TheChek News Flow

Built with input from publishers, SearchGPT will summarize real-time information on websites

OpenAI is launching a test version of its long-awaited search engine, which it says will cite sources of information including news from business partners such as The Wall Street Journal parent News Corp NWSA 0.05%increase; green up pointing triangle and the Atlantic magazine.

The tool, called SearchGPT, will summarize the information found on websites, including news sites, and let users ask follow-up questions, just as they can currently with OpenAI’s popular chatbot, ChatGPT. The sources are linked at the end of each answer in parentheses.

OpenAI also built a sidebar where it said users can see more results and sources with relevant information.

SearchGPT is OpenAI’s most direct challenge yet to Google’s dominance in search since the release of ChatGPT in 2022 caught the tech company flat-footed. Google this year widely rolled out its own AI search feature that synthesizes information from multiple web sources. Shares in Google-parent Alphabet GOOGL -1.84%decrease; red down pointing triangle fell about 2% in intraday trading after OpenAI announced the test.

Other AI companies are also entering the search battle, including Perplexity, which is backed by Jeff Bezos and founded by a former OpenAI employee.

OpenAI said it partnered with publishers to build the search tool. In recent months, OpenAI representatives have shown mock-ups of the feature to publishers, who have grown increasingly uneasy about the way AI could reshape their newsrooms and newsgathering amid recent declines in online traffic for many publishers.

Publishers are broadly concerned that AI-powered search tools from OpenAI or Alphabet’s Google will serve up complete answers based on news content, eliminating the need to click on an article link and starving publishers of online traffic and advertising revenue.

It isn’t clear how much traffic a product such as SearchGPT could send publishers’ way. “We expect to learn more about user behavior” in the test, an OpenAI spokeswoman said.

Publishers are leery of tech partnerships after more than a decade of dealing with the whims of tech companies including Meta Platforms’ Facebook and Google, whose product changes could sometimes trigger violent changes in online traffic.

Their fears were further fanned when last month Perplexity repurposed a story by Forbes magazine for one of its products and didn’t mention the news source until the bottom of the page. Chief Executive Aravind Srinivas attributed the issue to the product’s “rough edges.”

Even so, many publishers see value in selling access to their intellectual property to AI companies who need massive amounts of data and content to refine their AI systems and create new products like SearchGPT.

Over the past year, OpenAI has struck partnerships with a litany of news publishers including Politico and Business Insider’s parent, Axel Springer; the Associated Press; Le Monde; the Financial Times; and IAC’s Dotdash Meredith, home of such publications as People and Better Homes & Gardens.

In some of those deals, OpenAI has extended millions of dollars in cash and cloud credits to publishers in exchange for the right to train new generative AI models on their work.

Other publishers, including the New York Times, have opted to battle OpenAI and its backer, Microsoft MSFT -1.90%decrease; red down pointing triangle, in court, alleging in lawsuits that their content was used without permission to train OpenAI’s systems. OpenAI has said the Times lawsuit is without merit.

Many of the discussions OpenAI had with publishers about the search tool were focused on how their news content will be used in answers to queries. Thursday, OpenAI said publishers can manage how their content appears in SearchGPT.

In a statement included as part of OpenAI’s press release Thursday, News Corp CEO Robert Thomson said CEO Sam Altman and other OpenAI leaders understood that any AI-powered search must rely on “the highest-quality, most reliable information furnished by trusted sources.”

For now, SearchGPT will be tested as a separate product, but eventually OpenAI plans to integrate it within its main ChatGPT service. News publishers and creators will be among those first few testers and OpenAI will offer a wait list where U.S. users can sign up to try the tool.

Wall Street Journal owner News Corp has a content-licensing partnership with OpenAI.

The billionaire hedge funder spent more than $90 million on a roughly 2-acre French waterfront estate

Billionaire hedge fund giant Ken Griffin is known for purchasing some of the world’s most expensive homes and assembling properties to form sprawling private compounds for himself and his family.

Griffin’s latest target: St. Tropez, where the financier recently purchased a lavish roughly 2-acre waterfront estate with at least four structures for more than $90 million, according to a person familiar with the situation. The deal, which hasn’t previously been reported, closed in late June, according to that person.

