FT : Pentagon steps up stockpiling of critical minerals with $1bn buying spree

Pentagon steps up stockpiling of critical minerals with $1bn buying spree
Trump administration challenges Chinese dominance of supply chain for metals essential to defence industry

The Pentagon has sought to procure up to $1bn worth of critical minerals as part of a global stockpiling spree to counter Chinese dominance of the metals that are essential to defence manufacturers.

The Trump administration’s accelerated effort to bolster the national stockpile is outlined in public filings published in recent months by the Pentagon’s Defense Logistics Agency. It follows export restrictions imposed on many of the materials by China, which dominates the supply chains for critical minerals and permanent magnets needed for technologies from smartphones to fighter jets.

“They [the US defence department] are incredibly focused on the stockpile,” said one former defence official. “They’re definitely looking for more, and they’re doing it in a deliberate and expansive way, and looking for new sources of different ores needed for defence products.”

Another former defence official said the $1bn is an acceleration over previous stockpiling efforts.

This week Beijing unveiled sweeping new export controls on rare earths and related technologies, prompting Donald Trump to say on Friday that he would no longer meet Chinese leader Xi Jinping later this month as planned.

The US would impose an additional 100 per cent tariff on Chinese imports in response, Trump said, adding: “There is no way that China should be allowed to hold the world ‘captive’ but that seems to have been their plan.” 

Beijing’s restrictions have fuelled fears in the US and Europe about their continued access to the metals.


Critical minerals are a national security priority for the Pentagon because they are crucial to virtually every weapons system, as well as technologies such as radar and missile detection systems. The defence department’s recent stockpiling activity is a marked acceleration driven by the Trump administration’s renewed enthusiasm for critical minerals. Some of the metals the Pentagon is seeking to acquire were not previously being stockpiled.

“China’s ability to turn off the supply of these critical minerals would have a direct, palpable and adverse effect on US ability to field the kind of high-tech capabilities that we’re going to need for any kind of strategic competition or conflict,” said Stephanie Barna, a lawyer at Covington & Burling in Washington.

Recent expressions of interest from the DLA include plans to buy up to $500mn of cobalt, up to $245mn of antimony from the domestic US Antimony Corporation, up to $100mn of tantalum from an undisclosed US company and up to a combined $45mn of scandium from Rio Tinto and APL Engineered Materials, a chemical manufacturing company based in Illinois that has offices in Japan and China.

The plans show that the US government was “conscious of how critical this stuff is, and wants to support whatever domestic capacity they have,” said one sector executive. “It’s very early days for western governments to stockpile critical minerals but they’re increasingly focused on it.”

The DLA stockpiles dozens of alloys, metals, rare earths, ores and precious metals, which are stored in depots throughout the country. Its assets were valued at $1.3bn as of 2023. The materials can only be released by the president in times of declared war, or if deemed necessary for national defence by the under-secretary of defence for acquisition and sustainment.

The price of germanium has soared this year as exports from China have fallen, with western traders warning of “panic” in the market as companies struggled to get hold of it. The germanium issue is one the Pentagon is trying to fix.

The price of antimony trioxide has almost doubled over the past 12 months, while carmakers have struggled to secure rare earth materials this year after China restricted certain exports.

Trump’s One Big Beautiful Bill Act contains $7.5bn for critical minerals, including $2bn to bolster the national defence stockpile which the Pentagon intends to spend by late 2026 or early 2027.

The OBBA also includes $5bn for defence department investments in critical minerals supply chains and $500mn for a Pentagon credit programme to spur investments.

One former defence official said several offices involved in securing the critical mineral supply chains were now “flush with cash” following the passage of the OBBA. 

The DLA declined to comment.

Analysts at Jefferies said the Rio deal, for around 6 tonnes of scandium oxide, was at a price that was “higher than market expectations”. Global consumption of scandium oxide is around 30-40 tonnes, according to price reporting agency Fastmarkets, with China the leading producer. 

