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OpenAI proposes handing Trump administration 5% stake

Sam Altman’s start-up in early talks for a public ownership deal as political pressure rises

OpenAI has discussed giving a 5 per cent stake to the US government as the $852bn AI start-up seeks to clear political obstacles by securing financial buy-in from the Trump administration.

Sam Altman, chief executive of the ChatGPT maker, has argued that giving the public a financial stake in the company is the best way to share the upside of AI and has suggested a stake of this size in early conversations with the administration, according to two people familiar with the talks.

The proposed arrangement would involve other US AI companies handing over a similar stake, although it is not clear if the other labs would be willing to do so.

Giving the government an ownership stake could help secure good relations with the administration and would mark an attempt to address political blowback by sharing the wealth generated by AI with the public.

AI labs have faced an increasingly challenging environment in Washington as the American public and politicians grow more concerned about vast data centre construction and the implications of AI for jobs and cyber security.

OpenAI and its chief rival Anthropic have recently both had the release of their cutting-edge models held up by US scrutiny, while some Republicans and advisers to President Donald Trump favour much tighter regulation of the sector.

The two rivals are also preparing for public listings, which would expand their ownership base and generate big gains for current investors, although OpenAI’s float may not take place until next year.

Altman and other OpenAI executives have suggested that each of America’s leading AI developers allot 5 per cent of their equity to a vehicle like the Alaska Permanent Fund, a sovereign fund that invests the state’s oil wealth into stocks and pays dividends to the state government and residents.

These companies might include Anthropic as well as Google, Meta and others, although it is not clear any of these groups would agree with OpenAI’s proposal.

After publicly attacking Intel’s chief, Trump has swung behind the US chipmaker after the government took a 10 per cent stake.

“Conceptual” talks between the government and OpenAI were in the early stages, and any deal might require an act of Congress to implement, the people said. But the discussions point to a potential mechanism to distribute the financial gains from the technology.

Altman has been in active talks with the administration about the issue of public ownership, including Trump, commerce secretary Howard Lutnick and Treasury secretary Scott Bessent, according to multiple people familiar with the matter.

The OpenAI chief has also spoken to Democratic Senator Bernie Sanders in recent weeks. Sanders has pushed for public ownership of closer to half of each US AI company through a sovereign wealth fund.

OpenAI and Anthropic have previously suggested in economic policy proposals that arrangements such as public or sovereign wealth funds may be required in future to distribute shares to the public.

In April, OpenAI proposed a “public wealth fund” that “provides every citizen — including those not invested in financial markets — with a stake in AI-driven economic growth”.

The OpenAI Foundation, the company’s non-profit arm, said in May that in an AI-led future, “society will likely need new approaches that give people durable stakes in the systems creating value”, pointing to public or sovereign wealth funds.

“The goal is not only to support people through economic change after decisions have already been made, but to give them a stake and a voice in shaping how that change unfolds,” the foundation said in a blog.

OpenAI declined to comment. The White House did not immediately respond to a request for comment.

Millennium and Point72 gain as hedge funds rebound from Iran war

Izzy Englander and Steve Cohen’s firms post double-digit returns in first half of year

Izzy Englander’s Millennium and Steve Cohen’s Point72 were among big hedge funds to have posted double-digit gains in the first half of the year, as the industry recovers from losses sustained after the outbreak of the Iran war.

Millennium, which manages about $89bn in assets, gained 4.1 per cent last month, taking its gains in the six months to June to 10.5 per cent, according to people who have seen the numbers. Point72 made 3.4 per cent last month to June 25, taking gains this year to 14.5 per cent, the people said.

The flagship fund of rival Schonfeld, which manages $22bn in overall assets, was up 8.4 per cent for the six months. All three firms declined to comment.

Many so-called multi-manager hedge funds, which run tens or even hundreds of trading teams, had a challenging first quarter, as the US-Israeli strikes on Iran sent the price of oil soaring.

That led to a sharp repricing of market expectations on inflation and interest rates, upending a number of funds’ bets on bonds, currencies and other assets.

Hedge funds on average lost 2.8 per cent in March following the outbreak of the conflict, according to data provider HFR, but have rebounded strongly since then, helped by a sharp rally in stock markets.

Many funds have latched on to semiconductor stocks such as AMD, Sandisk and Intel, which have soared this year as the beneficiaries of huge spending by the hyperscalers.

Elsewhere, London-based hedge fund Pharo’s Macro fund was up 9.7 per cent for the first half of the year, while London-listed Man Group’s flagship multi-strategy fund was provisionally up 8.2 per cent.

Mega takeovers drive record $2.8tn in dealmaking

Companies and investors turn to M&A as they adjust to economic shifts driven by the rise of AI

Dealmaking hit record levels in the first half of the year as companies shook off war and market volatility to strike more mega takeovers than ever before.

Mergers and acquisitions worth $2.8tn were agreed globally in the first six months of the year, a 49 per cent increase on the same period in 2025, according to data from the London Stock Exchange Group.

US President Donald Trump’s administration has helped fuel the rise in M&A by lowering antitrust guardrails, while companies and investors have turned to takeovers as they attempt to adjust to economic shifts driven by the rise of AI, according to dealmakers.

“We’re in a risk-on environment where people can get deals done,” said Ben Goodchild, a partner at Paul Weiss. “Boards are looking at all of their options, including once-in-a-cycle transactions.”

Top deals this year included Dominion Energy’s merger with NextEra Energy to create a $420bn US utilities giant, part of a wave of acquisitions driven by surging use of AI and the resulting data centre power demands.

