FT : Vibecoding isn’t going to kill business software services

Vibecoding isn’t going to kill business software services
SaaS companies have an opportunity to use AI to make a more intelligent software

Vibecoding — using verbal prompts and AI to write code — is gunning for software giants. Shares in SAP, briefly crowned Europe’s most valuable company last March, are down by a fifth since then; ServiceNow in the US has lost two-fifths of its value in the past year.

On the face of it, there’s good reason for investors to run scared. AI tools such as Anthropic’s Claude Code theoretically enable anyone to do what these office-software stalwarts have done for the past half century or so. If the intern can create an invoicing app in their lunch hour, there’s less reason to pay monthly fees for a smorgasbord of services only some of which are frequently used, as often happens with Software-as-a-Service (SaaS).

Circumstantial evidence abounds. Searches for vibecoding, as measured by Google Trends, have spiked worldwide and especially in the US this month. Social media platforms yield plenty of “how to” videos — as well as woeful tales of lost contracts at the big SaaS players. For bearish investors, a short stroll to the nether reaches of their IT and HR departments ought to provide evidence of these new ways of working.

While barriers to entry are falling, and the so-called hyperscalers — cloud providers such as Amazon that offer their own AI tools — create a new threat, it will nonetheless take more to dislodge the SaaS incumbents.

This is an industry used to evolving, having moved from clunky discs to the cloud. Earnings, so far, are holding up. Sage Group on Tuesday said it was expecting organic revenue growth of more than 9 per cent this fiscal year. Analysts expect SAP, which reports its 2025 numbers on Thursday, to keep increasing adjusted operating profit by 15-18 per cent a year through 2030.

As such, retreating share prices are mainly the result of the lower multiples investors are willing to pay for their profit, which reflects a more pessimistic view of the future. Over the past year, multiples have come down by more than a third, to an average of 25 times forward earnings.


Yet SaaS growth is typically of pretty high quality: subscriptions mean recurring revenue, which is usually stickier, while licensing software doesn’t require chunky capital spending. Besides, these companies are also deploying AI, either organically or via partnerships and acquisitions. Israel’s Nice last year paid $1bn for Germany’s Cognigy, which uses agentic AI for customer services, while SAP has partnered with Perplexity.

Where SaaS companies have an untapped opportunity is in using AI to make the software that runs a customer’s business systems more intelligent and reactive to real-world events. Clients might be able to adjust their supply chains to cope with mooted tariffs, for instance. The odds are that companies, for now, will prefer to buy such offerings from the pros, rather than spend weeks eliminating bugs from home-cooked alternatives.

FT : UK energy company urges Starmer to ‘embrace’ Chinese technology

UK energy company urges Starmer to ‘embrace’ Chinese technology
Octopus chief adds to debate over critical sector as PM embarks on first trip to Beijing by a British leader since 2018

The UK’s largest household energy supplier says Britain should embrace Chinese technology in its energy market, adding its weight to a fierce debate about China’s role in a critical industry as the prime minister travels to the country.

Zoisa North-Bond, chief executive of Octopus Energy’s power generation arm, said greater competition could cut wind farm development costs by almost a third, helping the UK government meet its goal of keeping energy bills down. The company said in September it wants to deploy wind turbines from one of China’s largest manufacturers on its own projects in Britain.

“We look to China and we see the sheer innovation and speed at which they have deployed wind models and how much they have invested in innovation — and you cannot ignore that,” she said.

“And the cost at which they are deploying — when you speak to a Chinese hardware manufacturer, actually it could save 30 per cent on developing wind here in the UK if we could access Chinese wind turbines.”

The intervention comes as Sir Keir Starmer is due to arrive in Beijing on Wednesday with 60 British businesses, including Octopus Energy represented by its chief executive Greg Jackson. The trip is part of efforts to restore UK-China relations after veering in recent years “from the Golden Age to the Ice Age”. 

China dominates global supply chains for clean energy hardware and many raw materials, but critics fear its success makes other countries too reliant on the communist state and raises questions over cyber security, state subsidies and rights.

The UK government is also weighing whether to approve proposals for a £1.5bn wind turbine factory in Scotland by Shanghai-listed manufacturer Ming Yang, giving the company an important foothold in a market still dominated by European rivals.

Octopus wants to deploy potentially around six gigawatts of Ming Yang’s turbines in Britain, saying it would explore implementing software to “create the highest levels of data protection and cyber security”.

North-Bond added: “[Security concerns] shouldn’t be a blocker — it’s about how you design software that’s fit for the market. We know we can design software combined with Chinese hardware that could allay some of those concerns.”

Octopus’s retail arm supplies almost 8mn UK households. It has become an influential voice in British business: Jackson is also a government adviser, and the UK has agreed to invest £25mn in Octopus’s technology arm, Kraken.

Starmer’s visit takes place after Donald Trump’s wrecking-ball diplomacy last week and was presented by China as a chance to work with the UK to promote “world peace”.

In an apparent reference to Trump, China’s foreign affairs ministry said: “The international landscape is witnessing turbulence and transformation.” Starmer in turn promised “a strategic and consistent relationship” with Beijing.

