TheChek News Flow

Training AI models is expensive. OpenAI has told investors it expects to spend more than $7 billion on training models this year and nearly $17 billion in 2026.

Reflection has raised $130 million in venture capital from investors including Lightspeed Venture Partners, Sequoia Capital and CRV. The company was last valued at $545 million, according to PitchBook. The valuation it is discussing for its current round couldn’t be learned.

Index Ventures was among the first investors in startup hits Figma, Scale AI and Wiz

Index Ventures, a venture firm with origins in Europe, is the envy of Silicon Valley.

A string of large startup exits could send more than $11 billion in proceeds to Index and its limited partners at a time when the venture market overall is still struggling to generate cash.

As the largest venture backer of software-maker Figma FIG -27.38%decrease; red down pointing triangle, Index has turned its $86.5 million investment in the company over the years into a stake worth nearly $6 billion, based on the most recently disclosed share volume and intraday Monday prices.

Figma’s IPO last week stunned the market when its shares jumped 250% in the first day of trading. Index sold about 5% of its holdings at the IPO price of $33, generating about $108 million, and continues to retain a stake of greater than 15% in Figma post-IPO. The stock fell by about 20% on Monday but is still trading well above its listing price. Figma provides browser-based collaboration tools to help users design websites, mobile apps and social media posts.

Index also reaped a windfall from the recent investment by Meta Platforms into Scale AI, which paid out shareholders, and Google’s pending acquisition of cybersecurity company Wiz.

Index, whose performance this year has been noteworthy among VC-watchers due to its smaller size compared with rivals, was among the earlier investors in each of these three companies, helping it to notch massive profits.

Index made more money than Sequoia Capital, widely considered the top venture firm in Silicon Valley, for both Figma and Wiz. Sequoia backed Figma at a later stage—its stake in the company is just over half the size of Index’s ownership—and didn’t invest in Scale. It was the first investor in Wiz, alongside Index and the Israeli firm Cyberstarts, but ended up with a smaller overall stake.

The number of rainmakers at a single firm is also notable, with each of the recent successes led by different Index partners.

“The performance they’ve delivered, and are delivering here in the future, is unbelievable,” said Miles Dieffenbach, managing director of investments at Carnegie Mellon University, and a limited partner in Index funds, in a recent interview on the 20VC podcast. “They could raise as much capital as they want to and they don’t. They are the most performance-driven culture that we see.”

When Meta acquired a 49% stake in Index portfolio company Scale AI in a bid to amp up its Superintelligence Labs unit, the firm received more than $1.4 billion, according to a person familiar with the situation. Index also struck gold earlier this year when Alphabet’s Google agreed to buy its portfolio company Wiz, an Israeli cybersecurity provider, for $32 billion, in one of the largest tech acquisitions in history. Index’s stake in Wiz would be worth $4.3 billion should the Google deal finalize, The Wall Street Journal previously reported.

Founded in Switzerland in the 1990s, Index first expanded to London and then opened a San Francisco office in 2011. That’s about the time when Index Partner Danny Rimer spotted Dylan Field, an energetic 18-year-old intern making a presentation for a startup in which Index had invested.

About a year later, Field and his co-founder and former computer science teaching assistant at Brown University, Evan Wallace, came to Index’s office to pitch their new startup Figma. At that time they were the only employees at the company, recalls Terrence Rohan, who was an investor at Index at the time and joined Figma’s board to represent the firm.

Impressed by the demo of their browser-based product-design tool, Index made an offer and eventually negotiated itself into a leading position for Figma’s 2013 seed round with a $1.8 million check.

“It was a high conviction shot by Index,” said Rohan, who is now managing director at seed venture firm Otherwise Fund. Some venture firms were making a multitude of small seed investments in companies without dedicating significant resources to the startups, he said. Index’s strategy, by contrast, was to lead, join boards, and offer support, he said.

The Figma seed deal came out of Index’s sixth fund, Rohan said. That fund also backed Robinhood, among others. “It’s done many, many turns,” he said of the fund.

