TheChek News Flow

Joining from Valentino, De Sarno's first collection will bow in Milan in September.

MILAN – Mystery solved. On Saturday morning, Kering and Gucci announced that Sabato De Sarno is the Italian brand’s new creative director, succeeding Alessandro Michele who exited last November.

His first show will bow in September during Milan Fashion Week.

De Sarno, who will report to president and CEO Marco Bizzarri, was raised in Naples, began his career at Prada in 2005, moving to Dolce & Gabbana, before joining Valentino in 2009, where he held positions of increasing responsibility, finally being appointed fashion director overseeing both men’s and women’s collections.

“I am delighted that Sabato will join Gucci as the House’s new creative director, one of the most influential roles in the luxury industry,” said Bizzarri. “Having worked with a number of Italy’s most renowned luxury fashion houses, he brings with him a vast and relevant experience. I am certain that through Sabato’s deep understanding and appreciation for Gucci’s unique legacy, he will lead our creative teams with a distinctive vision that will help write this exciting next chapter, reinforcing the House’s fashion authority while capitalizing on its rich heritage.”

François-Henri Pinault, chairman and CEO of Kering, said: “One hundred and two years after Guccio Gucci opened his first store in Florence, Gucci remains one of the most iconic, prominent and influential luxury houses in the world. With Sabato De Sarno at the creative helm, we are confident that the House will continue both to influence fashion and culture through highly desirable products and collections, and to bring a singular and contemporary perspective to modern luxury.”

“I am deeply honored to take on the role as Creative Director of Gucci. I am proud to join a House with such an extraordinary history and heritage, that over the years has been able to welcome and cherish values I believe in. I am touched and excited to contribute my creative vision for the brand,” said De Sarno.

The Valentino fashion director will present his first collection for Gucci in Milan in September.

Gucci has named Sabato De Sarno, a close associate of Valentino designer Pierpaolo Piccioli, its new creative director. He will present his first collection for Gucci in September, the brand said in a statement.

Rome-based De Sarno joined Valentino in 2009 after holding roles at Prada and Dolce & Gabbana. Since rising to the role of Valentino’s fashion director, overseeing its men’s and women’s ready-to-wear collections, De Sarno has become a fixture at the brand’s events around the world, but remains unknown to the fashion consuming public.

The move sees Gucci owner Kering once again elevating a behind-the-scenes figure to lead one of its brands. De Sarno’s predecessor at Gucci, Alessandro Michele, who departed the brand last November, was an unknown veteran of Gucci’s studio before leading a historic expansion, starting in 2015.

Kering has been under pressure to identify a successor to Michele, whose hit maximalist aesthetic helped the brand to nearly triple annual sales to almost €10 billion and quadruple profits.

The brand recently promised investors to stay in the spotlight with a full return to the fashion calendar — showing its collections 6 times a year — making the creative vacancy even more urgent to fill.

De Sarno has “vast and relevant experience,” Gucci chief executive Marco Bizzarri said in a statement. “He will lead our creative teams with a distinctive vision that will help write this exciting next chapter, reinforcing the house’s fashion authority while capitalising on its rich heritage.”

Artificial intelligence is certainly having a moment right now. This week it was all about OpenAI with its massive $10 billion round — a round so big, it’ll be hard for any company to top all year. Right now, it seems every startup is claiming to use AI in some form or another, and why not? Those two letters are getting strategics and VCs excited all the same. It’ll be interesting to see what it does to venture overall in the next six months.

1. OpenAI, $10B, artificial intelligence: The deal had been rumored for weeks, but was finally made official. Microsoft confirmed it has agreed to a “multiyear, multibillion-dollar investment” into OpenAI, the startup behind the artificial intelligence tools ChatGPT and DALL-E. The exact dollar amount was not confirmed, but Semafor reported earlier this month that Microsoft was in talks to invest as much as $10 billion. The deal follows a $1 billion investment in 2019 from Microsoft into the AI startup. It will help position Microsoft in what will be an all-out battle for AI dominance with other tech giants such as Alphabet and Amazon. Earlier this month The Wall Street Journal reported the startup could be valued at $29 billion thanks to a new tender offer.

2. Paradigm, $203M, health care: New York-based Paradigm emerged this week looking to take on one of the more complicated aspects of the health care industry. The startup, conceived by Arch Venture Partners and co-incubated by Arch and General Catalyst, raised a $203 million Series A. Paradigm is trying to change the way clinical trials are run, making it more equitable for patients to get in on them while also making it easier for health care providers to participate and cooperate. The tech-enabled platform aims to open up trials for more people and reduce barriers such as location and finance as it also looks to accelerate the clinical research process. Time will tell if it is successful — the startup already has big-name backers.

