TheChek News Flow

As the health benefits of anti-obesity medicines widen, pharma companies need to rethink what they charge

From amphetamines to slimming pills, there is a long history of weight-loss drug crazes that ended in disappointment, or worse. Until anti-obesity medicines such as Wegovy and Zepbound, none of them had started out promisingly and then produced better and broader results.

It is surprising, but studies of the health impact of the new generation of weight drugs have steadily brought more encouraging news. One published this week found that patients who took Novo Nordisk’s Wegovy sustained weight loss for up to four years. It builds on data from last November showing the drug reduced the risks of heart attacks and death.

Health systems are waking up to the full potential of medicines that were first developed to address diabetes: Eli Lilly’s Zepbound anti-obesity injectable was only approved in the US last year. “These drugs are doing more than just one thing and producing benefits across a range of diseases,” Naveed Sattar, a Glasgow University professor who chairs the UK government’s Obesity Mission, tells me.

Other companies are playing catch-up with the leaders in the field, while they advance: Novo Nordisk is trialling its compounds to see if they can reduce alcohol intake and alcoholic liver disease. The reasons to remain cautious over safety and whether these drugs improve health as well as promoting weight loss, which I wrote about last July, are diminishing.

But everything comes at a price, and the one attached to the GLP-1 agonist drugs is enormous. Indeed, the more effective they turn out to be in treating a variety of chronic and life-shortening ailments, the higher the looming costs to health insurers and governments. Battles about the prices of innovative drugs are nothing new, but this one is on another financial scale.

The drugs are now testing the rule that no product can be too successful. If they were as cheap and convenient as blood pressure pills and statins, they might soon be routinely prescribed. But they are far from it: Wegovy’s list price in the US is $15,600 per year, although insurers obtain discounts. There is a widening gulf between benefit and affordability.

Bernie Sanders, the democratic socialist US senator, this week released a study that claimed these drugs had “the potential to bankrupt Medicare, Medicaid and the entire [US] healthcare system”. He wants Novo Nordisk to reduce the US price of Wegovy to the much lower one in Denmark but, even there, the government only provides limited coverage for severe obesity.

It was easier for governments and insurers to hold the financial line before studies showed benefits beyond simply curbing obesity. But the US Food and Drug Administration approved Wegovy for heart disease risk in March, opening coverage for older Americans under Medicare. If it does what trials show, cost alone may become the chief obstacle to mass adoption.

Still, the fact that something is useful does not make it worth the price. It is extremely valuable to an individual to avoid a heart attack that debilitates or kills them, but that does not mean a government should provide the same treatment more widely to limit the risk to millions of people. There is a hard financial calculation to be made.

Drugs such as Wegovy and Zepbound fail the latter test at their current US prices, says Jonathan Gruber, economics professor at the Massachusetts Institute of Technology. A healthcare system can save money with drugs that prevent disease, but “the bottom line is that the savings are not enough to justify anything near the price”, he says.

Very large numbers accumulate on both sides of the calculation. The potential cost of prescribing such drugs to all obese Americans could exceed $1tn, Gruber has estimated. Yet obesity also has high costs, not just to healthcare systems but to societies and economies. Being overweight can make it more difficult for people to work, and add to the burden of social care.

There are sound reasons for optimism: the tensions are, after all, produced by the fact that the drugs seem to be very effective. Sattar believes they could not only contribute to raising workforce productivity, but address conditions from kidney disease to dementia, if current progress continues. “There is a sweet spot in the future where they will become cost effective,” he says.

So far, the companies leading the field have enjoyed amazing success: Goldman Sachs predicts that the global market for these medicines will grow to $100bn or more by 2030. But very high drug prices are usually justified by their research costs having to be spread over a limited set of potential patients. In this case, the target population could be more than 1bn people.

The question is not whether something has to give on anti-obesity drugs, but how soon it happens. Novo Nordisk has cut its prices in response to Eli Lilly’s and has talked of innovative deals to spread costs over years, matching long-term health benefits. The elite pricing model with which it started is being overtaken by events.

Jan Leike’s exit from ChatGPT maker is the latest sign of internal divisions over technology’s development

OpenAI’s top safety leaders left the company this week after disagreement over whether to prioritise “shiny products” or safety reached “breaking point”, says one of the departing researchers.

Jan Leike, who led OpenAI’s efforts to steer and control super-powerful AI tools, said he quit on Thursday after clashing with his bosses about the amount of time and resources the start-up is putting into those efforts.

“Over the past years, safety culture and processes have taken a back seat to shiny products,” wrote Leike in a post on social media site X on Friday.

