TechCrunch : Sam Altman biographer Keach Hagey explains why the OpenAI CEO was ‘

Sam Altman biographer Keach Hagey explains why the OpenAI CEO was ‘born for this moment’

In “The Optimist: Sam Altman, OpenAI, and the Race to Invent the Future,” Wall Street Journal reporter Keach Hagey examines our AI-obsessed moment through one of its key figures — Sam Altman, co-founder and CEO of OpenAI.

Hagey begins with Altman’s Midwest childhood, then takes readers through his career at startup Loopt, accelerator Y Combinator, and now at OpenAI. She also sheds new light on the dramatic few days when Altman was fired, then quickly reinstated, as OpenAI’s CEO.

Looking back at what OpenAI employees now call “the Blip,” Hagey said the failed attempt to oust Altman revealed that OpenAI’s complex structure — with a for-profit company controlled by a nonprofit board — is “not stable.” And with OpenAI largely backing down from plans to let the for-profit side take control, Hagey predicted that this “fundamentally unstable arrangement” will “continue to give investors pause.”

Does that mean OpenAI could struggle to raise the funds it needs to keep going? Hagey replied that it could “absolutely” be an issue.
“My research into Sam suggests that he might well be up to that challenge,” she said. “But success is not guaranteed.”

In addition, Hagey’s biography (also available as an audiobook on Spotify) examines Altman’s politics, which she described as “pretty traditionally progressive” — making it a bit surprising that he’s struck massive infrastructure deals with the backing of the Trump administration.

“But this is one area where, in some ways, I feel like Sam Altman has been born for this moment, because he is a deal maker and Trump is a deal maker,” Hagey said. “Trump respects nothing so much as a big deal with a big price tag on it, and that is what Sam Altman is really great at.”
In an interview with TechCrunch, Hagey also discussed Altman’s response to the book, his trustworthiness, and the AI “hype universe.”
This interview has been edited for length and clarity.

You open the book by acknowledging some of the reservations that Sam Altman had about the project — this idea that we tend to focus too much on individuals rather than organizations or broad movements, and also that it’s way too early to assess the impact of OpenAI. Did you share those concerns?

Well, I don’t really share them, because this was a biography. This project was to look at a person, not an organization. And I also think that Sam Altman has set himself up in a way where it does matter what kind of moral choices he has made and what his moral formation has been, because the broad project of AI is really a moral project. That is the basis of OpenAI’s existence. So I think these are fair questions to ask about a person, not just an organization.

As far as whether it’s too soon, I mean, sure, it’s definitely [early to] assess the entire impact of AI. But it’s been an extraordinary story for OpenAI — just so far, it’s already changed the stock market, it has changed the entire narrative of business. I’m a business journalist. We do nothing but talk about AI, all day long, every day. So in that way, I don’t think it’s too early.

And despite those reservations, Altman did cooperate with you. Can you say more about what your relationship with him was like during the process of researching the book?
Well, he was definitely not happy when he was informed about the book’s existence. And there was a long period of negotiation, frankly. In the beginning, I figured I was going to write this book without his help — what we call, in the business, a write-around profile. I’ve done plenty of those over my career, and I figured this would just be one more.

Over time, as I made more and more calls, he opened up a little bit. And [eventually,] he was generous to sit down with me several times for long interviews and share his thoughts with me.

Has he responded to the finished book at all?
No. He did tweet about the project, about his decision to participate with it, but he was very clear that he was never going to read it. It’s the same way that I don’t like to watch my TV appearances or podcasts that I’m on.
In the book, he’s described as this emblematic Silicon Valley figure. What do you think are the key characteristics that make him representative of the Valley and the tech industry?

In the beginning, I think it was that he was young. The Valley really glorifies youth, and he was 19 years old when he started his first startup. You see him going into these meetings with people twice his age, doing deals with telecom operators for his first startup, and no one could get over that this kid was so smart.
The other is that he is a once-in-a-generation fundraising talent, and that’s really about being a storyteller. I don’t think it’s an accident that you have essentially a salesman and a fundraiser at the top of the most important AI company today,
That ties into one of the questions that runs through the book — this question about Altman’s trustworthiness. Can you say more about the concerns people seem to have about that? To what extent is he a trustworthy figure?
Well, he’s a salesman, so he’s really excellent at getting in a room and convincing people that he can see the future and that he has something in common with them. He gets people to share his vision, which is a rare talent.
There are people who’ve watched that happen a bunch of times, who think, “Okay, what he says does not always map to reality,” and have, over time, lost trust in him. This happened both at his first startup and very famously at OpenAI, as well as at Y Combinator. So it is a pattern, but I think it’s a typical critique of people who have the salesman skill set.
So it’s not necessarily that he’s particularly untrustworthy, but it’s part-and-parcel of being a salesman leading these important companies.
I mean, there also are management issues that are detailed in the book, where he is not great at dealing with conflict, so he’ll basically tell people what they want to hear. That causes a lot of sturm-und-drang in the management ranks, and it’s a pattern. Something like that happened at Loopt, where the executives asked the board to replace him as CEO. And you saw it happen at OpenAI as well.
You’ve touched on Altman’s firing, which was also covered in a book excerpt that was published in the Wall Street Journal. One of the striking things to me, looking back at it, was just how complicated everything was — all the different factions within the company, all the people who seemed pro-Altman one day and then anti-Altman the next. When you pull back from the details, what do you think is the bigger significance of that incident?