3. Boston Metal, $120M, cleantech: Certain parts of cleantech seem to do well in turbulent VC times, and right now eliminating greenhouse gas is big. Boston Metal was the latest to get funding in the cleantech space, taking in a big $120 million round led by steel and mining company ArcelorMittal. The startup is creating equipment that is able to take heavy greenhouse gas emissions out of steel production. It hopes to go to market with its solution by 2026. Founded in 2012, the company has raised nearly $191 million, per Crunchbase.

4. Alleviant Medical, $75M, medical devices: Austin, Texas-based Alleviant Medical landed a $75 million equity financing co-led by S3 Ventures and RiverVest Venture Partners to help combat heart failure. The medical device company is developing a no-implant interatrial shunt for heart failure — the leading cause of hospitalizations worldwide. Alleviant is preparing to go to trial with its device, and expects to enroll 400 to 700 patients at sites worldwide. Founded in 2017, the startup has now raised $88 million, per Crunchbase.

5. (tied) Osmo, $60M, artificial intelligence: Yet another AI company. However, this one is a little different. Osmo — a spinout of Google Research — is trying to give computers a sense of smell. Its goal is to scientifically create molecules to be used in perfumes, candles, etc. The company launched with this Wired article, where it’s reported the Cambridge, Massachusetts, startup raised $60 million in an initial funding round led by New York-based Lux Capital and GV.

5. (tied) QuickNode, $60M, blockchain: It has been a tough fundraising environment for Web3 startups lately. However, that didn’t stop Miami-based blockchain development platform QuickNode from closing a $60 million Series B funding led by 10T Holdings that values the company at $800 million. QuickNode helps developers build and scale Web3 applications faster. The startup said it grew its user base 400% and its revenue 300% in the past year. Founded in 2017, the company has raised nearly $102 million, according to Crunchbase.

7. Angle Health, $58M, health care: Like we said, AI is a big buzzword right now — even when it comes to health care. Angle Health locked up a $58 million Series A led by Portage this week. The San Francisco-based startup offers an “AI-enabled technology platform” that helps employers tailor health care plans that include traditional health benefits as well as telemedicine, behavioral health and other digital health solutions. Founded in 2019, the company has now raised $62 million, per Crunchbase.

8. Cygnvs, $55M, cybersecurity: Los Altos, California-based Cygnvs officially launched with a $55 million Series A led by Andreessen Horowitz. The company offers a cyber crisis platform that helps companies prepare and practice for a security event.

9. (tied) Crux, $50M, big data: San Francisco-based data integration and observability platform Crux announced a $50 million venture funding led by Two Sigma and Goldman Sachs Asset Management. Founded in 2017, Crux says it has raised a total of $157 million.

9. (tied) Forward Networks, $50M, information technology: Santa Clara, California-based digital twin network modeling software developer Forward Networks closed a $50 million Series D led by MSD Partners. Founded in 2013, the company has raised more than $112 million, according to Crunchbase.

Big global deals

OpenAI was not the only private company to see a round in the billions.

The country's stocks are up 50% since officials rolled back Covid-19 restrictions. Alibaba, Yum China, and other names stand to gain.

Much of the start-up capital for the legal cannabis industry came from Russian oligarch Roman Abramovich, newly revealed records show.

The 56-year-old Abramovich is perhaps the best known of the oligarchs who ended up controlling large parts of the Russian economy after the Soviet Union collapsed in the 1990s. He became a supporter of Russian President Vladimir Putin and assumed government positions after Putin took charge.

After Russia’s February 2022 invasion of Ukraine, Abramovich was sanctioned in European Union, the U.K., Switzerland, and Canada, forcing him to sell his best-known asset, the Premier League’s Chelsea Football Club. A more detailed picture of some of his other assets is now emerging from leaked records of a Cyprus-based firm that provided Abramovich with shell companies for his holdings and officers and directors for those companies.

The records detail billions of dollars that Abramovich invested in U.S. blue-chip stocks, films, oil and gas assets, art, venture capital—and the nascent cannabis industry. He funded marijuana media like Toke.TV, sales software, and the drug’s state-licensed producers. Most of his cannabis bets came through a British Virgin Islands company called Cetus Investments, the records show. Cetus is Latin for whale, and Abramovich was truly the whale of legal weed.