OpenAI has been the frontrunner in a fierce race to build evermore powerful models, competing with rivals including Google, Meta and Anthropic to push the frontiers of AI technology.

The company has raised billions of dollars — including $13bn from Microsoft — to build AI models that can interpret text, speech and images and can demonstrate reasoning abilities. The pace of those advances has stoked concerns about everything from the spread of disinformation to the existential risk should AI tools “go rogue”.

Leike, one of OpenAI’s most highly regarded researchers, left alongside Ilya Sutskever, the company’s co-founder and co-lead of the safety-focused “superalignment team”, who announced his resignation earlier this week.

That in effect disbands the team at OpenAI most explicitly focused on ensuring its technology is developed safely. It has also exposed a growing tension at the heart of the company between capitalising on an early lead in AI and abiding by its core mission of ensuring super-powerful AI “benefits all humanity”.

“We urgently need to figure out how to steer and control AI systems much smarter than us,” Leike wrote. “I joined because I thought OpenAI would be the best place in the world to do this research. However, I have been disagreeing with OpenAI leadership about the company’s core priorities for quite some time, until we finally reached a breaking point.”

Sam Altman, OpenAI’s chief executive, wrote on X that he was “very sad to see [Leike] leave. He’s right we have a lot more to do; we are committed to doing it.”

Concerns over safety were also a factor in November’s boardroom drama at OpenAI, during which Altman as ousted by directors — including Sutskever — only to return four days later. Before he was sacked, Altman had clashed with then-board member Helen Toner, who compared OpenAI’s approach to safety to that of rival Anthropic in a way Altman felt was unfavourable to his company.

OpenAI launched its superalignment team last year, saying it was designed to address concerns superintelligent machines “could lead to the disempowerment of humanity or even human extinction”. At the time, the company suggested AI could outsmart humans within the decade. In the months since, the start-up has been behind a number of major advances.

The company committed to allocate 20 per cent of its computing resources to support the team’s work ensuring AI would align to human interests even as it became exponentially more powerful.

But Leike said not enough attention had been given to the safety and societal impact of more powerful models: “These problems are quite hard to get right, and I am concerned we aren’t on a trajectory to get there.”

The superalignment team struggled to access computing resources which were being sucked into developing new models for consumers such as GPT-4o, OpenAI’s latest model released on Monday, Leike said.

“Over the past few months my team has been sailing against the wind. Sometimes we were struggling for compute and it was getting harder and harder to get this crucial research done,” he wrote.

Regulator has requested detailed plans from lenders including Italy’s UniCredit and Austria’s Raiffeisen

The European Central Bank has told all Eurozone lenders with operations in Russia to speed up their withdrawal plans because of fears they could be hit by US punitive measures.

The ECB has written to lenders in recent weeks asking for detailed plans on their exit strategies, according to several people with knowledge of the communication. Lenders need to provide the regulator with an “action plan” for their Russian business as early as June, some of the people said.

Last week, Austria’s Raiffeisen Bank International was forced to abandon a deal to swap assets in Russia for ones in Europe after pressure from US authorities. The US intervention has led to concern at the ECB that RBI and other lenders could be targeted in future crackdowns.

“This could lead to serious damage to the banking system if the US authorities take sanctions,” said a person briefed on the ECB’s position.

The letters underline the increasing pressure from Washington over European groups that might support Russia’s war in Ukraine more than two years after the invasion.

“The ECB’s response to the US interventions shows the big dependency of Europe on the US,” said an adviser to the banks with Russian subsidiaries. “We are more followers than leaders on judgments involving European companies.”

The US Treasury did not immediately respond to a request for comment.

The person briefed on the ECB’s position said supervisors there wanted to avoid European banks facing a similar fate as ABLV, a Latvian bank that was shut down after the US Treasury department accused it of “institutionalised money laundering” as well as breaches of North Korean sanctions and cut off its access to the US financial system in 2018.  

The letters from the ECB have been written with different levels of severity depending on how advanced each bank is in pulling out of Russia, according to people with knowledge of their contents. The central bank has been calling on Eurozone banks to look for an exit from Russia since Moscow launched its full-scale invasion of Ukraine in February 2022.

At one extreme, RBI, which has the biggest exposure to Russia among the European lenders, has been told to reduce its lending in the country by two-thirds from its current level by 2026. The bank, which faces potential fines by the ECB if it fails to comply, has already shrunk its Russian loan book by 56 per cent since the war began. 

Meanwhile, other banks including Italy’s UniCredit — the lender with the second-biggest exposure — have been asked to provide the ECB with a detailed breakdown of their plans for their operations. UniCredit has been given a deadline of June 1 to respond. The ECB declined to comment.

