World Street | Elon Musk's xAI raises $6 bn; US markets shift to T+1 settlement; China launches semiconductor investment fund, and more

World Street offers a sneak peek into the world of business and the economy.

Elon Musk founded xAI secures $6 billion in funding, propelling. US markets shift to the T+1 settlement cycle. Ether bets surge amid US regulatory shift. ECB eyes rate cut, BOJ adopts cautious stance. China launches semiconductor investment fund. UBS completes job cuts ahead of Credit Suisse merger. All this and more on this edition of World Street.

xAI, the artificial intelligence firm founded by Elon Musk has raised another $6 billion from investors, boosting its valuation to $24 billion. Investors providing the second-round funding included Sequoia Capital, Andreesen Horowitz, and Saudi Prince Alwaleed Bin Talal.

Musk, who founded xAI in July last year, wrote on X that there would be “more to announce in the coming weeks,” and that the startup had a valuation of $18 billion before receiving the new funding.

The US financial markets will transition from the traditional T+2 settlement cycle to a quicker T+1 settlement cycle starting Tuesday. The last time share trades in New York settled in a single day was about a 100 years ago.

The change, halving the time it takes to complete every transaction, is aimed at enhancing market efficiency and reducing various risks associated with securities trading.

Bets on more Ether gains are intensifying following a surprise US regulatory pivot toward allowing exchange-traded funds (ETFs) for the digital asset, even as questions swirl about the strength of demand for the products, reported Bloomberg.

The shift by the US Securities & Exchange Commission (SEC) catalyzed a 26 percent jump in the second-largest token in the seven days through Sunday, the biggest weekly advance since the 2021 crypto bull market, data compiled by Bloomberg showed.

The European Central Bank will likely cut interest rates from historic highs at its upcoming meeting on June 6, suggested its chief economist, Philip Lane, in an interview with the Financial Times. Lane also brushed off fears that doing so before the US Federal Reserve could backfire.

Investors are betting that the ECB will lower its benchmark deposit rate by a quarter percentage point from its record high of 4 percent after eurozone inflation fell close to the bank’s 2 percent target.

The Bank of Japan (BOJ) will approach inflation-targeting frameworks with caution, Governor Kazuo Ueda stated, highlighting that certain challenges are "uniquely difficult" for Japan following years of ultra-easy monetary policy.

In an opening speech to a BOJ-hosted conference in Tokyo on central banking, Ueda said Japan has "made progress in moving away from zero and lifting inflation expectations." To attain 2 percent inflation sustainably and stably, the BOJ "will proceed cautiously, as do other central banks with inflation-targeting frameworks," he said.

China has established its third state-backed investment fund to bolster its semiconductor industry, with a registered capital of 344 billion yuan ($47.5 billion), according to a filing with a government-run companies registry, Bloomberg reported.

The substantial investment of hundreds of billions of yuan underscores President Xi Jinping's push for self-sufficiency in semiconductors.

This commitment has gained urgency after the US imposed a series of export control measures over the past few years, citing concerns that Beijing might use advanced chips to enhance its military capabilities.

UBS Group AG’s Asia Pacific president has indicated that the majority of the bank’s job cuts in the region have been completed as it approaches the finalization of its historic merger with Credit Suisse Group AG.

“We have optimized most of the positions both in terms of lines of business and geography,” Edmund Koh, Asia Pacific president at UBS, stated in an interview with Bloomberg Television on Tuesday. UBS operates in 13 locations across Asia Pacific and “for most of that, we are done,” he added.

China has urged Japan and South Korea to reject “protectionism” and uphold free trade as leaders of the countries met in a trilateral summit in Seoul.

Chinese Premier Li Qiang said he opposed turning economic and trade issues into “political games or security matters,” Chinese state media reported, as he met Japanese Prime Minister Fumio Kishida and South Korean President Yoon Suk-yeol.