WWD : Hudson’s Bay Extends Liquidation to Entire Fleet

Hudson’s Bay Extends Liquidation to Entire Fleet
Canada's venerable retailer suffered from too much debt, failure to pay bills and insufficient investment in its department stores for years.

After triggering liquidations at 86 locations across Canada, the Hudson’s Bay Co. has decided to liquidate its remaining six Hudson’s Bay stores and one Saks Fifth Avenue location.

The company had been seeking a buyer for the six stores, but on Friday said it believed that a viable bid for the current six-store model is unlikely, and therefore liquidation sales in those stores began Friday. Should an 11th-hour bid surface, the six stores could stop liquidating.

A company called Reflect Advisors continues to solicit interest in parts of Hudson’s Bay, including certain properties and other assets, as well as a refinancing of all or a portion of the business of the company. But the deadline for these submissions is Wednesday, leaving little hope for Hudson’s Bay to live on, even as a sliver of what it once was.

The 73 other Hudson’s Bay, 13 Saks Off 5th and two Saks Fifth Avenue locations began liquidation sales last month, as reported by WWD.

The closure of Hudson’s Bay, given that it operated 79 stores across Canada — including some huge downtown locations in Toronto, Vancouver and Montreal — dramatically alters the country’s retail landscape and put thousands of people out of work. Hudson’s Bay employs 9,364 people.

The venerable retailer, considered the oldest company in North America having been founded in 1670, originally as a trading company, was dragged down by more than 1 billion Canadian dollars in debt, a weak consumer economy and an inability to pay bills. Its first department store opened in 1881 in Winnipeg, Manitoba.

Past talks to secure financing fell apart. Over the years a handful of retail companies and private equity players considered buying Hudson’s Bay, but they reconsidered after examining the books. Still, Hudson’s Bay’s business had been floundering for years, even before Richard Baker’s NRDC firm took control of the Toronto-based department store chain. However, under Baker’s 17 years of control there has been a revolving door of senior leadership, flip-flopping strategies and the abdication of market share as well as some lucrative monetization of retail real estate. Retail experts saw a lack of investment in the stores, diminishing service levels and deteriorating physical conditions, like malfunctioning escalators and water damage in certain locations.

The Hudson’s Bay and Saks Fifth Avenue stores in Canada are expected to operate no later than June 15, although some might close earlier. Additionally, nine Saks Off 5th stores will close Sunday. Through a licensing agreement, three Saks Fifth Avenue and 13 Saks Off 5th locations have been operating in Canada.

Hudson’s Bay was severed from Saks Global late last year. It is a separate company from Saks Global, which operates Neiman Marcus, Saks Fifth Avenue and Saks Off 5th, and which has also been late paying bills. But both businesses are under Baker’s control.

Currently, Hudson’s Bay stores are offering 40 to 70 percent discounts storewide, depending on the category. Saks Fifth Avenue in Canada is offering up to 30 percent off storewide, and Saks Off 5th is offering 40 to 60 percent off its lowest ticketed prices. Select luxury brands and the HBC Stripes Collection are not being discounted. In addition, select store fixtures, furnishings and equipment will soon be available for purchase at participating locations.

“Hudson’s Bay extends its sincerest gratitude to its dedicated associates and loyal customers for their overwhelming support over the years and throughout this chapter,” the company said in a statement Friday.

The Information : Andreessen Horowitz Comes to Deel’s Defense in Spy Battle

Andreessen Horowitz Comes to Deel’s Defense in Spy Battle
With billions on the line, venture-capital firm has told Deel to fight hard against claims it paid a spy for information on a rival

The Takeaway
• Software startup Deel is accused of spying on archrival Rippling
• Andreessen Horowitz has big stake in Deel, and a difficult history with Rippling’s CEO
• VC firm has been involved in Deel’s defense against Rippling lawsuits

Venture capital firm Andreessen Horowitz has landed in the middle of a nasty Silicon Valley spy scandal between one of its most successful startups and a company run by a chief executive the VC firm pushed out nearly a decade ago from the company he founded.

The VC firm is playing a central role in the fight between rival human resources software companies Deel, which it backs, and Rippling. Andreessen has been advising Deel, one of its fastest-growing investments, to push back against the accusations Rippling made in a California court filing last month that Deel hired a spy to deliver inside information on Rippling.

The spy scandal has put billions of dollars in potential profits at risk for Andreessen, which is Deel’s biggest investor. There’s also a personal element to the fight: Deel is accused of spying on Rippling, whose chief executive, Parker Conrad, has said he was pushed out of his previous startup, Zenefits, by Andreessen Horowitz nearly a decade ago.

The battle escalated Friday when Deel said in a Delaware Superior Court filing that Rippling defamed it for years by making allegedly false and misleading statements about the company to the press, government officials and others. It said in the lawsuit that Rippling CEO Conrad “has made it his life’s goal to exact misguided and petty revenge on those connected with Andreessen.”

In the middle of it all is a top partner at the VC firm, Anish Acharya, who is the only venture capitalist on Deel’s six-member board. In internal meetings at Deel a few weeks ago, Acharya argued against singling out any Deel executives, a person with direct knowledge of the meetings said. He argued that Deel’s board should take no immediate action, make no public statement and deny any wrongdoing at that time. The company hasn’t announced an investigation into the allegations. It is unclear whether the board is investigating the matter.

Deel said in its response to Rippling’s lawsuit that Rippling failed to show that any information obtained by the spy was valuable enough to constitute a trade secret. Deel also characterized the Rippling employee as a whistleblower, rather than a spy. The employee, Keith O’Brien, admitted to spying on Rippling for Deel in a sworn statement in a court in Ireland, where he lives.

(Deel alleged that O’Brien took directions from Michael Roddan, one of the authors of this story, who was working on an article about Rippling and Deel. The Information previously reported that Roddan didn’t know O’Brien existed until the accused spy was named by Rippling in a lawsuit.)

Andreessen Horowitz helped bring in its favored advisers. Deel replaced its law firm, Paul Weiss, with Skadden Arps, which has worked with Andreessen Horowitz, to prepare a legal defense and countersuit against Rippling. Paul Weiss would not comment. Andreessen also helped bring in a new crisis public relations representative, Michael Sitrick, to handle the fallout.

A Deel spokesman, who also represents CEO and board member Alex Bouaziz, said the details of the internal discussion are inaccurate but would not comment further. Earlier, the spokesman said: “As you know, information concerning any of the types of communications with counsel you allege is confidential and privileged and the company has no interest in litigating this matter in the media.”

Andreessen Horowitz did not comment.