Index stuck with Figma through multiple rounds of funding. The company took years to release its product and suffered a setback after a proposed $20 billion acquisition by Adobe was called off due to regulatory concerns.

Index, meanwhile, was growing too but it avoided the kind of massive expansion that top venture firms like Sequoia and Andreessen Horowitz have pursued lately. Last year, Index raised $2.3 billion in capital for two funds, less than it collected for its prior set of funds in 2021.

“Not many outsiders can enter Silicon Valley and so quickly rise to prominence,” said Hussein Kanji, founder of London-based Hoxton Ventures, who has co-invested with Index.

Countries will be ‘unable to sustain growth’ unless companies start opening the taps

Weak business investment is threatening global growth, the OECD has warned, with corporate spending in most advanced economies failing to return to historic trends after the financial crisis and pandemic.

Net investment across the OECD nations has dropped from 2.5 per cent of GDP before the 2008 crisis to 1.6 per cent of GDP for the median country, with the pandemic delivering a further blow, according to the organisation’s figures.

If corporate spending on new projects and facilities does not pick up, countries will “not be able to sustain growth”, Álvaro Pereira, outgoing chief economist at the Paris-based organisation told the Financial Times.

Only two advanced economies out of 34 it tracked had surpassed their pre-financial crisis net investment trends as of last year — Israel and Portugal. Just six countries are above their pre-Covid investment trends, including Canada, Italy and Australia.

Average investment among the group is 20 per cent below levels that would have prevailed if pre-financial-crisis trends had continued, according to an OECD working paper. It remains 6.7 per cent below the pre-Covid trend.

Last week, the IMF upgraded its forecast for global growth amid signs that US President Donald Trump’s trade war will inflict less damage than initially feared.

However, its forecast of 3 per cent growth this year still marked a slowdown from 2024’s figure of 3.3 per cent and the 3.7 per cent average before the pandemic.

Multiple factors are playing a part in the phenomenon, but “pervasive” policy uncertainty is a key cause as businesses get buffeted by repeated shocks, warned Pereira, who was recently announced as the next governor of the Bank of Portugal.

Trump’s chaotic tariff rollout has added a fresh reason for corporations to hold back from big spending decisions, the OECD said, adding that business investment had fallen across all major industries.

“Uncertainty has been very pervasive since the financial crisis and we have had a lot of big crises,” Pereira said. “Sooner or later if we don’t have more investment you will not be able to sustain growth — it is absolutely vital.” 

A one standard deviation increase in economic policy uncertainty reduces business investment growth by a percentage point after a year, the OECD analysis found. 

This is because firms become more reluctant to splash out on long-term projects when they are unclear about the outlook for global demand, regulation or trade policy. 

While there has been strong growth in digital and knowledge-based investment, it has failed to offset the impact of higher depreciation and weak investment in physical assets, leading to ongoing declines in net business investment as a share of economies.

If current elevated levels of uncertainty prevail, real investment could be trimmed by 1.4 percentage points by the end of next year, the OECD added.

While the cost of capital fell after the financial crisis, the research found that firms are failing to undertake the “profitable marginal investments” that should be possible as a result, with companies in a number of countries boosting shareholder payouts compared with pre-crisis trends. 

The tension between shareholder returns and investment has been most acute in the UK’s troubled water sector. English water companies have paid out £83bn in dividends since privatisation 34 years ago, more than a third of the £230bn companies spent in the same three decades on infrastructure.

But the conflict has also been apparent in many other industries. Oil major BP has come under pressure from investors to make deep cuts to spending to protect shareholder payouts.

Australia picks Mitsubishi over German rival for $6.5bn defence deal

Boost for Japan as MHI named preferred bidder ahead of Thyssenkrupp<

Mitsubishi Heavy Industries has been selected as the preferred bidder to build a new fleet of Australian frigates, beating German rival Thyssenkrupp in a significant win for Japan’s defence industry. 

The order to build up to 11 frigates is worth as much as A$10bn ($6.5bn) in its first phase. It will be Japan’s first deal to export warships, some of which will be built in Australia with a partner.