UniCredit and OTP — the Hungarian bank that is not under direct supervision of the ECB — have in the past year started to repatriate profits from their Russian subsidiaries in the form of quarterly dividend payments.

According to people with knowledge of how the repatriation system works, the banks were required to make a request to Russian authorities, which allowed the payments of up to half their subsidiaries’ net profits, as long as they paid local taxes.

Last year, UniCredit received €137mn from its Russian subsidiary, while OTP received €135mn. UniCredit declined to comment. OTP said the repatriated dividends were part of its efforts to reduce its presence in Russia.

RBI’s stranded profits were originally intended to be repatriated as part of its planned €1.5bn asset swap deal, according to a person briefed on Russia’s decision-making. The bank abandoned the deal this month after the US Treasury warned the lender that it risked being cut off from the US financial system if it went ahead.

The Vienna-based lender said it had not taken a dividend from its Russian division “since the start of the war” and did not expect to be able to do so in the future. 

“To receive a dividend, the Russian authorities were very clear: commit to remaining in the market, meet business targets, and dividends can be distributed . . . we have been reducing business substantially and are actively looking to sell. This of course is contrary to committing to remain in the market,” they said. 

US authorities are also concerned about recent reports by the Financial Times of Raiffeisen’s expansion in Russia. The bank posted 2,400 job ads between December and mid-April, many of which stated the bank was looking to grow in the country.

EXCLUSIF - La 7e fortune française est en pleine restructuration de son domaine viticole bourguignon. Le milliardaire François Pinault négocie pour reprendre le Château de Puligny-Montrachet et pourrait revendre une quarantaine d’hectares provenant de la maison Bouchard Père & Fils.

Pour la Saint-Vincent Tournante, François Pinault et sa famille ont gardé porte close les 27 et 28 janvier derniers. Alors que la fête viticole se tenait pour sa 80e édition à Morey-Saint-Denis, où il possède le fameux Clos de Tart, le milliardaire n’a pas participé aux festivités. Prudence et discrétion. Il faut dire que la 7e fortune française au classement Challenges fait ces derniers mois l’objet de toutes les attentions du petit milieu du vignoble bourguignon. Depuis un an et demi, François Pinault a en effet lancé des grandes manœuvres en Bourgogne.

Fin 2022, il a mis la main sur la maison Bouchard Père & Fils, vieille de 300 ans et à la tête d’un des plus vastes domaines viticoles bourguignons, via une fusion avec les anciens propriétaires (la famille Henriot). Cinq mois plus tard, il a revendu les champagnes Henriot au groupe Nicolas Feuillatte, puis, début janvier 2024, les 70 hectares du domaine William Fèvre autour de Chablis aux Domaines Barons de Rothschild (Lafite).

Le Château de Puligny-Montrachet en ligne de mire

Et ce n’est pas fini. Selon nos informations, Artémis Domaines, la filiale viticole de la société patrimoniale de la famille Pinault, serait en négociation avec Etienne de Montille, descendant d’une célèbre famille bourguignonne remontant au XVIIe siècle, pour racheter le Château de Puligny-Montrachet en Côte de Beaune. « Nous confirmons un intérêt pour les biens immobiliers du Château de Puligny-Montrachet, précise Artémis Domaines à Challenges. Il s’agirait d’une acquisition du bien immobilier et non pas du domaine viticole. »

Sur le fond, ce rachat s’inscrirait dans la volonté du milliardaire de toujours mieux valoriser ses vins les plus haut de gamme. « L’objectif serait de regrouper au Château de Puligny-Montrachet la vinification des vins blancs, grands crus et premiers crus, de la Côte de Beaune et de les commercialiser sous cette marque, confie un connaisseur du dossier. Tandis que les rouges, hormis ceux du Clos de Tart, seraient rassemblés sous le nom Domaine d’Eugénie, racheté en 2006 à la famille Engel et situé à Vosne-Romanée. »

Vente de 40 hectares à venir

Cette concentration sur les crus les plus prestigieux pourrait d’ailleurs conduire la famille Pinault à vendre encore d’autres parcelles tombées dans son giron à la faveur de la prise de contrôle de la maison Bouchard Père & Fils. Sur les 130 hectares en Côte-d’Or, elle pourrait ainsi ne conserver que les 12 hectares de grands crus et 74 hectares de premiers crus, et céder la quarantaine d’hectares restante. La société Artémis Domaines dément toutefois qu’il y aurait des discussions déjà engagées concernant de telles cessions.

