Grab is buying Singapore-based buy-now, pay-later platform Atome Financial for $1.49 billion in cash as the Southeast Asian technology company moves to deepen its consumer lending business and expand the reach of its financial services operations.

Grab will initially acquire a 60% controlling stake in Atome, with plans to purchase the remaining 40% roughly two years after the first transaction closes. The two-stage structure is intended in part to reduce the capital-allocation risk associated with the deal, Grab Chief Financial Officer Peter Oey told CNBC’s “Squawk Box Asia” on Wednesday.

Grab shares closed 3.64% lower on Nasdaq following the announcement, suggesting investors were initially cautious about the scale and structure of the transaction.

The acquisition gives Grab an established consumer-credit platform that operates across sectors where the company has a more limited presence, including travel, beauty and e-commerce. Atome’s network of merchants and consumers could allow Grab to extend its financial services ecosystem beyond the users and transactions already generated through its mobility, delivery and digital platforms.

“All this together actually brings our capability to the next level when it comes to financial services,” Oey said, adding that the transaction would be accretive to the business and had contributed to Grab raising its 2028 outlook.

The deal is expected to close next year. As a result, Atome’s financial contribution is expected to become more significant toward the latter part of that year and into 2028, according to Oey.

Grab expects its financial services segment to generate $500 million in adjusted EBITDA by 2028, making the Atome acquisition an important part of its effort to turn financial services into a larger contributor to the group’s earnings.

Grab Expands Beyond Payments And Mobility

Grab has spent years building financial services around its broader Southeast Asian consumer ecosystem. Its expansion into lending represents a shift from simply facilitating transactions toward capturing more of the financial activity generated by consumers and merchants using its platforms.

Atome gives Grab an existing business in a segment where customer relationships and merchant acceptance are critical. Rather than building a new buy-now, pay-later operation from scratch, Grab will take control of a platform already connected to brands across several consumer categories.

Oey said Atome’s presence in travel, beauty and e-commerce would give Grab access to areas where its existing operations have less reach.

That diversification could yield positive results as Grab seeks to increase the scale and profitability of its financial services business. Consumer lending can generate higher revenue per customer than basic payment services, but it also introduces greater exposure to credit losses, regulatory requirements, and changing consumer borrowing behavior.

The acquisition therefore expands both the opportunity and the risk within Grab’s financial services operations. The company will need to integrate Atome while maintaining underwriting discipline and managing the regulatory requirements associated with consumer credit across multiple Southeast Asian markets.

Grab plans to retain Atome’s existing management team, Oey said. The decision could help preserve operational expertise and reduce disruption during the integration process.

The two-year gap before Grab acquires the remaining 40% will also give the companies time to develop potential synergies before the full transaction is completed. Oey said the period would allow Grab and Atome to work on those opportunities while limiting the amount of capital committed immediately.

The structure effectively gives Grab time to assess how the businesses work together before completing the acquisition. It also provides a longer window for integrating technology, customers and merchant relationships and determining where the combined platforms can generate additional revenue.

Southeast Asia’s Credit Gap Becomes A Growth Opportunity

Grab’s interest in consumer lending comes as financial access remains uneven across Southeast Asia. Oey pointed to access to fair credit as an area where Grab wants to work with regulators, indicating that the company’s expansion will depend not only on demand but also on the regulatory framework governing digital lending.

The company is also examining micro-investing as another potential financial services opportunity in the region. That broadens the potential ambition beyond lending. A combination of payments, credit, investment products and other financial services could allow Grab to develop a more comprehensive financial ecosystem around its large consumer and merchant base.

However, the economics of such an expansion will depend on execution. Lending businesses can grow rapidly when credit is readily available, but profitability can deteriorate when borrowers struggle to repay or when regulators impose tighter requirements.

For Grab, the attraction of Atome is therefore not simply the addition of another financial product. It is the possibility of using an established consumer-credit platform to extend the company’s reach into transactions and customer relationships that sit outside its traditional strengths.

