TheChek News Flow

Belstaff's parent company Ineos, a U.K.-based manufacturer of petrochemicals, in return will make a significant strategic investment in Castore at a holding company level.

LONDON — Castore, a U.K.-based performance brand for global sports teams, has agreed to acquire a full stake in the century-old British fashion label Belstaff on a debt-free, cash-free basis.

The financial terms of the team were undisclosed.

At the same time, Belstaff’s parent company Ineos, a U.K.-based manufacturer of petrochemicals, will make a significant strategic investment in Castore at a holding company level.

The union between two British brands is aimed at driving future growth across premium categories by capitalizing on Castore’s direct-to-consumer and online retail networks, supply chain, growing global retail footprint and roster of professional sports team partnerships, including McLaren F1, Oracle Red Bull Racing, England Cricket Board and BWT Alpine Formula 1 Team.

Ashley Reed, chairman of Belstaff, said the two brands come together through shared qualities of “purpose-led design and entrepreneurial spirit.”

“Castore is disrupting the sportswear market and has demonstrated phenomenal growth and resilience in recent years. Having witnessed their journey, we saw a unique opportunity to join forces and accelerate Belstaff’s transformation through shared knowledge and resources,” Reed added.

Tom Beahon, chief executive officer and cofounder of Castore, said he has personally been a huge fan of Belstaff for a long time and is delighted that Ineos is investing in Castore.

“Ineos and the management team at Belstaff have done a phenomenal job in steering the company back to profitability following a challenging period for the retail sector. To have the opportunity to take Belstaff through the next stage of its growth journey is a dream come true and a huge privilege,” Beahon added.

Founded in Liverpool in 2016 by brothers Tom and Phil Beahon, Castore’s business model combines premium performance apparel with a vertically integrated digital commerce platform and supply chain platform for top sports teams and leagues.

Castore raised 7.5 million pounds from private investors, including tennis star Andy Murray, in 2020, and received a 145 million pound investment in a funding round led by Raine Partners, the growth equity arm of The Raine Group, an advisory and investment firm focused on media, entertainment and sports in 2023.

Under Ineos’s backing, the motorcycling and windproofing outerwear specialist celebrated its centenary last year with a retrospective exhibition in Stoke-on-Trent, a city in England’s Midlands, and the birthplace of the brand.

The brand operates 11 permanent stores and has plans to expand through pop-ups, with a focus on the U.K., Germany, and potential growth in Asia and North America.

Last year, it launched a street-meet-luxury collaboration with Manchester-originated fashion label Represent. Belstaff has also teamed with 1TRL, a subbrand of Merrell, on two sneakers and partnered with Grenson on a trio of service boots.

After a record two years of merger and acquisition activity, things have slowed down

Global oil and gas M&A plummets after record run

After a record two years of merger and acquisition activity in the global oil and gas industry, a slowdown is taking hold.

Deal values in the exploration and production sectors fell by a third to $82bn in the first half of the year, when compared with the same period in 2024. The decline was driven by a sharp drop in activity in North America, where the region’s share of global deal value fell to 51 per cent, down from above 70 per cent a year earlier, according to a new report by Rystad.

The consultancy said the big decline in deal value reflected a “natural pause” in transactions after a more than $200bn splurge in consolidation in the US shale oil sector over the previous two years led by ExxonMobil’s $60bn takeover of Pioneer Natural Resources. Macroeconomic uncertainty linked to the Trump administration’s tariff policies and geopolitical tensions had caused volatility in oil prices and a reduction in M&A activity, Rystad said.

“Upstream M&A is losing steam in 2025 as macroeconomic turbulence widens the gap between buyers and sellers. Oil price swings are stretching negotiations and extending timelines, leaving both parties leery of pulling the trigger on large deals,” said Atul Raina, Rystad’s vice-president of oil and gas research.

A sharp fall in oil prices had led to the cancellation of deals and withdrawal of several sale processes, according to the consultancy. It cites the example of Amplify Energy’s decision to terminate its proposed $306mn acquisition of Rocky Mountain assets from Juniper Capital.

