Month: March 2025

Italian opposition parties stepped up criticism proposed deal between the government and SpaceX’s Starlink following founder Elon Musk’s suggestion he could cut Ukraine from the satellite network.

Prime Minister Giorgia Meloni’s hard-right government has been negotiating with Musk’s privately-owned SpaceX over a reported 1.5-billion-euro ($1.6-billion) deal to use Starlink to provide secure telecommunications for its diplomats and military.

The proposal has sparked outrage among Italy’s opposition parties, which on Monday renewed their demands that talks stop after Musk said on his X social media platform Sunday that Ukraine’s “entire front line would collapse” were he to turn off Starlink for Kyiv’s forces.

Poland’s foreign minister accused him of threats, after which Musk — the richest man on earth and a senior advisor to US President Donald Trump, who has frozen US military support to Kyiv — insisted Starlink will “never turn off its terminals” in Ukraine.

Still, centrist Carlo Calenda, who leads Italy’s Action party, on Monday branded Musk “not a reliable partner”.

The leader of the Democratic Party, Italy’s largest opposition group, said Sunday that Meloni should “change course immediately”.

“How can Giorgia Meloni want to hand over the keys to Italy’s national security to Musk after hearing his latest, very serious words?” she wrote on X.

Meloni has said in the past she has “excellent relations” with the billionaire Musk, whom she has called a “genius”.

In January, she said she would evaluate any Starlink deal through “the lens of national interest”, while adding that there were “no public alternatives”.

However, last week the head of European satellite operator Eutelsat, Eva Berneke, told the news agency Bloomberg that it was in discussions with Rome.

Italian media have reported that President Sergio Mattarella, Italy’s head of state, also has reservations about the Starlink deal.

Responding to one such report at the weekend, Musk wrote on X: “It would be an honour to speak with President Mattarella.”

Deputy Prime Minister Matteo Salvini, leader of the far-right League party, backs a deal and said this weekend he would be ready to sign it “tomorrow morning”.

“Not because I like Musk or because I’m rooting for Trump — because it would improve Italy’s national security,” he said at a party event in Milan, according to Italian news agency Ansa. AFP

NASA is eliminating its chief scientist role and closing down an office that studies policy matters on space and technology, in a round of layoffs affecting 23 employees.

NASA’s acting administrator Janet Petro told employees by email on Monday the Office of the Chief Scientist, the Office of Science, Policy, and Strategy, and the diversity, equity and inclusion branch within the Office of Diversity and Equal Opportunity would be closed.

A NASA spokesperson confirmed the cuts and said 23 employees would be affected.

The agency has had a chief scientist for decades – except when the post was terminated between 2005 and 2011 – to advise on its missions and areas of space science and astronomy to focus research efforts.

The cuts, part of President Donald Trump’s government cost-cutting initiative, will include the departures of NASA’s current chief scientist, Katherine Calvin, as well as NASA’s chief technologist, A.C. Charania.

NASA still has an associate administrator for the Science Mission Directorate, who oversees science-focused missions.

Many of NASA’s 18,000 employees have been anxious over the Trump administration efforts to trim back the federal bureaucracy, which have been spearheaded by Elon Musk and the Department of Government Efficiency. Musk’s rocket company, SpaceX, has contracts worth roughly $15 billion with NASA, according to federal contracting data.

Petro said in the email that NASA had been actively working with the U.S. Office of Personnel Management to implement Trump’s January executive order directing government agencies to reduce and reorganize their workforces

NASA’s policy, diversity and science offices are the latest space-focused units in the U.S. to be affected by Trump and Musk’s government efficiency agenda.

Roughly a third of the National Oceanic and Atmospheric Administration’s 25-person Office of Space Commerce, a little-known body heavily relied upon by the space industry, was laid off earlier this month.

However, two officials from that office were allowed to return after pushback from employees and industry groups, according to two people familiar with the moves.

NASA’s associate administrator, Jim Free, who was poised to become acting NASA administrator pending confirmation of Trump’s nominee, retired from the agency last month, while hundreds of agency employees have accepted the Trump administration’s buyout proposal, Petro has said. Reuters

President Donald Trump’s trade war and efforts to bring manufacturing back to US shores have put one of his predecessor’s signature achievements on the firing line: the Chips and Science Act.

