TheChek News Flow

Bernard Arnault, billionaire owner of luxury group LVMH, will appeal against ruling

France has ordered Bernard Arnault, the country’s richest man, to pay €22.5mn of back taxes after a years-long legal battle.

Arnault and his wife should have paid tax on most of a €50mn payment they received after taking money out of a Belgian holding company that held shares related to luxury giant LVMH, an administrative court ruled on Thursday.

In successive court cases since 2020, Arnault contested the arguments made by the tax authorities and had prevailed twice before this reversal. A spokesman for him said he would again appeal.

The ruling was first reported by media outlet l’Informé on Saturday.

The tycoon has been a vocal opponent of wealth tax proposals. He lashed out at one promoted by prominent academic Gabriel Zucman last year that was pushed by leftist parties, saying it would be “deadly to the French economy”. He dismissed Zucman as “a far-left activist . . . who puts his pseudo-academic competencies in the service of his ideology”.

After heavy lobbying from business interests, the proposed “Zucman tax” failed in parliament. It would have required people with fortunes of more than €100mn to pay a minimum of 2 per cent tax annually on all their assets, including their companies, shares of companies and unrealised gains.

Arnault and his family are the controlling owners of LVMH — known for brands such as Louis Vuitton and Dior — via a 50.01 per cent stake. The Bloomberg Billionaires index puts him as the eighth richest person in the world with a fortune worth $165bn.

The tax dispute stemmed from a restructuring in which Arnault transferred LVMH-related shares into a Belgian holding company in exchange for shares in the Belgian entity. Years later, when the company returned about €50mn to him by reducing its share capital, Arnault argued that the payment should have been treated as a tax-free repayment of capital.

But tax authorities maintained that most of it should instead be treated as taxable distributed income.

In the ruling, the court reinstated about €22.5mn in additional income tax, social charges and related wealth tax liabilities.

“This ruling, which overturns both the first-instance judgment and an earlier decision by the same appeal court, will be appealed to the Conseil d’État,” said Arnault’s spokesman, referring to France’s highest administrative court.

The spokesperson added: “LVMH is France’s biggest corporate taxpayer. The group’s overall activities also contribute more than 1 per cent of the country’s GDP.” The company’s total income tax payments rose to about €5.5bn last year, more than €300mn higher than 2024, according to its finance director in an earnings call.

Arnault was caught in a furore in 2012 after he applied for Belgian citizenship, in addition to his French citizenship, in a move that critics said was aimed at optimising his tax affairs.

At the time, then Socialist president François Hollande was proposing a “supertax” of 75 per cent on earnings over €1mn a year, which ultimately was not implemented.

In an interview with Le Monde newspaper at the time, Arnault said the move aimed to “better protect the Belgian foundation I established, with the sole objective of ensuring the continuity and integrity of the LVMH group should I die and my heirs fail to reach agreement”.

He later abandoned the citizenship application.

Another French billionaire, Liliane Bettencourt, whose family owns part of cosmetics group L’Oréal, had to pay back taxes after prolonged disputes with authorities.

The Franco-American Wildenstein family, who made their fortune in international art, also fought with the government over offshore trusts, resulting in Guy Wildenstein being convicted for tax fraud in 2024.

As part of an ongoing legal dispute with three Hollywood studios, AI startup Midjourney is seeking to compel those studios to reveal how they use AI themselves.

Disney and Universal sued Midjourney for alleged copyright infringement last year, noting that the startup’s image-generation models could create images of characters, such as Bart Simpson and Darth Vader, who are owned by the studios. A few months later, Warner Bros. sued Midjourney as well.

The startup argues that training its AI models on images of copyrighted characters is permitted under fair use.

The current dispute revolves around the documentation the studios will need to produce during the discovery process. A judge previously ruled that the studios would indeed have to provide information about their generative AI usage – but only when it led to “consumer-facing” videos and images.

In its latest filing, Midjourney seeks to overturn that limitation, arguing that it “unfairly” allows the studios “to cherry-pick only those documents they believe support their market harm claims while depriving Midjourney of documents that would support its defenses.”

Midjourney goes on to claim that the “documents [the studios] are withholding are precisely those that would reveal whether, behind closed doors, they are doing exactly what they are suing Midjourney for doing.”

For example, the startup says that if the studios are developing image-generating AI models “for internal use in storyboarding or ideating content for film or TV, that evidence would equally demonstrate that it is an industry custom, even among the studios themselves, to download and train AI on unlicensed copyrighted content.”

