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U.S. officials don’t know who is behind the drones that have flown unhindered over sensitive national-security sites—or how to stop them

U.S. Air Force Gen. Mark Kelly wasn’t sure what to make of reports that a suspicious fleet of unidentified aircraft had been flying over Langley Air Force Base on Virginia’s shoreline.

Kelly, a decorated senior commander at the base, got on a squadron rooftop to see for himself. He joined a handful of other officers responsible for a clutch of the nation’s most advanced jet fighters, including F-22 Raptors.

For several nights, military personnel had reported a mysterious breach of restricted airspace over a stretch of land that has one of the largest concentrations of national-security facilities in the U.S. The show usually starts 45 minutes to an hour after sunset, another senior leader told Kelly.

The first drone arrived shortly. Kelly, a career fighter pilot, estimated it was roughly 20 feet long and flying at more than 100 miles an hour, at an altitude of roughly 3,000 to 4,000 feet. Other drones followed, one by one, sounding in the distance like a parade of lawn mowers.

The drones headed south, across Chesapeake Bay, toward Norfolk, Va., and over an area that includes the home base for the Navy’s SEAL Team Six and Naval Station Norfolk, the world’s largest naval port.

Officials didn’t know if the drone fleet, which numbered as many as a dozen or more over the following nights, belonged to clever hobbyists or hostile forces. Some suspected that Russia or China deployed them to test the response of American forces.

Federal law prohibits the military from shooting down drones near military bases in the U.S. unless they pose an imminent threat. Aerial snooping doesn’t qualify, though some lawmakers hope to give the military greater leeway.

Reports of the drones reached President Biden and set off two weeks of White House meetings after they first appeared in December last year. Officials from agencies including the Defense Department, Federal Bureau of Investigation and the Pentagon’s UFO office joined outside experts to throw out possible explanations as well as ideas about how to respond.

Drone incursions into restricted airspace were already worrying national-security officials. Two months earlier, in October 2023, five drones flew over a government site used for nuclear-weapons experiments. The Energy Department’s Nevada National Security Site outside Las Vegas detected four of the drones over three days. Employees spotted a fifth.

U.S. officials said they didn’t know who operated the drones in Nevada, a previously unreported incursion, or for what reason. A spokeswoman said the facility has since upgraded a system to detect and counter drones.

The sightings revealed the dilemma of defending against drones on U.S. soil compared with the ease of deploying or battling them abroad. Drones have become a deadly and cost-effective tool of war, capable of carrying surveillance gear, explosives or lethal chemicals. Yet shooting down suspicious aircraft over the U.S. risks disrupting or endangering the lives of Americans the military is sworn to protect.

Early last year, a suspected Chinese spy balloon crammed with electronic surveillance gear floated across the country for eight days, while military leaders waited for it to reach a spot isolated enough to shoot it down safely. After the balloon made it to the Southeast coast, an F-22 jet from Langley punctured it with a missile.

Ten months later, the phalanx of drones appeared at Langley.

Over 17 days, the drones arrived at dusk, flew off and circled back. Some shone small lights, making them look like a constellation moving in the night sky—or a science-fiction movie, Kelly said, “‘Close Encounters at Langley.’” They also were nearly impossible to track, vanishing each night despite a wealth of resources deployed to catch them.

Gen. Glen VanHerck, at the time commander of the U.S. Northern Command and the North American Aerospace Defense Command, said drones had for years been spotted flying around defense installations. But the nightly drone swarms over Langley, he said, were unlike any past incursion.

VanHerck, who led the military response to the Chinese balloon, ordered jet fighters and other aircraft to fly close enough to glean clues from the drones. He recommended that Defense Secretary Lloyd Austin authorize a full menu of electronic eavesdropping and spycraft to learn more, though the Pentagon is limited in what it can do on U.S. soil.

“If there are unknown objects within North America,” VanHerck said, the job is “to go out and identify them.”

Solving that mystery, even for the world’s pre-eminent superpower, proved easier said than done. Local police were among the first to try.

For two nights, starting on Dec. 6, Hampton, Va., officers chased the drones, by patrol car and on foot, relaying momentary sightings along with information from Langley over police radios: One was seen in the area of Marshall Street or Gosnold’s Hope Park.

Three more appeared to land but returned to the air before officers could reach them. Another looked like it landed offshore. Police finally gave up.

Gen. Kelly, now retired, said the Pentagon was stumped, too.

What would the U.S. do, he asked, “if this happens over the National Mall?”

This account is based on interviews with more than two dozen government officials and other people familiar with the events, as well as police records, court documents and photographs of the drones.

Flying blind

The drone swarm was reported to the Pentagon office of the National Military Command Center, which is responsible for dispersing emergency messages to U.S. military commanders worldwide.

A report went to the White House Situation Room, and the president learned about it in his daily briefing.

U.S. officials didn’t believe hobbyists were flying the drones, given the complexity of the operation. The drones flew in a pattern: one or two fixed-wing drones positioned more than 100 feet in the air and smaller quadcopters, the size of 20-pound commercial drones, often below and flying slower. Occasionally, they hovered.

They came from the north around 6 p.m. to traverse the base, which sits on a peninsula at the mouth of Chesapeake Bay, and continued south, beyond the reach of radar. They repeated the pattern and then disappeared, typically by midnight.

