Big Business This Week: Meltdown, Schmeltdown!

The race to power data centers and AI is reawakening the slumbering U.S. nuclear power industry. Microsoft said last month it had entered a 20-year power purchase agreement to buy electricity from Constellation Energy, which would restart its notorious Three Mile Island nuclear plant in the middle of Pennsylvania’s Susquehanna River. This week both Amazon and Google said they’re investing in small nuclear reactors as they seek new sources of carbon-free electricity.

For Big Tech, having access to electricity is the only way to keep up with global demand for ever more computing power, as businesses rush to cloud computing centers and AI sucks up gigawatt-hours to run all those Nvidia B200 chips.

While solar, wind, hydropower, and other renewables now account for 30% of the world’s energy supply, the demand for electricity keeps growing, up 2% last year.

The new nukes will be smaller modular systems that can be built with less infrastructure and in less time than conventional nuclear plants with their massive cooling towers, but most of the designs now on the table are still awaiting approval from the Nuclear Regulatory Commission. And while nuclear power doesn’t produce planet-warming greenhouse gases, it does have one significant waste issue: radiation.

In fact, the last time America went on a nuclear binge, it ended at Three Mile Island.

In 1979, human error and design flaws led the plant’s Unit 2 reactor to the brink of a full meltdown, an unstoppable nuclear chain reaction. Small doses of radiation were emitted, but operators and emergency crews were able to halt the reaction. The accident put a damper on U.S. enthusiasm for nuclear power, and dozens of planned or operating plants were closed after regulators took a closer look at potential safety problems. Last year, Georgia Power began producing electricity from the first U.S. nuclear reactor to be built in decades.

Concerns about safety have kept many Americans from embracing nuclear power, but advocates say it’s the only way to beat Beijing at the AI game. Hmmm. Anyone remember “The China Syndrome”?

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Elon’s World

Musk has given $75 million to his America PAC aimed at helping win the presidency for Donald Trump, who has continued to praise Musk, suggesting he might have a place in his administration. • SpaceX on Sunday launched the world’s largest and most powerful rocket on its first attempt, and the rocket launcher actually caught the spent booster in midair using its chopsticks-like arms. • Tesla’s much-hyped Robotaxi debuted at the end of last week in a late-night unveiling in Los Angeles, and as The Economist pronounced, Musk’s promises were “long on bombast and short on reality,” noting that “the road to self-driving taxis will be long, and Tesla will face intense competition along the way.” The event was noticeably short on the kind of details that investors wanted—like a business plan. Tesla shares fell 9% when the markets opened Friday, costing Musk about $15 billion of his fortune. There was a silver lining, though not for Tesla: Uber shares were up 11% and Lyft shares rose 10% the next morning. • “I Robot” director Alex Proyas says the Tesla Robotaxi and the humanoid robots presented at the taxi’s unveiling last week were copied from his film. “Hey Elon, Can I have my designs back please?” Proyas posted on X. • Tesla moved some $750 million worth of Bitcoin to new wallets on Wednesday, the first move in over two years, spooking traders who feared the carmaker might be selling the digital currency to meet a cash call. But so far the coins have not been moved to a trading platform, CoinDesk reports. • Musk sued California environmental regulators who rejected a Pentagon request to let SpaceX launch 50 rockets a year from the Vandenberg Space Force base near Santa Barbara. The commission questioned SpaceX’s safety record. But Musk’s lawsuit says one commissioner’s anti-Musk political rants illegally swayed the regulators. • Meanwhile, the outgoing vice president of the European Commission called Musk a “promoter of evil” who “is not able to recognize good and evil.” Vera Jourova told Politico that she is “really scared by digital platforms in bad hands.” • Just weeks after denying they were romantically entangled, Musk and Italian Prime Minister Giorgia Meloni have agreed on one thing: Italy will test whether Musk’s Starlink satellites can offer internet service in remote parts of the country, a senior Italian government IT official said. • Musk got India’s government to back down this week and abandon plans for an auction to allocate spectrum for broadband satellites, instead promising that administrators will devise a plan to divvy up the bandwidth. Indian tech billionaire Mukesh Ambani, whose firm Reliance has its own satellite service that competes with Musk’s Starlink, said an auction is the only way to ensure the process is honest.

The Usual Suspects

Facebook Faces the Music: A federal judge in California said Facebook parent Meta must face lawsuits, brought by more than 30 states, accusing it of fostering mental health problems in teens. The suits say the social media platform designed addictive algorithms that breed anxiety, depression, and body-image issues in adolescents whose brains have yet to fully develop. Meanwhile, Australia’s government is planning an all-out ban on access to social media platforms for young people. No age limit has been set yet. Banks Go Boom: Shares in banking stocks are up. Morgan Stanley, JPMorganChase, Goldman Sachs, and Bank of America all saw their stocks jump over the past week or so, as they reported earnings far exceeding Wall Street’s expectations. High interest rates, a booming stock market, and the return of investment banking M&A work have fattened their pockets. The Dow Jones U.S. Banks Index is up 6.8% this month and 53% in the past year. The rate on six-month CDs has risen just 16% in the past year, topping out at about 1.9% this week.