The dash to win the AI race also drove SpaceX’s $60bn all-stock acquisition of the coding aid Cursor shortly after its milestone initial public offering, helping to make the technology sector the busiest for deals.

There have been a record 47 transactions worth more than $10bn this year, a 62 per cent increase over the same period last year, according to LSEG, whose data stretches back to 1980.

The $2.83tn of deals recorded in the first half of the year eclipsed the $2.74tn total from the first half of 2021, when dealmaking rebounded after a pandemic-driven slump.

The spree was capped on Monday by Martin Marietta Materials’ $13.5bn cash-and-stock combination with limestone supplier Lhoist North America and Rocket Lab’s $8bn swoop on satellite operator Iridium Communications.

Other notable deals included Fox Corporation’s $22bn agreement to buy streaming hardware maker Roku and a flurry of bolt-on biotech acquisitions as Big Pharma hunts for new drugs.

“There’s a bias to action in boardrooms,” said Charlie Bouckaert, global head of M&A at JPMorgan Chase. “Companies understand that standing still carries its own risks and the strategic imperative to act is increasingly outweighing the uncertainty.”

After technology, energy and power, and industrials were the busiest sectors for deals. Companies in less active sectors turned to M&A both to position themselves to benefit from AI build-out and as a defensive posture in a market in which investors are increasingly drawn to very large companies.

“AI broadly speaking — meaning the AI industry, or the industries where AI is creating opportunities or the industries being disrupted by AI — is driving a lot of the market,” said Sarkis Jebejian, a partner at Kirkland & Ellis.

The surge in big deals meant the overall value of acquisitions agreed rose despite a 9 per cent decrease in the number of transactions, which fell to the lowest level since 2020. The number of smaller takeovers fell due to heightened risks linked to volatile energy prices and the threat of AI disrupting companies’ business models.

The surge in activity has driven a fees bonanza for investment banks, with Goldman Sachs set to be the biggest beneficiary having advised on more than $1tn worth of deals.

The US and Europe were the drivers of the surge, with the value of dealmaking up 77 per cent and 105 per cent respectively. Asia-Pacific deals were down about 2.4 per cent from the same period last year. Transaction volumes in Europe fell 14.2 per cent as the region faced an outsized impact from the Iran war.

“There’s a split between the level of activity in the US and outside the US. US confidence levels haven’t been hit whereas there has been a material impact on deal volumes in Europe,” said Nick Rumsby, co-leader of the Emea corporate practice at law firm Cleary Gottlieb.

Top deals in Europe included the $66bn merger of Unilever’s food division with US spice and sauce maker McCormick and the ongoing takeover battle in Italy to acquire the world’s oldest bank Monte dei Paschi di Siena.

The UK in particular has stood out for a surge of inbound acquisitions, as foreign buyers target London-listed companies to capitalise on a perceived valuation discount, with industrial groups viewed as particularly attractive.

“If you look at the UK market in particular, there’s still a feeling that lots of companies are undervalued compared to peers in the US,” said Rumsby.

M&A involving private equity-backed groups rose 54 per cent to $601bn, a positive sign for the industry as it seeks to offload trillions of dollars’ worth of assets.

“I do think this transactional window will be around for most of 2027,” said Steve Baronoff, chair of global M&A at Bank of America. “The boardroom sentiment right now is, are we overlooking anything? We’re going through a period now where people are saying this is the time to be bold.”

Franco-German tank maker says it will wait for ‘more favourable’ market conditions

Franco-German tank maker KNDS has postponed its blockbuster flotation until markets return to “more favourable” conditions, after investors balked at the target valuation of more than €12bn. 

Investor sentiment towards the planned initial public offering by KNDS, which would have been one of the largest European market debuts in years, has soured in recent days.

The maker of the Leopard and Leclerc tanks had proposed a listing in Frankfurt and Paris later this month.

But the FT reported on Tuesday that KNDS was struggling to convince investors to back the IPO at a valuation of more than €12bn, raising the prospect of a delay.

KNDS’s German family shareholders, who own 50 per cent of the equity with the French government holding the rest, had made clear that they would not proceed with an IPO at a valuation below €12.5bn, the FT also reported. A valuation of between €18bn and €20bn had been discussed earlier this year. 

On Wednesday evening KNDS, which is chaired by former Airbus chief executive Tom Enders, said that “in light of current market volatility for the European defence sector, KNDS . . . announces that its shareholders have informed the company of their intention to resume the initial public offering process upon the return of more favourable market conditions”.

The company added it had completed preparation phases for the IPO and that talks with investors had confirmed their belief in KNDS’s long-term strategy.

KNDS said the company and its shareholders stood “ready to resume the IPO process as soon as market conditions allow”. 

A spokesperson for the German family shareholders declined to comment.

Investor euphoria around European defence stocks — fuelled by European governments re-arming in response to Russia’s full-scale invasion of Ukraine — has cooled amid concern about production bottlenecks and profit-taking.

The Stoxx Targeted Defence index, tracking Europe’s biggest listed defence groups, is slightly down so far this year.

Last month a decision by the German government to cancel a multibillion-euro warship project sent shares in defence champion Rheinmetall sharply lower.

The German defence company, which is seen by investors as the closest peer to KNDS, had been expected to take over the frigate project as lead contractor.

The cancellation of the project came on the same day that KNDS formally launched its plans for a listing — triggering exasperation among the company and its shareholders. People close to the IPO process complained of a lack of co-ordination with the German government. 

One potential trigger for KNDS to revisit the listing could be finalisation of the German government’s planned big order for the Boxer, an armoured vehicle jointly built by the tank maker and Rheinmetall. It should be an important part of both companies’ order books.