Homeland Security Advisor Elizabeth Sherwood-Randall convened the White House brainstorming sessions. One official suggested using electronic signals to jam the drones’ navigation systems. Others cautioned that it might disrupt local 911 emergency systems and Wi-Fi networks.

One suggestion was to use directed energy, an emerging technology, to disable or destroy the drones. An FAA official said such a weapon carried too high a risk for commercial aircraft during the December holiday travel season.

Others suggested that the U.S. Coast Guard shoot nets into the air to capture the drones. An official pointed out that the Coast Guard might not have the authority to use such a weapon in this instance. Besides, the drones were too difficult to track closely.

Langley officials had called on U.S. Navy and Coast Guard ships to keep a watch out for the drones with little luck. They were much smaller than military aircraft and didn’t always show up on radar. Military personnel had to recalibrate their radar systems, which were set to ignore anything that resembled a bird.

Analysts learned that the smaller quadcopters didn’t use the usual frequency band available for off-the-shelf commercial drones—more evidence that the drone operators weren’t hobbyists.

Langley officials canceled nighttime training missions, worried about potential collisions with the drone swarm, and moved the F-22 jet fighters to another base. Base residents shared their sightings at the local Starbucks and posted blurry photos of the drones on private Facebook groups.

Intelligence officials spotted a vessel floating in international waters off the coast of Virginia and suspected a connection. Coast Guard crews boarded the vessel but found no computers or other gear to support the hunch.

On Dec. 23, the drones made their last visit.

In January, authorities found a clue they hoped would crack the case.

‘Worst spy ever’

During a rainy morning on Jan. 6, Fengyun Shi parked a rented Tesla near 65th Street and Huntington Avenue in Newport News, Va., 11 miles from the Langley base. The car was outside a shipyard run by HII, the company that builds nuclear submarines and the Navy’s newest generation of the Ford Class aircraft carrier.

Shi, a student at the University of Minnesota, told nearby residents around midmorning that he was flying a drone that got stuck in a tree. As he tried to free it using his controller, a neighbor called Newport News, Va., police. Officers asked Shi why he was flying it in such foul weather, and they told him to call the fire department for help.

Shi instead returned his rental car an hour later and took an Amtrak train to Washington, D.C. The following day, he flew to Oakland, Calif. By chance, the drone fell to the ground that same day and ended up with federal investigators. FBI agents found that Shi had photographed Navy vessels in dry dock, including shots taken around midnight. Some were under construction at the nearby shipyard.

On Jan. 18, federal agents arrested Shi as he was about to board a flight to China on a one-way ticket. Shi told FBI agents he was a ship enthusiast and hadn’t realized his drone crossed into restricted airspace. Investigators weren’t convinced but found no evidence linking him to the Chinese government. They learned he had bought the drone on sale at a Costco in San Francisco the day before he traveled to Norfolk.

U.S. prosecutors charged Shi with unlawfully taking photos of classified naval installations, the first case involving a drone under a provision of U.S. espionage law. The 26-year-old Chinese national pleaded guilty and appeared in federal court in Norfolk on Oct. 2 for sentencing.

Magistrate Judge Lawrence Leonard said he didn’t believe Shi’s story—that he had been on vacation and was flying drones in the middle of the night for fun. “There’s significant holes,” the judge said in court.

“If he was a foreign agent, he would be the worst spy ever known,” said Shi’s attorney, Shaoming Cheng.

“I’m sorry about what happened in Norfolk,” Shi said before he was sentenced to six months in federal prison.

U.S. officials have yet to determine who flew the Langley drones or why.

“This isn’t a tomorrow problem, this is a today problem,” said Tom Karako, senior fellow at the Center for Strategic and International Studies, a national-security think tank in Washington. “It’s not an over-there problem—it’s an over-there, over-here and everywhere problem.”

U.S. officials confirmed this month that more unidentified drone swarms were spotted in recent months near Edwards Air Force Base, north of Los Angeles.

The move comes as U.S. and Israel are holding talks on a possible Israeli attack on Iran

The Biden administration is planning to send an advanced antimissile system to Israel along with American troops to operate it, moving to bolster its top Middle East ally’s defenses, U.S. officials said Sunday.

The deployment of the Thaad system, a ground-based interceptor designed to shoot down ballistic missiles, would mark a significant step in American efforts to directly protect Israel against an enemy attack by putting U.S. soldiers on the ground.

The move comes as U.S. and Israeli officials have been holding talks on a planned strike on Iran. U.S. officials have urged Prime Minister Benjamin Netanyahu’s government not to target Iran’s oil facilities and nuclear sites.

If Iran responded to the planned Israeli strike with an attack on Israel, it would be the third instance of Tehran hitting Israeli territory this year.

The soldiers, just under 100 troops in all, would man the system, a rare U.S. deployment to Israel. How quickly the Pentagon can move the system to Israel wasn’t immediately clear.

The White House didn’t immediately respond to a request for comment.

In just a few years, its stock has plummeted, reaching in September its lowest level in 10 years.

