TheChek News Flow

War, huh, yeah, whom is it good for?

European manufacturing looks broadly miserable — expensive energy, China pressure, legacy sectors fading — and yet, in places, it’s never had it so good.

Europe’s industrial base is having a bit of a split-screen moment. On one side: chemicals, metals and other energy-guzzling stalwarts. All are still reeling from high gas prices and now staring down another squeeze as oil and natural gas jump on the back of the war in the Middle East.

On the other: weapons, planes and anything with a defence budget attached. These are quietly (or not so quietly) booming.

The latest Eurostat data captures the divergence neatly. Eurozone industrial production fell 1.2 per cent year on year in January, with chemical output down a chunky 6.6 per cent. Meanwhile, production of weapons and ammunition jumped 31 per cent to a record high.

Germany tells the same story, just with more angst. Overall manufacturing output shrank 1.6 per cent on the year to January and was no bigger than it was in 2010. But weapons production? Up 78 per cent to levels never experienced before.

Monthly data are noisy, but the direction of travel is becoming clearer: wars and successive shocks are reshaping Europe's industrial mix. Defence-linked sectors are thriving; energy-intensive ones are not.

And the latest Middle East shock risks entrenching that divide. As Oxford Economics’ Sean Metcalfe puts it, a prolonged conflict could “reinforce” the trends already in play. Read: more pain for chemicals and friends.

There are pockets of lift elsewhere. Aerospace is having a moment, with eurozone output up 15 per cent on the year to January and posting double-digit growth in most recent months; the UK is tagging along at a respectable 7 per cent. Defence spending helps, obviously. (The UK does not report on the production of weapons and ammunition.)

Zoom out, and the backdrop is hardly subtle. Europe faces its most acute security challenge in decades, from Russia’s war in Ukraine to a US that looks increasingly unwilling to provide Europe’s military security and shows conflicting interests with the old continent in the Middle East. Rearmament is no longer theoretical.

Metcalfe expects the defence to become a “very important driver of industrial performance” in Europe, with effects rippling through supply chains into areas such as metal products, aerospace and certain types of transport equipment.

The companies are already obliging. Hensoldt, a German multinational corporation focusing on sensor technologies in the defence, security and aerospace sectors, reported a 62 per cent increase in order intake to a record high in the 2025 financial year, alongside rising revenues and profitability.

“The geopolitical situation is forcing Europe to sustainably strengthen its defence capabilities,” said Oliver Dörre, CEO at Hensoldt, noting faster and more concrete procurement decisions.

Italy-based aerospace, defence and security company Leonardo plans to hire 28,000 people to reach a workforce of 75,500 by 2030, after recruiting 20,000 between 2023 and 2023 as it reported double-digit growth rates in new orders, revenues and profits in 2025. Sales have nearly doubled since 2021 at Swedish aerospace and defence company Saab.

Elsewhere, it’s a different story. As ING’s Edse Dantuma notes, Europe is where the macro hit “lands hardest”, with industry taking it on the chin at precisely the wrong time. The usual suspects — chemicals, basic metals, plastics, paper — sit top of the vulnerability list.

Some of the pain is delayed. Hedging means not every factory feels higher gas prices immediately. Oil, though, feeds through faster — via fuel, transport, and everything that depends on them.

And this is landing on an already weakened base. In January, chemical production was no larger than it was a decade ago in the UK, and was down 27 per cent from its 2022 peak in the Eurozone.

Steve Elliott, chief executive of the UK-based Chemical Industries Association, said that many chemical factories closed over the last four years, due to “uncompetitive energy costs,” which were already four times higher than those faced by competitors in countries such as the US.

“What is happening as a result of the international conflict adds significantly to that.”

There are a few other bright spots. Pharma is doing well (helped, yes, by weight-loss drugs), and food and drink remain relatively resilient, cushioned by domestic demand and intra-European trade.

