TheChek News Flow

Facebook parent could sell tens of billions of dollars in new stock as it seeks to finance AI infrastructure

Meta is considering raising tens of billions of dollars in a stock offering as it seeks new sources of capital to fund Mark Zuckerberg’s vast ambitions in AI, following the launch of Google’s record $85bn share deal this week.

Executives at the social media company have been exploring “creative” ways to raise cash as it prepares to sharply boost its AI-related capital expenditures to as much as $145bn this year and even higher in 2027, according to three people familiar with the plans.

After the success of Google parent Alphabet’s equity raising this week, which was increased by $5bn after strong investor demand, the discussions have intensified, the people said. 

Meta shares were down about 7 per cent in US trading on Friday before closing down 5.5 per cent, with the decline having accelerated following the FT’s report over its talks about an equity fundraising.

Meta’s discussions over a fresh share sale come amid a frenzy of activity in US equity capital markets, with Elon Musk’s SpaceX set to hold its initial public offering next week and AI groups Anthropic and OpenAI also working on plans for massive Wall Street debuts.

Big Tech companies have also tapped debt markets as they rush to finance AI infrastructure, including chips and data centres.

Finance chief Susan Li is leading the talks over the potential share sale alongside Dina Powell McCormick, who moved from Meta’s board to take a more active role as president in January.

Powell McCormick has been tasked with overhauling Meta’s approach to AI infrastructure and financing, with a focus on longer-term planning as it enters the most capital-intensive period in its history.

Meta must find new ways to fund the huge data centres needed to train and run advanced AI models to fulfil Zuckerberg’s vision for “personal superintelligence” delivered through Facebook, WhatsApp and Instagram, as well as a family of AI-powered wearables such as smart-glasses and voice pendants.

Meta has not yet hired banks and ultimately may not issue new stock. One person cautioned that it was “premature” to say that the company had decided what to do and all financing options remain on the table.

A Meta spokesperson said the share sales talks were “pure speculation”, but added “we’ve been clear that huge opportunities lie ahead in AI, and we’ll continue focusing on raising capital in the most flexible ways to support that”.

A person familiar with Meta’s discussions said the group had looked at the structure of Alphabet’s capital raising, which included “mandatory convertible preferred issuance”. This allows it to raise cash immediately, but defers the stock issuance potentially for years.

Goldman Sachs would be in a strong position to win the Meta mandate considering Powell McCormick spent 16 years at the investment bank. The Wall Street bank led the Google deal announced this week.

Meta executives are conscious that they will have to move fast if they decide to raise equity to ensure capacity and investor enthusiasm remain amid a historic glut of activity in US public markets.

SpaceX is set to raise as much as $86bn next week in an IPO that would value the group at $1.78tn. Claude maker Anthropic has confidentially filed for its own listing and rival OpenAI is also preparing to go public. Both are expected to raise tens of billions and attract $1tn-plus valuations.

Analysts say that Meta’s Big Tech rivals such as Microsoft and Amazon are also likely to be considering their own stock sales as their data centre spending surges and investors question the impact on their balance sheets.

Meta has already raised fresh capital through new means and innovative structures.

The company had less than $10bn in long-term debt as recently as 2022, but borrowed $55bn in globe-trotting deals in recent months. In October, it raised $27bn in a bond sale through a joint venture with private capital firm Blue Owl to build a Manhattan-sized data centre in Louisiana dubbed “Hyperion”.

Meta has also been conserving capital by cutting costs and other means. Last month it fired 8,000 people and stopped hiring for 6,000 roles.The company also halted share buybacks in late 2025 after repurchasing its shares regularly since 2017.

Google paused its buyback programme in the first quarter after repurchasing about $45bn last year, according to FactSet data and company filings.

SpaceX signs $30bn deal to lease computing capacity to Google

Agreement comes ahead of a record-breaking initial public offering for Elon Musk’s rockets-to-AI conglomerate

SpaceX has signed a $920mn-a-month deal to lease computing capacity to Google, as Elon Musk’s rockets-to-AI conglomerate races to boost revenue ahead of a record-breaking initial public offering next week.