The very big picture is that the nonprofit governance structure is not stable. You can’t really take investment from the likes of Microsoft and a bunch of other investors and then give them absolutely no say whatsoever in the governance of the company.
That’s what they have tried to do, but I think what we saw in that firing is how power actually works in the world. When you have stakeholders, even if there’s a piece of paper that says they have no rights, they still have power. And when it became clear that everyone in the company was going to go to Microsoft if they didn’t reinstate Sam Altman, they reinstated Sam Altman.
In the book, you take the story up to maybe the end of 2024. There have been all these developments since then, which you’ve continued to report on, including this announcement that actually, they’re not fully converting to a for-profit. How do you think that’s going to affect OpenAI going forward?
It’s going to make it harder for them to raise money, because they basically had to do an about-face. I know that the new structure going forward of the public benefit corporation is not exactly the same as the current structure of the for-profit — it is a little bit more investor friendly, it does clarify some of those things.
But overall, what you have is a nonprofit board that controls a for-profit company, and that fundamentally unstable arrangement is what led to the so-called Blip. And I think you would continue to give investors pause, going forward, if they are going to have so little control over their investment.
Obviously, OpenAI is still such a capital intensive business. If they have challenges raising more money, is that an existential question for the company?
It absolutely could be. My research into Sam suggests that he might well be up to that challenge. But success is not guaranteed.
Like you said, there’s a dual perspective in the book that’s partly about who Sam is, and partly about what that says about where AI is going from here. How did that research into his particular story shape the way you now look at these broader debates about AI and society?

I went down a rabbit hole in the beginning of the book, [looking] into Sam’s father, Jerry Altman, in part because I thought it was striking how he’d been written out of basically every other thing that had ever been written about Sam Altman. What I found in this research was a very idealistic man who was, from youth, very interested in these public-private partnerships and the power of the government to set policy. He ended up having an impact on the way that affordable housing is still financed to this day.
And when I traced Sam’s development, I saw that he has long believed that the government should really be the one that is funding and guiding AI research. In the early days of OpenAI, they went and tried to get the government to invest, as he’s publicly said, and it didn’t work out. But he looks back to these great mid-20th century labs like Xerox PARC and Bell Labs, which are private, but there was a ton of government money running through and supporting that ecosystem. And he says, “That’s the right way to do it.”
Now I am watching daily as it seems like the United States is summoning the forces of state capitalism to get behind Sam Altman’s project to build these data centers, both in the United States and now there was just one last week announced in Abu Dhabi. This is a vision he has had for a very, very long time.
My sense of the vision, as he presented it earlier, was one where, on the one hand, the government is funding these things and building this infrastructure, and on the other hand, the government is also regulating and guiding AI development for safety purposes. And it now seems like the path being pursued is one where they’re backing away from the safety side and doubling down on the government investment side.
Absolutely. Isn’t it fascinating?

You talk about Sam as a political figure, as someone who’s had political ambitions at different times, but also somebody who has what are in many ways traditionally liberal political views while being friends with folks like — at least early on — Elon Musk and Peter Thiel. And he’s done a very good job of navigating the Trump administration. What do you think his politics are right now?
I’m not sure his actual politics have changed, they are pretty traditionally progressive politics. Not completely — he’s been critical about things like cancel culture, but in general, he thinks the government is there to take tax revenue and solve problems.
His success in the Trump administration has been fascinating because he has been able to find their one area of overlap, which is the desire to build a lot of data centers, and just double down on that and not talk about any other stuff. But this is one area where, in some ways, I feel like Sam Altman has been born for this moment, because he is a deal maker and Trump is a deal maker. Trump respects nothing so much as a big deal with a big price tag on it, and that is what Sam Altman is really great at.

