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Marco Buti: Europe’s defense spending is a move towards ‘strategic autonomy’ from the U.S.

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  • In today’s CEO Daily: Peter Vanham talks to Marco Buti, a former European Commission director general, about strategic autonomy from the U.S.
  • The big story: Trump’s April 2 tariff deadline approaches.
  • The markets: Low volatility, small gains.
  • Analyst notes from Goldman Sachs on Germany, JPMorgan on the gender pay gap, and Wedbush on Nvidia, Musk, and Tesla.
  • Plus: All the news and watercooler chat from Fortune.

Good morning. Europe’s defense industry is about to get the boost of a lifetime. With its “ReArm Europe” plan, the European Union is planning to increase defense spending by $865 billion (€800 billion) over the next few years. Last week, the new German government in Berlin piled on, announcing it would lift its government spending limit to allow for $1.08 trillion (€1 trillion) in additional investments, part of which will also go to defense. If it materializes, the consequences for both European and American Fortune 500 defense companies will be huge.

The companies standing to gain the most? Fortune 500 Europe defense giants such as Airbus (No.41 in 2024), BAE Systems (No.140), Safran (No.152), Thales Group (No.194), Rolls Royce (No.205), Leonardo (No.246), and Rheinmetall (No.421)—as European leaders have expressed a clear intention to show a “European preference” in the new spending.

One reason driving this, says Marco Buti, a former director-general for economics and finance at the European Commission, is that Europe is serious about increasing its “strategic autonomy” from the U.S. “It’s about making sure we are in a reasonably good position compared to the [United States],” he said.

Building up a homegrown military-industrial sector also fits into a broader push from Europe to regain competitiveness and dynamism in its economy more broadly. For the past few decades, the bloc trailed both the U.S. and China in growth and innovation, and fell behind in everything from automotive to tech. 

“We have a European growth model which is basically not sustainable,” Buti, who headed the European Commission’s powerful Economic and Financial Department from 2008 to 2019, told me. “It is a growth model that has at the center, Germany, clearly. It is very much export-oriented, and it’s caught in the ‘middle technology’ trap,” meaning it applies, but does not develop, the latest technologies (e.g. German cars running on Google software).

Whether the push will succeed remains to be seen. But a rally has already started among the European Fortune 500 defense stocks. Rheinmetall, for instance, saw a 15-fold increase in its stock price since the Russian invasion in Ukraine, including a doubling since the beginning of the year. It is now more valuable than Volkswagen.

And the ripple effect has started as well. A European tech and AI entrepreneur I met in London last week, who did not want his name used given his existing contractual obligations, told me he’d not seen as much excitement in the European investor and start-up environment since the 1990s.

“It’s the playbook of the U.S. and Israel, basically,” he said, pointing to the other countries where defense spending led to an ecosystem of successful tech companies. As for Europe, he said, “I’m already seeing investors shift to defense, given Europe’s increase in military spending. And if I can find an elegant way to get out of my current company, I’ll start a defense start-up myself.” — Peter Vanham

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Contact CEO Daily via Diane Brady at diane.brady@fortune.com

This story was originally featured on Fortune.com



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Microsoft’s memorable cultural legacies at 50, from Clippy to the Blue Screen of Death

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Providing ubiquitous desktop software for decades, Microsoft has come in for jibes, mockery and even loathing even as it has helped millions of people get things done.

Every design decision is felt around the world for better or worse — often staying with people for years as a fond memory or a meme.

Here are a few of the ways Microsoft has marked computing culture:

Blue Screen of Death

A fixture since the very first versions of Windows — if mercifully much rarer these days — the Blue Screen of Death, or BSOD, is displayed when Microsoft’s operating system encounters a fatal error in a programme, or the application becomes unresponsive.

It has most commonly been a full blue screen with white text — originally composed by Steve Ballmer, who later went on to head the company — warning of the problem.

Some versions of the screen include error codes to help power users figure out what has gone wrong.

More recent editions of Windows have added a sad-face smiley in an apparent bid to sympathise.

While it has often offered the option to continue working by closing the programme or restarting the computer, many users have found the only way to escape it is by manually turning the machine off and on again.

Blissful background

In a breath of fresh air from previous versions of Windows, users booting up the 2001 “XP” edition were presented with a vision of lush, sun-dappled hills under a vivid blue sky.

For many who grew up using computers in the 1990s and 2000s, the idyllic desktop background now recalls a simpler time of after-school gaming or using still-novel online chat programmes to talk with friends.

Wine industry photographer Chuck O’Rear took what has been called “the world’s most-viewed picture” in 1996, after driving by a spot in California’s Sonoma County where vines had been torn up to fight the phylloxera pest.

Dubbed “Bliss”, the background can still be spotted in the wild today on systems that have not been updated in a while, and has spawned endless memes, parodies and now AI imaginings of what the rest of the scene might look like.

Inviting melodies

2001 was far from the beginning of Microsoft’s attempts to craft a soothing environment for PC users.

The 1995 edition of the operating system played ethereal startup chimes as the machine laboured into life.

Windows 95’s enchanting startup sound was crafted by electronic music legend Brian Eno, who told news site SFGate in 1996 that the piece was like “a tiny little jewel”.