Starmer knows his visit could rile Trump, who threatened new tariffs on Canada after its prime minister Mark Carney announced a “strategic partnership” with Beijing and agreed to reduce tariffs on Chinese electric cars.

But the prime minister noted before the trip that a succession of western leaders has been to Beijing in recent years and that Trump himself is due in Beijing in April.

The travelling party accompanying Starmer on his visit to Beijing and Shanghai spoke of the kind of deals the UK hopes to secure off the back of an improved diplomatic relationship with China.

The delegation includes bosses from financial and business services firms, life sciences, car companies and energy firms alongside representatives hoping to exploit the growing Chinese sports and cultural market.

The cultural delegation includes figures from the National Theatre, the Science Museum, the V&A Museum, the World Professional Billiards and Snooker Association and Table Tennis England.

“For years our approach to China has been dogged by inconsistency, blowing hot and cold, from Golden Age to Ice Age,” said Starmer, the first British prime minister to visit the country since Theresa May in 2018.

“As one of the world’s biggest economic players, a strategic and consistent relationship with them is firmly in our national interest.”

British officials insist Starmer will not shy away from raising issues including human rights, although any such criticism of Beijing over its actions in Hong Kong or its treatment of the Muslim Uyghur minority is likely to be kept out of public view.

Starmer insisted Britain would “not turn a blind eye” over security threats posed by China but said it was better for the country to “engage even where we disagree”.

The opposition Conservative Party has strongly criticised Starmer for what it claims is his “kowtow” approach to Beijing, including the government’s approval last week of a new Chinese “super embassy” on the edge of the City of London.

China has embraced Starmer’s visit which, from a diplomatic point of view, should be easier for the UK prime minister to navigate than his engagements with the increasingly erratic President Trump.

Beijing said the trip was “an opportunity to enhance political mutual trust with the UK, deepen practical co-operation, open a new chapter of sound and steady development of China-UK relations and together make due efforts and contributions to world peace, security and stability”.

China’s commerce ministry also took the chance to troll President Trump. “Amid escalating global trade protectionism, both China and the UK uphold free trade and the multilateral trading system,” it said. Starmer hopes to get approval soon for Britain to revamp its embassy in Beijing.

Starmer will be under pressure in Beijing to take on security hawks at home — and in the US — and to allow more Chinese investment in the UK.

However, there will be no revival of the “access all areas” approach taken by David Cameron’s Conservative government during the so-called “Golden Age” of UK-China relations, when Chinese investment was welcomed in areas from telecoms to nuclear power plants.

Starmer will meet President Xi Jinping and premier Li Qiang on Thursday before travelling to Shanghai for meetings with British and Chinese business representatives.

UK companies on the visit include British Airways, HSBC, GSK, Jaguar Land Rover, Brompton Bikes, Freshfields, KPMG, McLaren and USTWO Games.

WSJ : Key Gulf Allies Say They Won’t Aid U.S. in an Iran Strike, Limiting Trump’

Key Gulf Allies Say They Won’t Aid U.S. in an Iran Strike, Limiting Trump’s Options
Saudi Arabia and the U.A.E. say the U.S. can’t use their airspace for a military operation against Tehran

  • Saudi Arabia ruled out the use of its airspace and territory for a potential U.S. attack on Iran, complicating U.S. options.
  • The United Arab Emirates earlier issued a similar statement, representing a foreign policy setback for the Trump administration.
  • Military experts state that while the move increases operational complexity and costs, it wouldn’t prevent U.S. military action.

Saudi Arabia on Tuesday ruled out the use of its airspace and territory for a potential U.S. attack on Iran, complicating the Trump administration’s options in response to Tehran’s violent crackdown against Iranian protesters.

The Saudi move follows a similar statement Monday by the United Arab Emirates’ foreign ministry.

The declarations from the two Gulf states represent a foreign policy setback for the Trump administration as it seeks to ratchet up pressure on Tehran, which has defied Washington’s demand that it halt uranium enrichment and end the suppression of protesters.

Crown Prince Mohammed bin Salman, the kingdom’s de facto leader, outlined his country’s position while talking by phone with Iranian President Masoud Pezeshkian.

A Saudi readout of the Tuesday call said the crown prince had stressed that the kingdom “will not allow its airspace or territory to be used for any military actions against Iran.”

Saudi Arabia is worried about being drawn into a conflict with Iran, which attacked the kingdom’s oil facilities in 2019 during President Trump’s first term in office.

“Both Saudi and the UAE have been targets of attacks by Iran and their proxies. A degraded and less threatening Iranian regime is in their interests, but they worry about regional unrest and Iranian retribution and don’t want to be the tip of the American spear,” said Karim Sadjadpour of the Carnegie Endowment for International Peace.

A White House spokesperson said Trump “is watching the situation in Iran very seriously and all options are on the table if the regime executes protestors.”

Former high-ranking American military officers said that the Saudi and U.A.E. moves would hamper the Trump administration’s planning for military action, but wouldn’t prevent it if Washington was determined to act.