The DLA stated in its filings that Chinese export controls on scandium had “constrained the supply chain”. 

The deal with USAC for antimony, meanwhile, would grow a stockpile “sufficient for industrial base mobilisation in a national emergency” and enable the company to continue producing in what was a “volatile” sector, it said.

USAC sources the mined material that it turns into metal from Canada, Mexico, Australia, Chad, Bolivia and Peru, chief executive Gary Evans told the FT. The company reported revenues of $15mn in 2024 and does not report its annual antimony metal production. The DLA deal for around 3,000 tonnes of antimony metal compares to total US antimony consumption in 2024 of 24,000 tonnes, according to the US Geological Survey.

“Market participants have been taken aback by the volumes requested by the DLA across several metals. Many consider the quantities to be unrealistic, especially within the proposed five-year timeframe,” said Cristina Belda, from Argus Media. “In most cases, the requested tonnages exceed the US’s annual production and import levels.”

The DLA has also sought information for the potential acquisition of rare earths, tungsten, bismuth and indium to add to the stockpile. 

The volumes of bismuth and indium were “significant” given the global size of the markets, said Solomon Cefai from Fastmarkets. “It is hard to imagine a situation where non-China supply would not be pressured by the volumes the DLA is looking at,” he said.

The DLA is seeking information for the potential acquisition of 222 tonnes of indium ingots, which compares to US consumption of refined indium of around 250 tonnes in 2024, according to the USGS.