SpaceX on Friday disclosed the agreement in a Securities and Exchange Commission filing, which said the deal would be worth more than $30bn over the length of the contract. It follows an arrangement similar to one it inked with Anthropic, as Musk puts SpaceX’s role as an AI powerhouse at the centre of its future ambitions.

The two deals combined will contribute more than $26bn to SpaceX’s annual revenue, boosting the company’s financial performance as it seeks an unprecedented $1.8tn valuation in next week’s listing.

But they also signal that Musk’s own Grok chatbot is lagging behind competitors. Google, Anthropic and OpenAI have been hunting for computing capacity to meet increasing demand for their tools.

Earlier this week Google announced a record $85bn equity raise to fund its massive AI infrastructure spending.

The SpaceX-Google deal is the latest in a fast-growing web of tie-ups linking chipmakers, data centre operators and AI model-builders as Big Tech races to bring computing power online to satisfy surging AI demand.

Google Cloud said the two companies were “longtime partners” and said it was “a short-term, timely agreement to ensure we have bridge capacity to meet surging customer demand” for its AI models.

SpaceX has pinned AI as its largest market with research analysts at Goldman Sachs this week projecting revenues from the division would surge 100-fold to $322bn by 2030.

Revenues of that scale would only be achievable if Musk can either create a leading AI model that captures what he estimates to be a $26.5tn market for the technology or if SpaceX becomes the dominant provider of AI infrastructure.

The billionaire’s ultimate ambition is to harness the power of the sun to power “orbital data centres” — satellite-based computing clusters. In a pitch to investors hosted by JPMorgan’s chief executive Jamie Dimon on Thursday, Musk said putting AI data centres in space would not be a “particularly difficult thing to do, and in fact easier than our communication satellites”.

“We do intend with our SpaceX AI satellites to allow people to put whatever [graphics processing units] or [central processing units] they want [on them],” Musk said, adding the rocket maker would someday send up 1 terawatt of “space compute” from Earth and 1,000 times that from a future manufacturing base on the Moon.

SpaceX said in its SEC filing that the contract with Google includes access to 110,000 Nvidia GPUs and the other components and would be worth roughly $11bn per year until June 2029, though it could be cancelled by either side earlier.

SpaceX’s computing capacity deals with Anthropic include access to 325,000 Nvidia GPUs at its Colossus facilities in Tennessee.

Time’s up for Swatch?

A fall in profits has increased pressure for change, but the Hayek family has decried ‘short-termism’ and defended its strategy

Chaotic scenes erupted from New York to Zurich, Paris and Tokyo in May as collectors and resellers queued, sometimes for days, to buy brightly coloured plastic pocket watches.

Fist fights broke out, stores were forced to close and police used tear gas in at least one city to disperse crowds trying to get their hands on a Royal Pop watch, created by Swatch and Audemars Piguet.

The frenzy was a reminder that few companies understand hype better than Switzerland’s Swatch Group. But the world’s largest finished watchmaker, whose 16 brands range from $50 plastic Swatches to high-end Breguet timepieces costing tens of thousands of dollars, is facing one of the most difficult periods in its history.

The group’s net profit collapsed by almost 90 per cent to just SFr25mn ($32mn) in 2025, having fallen 75 per cent in the preceding year. The strong Swiss franc is squeezing margins, which more than halved last year, while a luxury downturn in key markets such as China is hurting sales. Swatch’s market capitalisation has fallen from nearly SFr20bn a decade ago to less than SFr11bn today.

The financial downturn at the family-controlled company has heightened a sense of disenfranchisement among its public investors, many of whom say Swatch’s version of shareholder capitalism treats them as irritants rather than co-owners.