Signed by Joe Biden in 2022, the bipartisan law is Washington’s $52 billion bid to revitalize the American semiconductor industry. The goal is to reduce US reliance on Asia for the tiny components that are the lifeblood of the modern economy, found in smartphones and missiles alike.

The Chips Act has spurred nearly $450 billion in commitments to build factories on US soil, amounting to almost $10 of private sector investment for every $1 spent by the government. Even so, Trump has complained that the program is a waste of taxpayer money, telling Congress that it’s a “horrible, horrible thing” and imploring Republican lawmakers, who control both chambers, to repeal the legislation.

He argues that tariffs function better than subsidies to encourage investment in the US, with the added bonus of generating federal revenue from the duties on imports into the country. Trump has signaled that he’ll impose new import levies on semiconductors as soon as April.

He credited the threat of tariffs for the decision of Taiwan Semiconductor Manufacturing Co., the world’s top manufacturer of artificial intelligence chips, to invest an additional $100 billion in US plants. TSMC says its US expansion is due to significant market demand.

What is the Chips Act?
The law is among the country’s biggest forays into industrial policy. It includes $39 billion in grants to incentivize semiconductor manufacturing and $11 billion for research and development. Companies can also access up to $75 billion in loans and loan guarantees, though the Commerce Department — which oversees the funding — has only used a small amount of that authority. Several major chipmakers opted not to tap that financing.

More than 85% of the grant funding, spread across 20 firms, was finalized prior to Trump reentering office. But only $4.3 billion actually went out the door under Biden. That’s because the awards are designed to be disbursed over time as companies hit negotiated project milestones, and factories take years to build.

The Chips Act also includes a lucrative 25% tax credit for manufacturing projects which, for most businesses, will constitute the largest federal incentive they access under the program. Grants, by comparison, typically cover 10% to 15% of project costs. Together, these policy tools aim to make it as cost-effective to build a factory in the US as in Asia, which has benefited from access to cheaper labor and economies of scale.

There’s no cap on the dollar amount firms can claim from the Chips Act’s tax credit. The Peterson Institute for International Economics estimated in June 2024 that this credit could cost the government over $85 billion in foregone revenue, more than three times the original projection of the Congressional Budget Office — a reflection of the huge amount of investment the law spurred.

Who are the main beneficiaries of the Chips Act?
Around three-quarters of the grant funding is slated to go to four companies that produce advanced semiconductors: Intel Corp., TSMC, Samsung Electronics Co. and Micron Technology Inc. Intel is the single biggest beneficiary, with a $7.9 billion grant to support commercial factories and a separate $3 billion award geared toward the production of military chips.

Firms that produce older generations of chips have also been selected for funding, such as Texas Instruments Inc. and GlobalFoundries Inc., as well as companies building plants for packaging — the process of fitting chips together for use in devices.

The Commerce Department set aside $500 million for smaller businesses across the semiconductor supply chain, but didn’t announce any awards from that program before Biden left office.

The US states with the largest pledged investments include Arizona, Ohio, New York and Texas.

How has the Chips Act impacted the US semiconductor industry?
While the Chips Act represents a large total in terms of taxpayer money, it’s a relatively small sum for the semiconductor industry, where single companies can burn through a comparable amount in just one year. TSMC, for example, expects its capital expenditure to reach as much as $42 billion in 2025.

Nonetheless, the law has had a measurable impact. Spending on the construction of US chip factories skyrocketed in the months leading up to and following the passage of the Chips Act. Even businesses that aren’t receiving government funds are benefiting from a US ecosystem that now includes the biggest names in the sector.

That’s a sea change from just a few years ago, when the country made virtually none of the world’s most advanced logic chips — the components that serve as the brains of devices. The Biden administration sought to get that share to 20%; Trump, when announcing TSMC’s $100 billion investment, said he’s targeting 40%.

To approach those levels, the US would need companies’ plans to turn into real factories. Some projects, like TSMC’s facility in Arizona, have gone exceptionally well. But Intel and Samsung, the other two big spenders, are mired in financial woes, which could put their overall investment plans at risk.