You open and close the book not just with Sam’s father, but with his family as a whole. What else is worth highlighting in terms of how his upbringing and family shapes who he is now?
Well, you see both the idealism from his father and also the incredible ambition from his mother, who was a doctor, and had four kids and worked as a dermatologist. I think both of these things work together to shape him. They also had a more troubled marriage than I realized going into the book. So I do think that there’s some anxiety there that Sam himself is very upfront about, that he was a pretty anxious person for much of his life, until he did some meditation and had some experiences.
And there’s his current family — he just had a baby and got married not too long ago. As a young gay man, growing up in the Midwest, he had to overcome some challenges, and I think those challenges both forged him in high school as a brave person who could stand up and take on a room as a public speaker, but also shaped his optimistic view of the world. Because, on that issue, I paint the scene of his wedding: That’s an unimaginable thing from the early ‘90s, or from the ‘80s when he was born. He’s watched society develop and progress in very tangible ways, and I do think that that has helped solidify his faith in progress.
Something that I’ve found writing about AI is that the different visions being presented by people in the field can be so diametrically opposed. You have these wildly utopian visions, but also these warnings that AI could end the world. It gets so hyperbolic that it feels like people are not living in the same reality. Was that a challenge for you in writing the book?

Well, I see those two visions — which feel very far apart — actually being part of the same vision, which is that AI is super important, and it’s going to completely transform everything. No one ever talks about the true opposite of that, which is, “Maybe this is going to be a cool enterprise tool, another way to waste time on the internet, and not quite change everything as much as everyone thinks.” So I see the doomers and the boomers feeding off each other and being part of the same sort of hype universe.

As a journalist and as a biographer, you don’t necessarily come down on one side or the other — but actually, can you say where you come down on that?
Well, I will say that I find myself using it a lot more recently, because it’s gotten a lot better. In the early stages, when I was researching the book, I was definitely a lot more skeptical of its transformative economic power. I’m less skeptical now, because I just use it a lot more.

9to5 : Gurman: Apple needs a major AI comeback, but this WWDC probably won’t be

Gurman: Apple needs a major AI comeback, but this WWDC probably won’t be it

According to Mark Gurman in his latest Power On newsletter, Apple insiders “believe that the conference may be a letdown from an AI standpoint,” highlighting how far behind Apple still is. Still, Apple has a few AI-related announcements slated for June 9.
As previously reported, this year’s biggest AI announcement will be Apple’s plans to open up its on-device foundation models to third-party developers.
These are the same ~3B parameter models Apple currently uses for things like text summarization and autocorrect, and they’ll soon be available for devs to integrate into their own apps.
To be clear, this is a meaningful milestone for Apple’s AI platform. It gives developers a powerful tool to natively integrate into their apps and potentially unlock genuinely useful features.
Still, these on-device models are far less capable than the large-scale, cloud-based systems used by OpenAI and Google, so don’t expect earth-shattering features.

AI features slated for this year’s iOS 26
Elsewhere in its AI efforts, Apple will reportedly:
  • Launch a new battery power management mode;
  • Reboot its Translate app, “now integrated with AirPods and Siri”;
  • Start describing some features within apps like Safari and Photos as “AI-powered”.
As Gurman puts it, this feels like a risky “gap year.” Internally, Apple is aiming to make up for it at WWDC 2026, with bigger swings that “it hopes it can try to convince consumers that it’s an AI innovator.“. However, given how fast the competition is moving, waiting until next year might put Apple even further behind, perception-wise.

What’s still in the works?
Currently, Apple’s ongoing AI developments include an LLM Siri, a revamped Shortcuts app, the ambitious health-related Project Mulberry, and a full-blown ChatGPT competitor with web search capabilities.
According to Gurman, Apple is holding off on previewing some of these features to avoid repeating last year’s mistake, when it showed off Apple Intelligence with features that were nowhere near ready and are still MIA.
Behind the scenes, Gurman reports Apple has made progress. It now has models with 3B, 7B, 33B, and 150B parameters in testing, with the largest ones relying on the cloud.
Internal benchmarks suggest its top model is close to recent ChatGPT updates in quality. Still, concerns over hallucinations and internal debates over Apple’s approach to generative AI are keeping things private, for now.

Apple’s dev AI story
As for Apple’s developer offerings, Gurman reports:
“Developers will see AI get more deeply integrated into Apple’s developer tools, including those for user interface testing. And, in a development that will certainly appease many developers, SwiftUI, a set of Apple frameworks and tools for creating app user interfaces, will finally get a built-in rich text editor.”
And if you’re still waiting for Swift Assist, the AI code-completion tool Apple announced last year, Gurman says Apple is expected to provide an update on it. Still, there is no word yet on whether this update includes releasing the Anthropic-powered code completion version that its employees have been testing for the past few months.

WSJ : Ukraine Says It Destroyed Dozens of Warplanes Deep Inside Russia

Ukraine Says It Destroyed Dozens of Warplanes Deep Inside Russia
Clandestine drone attack, 18 months in planning, deals blow to Moscow’s ability to strike from the air

Key Points
  • Ukraine damaged over 40 Russian warplanes in a drone attack on four military airports in Russia’s far east.
  • The attack, dubbed “Spider’s Web,” took a year and a half to prepare, officials at Ukraine’s intelligence agency said.
  • The bombardment is a significant victory for Ukraine’s deep-strike program, which uses drones to target crucial material on Russia’s soil.

