Europe’s defense boom, Florida’s college enrollment, and keeping coal plants online : Planet Money : NPR

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Have you ever wondered what Warren Buffett does in his free time? Turns out he’s a YouTube guy, as prone to the rabbit hole as any of us. You might expect the recently retired Berkshire Hathaway CEO to consume nerdy financial content, but no. According to The Wall Street Journal, we learned he’s prone to watching Paul Anka videos, clips of Bill Murray films, and my personal favorite … O’zbekiston Got Talent, the Uzbek knock-off of America’s Got Talent. But who hasn’t gone through that phase?

Coming up

• European defense start-ups are raking in cash; Americans are benefiting
• These six power plants should be offline. This is what they cost tax-payers
• Why Florida college enrollment seems to be doing well 

Trivia: What do most countries with a sovereign wealth fund have in common? Email your answer to [email protected]

News We’re Watching

Why U.S. investors are throwing money at defense start-ups – Bloomberg

What to Know: American investors are seeing an opportunity in Europe. The continent saw a 14 percent rise in military spending to $864 billion last year, due to pressure from Russia and Trump’s own unhappiness with low spending from NATO allies. The hike is prompting a spate of new defense start-ups keeping up with modern warfare. They’re building tech like AI-powered battlefield management, drones, and spy satellites. These start-ups are already bidding and winning contracts… so the pay-off is coming fast. In fact, these startups have raised a RECORD amount of capital this year, with help from Americans.

Why the U.S. is loving this: Just about half of the funding in Europe’s defense tech industry is coming from American investors this year! What’s up?

1. European VC’s aren’t remotely measuring up: Europe does have venture capital (VC) firms. But there’s about €150 billion in EU-based funds versus more than a trillion dollars in its U.S. counterparts. U.S. firms are out-investing EU ones at every funding round level, getting significantly larger at later-stage rounds when the big, risky checks are needed.
2. American investors are seeing dollar signs: NATO allies have committed to investing 5% of GDP into defense. That means a lot of government contracts. Cody Huggins, a partner at Scout Ventures, a VC firm, told CNBC last year, “you’re going to see high-caliber entrepreneurs that otherwise wouldn’t have built in this space because they would be concerned that there weren’t the contracts or the venture capital or growth equity in Europe.”
3. Restrictions on European investment: Some European money comes with restrictions on defense spending. For example, the European Investment Bank limits investment in weapons and ammo for ethical reasons. The German fund KfW Capital won’t finance what it deems ‘controversial’ weapons.

A Ukrainian soldier stands ready to defend against a Russian drone attack.

Efrem Lukatsky/AP Photo

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Efrem Lukatsky/AP Photo

These power plants should be offline. Whose paying to keep them going? – E & E News

What to Know: Five coal-fired power plants and one running on oil and gas would no longer be online if not for the Trump administration. The Department of Energy used emergency authority to keep the plants going past their scheduled retirement, something that’s never been done in the history of the DOE. It was also against the wishes of some of the plants. Secretary of Energy Chris Wright said it’s about giving people access to more reliable power to help address periods of peak demand. What’s odd: several of the plants are running at limited capacity or not at all. That said, utilities are still incurring millions of dollars just to maintain a power plant on standby. Wright told Reuters last year that he expects most of the nation’s power plants to hold off on retirement in order to help power artificial intelligence aka data centers.