Une vente à la découpe permettrait de contenter les viticulteurs locaux, mais la famille Boisset, déjà propriétaire de 153 hectares en Côte-d’Or et de la marque Bouchard Aîné & Fils, pourrait être intéressée par l’ensemble. « Pour les Pinault, cette vente d’un bloc serait idéale, relève un observateur. Mais encore faut-il se mettre d’accord sur le prix. » De quoi s’assécher le gosier.

UK water companies embrace PFI to deliver £14bn of infrastructure

Ofwat encourages debt-laden utilities to set up entities to deliver reservoirs and pipelines

Britain’s debt-laden water utilities are being encouraged by the regulator to set up new privately financed companies to deliver billions of pounds worth of critical infrastructure such as reservoirs, treatment works and pipelines, which will be paid for through customer bills.

United Utilities — the water company that came under fire this week over sewage spills at Windermere — is seeking investors for an estimated £1.75bn project to replace the ageing Haweswater Aqueduct; a 110km pipeline in north-west England that was built in the 1950s and provides about a third of the water supply in Manchester, Lancashire and Cumbria.

It is one example of a model pushed by the sector watchdog, Ofwat, known as “direct procurement for customers” (DPC). The regulator argues that the model — which involves regulated water companies creating off-balance sheet special purpose vehicles backed by private investors — will encourage competition to deliver much-needed water infrastructure across the country. Some £14bn of projects are earmarked to use the model over the next decade.

Funds backing the SPVs receive returns in exchange for financing, designing, building, operating and maintaining infrastructure on contracts lasting 20 to 35 years or more. The costs will be paid for by customers through their bills — either during or after construction, depending on the scheme — with the project returning to the water company when the private finance initiative (PFI) expires.

Although Ofwat argues that the creation of separately privately financed vehicles will lower costs, the additional charges involved in DPC schemes are likely to concern consumers who are already expecting steep increases to bills over the next five years.

Water companies are already the subject of political scrutiny and public anger after a series of service and pollution failures. The woes of Thames Water, the UK’s biggest water provider, has also put the utilities’ finances under the microscope. Water companies are under fire for paying out £78bn in dividends while racking up £64bn in debt in the 32 years between privatisation from 1991 to March 2023, according to research by the Financial Times.

Dieter Helm, professor of economic policy at Oxford university, said that although there were merits in the use of DPC schemes to improve infrastructure, their use was in part a result of “Ofwat’s failure to stop the balance sheets of the utilities being misused for financial engineering”.

“Now they need more private balance sheets from DPC to fill the gaps,” he added.

“The longer-term risk is that the DPCs will fragment the system further as, unlike the usual contracts the water companies enter into, DPC means that the utilities no longer retain control of the asset or are responsible for maintenance,” Helm said.

Ofwat said, “The DPC model is not just about financing. It improves competitive processes for complex infrastructure projects, promotes innovation by bringing in fresh ideas and widens the pool of potential investors, all of which provide better value for customers. As regards control of assets, it is a licence requirement for a company to have sufficient control of its assets and the DPC model does not change this.”

The impact on customer bills for United Utilities’ Haweswater scheme, for instance, is not yet known, according to the company, which this week said its annual profit after tax fell by 38 per cent to £126.9mn. The utility is expecting to pick the winning consortium early next year and for work to start soon after. The investors will set up the SPV that will design, build and maintain the pipeline on a 33-year contract.

Southern Water is also consulting on plans for a £459mn water recycling project that would be delivered under the DPC scheme. The company has already asked for the steepest bill increase in the country: a rise of 74 per cent that would see bills rise to about £727 a year by 2029-30 before inflation.

If approved, construction on the Hampshire Water Transfer and Water Recycling Project is expected to start in 2028 with the new system operational by 2034.

Rob Stewart, director of capital delivery at Southern Water, said the project will “help protect Hampshire’s rare and sensitive chalk streams and keep taps and rivers flowing for many generations to come”.

Welsh Water was also using the DPC to build a new treatment works that will replace three that were built in the 1900s and were “reaching the end of their operational lives and becoming increasingly difficult to maintain”, the company said. It is at the early planning stage, with proposals to be put to the public later this year.

Ofwat has refined the DPC model following the implementation of PFI deals such as the Thames Tideway Tunnel, London’s new “super sewer” that is expected to be operational next year. Thames Water customers pay for the tunnel through a surcharge on their bills — currently £26 per household per year — even though it is owned by a discrete company set up by the utility and the government.

The watchdog argues that consumers benefit from DPC projects because the regional water monopolies — all of which are privatised in England and Wales — will have to compete for their large infrastructure programmes.