In the filing, the startup also argues that the studios should reveal all the prompts they used in Midjourney, as well as the resulting outputs, not just the prompts that produced the allegedly infringing images.

The studios’ lead attorney David Singer previously claimed Midjourney was seeking this documentation as part of a “fishing expedition.”

He also said the studios “do not seek to stop AI technology or even shut down Midjourney’s business,” but rather “simply want Midjourney to stop copying their movies and TV shows and to stop distributing, publicly displaying, publicly performing, and creating derivative works that include copies of [their] famous characters without authorization.”

Blacklisted entities handled $100 billion in crypto in 2025, financing terrorism and weapons

Iran, Russia, North Korea and other sanctioned targets handled around $100 billion in crypto last year.

They have used digital currencies to buy drones and weapon parts, and to pay salaries for seafarers who smuggle sanctioned oil.

Western officials are struggling to police the largely unregulated market, despite stepping up sanctions on exchanges and seizing crypto.

Iran, Russia, North Korea and other targets of sanctions have dramatically increased their use of virtual currencies to duck U.S. pressure, handling around $100 billion worth of crypto last year alone, firms that track the flows say.

They are also becoming more sophisticated in how they navigate the market, creating their own digital tokens and crypto exchanges to help process transactions, the firms and Western authorities say.

Iran and Russia have used virtual cash to buy drones and weapon parts, and Russia has used it to pay salaries for seafarers who smuggle their sanctioned crude around the world, according to Western officials and crypto analytics firms. North Korea, which has mastered the art of stealing crypto through hacks and other cybercrimes, has used it to buy fuel and military equipment, officials say.

Using crypto enables them to bypass traditional banks, which play a central role in policing sanctions imposed by the U.S. and others.

“Crypto has changed the sanctions evasion game significantly,” said Kaitlin Martin, a senior intelligence analyst at analytics firm Chainalysis. It estimates that cryptocurrency addresses linked to sanctioned entities received over $100 billion in 2025, almost eight times the amount received in 2024.

Russia considers international sanctions to be illegal under international law and has “deployed and developed alternative mechanisms that allow the economy to function normally,” Kremlin spokesman Dmitry Peskov said. North Korea recently called allegations that it engages in cybercrimes “absurd slander” and an extension of Washington’s “hostile policy” toward Pyongyang. Tehran didn’t reply to a request for comment.

Western officials are struggling to keep up as crypto becomes more popular for sanctions evasion. Although the U.S. has temporarily waived sanctions on Iranian oil as it negotiates a possible peace agreement with Tehran, it still considers sanctions to be a key tool to pressure adversaries worldwide. Washington is holding out the possibility of restoring oil sanctions on Iran if a peace deal isn’t achieved.

Last month, Washington sanctioned four Iranian crypto exchanges, including its largest, Nobitex. Treasury Secretary Scott Bessent said the U.S. has seized $1 billion in crypto from Iran. Nobitex and another sanctioned platform, Bitpin, denied they facilitate illegal activities and said their customers are ordinary people. The other two exchanges didn’t reply to requests for comment.

In the U.K., authorities in May blacklisted one of the world’s largest crypto exchanges on suspicion of supporting Russia’s government. The exchange, HTX, said it would work with authorities to promptly address any concerns.

Getting a firm grip on the market is nearly impossible, because much of the industry isn’t regulated, and transactions can be done anonymously, making them hard to trace.

The Iranian crypto platforms recently sanctioned by Washington are only the most prominent nodes in a larger network, said Ari Redbord, head of policy at analytics firm TRM Labs, which monitors more than 100 Iranian crypto exchanges.

“Their takedown does not dismantle the architecture underneath them,” he said. If anything, he said, the market is becoming harder to police.

“Over the last year, Iran and Russia have moved from one-off crypto transactions to building layered sanctions evasion programs.”

In Allah’s name

Unlike traditional money, which is usually linked to bank accounts, crypto transactions aren’t easily identifiable. Digital wallets holding crypto are represented by numbers and letters, with no names attached. Anyone can create a wallet and hold or transfer crypto with minimal disclosure of where they got their funds.

Hamas, the U.S.-designated terrorist group and Iran ally, has asked for donations in crypto, according to the Federal Bureau of Investigation. Last year, an FBI agent came across one of the group’s requests on Telegram, according to a court request filed by the FBI to seize the funds.

When a confidential source for the agent contacted the email provided, the source received instructions to visit a money transfer office that converts traditional currencies into crypto, and then provide the teller with a wallet address where the money should be sent, the FBI said.

“It is necessary not to inform the party that will undertake the transfer on your behalf of our identity,” the instruction said. It also said Hamas changed the wallet address for donations constantly to avoid detection.

