TheChek News Flow

Campaigners launch legal challenge to Thames Water reservoir plan

Company should fix leaky pipes instead of pursuing £2.2bn Oxfordshire project, say activists

Thames Water’s plans to build a privately financed £2.2bn reservoir in Oxfordshire will be challenged by campaigners in the High Court on Wednesday in a landmark case that could upend the company’s drought management plans.

The new reservoir — which would cover an area the size of Gatwick airport — was last week designated as a “nationally significant” infrastructure project, meaning it will be considered by the government, not the local planning authority. 

Groups including the Campaign to Protect Rural England and anti-reservoir activists SaferWaters are seeking to overturn the decision by Steve Reed, secretary of state for environment, to approve plans for it to apply for a development consent order next year, and are calling for a public inquiry.

Thames Water says the planned Abingdon reservoir would secure water supplies for 15mn people across southern England, including Affinity Water and Southern Water customers. Without it the utility said it would “face a 1bn litre shortfall per day for our customers by 2050”. The company has also been told to reduce river and groundwater abstraction, adding to the pressure on water resources, while the population is expected to grow.

But the campaigners, which are advised by former water engineers, argue that the “South East Strategic Resource Option” is expensive, unnecessary and risks hurting biodiversity and exacerbating local flooding.

Instead they say Thames Water should fix its leaky pipes, which lose about 20 per cent of treated water. It should also build cheaper transfer pipes that bring water from wetter areas in the north-west, and introduce sustainable drainage and grey water systems that cut the amount of treated water used, for example on gardens.

Derek Stork, a director of SaferWaters and a former director of technology at the UK Atomic Energy Authority, said water companies were incentivised to build large infrastructure rather than introducing smaller conservation schemes because it “boosts their balance sheets and shareholder value”.

“This is a scandalous misuse of the public’s money,” he said. “Instead of investing in essential sewage clean-up and modern water reuse systems, Thames Water wants to build an untested reservoir . . . that puts communities at risk while lining shareholder pockets.”

Lisa Warne, director of CPRE Oxfordshire, said: “The government should prioritise leakage reduction, water reuse, and efficiency, not this vanity reservoir.”

According to the Environment Agency such measures would reduce water demand by about 15 per cent over the next 25 years. 

The reservoir is part of a wider £50bn plan from regulator Ofwat to deliver 30 new projects to improve Britain’s crumbling water infrastructure over the next 15 years, many of which will be financed through separate private finance vehicles.

The Abingdon project would have its own corporate structure, management team and investors. It is modelled on the Thames Tideway sewage tunnel which is paid for through an additional surcharge — currently £26 a year — on Thames Water customers’ bills. 

Thames Water said it was a “proven competitive financing and delivery model” and would deliver “value for money”.

The company is currently struggling under the weight of its £20bn debt. Its creditors have offered a £5bn rescue plan but the UK government has signalled it will reject their demands for exemptions from environmental laws, raising the likelihood that Thames Water will be renationalised.

It opened a desalination plant in Beckton, east London, in 2010 but the £250mn facility, which can turn seawater into drinking water, has rarely been switched on. It cannot be used this year because of maintenance issues, even as the company urges customers to conserve water during the recent heatwave. The company said on Sunday its reservoir levels “remain average” for this time of year and were 94 per cent full.

Defra said it “can’t comment on ongoing legal matters”.

“Without action some parts of the country could run out of water by 2030 and that’s why £104bn is being invested to improve water infrastructure, including nine new reservoirs.”

Donald Trump’s drug plan risks higher medicine prices in Europe

US president’s ‘most favoured nation’ policy could also lead to European patients losing access to new treatments

European healthcare systems face paying more for drugs or losing access to new treatments as a result of Donald Trump’s push for the global medicines industry to cut prices in the US, industry experts have warned.

Global drugmakers are in talks with the Trump administration as he pressures them to voluntarily reduce their prices for American patients.

Experts say the US president’s plan risks significant consequences for European healthcare systems, as both the Trump administration and pharmaceutical companies are likely to seek price increases in Europe to allow for cheaper costs in the US.

Trump’s so-called most favoured nation drugs policy, set out in an executive order in May, is hanging over the industry’s negotiations about changes to its UK pricing agreement, which are due to conclude this month.

Drugmakers are using the policy as an argument to bolster their case for charging the UK’s National Health Service more, people familiar with the matter say. The industry fears that if it settles for less with the NHS, the Trump administration could try to cut US drug prices to UK levels.

European countries are likely to resist significant price hikes because budgets are stretched and many contracts with companies are long. This could mean drugmakers end up not launching new medicines in markets where the price will be much lower.