“We see this offers a significant opportunity for investors and supply chain to participate in a forward capital programme,” Ofwat said in a note to investors in 2022. “The water sector has a strong track record for long term stable returns and a revenue stream underpinned by regulated revenues payable by customers and therefore is an attractive proposition to investors.”

As well as DPC schemes, Ofwat is also encouraging companies to launch projects based on the model used by the Thames Tideway Tunnel. The “specified infrastructure provider model” differs from DPCs in that the SPV used would have their own licence and be regulated directly by Ofwat.

The model was for projects with size, risk and complexity so large that it could threaten the financial survival of the existing debt-laden water company, Ofwat said. It is being considered by Thames Water for the new Abingdon reservoir, for example.

Other innovative models to deliver new infrastructure are already under way. They include a project by Southern Water and Portsmouth Water to deliver a new £340mn reservoir in Hampshire, the first in 29 years. Costs will be recovered through Southern Water customers’ drinking-water bills from 2029-30 initially at about £17 per property per year, Southern Water said.

There is still scepticism over whether the private finance models will ultimately help fix the UK’s water problems, or whether they are simply storing up problems for the future.

Ofwat has “allowed water companies to create these overcomplicated, debt-laden financial structures already and now they are going to add to that mess by setting up even more companies with completely clean balance sheets that will soon be laden with debt”, said Feargal Sharkey, a water campaigner. “Ultimately it’s always customers who pay the costs.”

Google and OpenAI unveiled new tools to bring ‘intelligent systems’ a step closer. Will this be a milestone for generative AI?

At Google’s Mountain View headquarters this week, a man clad in a rainbow-hued dressing gown emerged from a giant coffee cup to give a vibrant if somewhat surreal demonstration of the company’s latest achievements in generative AI.

At the I/O event, electronic musician and YouTuber Marc Rebillet tinkered with an AI music tool that can generate synced tracks based on prompts like “viola” and “808 hip-hop beat”. The AI, he told developers, came up with ways to “fill in the sparser elements of my loops . . . It’s like having this weird friend that’s just like ‘try this, try that’.”

What Rebillet was describing is an AI assistant, a personalised bot that is supposed to help you work, create or communicate better, and interface with the digital world on your behalf. This new class of products has stolen the limelight this week among a flurry of new AI developments from Google and its AI division DeepMind, as well as Microsoft-backed OpenAI.

The companies simultaneously announced a series of upgraded AI tools that are “multimodal”, which means they can interpret voice, video, images and code in a single interface, and also carry out complex tasks like live translations or planning a family holiday.

In a video demonstration, Google’s prototype AI assistant Astra, powered by its Gemini model, responded to voice commands based on an analysis of what it sees through a phone camera or when using a pair of smart glasses.

It successfully identified sequences of code, suggested improvements to electrical circuit diagrams, recognised the King’s Cross area of London through the camera lens, and reminded the user where they had left their glasses.

Meanwhile, at OpenAI’s product launch on Monday, chief technology officer Mira Murati and her colleagues demonstrated how their new AI model, GPT4o, can perform voice translation in live conversation, and similarly interact with the user using an anthropomorphised tone and voice to parse text, images, video and code. “This is incredibly important because we’re looking at the future of interaction between ourselves and the machines,” Murati tells the FT.

While smart assistants powered by AI have been in train for nearly a decade, these latest advances allow for smoother and more rapid voice interactions, and superior levels of understanding thanks to the large language models (LLMs) that power new AI models. Now, a fresh scramble is under way among tech groups to bring so-called AI agents out to consumers.

These are best understood as “intelligent systems”, said Google chief executive Sundar Pichai this week, “that show reasoning, planning and memory, are able to ‘think’ multiple steps ahead, and work across software and systems, all to get something done on your behalf”.

As well as Google and OpenAI, Apple is expected to be a major player in this race. Industry insiders anticipate that a significant upgrade to Apple’s voice assistant, Siri, is on the horizon, as the company rolls out new AI chips, designed in-house and capable of powering generative models on-device.

Meta, meanwhile, has already launched an AI assistant on its platforms Facebook, Instagram and WhatsApp across more than a dozen countries in April. Start-ups like Rabbit and Humane are also attempting to enter the space by designing products that act as standalone AI helpers.

Although analysts point out that this week’s big announcements remained largely “vapourware” — concepts rather than real products — it is clear to industry watchers that AI assistants or agents will be key to bringing the latest AI technology to the masses.

“It’s unquestionable, this is the moment for personal [artificial] intelligence,” says Mustafa Suleyman, CEO of Microsoft AI, who was not involved with either release this week. Suleyman previously founded Inflection, a start-up building a consumer-focused AI assistant known as Pi, which he left in March.