"What is happening at Ubisoft?" This question is stirring the video game industry as the French giant wobbles on the stock market and faces a new strike starting Tuesday, against a backdrop of buyout rumors. The publisher of franchises like Assassin’s Creed and Just Dance enjoyed a successful run in the late 2000s and at the turn of the 2020s, competing with American and Japanese giants. But in recent years, its stock has collapsed, reaching its lowest point in 10 years in September. "Ubisoft is suffering from a series of releases that haven’t met the expected success," says Oscar Lemaire from the specialized site Ludostrie, citing, in particular, the pirate game Skull and Bones and the new installment of Prince of Persia.

At the end of September, Ubisoft's founder and CEO, Yves Guillemot, admitted that the initial sales of Star Wars Outlaws, released at the end of August, were "weaker than expected," forcing the company to lower its financial targets. The release of the next installment in its most popular series, Assassin’s Creed, was delayed by three months to allow the teams to fine-tune it. "They know they can’t afford to miss the mark," anticipates Oscar Lemaire. Another failure would be disastrous for Ubisoft.

Outdated Formula

While its "open-world" game formula—where players can freely explore a virtual universe—was groundbreaking in the 2010s, "it’s starting to feel a bit outdated," notes the creator of Ludostrie. "What’s holding Ubisoft back is its lack of adaptation to the evolution of the industry," adds Martin Szumski, a financial analyst at Morningstar. Since the success of online games like Fortnite, which generate significant revenue each month through in-game purchases, all major publishers have tried to replicate this "live service" model. Ubisoft made this bet in May with the shooter XDefiant, but the game failed to meet "expectations," according to Yves Guillemot. By missing this opportunity, Szumski believes Ubisoft is now "lagging behind the rest of the industry."

With nearly 45 studios in France and abroad (Canada, Italy, China…) and around 19,000 employees, Ubisoft is one of the largest companies in the sector. But it has not been immune to the crisis that the video game industry has been experiencing for two years. Announced in January 2023, its cost-cutting plan resulted in the departure of 1,700 people over 18 months. In France, where Ubisoft employs 4,000 people, discontent is growing over working conditions and wages.

Strikes and Buyout Rumors

After a first strike in February that mobilized nearly 700 people—one of the largest in the sector—several unions are calling for a three-day walkout starting Tuesday to protest against the decision to impose at least three days of in-office work per week. "We are currently exploring ways to fine-tune (our model) to better balance the benefits of remote and in-office work," Ubisoft said after a meeting with unions last Tuesday. On October 4th, Bloomberg reported on a potential buyout of Ubisoft by Chinese tech giant Tencent and the Guillemot family, the group’s main shareholder, to take the company private. Ubisoft "regularly reviews all its strategic options" and "will inform the market in due time, if necessary," the company responded.

Tencent, with whom the Guillemot brothers formed a partnership in 2022 to maintain control of the company, holds nearly 10% of the capital—a threshold it cannot exceed before 2030 according to the agreement—while the Guillemot family owns about 14%. "If a buyout happens, Tencent will likely push for more control than before," assesses Martin Szumski, "even though the Guillemot family wants to retain as much control as possible over the company." "Tencent is very strong in the Chinese market, especially in mobile games and free-to-play games," explains Oscar Lemaire. A buyout would allow them to gain a foothold in the Western market and into the big-budget games Ubisoft specializes in.

Taking the company private wouldn’t necessarily be negative for Ubisoft, "as it would allow them to implement their strategy without being constantly scrutinized by the markets," says Michael Hodel, an analyst at Morningstar. "In the short term, it’s a way for the Guillemots to have peace of mind. But it leaves a sword of Damocles hanging over their heads," concludes Oscar Lemaire.

En quelques années, son cours de Bourse s'est effondré jusqu'à atteindre en septembre son plus bas niveau en 10 ans.

«Que se passe-t-il chez Ubisoft ?» La question agite l'industrie du jeu vidéo alors que le géant français vacille en Bourse et fait face à une nouvelle grève à partir de mardi, sur fond de rumeurs de rachat. L'éditeur de franchises comme «Assassin's Creed» et «Just Dance» a connu une période faste à la fin des années 2000 puis au tournant des années 2020, rivalisant avec les géants américains et japonais. Mais en quelques années, son cours de Bourse s'est effondré jusqu'à atteindre en septembre son plus bas niveau en 10 ans. «Ubisoft souffre d'un enchaînement de sorties qui n'atteignent pas le succès escompté», estime Oscar Lemaire, du site spécialisé Ludostrie, citant notamment le jeu de pirates «Skull and Bones» et le nouvel épisode de «Prince of Persia».

Fin septembre, le fondateur et PDG d'Ubisoft, Yves Guillemot, a admis que les premières ventes de «Star Wars Outlaws», sorti fin août, étaient «plus faibles que prévu», forçant Ubisoft à revoir à la baisse ses objectifs financiers. Et la sortie du prochain épisode de sa série la plus populaire, «Assassin's Creed», a été repoussée de trois mois pour permettre aux équipes de le peaufiner. «Ils savent qu'ils ne peuvent pas rater leur coup», anticipe Oscar Lemaire. Un nouvel échec serait désastreux pour Ubisoft.