Trump has accused Europe of being among the world’s “foreign freeloaders” that he says enjoy cheap drugs on the back of the US healthcare system, which pays sky-high prices for branded medicines.

The Most Favoured Nation policy pushes drugmakers to offer US patients the lowest price they charge in any country where GDP per capita is at least 60 per cent of US levels.

Dustin Benton, managing director at Forefront Advisors, a political risk research firm, said the policy is built on the premise that the administration can pressure European healthcare systems to pay more for drugs.

“The idea being that if Europeans pay more for drugs, then Americans can pay less for drugs”, he said, adding that the medicines industry was discovering the “downside of being multinationals”.

“We think the ultimate goal is if the price in the US is $100, and in Europe it is $20, Trump wants Europe to come up to $80 or $90, and the US to come down to the same,” said Philip Sclafani, a partner in PwC’s life sciences practice.

Trump has already shown signs of trying to put pricing pressure directly on other countries through trade deals.

The EU would struggle to include promises on medicine prices in its potential trade deal with Washington because member states control their own budget negotiations on drugs.

But the UK-US trade deal includes a promise from London that it will “endeavour to improve the overall environment for pharmaceutical companies operating in the United Kingdom”, without specifying what this might mean.

The UK is likely to resist dramatic changes to the methodology it uses to value drugs, but it could present any changes to its pricing deal as a victory for Trump, if it could also make that politically palatable at home by winning additional investment from drugmakers.

The UK caps the total bill for branded medicines with a clawback tax, and assesses each drug for value for money in a stringent process.

Most Favoured Nation threatens pharmaceutical companies’ business models, which are based on a large US market where drug prices are on average about 2.3 times higher than in 32 other OECD countries, according to research by the Rand Corporation for the US health and human services department.

Companies are likely to try to offer small voluntary changes to the Trump administration. If those fail, legal challenges could follow. A court stopped the policy when Trump tried to introduce it towards the end of his previous administration, but on the grounds that he did not allow enough time for consultation.

The industry shares some common ground with the Trump administration, however, as it has for a long time argued that Europe should pay more for drugs.

Richard Torbett, chief executive of the Association of the British Pharmaceutical Industry, said Most Favoured Nation was a “validation of what we have been saying for a long time”: that the UK will miss out on investment because it pays so little for drugs.

Sclafani said the US administration is asking a lot if it expects the outcome to be an ideal “pie in the sky world” where America spends less on healthcare and European countries are pushed to spend significantly more, even though this was achieved with Ukraine and defence spending.

“It would be very tough for most European populations to say the price of a drug is going to double,” Sclafani said.

The UK health department said it had “well-established and effective mechanisms for managing the costs of medicines and has clear processes in place to mitigate risks to supply”.

The Danish ministry of the interior and health said there was “free pricing” on pharmaceuticals in Denmark and there would continue to be so, while Germany said the country’s assessments of a drug’s benefits played a “crucial role” in pricing.

Jakub Dvořáček, Deputy Minister of Health of the Czech Republic, told the FT that the US was trying to replicate a system of reference pricing across EU member states — which “may sound easy, but is actually very complicated”.

Trump’s attacks on the Fed and growing geopolitical risks reignite public debate about repatriating bullion

Germany and Italy are facing calls to move their gold out of New York following President Donald Trump’s repeated attacks on the US Federal Reserve and increasing geopolitical turbulence.

Fabio De Masi, a former Die Linke MEP who joined the leftwing populist BSW party, told the Financial Times that there were “strong arguments” for relocating more gold to Europe or Germany “in turbulent times”.

Germany and Italy hold the world’s second- and third-largest national gold reserves after the US, with reserves of 3,352 tonnes and 2,452 tonnes, respectively, according to World Gold Council data. Both rely heavily on the New York Federal Reserve in Manhattan as a custodian, each storing more than a third of their bullion in the US. Between them, the gold stored in the US has a market value of more than $245bn, according to FT calculations.

This is largely down to historic reasons but also reflects New York’s status as one of the world’s most important trading hubs for gold, along with London.

Yet Trump’s erratic policymaking and wider geopolitical unrest are fuelling a public debate about the issue in parts of Europe. The US president said earlier this month he may have to “force something” if the US central bank did not lower borrowing costs.

In Germany, the idea of repatriating gold is attracting support from both ends of the political spectrum.

Peter Gauweiler, a prominent former conservative MP from Bavaria’s Christian Social Union, stressed that the Bundesbank “must not take any shortcuts” when it came to safeguarding the country’s gold reserves.

“We need to address the question if storing the gold abroad has become more secure and stable over the past decade or not,” Gauweiler told the FT, adding that “the answer to this is self-evident” as geopolitical risk had made the world more insecure.