KYIV—Ukrainian officials said its drones damaged more than 40 warplanes in attacks on four military airports inside Russia, a daring clandestine strike against Moscow’s airborne capabilities.

The attack, dubbed “Spider’s Web,” took a year and a half to prepare, officials at Ukraine’s main security and intelligence agency, the SBU, said on Sunday. Ukraine’s drones targeted Russia’s Belaya, Ivanovo, Dyagilevo and Olenya air bases, all of which house Russian military planes.

The bombardment is a significant victory for Ukraine’s deep-strike program, which uses drones to target crucial materiel on Russia’s soil. Ukraine’s intelligence agency has used sea drones and long-range bombing drones to strike inside Russia.

Video taken by drones showed smoke emanating from planes at Belaya airfield near Russia’s border with Mongolia, according to footage shared by Ukrainian intelligence officials.

“This is how nice the Belaya airfield looks now,” Vasyl Maliuk, head of Ukraine’s intelligence agency, said in the video.

Ukrainian intelligence officials said the agency moved dozens of small quadcopter drones to Russian territory. It then moved wooden containers to Russia, which were used to hide the drones ahead of the attack. When it came time to strike, the containers were placed on trucks and the lids of the containers were opened remotely. The swarm of drones flew out to find their targets.

In one video posted to social media, a drone appeared to take off out of a container with a buzzing sound. Shots rang out in an apparent attempt to down it. Another drone few out of the container in the same direction.

The scope of the damage would take time to assess but it appeared to be a significant blow to Russia’s long-range aviation capacity, said Justin Bronk, a senior research fellow at the Royal United Services Institute in London.

“Ukrainian special services have struck by far the heaviest blow of the war against the Russian Long Range Aviation bomber fleet,” Bronk said.

Losing dozens of long-range aircraft vital to Russia’s nuclear forces and its attacks on Ukraine would gravely damage Russian military strength. Russia no longer produces the Tu-95MS or Tu-22M3 planes that were among those damaged, according to Ukrainian intelligence officials.

Russian and Ukrainian delegations are set to meet on Monday in Istanbul for negotiations aimed at ending the war. Ukraine’s President Volodymyr Zelensky said Ukrainians are demanding a full cease-fire, the release of prisoners and the return of the children Russia abducted. Russia hasn’t sent its proposals ahead of the talks, Ukrainian officials said.

WSJ : Needing Dollars, Iran-Backed Militias Turn to Visa and Mastercard

Needing Dollars, Iran-Backed Militias Turn to Visa and Mastercard
Armed groups lost access to dollars when a banking loophole was closed. They quickly pivoted to exploit a currency-exchange scheme using cards that at its peak involved $1.5 billion a month.

Iraq was a minor market for Visa and Mastercard a couple of years ago, generating just $50 million a month or less in cross-border transactions at the start of 2023. Then it exploded to around $1.5 billion in April that year, a 2900% increase almost overnight.

What changed? Iraqi militia groups figured out how to squeeze dollars on an industrial scale from Visa and Mastercard’s payment networks for themselves and for their allies in Iran, according to U.S. and Iraqi officials and documents reviewed by The Wall Street Journal.

The shift into cards came after the U.S. Treasury and the Federal Reserve Bank of New York in late 2022 shut down a gaping loophole being used for fraud—international wire transactions by Iraqi banks that lacked money-laundering safeguards. Flaws in that system, created by the U.S. during the occupation of Iraq, allowed Iran and the militia groups it supports to access billions of dollars over more than a decade.

After the U.S. finally closed that spigot, militias quickly found ways to profit from the card scheme.

The U.S. payment giants helped fuel the boom by signing up Iraqi partners to issue Mastercard and Visa-branded cash and debit cards, offering them financial incentives to boost transaction levels. In some cases, the Iraqi issuers had militia ties and inadequate fraud controls in a country known for rampant corruption, documents show.

Yet after being informed by Treasury of the armed groups’ involvement, the card companies took months to significantly rein in the transactions—which came down from their peak but still ranged from around $400 million to $1.1 billion a month until earlier this year. In an effort to get control of the card payments, the Central Bank of Iraq recently set a cap of $300 million a month, according to people familiar with the matter.

Iraq has both an official dollar exchange rate and a higher, unofficial rate. That means a person can buy prepaid cash and debit cards in Iraq, withdraw the money as dollars in other Middle East countries at Iraq’s official rate, and then return it to Iraq to convert it back into dinars at the unofficial rate. That generates gains that have reached as high as 21%.

