Beijing is the inadvertent star of this morning’s show as Washington hosts Pax Silica, round 2

Good morning, wonderful people. Although our Lede today is all about the regional airline industry and the odds we could see a price war this fall, Beijing is the inadvertent star of this morning’s show.

Saudi Arabia sat out Washington’s bid last week to deepen the moat around American frontier AI makers — even as the UAE, Qatar, and Bahrain signed on. Last week’s “Pax Silica” conference came just as Z.ai’s GLM 5.2 closed the gap (at least in coding and longer agentic workflows) with the latest model from industry leader Anthropic.

Meanwhile, Beijing may want a trade deal with Morocco, but Rabat isn’t so certain it’s interested in playing ball. At the heart of the dilemma: Protecting its hard-won industrial base and preserving domestic manufacturers’ access to the European Union, which is growing jittery as Egypt throws its doors open to more and more Chinese plants.

One thing we’re watching this morning: “Oman has told European officials there’s no way of going back to the pre-war status quo with the Strait of Hormuz and transiting ships may have to be charged some fees,” Bloomberg reported over the weekend.

For the nerds among us: The Global Games Show opens today in Riyadh, which bills the two-day event as the kingdom’s premier B2B gaming gathering. Developers, publishers, and investors will be on hand as the world’s richest gamer keeps piling into his big esports bet. The show is the curtain-raiser for the Esports World Cup, which opens 6 July — but in Paris, not Riyadh, making it the PIF-backed tournament’s first edition outside the Kingdom. –Patrick