“From a military perspective, it increases operational complexity and costs for any U.S. action against Iran but won’t stop it,” said David Deptula, a retired Air Force lieutenant general who played a key role in the 1991 Desert Storm air campaign against Iraq, which the U.S. led from a command post in Saudi Arabia.

Deptula added that the Saudi and U.A.E. statements would also lower “the political cost for Tehran of resisting external pressures.”

The Trump administration has dispatched the aircraft carrier USS Abraham Lincoln and its accompanying warships to the Middle East, including vessels equipped with cruise missiles. It also has several squadrons of F-15E fighters in Jordan.

The U.S. still could deliver a military blow by using those assets and by drawing on B-2 stealth bombers and other long-range bombers that could fly from the U.S. or be positioned at the Diego Garcia base in the Indian Ocean.

“I think this could force us to rely more heavily on carrier-based aviation or long-range assets coming from CONUS or bases like Diego Garcia,” said Joseph Votel, a retired Army general, using the acronym for the continental U.S.

“This action puts pressure on other regional states who may be considering support for a U.S. operation,” added Votel, who led U.S. Central Command from 2016 to 2019. “Finally, it means that an operation will have more of a U.S. flavor rather than a robust regional coalition against Iran.”

Trump has nurtured close ties with the Saudi crown prince, who visited the White House in November. At the time, Trump promised to sell advanced F-35 fighters to Saudi Arabia and defended the crown prince against allegations that he orchestrated the killing of Washington Post journalist Jamal Khashoggi. Saudi Arabia confirmed in a defense cooperation agreement that the U.S. was its “primary strategic partner,” and an agreement was announced that provided Riyadh with more access to U.S. artificial-intelligence technologies.

Analysts in Gulf states worry that U.S. military action would be more likely to lead to chaos within Iran than regime change, with consequences that could spill over into the region.

“Yes, Iran has been weakened, and its proxies have been weakened, but they have not disappeared,” said Bader Al-Saif, a Gulf expert and academic at Kuwait University. “We’ve been promoting ourselves as being the stable neighborhood where everyone can come in and invest. No one is going to come in and invest if this becomes the new normal.”

The U.S. would still be able to strike targets in Iran without access to Saudi airspace and bases by sending bombers and other aircraft through Jordanian, Syrian and Iraqi air space, launching cruise missile attacks from submarines and using aircraft from the carrier in the Arabian Sea.

But Middle East experts say that toppling the Iranian regime, or even striking it forcefully enough to dissuade it from repressing the protestors, would likely require a military campaign that could last weeks or even months. That would be more challenging without the cooperation of Gulf states.

“We have to remember that the regime is determined not to fall and willing to kill as many people as it needs to to stay in power,” said Kenneth Pollack, vice president for policy at the Middle East Institute and a former CIA analyst. “Overcoming that was always going to be extremely hard with air power alone, and even harder if we are limited to the carrier and what comes from CONUS and Diego Garcia.”

WSJ : Trump Has Four Finalists to Run the Fed. None of Them Are Exactly What He

Trump Has Four Finalists to Run the Fed. None of Them Are Exactly What He Wants.
The president wants someone who will pursue lower interest rates—and who’s credible enough to actually deliver them.


  • President Trump is seeking a Federal Reserve chair who will lower interest rates while maintaining credibility with Wall Street and colleagues.
  • Four finalists are under consideration: Kevin Warsh, Christopher Waller, Rick Rieder and Kevin Hassett, each presenting different trade-offs.
  • Trump’s concern is that candidates may assert independence after confirmation, despite expressing alignment with his views during interviews.

President Trump has said for months that he’s made up his mind about who should lead the Federal Reserve. But with each passing week without an announcement, some people close to the process aren’t sure any of his four finalists fully meet his requirements.

The difficulty: Trump wants something that may not exist—a new chair who will pursue his demands for lower interest rates while still commanding enough credibility on Wall Street and from his colleagues to deliver them.

Treasury Secretary Scott Bessent has been managing the search and, after ruling himself out of contention, has presented Trump with four finalists: Kevin Warsh, a former Fed governor; Christopher Waller, a current Fed governor whom Trump appointed to the board in 2020; Rick Rieder, a senior executive at BlackRock; and Kevin Hassett, the director of the White House National Economic Council.

Each represents a different trade-off between the two things Trump says he wants.

The tension was on display last week when Trump addressed the World Economic Forum in Davos, Switzerland. “They’re all respected. They’re all great…. Everyone could do, I think, a fantastic job,” he said of his finalists.

Then he telegraphed his core anxiety about the selection—that candidates “say everything I want to hear” during interviews, only to assert their independence once they have been confirmed. “It’s amazing how people change once they have the job,” Trump said. “It’s too bad, sort of disloyalty, but they got to do what they think is right.”

In a Dec. 23 post on Truth Social, the president laid out what he called “The Trump Rule”—a demand that the Fed abandon an approach to inflation that has conditioned markets to treat good economic news as bad news, since it means rates won’t come down as fast. He concluded with an unambiguous warning: “Anybody that disagrees with me will never be the Fed Chairman!”

The two statements capture the bind Trump has created for himself as he searches for someone to replace Jerome Powell, whose term expires in May.

