TheChek News Flow

Private credit fund Arini’s performance tumbles

London-based credit investor Arini Capital Management has had a difficult year so far, with a number of soured bets pushing its flagship strategy to a loss as two of its top traders have left.

The London-based investor, which manages $22bn, has in recent years been at the centre of Europe’s thorniest distressed debt trades, using leverage to take big concentrated bets on struggling corporates, write Euan Healy, Costas Mourselas and Robert Smith.

Founded in 2021 by former Credit Suisse high-yield trader Hamza Lemssouguer, the contrarian approach has earned its master fund huge profits. Arini gained 27 per cent in 2023, 21 per cent in 2024 and 10 per cent last year.

Over its first four years, the credit investor earned a return of 73 per cent.

But a number of the 35-year-old Moroccan’s bets have deteriorated this year. Its flagship strategy has fallen to a loss of more than 8 per cent since the start of the year, the FT reported.

Large positions in the debt of distressed companies, including Aston Martin and Patrick Drahi’s Altice International, were its two largest losses for July.

Both have struck aggressive deals that shifted assets out of the reach of lenders in the past year, causing the price of their debt to crash. Both companies have been threatened with legal action by creditors including Arini.

During a difficult year for the fund, a number of senior traders including US chief executive Gavin Yates and Ben Elliott, another member of the investment team, have departed. Yates is set to join Citadel.

The fund sought to reassure investors in a letter about the July performance, telling them that its expectations about worst-case scenarios and timelines for its positions to come good were unchanged, and that it had doubled down on its highest-conviction trades.

Stanley Druckenmiller says no US rate cuts needed

Stanley Druckenmiller has long mentored US Treasury secretary Scott Bessent and Federal Reserve chair Kevin Warsh. Regardless of their status in the current US administration, Druckenmiller is not holding his tongue.

On Thursday, the macro hedge fund manager told a closed-door meeting that rate cuts “are no longer needed”, writes Amelia Pollard.

“Committee members on the Fed who keep saying fed funds rates are restrictive are just ridiculous,” he told a packed crowd of hundreds of Wall Street investors on Thursday morning at a conference hosted by Piper Sandler in New York, according to a transcript seen by the FT and multiple people familiar with the matter.

“I believe in common sense, and all you have to do is look at asset prices around the world,” Druckenmiller said.

His views on US monetary policy matter more now because of his longstanding relationship with Warsh. Although Druckenmiller said he can no longer speak to the Fed chair, he described Warsh as one of his “closest friends” and great at his job.

Investors have long viewed Druckenmiller as one of the brightest economic thinkers on Wall Street. He worked for George Soros in the 1990s during the hedge fund manager’s historic bet against the British pound, and has made a fortune at his own family office, Duquesne Capital, where Warsh worked as a partner before he was confirmed as Fed chair earlier this year.

Most of Duquesne’s recent profits have come from bets on AI instead of traditional macro investments such as currency or bond wagers. But Druckenmiller said that while the firm was bullish on AI companies, it had cut its investments in the industry to 20 per cent of what they were six months ago.

“It’s been an incredible ride on the whole AI thing,” he said. “I think we’re getting late enough in the build-out that one has to start to worry a little.”

However, he said he was “afraid to short the dollar” because of the US’s huge advantage globally in AI development, which he said Europe was “nowhere” on.

President defends minimal regulation and stresses need to keep lead as tech executives raise alarms about breakneck development

WASHINGTON—President Trump and White House AI adviser David Sacks this weekend defended the administration’s strategy of minimal regulation after the heads of the nation’s top artificial-intelligence companies endorsed a coordinated slowdown in the technology’s development.

“We can put up guardrails, and we can do this and that, but I think you have a lot of negative forces that are bringing it up,” Trump told reporters Sunday while traveling in Ireland. “And they’re bringing up things that won’t happen.”

The president reiterated his belief that the U.S. must outpace China in building AI, saying “whoever wins AI wins.”

Alarm over AI surged this week after Anthropic researcher Jacob Coxon quit the company and issued a viral warning about world-ending consequences of the technology if it grew out of control. Sacks and others in Silicon Valley have said Coxon coordinated with nonprofit groups that Republicans see as hostile to the industry because of the groups’ focus on existential risk and support for government controls. Coxon has said he acted on his own.