“May Allah write you the reward and reward you with all good,” the instruction said.

Eight wallets Hamas used for donations received $70,000 in cryptocurrency during a two-week period, according to the FBI agent.

Hamas didn’t respond to a request for comment.

Iranian crypto

In Iran, dozens of crypto exchanges have popped up in recent years, driven in part by demand from everyday citizens who need ways to transfer money and build savings amid a weakened rial currency and Western sanctions.

Iran’s Islamic Revolutionary Guard Corps has used crypto exchanges—both at home and abroad—to get paid for oil sales, particularly from China, its biggest customer.

The Wall Street Journal has reported how billions of dollars have moved through Binance, the world’s largest crypto exchange, to networks financing the Revolutionary Guard. Binance has called the reporting inaccurate, adding that it didn’t permit any transactions with individuals or digital wallets that were sanctioned at the time and that Binance took all appropriate actions once they were. The company filed a lawsuit against the Journal over its reporting. A Journal spokesperson said it stands by its reporting.

The Journal has also reported that CoinEx, an eight-year-old exchange founded by a Chinese engineer, has played a growing role in connecting Iran’s crypto operations to the world as the country tries to evade sanctions. CoinEx said it doesn’t “provide services to any sanctioned entity or individual” and has “never knowingly provided any form of facilitation to any party after it was designated.”

Russian workarounds

Russia has also become more sophisticated in using crypto, Western authorities say, since the U.S. shut Russian banks off from the global financial system in response to the Ukraine war.

Last year, a company owned by Ilan Shor, a sanctioned Moldovan oligarch, and Promsvyazbank, a Russian state-owned bank sanctioned for its role in serving the country’s defense sector, joined forces to create a token called A7A5, according to Western authorities and crypto-analytics firms.

The token is pegged to Russia’s currency and can be used in its place to get around restrictions on how rubles can be transferred abroad. Users buy the token using rubles inside Russia and then change it to another cryptocurrency, such as the stablecoin Tether, which can be used internationally or converted into U.S. dollars.

At a conference in Russia last year, Shor said part of A7A5’s appeal is that it “has no risk of being frozen.” Neither his company nor Promsvyazbank replied to requests for comment.

Kaitlin Martin from Chainalysis said she detected payments to China-based drone vendors that were sourced from A7A5-to-stablecoin swaps. Her firm estimated that in total A7A5 processed over $90 billion in transactions last year.

Even though the U.S. and other countries sanctioned the company behind A7A5, the currency continues to be used.

Russian businesses are also using other crypto. A Moscow-based supplier for Rosatom, a Kremlin-controlled nuclear company, needed $1 million worth of equipment from an Asian firm, but couldn’t transfer the money because of sanctions, according to an indictment filed by the U.S. government last year.

The funds were converted into cryptocurrency and sent to a digital wallet belonging to a Russian man, Iurii Gugnin, in the U.S., the indictment said. Gugnin then allegedly used a crypto exchange to convert the virtual currency into dollars, which were deposited in his company’s account at a New York bank.

From there, prosecutors said Gugnin transferred the $1 million to the bank account of the Asian firm, in South Korea.

Rosatom said it couldn’t verify the allegations in the indictment, which targets Gugnin, but said it “carries out its financial activities through lawful and legitimate channels.” It also said it views sanctions targeting Russian enterprises as discriminatory.

Gugnin moved more than $500 million through the U.S. financial system on behalf of Russian and other clients, according to U.S. prosecutors. Through him, Russian clients were able to procure U.S. technology components, including a computer server that faced export controls for antiterrorism reasons, the prosecutors said.

Gugnin was arrested last year and in April pleaded guilty to four charges, including conspiracy to launder money and sanctions violation. A lawyer for Gugnin didn’t reply to requests for comment.

Industry experts think newfound knowledge of battery durability is a game-changer for consumer confidence in EVs

Modern electric-vehicle batteries are proving exceptionally reliable and long-lasting, performing better than many in the auto industry expected.

Despite improved battery longevity, consumer fear of replacement costs remains a top reason for avoiding EVs, hindering U.S. adoption.

Richard Symons recently took his five-year-old Tesla Model 3 on a 260-mile road trip across England without having to stop for a charge.

A new electric vehicle could make the trip no-problem. But Symons’s car—which he has affectionately nicknamed “Miles”—has logged 247,000 miles and is still up for frequent long-distance drives.

Symons, the owner of a U.K.-based used-car sales company that specializes in EVs, has found that the batteries that power these cars continue to perform well even after several hundred thousand miles. This has come as a welcome surprise to him and other EV enthusiasts.