>>> Barron’s Weekend Summary

Cover:
-Oracle, founded and controlled by Larry Ellison, has experienced considerable success due to the artificial intelligence boom, reporting a significant uptick in new business. The company's stock surged 373% over three years, significantly outperforming the market's 87% rise and its competitor, Microsoft, which rose by 123%. Ellison, who owns 40.6% stake in Oracle (valued at $343B), has recently remarried and enjoys the success of his two children, Megan and David, as well as engaging in business ventures with them, including offers for media companies like Paramount and Warner Bros. Discovery and a bid for TikTok's U.S. operations. Ellison's enduring vision highlights the importance of data over hardware or consumer internet technologies, asserting that managing and monetizing data is crucial—especially as AI demands massive data efforts. Oracle has secured a $300B deal with OpenAI, indicative of its strong theoretical positioning in AI, but it also faces significant costs and risks, reflecting the company's historical pattern of balancing opportunity and vulnerability.
Interview:
-Raphael Bostic, the president of the Atlanta Federal Reserve (his district spans Alabama, Florida, Georgia, and parts of Louisiana, Mississippi, and Tennessee) has been a prominent inflation hawk throughout 2025, advocating for a conservative approach to interest rate cuts, projecting only one cut for the year compared to the broader Federal Reserve’s expectation of three. Despite a rate reduction in September, Bostic expressed a preference to delay further cuts until 2026. However, recent economic observations and discussions during a visit to Nashville have prompted him to reconsider; he noted that the risks regarding inflation and a declining labor market are becoming more balanced than they have been in the past few years. This shift raises questions about whether Bostic's changing perspective signals a genuine transformation in his views or reflects the uncertain economic landscape that Federal Reserve officials are facing. Bostic observed a change in sentiment among business leaders during his Nashville meetings; concerns over inflation are now nearly on par with fears of layoffs, a shift from earlier months when inflation dominated the conversations.
Tech Trader:
-Are we experiencing an artificial-intelligence bubble akin to the dot-com boom of the 1990s? Indicators suggest parallels, such as investors funding customers and concentrated investments in AI data centers, driven by a high demand for AI computing. Central to this landscape is OpenAI, the creator of ChatGPT, which became a significant player in 2022 and could represent a critical vulnerability for the AI market. The demand for AI is influenced by anticipated future returns. Major tech companies like Meta, Amazon, Alphabet, and Microsoft are projected to spend $335B on capital expenditures this year, while AI startups have raised $259B since 2024, per Crunchbase data. OpenAI stands out with a record $40B funding round, although this pales in comparison to its future spending commitments. CEO Sam Altman has proposed an ambitious trillion-dollar investment plan for global AI data centers to scale ChatGPT to match Google Search's size.
The Trader:
- Utility stocks are performing exceptionally well, with the Utilities Select Sector SPDR ETF up 20% this year, outpacing the S&P 500’s 15% gain. Historically regarded as defensive stocks that provide stability during market downturns, utilities have maintained this reputation in 2025, experiencing an average decline of only 0.26% on the 80 days the S&P 500 fell, and achieving 35 instances of closing higher. However, the sector is also benefiting from the rising demand for energy to support artificial intelligence (AI) data centers, linking utilities to growth within the tech sector. Companies like Constellation Energy and Dominion Energy are supplying power to major hyperscalers, illustrating utilities' dual role as both defensive and offensive investments. Analysts predict earnings growth for utilities at nearly 9% annually over the next two years, contrasting with their historical growth rate of 4.2%. Currently, utilities trade at a valuation of about 19 times their forward earnings, indicating a significant discount compared to the S&P 500's 23 times, suggesting strong potential for future gains.
-The bull market is set to celebrate its third anniversary, but investors are concerned about a potential artificial intelligence bubble and renewed tariff issues, leading to stock sell-offs. The Dow Jones Industrial Average, S&P 500, and NASDAQ Composite indices are experiencing significant weekly declines, with the Dow projected to drop 2.2% and the S&P 500 and Nasdaq showing declines of 1.8% and 3.56%, respectively. The week began with worries after AMD announced a deal with OpenAI, positioning itself as a major supplier of AI chips, but ended with concerns over escalating tensions with China expressed by President Trump. Despite recent pullbacks, the stock market has seen strong gains, with the S&P 500 climbing 85% since its low on October 12, 2022, thanks to tempered inflation, a more accommodating Federal Reserve, ongoing economic growth, and a surge in AI investments.
Features:
-September's inflation data release has been delayed due to the government shutdown that began on October 1. The Bureau of Labor Statistics (BLS) is planning to recall furloughed workers to prepare the Consumer Price Index (CPI) to facilitate the Social Security Administration's (SSA) calculation of inflation-adjusted benefit payments. The BLS has announced that the September CPI will be published at 8:30 AM ET on October 24. Other data releases will not occur until regular government services resume. The SSA is mandated by law to calculate annual cost of living adjustments using the third-quarter CPI data and must publish these adjustments before November 1. Although the SSA benefits will continue during the funding lapse due to remaining available funding, necessary BLS staff will be recalled as required to ensure timely completion of the inflation data release.
-Ferrari introduced its first electric model, the Elettrica, in a presentation characterized by sci-fi themes. The event showcased the vehicle's chassis, motor, and battery pack, along with a sound system designed to emulate the traditional supercar roar, aiming to appeal to drivers' sensory experiences. However, the presentation was overshadowed by disappointing financial projections, leading to a 15.8% drop in stock value, marking the company's largest single-day decline since its IPO in October 2015. This downturn interrupted a previous upward trajectory where shares had more than doubled over three years and have now dropped approximately 15% in 2023. The Elettrica represents both challenges and uncertainties for Ferrari, with production underway at a new facility in Maranello. Full details on its launch are expected in spring 2026, as the company revises its electrification strategy, targeting 20% electric models by 2030 to maintain its position as Europe's most valuable car manufacturer, with a market value of $76.5B.
Europe:
- ESG (Environmental, Social, and Governance) investing remains a prominent focus in Europe, with assets under management reaching $3 trillion, constituting 85% of the global total. Despite the U.S. demonization of ESG, it continues to attract European investors, as evidenced by a study from the European Securities and Markets Authority (ESMA) indicating that including an ESG tag can significantly boost fund inflows. However, the meaning of ESG varies widely among Europeans, even after the European Commission introduced the 2021 Sustainable Finance Disclosure Regulation (SFDR). Thousands of funds, covering a range of ESG interpretations, claim adherence to Article 8 of the SFDR, which lacks stringent requirements, generally only excluding coal and tobacco producers. A significant shift is observed as defense stocks, historically avoided by ESG investors, are now increasingly embraced as geopolitical tensions prompt Europe to enhance its military capabilities. More than half of Article 8 funds are now investing in armament manufacturers. This rebranding of defense as socially necessary raises questions about its sustainability status. Furthermore, long-term investors are recognizing that companies face environmental and resource risks that traditional financial disclosures do not adequately capture.
Emerging Markets:
-No update
Commodities:
-Gold futures recently exceeded $4,000 an ounce, marking a significant milestone in the precious metal's trading activity. As of early trading, gold prices were slightly adjusted to $3,978 an ounce, yet they have experienced a substantial increase of over 50% in 2025, making it the most robust yearly performance since 1979 when prices surged due to geopolitical tensions and inflationary pressures. The current surge is attributed to political instability in major economies, with a government collapse in France and a leadership change in Japan prompting expectations of increased public spending. Additionally, the ongoing U.S. government shutdown and anticipation of Federal Reserve interest-rate cuts are further boosting gold's appeal as a safe-haven asset. As the labor market weakens, traders are forecasting an 80% probability of a rate cut by the Fed by the year’s end, enhancing gold's attractiveness compared to other income-generating assets.
Streetwise:
-Stocks, gold, and cryptocurrencies are reaching all-time peaks, leading to inflated portfolio values. Despite concerns about the high S&P 500 index, which stands at 25 times earnings, historical trends suggest limited correlation between current valuations and short-term returns. This situation implies that even high prices could continue to rise. Investing some cash now may mitigate sudden downturn risks, yet it carries the risk of underperforming relative to fully invested neighbors. Among various warning signs, the intertwining financial relationships within the artificial intelligence sector, highlighted in a Morgan Stanley report, stand out. The report’s visual representation of these connections is unsettling yet reflects the industry's dynamic. Previously noted was the case of CoreWeave, transitioning from crypto mining to deploying Nvidia AI chips, with Nvidia being a key investor. Recently, Nvidia made significant investments in OpenAI, the creator of ChatGPT, which in turn partnered with AMD—Nvidia's competitor.