The Taxpayers Association of Europe has sent letters to the finance ministries and central banks of both Germany and Italy, urging policymakers to reconsider their reliance on the Fed as a custodian for their gold.

“We are very concerned about Trump tampering with the Federal Reserve Bank’s independence,” Michael Jäger, the TAE’s president, told the FT.

“Our recommendation is to bring the [German and Italian] gold home to ensure European central banks have unlimited control over it at any given point in time.”

Ahead of Italian Prime Minister Giorgia Meloni’s trip to Washington to meet Trump in April, economic commentator Enrico Grazzini wrote in the newspaper Il Fatto Quotidiano: “Leaving 43 per cent of Italy’s gold reserves in America under the unreliable Trump administration is very dangerous for the national interest.”

A survey of more than 70 global central banks this week showed more were thinking of storing their gold domestically amid concerns about their ability to access their bullion in the event of a crisis.

The reliance of European central banks on the Fed as a gold custodian has long been a bone of contention. Western European countries accumulated huge gold reserves during the economic boom in the two decades after the second world war, when they ran large trade surpluses with the US.

Up to 1971, the dollar was converted into gold by the US central bank under the Bretton Woods system of fixed exchange rates. Storing the precious metal across the Atlantic was also seen as a hedge against a potential war with the Soviet Union.

France in the mid-1960s nonetheless moved most of its overseas gold reserves to Paris, after President Charles De Gaulle lost faith in the Bretton Woods system.

In Germany, a grassroots campaign to “repatriate our gold” from 2010 changed Bundesbank policy. In 2013, Germany’s central bank decided to store half of its reserves at home, moving 674 tonnes of bullion from Paris and New York to its Frankfurt headquarters in a high-security operation that cost €7mn. Currently, 37 per cent of the Bundesbank’s gold reserves are stored in New York.

“When we started . . . we were accused of peddling conspiracy theories,” said Peter Boehringer, a precious metal expert who launched the original campaign and today is an MP for Germany’s far-right Alternative für Deutschland party.

For Boehringer, the principal argument to bring home the gold is not linked to the current US administration. “Gold is an asset of last resort for central banks, and hence it needs to be stored without any third-party risk,” he said, adding that at times of serious distress, “it is not just legal ownership but physical control over the gold that really matters”.

In 2019 in Italy, Meloni’s far-right Brothers of Italy party, when still in opposition, lobbied for the repatriation of the country’s gold reserves. Meloni vowed to bring Italian gold home if her party came to power.

However, since taking the premiership in late 2022, Meloni has been silent on the subject. She wants to maintain a friendly relationship with Trump while averting the threat of a deepening trade war.

Fabio Rampelli, a Brothers of Italy parliament member, said the party’s current stance was that the “geographical location” of Italy’s gold was of only “relative importance” given that it was in the custody of “a historic friend and ally”.

German investment veteran Bert Flossbach, co-founder of the country’s largest independent asset manager Flossbach von Storch, made a similar argument: “Bringing the gold back now with great fanfare would send a signal that relations with the US are deteriorating.”

The Bundesbank told the FT in a statement that it “regularly evaluates the storage locations for its gold holdings” based on its 2013 guidelines, which focus not only on security but also on liquidity to “ensure that gold can be sold or exchanged into foreign currencies if needed”.

It stressed that the New York Fed remained “an important storage site” for German gold, adding: “We have no doubt that the New York Fed is a trustworthy and reliable partner for the safekeeping of our gold reserves.”

The Bank of Italy, Meloni’s office and the finance ministry in Berlin declined to comment.

WWD has learned that D'Attis will leave his role on June 30 and Prada Group CEO Andrea Guerra will succeed on an interim basis.

MILAN — Changes are afoot at Prada.

WWD has learned that chief executive officer Gianfranco D’Attis is exiting the Italian luxury brand.

Milan-based sources said disagreements over strategy caused D’Attis’ relations with Prada’s owners and with the top brass to become strained.

D’Attis was not present at the men’s spring 2026 show on Sunday in Milan, and, asked to comment, Prada confirmed the group is parting ways with the executive “by mutual agreement,” effective June 30.

Prada Group CEO Andrea Guerra will succeed him on an interim basis.

D’Attis joined Prada in January 2022, reporting to Guerra. He arrived as the group — which also comprises Miu Miu, Church’s and Car Shoe — was going through a managerial reorganization. He was the first executive outside of the family to hold the CEO role of Prada. Chairman Patrizio Bertelli and Miuccia Prada were previously co-CEOs of the group and of the signature brand.

D’Attis was previously president of Christian Dior Couture Americas. Earlier, he was international managing director of Jaeger-LeCoultre.

