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Funding round, which also includes JPMorgan Chase and Andreessen Horowitz, values hypersonic munitions maker at $13 billion

Missile-making startup Castelion closed a more than $1 billion funding round co-led by private-equity giant Carlyle CG 2.13%increase; up pointing triangle Group, reflecting blue-chip firms’ growing interest in a booming corner of the defense industry.

California-based Castelion said it would use the new investment led by Carlyle, JPMorgan Chase and Andreessen Horowitz to boost planned production of its Blackbeard hypersonic missile. The fresh capital will also fund development work on an even bigger hypersonic strike weapon and a mass-produced air-defense missile, the company said.

Military leaders have said they need more hypersonic weapons capable of zipping through enemy defenses to match China’s growing arsenal of similar missiles. The Pentagon is meanwhile asking factories to increase production of traditional defensive batteries like the Patriot missile system.

Russia’s war with Ukraine has stressed the West’s Patriot missile stockpiles, and this year’s U.S. war with Iran has drawn them low enough to alarm Trump administration officials.

New defense companies have traditionally grown their operations with the help of venture-capital firms like Andreessen Horowitz, which previously invested in Castelion. The new investments from JPMorgan Chase’s $10 billion fund, part of a national-security initiative at the bank, and Carlyle shows Wall Street’s growing appetite for early-stage companies in the defense sector.

Ian Fujiyama, the head of Carlyle’s aerospace, defense and government practice, said his firm took equity in Castelion to take advantage of the company’s promise to design and manufacture weaponry on a tight timeline.

“We think there’s a multidecade need to rebuild some of that capability that has just atrophied over the years,” Fujiyama said, citing a near-term dearth of munitions and hypersonic weapons in particular.

Castelion said the new capital raises its valuation to $13 billion. The Series C investment, which included other venture-capital firms, includes $800 million in equity and a $250 million revolving credit facility.

Castelion was co-founded by three SpaceX alumni under the premise that a new manufacturer could design, test and produce weaponry more quickly than traditional defense contractors like RTX and Lockheed Martin.

The company has spent roughly $250 million to build a New Mexico production campus for Blackbeard, a missile named after the legendary pirate to reflect its expected sea deployment. Castelion is now searching for a new factory site to build its next missile models.

Engineers drafted early designs for Castelion’s longer-range hypersonic weapon with an eye toward the U.S. military’s efforts to match Chinese capabilities in the Pacific region. Executives said that moving early to get a jump on the project, even before the Pentagon commits to a contract, is the best way to deliver the weapons quickly.

“We spent tremendous amounts of our early capital starting that program at a point in time that, quite frankly, was very risky,” Castelion Chief Executive Bryon Hargis said. “But it takes that level of time to get the development correct, and because we did that, we’re now in a position that we’re going to start doing the testing next year. That is an example of the power of private capital.”

The United Arab Emirates, long Tehran’s gateway to global commerce, has pledged to crack down. But it’s complicated.

President Trump’s effort to squeeze Iran into submission will depend heavily on curbing one of the country’s biggest economic lifelines: Dubai.

The United Arab Emirates said late Tuesday that it has suspended financial and economic transactions with Iran, potentially threatening Tehran’s access to a major source of imports and a financial back door to the world.

The move follows weeks of Trump administration cajoling of the U.A.E. to crack down on Iranian financial networks operating in the country, telling Emirati officials that targeting money flows linked to Iran’s Islamic Revolutionary Guard Corps could have a greater impact on Tehran than the U.S. naval blockade of Iranian ports, according to people familiar with the matter.

The U.S. has also urged the U.A.E. during the war to take tougher action against sanctioned Iranian entities and other networks operating covertly in the Emirates, the people said.

“Today, I am also announcing that ANY country that allows its financial institutions, businesses, airports, or government entities to provide any type of lifeline to Iran will itself face TREMENDOUS Economic Consequences,” Trump said on social media late Wednesday. “Oil smuggling, swap lines, cash transfers, exchange houses, ship registries, front companies—It all needs to stop NOW. You know who you are.”

The president didn’t specify which countries he had in mind but said he wants all U.S. allies to stand with him.

If implemented broadly, the U.A.E. step could significantly curb Tehran’s access to foreign currency and global trade networks as the Iranian economy buckles under soaring inflation, sanctions and wartime disruption. The Trump administration hopes that could increase pressure on Iran to strike a deal.

But severing those links will be difficult. Much of the activity is deliberately obscured. U.S. sanctions orders in recent years show that oil revenues, foreign-currency trades and payments for Iranian entities have long moved through shell companies and exchange houses in Dubai, often without an Iranian name appearing on the transaction.