Trump’s comments threw into question whether tech companies’ calls to tap the brakes on development would have government support.

On Saturday, Anthropic CEO Dario Amodei, Sam Altman of OpenAI, SpaceX CEO Elon Musk and Demis Hassabis of Google parent Alphabet said they support a coordinated industry slowdown. More than 1,000 AI researchers recently signed a statement endorsing such a move.

AI executives have said government support would help such an initiative by giving the companies assurance that coordination wouldn’t violate antitrust rules or cause other problems. Sacks said on X late Saturday that government involvement isn’t needed if OpenAI and Anthropic, the two companies seen as leading the industry’s development, agree to coordinate.

“Stop pretending you need anyone else’s permission,” Sacks, a venture capitalist, said in the post. “Go ahead and pace the frontier. You are the ones setting it.”

Amodei said in an essay Saturday announcing his support for industry pacing of model development that the U.S. should “mediate or at least enable” any coordinated slowdown among AI companies to avoid antitrust concerns.

He told CBS in an interview that aired Sunday that he hoped Trump and Chinese leader Xi Jinping, when they meet later this month, could reach an agreement to ban the use of AI to develop biological weapons, an area of concern for researchers and national-security officials. “The more long-term thing would be working together to put a speed limit on the rate of AI progress. I think that’s going to be very difficult” because of the military incentives of moving AI forward, he said.

“If the AI we build is not helping humanity and under human control, it’s not worth pursuing,” Microsoft Chairman and CEO Satya Nadella wrote on X Sunday. He said that he welcomed “the research, focus, and deliberate pacing needed to get alignment right” and urged decision-making discussions to include representatives from across the AI ecosystem and not just voices from “a handful of entities.”

Nadella said Microsoft would publish the code of conduct for its MAI reasoning models on Monday, for public consideration.

House Speaker Mike Johnson (R., La.) said Congress should be cautious before imposing serious new AI regulations. He said guardrails need to be planned with the companies themselves and said he has discussed with Trump the idea of having all the top AI CEOs in a meeting to coordinate appropriate responses. The CEOs have rarely fully aligned on potential AI regulations.

“The guys that are calling for this are the ones that are pushing the frontier,” Johnson said on CNN’s “State of the Union.” “If they want to slow that down, that’s fine. But we also, at the same time, have to resist Congress jumping in and imposing some sort of emergency moratorium.”

House Minority Leader Hakeem Jeffries (D., N.Y.) said Congress should act urgently to mitigate AI risks.

“We should take decisive action now so that we can slow down” the technology’s development, he said on ABC’s “This Week,” adding that Democrats have a meeting Tuesday and AI will be a priority.

Jeffries didn’t say whether he would support a proposal by Sen. Bernie Sanders (I, Vt.) to attempt to ban superintelligence that is more capable than the most gifted humans.

Former President Barack Obama at a private fundraiser Thursday urged Democrats to develop a strategy with sensible guardrails to maximize the benefits of AI and prevent catastrophe. “This is something that is moving very fast in private hands, and if we don’t get on top of it, I think can be dangerous,” he said, according to his office.

The company plans to raise $2.0 billion through a share placement and another $3.01 billion via zero-coupon convertible bonds

China’s Z.AI plans to raise over $5 billion through equity and debt to fund its artificial intelligence investments.

The company will raise $2.0 billion through a share placement and $3.01 billion via zero-coupon convertible bonds.

Z.AI said rising demand for AI services and the development of its next-generation language models have increased its need for computing capacity.

China’s Z.AI plans to raise over $5 billion through equity and debt to fund its artificial intelligence investments amid a global spending boom.

The company, whose AI models compete with those of OpenAI and Anthropic, plans to raise nearly 15.68 billion Hong Kong dollars, equivalent to US$2.0 billion, through a share placement, and another US$3.01 billion via zero-coupon convertible bonds, Z.AI said Sunday.

Z.AI plans to issue 21.97 million new shares at HK$714 each, representing a 9.96% discount to its closing price of HK$793 on Friday.

Separately, the company also plans to issue zero-coupon convertible bonds due 2027. The bonds can be converted into about 26.37 million shares, with an initial conversion price of HK$892.50 a share, representing a premium of 12.6% over Friday’s closing price.

The latest fundraising by Z.AI, formerly known as Zhipu AI 2513 -7.25%decrease; red down pointing triangle, comes less than two months after the company raised US$4.0 billion through a share placement in July.