In an interview with WWD last year, D’Attis, who brought his experience in retail and knowledge of the American market to Prada, said that among the priorities for the brand was a focus on China and the U.S. He aimed to integrate new categories, home and jewelry made with recycled gold in the brand’s flagships, and to attract new and younger consumers. He is said to have changed the merchandising and retail structure.

Prada Group sales in the first quarter of the year were up 13 percent to 1.34 billion euros, mainly propelled by Miu Miu.

The Prada brand’s retail sales were relatively flat at 827 million euros compared with 826 million euros last year, while Miu Miu revenues climbed 60 percent at constant exchange rates to 377 million euros, growing across categories and regions.

After months of speculation, Prada Group in April confirmed it was acquiring 100 percent of Versace from Capri Holdings for 1.25 billion euros.

The report highlights innovation, collaboration and tech as key strategies for navigating the shifting expectations of consumers, retailers and investors and an uncertain consumer goods landscape.

The consumer products market is currently at a critical crossroads. Confidence within the industry continues to decline given the cost of living, the volatile nature of the economy and an uncertain political landscape. And now, even the ultra-wealthy who have been the primary drivers of luxury spending despite the slump, are losing interest.

EY’s recently published inaugural State of Consumer Products report looks at the challenges the consumer products industry faces and how doubling down on investment and innovation is the path forward in this fast-paced market. One main takeaway from EY’s report is that retail firms must build resilience by reclaiming their brand relevance to survive the ultra-competitive and turmoil-riddled market of today.

The study surveyed more than 500 consumer product manufacturers and retailers, more than 20,000 consumers and 190 global consumer product chief executive officers. The report also spoke at length with 24 key industry executives.

The report’s authors noted that the consumer products industry has had massive shifts in three core relationships. Consumers expect “sharper value from brands,” distinction and innovation. Consumers are expecting personalized marketing that makes them feel seen and heard. For the retailers, they are looking for valuable partners to grow in their respective categories across various channels. From their partners, retailers are looking for those who can “execute excellence” and use data to drive growth. For capital markets, the investment community is looking for consumer product companies to showcase their strategic focus, operational capabilities, performance and cash flow to be a desired asset.

With the evolving landscape that consumer products brands now find themselves in, investors and their expectations are seeking out those with steady and reliable performance. Sixty-five percent of consumer product executives said that investor expectations are becoming a larger influence on their business strategies. Now, more than ever, leaders are looking to M&A to help drive their next phase.

While 81 percent of consumer products leaders polled hold the belief that valuation gaps will hinder M&A recovery over the next quarters, consumer product firms are accelerating their review of their M&A portfolios and their growth strategies to better position themselves to capture new markets and segmentations.

EY’s report authors suggest that companies need to regain the confidence of their investors by prioritizing a more future-thinking model — with advanced technology, “enhanced and granular commercial practices” and innovation in their product to help shape and capture consumer trends.

“The companies that are adapting have sustained investor confidence by delivering what matters,” said Rob Holston, consumer products sector leader at EY Global and EY Americas. “Earnings-led growth is being rewarded: companies growing through operational performance are significantly outperforming those reliant on M&A or financial engineering.”

Moreover, the report states that the new reality major companies find themselves in calls for new strategies — especially for established players who are facing the uncomfortable new reality of a changing market. While their distribution power once gave them longstanding market protection, the report calls for “more sophisticated go-to-market capabilities” for them to survive. Making investments in creativity and innovation rather than continuing their “slow and outdated” brand development will help the companies continue to be competitive in the marketplace.

Another notable takeaway from the report is that competition for shelves has vastly changed the dynamic between consumer product companies and their retailers. Retailers have now gained more leverage over consumer product firms through the expansion of their private labels, having control over consumer data and retail media networks.

Seventy-eight percent of retailers said that in the long run, only one mass-market brand will remain on the shelves, with the rest of the space taken up by private labels and premium or niche brands — a sentiment also shared by 65 percent of consumer goods companies.

Furthermore, EY said this forecasts that retailers will be the primary drivers of change. Hence, consumer product firms will have to further define their relevancy and profitability to maintain space on both physical and digital shelves. Seventy-six percent of retailer respondents said shelf space has also become an important tool in negotiations with consumer product firms.

According to the survey, 47 percent of consumer product leaders in the Americas predict a retailer-dominated future; they are leading the charge by consolidating power through platform models, acquisitions and logistics controls. Meanwhile, 40 percent of leaders from Europe, the Middle East, India and Africa, or EMEIA, forecast a stronger retailer relationship with consumer product companies. Forty-one percent of Asia-Pacific, or APAC, leaders also predict retailer dominance.

