FT : Will Volkswagen’s radical revamp be enough?

Will Volkswagen’s radical revamp be enough?
A year after revealing plans for capacity cuts and job losses in Germany, some think more retrenchment is needed

Saying goodbye to Volkswagen was a hard decision for Martin Maatz. Accepting the car maker’s voluntary redundancy offer after 15 years at the company’s Dresden factory involved a lot of “hand wringing”, the 40-year-old tells the FT.

Getting a job at Volkswagen had been a “dream” for him. The German auto giant “was simply the brand with the biggest draw,” he recalls, before adding that its image has “suffered a lot in recent years”.

Maatz, who works on the assembly line and acts as a shop steward, is one of 35,000 German workers whose jobs will disappear by the end of the decade, under a sweeping cost-cutting plan.

That deal, struck with the country’s powerful labour unions last year, was a milestone. It will lead to more than one in four domestic roles at the VW brand being axed and — for the first time in its 88-year history — the end of car production at one of its sites in Germany.

Volkswagen is struggling to adjust to the rise of electric vehicles, big sales declines in China and lacklustre demand in Europe. Its chief executive, Oliver Blume, warned at the time that the core VW brand faced an unprecedentedly “serious situation”.

“The general conditions haven’t improved. In fact, they’ve gotten worse”, says Stefan Bratzel, director of the Center of Automotive Management in Germany. The crisis has spilled over to the carmaker’s premium marques, Porsche and Audi, which historically have driven high growth and rich profits. US President Donald Trump has imposed tariffs on imported cars.

These will cost Volkswagen up to €5bn this year alone, putting it among the hardest hit carmakers in the world. “US tariffs, in particular, are having a lasting negative impact on our results,” chief financial officer Arno Antlitz tells the FT.


Auto industry experts are now asking whether last year’s landmark cost-cutting plan will be enough. “Another multibillion-euro funding gap has emerged,” says Helena Wisbert, professor for automotive economics at the Ostfalia University of Applied Sciences in Wolfsburg, the Lower Saxony city long dominated by the auto giant.

She questions whether the fragile compromise between Volkswagen and its powerful labour unions will hold until 2030, and says the carmaker could be forced to sell off business units or make more drastic cuts.

“I’m curious to see what Volkswagen comes up with, because this major cost-saving programme has already examined all possible cost reduction options.”

Analysts polled by Reuters forecast that the group’s net profit will more than half to €5.2bn this year compared to last. Porsche, the maker of the iconic 911 rear-engined sports car, fell into a loss in the third quarter after writing off €1.8bn because of delays to new electric vehicle models.

Even if a forecast rebound materialises as expected, Volkswagen’s group profit in 2027 will still be 16 per cent below its post-pandemic peak in 2023.

Its shares have dropped 60 per cent from the highs of 2021, wiping out €94bn in market capitalisation and making it one of the worst performing German blue-chips.

The group has responded by vowing to improve profits by €6bn by the end of the decade, with €2bn of the uplift coming from a long-term wage deal with unions that limits pay rises and trims perks, as well as another 15,000 job cuts at other business units.

“We must accelerate the implementation of the existing programmes and increase our efforts on the cost side — without making any concessions on the products,” Antlitz says.

Rival German carmakers BMW and Mercedes-Benz have also been hit hard by the downturn in China sales and the imposition of tariffs. But Volkswagen, the global symbol of German carmaking prowess, is more reliant on lower-margin mass market cars and employs a disproportionately large number of staff in Germany — two-fifths work there, even though only 19 per cent of its vehicles are manufactured domestically. Production costs in the country are among “the highest worldwide”, says Wisbert.

In China, Volkswagen has sought to shore up its position by localising development and says it can halve production costs for a new battery car compared with Germany, thanks to lower labour costs, quicker development times and stronger supply chains for key components.

For many, the surprise is that the company’s dramatic retrenchment has taken so long. Maatz, who will undertake a training course before looking for another job in the auto sector, says “it’s been a long time since anyone expected another outcome”.

The glass-walled “transparent factory” in Dresden where Maatz worked was conceived as a showcase for both German reunification and Volkswagen’s engineering prowess.

It was a pet project of Ferdinand Piëch, who spent more than two decades as chief executive and then chair and died in 2019. He was the grandson of Ferdinand Porsche, who had designed the cheap and dependable “people’s car” that handed Germany’s 1930s Nazi government a propaganda coup and gave Volkswagen its name.


But it was the domineering and autocratic Piëch, who took over at Volkswagen in 1993 during a profitability crisis, who transformed the group into a sprawling portfolio of automotive and truck brands and built up its commanding position in the Chinese market.

Piëch slashed procurement costs by squeezing suppliers and widened the group’s global footprint by acquiring luxury brands such as Bentley and Lamborghini and truckmakers MAN and Scania.

He and his protégé Martin Winterkorn, who became chief executive in 2007, pursued a grandiose vision of becoming the world’s biggest mobility group. In 2012, the enlarged group reported €25.5bn in pre-tax profit, the highest ever for a listed German company, and would later dethrone Toyota as the world’s biggest carmaker by volume.

During this era, sales growth and profitability was driven by high-margin premium brands such as Audi and Porsche — and its spectacular success in China. Volkswagen was a pioneer there, setting up the Shanghai Volkswagen Automotive Company, or SAIC, as early as 1984.

In the years leading up to the Covid-19 pandemic, Volkswagen cashed in close to €5bn of profit annually from its joint ventures. China became the single biggest market for Porsche and Audi, with the country’s nouveaux riches snapping up gas-guzzling luxury sedans and SUVs.

Piëch’s obsession with engineering expertise, detail and quality played well in premium models, such as the 570-horsepower Porsche Cayenne that famously towed a 285-tonne Airbus A380 across Paris airport in 2017.