David Rockecharlie, chief executive of Crescent Energy, told investors there was a “dislocation” in M&A markets during a conference call on August 5.

“The punch line is 75 per cent or more of the asset sale processes we saw in the Eagle Ford [shale basin in Texas] were pulled and never transacted as a result of volatility that we saw in the second quarter.”

“So, our view is the market’s functioning right now, and we’re able to get some things done, but there’s just a lot out there in our view that’s still sitting on the sidelines.”

Deal value in Eagle Ford fell by 58 per cent to about $980mn in the first half of the year, compared with the second half of 2024. In the Permian Basin, the largest US oilfield, M&A declined by about a quarter to $6.8bn over the same period. There had been no activity in the Bakken so far in 2025, said Rystad.

Crescent is one of a handful of US shale operators that have clinched multibillion-dollar deals this year. On Tuesday the Houston-based company announced it had agreed a $3.1bn all-stock transaction to buy Vital Energy, which owns acreage in the Permian Basin.   

The US is not the only global region to suffer a slowdown in M&A, with Africa, Asia and the Middle East also seeing a reduction in deal value. Increased activity in Oceania, South America and Europe was not enough to offset the overall downturn.

But it's not all doom and gloom for dealmakers. The slowdown in M&A in the US shale oil sector stands in contrast to a rise in gas-focused transactions.

Strong demand for natural gas from liquefied natural gas terminals, as well as forecasts of surging demand for gas-fired power plants to fuel the AI boom, is attracting buyers. Deal value in pivotal US shale gas producing areas, including Marcellus/Utica and the Haynesville/Bossier, surged to $9.1bn in the first half of the year, up from $1.8bn in the second half of 2024, said Rystad.

EOG Resources, Citadel and EQT all announced multibillion-dollar shale gas deals in the first half of 2025.    

“Gas deals are up as operators look to gain size and scale to participate in the rush to build new gas fired generation, which is now supported by the federal government,” said Andrew Gillick, a managing director at energy research group, Enverus.

“In the shale oil sector there just aren’t that many companies left to buy after the last two years of aggressive dealmaking. Also, the remaining companies are reticent to sell with where crude prices are today.”

US supermajor warns Europe’s approach has driven up energy costs and eroded public backing for green transition

ExxonMobil has stepped up its campaign against Europe’s climate policies, saying they have caused energy prices to soar and undermined public support for the low-carbon technologies required to meet the continent’s emissions reduction targets.

The US supermajor’s Global Outlook report, released on Thursday, included a section titled “Lessons from Europe”, which slams the EU’s “high-regulation, high-cost” approach to lowering emissions, which it claimed had “hurt” the bloc’s economy.     

“Under Europe’s decarbonisation approach: Industrial production, a critical sector in Europe’s economy, is declining. Energy prices in heavy industry and commercial transportation are rising. As a result, public support for lower emissions technology needed to reach EU climate goals is wavering,” Exxon said.

Exxon has consistently lobbied against European regulations in the climate and sustainability area, arguing that it threatens to undermine the continent’s competitiveness and entangle US companies in bureaucracy that erodes their global competitiveness.

Darren Woods, Exxon chief executive, last month called for US President Donald Trump to use trade talks with Brussels to fight a European directive requiring non-EU companies to ensure their supply chains do not harm the environment or human rights.

Exxon’s Global Outlook, which makes forecasts about the global energy market up to 2050, said politicians needed to consider affordability when setting energy policies because voters would lose confidence in the economy and their administrations if prices increased rapidly.

“I don’t want it to come across as . . . the energy transition can’t happen or shouldn’t happen,” Chris Birdsall, director of Exxon’s economics and energy division, told reporters in a conference call. “Our point is, you need to need to be smart about it.”  

He said the EU had tried to “push through” climate policies too quickly in the mistaken belief that the energy transition would result in cheaper energy for the continent because, at present, it imports a lot of oil and gas.

But this transition period could take up to 30 years and low-carbon investments were significantly more expensive than existing energy sources, said Birdsall.

“We do think high-income countries like the US and EU, over time, can afford more lower emissions solutions, but that has to play out over time. One, keep growing your economy and, number two, keep investing in technology,” he said.