But elsewhere, it’s tougher going. Cars and machinery are under pressure from Chinese competition, with eurozone vehicle output still 31 per cent below its 2017 peak. Textiles and leather continue their slow fade.

The bigger risk is that this divergence doesn’t stay neatly contained. Persistent disruption to energy markets could push up inflation and weigh on business confidence across the board, hitting sectors from construction to furniture.

Meanwhile, the war in Iran adds urgency to Europe’s rearmament push.

“We think defence-facing sectors will outperform in Europe this year,” said Metcalfe.

Inside Meta, a Rogue AI Agent Triggers Security Alert

The Takeaway

A Meta spokesperson confirmed the incident, while adding that “no user data was mishandled” as a result of it. The episode underscores the growing risks of giving AI agents access to internal systems.

According to internal Meta communications and an incident report seen by The Information, the episode occurred last week after a Meta software engineer used an in-house agent tool, similar to OpenClaw, to analyze a technical question that another Meta employee had posted on an internal discussion forum. After doing the analysis, the AI agent posted a response in the discussion forum to the original question, offering advice on the technical issue, according to internal communications. The agent did so without approval from the employee.

The second employee then acted upon that advice, triggering a chain of events that ultimately led to a critical security incident.

For nearly two hours, Meta systems storing large amounts of company and user-related data were accessible to engineers who didn’t have permission to do so last week, according to the incident report. So far, there’s no sign that anyone took advantage of the temporary access or made the data public, according to a person familiar with the matter.

Still, Meta ultimately classified the incident as a Sev 1, the second-highest level of severity on an internal scale that Meta uses to rank security incidents, according to the report. The employee involved in the incident noted in an internal post that additional unspecified issues also contributed to the severity of the incident.

The episode highlights how quickly small missteps involving AI systems can escalate into significant security risks. Earlier this year, the open source agent tool OpenClaw took the world by storm when techies began using it to automate basic functions, such as sending emails, operating websites and organizing files on their computers. Unlike traditional assistants, OpenClaw is designed to carry out multi-step tasks on its own and in the background, operating continuously across systems without constant supervision.

However, that same autonomy introduces new risks. In February, Summer Yue, director of safety and alignment at Meta’s AI division, described a troubling experience involving an OpenClaw agent in a viral post on X. Yue said she had asked the agent to review her personal email inbox and suggest what to delete or archive, with clear instructions to “confirm before acting.” Despite that instruction, the agent began deleting emails on its own.

Yue said she repeatedly told the agent to stop, but it ignored her commands and continued its actions. Unable to intervene from her phone, she ultimately had to rush to another device to halt the process. “I had to run to my Mac mini like I was defusing a bomb,” she wrote.

Other tech companies have encountered related issues as well. Amazon Web Services, for example, experienced a 13-hour outage of a cost calculator tool in December after agent-assisted coding changes. While the company said the issue was limited in scope—affecting only a single service in parts of China and not broader customer-facing systems—it still highlights how automated systems can introduce instability when safeguards fall short. And in China, authorities and state-run companies have cautioned staff not to install OpenClaw agents on workplace devices due to security concerns.

In the Meta security incident last week, there is perhaps one consolation: The misbehaving AI agent does not appear to have disguised itself as a human being. According to a Meta spokesperson, the post by the agent was labeled at the bottom of the message as being AI-generated.

Still, the Meta engineer who originally asked the agent to analyze the technical issue raised by the second employee proposed taking steps to avoid similar mishaps. In a post after the security incident, she suggested requiring agents to request explicit permission before taking actions on behalf of users and more clearly labeling whether responses in company discussion forums are generated by an AI or a human.

Tehran vowed to retaliate against Gulf energy sites after its South Pars gasfield was hit

Iran has inflicted “extensive damage” to the site of the world’s largest liquefied natural gas facility in Qatar, after vowing retaliation for an earlier attack on its South Pars gas field.