But his managerial priorities did not wring the same benefits from the group’s main volume marque. Profitability at the Volkswagen brand was underwhelming even in better times for the wider group. Its operating margin averaged 3.2 per cent across the five years before the coronavirus pandemic, just half of management’s current target and far behind that of Škoda, another of the group’s volume brands whose manufacturing base is largely outside Germany.

The transparent factory came to symbolise such shortcomings. It was originally built to produce the flagship Phaeton, a luxury sedan named for a mythological Greek god with some variants costing €90,000 or more. But the car, widely derided as boring and overpriced, was a commercial flop and production finally ceased in 2016.

By that time Volkswagen was embroiled in a much deeper crisis. Early in 2015, Piëch and Winterkorn had a spectacular falling out, with Piëch quitting as chair of the group’s supervisory board as a result. Winterkorn resigned later that year, after US authorities discovered that the group had installed software to detect when diesel-engined cars were being tested for emissions and alter engine performance to ensure they complied.

“Dieselgate” erupted into one of the biggest frauds in German corporate history and dragged Volkswagen into a maelstrom of litigation around the world that has so far resulted in over €30bn worth of fines and settlements.

Former Audi boss Rupert Stadler pleaded guilty to fraud in 2023 and was handed a suspended jail sentence and fined €1.1mn. Proceedings against Winterkorn were suspended this year due to the former chief executive’s poor health.

The long years of success, particularly in China, “masked many structural problems in Wolfsburg”, says Bratzel. Governance experts and investors link Volkswagen’s many blunders to its byzantine corporate structure.

It has two classes of shares. The Porsche-Piëch family controls 53 per cent of the voting rights through its holding of ordinary shares. The Qatar Investment Authority owns a further 17 per cent. But most other institutional shareholders are reduced to owning so-called preference shares, which are far more liquid but do not carry votes.

VW is not “transparent” with its shareholders and its supervisory board is not truly independent, according to Ingo Speich, head of corporate governance at VW shareholder Deka Investment. He is also unhappy that such a large and complex conglomerate has, for the past three years, been run by a part-time chief executive, since Blume also runs Porsche — a role he will pass on only at the end of this year.

VW said it met all corporate governance requirements and that the supervisory board acted “in shareholders’ best interests”.

The state government of Lower Saxony, which Bratzel describes as economically “dependent” on Volkswagen, holds another 20 per cent of the voting rights. It also has a special veto on key decisions and can name two supervisory board members that do not require approval from other shareholders.

Another 10 seats on the 20-member supervisory board are held by workers representatives, as is normal at larger German companies. That means the two entities which share a desire to preserve jobs are able to outvote the representatives of the Porsche-Piëch family and the QIA.

Despite their control of the voting rights, “the owners cannot do what they want,” says Bank of America auto analyst Horst Schneider, adding that Volkswagen’s current cost-cutting plan might not be “sufficiently ambitious” and that its eventual scope would “depend on what management could do with the unions”.

After the Phaeton was abandoned, the Dresden factory was converted into a laboratory for VW’s electrification efforts, producing an electric version of the Golf hatchback and more recently the battery-powered ID.3.

But with an annual output of just 6,000 vehicles, the plant accounts for a tiny fraction of the group’s global output. Doubling up as a showroom, it is visited by tens of thousands of tourists a year who watch the live production through its massive glass walls.


After all production stops in mid-December, the site is set to become an “innovation campus” for Dresden’s Technical University, although VW plans to maintain a presence. Heiko Rabe, who joined Volkswagen almost 25 years ago and now works in the visitor centre, plans to stay on. But the looming end of carmaking was “sobering” for 300 or so remaining employees at the factory, he says.

A similar fate awaits for the much larger Osnabrück plant, which employs 2,300 staff and produced 35,000 vehicles last year. In mid-2027, the production of the final model made there — the T-Roc convertible — will end, and Volkswagen has not named a new model for the site.

Instead it is searching for a buyer, with defence group Rheinmetall initially expressing an interest but later pulling back. “Unless some kind of miracle happens, it will be extremely difficult [to save Volkswagen car production in Osnabrück],” says Jürgen Placke, the head of the local works council.

He insists that the site’s issues are not caused by German wage levels but poor managerial decisions. The Osnabrück factory has long specialised in low-volume niche models, and was the birthplace of the famous Karmann Ghia sports car in the 1950s. But demand for convertibles has been declining around the world.

When running at full capacity, the plant was not only profitable but — according to Volkswagen’s own internal benchmarking — “a top performer”, union representatives stress. They blame management’s flawed model strategy and the lack of EV models that appealed to consumers for the crisis.

The situation has become so dire that even Volkswagen’s headquarters in Wolfsburg — which has for decades been the largest car factory in Europe, cranking out more than half a million cars — will be stripped of two of its four production lines. Overall, the VW brand is slashing production capacity in Germany by 40 per cent, shutting production lines for 734,000 vehicles.

A year since agreeing the cuts, the company says it has made some palpable progress. It identified 70 per cent of the German workers who will leave by 2030. Factory costs at three of its largest sites — Wolfsburg, Emden and Zwickau — have been cut by 30 per cent on average already, it adds.

There are other positive signs, too. Drivers in Europe have started to warm to Volkswagen’s new electric vehicles, even as a wave of cheap imported Chinese cars threatens to undercut them. One in every four battery-powered vehicles sold in Europe so far this year has been produced by the German group.

In its home country, the VW brand’s electric car sales have risen by almost three-quarters so far this year, partly at the expense of Tesla, whose sales have halved. Some of its models, including the mid-sized ID.7 sedan, are regarded as being among the best battery-powered vehicles.

“We are currently very successful in the electric segment. That was not always the case,” says Alexander Sauer-Wagner, head of the German Volkswagen and Audi dealership association. He hopes that smaller and cheaper electric models, planned for launch over the coming two years, will bring a “big boost” to sales. He stresses that a strong offering in the entry segment was a must. “That’s ultimately what makes Volkswagen strong.”

