TheChek News Flow

US strikes only delayed Iran’s nuclear progress, says intelligence report

Leaked assessment casts doubt on Trump’s claims to have ‘obliterated’ facilities

The US air strikes on Iran set back its nuclear progress by less than six months, according to an early US intelligence assessment that casts doubt on Donald Trump’s claims to have “obliterated” the programme.

The findings of the preliminary report into the attack by the Defense Intelligence Agency, described by some US media, came just three days after the US president authorised the bombing of Iran’s most important nuclear sites.

The DIA’s findings, revealed on Tuesday by CNN and others, were furiously rejected by the White House and the Pentagon, which stood by Trump’s judgment that Iran’s nuclear programme had been destroyed.

In a post on his Truth Social platform late on Tuesday, the US president reiterated his claim that Iran’s nuclear sites were “COMPLETELY DESTROYED”.

“FAKE NEWS CNN, TOGETHER WITH THE FAILING NEW YORK TIMES, HAVE TEAMED UP IN AN ATTEMPT TO DEMEAN ONE OF THE MOST SUCCESSFUL MILITARY STRIKES IN HISTORY,” he said.

White House press secretary Karoline Leavitt said on X that the “alleged ‘assessment’” had been leaked by “an anonymous, low-level loser in the intelligence community”.

Leavitt added: “Everyone knows what happens when you drop fourteen 30,000 pound bombs perfectly on their targets: total obliteration.”

The report’s findings will raise questions about the merits of the US military strike, which involved B-2 stealth bombers and submarine-launched missiles hitting Iranian nuclear sites at Natanz, Isfahan and Fordow, a facility buried half a kilometre underground.

Iran has repeatedly said that its nuclear programme is for civilian purposes. US intelligence earlier this year also said that Iran was not building a bomb, although Trump rejected that assessment.

“Based on everything we have seen — and I’ve seen it all — our bombing campaign obliterated Iran’s ability to create nuclear weapons. Our massive bombs hit exactly the right spot at each target — and worked perfectly,” US defence secretary Pete Hegseth said.

“The impact of those bombs is buried under a mountain of rubble in Iran; so anyone who says the bombs were not devastating is just trying to undermine the president and the successful mission,” he added.

The DIA is part of the US Department of Defense.

On Tuesday, the Trump administration postponed a classified briefing for US lawmakers to discuss the outcome of the strikes, drawing fury from Democrats.

Chuck Schumer, the top Democrat in the Senate, described the postponement as “outrageous”. He added: “They’re bobbing and weaving and ducking. Senators deserve full transparency.”

Pat Ryan, a Democratic congressman from New York and member of the House armed services committee, claimed Trump had cancelled the briefing because “his team knows they can’t back up his bluster and BS”.

The growing debate in the US about whether the mission succeeded came after Iran’s president said Israel had failed to destroy the country’s nuclear sites and knowhow.

Masoud Pezeshkian said in a late-night address to his nation on Tuesday that “the aggressor enemy failed in achieving its sinister aims which were destroying facilities, declining nuclear knowledge and social unrest”, according to state media.

The president added that, while Iran suffered loss of life during 12 days of war with Israel, the damage suffered by Israel was “beyond imagination”.

However, in a pre-recorded address on Tuesday night, Israel’s Prime Minister Benjamin Netanyahu backed up Trump’s claims, saying the Israeli and US bombing campaigns had brought Iran’s nuclear programme to “ruin”.

He also threatened to “act in the same way” if Iran tried to rebuild it.

Why art dealers are up in arms at the EU’s new anti-terror legislation

Cultural property laws that come into force this week have been condemned as ‘stupid’ and ‘absurd’

While art dealers fret about possible US tariffs, less discussed but very real EU cultural property laws come into effect this week. These aim to prevent trade in illegally exported goods but risk drowning the market in needless and costly bureaucracy, according to dealers and other market experts.

“Regulation is not a sexy topic. It’s more exciting to talk about a scandal than a sector that is being victimised, but the art and antiques trade is being victimised,” says Erika Bochereau, secretary general of CINOA, a confederation of more than 5,000 art and antiques dealers worldwide.