Cutting off Iran would also require Emirati authorities to crack down much more aggressively on opaque financial and trading activity, which could hurt Dubai’s role as a freewheeling global hub for commerce, capital and re-exports.

“When you look at Iranian sanctions evasion and Iran’s ability to earn money from illicit oil sales, Dubai is a major hub for illicit financial flows,” said former U.S. sanctions official Max Meizlish, who is now a research fellow at the Foundation for Defense of Democracies. “The U.A.E. taking action against direct trade and financial activity is important but the reality is that a great deal of indirect activity flows through banks in Dubai supporting Iran’s shadow-banking and illicit-financing operations.”

The U.A.E. action followed weeks of escalating tensions, including what Emirati officials say were Iranian attacks on seven of its ships this month alone. On Tuesday, Iran fired two ballistic missiles toward the U.A.E., triggering the country’s air defenses. The Emirates’ Defense Ministry said the missiles were aimed at maritime traffic and fell into the sea.

The U.A.E. moves to limit dealings with Iran had been planned as part of an effort to deter the Revolutionary Guard’s attacks on its ships.

Emirati officials see the latest measures as part of a gradual escalation rather than a wholesale break with Tehran, the people familiar with the matter said. The U.A.E. is expected to move step by step, beginning with new restrictions on cargo and potentially expanding to a broader crackdown on Iranian-linked entities if the Revolutionary Guard continues its strikes. The approach reflects the U.A.E.’s preference for testing what works while preserving room to adjust.

U.A.E. policymakers worry Washington’s strategy of inflicting deeper economic pain on Iran could hurt the segment of Gulf states’ economies that relies on tourism and trade rather than oil, and eventually provoke further Iranian military retaliation, the people said. Emirati officials also want to keep some channels to Tehran open so they retain a diplomatic option if the Trump administration’s pressure campaign fails, they said.

The U.A.E. didn’t respond to a request for comment. An administration official said the U.S. sanctions and blockade have crippled Iran’s economy and that Trump has more levers to pull.

Earlier in the war, the U.A.E. suspended direct cargo shipping with Iran and launched a broader crackdown on Iranian activity in the country, including canceling visas and shutting schools and clubs.

After engaging in sporadic fighting and warning of major escalation last month, Trump has pivoted toward trying to grind down Iran economically. Treasury Secretary Scott Bessent last week indicated that Washington would slap new restrictions on Iran’s economy in the coming days, in what would be a “one-two punch” along with the U.S. naval blockade of Iranian ports.

To squeeze Iran harder, it needs the U.A.E. to join in. The Emirates sits just across the Persian Gulf and has deep commercial, historical and cultural links with its larger neighbor, even though the two governments have frequently been at odds.

Before the war, the U.A.E. was Iran’s largest source of imports ahead of China, supplying more than 30% of the country’s total—about $21 billion worth—in 2024, according to the World Trade Organization.

The U.A.E. has for years served as a key financial hub for Iranian companies and individuals looking to work around Western sanctions, according to analysts tracking Tehran’s activities and the U.S. Treasury. Iran’s sanctions-evasion network has helped Tehran continue selling oil overseas and channel the proceeds toward weapons programs and allied regional groups, they say.

Iran has set up front companies in the U.A.E. to collect oil payments, settle transactions and obscure where the money originated, according to the Treasury and analysts tracking Tehran’s activities.

In 2024, $9 billion passing through correspondent accounts maintained by U.S. banks appears to have been tied to clandestine Iranian financial activity, according to the Treasury Department. The Treasury said U.A.E.-based firms—mostly in Dubai, which is one of the country’s seven emirates—received 62% of those funds.

Iran has also relied on a shadow fleet of older tankers to transport sanctioned crude while masking the vessels’ movements and ownership structures. Many tankers tied to Iran’s shadow trade are owned or managed by companies based in the U.A.E., according to the Treasury.

The U.A.E. has previously said it adheres to sanctions and has a strong commitment to protect the integrity of the global financial system.

Even with the U.A.E.’s newly announced measures, tackling that parallel financing web would remain a challenge, analysts say.

“It is doable but with limits,” said Eric Alter, the dean of the Anwar Gargash Diplomatic Academy in Abu Dhabi, another of the emirates. The government can shut down official banking and major port traffic, but it “cannot police every local partner, every free-zone or every small-vessel movement across seven emirates with different commercial cultures,” he said.