Optimists point to Volkswagen’s overall heft as it owns some of the industry’s most coveted and emotional global brands, boasts deep engineering expertise and, despite the financial impact of dieselgate, still has a robust balance sheet; its automotive division had €31bn of net cash and short-term deposits at the end of September.

For the VW brand, “things are already looking up”, says Wisbert. “It has already reached the bottom.”

The information : Databricks Boosts Sales Forecast, Driving Valuation to $134 Bi

Databricks Boosts Sales Forecast, Driving Valuation to $134 Billion

The Takeaway
  • Databricks seeks $5 billion at $134 billion valuation, 32 times sales
  • Databricks projects 55% sales growth, but gross margin has fallen to 74%
  • CEO Ali Ghodsi has warned of an AI bubble despite Databricks’ growth from AI

Databricks CEO Ali Ghodsi has been more vocal than other Silicon Valley executives about the dangers of an AI bubble. His company’s new $5 billion round of fundraising, at a higher valuation than ever, epitomizes the risks and rewards of the boom: While sales are growing faster than forecast, AI development costs are squeezing gross profit margins.

Privately held Databricks began asking investors for cash two weeks ago in a fundraising round that values the company at $134 billion, which is roughly 32 times this year’s expected sales of about $4.1 billion, according to investor documents and a person familiar with the matter. Last year, Databricks raised cash at 24 times that year’s sales, and the year before, at 26 times.

Investors appear to be willing to give Databricks a higher multiple because it has been able to continue a streak of several years with a more than 50% growth rate, an unusually fast pace among mature software firms.

In fact, the company has increased its sales projections at least twice this year, according to the documents and the person. In September, it revised its sales projection from $3.8 billion to $4 billion, before revising it upward again slightly. It now expects sales to grow by 55% this year.

At the same time, the company has told investors its gross margin is falling faster than anticipated, to 74% compared to an earlier plan for 77%, due to increasing usage of its AI products.

Overall, Databricks is operating at roughly breakeven, anticipating about $10 million in free cash flow this year. That’s a big improvement from when the company was burning hundreds of millions in cash a year, as recently as 2023. But it’s far less profitable, by the measure of free cash flow margin, than similarly sized public companies like Palantir and Snowflake.

Databricks’ valuation puts it in the middle of the pack relative to some of its rivals. Snowflake and Datadog are valued at 21 times and 16 times expected sales, respectively. Palantir, a favorite stock among retail traders, is the only publicly traded software firm with a richer valuation, more than 90 times this year’s expected sales.

Databricks sells a data lake, a type of database for storing different types of corporate data. Recently, it has been trying to win more business by convincing customers they can use its AI agents to automate human resources and IT service management tasks, replacing more traditional software. Databricks has said it derives about a quarter of its revenue from AI products.

The company has close ties with OpenAI, one of its biggest customers. In September, Databricks said it would spend $100 million on OpenAI models over several years. It’s previously told investors its top 10 customers collectively make up less than 15% of its usage.

Bubble Warning

While touting how his own company has benefited from AI sales, CEO Ali Ghodsi, a co-founder, has warned investors that other AI executives have become overexuberant about the near-term capabilities of AI. In an interview with Goldman Sachs CEO David Solomon in September, Ghodsi said, “It’s early days. That’s why we’re in a bubble, right?”

He added that Databricks was benefiting from customers moving quickly to try to automate more business tasks. “The only thing I don’t know is if there is a big correction, that could set us back,” he added.

What concerns some investors more immediately is rising costs. Databricks’ gross margin fell to about 74% in the third quarter from 79% in the same period last year. The decline was due to increasing expenses tied to running a new cloud storage offering for customers and buying graphics processing units to run small AI models, the company told investors recently.

Publicly traded software firms with similar data infrastructure businesses, such as Snowflake, have also reported declining gross margins in recent quarters.

Ghodsi has been happy to raise money privately while pushing off an initial public offering that would be one of the most highly anticipated listings in tech in years. Databricks is the fifth most valuable private tech company in the U.S., after OpenAI, SpaceX, Anthropic and xAI. Its $10 billion funding round last December was among the largest ever by a private company.

Insight Partners, a tech investment firm that buys shares in public and private companies, is an existing investor in Databricks and is expected to lead the new round and invest at least $500 million. The company would use the capital from the new funding round to buy back shares from employees while covering taxes related to the share sales.

NYT : Call My Agent, the Basketball Version

Call My Agent, the Basketball Version
There have never been more basketball stars from France. Two best friends saw it coming decades ago and are reaping the benefits.

Bouna Ndiaye, left, and Jérémy Medjana have led their agency, Comsport, to become the premier agency for French basketball players. They represent the N.B.A. superstar Victor Wembanyama.Credit...

Last spring, in his quest to become one of the greatest basketball players of all time, Victor Wembanyama, a 7-foot-4 Frenchman now in his third National Basketball Association season with the San Antonio Spurs, decided he wanted to do something unusual in the offseason to boost his training regimen. But he didn’t know exactly what. So he and Bouna Ndiaye, one of his agents, brainstormed together.

What if he did workouts standing on his hands — too wacky? What about training like a ninja? Something in the martial arts?

Mr. Ndiaye saw the vision. So he found a 1,500-year-old Buddhist temple in the Henan province of China, where Mr. Wembanyama could live with the monks and train in kung fu. This idea delighted Mr. Wembanyama. In China, he lived in seclusion for 11 days. He shaved his head, he meditated, he contorted his body in ways even people only three-quarters his size might struggle to do.

This was one piece of a busy offseason that Mr. Ndiaye helped orchestrate for Mr. Wembanyama, a once-in-a-generation type of star who was coming off a season that ended early because of a potentially life-threatening blood clot in his right shoulder.