Trump and Bessent have for weeks suggested an announcement is just around the corner. That guidance has shifted so many times that some people close to the process have begun to wonder whether the president is looking for something he won’t ever find.

“President Trump will make this announcement at the appropriate time. Until then, anyone pretending to know who President Trump’s Fed Chair pick will be is kidding themselves,” White House press secretary Karoline Leavitt said in a statement.

Trump selected Powell to lead the Fed eight years ago after concluding Powell would be most likely to support lower interest rates. But he has raged at Powell in the years since, frustrated that the former private-equity investor hasn’t sought out or heeded his views on where to set rates.

The Fed is expected to hold interest rates steady when it concludes a two-day meeting on Wednesday. The decision is likely to draw fresh criticism from a president who has declared inflation defeated and called for aggressive cuts.

Of the four finalists, Hassett is the candidate Trump knows best and the one most aligned with his economic agenda. But naming his own adviser to the role could invite questions about Fed independence that some analysts have said could spook the bond market—the opposite of what Trump and Bessent want.

Trump seemed to take Hassett out of contention earlier this month when he said he didn’t want to lose a loyal and vocal television surrogate.

Warsh has praised Trump on television, spent five years on the central bank’s board and looks the part of a Fed chair. But he is close to Stan Druckenmiller, the billionaire investor who has been publicly skeptical of the case for rate cuts, and was himself an inflation hawk during his time on the board—including after the 2008-09 financial crisis.

He is also seen as an establishment Republican in a party that has moved away from the free-trade, entitlement-cutting orthodoxy of former House Speaker Paul Ryan. “Warsh is a great pick if this was Paul Ryan’s GOP. It isn’t,” said Neil Dutta, an economist at Renaissance Macro.

Trump has consistently said he favors “both Kevins,” and he doesn’t have a personal relationship with the other two finalists.

Waller is popular on Wall Street in part because he most resembles the man Trump is trying to replace: a Fed insider who has made intellectually consistent arguments for lower rates that prioritize the health of the labor market.

But Waller has no personal relationship with Trump and wasn’t given much of an opportunity to build one during a 30-minute interview last month that some people said didn’t impress Trump. According to people familiar with the meeting, Trump pressed Waller on his support for the Fed’s 50-basis-point rate cut in September 2024—a decision Trump has characterized as politically motivated to help Democrats before the election.

The meeting was sandwiched between a somber ceremony at Dover Air Force Base for the dignified transfer of American soldiers killed in Syria and a prime-time address to the nation Trump delivered from the White House that night.

Rieder is even more of an outsider because he hasn’t served at the Fed or in any government role. That would make him the first Fed chair without any ties to Washington since G. William Miller, a former Textron executive picked by President Jimmy Carter for a term that began in 1978.

As BlackRock’s chief investment officer of global fixed income, Rieder oversees more than $3 trillion and has been a consistent advocate for views that support lower interest rates—positions so long held that they are rooted in his market outlook rather than any ambition to lead the Fed. That track record could appeal to a president worried about nominees who change their tune once confirmed.

Rieder has also impressed Bessent and other senior officials with plans to address housing affordability, a top economic priority for the administration.

But he comes with baggage that could give pause to any president seeking a loyalist. Rieder has no relationship with Trump or his inner circle, and unlike Warsh or Hassett, he hasn’t built a public profile as a Trump supporter.

BlackRock has drawn suspicion from Trump’s political base over its embrace of environmental, social and corporate-governance investing. And Rieder’s political donations have gone seemingly everywhere except to Trump: He gave to Pete Buttigieg’s Democratic presidential campaign in 2020 and to Nikki Haley, one of Trump’s primary rivals, in 2023.

For all the speculation, there is no urgency to name a nominee. Powell’s term doesn’t expire until mid-May, leaving plenty of time for Senate confirmation even if Trump doesn’t make a decision until late February. That timeline would be well within the historical norm for announcing a new chair to replace an incumbent.

WSJ : These Billion-Dollar AI Startups Have No Products, No Revenue and Eager In

These Billion-Dollar AI Startups Have No Products, No Revenue and Eager Investors
Flapping Airplanes is one of a wave of new startup research labs drawing intense interest from investors, the latest chapter in the AI race

  • “Neolabs,” like Flapping Airplanes, give priority to long-term AI research and model development over immediate profits, attracting significant venture capital.
  • Investors are funding neolabs, such as Safe Superintelligence with $3 billion raised, hoping to find the next OpenAI, despite high valuations and profit concerns.
  • The rise of neolabs is drawing promising young talent away from academia, leading to concerns about future academic research and training.

Ben Spector had an unusual pitch for investors last fall.

A Ph.D. student at Stanford University with a highly prized artificial-intelligence background, Spector had no near-term plans to make money and no traditional pitch deck. He didn’t even have an idea for a hit AI product.

What he did have was a lab, called Flapping Airplanes, a novel idea for training AI models and a zeal to hire talented young researchers eager to tackle AI’s biggest problems.

Venture-capital firms jumped at the chance to back him.

“Small teams of brilliant young people that are able to look at the problem in a new way—those are the kinds of organizations that actually win,” said Spector, 25.