CK Hutchison Files Arbitration Against Panama, Seeking $1.5 Billion in Damages

Efforts to reach a resolution before initiating arbitration were unsuccessful, the company said

Hong Kong conglomerate CK Hutchison 1 -0.07%decrease; red down pointing triangle has launched international arbitration proceedings against Panama, escalating a dispute over two strategically-important ports that have become caught up in U.S.-China tensions.

The conglomerate said it is seeking more than US$1.5 billion in damages for the “destruction of the company’s investments” in the country.

Hutchison alleged that Panama breached an investment protection treaty through a series of measures taken between 2025 and 2026, which it said resulted in the “destruction” of the concession contract for the ports of Balboa and Cristobal, located on either end of the Panama Canal, and Panama taking over these terminals.

Efforts to reach a resolution before initiating arbitration were unsuccessful, the company added.

The board added it “strongly disagrees” with the measures taken by Panama and will continue to seek resolution with the country while pursuing its rights under the treaty and international law.

The move intensifies a dispute that began in January, when a Panamanian court voided CK Hutchison’s contracts to run two terminals at either end of the Panama Canal.

Hutchison has been in dispute over the concessions since Panama’s Supreme Court ruled its port operations unconstitutional.

The ruling was seen as a win for the Trump administration amid rising China-U.S. tensions, as the U.S. continued efforts to curb China’s influence in the Western Hemisphere.

China’s office of Hong Kong affairs said that the Supreme Court ruling was “unfounded, unreasonable and absurd,” noting that Hutchison’s contract had been in force for nearly 30 years.

Hutchison said Thursday its unit Panama Ports Co. will continue to pursue its own rights under a separate arbitration against Panama.

The subsidiary also separately started arbitration against A.P. Moeller-Maersk in April, accusing it of undermining a long-term contract.

The unit said Maersk is “aligned with the Republic of Panama” in a campaign against it and a plan to replace it “through a takeover that installed new port operators.”

Maersk said then it “does not believe it is liable for the claims and will address them in the appropriate forum,” adding it had no further comment at the time.

Hutchison previously said the issue muddled talks over a potential sale of stakes in certain port assets.

The company had planned to sell the two contested ports as part of a US$23 billion deal to a group that includes BlackRock.

On an earnings call last week, the company said that the expropriation of the Panama ports cost it about 496 million Hong Kong dollars, equivalent to US$63.3 million, in lost earnings before interest, depreciation and amortization.

Excluding Panama, underlying Ebitda would have increased 10% in reported currencies and 6.0% in local currencies, the company said.

As for whether the company would need to book an impairment on the Panama ports business, Group Chief Financial Officer Kwan Cheung said the company doesn’t think that will be necessary.

“We believe on the adviser council that our legal cases are strong, and therefore, as a result of that, we don’t believe an impairment is required at all.”

Hudson River posts $11.4bn trading windfall as it seizes on market tumult

Wall Street firm benefited from swings in AI stocks and volatility triggered by Iran war

Hudson River Trading posted a record $11.4bn in quarterly trading revenues as the Wall Street firm capitalised on tumultuous markets.

The trading shop earned a $7.4bn net profit in the three months to June and projected no losses of the kind that stung rival Jane Street in the current quarter, according to a person familiar with the matter.

Proprietary firms such as Hudson River have benefited from volatility in markets triggered by the war in Iran as well as huge swings in AI stocks.

Jane Street last week reported a $15bn loss in July after an investment in Leopold Aschenbrenner’s hedge fund Situational Awareness as well as other AI stocks backfired. But the firm had still generated more than $40bn in net trading revenues in the year to last Friday.

Choppy markets have been a boon to trading specialists’ market-making divisions, which use powerful models and advanced technology to rapidly profit from small differences in asset prices.

In 2025, Jane Street, Hudson River and Ken Griffin’s Citadel Securities made more than $60bn in trading revenues. Hefty hauls this year have also beaten trading desks at major investment banks such as JPMorgan Chase and Goldman Sachs, which also benefited from whipsawing in markets.

Like its peers, Hudson River has made significant investments in AI infrastructure. Proprietary firms are in a race to secure computational capacity and augment trading models used across financial markets. 

“The amount of compute I’ll have next year versus this year looks exponential,” Iain Dunning, the firm’s head of AI, said on a recent Odd Lots podcast. “We’re doing things today that I didn’t really dream of.”

Hudson River declined to comment. Bloomberg News first reported Hudson River’s results. 

Donald Trump proposed reviving the Keystone XL pipeline. Does Canada still want it?

The bilateral relationship has soured significantly since the project was first proposed two decades ago

Donald Trump has triggered excitement in Canada’s oil heartlands over the country’s potential to become an energy superpower by floating the revival of the ill-fated Keystone XL pipeline.

