TheChek News Flow

David and Simon Reuben in discussions to invest in consortium led by LA investment firm Forest Road

The Reuben brothers, the billionaire property moguls, are in talks to invest in a consortium led by Los Angeles-based investment firm The Forest Road Company that is seeking to take control of porn streamer OnlyFans.

David and Simon Reuben could invest hundreds of millions of dollars via a holding company in a consortium discussing a deal with OnlyFans, the online streaming platform for sex workers, sports stars and celebrities, according to people familiar with the matter.

The family’s business empire was considering backing a special purpose acquisition vehicle set up by Forest Road to take a majority stake in OnlyFans, which could value the business at as much as $7bn, the people added.

The billionaire brothers, whose investments include a minority stake in Premier League football club Newcastle United and Mayfair real estate such as Burlington Arcade, are among at least a dozen parties considering joining the consortium.

The Reuben family is at heart of the British establishment and is among the UK’s richest families.

Their foundation has supported institutions including the British Museum and National Gallery, while Jamie Reuben — David’s son and a principal at the family’s investment firm — is a big Conservative party donor. The younger Reuben has also spearheaded the family’s investment in upmarket hospitality, such as New York’s The Surrey Hotel and the luxury Twenty Two members’ club.

Representatives for the Reuben brothers and OnlyFans declined to comment. Forest Road did not respond to multiple requests for comment.

The Reuben family had not yet agreed to the deal, people added, and could decide not to invest. The discussions over a majority stake sale of the business could also collapse entirely or another buyer could emerge. A person close to the Reuben Brothers said that there were no talks for them to take a leading or majority stake in the company.

OnlyFans owner Fenix International, whose sole shareholder is Ukrainian-American billionaire Leonid Radvinsky, earlier this year kicked off a process to sell a large stake in the paid social media platform, which has more than 300mn registered users.

Radvinsky, who bought the company from its UK-based founders Tim and his father Guy Stokely in 2018, will retain a shareholding in the business if a deal materialises.

In 2022, Radvinsky considered taking OnlyFans public via a blank cheque vehicle and at the time held discussions with Forest Road Acquisition Corp II, a Spac convened by Forest Road Company and backed by basketball star Shaquille O’Neal and former Disney executive Kevin Mayer. A blank cheque listing never materialised.

Boutique investment bank Raine was informally advising Forest Road on the efforts to raise equity for the deal, people familiar with the discussions said. Raine, which specialises in US entertainment, sports and tech dealmaking advice, declined to comment.

Fuelled largely by demand for adult content, OnlyFans has soared in popularity in recent years. It takes a 20 per cent cut of the $7.9bn of payments made on its platform, according to annual accounts filed last year, generating $657mn in pre-tax profits for 2023.

OnlyFans rejects that it is a pornography site, pitching itself instead as a paid-for online streaming platform for content makers, sports stars and celebrities, but its association with adult content has stirred controversy. In 2021, the site considered the idea of banning sexually explicit content entirely before reversing course.

Online platforms linked to adult content have historically struggled to gain the same valuation as tech companies, because banks and financial institutions have long shunned services associated with sex work for compliance reasons.

The last big porn site to sell was Pornhub owner MindGeek, which was bought by Canadian private equity group Ethical Capital Partners in 2023.

Manufacturers and dealers are threatened by increased levy in a market worth more than $5bn

Switzerland’s watch industry is facing a threat to sales after Donald Trump said he would impose 39 per cent tariffs on the country, raising the prospect of significantly higher prices in one of its biggest markets. 

The elevated levy will push prices up for US consumers and hit volumes at some brands, analysts warned. The US accounted for 16.8 per cent of Swiss watch exports in 2024, worth roughly SFr4.4bn ($5.4bn).

Swiss manufacturers The Swatch Group and Richemont, as well as London-listed Watches of Switzerland, a big Rolex and Patek Philippe dealer, all face “pain” if tariffs kick in next week as planned, Jefferies said.

At 39 per cent, the levy exceeds the 31 per cent proposed by Trump on “liberation day” in April, and far outstrips the 15 per cent facing Switzerland’s EU neighbours. Even at the lower rate, some retailers previously said they would need price rises “in the mid to high teens” to preserve US gross profit, according to Jefferies. 