Flapping Airplanes—a reference to the biological cues future AI should take from nature—is part of a new wave of startups some have dubbed “neolabs,” which give priority to long-term research and developing new AI models over immediate profits.

The interest in neolabs has skyrocketed as investors hunt for the next OpenAI, which began as a research lab and later became one of the world’s most valuable startups. A large subset of top AI researchers believe that models like ChatGPT and Claude have effectively hit a dead end and will never reach a level of intelligence that matches or exceeds that of humans (top AI companies dispute that view).

While there are more than a thousand startups with valuations of $1 billion or higher, the number of neolabs is generally believed to be in the dozens, according to researchers and investors.

Some of the neolabs have seen their valuations soar into the tens of billions of dollars, prompting critics to suggest that most of them will have slim odds of turning a profit or launching a winning product. The labs have created a recruiting frenzy among academics in ways that are drawing promising students away from academia.

This month, Flapping Airplanes raised $180 million at a valuation of $1.5 billion from investors including GV, Sequoia Capital, Index Ventures and Menlo Ventures. Spector took leave from his Ph.D. program in September.

Humans& in January raised $480 million at a $4.48 billion valuation to build AI systems that help people collaborate. Reflection AI raised $2 billion in October at an $8 billion valuation to build an open-source model. And Periodic Labs, which aims to develop AI to automate scientific research, launched with $300 million in funding in September.

There is also Safe Superintelligence, the AI lab founded by Ilya Sutskever, a co-founder and former chief scientist at OpenAI largely credited with inventing ChatGPT.

In June 2024, Sutskever said he was starting a new company with one goal: building safe superintelligence. He has raised $3 billion so far, most recently at a $32 billion valuation, and has been unusually direct with investors about his intentions.

“The way I would describe it is that there are some ideas that I think are promising and I want to investigate them,” Sutskever said on a November episode of the Dwarkesh Podcast, making no promise that such ideas would lead to a breakthrough, a product or revenue. He also said AI is returning to an “age of research” after scaling up from 2020 to 2025.

In the past, the most ambitious AI research happened inside academic institutions or corporate research arms like Google’s DeepMind. Startups focused on finding applications of that research that could make money. The AI boom has pushed investors toward funding research itself.

“A venture-backed lab—this is a new thing,” said Pete Sonsini, co-founder of Laude Ventures. “It’s not traditional venture capital.”

U.S. AI startups raised a record $222 billion last year, according to research firm PitchBook. Investors say they are seeing a rising number of researchers pitching neolabs.

Not everyone is convinced these researchers can generate financial returns.

“The technical chasm to cross for each of these neolabs is very substantial and I think that risk is very real,” said Ashu Garg, a general partner at Foundation Capital. “The vast majority of them will not cross that at all. They will end up with something that is just incrementally better. And if you’re incrementally better than alternatives, you don’t matter.”

One of the biggest challenges neolabs face is talent retention. In an era when CEOs of the largest tech companies are offering more than $300 million to hire AI experts, it is difficult for startups to hold on to their prized researchers. It is a reality Thinking Machines Lab recently highlighted in dramatic fashion.

Co-founded by former OpenAI executive Mira Murati, Thinking Machines lost two of its founders, Barret Zoph and Luke Metz, to OpenAI in January. In October, another one of its founders, Andrew Tulloch, departed for Meta. Thinking Machines has sought additional capital in recent months that could value the company at $50 billion.

These losses have rattled investors, who have sought to be more probing with AI founders about their incentives.

“Is it a financial motivation or is it a motivation to really drive an impact?” said Dave Munichiello, a managing partner at GV and an investor in Flapping Airplanes. “Are they in it for 10 years? Or do they have four houses that they need to pay?”

Flapping Airplanes’ strategy to compete in the brutal talent war is to not try to hire the most famous researchers. Instead, they are recruiting newcomers who would have ordinarily pursued a Ph.D. or a role at a quant firm. They have tapped AI legends Andrej Karpathy, an OpenAI founding member, and Jeff Dean, chief scientist at Google DeepMind, as an adviser and an angel investor, respectively. One early area of interest for Spector and others is to train AI models with less data.

They have 11 employees so far, including Spector’s brother and co-founder Asher Spector, who recently completed his Ph.D. in statistics at Stanford, and co-founder Aidan Smith, a 21-year-old Thiel Fellow, a program that pays college students to drop out and pursue their own projects, as well as an 18-year-old high-school student.

Investors love the young hires.

“I am very interested in today’s 22-year-old who’s going to spend the next 10 years trying to find AGI,” said Sequoia Capital partner David Cahn, a Flapping Airplanes investor. “The best science has historically been done by people in their mid-20s,” he added, referencing Albert Einstein’s “miracle year,” when he published a series of influential papers at the age of 26.

The rush of younger AI startup talent means fewer purely academic researchers. Stefano Ermon, a computer-science professor at Stanford University, said this is the most turnover he has seen in academia in the decade he has been teaching.

“There will be fewer people going into academic positions and maybe it will be harder to train the next generation,” Ermon said.