Nearly 30 years ago, Mr. Ndiaye, 59, and his best friend, Jérémy Medjana, 53, started an agency called Comsport, which is now the premier agency for French players at a time when the country’s influence on basketball is exploding. France won the silver medal in last year’s Olympics. Two of the last three top picks in the N.B.A. were French.

The French ascendance has been good business for Comsport. In recent years, the agency has guided its clients through deals worth hundreds of millions of dollars, with Mr. Ndiaye in Dallas and Mr. Medjana in Paris. Now, they represent Mr. Wembanyama, who had played so well this year that there was talk early in the season that he could win the league’s Most Valuable Player Award. The agents’ story will even be told in a movie called “The American Dream,” which was produced by a prominent French production house, Quad Entertainment, and will be released in February.

“You forget the struggle,” Mr. Ndiaye said. “Ten years, you’re not making any money. You keep believing that you’re going to make it.”

When the pair started their agency in the 1990s, they set out to represent players from Africa and France. But there had only been only a handful of players from those areas to make it to the N.B.A.

Then came Tony Parker, who grew up in Normandy, was a 2001 first-round pick and went on to win four championships with the Spurs. Mr. Parker inspired a new generation of French basketball players, including Mr. Wembanyama. France invested in an effective youth system, and talent flourished.

Mr. Ndiaye, who spent his childhood in Senegal and moved to France as a teenager, met Mr. Medjana, who grew up in France near the Belgian border, on a basketball court in the south of France. Both were obsessed with the sport. They started a touring dunk competition called Slam Nation in 1997.

That partnership turned into a sports agency. For a decade, they made only enough money for the agency to stay afloat — not for salaries for themselves, certainly not enough to save anything. Mr. Ndiaye worked odd jobs in construction and cleaned airplanes to help support his young family; Mr. Medjana taught sports at an elementary school and sold knockoff designer clothes and worked shifts at his father’s video rental store.

“My family was thinking: ‘Are you crazy? What are you doing?’” Mr. Medjana said.

As they grew their business, a pipeline from France to the N.B.A. emerged, and Comsport was a key hub. Mr. Ndiaye and Mr. Medjana would scout talent from youth programs and begin developing relationships when the players were teenagers.

“This is such a very competitive business,” said Boris Lelchitski, a sports agent who teamed up with Comsport when it needed a presence in the United States. “The clients and players that they represent are very difficult to even get signed.”

Ian Mahinmi, who played 12 seasons in the N.B.A., remembers Mr. Ndiaye’s coming to his home in France when he was 16. His parents, his uncles and one aunt had gathered to hear pitches from potential agents. Mr. Ndiaye and Mr. Mahinmi’s family bonded over their common roots in Africa. (While Mr. Mahinmi grew up near Paris, his father is from Benin.)

“As soon as he left, we all looked at each other, and we were like, ‘OK, that’s him,’” Mr. Mahinmi said.

In 2005, Mr. Mahinmi became Comsport’s first N.B.A. first-round pick, an important milestone.

But there continued to be challenges. The pair worked with one U.S.-based agent who never paid them. Another time, a client who had been with them for more than 10 years, on whom they had spent resources they were hoping to recoup, fired them before his first big N.B.A. payday.

Mr. Ndiaye said the player, Ronny Turiaf, had told him, “You’re like my dad, but you’ve never negotiated free agency.” He wanted someone with more experience. (Mr. Turiaf declined to be interviewed for this article.)

As a result, Comsport went bankrupt. For seven years, the French government administered a recovery plan for the agency’s finances.

Soon, though, its clients in Europe and the United States started making real money. Nicolas Batum became a first-round N.B.A. draft pick in 2008, Evan Fournier in 2012 and Rudy Gobert in 2013. Mr. Gobert has won the league’s Defensive Player of the Year Award four times.

R.C. Buford, the chief executive of the Spurs, who drafted Mr. Mahinmi in 2005, credits Mr. Ndiaye’s work with helping to bring about the N.B.A.’s modern-day French influx.

“That has to be some reflection of the work that he has done with Batum and Rudy and the other people that he has represented and helped grow,” Mr. Buford said.

In 2015, Mr. Batum, Mr. Gobert, Mr. Fournier and Mr. Mahinmi presented a tearful Mr. Ndiaye with a Rolex watch at his surprise 50th birthday party. The next year, the four signed contracts worth a combined $371 million.

And so, when they had the chance to pitch a 15-year-old Mr. Wembanyama and his parents on representing him, five years after they became aware of him, Mr. Ndiaye and Mr. Medjana could tell them that they had done almost everything: They had represented undrafted players and first-round picks, but now they had also negotiated free agency and built relationships with sponsors. They had also known Mr. Wembanyama and his family for much longer than anyone else who might have competed for his business.

Comsport doesn’t get every French player. In the 2024 draft it represented Tidjane Salaun, whom the Charlotte Hornets took sixth overall, but two other French players went earlier — Zaccharie Risacher, first overall, and Alex Sarr, second — and neither is represented by Comsport.

These days, the pair’s roster has expanded beyond French and African players, but they still scout talent the old-fashioned way, scouring youth tournaments and college programs around the world. In fact, one month after Mr. Wembanyama was drafted first overall in 2023, they found themselves stuck on a Bulgarian highway in a miles-long customs line trying to get to Serbia for FIBA’s U-17 European Championships.

It had been Mr. Ndiaye’s idea that they fly to Bulgaria instead of straight to Serbia, still interested in saving a little money. What’s normally a two-hour trip took seven. Mr. Medjana was furious. Mr. Ndiaye assured him it would be much easier on the way back.

It took eight hours to drive back to Bulgaria, and Mr. Medjana cursed his best friend the whole way. Both missed their flights home.