Chinese AI companies are ramping up spending on computing infrastructure and large-language-model development as they compete with global players such as OpenAI, Anthropic and Google. Businesses are also seeking to use generative AI to automate tasks and boost productivity.

Z.AI faces competition at home from companies including DeepSeek, Moonshot AI and MiniMax, which are also investing heavily in large-language models.

The company said that rising demand for AI services and continued development of its next-generation language models have increased its need for computing capacity. The fundraising will also help broaden its shareholder base.

Justin Sun says he is suing actress Jing Tian to recover a staggering sum after his marriage hopes unraveled

SINGAPORE—Imagine a crypto billionaire paying a supposed $4.5 million fee so he can marry a Hollywood star—and then hiring a celebrity lawyer to get the cash back when the romance fizzled.

That, essentially, is the made-for-TMZ drama that has transfixed China over the past weeks.

The real-life cast features Justin Sun, a crypto titan known for elaborate publicity stunts; Jing Tian, a top Chinese actress who has crossed over into Hollywood; and Zhang Qihuai, a big-name lawyer who specializes in high-profile brawls.

As the story swept through China, the nation cycled through three collective reactions.

First: Wait, those two were together?

Second: The bride fee was how much?

Third: Is any of this actually real?

That doubt comes partly from Sun’s history of viral antics, which include postponing a $4.6 million charity lunch with Warren Buffett, and buying—and promptly eating—a $6.2 million banana that had been duct-taped to a wall as art.

It also stems from the disclaimer at the bottom of Sun’s post on X, titled “My Girlfriend Jing Tian.”

In the rambling essay, he said he had a crush on the actress since college, rented out a theater to watch “Zootopia 2” for a date and wired her family $4.5 million for a so-called bride fee, a traditional Chinese gift from a groom’s family to the bride’s family before marriage. He also detailed an intimate encounter involving fingernails.

When she later requested $50 million to have their child via a surrogacy in Southern California, Sun wrote, he consulted the AI model Claude—and took its advice to not pay.

Then at the end of the post, he wrote: “This article is entirely fictional; any resemblance to actual events or persons is purely coincidental.”

Yet what followed suggested the drama wasn’t entirely fake.

That same day, Zhang, the celebrity lawyer, said on Chinese social media that a court had accepted Sun’s lawsuit seeking the return of 30 million Chinese yuan, equivalent to $4.5 million, from Jing and her parents.

The next day, without specifying what she was referring to, the actress posted that she had “poor judgment” in men but “will never sell my love for money.” She added that “I believe in the law” and that “justice and fairness will ultimately prevail.”

A representative for Jing didn’t respond to a request for comment.

In written response to questions sent via his lawyer, Sun confirmed the lawsuit was to recover a bride fee. “We dated with marriage in mind,” he said.

He said as the couple prepared for medical procedures to have a child in the U.S., the “other party”—whom he didn’t name directly—demanded $50 million. When he refused to pay, he added, the other side cut off contact. “The engagement could no longer proceed,” he said.

The mix of star power, eye-popping wealth and references to an ancient wedding tradition made the saga an instant media obsession in China.

Sun, 36, grew up in China, earned a master’s at the University of Pennsylvania and founded blockchain company Tron in 2017. He is now worth about $8.5 billion, according to Forbes.

His career has been controversial. The Securities and Exchange Commission sued him in 2023 over alleged market manipulation, a case settled this year without Sun admitting or denying wrongdoing.

The settlement followed Sun’s investment in the Trump family’s crypto venture, which Sun said wasn’t politically motivated. The president has said he isn’t personally involved with the venture, World Liberty Financial. Sun has since sued World Liberty over alleged fraud, a suit the company has called meritless.

The British government and the European Union recently sanctioned his HTX crypto exchange over alleged ties to Russia, concerns the company said at the time it was addressing. HTX didn’t respond to a request for comment.

Jing, 38, has headlined blockbusters in both China and Hollywood, starring opposite Matt Damon in “The Great Wall” and appearing in “Kong: Skull Island” and “Pacific Rim Uprising.” She is no stranger to public romance, having previously dated Olympic table-tennis champion Zhang Jike, a national icon.

Despite Sun’s disclaimer that his account was fiction, some in the Chinese public treated his essay as fact. Many online commentators sided against him for airing details of a private relationship.

