TheChek News Flow

Beijing-backed Chinese Investment Corporation has put 10 per cent stake in London airport on ‘active watch’

A Chinese sovereign wealth fund is considering a sale of its stake in Heathrow airport over concerns about the rising cost of developing a third runway at the London airport. 

The Chinese Investment Corporation, which is backed by Beijing, has put its 10 per cent stake in Heathrow on “active watch” and is mulling a sale, two people with knowledge of its thinking said.

The fund held meetings with financiers to discuss a potential sale late last year but no formal decision has yet been made, the people added.

Heathrow wants to spend £33bn building a new runway and terminal complex to allow it to process tens of millions more passengers a year.

Chancellor Rachel Reeves has said she wants the runway to be operational by the mid-2030s, an ambitious timeline that would require construction to start before the end of this decade. 

But CIC is concerned that the steep costs undermine the business case for expanding the airport.

Airlines including British Airways have raised similar concerns, warning that the costs could be off-putting to carriers and that the total bill for the project, which includes moving part of London’s M25 motorway, may be far higher than currently forecast. 

CIC has held a stake in Heathrow since 2012. The airport’s other investors include Ardian, Qatar’s investment authority, Saudi Arabia’s PIF and Singapore’s GIC. Ferrovial, the Spanish investment group, sold its stake in the airport in 2024. 

The concerns about Heathrow’s costs come as the airport warned this week that it faces a drop in passenger numbers this year as the conflict in Iran saps travel to and from the Middle East. 

The airport is also facing an overhaul of the regulatory model that allows it to claw back its investment by charging airlines landing fees.

The Civil Aviation Authority will recommend a new structure within weeks but Heathrow’s investors have warned that a radical shift will impact the business case behind the third runway investment. 

The airport’s boss Thomas Woldbye has said he is convinced that the Heathrow’s hub status and proximity to London mean it can attract new airlines, even if charges rise in the future. 

As well as its investment in Heathrow, CIC also owns a 17 per cent stake in the Cadent UK gas distribution network. It is planning to sell up to half of its stake in the company over concerns about Britain’s shift towards green energy. 

Earlier this year, CIC was also forced to write down to zero the value of its 8.7 per cent share of Thames Water. The embattled utility is saddled with £20bn debt and being propped up by an expensive loan from creditors, which are seeking to take over the business.

CIC’s retreat from its UK investments comes as the country has become less welcoming to Chinese investors due to rising national security concerns.

In March, the government blocked a £1.5bn investment by Ming Yang for a wind turbine manufacturing plant at Ardersier Port in Scotland, citing security worries and the risk of over-reliance on a Chinese firm in a critical sector.

China believes that there are increasing currency and regulatory risks in the UK and “there are other places it can invest”, another source close to the CIC talks said.

CIC declined to comment. Heathrow did not immediately respond to a request for comment.

Volkswagen rolls out cheaper EVs in battle with Chinese carmakers

ID.Polo is one of four planned affordable electric vehicles across the VW, Škoda and Cupra brands

Volkswagen has unveiled one of its cheapest electric vehicles to date, as it bets on a series of new launches to boost profits from affordable battery-powered models and compete with Chinese rivals.

The ID.Polo, launched on Wednesday, will retail from about €25,000 and is the standard bearer in a new “family” of four entry-level EVs to be released this year across three Volkswagen Group brands — VW, Škoda and Cupra.

The cars were developed jointly, generating savings of about €650mn by avoiding duplicating work across the brands, said Volkswagen, which is seeking to boost the profitability of its EVs and reduce the cost of producing mass-volume models.

“This is how we are making electromobility economically viable in the volume segment and accessible to the masses,” VW brand chief executive Thomas Schäfer said at an event in March.

The vehicles share a common platform, have almost 80 per cent of the same components and will be produced at a single factory in Spain, where labour costs are lower than in Germany.

Volkswagen is in the midst of a major restructuring programme that will see it cut tens of thousands of jobs and capacity in Germany. Earlier this year, it said it was hoping to save €1bn by 2030 by coordinating production across its mass-market brands regionally.

The launch of the brands comes as Volkswagen — which accounted for one in four battery vehicles in Europe last year — faces intensifying competition from BYD and other Chinese manufacturers who are seeking to grow sales in the region.

The ID.Polo’s starting price compares with just under €23,000 for the entry-level version of BYD’s Dolphin Surf, which is in the same segment.

Bringing production for three different brands to one factory outside Germany was “no small thing” for Volkswagen and would give it a cost advantage, said Daniel Schwarz, an auto analyst at Metzler Bank.