A formal contract will be concluded in 2026, according to the Australian and Japanese governments.

The general purpose frigate order is part of a major overhaul of Australia’s defence capability against a backdrop of increased tension in the Indo-Pacific region. The overhaul includes the Aukus agreement with the US and UK to deliver nuclear-powered submarines to Australia as well as the construction of Hunter-class frigates in Adelaide.

Australia said last year that it had selected MHI and Thyssenkrupp as the two final bidders for the order, which was also contested by companies from South Korea and Spain.

Richard Marles, Australia’s defence minister and deputy prime minister, said MHI’s design was selected based on its ability to meet Australia’s needs and reflected the strength of the partnership with Japan.

“It’s a big moment in the relationship between Australia and Japan. We have a strong strategic alignment,” he said.

MHI will supply Australia with an upgraded model of its Mogami frigate. Japan’s largest defence contractor was considered the frontrunner in recent months despite concerns that its vessel was more expensive and that Japanese companies had no experience building warships in other countries. 

Pat Conroy, Australia’s minister for defence procurement, said MHI’s bid was “the clear winner” in terms of cost, capability and schedule with the first ship to be delivered by 2029. He said the Japanese proposal was cheaper over the life of the frigate contract as the Mogami design needed fewer crew onboard, was cheaper to arm and had a longer hull life. 

The first three ships will be built in Japan but eight will be constructed in Western Australia by Austal, an Australian company. Conroy said a company had been formed under Austal’s ownership to complete the work and that Australia’s government would have a “sovereign preference share”. 

The contest between the two frontrunners Japan and Germany had been pitched as a choice to deepen ties with Japan versus a more tried and tested route favoured by Australia’s navy, which has German-designed vessels in its fleet.

Japan has been a bit-part player in the global defence industry because of postwar constraints on arms exports, which were loosened in 2014.

The Mogami contract marks a turning point as a lack of commercial knowledge in forming defence contracts had hamstrung Japanese companies even after Tokyo pivoted to promoting arms exports.

Japan has sold radar equipment to the Philippines but the frigate contract from Australia is only its second deal to export fully assembled defence equipment and the largest ever secured by a Japanese group.

Yoshimasa Hayashi, chief cabinet secretary in Japan’s government, said the choice reflected “a high level of trust in Japan’s technological capabilities” and was “a significant step forward in elevating security co-operation with Australia, our special strategic partner”.

MHI’s shares rose 3.8 per cent on Tuesday to trade at a fresh all-time high.

Exporting arms systems is seen as critical for Japanese defence contractors to enlarge their customer base, expand capacity, develop technologies and bring costs down.

India’s Tata Motors bets big on Europe with $4.36bn Iveco purchase

Tata Motors bets big

In a major play to open up the European market, Tata Motors is acquiring the commercial vehicles business of Italy’s Industrial Vehicles corporation, popularly known as Iveco. 

The all-cash deal will cost the Indian automaker a whopping $4.36bn, significantly higher than the $2.3bn it paid in 2008 for its last big acquisition, Jaguar Land Rover. Tata Motors is using a bridge loan of $4.5bn, underwritten by Morgan Stanley and Mitsubishi UFG, and then plans to raise about $1.4bn in equity to repay part of it. The deal is conditional on Iveco’s separation of its defence business, which it is selling to Italian group Leonardo.

The massive amount of debt that Tata Motors is taking on has investors worried, and the stock has shed 6 per cent since the deal was announced. In a call with analysts, senior executives attempted to allay these fears, describing it as a meaningful, large acquisition in which both companies have agreed to build a business of “size and scale”. Tata estimates the deal will bring in more than $25bn in revenue from Europe, India and the Americas. 

Tata is making a bold move. While the commercial vehicle segment contributes 18 per cent of its revenues, sales volumes have been decreasing. For the immediate future, analysts worry that a slowdown in Europe and the US and Trump’s tariffs will hit revenues. Much as we might be tempted to analyse the deal based on the current business environment, it will take at least three or more years for the real impact of the deal to be clear. 

