TheChek News Flow

Like other AI startups, company is burning cash rapidly as it seeks to improve its flagship Grok chatbot

Elon Musk’s artificial-intelligence company, xAI, is in advanced talks to raise $15 billion in new equity at a $230 billion valuation, according to people familiar with the plans.

The new valuation would represent a significant increase from the $113 billion xAI disclosed after acquiring Musk’s social-media site, X, in March. The terms of the new fundraising were disclosed to investors by Musk’s wealth manager, Jared Birchall, on Tuesday night, the people said.

It couldn’t be determined whether the expected new valuation Birchall shared with investors was premoney or postmoney. Birchall and a spokeswoman for xAI didn’t immediately respond to requests for comment.

CNBC earlier reported xAI’s planned fundraising. After the article was published, Musk wrote “false” in response to an X post about the article from a fellow user of his social-media platform.

Many AI startups, including xAI, are burning cash rapidly as they seek to build infrastructure to help train and refine models. The companies are laying the groundwork for trillions of dollars in spending in the coming years, leaving them in a near-constant state of fundraising.

In June, xAI raised $5 billion in equity and $5 billion in debt to help build out its Colossus data center in Memphis, Tenn. Musk’s rocket company, SpaceX, invested $2 billion in the company as part of that round, The Wall Street Journal previously reported.

Musk, who is chief executive officer of Tesla, has publicly supported the idea of Tesla investing in xAI. At a recent shareholder meeting, Tesla shareholders had a mixed response to a proposal that asked the board to make such an investment, and it is now up to the board to decide.

Ahead of the meeting, Tesla Chair Robyn Denholm told the Journal that she questioned the logic of such an investment and said the board hadn’t yet done any of the due diligence required to move forward.

Musk’s AI startup has raised billions of dollars in its race to compete with OpenAI and to expand the capabilities of its chatbot, Grok, which competes with ChatGPT. News Corp, owner of the Journal, has a content-licensing partnership with OpenAI.

Musk turned his attention to xAI after wrapping up his work with the federal government, the Journal reported. The startup has recently lost several senior executives, including X CEO Linda Yaccarino, as well as the chief financial officers of X and xAI.

Investors include Nvidia and the Kuwait Investment Authority

Brookfield Asset Management is launching a new strategy aimed at investing in infrastructure tied to artificial intelligence, executives told The Wall Street Journal.

Chip maker Nvidia NVDA -2.81%decrease; red down pointing triangle and sovereign-wealth fund Kuwait Investment Authority plan to invest in the firm’s inaugural fund as founding partners.

The details

Brookfield is targeting $10 billion in equity for its new AI infrastructure fund and has already raised $5 billion of that from investors including Nvidia, KIA and Brookfield’s own balance sheet.

The Canadian investment firm said it plans to use that money, plus additional co-investments and debt, to build and acquire as much as $100 billion worth of AI infrastructure.

Brookfield will invest across the AI landscape, including in data centers, dedicated power providers and semiconductor manufacturing. It plans to devote a majority of its capital to projects that involve building from scratch on undeveloped land.

The new fund has already made a few investments. It signed a $5 billion partnership in October with Bloom Energy to install power in data centers. Brookfield also has partnerships with the governments of France and Sweden to create dedicated, secure AI infrastructure for those countries.

The context

Brookfield, which manages over $1 trillion in assets, is already the world’s biggest infrastructure investor. It has invested over $100 billion in digital infrastructure globally.

The firm estimates it will cost $7 trillion to build the infrastructure needed to power AI over the next decade. Like many of its peers, Brookfield wants to play a major role in financing that.

Firms such as Blue Owl Capital have been particularly aggressive, financing massive data centers costing tens of billions of dollars for the likes of Meta Platforms and Oracle.

Brookfield hopes the new AI infrastructure play will be as successful at attracting investor money as its energy transition strategy. Launched in 2022, it focuses on investing in decarbonizing heavy industry and developing sources of clean energy—areas where the firm had previously invested but didn’t have a stand-alone strategy. Brookfield recently announced the close of its second energy transition fund, a $20 billion vehicle.