The company would normally have had a debate with unions about “whether such an important car should be produced in a certain factory in Germany”, he added.

Analysts have said lower production costs in Spain and the latest iteration of Volkswagen’s battery technology would bring the new model range closer to its petrol offering in terms of profitability.

The new ID.Polo will be followed next year by the release of the smaller and even cheaper ID.Every1 with prices starting at €20,000. While the more compact car would set a price floor for Volkswagen’s battery electric range, executives expect to achieve healthier returns from the larger model.

The ID.Polo would “make Volkswagen fully competitive again in the important small car segment”, which was its traditional strength, Alexander Sauer-Wagner, head of the German Volkswagen and Audi dealership association, told the FT.

The new models would also win over consumers that EVs have so far failed to reach, said independent auto analyst Matthias Schmidt.

The launch of the four models could help “Volkswagen to enter higher-volume segments and markets,” such as southern Europe, where battery sales had lagged behind, he said.

Chief executive Sam Altman’s flexible approach to infrastructure projects is unsettling partners but boosting computing lead

OpenAI’s $500bn Stargate plan to secure computing power is being reworked and, in places, abandoned. Yet its willingness to strike whatever deals are necessary to secure capacity has given it an edge in the race to build AI infrastructure.

In recent weeks, the group has halted planned data centres in the UK and Norway, declined to expand its flagship site in Abilene, Texas and seen several senior figures tied to Stargate leave for rival Meta.

Originally announced in early 2025 by Donald Trump as a $500bn joint venture between OpenAI, Oracle, Abu Dhabi fund MGX and Japan’s SoftBank, Stargate was designed to finance and build dedicated data centres for OpenAI’s use. The idea was to pool capital to tackle the cost and complexity of AI infrastructure.

That concept has rapidly given way to a more flexible approach, with OpenAI increasingly relying on third-party providers, leasing capacity rather than building and owning its own facilities.

“I don’t know what ‘Stargate’ means at this point,” said a person who was involved in the data centre buildout at the outset. “I think it is a completely antiquated line right now.

The shape-shifting scheme embodies OpenAI’s broader efforts. From core technology to partnerships, the company places overlapping bets and abandons all but the most expedient. The approach owes much to chief executive Sam Altman’s “venture mindset”, said one person close to the company.

People familiar with the changes at Stargate said that, in practice, OpenAI has abandoned the joint venture in favour of a series of large bilateral deals. But OpenAI executives said the guiding principle remains to “build more compute”.

Oracle has played the most prominent role, agreeing last year to supply OpenAI with 4.5 gigawatts of computing capacity under a five-year, $300bn agreement.

The company has also struck partnerships with AMD, Broadcom, Nvidia, CoreWeave and Cerebras in deals that at one point totalled more than $1tn in commitments, some of which have since been scaled back.

Questions remain over whether it can afford its huge infrastructure spending. On Tuesday, a report that OpenAI had missed internal targets for revenue and user growth led to share price falls at companies linked to the start-up including SoftBank, Oracle and CoreWeave. OpenAI said in response that its business is “firing on all cylinders.”

OpenAI has cut costs by sidelining or revising Stargate plans. But the willingness to renegotiate or walk away from projects has unsettled partners and raised questions about OpenAI’s reliability as a counterparty.

It initially aimed to develop its own data centres under the Stargate banner as it faced two challenges: a complex supply chain, and wariness from lenders about funding a lossmaking start-up with no credit rating.

The joint venture — pooling cash from blue-chip partners and gaining the imprimatur of the US president — aimed to tackle both issues.

Since then, a surge in demand for AI tools has spurred chip, cloud and infrastructure groups into action and eased investor scepticism.

“We created enough demand in the market, and others came along, so we sidelined first party data centres,” said the person involved in Stargate.

OpenAI said: “Stargate is the umbrella for our compute strategy and we’ve done exactly what we said we would do: secure the compute OpenAI needs at unprecedented scale.

“We’ve expanded to a broad partner network across clouds, silicon, and infrastructure, capacity is coming online, and we’re ahead of schedule. Building at this scale is what allows us to put powerful AI into the hands of more people, businesses, and developers.”

OpenAI this month put on hold one data centre project in the north-east of England and rejigged another in Narvik, Norway. Both projects were badged as being part of Stargate in a tie-up with AI cloud start-up Nscale.

OpenAI annoyed the British government by blaming restrictive regulation and high energy costs for halting plans in the country. The UK AI minister Kanishka Narayan said that the “only thing that has changed [since] the moment of those commitments . . . has been the financing environment for OpenAI.”

