TheChek News Flow

On Tuesday night, Elon Musk gathered the employees of xAI for an all-hands meeting. Evidently, he wanted to talk about the future of his AI company, and specifically, how it relates to the moon.

According to The New York Times, which reports that it heard the meeting, Musk told employees that xAI needs a lunar manufacturing facility, a factory on the moon that will build AI satellites and fling them into space via a giant catapult. “You have to go to the moon,” he said, per the Times. The move, he explained, will help xAI harness more computing power than any rival. “It’s difficult to imagine what an intelligence of that scale would think about,” he added, “but it’s going to be incredibly exciting to see it happen.”

What Musk didn’t appear to address clearly was how any of this would be built, or how he plans to reorganize the newly merged xAI-SpaceX entity that is simultaneously careening toward a potentially historic IPO. He did acknowledge, proudly, that the company is in flux. “If you’re moving faster than anyone else in any given technology arena, you will be the leader,” he told employees, per the Times, “and xAI is moving faster than any other company — no one’s even close.” He added that “when this happens, there’s some people who are better suited for the early stages of a company and less suited for the later stages.”

It isn’t clear what prompted the all-hands, but the timing, whatever its cause, is at least curious. On Monday night, xAI co-founder Tony Wu announced he was leaving. Less than a day later, another xAI co-founder, Jimmy Ba, who reported directly to Musk, said he was bouncing, too. That brings the total to six of xAI’s 12 founding members who have now left the young company. The splits have all been described as copacetic, and with a SpaceX IPO reportedly targeting a $1.5 trillion valuation coming as soon as this summer, everyone involved stands to do very well financially on their way out the door.

The moon itself is a more recent preoccupation. For most of SpaceX’s 24-year existence, Mars was the end game. This past Sunday, just before the Super Bowl, Musk surprised many, posting that SpaceX had “shifted focus to building a self-growing city on the Moon,” arguing that a Mars colony would take “20+ years.” The moon, he said, could get there in half the time.

It’s a pretty big change in direction for a company that has never sent a mission to the moon.

Rationally or otherwise, investors do seem considerably more excited about data centers in orbit than about colonies on other planets. (Even for the most patient money in the room, that’s a long timeline.) But to at least one venture backer in xAI who talked with this editor last year, the lunar ambitions have nothing to do with Wall Street and aren’t a distraction from xAI’s core mission; they’re inseparable from it.

The theory, laid out by the VC at the time, is that Musk has been building toward a single goal from the beginning: the world’s most powerful world model, an AI trained not just on text and images but on proprietary real-world data that no competitor can replicate. Tesla contributes energy systems and road topology. Neuralink offers a window into the brain. SpaceX provides physics and orbital mechanics. The Boring Company adds some subsurface data. Add a moon factory to the mix and you start to see the outline of something very powerful.

Whether that vision is achievable is a very big question. Another is whether it is legal. Under the 1967 Outer Space Treaty, no nation — and by extension, no company — can claim sovereignty over the moon. But a 2015 U.S. law opened a significant loophole — while you can’t own the moon, you can own whatever you extract from it. As Mary-Jane Rubenstein, a professor of science and technology studies at Wesleyan University, explained to TechCrunch last month, the distinction is somewhat illusory. “It’s more like saying you can’t own the house, but you can have the floorboards and the beams,” she said. “Because the stuff that is in the moon is the moon.”

That legal framework is the scaffolding on which Musk’s moon ambitions apparently rest, even as not everyone has agreed to play by those rules (China and Russia certainly have not). Meanwhile, as the team that was supposed to help him get there keeps getting smaller, it isn’t clear who will be helping him on this adventure or whether, more immediately, his newest all-hands answered more questions than it raised.

Time for Ozempic to walk the plank?

Top dietitians in Australia this week are waving a red flag about an unforeseen impact of the GLP-1 class of weight-loss drugs, including Ozempic, Wegovy and Mounjaro.

In a new systematic review of existing research, led by professor Clare Collins of the Newcastle School of Health Sciences in New South Wales, Australia, it appears that very few global trials of the drugs have taken into consideration what and how much patients are eating while using them.