“They are proving themselves to be exceptionally reliable,” Symons said.

After five years on the road, the average EV will still be able to drive up to 95% of its original range, according to Recurrent, a data-science company that provides a battery-monitoring tool for EVs—better than many in the auto industry expected.

Consumers in the mass market have yet to develop trust in EV batteries, according to Jessica Caldwell, head of insights at car-shopping resource Edmunds. “There still is a lot of trepidation amongst buyers,” she said.

Potential new car buyers’ fear of having to pay for a battery replacement is the number one reason they choose to steer clear of EVs, according to a 2025 survey from industry research firm AutoPacific.

When early EVs hit the market, buyers’ concerns were well-founded. Roughly one in 12 EVs built from 2011 to 2016 have had to have battery replacements. But new data shows that more modern EVs are doing better so far. Among EVs built from 2022 on, 0.3% have had battery replacements, according to a 2025 study from Recurrent.

As battery technology has advanced, EVs have avoided problems like the ones that plagued the original Nissan Leaf when it hit the market in 2010, for example. Those cars lacked the battery-cooling technology that is in newer EVs, and they made headlines for wearing down quickly.

Buyer perception hasn’t quite caught up, according to Scott Case, co-founder and chief executive of Recurrent.

“I think that people ought to have a lot more confidence than they do,” Case said.

The newest battery-powered EVs have lifespans comparable to internal-combustion-engine vehicles, even when driven more miles, according to Viet Nguyen-Tien, a research officer at the London School of Economics who focuses on EVs.

Improvements in car batteries’ chemical contents, battery-management systems and thermal regulation have been the difference in making batteries last longer and cost less, Nguyen-Tien said. Battery prices have fallen more than 90% since 2010, according to a BloombergNEF report from late last year.

Industry analysts say battery-replacement costs are also improving as more EVs are designed for repairability in the long-haul.

An out-of-warranty battery replacement can cost anywhere from $5,000 to $16,000, depending on the manufacturer, according to Recurrent. But many EV manufacturers have shifted to allow smaller components of their battery packs to be repaired, which can allow owners to avoid the full costs of a battery replacement, Case said.

EV batteries aren’t without their challenges, though. A battery that is frequently fast-charged with high power loses its range, on average, at twice the rate of a battery charged at a lower power, according to telematics company Geotab.

Frequently charging a battery to 100%, or letting it rest at 0% for extended periods, can also reduce range long-term. And EVs regularly deliver less range in extreme cold or heat.

In the U.S., consumers have yet to fully embrace electric cars. America’s enthusiasm for EVs has waned after the Trump administration ended EV subsidies and regulations driving a more electric new-car market. EV sales are down 25% so far in 2026, compared with last year, according to data from Motor Intelligence.

But industry analysts don’t expect the U.S. slowdown on EVs to last forever. The share of new EVs sold is expected to nearly double to 11% of new-car sales in the U.S. by 2030, according to industry consulting firm AlixPartners.

Globally, EVs already make up 15% of new-car sales and are expected to form nearly a quarter of the global market by 2030, according to AlixPartners.

EV advocates like Ken Yannacci, a market analyst and founder of an EV-ownership and gear website, hope that a clearer picture of exactly how long car batteries can last will help them catch on in the U.S.

“As EVs get a reputation for having that battery longevity, that’s definitely gonna help,” he said.

Fast-growing energy supplier says employee share ownership means it’s not a ‘them and us’ company

Octopus Energy workers are gearing up to push for union recognition, in a challenge to the young, tech-savvy company’s approach to worker representation after its rapid ascent to become Britain’s largest household energy supplier. 

The GMB Union is preparing to submit a formal proposal for voluntary recognition at the London-based firm, which prides itself on looking after staff but eschews formal human resources models and is the only large British energy supplier that does not currently recognise a union. 

Founder and chief executive Greg Jackson, who has become one of Britain’s most prominent entrepreneurs and an official adviser to the Labour government, has spoken of his concern about the stifling effects of bureaucracy.

A self-styled disrupter, he has reportedly said that while he was not anti-union, he did not believe they were needed at Octopus, where every employee owned shares in the company.

Octopus is also at odds with GMB over the union’s criticism of government support for heat pumps, which Octopus has become a major installer of.

The GMB’s push for recognition comes after it raised a collective grievance last year over workloads and training among installers of heat pumps and electric car charging points in the company’s Octopus Energy Services division. 