The $1.49 billion initial cash consideration also makes the deal one of Grab’s more significant capital commitments as it seeks to build a larger earnings contribution from financial services. The staged acquisition allows the company to spread that commitment over time while pursuing potential operating synergies.

The immediate share-price decline shows that the market will scrutinize whether those expected benefits justify the cost and risks of the acquisition. Grab will ultimately have to demonstrate that Atome can contribute meaningfully to earnings while maintaining responsible credit standards across its markets.

The company has set a clear financial target: $500 million in adjusted EBITDA from financial services by 2028. With the Atome transaction expected to contribute more materially from late next year, the performance of the acquired business will become an increasingly visible part of Grab’s progress toward that goal. The deal marks another step in Grab’s evolution from a ride-hailing and delivery platform into a broader consumer technology and financial services company.

China has called for greater cooperation with the United States on artificial intelligence, noting that AI should not become a technology controlled by a handful of major powers and warning against turning competition over the industry into a zero-sum contest.

The comments, published Wednesday by the People’s Daily, the ruling Communist Party’s flagship newspaper, come as Beijing and Washington prepare for bilateral talks next week in which artificial intelligence is expected to be a significant issue. The two countries are the leading forces behind frontier AI development and its global adoption, but they remain sharply divided over technology policy, intellectual property, access to advanced computing and the use of AI models.

The People’s Daily commentary said China was prepared to work with the United States to manage the risks associated with AI and create what it described as an open and non-discriminatory environment for the technology’s development.

“Artificial intelligence is a new domain for human development, not a monopoly of great powers, and must not become an arena for zero-sum competition,” the commentary said.

The article was published under the pen name “Zhong Sheng,” meaning “Voice of China,” a byline frequently used by the People’s Daily to express views on foreign policy.

The intervention highlights a central tension in the emerging U.S.-China AI relationship. Both countries want to establish technological leadership, but restrictive controls on advanced chips, AI systems, and technology transfers have made access itself a major component of the competition.

Beijing Challenges Washington’s Distillation Claims

The People’s Daily also directly challenged U.S. accusations that Chinese companies have improperly extracted capabilities from American AI models through a process known as distillation.

Distillation involves training a smaller or more specialized model using outputs generated by a larger model, allowing developers to reproduce some of the larger system’s capabilities without bearing the full cost of training a frontier model from scratch.

The commentary argued that U.S. companies also use the technique and accused Washington of applying different standards depending on who is using it.

“According to U.S. logic, when American enterprises use distillation it is an ‘industry standard practice,’ while when Chinese enterprises apply it, it constitutes an ‘attack.’ This is naked double standards,” the paper said.

The accusation follows growing disputes over the extent to which Chinese AI developers have used outputs from leading U.S. models to improve their own systems. Washington has increasingly treated such activity as part of a broader technology-security challenge, while Beijing argues that the restrictions amount to an effort to preserve U.S. dominance.

The People’s Daily said elevating distillation into a national-security issue amounted to using security concerns as a pretext for seeking an AI monopoly.

The competing interpretations expose a bold fault line in the AI industry. Distillation itself is a widely used technical approach, but its legality and acceptability can depend on how it is conducted, the terms governing access to a model, the provenance of the training data, and whether developers are attempting to replicate proprietary capabilities in ways that violate contractual or other restrictions.

That makes the dispute broader than a disagreement over a single machine-learning technique. It is increasingly about who gets to participate in the development of advanced AI and what forms of technology transfer are considered legitimate.

AI Competition Moves Into a Diplomatic Arena

Washington and Beijing have been treating AI as both an economic technology and a national-security capability. The United States has imposed restrictions designed to limit China’s access to advanced semiconductor technology and computing infrastructure, while China has retaliated and pushed domestic companies to develop alternatives and expand the use of open-weight AI models.

The White House earlier this year accused China of stealing intellectual property from U.S. artificial intelligence laboratories on an industrial scale. Beijing has rejected such characterizations and has repeatedly presented open development and broader access to AI technology as alternatives to what it views as U.S. efforts to preserve technological advantages.