Huge Investment at Risk

The VC firm owns about 20% of Deel, the company said in a lawsuit against Rippling Friday. That likely would be among the largest percentage ownership stakes any single VC firm has in a private company valued over $10 billion. The stake would be worth more than $2.5 billion based on Deel’s most recent valuation of $12.6 billion.

Deel said in the lawsuit that Rippling had already done it harm. It claimed Rippling launched a campaign to defame Deel in 2022 by allegedly planting false and misleading claims about Deel in the media and with regulators.

Bouaziz on Friday told Deel staff that he appreciated his employees’ patience as the legal team worked on the company’s “response to Ripping’s smear campaign” in a slack message to staff. “Thanks for hanging in there,” he said.

A victory in Rippling’s California lawsuit against Deel would be payback for Conrad, who said he was pushed out as head of an earlier startup, Zenefits, by Andreessen Horowitz nearly a decade ago.

Zenefits laid off half its staff soon after and was later sold to a competitor at a fire sale price. Since then, Andreessen Horowitz and other VCs have more firmly backed their founders.

Deel, which helps companies pay remote employees and do other back office tasks, was Acharya’s first investment after he joined Andreessen. He courted Bouaziz before investing in 2020 and has remained close with him.

Acharya’s strategy for handling Deel’s crisis came as the alleged espionage scandal dramatically escalated. Board members learned that the accused spy alleged that he was paid by Deel executives.

Soon after, the alleged spy made a sworn confession in court saying that he was personally recruited by Bouaziz and his father, Philippe, who is also the company’s chairman and chief financial officer. When Rippling caught the spy in a honeypot trap, Deel’s lawyers allegedly coached him to destroy his phone and offered to fly him and his family to Dubai where he would be financially supported by the company, according to the alleged spy’s sworn statement.

In addition to Philippe and Alex Bouaziz, other board members are Acharya, former Illumina boss Francis D’Souza, former Coupa Software CFO Todd Ford and ex-SAP executive Franck Cohen.

VCs Back Their Founders

Acharya’s support for Deel follows a recent playbook by Andreessen and other VCs to more aggressively support even the most embattled founders. In 2022, the firm backed a new real estate venture, Flow, by Adam Neumann, the disgraced WeWork cofounder. The next year, it worked to keep in place the CEO of Synapse, a fintech startup that later collapsed, owing customers tens of millions of dollars.

Another Andreessen-backed founder who won the firm’s support amid controversy was Henry Ward of Carta, whose startup secondary trading business was accused of misusing customer data last year. “Everyone stuck with me,” he said in an interview Monday. “I think the world quadrupled down on founder-led companies.”

He added the VC firm “had a history” of pushing out founders in the past, referring to Conrad and Zenefits. “My view is they probably learned from that.”

In a podcast interview in 2022, Acharya was asked how he navigates conflict with Bouaziz. “Generally, the way I work is that we always defer to the founder,” Acharya said. “So whatever Alex wants to do, I always commit to giving him the strong form of the truth, and then supporting him in whatever he decides.”

It’s an industry trend that Bouaziz had noticed. He said in a separate 2022 podcast interview that venture capitalists had become “a lot more founder-centric than they used to be, compared to some super cutthroat investors that were in the past. It’s a luxury we have nowadays that a lot of previous entrepreneurs did not have.”

The strategy of always deferring to founders is being tested by Deel. In his confession in the High Court in Dublin, O’Brien said that Deel executives, including Alex and Philippe Bouaziz, arranged to pay him about $6,000 a month to pass on Rippling’s confidential business information.

O’Brien also laid out an alleged cover-up. He said that two of Deel’s most senior internal lawyers encouraged him to destroy his phone in spite of a court order and flee Ireland with his family to Dubai, where he would be financially supported by the company. One of those lawyers, Asif Malik, had moved from the UK to Dubai, Rippling’s lawyers said in court earlier this month. Deel’s board didn’t learn about the alleged cover-up until O’Brien’s affidavit was unsealed by an Irish court on April 2, a person familiar with the matter said.

Rippling is suing Deel over the alleged spying in U.S. federal court in California and in Ireland. The High Court in Dublin ruled earlier this month that Alex Bouaziz, and the lawyers Asif Malik and Andrea David Mieli could be added as codefendants to the case. Malik and Mieli did not respond to requests for comment.

Rippling’s lawyers told the court that they have had trouble serving summonses on Deel defendants in its Irish lawsuit. Rippling told the High Court that Deel’s law firm did not respond to requests that it accept service of the summons on behalf of Deel, while French bailiffs in charge of serving court summons on Alex Bouaziz have been unable to locate him at his Paris address, according to a person briefed on the matter. Bouaziz’s aunt told the bailiffs her nephew was in Dubai, the person said.

A Deel spokesperson said Bouaziz was in Dubai for a family holiday. The spokesperson said Malik’s move to Dubai had been planned for a year. (Malik registered a private consultancy in the UK with a registered address in the UK in March. The spokesperson didn’t respond to questions about this.)

Alleged Spy’s Confession

O’Brien in his confession claimed that money was transferred to him via a bank account held by Deel COO Dan Westgarth’s wife. Westgarth has resided in the United Arab Emirates since late 2024, according to documents filed with the UK companies registry. Westgarth’s wife was employed by broker Robinhood doing crypto compliance but left the company earlier this year, according to a Robinhood spokesperson. Philippe Bouaziz also resides in the UAE.

The Deel investment was the first and by far the best for Acharya, until recently a relatively low-profile consumer tech and fintech investor and weekend DJ who goes by the name illScience. He was promoted to be the firm’s head of consumer investing last year. A software engineer by training, he previously founded and sold two companies—one to Google and another to Credit Karma—before joining Andreessen Horowitz in 2019.

That year, he met Bouaziz in San Francisco’s South Park, in a meeting brokered by Deel angel investor Ryan Hoover.

Acharya has said he was drawn to Bouaziz’s energy rather than his technical knowledge. “We didn’t talk that much about the business,” Acharya later recalled in a podcast interview. “It was that feeling I remember—that feeling that this person is going to do something.”

The firm led Deel’s $16 million Series A round at a $60 million valuation, Bouaziz has said. It followed on with additional investments in later rounds.

Bouaziz later said he took Acharya’s initial investment offer at a discount to others. “​​I liked the fact that he was new at the firm, so tying his future to ours was a big part of my thinking process,” Bouaziz said.

Deel became one of Silicon Valley’s fastest-growing software startups in part by allowing companies to hire and pay software engineers in lower-cost countries. It charged customers fees to become the “employer of record” for employees based in countries where the customers didn’t have legal offices, and later expanded into running payroll for companies around the world.

Deel told investors last year in a presentation it was the fastest company ever to reach $500 million in revenue, and it forecast about $1.7 billion in revenue by 2026.