State-owned QatarEnergy said there had been missile attacks on Ras Laffan, which had previously been shut down by an Iranian drone strike in the first week of the US and Israel’s war against the Islamic republic.

“Emergency teams were deployed immediately to contain the resulting fires, as extensive damage has been caused,” QatarEnergy said in a post on X on Wednesday.

Iran had vowed to retaliate against oil and gas facilities across the Gulf after the attack on South Pars, part of the world’s largest gasfield and the backbone of the Islamic republic’s domestic energy system. 

The assault, which Iranian officials warned would trigger a significant escalation of the conflict, was the first against Iranian energy production facilities since the US and Israel launched their war on February 28, and also targeted petrochemical facilities fed by the field, Iranian state media said.

Oil and gas prices jumped earlier on Wednesday as Iran’s Revolutionary Guards warned it would strike some of the biggest energy facilities across the region, including Ras Laffan as well as facilities in the United Arab Emirates and Saudi Arabia’s Samref refinery on the Red Sea.

Saudi Arabia’s defence ministry said it had intercepted drones and ballistic missiles in its oil-rich Eastern Province, as well as four ballistic missiles launched towards the capital Riyadh.

Brent crude oil rose more than 5 per cent to hit nearly $109 a barrel, its highest level since March 9, before falling back to around $107, while European gas prices jumped 5 per cent to €53 per MWh.

The attack on South Pars is the first time that Iran’s gas production has been targeted. Iranian state media has previously reported that the facilities provide more than two-thirds of the country’s domestic gas.

Iran blamed the attack on “enemies” and vowed to retaliate against US-linked energy targets. Neither the US nor Israel immediately claimed responsibility for the attack, and both countries declined to comment.

A former Iranian oil official said the war is now in the “beginning of a far more dangerous phase” and added that Iran “will level” Qatar’s gas platforms “to the ground if Iran’s main refineries are hit”.

Iranian officials said four parts of the South Pars gas processing facilities were struck and were forced offline “in order to control and prevent the spread of fire”, but the full extent of the damage was not immediately clear.

No deaths were reported in the attack. 

Qatar and the UAE condemned the attack on South Pars, with Doha describing it as “dangerous” and “irresponsible”. The UAE “stressed the need to avoid targeting vital facilities under any circumstances”.

South Pars is part of the world’s largest natural gasfield and is an extension of Qatar’s North Field, which before the conflict had helped turn Doha into one of the world’s largest LNH suppliers. Qatar had already suspended exports because of an Iranian drone attack.

Torbjorn Soltvedt, associate director at risk agency Verisk Maplecroft, said the attack on the gasfield reinforced his view that the war “will most likely extend into May, with no immediate clear off-ramps in view”.

Iraq, which relies on imports of Iranian gas for electricity generation, said that flows from Iran had stopped completely on Wednesday afternoon and warned that it would “affect the grid”. 

The war has already caused a huge disruption to energy supplies, with traffic in the Strait of Hormuz grinding to a near halt after Iran struck a number of vessels.

Normally about 20 per cent of the world’s oil and LNG passes through the narrow chokepoint each day, and some Asian countries are facing potential shortages or rationing.

US President Donald Trump, who made keeping energy prices low a key pitch to voters, has authorised the release of strategic oil reserves in co-ordination with other International Energy Agency members in a bid to keep prices down.

But the risk of a prolonged disruption or widening attacks on energy infrastructure could drive oil and gas prices even higher.

Richard Bronze, head of geopolitics at Energy Aspects, said that attacking gas production may be an attempt to destabilise Iran internally.

He added that this effort, combined with the US bombing Iran’s coastline on Tuesday night, is “likely making traders realise the conflict can last for longer and the risk of damage to infrastructure is growing”.

The governor of Iran’s gas and petrochemical hub of Assaluyeh, which is fed by South Pars, said the strikes meant “the pendulum of war has swung” to a “full-scale economic war”.