Not everyone is quite so optimistic about AI. The Brookfield announcement comes after multiple days of stock-market declines driven by worries of an AI bubble.

Chip maker Nvidia has been both a major beneficiary of the AI boom and a major investor. It previously agreed to invest up to $100 billion in OpenAI, which in turn is looking to buy its specialized chips. Earlier this week, Nvidia and Microsoft agreed to invest up to $15 billion in OpenAI rival Anthropic.

Nvidia’s shares have sagged a bit recently and its earnings expected Wednesday are likely to be closely watched as an AI bellwether.

Meanwhile, major sovereign-wealth funds including the Kuwait Investment Authority have been pouring money into AI investments. KIA was an anchor investor in an AI partnership founded by BlackRock’s Global Infrastructure Partners, Abu Dhabi’s MGX, Microsoft and Nvidia.

President Trump is hosting leaders from Saudi Arabia and elsewhere this week and is expected to tout a multibillion-dollar investment in U.S. artificial-intelligence infrastructure.

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EU industry chief says bloc is becoming ‘collateral damage’ in race to secure rare earth minerals

The EU plans to create a central body to co-ordinate the purchasing and stockpiling of critical minerals to stop the US buying up global supplies from “under our noses”, the bloc’s industry chief has said.

Stéphane Séjourné, the EU’s executive vice-president for industrial strategy, told the Financial Times that the EU had become “collateral damage” in a spat between the US and China over access to rare earth minerals, which are crucial for defence and clean technologies.

China imposed export controls on 17 metallic elements known as rare earths in April, after the US banned the sale of some advanced technology to the country. Several EU companies were forced to shut down production lines and make lay-offs as a result of the move.

Beijing postponed even more wide-ranging controls for a year last month after a temporary truce in the tariff war between the two economic superpowers.

The European Commission in October said it would hastily pull together a plan to diversify stocks of critical minerals including rare earths, which also include more common metals such as lithium and copper, in an effort to cut its reliance on China.

China controls much of the critical minerals market and accounts for 88 per cent of refining capacity for rare earths. It also produces more than 75 per cent of refined germanium and gallium, and about 70 per cent of refined lithium, according to EU figures.

Séjourné said that Brussels aimed to create a critical minerals “centre” with dedicated funding “to buy, co-ordinate European purchases, set aside stocks and also to push companies to integrate more economic security into their supply chains”.

He said Europe was “late” putting together such tools compared with the US, which has invested in domestic miners and signed supply deals with governments.

“The Americans have a business department that buys stocks of critical materials before us everywhere in the world. They often buy them from under our noses,” Séjourné said.

Séjourné’s plan, which must first be agreed by the EU’s 27 commissioners and could be subject to change, should also include a rapid signing of partnership deals with countries such as Brazil and South Africa to secure supplies. Séjourné is travelling to both countries in the coming weeks.

The French commissioner also said that the EU should consider introducing price floors to ensure that European companies had access to domestic stock.

He said miners and processors were reluctant to invest in EU production because they feared customers would still prefer to buy cheaper supplies from China, despite the risk of it cutting supply.

Companies are vulnerable as they often keep just a couple of weeks of stock.

The commission is likely to make recommendations to prioritise stockpiling and to diversify supply, he said. Legislation could come later if behaviour did not change.

Victor van Hoorn, director at the industry group Cleantech for Europe, said that Europe needed to act faster to shore up its critical mineral supply chains after the ‘‘wake-up call’’ of the Chinese export controls. ‘‘Europe needs to clearly map its CRM [critical raw materials] needs and vulnerabilities and then throw the kitchen sink of financial de-risking instruments at them,” he said.

The EU in 2023 set targets for domestic production of critical minerals but lengthy and bureaucratic permitting processes and opposition to new mines, often on environmental grounds, have slowed the start of new projects.

Séjourné also defended the Dutch government’s seizure of chipmaker Nexperia from its Chinese owner, saying it acted ‘‘in the European interest’’.

