Silicon Valley leaders have long argued that artificial intelligence will make technology and services dramatically cheaper. OpenAI CEO Sam Altman has described a future where intelligence becomes extremely inexpensive, while Tesla and SpaceX CEO Elon Musk has predicted that AI and robotics will create greater abundance and drive down costs.

So far, those benefits have yet to materialise at scale. AI adoption remains relatively slow, while the enormous investment needed for data centres and AI infrastructure is putting pressure on electricity prices, supply chains and other costs. For the Federal Reserve, this creates a difficult balancing act: AI could eventually boost productivity and reduce inflation, but its current buildout is contributing to higher prices.

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OpenAI chief economist Ronnie Chatterji said AI needs to be adopted by organisations and generate measurable value before its broader economic impact becomes visible in productivity statistics.

AI Adoption Remains Uneven

Capital spending on AI infrastructure in the U.S. is expected to reach $581 billion this year, according to Goldman Sachs Research, with global investment potentially reaching $1 trillion.

Despite the scale of spending, adoption remains far from universal. A May survey by the U.S. Census Bureau found that 17% to 20% of U.S. businesses reported using AI, with adoption significantly higher among large companies.

Companies that have implemented AI at scale also highlight the challenges. Julie Averill, former CIO of Lululemon, said successful deployment requires changes in employee behaviour and trust in the technology. OpenAI has observed a similar divide: its most advanced business users deploy AI at around eight times the rate of average companies.

Why Productivity Gains May Take Time

Economists point to the limits of automation. AI can perform individual tasks effectively, but many jobs combine tasks that are difficult to automate.

Stanford professor Charles Jones refers to these as “weak links”. Radiology, for example, involves interpreting scans but also communicating with patients and working with colleagues. AI can automate part of the job without eliminating the profession itself.

As a result, the full economic impact of AI may not become clear until businesses adopt the technology more broadly and reorganise their operations around it.

AI Adds To The Fed’s Policy Challenge

AI’s economic impact has become part of the Federal Reserve’s policy debate. Fed Chairman Kevin Warsh has argued that AI could eventually become a significant disinflationary force by increasing productivity and strengthening U.S. competitiveness.

Other officials are more cautious. In July, the Fed kept interest rates at 3.5% to 3.75%, while some officials expressed concern that AI infrastructure spending could add to inflationary pressures.

Minneapolis Fed President Neel Kashkari pointed to massive data-centre investment as a new source of demand. Household electricity prices rose 10% in the two years through July, compared with a 6.2% increase in overall consumer prices. Meanwhile, shortages of chips and other AI components are pushing up costs. JPMorgan Chase estimates that DRAM prices could rise 400% by the end of 2026 compared with 2024.

Warsh has consequently adopted a more cautious tone, saying that while AI investment is laying the groundwork for future growth, the timing and scale of its economic effects remain difficult to predict.

For the Fed, the challenge is clear: AI could eventually deliver major productivity gains, but the cost of building that future is already showing up in the economy.

A hot and exceptionally dry summer is disrupting nuclear power generation across Europe, forcing governments and energy companies to take extraordinary measures to maintain electricity supplies.

In Romania, state-owned Nuclearelectrica warned that it could shut down its last operating reactor as water levels in the Danube continue to fall. The country has declared an energy emergency through August and has resorted to measures including dredging the river and sinking rock-filled barges. Romanian naval forces also carried out a controlled underwater explosion to improve water flow to the cooling systems of the Cernavoda nuclear plant.

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Romania’s two nuclear reactors typically generate around a fifth of the country’s electricity. Hungary has seen some relief after rainfall raised Danube water levels, allowing another turbine at the Paks nuclear plant to restart. Two of its eight turbines are now operating, with the plant supplying nearly half of the country’s electricity.

France Faces Heat, Drought And Jellyfish Disruptions

France is facing similar challenges. Nuclear power provides around 70% of its electricity, but EDF has reduced output at several reactors because of environmental conditions. Three reactors at the Gravelines plant were also shut down after a large influx of jellyfish triggered automatic safety measures.

France’s nuclear power plants have faced repeated disruptions this summer amid extreme heat, drought and wildfires. Because many nuclear plants rely on rivers or coastal waters for cooling, low water levels and unusually high temperatures can directly affect their operations.

European governments are now considering measures including upgraded cooling systems and scheduling maintenance around periods of extreme heat.

Treating Extreme Heat As An Emergency

The U.K. has also stepped up its response. Prime Minister Andy Burnham called a meeting of the government’s emergency Cobra committee as the country prepared for temperatures of up to 38°C.

Energy and Climate Intelligence Unit analyst Gareth Remond-King said the decision to treat extreme heat as an emergency may have come “a little overdue,” arguing that drought, wildfires and rising temperatures point to a broader climate crisis.