“Energy security in the region has reached the point of zero,” Eskandar Pasalar said in comments in state media.

Iran has struck energy facilities across the Gulf during the war, including hitting refineries in the UAE and Saudi Arabia and targeted oil and gasfields in both countries.

Unilever and Kraft Heinz held talks over food merger uniting ketchup and mayo

Exploration of deal worth tens of billions of dollars reflects struggle of both companies to combat subdued demand

Kraft Heinz and Unilever recently held talks on a megamerger of their food brands that would have brought Heinz ketchup and Hellmann’s mayonnaise together under the same roof, as the consumer goods giants struggle to reshape their portfolios to cater to shifting tastes.

The discussions between the companies in recent months, which have now ended, were over a merger of Unilever’s food business and Kraft Heinz’s condiments division, according to people familiar with the talks.

A combination would have created a new entity worth tens of billions of dollars.

The exploration of a merger underscores the extent to which both Kraft Heinz and Unilever are struggling against subdued demand from increasingly health-conscious consumers, who are shifting their spending away from packaged food brands.

Over the past decade Unilever has gradually pivoted away from food towards beauty and personal care brands. The FTSE 100 group, which still owns Marmite and Knorr, has carved out its spreads, tea and ice cream divisions.

Unilever’s new chief executive Fernando Fernández did not rule out the possibility of disposing of the Anglo-Dutch company’s entire food business when questioned on his intentions in December. The company is in the process of selling up to $1bn worth of smaller food brands, leaving Hellman’s and Knorr making up around 75 per cent of the division.

Jefferies analysts estimate the value of a standalone Unilever food business at $36-37bn, representing an enterprise value-to-ebitda multiple of 9.5 times.

Kraft Heinz, which has struggled since a landmark merger orchestrated by Warren Buffett and 3G Capital a decade ago, is also in the midst of its own strategy shift.

The talks with Unilever took place ahead of the US company’s decision in February to halt a planned break-up and commit to invest $600mn behind a turnaround under chief Steve Cahillane, who joined in January.

The proposed split would have separated its slower growth grocery-store staples, such as Oscar Mayer meats and Lunchables meal kits, from its faster-growing sauces, spreads and seasonings business, which houses Heinz ketchup and Philadelphia cheese. Kraft Heinz also sells mayonnaise under both the Kraft and Heinz brands.

Cahillane said in February that he was focused on returning Kraft Heinz to organic growth, which would give the business a broader range of options to reshape its portfolio next year.

As consumers move away from processed foods or trade down to supermarket own brands, consumer groups are attempting to reorient themselves around faster-growing businesses.

Unilever last year spun off its ice cream division into a standalone entity and acquired faster-growing brands, such as men’s grooming brand Dr Squatch.

Unilever declined to comment. Kraft Heinz did not immediately respond to requests for comment.

Advanced Navigation builds artificial intelligence-assisted hardware that provides accurate location data

An Australian startup that helps aircraft, ships and other vehicles navigate GPS dead zones has raised $110 million, hitting Silicon Valley’s prized unicorn status as it seeks to accelerate growth in the U.S. and Europe.

Advanced Navigation builds artificial intelligence-assisted hardware that provides accurate location data including in areas where GPS is deliberately jammed, unreliable, or otherwise unavailable.

GPS—short for Global Positioning System—has long had dead spots, but its reliability has been further eroded by the emergence of cheap handheld devices that can drown out the satellite signals upon which it relies.

So-called jamming has been commonplace along the Russia-Ukraine border over recent years, and now the Strait of Hormuz, through which 20% of the world’s oil is transported, is besieged by such electronic attacks.

Sydney-based Advanced Navigation seeks to avoid attacks by eschewing GPS entirely. Its bespoke units are packed with sensors that detect acceleration, velocity, and other variables. AI-powered software then combines and cross-checks data to provide an accurate location.