Watches of Switzerland shares fell 8 per cent in London trading on Friday. The company said it would “continue to work closely with our brand partners to mitigate any potential impact”. 

Brian Duffy, chief executive, said the tariff level was “a shock” but insisted the business was better positioned than some rivals, with its wealthy customers, many of whom wait years for chosen timepieces, able to bear higher prices.

“Half our business is in the US and half is waiting lists. It impacts us less than others,” he added. “Demand for watches still exceeds supply.”

The company — which had already warned investors of the impact of tariffs, saying last month that some of the brands it sells had already raised prices in the US — will try to bring forward orders and ship stock earlier to beat the changes.

However, it is limited by how much stock is on hand, and Duffy acknowledged that watches “could get more expensive” in the US.

Barclays warned that even high-end brands such as Rolex and Patek Philippe — which deliberately limit supply to boost desirability and value — may struggle with such steep tariffs, while “non-supply-constrained brands will find substantial price increases more difficult” and risk volume declines. 

The tariffs compound existing issues for Swiss watchmakers. The weaker dollar — down roughly 5 per cent against the Swiss franc since mid-2024 — had already made Swiss watches more expensive for American consumers. June export data showed Switzerland’s watch exports to the US were down 18 per cent on a year earlier.

Swiss watch exports have been weakening overall, declining by 2.8 per cent to SFr26bn in 2024 — the first annual drop since a pandemic rebound in 2020.

Vincent Subilia, head of Geneva’s chamber of commerce, warned that “the US consumer will unfortunately have to pay the price” of what he labelled an “irrational” US tax policy.

Oliver Müller, founder of LuxeConsult, which advises the watch industry, said Swiss watchmakers were “perceiving the punitive new custom duties . . . as being particularly unfair, because we are not threatening any US-based industry . . . Apart from a few niche watch brands, the US watch industry disappeared a long time ago.”

OpenAI Secures Another Giant Funding Deal

The venture capital round values the ChatGPT maker at $300 billion, and underscores the fierceness of the A.I. money race.

Andrew here. It’s a huge morning of news: We have an exclusive on OpenAI’s latest fund-raising round, with some new boldfaced investor names and one big check; we sort through the latest tariff news and what comes next; we also dive into Figma’s I.P.O. for the ages, and more.

And stay tuned for the jobs numbers, which come out shortly.

OpenAI’s latest mega-round

While Wall Street has been focused on how tech giants are spending on artificial intelligence, the most prominent name in the field, OpenAI, has been racking up big money as well.

DealBook is first to report on the huge numbers, and what the round means for the company behind ChatGPT in the increasingly heated A.I. race.

OpenAI has raised $8.3 billion at a $300 billion valuation, months ahead of schedule, as part of its plan to secure $40 billion in funding this year, DealBook has learned. Back in March, OpenAI announced its ambitious funding plans, with SoftBank committing to provide $30 billion by year-end.

The start-up raised $2.5 billion from venture capital firms that same month, with plans to raise an additional $7.5 billion by the end of the year. Instead, the fund-raising came much sooner — and over target.

A wave of new investors participated in the round, including the private equity giants Blackstone and TPG, and the mutual fund manager T. Rowe Price. Other participants include Fidelity Management, Founders Fund, Sequoia Capital, Andreessen Horowitz, Coatue Management, Altimeter Capital, D1 Capital Partners, Tiger Global and Thrive Capital.

Blackstone and TPG aren’t major investors in A.I. model makers. But they were seen by OpenAI as particularly valuable, since they can promote the adoption of ChatGPT among their portfolio companies, including those in health care, financial services and industrials.

The round was five times oversubscribed — and left some early investors in OpenAI frustrated by the smaller allocations they got as the company prioritized bringing on new strategic backers.

The lead investor was Dragoneer Investment Group, which committed $2.8 billion, an astonishing check from a single venture capital firm that may be one of the largest ever written.

The investment casts a spotlight on Dragoneer, which made successful early bets on companies like Airbnb, Spotify and Uber but has largely stayed behind the scenes in Silicon Valley. Marc Stad, Dragoneer’s founder, is now taking a very public claim on what many in Silicon Valley see as the defining tech platform of the next decade. The investment represents about 10 percent of the firm’s funds.