Formule «vieillotte»

Si sa formule de jeu «en monde ouvert» - où le joueur peut explorer à sa guise un univers virtuel - faisait autorité dans les années 2010, «elle commence à être un peu vieillotte», souligne le créateur de Ludostrie. «Ce qui freine Ubisoft, c'est son manque d'adaptation à l'évolution de l'industrie», renchérit Martin Szumski, analyste financier chez Morningstar. Depuis le succès de jeux en ligne comme «Fortnite», qui génèrent d'importants revenus chaque mois grâce à du contenu vendu dans le jeu, tous les gros éditeurs essayent de copier cette recette dite de «jeu service». Ubisoft a fait ce pari en mai avec le jeu de tir «XDefiant», mais le titre n'a pas répondu aux «attentes», selon Yves Guillemot. En ratant ce coche, Martin Szumski estime qu'Ubisoft se retrouve «en retard par rapport au reste de l'industrie».

Avec près de 45 studios en France et à l'étranger (Canada, Italie, Chine...) et environ 19.000 employés, Ubisoft est l'une des plus grandes entreprises du secteur. Mais elle n'a pas été imperméable à la crise que traverse l'industrie du jeu vidéo depuis deux ans. Annoncé en janvier 2023, son plan de réduction des coûts s'est traduit par le départ de 1700 personnes en 18 mois. En France, où Ubisoft emploie 4000 personnes, la grogne monte autour des conditions de travail et des salaires.

Mouvement de grève et rumeurs de rachat

Après un premier mouvement de grève qui a mobilisé près de 700 personnes en février - l'un des plus importants dans le secteur -, plusieurs syndicats appellent à un débrayage de trois jours à partir de mardi pour protester contre la décision d'imposer au moins trois jours par semaine de travail en présentiel. «Nous examinons actuellement comment affiner (notre modèle) pour mieux équilibrer les avantages du travail à distance et au bureau», a indiqué Ubisoft après une rencontre avec les syndicats mardi dernier. Le 4 octobre, l'agence Bloomberg faisait état d'un potentiel rachat d'Ubisoft par le géant chinois de la tech Tencent et la famille Guillemot, actionnaire principal du groupe, pour le sortir de la Bourse. Ubisoft «examine régulièrement toutes ses options stratégiques» et «informera le marché en temps voulu, si nécessaire», a réagi l'entreprise.

Tencent, avec qui les frères Guillemot ont scellé une union en 2022 pour garder la main sur l'entreprise, détient près de 10% du capital - seuil qu'il n'a pas le droit de franchir avant 2030, selon l'accord -, tandis que la famille Guillemot en possède autour de 14%. «Si un rachat a lieu, Tencent va probablement faire pression pour avoir plus de contrôle qu'auparavant», juge Martin Szumski, «même si la famille Guillemot veut conserver autant que possible la gestion de l'entreprise». «Tencent est très fort sur le marché chinois, surtout dans le domaine des jeux mobiles et les “free-to-play” (jeux gratuits)», explique Oscar Lemaire. Un rachat lui permettrait de mettre un pied dans le marché occidental et les jeux à gros budgets dont Ubisoft est spécialiste.

Sortir de la Bourse ne serait pas nécessairement négatif pour Ubisoft, «pour mettre en œuvre sa stratégie sans être constamment surveillé par les marchés», affirme Michael Hodel, analyste pour Morningstar. «À court terme, c'est un moyen pour les Guillemot d'être tranquilles. Mais ça laisse une épée de Damoclès au-dessus de leur tête», conclut Oscar Lemaire.

Apple is preparing some additional vision based products, according to Bloomberg’s Mark Gurman. We’re expecting smart glasses, similar to Meta’s collaboration with Ray-Ban, as well as AirPods with cameras. These products won’t launch until at least 2027, if they do at all.

According to the report, Apple wants to salvage some of their multi billion dollar R&D investment in Apple Vision Pro’s visual intelligence – by bringing the tech to more products. We already saw this with the announcement of visual intelligence alongside the iPhone 16’s camera control, and Apple’s next step is to reportedly bring this to a glasses form factor.

The glasses wouldn’t be full AR glasses with displays, but rather smart glasses with built in cameras, speakers, and mics – similar to Meta’s Ray Ban glasses, which have become pretty popular. Meta sells those glasses for as low as $299, although there are more expensive frames you can pick.

On top of that, the company is still planning AirPods with cameras, something that’s been reported on previously. It’s unclear why these would be an appealing product rather than just glasses, and it feels like AirPods would be a bad product for outward facing cameras, but Apple is still experimenting with the form factor for visual intelligence features nonetheless.

Meet the Chinese ‘Typhoon’ hackers preparing for war

Of the cybersecurity risks facing the United States today, few loom larger than the potential sabotage capabilities posed by China-backed hackers, which top U.S. officials have described as an “epoch-defining threat.”

In recent months, U.S. intelligence officials said Chinese government-backed hackers have been burrowing deep into the networks of U.S. critical infrastructure, including water, energy and transportation providers. The goal, officials say, is to lay the groundwork for potentially destructive cyberattacks in the event of a future conflict between China and the U.S., such as over a possible Chinese invasion of Taiwan.

“China’s hackers are positioning on American infrastructure in preparation to wreak havoc and cause real-world harm to American citizens and communities, if or when China decides the time has come to strike,” FBI Director Christopher Wray told lawmakers earlier this year.

The U.S. government and its allies have since taken action against the “Typhoon” family of the Chinese hacking groups, and published new details about the threats they pose.

