TheChek News Flow

Fewer international students and higher staff costs are taking an increasing toll, according to the Office for Students

The financial outlook for UK higher education has worsened, increasing the risk of a large provider becoming bankrupt, according to the university regulator.

The sector’s finances are “towards the most pessimistic end” of modelling from last May, increasing the risk of a “sudden market exit” by a large provider, according to reports from an Office for Students board meeting in December, which were published on Wednesday.

Universities have announced redundancies since the start of the year in an effort to offset the mounting pressure from softening international recruitment and rising employment costs. Unions warn that more than 10,000 staff jobs are at risk.

The board papers outline OfS plans to address escalating risks to the sector by increasing engagement with university finance directors and lenders, improving data-sharing on student recruitment, and triaging at-risk providers based on student numbers. 

The minutes reported that the OfS financial assessment team was being “bolstered” and professional services firms had been contracted to provide “additional expertise”, because it had “limited in-house capacity and capability” at present.

The OfS has created the equivalent of 10 new full-time positions since July last year after the government had provided an extra £1.5mn in funding to support its work on financial sustainability, according to a freedom of information request by the Financial Times.

Almost three-quarters of institutions are expected to be in deficit in the academic year starting September 2025 after about 150 providers failed to meet international recruitment targets last year, according to OfS estimates published at the end of last year.

The estimates signalled a deterioration in the state of the sector’s finances since May 2024, when the OfS modelled a best-case scenario of no change in student recruitment.

The Department for Education said in November that tuition fees in the 2025-26 year would increase with inflation, the first rise since 2017. The government is expected to continue to link fees to inflation.

Glen O’Hara, professor of modern and contemporary history at Oxford Brookes University, said previous years of frozen domestic fees and weakening international recruitment had created a financial “doom loop”.

Jo Grady, University and College Union general-secretary, said the Labour government needed to provide emergency funding to “avert catastrophe”.

“If the prime minister continues to sit on his hands, over 10,000 jobs will go, courses will close and one of the UK’s last truly world-leading sectors will crumble,” she added.

The OfS said it had consistently warned of increasing challenges and called for universities to take “bold” action.

“We are working closely with a small number of universities to better understand the actions they are taking to ensure students’ interests are protected. Despite ongoing financial challenges, it remains the case that we don’t expect a significant number of institutions to close in the short term.”

DfE said it had taken tough decisions to bolster universities’ financial sustainability and was committed to “fixing the foundations” of higher education. “We welcome international students who make a positive impact on the UK’s higher education sector, economy, and society as a whole,” it added.

Iberdrola chair warns of surge in Spanish power prices if country shuts nuclear plants

Ignacio Galán urges Madrid government to avoid repeating Germany’s ‘big mistake’

Iberdrola’s executive chair has warned power prices can jump by more than 25 per cent if Spain repeats the “big mistake” made by Germany of shutting down its nuclear power plants.

Ignacio Galán told the Financial Times the Spanish public would pay much higher prices and get a less reliable system if Madrid proceeded with plans to phase out all seven operating nuclear reactors in the country by 2035.

He said there was a need for “pragmatism” from policymakers, noting that the global debate was shifting in favour of prolonging the lifespan of nuclear energy plants or reopening decommissioned sites in the US, Belgium and Germany.   

“Can we as Europeans be in a position to renounce those natural energy resources, just because of ideology? Or do we have to be pragmatic, like the Americans?” Galán said in an interview.

“The Spanish will pay for [closing nuclear plants] . . . If the nuclear power plants close, we have some analysis that the prices of retail will increase in the range of 25 [per cent] to 30 per cent.”

Decommissioning the nuclear fleet in Spain would cause an increase in the wholesale electricity price of about €37/MWh, causing electricity bills to soar by 23 per cent for the domestic sector and small and medium-sized businesses, and by 35 per cent for industry, according to PwC.