Because it is hoping to raise equity to pay for some of the debt, the immediate challenge for Tata Motors will be to convince the market that the deal really is good for the company. But the company has had . . . let’s call it, a “troubled history”, with its past acquisitions. JLR, for example, cannot really be described as a major win, with the brand dogged by a drop in global demand and continued pressure on its margins. In the recent call, Tata executives said they had learned from their past experience and that this opportunity was too good to pass up. The big question is whether the company has bitten off more than it can chew with Iveco.

Sandoz targets 70% price cut for weight-loss drugs in Canada

Generic drugmaker is preparing cheaper alternatives for when patents expire in the country next year

Drugmaker Sandoz could offer unbranded weight-loss drugs at an up to 70 per cent discount to the branded versions in Canada when patents start to expire there next year.

Richard Saynor, chief executive of one of the world’s largest generic drugmakers, said Sandoz had not finalised the price for its generic weight- loss and diabetes drug semaglutide but that a reduction of “60 or 70 per cent of the list price” was possible.

The Canadian list price for the branded drugs — Novo Nordisk’s semaglutide blockbusters Ozempic and Wegovy and Eli Lilly’s Mounjaro and Zepbound, which have tirzepatide as their active ingredient — ranges from $200 to $400 for a month’s supply.

Semaglutide goes off-patent in Canada in January next year. The generic Sandoz drugs have not yet been approved but the process has started.

“As more [generic versions] come in, potentially the market would go down further,” Sandoz told the Financial Times. “If you were selling this at $40 or $50 a month, the market could be three or two or three times bigger in terms of the number of patients.”

Much cheaper generic drugs in Canada could also create huge demand from the US. The US list price for branded weight-loss and diabetes drugs is about $1,000 a month, though patients can buy directly from the drug companies for half that price.

Despite rules designed to discourage the practice, Americans already buy some prescription drugs from Canada because they tend to be much cheaper. Separately, the US Food and Drug Administration allows Florida to import some medicines from Canada and other US states have applied for permission to do this. 

Kevin Duane, owner of an independent pharmacy in Jacksonville, Florida, said if imports of weight-loss drugs from Canada were allowed, it could add “tens of millions of patients”.

“If Canada goes generic like we are expecting . . . then I think Florida would have to apply to the FDA” to expand the Canadian import programme, he said, “just because the cost savings would be massive”. 

Florida is the third-most populous American state.

The Canadian Pharmacists Association said that as demand for Ozempic surged in 2023, the province British Columbia discovered up to 15 per cent of prescriptions were being dispensed to Americans. 

“While we’re hopeful that generics will help improve affordability and access for Canadians managing diabetes and obesity, we also need to be prepared — with the right monitoring and safeguards in place — to prevent pressure and potential access issues within our drug supply,” said Joelle Walker, vice-president for public and professional affairs at the association.

Canada’s health department said there were regulations that prevented companies from exporting drugs intended for the domestic market, if it would cause or worsen a shortage. It added that it would monitor the availability of weight-loss and diabetes drugs and take action if necessary. 

Novo said it was “well equipped” to navigate the market as its patents expire in Canada. It added that US regulations meant importing generic semaglutide would not be permitted until it was approved in the US. The US patent for semaglutide does not expire until 2032.

“We work in close collaboration with all levels of government to ensure access and availability of our medicines for Canadians and to limit the sale of our medicines to non-Canadian residents,” it said.

Peter Thiel-backed groups such as Anduril and Palantir are set for paydays worth billions of dollars

Buried in Donald Trump’s “big, beautiful bill” was a provision that will give technology group Anduril an almost-guaranteed slice of the roughly $300bn earmarked to modernise the US’s military, defence infrastructure and homeland security.

The legislation provides for a $6bn expansion of border security technology, a chunk of which will be spent on autonomous surveillance towers — for which the Californian company is currently the only approved supplier.