Across all types of chips, the Washington-based Semiconductor Industry Association estimated last year that the US is on track to triple its manufacturing capacity by 2032, bolstering its global market share to 14%, from 10% at present. Without the Chips Act, the group said the US share would have likely shrunk to 8%.

The American push comes alongside major semiconductor industrial policy efforts from scores of other countries — especially China. The Asian nation is trying to beef up its advanced chipmaking sector while also making massive investments in older types of chips, rolling out subsidies that have raised alarm among US officials.

Can Trump succeed in axing the Chips Act?
The Chips Act enjoys broad support in Congress, having passed with bipartisan backing. Many Republican congressional districts have been chosen as sites for factories that have been awarded funding. A full repeal of the law would be politically difficult given the party’s slim majority in the House plus the likelihood that Senate Democrats would deploy the filibuster, a prerogative to demand neverending debate to thwart legislation.

If nullifying the act is off the cards, Republicans could attempt to roll back the provisions they find objectionable, such as labor-friendly regulations or environmental requirements.

Could the Trump administration undermine the Chips Act in other ways?
Prior to Trump’s call for a repeal, Commerce Secretary Howard Lutnick — who now oversees Chips Act implementation — expressed his support for the initiative in public and in private. That didn’t prevent the government office responsible for the program from losing about 40% of its staff as the Trump administration slashes the federal workforce — although Lutnick largely spared the teams responsible for negotiating deals and managing the disbursement of funding.

Still, Lutnick has stopped short of a commitment to honor existing contracts and is currently reviewing the planned investments. Renegotiating dollar amounts, or the benchmarks tied to them, would be a heavy lift that companies want to avoid.

In preparation for Lutnick’s arrival, Chips Act staff began preparing a list of more benign changes that can be made to the application process and finalized agreements. The idea is that removing things like a requirement for childcare facilities at large factories could enable the Trump administration to claim a win without significantly disrupting the distribution of funds.

There are also more aggressive options. The terms of Chips Act contracts allow the government to stall disbursement or even claw back funds in certain circumstances. Some companies have worried that those rules give federal officials too much leeway to make adjustments to their deals.

But even if Lutnick changes individual agreements, the Trump administration is still legally obligated to spend the money appropriated by Congress for the Chips Act. Lawmakers have already appropriated the full $39 billion in manufacturing incentives through fiscal year 2026. Bloomberg

The Indian National Space Promotion and Authorisation Centre (IN-SPACe) has shortlisted six out of nine bidders to build and manage a space-based earth observation (EO) system.

The selected entities include consortiums of SatSure, Pixxel, Dhruva Space and PierSight; Ananth Technologies, Solar Group and XDLINX; and Bharat Electronics Ltd and Sisir Radar.

Further, Tata Advanced Systems Ltd and Centum have also been shortlisted.

IN-SPACe has issued a draft request for proposal (RFP) to the selected applicants for the INR 1,500 Cr constellation of earth observation satellites project.

The final date to send in their financial bids as mentioned in the draft RFP is March 31.

IN-SPACe invited bids from Indian startups and companies in July last year to design, build and launch a constellation of satellites that will be equipped with advanced imaging technologies.

In December 2024, it was reported that IN-SPACe received bids from 30 entities to build the earth observation system.

To note, each consortium is limited to include only four members to jointly apply for the tender, where the government will reportedly offer a grant of up to INR 350 Cr to the winning consortium to build the system.

Further, the clutch of winning bidders will have to repay this grant amount over the operational period of the constellation.

This development comes weeks after IN-SPACe rolled out the Technology Adoption Fund (TAF) worth INR 500 Cr to financially support the nation’s space technology startups to refine their technologies, enhance production processes, and meet market demands both within India and abroad.

Notably, the Centre has taken a number of steps to promote private players in the space sector. In October last year, the Union Cabinet approved setting up a VC fund with a corpus of INR 1,000 Cr to boost the country’s space economy.

The VC fund would be operational in the first quarter of FY26.