Governments in several countries, including the US, Japan and Belgium, have begun work to extend the lifespan of their nuclear reactor fleets to help meet rising electricity demand and energy security concerns linked to a reliance on imported oil and gas. 

In October, the International Energy Agency revised up its forecasts for electricity demand, saying in its flagship World Energy Outlook report that usage in 2035 would be 6 per cent higher than was anticipated last year.

In Germany, Friedrich Merz and his Christian Democrats (CDU) — who won last month’s federal elections — have promised to explore whether it is possible to resurrect the three nuclear plants that were shut down in 2023.

The former operators of those facilities have reacted with little enthusiasm to the idea, warning that it is unlikely to be economically viable even if theoretically possible.

“Technically, everything is possible . . . but in the end, it’s a question, is it worth the effort?” said Markus Krebber, RWE chief executive, in an interview.

Spain is one of the few countries that is sticking to plans to close its nuclear plants. But the decision is generating a growing amount of discord as the closure of the first reactor — at the Almaraz plant — looms in 2027.

Station owners, led by Iberdrola, Naturgy and Endesa, decided on a graduated closure plan in 2019 when they were under pressure from a Socialist-led government, itself alert to public worries about safety and waste disposal.

But in the past two years, the heads of Iberdrola and Endesa have called publicly for a rethink and said the plants could be made to work longer.

Galan said shutting down Spain’s fleet of reactors would have a detrimental effect on grid reliability, with Iberdrola analysis showing the number of curtailments in power or potential blackouts could rise.

The Spanish government has resisted industry lobbying aimed at reversing the closure plans. It has argued that economic logic dictates that nuclear power make way for renewables because wind and solar power generate substantially more energy for the same cost.

Sara Aagesen, Spain’s energy minister, said last week that the government was in dialogue with the plant owners, but added: “The truth is that for the moment there is no news, no formal request from the companies to address the possibility of modifying the nuclear calendar.”

The Foro Nuclear, a lobby group based in Madrid representing plant owners, said the government needed to make the first move by cancelling ministerial closure orders it had issued for two reactors at Almarez.

Spain is already a global force in wind and solar, and its goal is to get 81 per cent of its electricity from renewables by 2030.

Retail traders take on hedge funds in Europe’s answer to ‘meme stock’ mania

Small investors have piled in to defence companies targeted by short sellers, in an echo of 2021’s GameStop trade

A handful of European stocks have become a battleground for retail traders taking on hedge fund short sellers, in a campaign with echoes of the “meme stock” craze that gripped Wall Street during the Covid-19 pandemic.

Companies including Germany’s Hensoldt and Renk Group and French satellite business Eutelsat have surged in recent weeks, far outstripping a broader rally led by the defence sector as investors anticipate a surge in military spending across Europe.

Analysts say small-scale traders — sometimes co-ordinating their efforts on social media forums such as Reddit — have turbocharged the gains by deliberately buying into stocks shorted by hedge funds including Marshall Wace and Millennium.

“There is a tectonic shift happening in Europe,” said Roland Kaloyan, an equity strategist at Société Générale, likening recent popular retail interest to 2021’s meme stock mania.

Then, Reddit-inspired traders targeted heavily shorted stocks — notably the video games retailer GameStop — sending share prices rocketing and forcing hedge fund Melvin Capital to close after it suffered huge losses.

The recent share price moves in Europe have been less extreme, and the stocks have not hit the same stratospheric valuations reached by GameStop. But the “short squeezes” encouraged by retail buyers had involved “the same mechanics” as the meme stock saga, Kaloyan said.

Hedge funds such as Millennium, Qube Research & Technologies and Marshall Wace have reined in their negative bets in recent weeks on Renk Group, according to data provider Breakout Point. Renk’s stock price has climbed nearly 50 per cent in the past three weeks.

Shares in French aircraft parts supplier Latecoere, another popular hedge fund short, have risen 80 per cent since late February.

By contrast, the broader Stoxx Europe Aerospace & Defense index is up about 16 per cent over the same period.