“To treat his former girlfriend with such viciousness is evil on a whole other level,” Hu Xijin, former editor of the state-run Global Times and one of China’s most prominent political commentators, said on social media. But he added that it is reasonable for an unmarried man to ask for his bride fee back.

Dutch start-up completes funding round for encrypted silicon technology

Fortaegis claims it can create ultra-secure computer networks by harnessing the unique digital fingerprint of chips

A Dutch start-up has raised $50mn for a technology that harnesses the unique digital fingerprint of silicon chips to secure the computer networks powering everything from drones and satellites to driverless cars.

Fortaegis, an Amsterdam-based firm with offices in the US, Europe and Asia, is working with 25 companies and nations to build a “secure compute” system for industries including defence, space, telecoms and data centres.

Boudewijn Wijnands, founder and chief executive, said the technology would help the west and its allies in a world in which security increasingly depends on “who controls the foundations of compute”. The rapid advancement of AI has intensified concerns over network and data security.

Fortaegis is working with governments in the US, UK, Japan, Singapore, Germany, France and the Netherlands. National laboratories in some of those countries have validated the three-year-old company’s technology, according to Wijnands.

He said Fortaegis had raised $50mn to begin commercial manufacturing in 2027. The round was led by Serendipity Capital, a Singapore-based venture capital firm, and included the venture capital arm of Tokyo Electron, Japan’s largest chipmaking equipment manufacturer.

The technology exploits a property of silicon that gives every chip a unique digital fingerprint. Fortaegis extracts those fingerprints to generate and randomise encryption keys. Because the keys are constantly changing and are not stored on devices, the company says the system is more secure than conventional approaches. Embedding the technology in hardware also provides an additional layer of security compared with relying on software.

“The big innovation is that we were able to extract that fingerprint and extract keys from that,” Wijnands said.

He added that the secure compute architecture was “quantum safe” because the keys were created randomly and organically, not by mathematical models.

“It’s basically a gift of Mother Nature,” Wijnands said. “A quantum computer can only crack something if there’s a mathematical model.”

Embedding the technology in hardware offered several advantages, Wijnands said, including helping ensure data sovereignty, an increasing concern for companies and governments around the world.

It also speeds up communication between devices on networks. Wijnands said external tests had shown that its system communicates at 200 times the speed of current cryptographic protocols used to protect data sent over the internet.

Faster communications could, for example, allow the creation of much bigger constellations of drones or autonomous vehicles. Militaries could also use the technology to authenticate the data transmitted from sensors that are a critical part of “combat cloud environments”.

The company has engaged with Nato and is taking part in exercises designed to better integrate emerging technologies into military systems.

Fortaegis is working on several projects with the Netherlands Organisation for Applied Scientific Research (TNO), including one using its technology to create huge swarms of tens of thousands of drones.

Kees Buijsrogge, TNO’s head of space and scientific instrumentation, said they wanted to create optical connectivity between drones, a much faster method of communication to reduce the barriers to big swarms and also prevent jamming.

Wijnands said the company had signed contracts with more than one country to help build massive drone swarms.

TNO has also validated Fortaegis’s technology. Marc Zegveld, head of the group that ran the tests, said it had employed the most aggressive forms of hacking possible but had been unable to penetrate Fortaegis’s integrated architecture.

Wijnands said Fortaegis was in talks with US hyperscalers and AI labs. It is also involved in a project with ASML, the Dutch manufacturer of the world’s most advanced lithography machines for making chips, and Eindhoven University of Technology to develop a security framework for autonomous AI systems.

Paul Taylor, a former senior UK government technical national security expert and now a member of the UK Prime Minister’s Council for Science and Technology, who has evaluated the technology, said it was impressive.

“It’s very exciting,” said Taylor, who has no commercial stake. “It’s one of the most applicable and implementable hardware security systems I’ve seen.”

Taylor said adversaries such as China would not be able to access the encryption keys. “They could steal the technology, like they can steal rockets or lasers or whatever. But the idea that they could break in and get a key . . . is not a thing.”

Mitsunobu Koshiba, one of the highest-profile figures in Japan’s chip industry and a Fortaegis board member, said the potential applications in Japan included protecting chipmaking equipment — the country’s “crown jewels” — from China, which is trying to reverse-engineer them.

