The blurring line

Wall Street’s bosses are saying the worlds of private credit and traditional bank debt are headed for a collision. Or is it a merger? Apollo Global Management’s Marc Rowan went so far as to predict that—in just 18 months—some borrowers won’t be able to tell the difference. The $1.7 trillion private credit market has famously swelled in size by providing capital to private, non-investment-grade companies or other businesses that can’t get traditional bank financing. Now, asset managers like Apollo and rival Blackstone are also trying to lend more to established businesses—putting them in a position to further unseat the big incumbents. “There’s going to be a blur,” Rowan said at the Future Investment Initiative in Riyadh. So what are giants like Citigroup and Goldman Sachs doing about this threat? Well joining in of course. Many are partnering with big asset managers on private credit deals as they hunt for ways to maintain revenue without tying up their balance sheets. —David E. Rovella

Ukraine should strike North Korean troops if they enter the country to fight alongside Russia, US President Joe Biden said as Pyongyang’s soldiers reportedly prepare to move toward the frontline. The US said it believes North Korea has deployed 10,000 troops, several thousand of which are already moving toward Russia’s Kursk region, where Ukrainian forces have occupied a small amount of territory, and that some are already there. The question now is what the US and Ukraine’s other allies will do in response.

In the early days of Javier Milei’s presidency, Volkswagen’s South America chief wasn’t too happy with him. Now he’s part of a chorus of business leaders feeling encouraged about Argentina for the first time in years. Milei’s move to devalue the peso after taking office last December, followed by aggressive austerity measures, dragged the economy into recession. Companies were left with diminished cash balances and weak demand. But executives have been cheering nonetheless: they like the way Milei is eliminating protectionist measures and they’re starting to see a path to profits. Meanwhile, poverty across the South American country spiked to 53% during the first six month of Milei’s tenure.

Google parent Alphabet reported third-quarter sales that climbed more than analysts expected, helped by the growth of its cloud computing business. As its main search business matures, Google is betting big on its cloud division, which supplies computing power, software and services to other companies. Google is drawing more cloud customers using its artificial intelligence expertise to gain ground on larger rivals Amazon and Microsoft, making inroads by signing on fast-growing AI startups—some of which were founded by former employees—as clients.

Speaking of which, Microsoft’s GitHub has agreed to bake AI models from Anthropic and Google into a coding assistant used by millions of software developers. After teaming up with OpenAI a few years ago, GitHub pioneered the use of generative AI to automate tedious parts of the coding process. While the company will continue to make OpenAI models the default setting, developers will now be able to switch to Google and Anthropic models if they wish. Since acquiring GitHub in 2018, Microsoft has let the coding platform maintain a wide array of partnerships—even if they’re technically Microsoft rivals.

But not everyone can be a winner in the AI sweepstakes. Advanced Micro Devices gave a lackluster revenue forecast for the current period, sparking concern that its AI sales are growing more slowly than anticipated. AMD is playing catch-up with Nvidia in the lucrative market for AI computing chips. The company is now generating billions of dollars from that type of product—a rapid rise from a year ago—but remains well short of the tens of billions of dollars its rival is raking in.

Indian Home Affairs Minister Amit Shah authorized a wave of violence across Canada that included extortion and homicides, David Morrison, Canada’s deputy foreign minister, told a parliamentary committee. India has rejected Canada’s allegations as “preposterous” even as the US charged an Indian national and an Indian government employee with attempting to kill a Sikh activist on American soil. Morrison was appearing at the committee alongside other Canadian government officials about the escalation of a diplomatic dispute with India. Canada ejected India’s high commissioner and five other diplomats from the country, and India then responded with a similar action.

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