“CP firms continue to recognize retailers are increasingly calling the shots,” Holston said. “To strengthen the retail relationship and secure relevance with consumers, CP brands must collaborate to compete. By embracing what we call ‘Disruptive Optimism,’ showing up with conviction with real-time consumer insights and how they can grow the total category, CPs will have every opportunity to be recognized as a category leader, strategic partner and source of shared value.”

While retailers are prioritizing innovation on the collaboration front, 21 percent of consumer product firms are still not joining in on their innovation efforts. Despite 76 percent of consumer product leaders noting that innovation is complex and requires tapping into analytics and artificial intelligence, only 32 percent of them see AI, data and analytical capabilities as being able to give them a competitive edge.

With retailers and consumer product firms steadily competing in the same spaces more and more, EY’s report sees that the consumer product companies’ influence is eroding. With these challenges, they require new strategies to face them head-on. And despite consumer product leaders doubling down on strategies for reach, efficiency and control, these are no longer viable. Notably, only one-third of companies boasting $1 billion in revenue are prioritizing selling through retailers — 67 percent have said are “building their own distribution channels to recapture power.”

“The scale and reach of big CP companies historically conferred a clear advantage,” Holston continued. “With strong distribution, familiar brands, adjacent innovation, well-placed marketing investment and finely tuned pricing strategies, their performance was steady and predictable. Even through periods of disruption, including the COVID-19 pandemic, that model largely held. But its foundations have gradually been eroding. Revenue growth, whether organic or supplemented through an acquisition, has been stalling in recent years. Despite efforts to grow sales through incremental initiatives like product line extensions and pricing optimization, large players have generally begun to stall as an array of macroeconomic challenges has emerged.”

But not all hope is lost on the consumer product company and retailer relationship — 75 percent of retailers said that working with manufacturers as efficiently as possible is vital to their success. The same goes for consumer product firms — 77 percent of them said that working with retailers is key to their success.

When examining what consumers actually want, they still value brands but expect more than ever before: better quality, better value and a sense of community or connection from the brands they purchase from. Eighty-three percent of consumers polled said they are looking for better quality from brands, 78 percent are looking for better value and 67 percent said they expect brands to offer something new.

While many consumers still see the role of brands as notable, EY’s report authors note that loyalty only goes so far if brands can’t deliver meaningful benefits to the consumer. It’s not a total rejection of brands but a “reset of expectations.” While brand loyalty was primarily driven by brand recognition, nowadays, loyalty is more fluid. Consumers are willing to try something new and can be easily swayed to switch — but trust needs to be earned in more impactful ways.

“For CP companies, willing to adapt and assess their portfolios, the opportunity is clear: stay ahead of demand and shape consumer behavior to be the brand of choice for these high-value consumer groups,” Holston explained.

The report also outlines that five key strategies for consumer product companies need to use to enhance their relevancy and profitability are portfolio innovation, M&A, tech-enabled operating models, commercial excellence and marketing and AI.

“Our findings present a roadmap for CP firms to reclaim relevance, restore belief in the power of brands and thrive in a changing world. By understanding the critical shifts in consumer expectations, retailer dynamics and capital market demands, leaders can act boldly to rebuild relevance to lead with confidence,” Holston concluded.

The firms’ chief executives had at least one conversation

Key Points

Bank of New York Mellon BK 0.02%increase; green up pointing triangle approached Northern Trust last week to express interest in merging with its smaller rival, people familiar with the matter said, in what would be a monster deal for the financial-services industry.

The chief executives of BNY and Northern Trust had at least one conversation, the people said, though the firms didn’t discuss a specific offer.

BNY is considering its next steps, which might include returning to Northern Trust with a formal bid. It is possible the talks won’t result in a transaction, the people cautioned.

Northern Trust has no interest in pursuing a deal with BNY, a person familiar with the company’s plans said.

Any deal would be huge. Chicago-based Northern Trust has a market value north of $21 billion after its share price has risen about 9% year to date.

The Trump administration has signaled more willingness to approve big banking deals, after few have been tried in recent years.

The two firms each have an array of businesses that safeguard, manage and move money for companies, investment firms and financial advisers.

BNY is the world’s largest custodian bank, keeping records for pension funds and other institutional investors, and helps manage companies’ cash and debt servicing. The bank also settles trades backed by U.S. government debt, and has a large asset- and wealth-management business.

Shares in BNY have surged more than 50% in the past year as a turnaround plan hatched by the bank’s chief executive, Robin Vince, has lifted profit and revenue. The stock’s rally has pushed the company’s market capitalization above $65 billion.

A former executive at Goldman Sachs, Vince has served as BNY’s CEO since September 2022. He was appointed chairman earlier this month.

A deal would marry two of the world’s largest asset-servicing businesses and create an investment-management powerhouse that oversees more than $3 trillion.