The outlook said climate policies had “largely failed”, as the world was not on track to meet emissions targets, and forecast oil and natural gas would remain key to powering the economy in 2050.

Exxon’s attack on European climate rules has drawn criticism from environmental groups, which claim the company is seeking to undermine global efforts to tackle the climate crisis.

Mark van Baal, founder of Follow This, a Dutch shareholder activist group, said Exxon’s claims were further proof that the oil and gas industry was putting enormous effort into resisting change.

“Exxon is blind [to] the inevitable disruptive innovation of clean energy. With or without climate policy, oil and gas demand will structurally fall in the next decade, and Exxon is not prepared,” he said.

“If the company continues to ignore the reality that many markets are transitioning to a diversified energy mix, their shareholders will ultimately intervene,” van Baal added.

Exxon sued Follow This in the US last year, claiming that a climate petition the activist group filed against it breached US securities rules. The lawsuit was dismissed by a Texas judge.

The supermajor has faced criticism in the US, where it is being sued by several states over allegations that it misled the public about climate change and the dangers of fossil fuels. The company denies these claims.

Staff ‘forced out’ and independence curtailed at the Nuclear Regulatory Commission

Donald Trump’s attack on the independence of the US nuclear safety watchdog has accelerated severe “brain drain” at the agency, raising the risks of future accidents, former officials have warned.

Almost 200 people have left the US Nuclear Regulatory Commission since the president’s inauguration in January, and the pace of executive departures shows little sign of slowing with the resignation of the agency’s director of nuclear security and its general counsel.  

Nearly half of the agency’s 28-strong senior leadership team has been installed in an “acting” capacity, and only three of five NRC commissioner roles are occupied. Trump sacked commissioner Christopher Hanson in June and Annie Caputo resigned unexpectedly last month.

“It is an unprecedented situation with some senior leaders having been forced out and many others leaving for early retirement or worse, resignation,” Scott Morris, the former NRC deputy executive director of operations who retired in May, said in an interview.

“This is really concerning for the staff and is one of the factors causing many key staff and leaders to leave the agency they love . . . creating a huge brain drain of talent,” he added.

Morris said any move to replace experienced nuclear safety professionals with politically motivated individuals would be a “dangerous game” that could result in problems being discovered years in the future. Almost two dozen new reactors are at present under development.

Several former NRC staff and commissioners told the Financial Times that the exodus began with a surge in private sector job opportunities due to the nuclear energy boom. But it accelerated drastically following the Trump administration’s attacks on the agency’s independence, they said.

Since taking office Trump has moved to assert presidential control over independent regulatory agencies, which were set up by Congress in part to shield them from executive interference.

In February he signed an order directing “so-called” independent agencies to submit all proposed and final significant regulatory actions for review. He has fired senior officials at multiple agencies, including the NRC, Equal Employment Opportunity Commission and National Labor Relations Board.

Earlier this week, Trump said he wanted to fire top Federal Reserve official, Lisa Cook, in a move that has raised fears that he is trying to demolish the independence of the world’s most important central bank.

The president claims the NRC suffers from a culture of “risk aversion” that has slowed the rollout of nuclear technologies. In May he directed a fundamental restructuring of the agency in consultation with a team from the so-called Department of Government Efficiency (Doge).

Trump has directed the NRC to set fixed deadlines for evaluating and approving licences, conduct a full review of its regulations and reconsider radiation safety limits.

Allison Macfarlane, who served as NRC chair from 2012 to 2014, said Trump’s actions at the NRC — when there were so many new entrants to the industry — raised safety risks.

“These are tech bros, and they are using a start-up model, move quickly and break things. And that doesn’t work in nuclear,” she said. “A lot of these folks want to sell their reactors overseas, but who is going to trust the NRC anymore?”

An NRC spokesperson said experienced, technically qualified managers were appropriately performing roles as acting office directors and related positions. “The NRC is aligned with our inter-agency partners in accelerating progress while upholding the highest standards of public health, safety, and environmental protection,” he said.