In January, the U.S. disrupted dubbed “Volt Typhoon,” a group of China government hackers tasked with setting the stage for destructive cyberattacks. Later in September, the feds hijacked a botnet run by another Chinese hacking group called “Flax Typhoon,” which masquerades as a private company in Beijing and whose role was to help conceal the activities of China’s government hackers. Since then, a new China-backed hacking group called “Salt Typhoon” emerged, capable of gathering intelligence on Americans — and potential targets of U.S. surveillance — by compromising the wiretap systems of U.S. phone and internet providers.

Here’s what we know so far about the Chinese hacking groups gearing up for war.

Volt Typhoon

Volt Typhoon represents a new breed of China-backed hacking groups; no longer just aimed at stealing sensitive U.S. secrets, but rather preparing to disrupt the U.S. military’s “ability to mobilize,” according to the FBI’s director.

Microsoft first identified Volt Typhoon in May 2023, finding that the hackers had targeted and compromised network equipment, such as routers, firewalls, and VPNs, since mid-2021 as part of an ongoing and concerted effort to infiltrate deeper into U.S. critical infrastructure. In reality, it’s likely the hackers were operating for much longer; potentially for as long as five years.

Volt Typhoon compromised thousands of internet-connected devices in the months following Microsoft’s report, exploiting vulnerabilities in internet-connected devices that were considered “end-of-life” and as such would no longer receive security updates. As such, the hacking group subsequently managed to compromise the IT environments of multiple critical infrastructure sectors, including aviation, water, energy, and transportation, pre-positioning itself for activating future would-be disruptive cyberattacks.

“This actor is not doing the quiet intelligence collection and theft of secrets that has been the norm in the U.S. They are probing sensitive critical infrastructure so they can disrupt major services if, and when, the order comes down,” said John Hultquist, chief analyst at security firm Mandiant.

The U.S. government said in January that it had successfully disrupted a botnet, used by Volt Typhoon, consisting of thousands of hijacked U.S.-based small office and home network routers, which the Chinese hacking group used to hide its malicious activity aimed at targeting U.S. critical infrastructure. The FBI said it was able to remove the malware from the hijacked routers, severing the Chinese hacking group’s connection to the botnet.

Flax Typhoon

Flax Typhoon, first outed in an August 2023 report from Microsoft, is another China-backed hacking group that officials say has operated under the guise of a publicly traded cybersecurity company based in Beijing. The company, Integrity Technology Group, has publicly acknowledged its connections to China’s government, according to U.S. officials.

In September, the U.S. government said it had taken control of another botnet, used by Flax Typhoon, which leveraged a custom variant of the infamous Mirai malware, made up of hundreds of thousands of internet-connected devices.

U.S. officials said at the time that the Flax Typhoon-controlled botnet was used to “conduct malicious cyber activity disguised as routine internet traffic from the infected consumer devices.” Prosecutors said the botnet run by Flax Typhoon allowed other China government-backed hackers to “hack into networks in the U.S. and around the world to steal information and hold our infrastructure at risk.”

According to Microsoft’s profile of the government-backed group, Flax Typhoon has been active since mid-2021, predominantly targeting “government agencies and education, critical manufacturing, and information technology organizations in Taiwan.” The Department of Justice said it corroborated Microsoft’s findings and that Flax Typhoon also “attacked multiple U.S. and foreign corporations.”

Salt Typhoon

The latest — and potentially most ominous — group in China’s government-backed cyber army uncovered in recent months is Salt Typhoon.

Salt Typhoon hit headlines in October for a much more sophisticated operation. As first reported by the Wall Street Journal, the China-linked hacking group is believed to have compromised the wiretap systems of several U.S. telecom and internet providers, including AT&T, Lumen (formerly CenturyLink), and Verizon.

According to one report, Salt Typhoon may have gained access to these organizations using compromised Cisco routers. The U.S. government is said to be in the early stages of its investigation.

While the scale of the internet provider compromises remains unknown, the Journal, citing national security sources, said the breach could be “potentially catastrophic.” By hacking into systems that law enforcement agencies use for court-authorized collection of customer data, the Salt Typhoon potentially gained access to data and systems that house much of the U.S. government’s requests — including the potential identities of Chinese targets of U.S. surveillance.

It’s not yet known when the breach occurred, but WSJ reports that the hackers may have held access to the internet providers’ wiretap systems “for months or longer.”

In Sailing’s Most Famous Race, Britannia Definitely Doesn’t Rule the Waves

It’s been 173 years since Britain first competed in the America’s Cup. And in all that time, the greatest naval power the world has ever known has never managed to bring home the trophy.

The annals of sporting futility are full of sad-sack teams that run into humiliating defeat, season after season, only to come back for more. The NFL’s Arizona Cardinals, for instance, have never won a Super Bowl in 58 years of trying. The Toronto Maple Leafs have gone more than half a century without a Stanley Cup. The Seattle Mariners have never reached a World Series.

Yet all of those streaks are just drops in the ocean compared with Britain’s record competing for the world’s oldest international sporting trophy.

The America’s Cup was invented in Britain and first contested in 1851. And in all that time, the greatest naval power the world has ever seen—the country of Horatio Nelson, Sir Francis Drake and “Britannia Rules the Waves”—has somehow never won the most famous race in sailing.