“Silicon Valley has always framed tech as a functional utility — getting things done efficiently and fast. But it’s kind of incredible — these tools are now in the creative domain of the product makers,” he says. “The tech has matured enough that it’s a new kind of clay that we can all invent with and . . . we are seeing that coming to bear now.”

For nearly a decade, tech groups have been competing to bring AI to consumers through virtual assistants such as Apple’s Siri, Microsoft’s Cortana and Amazon’s Alexa, which is now embedded across a range of devices.

Google, for instance, unveiled an AI Assistant back in 2016, with Pichai painting a picture of a post-smartphone world where intelligence is embedded in everything from speakers to glasses.

But eight years on, the smartphone is still a primary consumer interface to the web. The big challenges to mass adoption have been latency, or slow responses from AI agents, as well as errors in their understanding and execution of human instructions and needs.

The emergence in 2017 of the technology at the core of chatbots like ChatGPT, Gemini and Claude, known as the transformer, has vastly improved technologies underpinning AI assistants, such as natural language processing.

But to build AI assistants that the public wants to use, “the killer feature is speed”, according to technology analyst Ben Thompson, who writes the influential industry newsletter Stratechery.

“When you cross the threshold of speed and latency, that’s when it’s fun. The delight . . . and playfulness when you’re getting that immediate feedback is so different than sitting around waiting . . . then it’s like a parlour trick,” he said on the podcast Sharp Tech this week.

Thompson said he had noticed this in the context of Google and its AI search mode, known as the Search Generative Experience, which provides AI-generated answers to queries, alongside the traditional list of links.

“It’s getting so fast and so consistent that I’m using it more, and frankly using ChatGPT less, not even on purpose,” he said. “Google knows this better than anyone — they know every millisecond makes a difference in how engaged people are.”

But OpenAI’s flagship bot is no slouch. A version of its GPT4o model was able to fluidly translate between Italian and English in real time conversation. The model also displayed a conversational, albeit slightly flirtatious tone when chatting with the male engineers on stage. With OpenAI “the real improvements are in the user experience and the actual ChatGPT product”, Thompson said. “That is what it takes to win in consumer [technology], to a much greater extent than enterprise.”

Waiting in the wings, however, is Apple. Investors have been eager to learn more about the company’s plans for AI, as its share price has declined this year compared with Alphabet and Amazon.

This week, OpenAI announced it had sealed a deal with Apple to create a desktop app for Macs. The iPhone maker is also said to be exploring further potential partnerships with both OpenAI and Google Gemini, while hiring experts and pushing out research papers that give a rare insight into its work behind the scenes building AI models.

Insiders say Apple’s advantage lies in its massive existing user base, with more than 2.2bn active devices around the world, which places it in a position to steer the process of how people integrate generative tools like virtual assistants into their daily lives.

Apple is likely to build out a “next level Siri technology” in partnership with OpenAI, predicts Wedbush analyst Dan Ives. An assistant capable of carrying out complex tasks for iPhone users could eventually be turned into a paid subscription service, he said in a note — similar to how the company currently monetises other services like iCloud.

After OpenAI’s demo on Monday, Bank of America analysts reiterated their buy rating on Apple stock, saying it underlined the potential that virtual assistants and AI features present for app developers in its App Store ecosystem, which already nets Apple between $6bn and $7bn from commission fees every quarter, according to Sensor Tower estimates.

Google’s edge, however, is in the suite of consumer apps it offers, from email to calendar tools, where AI agents could be integrated.

“We’ve always wanted to build a universal agent that will be useful in everyday life. Our work making this vision a reality goes back many, many years. It’s why we made [the chatbot] Gemini multimodal from the very beginning,” Demis Hassabis, CEO of Google DeepMind, told reporters this week.

“At any given moment, we are processing a stream of different sensory information, making sense of it and making decisions. Imagine agents that can see and hear what we do, better understand the context we’re in, and respond quickly in conversation, making the pace and quality of interaction feel much more natural.”

Despite the AI companies jostling to create consumer bots that can assist in day-to-day tasks, it might be some time before they become everyday reality.

The AI-generated creation of content is still in its infancy, and occasionally prone to errors and “hallucinations”, or the fabrication of false information. This could become a big problem if the assistant is completing work-related tasks where accuracy, rather than creativity, is crucial.

Scaling up is also a huge challenge, says Suleyman. “It’s a hypercompetitive market . . . distribution matters and brand matters — Apple and Google . . . have big advantages in that sense.”

Suleyman moved to Microsoft in March after his start-up Inflection pivoted from a consumer focus to an enterprise model. “[Pi] was a deeply engaged product but getting to major scale like Gemini is super challenging.”