Some industry participants, such as Oklo, a small modular reactor developer, have welcomed the administration’s reform efforts. “The biggest challenge isn’t physics; it’s policy inertia,” said Jacob DeWitte, Oklo’s chief executive.

Oklo was refused a licence by the NRC in 2022 due to “significant information gaps” in its application and is reapplying.

But many executives are concerned the retreat from the agency could delay the nuclear renaissance.

“They are under an enormous amount of pressure, they’re losing people to private industry, [and] then more is being asked of them,” said James Walker, chief executive at Nano Nuclear Energy, a developer of small modular reactors. “There does need to be some sort of big investment . . . so they can grow commensurately with private industry taking off.”

Democrats warn that Trump’s “hostile takeover” of the NRC jeopardises nuclear safety and years of bipartisan progress to develop nuclear energy.  

“Hollowing out the agency will make us ill-equipped to usher in a nuclear renaissance and undermine our national safety and security, our economic growth, and our global leadership in the nuclear industry,” Sheldon Whitehouse, the top-ranking Democrat on the Senate environment and public works committee, told the FT.

Last week three members of the House energy and commerce committee wrote to Chris Wright, US energy secretary, asking him to clarify whether a Doge representative had told the agency to act as a “rubber stamp” to the department’s approval of new reactor licences.

A Department of Energy spokesperson said “unlocking nuclear energy” was critical to fuelling the artificial intelligence race and the administration was working with the NRC to return focus to the core mission of protecting human health and safety.

In May 2022, two rival U.S. battery startups announced similar coups.

Group14 Technologies, a developer of silicon anodes that promised greater driving range and faster charging in electric vehicles, said that within two years—in 2024—its product would be powering EVs made by Porsche. It was big news because, despite years of trying, no Western battery startup had managed to break into any major EV model.

Weeks later, Group14’s main U.S. competitor, Sila Nanotechnologies, said Mercedes-Benz would start using its silicon anodes just a bit later—in 2025.

But now both deals have been scotched, and Western-made next-generation batteries seem little closer to powering a major EV: On Monday, Porsche, already a year late to use Group14’s anodes, effectively shut down the division that would make the batteries. The automaker laid off 200 workers at battery-making subsidiary Cellforce Group, leaving only a skeletal research and development team. Sila CEO Gene Berdichevsky told me Mercedes’ plans were also off the board.

In separate statements, both German automakers blamed poor EV sales in the U.S. and China for their decisions; Porsche said it was also responding to U.S. tariffs.

But in abandoning their first-mover advantage in powerful new batteries, Porsche and Mercedes—long known for engineering-first cultures—reflect a Western auto industry that has generally gone cold on its strength: raw innovation. The moves illustrate how Western EV and battery companies are ceding ever-increasing ground and momentum to Chinese rivals, which have led the industry’s most recent technological advances and dominate production.

“As Western companies stagnate, Chinese firms are turning the page.…Options for U.S. battery manufacturing are narrowing,” Katherine He, an investor with TDK Ventures, wrote on Linkedin this week.

The EV and battery industries are in a malaise. Major carmakers have pushed back their timelines for adding next-generation batteries to their EVs. And most battery startups are struggling financially as venture funds have dried up for companies lacking commercial revenue.

Last week, for instance, Group14 said it had raised $463 million in a Series D round. But the round, led by South Korea’s SK, an industrial group that has a battery-making division, appears to have included in-kind assets: In the announcement, Group14 said that in addition to the fundraise, it had obtained full ownership of a South Korean battery plant in which it already held a 25% stake. It bought the remaining 75% from SK. I asked Group14 CEO Rick Luebbe whether the $463 million included the in-kind value of that 75% share. He told me the companies were not releasing the terms of the acquisition.

Explain how Apple is positioning itself in the AI talent war against other major tech companies.

Ironically, the current industry gloom seems in large part the result of a massive miscalculation. Starting about 2020, investors and the EV and battery industry’s main players announced combined spending in the hundreds of billions of dollars to prepare for the consumer EV bonanza that everyone (aside from Toyota) expected.