The move prompted outrage from Beijing and slowed the flow of chips from Nexperia to the EU, causing some companies to warn they will have to reduce production.

The plan will also fund innovation to develop technology that does not need rare earths. “The best way to become independent is not to have to use the raw material,” Séjourné said.

Rare bipartisan effort by Giorgia Meloni’s coalition and opposition to ease prosecution of sexual assault

Italy is modernising its penal code to make it easier to prosecute sexual assault, in a rare case of bipartisanship between Prime Minister Giorgia Meloni’s coalition and opposition lawmakers.

Meloni’s rightwing Brothers of Italy party is expected to vote together with the leftwing Democratic opposition in the lower house on Wednesday to broaden the definition of sexual violence to non-consensual acts.

Under the current penal code, rape is defined as an act committed with violence, threats or abuse of authority. Critics say these criteria dissuade victims from coming forward for fear they will not be believed if they cannot show physical signs of abuse or prove they tried to resist the assault.

“It’s very clear that sex without consent is rape,” said Laura Boldrini, a Democratic MP who has been pushing for this change. “We have had some rulings that were really shocking because there was no consent principle in our legal system.” 

Proponents say the reform will shift the focus of criminal prosecutions from questions about the behaviour of victims to that of perpetrators. In 2022, a man was acquitted of raping a woman in a bathroom, as the judge ruled that her failure to close the door fully was “an invitation” to the man. A year later, Italy’s top court overturned the acquittal and ordered a retrial. 

Currently, if victims froze, were terrified or not in a position to resist the assault, they would not be believed, Boldrini said. “During trials, men’s lawyers try to question the woman: how did you react? Did you say no? Did you push him back?” 

Carolina Varchi, a Brothers of Italy lawmaker who steered the bill through the justice committee, has called the law a “historic step” that would make it clear that any sexual act “without free, aware and current consent is a crime”. 

Meloni has made no direct comment on the change, which must still be approved by the senate before it becomes law.

Azzurra Rinaldi, a feminist economist and author, compared the legal change to a “revolution” in a society where blaming rape victims was still common, though she said it would have to be followed by wider social changes. 

“It’s an important step to introduce the idea of consent in Italian culture. Then you have to pass it from law to the everyday lives of people,” she said. 

The legal reform comes as Italy has been rocked in recent years by horrific murders carried out by jealous ex-partners and allegations of sexual assault committed by prominent individuals. 

In September Ciro Grillo, the 24-year-old son of comedian Beppe Grillo — founder of the populist Five Star Movement — and several of the young man’s friends were convicted of gang rape and sentenced to lengthy prison terms for assaulting a teenage model at Grillo’s villa in 2019. 

Alberto Genovese, a prominent Italian entrepreneur, was arrested in 2020 after an 18-year-old accused him of drugging her then sexually abusing her for hours at his penthouse apartment overlooking the Duomo in central Milan. He was convicted of sexual assault and drug trafficking and is the subject of a recent Netflix documentary.

Though rape cases are believed to be significantly under-reported, the number of victims filing complaints of sexual violence rose from 4,257 in 2014 to 6,231 in 2023, according to the most recent data from Istat, Italy’s official statistics agency. 

Italy’s laws on sexual assault have been gradually tightened in the past decades. In 1981, Rome scrapped provisions that had allowed men to escape punishment for rape if they married their victim. In 1996 rape was redefined as a crime against individual victims, rather than against the social order.

But not everyone backs the changes.

Economic sovereignty and security depend on access to minerals and the ability to smelt and refine them

Europe faces an uncomfortable truth. Having largely solved its dependency on Russian gas, it now faces the same vulnerability in metals supply chains.

The parallels with the energy crisis are unmistakable — and the stakes are just as high. Metals are the building blocks of modern life: they underpin critical infrastructure, defence supply chains, and the clean energy transition. Without them, there are no semiconductors, renewable energy, military equipment or artificial intelligence. Europe’s economic sovereignty, industrial competitiveness and security depend not only on access to minerals but crucially also on the ability to smelt and refine them into the metals.