Heat Could Weigh On Europe’s Economy

The impact extends beyond energy infrastructure. An analysis by Dutch bank Triodos estimated that Europe’s extreme summer heat could cost the economy around €180 billion, largely because of weaker labour productivity. Triodos’ analysis estimates the impact at roughly 1% of EU GDP, equivalent to the bloc’s expected economic growth for 2026.

Heat is affecting the economy through lower agricultural output, higher food and electricity prices, reduced energy production, transport disruption and declining worker productivity. The latest disruptions highlight how increasingly extreme weather can affect not only Europe’s energy security but also economic growth and critical infrastructure.

Cyprus-based technology company Powersoft365 will showcase eight AI agents for the apparel, fashion and retail sectors at the Indonesia Retail Summit & Expo 2026 in Jakarta on August 26–27.

The company’s appearance comes just weeks after it joined a Cyprus business mission to Southeast Asia led by Chief Scientist Demetris Skourides. During that visit, Powersoft365 explored Indonesia’s technology ecosystem and potential opportunities for international cooperation.

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Eight AI Agents For Retail

At booths i6 and i7, retailers, fashion groups, distributors and technology partners will be able to see Powersoft365’s AI Retail Operating Platform in operation.

The platform connects specialised AI agents with existing enterprise resource planning, point-of-sale, warehouse and e-commerce systems. The technology can analyse business data, forecast demand, recommend actions and automate selected processes.

Among the solutions on display will be ASR, an AI-powered stock replenishment tool that analyses sales and inventory and recommends product transfers between stores. The AI Data Analyst allows managers to query business data using natural language, while the AI Forecasting Agent supports purchasing and inventory planning.

The company will also demonstrate an AI POS Selling Assistant for sales recommendations and cross-selling, an AI Social Media Manager for content and campaigns, and an AI Virtual Try-On service for digital garment fitting.

Other solutions include ApparelBridge, which brings together product information from different suppliers, and an AI Stylist designed to match products with customer preferences.

From Retail Software To AI

Powersoft365 has more than 30 years of experience developing technology for clothing, footwear and fashion businesses, including retailers, chains, franchises and wholesalers.

Its ModaPro platform focuses on fashion-specific requirements such as size and colour matrices, multi-store inventory and real-time stock management. The company is now using that experience to move towards an agentic AI model, where software can understand business conditions, analyse data, recommend actions and assist with everyday decisions.

“AI in retail is not yet a chatbot,” CEO and founder George Malekkos said. “It is AI that understands your business, your products, your inventory, your customers, and your sales, and then helps you take action.”

Expanding Beyond Cyprus

Powersoft365 is positioning its platform as an API-first ecosystem, allowing retailers to connect AI agents with existing systems without replacing their entire technology infrastructure.

Malekkos said the company also wants to demonstrate that technology developed in Cyprus can compete internationally.

The Jakarta exhibition will give potential customers and partners an opportunity to test the technology and explore possible integrations and commercial cooperation.

Road freight activity in Cyprus continued to expand during the first quarter of 2026, with goods transported within the country increasing by 2.3% year on year. Freight movements to and from Cyprus recorded stronger growth, rising by 9.3%, according to figures from the Statistical Service.

International Freight Leads Growth

The latest figures point to continued growth in road-based goods transport despite Cyprus’ strong reliance on maritime connections for international trade.

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Eurostat data show that Cyprus recorded 1.099 billion tonne-kilometres of road freight transport in 2025, compared with 1.096 billion in 2024 and 1.023 billion in 2023. Tonne-kilometres measure the weight of goods transported in relation to the distance travelled.

EU Road Freight Edges Higher

Across the EU, road freight reached 1.886 trillion tonne-kilometres in 2025, up 0.9% from the previous year. Almost 13.3 billion tonnes of goods were transported by road during the year.

National transport accounted for 62.2% of total EU road freight activity, increasing by 2.2% in 2025. International transport represented another 24.4%, while cross-trade and cabotage together made up 13.4%.

Performance varied significantly across member states. Ireland recorded the strongest growth at 10.5%, followed by Portugal at 10.3% and Croatia at 7.7%. Luxembourg saw the sharpest decline, at 14.1%, followed by Slovenia at 10.7% and Estonia at 10.3%.

Poland remained the largest contributor to EU road freight performance, accounting for 20.2% of the total, followed by Germany at 14.7% and Spain at 14.5%.

Food And Consumer Goods Lead Volumes

Food products, beverages and tobacco represented the largest category of road freight in the EU in 2025, generating 311.1 billion tonne-kilometres.

Germany recorded the highest volume of goods transported by road when measured in tonnes and was also a major participant in international freight flows across the bloc.