The property is in a small enclave with just a handful of homes. It is unclear if Griffin plans to make offers on any of the other homes there. Griffin’s plans for the properties weren’t immediately clear. He declined to comment.

The main property, known as Domaine de la Capilla, was previously owned by celebrity photographer and heir to an industrial fortune Gunter Sachs, perhaps best known as the onetime husband of actress Brigitte Bardot. Sachs died in 2011 and the sale was handled by his sons, Rolf Sachs and Christian Gunnar Sachs. The Sachses couldn’t immediately be reached for comment.

The property is on Tahiti Beach, at the northern end of St. Tropez’s Pampelonne Beach. The area has long attracted the rich and famous, who are seduced by the glitz and glamour of the French Riviera, with its beaches, picturesque coastline, nightlife and yachting. Bardot’s iconic role in the 1956 film “And God Created Women” helped cement the town’s appeal to a global audience.

Griffin’s deal is among the most expensive ever sold in St. Tropez, which has been experiencing a luxury real-estate boom over the past few years thanks to a resurgence of international buyers, including from the U.S. Prices of homes valued at over $16 million along the southeastern coast of France rose between 15% and 20% in the five years through 2023, according to brokerage Beauchamp Estates.

For Griffin, the French Riviera deal is the latest in a long string of real-estate purchases over the past few years. His portfolio includes a $122 million mansion in London near Buckingham Palace, a roughly $240 million apartment in New York and a $165 million estate in Los Angeles.

In South Florida, Griffin has spent hundreds of millions putting together massive estates on both Star Island in Miami and in Palm Beach.

The company is closing stores and looking to put its business on a stronger footing.

SMCP, the owner of contemporary labels Sandro, Maje and Claudie Pierlot, swung to a loss in the first half as it struggled in China and started to rework its operations.

Net losses for the first six months of the year tallied 27.7 million euros, compared with earnings of 14 million euro a year earlier. Adjusted earnings before interest, taxes, depreciation and amortization fell 14.9 percent to 98.5 million euros.

Isabelle Guichot, chief executive officer, said: “At group level, our action plan launched at the beginning of the year — aimed at reviving our profitable growth — is beginning to bear fruit. Nevertheless, our profitability is still affected by one-off effects related to the restructuring of our store network in China and that of Claudie Pierlot, as well as additional costs linked to inflation.”

Elsewhere, sales were relatively stable or on the rise. Organic sales in France slipped 0.7 percent to 202.5 million euros, while the rest of Europe, the Middle East and Africa was up 0.8 percent to 191.8 million euros and America gained 5.8 percent to 84.8 million euros.

All together, SMCP’s first-half organic sales fell 3.6 percent to 585.3 million euros.

Guichot said: “In the second half of the year, we will continue our efforts to deploy our action plan both in terms of driving our sales in promising markets and optimizing our costs, whose effects should accelerate in 2025 — with the goal of having a positive impact of 25 million euros on our profitability by 2026.”

In April, the company said it would close 100 locations over the next two years, with the cuts mainly taking place in China. That will reduce its store footprint buy 15 to 20 percent this year.

SMCP is looking to ramp up its wholesale business with a partnership model and the Claudie Pierlot brand, which was set to close 30 stores, is focusing on its digital operations.

It’s been a busy summer for the company, which this month also saw the English High Court invalidate the 2021 sale of 15.9 percent of the company for 1 euro to Dynamic Treasure Group, which is owned by Chenran Qiu, daughter of Yafu Qiu, who is chairman of SMCP’s former owner, Shandong Ruyi.

Bill Ackman slashes fundraising target for US fund IPO by as much as 90%

Pershing Square USA distances itself from its CEO’s comments

Bill Ackman has slashed his fundraising target for the initial public offering of his US investment fund Pershing Square USA by as much as 90 per cent, falling far short of the initial target of $25bn.

The billionaire hedge fund manager said in a letter filed with the Securities and Exchange Commission that he expected to raise between $2.5bn and $4bn, although the total haul could increase to $10bn depending on how marketing efforts went in the coming days.