The result has been a booming business for Iraq’s powerful militias, which arose with Iranian backing two decades or more ago and remain under U.S. sanctions because of attacks on American forces in Iraq and Syria. Mastercard and Visa have also profited, through charging 1% to 1.4% on cross-border transactions or more in some high-risk markets.

Iraqi cardholders engaging in the scheme are estimated to have made around $450 million in profit in 2023 alone, and the foreign card networks are estimated to have taken in nearly $120 million between them, a person familiar with the matter said. The revenues are estimated to have grown in 2024 since total transactions were up by around 60%.

The U.S. has waged a yearslong battle to block Iran and its proxies in Iraq from obtaining dollars, which violates sanctions levied over decades for its nuclear program, terrorism financing and other issues. Among others, Iran also supports Hamas in Gaza and Hezbollah in Lebanon, U.S.-designated terrorist groups.

The Iraqi militias acquired huge quantities of Mastercards and Visas loaded with funds, transported the cards to the United Arab Emirates and other neighboring countries and withdrew the money, Treasury officials informed the card companies last fall. The armed groups then transferred the cash back to Iraq, exchanged it for dinars and profited from the currency arbitrage, Treasury said.

The graft likely financed their operations, paid for weapons or just lined their pockets.

Other permutations of the currency-exchange scheme also take place, all making use of the difference between Iraq’s official and unofficial dollar-exchange rate.

In recent days, Treasury formally asked the Iraqi central bank to block the more than 200,000 cards used by militia members due to fraud concerns.

The Trump administration, which has been holding high-level nuclear talks with Tehran since April, has taken new steps to cut off Iran’s access to hard currency, including by targeting ships it uses to sell oil in violation of sanctions and by restricting its access to dollars from neighboring Iraq.

Iraq’s most potent Iran-backed militias, including the Badr Brigade, Kataib Hezbollah and Asaib Ahl al-Haq, have the clout within Iraq’s government and financial sectors to help Tehran circumvent sanctions, forming what Treasury Secretary Scott Bessent in April called a “clandestine network of financial facilitators.”

“In line with administration priorities and to preserve the strength of the U.S. dollar, Treasury will continue to be vigilant about threats to the U.S. financial system, including by Iran-aligned actors,” a department spokeswoman said about its efforts to rein in Iraqi cash- and debit-card activity.

Funeral procession for Kataib Hezbollah fighters killed in a U.S. airstrike in Iraq.
Members from the Popular Mobilization Forces at the funeral of fighters from Kataib Hezbollah who were killed in a U.S. airstrike last year. Photo: Hadi Mizban/AP
U.S. and Iraqi officials said warnings to Visa and Mastercard about the militias’ role in the soaring cash- and debit-card payments went mostly unheeded for months.

Federal Reserve Bank of New York and Treasury officials began asking Visa and Mastercard to explain the rising transactions in May 2023, the U.S. and Iraqi officials said. They held regular meetings about the Iraqi market that also included Iraqi central bank officials in 2024 and early this year. The card companies began taking significant action in March.

The Iraqi card issuers that partnered with Visa and Mastercard weren’t under sanctions, and there is no public allegation that Visa or Mastercard violated any sanctions.

The companies, which have a roughly equal split of the Iraqi market, said they acted promptly to limit transactions after finding evidence of fraud.

“Ongoing government engagement is built into our programs so that we can quickly look into claims, identify the situation and take action as appropriate,” Mastercard spokesman Seth Eisen said. “That’s exactly what we have done with the U.S. government on this matter from a very early stage.” He said the Iraqi government is working to digitize its economy, which results in more electronic payment transactions.

Fletcher Cook, a Visa spokesman, said: “Central to our operations is a commitment to ensuring that transactions on our network do not violate the law…When we identify or are alerted to any suspicious or illegal activity, we take action.”

Lined up at ATMs
To keep money flowing through the economy after the international wire transactions crackdown, the Central Bank of Iraq in early 2023 permitted payments with cash and debit cards outside Iraq to be made at the official conversion rate—currently 1,320 Iraqi dinars to the dollar—a cheaper price for dollars than the rate available in Iraq’s currency markets. That supercharged the use of cards for currency arbitrage.

Militia couriers smuggled the cards into U.A.E., Turkey and Jordan. There they withdrew cash from ATMs—witnesses described Iraqis lined up day and night at ATMs in Dubai with stacks of prepaid cash cards, inserting one after another.

They moved the money back to Iraq, either through the informal Middle East money-transfer process known as hawalla or by electronic transfer between bank accounts. The funds were then exchanged for dinars in currency markets at the higher unofficial rate—close to 1,600 dinars to the dollar at its high point in 2023—resulting in a profit. The exchange-rate spread has fallen in recent months, to about 1,400 dinars to the dollar.