Northern Trust also provides back-office and administrative services to investment firms and, like BNY, has its own money-management division. Its chief executive, Michael O’Grady, is a former dealmaker.

In a bid to address an AI crisis at his company, the Meta CEO has gotten personally involved in recruiting top talent

Key Points

The smartest AI researchers and engineers have spent the past few months getting hit up by one of the richest men in the world.

Mark Zuckerberg is spending his days firing off emails and WhatsApp messages to the sharpest minds in artificial intelligence in a frenzied effort to play catch-up. He has personally reached out to hundreds of researchers, scientists, infrastructure engineers, product stars and entrepreneurs to try to get them to join a new Superintelligence lab he’s putting together.

Some of the people who have received the messages were so surprised they didn’t believe it was really Zuckerberg. One person assumed it was a hoax and didn’t respond for several days.

And Meta’s chief executive isn’t just sending them cold emails. Zuckerberg is also offering hundreds of millions of dollars, sums of money that would make them some of the most expensive hires the tech industry has ever seen. In at least one case, he discussed buying a startup outright.

While the financial incentives have been mouthwatering, some potential candidates have been hesitant to join Meta Platforms’ META -1.93%decrease; red down pointing triangle efforts because of the challenges that its AI efforts have faced this year, as well as a series of restructures that have left prospects uncertain about who is in charge of what, people familiar with their views said.

Meta’s struggles to develop cutting-edge artificial-intelligence technology reached a head in April, when critics accused the company of gaming a leaderboard to make a recently released AI model look better than it was. They also delayed the unveiling of a new, flagship AI model, raising questions about the company’s ability to continue advancing quickly in an industrywide AI arms race.

To remedy Meta’s AI malaise, Zuckerberg has become the company’s recruiter-in-chief. He has tried to recruit OpenAI co-founder John Schulman and Bill Peebles, the co-creator of OpenAI’s Sora video generator, according to people familiar with the matter. Neither of them have joined.

Zuckerberg also has tried to recruit OpenAI co-founder Ilya Sutskever, according to people familiar with the matter.

Meta invested in Sutskever’s new AI startup called Safe Superintelligence earlier this year, and is in talks to hire Daniel Gross, SSI’s CEO, and Nat Friedman, a former GitHub CEO and Microsoft executive. As part of those discussions, Meta is offering to buy out portions of their venture fund. At Meta, the two would help develop new AI products.

Zuckerberg also held discussions with Perplexity and offered to buy the AI search startup, according to people familiar with the matter. The Information and Bloomberg previously reported details of Zuckerberg’s efforts.

Zuckerberg has offered $100 million packages to some people. He doled out $14 billion for a stake in AI startup Scale and its CEO Alexandr Wang, who is slated to run the new AI team that Zuckerberg is assembling. At that price, he essentially made the 28-year-old one of the most lucrative hires in history.

Beyond the Scale deal and a few other hires, it is unclear how successful his efforts will ultimately be. OpenAI CEO Sam Altman says his best people remain at his company. OpenAI has given counteroffers to people Meta has tried to poach, promising them more money and scope in their jobs if they stay, according to a person familiar with the matter. Meanwhile, Altman has been on a spending spree of his own, paying billions for former Apple designer Jony Ive’s startup.

For those who have turned him down, Zuckerberg’s stated vision for his new AI superteam was also a concern.

He has tasked the team, which will consist of about 50 people, with achieving tremendous advances with AI models, including reaching a point of “superintelligence.” Some found the concept vague or without a specific enough execution plan beyond the hiring blitz, the people said.

Potential hires and Meta employees working on its AI teams also pointed to a major point of tension: Meta’s chief AI scientist is a skeptic of the fundamental approach that his company and others are currently taking to advance AI technology.

Yann LeCun, whom Zuckerberg convinced to come run a newly started AI research division at the time in 2013 using the same tactics, doesn’t believe that the large language models that the company and others in the industry are currently building will get the world to artificial intelligence that is smarter than human beings.

For Zuckerberg, the turning point came this past spring. After the model release fell flat, he sprung into action. These days, people inside the company say they have never seen him so focused on recruiting.

Zuckerberg is in a WhatsApp chat called “Recruiting Party 🎉” with Ruta Singh, a Meta executive in charge of recruiting, and Janelle Gale, the company’s head of people. Zuckerberg is also in the weeds of wonky AI research papers, digging into the tech and trying to find out about who is actually building it. He also believes there is a flywheel effect to recruiting: By talking to the smartest person he can find, they will introduce him to the smartest people in their networks.

When the Recruiting Party 🎉 chat finds people worth targeting, Zuckerberg wants to know their preferred method of communication, and he gets their attention by sending the first messages himself.