The Centre’s measures have resulted in the emergence of a number of new spacetech startups in the last few years. As a result India’s space economy is poised for transformative growth in 2025 and is eyeing a market size of $44 Bn by 2030. Inc42

AT&T, forecast first-quarter adjusted profit in line with analysts’ estimates on Monday, signaling steady demand for its discounted premium plans combining 5G mobile with high-speed fiber data.

The U.S. telecom giant has been investing in its high-speed fiber internet offerings to help drive faster subscriber and revenue growth, at a time when the pool of potential new wireless customers shrinks in the United States.

On an adjusted basis, the company expects per-share earnings of 48 cents or higher excluding DIRECTV, compared with estimates of 49 cents, according to data compiled by LSEG.

AT&T, which acquired DirecTV in 2015, said last year in September that it would sell its entire 70% stake in satellite TV provider DirecTV to private equity firm TPG, exiting a business marked by declining distributions for the telecom operator. The deal is expected to close in mid-2025.

The company said on Monday it expects to receive about $1.4 billion to $1.5 billion of cash payments from DIRECTV related to this deal.

AT&T also reaffirmed its annual adjusted profit forecast in the range of $1.97 to $2.07 per share. Reuters

US President Donald Trump’s threats to hike tariffs aren’t all bad news for India’s economy. They’re driving the government to lower trade barriers, which will spur competition and growth.

That’s the view of Viral Acharya, a former central bank deputy governor, who says greater competition means Indian firms will be forced to raise their standards to take on global rivals. That, in turn, means higher quality jobs and a larger manufacturing base, he said.

Trump has threatened to impose reciprocal tariffs on countries from April 2, effectively raising taxes on imports to the US to the same level that a trading partner imposes on American goods. Economists estimate that India would be one of the worst hit by the reciprocal tariffs given the wide differential of about 10 percentage points in average import duties between the two countries.

India’s government has already taken steps to ease tariffs, making significant cuts in February, and discussing reducing import taxes on US goods ranging from cars to chemicals and electronics.

Commerce Minister Piyush Goyal was in the US last week to hold talks with his US counterpart Howard Lutnick and other Trump officials on a multi-sector trade deal. The US president said Friday India was ready to make deeper tariff cuts.

Acharya, who was a deputy governor at the Reserve Bank of India between 2017 and 2019, said large Indian firms that had benefited from the protectionist measures will initially lose some value, but the economy will benefit overall.

“In a competitive market, companies should not be making fat margins unless they are the most efficient provider of that service or good,” he said.

Indian businesses, not just the big firms, are capable of competing with the best globally but that will require investments in efficiency and productivity, he said.

“Unless we subject them to this competition, we will never see their best,” he added.

‘Big Five’ Firms
Acharya, now director of doctoral education at NYU Stern School of Business, has previously argued for breaking up India’s biggest conglomerates. In a paper in March 2023, he said India’s “Big 5” firms — Reliance Group, Tata Group, Aditya Birla Group, Adani Group and Bharti Telecom Ltd. — had grown at the expense of smaller local firms, while the government’s “sky-high tariffs” have shielded them from competition from foreign firms.

Indian firms are “smart enough to innovate if they are put under pressure. And they will regain some of their mojo thereafter,” Acharya said in the interview.

Opening the economy to foreign firms may not just result in direct competition, but “it may lead to substantial knowledge transfer as strategic partnerships are formed with foreign players,” he said. “Eventually, some global giants will emerge from that process.”

To minimize the impact on Indian industries, Acharya suggested lowering tariffs in phases with clear communication about the end goal. If the policy path is predictable, businesses will invest in efficiency, innovation, and focus on upskilling their workers, he said.

Prime Minister Narendra Modi earlier this week urged Indian businesses to take advantage of the changing global landscape to invest more, calling it a “big opportunity” for them.

Although governments use protectionist measures to support their domestic industries and workers, Acharya said concerns about job losses if trade barriers are taken down are not backed by evidence.

“There is no evidence that when we opened up in the 1990s, we killed jobs,” he said. “It was not true in the nineties, it was not true in the 2000s.”

Instead, greater competition will boost private capital spending and productivity, and spur growth. It will also result in more higher-skilled jobs and raise domestic consumption.

“And that is the transformational change India needs at the moment,” he said. “It is just a version of what worked for us in the 1990s and 2000s.” Bloomberg