Morning Briefing

Good morning. It's Monday, March 2nd, 2026, and we have a genuinely consequential week ahead — geopolitically, commercially, and in AI. Let's get straight into it.

The story dominating everything this morning is the Middle East. Over the weekend, American and Israeli airstrikes killed Iranian Supreme Leader Ali Khamenei, along with senior IRGC commanders and nuclear programme staff. Trump has vowed strikes will continue throughout the week. Iran has retaliated with missiles and drones targeting US military bases across Bahrain, Kuwait, Qatar, Saudi Arabia and the UAE, and its navy has reportedly blocked the Strait of Hormuz — the chokepoint through which thirty-one percent of all seaborne crude travels. Oil was sitting at seventy-three dollars a barrel on Friday. Analysts now expect prices to spike to eighty-five to ninety dollars when markets open this morning, and airline operations across the Middle East have already collapsed. For SAP, the immediate implications are energy cost volatility feeding into customer planning cycles, potential disruption to Middle East operations, and a macro environment that could accelerate uncertainty in enterprise spending decisions. Watch the market open closely today.

The second story is a defining moment for the AI industry. The Trump administration has declared Anthropic a quote supply chain risk and ordered every federal agency to stop using its technology. The reason: Anthropic refused to remove AI safeguards that prevent use for mass domestic surveillance and autonomous weapons. Anthropic is signalling it will sue within days. Hours after that announcement, OpenAI concluded its own Pentagon contract — with stated restrictions on unconstrained monitoring of Americans and autonomous weapons, though critics note those limits are tied to existing laws rather than independent commitments. The juxtaposition is stark: one lab blacklisted, another contracted. The US government is now actively shaping the commercial AI landscape through compliance pressure rather than legislation. This has direct implications for how enterprise AI vendors — including SAP — communicate around AI governance, safeguards, and sovereign deployment. The Anthropic situation is a talking point you will be asked about.

Third, chip dynamics are shifting fast. Nvidia is preparing to unveil a new processor tailored specifically for inference workloads, which it describes as a major shake-up set to reset the AI race. At the same time, Google has struck a multibillion-dollar AI chip deal with Meta, sharpening its rivalry with Nvidia in custom silicon. And Broadcom reports earnings Wednesday, with analysts expecting nineteen-point-one billion dollars in revenue — up twenty-eight percent — after AI chip revenue surged seventy-four percent in the prior quarter. The inference chip angle matters for SAP: as inference costs fall and specialised silicon proliferates, the economics of running Joule and Business AI workloads at scale improve. That's a narrative worth reinforcing with customers and analysts.

Fourth, Apple is having a major product week — iPhone 17e, new MacBook Pros and Airs, updated iPads, and a low-cost MacBook expected to drive Windows and Chromebook switchers. But the more strategically interesting detail is at the software layer: Apple is replacing its Core ML framework with Core AI at WWDC and is deeply integrating Google's Gemini models into a new version of Siri codenamed Campo for iOS 27. That's a significant dependency on a key rival, and it signals that even Apple is now treating foundation models as infrastructure rather than a proprietary differentiator.

Fifth, and directly relevant to how we think about the enterprise software narrative: software stocks have continued their broad sell-off, and Condé Nast CEO Roger Lynch told the FT that Google's AI Overview feature is a quote death blow to SEO traffic. Together these signals reinforce the same underlying dynamic — AI is destroying value for incumbent content and software businesses while concentrating it in infrastructure and model providers. Investors are asking hard questions about AI's net impact on enterprise software spend. That pressure is real, and it's the context in which SAP needs to keep making the case that AI augments and drives ERP value rather than disrupting it.

A few additional items worth flagging. Amazon has named Peter DeSantis as its new AI chief — a personnel move to track as AWS sharpens its enterprise AI positioning. Block, the payments company, announced layoffs of forty percent of its workforce. And multiple federal agencies have reportedly raised safety concerns about Elon Musk's xAI tools — adding to a picture of significant fragmentation in US government AI adoption.

On the geopolitics side, beyond Iran, Ukrainian officials have suggested Russia agreed to American proposals for post-war security guarantees — a development worth watching for European stability signals. And European defence stocks have rallied sharply, with at least one analyst now warning the trade is getting expensive.

One macro note to close: the February US jobs report drops Friday. After a strong January, that number will influence how markets read Fed policy and enterprise investment appetite heading into the spring.

That's your Monday morning brief. A lot in motion — the Middle East situation in particular warrants close monitoring throughout the day. Stay sharp, and have a strong week. Today's briefing was based on newsletter digests, international news wires.