The uncloaking of aspects of the oligarch’s finances began in December, when 30,000 files from Cyprus-based accounting and trust company Meritservus Secretaries appeared at Distributed Denial of Secrets, a nonprofit website. Those files were scanned by the journalism consortium the Organized Crime and Corruption Reporting Project, allowing Barron’s and other news organizations to examine thousands of records. The leaked files show that Abramovich was a longtime Meritservus customer. His undisclosed funding of American cannabis was earlier reported by the news site Forensic News.

Abramovich placed a big bet on Curaleaf Holdings (ticker: CURLF), a Massachusetts-based cannabis producer whose 146 shops in 21 states make it the world’s largest licensed pot company. The Russian billionaire’s business records show he was one of Curaleaf’s founding shareholders, and he anchored Curaleaf’s syndicated debt with some $186 million in loans. When the Ukraine war began, he transferred his cannabis investments to family members.

His funding of American cannabis was hidden behind layers of trusts and offshore companies. Abramovich’s name appeared in no U.S. cannabis company’s securities filings or publicly disclosed state license applications, according to a computer search of filings in the U.S. and Canada. When Curaleaf went public in 2018, Barron’s asked why an executive from Abramovich’s family office, Millhouse, appeared on Curaleaf’s board in a Florida corporation record. Curaleaf said at the time that Abramovich wasn’t connected with its business.

Massachusetts regulators said last Thursday they had opened an inquiry into Abramovich’s backing of Curaleaf and its principals and whether it had been, or needed to be, disclosed. “The Cannabis Control Commission is aware of these allegations,” said a spokesperson for the commission. “As they pertain to an open inquiry, the agency has no further comment at this time.”

Curaleaf said it is unaware of the inquiry.

In addition to Abramovich’s direct funding of Curaleaf, the records show he lent about $84 million to Curaleaf’s largest shareholder, Andrey Blokh, and its chairman, Boris Jordan, with the stipulation that they spend the money on Curaleaf stock. When Jordan started a cannabis venture fund, Abramovich supplied two-thirds of the initial capital. Abramovich separately backed Blokh with $12 million to seek marijuana business opportunities in the western U.S.

Jordan says that his cannabis loans from Abramovich were repaid in 2020 and 2021. Blokh didn’t respond to requests for comment.

“The failure of corporate transparency requirements under existing U.S. laws and regulations makes the United States a haven for dirty money and undeclared foreign investment,” says Alex Zerden, a former anti-money-laundering official at the Treasury Department, now a compliance advisor—speaking about current disclosure rules.

Curaleaf says it has complied with disclosure obligations under securities laws and state cannabis licensing requirements. The company said it sufficed to cite Cetus Investments in its securities filings, without disclosing that Abramovich was behind the entity. One or two state cannabis commissions learned during the application process that Abramovich had bankrolled Jordan and Blokh, because they asked about the financing, says Curaleaf. Other states didn’t ask, according to Curaleaf.

“We disclose everything we have to disclose,” Jordan told Barron’s in a recent interview.

Jordan says the Abramovich family office Millhouse was a “blue chip” investor sought by institutions the world over. And if the billionaire’s name didn’t appear in public filings, his identity was known to Curaleaf’s underwriters and the institutions that joined Cetus in Curaleaf’s loan consortia.

“Having him as an anchor made it easier for our bankers to then go out and raise money from other investors,” says Jordan. “The presence in the debt transaction of Abramovich’s Millhouse was seen as a positive to the market. And frankly, up until recently with the war, [it] has always been very positive.”

The funding of American cannabis by a Russian oligarch troubles Steve Rolles, who heads policy analysis at a U.K. advocacy group called Transform Drug Policy Foundation. Rolles says the Russian government has been a relentless critic of cannabis legalization. He noted “the extraordinary hypocrisy of a Russian actor such as Abramovich with close political associations to Putin, investing in and profiting from cannabis industries—given the Russian state’s hawkish Drug War posturing on cannabis legalization.”

Abramovich didn’t respond to queries from Barron’s, but he has previously denied allegations that he is close to Putin or that he has done anything to merit sanction. When the U.K. sanctioned Abramovich last year, it accused him of having “clear connections” to Putin’s regime and cited Abramovich’s role in a secret deal that enriched a top Putin aide by $119 million (a deal previously reported by Barron’s). Abramovich didn’t comment then, while the Putin aide said that the transaction had been properly disclosed.

Cetus was formed as an investment vehicle by trustees of Abramovich in 2010. In internal communications, Meritservus employees referred to the owner of multiple shell companies like Cetus as “Mr. Blue.” Blue is the Chelsea team’s primary color. But in anti-money-laundering disclosures required by Cetus’ bankers, letters from Meritservus confirm that behind two layers of trusts, the “ultimate beneficial owner” of Cetus was Abramovich.

