Chinese tech groups expand AI teams in Silicon Valley

Good morning and welcome back. Today we’re covering:

• The Chinese tech groups expanding their AI operations in Silicon Valley

• Rehabilitating KPMG’s UK unit

• Vanguard opens up proxy voting to retail shareholders

China’s biggest technology groups are building artificial intelligence teams in Silicon Valley by seeking to hire top US talent despite Washington’s efforts to curb the country’s development of the cutting-edge technology.

Alibaba, ByteDance and Meituan have been expanding their offices in California in recent months despite US efforts to stymie their work.

Alibaba is recruiting an AI team in Sunnyvale in the San Francisco Bay Area and has approached engineers, product managers and AI researchers who have worked at OpenAI and the biggest US tech groups, according to three people familiar with the matter.

Meituan, China’s largest on-demand delivery platform, has been expanding its team in California after executives grew alarmed that it was falling behind on AI, according to two people familiar with the matter. TikTok owner ByteDance has the most established AI footprint in California, with multiple teams working on different projects.

Even smaller Chinese AI start-ups have established a footprint in the US, recruiting engineers with experience working at leading research laboratories and companies in the area. Read more on Chinese efforts to hire US AI talent.

Here’s what else we’re keeping tabs on today:

• G20: On day two of the rich countries’ summit in Rio de Janeiro, US President Joe Biden will attend a working lunch with Brazilian President Luiz Inácio Lula da Silva.

• Results: The world’s biggest retailer Walmart and Lowe’s Companies, the home improvement chain, report earnings before the market opens.

• US economic data: Economists expect new monthly residential construction to have decreased to an annualised pace of 1.33mn in October from 1.35mn in September.

• Israel: Local elections are being held for people in areas close to the border of Gaza and Lebanon who were unable to vote in February.

Join us from December 4 to 6 at The Global Boardroom, the Financial Times’ award-winning digital conference, and hear leaders in policy, business and finance debate strategies for growth amid continued geopolitical, economic and technological disruption. Register for free here.

Five more top stories

1. Damage caused to a pair of undersea communications cables in the Baltic Sea is likely to have been an act of sabotage, Germany’s defence minister has said. Boris Pistorius said it was unclear who was responsible for what he described as a “hybrid” warfare tactic after the severing of two fibre optic cables within 24 hours.

2. European leaders should be prepared to send military forces to Ukraine to underpin any peace deal brokered by Donald Trump between Kyiv and Moscow, Estonia’s foreign minister has said. The US president-elect has vowed to bring a swift end to the war in Ukraine once he takes office. Read the full interview with Margus Tsahkna.

3. Vanguard is giving retail shareholders the chance to vote in favour of putting profits above all else as it doubles the size of its experiment in letting more investors have a say on proxy votes. The addition of almost 4mn people controlling up to $250bn in shares in US companies comes as Vanguard and other large asset managers try to navigate a conservative backlash against environmental, social and governance factors.

4. Trump’s social media company is in advanced talks to buy Bakkt, a cryptocurrency trading venue owned by Intercontinental Exchange, according to two people with knowledge of the talks. A successful deal would deepen Trump’s move into the cryptocurrency, the value of which has soared since his election victory.

5. Goldman Sachs’ chief executive David Solomon has warned that global investors are still “predominantly on the sidelines” over deploying capital in China because of weak consumer confidence and difficulties getting money out of the country. He said investors “continue to be concerned” about cashing out of investments in the world’s second-largest economy. Read more on the comments made earlier today at an event in Hong Kong.

Join tomorrow’s Global M&A Outlook — Americas webinar, organised by the FT in partnership with Datasite, which convenes dealmakers to discuss M&A activity and trends in the Americas region.

Today’s big read

Howard Lutnick and Scott Bessent are at the centre of an increasingly bitter battle to be Donald Trump’s Treasury secretary, as Wall Street factions fight to discredit each other’s candidate. One person familiar with the deepening rivalry described the contest as a “pissing match” between the Lutnick and Bessent camps.

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Volkswagen’s high-stakes bid to woo US consumers with its electric vehicles in a slowing market was a risky endeavour from the start. But with Donald Trump’s return to the White House, the American dream of Europe’s largest carmaker is looking more fraught than ever with the president-elect promising to scrap EV subsidies and impose tariffs on foreign-made vehicles.

Take a break from the news

The work of William Morris, chief founder of Britain’s 19th-century Arts and Crafts movement, has become a global signifier of an innately British style. Yet a London exhibition traces the profound influence of Iranian, Turkish and Syrian arts on his geometrically precise designs.