Starting in 2022 and 2023, however, Ford, General Motors, Volkswagen and the battery makers that hoped to power their EVs noticed pronounced consumer resistance to the new EV models, and sales that did not take off as hoped.

That’s when the narrative of an industry “slowdown” took hold, and it’s been that way ever since.

But that narrative isn’t quite right: It should never have become industry dogma that consumers would pay thousands of dollars—in some cases, tens of thousands—more for an electric version of basically the same car. I previewed the fuzzy math behind such EV forecasts as far back as early 2021.

The truth is, consumer appetite for EVs in the West hasn’t been genuinely tested yet. That test will start in two or three years, when prices are lower. Most average consumers won’t need $20,000 or $25,000 EVs to look more longingly at EVs, but they won’t pay more for one—they will fork over more or less the same regardless of whether a car is electric, combustion or hybrid.

And if it’s an EV, it will have to compete. By then, what Chinese EV makers are offering will be widely known.

The signs thus far are that Western carmakers are just as complacent as they were in the 1980s and 1990s, when high-quality Japanese competition arrived in the U.S. and ate Detroit’s lunch. Today, it’s Chinese carmakers like Xpeng, Nio and Geely that have barreled ahead with batteries that charge in five minutes and power long-range EVs with heated massage seats, minirefrigerators, high-grade leather upholstery, voice-controlled electronics and superb sound systems.

So far, Western automakers haven’t gotten the memo. China’s BYD, for instance, currently offers autonomous advanced driver assistance systems as standard equipment in 21 models. But Stellantis recently killed its effort to develop hands-off-the-wheel, eyes-off-the-road ADAS, Reuters reported this week, saying consumer demand is too low. That was a surprising assertion from Stellantis given the wild popularity of ADAS in U.S. consumer surveys. The reality is that automakers everywhere will likely have to match BYD on free ADAS if they intend to compete.

Against this backdrop, Sila Nano’s Berdichevsky said that while Mercedes’ EV was off the table, he was tailoring silicon anodes for another major automaker, which he declined to name. Sila is almost finished building a production plant in Moses Lake, Wash., capable of manufacturing those anodes at large scale. Given qualification timelines, Sila’s anodes would be in this new automaker’s EVs by 2028 at the earliest, he said. Those anodes will contain low percentages of silicon; in terms of high-silicon anodes—the ones that will significantly boost range and charging time—that’s not likely until the early 2030s, he said.

Berdichevsky is holding out hope for a wild-card event that could accelerate the timeline for silicon’s commercialization—for example, if China overplays its stranglehold on battery supplies and cuts exports of graphite, the conventional anode material silicon hopes to replace.

“Imagine having a gigafactory and suddenly you can’t get graphite, but you can get silicon carbon anodes domestically,” he said. “That could drive adoption and road-map acceleration.”

Short of that, look for next-gen EV performance in a little over five years.

• Top AI researchers are receiving tens of millions of dollars in compensation, turning them into the equivalent of professional athletes.
• Companies are acquiring entire teams and leaders through complex, multi-billion-dollar deals and investments to gain influence and expertise.
• A distinct hierarchy has emerged among AI labs, with OpenAI, Anthropic, Google’s DeepMind, and xAI at the top, while Meta’s position is more tenuous.

A central question looms over artificial intelligence: How is the intensifying the war for talent impacting the race for artificial general intelligence (AGI)?

We asked our new Deep Research tool and got the following answer:

• Unprecedented Compensation: The compensation packages being offered are staggering. While OpenAI CEO Sam Altman has claimed Zuckerberg offered as much as $100 million in signing bonuses to lure away his talent, even more conservative reports point to multiyear packages worth tens of millions of dollars.1,2 These “eye-watering offers” have turned top AI researchers into the equivalent of professional athletes, commanding massive paydays.1
• Strategic ‘Acqui-hires’ and Investments: Companies are moving beyond individual hires to acquiring teams and leaders through complex deals designed to bypass lengthy antitrust reviews. Meta’s $14.3 billion investment for a 49% stake in Scale AI to hire its CEO, Alexandr Wang, as Chief AI Officer is a prime example.3 Similarly, Meta hired former GitHub CEO Nat Friedman and Safe Superintelligence CEO Daniel Gross, with plans to partially buy out their venture fund for over $1 billion.1 These moves are about acquiring not just individuals, but entire nodes of influence and expertise.
• A Clear Pecking Order: A distinct hierarchy has emerged among AI labs. At the very top are OpenAI, Anthropic, and Google’s DeepMind outfit, which have the clout, capital, and access to cutting-edge research to attract nearly anyone. Elon Musk’s xAI has vaulted up to join them near the top. Meta is sometimes discussed in this class, but its reputation has taken a hit since the disastrous launch of its Llama 4 model, making its position more tenuous despite its immense spending.1