These so-called inertial navigation units, which range from the size of a matchbox to that of a Kleenex box, can be made for use in the air, on land, underground or underwater. Boeing, Airbus, and iron-ore miner BHP are already customers.

Advanced Navigation, which was already backed by KKR & Co., now wants to scale production and marketing in response to growing demand, Chief Executive Chris Shaw said.

The company completed its latest funding round this month at a valuation of more than $1 billion, Shaw said.

“It’s not just for defense use. You’ve got all these oil tankers and everything getting lost in the strait because Iran and other people are jamming GPS in that region,” Shaw said.

Against that backdrop, there is plenty of competition among companies trying to develop affordable and reliable GPS alternatives.

U.S.-listed Honeywell Systems is spinning off its aerospace unit into a separate division, while France’s Safran has sold its navigation technology to customers including Finland’s defense forces.

California-based Anello Photonics is working on microchip-sized inertial-navigation devices. Alphabet spinoff SandboxAQ and Australia’s DeteQt are developing systems based on measurement of magnetic anomalies in the Earth.

“Geopolitical factors are really driving a lot of growth in our industry,” Shaw said.

Advanced Navigation expects to make more than $100 million in sales this year and is cash-flow positive, Shaw said. The company was generating about $60 million in revenue when it last raised capital in 2022.

The latest Series C round was led by Australia’s AirTree Ventures, which previously backed local startups including visual-design platform Canva. Australia’s sovereign National Reconstruction Fund contributed $35 million.

AirTree’s investment was the third largest by the $460 million growth fund that closed last year, Partner Kelland Reilly said.

Advanced Navigation’s cash-flow profile, presence in defense markets, and customer book had all become more attractive since it last raised capital, he said. Its valuation has doubled since then.

“They’ve really got the who’s who list of customers that are buying the product. They’re having a lot of success against some very large legacy companies, like a Honeywell or a Safran, who have been incumbents in this space,” Reilly said.

Neither Honeywell or Safran responded to requests for comment.

Advanced Navigation has deployed more than 100,000 of its systems and generates about 50% of its revenue in the U.S. About 30% comes from Europe, and the remainder from Asia-Pacific.

Former Australian Prime Minister Malcolm Turnbull chairs Advanced Navigation’s board, while former Central Intelligence Agency Director and KKR Partner David Petraeus advises on strategy, Shaw said.

“Over the last couple of years, our performance advantage over our competition has actually increased,” Shaw said. “We’re able to beat them in their home markets, which I think is a good sign.”

Advanced Navigation has plans for a base in Huntsville, Alabama, that it expects will improve its chances of successfully pitching to security conscious customers who want to deal with U.S.-based companies.

“This will open up doors,” Shaw said.

Stone Ridge pays investors 11% of what they requested to cash out

A fund holding consumer and small-business loans made by companies including Affirm and Block is the latest corner of the private-credit market to come under stress.

Stone Ridge Asset Management told clients in the fund last week that recent redemption requests were so high that it would honor only 11% of the amount investors wanted back, according to an investor update viewed by The Wall Street Journal.

That suggests that investors’ concerns about private credit are broadening. Unlike other private-credit funds that experienced a flight of investors in recent weeks, Stone Ridge’s fund didn’t hold loans to software makers or other corporate sectors that investors fear will be displaced by advances in artificial intelligence.

The details

The Stone Ridge Alternative Lending Risk Premium Fund buys whole loans and securities backed by loans made by fintech lenders. That includes buy-now-pay-later loans from Affirm, personal loans from LendingClub and Upstart and loans that payments companies like Block and Stripe offer to merchants using their platforms.

LENDX, as the fund is also known, owned $2.4 billion of total assets at the end of November, and $1.6 billion of net assets.

LENDX is structured as an interval fund, meaning it must offer to repurchase at least 5% of shares outstanding each quarter. The shares don’t trade publicly, so investors who want to exit have to submit redemption requests to Stone Ridge during predetermined windows, the most recent of which ended on March 6.