In the letter to investors in his Pershing Square holding company sent on Wednesday, Ackman said that “this is a moment when you can be very helpful to Pershing Square by participating in the PSUS offering and giving your order to the banks, the sooner the better”.

In an unusual move, Pershing Square USA said it “specifically disclaims” Ackman’s statement, in the filing which included the letter.

The fund has so far received orders from investors including Boston-based investment manager Baupost Group and the Teacher Retirement System of Texas. A family office with more than $65bn in assets, which Ackman did not name, had expressed interest in buying nearly 10 per cent of the ultimate deal, he said in the letter.

In addition to institutional investors, Ackman also emphasised the role that US retail investors would play in the flotation, adding that he anticipated them to be a “huge source of after-market demand”.

Pershing Square declined to comment.

Many hedge funds have struggled to raise capital in recent years, as investors have turned to a select group of multi-manager firms as well as alternative asset managers investing in infrastructure and private credit.

Ackman has become a prominent figure on platforms like X over the past year, garnering hundreds of thousands of social media followers as he criticised President Joe Biden and subsequently endorsed Republican presidential candidate Donald Trump.

In investor pitches this month, the billionaire has brought up his social media following as a potential benefit to the US fund’s shares once it had listed.

Ackman on Wednesday pressed investors to contact the banks leading the listing — a group that includes Citigroup, UBS, Bank of America and Jefferies — to place their orders.

“We would [be] grateful if you would participate in the PSUS IPO and indicate an order to the banks as soon as possible,” he said.

Pershing Square USA will be a closed-end fund listed on the New York Stock Exchange, investing in large, publicly traded stocks that Ackman and his team believe are undervalued.

Ackman had previously told investors that he expected the company to trade at a premium compared with the net assets it held. This may have been done to address potential investor concerns that the stock could trade at a persistent discount like his Amsterdam and London-listed vehicle, Pershing Square Holdings.

In Wednesday’s letter, Ackman said that investors had raised questions about a potential discount emerging.

“There is enormous sensitivity to the size of the transaction,” said Ackman in the letter.

“Particularly in light of the novelty of the structure and closed end funds’ very negative trading history, it requires a significant leap of faith and ultimately careful analysis and judgment for investors to recognise that this closed end company will trade at a premium after the IPO when very few in history have done so.”

Ackman also said that investors had raised concern about key man risk, with the health of the investment company at risk if something were to happen to him as a key decision maker.

GB Energy tie-up with Crown Estate raises questions about future of UK wind sector

Government claims partnership will lead to up to 30GW of new offshore developments securing leases by 2030

The partnership between state-owned GB Energy and the Crown Estate, unveiled by energy secretary Ed Miliband on Thursday, is being touted as a way to accelerate the building of thousands of offshore wind turbines in the UK over the coming years. 

Miliband has argued that a surge in domestic renewable capacity can increase Britain’s energy security and provide cheap, clean power. Yet the Labour government still faces questions about whether it can hit its ambitious target of a decarbonised power system by 2030 — not least due to long-standing delays for new wind and solar farms to connect to the electricity grid — and whether GB Energy is the answer.

Ministers are rushing through legislation to set up Scotland-based GB Energy, which will have £8bn of taxpayer money to spend on stakes in renewables projects or even operate its own schemes.

Crucial to Thursday’s announcement is the idea that closer co-operation means GB Energy can bring more strategic heft to the Crown Estate, while giving its projects greater access to public capital.

The government claimed the partnership would lead to up to 20GW-30GW of new offshore wind developments securing seabed leases by 2030. 

But this is not a new development — the Crown Estate had already set that target in November, long before the deal with GB Energy.

The deal also prompted headlines about it generating enough wind power for 20mn homes by the end of the decade. Yet many of the projects will not be generating electricity until 2040, given projects can take up to a decade after winning their seabed lease to start operating.

Government officials insist the partnership does make it more likely that the 2030 net zero power target would be hit, however. “The old government had targets without delivery,” said one.

