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Intelligence for the New World Economy

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US job cuts pile up, Japan gears up to vote, and Starlink becomes a geopolitical disruptor.͏‌  ͏‌  ͏‌  ͏‌  ͏‌  ͏‌ 
 
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February 6, 2026
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The World Today

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  1. Massive US job cuts
  2. Software investors spooked
  3. Chinese tech stocks hit
  4. Keir Starmer under pressure
  5. Sanae Takaichi on a roll
  6. China’s energy paradox
  7. The geopolitics of Starlink
  8. Central Asia builds new cities
  9. US faces housing crisis
  10. Rewriting bible of psychiatry

A delightfully weird documentary to get amped up about the Winter Olympics.

1

AI impact unclear as US job cuts pile up

Chart showing total US nonfarm job openings since 2016

US employers cut more jobs last month than in any period since 2009, new data showed. Several large companies announced massive layoffs, while hiring was the slowest for any January on record, suggesting the low-fire, low-hire dynamic that has kept the US labor market in an anxious balance may be tipping. Companies blamed AI for only 7% of the cuts, but it will take “more clarity about what AI can and can’t do for companies to get back to more normal hiring levels,” one economist said. Tech investor Orlando Bravo told Semafor in a recent interview that CEOs are using AI as a “cover” for margin-padding layoffs; the real AI job losses are yet to come.

Sign up for Semafor Business for more economic insights. →

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2

New Claude tool targets financial work

Traders on floor of New York Stock Exchange
Brendan McDermid/Reuters

AI startup Anthropic launched a financial service-focused AI model on Thursday, days after its new legal tool sparked a broad software selloff. The newly updated Claude can run analyses using company data and filings that might normally take a human days to complete, prompting financial service stocks to fall. Enterprise sales form about 80% of Anthropic’s business: “We are now transitioning almost into vibe working,” its head of product for enterprise told CNBC. Rival OpenAI is now hiring hundreds of new staffers to boost its enterprise sales, The Information reported. While spooked investors are dumping software shares, one analyst said security concerns will likely keep large companies from deploying such AI tools: “Panic over this is probably misplaced.”

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3

China tech caught up in global rout

Chart showing one-year market performance of Hang Seng, Hang Seng tech index and S&P 500

China tech companies were swept up in the global stock rout stemming from AI’s disruptive potential. Hong Kong-listed tech stocks, which are mostly mainland firms, fell into bear-market territory Thursday, on both AI spending concerns and rumors of an impending tax increase on internet services. Some analysts see the selloff as an overdue correction rather than the beginning of a downward spiral. Chinese tech valuations have surged in the past year on AI excitement, but some worry those gains may have outpaced fundamentals. Investors are also concerned that China’s tech giants could get pulled into another round of money-burning competition, after Tencent’s app announced cash giveaways as a Lunar New Year promotion.

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4

Starmer embattled over Epstein files

UK PM Keir Starmer
Peter Nicholls/Pool via Reuters

UK Prime Minister Keir Starmer is facing swelling scrutiny over his former US ambassador’s close relationship with Jeffrey Epstein. Starmer said Thursday that he didn’t know “the depth and darkness” of Peter Mandelson’s ties to the sex offender; Mandelson quit the House of Lords over the revelations, and is now being investigated by UK police. This is the “deepest crisis to engulf [Starmer’s] premiership,” said an expert at Eurasia Group, which put the possibility of Starmer’s removal by the end of 2026 at 80%. The pound fell nearly 1% against the dollar on Thursday. Electorates are “less tolerant of hypocrisy than of sex scandals or corruption,” The Economist wrote, meaning repercussions “over the Epstein affair will not be evenly distributed.”

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5

Takaichi mania takes off

Japanese PM Sanae Takaichi
Kim Kyung-Hoon/Reuters

Japan’s prime minister is on track for a decisive win in a Sunday snap election, setting her up to deliver expansive fiscal policies and a more assertive stance toward China. Sanae Takaichi took office just three months ago, but wants to cement power in the country’s legislature to build a more “outspoken and powerful Japan,” Bloomberg wrote. Stocks have risen the past week on bets that Takaichi will hold office for a long time and push shareholder-friendly policies benefiting the tech and defense sectors, even as some analysts caution against overreach. Key to Takaichi’s success is her unexpected popularity among young people: A type of “sanamania” has taken off, with people buying up pens and bags that Takaichi is spotted with.