OpenAI’s business continues to surge. DealBook hears that the company’s annual recurring revenue has soared to $13 billion, up from $10 billion in June — and is projected to surpass $20 billion by the end of the year.

The number of business users who pay for ChatGPT has reached five million, up from three million just a few months ago. (The Information previously reported on some of the growth numbers.)

The new funding round comes amid OpenAI’s delicate negotiations with Microsoft. Remember that OpenAI is seeking to become a for-profit company, a plan that requires sign-off by Microsoft, its biggest investor and business partner.

The stakes are big: A positive outcome could help shape OpenAI’s path toward an eventual I.P.O.

A.I. technologists are approaching the job market as if they were Steph Curry or LeBron James, seeking advice from their entourages and playing hardball with the highest bidders.

Mr. Zuckerberg wanted Mr. Deitke, a 24-year-old artificial intelligence researcher who had recently helped found a start-up, to join Meta’s research effort dedicated to “superintelligence,” a technology that could hypothetically exceed the human brain. The company promised him around $125 million in stock and cash over four years if he came aboard.

The offer was not enough to lure Mr. Deitke, who wanted to stick with his start-up, two people with knowledge of the talks said. He turned Mr. Zuckerberg down.

So Mr. Zuckerberg personally met with Mr. Deitke. Then Meta returned with a revised offer of around $250 million over four years, with potentially up to $100 million of that to be paid in the first year, the people said. The compensation jump was so startling that Mr. Deitke asked his peers what to do. After many discussions, some of them urged him to take the deal — which he did.

Silicon Valley’s A.I. talent wars have become so frenzied — and so outlandish — that they increasingly resemble the stratospheric market for N.B.A. stars.

Young A.I. researchers are being recruited as if they were Steph Curry or LeBron James, with nine-figure compensation packages structured to be paid out over several years. To navigate the froth, many of the 20-somethings have turned to unofficial agents and entourages to strategize. And they are playing hardball with the companies to get top dollar, much as basketball players shop for the best deals from teams.

The difference is that unlike N.B.A. teams, deep-pocketed A.I. companies like Meta, OpenAI and Google have no salary caps. (Mr. Curry’s most recent four-year contract with the Golden State Warriors was $35 million less than Mr. Deitke’s deal with Meta.) That has made the battles for A.I. talent even wilder.

Over the past few weeks, recruiting A.I. free agents has become a spectacle on social media, much like the period before a trade deadline in sports. As Meta, Microsoft, Google and OpenAI have poached employees from one another, job announcements have been posted online with graphics resembling major sports trades, made by the online streaming outlet TBPN, which hosts an ESPN-like show about the tech and business world.

“BREAKING: Microsoft has poached over 20 staff members from DeepMind over the last six months,” read one recent TBPN post about Microsoft’s hiring from Google’s DeepMind lab.

Jordi Hays, a co-host of TBPN, said that as tech and A.I. had gone mainstream, more people were following the recruitment fray “the way our friends from college obsess over sports — the personalities, the players, the leagues.”

On Wednesday, Mr. Zuckerberg said Meta planned to continue throwing money at A.I. talent “because we have conviction that superintelligence is going to improve every aspect of what we do.” Superintelligent A.I. would not just improve the company’s business, he said, but would also become a personal tool that “has the potential to begin an exciting new era of individual empowerment.”

A Meta spokeswoman declined to comment. Mr. Deitke did not respond to a request for comment.

The job market for A.I. researchers has long had parallels to professional sports. In 2012, after three academics at the University at Toronto published a research paper describing a seminal A.I. system that could recognize objects like flowers and cars, they auctioned themselves off to the highest corporate bidder — Google — for $44 million.

That kicked off a race for talent across the tech industry. By 2014, Peter Lee, Microsoft’s head of research, was likening the market to that for up-and-coming pro football players, many of whom were making about $1 million a year.

“Last year, the cost of a top, world-class deep learning expert was about the same as a top N.F.L. quarterback prospect,” Mr. Lee told Bloomberg BusinessWeek at the time, referring to a type of A.I. specialist. “The cost of that talent is pretty remarkable.”