Tony Tanushi, regional energy officer at the GMB, said the company’s management had shown “no appetite” for unionisation and that if its application for voluntary recognition did not work, he would be willing to take it to arbitration. 

“It’s about time they did what their competitors are doing if they want to be seen as a progressive, forward-thinking company,” he said. “They are good at selling energy; we are good at finding talented leaders and individuals in the workplace to hopefully work in harmony with them.”

Octopus Energy emphasised they believed that given every employee was a shareholder the company was “much less ‘them and us’ than traditional businesses” and said it was “consistently named one of the best places to work”.

They added that it was “unfortunate that the biggest unions in energy want to nationalise us — which would kill our employees’ share ownership, or oppose widespread heat pumps — one of our biggest areas of employment”.

The company also noted it inherited union recognition arrangements when it took over Co-op Energy in 2019, but workers voted to end this.

Octopus Energy was founded in 2015 to challenge the so-called Big Six suppliers that dominated the market, such as British Gas and SSE.

Backed by investors such as Al Gore’s Generation Investment Management and Japanese utility Tokyo Gas, it has grown rapidly and overtook British Gas at the start of 2025 to become the country’s largest household supplier, cementing Jackson’s status as one of Britain’s most successful entrepreneurs.  

Towards the end of last year it sold off a minority stake in its software arm, Kraken, for $1bn ahead of a potential IPO in New York or London over the next few years.  

Despite its size and political influence, it has retained the image of a young, agile, challenger company; exemplified through Jackson’s preference for jeans and T-shirts and criticism of “incumbents” during his frequent media appearances. 

Jackson on Friday shared a video with staff of him wearing an England football team cap, encouraging employees to watch the Three Lions World Cup match against Mexico in the early hours of Monday morning. He said most UK-based staff could start work a little later that day so they could enjoy the game.

“We’ll have snacks and stuff in the office on Monday morning to thank those who are providing the cover,” Jackson said.

But the push for unionisation shows how Octopus is being pulled into a more traditional way of working as it grows.

Britain’s unions, while far weaker than 50 years ago, still hold sway in certain areas of politics and public life.

The GMB is lobbying against energy secretary Ed Miliband’s potential elevation to chancellor when Andy Burnham becomes prime minister, due to concerns over Miliband’s ban on new oil and gas exploration licences. 

Tanushi said he was “confident” they had enough support to be eligible for voluntary recognition but declined to give absolute numbers on their support.

European space deal to create SpaceX rival draws antitrust claims

Germany’s OHB warns three-way merger would hurt competition, ultimately increasing costs for taxpayers

The CEO of a leading European satellite group has warned that a proposed merger of the space businesses of Airbus, Leonardo and Thales would weaken competition while doing little to strengthen the bloc against rivals such as Elon Musk’s SpaceX.

Germany’s OHB told the FT that governments would be left with fewer suppliers for publicly funded space programmes, ultimately increasing costs for taxpayers.

“This is a consolidation that reduces competition”, said Marco Fuchs, the chief executive of OHB. “That’s not good for the European citizens, that’s not good for the taxpayer, that is not good for the offering in the European market.”

Airbus, Thales and Leonardo, which agreed to merge their space units in October in a deal codenamed Bromo, are poised to file for formal antitrust clearance with European competition authorities.

The proposed tie-up comes as Europe’s space industry faces growing pressure from US and Chinese competitors. The merging companies argue scale was needed to remain competitive in the wake of the rapid expansion of SpaceX’s Starlink.

But Fuchs rejected the merged company’s ability to compete against SpaceX, arguing the US company primarily competed in launch services and satellite communications rather than manufacturing satellites for European institutional customers.

He also pointed out that Starlink’s founder had been characterised by some critics in Europe as “evil Elon”. “It’s a nice theme, but it’s not ‘evil Elon’ here. It’s a monopoly in Europe that is created,” he said.

Instead, Fuchs argued, the merger would reduce competition in programmes funded by the European Space Agency, the European Commission and national governments, where most demand comes from public procurement. While this could benefit his own company, he warned that flagship projects such as Galileo would face fewer credible bidders, weakening competition and ultimately increasing costs for taxpayers.

OHB last month announced it would issue new shares to raise up to €510mn, in a move Fuchs said would help to pursue more aggressive growth in response to the challenge laid down by the Bromo merger.

Fewer competitors as a result of a merger “obviously creates an opportunity [for OHB]”, said Fuchs, who added: “I am benefiting from this merger, but I find it really strange that . . . Europe is buying that story.”