Regulators in Iraq and U.A.E. limited daily withdrawals and cracked down on the card smuggling. In one case, more than two dozen Iraqis carrying a total of around 1,200 cash cards loaded with more than $5 million were arrested at Iraqi airports and border crossings. An Iraqi traveler was arrested at the airport in the city of Najaf with 300 bank cards hidden in cigarette packs in his luggage. In another, multiple Iranians and Iraqis were caught by border guards while attempting to smuggle Mastercards to Iran.

The militias adjusted, and began persuading merchants in the other countries with access to Visa and Mastercard networks to run fake purchase transactions in return for a kickback.

In an example described by bankers familiar with the scheme, a luxury-goods store in the U.A.E. charges a Visa or Mastercard cash or debit card $5,000, even though no merchandise changes hands. In return for a 5% payment, the shop gives the cardholder the $5,000 in cash or the equivalent in U.A.E.’s currency, the dirham, which is pegged to the dollar. The card company debits the card at the official Iraqi dollar rate. The funds then move back to Iraq for the market exchange.

The militias often use the funds to repeat the process over and over, profiting at every cycle.

Eventually, the scammers acquired hand-held “point of sale” machines, commonly used by restaurants and retail merchants, for themselves, the Iraqi and U.S. officials said. At so-called POS farms, they processed fake transactions on dozens of the devices, using virtual private networks to disguise their locations, the officials said.

Iraqi officials said they didn’t have adequate controls in place to prevent what they called rampant fraud. U.S. authorities also didn’t immediately see the flaws in the system, in part because card settlements are much less scrutinized than regular wire transfers, they said. Iraq was especially vulnerable to the card schemes because of loose controls on card issuers and an economy that remains largely cash based.

Authorities have had success blunting the exchange-rate ploy in some areas.

Officials saw a similar spike in funds moving out of Iraq through fund-transfer companies Western Union and MoneyGram. Transfers using those companies exceeded $1 billion in March 2023, soon after the crackdown on bank-to-bank wire transfers, and rose to $1.7 billion in June. When Western Union announced its second-quarter financial results in July 2023, it raised its full-year revenue forecast “primarily to business performance in Iraq.”

The company also disclosed it was having “regular discussions with policymakers in both the U.S. and Iraq about the elevated remittance volumes flowing through its network in Iraq.”

Alarmed U.S. and Iraqi regulators imposed new limits on monthly transfers for the two U.S. money-transfer companies. At authorities’ urging, Western Union and MoneyGram closed accounts at numerous Iraqi banks. The moves drove down monthly outflows from Iraq to $110 million by October 2024.

Western Union declined to comment, and MoneyGram didn’t respond to requests for comment.

After Baghdad’s First Iraqi Bank began offering an instant money transfer service known as Visa Direct in early 2024, it prompted a torrent of cash transactions to accounts linked to other Visa cards. Over two months, the bank’s Visa cardholders sent $1.2 billion to Dubai, Turkey and other places, according to a person familiar with the matter. One cardholder repeatedly transferred more than $5 million a day to 11 accounts in Indonesia, the person said.

Treasury and the Fed raised concerns about the huge transfers, and Visa halted the bank’s use of the service after 10 weeks. Visa and First Iraqi Bank didn’t respond to questions about Visa Direct.

Clear picture of fraud
But stopping individual products did little to dent the overall fraud, and the card business grew. The number of Iraqi issuers licensed to offer prepaid or debit cards rose from five to 17 from 2017 to 2024, a person familiar with the matter said.

U.S. officials were especially concerned about one of Iraq’s most widely held debit cards, known as Qi Card, a partner with both Mastercard and Visa that covers around half the market. Transactions using the card went up from around $10 million a month in early 2023 to more than $500 million a month by the beginning of this year.

Under a contract with a state-owned Iraqi bank, the card has been used to distribute salaries to millions of pensioners and government employees, including militias. The Popular Mobilization Forces, an umbrella organization of militia groups, was put on the government payroll a decade ago when Islamic State fighters swept across large parts of northern and western Iraq in 2014. After its U.S.-trained army largely collapsed, the Baghdad government turned to private armed groups, mostly Iraqi Shiites, in an emergency move to fight along U.S. forces.

As part of the arbitrage scheme, militia commanders took possession of rank and file members’ cards, and also padded the rolls with nonexistent or no-show troops to obtain more cards, an Iraqi banker said.

Even though Islamic State was largely defeated in 2019, the Popular Mobilization Forces have grown steadily more powerful within government and financial sectors. More than 200,000 militia members were receiving salaries on Qi Card, a foothold that U.S. and Iraqi officials said the militias used to become major players in the illicit card activity. That spurred a request in recent days from Treasury to the Iraqi central bank to block Qi cards issued to militias.