On Tuesday night, hours before US levies on $20bn worth of Canadian goods were set to go into effect, Trump hinted the massive cross-border pipeline could be resuscitated as part of a trade deal between the neighbours.

“The great Keystone XL Pipeline, long ago killed by Sleepy Joe Biden, may be awoken from the grave,” the US president posted on his Truth Social platform.

Trump’s missive opens the possibility that the pipeline project — which has been cancelled by two US presidents — could become a reality, almost two decades after it was first proposed.

But it comes as Prime Minister Mark Carney tries to break Canada’s dependence on the US after Trump launched devastating tariffs on vital sectors such as cars, steel and lumber.

In May Ottawa and Alberta signed an agreement to develop a new pipeline to the west coast to send 1mn oil barrels per day to Asian markets.

Keystone XL, an expansion of the existing Keystone pipeline that would send about 830,000 barrels per day of heavy crude from Alberta to refineries on the US Gulf Coast, was shuttered in 2015 by then-president Barack Obama before Trump relaunched it in 2017. Biden scrapped the project in June 2021 on environmental grounds.  

Alberta’s premier Danielle Smith, who wants Canada to double its oil output of 6mn b/d, said there would be more clarity about the viability of reviving the Keystone XL project after the terms of a US-Canada trade deal are announced, potentially before the new deadline on Friday.

“Alberta wants to build new pipelines west, east, north and south, and we are always in discussions with industry to support these opportunities,” she told the FT.

Analysts and investors said a Keystone revival had the potential to benefit the US and Canada, tying the two North American economies closer together at a time of global upheaval.

Adam Waterous, chief executive of Calgary’s Waterous Energy Fund, a large oil sands investor, said pursuing Keystone XL would ease the trade war by providing energy security to Washington as the shale boom over the past two decades begins to slow.

“It’s a huge strategic problem,” he told the FT. “They are going to go from 13mn b/d to 8 [mn b/d] over the next decade . . . Thank God, Canada’s right next door.”

Lisa Baiton, president of the Canadian Association of Petroleum Producers, said Canada could provide “unmatched energy security for the US”.

Canada supplies more than 4mn b/d of crude to the US, accounting for about 60 per cent of total US crude imports — a figure that has nearly doubled over the past decade.

The potential Keystone XL revival comes as analysts predict the Americas will play an increasing role in feeding rising oil demand over the coming decades — a trend set to benefit Canadian producers and exporters of crude. 

Bob McNally, president of Rapidan Energy, said there was a recognition that “peak demand will be delayed” just as “the Middle East has a new, big and permanent disruption risk”.

“Connect those dots, and it’s structurally bullish for western hemispheric hydrocarbons, up and down the supply chain, from Alaska to Tierra del Fuego,” he said.

But building two new pipelines would require expanding Canada’s oil sands patch, which will require huge investment in the range of $100bn, analysts say.

Eric Nuttall, a partner at Toronto-based Ninepoint Partners, said: “We have the resource depth to allow, but investors continue to want some return of capital which reduces growth capex.”

“Alberta needs to incentivise this to persuade investors, the owners of the businesses, to allow it,” he added.  

Trade tensions over the past 18 months have also raised doubts in Ottawa over the benefits of closer ties to its southern neighbour. The US and Canada last year raised the prospect of reviving Keystone XL as part of trade talks to ease Trump’s tariffs on steel and aluminium.

“Does Canada want to continue to integrate its oil production into the US system — based on the dramatic change in the relationship?” asked Kevin Birn, an analyst at S&P Global.

Trump on Wednesday said the US would be a big beneficiary of a shift away from reliance on Middle Eastern oil. “People are finding alternatives,” he said.

“[This] is very positive news for Canadian oil producers,” said Cole Smead, chief executive of Smead Capital Management, an investment firm with holdings in Cenovus, Imperial Oil, Strathcona and Tamarack Valley Energy.

“There are now as many as four pipelines or pipeline extensions being talked about in Canada and strong signals of government support. I’m confident that some of these pipelines will happen,” he said.

Representatives of South Bow, which operates the Keystone project, and Enbridge, one of Canada’s biggest pipeline operators, did not reply to a request for comment.

Companies are selling machines to government-backed centres that then sell training data back to robot makers

China’s humanoid robot makers are generating much of their revenue from selling machines to government-backed training centres — which then collect and sell training data back to the robot makers, raising concerns about actual demand in an industry Beijing is keen to promote.

The widely adopted model, reminiscent of Nvidia’s “circular financing” of AI data centres, has fuelled China’s so-called embodied AI industry. Valuations of start-ups such as AgiBot and Hong Kong-listed UBTech have soared on expectations that humanoids represent the future of AI.