The People’s Daily commentary therefore serves two purposes. It defends China’s AI industry against accusations of unfair technology acquisition while positioning Beijing as willing to discuss common rules for managing the technology’s risks.

China said it was willing to engage in “constructive and professional” discussions with the United States to promote what it called the open, inclusive, universal and beneficial development of AI.

The language is notable because the two countries are competing intensely for influence over the next generation of AI infrastructure and applications. The competition now extends from foundation models and semiconductors to cloud computing, data centers, robotics and AI agents capable of taking actions with limited human intervention.

At the same time, the risks associated with capable AI systems are becoming an area where the interests of the two countries overlap, even if their regulatory philosophies differ. Questions around cybersecurity, autonomous agents, model misuse, intellectual property and the potential loss of human control cannot be contained neatly within national borders.

Greater openness, for U.S. companies, could provide access to a much larger pool of researchers, developers and markets. But Washington also faces concerns that technologies developed or shared with Chinese companies could strengthen capabilities with military or strategic applications. Beijing, meanwhile, wants access to global AI markets and technology while developing a domestic ecosystem that is less dependent on U.S. suppliers.

That push has created a difficult balance between cooperation and technological containment.

The People’s Daily’s argument that AI should not become a “monopoly of great powers” is therefore as much a statement about the international rules governing the technology as it is about China-U.S. relations. Beijing is seeking a framework in which Chinese companies can participate in global AI development without being excluded by export controls, intellectual-property restrictions or national-security rules.

Washington accepting that premise will depend on how it distinguishes legitimate technological competition from activities it considers threats to U.S. security or intellectual property. The talks next week could provide an early indication of whether the two sides can establish areas of cooperation around AI safety and development while continuing to compete over the underlying technology.

Gold prices recovered on Wednesday as oil prices eased and investors positioned for the Federal Reserve’s interest-rate decision, with markets already assigning a high probability to another rate increase.

Spot gold rose 0.8% to $4,326.83 an ounce by 0650 GMT, recovering from a more than one-month low reached on Monday. U.S. gold futures for December delivery, however, fell 0.8% to $4,367.20.

Markets were pricing in a 92.7% probability of at least a 25-basis-point rate hike later Wednesday, according to CME FedWatch. A press conference from Fed Chair Kevin Warsh will follow the decision.

The immediate direction of gold is likely to depend less on the widely anticipated rate increase than on the Fed’s assessment of what comes next.

“A hawkish Fed could pull gold down, while any soft messaging may ease bets on hikes and help the metal recover,” said Frank Walbaum, a market analyst at trading platform Naga.com. “Traders are also monitoring oil prices and developments in the Middle East.”

Gold typically benefits from inflation and geopolitical uncertainty because investors use the metal as a store of value when confidence in financial assets or currencies deteriorates. But it does not generate interest or dividends, making higher interest rates a competing attraction. When Treasury yields rise, the opportunity cost of holding bullion increases.

That tension has escalated now because the bond market is already undergoing a significant repricing.

The U.S. 10-year Treasury yield breached the closely watched 5% level on Tuesday, pushing global government bond yields higher and adding pressure to assets that compete with fixed-income securities. The rise in long-term yields has occurred even as investors confront an energy shock that threatens to keep inflation elevated.

Gold’s resilience in that environment has surprised some analysts.

Commerzbank said it was somewhat unexpected that bullion had not come under greater pressure given the rise in yields. The bank pointed to persistent fiscal concerns, reflected in elevated long-term government bond yields, as well as a recent increase in U.S. political risks, as factors that could be supporting gold.

That has resulted in a more complicated backdrop for the precious metal than the conventional relationship between gold and interest rates would suggest.

If the Fed signals that rates will remain elevated for longer, real yields could rise further and weigh on gold. But if investors increasingly question the sustainability of government borrowing, currency stability or the ability of central banks to contain an energy-driven inflation shock, demand for bullion could remain strong even with elevated rates.

Oil is adding to that uncertainty.