The European Union’s so-called 2019/880 legislation, which comes into force on June 28, was conceived to stop stolen or looted works, particularly those used to fund terrorism, from entering the EU. Objects more than 200 years old which originated from a country outside the EU will now need, at the least, a declaration of their legitimate export. The law applies to all items valued at more than €18,000 (including costs such as sales taxes, shipping and auction house fees), so anyone outside the EU with a collection of, say, English 18th-century portraits, Chinese antiques or pre-Colombian sculptures, needs to find evidence of legal export for each object before importing it into the EU, for display or for sale. There are even more stringent regulations for archaeological objects more than 250 years old. 

“It is a totally understandable motivation to protect cultural property being moved around by unsavoury characters but, quite frankly, these regulations are totally excessive and absurd. There has never been a need to keep the paperwork once something has been legally exported, if there even was any,” says Pierre Valentin, co-head of art law at London-based law firm Fieldfisher. As Bochereau puts it, “you might have things in your house that you received from your grandmother and you don’t know where she got them, but that doesn’t mean they were stolen.” 

Also of concern is the onus on the owner, who must sign a legal declaration that the item in question was legally exported. This means they “must know which country was the country of origin when the original export took place and what the local law was at the time, or that none existed,” explains Ivan Macquisten, who advises trade associations. It is “quite a terrifying statement”, says Charis Tyndall, director of the London antiquities and modern art gallery Charles Ede. “I’m sure people will get used to it, but right now it is a bit of an issue for anyone who just wants to buy something even with good provenance.”

Tyndall says the trade will ultimately adjust — “where there’s a will, there’s a way” — but for dealers based in the EU who specialise in works from outside, the incoming law is already taking its toll. “The stupid regulation will kill a lot of art galleries,” says Christian Deydier, a Paris and Hong Kong dealer of Asian art, notably Chinese archaic bronzes. He is closing his business in France this year, partly because of 2019/880. “I am not the only one leaving,” he says. “People are going to New York, Switzerland, the UK too, but I am the only one to speak up. This bureaucracy was not what the EU was meant to be for.”

The market is small within the scheme of things — average dealer turnover of antiques totalled $1.9mn in 2024 and old masters (1250-1821) at $4.8mn, while sales of postwar art alone were at $9.4mn, according to the latest Art Basel & UBS report. This finds too that average sales for the antiques trade fell 11 per cent in a “challenging” 2024. Bochereau says things have not improved much since: “If you ask most art dealers in every field, it not that easy to sell anything at the moment.”

Fairs in the EU that specialise in older art have their work cut out. There is an exception within the law that means items can come in temporarily, but this wouldn’t cover a work that then gets sold to a European buyer. “The process could take up to five months, why would you bother [as a buyer]? And if the work is refused for some reason, could it be seized while on EU ground?” Tyndall asks. 

Maybe 50 years ago the art market wasn’t as clean as it is today but now it is a business like any other

Will Korner, head of fairs at the prestigious Tefaf, says that such questions “are a big part of my life these days”. The devil is in the detail, quite a lot of which is yet to be defined. “It will be up to each national authority to apply the law and we don’t know how exactly it will work. Final guidance [from the EU] only came in the past few weeks and there are still different answers from the Dutch customs, the French authorities and the European Commission, for example,” he says. Changing the legislation is not on the cards, he says; he sees Tefaf’s role, alongside CINOA, as “making sure people understand about the implementation”. The situation “doesn’t suggest discontinuing the fair in Maastricht or its future in the EU”, he says.

Korner recognises the “noble aims” of the legislation but does not see “how its application will have a huge impact” on what it hopes to resolve. Others note that evidence of the art trade’s links to terrorism financing are slim, at best. “Nobody has the statistics,” say Bochereau. “Maybe 50 years ago the art market wasn’t as clean as it is today but now it is a business like any other, with hundreds of laws already and the transparency of the internet. The art market just has an image problem.”

There are scant verifiable figures for the value of the illicit trade in cultural property. Unesco raised alarm bells in 2020 when it put this at nearly $10bn a year, a figure that is heavily disputed by the trade (the figure would represent more than 17 per cent of the total art market). The EU Commission’s website cites an unnamed study that estimates the value of such illegal trade between €2.5bn-€5bn a year, though it notes that the value is “difficult to assess, since it is a criminal activity”. 