Zuckerberg has taken recruiting into his own hands, according to a person familiar with his approach, because he recognizes that it is where he can personally have the most leverage inside the company he founded—that an email from him is a more powerful weapon than outreach from a faceless headhunter.

Once the researchers actually believe the person emailing them really is the CEO of Meta, Zuckerberg often hosts them for meals at his homes in Palo Alto, Calif., and Lake Tahoe. He likes to remain involved during every step of the recruiting process, right down to planning their desk locations.

He is also telling researchers they won’t have to worry about computing power or funding at Meta, since their work will be supported by hundreds of billions of dollars in advertising revenue and the company’s plentiful access to the most powerful chips.

But it remains unclear whether this strategy of combining a personal touch with piles of money will pay off for Meta. In recent days, one of Zuckerberg’s rivals publicly derided his offers.

“At least so far,” Altman said, “none of our best people have decided to take them up on that.”

The perils of war with Iran

Tehran’s grand strategy has failed, but that is no guarantee Israel and America can succeed

Going to war is always a gamble. Iran, Israel and now the US have all rolled the dice.

In the short term, it looks as if Israel’s gamble has succeeded. The government of Benjamin Netanyahu has managed to kill much of the military leadership of Iran and to inflict serious damage on the country’s nuclear and military infrastructure. Israel has also succeeded in its clear aim of drawing the US into the fight.

Donald Trump’s decision to join the conflict was, in part, a reaction to the early Israeli successes. The US president is always keen to look like a winner and, in the aftermath of the US bombing raids on Iran, has claimed a “spectacular military success”.

By contrast, the Iranian government’s gamble that it could lead an “axis of resistance” to Israel — while avoiding open confrontation — has failed badly. For decades, Iran has skilfully advanced its interests across the region, by sponsoring proxies such as Hizbollah, Hamas and the Houthis, while working on its own nuclear programme.

For many years, the Iranian strategy looked both subtle and effective. In the Gulf states it was commonly complained that four Arab capitals — Beirut, Baghdad, Damascus and Sana’a (in Yemen) — were controlled by pro-Iranian forces. Iran had also got much closer to having the capacity to develop a nuclear weapon.

But this long-term strategy is now in tatters. The Assad regime has fallen in Syria and Hizbollah and Hamas have been gravely damaged by Israel. Now the Iranian regime itself is under direct attack.

The medium and long-term consequences of this war are, however, much less clear. Israel will struggle to convert short-term tactical successes — no matter how spectacular — into long-term security. The US has long and bitter experience of seeing initial military victories turn into grinding, endless wars. The Iranian theocracy is under unprecedented attack. But bombing campaigns rarely lead to regime change. So the regime could well cling on and live to fight another day.

Iran’s supreme leader, Ayatollah Ali Khamenei, and what’s left of his military now face a menu of deeply unappetising choices. Emotionally, they will want to hit back. But Trump has promised that Iranian retaliation will lead to more intense US attacks.

In the interests of its own survival, the leadership in Tehran might opt for minimal retaliation and then reach for the diplomatic option. But the Iranians will also fear that, as American neoconservatives like to say, “weakness is provocative”. A failure to respond could invite further attacks by Israel, as well as emboldening Iran’s domestic enemies.

Tehran will also know that Trump made the decision to bomb against the backdrop of deep misgivings from his own supporters — who fear that the US is entering another “forever war”. If Iran hits American targets in the Middle East — or forces up the price of oil by closing the Strait of Hormuz — then those misgivings and divisions within America will increase. Trump’s first reaction would be to retaliate. But he is volatile and can reverse himself in an instant, particularly when under domestic political pressure.

The US has also been known to pull out of Middle East entanglements in the face of heavy losses. The 1983 bombing of the US marine barracks in Beirut, widely blamed on Hizbollah, cost the lives of 241 Americans — and led to a US decision to withdraw from Lebanon, rather than to escalate.

Memories such as that underline the risks that Trump is taking. The only end result that would allow the US to credibly claim “mission accomplished” would be if Iran completely and verifiably dismantled its nuclear programme, and if the current Iranian regime was somehow replaced by a stable, pro-western government, with no desire for further conflict with the US or Israel.

Those outcomes seem very unlikely. The more likely alternatives are a badly wounded but still hostile Iran — which could strike back in unpredictable ways. A second possibility would be the collapse of the current regime, followed by civil conflict — which might draw in outsiders or allow terrorists to establish safe havens. Either of those outcomes would risk drawing the US into yet another Middle Eastern war, including the commitment of ground troops.

The uncertainty over Iran’s options and America’s staying power underlines the fragile nature of Israel’s current successes. The Netanyahu government is currently at war on multiple fronts — in Gaza and Iran and, to a lesser extent, in Syria, Lebanon, Yemen and on the occupied West Bank. It has no clear vision for ending any of those conflicts.