The government claimed that the GB Energy tie-up with the Crown Estate, which manages the monarch’s legacy portfolio of land and seabed, could help attract £30bn-£60bn of private sector investment for offshore wind turbines and other, earlier-stage technology, such as carbon capture and hydrogen.

However, proposals for GB Energy to carry out development work for offshore wind projects, such as scoping out the seabed and navigating the planning process, triggered some concern among industry about the state potentially taking too big a role in a market which has been broadly successful so far.

The UK has the largest offshore wind capacity outside of China, with the private sector investing heavily over the past decade with the support of government guarantees on the price they can earn for the electricity they produce.

“Companies view it as a strategic advantage to do [development work] quicker and faster than others,” said one industry source. “The risk is that it’s even slower as no one in the state is used to doing this yet.” There is also the risk GB Energy could deter private investment, trigger unfair competition concerns, or simply replicate work already being done by the Crown Estate. 

“The next steps of its development will have to be formed in close partnership with the sector,” said Dan McGrail, chief executive of trade group RenewableUK. “In the offshore wind industry alone, over £100bn of private capital will be needed to deliver the government’s target of 60GW by 2030.”

However, much remains outside the control of the Crown Estate, which announced that profits more than doubled on Wednesday — mostly thanks to wind seabed leases.

For example, the Ministry of Defence has intervened on various occasions to try to block new wind farms because of concerns over their impact on aerodromes, explosive stores, radar facilities and range areas. This year, it resisted a proposal for an extension to the Clashindarroch wind farm near a tactical training area for pilots at RAF Lossiemouth.

People in Whitehall told the Financial Times that the Crown Estate’s next leasing round, for floating offshore wind in the Celtic Sea, was scaled back from a potential 6.5GW of capacity to 4.5GW after an intervention from the MoD.

Constraints on the capacity of the electricity grid to take power from offshore wind farms on to land and around the country remain a huge problem. “The biggest challenge is going to be connections to the grid,” said Alasdair Grainger, net zero managing director at Grant Thornton. 

One Tory MP said that Miliband had focused on the supposed shortage of capital for the sector when the problems for the renewable sector were instead a lack of community consent, environmental hurdles and a dearth of grid connections.

“The decision to have the public sector take on additional early development work is a positive move that will reduce risk for developers and attract greater private investment,” said James Alexander, chief executive of the UK Sustainable Investment and Finance Association.  

“One barrier this will not solve is the current inadequacy of our grid connections, which we know remains a major barrier to investment.”

Court to decide whether patriarch’s move to hand power to his oldest son is in good faith

Rupert Murdoch has moved to hand control of his family trust to his eldest son, Lachlan, sparking a bitter legal war between his children that could determine the direction of two of the world’s most powerful media businesses.

The 93-year-old media baron has sought to overhaul an irrevocable family trust to give Lachlan full control of its voting powers and decision-making after the patriarch’s death, according to three people familiar with the situation. Lachlan had already assumed the leadership of Fox and News Corp last year when his father stood down as chair of the businesses behind Fox News, The Times and The Australian.

The billionaire news mogul has tried to enshrine this move by amending the trust that holds the family’s interests in the two companies, these people said. Control of the entity was supposed to be split between his four eldest children — Lachlan, James, Elisabeth and Prudence — when he dies. 

One person said the move appeared to be an attempt “to disenfranchise the three children . . . they would be powerless”. 

However, a Nevada probate commissioner has ruled that a court hearing would decide whether the amendments to the trust are in good faith and for the sole benefit of Murdoch’s children, the people said. The hearing is expected in September.

The family rift and commissioner decision was first reported by The New York Times, which said Murdoch had argued that he was acting to protect the value of the businesses to the benefit of his heirs.

The move has reignited long-simmering tensions in the family, with James already estranged from his father after being passed over in a succession battle with Lachlan.

James and his sisters are more politically moderate than their father and eldest brother, people familiar with the family say. The proposed changes to the trust are designed to cement a conservative direction for Fox and News Corp news outlets in the future, including the right-leaning Fox News, people familiar with the matter said. 