The law has been welcomed in some corners. Vera Carasso, director of the Dutch Museums Association, told the Netherlands press: “In the past, many art objects were traded illegally. This way of working provides more control,” adding that the associated administrative and financial burdens are “unavoidable”.

An EU Commission spokesperson did not respond directly on whether claims around the trade’s links to terrorism had been satisfactorily proved. They say that its regulation “was adopted in 2019, which gave market participants a six-year period to prepare for the introduction of the licensing requirements” and that “importers following the rules will not face difficulties obtaining the necessary (online) import licences or filling-in (again, online) importer statements.”

Market players are yet to be convinced and see repercussions that go beyond the trade. “We are not as big as the modern and contemporary art market, but we still have important roles,” says Tyndall. “If it wasn’t for dealers, where would museums and private collections source their works? Imagine if they couldn’t have things that were more than 200 years old, a lot of knowledge would disappear.” Deydier’s vision is of a future comprised of only conceptual art by the likes of Maurizio Cattelan: “It won’t take long to destroy the market. There are already very few real collectors now. They will all just want to buy bananas.”

EDF chief weighs asset sales as Paris pushes for new nuclear focus

Insiders say Fontana’s stance signals he is aligned with the French government unlike his predecessor

EDF’s new boss is conducting a portfolio review that could lead to the French energy group selling some assets, as he seeks to meet government demands to focus on building new nuclear reactors in France.

Bernard Fontana has told insiders that he wanted to assess which assets were not profitable or did not fit with the state-owned group’s strategic priorities, according to several people with knowledge of the situation.

Fontana, who took over as chief executive of the state-owned group last month, told the people that sales could come after the review, although he has not yet concluded which parts of the business should be sold off.

The state “has said that we have to make the new nuclear programme in France a success, and exploit the current nuclear centres. For the rest, if there aren’t the means, we’ll have to arbitrate”, said one of the people.

The review comes after Fontana replaced Luc Rémont, who repeatedly clashed with the government over strategy, and was forced out in March after less than three years in the job.

EDF is responsible for operating France’s fleet of 57 reactors, as well as nuclear plants in the UK.

Its other assets and subsidiaries include the construction engineering division Framatome — of which Fontana was previously CEO — renewable installations in France and across the world, Italian utility business Edison and services company Dalkia.

Several people familiar with EDF said Dalkia and Edison are among the business units that could be sold. Renewable assets, with the exception of EDF’s hydraulic power projects, could also be under consideration, the people said.

The portfolio review signals that Fontana is more aligned with the French government than his predecessor, the people said. One of them said Fontana is “trying to move on from conflict with government”.

Rémont clashed with ministers over his tough approach to negotiations regarding the funding mechanism for new reactors.

France is planning to build six so-called Evolutionary Power Reactor 2 models (EPR2), an upgraded technology of the EPRs under development at Hinkley Point C in the UK and in use at France’s newest nuclear reactor Flamanville 3.

He also failed to reach commercial agreements with industrial groups over energy supply, seen as critical to guaranteeing the competitiveness of French industry, while multiple people told the Financial Times that the former boss was opposed to selling large assets.

EDF declined to comment and referred to Fontana’s statement in parliamentary hearings ahead of his confirmation, where he said asset sales could be made to “free up room to make investments”. He added that EDF wanted to remain an integrated business.

“Bernard Fontana doesn’t have the same perspective as [Rémont]. I think he is ready to look from now on what assets he thinks are not absolutely necessary to EDF’s future,” said one of the people.

Still, the company’s aims could be complicated if it tries to sell assets during a difficult economic environment, potentially forcing it to offload some assets at deep discounts, especially in the the US where it has a number of offshore wind and solar projects.

Asset sales would also do little to meet the enormous costs of delivering the new EPR2 programme, people familiar with the business said. The government and EDF recently agreed a funding mechanism for the project, but the total cost is yet to be determined.

Building the EPR2s and meeting EDF’s other priorities such as guaranteeing low energy prices to consumers and industrial groups, and completing Hinkley Point make for a “complicated economic equation . . . unless someone has found a magic wand”, said one of the people.

Carmakers push back against Apple’s takeover of the dashboard

CarPlay Ultra rollout comes as auto groups are introducing their own infotainment systems

Apple is facing pushback from the automotive industry over its ‘CarPlay Ultra’, three years after the tech giant unveiled a software system that will occupy the vehicle dashboard for the first time. 