TechCrunch : Kalshi hits $5B valuation days after rival Polymarket gets $2B NYSE

Kalshi hits $5B valuation days after rival Polymarket gets $2B NYSE backing at $8B

Kalshi, a prediction market that allows people to bet on future events, announced that it raised over $300 million at a $5 billion valuation. The company’s value has increased 2.5x since its last fundraise just three months ago, when it was valued at $2 billion.

The fresh capital came from Kalshi’s existing investor, Sequoia Capital, with new investor Andreessen Horowitz co-leading the round. Paradigm Ventures, CapitalG, and Coinbase Ventures also participated.

Kalshi also revealed that consumers in 140 countries can now make bets on its platform.

The prediction market is seeing a dramatic surge in activity: Kalshi is set to reach $50 billion in annualized trading volume, up significantly from the approximately $300 million volume posted last year, the New York Times reported.

Kalshi’s fundraise announcement follows one made just days earlier by archrival Polymarket, which revealed that it had secured an investment of up to $2 billion from Intercontinental Exchange (ICE), the owner of the New York Stock Exchange, at a pre-money valuation of $8 billion. The deal valued Polymarket at $8 billion pre-money, a monumental increase from its $1 billion valuation only two months earlier in August.

Both Kalshi and Polymarket rose to prominence last year, drawing significant attention for their prediction markets on the presidential election outcome.

Polymarket has been barred from serving U.S. residents since 2022, following a settlement with the Commodity Futures Trading Commission (CFTC). In July, the company acquired a derivatives exchange and a clearing house. The move helped Polymarket receive the right to reenter the U.S. market. Last month, the company’s CEO and founder, Shayne Coplan, said on X: “Polymarket has been given the green light to go live in the USA by the CFTC.”