The technology could also help create “trusted networks” to reassure international partners that Japan was becoming better at protecting intellectual property in projects such as a joint programme with the UK and Italy to build fighter jets.

Ilyas Khan, chair of Fortaegis and founder of the recently listed quantum-computing company Quantinuum, described the technology as the “Holy Grail” and predicted it would become the “standard for security on silicon”.

Robert Jesudason, CEO of Serendipity and a Fortaegis board member, said his firm invested because of the technology and potential market size.

“Boudewijn is not trying to build a unicorn,” said Jesudason. “He’s trying to build a company where the chips will be in every serious product in the world.”

Michael Dell’s family office leads $7.7bn deal to take insurance broker private

DFO Management and Sequence near acquisition of Baldwin Group as industry undergoes wave of consolidation

An investor consortium led by the family office of technology billionaire Michael Dell is nearing a $7.7bn take-private deal for insurance broker The Baldwin Group.

A go-private deal for Baldwin is set to be announced as soon as Monday, provided it does not hit any last-minute snags, according to people familiar with the matter. The transaction is co-led by Dell’s DFO Management and Sequence Holdings, a venture capital-backed tech group investing in the service economy, they added.

The Dell-led consortium prevailed over several large private equity groups in its pursuit of Baldwin, showing how the tech world is increasingly encroaching on Wall Street as it tries to import AI-enabled tech to the real economy.

The potential deal is expected to value Baldwin at $32.50 a share, or an enterprise value of $7.7bn, the people said. That price tag equates to a nearly 90 per cent premium to its valuation in June, when reports first emerged that Baldwin was exploring a sale.

Baldwin specialises in commercial insurance brokerage, advising midsized and large companies shopping for insurance policies for everything from cyber security to employee benefits to real estate.

Shares in Baldwin are up by nearly 25 per cent since the start of the year off the back of speculation about a go-private deal, giving it a market capitalisation of $4.1bn, as of Friday’s close. Baldwin had net debt of $2.3bn as of the end of June this year.

A potential take-private deal comes on the heels of Aon buying KKR-backed brokerage firm USI Insurance at the end of last month for $17bn, in a sale which is set to generate the New York-based private equity giant $3.3bn.

A takeover of Baldwin would be a rare full-blown leveraged buyout led by DFO, one of the world’s largest family offices, which manages tech billionaire Dell’s money. DFO’s predecessor, MSD Capital, played a major role in the $24.9bn leveraged buyout of Dell Technologies alongside Silver Lake Capital Management in 2013.

Sequence launched earlier this year with the aim of deploying tech to boost the performance of service businesses, making its first minority investment in privately held community lender BankSouth. Sequence, which deploys its team of engineers to work alongside management, has backing from Silicon Valley VC firms including 8VC, Lux Capital and Conviction, as well as DFO.

DFO was recently a minority equity investor in the Silver Lake-led consortiums buying social media app TikTok’s US business and taking entertainment giant Endeavor Holdings Group private. DFO also invests in public equities.

Tampa, Florida-based Baldwin traces its roots back to 2006. Its co-founder Lowry Baldwin is still among the group’s largest shareholders and serves as chair of the board.

The historically fragmented industry of insurance brokerage is in the midst of a wave of consolidation as companies are seeking scale and greater market share.

DFO, Sequence and Baldwin did not immediately respond to requests for comment.

Owners of defence and technology groups fear selling to American bidders will attract opposition from European governments

Europe’s willingness to allow defence companies to be sold to American buyers is set to be tested in a series of planned deals as the region’s governments seek to bolster their sovereignty from the US.

Upcoming sales of several European drone detection businesses, such as Robin Radar Systems, will be the latest test of companies’ appetite to strike deals with US investors, and of governments’ inclination to intervene in transactions.

The private equity owner of Robin Radar, a supplier to the Dutch military, was discouraging US arms makers from bidding for the business because they were likely to face local government opposition, according to people familiar with the matter.

Parcom, which is working with an adviser to launch a sales process in the coming months, would prefer a European strategic or private equity investor to avoid the risk of political intervention as it sought $2bn or more for the business, the people said.

European government scrutiny is increasing in mergers and acquisitions as Brussels and national governments seek greater influence in strategic sectors such as defence, technology and energy.