German luxury brands Mercedes-Benz and Audi as well as Volvo Cars, Polestar and Renault said they have no plans to bring the upgraded software to their vehicles, despite earlier indications from Apple that they would. 

While few have followed General Motors, which announced in 2023 it would stop installing CarPlay or Android Auto on some of its EV models in North America, there is increasing debate as to how much carmakers should allow tech groups to take over the inside of a vehicle.

Some companies have found Apple’s foray into driver screens as over-reach. One executive at Renault, which is developing a vehicle mainly controlled by software with Google and Qualcomm, said the French carmaker told Apple: “Don’t try to invade our own systems.”

CarPlay Ultra connects the vehicle not only to iPhone’s music and maps, but other vehicle information on the dashboard such as temperature, speed and fuel use. 

Aston Martin recently became the first carmaker to introduce the Apple system in its cars, but many other carmakers are developing their own infotainment system in the hopes of generating more revenue from in-car services and vehicle data.

A high percentage of new cars come with CarPlay, with the share reaching 98 per cent in the US, according to Apple, and drivers in America using the system more than 600mn times per day.

Carmakers developing their own platforms are now facing a dilemma as the tech group looks to entrench its vast iPhone user base with CarPlay’s long-anticipated upgrade, offered for free.

“The western carmakers are trying to figure out how to find growth in a world which is at or near its peak in terms of car sales,” said Simon Middleton, a partner at McKinsey. “In the highly competitive premium segment, you’re also fighting for differentiation.”

At a time when carmakers face advanced tech offerings of their Chinese rivals, analysts say software will gain more importance as the industry shifts to electric and autonomous vehicles. This will lead to further competition between technology groups and carmakers over the control over the in-car driving experience. 

The new Apple system allows drivers to switch the radio station and change the car’s cabin temperature on a car’s touchscreen without leaving Apple Carplay.

Emily Clark Schubert, Apple’s director of car experience, said at its recent annual developer event that the new system allowed for “a unified and consistent experience across all the driver’s screens”.

The launch with Aston Martin follows a pattern of Apple first introducing the software in luxury cars, with Ferrari the first to offer CarPlay in 2014. Although Hyundai and its Kia and Genesis cars were not part of the 14 named by Apple in 2022 as future CarPlay Ultra users, the tech giant has said the Korean brands would be next.

More carmakers using CarPlay Ultra were on the way, Apple told the Financial Times. Porche plans to add support for the new software in its future models, according to its chief designer Michael Mauer. “We’re collaborating closely with automakers to provide the best of iPhone and the best of the car and this work takes time,” Apple said.

Of the original 14 brands listed by Apple, Jaguar Land Rover said it was still evaluating the system, while Ford and Nissan along with its Infiniti brand said they had no information to share about future application.

According to a survey conducted by McKinsey in 2023, almost half the car buyers said they would not buy a vehicle that lacked Apple CarPlay or Android Auto, while 85 per cent of car owners who have Apple CarPlay or a similar service preferred it over the auto group’s own built-in system.

Many carmakers, including Mercedes-Benz, BMW and Audi, have developed infotainment and operating systems but they would continue to offer the option of using standard Apple CarPlay to meet consumer demand. Apple said customers were going to like CarPlay Ultra and carmakers would ultimately respond to consumer demand.

BMW said it would integrate the existing Apple CarPlay with its new design, while Audi said its focus was to offer drivers “a customised and seamless digital experience” so it would not use CarPlay Ultra although the standard version was available on its vehicles.

While Volvo Cars said there were no plans to use CarPlay Ultra, its chief executive Håkan Samuelsson said carmakers should not try to compete on software with technology companies. “There are others who can do that better, and then we should offer that in our cars,” he said. 

Aston Martin integrated Apple’s CarPlay Ultra with its newly developed infotainment system but stressed that the design inside the car remained “unmistakably” Aston Martin. The traditional physical dials were also available for those who do not want to use the touchscreen, it said. 

People close to the carmaker said discussions with Apple in integrating CarPlay Ultra involved setting clear lines on data sharing from the start. The use of CarPlay Ultra did not entail additional sharing of vehicle data, which are stored inside Aston Martin’s own infotainment system and software. Apple also said vehicle data was not shared with the iPhone.