“Right now there is a clear disregard for minority investors,” says Steven Wood, chief executive of US-based GreenWood Investors, who has campaigned since 2024 to give outside investors a voice in the group’s boardroom and is bringing legal proceedings against the company.

Swatch remains firmly controlled by the Hayek family through a dual-class share structure. Chief executive Nick Hayek and chair Nayla Hayek are the son and daughter of founder Nicolas Hayek, who once quipped that the company “sells watches, not shares”.

Some Swiss agree with Wood’s assessment. “It’s among the worst governance structures we see in Switzerland,” says Vincent Kaufmann, chief executive of Ethos, a non-profit group founded by Swiss pension funds.

He adds that Hayek domination of the board means there has been no meaningful independent oversight of the company.

But for many Swiss, the company occupies a special place in the national imagination even if it has been a disappointing investment. They recall how, in the early 1980s, founder Nicolas Hayek in effect saved the country’s watch industry from a flood of cheaper battery-powered watches in the so-called quartz crisis — a turnaround still regarded as one of Europe’s greatest industrial rescues.

“They don’t make money because [Nick Hayek] protects Swiss jobs,” says one admiring long-term domestic Swatch Group shareholder.

The company sponsors major sporting events and remains embedded in popular culture, while a manufacturing ecosystem that stretches across Switzerland, operating from more than 150 production sites, is a powerful source of national pride.

The family has long maintained that a focus on short-term financial targets and maximising value for shareholders is inappropriate in an industry so dependent on skills and craftsmanship.

Swatch Group said in a statement that without its domestic manufacturing and workforce “there would be zero return, neither for shareholders, employees nor clients”.

But that stance was easier to justify when sales and profits were buoyant. Peter Kunz, professor of business law at the University of Bern, believes the challenge from Wood represents a watershed moment.

“This is the very first time the family has really been challenged — including in court,” he says.

In the 1990s, in a hotel near the Jura Mountains that anchor Switzerland’s watch industry, Nicolas Hayek gave 400 Swatch Group managers a lesson in how to project power.

During a question-and-answer session, a young Omega employee named Oliver Müller stood up and asked the Beirut-born, cigar-smoking patriarch whether the industry’s “made in Switzerland” appeal was being undermined by the use of some Asian-made components.

The room froze. Hayek asked Müller to repeat his name, appeared to write it down, and then spent 15 minutes publicly educating him about Swiss manufacturing, competition and national identity.

During the break, Müller was summoned to meet him. Colleagues assumed he would be fired. But Hayek shook his hand, telling him that “we need people like you, who are daring enough to ask such questions”.

The story captures much of what made Hayek, who died in 2010, one of Europe’s great postwar industrialists: theatrical, combative, charismatic and confident enough to engage directly with dissent.

“He had a vision,” says Müller, who went on to found Swiss consultancy LuxeConsult. “The media, the financial world, the buyers — everyone bought into his story.”

Since its creation Swatch Group has represented an alternative vision of capitalism. While many western companies outsourced manufacturing to cheaper locations, Hayek argued that Switzerland should continue making things.

“We must build where we live,” he told Harvard Business Review in 1993. “When a country loses the knowhow and expertise to manufacture things, it loses its capacity to create wealth.”

Under his leadership, Swatch Group became a symbol of Swiss industrial identity, and his worldview is shared by his son, who succeeded him as chief executive in 2003.

Like his father, Nick Hayek argues that quarterly reporting encourages destructive short-termism and that public markets often misunderstand industrial strategy.

The junior Hayek, who dropped out of university and briefly pursued a career in filmmaking, also has some of the founder’s flair for provocation, smoking cigars at press conferences and sparring with analysts. He once told dissatisfied investors they were welcome to take their money elsewhere.

One year, Swatch Group published its annual report in Swiss German — a dialect with no standard written form — and another year printed it in type so small that readers needed a magnifying glass to read it.

While both men relished confrontation — Nicolas Hayek once retorted to analysts that he had become a billionaire by doing “the opposite of what you recommended” — there have been flashes of vindictiveness during the son’s tenure.