But investors are beginning to question whether government-driven purchases can lead to real commercial demand.

“There is a broad consensus among early-stage investors that humanoid robotics is approaching the peak of the hype cycle,” said a senior investor at a Beijing-based venture capital fund who asked not to be named. “We’re looking for opportunities to sell down some of our holdings to other investors and secure an exit.”

As part of Beijing’s plan to develop China’s humanoid robot industry, it has encouraged local governments to build large-scale training centres, where humans “teach” robots how to perform physical tasks through a remote-controlled process called teleoperation.

This has encouraged the proliferation of robotics start-ups. Nearly 370 have been established in the past two years, and more than 50 of them have listed or are preparing to go public. The most closely watched, Unitree, surged more than 600 per cent after listing on Shanghai’s tech-focused Star Market on Wednesday, giving it a $50bn valuation.

The centres, often co-funded by local governments and robot makers, buy the machines, generate training data and sell the data to the robot makers to improve their technology.

“This model is spreading rapidly because it reduces the cost of building facilities, buying equipment and organising teleoperation teams,” said Poe Zhao, an independent China tech analyst and founder of Hello China Tech.

“But it also blurs the distinction between independent demand and demand created within a policy-supported ecosystem.”

Only a small share of the data is sold to non-robotics manufacturers such as carmakers for assembly line applications, training centre staff told the FT.

“This model can’t last,” said another investor. “If they fail to prove their robots can be deployed at scale on factory floors, investors will begin to reassess valuations over the next year.”

More than 90 training centres had been established or were being built across China by June, according to consultancy Interact Analysis. Leading centres said they generated more than 10mn data points a year.

Prices vary, but one seller told the FT that training data for a five-minute robot dance could cost as much as Rmb1mn ($148,000).

The training centre build-out is reshaping industry forecasts. Morgan Stanley raised its estimate for China’s humanoid robot shipments in 2026 to 50,000 units, from 28,000 in June, citing stronger than expected purchases by local governments and commercial users.

Supporters of the model argued it would help build up the country’s robotics industry and supply chain, noting the examples of electric vehicles and solar panels — sectors that China now dominates after government purchases drove initial demand.

For local governments, the model helps attract investment, talent and supply chains to areas where income from land sales has declined. Some training centres hire university students as robot trainers and offer paid tours for children and teenagers during school holidays.

For the robot makers and their suppliers, the training centres are a source of revenue amid limited commercial demand.

Shenzhen-based Leju Robot said training centres accounted for 45 per cent of sales of its flagship Kuavo humanoid last year, making them its largest revenue source.

UBTech disclosed Rmb140mn ($21mn) of orders from government-backed training centres last year. Although still lossmaking, the company said robot deliveries accounted for 41 per cent of its Rmb2bn revenue last year and expected government orders to drive further growth this year.

Almost three-quarters of Unitree’s humanoid robot revenue in the first nine months of 2025 came from users in the education and research sectors, including universities. Analysts said a relatively small proportion of shipments went to data collection centres.

Analysts said the close ties between local governments and robot makers made it difficult to distinguish genuine demand from policy-driven purchases.

“Companies like ours need revenue, not necessarily profits,” said an algorithm engineer at a Beijing-based company that sells software to robot makers. “The robot training centres can tell their superiors they’ve bought the equipment and robots, they’ve built data collection facilities and they’ve sold data.”

He added: “Both sides get what they need, and both sides have something to show.”

At Beijing’s largest robot training centre, where more than 100 Kuavo robots have been deployed, Leju owns almost 38 per cent of the operating company, according to registration records.

UBTech declined to comment. Leju and Unitree did not respond to requests for comment.

Another open question is whether the data generated justifies the investment.

Marco Wang, a Shanghai-based analyst at Interact Analysis, said training centre data was not going to be “100 per cent useful” because the robots were not deployed in real-world settings.

“The real-world application or real-world manufacturing line, real-world warehouse is always different from your scenario,” said Wang.

Analysts at Goldman Sachs said scarce high-quality, real-world data remained the biggest hurdle to widespread adoption.

A senior manager at a training centre in northern China said each robot maker’s data could only be used by that company, raising concerns about compatibility.

She added that on average, only two or three hours of data from an eight-hour training shift were actually usable.

“China often accepts duplication and failed projects in the early stages of a strategic industry,” said Hello China Tech’s Zhao.

“The expectation is that technical learning, stronger supply chains and a handful of globally competitive companies may justify losses elsewhere.”