Kalshi secured the right for Americans to use its platform after successfully suing the CFTC last year.

WSJ : Rekindling of Tariff Fight Pressures Wall Street’s Hottest Trades

Rekindling of Tariff Fight Pressures Wall Street’s Hottest Trades
Tech rout sends S&P 500 to worst day since April market turmoil


Investors are taking a harder look at some of the market’s hottest investments than at any time since “Liberation Day.”

Friday’s market slide—fueled by President Trump’s new threat of “massive” tariffs on goods from China—wasn’t huge by historical standards. But its breadth and its focus on red-hot tech shares and smaller banks rattled some analysts and portfolio managers, who had come to believe that the 2025 market advance had grown immune to trade-war tensions.

The selloff leaves investors in an uncomfortable place. The biggest gainers, such as Nvidia or Robinhood, continue to have healthy businesses. Many expect tax cuts, strong earnings and falling interest rates to boost companies and consumers.

But the size of the pullback suggests that some fear tech remains vulnerable to changes in political tides, while selling in banks shows latent fears that the economy is weak enough that a rekindled trade fight with China could still mean recession.

Stocks were headed for records again early Friday before Trump’s midmorning Truth Social social post, a response to China’s announcement of new export restrictions on rare earths, which are critical components of semiconductors, electric vehicles and jet fighters.

That sent the S&P 500 to its worst day since April’s tariff-fueled market chaos, with the broad index surrendering all of its gains for the week and then some. Economic worries dragged down prices for copper and oil. The CBOE Volatility Index, known as Wall Street’s “fear gauge,” climbed around 30%, raising fears that a surge in market swings could reveal weakness masked by months of calm.

After months of markets powering through the White House’s tariff threats, investors sitting on huge gains and expensive stocks began taking the trade war seriously again.

“This isn’t the first time we’ve seen a bump in the road since April, but this seems like a significant one. Like one that could knock the wheels off,” said Art Hogan, chief market strategist at B. Riley Wealth Management.

The moves disrupted a hot run for markets. The S&P 500 has climbed around 32% since the April lows, hitting more than 30 new all-time highs. As recently as Friday morning, many investors were more concerned about a FOMO-fueled market bubble than another tariff selloff.

Instead, traders ended the week selling many of the year’s biggest winners, highlighting how big gains and high valuations can leave prices vulnerable when conditions shift.


Tech was particularly hard hit, with the S&P 500 information technology sector tumbling 4%, eroding part of its staggering 45% gain over the past six months. Highflying chip stocks such as Super Micro Computer, Synopsys and Microchip Technology were among the S&P 500’s worst performers on Friday.

“This step up in tensions has created a white knuckle moment for the markets with tech stocks under major pressure,” Wedbush Securities analyst Dan Ives wrote to clients on Friday.

Chips are on the front line of the trade war, but hardly the only vulnerable sector. Regional banks also slumped, with investors betting that without the big trading businesses that help Wall Street firms profit off market volatility, they could be more exposed to any economic fallout of the trade dispute. Similar worries helped drive down shares of FedEx, which fell 5.2%, and sent oil prices to some of their lowest levels since May, below $59 a barrel.

But Trump’s threat also hit shares of all kinds of trade-sensitive companies, such as automakers, clothing manufacturers and even health and beauty firms.

Some investors fear that markets are particularly vulnerable to disruption now, when the extended rally has stretched corporate valuations, making the biggest stocks historically expensive. Investors now are paying more than ever for each dollar of revenue the S&P 500’s members produce.

Meanwhile, gains in so-called meme stocks began to proliferate this summer in a way they haven’t since the zero-interest-rate days of 2021—a sign of mass exuberance that many Wall Street pros find concerning. Real estate platform Opendoor Technologies and bitcoin-related data-center developer Cipher Mining—recent favorites among the day trading, social-media crowd—have both posted monster rallies with little apparent tie to business fundamentals.