This, experts have said, means many patients have been functionally malnourished — sometimes developing serious vitamin deficiencies like scurvy.

Part of what makes these drugs so effective for weight loss and diabetes management is their ability to suppress appetite. But not eating, or not eating enough of the right stuff, is simply not a sustainable path forward for anyone, regardless of whether or not they’re using a GLP-1. And dietitians are calling for more oversight.

“A reduction in body weight does not automatically mean the person is well-nourished or healthy,” Collins told the Australian Financial Review. “Nutrition plays a critical role in health and right now it’s largely missing from the evidence.”

One high-profile case of scurvy arose last year, when British pop singer Robbie Williams was diagnosed with what he called a “17th century pirate disease.” He had been open about his use of injectable weight loss medication for years, and has also spoken anecdotally about its potential connection to his degrading eyesight.

While scurvy — a vitamin C deficiency that can be deadly if untreated — posed a regular threat to sea-farers of yore, these days, it’s quite rare, especially in the US, UK and Australia, where nutrient-dense diets are common.

But now, Collins told the AFP that she’s heard of several doctors reporting cases of scurvy. “Let’s not wait for every GP to see a case of scurvy, let’s get on the front foot and link these GP chronic management plans to a dietitian referral,” she said.

According to the AFP, use of a GLP-1 has also in rare cases been linked to thiamine deficiency, which can cause neurological and cardiovascular disease.

Only two of the more than 40 studies Collins and her team analyzed for this report — spanning controlled trials of weight-loss drugs that involved more than 50,000 participants over the course of 17 years — actually measured patients’ diets. This concerned her.

“Only one [trial] had published what people ate. We wrote to all the authors, and got data from one more trial. This is being missed,” she said. “It does not give you an opportunity on how it might impact their dietary intake. We know there are a lot of side effects. For such an expense it is a marked miss.”

In addition to common side effects like nausea and dizziness, other potentially serious GLP-1 side effects have come to light in recent months, from eating disorders to certain rare cancers.

Don’t toss all weight-loss drugs overboard just yet, though. Ozempic and Wegovy, brand names for semaglutide, still have their benefits on a case-by-case basis, and more research is regularly coming out about the best applications for the drugs.

Some longevity doctors are even pointing to microdoses of semaglutide as a potential anti-aging tool, citing decreased risk of heart attack, stroke and metabolic complications.

In 2024, the National Institute of Health released a poll showing that 12% of US adults had used a GLP-1. Among adults with diabetes, the number more than doubled, according to the CDC.

With stats like that, these drugs aren’t going anywhere soon. But without strong dietary guidance and support, more patients will feel marooned by their providers.

Dietitians Australia chief executive Magriet Raxworthy told the AFP that personalized medical nutrition therapy from a dietitian is essential for GLP-1-users to prevent more cases of scurvy and other severe complications.

Without it, “people may struggle to meet their nutritional needs and can be placed at risk of significant muscle loss, bone density loss, micronutrient deficiencies and disordered eating behaviors,” she said.

“In this case, it’s clear — medication alone does not deliver sustainable health outcomes.”

Hedging, not betting, on sports via prediction markets

Sports betting has propelled the prediction markets to new heights. The latest proof: The contract on which team would win Super Bowl LX drew some $500 million worth of bets on Kalshi alone. (That led to big losers, too.)

But Kalshi is also seeking to show that its platform goes beyond betting on the outcome of sports games and other events. One of those uses is hedging business risks, as a new partnership is expected to underscore, Michael de la Merced is first to report.

Kalshi is now working with Game Point Capital, an insurance company that helps college athletics departments, sports teams and sponsors to manage the financial risks of performance incentives in athletes’ and coaches’ contracts.

Game Point Capital has historically worked with traditional insurers to hedge its contracts, first through Lloyd’s of London, the big insurance market, and then through American providers. But starting this past weekend, the firm began hedging through Kalshi as well. It expects to hedge about $30 million annually through the prediction market.

Kalshi estimates that the global sports insurance market at about $9 billion annually, a number it expects to grow — and hopes to capture a bigger piece of it.