But this week, on shimmering waters off the coast of Barcelona, a British crew will attempt to undo 173 years of national ignominy when it takes on the defending America’s Cup champions from New Zealand. To lose again would represent more than the failure of a $140 million project. It would also perpetuate nearly two centuries’ worth of shambolic embarrassment.

“It has been a source of derision around the world that the British, who invented this damn thing in the first place, managed to lose it,” said Royal Yacht Squadron chairman Bertie Bicket, whose club is represented in the America’s Cup by the Ineos Britannia team.

“I would describe it as getting a new football, kicking it over the garden fence, and 173 years later, they still haven’t given it back.”

The thing is, Britain’s history in other maritime contests had made the country quite accustomed to winning on the open sea. British schoolchildren can recite the names of famous naval victories the way kids in Brazil can rattle off World Cup wins—the Battle of Trafalgar, the Battle of the Nile, repelling the Spanish Armada.

“We might not have won the America’s Cup in the 20th century, but the Royal Navy was existentially important in winning both World Wars,” said Andrew Lambert, the Laughton Professor of Naval History at King’s College London. “That we take seriously.”

But from the moment a boat named America from the New York Yacht Club first took down the Royal Yacht Squadron in a race around the Isle of Wight, it was clear that this battle would be different. Since then, U.S. clubs have held the America’s Cup for most of its existence. The Auld Mug, an enormous silver pitcher, has also been won by crews representing Australia, New Zealand, and the landlocked country of Switzerland—never the U.K.

It isn’t for lack of trying. British boats have been America’s Cup challengers on 16 previous occasions. Across all of those series, Bicket said, they have scored just five points. Experts agree that the problem through much of that history was that Britain treated it too much like a gentlemanly pursuit and not enough like a cutthroat, boundary-pushing competition that might tar British sailors as losers.

“There’s always been a bit of the Brits calling up the rules, saying, ‘Hold on, old chap, are you cheating?’” Bicket said.

What makes the America’s Cup uniquely frustrating is that the competition is so stacked in favor of the previous winner. The reigning champion is known as the Defender, who has the advantage of writing the rules for the next America’s Cup, setting the specifications for the boats, and choosing a course on home waters. Then it awaits the Challenger of Record, which is now selected through a grueling regatta that stretches over a month. In order to face the Kiwis, Ineos Britannia had to hold off four other teams from Italy, the U.S., France, and Switzerland.

And whatever happens now, the team can at least be sure it can’t go as badly as the last time a British team became the Challenger of Record. Back in 1964 a boat called the Sovereign traveled to Newport, R.I., to take on the U.S. defender known as the Constellation. Even by the standards of a 100-year losing streak, the 4-0 rout was particularly demeaning.

“The debacle at Newport,” the Daily Express called it. “Staggering and humiliating,” said the Daily Telegraph.

“The roses have wilted,” wrote the yachting correspondent of the Times of London. “The days of hope and excitement are things of the past.”

In short, the 1964 British challenge was a fiasco.

“They were all a fiasco, quite frankly,” Bicket said.

That’s because for most of the Cup’s history, Americans and Brits took opposite views on what it represented. American skippers dreamed of racing hard and going home with the Auld Mug. British crews saw it more as a friendly challenge between chums.

“And the British are surprised to find, ‘Oh, the Americans are quickest,’” Lambert said. “The British gentlemen who would go over and contest this weren’t obsessed with winning.”

That much has changed. Bicket believes that Ineos Britannia is the most professional outfit that the Royal Yacht Squadron has ever put on the water. Backed by the British petrochemicals billionaire Jim Ratcliffe, who also owns stakes in Manchester United, the Mercedes Formula One team, and the Ineos Grenadiers cycling team, the current boat is the result of nearly half a billion dollars’ worth of development.

The 75-foot yacht uses a state-of-the-art hydrofoil system to fly above the waves. The sails are moved by a crack squad of elite athletes pedaling stationary bicycles. And its skipper is Ben Ainslie, a four-time Olympic gold medalist, and possibly Britain’s finest sailor since Lord Nelson.

Ainslie, who is making his third consecutive run at the Auld Mug, has said that he would trade all of his medals for one America’s Cup. And by now, he adds, Ainslie feels battle-hardened enough to claim Britain’s most elusive naval triumph.

“The Royal Navy’s been the best navy in the world for the past 400 years,” Lambert said. “When it comes to war, we’re professional.”

Mike Ashley’s retail group has made two conditional offers for the UK luxury handbag maker

The majority shareholder in UK luxury handbag maker Mulberry has told Mike Ashley’s Frasers Group that it is not interested in selling the business, in a clear rejection of its two conditional offers to date.

After Frasers made a second proposal on Friday, valuing Mulberry at £111mn, Challice said in a statement on Sunday that it had “no interest in . . . selling its Mulberry shares to Frasers”.

Challice has been the majority owner of Mulberry since 2002 and has a 56.4 per cent stake in the business. Challice is controlled by billionaire property tycoon Ong Beng Seng and his wife Christina.

The statement said that Challice was “very supportive” of Mulberry and its management team and that while it “appreciates that Frasers is a supportive minority Mulberry shareholder” it believes that it is “an inopportune time for Mulberry to be sold”.

“Challice hopes that by making its position clear, Frasers will be encouraged to announce that it does not intend to make an offer for Mulberry,” it added.