The A7A5 token aims to facilitate financial flows disrupted after Ukraine war

A new cryptocurrency token designed to allow cross-border payments in spite of western sanctions on Russia, launched by a fugitive Moldovan oligarch and a Russian defence sector bank, has moved some $9.3bn on a dedicated crypto exchange in just four months since it was launched, the FT has found.

Billed as the first stablecoin pegged to the Russian rouble, the A7A5 token was officially launched in Kyrgyzstan in February and aims to facilitate large-scale financial flows into and out of Russia, which have been severely complicated by western restrictions.

An FT analysis of wallets linked to Grinex, a crypto exchange also founded very recently in Kyrgyzstan and trading only in A7A5, roubles, and a dollar-pegged stablecoin, shows a total of $9.3bn worth of A7A5 being moved to and from wallets linked to that exchange.

The stablecoin says it is backed by rouble deposits in Moscow’s Promsvyazbank, a defence sector bank subject to US, UK and EU sanctions over Vladimir Putin’s full-scale invasion of Ukraine. The coin’s rapid growth is clear: it now has 12bn tokens in circulation, equivalent to $156mn, and is used intensively by a relatively small group of users, whose daily transfers routinely amount to several times that volume.

But the A7A5 token also appears to be linked to Moscow’s attempts to use cryptocurrencies to bankroll political influence campaigns abroad, according to a new report by the Centre for Information Resilience (CIR), a London-based non-profit research group.

A7, the company initially behind the token, now subject to British sanctions, is majority-owned by Moldovan businessman Ilan Șor, Russian corporate records show. Șor fled from house arrest in Moldova in 2019 after he was convicted of stealing $1bn in the largest bank fraud in the country’s history. 

Șor moved to Moscow, and became a Russian citizen. Last year he was accused by Moldovan police of running a vast vote-buying operation in Moldovan elections, accusations he described as an “absurd spectacle”. 

In its new report, CIR found multiple domains used in political influence operations in Moldova shared an IP address with A7 and A7A5 sites. Șor did not respond to a request for comment. In a statement, A7A5 said that while it “co-operated with the technical team of A7 at the early stage”, it “decided to separate completely due to different visions of development strategy” last month.

The stablecoin’s creation comes amid increased scrutiny of Russia-linked transactions for sanctions compliance and the exclusion of some Russian banks from the Swift international messaging network.

“Russian business figures and government officials have been talking for a while about how they might use cryptocurrency to evade sanctions in a large-scale way, particularly by creating their own stablecoin,” Elise Thomas, senior investigator at CIR, said.

Kyrgyzstan was chosen because it is “friendly jurisdiction that is not so subject to sanctions”, A7A5’s director Leonid Shumakov has said. “It is no secret that this jurisdiction is currently helping a lot to cope with the pressure [Russia] is under.”

Russian users can buy A7A5 tokens on the Tron or Ethereum blockchains and then use them to purchase Tether’s USDT, a US-dollar pegged stablecoin. From there, the user can withdraw the value in whichever country or currency they need. 

Shumakov said A7A5’s goal was to give “people the opportunity to use it as a bridge for a safe transition” to USDT, adding that many current A7A5 holders were likely to be Russian importers.

According to the company, a rouble is deposited in Promsvyazbank for every one used to purchase A7A5 — protecting the client in Russia from the volatility of traditional cryptocurrencies. The company states that the existence of those fiat reserves is verified by an independent Kyrgyz auditor.

A7A5 and Grinex appear to have emerged and grown in the wake of the collapse of another major Russian shadow payments system.

Garantex, Russia’s largest crypto exchange, was taken down by US law enforcement in March. Tether co-operated and froze $23mn worth of USDT held in Garantex wallets.

Garantex described Tether’s move as a declaration of “war against the Russian crypto market”. It rushed to invite customers to come for face-to-face meetings in its Moscow office to discuss recovering frozen assets.

For Russian officials, Tether’s decision underscored the need to create a homegrown stablecoin. “Recent developments . . . lead us to think that we need to look at creating domestic instruments like USDT,” said Osman Kabaloev, a Russian finance ministry deputy.

CIR’s Thomas said that “if you have a stablecoin that is controlled by an entity that is based in the west . . . you could lose your money”, while if the asset is based in Russia or a friendly country, the investment is safer.