Two Swiss publications have told the FT that lucrative advertising was withdrawn for a while after critical coverage. “These [adverts] pay salaries,” says one of the people involved. “It was a bit painful and unfortunately we are more careful now.” Swatch Group said it was free to decide where to spend its advertising budget.

This year, Swatch issued an open letter in response to a widely followed report by Morgan Stanley and LuxeConsult that had highlighted Swatch’s loss of market share and questioned profitability at its Longines brand. The company said Longines is outperforming rivals and remains profitable, though without providing detail.

“When a listed company goes after an analyst house that way, it tells you a lot about the internal pressure,” says Jonathan Siboni, chief executive of brand adviser Luxurynsight.

At its full-year results in January, Hayek talked of operating income recovering to SFr500mn-SFr600mn “or more”, a big uplift from SFr135mn in 2025.

Analysts say that similarly bullish claims have often failed to materialise in the past. The company said his statement did not constitute guidance or a forecast.

The company’s sensitivity to outside scrutiny and criticism has grown more acute as its commercial difficulties have mounted.

Some of these are cyclical. Swiss watch exports have weakened following a post-pandemic boom in spending on luxury goods. Demand in China, once more than 40 per cent of total sales, has slowed sharply. The strength of the Swiss franc has made its products more expensive in other countries.

But analysts say some of its most prestigious brands are losing ground as luxury spending narrows to a small group of high-end brands.

“Swatch’s core portfolio — Omega, Longines and Tissot — is more exposed to aspirational middle-class consumers, who have been squeezed by inflation and economic uncertainty,” says Siboni.

Analysts believe Omega, once the industry’s undisputed number two premium brand behind Rolex, has slipped behind Audemars Piguet and Patek Philippe. Swatch Group said this was “purely speculation” but declined to provide current market share data.

Another criticism is that Swatch has under-exploited Breguet, the preferred timepieces of Napoleon Bonaparte. Industry estimates suggested it remained lossmaking last year.

Morgan Stanley and LuxeConsult estimated Swatch’s overall share of the Swiss watch market fell from 26.4 per cent in 2019 to 16.1 per cent last year.

Swatch said the report contained “extensive factual inaccuracies and methodological inconsistencies”, but does not publish revenue, profit or market share figures by brand.

The contrast is also stark in jewellery, where Swiss peer Richemont has emerged as a market favourite thanks to the growth of Cartier and Van Cleef & Arpels. Swatch Group’s Harry Winston, acquired in 2013, remains a far smaller contributor to its growth.

“I didn’t feel they were hiring the right expertise to lead their brands,” says one European institutional investor who sold out of the stock several years ago.

“Unfortunately the son is not the same visionary as the father, in my opinion.”

Such frustration has spilled into the debate around the group’s governance.

Critics argue that Swatch Group behaves more like a private family company than a listed entity with public shareholders. The Hayek family and linked entities own 26 per cent of the equity capital but control 44 per cent of the voting rights mainly through large holdings of the registered shares.

Its board remains unusually insular for a company that generates most of its revenues outside Switzerland. Nick, Nayla and her son Marc Hayek hold three of the eight board seats. Daniela Aeschlimann, who represents the shareholder pool that underpins family control, holds a fourth.

The remaining four directors are all Swiss and three of them have served for more than 15 years, well in excess of corporate governance norms. Swatch Group said it considered competence, integrity and experience as determining factors for non-executive directors.

Until Andreas Rickenbacher joined the board this year, Ethos did not consider a single director to be truly independent. Executive directors sit on the board’s audit and remuneration committees.

Wood, the US investor, first approached the Hayeks in 2024 about a board seat to represent holders of the group’s bearer shares, which represent 55 per cent of the group’s capital and are mostly owned by non-family investors.