• Internal Resentment: The influx of highly paid new talent is causing friction within existing teams. At Meta, some employees feel the emphasis on new superstars labels them as mediocre by comparison. At OpenAI, the massive offers from rivals have led some researchers to wonder if they should “throw a hissy fit” to secure a retention bonus.1 In response to Meta’s poaching, OpenAI is reassessing its compensation and has begun paying out substantial bonuses, some in the millions, to nearly a third of its staff to retain them.4
• The Investor Pitch: The pressure is so intense that even major investors are being deployed to keep talent in place. In a notable move, Josh Kushner, founder of major OpenAI investor Thrive Capital, gave a presentation to OpenAI staff arguing that leaving for a rival startup would be a poor economic decision due to factors like equity dilution.5 This kind of direct intervention from an investor to stanch employee churn is highly unusual and underscores the severity of the talent drain.
• The “Missionaries vs. Mercenaries” Debate: The talent war has taken on an ideological dimension. Sam Altman has publicly called Meta’s recruiting efforts “somewhat distasteful” and framed the battle as one where OpenAI’s mission-driven culture will ultimately triumph over mercenary motivations.6 This narrative aims to position OpenAI as the more authentic and dedicated player in the pursuit of AGI, a powerful non-monetary recruiting tool.

The Takeaway

• Analysts raise concerns about SoftBank’s spending

• SoftBank could influence portfolio companies to buy Intel-made chips

• SoftBank’s dealmaking likely won’t stop

In May, a Nomura Securities equity analyst asked SoftBank Chief Financial Officer Yoshimitsu Goto a pointed question on an earnings call: How could he justify SoftBank’s recent $6.5 billion purchase, using borrowed money, of Ampere Computing, a failing developer of data center chips? The startup had just $16 million in revenue and had lost hundreds of millions of dollars the year before the sale.

Goto didn’t answer the question directly. “I believe the valuation falls within a reasonable range,” he said, according to a transcript of the call, adding that SoftBank followed procedures carefully for a deal its board approved. The acquisition is still awaiting U.S. government approval. The exchange reflected simmering worries among investors about SoftBank’s spending even as the company’s investment in OpenAI is lifting its stock price.

SoftBank executives have made it clear that the whirl of dealmaking isn’t likely to stop. In February, executives at the Japanese conglomerate showed investment bankers a slide showing roughly two dozen AI and infrastructure-related deals it either had done or was considering, according to a banker who attended the call.

The latest, and one of its highest profile, is its $2 billion investment last week in Intel, the struggling chip manufacturer now partly owned by the U.S. government. The investment potentially provides SoftBank with a missing piece of its portfolio: chip manufacturing. SoftBank was most interested in the deal because of Intel’s foundry business, which is looking to compete with chipmaking giant Taiwan Semiconductor Manufacturing Co. in making chips for other companies, a person close to SoftBank said. In the past, Intel has concentrated on making its own chips, but TSMC’s rise to chip dominance has highlighted the weaknesses of that approach.

The Intel investment came the same week SoftBank bought an electric vehicle factory in Ohio from Foxconn to make AI computer servers. SoftBank will be installing those servers in future data centers as part of its planned—and delayed—$500 billion Stargate project. And in addition to purchasing Ampere, SoftBank also bought a smaller, struggling British AI chip firm, Graphcore, last year.