Garantex was a major conduit for cash. The exchange has handled over $60bn worth of transactions since April 2022 and was used by Russian elites as well as in global criminal money laundering schemes, according to Elliptic, a blockchain analysis company whose data was used by US law enforcement in the operation.

In the weeks preceding the crackdown, however, a large amount of funds held in USDT on Garantex were moved into A7A5, according to Swiss blockchain research company Global Ledger. The two were already close: footage shared on social media from Garantex’s office shows an A7A5 logo on one of the booths.

Some $29mn worth of A7A5 tokens were then shifted on to Grinex, a newly founded exchange in Kyrgyzstan.

Grinex, analysts say, appears likely to be an heir to the platform taken down by the US action. In its investigation, CIR found that Grinex and the issuer of A7A5 were both registered in Kyrgyzstan the same week.

“Garantex users with outstanding balances at the time it was shut down could have these balances credited to new accounts set up on Grinex,” said Tom Robinson, chief scientist and founder of Elliptic. “It is therefore clear that Grinex is a direct successor to Garantex, and highly likely to be operated and controlled by the same parties.”

Grinex told the FT it is an independent platform, unrelated to Garantex. “All claims of ‘continuity’ or ‘rebranding’ are speculative and not supported by the facts,” it said.

“Grinex capitalised on market opportunities after the closure of Garantex as part of its growth strategy,” a representative said. “Grinex obtained a portion of the non-toxic customer base of the blocked Garantex exchange, committing only to users with a transparent history.”

The company also said that Grinex and A7A5 were independent entities, and that the “coincidence of registration dates and peaks in activity does not indicate any affiliation” between them.

The listing of the stablecoin on the exchange was due to user interest, it said. “Amid increasingly frequent blockages by Tether, Russian-speaking customers need a reliable alternative to USDT.”

Grinex, it added, complies “with international sanctions regimes and does not conduct transactions with jurisdictions or individuals subject to restrictions”. It also contested the FT’s calculations.

An FT analysis of open source blockchain data found 124 wallets have transferred a combined $9.3bn worth of A7A5 to and from wallets that have been linked to Grinex. The true value of the transactions represented by these token movements is unclear: a large portion of the flows follow rigid fixed patterns which suggest they may be being used as part of an internal banking process.

“It seems highly likely that A7A5 exists for use by a relatively small number of services and actors at present,” an Elliptic note said.

It is not possible to confirm whether those actors are linked to Russia. However, an FT analysis of the transactions shows that they occur almost entirely on weekdays, often during Moscow office hours.

In a statement to the FT, A7A5 said it was “created as a response to the crypto community’s growing interest in stablecoins denominated in currencies other than the US dollar”.

“We see this as a real market opportunity,” it said.

Asked about connections to Garantex and the new Kyrgyz exchange, the issuer said: “The token was distributed through licensed brokers listed on the official website. Listings on individual trading floors took place on their own initiative or on the brokers’ initiative.”

A7 was added to the UK’s sanctions list in May. Speaking at a forum last week, Șor said that A7 was creating a larger, differentiated and “sufficiently invulnerable” new payments system. It would involve exchanging securities and “non-politicised” instruments like precious metals in order to avoid regulators. Crypto would be just one track, he said.

CIR found job adverts by A7 for Chinese speakers, energy experts and accountants in the United Arab Emirates, Kyrgyzstan and Russian-occupied Ukrainian regions.

Last year, Șor was involved in discussions with Keremet Bank in Kyrgyzstan, according to the US Office of Foreign Assets Control, as parts of plans “to create a sanctions evasion hub for Russia to pay for imports and receive payment for exports”. Ofac sanctioned the bank in January.

A7A5 did not respond to any questions from the FT about Keremet Bank, or about Șor and his activities in Moldova.

CEO of iyO won restraining order forcing Sam Altman-led group to pull marketing materials about $6.4bn venture

The chief executive of a start-up that forced OpenAI and former Apple design chief Sir Jony Ive to pull down marketing materials about their $6.4bn AI device venture has accused them of trying to “bury” his firm after discussing a potential collaboration.

iyO founder and former Google executive Jason Rugolo told the Financial Times he had been “blindsided” by the launch of io, OpenAI’s partnership with Ive to create new AI hardware products. Both companies had previously been in deal talks with his similarly named start-up.