Anduril — co-founded by Palmer Luckey and backed by Peter Thiel, two billionaires who have strongly supported the president — is among the most prominent tech firms set to profit from Trump’s flagship tax and spending legislation.

Another winner is likely to be Palantir, the data intelligence group co-founded by Thiel. Riding on their coattails is a pack of smaller, often Thiel-backed insurgents, competing with traditional defence contractors in a race to capture this influx of cash.

“With the leadership in the Pentagon now, [there is] a real willingness to support industry, to support the defence sector, and to work with non-traditional . . . companies,” said Christian Garrett, a partner at 137 Ventures, which has invested in Anduril, Palantir and Elon Musk’s SpaceX.

The legislation includes $150bn for the Department for Defense, to produce innovative drone systems, naval technology and for the modernisation of the American nuclear deterrence system, as well as another $165bn for the Department for Homeland Security, putting tens of billions of dollars up for grabs.

In a further expected boon to defence and space start-ups, Trump’s Golden Dome project last month began the process of spending at least $150bn to build a new missile defence system for the US, which will involve purchasing sensors, satellites and artificial intelligence. 

A report by venture capital firm Seraphim Space found $3.1bn had been invested into space tech start-ups in the three months to the end of June — up from $2bn in the previous quarter.

“Companies like ours are really leaning forward,” said the founder of a multibillion-dollar Silicon Valley space company. “We’re putting plans in place to make sure when the contracts hit the field . . . we are getting ready to execute.”

Palantir secured a $30mn contract in April to help Immigration and Customs Enforcement build an “ImmigrationOS” platform that will better track migrants and deportations as Trump seeks to increase removals. The US Army last week consolidated dozens of Palantir contracts into a single deal that could be worth $10bn over the next decade. Palantir reported on Monday a nearly 50 per cent surge in quarterly revenues, driven in part by rising sales to the government.

Anduril, co-founded by Luckey after he sold the Oculus virtual reality headset maker to Meta, has long been a big supplier of AI-powered surveillance towers for US Customs and Border Protection across both the Mexico and Canadian borders. 

Trump’s legislation laid out more than $6bn of spending on border security technologies and included a provision that the money is only used to buy towers that have been “tested and accepted by US CBP to deliver autonomous capabilities”. 

Anduril was the only company contracted by CBP to provide autonomous sensor towers along the US borders, according to a person close to the group.

The CBP had encouraged rival manufacturers to produce autonomous towers for years, but so far no others had had their products tested and accepted, the person said. Anduril’s de facto monopoly was first reported by The Intercept.

A White House official defended the provision, saying Anduril’s technology would help the president fulfil his promise to secure the US border.

The US Army in July also gave Anduril, Palantir and others almost $100mn to build a new command-and-control prototype in less than a year.

“The Trump administration has a high standard when spending American’s hard-earned tax dollars — which is why agencies have partnered with top-tier, American companies renowned for their long-standing history of innovation and results,” said White House assistant press secretary Taylor Rogers. “The real winners . . . are the everyday Americans who will pay lower taxes and have a secure border.”

Alumni from Anduril and Palantir have also joined Trump’s government. Soon after returning to office in January, Trump appointed former Palantir head of intelligence Gregory Barbaccia as the government’s chief information officer. The White House has also nominated Anduril director Michael Obadal to serve as the Army’s second most senior civilian official.

Palantir chief technology officer Shyam Sankar recently joined the US Army as a reservist with a tailor-made commission to help further develop a new AI-powered military industrial complex, along with executives from Meta and OpenAI.

Members of the administration and of Trump’s family are in turn invested in market-leading defence tech companies. 1789 Capital, which Donald Trump Jr joined last year, was an early backer of Anduril and Thiel-backed defence manufacturing start-up Hadrian.

White House deputy chief of staff Stephen Miller, who has overseen much of Trump’s immigration policy, owns at least $100,000 in Palantir stock via his child’s brokerage account, according to public disclosures, while other White House officials own smaller stakes in the company. 

Palantir is the best-performing company in the S&P 500 this year, in large part because of a sharp increase in revenue from the US government. Its market capitalisation has eclipsed that of more established defence contractors such as Lockheed Martin.