The nearly 300 per cent surge in Eutelsat has cost short sellers approximately $187mn in mark-to-market losses in the three weeks to March 14, while Hensoldt short sellers have suffered $110mn in losses as its shares climbed 40 per cent in the same period, according to figures from S3 Partners.

One poster on Boursorama — a French stock market forum — said Eutelsat had “an enemy” in Darsana, the US-based hedge fund that holds short positions in Eutelsat and its Luxembourg-based rival SES.

Another said: “If no one sells, the short sellers will have to buy more . . . Keep your shares and you will not lose.”

BlackRock, the world’s biggest asset manager, also held significant shorts in Eutelsat, before trimming these below the disclosure threshold of 0.5 per cent in recent weeks. “BlackRock is now completely out,” one user gleefully informed the forum last week.

Investors have also taken to “r/Aktien” and “r/wallstreetbetsGER” on Reddit — German versions of Reddit’s r/wallstreetbets forum — asking whether it is “time to buy” small and mid-sized stocks listed in Frankfurt.

One user said: “On this wonderful day I’ve gone long Renk. I hope that the lights go on in the fat cats’ heads and that they see what is soon going to happen here.”

Marshall Wace, Qube, Darsana, Millennium and BlackRock declined to comment.

Retail trading platforms report a massive pick up in activity. Flatexdegiro, a German retail broker, said it had handled 70 times as many trades in Eutelsat shares over the past month compared with the month before, while trades in Renk Group have risen more than fourfold.

eToro, a UK-focused retail broker, said traders had opened 18 times as many positions in Hensoldt over the past month as they had in the previous month.

The sudden burst of interest in European small stocks comes as President Donald Trump’s erratic tariff announcements have roiled US equity markets in recent weeks, fanning concerns about slowing economic growth in the world’s largest economy.

European stocks have been among the main beneficiaries of the resulting investor rotation out of US stocks, with the region’s prospects further boosted by Germany’s plans to unleash military spending and overhaul its infrastructure.

Some traders have taken aim at the Trump administration and sought to portray their activity as an effort to bolster Europe’s rearmament drive following the president’s insistence that the continent should no longer rely on the US for defence.

“I don’t care about the profit, I just want to pool some of my money to help, and move away from US assets & asset managers,” wrote one poster on Reddit’s r/eupersonalfinance forum.

In contrast with the US, which has limited disclosure on short bets, hedge funds and other investors have to disclose when they have shorted more than 0.5 per cent of a company’s shares in the EU and the UK, making it easier for retail traders to target a fund’s positions.

Eutelsat last year had nearly 100 per cent of its shares out on loan — a proxy for short interest — before this dropped to 80 per cent over the past two weeks as some funds bought back their positions, according to data from S&P Global.

The company’s recent share price surge appears to have prompted hedge funds to quickly exit other negative bets when shares began to rally, according to Aleksander Peterc, head of small- and mid-caps at Bernstein.

“There were very high short positions in small stocks,” he said. “It rang alarm bells when Eutelsat was squeezed, so [hedge funds] killed their short positions in other companies too, very quickly.”

The very tight rein in all aspects of policy — fiscal, monetary and regulatory — is easing

Is this the beginning of a period of European exceptionalism in markets? Six months ago, most investors would have thought the idea absurd, even more so once Donald Trump was re-elected to the White House and on a mission to Make America Great Again. But in euro terms, the MSCI Europe index is up 9 per cent in the year to date compared with the S&P 500’s decline of 9 per cent. Investors are questioning whether the tide is turning. It may well be.

Europe’s decade of equity market underperformance was caused by relative macroeconomic weakness, and the “wrong” sectoral composition. Let’s take these in turn. Naysayers will argue Europe’s economic problems are structural. Demographics aren’t conducive to strong growth and Mario Draghi, in his paper on Europe’s competitiveness, did a super job of highlighting the problems that come from the continent’s fragmentation.