Andreessen Horowitz touted Deel and its CEO. The firm published a case study on Deel, saying it was “reshaping how businesses hire, pay and manage talent across 150+ countries.” Last month, Bouaziz had a headline speaking gig at the VC firm’s annual fintech conference in Park City, Utah. Ben Horowitz is also close to Bouaziz, people familiar with the matter said. Acharya’s personal X profile displays a banner picture of himself with Bouaziz.

Conrad started Rippling soon after his dismissal from his startup, Zenefits, and has since criticized Andreessen Horowitz for abandoning him. Zenefits never regained its previous startup sheen, and was sold to HR software firm TriNet in 2021.

Conrad’s resignation from Zenefits in 2016 came at a board meeting called by Andreessen Horowitz. Conrad, who was accused by the state of California of breaking state insurance-broker licensing laws, rejected an offer to stay at the startup in a lower role. “I’m not going to fight it,” Conrad later said. He later paid a $350,000 fine to the Securities and Exchange Commission, without admitting wrongdoing.

In 2017, he announced he started Rippling, a company that would similarly focus on human resources software. He later said that part of what fueled his redemption effort was a comment from then-Andreessen Horowitz partner Lars Dalgaard, that Conrad wouldn’t succeed in founding another company. Dalgaard did not respond to requests for comment.

>>> Barrons Weekend Summary

Cover Story:
-The business of overseeing an endowment has evolved significantly, with managing millions or even tens of billions of dollars across the capital markets becoming a match of three-dimensional chess. Harvard Management Co. CEO N.P. "Narv" Narvekar, who manages Harvard University's $53B endowment, has been facing criticism from Students for Justice in Palestine and conservative activists like Christopher Rufo who accuse universities like Harvard of padding their endowments with federal grants while spreading far-left ideology. In February 2024, Narvekar, along with Harvard Corp. senior fellow Penny Pritzker and President Alan Garber, received a subpoena from the House Committee on Education and the Workforce related to an investigation into Harvard's handling of on-campus antisemitism. Harvard's endowment has seen a plunge in fund-raising, with philanthropic contributions falling by 14% in fiscal year 2024 as several billionaire donors publicly severed ties with Harvard over its response to campus antisemitism.
Meanwhile, the Trump administration has requested that the Internal Revenue Service start the process of revoking Harvard's tax-exempt status.

Interview:
-Scotts Miracle-Gro, a seed company based in Marysville, Ohio and it is owned by Jim Hagedorn, CEO. The company's two flagship brands, "the grow side" and "the kill side," own Ortho and distribute Roundup to consumers. Miracle-Gro, originally a liquid-based plant fertilizer product, was co-founded in 1950 by entrepreneur Horace Hagedorn. In 1995, Scotts offered to buy Miracle-Gro for $400M, but Hagedorn decided it was worth more than Scotts. Today, the company has a market cap of nearly $3B, with Hagedorn and his family controlling 25% of the company's common stock. Hagedorn began investing in the weed business in 2013, when SMG invested in a Colorado indoor-gardening products company focused on growing marijuana. The company created a subsidiary, Hawthorne, which made acquisitions in companies selling marijuana cultivation supplies and invested in a Canadian business directly involved in growing and selling marijuana.

Tech Trader:
-Wall Street is experiencing uncertainty as tech earnings season begins and tariffs continue to impact investor sentiment. ServiceNow, IBM, Intel, and Alphabet reported mixed views on the current state of tech. Meta Platforms, Microsoft, Amazon.com, and Apple are expected to report within a 24-hour period next week, with the Nasdaq Composite down 11% on the year. The economic environment has drastically shifted due to ongoing tariff announcements from the Trump administration. Investors will be more focused on guidance tech companies provide than quarterly results. Intel CFO David Zinsner stated that the current macro environment is creating elevated uncertainty across the industry. The stock was down 7.3% on Friday due to Intel's weaker-than-expected outlook.

The Trader:
The healthcare sector is expected to perform well in 2025, despite concerns about Health and Human Services Secretary Robert F. Kennedy Jr. and UnitedHealth Group's earnings guidance. The Health Care Select Sector SPDR exchange-traded fund is flat this year, while the broader market is down. Tariffs and trade war worries are less of a concern due to the domestic focus of many industry companies. Investors appreciate that many of the companies in the group are relatively recession-resistant. Jonathan Curtis, chief investment officer at Franklin Equity Group, believes that people will continue to get sick, pay insurance premiums, and see their doctors. However, there are also exciting opportunities in the sector due to innovative medications and biotech-developed treatments. Eli Lilly, the largest holding in the Health Care ETF, is up 11% in 2025, while Johnson & Johnson and Amgen are up due to solid earnings and strong pipelines.
-Coca-Cola shares have seen a significant increase, up nearly 18% this year and trading near a record high, making it the top-performing stock in the Dow Jones Industrial Average. Warren Buffett is also a shareholder, with Berkshire Hathaway holding a stake of over 9%. The company's stock is expected to be discussed at Berkshire's annual shareholder meeting on May 3. Despite concerns about President Trump's aluminum tariffs and the impact of GLP-1 weight loss drugs and the Make America Healthy Again movement on sugary beverage intake, Coke remains bullish. CEO James Quincey believes the company can adapt to changing consumer behavior and tighter regulations from Health and Human Services Secretary Robert F. Kennedy Jr., and 23 of the 29 analysts covering Coke have a buy on the stock. Coke recognizes the need to expand its beverage portfolio beyond carbonated sodas, with a push into milk and protein shakes with Fairlife, the lactose-free dairy brand bought in 2020.

Features:
-President Trump's recent campaign to pressure Fed Chair Jerome Powell may signal that the Federal Reserve still holds the final say in monetary policy. Trump's attacks on the central bank, involving social media and public and private comments, tested the extent to which American political leaders can influence monetary policy and the central bank's willingness to resist them. The standoff between Trump and Powell, dubbed "Mr. Too Late" for the Fed's refusal to cut interest rates, was rooted in the Trump administration's "Liberation Day" announcement of a trade policy shift that would apply a baseline 10% tariff on most imports. The proposal was met with skepticism, leading to stock falls and lower Treasury yields. The White House implemented a 90-day pause on many new tariffs, except for those on China.
-A small part of Pope Francis's legacy will be financial, as the Vatican's investments are generating profit, possibly due to a renewed focus on social values aligned with the Catholic Church. In 2023, the Administration of the Patrimony of the Apostolic See (APSA) made nearly 46 million euros from its investments, covering 37.9 million euros for Church expenses and the rest as profit. ASPA invested in international securities and fixed-income securities, providing consulting, financial solutions, and access to capital markets for the Church. The total investment rose more than 40% from 2022, when the Church issued a document outlining "faith-based measures for Catholic investors." The Church reiterated that it wouldn't invest in companies that didn't conform to Church teachings, such as the immorality of abortion, birth control, pornography, excessive alcohol use, weapons, capital punishment, and mining. The Church believes that investing in companies that score well based on environmental, social, and governance (ESG) metrics aligns with the principles of Catholic Social Teaching. However, it isn't entirely clear which companies the Church believes fit those criteria, as it doesn't list specific holdings.