At the same time, researchers are realizing that the opportunity to raise big VC dollars quickly and easily may not last long. In November, Ermon announced he raised $50 million for a neolab called Inception focused on developing diffusion models to generate text and code.

“This is the first time I felt like, yeah, the upside is so big and we are so uniquely positioned to go after this,” said Ermon. “It’s now or never.”

WSJ : Here’s What Happens When You Stop Taking Ozempic and Wegovy

Here’s What Happens When You Stop Taking Ozempic and Wegovy
Popular weight-loss drugs are meant to be lifelong treatments for a disease, not lifestyle fixes

A recent email ad from a telehealth company selling weight-loss medications features tennis-superstar Serena Williams.

“If you’re carrying 15-20 extra pounds,” it says, “medications like Wegovy can help jumpstart your progress.”

For obesity doctors and researchers, this kind of messaging is problematic. The blockbuster drugs—known as GLP-1s—are increasingly marketed as lifestyle fixes to help take off some weight. But they are actually designed as lifelong treatments for chronic diseases, namely obesity and Type 2 diabetes.

That distinction matters.

While nearly 18% of U.S. adults have taken a GLP-1 drug for weight loss or to treat a chronic condition, about half of people will stop taking it within a year. Often, they don’t understand what is likely to come next.

Studies show that after stopping the drugs, people typically regain lost weight within about 1.5 years. And any improvements in blood sugar, blood pressure or cholesterol are reversed.

People who take GLP-1s regain weight four times faster than those who lose weight through lifestyle interventions, according to a recent analysis published in the British Medical Journal.

The depressing results raise the question: Are the drugs worth starting if you can’t stay on them long-term? Doctors largely say yes but caution the need for proper counseling and lifestyle changes.

The medications, which include Ozempic, Mounjaro and Zepbound, mimic naturally occurring gut hormones such as GLP-1, suppressing appetite and making people feel full faster.

The BMJ review examined 37 studies that included people taking weight-loss medications; six were studies where people took GLP-1s rather than older weight-loss medications. On average, people taking a GLP-1 lost 32 pounds on the medications but gained back 21 pounds in the first year after stopping them, the study found.

The weight gain was four times the rate of people who lost weight through behavioral changes. That approach was analyzed in an earlier study where participants took on average four years to return to their baseline weight.

While taking the weight-loss medications, participants’ health markers, such as blood pressure, cholesterol and blood-glucose levels, improved. When people stopped them, levels returned to baseline within 1.4 years.

“It’s virtually parallel with weight gain,” says Sam West, a physiologist and postdoctoral researcher at University of Oxford in England who was lead author of the BMJ review.

In general, when you lose weight, your metabolism slows and you burn fewer calories. But there is another less-known impact.

Your appetite goes up, says Kevin Hall, a former senior investigator at the National Institutes of Health and specialist in nutrition who has done research documenting this phenomenon. “These drugs, they interfere with that feedback control system while you’re on them, but once you’re off the drugs and lost so much weight, your appetite is much higher than it was to begin with so you’ll be overeating calories,” he says.

Doctors say it isn’t surprising that weight gain is faster for those who stop taking medications as opposed to those who lost it through diet and exercise. When someone stops dieting, they don’t go from restricting calories to eating without limits, notes Dr. Katherine H. Saunders, a clinical assistant professor of medicine at Weill Cornell Medicine and co-founder of FlyteHealth, a medical obesity-treatment company. It is usually a gradual process.

When you stop taking a GLP-1, “the hunger and food noise symptoms come back with a vengeance,” she says.

Another less-studied phenomenon is when people stop taking a GLP-1 and then decide they want to go back on the medication. It isn’t always as successful the second or third time around, says Saunders.

The concept of metabolic adaptation explains the body’s desire to regain weight after stopping a GLP-1 medication, says Dr. Gitanjali Srivastava, medical director of obesity medicine at Vanderbilt University Medical Center in Nashville, Tenn.

This is our body’s survival mechanism, evolved over many centuries, to slow our metabolism down and conserve energy during times of famine or stress.

The greatest success stories come from combining lifestyle changes with obesity medications, says Srivastava. “We really need to provide these therapies in combination, all in one, for the maximum benefit of the patient,” she says.

Weight cycling—gaining and losing weight repeatedly—may negatively affect the proportion of fat to muscle, doctors say. When you lose weight, one-quarter to a third is muscle. When you gain weight back, it tends to be more fat than muscle.

“I think your body composition is likely to change,” says Dr. Robert Kushner, an obesity-medicine specialist and professor emeritus at Northwestern University.

Kushner says he’s only had a handful of patients who were able to keep their weight off long-term after stopping a GLP-1 medication.

In addition to your appetite roaring back, there is also the psychological impact of gaining weight back, which can lead to people feeling defeated and less likely to exercise.

Kushner says he tells patients that obesity care is no different than treating someone for high cholesterol or diabetes. When you stop taking a statin, the cholesterol will go back up. When you stop taking insulin, diabetes returns.

So is there any point to taking a GLP-1 short-term? Doctors think the answer is yes.