Stone Ridge’s update didn’t include what percentage of overall LENDX shares investors wanted to redeem. Already, the firm offered in February to repurchase as much as 7% of its shares outstanding, with an option to buy back an additional 2% of shares if its offer was oversubscribed.

The context

With scores of investors wanting to cash out of private credit in recent weeks, fund managers have had to grapple with whether to relax their existing redemption limits.

Cliffwater, for instance, is paying out about 50% of redemptions requests it received at the Cliffwater Corporate Lending Fund.

With $31 billion of assets under management at the end of 2025, Stone Ridge is a smaller player in private credit. The firm also manages investments in fine art, energy, reinsurance risk and, through its NYDIG affiliate, bitcoin.

Ross Stevens is the founder of Stone Ridge and chief executive of its parent company. Stevens made headlines in January when he gave a record $100 million gift to the U.S. Olympic & Paralympic Committee that included $200,000 for each athlete competing in the Milan Cortina Games.

Industry under threat from fraudsters uploading and repeatedly playing tracks created by AI to extract royalties

French streaming service Deezer said streams of AI-generated music on its platform were dominated by fraudsters, who upload and then repeatedly listen to thousands of songs to generate royalty payments to the detriment of legitimate artists.

The Paris-listed group, which on Wednesday posted its first net profit since being founded almost two decades ago, said that fraudsters were responsible for more than 80 per cent of all streams of AI-generated music.

Every fraudulent stream only generates a small amount of money, but Deezer chief executive Alexis Lanternier said AI made it possible to rapidly create thousands of songs. These are then played by the perpetrator’s accounts to try and game algorithms that select tracks for playlists and recommendations for Deezer’s legitimate users.

The fraudsters “manage to get a few euros or dollars [per song] and then [by] the end of the month, they make real money,” said Lanternier.

The growing threat from AI fraud was highlighted by Victoria Oakley, chief executive of music association IFPI, at the launch of its global music report on Wednesday.

“This is theft . . . uploading tracks via distributors and deploying armies of bots to create artificial plays . . . [we are] working with law enforcement to prosecute these crimes,” said Oakley, who also called on the industry to do more to stop it.

While streams of AI-generated tracks comprise only about 3 per cent of the total on Deezer, 85 per cent of these are classed as fraudulent. By comparison, fraudulent plays across Deezer’s entire catalogue accounted for about 8 per cent of all streams in 2025, the company said.

A music industry executive said that they estimated songs created for fraudulent streaming accounted for around 5-10% of content across all streaming platforms. Tools including Suno and Udio can generate an entire song from a single prompt in a matter of seconds.

More than 13mn tracks were detected and tagged as being created by AI on Deezer in 2025. The rate of uploads is accelerating, with over 60,000 AI tracks now being added to its platform a day, equal to about 39 per cent of the daily intake.

When tracks are detected as fraudulent they are removed from the royalty pool, which is shared among all artists and songwriters on Deezer’s platform.

Lanternier said Deezer did not know the identity of the fraudsters and that it was focusing on AI detection to determine which tracks were made legitimately with AI tools.

In results published after market close on Wednesday, the French streamer said that revenues fell 1.4 per cent to €534mn for the full year. 

Full-year adjusted earnings before interest, tax, depreciation and amortisation were €10mn — from a €4mn loss the previous year. Net income for the company was €9mn, the first positive result since Deezer was founded in 2007. Lanternier said this was “obviously an exciting achievement, although you would say it’s a bit late”.

The group’s main shareholders include Sir Leonard Blavatnik’s Access Industries, French telecoms group Orange and the Pinault family.

Deezer, which competes with larger rivals such as Spotify and Apple Music, counts France and Brazil as its largest markets. It offers its streaming services in more than 180 countries to consumers and acts as a “white label” provider of streaming platforms to companies.