A White House official said Miller had committed to recusing himself from participating in official matters that could affect the stocks he holds. The official added that previous administrations had also signed large contracts with Palantir.

Other tech companies have also benefited from the administration’s embrace of innovative tech. In just the past month Anthropic, Google, OpenAI and xAI signed $800mn worth of contracts to accelerate the Pentagon’s adoption of AI technologies. 

Enthusiasm over the Trump administration’s willingness to spend billions on untested defence tech attracted hundreds of small companies to the Reindustrialize conference in Detroit last month, where founders mingled with Silicon Valley investors, representatives from major banks and high-ranking officials from the CIA and the US army and navy.

“Our administration is focused on . . . removing red tape, and unleashing the full force of American ingenuity, from AI and advanced manufacturing to quantum and space,” Matt Whitaker, Trump’s ambassador to Nato, told the bullish crowd.

Others hailed the formation of a White House shipbuilding office and pledges to streamline defence procurement.

“There is certainly an acceleration [in adoption of new tech] . . . both from this administration, but also just the state of geopolitical affairs right now,” said Billy Thalheimer, chief executive of sea glider manufacturer Regent.

The company, which was initially backed by Thiel’s Founders Fund, as well as entrepreneur Mark Cuban, was one of several start-ups in Detroit announcing a move to “dual use” — or openly serving both commercial and defence customers worldwide.

The start-up unveiled its new defence arm at the Detroit conference, after the US Marine Corps expressed an interest in its next generation of vessels. Such moves may previously have “scared away” some commercial customers, said Thalheimer, adding: “I think the world understands how more geopolitically relevant it is.”

Tech investors are pouring large sums into defence and weapons groups, expecting a sector-wide boom.

Booz Allen Hamilton, a tech consultancy and government contractor, tripled the amount it would invest in these companies to $300mn in July and said it would make up to 25 new investments over the next five years. 

“We are in a massive technological race with China and the private sector and capital markets are bringing more resources to critical missions,” said Matt Calderone, chief financial officer of Booz Allen. “China has been integrating public and private [to this aim], and the US is starting to follow.”

Christian Sewing oversaw audit into transactions restated following Monte dei Paschi controversy

Deutsche Bank’s chief executive Christian Sewing signed off a €1.5bn deal that was later scrutinised as part of a probe he oversaw that led to the conviction of former colleagues, according to documents seen by the Financial Times.

The transaction with Italian lender UniCredit was arranged in 2010 when Sewing was Deutsche’s chief credit officer, and was similar to a controversial €2.2bn deal from 2008 with Italian bank Monte dei Paschi di Siena. 

Both were so-called enhanced repo deals, which utilised bonds and derivative transactions to conceal the size of loans Deutsche was making to other banks by netting off different elements against each other.

Deutsche subsequently restated its accounts after changing the accounting treatment of the trades, from financing transactions to derivatives trades.

In the wake of that change, the bank in 2013 commissioned a probe into the accounting which was overseen by Sewing, who by then had become the head of the bank’s internal audit unit. 

The audit’s findings became a central part of an Italian criminal trial which resulted in six former Deutsche bankers being sentenced to jail terms of up to four years and eight months for abetting false accounting and market manipulation.

The managers were later acquitted by an appeals court and are now accusing Deutsche of mishandling the case. One of them is suing the lender for €152mn in Frankfurt, with others preparing similar lawsuits in London.

According to people familiar with the matter as well as documents seen by the FT, Deutsche did not disclose Sewing’s involvement in one of the deals that was included in the probe, either in the audit report itself or in a later presentation to the Italian central bank. 

According to people familiar with Deutsche’s thinking, disclosure of Sewing’s role had been unnecessary because no potential conflict of interest existed at any point in time.

Deutsche told the FT that Sewing, in his role as chief credit officer, was “involved in the credit risk assessment of transactions, including the 2010 UniCredit transaction in question”.

