Toy Story is back!

**Leanna Byrne** (0:00)
Could a rate rise be back in the table for the Eurozone? It's World Business Express from the BBC World Service. I'm Leanna Byrne. Nvidia doubles down on Taiwan, and the latest Toy Story film is taking on playtime in the age of screens.
Yes, lots coming up in the programme, but let's start with Eurozone inflation. It's picked up again, driven by rising energy costs and a jump in service prices. Fiona Sincotta, Senior Market Analyst at StoneX is with me. Fiona, does this mean the European Central Bank is going to have to raise interest rates?

**Fiona Sincotta** (0:39)
Yes. I mean, this is the third straight month that inflation has been above the ECB's 2% target. And this is, as you mentioned, as energy prices remain elevated, they rose 10.9% in May. And also, service sector inflation is also high. And that's considered a gauge of sort of domestic price pressures. So another one to watch closely.
But yeah, so I mean, this really does support the view that the ECB will likely hike rates by around 25 basis points next week to control those inflationary pressures.

**Leanna Byrne** (1:10)
I thought this was the year it was going to bring down interest rates.
Another one for you, Fiona. In the United States, Google's parent company Alphabet is saying it plans to raise $80 billion through a stock sale to fund its rapidly expanding artificial intelligence infrastructure. Now, investors, they generally reward AI spending. But at what point do markets start asking whether these enormous investments are actually going to generate returns?

**Fiona Sincotta** (1:34)
Yeah, I mean, it's a really good question. The share price is down slightly today on the announcement. And I think that is a sign that investors are a little bit concerned. But I think it's also worth pointing out that this is the usual.
It's very unusual for a company alphabet size to raise this much equity capital. I think that really does highlight that it's sort of enormous investment requirements. But also the timing of this is really interesting. Obviously, the share price has been trading near record highs, so they want to capitalize on that. But yes, there are lots of concerns about when will this start to generate huge profits to match the investments.

**Leanna Byrne** (2:11)
Fiona Sincotta, Senior Market Analyst at Stonex, thank you so much. Now, Nvidia's Chief Executive, Jensen Huang, has defended the company's growing investment in Taiwan, insisting it isn't being forced to choose between its operations there and in the United States. Speaking at the Computex Technology Conference in Taipei, Huang unveiled new projects and partnerships despite ongoing tensions between China and the self-governed island. Nvidia sits at the heart of the global AI boom, relying heavily on local semi-conductor manufacturers to produce its most advanced chips. Our Asia business correspondent, Sirin Janna Tawari, was there.

**Surinjana Tiwari** (2:46)
While Jensen Huang, Nvidia's CEO, has been in Taiwan, he has announced new investments in the island. But of course, Taiwan is at the centre of tensions over its technology and its chip ecosystem because China claims it as its own. So, I had the opportunity to ask Jensen Huang if new investments and new announcements are essentially a vote of confidence in the future stability of Taiwan. Here's what he had to say.

**Jensen Huang** (3:17)
We can do both at the same time. Continue to invest in the expertise that are here and diversify and to make our supply chain as resilient as possible. It's one of the reasons why Taiwan is such an incredible strategic partner for the United States, because Taiwan is investing in the ecosystem, the manufacturing in the United States. If you look at TSMC and Amcor and Spill and Wishtron and Foxconn, the amount of investment they've put into the United States so that the global supply chain could be as diversified and resilient as possible is incredible.

**Leanna Byrne** (3:50)
Obviously, he's saying Nvidia isn't being forced to choose between the US and Taiwan, but as tensions between Washington and Beijing continue, is that really a realistic position for a company like Nvidia to maintain.

**Surinjana Tiwari** (4:02)
Jensen Huang also said that Taiwan is excellent at manufacturing computer chips and the entire ecosystem is here. President Donald Trump is pushing for manufacturing to move back to the US. The fact is that the industry, the centre of the industry, and Jensen Huang said it himself, that Taiwan is the epicentre of the chip industry. And it's something that we heard from the Intel CEO a little later after Jensen Huang was speaking today.
So even though there is this push and pull, as you heard from Jensen Huang, these companies saying that they can invest both in the US and Taiwan in order to continue to meet the demand.