“I was like, ‘Guys, why are you still putting yourself through this?’” said Issa Mboh, the head of global marketing at Comsport. Their success surely permitted them a chance to relax a bit. “There’s no need anymore.”

He couldn’t convince either of them.

NYT : Silicon Valley’s Man in the White House Is Benefiting Himself and His Frie



From: Laurent Chekroun (MAKOR CAPITAL MARKET) At: 11/30/25 19:39:05 UTC+1:00
Subject: NYT : Silicon Valley’s Man in the White House Is Benefiting Himself and His Frie
Silicon Valley’s Man in the White House Is Benefiting Himself and His Friends
David Sacks, the Trump administration’s A.I. and crypto czar, has helped formulate policies that aid his Silicon Valley friends and many of his own tech investments.

In July, David Sacks, one of the Trump administration’s top technology officials, beamed as he strode onstage at a neoclassical auditorium just blocks from the White House. He had convened top government officials and Silicon Valley executives for a forum on the booming business of artificial intelligence.

The guest of honor was President Trump, who unveiled an “A.I. Action Plan” that was drafted in part by Mr. Sacks, a longtime venture capitalist. In a nearly hourlong speech, Mr. Trump declared that A.I. was “one of the most important technological revolutions in the history of the world.” Then he picked up his pen and signed executive orders to fast-track the industry.

Almost everyone in the high-powered audience — which included the chief executives of the chipmakers Nvidia and AMD, as well as Mr. Sacks’s tech friends, colleagues and business partners — were poised to profit from Mr. Trump’s directives.

Among the winners was Mr. Sacks himself.

Since January, Mr. Sacks, 53, has occupied one of the most advantageous moonlighting roles in the federal government, influencing policy for Silicon Valley in Washington while simultaneously working in Silicon Valley as an investor. Among his actions as the White House’s artificial intelligence and crypto czar:

  • Mr. Sacks has offered astonishing White House access to his tech industry compatriots and pushed to eliminate government obstacles facing A.I. companies. That has set up giants like Nvidia to reap an estimate of as much as $200 billion in new sales.
  • Mr. Sacks has recommended A.I. policies that have sometimes run counter to national security recommendations, alarming some of his White House colleagues and raising questions about his priorities.
  • Mr. Sacks has positioned himself to personally benefit. He has 708 tech investments, including at least 449 stakes in companies with ties to artificial intelligence that could be aided directly or indirectly by his policies, according to a New York Times analysis of his financial disclosures.
  • His public filings designate 438 of his tech investments as software or hardware companies, even though the firms promote themselves as A.I. enterprises, offer A.I. services or have A.I. in their names, The Times found.
  • Mr. Sacks has raised the profile of his weekly podcast, “All-In,” through his government role, and expanded its business.

No event better illustrates Mr. Sacks’s ethical complexities and how his intertwined interests have come together than the July A.I. summit. Mr. Sacks initially planned for the forum to be hosted by “All-In,” which he leads with other tech investors. “All-In” asked potential sponsors to each pay it $1 million for access to a private reception and other events at the summit “bringing together President Donald Trump and leading A.I. innovators,” according to a proposal viewed by The Times.

The plan so worried some officials that Susie Wiles, the White House chief of staff, intervened to prevent “All-In" from serving as the sole host of the forum, two people with knowledge of the episode said.

Steve Bannon, a former adviser to Mr. Trump and a critic of Silicon Valley billionaires, said Mr. Sacks was a quintessential example of ethical conflicts in an administration where “the tech bros are out of control.”

“They are leading the White House down the road to perdition with this ascendant technocratic oligarchy,” he said.

Mr. Sacks has been allowed to serve in government while working in private industry because he is a “special government employee,” a title the White House typically confers on experts who temporarily advise the government. He is not paid for his work for the administration.

In March, Mr. Sacks received two White House ethics waivers, which said he was selling or had sold most of his crypto and A.I. assets. His remaining investments, the waivers said, were “not so substantial” as to influence his government service.

But Mr. Sacks stands out as a special government employee because of his hundreds of investments in tech companies, which can benefit from policies that he influences. His public ethics filings, which are based on self-reported information, do not disclose the value of those remaining stakes in crypto and A.I.-related companies. They also omit when he sold assets he said he would divest, making it difficult to determine whether his government service has netted him profits.

A White House spokeswoman, Liz Huston, said Mr. Sacks had addressed potential conflicts. His insights were “an invaluable asset for President Trump’s agenda of cementing American technology dominance,” she said.

Jessica Hoffman, a spokeswoman for Mr. Sacks, said that “this conflict of interest narrative is false.” Mr. Sacks has complied with special government employee rules and the Office of Government Ethics determined that he should sell investments in certain types of A.I. companies but not others, she said. His government role has cost him, not benefited him, she added.

At a White House dinner for tech executives in September, Mr. Sacks said he was grateful to work in both technology and government. It was “a great honor to have a foot in each one of these worlds,” he said.

‘David’s House’

Mr. Sacks’s road to the White House began in Silicon Valley.

He arrived in the tech heartland in 1990 as an undergraduate at Stanford University, where he met fellow students including Peter Thiel. Mr. Sacks later joined Mr. Thiel at a start-up that became the electronic payments firm PayPal, alongside Elon Musk.

After eBay bought PayPal for $1.5 billion in 2002, the men invested in one another. Mr. Sacks helped fund Mr. Musk’s rocket company, SpaceX, as well as Palantir, the data analysis firm co-founded by Mr. Thiel. In turn, Mr. Thiel backed Yammer, Mr. Sacks’s business communications start-up that was sold to Microsoft in 2012 for $1.2 billion.

In 2017, Mr. Sacks began Craft Ventures, a firm that has invested in hundreds of start-ups, including some owned by his friends. He also started the “All-In” podcast three years later with friends and fellow investors Jason Calacanis, Chamath Palihapitiya and David Friedberg.