The oligarch had a long acquaintance with Jordan and Blokh. The U.S.-born Jordan was one of the go-to bankers in Russia’s transition to capitalism and during the subsequent battles for prize corporate assets. Blokh, also a U.S. citizen, ran Abramovich’s oil company, Sibneft, then used the billionaire’s backing to consolidate Russia’s dairy industry and sell the resulting company to Danone (DANOY) in 2010.

Jordan first invested in the vaping company that would become Curaleaf in 2011, according to a Jordan investment presentation. Four years later, he took control of the company and, in 2016, brought in Abramovich, Cetus records show. Through Cetus, Abramovich extended Curaleaf a bridge loan and bought 21% of its stock, according to a deal in which representatives of Jordan and Abramovich agreed to add a director of Abramovich’s choosing. December 2016 agreements gave Abramovich’s Cetus veto power over Curaleaf deals and acquisitions, then transferred that power to Blokh.

Curaleaf says that Abramovich never had any influence or decision-making role and has cut ties. “Mr. Abramovich is no longer a creditor to, or investor in, Curaleaf,” said the company in a statement, “and the loans he provided to its founding shareholders to invest in the company have been repaid for several years.”

“Curaleaf was one of thousands of companies globally and in the U.S. that were beneficiaries of Mr. Abramovich’s financing,” Curaleaf’s statement continued. “At the time he was a much sought-after investor and a well-recognized businessman around the world. He remains unsanctioned in the United States.”

Cetus records show that it lent Blokh $50 million in December 2016 to buy stock in Curaleaf. Blokh’s borrowings for Curaleaf shares grew to $60 million the next year, and Cetus also lent $24 million to Boris Jordan to buy stock in the cannabis company. Curaleaf shares secured another $95 million that Jordan borrowed from Cetus. By the time Curaleaf came public in October 2018, its main source of funding was an $85 million loan from Cetus. Blokh didn’t respond to questions from Barron’s.

Curaleaf didn’t mention Abramovich’s name in filings for its October 2018 initial public offering, or the securities filings that followed.

Well before Russia’s full-scale invasion of Ukraine, the oligarch was controversial because of his alleged connections to Putin, says Justyna Gudzowska, a former attorney with the U.S. Treasury’s Office of Foreign Assets Control, who now works at The Sentry—a nonprofit that uncovers funds derived from war crimes. In 2018—she notes—his U.K. visa wasn’t renewed and the billionaire settled a case over unpaid debt filed in Switzerland by the European Bank for Reconstruction and Development on confidential terms. Abramovich publicly denied wrongdoing at the time. Switzerland refused him a residence visa, citing risks of money laundering and public safety, which Abramovich disputed.

“If you did a quick Google search, there was plenty of so-called negative news,” says Gudzowska. “How did they get comfortable with his money?”

Abramovich didn’t confine his funding of American cannabis to Curaleaf. Cetus records show when Jordan started a cannabis venture fund called Measure 8 in 2017, Abramovich supplied the majority of its $54 million in initial capital. A year later, an investment presentation by Jordan boasted that Measure 8 partners’ money had quadrupled.

That return would have swelled Abramovich’s share of Measure 8 from $35 million to $150 million. From the leaked records, it isn’t possible to know what return he got on his Curaleaf stock. From the cannabis company’s debut at $7.79 a share in 2018 to its peak above $18 in 2021, Curaleaf’s market capitalization grew from $4 billion to $10 billion. Today, the stock trades for $3.60.

Cetus financials show that Abramovich also committed $10 million to be an early partner in Tuatara Capital, a New York-based fund that backed more than a dozen cannabis companies and sponsored a cannabis-focused special-purpose acquisition company, during the 2021 SPAC bubble. The SPAC merged last year into the marijuana marketing company SpringBig Holdings (SBIG). SpringBig said it wasn’t aware of an Abramovich investment in Tuatara, and Tuatara didn’t respond to requests for comment.

By the end of 2018, the Cetus balance sheet showed it had invested $130 million across the industry, with another $194 million in loans. Among its shareholdings: California weed delivery service Eaze Solutions; Toke.TV webcast producer Greenrush Media; a dispensary software vendor, Flowhub; CBD brand Green Gorilla; and publicly held vape maker Tilt Holdings (TLLTF). Legal agreements at Meritservus show that all these investments were directly negotiated private placements. Tilt says executives who brought in the Abramovich investment are no longer working there. Eaze says it wasn’t aware that Abramovich owned Cetus.

