Heard in Davos: What we learned from the WEF in 2025

Vestas Wind Systems A/S

27/01/2025 01:00

(Repeats item first published on Friday, with no changes to
text)
       DAVOS, Switzerland, Jan 24 (Reuters) - World leaders and
business executives left the Swiss mountain resort of Davos
after a week of discussions dominated from a distance by Donald
Trump's return as U.S. President.
    
Here's what we learned:
    
    MIDDLE EAST
    There was real talk of regional peace, driven by Israel's
ceasefires with Hamas and Hezbollah, with friends and foes
agreed that if anyone can push Israeli Prime Minister Benjamin
Netanyahu to agree to a Palestinian state it is Trump.
    Iran, one of Trump's main targets during his first term,
chose Davos to tell the world it was ready to renegotiate a
nuclear deal, had no ambition or intention of building a nuclear
bomb and posed no threat to its neighbours or the world.
    "Now it's the time for us to move forward based on
opportunity, not threats," Tehran's diplomatic face, Javad
Zarif, Vice-President for Strategic Affairs, said.
    
    UKRAINE
    World leaders and businesses positioned themselves for a
ceasefire in Ukraine, with Trump using his remote video address
to say he wants to meet Russian President Vladimir Putin
"immediately" to negotiate an end to nearly three years of war. 
    Ukraine's Volodymyr Zelenskiy said one condition of any deal
would be a European contingent of at least 200,000 peacekeepers,
a demand Russia rejected. Meanwhile, his officials are lining up
larger privatisations to attract foreign investment in the
roughly $500 billion reconstruction effort ahead.
    "The recovery starts before a peace deal," Henrik Andersen,
CEO of wind turbine maker Vestas, said after closing a $470
million wind farm deal in Ukraine.
    
    FINANCE
    For financiers touting for business, U.S. deregulation is
seen as awakening the "animal spirits" likely to prompt
dealmaking across industries, including in finance with banks
expected to consolidate in both the United States and Europe.
    While "economic exceptionalism" was one phrase doing the
rounds in the corridors of Davos to describe U.S. policy under
the new Trump administration, investors and bankers expressed
confidence in the underlying strength of the U.S. economy.
    Although not as visible as in other years, the crypto crowd
were once again part of the Davos discussion. 
    The question for many was if, and how, mainstream finance
may embrace crypto in light of the U.S. move to draft new rules,
with many executives signalling they need to wait and see.
    
    AI
    Two years after ChatGPT captured the world's imagination,
tech executives and investors say using AI agents to automate
certain tasks, starting with the straightforward and repetitive
ones, could fuel the next wave of adoption.
    "Agents are a big part of how AI will impact (the) workforce
... this is the year that we'll see deployment of agents inside
enterprises," said Guru Chahal, partner at Lightspeed Venture.
    Because the sheer scale and complexity of AI models already
requires huge amounts of data, much of the talk in Davos was
around the associated infrastructure and geopolitics.
    The message from U.S. business executives is that while the
U.S. is ahead of China in AI for now, the government needs
tech-friendly policies and investment to maintain the edge.
    "It comes back to whether or not they can do the
infrastructure build-out alone," said Jared Cohen, co-head of
the Goldman Sachs Global Institute. 
        
  
        ENERGY 
  
    Davos delegates felt the energy industry landscape shift
around them as they digested a spate of Trump announcements.
    These ranged from pledging to unleash the U.S. energy
industry to boost output, accelerating the pace of LNG projects,
threatening the EU with tariffs if the bloc does not buy more
gas, suspending new federal offshore wind leasing, declaring
U.S. withdrawal from the Paris Climate Agreement and asking
Saudi Arabia and OPEC to bring down the cost of oil.
    Washington's withdrawal from the climate pact is not
expected to meaningfully change the energy transition momentum,
which is seen more in China and Europe than the U.S., but
executives in Davos said Europe needed to speed up deregulation
to incentivise investments to maintain its competitiveness.
            
        DEI
  
    Trump's moves on DEI reverberated through the corridors in
Davos, where gender parity, diverse workforces and better
representation of minorities are key World Economic Forum goals.
    Escalating pressure on the private sector to ditch diversity
programmes left some searching for new words to describe
workplace practices they say are essential to their businesses. 
    Trump has issued a series of executive orders cutting
federal diversity, equity and inclusion (DEI) programs, which
attempt to promote opportunities for women, ethnic minorities,
LGBTQ+ people and other traditionally underrepresented groups.
        
  
        CHINA
  
    Trump's return to the White House had raised big concerns
among Chinese business executives and investors about a further
deterioration in bilateral relationship between the world's two
largest economies.
    But the U.S. president unexpectedly held off on imposing
tariffs on China on his first day back in power and, during his
video address to Davos, he expressed a need for China's help in
ending the war in Ukraine. 
    This led some to speculate on the prospect of a
rapprochement between Washington and Beijing, while questioning
how long any honeymoon period might last.
    Global investors said they maintain an interest in
China-related assets, but are eager to see more concrete
stimulus policies. They will be particularly attentive to clues
about how Beijing plans to address the prolonged property
crisis, high local government debt and weak consumer demand.
    
    EUROPE
    ECB President Christine Lagarde characterised the global
economic challenges facing Europe as "an existential threat".
    "If European leaders can get their act together and respond
to this existential threat, there is a huge potential for Europe
to respond to the call," said Lagarde.
    Some executives noted that Trump's promises to roll back
corporate regulation in the U.S. had added fresh urgency to the
EU's long-running discussions on how to be more competitive.
    "They're rolling back regulations in the U.S. fast, so it
makes it more important to do (so) in Europe," said Nicolai
Tangen, CEO of Norges Bank Investment Management.
    European Commission head Ursula von der Leyen told Davos
that the bloc wants to dissuade innovative start-up firms from
moving to the U.S. to grow by creating rules that would allow
them to easily operate across the 27-nation European Union.
    Other executives said that while the EU's rhetoric on
deregulation was encouraging, they wanted to see quick action.

 (Reporting by the Reuters team in Davos; Compiled by Alexander
Smith; Editing by Alex Richardson)
 ((alex.smith@tr.com;))