Europe:
-Apple and Meta Platforms have been fined by the European Union for breaches of the EU's Digital Markets Act. The move could exacerbate tensions between President Donald Trump and the Trump administration, who has previously threatened tariffs as retaliation for sanctions on US companies. Apple received a €500M ($571.3 million) penalty, while Meta, the owner of Facebook, was fined €200M. Trump has previously threatened tariffs in response to digital services taxes, fines, practices, and policies imposed on American companies. The relatively small scale of the fines could reduce the likelihood of retaliatory action from the Trump administration. The EU Commission requires companies to comply with the Commission's decisions within 60 days to avoid periodic penalty payments.

Emerging Markets:
-The US is increasingly resembling an emerging market, with President Donald Trump attacking the independence of the Fed and its chairman, Jerome Powell. Trump demands aggressive rate cuts and threatens to fire Powell if he doesn't get them, but this time amid a generational loss of confidence in the US dollar and Treasury bonds. Trump's behavior, including his irrational tariffs and administration's abandonment of traditional allies, disregard for the rule of law, and threats against Powell, intensifies the drop-off in confidence. The growing US debt since 2008 provides an ominous backdrop. This is a result of the "EM-ification" of US politics, where growing social polarization, political violence, and institutional conflict generate political instability, policy uncertainty, and market volatility typical of emerging markets. Since at least 2017, most US assets have rallied despite an 18% increase in political risk, a bigger increase than seen for any other developed market.

Commodities:
-Gold has seen a 30% increase in value this year, reaching $3,406 per troy ounce. Over the past 20 years, SPDR Gold Shares has surged 630%, 85 points more than the SPDR S&P 500. This is not expected, as businesses are expected to outperform gold over decades. Gold's price action is mostly about demand, as nearly every ounce found is still around somewhere. Since 2022, price action has been ravenous and broad. The US and its allies placed sanctions on Russia, including its largest banks, and China went on a bullion spree. However, other central banks have stepped in, possibly due to decadeslong diversification by finance ministers away from the US dollar. The recent uptick in gold stockpiling looks to JPMorgan Chase, the world's largest bullion dealer, like a debasement trade. Investors are nervous about President Trump's tariffs, his browbeating of the Federal Reserve Chairman over interest rates, and blowout US deficits.

>>> Weekend Papers Summary

FINANCIAL TIMES
-Pope Francis' funeral mass in Rome has attracted world leaders, including US President Donald Trump, who broke tradition and requested simplified rites. The late pontiff, who will be laid to rest at Santa Maria Maggiore, has requested a more compassionate and accessible Catholic church, addressing contemporary issues like climate change. During his 12 years on the throne, Francis aimed to make the Catholic Church more accessible and compassionate. His death at the age of 88 has sparked grief from admirers and dissent from critics, including influential members of Trump's Maga movement. The Holy See estimates that around 200,000 mourners have gathered in St Peter's Square for the mass, including 220 cardinals and around 750 bishops and priests. The Vatican reported that an estimated 250,000 people had passed through St Peter's Basilica over the three days Francis lay in state before his coffin was sealed.
-The Church in the west struggles to maintain its legacy of properties, while in the southern continents, it lacks resources to build churches and schools quickly enough for an expanding flock. Cultural differences now shape ethical questions, but these are not disagreements over doctrine itself but how it is applied. The differences between cardinals are more about how the Church evangelizes, focusing on its "style" - its way of being, culture, and mindset. The late pope's reforms reflected his understanding of the Church's role in the "change of era" marked by the general expulsion of Christianity from law and culture. Francis criticized the negative view of the Church's diminished social relevance, arguing that it seeks to recover or shore up its attachment to secularization.
-China has seized a disputed reef near the Philippines' most important military outpost in the South China Sea, raising the risk of a new stand-off between the two rival claimants. The China Coast Guard has exercised sovereign jurisdiction over Sandy Cay, marking the first time in many years that Beijing has officially planted its flag on another previously unoccupied land feature. The move comes as the Philippines and its ally the US conduct Balikatan, their largest annual military exercise, which will include coastal defense and island seizure drills. Sandy Cay has strategic value for China because it grants it a territorial sea.
-British Prime Minister Sir Keir Starmer has been rebuffed by Brussels in a bid to gain access to the EU single market as part of a post-Brexit reset. The British government sought a mutual recognition agreement on certifying product standards, which would have reduced red tape for British businesses. However, France rejected the demand, and EU diplomats believe it is a non-starter. The skirmish is part of a larger dispute between Britain and the EU, expected to intensify in autumn with the aim of finalising a deal by the end of the year. The deal would require Britain to roll over EU fishing rights in UK waters for several years.
-President Trump has pardoned Florida healthcare executive Paul Walczak, whose mother played a role in exposing the contents of Ashley Biden's diary. Walczak was sentenced to 18 months in prison and ordered to pay nearly $4.4 million in restitution for tax crimes used to finance a lavish lifestyle. His mother, Elizabeth Fago, was a longtime Republican donor and fund-raiser who played a role in a surreptitious effort to help Trump by undermining Biden Jr. in the 2020 election.
-Former Fed governor Kevin Warsh has accused the US central bank of committing systematic errors and failing to control the worst inflationary surge in a generation. Warsh accused the bank of acting more as a general-purpose agency of government than a narrow central bank, and said the "drift" had stopped it from keeping inflation at its 2% goal. He added that the Fed's $7T balance sheet enabled rampant federal government spending, leaving the US's fiscal position on a dangerous trajectory. Warsh referred to the central bank's Treasury debt purchases under quantitative easing.
-The IMF and World Bank's spring meetings saw Trump's reversals, leaving US allies bewildered by the administration's trade agenda and the ongoing uncertainty affecting their economies. Share prices rallied after Trump announced he would curb tariffs on China and not plan to fire Federal Reserve chair Jay Powell. However, the IMF's World Economic Outlook warned that instability in international trade would inevitably hinder global growth, highlighting the world economy's new and major test.
-The FBI has arrested Judge Hannah Dugan in Wisconsin on obstruction charges for allegedly helping an immigrant evade detention by federal agents. The judge, who has been a judge in Milwaukee County since 2016, has been accused of intentionally misdirecting federal agents away from the subject to be arrested in her courthouse. The FBI director, Kash Patel, alleged that Dugan's obstruction created increased danger to the public. Dugan has been a judge in Milwaukee County since 2016, primarily handling cases in the court's misdemeanour section. This move brings tensions between Trump's administration and the judiciary to new heights, raising existential questions about the country's separation of powers.
-Boeing has returned one 737 aircraft to Zhoushan airport near Shanghai, marking a significant shift in the US-China trade war. Beijing suspended orders for new jets due to rising tariffs, and Boeing is currently bringing back two planes due for delivery. The return of the planes demonstrates the disruption US business in China, a major market for Boeing. The potential break between the US and China threatens the corporate infrastructure of American companies, from factory floor to consumer, which has been central to their growth prospects. Despite Washington encouraging US companies to "de-risk" their presence, many still rely on Chinese supply chains or sell products into the mainland.
-President Donald Trump claimed that Chinese President Xi Jinping had called him, despite Beijing's denials of talks to ease trade tensions between the world's two largest economies. Trump claimed to have sealed "200 deals" on trade, though no such pacts have been announced. However, some people in Washington and Beijing said Xi had not called Trump, and the Chinese embassy in Washington did not comment.
-A Financial Times analysis of over 350,000 posts on X related to the Canadian federal election has revealed a network of coordinated accounts pushing content to boost Conservative leader Pierre Poilievre and tarnish Liberal candidate Mark Carney. The analysis, in collaboration with researchers at the University of Southern California, identified a network of suspicious accounts promoting rightwing memes and news sources. The US has been a major information exporter to Canada, but in recent years, there has been "mass amounts of disinformation coming from the influencer sphere in the US."
-Indians are demanding accountability for the worst terrorist attack on civilians since the 2008 Mumbai attacks, questioning how it could have happened in a region with heavy security presence. Prime Minister Narendra Modi has pledged to exact revenge, stating that New Delhi will identify, track, and punish terrorists and their backers. World leaders, including US President Donald Trump, French President Emmanuel Macron, and Israeli Prime Minister Benjamin Netanyahu, have expressed condolences and support for the situation. India and Pakistan both claim Kashmir and occupy part of the region.