Mr. Sacks became a major player in Republican politics in 2022, when he donated $1 million to a super PAC supporting the Senate run of JD Vance, a former tech investor who worked for Mr. Thiel.

Last year, Mr. Sacks hosted a $12 million fund-raiser for Mr. Trump at his San Francisco mansion. The dinner made an impression on the presidential candidate.

“I love David’s house,” Mr. Trump said on “All-In” two weeks later. “What a house.”

After the election, Mr. Trump’s team asked Mr. Sacks to join the administration. He said he would, as long as he could continue working at Craft — and got his wish.

“It’s exactly what I requested,” Mr. Sacks said of his dual position in December.

Allying With Nvidia
Mr. Sacks opened the door of the White House to Silicon Valley leaders. Among the most prominent visitors was Jensen Huang, Nvidia’s chief executive.

Mr. Sacks and Mr. Huang, who had not met before Mr. Sacks joined the administration, forged a tight bond this spring, said three people familiar with the men, who were not authorized to discuss their interactions.

Both stood to benefit. Mr. Huang, 62, wanted government clearance to sell Nvidia’s highly coveted A.I. chips around the world, despite security concerns that the components could bolster China’s economy and military. Mr. Huang argued that restricting exports of Nvidia’s chips would push Chinese companies to develop more powerful alternatives. And spreading Nvidia’s technology would expand the A.I. industry, aiding the A.I. investments owned by Mr. Sacks and his friends.

In White House meetings, Mr. Sacks echoed Mr. Huang’s ideas that the best way to beat China would be to flood the world with American technology. Mr. Sacks worked to eliminate Biden-era restrictions on Nvidia and other American chip companies’ sales to foreign countries. He also opposed rules that would have made it difficult for foreign companies to buy U.S. chips for international data centers, five people with knowledge of the White House discussions said.

Free of those restrictions, Mr. Sacks flew to the Middle East in May and struck a deal to send 500,000 American A.I. chips — mostly from Nvidia — to the United Arab Emirates. The large number alarmed some White House officials, who feared that China, an ally of the Emirates, would gain access to the technology, these people said.

Ms. Hoffman said Mr. Sacks developed his thinking by talking to many people, not just Mr. Huang, and “wants the entire American tech stack to win.” None of his holdings benefited from the Emirates deal, she said.

Mylene Mangalindan, an Nvidia spokeswoman, said Commerce Secretary Howard Lutnick was the company’s primary contact for A.I. chip sales abroad.

Mr. Sacks trumpeted the Emirati deal on “All-In” in May. “I would define winning as the whole world consolidates around the American A.I.” companies, he said.

There was one last obstacle to that goal: removing a U.S. ban on direct chip sales to China.

In the White House, Mr. Sacks promoted the idea that the ban inadvertently helped China by diverting chip sales to Huawei, a Chinese rival to Nvidia, four people familiar with the discussions said.

In July, Mr. Sacks and Mr. Huang took their argument to an Oval Office meeting with Mr. Trump. Before the meeting ended, Mr. Trump cleared Nvidia to sell its chips to China.

The Sacks Portfolio
The White House has praised Mr. Sacks, saying he minimized his financial conflicts of interest.

The ethics waivers that Mr. Sacks received said he and Craft Ventures had sold more than $200 million in crypto positions, including investments in Bitcoin, and were divesting stakes in A.I.-related companies including Meta, Amazon and xAI.

Mr. Sacks had started or completed sales of “over 99 percent” of his “holdings in companies that could potentially raise a conflict of interest concern,” the White House said.

Ms. Huston, the White House spokeswoman, said Mr. Sacks was “recused from participating in any matters that could affect his financial interests until he was able to divest of conflicting interests or until he received a waiver.”

But Mr. Sacks’s waivers provide an incomplete picture of his wealth and do not say when he sold his holdings in Meta, Amazon and other companies.

What is clear is that Mr. Sacks, directly or through Craft, has retained 20 crypto and 449 A.I.-related investments, according to The Times analysis.

Of the A.I.-related investments, 11 were designated in one waiver as “A.I. Interests.” The other 438 were classified as software or hardware makers, even though they promote A.I. offerings or services on their websites. In one example, the waiver categorized Palantir as “software as a service,” while the company’s website says it provides “A.I.-Powered Automation for Every Decision.” Forty-one of the companies have A.I. in their names, such as Resemble.AI and CrewAI.

In one of the waivers, the White House said many of the software companies “do not currently use A.I.-related applications in their core business in any material way,” but added that “many of them are likely to at some point in the future.”

Policies that Mr. Sacks supported at the White House have laid the groundwork for his investments to flourish.

The A.I. Action Plan promoted domestic production of autonomous drones and other A.I. inventions for the Pentagon. Mr. Sacks has stakes in defense tech start-ups such as Anduril, Firestorm Labs and Swarm Aero that make drones and other products, according to his filings. In September, Anduril announced a $159 million contract with the U.S. Army to build a new type of night vision goggles with A.I.

Shannon Prior, an Anduril spokeswoman, said the company had a relationship with the Army before the A.I. Action Plan and that it received the contract because its founder, Palmer Luckey, is “the world’s best virtual reality headset designer.” Ms. Hoffman said it was an “obvious idea” to include the military use of A.I. in the policy plan.

This spring, Mr. Sacks also backed a bill called the GENIUS Act to regulate stablecoins, a type of cryptocurrency designed to maintain a constant price of $1. Mr. Sacks promoted the legislation on CNBC and worked to advance it through Congress.

After the bill passed in July, Mr. Sacks called it “historic” and “momentous” on “All-In.” It is poised to significantly expand the stablecoin business.