The leverage that A.I. researchers have in negotiating job terms has only increased since OpenAI released the ChatGPT chatbot in 2022, setting off a race to lead the technology. They have been aided by scarcity: Only a small pool of people have the technical know-how and experience to work on advanced artificial intelligence systems.

That’s because A.I. is built differently from traditional software. These systems learn by analyzing enormous amounts of digital data. Few researchers have experience with the most advanced systems, which require giant pools of computing power available to only a handful of companies.

The result has been a fresh talent war, with compensation soaring into the hundreds of millions of dollars a year, from millions of dollars a year.

In April, Mr. Zuckerberg — whose company was struggling to advance its A.I. research — dived in by sending personal messages to potential recruits, offering them larger and larger sums.

His approach was similar to that of sports franchise owners, two Meta employees said. Even if the offers seemed absurd, if the new hires could help increase revenue by even half a percent — especially for a company that is closing in on a $2 trillion market capitalization — it would be worth it, the people said.

“If I’m Zuck and I’m spending $80 billion in one year on capital expenditures alone, is it worth kicking in another $5 billion or more to acquire a truly world-class team to bring the company to the next level?” Mr. Hays said. “The answer is obviously yes.”

Meta’s initial offers to engineers varied but hovered in the mid-tens of millions of dollars, three people familiar with the process said.

The company also offered recruits something that was arguably more attractive than money: computing power. Some potential hires were told they would be allotted 30,000 graphical processing units, or GPUs, for their A.I. research, one of the people said. GPUs, which are powerful chips ideal for running the calculations that fuel A.I., are highly coveted.

Mr. Zuckerberg has hired with the help of the List, a document with the names of the top minds in A.I., two people familiar with the effort said. Many on the List have three main qualifications: a Ph.D. in an A.I.-related field, experience at a top lab and contributions to A.I. research breakthroughs, one of the people said.

The Wall Street Journal previously reported some details of the List.

Some researchers on the List have created chat groups on Slack and Discord to discuss offers, two people in the groups said. When someone lands an offer, they can drop the details in the group chats and ask peers to weigh in. (A.I. is a tightknit field where people often know one another.) They trade information about which companies to approach for another offer so they can build up their price, the people said.

Working with friends can be just as important as the money. After a researcher joins a new lab, the first thing that person often does is try to recruit friends, two people familiar with the process said.

The talent wars have started causing pain. OpenAI has changed its compensation structure to account for the shift in the market, employees at the company said, and is asking those approached by competitors to consult executives before immediately accepting offers.

“Are we countering? Yes,” Mark Chen, OpenAI’s chief research officer, said at a company meeting this month, according to a recording reviewed by The New York Times. But he added that OpenAI had not matched Meta’s offers because “I personally think that in order to work here, you have to believe in the upside of OpenAI.”

OpenAI declined to comment. (The Times has sued OpenAI and Microsoft, claiming copyright infringement in relation to news content related to A.I. systems. The two companies have denied the claims.)

Not all of Meta’s overtures have succeeded. The company has been rebuffed by some researchers, two people said, partly because Mr. Zuckerberg’s vision for artificial intelligence was unclear compared with those at other companies.

Still, the frenzy has allowed even little-known researchers like Mr. Deitke to chart their own destinies.

Mr. Deitke, who recently dropped out of a computer science Ph.D. program at the University of Washington, had moonlighted at a Seattle A.I. lab, the Allen Institute for Artificial Intelligence. There, he led the development of a project called Molmo, an A.I. chatbot that juggles images, sounds and text — the kind of system that Meta is trying to build.

In November, Mr. Deitke and several Allen Institute colleagues founded Vercept, a start-up that is trying to build A.I. agents, which can use other software on the internet to autonomously perform tasks. With about 10 employees, Vercept has raised $16.5 million from investors such as the former Google chief executive Eric Schmidt.

Then came Mr. Deitke’s back-and-forth with Mr. Zuckerberg. After Mr. Deitke accepted Meta’s roughly $250 million four-year offer, Vercept’s chief executive posted on social media, “We look forward to joining Matt on his private island next year.”

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