NEW YORK TIMES
-Pope Francis's papacy was marked by debate over radical action, with some liberal Catholics expecting him to ordain women or allow gay marriage, while others believed he would tear up Church doctrine. However, Francis ultimately balked, deciding that the church wasn't yet ready to lift a roughly 1,000-year-old restriction. This led many of his supporters, who expected him to be a pope of radical change, to feel let down. Francis, who died on Monday at 88, was a pope of great, often outsized, expectations. His revolutionary and freewheeling style led Catholics across the spectrum to invest him with their most ambitious — at times unrealistic — hopes and fears, sometimes independent of what he said or did. Some liberal Catholics, forgetting Francis was the leader of a deeply conservative institution, expected him to make women priests, change teaching on birth control, or throw his weight behind same-sex unions and gay marriage. Some conservatives, including some who believed the Argentine pope was a secret Communist, worried he would torch the church doctrine, even though he never touched it.
-Ukraine's leadership has drafted a counterproposal to a Trump administration plan that has drawn criticism for conceding too much to Russia. The plan, obtained by The New York Times, hints at possible concessions on issues that have long been seen as intractable. Under the plan, there would be no restrictions on the size of the Ukrainian military, a European security contingent backed by the United States would be deployed on Ukrainian territory to guarantee security, and frozen Russian assets would be used to repair damage in Ukraine caused during the war.
There is no mention of Ukraine fully regaining all the territory seized by Russia or an insistence on Ukraine joining NATO, two issues that President Volodymyr Zelensky has long said were not up for negotiations.
-A New York Times/Siena College poll found that voters believe President Trump is overreaching with his aggressive efforts to expand executive power and have deep doubts about some of the signature pieces of his agenda. The turbulent early months of Trump's administration are seen as "chaotic" and "scary" by majorities of voters, even many who approve of the job he is doing. Voters do not view him as understanding the problems in their daily lives and have soured on his leadership as he approaches his 100th day in office. Trump's approval rating sits at 42%, which is historically low for a president this early in a term, but it is in line with his stubborn unpopularity. However, voters express dimming confidence about his handling of some of the top issues that propelled him back to the White House, including the economy and immigration, even as most Americans support deportations. Only 43% said they approved of how he has managed the economy this term, a serious erosion on an issue long seen as a strength for him.
-Wisconsin County Judge Hannah Dugan was arrested by F.B.I. agents on suspicion of intentionally misdirecting federal agents away from an undocumented immigrant being pursued by authorities. Dugan was accused of steering the immigrant through a side door in her courtroom while the agents waited to arrest him in a public hallway. This decision to charge a sitting state court judge is a major escalation in the Trump administration's battle with local authorities over deportations. The administration has demanded that local officials not impede federal efforts to deport millions of undocumented immigrants, and the arrest sent a message that the administration intends to take a harder line with those that do. The arrest of Dugan comes after months of rising tensions between the Trump administration and the judiciary, with President Trump and his top advisers repeatedly assailing "local judges" for halting or questioning actions taken by the administration, particularly when it comes to immigration cases.
-The Trump administration has reopened the legal status of thousands of international students in the United States, despite a series of legal challenges. Immigration officials have indicated that they will continue to attempt to terminate their legal status, despite the ongoing legal battles. The decision, revealed during a court hearing in Washington, was a significant shift by Immigration and Customs Enforcement, despite the administration describing it as a temporary reprieve. The back and forth situation has added to the anxiety and confusion faced by international students as the administration has canceled over 1,500 student visas in recent weeks. A Justice Department lawyer, Joseph F. Carilli, stated that immigration officials have begun working on a new system for reviewing and terminating the records of international students and academics studying in the United States.
-Attorney General Pam Bondi has announced that federal authorities may seek reporters' phone records and compel their testimony in leak investigations, reversing a Biden administration policy aimed at protecting journalism from intrusive efforts to identify and prosecute leakers. The change is necessary to safeguard "classified, privileged and other sensitive information," a broader set of government secrets than protected by the criminal code. President Trump has long complained about leaks, and First Amendment advocates have expected his administration to rescind Biden-era protections for journalists.
-President Trump and Ukrainian President Volodymyr Zelensky met privately in Rome on the sidelines of Pope Francis' funeral service. This was the first meeting between the two leaders since their televised argument in February. The meeting came at a critical moment, as the US presented a proposed cease-fire plan for Ukraine's war with Russia and a postwar plan that would give Russia control over all lands it has illegally seized since the invasion began three years ago. The plan includes a major reversal of American policy, recognizing Crimea as Russian territory.
-A third round of talks between Iran and the US over Tehran's nuclear activities began, raising hopes for a new accord that could avert another Middle East conflict. President Trump said he believes a deal with Iran is possible, despite abandoning a previous nuclear deal in 2018. The talks could reshape regional and global security by reducing the chance of a US-backed Israeli attack on Iranian nuclear facilities and preventing Iran from producing a nuclear weapon.
-India and Pakistan are on the brink of another military conflict, with India threatening retaliation for a deadly terrorist attack in Kashmir linked to Pakistan. The downing of an Indian jet by Pakistan in 2019 prompted India to invest billions in modernization efforts, seek international arms purchases, and expand defense manufacturing capacity. Tensions have risen so sharply that India has vowed to disrupt the flow of a major river system into Pakistan, a step it has never taken before, despite the wars the two countries have fought over the decades.

