👀 Talk about a power move

What’s going on here?

Weight-loss drug pioneers Novo Nordisk and Eli Lilly have competition: Chinese regulators just approved a homegrown rival – and the new contender could bodyslam the incumbents.

What does this mean?

Chinese regulators just approved Innovent Biologics’s “mazdutide” drug, creating Novo and Eli’s first serious competitor (and we’re not talking about celery juice diets or weighted hula hoops). Over 600 million Chinese adults are projected to be overweight by 2050, making China one of the world’s biggest markets. And with Novo being based in Europe and Eli in the US, Innovent will likely benefit from the hometown advantage.

Why should I care?

For markets: Let’s get lean.

♠️ For now, Novo still has an ace up its sleeve: patents for semaglutide, the key ingredient in its bestselling Wegovy drug.

⏰ Problem is, the one that applies in China will expire next year. And when it does, you can bet that plenty of local drugmakers will churn out cheaper versions.

💉 Semaglutide aside, Chinese companies already have more than 30 obesity drugs in the pipeline, with a few delivering decent results in clinical trials.

💰 Right now, weight-loss drugs are premium products – which means they bring in hefty profit margins for their makers. But if Chinese firms can bring cheaper options to the market, those drugmakers’ takings might start shedding a few pounds of their own.

Zooming out: Come one, come all.

No matter the industry, Chinese firms tend to share a similar strategy: beat the world’s best on performance and on price. Just look at the tech sector, where Baidu – dubbed China’s answer to Google – recently opened up its Ernie chatbot to developers and made the tool free. That could shake the sector. See, most top-of-the-line products come with paywalls or protected platforms. So, by making Ernie free, Baidu’s pushing competitors like OpenAI to drop prices, speed up innovation, or risk losing users.

What’s going on here?

American utility companies are expected to spend a record-breaking amount on power infrastructure to answer AI’s never-ending calls for attention.

What does this mean?

Data centers are just what the latest “Mission: Impossible” made them out to be: massive tech-filled warehouses that run AI systems. But their biggest issue isn’t as dramatic as the film’s rogue agent… rather, they’re just hungry for power. Data centers are expected to help push American electricity demand up 25% by 2030 and 78% by 2050, compared to 2023’s levels.

Desperate to keep up, utility companies are predicted to spend a historic $212 billion this year – 22% more than last year and over double what they spent a decade ago. That could rise to a record-breaking $228 billion by 2027, according to investment bank Jefferies. A big chunk of that cash will go toward power plants and transmission lines, reversing years of underinvestment in the grid.

Why should I care?

Zooming in: Light it up.

Utility companies might be fronting a lot of cash, but they’ll probably be rewarded for it. See, their returns are regulated based on the value of their approved investments. In other words, the more they spend, the more they can earn. Throw in attractive valuations and falling interest rates (which tend to spur on dividend-paying utility stocks), and you can see why investors have started warming up to the often-overlooked sector.

The bigger picture: Big Tech might ditch the grid.

Reluctant to increase prices for everyday households, utility firms are charging data centers directly by locking them into long-term contracts with usage minimums. Thing is, if electricity prices climb too high, data centers might just decide to short-circuit utility companies and power themselves. Small modular reactors (SMRs) could be a good option: the compact nuclear units deliver round-the-clock clean energy right where it’s needed. In fact, Oracle, Amazon, and Google have already inked contracts to power some future data centers that way.