces were spun off, and Schibsted subsequently sold a stake in them in a major transaction worth 24 billion Norwegian kronor. The Nordic marketplaces remained listed, while the major shareholder the Tinius Foundation bought the media side out from the exchange. That is where we are now.

Seen from this perspective, today’s TV4 deal is entirely logical. Is it the best financial investment available in corporate Sweden today? No. But the situation does not leave many openings. The owner is a foundation whose mandate is to run media operations. They want to stay within the Nordics. How many other major deals are there to be done? Essentially none.

The commercial media market in the Nordics consists of essentially a handful of players — Bonnier, Egmont, Aller, Sanoma, and Schibsted — and as a result very few companies change hands. Schibsted already tried to buy Viaplay once, last year, in a deal that ended with losing around 380 million kronor. If you want to grow significantly as a media owner in the Nordics, the alternatives are very limited.

The Tinius Foundation has now broadened its media ownership beyond newspapers. A different type of media company is beginning to take shape. Tinius has also opened its wallet significantly to enter the game. But to stay in it, they will in all likelihood need to do so again.

The challenge is that while the competing media owners are Nordic, the competition for advertising and viewers is very much global. A Schibsted-owned TV4 faces not only Bonnier but also players such as Netflix, Disney+ and Max. Viaplay has new owners who — despite their crashed share price — keep pressing on. How a local player meets these global tech giants is something nobody has really figured out yet.

Disclosure: Schibsted Media today owns Aftonbladet, Svenska Dagbladet, Omni and Podme in Sweden.

This is the definitive end

February 18, 2025
by Björn Jeffery
SvD Näringsliv

This analysis was first published in SvD Näringsliv, in Swedish, on February 18th, 2025. This piece was translated from Swedish by Claude. Some phrasing may differ from a human translation.

Following SvD’s report that Scania is buying a factory from Northvolt, the next question immediately arises: who — or what — might buy the rest?

It was painted as a corporate empire in the green transition — before the first factory had even opened.

Northvolt rapidly launched operations in Sweden, Germany, Canada, and Poland. Joint ventures, so-called “joint ventures,” could be found in both Norway and Portugal. It looked ambitious and large-scale. The momentum behind Northvolt was enormous — and why not strike while the iron was hot?

Then came the crisis and the restructuring. The large corporate group with tentacles in different parts of the world may now instead become a liability. What type of buyer wants to deal with all these operations simultaneously? Especially when so few of them are functioning at their intended capacity.

Scania is now acquiring a factory in Poland, according to SvD, for a fraction of the roughly 1.6 billion kronor invested there. That solution — applied on a broad front — is looking increasingly like a realistic path forward. It appears that no white knight is coming to lift Northvolt out of its restructuring in one piece.

In other words: a large Northvolt could end up becoming many small ones.

Finding major shareholders willing to step in and take on greater responsibility has been a challenge for Northvolt throughout the crisis. Before the restructuring, Volkswagen was the single largest shareholder with around 22 percent of the shares. But the German automotive giant had its own problems to work through before a rescue of Northvolt could receive sufficient focus.

In December, Volkswagen agreed with German trade unions not to close the factories it had previously announced it would, but 35,000 jobs will still disappear by 2030 — a saving of 168 billion kronor. In such circumstances, prioritising further money to save Northvolt was not possible.

Being a part-owner of something is also not the same as wanting to run the entire operation. For Volkswagen to be a good customer and place purchase orders as a form of guarantee is one thing. Being a permanent industrial owner of a half-finished production facility making battery cells and systems is quite another.

Northvolt may now be broken apart by individual industrial players, financial consortia, or suppliers and industry peers who see an opportunity to turn the operations around.

The three tracks — which can proceed in parallel — look like this:

The first is industrial players, exactly like Scania. They are often already parties to the process, have been following Northvolt for a long time, and know what they need and what they don’t. If they can secure part of their supply chain cheaply, it could be an attractive option. Another example following the same track is Volvo Cars, which in January bought out Northvolt from the joint venture Novo Energy in Gothenburg. And like Scania, it would not be inconceivable for truck manufacturer AB Volvo to be interested.

Track two is financial consortia. They tend to emerge opportunistically when deals are to be made. Private equity firms are certainly doing the sums on what price individual parts of Northvolt would need to be at to make a good investment. An educated guess is that Vargas — another major Northvolt shareholder — could become a player here. EQT — with its newly arrived CEO — is another potential option.

The third track would be if a direct competitor to Northvolt bought a factory, or alternatively one of their many suppliers. Among the competitors one finds names such as BYD and CATL. And the most important supplier is Wuxi Lead. What all three have in common is that they are Chinese.

For that solution to be possible, there is a further complicating factor. Not only do willing buyers need to be found — they must also be approved by the government agency ISP, the Inspektionen för strategiska produkter (the authority for strategic products). They have previously blocked Chinese ownership of similar projects in Sweden.

Last autumn I posed the question of who would want to save Northvolt from its crisis. The conclusion at that point was that it was likely cheaper to let the company go into restructuring than to put money in at that moment. Now we are exactly there.

The Scania deal suggests that there could be a solution in which the company is broken up into smaller pieces. A handful of battery factories, spread across the world, could then live on under new owners. But it would also mean something else: the definitive end of the corporate empire Northvolt, as we know it today.

Update: American company Lyten, which announced the purchase of Northvolt’s assets in August, was subsequently reported by SvD to be experiencing difficulties securing the financing for its acquisition — with the deal’s completion repeatedly pushed back from October to December to January, leaving the situation unresolved.