Mulberry shares closed at 112.50p on Friday before the latest Frasers bid of 150p. The stock is down more than 40 per cent in the past year.

Frasers made its first conditional offer, which implied a valuation of £83mn, last month. It has owned shares in Mulberry since 2020 and has a stake of around 37 per cent.

Under UK takeover rules, it has until October 28 to either make a formal offer or walk away.

Mulberry sank to an annual pre-tax loss of £34mn in the year ended March 31, from a £13mn profit the previous year. Revenues fell 4 per cent to £153mn.

It appointed chief executive Andrea Baldo in July to lead a turnaround of a company that has suffered as wealthy customers have cut their luxury spending.

Mulberry supplies the House of Fraser and Flannels department store chains that are both owned by Frasers.

Ashley stepped back from the FTSE 100 business in 2022, handing the reins to his son-in-law Michael Murray, who serves as its chief executive.

The company has a wide range of retail interests, ranging from its recent investment in UK ecommerce company THG to stakes in Hugo Boss, Asos, Boohoo, and white-goods seller AO World.

But its main profit engine remains sportswear retailer Sports Direct, which was founded by Ashley in 1982.

Earlier this month, Singapore charged Ong with two offences of abetting a former Singapore transport minister to obtain gifts and obstruct justice. Ong did not enter a plea, local media reported.

German online fashion retailer Mytheresa announced this week it was acquiring Yoox-Net-A-Porter (YNAP) from Cartier owner Richemont. The long-awaited deal removes a major thorn in the side of Richemont and puts an end to more than 14 years of having to disburse hundreds of millions of euros on botched IT projects and on covering YNAP’s losses every year.

Richemont, which acquired a controlling stake in Net-A-Porter in 2010, lost more than €5 billion on that company hoping it would have a state-of-the art e-commerce service for its brands. Now it has to start all over again. It’s been an expensive distraction for Richemont Chairman Johann Rupert. You wonder if its cash would not have been better spent if Richemont had concentrated on its core business.

The Swiss luxury group is great at making and marketing watches and jewelry. Cartier is far and away the world’s leading jewellery brand by revenues. Rupert got badly burnt trying to figure out how technology and luxury goods go together.

Richemont could have bought a brand like U.S. jeweler Harry Winston – which Swatch Group acquired in 2013 for €1 billion and has severely damaged as Miss Tweed reported in 2021. Richemont would have been a much better parent for Harry Winston. It would also have allowed Rupert to better rival LVMH which is now gaining global clout in watches and jewellery since Bernard Arnault’s purchase of US jeweller Tiffany in 2020. LVMH’s market cap today now worth €325 billion, dwarfing Richemont’s €70.7 billion.

As part of the agreement with Mytheresa, Richemont will get a 33 percent stake in New York-listed Mytheresa, which prior to the deal had a market capitalization of around €350 million. Richemont will also inject €555 million into YNAP, making it debt-free, and the Swiss luxury group will provide a one-year €100 million credit facility. The news which came out on Monday pushed up Mytheresa’s share price by nearly 40 per cent. The stock price has doubled in the past month, closing at $7.95 and valuing the company at $678 million.

It looks like Richemont is giving away much more than it’s getting.

SETBACK

Richemont must finance YNAP’s losses until the deal closes in the first half of next year. That means that it will need to disburse another €250 million – at least. It will also have to pay for the re-platforming of several of its brands including Chloé, Alaïa and Dunhill which were using YNAP’s e-commerce software solutions. That’s one more major expense on which by past form there will likely be little communication.

In all, it is a setback for the Swiss luxury group. Richemont spent vast amounts on YNAP’s new e-commerce platform after its failed attempt to development of its “Next Era” software project four years ago as Miss Tweed reported in 2020.

Now it will have to disburse roughly another €1 billion in cash to get rid of YNAP if you add up the cash injected into the business, the funding of losses and the e-commerce platform switch of its brands, industry insiders estimate. If you talk about just YNAP, Richemont said the write-down of its net assets would amount to approximately €1.3 billion and the final figure would depend on Mytheresa’s share price when the deal closes.

It's unfortunate since Rupert strongly believes in the future on online retail – which he continues to call “New Retail” even though the Internet has been around for 25 years. The problem is that he never hired the right talents to succeed in that field nor does he understand that technology was a fast-moving world. It requires agility and is incompatible with the slow-moving, risk-averse and excessively hierarchical corporate culture he instilled in the group.

By contrast, LVMH owner-boss Bernard Arnault hired Apple executive Ian Rogers in 2015 to head up its digital business. He helped guide the world’s biggest luxury group to ride the disruptive Internet era, allowing LVMH to emerge as by far the biggest luxury player of the new age. Rogers then put LVMH front and centre at Europe’s biggest tech conference Viva Tech. Since 2020, Rogers remains an adviser to Europe’s richest man. Smaller luxury groups have sought to link tech and luxury in other ways. Remo Ruffini, Moncler owner-boss last month launched a collection designed by Apple’s former design supremo Jony Ive.

Richemont has been through several technology chiefs in the past ten years. The group takes a long time to make decisions. This was one of the many symptoms of how dysfunctional the group’s corporate structure was until the appointment of Nicolas Bos as CEO earlier this year.