Despite support from bearer shareholders at last year’s annual meeting, the Hayek-controlled voting bloc opposed him on the grounds that he was not a Swiss citizen or resident. Wood responded with a lawsuit.

At this year’s meeting, held last month, Swatch Group sought to placate investors by nominating Rickenbacher, a former regional politician, as an independent director and representative of bearer shareholders.

International proxy voting advisers ISS and Glass Lewis, along with Ethos, backed Wood’s renewed bid and more than 80 per cent of bearer shareholders ultimately backed him.

But his nomination still had to pass a vote of all shareholders, at which the Hayek family blocked his candidacy and installed Rickenbacher as an independent director, but without a mandate to represent bearer shareholders.

According to calculations by Ethos, several other key resolutions would not have secured backing from other shareholders this year.

The company said it complied with Swiss corporate law.

Kaufmann, the Ethos chief executive, argues the issue is not that Swatch Group should abandon its role as an industrial steward. “We are trying to defend Swiss industry by creating counterweights to a controlling shareholder concentrating all powers,” he says.

In response, Wood has broadened his challenge. “There are further avenues we are pursuing, including legal ones,” he says. “It does not have to be me that ultimately sits on the board, but I will continue to fight for bearer shareholders to have a voice.”

Corporate governance concerns extend beyond financial performance and board composition. Ethos has also questioned executive pay levels; Nick Hayek received SFr4.85mn in total remuneration last year, despite the profit collapse, and Nayla Hayek SFr3.04mn. The company said overall pay did not increase in years where profit fell.

Nick Hayek, who is 71 and has run the group for almost a quarter-century, has given little indication of when he plans to step aside. Industry speculation about potential successors often centres on Nayla’s son Marc Hayek, the chief executive of Blancpain, who joined the board in 2024. The company said succession scenarios were not discussed in public, adding that “the future will tell” with regard to Marc.

There have been some recent signs of positive, if incremental, change.

Analysts are more optimistic about Gregory Kissling, the new head of Breguet. Brands such as Tissot are improving and have received more investment. The latest Swiss watch export data for April shows signs of stabilisation in Asia.

The company said it hoped to hold an in-person annual meeting — the first since 2019 — next year and has hinted it may hold an investor day.

For all the criticism, the group retains the ability to generate cultural excitement. The MoonSwatch collaboration with Omega became a global phenomenon in 2022 and industry estimates suggest Royal Pop could generate SFr150mn-SFr170mn of revenue, although it is unlikely to materially alter Swatch Group’s overall financial trajectory.

The lacklustre performance and the challenge from Wood may still represent the most serious test of the Hayek family’s control in decades. “The company has never been under so much pressure,” says Müller, of LuxeConsult.

But Kunz, at the University of Bern, believes the family is betting that time is on their side, given that a final ruling in Wood’s legal action could take years.

“They assume, perhaps correctly, that he won’t stay for years,” says Kunz. “It is pragmatic and even a bit Machiavellian. But the Hayeks can play a long game.”

Investors wake up to the merits of sleep biotech

More people worry about poor sleep than excess weight, but drugmakers have been deterred from entering the market by costs

A good night’s sleep is invaluable. Big Pharma and smaller peers think so too, investing in treatments designed to improve the quantity and quality of sleep. Look at Eli Lilly of the US, paying up to $7.8bn for Centessa, one of whose narcolepsy drugs is readying for phase 3 efficacy trials. Sleep disorder biotech Avadel Pharmaceutical even spawned a bidding war, ultimately going to Ireland-headquartered Alkermes for up to $2.4bn.

The sector’s attractions are clear as day. More people worry about poor sleep than excess weight. About a third of adults in western countries suffer sleep problems at least once a week, says the National Institute for Health and Care Excellence. That pips those eligible for weight-loss GLP-1s. But like the latter, sleep disorder treatments are also likely to be sold directly to consumers.

Science and governments would appear to be on board too. A UK parliamentary paper on the topic noted sleep was as important as food and water; although nearly a decade later, there’s been little by way of action. Government concerns reflect links with a host of diseases and conditions, among them Alzheimer’s, cancer and diabetes.