However, there is another part of the region’s underperformance that is often overlooked. That is, for the past decade, Europe has been kept on a very tight rein in all aspects of policy — fiscal, monetary and regulatory.

Here are some statistics to demonstrate this point. In the past decade, the US government has been showering its economy with cash: subsidies and tax cuts for companies and, quite literally, cheques in the post for households. As a result, government debt as a per cent of GDP has risen by 17 percentage points. By contrast, in the eurozone, government debt as a per cent of GDP has fallen by 5 points.

Monetary policy also played a critical part in the relatively weak period post-pandemic. Though the Federal Reserve also raised interest rates to combat inflation, the impact on US households and businesses was limited by the fact that the vast majority of mortgage borrowers were protected by long-term contracts, locked in at low interest rates. By contrast, Europe’s borrowers still largely rely on floating rate interest rate loans provided by their local bank. Statistical measures that capture these financial conditions show barely any restrictiveness in the US, but in the Eurozone and UK, financial conditions have been tighter in the past two years than at any point in the past 15 years.

Finally, one also has to consider regulatory policy. Regulations to combat climate change have soared in recent years to drive companies towards broader net zero targets. Adding to these macroeconomic woes, Europe’s stock markets were short of the tech stocks that were much in favour, as artificial intelligence excitement grew, and overweight in the financial stocks.

Viewed through this lens, one can see how the tide is turning. The adversarial stance of Trump has galvanised the region into action. Fiscal policy is being loosened, and not only in the area of defence. Germany’s €500bn infrastructure package alone is a boost of 1 per cent of the country’s GDP annually over the next decade. Monetary policy is also easing. It looks likely that real interest rates will soon be back close to zero in the Eurozone and the UK. This is already spurring loan growth. And, finally, regulatory stipulations are easing in areas such as climate change policy.

While all this should boost confidence and fuel the recovery, it could be offset by a wave of US tariffs and a worsening situation in Ukraine. But one also has to overlay this macro view with an assessment of the outlook for key equity sectors, particularly US technology. The last significant period of European equity outperformance, relative to the US, was 2000-09, coinciding with the long and painful bursting of the US tech bubble in the 2000s.

It is not obvious that US tech stocks are destined for the same fate this time around. The companies that have driven US returns in recent years have been producing fantastic earnings, and most have considerable cash on their balance sheets. But these companies are at that tricky stage of having to live up to the AI hype and deliver a high return on the massive amounts of investment they have been deploying.

Despite recent relative performance, most European stocks still trade at a heavy discount to their US counterparts. The points I’ve made above therefore do not, to me, appear to be in the price yet. Investors that have focused on passive investing should be particularly wary, given the weight of the US in the global MSCI ACWI benchmark has increased from 42 per cent in 2009 to 66 per cent today. This recent European outperformance might not be over, and investors should continue to think about whether such a large overweight to US equities is the right set-up for the decade ahead.

In an era of extraordinary turnover at top fashion houses, brands often lean into their classics—from Gucci’s bamboo-handle bags to Chanel’s tweed suits

In fashion, creative directors are royalty. Like kings and queens, they’re idolized for their successes and blamed for their failures, while always being gossiped about. The all-time greats—like Karl Lagerfeld, Phoebe Philo, Hedi Slimane—have the power to shape every aspect of a luxury brand, from its collections to its store designs (Slimane even put his stamp on the branded bottled water served at Celine’s stores). But what happens when a creative director leaves (or dies), and their successor has yet to be named?

In a period of extraordinary turnover at the top of design houses, many brands have found themselves without a creative leader for months and even years. Chanel will have shown seven collections between Virginie Viard’s departure in June 2024 and Matthieu Blazy’s first collection for the house this fall. Givenchy survived without a creative-director-designed collection for over a year until Sarah Burton presented her debut this month. Demna, just announced as the next artistic director of Gucci, won’t begin until July. Balenciaga, Fendi, Loewe and Bally have yet to announce new creative directors after recent departures.