NEW YORK POST
-Virginia Giuffre, a prominent victim of convicted pedophile Jeffrey Epstein, has taken her own life. Giuffre, who was a lifelong victim of sexual abuse and sex trafficking, died at her farm in Western Australia. Her family announced her death, stating that she had "four days to live" following a bus collision. Giuffre was one of Epstein's most outspoken abuse survivors. In 2015, she filed legal action against Epstein, alleging she was sex trafficked at 16 after his ex-lover and convicted madam, Ghislaine Maxwell, recruited her from her job as a locker room attendant at President Trump's Mar-a-Lago resort. Giuffre's family said she was the light that lifted many survivors and will be missed beyond measure. Her children Christian, Noah, and Emily were the light of her life.
-Treasury Secretary Scott Bessent has been a key figure in US trade negotiations, as President Trump expressed hope that he would open China to American goods with aggressive tariffs. Bessent and Trump are in the driver's seat, but Commerce Secretary Howard Lutnick and White House trade adviser Peter Navarro continue to have access and say. Bessent, a successful hedge fund executive worth an estimated $520M, has been the public face of the talks and has voiced confidence about progress in talks with India, South Korea, and Japan. He met last week with a Japanese delegation, with followup talks expected before the end of the month. Bessent was surprised by the progress made in the talks with Seoul officials, stating that the Asian delegation "came with their 'A' game."

TechCrunch : The OpenAI mafia: 15 of the most notable startups founded by alumni

The OpenAI mafia: 15 of the most notable startups founded by alumni

Move over, PayPal mafia: There’s a new tech mafia in Silicon Valley. As the startup behind ChatGPT, OpenAI is arguably the biggest AI player in town. Its meteoric rise to a $300 billion valuation has spurred many employees to leave the AI giant to create startups of their own.

The hype around OpenAI is so high that some of these startups, like Ilya Sutskever’s Safe Superintelligence and Mira Murati’s Thinking Machines Lab, have been able to raise billions of dollars without even launching a product.

But there are lots of other startups in the OpenAI mafia ecosystem. These range from AI search giant Perplexity to xAI, the new owner of X (formerly Twitter.) There’s also smaller outfits with some futuristic plans, like Living Carbon, which is creating plants that suck more carbon out of the atmosphere, or Prosper Robotics, which is building a robot butler.

Below is a roundup of the most notable startups founded by OpenAI alumni.

Dario Amodei, Daniela Amodei, and John Schulman — Anthropic
Siblings Dario and Daniela Amodei left OpenAI in 2021 to form their own startup, San Francisco-based Anthropic, that has long touted a focus on AI safety. Later, OpenAI co-founder John Schulman joined Anthropic in 2024, pledging to build a “safe AGI.” OpenAI reportedly remains multiple times larger than Anthropic by revenue ($3.7 billion compared to $1 billion for 2024, The Information reported). But Anthropic has quickly grown to become OpenAI’s biggest rival and was valued at $61.5 billion in March 2025.

Ilya Sutskever — Safe Superintelligence
OpenAI co-founder and chief scientist Ilya Sutskever left OpenAI in May 2024 after he was reportedly part of a failed effort to replace CEO Sam Altman. Shortly afterward, he co-founded Safe Superintelligence, or SSI, with “one goal and one product: a safe superintelligence,” he says. Details about what exactly the startup is up to are scant: It has no product and no revenue yet. But investors are clamoring for a piece anyway, and it’s been able to raise $2 billion, with its latest valuation reportedly rising to $32 billion this month. SSI is based in Palo Alto, California, and Tel Aviv, Israel.

Mira Murati — Thinking Machines Lab
Mira Murati, OpenAI’s CTO, left OpenAI last year to found her own company, Thinking Machines Lab, which emerged from stealth in February 2025, announcing (rather vaguely) that it will build AI that’s more “customizable” and “capable.” The San Francisco AI startup has no product or revenue but plenty of former top OpenAI researchers and is reportedly in the process of raising a massive $2 billion seed round valuing it at $10 billion, minimum.

Aravind Srinivas — Perplexity
Aravind Srinivas worked as a research scientist at OpenAI for a year until 2022, when he left the company to co-found AI search engine Perplexity. His startup has attracted a string of high-profile investors like Jeff Bezos and Nvidia, although it’s also caused controversy over alleged unethical web scraping. Perplexity, which is based in San Francisco, is currently raising about $1 billion at an $18 billion valuation as of March 2025.

Kyle Kosic — xAI
Kyle Kosic left OpenAI in 2023 to become a co-founder and infrastructure lead of xAI, Elon Musk’s AI startup that offers a rival chatbot, Grok. In 2024, however, he hopped back to OpenAI. Palo Alto-based xAI recently acquired X, formerly Twitter, and gave the combined entity a valuation of $113 billion. The all-stock transaction raised some eyebrows but is a good deal if you’re betting on Musk’s empire.

Emmett Shear — Stem AI
Emmett Shear is the former CEO of Twitch who was OpenAI’s interim CEO in November 2023 for a few days before Sam Altman rejoined the company. Shear is working on his own stealth startup, called Stem AI, TechCrunch revealed in 2024. Although there are few details about its activity and fundraising so far, it has already attracted funding from Andreessen Horowitz.

Andrej Karpathy — Eureka Labs
Computer vision expert Andrej Karpathy was a founding member and research scientist at OpenAI, leaving the startup to join Tesla in 2017 to lead its autopilot program. Karpathy is also well-known for his YouTube videos explaining core AI concepts. He left Tesla in 2024 to found his own education technology startup, Eureka Labs, a San Francisco-based startup that is building AI teaching assistants.

Jeff Arnold — Pilot
Jeff Arnold worked as OpenAI’s head of operations for five months in 2016 before co-founding San Francisco-based accounting startup Pilot in 2017. Pilot, which focused initially on doing accounting for startups, last raised a $100 million Series C in 2021 at a $1.2 billion valuation and has attracted investors like Jeff Bezos. Arnold worked as Pilot’s COO until leaving in 2024 to launch a VC fund.