Israel has gone a long way to establishing itself as the superpower of the Middle East. It has (undeclared) nuclear weapons and the backing of the US. But, in the long run, it is untenable for a country of 10mn people to dominate a region with a population of several hundred million.

Israel is also taking big risks with its relationship with the US. Its brutal war in Gaza has severely damaged its reputation with the Democrats. If the Netanyahu government is now blamed for leading the US into another forever war, the American backlash against Israel could become bipartisan and long-lasting.

In their different ways, Iran, Israel and the US have all gambled on war. The risk is that they will all end up as losers.

Spac revival puts spring in step of investors in New York

Blank cheque companies are enjoying a fresh moment in the sun as the traditional IPO market struggles

The Spac market was shrivelling when the industry’s annual conference rolled around in mid-2022, with a hastily arranged guest appearance by porn star Stormy Daniels failing to brighten the gloomy mood.  

This year’s event at a golf club in an upscale suburb of New York was markedly more upbeat, attended by some of Wall Street’s most illustrious money managers, delegates from several of America’s largest law firms and dozens of banks, consultants and private investors.

Special purpose acquisition companies are enjoying another moment in the sun as the market for traditional initial public offerings continues to struggle, four years after ultra-low interest rates directed billions of dollars into the investment vehicles to fund flying taxi firms, commercial space ventures and a host of other speculative projects.

“There’s a spring in everyone’s step and so many more smiling faces,” said one Cayman Islands-based lawyer at the Spac Conference 2025 on Wednesday, hosted at Westchester Country Club in Rye, New York, and attended by a record number of guests, according to organisers.

Spacs have listed on US stock markets for more than 30 years, allowing investors to raise equity through an IPO for an empty shell that has around two years to identify a private company to merge with or acquire. Most that do, eventually trade far below their initial listing price, with retail traders often left holding the bag.

Once derided as “a poor man’s IPO,” Spacs became wildly popular during the bull run early in the Covid-19 crisis, with 600 deals in 2021 raising a record $163bn before the fervour died down as higher interest rates weighed on global stock markets. But there have been 56 Spac offerings so far this year raising over $10bn, roughly equal to the total for all of 2024.

The revival has come as uncertainty fuelled by Donald Trump’s tariff war has weighed on the traditional IPO market. At the same time, Trump’s return to the White House has unleashed a fresh wave of speculation that has energised markets for risky assets such as cryptocurrencies. 

Walking the conference floors — and steering clear of an axe-throwing stall parked on the lawn — this week were Spac industry stalwarts including Loeb & Loeb co-chair Mitch Nussbaum and White & Case partner Joel Rubinstein, as well as Joaquin Dean, chief executive of US hip hop record label Ruff Ryders.

Serial Spac sponsors including former Citigroup executive Michael Klein, Los Angeles billionaire Alec Gores and banking entrepreneur Betsy Cohen were absent. Other guests previously put off by the Biden administration’s stricter regulatory approach and the reputational stigma that Spacs still carry were making their first conference appearance in years.

Sashaying between the Bandshell Terrazzo and the century-old Westchester Ballroom, and later over drinks and hand-rolled cigars, representatives of some of Wall Street’s biggest banks rubbed shoulders with the cast of smaller boutiques including BTIG, Cohen & Co and D. Boral Capital that in recent years has sprung up to replace them. 

Chatter was dominated by rumours of a deal brewing involving a once prolific sponsor, the perks of listing in the Cayman Islands rather than Delaware, and reports that Goldman Sachs is set to return to the market following a three-year hiatus.

Yet, there appeared little sense of panic among the bank’s smaller Spac competitors. “The pie is big enough for everyone,” said one head of Spac investment banking at a New York-based firm. 

More of the bigger players “will come back towards the end of the year when they can no longer ignore the fees,” said another Spac banker, “especially if and when you see private equity firms taking their portfolio companies and auctioning them off”.

Panel discussions underscored what attendees said was a fervent industry desire to move on from a series of high-profile flops four years ago. Topics included “renewed focus on quality deals and due diligence”, and a “shift to prioritising Spac targets in desirable industries with solid revenue”. 

And one industry is driving the Spac resurgence more than any other, according to the Cayman Islands-based lawyer. “Right now it’s all crypto,” he said, nodding to several recent Spac deals involving companies established to mimic the tactics of Michael Saylor’s Strategy, the world’s biggest corporate holder of bitcoin.

“The Spac market is in a good place,” said one banker overlooking Westchester’s verdant 18-hole course as the conference drew to a close.

“In 2021 it was completely oversaturated. [Now] there’s not so much supply that we’re going to get ourselves into trouble again.”