During these rudderless in-between times, luxury brands’ collections are typically designed in-house by “the studio,” either as a democratic collective or under a designated head of design. Some designers see it as a time to take long lunches; others take the opportunity to hustle. Labels usually lean on tried-and-true hits to buoy sales during this time, like archival bags and shoes. However, that doesn’t always work.

“It typically leads to a hit on the top line,” said luxury analyst Achim Berg of the independent think tank FashionSights.

In a luxury climate defined by an uncertain economy and a declining Chinese market, brands are swapping creative directors in a frantic bid for success. Berg said, “There was typically a reason for the change, which means it wasn’t selling that well in the first place.”

If a creative director isn’t panning out, multibillion-dollar companies tend to have plans in place. Floriane de Saint Pierre, the founder of an advisory and executive search firm for major luxury brands, emphasized that “creative leadership is a key driver of value creation for large, influential brands.” She said that boards and chief executives had succession strategies cued up at all times, which are reexamined regularly.

Despite these contingency plans, brands are often left in flux. But it’s not as bad as it sounds.

Look at the case of Chanel. Recent couture and ready-to-wear shows were well-received by critics and front-row regulars. The fall collection had moments of wearable creativity, like long black tulle skirts layered over suits. The brand has kept up its momentum on the red carpet, dressing stars including Margaret Qualley and Penélope Cruz for the 2025 Oscars.

After last week’s show in Paris, the store was as busy as it’s been in recent years, with gaggles of women gathering around piles of quilted handbags. The true grails at Chanel, from purses to costume jewelry to black tweed suits, have remained constant since the 1920s.

“What we typically see is the momentum that was driven by an outgoing creative director continues, and studios in large part continue designing within that same design language,” said Sam Lobban, executive vice president and general merchandising manager of Nordstrom. “So it’s still familiar to the customer.”

Lobban said that Nordstrom did not tend to reduce its spending on designers it carried during in-between seasons. He said most customers were not aware of personnel changes at brands. Savvy shoppers will try to buy pieces from the last collection of a special creative director, or the first collection from a new one. But he said people typically bought into the long-term vision of the brand and its quality level, even between creative directors.

Transition periods are opportunities to truck out house signatures. For example, Gucci can lean on its classic bamboo-handle bags and Jackie-O-era silk scarves, and Bottega Veneta will highlight tried-and-true products like its intrecciato woven accessories. Merchandising departments, which are tasked with liaising between design and sales departments, often muscle in and request reliable styles that have sold in the past.

That doesn’t necessarily sit well with the designers on staff. Nina Christen, who worked at Saint Laurent and Celine in the mid-2000s through multiple transitions, described it as, “basically the worst ground for anything creative to happen.”

There are opportunities for go-getters in this period, she said, though “They need enough willpower and authority to impose themselves, which then can also create tensions in the teams and make creative output more difficult.” Christen said she had designed some of her best, most personal shoes during the period at Celine between Philo and Slimane, such as a pair of boots with leather pompoms on the toes.

While these periods can be stable—and even surprisingly fruitful—they cannot go on too long. Lobban cautioned that while an outgoing creative director can provide momentum that a brand can ride for some time, longer than a season or two can be damaging.

What’s more, the transition period doesn’t end—pouf!—when the new creative director arrives. The analyst Berg said not to underestimate what he calls “the time lapse” of a new arrival. “It typically takes two or three collections until they’ve managed to really touch the different product categories. And if they are asked to even introduce new categories, it might take even longer.”

It’s not just about clothes. A good creative director sets the tone for the entire marketing of a successful collection, too, from ad campaigns to social media to celebrity partnerships—all of which needs to stay fresh and surprising. Lobban said, “If you’re standing still too long in an overall industry and ecosystem that’s constantly putting out new messages, it becomes noticeable.”

The LVKV-02 GMR 6 features a tantalum and platinum case and an intricate multicolor hand-decorated dial, in a limited edition of five.