David Luan — Adept AI Labs
David Luan was OpenAI’s engineering VP until he left in 2020. After a stint at Google, in 2021 he co-founded Adept AI Labs, a startup that builds AI tools for employees. The startup last raised $350 million at a valuation north of $1 billion in 2023, but Luan left in late 2024 to oversee Amazon’s AI agents lab after Amazon hired Adept’s founders.

Tim Shi — Cresta
Tim Shi was an early member of OpenAI’s team, where he focused on building safe artificial general intelligence (AGI), according to his LinkedIn profile. He worked at OpenAI for a year in 2017 but left to found Cresta, a San Francisco-based AI contact center startup that has raised over $270 million from VCs like Sequoia Capital, Andreessen Horowitz, and others, according to a press release.

Pieter Abbeel, Peter Chen, and Rocky Duan — Covariant
The trio all worked at OpenAI in 2016 and 2017 as research scientists before founding Covariant, a Berkeley, California-based startup that builds foundation AI models for robots. In 2024, Amazon hired all three of the Covariant founders and about a quarter of its staff. The quasi acquisition was viewed by some as part of a broader trend of Big Tech attempting to avoid antitrust scrutiny.

Maddie Hall — Living Carbon
Maddie Hall worked on “special projects” at OpenAI but left in 2019 to co-found Living Carbon, a San Francisco-based startup that aims to create engineered plants that can suck more carbon out of the sky to fight climate change. Living Carbon raised a $21 million Series A round in 2023, bringing its total funding until then to $36 million, according to a press release.

Shariq Hashme — Prosper Robotics
Shariq Hashme worked for OpenAI for 9 months in 2017 on a bot that could play the popular video game Dota, per his LinkedIn profile. After a few years at data-labeling startup Scale AI, he co-founded London-based Prosper Robotics in 2021. The startup says it’s working on a robot butler for people’s homes, a hot trend in robotics that other players like Norway’s 1X and Texas-based Apptronik are also working on.

Jonas Schneider — Daedalus
Jonas Schneider led OpenAI’s software engineering for robotics team but left in 2019 to co-found Daedalus, which builds advanced factories for precision components. The San Francisco-based startup raised a $21 million Series A last year with backing from Khosla Ventures, among others.

Margaret Jennings — Kindo
Margaret Jennings worked at OpenAI in 2022 and 2023 until she left to co-found Kindo, which markets itself as an AI chatbot for enterprises. Kindo has raised over $27 million in funding, last raising a $20.6 million Series A in 2024. Jennings left Kindo in 2024 to head product and research at French AI startup Mistral, according to her LinkedIn profile.

FT : US stocks underperform rest of world by widest margin since 1993

US stocks underperform rest of world by widest margin since 1993
Investors fear Trump’s tariff blitz will lead to US stagflation while weak dollar adds to woes

US stocks have underperformed the rest of the world this year by the widest margin in more than three decades as Donald Trump’s erratic policymaking sparks an investor exodus from American assets.

The MSCI USA index — a broad gauge of US equities — lost 11 per cent in the first 16 weeks of the year. The MSCI all world ex-US benchmark climbed 4 per cent in dollar terms over the same period, the biggest gap with Wall Street since 1993, when US investor enthusiasm for foreign stocks surged on the back of trade liberalisation and concerns over the domestic economy.


The gulf in performance underlines investors’ expectation that Trump’s tariff blitz will take a heavier toll on the US economy, by hurting growth and driving up inflation, than it will on economies elsewhere. The gap has been particularly marked with Europe, where US isolationism has prompted pledges of higher government spending — particularly on defence — which are expected to boost the local economy and support equity markets.

“A large part of this underperformance is the repricing of US assets due to increased policy uncertainty and the stagflationary shock from tariffs,” said Sameer Goel, head of emerging markets and Apac research at Deutsche Bank.

The tumbling greenback has helped widen the gap in performance. It has fallen by 8 per cent this year against a basket of six major currencies including the euro and yen, boosting non-US market performance in dollar terms.

Investors started the year betting that US stocks would continue to outshine their peers elsewhere as Trump’s tax cuts buoyed corporate profits. But that view quickly unwound after the US president launched a trade war that was far more aggressive than most investors had anticipated.


The S&P 500 fell as much as 12 per cent in the week following Trump’s “liberation day” tariff announcement on April 2. Although it has since recouped much of those losses as Trump reversed or delayed some of his tariffs, it continues to lag far behind global rivals such as Hong Kong’s Hang Seng or the Stoxx Europe 600.

In Europe, defence stocks such as Germany’s Rheinmetall, Italy’s Leonardo and the UK’s Rolls-Royce have led indices higher, boosted by the region’s plans to increase military spending to cut dependence on the US. Germany’s Dax index is up more than 20 per cent in dollar terms this year while France’s Cac 40 is up around 12 per cent.

“Capital is flowing towards Europe, buoyed by confidence in strong institutions, governance, and equity markets which typically trade at discounts relative to their US counterparts,” said Lewis Grant, senior portfolio manager for global equities at Federated Hermes.

In Asia, the Hang Seng is up 10 per cent this year in dollar terms, led by Chinese tech stocks following the unveiling of AI models by start-up DeepSeek that the company claims were trained at a fraction of the cost and computing power of US rivals such as OpenAI.

FT : DeepMind UK staff seek to unionise and challenge defence deals and Israel l

DeepMind UK staff seek to unionise and challenge defence deals and Israel links
Move by employees at Google’s AI arm follows discontent after weapons and surveillance pledge is dropped

Google DeepMind staff in the UK are seeking to unionise in an effort to challenge the company’s decision to sell its artificial intelligence technologies to defence groups and ties to the Israeli government.

Around 300 London-based employees of the tech giant’s AI arm, which is led by British Nobel laureate Sir Demis Hassabis, have sought to join the Communication Workers Union in recent weeks, according to three people briefed on the move.

The effort creates new strain on DeepMind which is being pushed by its corporate parent to find commercial uses for its powerful AI, with Hassabis suggesting recently that companies in democratic countries should work together to support national security. 

The move to unionise follows growing discontent at the company after Google dropped a pledge in February not to develop AI technologies that “cause or are likely to cause overall harm”, including weapons and surveillance.

Three people involved with the unionisation drive said media reports that Google is selling its cloud services and AI technology to the Israeli Ministry of Defence has also caused disquiet. The Israeli government has a $1.2bn cloud computing agreement with Google and Amazon, named Project Nimbus.

Further tension was caused by media reports that the Israel Defense Forces have used AI systems to generate targets for assassinations and attacks in the Gaza strip, although it is unclear if the IDF is using commercially purchased software for those purposes, or building its own. The IDF did not reply to a request for comment.