SoftBank CEO Masayoshi Son appears to have sufficient investor support to keep the money flowing. The company’s stock has hit record highs this year, up 79% year to date, driven in part by an increase in value for its huge bet on OpenAI, as well as the stock price of Arm Holdings, which has increased more than 160% since SoftBank took it public in the fall of 2023, although it’s only up 9% this year. Arm sells chipmaking architecture to companies like Apple and incorporates its technology into Nvidia chips.

Time and time again, SoftBank’s high-wire investment strategy has hinged on the idea that its constellation of investments could complement each other. Sometimes the strategy flops. It bet on ride-hailing companies like Uber and Grab with the idea that it could create a global transportation network—an idea that never came to pass. It wanted to stock office buildings operated by WeWork with other startups it was backing, a strategy it couldn’t pull off.

“Softbank’s approach to investing has always been an index-like approach—own every layer in the stack that feeds into a megatrend, then have all those players give business to each other to strengthen each other,” said Kevin Xu, founder of Interconnected Capital, an investment fund focused on AI infrastructure stocks.

Xu, whose investment firm owns Intel shares, said the chip deals seemed to tie together in a few ways. SoftBank’s investment in Intel, for instance, could indicate SoftBank’s willingness to influence its companies to commit to using Intel’s chipmaking foundry, a crucial sign of support for the struggling business. Intel CEO Lip-Bu Tan said in a note to employees last month that Intel’s investment in its next-generation chipmaking process, 14A, will hinge on confirmed customer commitments. It is expected to mass-produce chips by 2027 if it can secure enough customers and ensure efficient production.

Access to that chip production would also be useful if SoftBank pulls off a long-shot effort to develop its own chip. Its purchases of smaller firms like Ampere and Graphcore would give Son a bigger stable of chip designers, who “are as scarce as the AI researchers getting the big packages from OpenAI and Meta,” Xu said.

Valid Concerns

Still, some Wall Street analysts have started to raise questions about whether the heavy spending is too risky. David Gibson, an equity analyst at MST Financial, wrote in the spring, “Son’s plans for chipmaking I think remains a big risk in the short term.” He added that the purchase of Ampere “raises valid concerns that Masa is spending excessively like he did with WeWork.”

But SoftBank may have bigger ambitions. Arm reported last month that a growing portion of its revenues are from selling licenses and providing design services for SoftBank, which still owns about 87% of Arm.

That indicated SoftBank itself was building an AI chip using Arm’s technology, even if it has not announced a product. (If the effort is successful, it would provide some cold comfort for SoftBank on missing out on the meteoric stock rise of dominant chip provider Nvidia, which agreed to buy SoftBank-owned Arm in 2020 before the deal collapsed due to regulatory scrutiny.)

“Our business relationship with SoftBank has expanded to help them build towards their greater, broader AI vision,” said Arm CEO Rene Haas on the chip designer’s earnings call last month. Haas has become a close confidant of Son and sits on the board of Stargate.

The fates of SoftBank and Arm are deeply intertwined in other ways. As of last quarter, the value of SoftBank’s stake in Arm made up 48% of SoftBank’s roughly $200 billion asset value, a crucial metric that allows it to borrow more money. Earlier this year, SoftBank took out $8.5 billion of loans, adding to the tens of billions of dollars of debt it already had. Its executives have said they will maintain debt levels around or below 25% of the value of its assets.

The company has also been selling stakes in telcos Deutsche Telekom and T-Mobile to finance its AI investments, and anticipates it will get more cash from initial public offerings of startups it owns, like Japanese payments firm PayPay.

And despite anxieties among investors about SoftBank’s spending, Son continues to find enough banks to finance his AI ambitions. For Japanese and European banks that have worked closely with Son for many years, SoftBank is an extremely important customer, because few other clients in their countries repeatedly borrow large amounts as SoftBank does.

Gibson, the MST Financial analyst, estimated the company would have about a $20 billion shortfall over the next few years, which it could cover in part by selling more of its stakes in Deutsche Telekom and T-Mobile.

Plenty of questions remain about Son’s ability to make all his deals come together. But Xu noted, “None of this has to make sense at the end of the day either, because we are dealing with Masa’s whims and desires to build empires, so everyday business logic may not matter.”