Road Transport Remains Key To Logistics

Road freight continues to play an important role in connecting ports, airports, warehouses and final destinations. According to DHL, the extensive road network gives trucks greater flexibility than other modes of inland transport and allows goods to reach locations that are not directly connected to major transport hubs.

For Cyprus, the 9.3% increase in freight movements to and from the island highlights the continued importance of road haulage in supporting trade and connecting businesses with ports and final destinations.

Overall, the latest figures point to moderate but continued growth in Cyprus’ road freight sector, while the wider European market also expanded in 2025 despite significant differences between countries and types of transport.

AI code-testing startup Blacksmith has raised $45 million in a Series B round, bringing its valuation to $550 million, nearly nine times higher than less than a year ago.

Peak XV Partners led the round, with existing backers GV and Y Combinator also participating. The latest funding brings Blacksmith’s total capital raised to $58.5 million.

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Demand Grows As AI Speeds Up Coding

Founded in 2024, Blacksmith helps companies build, test and validate software before it reaches production. Customer numbers have grown from more than 700 to over 5,000 in less than a year, with companies including Mercury, Supabase, Clerk, Ashby and Expensify using the platform.

As tools such as Cursor, OpenAI’s Codex and Anthropic’s Claude Code make software development faster, companies are producing more code, increasing the need for reliable testing.

“Validating code is still a bottleneck, and it’s an even bigger bottleneck because people are writing even more,” CEO and co-founder Aditya Jayaprakash said.

From CI Platform To AI Coding Tools

Blacksmith initially focused on cloud infrastructure for continuous integration, allowing companies to run the builds and tests required before releasing software. It has since expanded into AI-powered development with Codesmith, an agent designed to automatically fix failed code checks.

The company reached a $10 million annualized revenue run rate with a team of just 10 people and has since expanded to around 30 employees. Revenue is now in the tens of millions of dollars, while some major customers spend more than $1 million annually on the platform.

Competition Remains Intense

Blacksmith faces competition from established platforms including GitHub Actions, as well as AI coding products and cloud providers such as Amazon Web Services, Microsoft Azure and Google Cloud.

Jayaprakash said the company aims to differentiate itself through faster testing and competitive pricing. Blacksmith plans to expand its platform further, with the broader goal of helping developers write, test and merge software more efficiently.

Norway’s $2.34 trillion sovereign wealth fund recorded a record profit of more than $184 billion in the first half of 2026, boosted by strong performance from Asian technology stocks.

Norges Bank Investment Management (NBIM), which manages the fund, reported a 9.4% return for the first six months. Profit reached more than 1.75 trillion Norwegian kroner, equivalent to around $184.9 billion.

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Asian Technology Stocks Drive Growth

“The result is driven by good returns in the equity market, particularly from Asian technology stocks,” said Nicolai Tangen, CEO of NBIM.

Equities account for more than two-thirds of the portfolio, while other investments include fixed income, real estate and renewable energy infrastructure. U.S. stocks make up around 40% of the portfolio, with Nvidia, Apple and Microsoft among its largest holdings.

SpaceX Stake Revealed For First Time

NBIM also disclosed a 0.05% stake in SpaceX worth more than $1.2 billion as of June 30. Compared with its largest investments, the SpaceX holding remains relatively small. Nvidia accounted for around $61.8 billion of the portfolio, while Apple was valued at approximately $52.7 billion at the end of June.

Norway’s wealth fund also holds a 1% stake in Tesla worth around $15.7 billion, giving it exposure to two major companies led by Elon Musk.

With investments in more than 7,000 companies across over 50 countries, NBIM owns stakes equivalent to around 1.5% of all publicly listed companies globally.

Hotel occupancy in Larnaca fell by around 15% year on year in both July and August, as the conflict in the Middle East and continued geopolitical uncertainty weigh on the city’s tourism market.

According to Larnaca PASYXE President Marios Polyviou, the impact was strongest during the early months of the crisis. While conditions have since stabilised, the city entered the peak summer season with occupancy below last year’s levels.

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August Bookings Show Some Improvement

July ended with occupancy around 15% below 2025, while August started at approximately 75%, compared with 90% a year earlier.

Late bookings have since improved the outlook, with Polyviou hoping the figures will strengthen further before the end of the month. Uncertainty remains, however, given Larnaca’s exposure to tourism markets affected by developments in the Middle East.

Israel Remains Key Tourism Market

Israel continues to be Larnaca’s largest tourism market, with flights returning to last year’s levels from the second half of July. Around 25 flights a day are currently operating between Israel and Larnaca Airport.

The UK remains the second-largest market, followed by Germany, Poland, Greece and other EU countries.

September Bookings Look More Promising

While Polyviou said forecasting the autumn season remains difficult, September bookings are currently developing at a good pace, raising hopes that the month will perform at least as well as last year.