“We want to offer the most efficient pricing for teams and other clients,” Will Hall, a co-founder and the C.E.O. of Game Point Capital, told DealBook.

He was introduced to Kalshi by a friend about a month ago, and was drawn to the prediction market’s claims that it could offer more transparent pricing than traditional sports books.

In some instances, Hall said, “it might make more sense to hedge through Kalshi than through traditional channels, which might come with additional costs and fees.”

How it works: Companies like Game Point Capital can use Kalshi’s “request for quotation,” a system for soliciting bids for particular contracts. Market makers on the platform can then find counterparties, helping build up volume.

Adequate liquidity is paramount for making hedging work, Hall said. (That said, Game Point Capital also expects to continue hedging through traditional insurers.)

Kalshi wants to expand this business. It has been building up a team to focus on sports hedging, and is expected to hire an executive to lead the unit, a spokeswoman told DealBook.

Commerce Secretary Howard Lutnick and Casey Wasserman, the entertainment mogul, are among those facing blowback amid the release of files related to Jeffrey Epstein.

Andrew here. There’s more fallout from the Epstein files, with pressure growing on Commerce Secretary Howard Lutnick and Casey Wasserman, the entertainment mogul, among others.

We also take a look at the web of venture capitalists backing SpaceX (and xAI and X). And we’ve got an exclusive on how some companies are using prediction markets to hedge their business risks, and the implications of that.

More Epstein files fallout

The Justice Department’s release of files related to Jeffrey Epstein, the convicted sex offender, continues to rock the halls of power. (Adding to the fire was Ghislaine Maxwell, Epstein’s longtime associate, refusing on Monday to answer questions before the House Oversight Committee.)

The latest Epstein revelations have sent shock waves through Hollywood, Washington, Europe and the Middle East, and even briefly jolted Britain’s gilt and foreign exchange markets.

Among those facing blowback over the latest revelations:

Howard Lutnick: More prominent Republican and Democrat lawmakers have called on the commerce secretary to resign over new details showing that he had more extensive ties to Epstein than he had previously let on.

“Lutnick has no business being our commerce secretary, and he should resign immediately,” Senator Adam Schiff, Democrat of California, said in a statement released on Monday. Representative James Comer of Kentucky, a Republican and the chairman of the House Oversight Committee, didn’t rule out issuing a subpoena to compel Lutnick to testify before Congress.

Casey Wasserman. Pressure on the longtime sports and entertainment mogul has ramped up since decades-old flirtatious messages between him and Maxwell emerged. On Monday, Chappell Roan, the Grammy-winning pop star, said she had cut ties with Wasserman’s talent agency, while other artists have pushed him to leave. A group of music agents at the firm have demanded Wasserman’s resignation, The Wrap reported, citing unnamed sources.

Wasserman also remains under pressure to step down from LA28, the Los Angeles Olympic organizing committee, though he appears to have the support of the International Olympic Committee.

Keir Starmer. The British prime minister appeared to have staved off a mutiny by members of the Labour Party on Monday over his appointing Peter Mandelson, a senior British politician who had ties to Epstein, as Britain’s ambassador to the U.S.

Two aides to Starmer have resigned in recent days, including his chief of staff. Many political observers remain pessimistic about Starmer’s political survival: The odds on Kalshi, a prediction market, suggest he has a 65 percent chance of losing his job by Sept. 1.

Sultan Ahmed bin Sulayem. Ties between the powerful Emirati businessman and Epstein emerged late last year in a previous Justice Department release. But details from the latest release added more context, including efforts to broker deals for each other and crude discussions of women.

More revelations could yet emerge. A small, bipartisan group of lawmakers on Monday reviewed unredacted versions of the Justice Department’s Epstein files. Some of them criticized some of the department’s redactions; two of them — Representative Thomas Massie, Republican of Kentucky, and Representative Ro Khanna, Democrat of California — threatened to reveal the names of six men in particular.

London-based Olix targets development of AI chips that are faster and cheaper than Nvidia’s

A 25-year-old British entrepreneur has raised $220mn for a secretive UK semiconductor start-up aiming to build AI chips that are faster and cheaper than Nvidia’s.