• Boeing’s Cash Crunch: Boeing, America’s largest single manufacturer, is finalizing plans to raise as much as $25 billion by issuing new stock and convertible bonds, the company said in a regulatory filing. Boeing has also reached a $10 billion credit agreement with Bank of America, Citibank, Goldman Sachs, and JPMorganChase. Word of new cash comes as the company burned through more than $8 billion in the first half of the year and is losing about $1 billion a month while 33,000 manufacturing employees strike for better pay and pensions. At the end of last week, CEO Kelly Ortberg said he’ll cut the workforce by 10%, eliminating 17,000 jobs. Shares of Boeing closed up 2.3% after the filing. Boeing is expected to announce full details after it reports Q3 earnings on Oct. 23.
• Dinged for Stalling: Stellantis, the owner of Chrysler, Fiat, and Peugeot, took flack from the White House this week for stalling on plans to reopen plants. Stellantis agreed with the United Autoworkers Union in 2023 to spend $1.5 billion to reopen an Illinois assembly plant and build new mid-size trucks there by 2027. But the company has been hit with declining sales and management turmoil. The Wall Street Journal reported that Stellantis is moving some Ram pickup production to Mexico, and the UAW says its members may strike unless Stellantis carries through on its U.S. investment commitments.
• The Kind of Cancel Culture Everyone Loves: The Federal Trade Commission has issued a new “click to cancel” rule requiring retailers, gyms, and other businesses to get consumers’ consent for subscriptions, auto-renewals, and free trials that convert to paid memberships. Canceling must be “at least as easy” as signing up. “Companies shouldn’t be able to trick you into paying for subscriptions that you don’t want,” FTC Chair Lina Khan told Reuters.
• Spend, Baby, Spend! Retail sales beat expectations in September, growing 0.4% over August, and likely grew 3% on an annualized basis. That’s good news, says EY senior economist Lydia Boussour, who noted that “relatively healthy household finances and smart prudence displayed by consumers” should keep spending growth strong enough to power the economy, but low enough to let the Fed keep cutting rates. Boussour said she expects the Fed to cut rates by 25 basis points at every meeting through next June, bringing the Fed funds rate to 3.4% in June 2025.

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The Short Stack

• Don’s Dimming Coin: Donald Trump’s cryptocurrency raised only about $11 million of the $300 million it hoped to get from its launch. About 9,000 unique wallets hold the coin, which is selling for about 1½ cents. “That’s a dud start for the project in an industry where meme coins and whitepapers can often raise millions of dollars in the hours after offering their tokens,” wrote Crypto news site CoinDesk. Meanwhile, shares in Trump Media, the parent of Truth Social, have jumped 82% in the past month, although they are still trading for about half of what they sold for when the company went public in a reverse merger in March.
• How Do You Lose $60 Billion? In the case of luxury goods billionaire and former world’s richest man Bernard Arnault, you suffer when Chinese consumers lose their taste for your fancy wares. A 3% drop in sales last quarter at LVMH, the conglomerate Arnault built from the likes of Moet & Chandon, Louis Vuitton, and Tiffany, sent shares tanking 7% overnight. In March, Arnault was the world’s richest person, with a net worth of $231 billion, most of it in LVMH stock. Now he’s ranked fifth, with a family fortune of about $170 billion, according to Forbes. Remember, it’s less lonely when you’re not at the top.
• Attention, Kmart Shoppers! Kmart is closing its last standalone store, in the tony New York beach town of Bridgehampton. The first Kmart opened in Michigan in 1962, but bad management left it unable to compete with newcomers like Walmart and Target, and in 1992, with more than 2,000 stores, it filed for bankruptcy. A 2005 merger with Sears under the ownership of investor Eddie Lampert sent both chains down the proverbial drain. Blue light specials, we’ll miss you.
• Walgreen’s, Too? The drug and grocery chain said it plans to shut 1,200 stores over the next three years and focus on women’s health, in a bid to turn around its flagging fortunes. The company said it has 8,000 stores in the U.S. and 6,000 of those are turning a profit. Shares of Walgreens’s parent Walgreens Boots Alliance rose 10% on the announcement. They’re down 60% so far this year.

About That Wealth Gap

The Nobel Prize for economics has gone this year to a trio of researchers who looked at why some countries get rich and stay rich, and why some countries just stay poor.

Daron Acemoglu and Simon Johnson of the Massachusetts Institute of Technology, and James Robinson of the University of Chicago, found that the wealth of former colonies today is partly a result of how a country was governed as a European colony.

Colonies that protected personal property rights and allowed widespread participation in the economy got on track for longer-term prosperity. But countries built on extracting resources that generally kept local elites in control, and gave workers little hope of sharing in the wealth, have failed to break out of the poverty trap. Acemoglu and Robinson wrote a book based on their findings, called Why Nations Fail. As Acemoglu said at a press conference announcing the award, democracy is the secret sauce of long-term economic prosperity.

Still, Acemoglu said, the many people left behind economically in the United States show that the system is not working perfectly. “Democracy needs to work harder, too,” he added.

About Peter S. Green

Peter S. Green is a veteran reporter and editor who has spent more than two decades covering business and finance from Eastern Europe to New York City, and has worked for Bloomberg News, The New York Post, The New York Times and The Messenger. He lives in New York City and is always looking for the next big story.

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