Kushner says he’s had patients who want to go on a GLP-1 for a limited amount of time. He tells them they need a long-term strategy that could involve transitioning to a less-expensive, older-generation weight-loss medication or starting a more intensive lifestyle intervention.

“I would never say to them there’s no point in starting, but I will tell them right up front we have to start thinking of the day after stopping now,” he says.

WSJ : SoftBank in Talks to Invest Up to $30 Billion More in OpenAI

SoftBank in Talks to Invest Up to $30 Billion More in OpenAI
The Japanese conglomerate is exploring further investment as part of the startup’s efforts to raise up to $100 billion

  • SoftBank is in talks to invest up to an additional $30 billion in OpenAI.
  • OpenAI is seeking to raise up to $100 billion in new capital, which could value the company at as much as $830 billion.
  • SoftBank already has an 11% stake in OpenAI

SoftBank 9434 -0.14%decrease; red down pointing triangle is in talks to invest up to $30 billion more in OpenAI, according to people familiar with the matter, adding to the Japanese conglomerate’s already large stake in the startup.

The ChatGPT maker is seeking up to $100 billion in new capital from investors, a round that could value it at as much as $830 billion, if it succeeds in raising the full amount, The Wall Street Journal previously reported. The deal talks are ongoing and terms could still change.

SoftBank is already one of OpenAI’s largest shareholders with a stake that grew to 11% in December, when it invested $22.5 billion. In a statement at the time, SoftBank Chairman Masayoshi Son said the firm was “deeply aligned with OpenAI’s vision.”

To fund that OpenAI bet, SoftBank said it sold its stake in chip maker Nvidia for $5.8 billion.

OpenAI needs substantial funding to continue developing its artificial intelligence models, paying for its vast computing needs and retaining top researchers in an increasingly competitive market.

OpenAI, which is weighing a potential initial public offering, is also aiming to raise capital from Middle Eastern sovereign-wealth funds and other venture capital funds. The company’s existing investors include Thrive Capital, Khosla Ventures and MGX, the United Arab Emirates fund.

News Corp, owner of The Wall Street Journal, has a content-licensing partnership with OpenAI.

WSJ : China Vanke Avoids Immediate Default With More Bond Repayment Deferrals

China Vanke Avoids Immediate Default With More Bond Repayment Deferrals
Bondholders of two yuan bonds voted in favor of a revised extension plan

  • China Vanke secured a 2.36 billion yuan (US$339.3 million) loan from Shenzhen Metro Group, its largest shareholder, to repay bond principal and interest.
  • Bondholders approved revised repayment extensions for two yuan bonds, delaying the majority of payments originally due in December.
  • The developer’s shares rose 2.2% in Hong Kong and 1.9% in Shenzhen following news of the loan and bondholder approvals.

China Vanke 000002 1.47%increase; green up pointing triangle received approval from bondholders to push back repayment on debt and obtained a fresh loan from a state-owned shareholder, giving it more breathing room as the developer wrestles with a prolonged liquidity crunch.

The company said in a statement dated Tuesday that it has received a loan of up to 2.36 billion yuan, equivalent to US$339.3 million, from Shenzhen Metro Group, its largest shareholder with a 27.18% stake. The loan will be used to repay Vanke’s bond principal and interest, the developer said.

“We think Shenzhen Metro and the local government has provided a critical lifeline for Vanke, said Morningstar equity analyst Jeff Zhang.

Meanwhile, bondholders of two yuan bonds voted in favor of a revised extension plan for payments originally due last December, according to a separate filing. Vanke will need to repay 40% of the principal on a 2 billion yuan note and a 3.7 billion yuan bond on Jan. 28, with the rest delayed to the final month of this year.

The Chinese developer came to a similar agreement last week on a separate 1.1 billion yuan bond originally due last month.

The approval of proposed changes to bond repayments as well as a new loan from Shenzhen Metro signals local government support for Vanke in averting immediate default for now, Zhang said.

The embattled home builder has been battered by a prolonged crisis in the Chinese property sector but is viewed as one of China’s more financially resilient developers and one of the few major players yet to default on its debt.

Many of China’s other large developers have defaulted and investors continue to speculate over how policymakers plan to address the yearslong real-estate slump as it drags on.

There may be more liquidity injections by Shenzhen Metro and financial institutions for Vanke, which has more than 7 billion yuan in bonds coming due in the first half of the year, Zhang said.

Vanke’s shares rose 2.2% to 3.69 Hong Kong dollars, equivalent to 47 U.S. cents, early Wednesday in Hong Kong, while its Shenzhen-listed shares advanced 1.9%.