Crude prices fell Wednesday following an unexpected increase in U.S. inventories, but the market remained focused on supply risks after Saudi Arabia suspended oil loading at its Yanbu port.

Brent and U.S. crude have remained above $100 a barrel as the war involving Iran continues to disrupt energy flows and raise concerns about the security of critical infrastructure and shipping routes.

Saudi Arabia’s air defenses also destroyed a Houthi drone south of Mecca before it entered prohibited airspace over the holy city, according to a spokesperson for the Saudi-led military coalition in Yemen.

The continuing attacks mean oil remains an important variable for both the Fed and financial markets. A sustained rise in crude prices can feed directly into fuel and transportation costs and eventually influence broader inflation expectations. That could make it harder for the central bank to ease monetary policy even if higher borrowing costs begin weighing on economic activity.

For gold, analysts say the effect is more complicated. This is because higher oil prices can initially hurt bullion by reinforcing expectations for higher interest rates. Still, persistent inflation and geopolitical risk can simultaneously strengthen its appeal as a hedge.

That conflict is playing out across financial markets.

Global government bonds have extended their sell-off as the 10-year Treasury yield moved through 5%, while equities have remained remarkably resilient. The S&P 500 is up more than 10.8% this year, the Nasdaq Composite has gained 11.8%, and the Dow Jones Industrial Average is up 8.4%.

Stocks in South Korea, Japan and Europe have also advanced, despite the combination of an energy crisis, higher bond yields and recurring geopolitical volatility.

The apparent disconnect is especially pronounced in technology stocks.

Recent warnings from leading AI executives that the development of powerful models may be moving too quickly have introduced another source of uncertainty for investors. Yet equity positioning remains broadly bullish.

Bank of America’s latest Global Fund Manager Survey, released Tuesday, found that the “excess bullishness” evident over the summer had moderated, but investors continued to expect strong economic growth and corporate earnings.

The survey of 170 investors managing a combined $470 billion found that a net 49% remained overweight global equities in September. That was slightly lower than the previous month, but equities remained the most widely held overweight asset class.

Investors have also become more optimistic about earnings. Expectations for double-digit earnings-per-share growth over the next 12 months reached their highest level since August 2021, while 38% of respondents expected the global economy to experience a “boom” over the coming year.

At the same time, bond allocations fell to their lowest level since May 2022. That positioning presents a notable tension with what is happening in fixed income and commodities.

Investors are heavily positioned for corporate earnings growth and continued AI spending, even as the risk-free rate is rising, oil remains above $100, and geopolitical uncertainty is feeding into inflation expectations.

If Treasury yields continue to climb, that could eventually force investors to reassess how much they are willing to pay for equities whose valuations depend on future earnings. Higher yields increase the discount rate applied to those earnings, particularly affecting growth-oriented companies with cash flows expected further in the future.

Gold occupies a different position in that debate.

The metal can lose some appeal when real interest rates rise, but its investment case can strengthen when investors become more concerned about fiscal sustainability, geopolitical instability or persistent inflation. The simultaneous rise in bond yields and gold is thus seen as an indication that at least some investors are not treating higher yields as sufficient protection against longer-term macroeconomic risks.

Other precious metals also moved higher. Spot silver gained 1.5% to $64.59 an ounce, platinum rose 0.7% to $1,787.90, and palladium advanced 2.2% to $1,317.50.

The Fed decision will provide the next immediate test for gold. A clearly hawkish message could bolster the dollar and Treasury yields, increasing pressure on bullion. A softer signal could allow gold to extend its recovery.

But the larger market question extends beyond Wednesday’s rate decision.

Investors are simultaneously confronting an energy shock, a Treasury market sell-off, elevated inflation, geopolitical risk and a technology sector whose enormous investment cycle is increasingly being questioned on safety and valuation grounds. Yet positioning data show that many investors continue to expect strong earnings and economic growth.

The situation leaves gold caught between two powerful forces. Higher rates raise the cost of owning a non-yielding asset, while the very inflation, fiscal, and geopolitical pressures driving rates higher are also strengthening the case for holding bullion.