London-based Olix, launched in 2024 by James Dacombe, has quickly attracted a total of $250mn in financing from investors including Plural, Vertex Ventures, LocalGlobe and Entrepreneurs First.

Olix’s latest $220mn funding round was led by London-based Hummingbird Ventures, valuing the start-up at just over $1bn, according to documents seen by the FT. Hummingbird has previously backed fintechs Kraken and Revolut and food-delivery app Deliveroo.

Rather than challenging Nvidia on existing AI workloads, Olix is developing a novel approach to AI chip design that targets the growing demand for AI “inference”.

The latest AI agents, such as Anthropic’s Claude Code and other AI tools that can “reason” or undertake deeper research before responding to users, consume much more computing resources than earlier generations of chatbots such as ChatGPT or Copilot.

Many chip start-ups have tried to take on Nvidia’s dominance in AI infrastructure by adapting the Big Tech company’s graphics processing unit architecture, a descendant of its origins in video games 30 years ago.

But Olix says it is building a “new class of accelerator” designed for high performance that is “free from the architectural and supply chain constraints” of today’s AI processors, according to its website.

The company says it is developing an optical digital processor with a “novel memory and interconnect architecture” that will still be compatible with existing AI models.

“One of the biggest constraints in AI today is the compute required to run these models at scale,” said Jonathan Heiliger, general partner at Vertex Ventures, a former Facebook infrastructure executive.

“Today’s GPU-based approach forces a compromise between speed and cost,” he added. “Olix is taking a radically different approach designed to deliver a step change in both and it has huge promise.”

Olix, which until recently was named Flux Computing, hopes to deliver its first products to customers as soon as next year, according to people familiar with the matter. The start-up declined to comment on its fundraising.

No start-up has yet succeeded in significantly loosening Nvidia’s grip on the AI market. But Nvidia’s recent deal with start-up rival Groq, which brought in one of the original founders of Google’s AI chip programme, has helped to reignite investor interest in a category long written off as too risky and capital intensive.

“AI inference demands a ground-up reconsideration” of how chips are built, said Heiliger, who previously helped launch Meta’s Open Compute Project. “This magnitude of systems-level rearchitecting is brutally hard and James and team are executing faster than companies with 10 times their resources.”

Dacombe is also chief executive of brain monitoring start-up CoMind which he founded when he was a teenager and has raised $100mn in funding.

Some UK-based investors hope that Olix can give Britain a stronger foothold in a booming AI infrastructure market that is dominated by US players.

However, UK financing for chip companies still trails far behind Silicon Valley. California-based Cerebras last week announced a new $1bn fundraise, valuing it at $23bn. D-Matrix, another Silicon Valley chip start-up targeting the AI inference market, has raised $450mn to date.

Chip designer Arm is headquartered in Cambridge but majority owned by Japan’s SoftBank, which also acquired Bristol-based AI chipmaker Graphcore in 2024.

Fractile, another British AI chip start-up, said on Tuesday that it planned to invest £100mn to expand its facilities in London and Bristol over the coming years.

The commitment was announced in a speech by the UK government’s AI minister Kanishka Narayan, who urged British tech entrepreneurs and investors to “embrace risk” and back “homegrown” innovation.

BP is not getting enough credit for its turnaround 

UK oil major’s valuation as a multiple of expected ebitda is lower than its European peers and the gap is widening

Errant schoolchildren will know the feeling. Even when they make an effort to mend their ways, they are regarded with wary suspicion. So it is with BP. However much the beleaguered UK oil major seems to have improved, investors seemingly remain lukewarm over its turnaround strategy.

BP’s shares fell 6.5 per cent on Tuesday after it axed its share buyback programme amid lower oil prices. Others have done this without such opprobrium. When French rival TotalEnergies announced a reduction in share buybacks last year, it was met with little more than a shrug by the market.

True, BP has stopped purchasing its own stock rather than trimming the amount. And investors may have been disappointed by the fact that, despite the group spending less on returns to shareholders, it did not dial down its estimate of the amount of net debt it expects to have in 2027. But while painful, conserving cash is the right thing to do for the company, which is relatively highly leveraged.