Tourism revenue across Cyprus fell 16% in the first half of 2026 compared with the same period in 2025. Polyviou noted that January and February had recorded a 15% increase, suggesting the decline during the subsequent crisis-affected months was more pronounced.

New UK Partnerships Could Boost Larnaca

Larnaca hotels have also signed agreements with UK tour operators TUI and Jet2, which Polyviou described as particularly significant for the local market.

He said a coordinated push by major tour operators into Larnaca had not been seen on this scale since the pandemic. The new partnerships are expected to support British arrivals, with hopes for stronger growth in 2027.

Hotel occupancy in Limassol has reached around 90% in August, bringing the city’s performance back in line with last year, according to PASYXE Limassol President Christos Tsanos.

Last-minute bookings have played a key role in the recovery, with demand strengthening particularly during the week of August 10-17. Domestic travellers have also contributed to the increase, helping hotels across the city and district reach current occupancy levels.

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Late Bookings Drive Summer Recovery

Tsanos said the strong role of last-minute reservations was the defining feature of this year’s tourism season. He added that the latest figures confirm his earlier expectation that the negative impact of the war in Iran would gradually ease.

In late June, Tsanos had forecast a recovery in tourist traffic following changes to travel advisories in several countries. At the time, however, he warned that a strong summer alone would not be enough to offset weaker periods earlier in the year.

Hotels Keep Prices Mostly Stable

Most Limassol hotels have kept their prices close to last year’s levels, with increases generally limited to no more than 5%.

Tsanos said the approach was intended to support both the domestic market and international visitors considering a return to Limassol. With the city attracting a large share of higher-income tourists, he added that maintaining high service standards remains particularly important.

Hotel demand across Cyprus is showing mixed results this summer, with Limassol and the eastern resorts reporting strong occupancy while Larnaca continues to feel the impact of regional conflicts.

Limassol hotels are around 90% full in August, while Larnaca is about 15% below last year. Protaras and Ayia Napa are also expecting occupancy to approach full capacity in the coming weeks.

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Limassol Maintains Strong Demand

Hotels in Limassol are matching last year’s August booking levels, according to Christos Tsanos, president of the Cyprus Hotels Association branch in the city.

Prices have largely remained stable, with increases in most categories limited to around 5%. Tsanos said Limassol’s appeal among higher-income visitors was also supporting demand.

Larnaca Still Feels Regional Impact

Larnaca hotel occupancy is around 15% below last year in both July and August. Marios Polyviou, head of the local hotel association, said the city had been particularly affected by the conflict in the Middle East.

August began with occupancy at approximately 75%, compared with around 90% in 2025. Hoteliers are hoping for more last-minute bookings, while September reservations are showing a more positive trend.

Paphos And Famagusta See Stronger Demand

Paphos is showing signs of recovery, with improvements to the seafront and key tourist areas following a municipal clean-up campaign.

Hotels in Protaras and Ayia Napa are expecting occupancy of 90% to 95% over the next two to three weeks. Demand is being driven by visitors from the UK, Israel and Scandinavian countries, alongside domestic bookings.

Norway’s $2.3 trillion sovereign wealth fund, the world’s largest, recorded a profit of 1.75 trillion Norwegian crowns ($184.3 billion) in the first half of 2026, marking its strongest first-half result on record. Strong equity markets, particularly in Asian technology stocks, provided the main boost to the fund’s performance.

Technology Stocks Drive Strong Returns

“The result is driven by good returns in the equity market, particularly from Asian technology stocks,” said Nicolai Tangen, CEO of Norges Bank Investment Management, which manages the fund.

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With investments across around 7,100 companies worldwide, Norway’s wealth fund owns an average of 1.5% of all publicly listed companies globally. Among its largest technology holdings are a 1.28% stake in Nvidia worth around $62 billion, a 1.24% position in Apple valued at $52 billion and a 1.17% holding in Alphabet worth approximately $50 billion.

Other major investments include a 1.27% stake in Microsoft valued at $35 billion and a 1.7% position in Taiwan Semiconductor Manufacturing Company worth around $34 billion.

Norway Fund Reveals SpaceX Investment

Norway’s wealth fund also disclosed a 0.05% stake in SpaceX worth approximately $1.22 billion as of June 30. While relatively small compared with its other major technology investments, the holding adds the private space company to the fund’s expanding technology portfolio.

SpaceX shares rose sharply following its record-breaking IPO in late June before retreating as investors questioned whether a valuation equivalent to around 77 times expected revenue could be justified.

A Major Force In Global Markets

Norway’s sovereign wealth fund invests revenues from the country’s oil and gas industry across equities, property and renewable energy projects. Its broad portfolio and significant stakes in thousands of companies make it one of the most influential investors in global financial markets.