Qi Card’s Iraqi parent company, International Smart Card, said it “no longer provides any services to the PMF.”

Bahaa Abdul Hadi, the company’s 55-year-old founder, said it has taken other steps to reassure Treasury and the Fed that no one who receives a Qi Card is under U.S. sanctions and that militia members hadn’t received Qi Cards that can be used outside Iraq. “The only service provided to PMF cardholders was the transfer of outbound salaries from their employer,” the company said.

U.S. and Iraqi officials said funds paid to the militias could easily be moved to other cards that do work outside of Iraq.

Data tracking Iraqi cross-border card use overall painted a clear picture of fraud, the officials said.

One out of every five transactions by foreign cardholders in U.A.E. in 2024 involved an Iraqi debit or cash card, even though only one out of every 250 travelers to the country was from Iraq, according to a person familiar with the matter.

Most of the Iraqi payments involved little-known businesses in foreign trade zones or high-end jewelers, instead of the hotels, restaurants and tourist attractions where foreigners who travel to Dubai and other U.A.E. cities typically spend money. More alarming was that vendors did almost all of their business only with Iraqi-issued cards, month after month.

Visa, Mastercard action
When a Mastercard Global Compliance Team conducted a virtual review in August 2023 of Yana Banking Services, a card provider based in Erbil, it found no evidence that customers were being screened to ensure they weren’t under U.S. sanctions, a requirement under its licensing agreement with Mastercard.

The review also found “ineffective suspicious activity monitoring and reporting” aimed at preventing fraud, as well as ineffective anti-money-laundering safeguards. “No customer risk rating is performed, and no risk ratings were reflected on eight cardholder and three merchant files tested during the review process,” according to Mastercard’s findings, which were reviewed by the Journal.

Yana was banned from issuing new Mastercard-branded cards until it corrected what the review described as “high priority” violations. The suspension was later lifted after the problems were addressed, according to a person familiar with the matter.

“The goal is to ensure they avoid further violations of Mastercard standards or regulatory requirements,” said Eisen, the Mastercard spokesman. “We reserve the right to revisit any allegation to ensure this compliance.”

Yana didn’t respond to requests for comment.

The enforcement accelerated this spring. In March, Mastercard blocked more than 100,000 Iraqi-issued cards and removed 4,000 merchants in U.A.E. from its payment network suspected of involvement in fraudulent Iraqi transactions. Half of the cards were issued by International Smart Card, U.S. and Iraqi officials said.

Information about Qi Card and International Smart Card that Mastercard received from government agencies “was compiled with existing information and actioned accordingly,” Eisen said.

In April, Visa sent alerts about potential fraud for 70,000 Iraqi cards and barred around 5,000 U.A.E. vendors, temporarily blocking their use.

Some of the cards were later reactivated after Mastercard and Visa concluded their charges were legitimate, according to a person familiar with the matter.

The companies and authorities have started blocking some of the 17 Iraqi card issuers, cutting the total by about half.

Along with the $300 million monthly cap on the country’s total cross-border transactions, the Central Bank of Iraq imposed a monthly $5,000 cap per cardholder. It also hired K2, a New York financial crimes advisory firm, to monitor card transactions and required every card issuer to shift to an Iraqi bank with a correspondent U.S. bank, officials said.

Treasury has taken sweeping action on its own, blacklisting three Iraqi card issuers suspected of ties to the militias. All three were Visa or Mastercard partners.

One of them, Al Saqi Electronic Payment Company, is affiliated with the Holy Shrine of Al Abbas, a golden-domed Shia mosque in Karbala, Iraq. Every year millions of pilgrims, many from Iran, visit the shrine. Al Saqi didn’t respond to requests for comment.

Visa has stopped processing Al Saqi cards on its payment network. The Iraqi company’s website, though, still features pictures of Visa cards, promising customers “all the advantages offered by Visa, including ease of use, global acceptance, and high-security standards.”

WSJ : Taser Boss Tops Ranking of Highest-Paid CEOs, With $165 Million. Here’s th

Taser Boss Tops Ranking of Highest-Paid CEOs, With $165 Million. Here’s the List.
Stock award propels Rick Smith past Apple’s Tim Cook and Blackstone’s Schwarzman to the top of WSJ’s annual ranking


Key Points
  • Axon Enterprise CEO Rick Smith topped CEO pay in 2024 with $165 million, surpassing leaders of larger firms.
  • Half of the analyzed CEOs made at least $17.1 million, up from $15.8 million the prior year, based on a MyLogIQ analysis.
  • Smith’s compensation largely comes from stock awards tied to market targets, part of a program open to all Axon employees.

Rick Smith, who co-founded and runs the maker of Taser stun guns, tops this year’s list of the highest-paid chief executives, with pay of $165 million.