Metals such as germanium, gallium, and antimony are crucial for defence and high-tech applications. Demand for germanium in the EU, for example, is expected to increase by 30 per cent over the next decade, according to estimates by consultancy Cru Group, yet the bloc depends entirely on imports for primary supply. These metals are only produced in small quantities, but they are vital, hard to replace and typically extracted as byproducts of base metals such as zinc, lead and aluminium.

This challenge is unfolding as the world economy is growing more fragmented and less globalised. The assumption that free markets always deliver optimal outcomes no longer holds. There is now a real “national security” value to these metals — one the private sector cannot price. We have already witnessed rare earths become weaponised in US-China tensions. The same risks exist for critical metals. China now controls much of the world’s refining capacity for key industrial metals and rare earths. It recognised early the strategic nature of metals and invested in refining and smelting capacity to secure supply. Europe, by contrast, has not built a new greenfield smelter since the 1990s, and nearly a third of its base metal smelters have been closed or curtailed in the last decade. The only metal with increased European production during this period is copper — largely driven by the Bor smelter in Serbia, controlled by a Chinese company.

The reasons for closures are clear. Stubbornly high energy costs combined with historically low treatment and refining charges mean virtually no smelter is profitable. We should know: Trafigura owns four zinc and lead smelters in Europe and three others in the US and Australia, operated by our Nyrstar subsidiary. Since 2019, through Nyrstar, we have invested more than €680mn in our European smelters, supporting more than 1,700 direct jobs and thousands of others in the economy. But there are limits to what companies can do alone when facing sustained losses.

These facilities and many others across Europe are strategic assets. They can be safeguarded through a combination of direct subsidies, competitive electricity pricing and lower grid connection fees. Such targeted interventions would not displace private capital but draw it in, boosting new investment.

Based on recent revamps, we estimate that between €75bn and €150bn would be required to fully modernise Europe’s smelting fleet. While that may sound like a lot, it needs some context. Metal-consuming industries in Europe, such as automotive manufacturing, defence, and infrastructure are huge. We estimate the cost of overhauling Europe’s entire smelting fleet could be offset by the equivalent of as little as one or two weeks of output from such industries.

To modernise existing smelters and increase recovery of critical byproducts such as gallium, germanium, and antimony, Europe should add new tools to its policy arsenal and better use existing ones: price floors; strategic offtake agreements; critical material stockpiles — and better use of trade restrictions.

Europe could also look to others: Australia and the US have acknowledged the importance of maintaining sovereign processing capacity. Once lost, it is incredibly difficult to recover. The recently signed US-Australia Critical Minerals and Rare Earths Framework shows how like-minded nations can accelerate efforts to build stronger, more resilient supply chains.

Europe has the industrial base, technical expertise, diplomatic relations and financial resources to secure its metal supply. The EU’s REPowerEU action plan successfully weaned the bloc off Russian gas, deploying financing and permitting reform at speed to build a more resilient and diversified energy system. We now need the same urgency on metals through the similar RESourceEU initiative. Europe needs to act quickly or accept permanent dependence on others for critical metals.

EU risks decimating its cobalt industry with new safety rules, business says

Glencore and Umicore among companies saying rules risk reinforcing dependence on China for crucial metals

Mining and refining companies, including Glencore and Umicore, have said new EU rules aimed at limiting exposure to cobalt could “decimate” the industry in the region, derailing efforts to reduce dependence on supplies from China.

In a letter to the European Commission, executives said a proposal to set a maximum limit of cobalt that can be inhaled at lower levels than in China or the US was already deterring investment. This was undermining attempts to build a local supply chain for a metal that is crucial to industries from electric vehicles to defence, they added.

“The damage is already being felt,” 12 executives and industry bodies wrote to commission president Ursula von der Leyen ahead of a vote of EU member states on the cobalt exposure standards on Wednesday. Companies “are diverting investment away from the EU” as a result of the plans, they said.

The proposals would “only result in greater dependence on the US and China for materials that are strategic to defence and vital to the green, circular and digital transitions”, they said in the letter seen by the Financial Times.