The LVKV-02 GMR 6 and its bespoke trunk.

PARIS — For its second collaboration with independent watchmakers, Louis Vuitton has unveiled Thursday a travel-inspired timepiece with Finnish-born, Switzerland-based Kari Voutilainen.

“Kari Voutilainen stands as one of the most prolific watchmakers of his era, and notably one of the pioneers of independent watchmaking,” said Jean Arnault, Louis Vuitton’s director of watches. “It is my hope that this timepiece will be recognized as a celebration of independent watchmaking that will make it possible to support the movement in the years to come.”

The LVKV-02 GMR 6 watch. Courtesy of Louis Vuitton

Dubbed the LVKV-02 GMR 6, the watch is available in a limited run of five pieces, priced at 550,000 euros each. It is part of a five-year run of collaborations between the French brand and independent watchmaking labels.

As with the model cosigned with Atelier Akrivia, proceeds of this watch’s sale are earmarked to fund the biennial Louis Vuitton Watch Prize for Independent Creatives launched in 2023 and now on its second edition.

Trained at the renowned Kelloseppakoulu watchmaking school in Finland, the master watchmaker moved to Switzerland in 1989, where he completed the WOSTEP complicated watch course at the International Watchmaking School.

Spotted by Parmigiani Mesure et Art du Temps, he spent almost a decade restoring rare pieces and creating one-offs designs before a three-year stint teaching at the WOSTEP School of Watchmaking.

In 2002, Voutilainen opened his eponymous workshop in Saint-Sulpice, Switzerland, the same year Louis Vuitton launched its inaugural Tambour watch.

Over the years his work has since garnered a number of awards, including 11 gongs at the Grand Prix de l’Horlogerie de Genève, considered the Oscars of the watchmaking world.

Voutilainen also serves as a member of the expert committee of the prize.

Calling the endeavor “a genuine collaboration that is remarkably coherent for both houses,” the master watchmaker said the timepiece “embodies the identity of Louis Vuitton while also capturing the spirit of our workshop.”

Based on Louis Vuitton’s redesigned Escale launched in 2024, it features a case made of tantalum, a metal that is complex to utilize due to characteristics that include gold-like density and a high melting point, while the bezel, back, lugs, crown and strap buckle are made of platinum.

Epitomizing the collaboration between the two watchmakers is the dial, which features the portemanteau “LVoutilainen” moniker blending their names.

Under gold Roman numerals is a striking multicolored hour circle that was hand-decorated by Maryna Bossy, a skilled artisan in the Métiers d’Art workshop of La Fabrique du Temps Louis Vuitton. It required 28 different colors, 32 hours of painting and a total of eight hours of firing.

Also taking pride of place on the center of the dial is the hand guilloché engraving by Voutilainen’s workshop, in an intricate pattern nodding to the French house’s Damier motif. They’re also behind the sun and moon used on the day-and-night indicator, delicately engraved and then enameled, where stars turn out to be minute Monogram flowers.

The case back is engraved with “Louis cruises with Kari” while its sapphire gives a peek of the watch’s manual self-winding movement based on Voutilainen’s GMR 6 caliber. In a nod to Vuitton’s travel heritage, it is a GMT complication with a day-night indicator and a power reserve indicator. The second timezone is indicated at 6 o’clock.

The trunk for the LVKV-02 GMR 6 timepiece. Courtesy of Louis Vuitton

A major feature of this movement is its innovative construction with two escapement wheels, which improves efficiency and gives it increased longevity, stability and a longer power reserve. It also has a unique balance-spring system, pairing a typical Philipps overcoil with the little-known Grossmann curve.

Each watch comes in a bespoke Louis Vuitton travel trunk, bearing a hand-painted rendition of the dial and edition number on the front as well as the signatures of Voutilainen and Arnault inside.

The designer used the Hamptons as inspiration for his latest marketing initiative.