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6

The paradox of Chinese energy

Chart showing China’s total electricity generation by source

Growing power demand in China and the size of the country’s market showcased what appeared to be countervailing trends — the persistence of coal, and the rise of renewables. New data showed Chinese developers applied to build 161 GW of coal-fired power plants last year, a record, while coal output also reached a new high. Yet solar power capacity is forecast to overtake coal this year, and renewables will account for two-thirds of the country’s power mix by the end of 2026. Even as a supply glut has weighed on Chinese energy firms’ profits, tech giants’ need for power to fuel data centers is driving fresh investor enthusiasm. Chinese solar shares jumped Wednesday on reports that Elon Musk’s staff visited local suppliers.

For more insights on the global energy transition, subscribe to Semafor Energy. →

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7

Starlink’s growing geopolitical role

Ukrainian soldier uses Starlink terminal
Inna Varenytsia/Reuters

Elon Musk’s Starlink satellite internet venture is increasingly being seen as critical infrastructure that can be targeted or exploited in geopolitical conflicts. French authorities on Thursday accused two Chinese nationals of trying to intercept sensitive military data using Starlink from an Airbnb rental. And Russia, which is not allowed to use Starlink, has been illegally mounting Starlink systems on its attack drones, according to researchers. However, Ukraine said Thursday that Moscow’s terminals had been “cut off,” in a blow to Russia’s military communications. Activists in Iran also used Starlink after Tehran imposed internet blackouts during anti-government protests last month. But relying solely on Starlink, given Musk’s strong political views, “can be really dangerous from a country’s sovereignty perspective,” one expert argued.

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8

Central Asia builds new cities

Overhead view of Bishkek
Bishkek. Pavel Mikheyev/Reuters

Central Asian countries are looking to ease their urban overpopulation problem by building new cities. Kazakhstan, Kyrgyzstan, Turkmenistan, and Uzbekistan all have outdated Soviet-era infrastructure and growing populations; the UN predicts that Central Asia’s 84 million people will become 114 million by 2050. The four countries are all building major new cities — called Alatau, Asman, Arkadağ, and New Tashkent, respectively — each designed for about 250,000 people. They hope that the move will attract new foreign investment, as the region tries to integrate with the world economy, a Jamestown report noted: Three of the cities are actively seeking Chinese investment, and none are looking to Russia, a sign of Moscow’s dwindling influence in a region it once controlled.

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9

US housing crisis balloons

Manhattan apartment block.
Bing Guan/Reuters

The scale of the US housing crisis is unknown, but may be huge, analysts warned. Estimates put the number of houses needed between 2 million and 20 million. The US has low housing vacancy — the homeowner vacancy rate is just above 1%, while experts say the healthy range is between 3% and 13% — and high land values, caused in part by restrictive zoning laws, The Washington Post reported. Home prices went up 50% between 2019 and 2024, and polls show young people think housing is unaffordable. But President Donald Trump recently said that he wanted “to drive housing prices up for people that own their homes.” Housing is both “a basic necessity [and] a financial asset,” The New York Times noted, making it “the double-edged sword of economic policy.”

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10

US psychiatry bible gets an update

The US “bible” of psychiatry is getting a rewrite, and could end up looking very different. The Diagnostic and Statistical Manual of Mental Disorders was first published in 1952; the most recent edition, DSM-5, came out in 2013. It lists the conditions acknowledged by the American Psychiatric Association, from autism to Alzheimer’s. It’s unclear when the next one will be released, but the APA has begun its groundwork. The name itself is changing: “Statistical” will be dropped for “Scientific,” Nature reported. More profound possibilities are that the DSM could become an online “living document,” constantly edited, rather than one giant tome released every decade or two. Another is that it will use sliding scales of shared symptoms rather than fixed conditions.