The bank said that Sewing’s audit did not address “the credit risk assessment of the transactions in question” but focused on aspects that Sewing “was not involved in” in his earlier role. 

“Any allegation of a conflict of interest involving Christian Sewing is completely unfounded,” the lender said.

Deutsche added that it stood by an earlier statement that the audit was conducted “thoroughly, properly and independently, and the executives involved discharged their responsibilities appropriately”.

Sewing’s audit was launched after Deutsche changed the accounting treatment of billions of euros of deals with counterparties including Italian lenders Monte dei Paschi and UniCredit.

The probe focused on the Monte dei Paschi transaction, which had additional features that enabled the Italian bank to conceal losses and were particularly controversial.

But it also examined 87 other enhanced repos with 22 counterparties, including the one with UniCredit, with more than 30 of those restated.

The audit blamed the bankers who structured the enhanced repos for the restatement, which it attributed to a “failure of front office to inform finance” about core details of the structure, backing up the rationale Deutsche had given for the retrospective accounting change to its external auditor and regulators.

An Italian appeals court later rejected that view, arguing that the structure had been standard and well known in the bank. The appeals court also argued that Deutsche’s justification for the restatement had been a red herring, concluding the bank had changed its accounting to sidestep costly regulatory requirements.

Deutsche has disputed the court’s conclusions. People familiar with the bank’s thinking said a separate investigation commissioned by German regulator BaFin into the matter in 2014 vindicated Sewing’s audit. 

Sewing, who rose to become chief executive in 2018, was not involved in setting up the most contentious deal that was at the heart of his probe — Deutsche’s 2008 transaction with MPS worth €2.2bn.

He did, however, have a role in the second biggest transaction that was subject to Deutsche’s accounting change: the 2010 trade with UniCredit. 

At that point, Sewing was the lender’s chief credit officer and part of a committee that approved the UniCredit deal in which Deutsche acquired bonds worth at least €1.5bn.

The Italian bank committed itself to repurchasing the securities at a later stage and a higher price — a standard feature of a repo deal, with the spread earned by Deutsche in effect equivalent to the interest payable to a lender.

The enhanced repo structure allowed clients to avoid using mark-to-market accounting, which would have otherwise forced them to immediately recognise changes in value.

Before the deal however, UniCredit acquired the bonds underpinning the trade from Deutsche in a structure similar to the MPS transaction — referred to as “bond sourcing” in its internal probe, and a point of contention because it meant the movement of the bonds was circular. This fact was key for the restatement.

Documents seen by the FT show that the €1.5bn UniCredit deal that Sewing approved was identified as a “similar transaction” to the MPS trade in the internal audit, and as one of three other comparable deals with “large notional balances”. 

The documents also show that Sewing was directly involved in the approval of the UniCredit deal, which in parts needed sign-off from the executive board. In an internal email from October 2010, Sewing told colleagues: “Unicredito was approved by the Board”. 

Sewing declined to comment for this article.

Asked by the FT if Sewing had been required by internal compliance rules to disclose his work on the UniCredit transaction internally and if he did so, the bank declined to comment. 

His audit found that “no reference to bond sourcing was made in the Board Credit & Approval Form”, underpinning Deutsche’s argument that its finance department was not aware of all necessary details at the time and hence erroneously booked the trade as a repo transaction rather than a derivatives deal. 

Deutsche said it was “unaware of any evidence suggesting that Mr Sewing knew that the UniCredit transaction involved bond sourcing”, stressing that this aspect of the transaction was “not a relevant factor in assessing the credit risk of a repo transaction”.

AI executives loved it when President Trump sided with them against copyright holders—but the White House dodged the topic in its AI Action Plan. Here’s why.

Before the White House released its AI Action Plan in July, people involved with drafting the document weighed whether to include recommendations that could have impacted the contentious relationship between artificial intelligence companies and copyright holders.

Publishers, authors, film and music companies have filed more than 40 lawsuits in the past few years, arguing that AI firms have infringed on their copyrights by using their data without permission to train large language models. AI companies have argued they’re abiding by fair use, a legal doctrine that allows limited use of copyrighted material without permission from rights holders in certain situations.