Commissioned to make it “inspiring, universal, blah-bah, da-da-da, optimistic, futuristic, sentimental, emotional,” Eno composed 84 clips before selecting the best — which was twice as long as the original three-and-a-quarter-second brief.

‘Helpful’ Clippy

Long before ChatGPT was helping to write essays or generate emails, Microsoft tried to back up users of its Office productivity suite with smart software.

From the late 1990s, an “Office Assistant” interactive animated character would pop up to offer help with the task it believed was at hand.

The best-remembered is chirpy paperclip “Clippy”, whose often mistaken assumption that Word users needed help writing letters spawned a million memes.

Assistant emerged from research suggesting that users experienced interactions with a computer like working with human colleagues.

It was a “truly tragic misunderstanding” of the study, interaction designer Alan Cooper later said.

“If people are going to react to computers as though they’re humans, the one thing you don’t have to do is anthropomorphise them,” he told broadcaster G4TV.

Nevertheless, nostalgics can find Clippy as the face of a ChatGPT-powered assistant for Windows 11 built by developers FireCube.

Secret flight simulator

Microsoft produces a highly detailed and well-loved series of games simply called “Flight Simulator” with recreations of real locations and aircraft.

Office workers without a joystick or high-end graphics card, though, could escape into a bizarre neon-tinged hilly landscape that they could fly around using only the mouse via a series of hidden inputs in Excel 97.

The scene, which also included the credits for the spreadsheet programme, is just one of dozens of hidden “Easter eggs” scattered through the company’s software over the decades.

This story was originally featured on Fortune.com



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CoreWeave CEO Michael Intrator on capital markets vs the media

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  • In today’s CEO Daily: Diane Brady talks to CoreWeave CEO Michael Intrator.
  • The big story: Markets fall worldwide as tariff “Liberation Day” approaches.
  • The markets: It’s grim out there.
  • Analyst notes from UBS, Bank of America, EY, and Apollo on tariffs and the economy.
  • Plus: All the news and watercooler chat from Fortune.

Good morning. The performance of an IPO can reflect broad market sentiment or narrow investor enthusiasm for the company being listed—or a bit of both. There were a lot of eyes on CoreWeave’s Nasdaq debut on Friday, which closed flat at its scaled-back IPO price of $40 a share. Some saw the underwhelming performance of the Nvidia-backed AI cloud-computing provider as a bad sign for tech IPOs and AI, while others, including my colleague Jeremy Kahn, believe the reaction to CoreWeave reflects the challenges of being CoreWeave

Maybe it’s a bit of both. I spoke with CoreWeave CEO Michael Intrator on Friday about the New Jersey-based company’s much-scrutinized debut. He said they had scaled back the price and size of the stock offer because of “broader market headwinds,” describing the IPO as “a means to an end” for the company to grow.

“It puts us on the path towards what we need to accomplish as a business,” he said. “A little bigger, a little smaller, a little higher, a little lower. That’s not going to matter. What’s going to matter is: how do we execute on our business?”

That is a topic of much debate. Being a public company could drive down the cost of accessing debt markets, but CoreWeave’s capital-intensive model and existing debt burden unnerves some investors. The company has borrowed $8 billion to build out data centers that run graphics processing units (GPUs) provided by Nvidia. Servicing that debt is likely to cost at least $1 billion this year, which puts the $1.5 billion it raised through Friday’s IPO in perspective.

CoreWeave also relies heavily on one customer—Microsoft, which accounted for 62% of its revenue last year. Besides that, the company is betting heavily on a class of Nvidia chips that could be disrupted by newer models. And then there’s the question of whether we’re in a data center bubble, which Intrator dismisses.

“There’s a divergence between what the capital markets and what the media is thinking, and what I am feeling down in the trenches. What I am feeling is relentless demand,” he says. “I know what my clients want. I know the type of infrastructure they need. I know the type of scale that they’re requesting, and I build for them. Over time, I will be able to generate enormous value for my investors. I don’t really care where it is today or tomorrow or the day after.”

You can read my full interview with Intrator here

More news below.

Contact CEO Daily via Diane Brady at diane.brady@fortune.com

This story was originally featured on Fortune.com



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Primark boss steps down after 16 years due to inappropriate ‘behaviour toward a woman’

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Primark chief executive Paul Marchant has resigned following a company investigation into his behaviour toward a woman “in a social environment”, the budget fashion chain’s owner Associated British Foods announced Monday.

His resignation, which takes immediate effect, comes after he spent 16 years as Primark’s CEO, overseeing its expansion in Europe and into the United States.

“Marchant cooperated with the investigation, acknowledged his error of judgement and accepts that his actions fell below the standards expected by ABF,” the company said in a statement.

“He has made an apology to the individual concerned,” the group added.

ABF said it continues to offer support to the person who brought his behaviour to its attention.

The group did not immediately provide further details when contacted by AFP.

“I am immensely disappointed,” George Weston, chief executive of ABF, said in the statement.

He added that “our culture has to be, and is, bigger than any one individual”.

Marchant will be replaced on an interim basis by Eoin Tonge, ABF’s chief financial officer.

This story was originally featured on Fortune.com



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