He said German policymakers might be positioning the Bromo deal as a “symbol of Franco-German friendship” at a time when Berlin has cancelled or scaled back joint defence projects, such as the Future Combat Air System (FCAS), while embarking on a historic military build-up.

“The big picture is: Germany is arming up and does not want to scare its neighbours,” Fuchs said. “That’s why they need [the satellite merger]: OK, we cancel the aircraft but now on space we do something nice together.”

Uber stalls European food delivery push as it pursues Delivery Hero takeover

Ride-hailing company will no longer launch in five of its seven planned new markets this year

Uber has paused the majority of its planned food delivery expansion in Europe just months after it was announced, as the San Francisco-based giant continues its effort to acquire its biggest rival on the continent.

The company no longer plans to launch in five of the seven countries it had targeted for expansion this year, including Austria, Norway and Greece, according to two people familiar with the matter.

The reversal comes just five months after Uber announced its European food delivery expansion — which also included launches in the Czech Republic and Romania — as part of a push to deliver an additional $1bn in gross bookings over the next three years.

However, the group is still seeking to acquire Delivery Hero, after its €10bn bid for the Berlin-based company was rejected in May.

That deal remains fraught with difficulty. The German company’s biggest shareholder Prosus is considering expanding its stake in a move that could scupper an Uber takeover, while EU regulators are expected to scrutinise any acqusition.

Uber told the FT it had decided to halt its expansion after the “huge success” of launches in Finland and Denmark, with plans to “focus on continuing the momentum” in existing markets. 

One industry figure said the pause could help smooth any EU antitrust review of a Delivery Hero takeover, which will probably face scrutiny if Uber agrees a deal because of the large overlap between the two companies’ markets. 

Delivery Hero’s Foodora brand is present in Austria, Norway and the Czech Republic; its “efood” service is available in Greece and its Glovo brand in Romania.

The ride-hailing group has been seeking to grow its international food delivery offering in a bid to scale its operation and tackle DoorDash-owned Wolt and Deliveroo.

But the expansion plans have faced difficulties, with its global head of delivery, Susan Anderson, announcing her departure last month after just 12 months in the role.

While Uber Eats has gained market share in the UK, France and Germany, it has lost ground in the US to DoorDash, which has widened its market share to 64 per cent, its highest level since the end of the coronavirus pandemic. In comparison, Uber has a 31 per cent share of the US market, according to YipitData. 

Uber Eats has also been hit with a technical issue in recent months that left some partner restaurants unable to receive orders, according to a person familiar with the matter.

Uber said it had not seen “any material impact to Delivery’s overall performance” from the issue, adding it had not been a role in Anderson’s exit.

Paris loses out on cheap loans due to strict eligibility criteria it had championed

A French push to keep the UK out of an EU defence fund has backfired, costing Paris cheap loans it had planned to spend on Franco-British weapons projects.

The French government requested €16.2bn from Safe, the EU’s €150bn rearmament fund. But the European Commission approved only €15.1bn, in part because some UK-linked projects failed to qualify under strict eligibility rules that France had championed, according to three people familiar with the matter.

The disqualified projects involved missile maker MBDA, which is jointly owned by Airbus, Britain’s BAE Systems and Italy’s Leonardo, one of the people said. MBDA’s UK and French units together produce the long-range Storm Shadow/Scalp missile used by Ukraine. MBDA declined to comment.

Safe was designed to channel money into European arms production as the continent faces the threat from Russia and a less engaged US, its main security provider. Its advantage is that it offers cheaper funding, thanks to the European Commission’s triple A rating, compared with higher national borrowing costs.

The scheme was agreed last year after EU leaders accepted French demands that 65 per cent of the value of funded products must originate in the EU single market (including Norway and Iceland) or in Ukraine.

Contractors from other countries can account for only 35 per cent of the value unless their government has signed a Security and Defence Partnership with the EU and agreed to contribute financially to the scheme. So far, only Canada has met both conditions.

London signed a defence agreement with the EU last year, but talks on a participation fee collapsed after France pushed the Commission to demand more than €6bn from the UK. The figure was later reduced to €2bn, but the two sides still failed to reach an agreement.

Many of the bloc’s most advanced weapon programmes still rely on UK expertise, and as a result, are not eligible for Safe loans.

Companies including MBDA and defence electronics group Thales have lobbied for the UK to be included given enmeshed supply chains and key partnerships.

British officials have suggested that companies with a pan-European footprint should qualify as EU-made.

Despite the setback, Paris said that the country’s position had not changed. “We fully support the eligibility criteria associated with Safe, which we advocated for ourselves,” said a French official. “Safe is a means to develop and support the European [defence industry], which is the whole point of European preference.”