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Flagging

Feb. 6:

  • Ørsted, Philip Morris, and Toyota report earnings.
  • Catholic priest Ronald Hicks officially becomes the Archbishop of New York.
  • The 2026 Milano Cortina Winter Olympics kick off at the Stadio San Siro.
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Substack Rojak
Substack Rojak graphic

Rojak is a colloquial Malay word for “eclectic mix,” and is the name for a Javanese dish that typically combines sliced fruit and vegetables with a spicy dressing. In this recurring Flagship feature, we highlight the best newsletter writing from and about Asia.

Mr. Worldwide

DJs have become the unlikely flag-bearers for globalization at a time of increasingly fractured and nationalist worldviews. Multilateral institutions are under attack and appear in decline, but “for the DJ, another world remains open,” Patrick Kho writes in The Chow. Hong Kong is a perfect example: British influence is retreating as the city becomes more Chinese, but in its clubs, you can hear UK garage music, Western pop, Chengdu rap, and Yunnan reggae — sometimes all blended together. “When you’re listening to a set and you’re hearing a heavy, dark German techno track, and the next track is Daft Punk, it does something to your brain,” one local DJ said.

Kho likened the world of DJing to a modern-day Silk Road, in which ideas, trends, and vibes spread through grassroots connections — “an improvised, informal global trade system.” The road runs both ways: Some London DJs are adding Cantopop to their sets.

Fake boyfriends, real problems

China’s “virtual boyfriend” games are spreading overseas — sparking a fraught debate over cultural identity. Love and Deepspace, in which players battle interdimensional creatures while forming relationships with handsome male avatars, is one such game targeted at Asian markets, but it has since developed a Western following, raising questions about whether these characters are in fact Chinese or white, Peiyue Wu wrote in Calling The Shots.

That, in turn, has fueled a wave of nationalist discourse on Chinese social media from users who felt foreign players were “denying the characters’ Chineseness,” Wu noted: It’s clear “that real-world anxieties about race, geopolitics, cultural hierarchy, and recognition are being projected onto these virtual romances.” Gaming is often seen as a potent cultural export for China. But many characters are indeed deliberately racially ambiguous, and exist in worlds that can be applied to different cultural contexts. “Are these games truly exporting Chinese culture? Or are they primarily adapting to global tastes?”

The humanoid touch

Chinese robot companies really want the public to know they exist. Despite middling sales, the country’s humanoid-makers are spending millions on partnerships at the upcoming Spring Festival Gala, an Olympics-level ceremony widely watched throughout China; last year’s program drew nearly 17 billion views across media platforms. Beyond entertainment, the gala carries institutional weight, China tech analyst Poe Zhao wrote in his newsletter: “Every minute of airtime signals government endorsement.”

China’s leading robotics firms haven’t yet shipped many humanoids: The top company reported 5,500 last year. But by “fighting for visibility,” they are creating perceptions of legitimacy to investors, the public, and the government, Zhao argued. The play to capital markets also suggests they may be looking to IPO “before deployment success rates face scrutiny.”

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Semafor Recommends
Semafor Recommends graphic

White Rock, directed by Tony Maylam. If you need to get fired up ahead of the Milano Cortina Olympics starting Friday, the official film of the 1976 Innsbruck Winter Olympics is a documentary set to a propellant synthesizer score by Yes keyboardist Rick Wakeman, and features certified Hollywood tough guy James Coburn as a “guide for the uninitiated.” In addition to expounding on the finer points of downhill skiing and figure skating, Coburn also tries his hand at the four-man bobsled, luge, ice hockey, and biathlon. Part “psychedelic tone poem” and part “action movie,” White Rock is a glorious example of the vitality sports films can offer when they are “allowed to be weird,” The Atlantic wrote.

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Semafor Spotlight
Semafor Spotlight graphic

The Scoop: The significant layoffs announced this week renewed calls for owner Jeff Bezos to consider selling the storied newspaper. →

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