BP shares have mostly kept pace with European peers Shell, Total and Italy’s Eni since last summer, yet its valuation as a multiple of expected ebitda is lower than theirs and the gap has widened.

That’s despite the fact that BP looks better placed now than it did then, thanks in no small part to its largest discovery in 25 years off the coast of Brazil. The giant Bumerangue field contains an estimated 8bn barrels of liquids, says the group. Citigroup analysts reckon the net present value of this asset alone could be as much as $15-20bn — significant for a company with almost $160bn of enterprise value. BP could raise money by selling a share of that asset, given how bad the industry as a whole has been at finding new oilfields.

On top of that, BP has made decent progress in its asset-shedding programme, closing a deal to sell 65 per cent of its US lubricants business Castrol to Stonepeak for a net cash inflow of about $6bn. Its governance has been spruced up, too: new chief executive Meg O’Neill joins on April 1, and new chair Albert Manifold was appointed at the end of July.

True, BP is nowhere near the top of its set. Its debt including leases and hybrid bonds is relatively high. Following the suspension of its buyback, cash returns to shareholders — in the form of its dividend — will be 5.7 per cent of its market value, according to Berenberg analysts. Clawing itself back into investors’ good books is a hard slog. Still, BP is actually trying. It deserves to cast off its image as the class miscreant.

Europe’s haves and have-nots

For European AI and defence start-ups, venture capital funding is coming fast and furious.

Last year total European VC investment rose 5 per cent to €66bn, a post-pandemic high, according to PitchBook.

And several companies in those sectors are in talks to raise fresh funding at sharply higher valuations, the FT reports.

Among them are Swedish legal AI start-up Legora, which is in talks to raise funding at about a $4bn valuation, more than doubling its $1.8bn valuation reached last October, said people familiar with the matter.

In the defence tech sector, Munich-based satellite launcher Isar Aerospace, which is valued at $1bn, is discussing raising significant new funds.

While defence deals are rapidly on the rise, AI has been the main driver of activity.

AI-related deals last year accounted for more than 35 per cent of all European venture capital transactions, worth €23.5bn. That marked an increase from €17.7bn for such deals in 2024.

“The market has clearly decided that AI is the future,” said Matt Miller, the founder and managing partner of Evantic Capital. “Companies that are doing the playbook from 10 years ago are just not interesting.”

Defence and AI groups are benefitting from a push by European officials to increase their tech and security independence.

European start-ups focused on defence and related technologies had investment soar 55 per cent year on year to a record $8.7bn in 2025, according to the Nato Innovation Fund and research group Dealroom.

“The sovereignty tailwind is not to be underestimated,” said Siraj Khaliq, a senior adviser at the €1bn European deep-tech fund Kembara.

Is Andrea Pignataro the next Patrick Drahi?

Software groups have been the biggest losers in global markets this year, as investors fear new AI tools will upend the sector.

Highly levered software businesses, which aggressive sponsors bought with other people’s money, have been hit hardest by the sell-off.

Their lenders — concerned that AI’s disruption could leave them on the hook for steep losses — are dumping investments quickly, causing bond and loan prices around the world to plummet.

In Europe, one junk bond issuer has borne quite a bit of the pain. It’s owned by a secretive Italian bond maven billionaire whose fintech empire underpins vital parts of trading of shares, debt and derivatives across the globe.

Andrea Pignataro, a maths wiz turned Salomon Brothers bond trader, launched Ion Group in 1999 before embarking on a two-decade-long debt-fuelled acquisition spree that has turned him into one of Italy’s richest men.

But in recent weeks credit investors have been dumping bonds issued by Ion, a roll-up of financial data companies including Mergermarket, Fidessa and Dealogic, as AI fears have swept across markets.

It has not helped Pignataro that he’s drawing comparisons to fellow European junk debt royalty Patrick Drahi, owner of the heavily indebted telecoms group Altice. For its part Ion is more than eight times levered with a $13bn debt pile. About $2.5bn of Ion’s financing is made of private credit at its holding company.