There are plenty of reasons to believe the gains stand on a firm foundation. Corporate earnings growth has been strong and is projected to get even stronger. Wall Street analysts expect 16% earnings growth for S&P 500 companies over the next year.

Tech stocks and speculation in artificial intelligence have been a key driver of market gains, but the rally has broadened to other sectors as well. Industrial shares are up 14% for the year, while financial companies have gained 8%.

Meanwhile, consumer staples, a stable of companies with stable earnings growth and little fanfare that investors often favor during recessions, is the only S&P 500 group that is in the red for the past six months.

Stocks have rebounded quickly from market slides in recent years. And indexes could get a fresh boost when banks report what many expect to be robust profits when earnings season kicks off this coming week.

But for now, with a trade war back, investors are considering that the best-case economic scenario they have priced into stock valuations might not be the only scenario on the horizon.

“Bull markets don’t die of old age, they die of fright. And they are most afraid of recession,” said Sam Stovall, chief investment strategist at CFRA Research.

FT : Donald Trump threatens extra 100% tariff as he retaliates against China

Donald Trump threatens extra 100% tariff as he retaliates against China
US president says measures will include export controls on software and take effect from November 1 ‘or sooner’

Donald Trump has said he will impose additional tariffs of 100 per cent on China and threatened to cancel his summit with President Xi Jinping, reigniting trade tensions between the world’s largest economies.

The US president accused Beijing on Friday of taking an “extraordinarily aggressive position on trade”, and said he would impose “large scale Export Controls on virtually every product they make” as well as on “all critical software”.

The new measures would be imposed from November 1 “or sooner”, depending on China’s actions, he added in a post on Truth Social.

China this week unveiled a package of export controls that would disrupt global supplies of rare earths and critical minerals. Under the new rules, foreign companies would have to obtain Beijing’s permission to export critical magnets and other products that contain even small amounts of rare earths sourced from China.

In response, Trump suggested he would cancel a meeting with Xi that was expected to take place on the margins of the Asia-Pacific Economic Cooperation forum in South Korea at the end of October. International companies had considered the planned meeting as a step towards stabilising US-China relations.

“This was a real surprise, not only to me, but to all the Leaders of the Free World,” Trump wrote on Truth Social about the new Chinese policy. “I was to meet President Xi in two weeks . . . but now there seems to be no reason to do so.”

China’s foreign ministry and state media, sometimes used as an official mouthpiece, had not commented on Trump’s actions by late afternoon in Beijing on Saturday. 

Cory Combs, associate director of consultancy Trivium China, said Beijing might not have expected Trump’s response to be “this blunt and severe”, including the US president’s threat to walk away from a meeting with Xi.

“If they had, I can’t imagine they would’ve gone with this as a strategy,” Combs said on Saturday. 

He added that while China could deploy more “tit-for-tat” measures — as it has throughout this year, targeting US supply chain vulnerabilities — Beijing might now be looking to adjust this approach.

“The game has changed,” Combs said. 

But Wang Wen, dean of the Chongyang Finance Research Institute at Renmin University of China in Beijing, said: “Trump does not have the capability to completely block Chinese imports”.

He said Chinese goods would still enter the US via re-exports no matter what Trump did because “a large number of ‘Made in China’ goods are irreplaceable”.

Wang added that Beijing's rare earth measures were a response to US charges on Chinese vessels. “If the United States chooses to engage in conflict, China will stand firm and continue the fight.”

Trump said the US had also been contacted by “other Countries who are extremely angry at this great Trade hostility, which came out of nowhere”.

Later on Friday, Trump suggested the meeting with Xi might go ahead. “I’m going to be there regardless, so I assume we might have it,” he told reporters in the Oval Office.

“We’re going to have to see what happens, that’s why I made it November 1. We’ll see what happens.” He added that the US could impose export controls on goods such as “airplane parts”.

“We were just surprised at China. I have a very good relationship with President Xi, and they did that,” Trump said. “This is not something that I instigated.”