“We’re putting two and two together and think the technology we’re developing is being used in the conflict [in Gaza],” said one engineer involved in the unionisation effort. “This is basically cutting-edge AI that we’re providing to an ongoing conflict. People don’t want their work used like this.”

“People feel duped,” the person added. 

According to correspondence seen by the FT, five DeepMind staff have quit over the past two months citing the Israel cloud computing deal and Google’s reversal of existing commitments around the use of its AI. In the US, Google fired some staff for staging sit-in protests over Project Nimbus.

In May 2024, DeepMind staff sent a letter to the company’s leadership calling on it to drop its military contracts, and have held some meetings with management, but their requests have been denied.

The effort to organise will now need to be recognised by the company, through a vote among DeepMind employees in the UK. The AI unit has around 2,000 staff in the UK.

A spokesperson for Google said: “Our approach is and has always been to develop and deploy AI responsibly. We encourage constructive and open dialogue with all of our employees. In the UK and around the world, Googlers have long been part of employee representative groups, works councils and unions.”

The company said it still complies with its AI principles for responsible development, but that the landscape has changed significantly since its 2018 pledge against AI weapons and surveillance.

Unionisation remains relatively rare across the tech sector, which has long resisted attempts to organise its workforce. But there has been growing activity in recent years, including at Amazon and Apple. Google employees founded the Alphabet Workers Union in the US in 2021. 

One person said that if the union gains recognition from DeepMind, it will seek to meet management to request that the company changes course on defence deals and, if unsuccessful, to consider strike action. They said that colleagues in the US were also in discussions about unionisation. 

“What I hope and what people who are active are hoping is that we stay away from any military contracts,” they added. 

Google has faced similar protests over its military ties before. In 2018, several staffers quit and thousands of employees signed a petition in protest against Project Maven, a contract for the US military that used AI technology to improve drone strikes. Following widespread staff discontent, Google did not renew its contract with the Pentagon and pledged not to work on AI technologies for weapons or surveillance. 

One senior figure in the CWU union who is not a DeepMind employee said that when the company was first founded it “attracted lots of smart people that wanted to work on things for genuine good”, but that Google had started “chasing military money”. Google bought the company in 2014.

They noted that staff at DeepMind are often on high salaries. “They’re not joining the trade union for pay negotiations. They’ve joined because they’ve seen the benefits of collectivising to hold Google to account for their stated ethics,” they said.

The engineer at DeepMind who has joined the CWU and is involved in organising discontented staff, said that “joining a union is probably the craziest thing a lot of DeepMinders would have ever thought they’d do” but “people’s level of discomfort has slowly risen over the past few years”.

The company is “sacrificing morals for greed”, the employee added.  

FT : Saudi Aramco steps up e-fuel investment to prolong combustion engine era

Saudi Aramco steps up e-fuel investment to prolong combustion engine era
World’s largest oil company says synthetic fuels have a part to play despite global shift towards electric vehicles

The world’s largest oil company is stepping up investment in synthetic fuels derived from renewable energy, as it bets on the conventional combustion engine to remain a crucial part of transport despite the shift towards electric vehicles.

Ahmad Al-Khowaiter, a senior executive at Saudi Aramco, said the global rush to electrify most road transport “does not make sense” from a climate perspective, especially for countries where energy is sourced from fossil fuels, such as China, which relies on coal power for more than half its electricity.

“There’s been a lot of exuberance around the pace by which electrification will take place around the world,” Al-Khowaiter, Saudi Aramco’s executive vice-president for technology and innovation, said in an interview. “It has its place in the market, but there will always be a need for other solutions like internal combustion engines.”

Saudi Aramco’s bet on internal combustion engines also includes taking a 10 per cent stake in Horse Powertrain, a joint venture with Geely and Renault to create a new engine manufacturer, and a collaboration it announced with Chinese automaker BYD on Monday, under which the Middle Eastern group will share engine technology with the Chinese company for use in its hybrid vehicles.

Its ventures have a common goal: to reduce emissions from the current fleet of cars and prolong the use of internal combustion engines.

E-fuels, produced primarily from renewable electricity, carbon dioxide and water, are seen as a way to decarbonise transport and narrow the emissions gap between EVs and conventional engines.

Carmakers such as Stellantis and Toyota are testing e-fuels to reduce emissions, although auto executives are reluctant to forecast when these fuels will become affordable enough for mass production.

Stellantis said its tests had demonstrated that its engines launched before 2023 could operate well with e-fuels, and that all engines launched since then were ready to use these alternative fuels from the outset.

The owner of Peugeot and Fiat said e-fuels could be “a competitive drop-in alternative to fossil fuels, contributing to decarbonise the existing car [fleet] — assuming favourable financial and regulatory conditions”.

A big hurdle is that e-fuels are prohibitively expensive, costing about $14 a gallon — or four times the price of petrol in the US — according to Rob West, an energy analyst at Thunder Said Energy.

Saudi Aramco has two e-fuel projects under construction. One in Spain to produce 50 barrels a day of e-kerosene for jet engines, and another in Saudi Arabia to make 35 barrels a day of e-gasoline, although these quantities are tiny compared with the company’s net refining capacity of more than 4mn barrels a day.

Al-Khowaiter, who hoped the plants would be in operation by 2027, said Saudi Aramco had put “several hundred million dollars” into the two projects, and would invest more as the businesses scaled up.

“The idea is to have a supply of fuel to meet the needs of carmakers to test it, as well as for Formula 1” and other types of motor racing, he said. 

He also said the supply of e-kerosene would help regulators to understand and certify the new aviation fuel. The EU has a mandate for airlines to start using e-kerosene by the end of the decade and wants the fuel to make up 35 per cent of total fuel use by 2050. 

While it will take a significant amount of time before e-fuel prices start to fall, Saudi Aramco believes they will help hybrid cars, in particular, come very close to the lifetime emissions of an electric car.

“The other advantage of these fuels is that you can impact 90 per cent of the existing fleet, as opposed to the 10 per cent of new cars that are sold,” Al-Khowaiter said. 

The car industry is betting on the longer lifeline for hybrids after the EU relaxed its emissions regulations on petrol cars, while US President Donald Trump has threatened to roll back consumer tax credits for EVs. In the UK, the government has also watered down its EV sales targets and will allow full and plug-in hybrids to be sold until 2035.

Al-Khowaiter said Saudi Aramco was seeing interest in its e-fuels project from carmakers in the EU and China and that any demand for biofuels could “easily be replaced” by e-fuels by 2050. “We believe today that e-fuels are cost competitive with second and third generation biofuels,” he said.