Drahi, a Franco-Israeli billionaire, is known for using aggressive tactics against creditors when finances are stretched. It’s a playbook that much of Europe’s high-yield market believes Pignataro would be willing to deploy.

As investors have sold out of Ion its bond prices have crashed, meaning some of its debt now pays a yield of more than 10 per cent.

The investors that dumped Ion’s debt will be feeling lucky. Some of their counterparts — higher up in Ion’s capital structure and further afield — don’t have that luxury.

Meanwhile, the AI threat trade is spreading across Wall Street.

Among the losers are also listed private credit funds that have built a large concentration of software company bets.

Shares of Blue Owl Technology Finance Corp, which has more than half of its loan book exposed to software companies, according to Barclays, had fallen about 11 per cent from the beginning of the year as of noon on Monday. 

Financial data groups FactSet, S&P Global, Morningstar and the London Stock Exchange Group have also fallen sharply this year, while ratings agency Moody’s plunged on Tuesday.

DD reckons that while many investors are surely feeling the pain, the stock plunges are also allowing PE investors to ready new investments given the industry’s hundreds of billions of dollars in so-called dry powder.

Debt of Ion Group’s fintech empire has tumbled in price, leaving some bonds yielding more than 10%

Billionaire Andrea Pignataro’s heavily indebted fintech empire is under increasing pressure in credit markets, as concerns over AI’s impact on software companies hit one of Europe’s largest sellers of junk bonds.

The sell-off in bonds issued by Ion Group, a debt-fuelled roll-up of financial data companies including Mergermarket, Fidessa and Dealogic, has accelerated in the past week, wiping hundreds of millions of dollars from the market value of a more than $10bn debt stack. Ion’s holding company has another $2.5bn of private debt.

Some of the group’s debt has tumbled in price, with one bond falling to 86 cents on the euro on Tuesday from about 96 cents in mid-January. The price drop means that some of Ion’s debt now comes with a yield of more than 10 per cent.

Pignataro’s woes have drawn parallels with Patrick Drahi, the Franco-Israeli entrepreneur who has repeatedly battled with creditors amid strains at his debt-laden telecoms empire.

“Ion is over eight times levered, has a Drahi-like sponsor and is cutting costs aggressively . . . and AI means the tech is much more replaceable,” said one high-yield bond trader.

As well as selling Ion’s debt, hedge funds have racked up bets that the group will fail to meet its repayment obligations, resulting in short positions against almost 15 per cent of one Ion bond, according to S&P data.

Ion did not immediately respond to a request for comment.

Concerns have risen in the past week over the potential impact of AI on software and financial data businesses, as investors worry that new coding tools, such as those released by AI group Anthropic in recent weeks, will disrupt their business models.

Ion’s sell-off comes after a number of Europe’s largest issuers of high-yield debt, including part of Drahi’s Altice empire and Paul Coulson’s Ardagh, came under pressure as interest rates rose following the Covid-19 pandemic. This forced some of them to reach restructuring deals with creditors after months of tough negotiations. 

Ion, founded by the former Salomon Brothers bond trader in 1999, grew rapidly in the past two decades through a series of acquisitions financed by cheap debt during the era of low interest rates. Pignataro’s ownership of the group has made him one of Italy’s richest men and one of the largest players in Europe’s market for junk debt.

But investors have become increasingly worried about Ion’s indebtedness, particularly in a higher interest-rate environment.

Ion’s leverage — its ratio of net debt to earnings before interest, tax, depreciation and amortisation — has risen to more than eight times, as Pignataro continued his buying spree. He acquired Italy’s Cerved, a credit rating and financial analysis agency, for more than €2bn in 2021, then in 2024 Ion bought Prelios SpA, an Italian alternative asset manager and real estate services provider, for €1.35bn.

As it acquired more businesses, Ion became known for aggressively cutting costs.

Last year, it completed a $7bn refinancing, replacing debt issued by several different entities with newly issued bonds and loans consolidated between co-borrowers Ion Platform Finance US and Ion Platform Finance SARL.

“That deal was never loved when it came, and failed to trade meaningfully above par,” said one high-yield credit investor. “Now Ion is in the crosshairs of a software disruption, on top of its higher leverage.”