The S&P 500 closed 2.7 per cent lower for its biggest one-day drop since early April following Trump’s threat. The Nasdaq Composite tumbled 3.6 per cent. The yield on the two-year US Treasury sank to its lowest level in three weeks, while the dollar fell 0.7 per cent against a basket of currencies.

Beijing’s announcement of export controls this week amounts to a Chinese version of the extraterritorial “foreign direct product rule” that Washington has used to require companies from third countries to obtain licenses to export chips with US content to China.

The move was widely viewed as an effort to create leverage before the two leaders held their first meeting since Trump returned to office.

“Nobody has ever seen anything like this but, essentially, it would ‘clog’ the Markets, and make life difficult for virtually every Country in the World, especially for China,” Trump said in his post.

Trump’s new levies on China raises the prospect of the two countries returning to the full-blown trade war that erupted this year when he hit Beijing with 145 per cent tariffs and Xi retaliated by slapping 125 per cent levies on goods coming from the US.

The average US tariff on imports from China is near 58 per cent, according to analysis from the Peterson Institute for International Economics. China’s average tariff on US goods is about 37 per cent.

The economic tensions have had a dramatic impact on trade flows, which US Treasury secretary Scott Bessent warned amounted to a de facto trade embargo.

US and Chinese negotiators reached a truce in the trade war in a meeting in Geneva. But the ceasefire came under threat after China started slowing the export of rare earths, which are critical to industries ranging from the auto sector to defence.

The two sides resolved the initial rare earth issue in London in June and have since held trade talks in Stockholm and Madrid that paved the way for Trump to meet Xi. The current 90-day ceasefire that holds tariffs at current levels is set to expire in mid-November.

Some experts have warned that China has leverage over the US because of its dominance in rare earths. However, others have suggested the US has more options that it could deploy, such as requiring chipmakers to obtain a licence to sell any semiconductors to China.

Trump said the new Chinese measures were surprising because the US-China relationship had been “very good” over the past six months, but he claimed Beijing had been “lying in wait” to attack.

“There is no way that China should be allowed to hold the World ‘captive’, but that seems to have been their plan for quite some time, starting with the ‘Magnets’ and, other Elements that they have quietly amassed into somewhat of a Monopoly position, a rather sinister and hostile move, to say the least,” he said.

FT : MKS Instruments to offload $1bn chemicals unit to focus on chips

MKS Instruments to offload $1bn chemicals unit to focus on chips
Supplier of semiconductor manufacturing equipment hopes to tap into artificial intelligence boom

MKS Instruments, a supplier to Taiwan Semiconductor Manufacturing Company, is selling a $1bn speciality chemicals division in a bid to focus its operations on supplying chipmakers, according to people familiar with the matter.

The Massachusetts-based technology group, which specialises in advanced manufacturing equipment crucial to the semiconductor supply chain, is working with advisers to divest the division, which it acquired as part of its $5.1bn takeover of Atotech in 2021.

The unit, which generates about $100mn in adjusted earnings a year, focuses on supplying technology used to apply coatings and finishes to automobiles and industrial equipment. MKS will hold on to the remainder of the division that provides equipment used to produce semiconductors and circuit boards.

MKS is trying to sell investors on how the boom in artificial intelligence and other technologies will drive a surge in demand for its manufacturing instruments, which it says are essential to the next wave of innovation. The company supplies semiconductor giants such as TSMC, Applied Materials and Lam Research.

Both its semiconductor and electronics divisions delivered revenue growth above analyst projections in the most recent quarter.

John Lee, MKS chief executive, said on an earnings call in August that the double-digit growth in its electronics and packaging arm was “validating MKS’s position in a market where complex electronics applications like AI are driving growth”.

MKS declined to comment. Shares in MKS stood at $121.3 each at Friday’s close, up 14.4 per cent this year, giving it a market value of $8.3bn.