The episode exposes a tension in efforts by European countries to increase arms production and upgrade their militaries.

Nato’s target for members to spend 5 per cent of GDP on their armed forces and related infrastructure by 2035 has helped drive an increase in defence budgets. But two-thirds of arms contracts in the EU are with US manufacturers, according to the Brussels School of Governance, a think-tank.

The restrictive criteria for Safe loans also came under criticism from the US ambassador to Nato.

“We certainly do not support the protectionist language that, oftentimes, many of the European defence initiatives have included, that would cut out allies, not just the United States, but all non-EU allies, including Turkey and others,” Matthew Whitaker told the FT.

A senior EU diplomat said the disqualified Franco-British project illustrates the need to “bridge the ambition leaders have” with what happens “on a practical level.”

The French Ministry of Defence declined to comment, as did the European Commission.

The UK ministry of defence also did not comment.

Besides France, countries including Hungary and Italy are planning on taking up fewer Safe loans than they were eligible for, leaving a total of up to €18bn in unused borrowing capacity, according to EU officials and diplomats. The Commission wants to retender the remaining loans in the autumn, they added.

While heavily indebted countries such as Italy are wary of taking on more debt, countries with lower borrowing costs, such as Germany, see little benefit in tapping the Safe fund.

“There is not that much demand from member states for more borrowing,” said a senior EU diplomat. 

“We are seeing no signs that member states are ready for more borrowing, even in defence.”

Following the Trump directive that led Anthropic to pull its latest AI models offline and growing calls for sovereign tech that reduces reliance on the U.S., Mistral AI has been caught in a whirlwind of attention. But the French AI darling is often misunderstood, and the fact that it develops large language models (LLMs) has muddied the picture.

Anyone who judges Mistral by how close it is to becoming ‘the OpenAI from Europe’ is in for disappointment. Its chat and agent Vibe, formerly Le Chat, only has an ounce of ChatGPT’s brand recognition, and Claude is more popular than Mistral’s models even among founders based at Station F, Paris’ startup campus.

On the other hand, casual observers tend to miss that the French decacorn is following the Palantir playbook, with forward-deployed engineers that help governments and large corporations adopt AI and tailor it for their use cases.

This approach is also better suited for Mistral’s means. While the company is rumored to be raising some $3.5 billion at a $23.15 billion valuation, nearly doubling its current valuation, that’s still far less than U.S. frontier labs. But its revenues have also ramped up; in February, it disclosed that its annual recurring revenue was now above $400 million, up from $20 million just one year earlier, and claimed it was on track to surpass $1 billion in ARR this year.

This has helped Mistral gain a seat at the table in places like Davos, and even in rooms where tech CEOs have a hard time getting their message across, such as the French Parliament. Mistral CEO Arthur Mensch has become a public ambassador for a certain vision of AI, but he still has some evangelizing to do when it comes to explaining his own company.

In a lengthy LinkedIn post, Mensch broke down what the Paris-based company has been doing “for a living” — deploying its models and agent platform on the infrastructure of its Enterprise customers, and helping them build custom models with Forge, a platform that lets them use their own data for training.

However, misunderstandings and bigger hopes around Mistral don’t stem out of thin air. Named after a wind, the company pursues a grand vision. “We exist to make sure that everyone gets access to the best AI systems, outside of centralized control exercised by states or corporations that feel the need to control in-fine deployment of AI,” Mensch wrote.

This vision means that Mistral is looking beyond the enterprise. It also aims to keep on making big investments into research to keep up with foundational AI rivals — and Mensch’s post also covered where he thinks the company stands in that regard.

“Today, we do not yet own the best language models, but we’ve constantly reduced that gap. We have a very exciting model to come this summer – it will be open-weight, and we’re opening early access to it in July. In domains that are less compute bound, e.g. voice, vision and document processing, we have state-of-the-art solutions,” Mensch claimed.

Mistral’s upcoming model has already generated some buzz on X, where Mensch and Mistral backer Marc Andreessen have engaged with jokes and amplified memes on what we now know won’t be called “Le Chaton Fat.” That’s another sign that the world — especially “the rest of the world” — is keeping an eye out for whatever Mistral has in its bag.

The most interesting part may be happening behind the scenes. Earlier this year, Mistral acquired infrastructure startup Koyeb to further boost its plans to build “a true AI cloud. The company also announced a €4 billion investment strategy (around $4.56 billion) to build data centers in France and Sweden — and the sovereignty undertones are never very far.