Until Russia’s invasion of Ukraine, the oligarch remained the anchor lender in Curaleaf’s debt deals. Records from Meritservus show the oligarch was owner of a British Virgin Islands company called Meliastove that lent Curaleaf $60 million in December 2021. Curaleaf says it is still indebted to Meliastove, but that it has been assured that Abramovich no longer owns it.

In the time leading up to the war, Meritservus files show that Cetus sold $8 million of its Curaleaf shares to the wife of a top official of the state-owned Russian Railways. Then on Feb. 25, 2022—the day after Russia invaded Ukraine—Abramovich told his UBS bankers that he was making his children beneficiaries of the trust that owned Cetus, according to a UBS document.

After a rough year for U.S. stocks in 2022, investors may be wondering if there are better returns to be had overseas.

Germany—the world’s third-biggest economy, known as the powerhouse of Europe—might be one place to look. The country’s DAX index of blue-chip stocks lost 12% last year. Not great, but still better than the S&P 500 index’s nearly 20% decline.

Deutsche Telekom , Germany’s flagship telecommunications company, splits the difference between betting on the U.S. economy and exposure to overseas stock markets. It’s a big German company that makes most of its revenue in the U.S. through T-Mobile , the mobile-phone operator of which it owns just under half. T-Mobile was a Barron’s stock pick in August. Deutsche Telekom has a presence in more than 50 countries, and its shares have gained almost 30% in the past year.

T-Mobile’s U.S.-traded shares (ticker: TMUS) are up more than 40% from a year ago, leaving some room for the German-traded Deutsche Telekom shares (DTE.Germany) to catch up.

Currency moves may also help this year. The dollar’s spectacular appreciation last year hurt organic growth, the company said in November. But the trend may reverse this year, as currency forecasters see the euro appreciating in 2023. That may also flatter returns of German shares in dollar terms.

If economic clouds are gathering, Deutsche Telekom might be considered a relatively safe play. If German or U.S. households and businesses get squeezed in a recession this year, phone lines might be one of the last things they cut back on.

The company itself is bullish. It raised earnings guidance three times last year. In November, it said it plans to lift its dividend to 0.70 euros (0.76 U.S. cents) a share for 2022 from €0.64 in 2021. “We are once again proving to be an anchor of stability in difficult times,” said Tim Hoettges, chairman of the Board of Management, at the time. “Our businesses continue to grow.”

Deutsche Telekom emerged from the privatization of the German postal service in 1995. It was the monopoly internet service provider until then, and remains the biggest ISP in Germany. Through a series of mergers and acquisitions, it expanded throughout Europe. The company got a foothold in the U.S. in 2001 by buying VoiceStream Wireless. It got bigger over the years, helped by a series of mergers, and is now the second-biggest mobile provider in the country.

Deutsche Telekom also holds a roughly 12% stake in BT Group (BT.A.UK) in the United Kingdom. The T-Mobile brand is no longer used in Britain after being folded into EE, another mobile provider now run by BT.

The German state still directly owns about 14% of Deutsche Telekom, while the state-backed development bank KfW holds 17%. Retail investors constitute 18%, with institutional investors owning 47% and the Japanese conglomerate SoftBank holding 4.5%.

Deutsche Telekom has a market value of €100 billion, fetches 12.5 times this year’s expected earnings and is valued in line with its peers. It offers a dividend yield of 3.4%. Shares currently trade at about €20.67. Robert Grindle at Deutsche Bank says the shares could rise to €29.50 and rates them a Buy. Of the ratings collected by FactSet, 12 analysts have Buy ratings while two are at Hold. None give it a Sell. Deutsche Telekom presents 2022 annual results on Feb. 23.

The company “remains one of our top sector picks, given its strong earnings momentum on both sides of the Atlantic,” wrote Credit Suisse analysts after the latest guidance change in November. “Its economic resilience and inflation resilience currently are attractive.”

With snow scarce, some resorts promote biking trails and adventure parks, others try to move their ski runs to higher elevations. Many have closed.

LA MORTE, France—Earlier this month it was too warm even to make artificial snow in this Alpine village. The local ski resort’s operators did something they never had before: They opened summer biking trails in the middle of winter.

The event drew hundreds of mountain bikers over the course of a weekend. But it did little to assuage fears that the ski resort’s days are numbered.

“It’s not enough to keep the station going,” said Éric Nowak, director of the Alpe du Grand Serre ski resort. “We can’t continue like this.”

Like many low- or medium-altitude ski stations across Europe, Alpe du Grand Serre has been struggling financially for years. Breaking even in a year largely depends on whether there’s enough snow. In recent years, there often hasn’t been.