As a result, several senior deal advisers said they were now engaging earlier than before with governments and militaries to discuss sensitivities around defence assets they intended to sell. Owners and bidders were trying to offer guarantees around retaining jobs and technology locally to get around drawn-out FDI reviews or rejections, some of the people said.

The Dutch government in May blocked US firm Kyndryl’s acquisition of cloud company Solvinity, a provider for the country’s digital ID system for citizens’ tax, medical and pension information. It was the first time the Dutch Investment Screening Bureau blocked a US acquisition since its founding in 2020.

“The mandate from European governments is becoming clearer: build it here, keep it here,” said Diana Dimitrova, head of BCG’s UK aerospace and defence practice. “This isn’t just about defence. It’s about jobs, supply chains, and who controls Europe’s industrial base.”

Several defence-tech start-ups considering sales have told advisers they will only sell to Europeans to avoid risking the loss of key government contracts, said one dealmaker. But rejecting deep-pocketed US bidders could come with a downside, the dealmaker said: “Some sellers want European capital at US valuations, but those don’t always reconcile.”

Robin Radar joins several other European defence assets that are on the block and which could test government appetite to allow US ownership.

UK-listed private equity firm Bridgepoint is preparing to sell a Danish drone detection and jamming company MyDefence for about $1bn, while Polish anti-drone company Advanced Protection Systems is also conducting a strategic review including a potential sale, according to people familiar with the matter.

APS is a key participant in Poland’s plans to build an anti-drone shield, dubbed the largest in Europe, following Russia’s airspace violations against a Nato member. The group was recently added to Poland’s list of strategic companies, giving the country the power to block any sale.

Asked about a possible sale of APS, chief executive Maciej Klemm said the company was “only analysing various options for further growth” and wanted to become a leading European anti-drone company.

Interest in unmanned aerial vehicles has surged among militaries, manufacturers and investors as the conflicts in Ukraine and the Middle East have propelled drones and anti-drone equipment to the forefront of modern-day warfare.

Robin Radar, one of a new breed of short-range, cost-efficient radar companies, started with bird detection but switched tack towards drones in 2014. The company has since won a range of customers in Europe and the US and has supplied radars to Ukraine.

It has multiple contracts from the Dutch government, including an order for 100 of its flagship IRIS drone detection radars. The company has also expanded in the US, opening a larger operations centre in northern Virginia last month after sales of its IRIS radars rose 75 per cent in the first six months of the year. 

One person familiar with the matter said the company had received several approaches from interested parties in recent months.

Robin Radar declined to comment. Parcom did not respond to requests for comment.

Government must increase investment by two-thirds to deliver planned reservoirs, prisons and schools

Every adult in Britain would have to pay an extra £590 a year in tax to fund the £258bn of public investment needed to build planned reservoirs, prisons and schools, according to a new report on the state of Britain’s infrastructure.

Delivering crucial projects such as Thames Water’s long-delayed White Horse Reservoir would require the government to increase infrastructure investment by two-thirds — or roughly £25bn a year by 2030 — if funded publicly, said Sir John Armitt, chair of the private-sector-led Public Private Partnership Commission.

The crisis surrounding the early release scheme has highlighted the UK’s need for more prison capacity, while Ofwat has warned that population growth and climate change could leave England facing a water deficit of billions of litres a day within the next 25 years.

Armitt, the last chair of the National Infrastructure Commission before it was replaced by a new body, said strained government finances meant that the UK’s fiscal rules would be “in danger” if it attempted to fund infrastructure spending through additional borrowing.

This would add around £7bn to debt interest costs by 2030, £14bn by 2035 and £23bn by 2040, the report found.

Former chancellor Rachel Reeves tweaked fiscal rules to treat infrastructure investment differently from day-to-day spending, but the extra borrowing required would still increase overall public debt.

“Anyone who believes the taxpayer and public sector can close that gap alone has not looked at our public finances,” said Armitt, who has proposed an OBR-style body for infrastructure.

“Debt interest, were it a government department, would be the fourth largest in Whitehall,” he continued. “The UK faces a fundamental choice: do we want to deliver the infrastructure that the public expects and the country needs, or don’t we?”

A rise in gilt yields over the past fortnight has squeezed the government’s fiscal buffer and increased pressure on Reeves’ successor, John Healey, to balance the public books while Prime Minister Andy Burnham is targeting “growth in every postcode”.