Wiz’s $32 billion all-cash acquisition by Google parent Alphabet promises a colossal payday for the cybersecurity startup’s early-stage investors.

The deal is a big win for Sequoia, one of the best-known VC firms, which stands to make $3 billion, about 25x the money it invested in the company, Bloomberg reported. Despite substantial returns for Sequoia’s limited partners, their percentage gains will be far less than those of another early Wiz backer: Israel-based VC Cyberstarts.

Cybersecurity-focused Cyberstarts invested $6.4 million from its first $54 million fund towards Wiz’s seed round in February 2020.

Today, that fund owns 4.1% of Wiz, which means it’s poised to make a whopping $1.3 billion on the deal, according to a person familiar with the firm’s performance. Cyberstarts also previously sold $120 million shares of Wiz in secondary transactions, bringing the fund’s total return to $1.42 billion — a remarkable 222x return on the original investment.

Cyberstarts also participated in Wiz’s later-stage rounds, investing a total of $40 million from its opportunity fund. Those investments are now worth $128 million, a more modest 3.2x return on invested capital, a person familiar with Cyberstarts performance told TechCrunch.

“Cyberstarts is going to have one of the best returning funds in VC history,” Shai Goldman, a partner at Next Wave NYC, wrote on X. “This investment was done out of their inaugural fund, a good reminder that Fund 1 can be amazing one to back as a LP.”

Cyberstarts wasn’t an ordinary emerging VC manager when it closed its inaugural fund in 2018. The firm was started by Gili Raanan, who previously spent nearly nine years as a Sequoia general partner leading its Israel investment strategy.

The small $54 million fund has already achieved a 26x multiple on its limited partner capital. And that’s not even counting other potential exits, such as Island, a startup reportedly raising capital at a valuation of $4.5 billion.

Index Ventures, which owns a 12% stake in Wiz, is poised to make over $3.8 billion once the sale is complete, Reuters reported.

The documents offer a rare window into some of the U.S. government’s most secret work, including CIA operations in Cuba and safe houses in Maryland

SoftBank expands AI portfolio with $6.5bn Ampere deal

Japanese tech group acquires US chip start-up specialising in data centre servers for artificial intelligence applications

SoftBank has agreed to acquire chip start-up Ampere Computing for $6.5bn as the Japanese tech group’s founder Masayoshi Son expands his ambitions in artificial intelligence.

The deal is the latest big move by Son, who has said SoftBank will build a vast infrastructure for AI that includes chip design, production, energy, robotics and data centres.

Ampere makes processors for cloud computing and data centre applications based on technology from UK chip designer Arm, which is majority-owned by SoftBank.

Arm intends to launch its own chip this year after securing Facebook owner Meta as one of its first customers, in a radical change to its business model of merely licensing its blueprints to the likes of Apple and Nvidia.

The chip will tap surging investment in AI infrastructure by big tech groups and is expected to be a processor for servers in large data centres, built on a base that can be customised for clients.

Ampere and its chip designers are seen in the industry as another building block for Arm’s evolution. SoftBank also bought UK-based, AI-focused chip start-up Graphcore last year.

SoftBank said Ampere would “serve a critical role in the industry as hyperscalers and data centre providers are increasingly looking to improve energy efficiency and reduce costs”. Ampere was founded by former Intel president Renée James in 2018.

“This is a fantastic outcome for our team, and we are excited to drive forward our . . . road map for high-performance Arm processors and AI,” James said in a joint statement on Thursday.

In January, SoftBank and OpenAI unveiled a plan called Stargate to spend a purported $500bn building AI infrastructure in the US, with Abu Dhabi state fund MGX and Oracle also providing funding.

Arm is a key technology partner for Stargate, along with Microsoft and Nvidia.

California-based Ampere will operate as a wholly owned subsidiary of SoftBank but retain its name.

Major investors Oracle and private equity group Carlyle will sell their stakes in Ampere as part of the deal, which is expected to close in the second half of this year.