Any move by President Donald Trump’s administration to take a side in the dispute could undercut the efforts of publishers and Hollywood to protect their copyrights. In the months leading up to the AI Action Plan’s release, groups representing the music, film and media industries got wind that the document would address copyright in some way, according to a person in the music industry.

In meetings with different government agencies involved in developing the plan, as well as key figures including David Sacks, White House AI czar, and Michael Kratsios, White House science and tech adviser, representatives of publishers, music and film companies argued that the debate about copyright should be left to the courts, the person said.

When the plan came out on July 23, it made no mention of copyright. That was because the people who put the plan together couldn’t figure out what kind of policy recommendation they could actually make, according to a person with knowledge of the situation.

So it was a surprise to audiences at the Winning the AI Race summit—an event in Washington hosted later that day by the “All-In” podcast—when President Donald Trump weighed in on the issue on the side of the AI firms. “You can’t be expected to have a successful AI program when every single article, book or anything else that you’ve read or studied, you’re supposed to pay for,” he said.

AI executives were elated by the comments. One of them said they hoped Trump’s words would influence court decisions or prompt government bodies to take a similar stance. A music industry official predicted the courts won’t care about those comments, however.

Legally, Trump’s words have little significance. A patchwork of state and federal laws protects intellectual property in the U.S., and many of those regulations, including the Copyright Act, have been around for decades. Any changes to federal law would need to go through Congress.

Tod Cohen, a partner at Manatt, Phelps & Phillips in San Francisco who previously worked at Twitter and eBay, said the administration would have the option of filing an amicus brief in an AI copyright lawsuit, outlining its position. Such briefs can be persuasive but are not legally binding.

Cohen said the challenge for the administration if it wanted to set a more general rule around fair-use disputes is that each situation has a specific set of facts and requires evaluation on a case-by-case basis. “If you wrote, ‘The position of the government in the AI Action Plan is training data is fair use,’ that doesn’t help a court at all to help determine what the law is, because you have to evaluate it by what the facts are that are presented in each case,” he said.

To Cohen, the companies’ stance in the broader debate boils down to money. “‘We can get away with not paying’ is the ultimate position of them all,” he said.

Much is at stake. The New York Times’ case against OpenAI is heading toward the deposition phase. Courts in two other copyright cases ruled partly in favor of Anthropic and Meta. But the judge in the Anthropic case also ruled in July that the book authors involved in the dispute could move forward with a class action suit against Anthropic, potentially exposing the company to billions of dollars in penalties.

Some AI firms have struck licensing deals with publishers. OpenAI has signed numerous deals with publishers such as Vox Media and News Corporation, allowing the ChatGPT creator to use their data for training its models, in exchange for payment of some kind. Damon Beres, a senior editor at The Atlantic—one of the publishers who reached a deal with OpenAI—wrote an essay calling it “a devil’s bargain.”

Others, such as Google, have not made such deals, preferring to rely on the fair use legal doctrine to protect their use of publishers’ data in the training of Google models.

The disconnect between the president’s public position and the plan itself shows how unpredictable Trump can be on issues of the day—and it illuminates inconsistencies in the government’s approach to AI. In the same speech in Washington, Trump criticized state AI regulation and advocated for a federal rule, just weeks after the Senate killed an industry-backed effort to ban states from regulating AI for a decade.

The White House and the Office of Science and Technology Policy did not respond to requests for comment.

The situation also illuminates the growing role of technology companies in pushing AI policy. The CEOs of Silicon Valley companies such as Meta Platforms, Nvidia and OpenAI have all been trying hard to earn Trump’s favor since he was elected, making frequent trips to his private Mar-a-Lago club. The same companies have also been pouring millions of dollars into federal lobbying efforts, seeking to capitalize on a business-friendly administration that is open to rolling back regulations for AI companies if it means beating China in the AI race.

Meanwhile, the key White House tech advisers behind the AI plan, including Sacks and Kratsios, have close ties to Silicon Valley.