Their intervention comes with the EU’s industry commissioner, Stéphane Séjourné, due to deliver a speech on Wednesday on plans to build up supplies of critical minerals, including cobalt, lithium and rare earths, as the bloc tries to catch up in the global race for the materials.

The US has moved swiftly this year to secure the supply of critical minerals, including making a $400mn direct investment in rare earths producer MP Materials, and concluding deals with countries such as Japan. China’s imposition of export controls on some rare earth elements in April, partly in response to US tariffs, increased the sense of urgency in Washington.

But in Europe, proposed new safety rules risked undermining targets set out in its Critical Raw Materials Act, which seeks to ensure access to a “secure and sustainable supply” of the materials, the industry leaders said in the letter. If adopted, the commission’s proposals “would decimate Europe’s cobalt value chain”, they said.

The commission estimates that demand for cobalt will rise fivefold by 2030. The industry said the proposed new rules — which were proposed in July and must be signed off by member states and the European parliament before becoming law — would instead lead to the loss of one in six cobalt sites and jobs.

The commission argues that a 0.01 mg/m³ limit for cobalt particles that can be breathed in through the nose and mouth will help reduce lung, kidney and liver diseases, while the industry favours 0.02 mg/m³.

The industry said the limit was too restrictive and risked jobs being shifted to jurisdictions such as China or the US, which have much higher limits. The cap in China is 0.05mg/m³, while in the UK it is 0.1 mg/m³.

The commission confirmed that it had received the letter and said it would respond in due course.

David Ellison met officials from the kingdom’s Public Investment Fund, among other Gulf investors

Paramount’s David Ellison held preliminary talks with Saudi Arabia’s sovereign wealth fund and other major Gulf investors about backing his company’s effort to buy Warner Bros Discovery, people briefed on the matter said.

Ellison, who acquired Paramount this year for $8bn, in recent weeks separately met the kingdom’s Public Investment Fund and other officials from the region after they independently expressed an interest in participating in the bid, the people said.

The talks come as Ellison positions himself to compete for control of one of the industry’s most important libraries, networks and streaming assets at a moment of upheaval for the sector.

Acquiring Warner Bros Discovery — which owns the legendary movie studio, HBO, CNN and franchises from Harry Potter to Batman — would help Paramount compete against larger rivals Netflix and Comcast.

No agreement had been reached with the potential investors, said the people briefed on the talks. But the conversations were described as “active”, underscoring the scale of financing Ellison is seeking to marshal ahead of the opening round of bids.

The most advanced conversations had taken place with Saudi Arabia, the people said. The PIF did not immediately respond to a request for comment. Paramount declined to comment.

Riyadh has been accelerating its push into investing in global entertainment and sports, including recently backing the $55bn buyout of video gaming company Electronic Arts together with Jared Kushner, Donald Trump’s son-in-law, and private equity group Silver Lake.

Those efforts, combined with the kingdom’s deep pockets and close ties with the White House, have made Saudi Arabia a natural choice for Wall Street to sound out as the contest for Warner enters a decisive phase.

Saudi Crown Prince Mohammed bin Salman met the president at the Oval Office on Tuesday to underscore the special relationship between the two leaders.

The president on Tuesday played down concerns about the killing of Saudi journalist Jamal Khashoggi — which the CIA during Trump’s first term concluded the crown prince had approved — and lauded his “friend” Mohammed bin Salman who vowed to invest $1tn in the US.

The renewed interest in Warner has helped lift the company’s stock price in recent weeks. Shares in the company have risen nearly 90 per cent since The Wall Street Journal first reported in early September that Paramount was weighing a move for Warner, sparking speculation that a competitive auction could emerge.

Despite the talks, none of the Gulf investors were expected to be named in Paramount’s nonbinding offer due on Thursday, the people said.

Discussions remain preliminary and it is unclear whether any of the investors will ultimately participate in the transaction.

People involved cautioned that despite the momentum, the process remained complex and negotiations could stretch into early next year.