Higher recent temperatures are fanning fears in Europe that the golden age of skiing is drawing to a close. The snow season has gotten shorter, rendering the economic model that enabled ski resorts to flourish decades ago less viable.

More resorts depend on costly snow machines to keep many of their runs open. But even those require sufficiently cold temperatures.

Skiing for the masses took off in the 1960s and 1970s, becoming an economic driver for Europe’s Alpine region, which previously was relatively poor. The Alps became the pre-eminent global skiing destination, home to a third of the world’s ski resorts. With annual revenue of $33 billion, the industry indirectly sustains the livelihoods of millions of people in France, Austria, Italy and Switzerland.

Businesses that depend on winter sports, such as lift operators, hotels and suppliers of winter equipment, worry for the long-term survival of the whole sector.

Snow conditions have always varied from year to year, but climate scientists looking at data that goes back decades have observed a clear trend: Winter in the Alps has become shorter. Less snow is falling. And it’s melting faster.

In the 1960s, there was regularly enough snow to ski at 1,650 feet above sea level. Now it is almost impossible in most resorts below 3,000 feet, and the snowline is expected to rise further, said Christoph Marty, a scientist at the Institute for Snow and Avalanche Research in Davos, Switzerland.

Many in the ski industry forecast that only the big, high-altitude resorts, with plenty of terrain over 6,500 feet above sea level, will clearly be financially viable by midcentury. “People who want to go skiing will have to go higher,” said Mr. Marty.

The livelihood of La Morte, a village of about 150 full-time residents a short drive from the city of Grenoble, depends heavily on the Alpe du Grand Serre ski resort.

“When I was a child, I remember walls of snow at Christmas. That was normal,” says Cécile Desmoulins, who owns a sportswear and ski rental shop. “Now what’s normal is that there isn’t snow.”

This year’s season began promisingly. After a big snowfall in early December, the slopes were groomed, the lifts opened, and local businesses hired seasonal staff.

Then the weather suddenly changed. Temperatures reached 59º F. The melting snow forced Alpe du Grand Serre to close during Christmas holidays, usually a peak time.

“We were left with a whole team. We tried to keep them busy, but there was no business,” said Ms. Desmoulins, who this month briefly pivoted to renting out mountain bikes.

Bigger businesses are adapting in other ways. Rossignol, based at the foothills of the French Alps outside Grenoble, is one of the world’s biggest and oldest ski manufacturers, its first wooden skis dating back to 1907. Last year, it began selling Rossignol-branded mountain bikes. It is about to launch a line of hiking boots.

“Alpine and Nordic skiing are in the DNA of the company,” said Rossignol’s CEO, Vincent Wauters. “Now we are accelerating our diversification toward four-season activities.” For the future, the company is betting on clothing, footwear and rucksacks, currently 25% of the brand’s sales.

Adapting is much harder for ski resorts. Almost all their money is made during the snow season.

When snow began falling again in mid-January, Alpe du Grand Serre gradually reopened most of its 34 miles of downhill runs. Even in good years, revenue of around €1.3 million just about covers salaries, electricity and other costs.

The resort is planning a revamp to survive. The goal is to attract overnight tourists all year round, such as by developing more biking and trekking trails.

It aims to move the ski station’s base from 4,500 feet to a higher altitude, and envisions building an artificial lake to supply water for snow making.

“Moving higher up will give us another 15 to 20 years,” said Mr. Nowak, the resort’s 59-year-old director. “Already, without ski cannons, we wouldn’t be able to operate. I am about to retire. It’s my younger staff that I worry about.”

The resort, owned by a consortium of local villages, has so far secured €11 million of the €24 million needed to make the changes happen. It is hoping for central government or other public funding to cover the rest.

Elodie Locqueneux owns the only mountainside ski lodge at Alpe du Grand Serre. To reach it, visitors have to take two chairlifts and ski down a slope. The restaurant offers hearty Alpine dishes such as tartiflette, a creamy potato casserole. So far this winter, it has been able to open only 13 days.

“We depend on the ski lifts,” said Ms. Locqueneux as she tidied up after lunch. If the project to revive Alpe du Grand Serre falls through, “we will close.”

The Alps’ ski season has shortened by about a month compared with 50 years ago, according to a research paper that gathered data on snow cover in Europe up to 6,500 feet of altitude between 1971 and 2019.

“At low elevations, we are expecting to lose one month of snow coverage duration per degree of further global warming,” said Samuel Morin, a scientist at France’s national meteorological service and its National Center for Scientific Research, who co-wrote the paper.

Lack of snow and guests have already led about 40% of Switzerland’s ski lifts to close since the 1990s, according to a study carried out at Dortmund University in Germany, often leaving behind the skeletal remains of lifts. In France, 10% have closed over two decades.