“We’re building under the premise that AI technology is a commodity technology that every organization needs a secured and affordable supply of,” Mensch wrote. If you are curious to learn more, keep on reading.

Mistral’s three founders share a background in AI research at major U.S. tech companies that have operations in Paris. Before becoming Mistral’s CEO, Mensch used to work at Google’s DeepMind; CTO Timothée Lacroix and chief scientist officer Guillaume Lample are former Meta staffers.

Mistral also granted the title of co-founding advisers to the cofounders of health insurance startup Alan, Charles Gorintin and Jean-Charles Samuelian-Werve (also a board member). In addition, it recently appointed three new executives to support its growth: Johan Bergqvist as Chief Financial Officer, Brian Hall as Chief Marketing Officer and Kamal Brar as SVP, Partners & Alliances.

Mistral has developed a broad suite of models ranging from LLMs to multimodal, reasoning, audio and OCR models. Not all of its models emphasize size; there’s the tellingly named Mistral Small 4 and “Les Ministraux,” a family of models optimized for edge devices such as phones. Some are open weights, and it also made code agent Leanstral open source.

In 2024, Mistral signed a deal with Microsoft that included a €15 million investment and a strategic partnership for distributing the French company’s AI models through Microsoft’s Azure platform.

In May 2025, Mistral said it would participate in the creation of an AI Campus in the Paris region, as part of a joint venture with UAE investment firm MGX, NVIDIA, and France’s state-owned investment bank Bpifrance.

In June 2025, Mistral said it would launch a European platform dedicated to AI and powered by Nvidia processors, Mistral Compute, in 2026. The initiative was hailed as “historic” by France’s president, Emmanuel Macron, who shared the stage with Mensch and Nvidia CEO Jensen Huang at the VivaTech conference shortly after the announcement.

In July 2025, Mistral launched AI for Citizens, an initiative that the company claimed could “help States and public institutions strategically harness AI for their people by transforming public services.”

In September 2025, Mistral and chip company ASML struck a partnership “to explore the use of AI models across ASML’s product portfolio as well as research, development and operations.”

Mistral also secured strategic partnerships with the likes of Accenture, press agency Agence France-Presse, France’s army and job agency, Luxembourg, shipping giant CMA, German defense tech startup Helsing, IBM, Orange, and Stellantis.

Most of Mistral AI’s funding to date was debt financing, but the company has also raised several venture funding rounds, with a grand total around $4 billion, according to Crunchbase.

In June 2023, just one month after being founded, Mistral AI raised a record $113 million seed round led by Lightspeed Venture Partners. Sources at the time said the seed round, Europe’s largest ever, valued the startup at $260 million.

Other investors in that round included Bpifrance, Eric Schmidt, Exor Ventures, First Minute Capital, Headline, JCDecaux Holding, La Famiglia, LocalGlobe, Motier Ventures, Rodolphe Saadé, Sofina, and Xavier Niel.

Six months later, Mistral closed a €385 million Series A ($415 million at the time), at a reported valuation of $2 billion. The round was led by Andreessen Horowitz (a16z) and saw participation from Lightspeed, as well as BNP Paribas, CMA-CGM, Conviction, Elad Gil, General Catalyst, and Salesforce.

Microsoft’s $16.3 million convertible investment in Mistral as part of a partnership announced in February 2024 was presented as a Series A extension, implying an unchanged valuation.

In June 2024, Mistral raised €600 million (about $640 million) in a mix of equity and debt. The long-rumored round was led by General Catalyst at a $6 billion valuation, with notable investors including Cisco, IBM, Nvidia, and Samsung Venture Investment Corporation participating.

In September 2025, Mistral closed a €1.7 billion Series C round (about $2 billion) led by ASML at a €11.7 billion valuation (approximately $13.8 billion), with participation from existing backers DST Global, a16z, Bpifrance, General Catalyst, Index Ventures, Lightspeed, and Nvidia.

In addition to infrastructure startup Koyeb, Mistral has also bought Emmi, an Austrian startup focusing on physics AI, with the ambition to better support industrial enterprises in their AI transformation.

While Mistral has yet to design its own chips, Mensch isn’t ruling it out. “Owning the chips may come, I think it should come at some point, but for now we are relying on Nvidia, which is a great partner to us, and we’re testing a few things here and there,” he told CNBC.

Mistral is “not for sale,” Mensch said in January 2025 at the World Economic Forum in Davos. “Of course, [an IPO is] the plan.”

This makes sense, given how much the startup has raised so far: Even a sale to a rumored prospective buyer like Apple may not provide high enough multiples for its investors, not to mention sovereignty concerns depending on the acquirer.