One of Craft’s crypto investments is BitGo, a company that works with issuers of stablecoins. BitGo celebrated the GENIUS Act on its website and promptly capitalized, declaring that its service “fit perfectly” with the new guidelines. “The wait is over,” the site said.

In September, BitGo filed for an initial public offering. Craft owns 7.8 percent of the company, according to financial filings, which would be worth more than $130 million at BitGo’s 2023 valuation.

BitGo declined to comment. Ms. Hoffman said the GENIUS Act’s passage “contained no specific benefit for BitGo.”

Since Mr. Sacks joined the White House, A.I. companies have continued to announce new investments from Craft. In July, Vultron, a start-up that develops A.I. software for government contractors, celebrated $22 million in new financing and heralded the contribution of “Craft Ventures, co-founded by White House A.I. adviser David Sacks.”

The funding was secured before Mr. Sacks joined the administration, said Mac Liu, Vultron’s chief executive. “We mentioned David in the announcement because he’s a big name in A.I.,” he said.

Mr. Sacks remains on the board of Glue, a start-up that he helped found that offers an A.I.-assisted chat platform. In October, Glue announced $20 million in new funding, including from Craft.

Mr. Sacks had left corporate boards before joining the Trump administration, but stayed on Glue’s because “it was allowed,” Ms. Hoffman said. The funding was completed last year, she said. Glue did not respond to a request for comment.

Going ‘All-In’
In an “All-In” episode in March, two of the podcasts’ hosts, Mr. Friedberg and Mr. Palihapitiya, stood outside the East Wing.

They had been “running around” the White House, Mr. Palihapitiya said, as the show spliced in photos of them walking through wainscoted rooms and joining Mr. Sacks in the portico dividing the East and West Wings.

The podcasters then interviewed Treasury Secretary Scott Bessent about economic policy. Days later, they returned with a nearly two-hour interview with Mr. Lutnick. Two months after that, they interviewed the secretaries of agriculture and the interior. In September, “All-In” posted a video of a private Oval Office tour with Mr. Trump.

Mr. Sacks’s government work has boosted the profile of the podcast, which is downloaded 6 million times a month. Its annual conference in Los Angeles generated roughly $21 million in ticket sales this year, up from $15 million last year, based on its $7,500 ticket price and public attendance estimates. In June, the podcast introduced a $1,200 “All-In”-branded tequila.

Mr. Sacks has forgone A.I. and crypto-related revenues, such as from sponsorships, but can share in sales from tequila and event tickets, Ms. Hoffman said. Jon Haile, the podcast’s chief executive, did not respond to a request for comment.

Mr. Sacks’s personal business and policy work came together at the July A.I. event in Washington, which he tapped “All-In” to host.

But Ms. Wiles, the White House chief of staff, did not want the administration to appear to endorse the “All-In” brand, two people with knowledge of the summit said. They said she called for the addition of a co-host. Mr. Sacks went to the organizers of the Hill and Valley Forum, an annual conference for tech and government officials, Ms. Hoffman said.

Visa and the New York Stock Exchange sponsored the A.I. summit. The organizers declined to disclose what the companies paid. Ms. Hoffman said “All-In” lost money hosting the event, and that “no V.I.P. reception occurred.” The New York Stock Exchange declined to comment, and Visa did not respond to a request for comment.

Mr. Sacks opened the event by describing his White House experience as “incredible” and hailing the administration’s work on A.I. and crypto. Then he handed off hosting duties to his “All-In” partners, who interviewed Mr. Huang of Nvidia and White House officials onstage.

In the keynote speech, Mr. Trump described Mr. Sacks as “great” before signing executive orders to speed the building of data centers and exports of A.I systems.

Then he handed Mr. Sacks the presidential pen.

WSJ : America Loves a $13 Lunch Bowl. Don’t Bet Against It.

America Loves a $13 Lunch Bowl. Don’t Bet Against It.
Consumers may be struggling, but they still want fresh and fast offerings from restaurants like Cava and Chipotle

It has been a rough stretch for the makers of healthy—but fast—lunch bowls. After years of riding a wellness wave, they’ve suddenly found themselves squeezed between rising costs and a jittery consumer.

Younger consumers are looking for places to trim. For some, that means fewer carne asada burritos and harissa bowls. Chipotle, Cava and Sweetgreen SG -2.11%decrease; red down pointing triangle have all reported softer results in recent quarters. Their stocks show the damage: So far this year, Chipotle is down around 44%, Cava about 56% and Sweetgreen about 80%.


Companies point to the same culprits: student-loan payments, higher rents and a softer job market that are pushing younger consumers back into their kitchens. And when young people stop spending, fast casual feels it first. Roughly 75% of the customers for these chains are Gen Z or millennials, notes David Henkes of Technomic.

Near term, expect slightly shorter lines at your local Chipotle or Cava as the worker earning $70,000—or the newly laid-off Gen Zer—decides to make lunch at home. Let’s face it, though: Longer term, America’s growing appetite for fast-casual restaurant chains isn’t going anywhere.

The bowl occupies a rare pricing sweet spot: genuinely fresh food for only a couple of dollars more than fast food—and still far less than a sit-down entree once you add tax and tip. Yes, you can get a burger, fries and a soda for $10.79. But is that really a better deal than a $13 bowl of fresh greens, whole-grain rice, grilled chicken, tahini and pickled cabbage? More Americans seem to think not.

What started as the lunch of well-paid office workers is now something that anyone—a hairdresser, a college student, a delivery driver—might grab on a break. In 2008, fast casual made up just 6% of the restaurant industry. Today it’s about 15% of the restaurant market, according to Technomic.

Cava might be the best way to bet on the group. After its shares peaked around $150 late last year, the stock now trades around $50 a share—not far from its post-IPO level in the summer of 2023, even though it’s a far bigger company since then.