UK-based Nscale had been investing heavily in anticipation of leasing capacity to OpenAI. Microsoft has stepped in at Nscale’s Narvik site. OpenAI said it still plans to access capacity in Norway via its broader Microsoft deal, instead of leasing directly from Nscale.

Last month, the AI lab ditched plans to expand its Abilene, Texas site, declining to take up a lease option with developer Crusoe.

The person involved in Stargate said OpenAI sourced cheaper options, including in Michigan, because “there is limited money in the world, whatever Sam [Altman] might say [and] the expansion was at an insane price.”

Microsoft has stepped in to take the extra capacity at Abilene. A person close to Crusoe said Microsoft was a preferable tenant. “It’s a better outcome, [they are] more creditworthy.”

Someone familiar with Microsoft’s thinking said its decision “helps out those who are feeling let down and misled by OpenAI on projects”.

“Stargate has now had three or four permutations, I don’t know what it is right now. I can’t tell you. Maybe it never really existed in the first place,” the person added.

When Stargate launched, the company set a goal of locking in 10GW of capacity — roughly equivalent to 10 nuclear power stations — at a cost of about $500bn by the end of the decade.

The company now aims to beat that target. It claims to have already secured more than 8GW of capacity, and forecasts spending more than $600bn by the end of 2030.

That would mean the lossmaking company far outspending rivals such as Anthropic and Elon Musk’s xAI. OpenAI’s commitments are more in line with Amazon, Google, Microsoft and Meta — which generate tens of billions in annual profit.

SoftBank, the main financial sponsor of the original joint venture, is working on building its own data centres but those are yet to come online. The computing capacity from one project in Ohio could eventually go to OpenAI after a tender process, said a person close to the situation.

“Stargate hasn’t disappeared but it has evolved and people can basically pick their own definition of Stargate now,” said another person familiar with the Japanese investor’s thinking. “In one way, basically any compute that involves Softbank or Oracle can be Stargate”.

SoftBank declined to comment.

According to the person involved in Stargate, the term lost its meaning when it was co-opted by OpenAI’s policy and public relations teams as a catch-all for infrastructure build-out. The idea that being the tenant of a data centre in Europe fell under the Stargate umbrella was “always fake”, they said.

Still, OpenAI’s infrastructure push could give it an advantage. Anthropic chief executive Dario Amodei has criticised rivals for their gung-ho plans. But with power constraints starting to weigh on its ability to meet fast-rising demand, Amodei signed off hundreds of billions of dollars of spending on long-term capacity this month.

OpenAI’s moves may be prescient, as long as the company can meet its lavish spending commitments.

In a note to sales staff earlier this month, OpenAI’s chief revenue officer Denise Dresser wrote: “We saw the exponential compute curve earlier, acted on it faster, and now have a real structural advantage.”

Funding from consortium backed by billionaire Lawrence Stroll comes after fifth consecutive quarterly loss

Aston Martin has secured a fresh £50mn funding from a consortium backed by its chair as the struggling carmaker fell to a fifth consecutive quarter of losses and warned of continuing geopolitical uncertainty.

The group — whose shareholders include Aston’s billionaire chair Lawrence Stroll, China’s Geely and Saudi Arabia’s Public Investment Fund — has struggled for years to generate steady cash flow and profits. Its shares and bonds have sunk to record lows recently amid concerns about the pace of its cash burn. 

Adjusted losses before tax and interest decreased to £56.9mn in the first quarter compared with a £64.5mn loss a year earlier, the British carmaker reported on Wednesday, beating analyst expectations of a £63.7mn loss.

During the first quarter, its net debt increased to £1.5bn from £1.3bn a year earlier. Its free cash flow improved to £117mn from £120mn following the £50mn sale of its Formula 1 naming rights to AMR GP Holdings, the racing team’s holding company that is indirectly controlled by Stroll.

The carmaker has turned to the Canadian billionaire multiple times to shore up its balance sheet. Last year, Aston Martin raised £52.5mn by selling 75mn new shares to Stroll’s consortium, which increased its stake in the group to 33 per cent from 28 per cent.

“Further financial improvement is expected through the rest of the year as we benefit from our expanding core model range, continued Valhalla deliveries . . . and ongoing operational discipline,” said its chief executive Adrian Hallmark.

In February, the company issued a profit warning and confirmed plans to reduce its worldwide workforce by up to 20 per cent.

For 2026, the carmaker maintained its projection that its wholesale volumes would remain flat at about 5,450 vehicles while its gross margin was expected to improve into the upper 30 per cent level compared with 29 per cent last year.