But Bret Taylor, chair of OpenAI’s board, and the chief executive of a new AI agent start-up Sierra, says the displacement of existing consumer interfaces offered opportunities for a range of companies.

“In big tech shifts, start-ups can stand out and succeed because there’s not necessarily a market leader right now,” he says.

While the Big Tech companies and their partners might be best positioned to take advantage of the current moment, Meta’s chief AI scientist Yann LeCun says that they will need to open up their models to scale AI assistants beyond individual countries in the west.

“In the new future every single interaction with the digital world will be through an AI assistant of some kind. We will be talking to these AI assistants all the time. Our entire digital diet will be mediated by AI systems,” he said at a Meta event in London last month. “This can’t be done by companies on the west coast of the US. We need them to be diverse.”

Snowflake, the data storage and analytics company, is in talks with startup Reka AI over a possible acquisition, Bloomberg reported Thursday. A potential deal could value the AI upstart at over $1 billion as the publicly traded Snowflake looks to add more generative AI capabilities to its data offerings.

Reka AI, which develops large language models for a range of creative and enterprise tasks, was valued at $300 million post-money after its $50 million Series A round backed by DST Global and Snowflake’s venture arm.

Snowflake declined The Information’s request to comment, and Reka AI did not immediately respond.

Competition has been heating up between Snowflake and its privately-held rival Databricks. Databricks has been on an acquisition spree since last year, acquiring more than half a dozen companies, including generative AI startup MosaicML for $1.3 billion last year, according to data firm PitchBook.

In the last 18 months, Snowflake has made at least eight acquisitions, including the $185 million takeover of Neeva, the private search engine company founded by Sridhar Ramaswamy, who formerly led Google’s advertising division. Ramaswamy, originally Snowflake’s head of AI, became CEO in February, replacing Frank Slootman, who steered the startup to become a publicly traded company.

Apple is developing a significantly thinner version of the iPhone that could be released as early as 2025, according to three people with direct knowledge of the project.

The slimmer iPhone could be released concurrently with the iPhone 17, expected in September 2025, according to the three people with direct knowledge and two others familiar with the project. It could be priced higher than the iPhone Pro Max, currently Apple’s most expensive model starting at $1,200, they said.

The Takeaway

• Apple is developing a thinner version of the iPhone that could be released as early as 2025

• It could be priced higher than the iPhone Pro Max, Apple’s most expensive model starting at $1,200

• Apple plans to drop the iPhone Plus, a less-expensive model with a large screen, after this year

The people familiar with the project described the new iPhone, internally code-named D23, as a major redesign—similar to the iPhone X, which Apple marketed as a technological leap from previous generations and which started at $1,000 when it was released in 2017. Several of its novel features, such as FaceID, the OLED screen and glass back, became standard in subsequent models.

Apple is still testing different designs for the slimmer phone, which could include an aluminum chassis and a smaller hole and pill-shaped cutout for its front-facing camera and sensors, one person with direct knowledge of the matter said. The phone will include Apple’s latest-generation processor, likely called the A19, and could have an improved front camera for video calls and selfies. The screen will measure somewhere between the 6.12-inch diagonal display of the standard iPhone and the 6.69-inch display of the iPhone Pro Max, the person added. The rear cameras could be relocated from the upper-left corner of the phone’s back to the top center as part of the redesign, another person with direct knowledge said.

Some details of a new, slimmer iPhone were first mentioned in a research note last week by Jeff Pu, an analyst at Hong Kong investment bank Haitong Securities. Ross Young, CEO at Display Supply Chain Consultants, later said on X that this model would have a 6.55-inch display, which would make it slightly smaller than the iPhone Pro Max.

Apple is grappling with a decline in iPhone sales, which fell 11% in the most recent quarter ending in March when compared with the same period a year earlier. The shrinking sales come amid rising competition in China from local smartphone brands such as Huawei and a global economic slowdown, which has hurt consumer spending. The iPhone 16 models to be released this fall are expected to lean heavily on new artificial intelligence software features but will largely retain the same physical design as previous models.

In recent years, Apple has released four iPhone models. It plans to drop the iPhone Plus, one of its less-expensive models, which has a large screen but lacks the latest-generation processors and cameras, in 2025, three people said. The Plus, which debuted with the iPhone 14 and will still be part of the iPhone 16 lineup this year, has sold below expectations, they said.

An Apple spokesperson declined to comment.

