Canada deepens EU ties as UK risks isolation, Anthropic withholds its latest model from UK testing, and Apple unveils its first foldable iPhone.

Welcome to this week’s Market Pulse, your 5-minute update on key market news and events, with takeaways and insights from the Sidekick Investment Team.

Today, we’re looking at Canada forging a partnership with the EU that risks leaving the UK behind, Anthropic refusing to submit its latest model for UK safety testing, and Apple unveiling its first foldable iPhone alongside broad price increases.

But first, our number of the week…

£450 million

That’s how much McLaren is planning to invest in its Woking technology centre, creating 1,000 new jobs in the UK’s struggling auto industry. The investment follows last year’s merger with an electric vehicle start-up under new Middle Eastern ownership.

Sidekick Takeaway: McLaren’s investment is a rare bright spot for UK carmakers, arriving just days after Jaguar announced 4,000 job cuts. But with UK vehicles facing a tariff on exports to the US and increased competition with China, the longer-term outlook remains challenging.

Only have a minute to read? Here’s the TL;DR:

• As rifts with America deepen, the EU and Canada are building a partnership that encompasses trade, defence, and supply chains. Weighed down by post-Brexit baggage, the UK risks being left without deep ties on either side of the Atlantic.
• Anthropic has refused to submit its latest AI models for pre-release testing to the UK’s AI safety lab, marking the first time the company has done so. The decision raises questions about international cooperation on AI safety amidst growing US protectionism.
• In the first keynote event headlined by CEO John Ternus, Apple unveiled the iPhone Duo, its first foldable phone. Catering to premium customers, high-end models are expected to cost up to $3,199, with other iPhones seeing price increases of about $100.

It’s important to note that the content of this Market Pulse is based on current public information which we consider to be reliable and accurate. It represents Sidekick’s view only and does not represent investment advice - investors should not take decisions to trade based on this information.

Stuck in the Middle: Canada and EU Deepen Ties as UK Left Behind

As rifts with America deepen, the EU and Canada are currently working toward a more integrated partnership, seeking cooperation on defence, trade, and critical minerals.

Details of the partnership are set to be unveiled at the EU’s State of the Union address next week. Canadian PM Mark Carney will be in attendance.

Notably, Canada’s relationship with Europe is expected to be far deeper than the UK’s – a sign of lingering post-Brexit baggage.

As the rules-based international order increasingly fades, the UK risks being stuck without deep ties on either side of the Atlantic.

In all but name

According to one Canadian official, the country is actively considering everything short of full EU membership:

• Earlier this year, Canada became the first non-EU country to join the bloc’s defence procurement fund. The expanded partnership is expected to go far beyond defence.
• The negotiations come amidst Canada’s worsening trade spat with the US, pushing the country to seek more robust ties elsewhere.
• In the UK, Labour has sought a ‘reset’ with the EU following Brexit. However, EU officials have appeared sceptical of making substantial agreements with a former member.

Carney has positioned himself as a champion of ‘middle powers’ in a world increasingly dominated by the US and China.

Canada’s new partnership with the EU would create the strongest middle-power alliance in the world, helping its members weather increasing geopolitical storms.

Sidekick Takeaway: With polls indicating that a significant majority of Britons believe that Brexit was a failure, it’s clear that there’s political appetite in the UK for a deeper relationship with the EU. While Burnham has pushed for a new EU deal, don’t expect it to be as expansive as Canada’s partnership.

For My Eyes Only: Anthropic Withholds Latest Model from UK Testing

In a sign of increasing protectionism in the AI industry, Anthropic refused to submit the company’s latest models to the UK for pre-release testing.

The episode marks the first time that the UK’s state-run AI Security Institute (AISA) has not been allowed to conduct preliminary testing.

Anthropic’s decision could be linked to the US government’s focus on preventing other countries from accessing frontier models.

That protectionism could increase the risk of catastrophic AI outcomes, both in the UK and abroad.

Protectionism undermines safety

AISA has emerged as one of the world’s leading AI safety labs. But amidst rising protectionism, international cooperation on AI safety could be fading:

• Although Anthropic has a rocky relationship with the US government, some UK officials believe that the firm was ordered to withhold the model from AISA by regulators.
• The US has grown increasingly cautious of distributing leading models abroad. In June, the Trump administration banned foreign nationals from using certain Anthropic models.
• The episode comes at a pointed time for AI safety, with one Anthropic researcher recently quitting over the belief that frontier labs are ‘gambling with our lives.’

With some of OpenAI’s agents recently hacking into another company’s servers on their own, it’s clear that safety risks are no longer theoretical.

Sidekick Takeaway: Much like nuclear technology, AI has the potential to be both highly useful and highly dangerous. But unlike nuclear technology, the world still lacks meaningful international cooperation on AI safety – something which short-sighted protectionism makes harder to achieve.

A New Hope: Apple Unveils Foldable iPhone, Price Increases

In his first keynote event as head of the company, Apple CEO John Ternus set a new direction for the $4 trillion behemoth.

First, Ternus unveiled the iPhone Duo, Apple’s first foldable phone – a market the company has long hesitated to enter.

Second, Apple announced price increases to existing products, signalling increased focus on premium customers.

With outgoing CEO Tim Cook presiding over shareholder gains of over 2,300%, investors hope that this new direction can extend Apple’s winning streak.

Hardware chief unveils hardware bets

Although Apple has been criticised for the company’s lack of hardware innovation in recent years, the foldable iPhone could mark a turning point:

• Foldable smartphones have historically struggled with poor battery life and inferior cameras. Apple is betting that foldable technology is now mature enough for mass adoption.
• However, the Duo will be pricey, costing as much as $3,199 for high-end models – a record-high for iPhone pricing.
• Other iPhone models are also expected to see price increases of about $100. Still, one Bank of America analyst noted that the increases were more modest than expected.

With Ternus previously serving as Apple’s hardware chief, time will tell whether the company can reclaim its reputation for product innovation.

Sidekick Takeaway: Although some of Apple’s price increases can be linked to a sharp rise in memory prices, the decision is still telling. By raising prices, Apple is betting that the company’s focus on premium customers can make up for any reduction in units sold.

Notices

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