James, in particular, has distanced himself from the direction taken by his father and elder brother since he stepped down as Fox’s chief executive in 2019 and left the News Corp board in 2020. He backed Joe Biden’s 2020 presidential campaign and has criticised media groups that act as “enablers [for] toxic politics”.

The attempt to change the voting balance of the trust challenges a delicate status quo that has existed since it was set up following Rupert’s 1999 divorce from Anna Torv, the mother of Lachlan, Elisabeth and James. Each will have an equal voting right after the death of their father. Grace and Chloe, the children from his marriage to Wendi Deng, have an economic interest in the trust but no voting control. 

Given their voting rights, Lachlan’s three eldest siblings could in theory combine to block his decisions after Rupert’s death. A person close to the situation said that while the three had joined forces to oppose their father’s move, they were not necessarily as aligned on wider matters. They are jointly represented by Gary Bornstein, co-head of litigation at Cravath, Swaine & Moore.

“This is not the intention of the trust that was set up,” said the person, who pointed to the origins to the structure insisted on by Anna as part of her divorce from Rupert. “It's not what the family had agreed.”

Murdoch watchers were already speculating about a family rift after James, Elisabeth and Prudence were absent from Rupert’s most recent wedding this summer. The trust had already explored options to buy out James after Fox sold its 21st Century Fox entertainment assets to Disney, according to people involved at the time.

Representatives for Rupert Murdoch and Fox directed inquiries to Adam Streisand, a lawyer at Sheppard Mullin. Representatives for James and Elisabeth Murdoch declined to comment.

Birkin bag maker remains one of the industry’s strongest performers

Paris-based Hermès once again defied the luxury downturn to grow sales in the double-digits across all regions except Asia as Chinese shoppers rein in spending on silk scarves and $10,000 bags.

Second-quarter sales at the Birkin bag maker grew 13.3 per cent at constant exchange rates for a total of €3.7bn, in line with consensus expectations compiled by Reuters. Sales in Asia outside Japan rose 5.5 per cent on a like-for-like basis, a stronger performance in comparison to peers including LVMH, Richemont and especially Kering, whose China business has fallen sharply.

Hermès is one of the most reliable performers in luxury even in more difficult times, benefiting from its ultra high-end positioning, carefully controlled distribution and wealthy client base.

Sales have nevertheless slowed since the start of the year, coming down from 17 per cent growth in the first quarter.

First-half operating profit of €3.15bn and a 42 per cent margin were also in line with expectations despite the more difficult environment.

“The solid first-half results, in a more complex economic and geopolitical context, reflect the strength of Hermès’ model,” said executive chair Axel Dumas. “The group is confident in the future and is continuing to invest, to pursue its vertical integration projects and to create new jobs.”

The group’s biggest division, leather goods, was robust, growing 18 per cent in the quarter as shoppers continued to snap up its coveted Birkin and Kelly model bags, while sales of ready-to-wear fashions and accessories also grew by double digits.

Demand for its iconic silk scarves and watches fell, however, indicating some pressure as Hermès navigates the tougher luxury environment. 

The company’s performance was “solid” in the second quarter although Hermès was “not completely immune to wider trends”, said Zuzanna Pusz, an analyst at UBS. “First-half results confirm the resilience of the business model despite slower Asia-Pacific,” she added.

Shares in the group have gained 6 per cent so far this year and stood at €2,007 at Thursday’s close, giving it a market capitalisation of €213bn, during a period when LVMH and Kering shares have fallen. 

Paris-based Hermès outperformed the rest of the sector during a luxury boom that peaked during the pandemic, a trend that has continued. While much of the sector’s growth in the past decade has come from brands’ efforts to appeal to more aspirational clients through marketing and expansion of their entry-level product lines, the most exclusive names such as Hermès, Brunello Cucinelli and LVMH’s Loro Piana have largely eschewed this to focus on their core of wealthy customers.

Hermès also profits from the fact that demand outstrips supply for its most coveted products such as the Kelly and Birkin bags, which start at about $10,000 a piece, as the company carefully controls production. Hermès has said it planned to expand its leather products production capacity by 6-7 per cent a year as it opens new workshops and trains specialist artisans.

It is also less reliant on tourist flows for sales than some of its competitors.