The slimmer iPhone planned for next year could rejuvenate interest in the product, giving consumers a reason to upgrade their devices. Since the release of the iPhone 12 in 2020, Apple has been criticized for making only incremental changes to the iPhone’s design each year. In 2022, for example, Eve Jobs, daughter of Apple’s late co-founder, Steve Jobs, drew media attention after she poked fun at the iPhone 14 on Instagram for being nearly identical in design to the iPhone 13.

Last week, Apple unveiled its thinnest product to date, a new version of the iPad that is 5.1 millimeters thick, roughly equal to the thickness of five stacked credit cards. By comparison, the iPhone 15 is 7.8 millimeters thick. Apple later apologized for an ad promoting the new iPad that featured a hydraulic press crushing musical instruments and other objects; the ad offended many viewers.

People familiar with Apple’s iPhone road map for the next two years said the lineup calls for the release of four iPhone 16 models this year—internally code-named D47, D48, D93 and D94. Those models will have a new button on the side with a touch sensor that will give users better control of the cameras, The Information previously reported. Apple also plans to release a cheaper iPhone that is a successor to the iPhone SE—internally code-named V59—in the spring of 2025, largely based on the physical design of the standard iPhone 14, according to two people familiar with the project.

The ranking also showed that Mike Ashley's fortune shrank by 41 million pounds, while James Dyson's net worth dropped a whopping 2.2 billion pounds.

LONDON — Few can withstand a subpar global retail climate, as the Sunday Times on Friday released its annual Rich List, showing that several major U.K.-based players in the retail and fashion sector saw their net worth shrink by billions of pounds in the past 12 months.

Power couple François-Henri Pinault and Salma Hayek’s estimated net worth shrank by 1.9 billion pounds to 6.14 billion pounds, compared to the last time the British newspaper carried out a calculation of their wealth.

Pinault’s investment in CAA via his family-holding company Artémis also raised eyebrows among analysts, said The Sunday Times, as they questioned whether moving into talent management is a distraction from Kering’s core business of fashion.

Another fashion power couple, David and Victoria Beckham, meanwhile, saw their estimated net worth rise by 30 million pounds.

According to Forbes, the decision by Lionel Messi to sign last year with the Inter Miami football team, part-owned by the British football star, sent the value of the club soaring to $1 billion.

Authentic Brands, a global brand owner, development and entertainment company, also paid 200 million pounds for a 55 percent stake in DB Ventures, David Beckham’s brand management firm, in 2022. The deal is thought to have netted him 160 million pounds in cash, plus stock in Authentic currently worth about 80 million pounds.

Victoria Beckham’s own fashion business has improved in profitability as well. The latest figures from Victoria Beckham Holdings showed revenues increased 44 percent to 58.8 million pounds in 2022. Operating losses in the period were reduced from 3.9 million pounds to 0.9 million pounds, year-over-year.

James Dyson and his family, the maker of luxury hairdryers, fans and vacuums, registered a 2.2 billion pound decline in their net worth, according to the Sunday Times estimations. That said, he is still the fifth richest man in the U.K., with an estimated fortune of 20.8 billion pounds.

The Westons, who sold Selfridges Group to Central and Signa in 2021, saw a slip of 7 million pounds in their estimated net worth. The family ranks ninth in the 2024 Rich List with an estimated net worth of 14.493 billion pounds.

The Sunday Times said the transatlantic dynasty still owns the fast fashion chain Primark, the Heal’s chain of furniture stores, and Wittington Investments, which is nearly 80 percent owned by the Garfield Weston Foundation — a trust managing 13.16 billion pounds worth of assets — as well as their 63 percent stake, worth 8.9 billion pounds, in their original Canadian business George Weston, which encompasses retail and real estate interests, including Loblaw supermarkets and Shoppers Drug Mart pharmacies.

Controversial retail magnate Mike Ashley’s net worth dropped by 41 million pounds to 3.799 billion pounds, ranking 49th on the Rich List.

His company Frasers Group last year acquired upmarket retailer Matches at a knockdown price just before Christmas in a deal valued at 52 million pounds and has since repurchased the retailer’s intellectual property. He’s licensed it back to the administrators, Teneo, as they attempt to clear the final stock from Matches’ three London stores and warehouse.

The estimated net worth of River Island owner Bernard Lewis and family logged a 20 million pound increase to 2.711 billion pounds on the Rich List, while Bestseller and Asos owner Anders Holch Povlsen saw his estimated net worth decrease by 1.77 billion pounds to 6.73 billion.

Launched in 1989, the Sunday Times Rich List tracks the minimum wealth of the 350 richest people or families who live and work in Britain.

It considers identifiable wealth, whether land, property, racehorses, art, or significant shares in publicly quoted companies. Private bank accounts and small shareholdings in a private equity portfolio are excluded from the calculation.