The report by the commission, which is run by consultancy Bradshaw Advisory, also found that the UK had the lowest levels of investment in the G7.

It argues that the UK’s planning regime needs to be overhauled and political risk aversion and other regulatory barriers addressed to reduce the cost and delivery time of infrastructure projects.

UK rail projects also take 50 per cent longer than the international average, while delivery times for nationally significant projects doubled between 2009 and 2019, the report found.

It recommends introducing a “parliamentary confirmatory vote” for critical national infrastructure projects to speed up construction and reduce the threat of bureaucracy, or what Armitt called the “horrible merry-go-round” of legal challenges.

The commission said that uncertainty increased costs on infrastructure projects by producing “over-engineered designs to withstand every potential objection and repeated consultation”.

Armitt called for more pragmatism in Whitehall over the role of private investors and developers, who are more efficient at building infrastructure than the public sector because they need to make a return on their investment.

He also argued that the pool of capital was much larger. UK pension funds hold trillions of pounds in assets, but only a small proportion is allocated to infrastructure projects.

Armitt said infrastructure investors had recently raised concerns that the government’s push for increased public control had dampened their enthusiasm for investing in the UK.

The shift “will have investors running a mile”, he said, pointing to windfall taxes on North Sea oil. Investors, particularly pension funds, “want long-term certainty and confidence”, Armitt added.

A separate Oxford Economics report commissioned by transport groups and infrastructure investors last week found that the UK had lagged every major economy except Greece for investment for the past 25 years.

Jon Phillips, chief executive of the Global Infrastructure Investor Association, said: “Private capital is mobile by its very nature . . . At a time when German, French and Canadian governments are actively courting international investors the UK is in danger of losing ground.”

A government spokesperson said that it welcomed “ideas to build the infrastructure that is needed across the UK”.

“We have made progress this parliament by providing the stability businesses and local leaders need to make long-term decisions, including publishing the 10-year infrastructure strategy, increasing public investment by £120 billion to unlock private capital, and delivering reforms to planning, major infrastructure and regulation.”

Music industry targets AI songs in crackdown on streaming fraud

Scammers are flooding platforms with tracks then deploying bots to rack up plays and royalty payments

Music companies and distributors have agreed new rules to clamp down on the use of AI-generated music to defraud streaming services and divert royalties away from legitimate artists.

Industry executives estimate that almost 10 per cent of streams are now deemed to be fraudulent, with AI generating much of the music. 

Streaming fraud involves the creation of huge numbers of tracks from simple prompts before using networks of bot accounts to play them repeatedly, generating large sums in royalty fees for the owner of the tracks and diminishing the pot of cash available for genuine artists.

French streaming service Deezer said that AI-generated songs made up more than half of new music uploaded in July, averaging 90,000 tracks a month. It also found that up to 85 per cent of streams of fully AI-generated tracks last year were fraudulent.

The International Federation of the Phonographic Industry (IFPI), which represents recorded music companies worldwide, will say on Monday that major distributors have agreed to new guidelines to help stop fraudulent AI-generated tracks reaching streaming platforms.

“Streaming fraud misleads fans and deprives legitimate artists and songwriters of income that should rightfully flow to them,” said Victoria Oakley, IFPI chief executive. “This is theft, plain and simple.”

Distributors will commit to do more to prevent fraudulent tracks being uploaded, including verifying rights ownership and customer identities.

They have also agreed to vet content for infringement, fraudulent activity and AI-related risks, and will act against repeat offenders and share information.

The Streaming Integrity Initiative is supported by more than a dozen labels and distributors such as Sony Music, Universal Music, Virgin Music, Absolute Label Services, Revelator, Warner Music, Absolute, FUGA and The Orchard.

The organisations are calling on remaining distributors and digital service providers to back the initiative, which establishes a set of baseline practices for the industry to help prevent, detect and respond to streaming fraud.

The new initiative builds on the End Streaming Fraud campaign, launched by the IFPI and leading music companies to raise awareness of the threat posed to the music ecosystem.

Some streamers have already committed to tackling AI-generated music fraud. Deezer said it excludes fraudulent AI streams from royalty payments when they are discovered.

Some countries have also started to crack down on music fraudsters. A man pleaded guilty this year in the first US criminal prosecution for AI-assisted streaming fraud, while Brazilian authorities have targeted businesses selling fake streams, followers and engagement.