MIGRATION

Mytheresa said that all the YNAP companies would migrate to the new e-commerce platform developed in-house which the German firm started using in April. “We have a technology platform that fulfills absolutely the requirements of Mr Porter and Net-A-Porter and it’s working,” Mytheresa CEO Michael Kliger told reporters in a conference call after the deal was announced.

Kliger said he believed the newly combined entity had the potential for annual growth of 15-20 percent. In the last five years, the top line average yearly growth rate was 19 percent, he noted.

“We expect that the integration will be a multi-year process,” Kliger said.

One question is what will happen to the fancy tech and logistical hub in Bologna on which YNAP spent tens of millions of euros. Mytheresa opened a new 55,000 square meter warehouse near Leipzig airport in September. It’s one of the many questions the company will need to address.

ONLY ONE

The Richemont-YNAP deal signals welcome consolidation in what was a very competitive and overcrowded market. It comes after the demise of MatchesFashion earlier this year and the implosion of Farfetch. The firm has been forced to sell many of its businesses since it was acquired by South Korea’s Coupang in December last year. In August, Farfetch discontinued FPS, its white label e-commerce service used by dozens of brands and retailers including Harrods.

Matches’ website now reroutes to Flannels, the online fashion retail business of Frasers Group, which bought MatchesFashion in December and refused to pay many brands for their stock after the company was placed into administration in March, as Miss Tweed reported at the time.

Like in the film Highlander, in the end, “there can be only one” with the last immortal standing being all powerful and getting “the prize.” It looks like Mytheresa will end up being the only online fashion operator still operating in a year or two as rivals fall by the wayside.

There are still a few players out there. There’s Canada’s Ssense whose future is looking uncertain due to its high losses. It has had to lay off a lot of staff in the past two years. Then there is Italy’s Luisaviaroma which got another capital injection of tens of millions of euros from Style Capital this year but it’s not clear how long it will be able to continue trading.

By acquiring YNAP, Mytheresa takes out a competitor. The plan could be for Mytheresa to continue focusing on Europe where it is now the dominant platform and for Net-A-Porter and Mr Porter to concentrate on the United States, one person close to the deal said. Mytheresa denied that was the case. “There is no plan to reduce the geographic reach of these brands,” a spokeswoman for the company said. Time will tell.

But what will happen is that Mytheresa will service the ultra-high end with its curated offering and NAP and Mr Porter will offer more accessible fashion and luxury brands. Mytheresa will gain access to NAP and Mr Porter’s base of affluent customers. That’s precious when you know how expensive it is to acquire and retain customers. Having bought out such a big competitor such as YNAP also means that Mytheresa will be able to corner the market in terms of price, particularly in Europe and the United States.

SEPARATION

Mytheresa said it was going to separate from YNAP the online platforms Yoox and the Outnet which sell collections from past seasons at discounts of up to 80 percent. The expectation is these will then be sold. Still, disentangling the e-commerce platforms of the two companies as well as the back-office, HR, finance, logistics and other functions is going to a long, painful and expensive process. That’s what the €550 million from Richemont will be partly spent on.

Kliger already hinted at significant job cuts when he said that they were going to be much “leaner” businesses. Several industry sources said the plan was to sell on Yoox and YNAP to a venture capital fund or another online business operator or shut them down if no one wants them. It’s clear that this was a pre-condition for Mytheresa to accept to acquire YNAP. The German company wants to focus on selling fashion and luxury at full price. It is essential to preserve those crucial good relationships with brands. Flannels owner has learned that the hard way too with its takeover of MatchesFashion.

Interestingly, Mytheresa said the off-price businesses were lossmaking but NAP and Mr Porter were profitable. It declined to give details about that or disclose what were YNAP’s total losses. We will find this out once the transaction is closed next year since Richemont will have to say how much it spent on financing the company’s losses.

Last month, Mytheresa said it was investing in China – a smart move considering the super competitive Chinese market will pick up eventually. It’s also timely considering YNAP pulled out in June. YNAP also closed its joint venture with Alibaba which was called Feng Mao.

Online luxury failures are mounting up for Richemont.

CRUCIAL CHINESE CLIENTS

Mytheresa said it had launched a WeChat Mini Program for Chinese clients. It offers a “curated selection of more than 180 of the most coveted luxury brands across the womenswear, menswear and kidswear categories.”

“The Mini Program will leverage all the famous service elements of Mytheresa with fast shipping directly from Europe, a constant offer of exclusive products and capsules, highly luxurious packaging and personal shopping services for the top customers,” the company said last month.

The success of the Mytheresa and YNAP deal will very much depend on how well it is executed. Investors hope that it will not be too much of a distraction for Mytheresa’s management. Online sales are down compared to those in boutiques. After being trapped inside their houses during the pandemic people prefer the “live” experience of shopping on the high street than on the Internet these days. Battling a severe downturn in luxury spending and handling a complex merger is going to be a challenge.

- Believes neutral rate is higher than used to be in the past; There is room to go before reaching it.

- Fed Funds rate is high relative to where inflation is currently

- Fed has to be more forward-looking than the market

- I would cut rates by a (further) 25 bps. Stop-and-go is not a good look for the Fed.

- Recent data has not changed the medium-term economic outlook

- Don't think that much has changed in the economy