Consolidated revenue is on track to climb 21% to a projected $1.17 billion in 2025, according to analysts’ estimates on FactSet. The store base has grown from 309 at the end of 2023 to 415 as of the last reported quarter, with management opening restaurants as quickly as it can.

The problem—and the reason the stock has reset—is simple: Investors don’t like when guidance goes in the wrong direction.


Cava last quarter cut its same-store sales outlook and overall profitability for 2025. Chief Executive Brett Schulman blames the lower growth figure partly on “the honeymoon effect,” in which new restaurants open hot and then settle into more normal volumes.

That dynamic is real. But it doesn’t change the fact that growth is cooling from high levels, and investors have adjusted their expectations accordingly.

Dwelling on the lowered, near-term growth risks missing the larger story.

Consumers are excited about each Cava store opening, and the company is opening restaurants quickly. On average, units opened in 2025 are trending above $3 million in annual sales. This is higher than the chainwide $2.9 million average and far ahead of the year-one $2.3 million target, notes Sharon Zackfia of William Blair. Those locations earn back their roughly $1.4 million build costs in about two years on average, an unusually fast payback in the restaurant industry.

That strength is showing up both in legacy markets and brand-new ones. This is why analysts think Cava can grow well beyond 1,000 restaurants.

If the chain eventually matches the store density it already has in the Washington, D.C., area, Zackfia estimates it could support something closer to 2,000 locations nationwide. “Five years from now, nobody is going to be talking about the fourth quarter of 2025,” she said. “The business will be much bigger by then.”

Scaling to over 1,000 restaurants won’t be easy, and plenty could go wrong if it isn’t done right. It’s about execution: every bowl, every line, every shift.

Cava’s Schulman is blunt about the stakes: “No deal, no discount, no marketing campaign can get you out of bad operations. If people have bad experiences, they’re not going to come back.”

At the same time, Cava needs to continue broadening its appeal to the masses. That’s not easy in an economy where McDonald’s and Taco Bell are waging a price war. Cava can’t just roll out an $8.99 bowl without undermining its brand.

What it can do is keep raising prices at a slower pace than inflation. Since 2019, Cava has lifted prices less than 17%—about half the 34% industry average and well below the 27% rise in inflation, Schulman says.

The per-person average—which can include drinks and sides—is just over $14, but in many markets bowls run $10.65 to $12.95. Cava also offers things like tiered status—perks for people who visit more often—free pita chips and letting customers cash in points for avocado.

Cava may never be the cheapest lunch in town, but both its bowls and stock offer solid value.

FT : Swiss voters reject 50% inheritance tax for the super-rich

Swiss voters reject 50% inheritance tax for the super-rich
Overwhelming majority opposed wealth tax in contentious referendum

Swiss voters on Sunday overwhelmingly rejected a proposal to impose a 50 per cent inheritance levy on the super-rich, in a contentious referendum that came as governments around the world wrestle with how to tax the wealthy.

More than 80 per cent rejected the initiative, with about 42 per cent of the population participating by Sunday afternoon. Opponents of the measure had feared that a narrow defeat would invite other similar tax proposals in years to come.

The referendum, one of the most divisive in recent Swiss political memory, comes amid a global split between countries competing to lure wealthy families with fiscal incentives and those seeking to tax what they see as excessive fortunes.

The proposal from the far-left Young Socialists party would have introduced a federal inheritance and gift tax of 50 per cent on estates and transfers above SFr50mn (£47mn), marking a dramatic break from Switzerland’s tradition of decentralised, low-burden taxation. Revenue would have been earmarked for climate-related spending. 

The federal government opposed the initiative, warning it would damage Switzerland’s appeal as a stable home for internationally mobile wealth. The proposal was originally drafted to be retroactive — a clause that provoked a fierce backlash from business groups and tax lawyers and was later softened.

The move prompted deep anxiety among Swiss family offices and wealthy residents, some of whom were reviewing relocation options this year ahead of the vote, the Financial Times reported in June. Economists and lawyers warned the measure could affect succession planning for family-owned companies whose wealth is tied up in illiquid assets.

Frédéric Rochat, managing partner at Swiss private bank Lombard Odier, said the unequivocal result showed “Swiss common sense had prevailed”.

“Swiss people like to see their country’s policies remain stable [and] predictable,” he said. “They reject base populism that makes unnecessary noise.”

A “Yes” vote would have been a “significant change” to the Swiss tax landscape, said Philipp Zünd, tax expert at KPMG in Switzerland.

“Swiss voters have reinforced Switzerland’s reputation as a stable business hub,” he said.

The Swiss vote lands at a moment when governments’ approaches to wealthy individuals have diverged sharply.

In some financial centres the race to attract rich families is accelerating. Dubai, Abu Dhabi, Hong Kong and Singapore are offering tax concessions and light-touch regulation to draw single-family offices — the private investment vehicles of the global super-rich. Hong Kong, which hosted an estimated 2,700 family offices in 2023, aims to attract 200 more by the end of 2025.

Elsewhere, countries are tightening rules or increasing levies. Italy has drawn a surge of arrivals under its flat-tax regime for foreign income, centred on Milan, but the government announced in October it plans to increase the levy by a further 50 per cent to €300,000 from next year.

In her first Budget last year, UK chancellor Rachel Reeves hit the super-rich by confirming the abolition of “non-dom” status, which allowed UK residents who declared their permanent home as being overseas to avoid paying UK tax on foreign income and gains.

Swiss lawyers said the referendum proposal had undermined Switzerland’s chances of attracting tax exiles from the UK following the non-dom change, with many opting for Italy rather than Switzerland.

Meanwhile, in late October the French parliament voted to reject a Socialist proposal for a tax of 2 per cent on wealth of more than €100mn. Another proposal for a 3 per cent tax on wealth over €10mn was also rejected.