Among them is Saint-Honoré 1500, which used to link up with the slopes of Alpe du Grand Serre. Built in the late 1980s, when ski resorts were growing, Saint-Honoré quickly faced struggles. Snow on its south-facing slopes melted too quickly. Ambitious construction projects in the village were never completed, and the ski station closed in 2003.

Today, the hulk of what was meant to be a sprawling hotel lurks above the valley. A closed ticket office faces the treeless hillside.

The desolation doesn’t bother Arnaud Foglia, who owns an apartment in one of the two apartment blocks that were completed at Saint-Honoré. The IT consultant wanted a place to get away from the rising heat of Grenoble, where summer temperatures can reach 104º F.

“Down in the valley it’s almost unlivable,” said Mr. Foglia, as he pulled his 4-year-old son on a sled. “Little by little, we have to move higher up.”

Saint-Honoré is in the department of Isère, which includes Grenoble and 21 ski resorts, among them Alpe du Grand Serre.

The resorts are vital to the local economy, said Nathalie Faure, a regional official.

Her department is considering subsidies for struggling resorts, including Alpe du Grand Serre, so long as their plans aren’t focused solely on winter tourism. The aim, she said, is to keep ski resorts open for as long as the climate permits and make preparations for the days after.

Éric Piolle, the mayor of Grenoble, said it’s a mistake to try to extend the life of struggling ski resorts. The focus should be to a plan for a future without them instead, such as by investing in better-insulated housing and high-speed internet connections so people could work remotely.

“The snow industry can’t be like the coal industry. We tried to make it last, we resisted until the end, and then suddenly it was over. Then everyone is stuck,” he said.

The management of Métabief, a French ski station with a base elevation of 3,600 feet, plans to run the lifts for only another decade or so.

The realization dawned in 2016, when managers thought about replacing four old and creaking chairlifts.

“The big question was: Do we have at least 20 years of skiing guaranteed to justify the investment in new chairlifts?” recalled Olivier Erard, the ski station’s director at the time. They looked at the French government’s climate-change projections for the area.

“We had to admit that 20 years would be too optimistic,” says Mr. Erard. The chairlifts, some of them 40 years old, were repaired rather than replaced. “That’s when we became aware that the end of Alpine skiing for us would come probably between 2030 and 2040.”

Mr. Erard gradually broke the news to co-workers and business partners before making the decision public in 2021.

Mr. Erard’s main job now is to help plan the local community’s transition to a future without skiing. A big focus is non-winter mountain sports, from climbing to trail running.

“It’s the beginning of the end of Alpine skiing, of this business model,” he says. “But it’s not the end of life in the mountains.”

Bank’s offices raided this week as part of investigation that has already led to one arrest in Germany

Investment bank Perella Weinberg suspended a London-based banker after its European headquarters were raided this week as part of an insider trading investigation by German police and regulators, according to people familiar with the matter.

German law enforcement suspected that the Perella Weinberg employee shared sensitive information about looming mergers and acquisitions deals with four German citizens who traded on the information, officials said in a statement on Thursday.

The insider trading, which can be punished with up to five years in jail, is alleged to have occurred between 2017 and 2021. Prosecutors say the deals could have generated a double-digit million-euro profit.

A 47-year-old German citizen who has been accused of trading on the insider information was arrested in Munich earlier this month and is in police custody. Three other individuals, including the 82-year-old father of the arrested trader, are also under investigation.

The 47-year-old, who the Financial Times is not naming for legal reasons, is a former journalist who became an executive at German publishers before starting his own communications advisory business, people familiar with the matter told the Financial Times.

Perella Weinberg said: “The firm is assisting in an investigation by German law enforcement authorities. The firm is not the subject of the investigation, and there is no suggestion of wrongdoing on the part of the firm.”

The suspension was first reported by Manager magazine, a monthly business publication.

Over the past few years, Perella Weinberg, led by former Morgan Stanley banker Dietrich Becker, has risen to become one of the leading M&A advisers in Germany.

It has been at the centre of most large-scale transactions in Germany, including the €29bn takeover of Deutsche Wohnen by Vonovia in 2021, the €4.5bn takeover of Osram in 2019 and the €59bn asset swap between RWE and Eon in 2018.

German law enforcement officials, including the Federal Criminal Police Office, have been investigating the alleged insider trading since November 2021 after regulator BaFin flagged suspicious trading patterns.

The probe, which involved raids at eight premises in Germany, the UK and Austria, was disclosed on Thursday without naming Perella Weinberg.