Rand Europe has even put a value on the cost of lost sleep: insomniacs would trade an average 14 per cent of their annual household income to feel better rested — taken nationally, says the research body, that’s up to $130bn.

Given that, the bigger question is why there aren’t more drugmakers moving in. One reason for this is the huge outlay in terms of time and money: a 15-year gestation period, $2bn-plus bill and wafer-thin odds of success.

Hence much of the funding so far has gone into sleep aids and trackers such as those made by Oura — which plans to list later this year — and Whoop, which monitors the stages of sleep as well as hours. Eight Sleep, maker of bed products that claim to foster the natural circadian temperature rhythm during sleep, was valued at $1.5bn after a March funding round.

Still, there is a small Petri dish of early-stage sleep biotech companies. One such is the UK-based astronauTx, which aims to treat neurological conditions like Alzheimer’s by improving sleeping patterns. It aims to be ready for Phase 1 testing — determining it is safe for humans — next year.

These newcomers benefit from evolving technology that can help shrink timeframes and costs. Many parts of the process, from screening for candidates to testing the drugs through to clinical trials, can be done more speedily and efficiently by harnessing AI. 

More quotidian kit helps too. The need to keep trial candidates capped in a tangle of electrodes physically hooked up to monitors is being superseded thanks to innovations such as Beacon Biosignal’s headband, which can be worn anywhere. Time at last to replace counting sheep with counting dollars.

Sir Pascal Soriot says countries will have to spend more on innovative medicines following US trade deal

The chief executive of AstraZeneca has warned that the drugmaker could be forced to withhold new medicines in the UK and Europe if it did not secure higher prices, given the terms of its agreement with the Trump administration to lower costs for US patients.

Sir Pascal Soriot told the FT that European countries would have to spend more on innovative medicines or the Anglo-Swedish group would be left with no choice but to focus almost exclusively on the US market where it draws nearly half of its revenues.

“It’s sad and it’s heartbreaking but we would have no choice. I have to take care of patients but I also have to take care of our shareholders and generating enough revenue so we can reinvest in our R&D and invest in new medicines,” Soriot told the FT in an interview.

US President Donald Trump has put pressure on the sector to reduce prices for patients since returning to office. Over the past nine months, most global groups including AstraZeneca have announced agreements with the administration that compel them to lower some prices in the US, guaranteeing that the cost of certain drugs do not exceed those in Europe, Japan and Canada.

These so-called Most Favored Nation agreements have roiled the industry for months and prompted many companies to consider not launching new drugs in Europe in order to avoid price controls in the US.

The UK has already committed to increasing medicines spending across the NHS but it is unclear where the extra funding will come from.

Soriot argued that while the UK government’s announcement represented “progress” it still fell short of what was needed, saying that Europe, including the UK, only spends about 0.4 per cent of GDP on innovative medicines while the US is closer to 0.8 per cent.

“Forty-five per cent of our revenue is in the US,” he said. “[The] UK is 2 per cent, it’s the same for France, Spain. Why would you threaten 50 per cent of your revenue if you think you cannot get a reasonable price in the UK or France?”

His comments came moments after ringing the opening bell at the New York Stock Exchange to celebrate the company’s direct listing on the bourse which was completed in February. Although AstraZeneca’s decision to list directly in the US has led to speculation that the company could withdraw from the London Stock Exchange, Soriot insisted that the company was committed to the UK.

“People should see this not as a negative but as a positive. If our company is more successful, the UK is more successful because we employ people and have a large R&D site in Cambridge,” he said. “It doesn’t affect our standing in London, we’re still in the FTSE Index and it remains the anchor to our share in the UK.”

AstraZeneca announced in April that it would invest £300mn to complete the expansion of an R&D facility in Cambridge. The group also said it would build a new laboratory in the northern town of Macclesfield.

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