A wide array of strategic buyers and private equity groups had been approached as part of the auction, the people said. The sale process was at an advanced stage, but there were no guarantees that a deal will be clinched, they added.

Private equity groups have jumped on similar carve-outs in recent weeks. This month, Carlyle struck a €7.7bn deal to take control of BASF’s coating unit, as part of which the German chemicals giant will retain a minority stake.

Before MKS struck a deal to buy Atotech, Carlyle owned 79 per cent of the outstanding shares.

FT : The art world loves to party — but don’t forget who your real friends are

The art world loves to party — but don’t forget who your real friends are
Those Bellini-fuelled nights are an excuse for great debauchery — just don’t mention the money

I can remember the precise moment when I knew I wasn’t going to make it as an art dealer. It was in 2017, in the bar of Les Trois Rois hotel, on the opening night of Art Basel. By the time I hustled my way into the party, the air was thick with bespoke perfume and underdressed ambition.

An older American dealer I knew accosted me. Booze shimmered off him as he launched straight into a story from earlier that evening. Another dealer owed him a large sum of money — in the region of $1mn, he claimed — and had been slow to pay. When he knocked on his hotel room door, the debtor appeared wearing nothing but a confused look and a Rolex; behind him, a naked woman lay on the bed. He dolefully handed over a rumpled cheque, glanced at his watch and then at the woman. He turned back to my acquaintance: “Drink downstairs in 15 minutes?”

When the dealer had finished his tale, he put his arm around me and gestured to the crowded room. “This is what it’s all about, eh?” I was thinking exactly the opposite. 

There are two things to know about the art world. First, it is driven by desire. No one needs art, after all: people are largely driven to own it to possess it themselves, but also, in my experience, out of a competitive urge for someone else not to. Second, the art market differs from other businesses in that its attitude to money is rather like the Victorians’ attitude to children. You see commerce everywhere — but nobody talks about it.

Art world parties are a way of sewing these two together: a place for gallerists, collectors and curators to peacock while tiptoeing around the elephant in the room. The effect is often seductive.

The twin peaks of nocturnal art world opulence are the Venice Biennale (every other April or May) and Art Basel Miami Beach (every December). Miami is not an art town; Miami is a party town, and each year the latter does the work of making up for the former. It’s like “spring break for plutocrats”, as one gallerist described it to me.

Venice is also a venue for great debauchery. The Biennale transforms the floating city into a frenzy of superyachts and Bellini-fuelled misbehaviour. Parties are secluded behind the walls of grand palazzos; often the only clue as to their existence is a lengthy queue to get in.

And people always want what they can’t have. One critic I spoke to told me about gatecrashing parties at the Bauer Hotel. “We used to shimmy along the back wall of the Bauer to sneak into Biennale parties that we weren’t on the list for. The wall faces directly on to the Grand Canal.” If you were lucky enough to make it to the other side, “you would do so with completely sodden shoes”. On departure, the writer was shocked to see a gallerist crouched over the bank of the Grand Canal. Unfortunately, the drinks that had caused such urinary urgency also meant that her balance was impaired and she tumbled backwards into the murky waters. 

All this exuberance, though, is an opportunity to see these parties for what they really are. In my experience, and from reminiscing with friends and former colleagues, one truism rang out: no matter how many invitations you receive, the events are just not that enjoyable. It’s performative fun, simulations of the real thing — the social equivalent of Diet Coke. 

Sure, the social life of the art world is a draw to many a lost and lonely rich kid. When I was a dealer, I met many of them. One New Yorker, not much older than me, seemed to have begun collecting in order to make friends. He came to dinners and parties and sometimes organised evenings of his own: an expensive restaurant dinner followed by the kind of nightclub where all the drinks seem to arrive with sparklers attached.

On one of those nights, I was grinding my teeth, wondering when I could leave when the collector and I locked eyes in the dark, flashing room. In that moment, we both realised something. I knew he wasn’t going to buy anything I was selling — and he knew I wasn’t going to be his pal.