BaFin and Frankfurt prosecutors declined to comment on the identity of the bank.

The case is the third big insider trading scandal involving a large financial institution in Germany over the past two years.

In September 2021, a former senior funds manager at Union Investment was sentenced to three-and-a-half years in jail and ordered by a Frankfurt court to repay almost six times the €8mn in profits he made.

Last year, a former Lazard investment banker who shared confidential information with a trader received a suspended jail term of one-and-a-half years. The trader was sentenced to three years and eight months in jail by a Frankfurt court.

Painters and singers need legal protection from the revolution in algorithmic creativity

A flat above a fried chicken shop in Notting Hill is an odd place to be at the heart of what has been called “one of the most important legal questions” of the 21st century. It is the registered office of Stability AI, an artificial intelligence group that is upsetting artists around the world.

Stability AI is run by Emad Mostaque, a computer scientist and former hedge fund employee. It operates the image-generating software Stable Diffusion, described in a US lawsuit as “a 21st-cen­tury col­lage tool that remixes the copy­righted works of mil­lions”. Type in “Elon Musk in a Van Gogh painting” and it produces an amusing pastiche.

The three women artists behind the US lawsuit have backing. Getty Images, the stock photo group with 135mn copyrighted images on its database, last week started another legal action against Stability AI in the UK courts. Getty’s images, along with millions of others, are used to train Stable Diffusion so it can perform its tricks.

The generative AI revolution has erupted fast: Stable Diffusion was only released in August, and promises to “empower billions of people to create stunning art within seconds”. Microsoft has made a multibillion-dollar investment in OpenAI, which last year unveiled the text-to-image generator Dall-E, and runs ChatGPT.

Visual art is not the only discipline in which AI agents threaten havoc. The music industry is quaking at the prospect of millions of songs (and billions in intellectual property) being pored over by AI to produce new tracks. Tencent Music, the Chinese entertainment group, has released more than 1,000 tracks with synthetic voices.

In theory, algorithmic art is no more able to escape copyright and other IP laws than humans: if an AI tool produces a song or an image that does not transform the works on which it draws enough to be original, the artists who have been exploited can sue. Using a black box to disguise what has been dubbed “music laundering” is not a convincing legal strategy.

Nor is an AI agent learning from a database wholly different from what humans have always done. They listen to songs by rival bands, and study other artists to learn from their techniques. Although courts are full of disputes over whether songwriters have copied illegally, no one tells them to block their ears, or warns painters to close their eyes at exhibitions.

But scale makes all the difference, as the music industry knows very well. It was safe enough in the pre-digital era, when music was sold on vinyl and CDs and sometimes copied on tapes by fans. When Napster enabled mass downloading and distribution of digital tracks, the industry faced deep trouble before it was rescued by Spotify and licensed streaming.

AI tools not only crunch databases but manufacture images to order: why stop at Van Gogh when you can get Musk by Monet, Gauguin or Warhol just by typing in prompts? It is not high art but Estelle Derclaye, a professor of intellectual property law at Nottingham university, observes that “if AI starts to replace human creativity, we have a problem”.

Humans retain plenty of advantages: a synthetic version of Harry Styles called by another name would not be a fraction as popular a performer, even if the owner of the AI tool got away with it. But there are other uses — background music in video games, for example — for which a synthetic band sounding like BTS might be good enough.

Trying to halt AI artistry would be impossible, as well as undesirable. But the legal framework needs to be set to prevent human creativity becoming financially overwhelmed. The issue raised by Getty is whether companies such as Stability AI should be able to train their AI tools on vast amounts of copyright material without asking permission or paying licence fees.

This is legal for research in many countries, and the UK government has proposed extending that to commercial use. There have been similar calls in the US for AI models to gain the right to “fair learning” on such data because it would be impossible to track down all the licence holders of gigabytes of stuff scraped from the web, seek approval and reward them.

That strikes me as too blasé, and similar to arguments in the days of illegal downloading that the digital horse had bolted, and everyone had to get used to it. Stability AI has been valued at $1bn and Microsoft’s investment in OpenAI shows that there is money around; what is needed is a mechanism to distribute more among creators.

Individuals need further protections: it is one thing to train AI software on a mass of material, but what if someone feeds in the works of a single living artist and then asks for a new sketch in her style? One Los Angeles illustrator was subjected to such AI “fine-tuning” by a Stable Diffusion user recently; it is not clear whether a court would call that fair use, but I don’t.

“Please know that we take these matters seriously,” Stability AI promised last week. Was its statement drafted by a human or by an AI tool? These days, it is so difficult to tell.