“This is a story of corporate aggression, of large companies trying to bury smaller companies,” said Rugolo. “If we didn’t win the restraining order, this announcement very well could have killed us.”

The trademark dispute comes just a month after OpenAI revealed plans to acquire Ive’s hardware start-up in a bet on alternatives to the smartphone as the dominant device to access AI.

Over the weekend, OpenAI removed a blog post and short video about the deal, following a restraining order by a US federal judge on Friday. OpenAI and LoveFrom, Ive’s design firm, have denied any intentional trademark infringement or wrongdoing.

Rugolo pitched iyO to OpenAI chief executive Sam Altman in March, according to emails seen by the FT.

“I’d like to convince you on the idea of bringing iyO into OpenAI, and to launch the iyO ONE as an openAI [product] this October,” Rugolo wrote to Altman.

The two had a video call on March 26, and a follow-up demonstration was set up for May 1 with OpenAI’s vice-president of product, Peter Welinder and io executive and former top Apple designer Tang Tan, according to people familiar with the meetings.

On May 23, days after the io deal was announced, Rugolo emailed Altman about the launch, which he said led him to feel “a little vulnerable and exposed, David and Goliath style”.

He asked if Altman was “serious and optimistic” about a potential acquisition of iyO.

Altman forwarded the email to Welinder for his thoughts, who replied internally: “I don’t think there’s a fit [because] their device is very orthogonal to ours and doesn’t really work yet. They offered that we look at the IP but I doubt there’s anything there. Tang knows their engineers since before and doesn’t think we need them.”

Rugolo told the FT that OpenAi’s decision had “totally blindsided me: the announcement of a company doing a similar thing with the exact same name . . . They know what they are doing.”

OpenAI said: “This is a baseless trademark dispute and not a case about stolen ideas or technology. iyO demoed a product in May 2025 that didn’t function properly or meet our standards in hopes that we’d acquire iyO. We passed. Jason Rugolo was also well aware of the io name and never raised concerns before our announcement.”

iyO, spun out of Google’s Moonshot lab in 2021, has designed AI earbuds named “iyO One”. The “audio computers” have conversational voice assistants plugged into a suite of apps.

In its lawsuit, filed this month, iyO detailed the meetings between Rugolo, OpenAI and Ive’s team leading up to May.

Tan requested that several team members try out the iyO device, according to emails disclosed in the suit. Tan, Welinder, and Evans Hankey — the former Apple design chief who joined Ive at io — met iyO again in May for a presentation of its product, according to the lawsuit.

“They were talking about buying our company,” said Rugolo. “They got everything, right down to how the software stack works. I foolishly trusted them, because I thought we were collaborating and serious about working together.”

The meetings came three years after an initial round of contacts. In April 2022, iyO said it met Ryan Cohen, an executive at Altman’s personal investment fund Apollo Projects, and LoveFrom team member and former Pinterest co-founder Evan Sharp. Both passed on investing at the time.

In a statement to the court, Altman said he was not aware of Rugolo or his company in 2023 when io was founded, adding that Rugolo emailed him “out of the blue” in March of this year seeking $10mn in funding. Altman said he passed Rugolo on to the io team “as a courtesy” and to “evaluate any opportunities for collaboration”. 

In his court statement, Tan said he had agreed to meet Rugolo as a favour to a friend, that the demonstration of iyO One had failed, that he had refused offers to review the company’s intellectual property, and that Rugolo “seemed desperate for cash”. 

Tan claims in the court filings that Rugolo offered to sell the company for $200mn, with Rugolo “raising the issue of the io name in bad faith to try to force a deal with his company”.

Rugolo said this statement was “100 per cent false” but could have arisen from a misunderstanding of the deal terms.

Rugolo said his start-up had been trying to raise new funding this year as it looked to make a limited launch of 20,000 devices but said the io announcement had hurt discussions.

io products, OpenAI, Altman and Ive argue in court filings that the suit is “premature”, as io is “at least a year away from offering any goods or services” so there is “no io product or marketplace context to evaluate”. The defence added that io’s first product “is not an in-ear device like the one [the] Plaintiff is offering”.

The trial in the case is scheduled for January 2028, with a preliminary injunction hearing set for October this year to determine whether the ban on products carrying the io brand will continue.

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