>>> US After Hours Summary: LRN +18.4%, FFIV +10.3%, NXT +8.6%, TXN +8.3%, STX +

After Hours Summary: LRN +18.4%, FFIV +10.3%, NXT +8.6%, TXN +8.3%, STX +6.7% higher on earnings; QRVO -9.4% lower on earnings; ALHC +6.5% on bullish comments from Baird analyst on CNBC

After Hours Gainers:

Companies trading higher in after hours in reaction to earnings/guidance: LRN +18.4%, FFIV +10.3%, NXT +8.6% (also to supply 2.25 GW of smart solar trackers; also authorizes new $500 mln share repurchase program), TXN +8.3%, STX +6.7%, RNST +3.4%, MANH +1.9%, BXP +1.1%, FCF +0.6% (also increases share repurchase authorization by $25 mln), UMBF +0.5%, LOGI +0.3%

Companies trading higher in after hours in reaction to news: ALHC +6.5% (bullish comments from Baird analyst on CNBC), LZ +4.7% (to join S&P SmallCap 600), AMRX +3.3% (to join S&P SmallCap 600), BROS +2.9% (to join S&P MidCap 400), AHR +2.9% (to join S&P MidCap 400), APLS +2.3% (to join S&P SmallCap 600), EMBJ +1.9% (Q4 backlog reached a record $31.6 bln), ASB +1.5% (authorizes new $100 mln share repurchase program), RYN +1.4% (RYN and PCH stockholders approve merger), ITRI +0.8% (ITRI and SNOW collaborate to advance grid planning with AI-powered data cloud), NGD +0.8% (NGD stockholders approve merger), SM +0.5% (SM and CIVI stockholders approve merger), SNOW +0.5% (ITRI and SNOW collaborate to advance grid planning with AI-powered data cloud), CDE +0.5% (NGD stockholders approve merger), SYBT +0.4% (to acquire Field & Main Bancorp), VALE +0.4% (provides Q4 production and sales update), BDX +0.3% (authorizes additional 10 mln share repurchase program), TTMI +0.3% (to join S&P MidCap 400), LYFT +0.3% (appoints former Waymo exec Deborah Hersman to its Board), DE +0.3% (announces two new US facilities), ET +0.2% (increases dividend), SF +0.2% (3-for-2 stock split)

After Hours Losers:

Companies trading lower in after hours in reaction to earnings/guidance: VENU -17.5% (guidance; also $75 mln stock offering), QRVO -9.4%, SARO -4.7% (guidance; also stock offering by selling shareholders; also 50 mln share offering by affiliates of the carlyle group inc. and GIC), GEF -4.2%, NBHC -2.6% (also increases share repurchase authorization to $100 mln), PKG -2.1%, PPG -1.2%, ENVA -0.4%

Companies trading lower in after hours in reaction to news: BZAI -3% (files for $250 mln mixed securities shelf offering), CCIX -1.7% (postpones shareholder vote on PlusAI vote to Feb 11), SUN -1.5% (increases dividend), ADP -0.8% (increases dividend), AEIS -0.8% (to join S&P MidCap 400), CIVI -0.4% (SM and CIVI stockholders approve merger), LMT -0.2% (awarded a $129 mln Air Force contract), JKHY -0.1% (deconversion revenue for Q2 was $6.2 mln)

The Information : C3.AI in Talks to Merge with Startup Automation Anywhere

C3.AI in Talks to Merge with Startup Automation Anywhere

The Takeaway
  • C3.AI in talks to merge with startup Automation Anywhere, which would go public
  • C3.AI market cap slid to $1.7 billion, a tenth of its valuation six years ago
  • Automation Anywhere would go public via merger, gaining AI automation capabilities

C3.AI, founded by tech industry veteran Thomas Siebel, is in talks to merge with privately held startup Automation Anywhere, which will effectively go public in the deal, according to people familiar with the discussions.

C3.AI, which sells AI to large companies and government agencies, was the first branded AI stock when it went public in 2020. It has struggled for several years amid the rise of generative AI and its market cap has slid to $1.7 billion, a tenth of its valuation six years ago. Automation Anywhere, a rival to UiPath, develops software for automating repetitive tasks inside businesses. If the deal materializes, Automation Anywhere would buy C3.AI and go public as a result, the people said.

A combination with C3.AI could give Automation Anywhere more AI automation capabilities across different sectors. In November, it agreed to buy Aisera, a startup that sells AI automation tools for back-offices like IT services, human resources and customer service.

The price of the deal couldn’t be learned. Both companies may decide not to go ahead with it, and Automation Anywhere could still opt to go public in a more traditional way. Representatives from the companies declined to comment.

Automation Anywhere was valued at $6.8 billion in 2019 by private investors. Its recent valuation couldn’t be learned.

C3.AI products help financial services firms flag fraudulent transactions and assist oil and gas companies in identifying locations for drilling. It counts Shell, U.S Air Force as some of its customers.

Automation Anywhere was founded in 2003 under the name ​​Tethys Solutions. Companies providing automation software services have come under pressure from newer generative AI tools since ChatGPT launched in 2022. UiPath’s shares have fallen 80% since 2021.

However, more recently, these automation software companies have touted their ability to complement the large language model providers to handle complex workflows with less errors and have rebranded themselves as agentic process automation companies.

Shares of C3.AI have also sunk as competitors, including major cloud providers, flooded the market with similar products and began targeting the same set of customers.

The sell-off accelerated after Siebel said he would step down from the CEO role in July. Siebel said he was diagnosed with an autoimmune disease earlier this year that resulted in “significant visual impairment.” He remained as executive chairman of the company.

In November, C3.AI began working with investment bankers after receiving takeover interest, according to the people.