The Axon Enterprise CEO’s AXON 2.75%increase; green up pointing triangle pay outstripped that of the leaders of much larger companies, including General Electric’s Larry Culp, Blackstone’s Steve Schwarzman and Apple’s AAPL 0.45%increase; green up pointing triangle Tim Cook. Smith was the only S&P 500 CEO to receive a pay package above $100 million in 2024.

Overall, CEO pay set another record. Half the chief executives in The Wall Street Journal’s annual analysis made $17.1 million or more last year, up from $15.8 million for the same executives a year earlier, the analysis of pay data from MyLogIQ found.

JPMorgan boss Jamie Dimon came in at No. 23 with $37.7 million, while No. 63 Mark Zuckerberg got $27 million from Meta last year, mostly for security services. Tesla’s Elon Musk, whose last pay package has become a legal battle, came in last at $0.


Like most CEOs, much of Smith’s compensation came from a stock award, not salary. His May 2024 award is tied to a series of market and operating targets over several years.

It isn’t the first big payday for Smith, who has run the company since 1993. In 2019, Axon reported pay of $246 million for him based on a similar stock award, when the company wasn’t in the S&P 500. Smith jointly ran the company with his brother Thomas for two decades, securing rights for the technology and developing the Taser into a common tool for police forces.

Smith said his 2024 award was granted under a new program open to all Axon employees, allowing them to convert some or all of their pay over seven years into restricted shares that could triple in number or be cut to zero depending how the company performs. It was narrowly approved by shareholders last year.

“One of the things I love about the design is I can make zero—I feel better about making a lot if I can also make zero,” Smith said in an interview. “For me it creates that startup kind of vibe.”

Axon’s share price has gained about 160% over the past year, pushing its market capitalization above $50 billion and helping to raise the value of the shares underlying Smith’s award to around $500 million at recent prices. Two of seven performance targets had been met by March, company filings said.

A handful of executives outside the S&P 500 also made more than $100 million last year, including Peter Gassner of cloud-computing company Veeva Systems, at $172.4 million, and Shopify’s Tobias Lütke, at $150 million. It marks the fewest CEOs making nine figures since 2016.

The Journal’s analysis used data from MyLogIQ, a provider of public-company data, and included CEOs on the job for at least a year at more than 400 S&P 500 companies reporting pay through mid-May for fiscal years ending after June 30, 2024.

FT : Pete Hegseth warns Chinese military action against Taiwan ‘could be imminen

Pete Hegseth warns Chinese military action against Taiwan ‘could be imminent’
Beijing says US defence secretary is trying to instigate confrontation and stir up the region

US defence secretary Pete Hegseth warned that a Chinese military attack on Taiwan “could be imminent” as he called on America’s allies in the Indo-Pacific to boost defence spending as a further deterrence to Beijing.

Speaking at the IISS Shangri-La Dialogue defence forum in Singapore on Saturday, Hegseth said China wanted to become a hegemonic power in Asia and was acting in a manner that should be an urgent “wake-up call”.

“Any attempt by Communist China to conquer Taiwan would result in devastating consequences for the Indo-Pacific and the world,” he said.

“There is no reason to sugarcoat it. The threat China poses is real, and it could be imminent. We hope not, but it certainly could be.”

US intelligence officials and military officers have said President Xi Jinping has told the Chinese military to develop the capability to invade Taiwan by 2027. But while they are increasingly worried about China’s rapid military rise, most officials stressed an attack was not imminent.

In his second trip to Asia as defence secretary, Hegseth said US partners in the region should follow the “newfound example” of Europe in pledging to boost defence spending, saying “time is of the essence”.

“It doesn’t make sense for countries in Europe to do that while key allies in Asia spend less on defence in the face of an even more formidable threat [from China], not to mention North Korea.”

Hegseth said no one should doubt the US commitment to its allies in the region and that the Indo-Pacific remained the “priority theatre” for the US,

While he accused Joe Biden of weakening the US, many of the policies he outlined appeared to be a continuation of measures introduced by the former president. Ely Ratner, the top Pentagon Asia official in the Biden administration, said apart from the rhetoric there was “near total continuity”.

Hegseth said the US did “not seek conflict” with China but would “not let our allies and partners be subordinated”. He noted that China was using its cyber capabilities to attack critical infrastructure in the US and beyond and was harassing its neighbours, including Taiwan, in the South China Sea.

“Xi has ordered his military to be ready to invade Taiwan by 2027,” he added. “The [People’s Liberation Army] is building the military needed to do it, training for it every day and rehearsing for the real deal.”

Hegseth said many countries were “tempted by the idea of seeking both economic co-operation with China and defence co-operation with the US”. But he warned that economic dependence on China “complicates our decision space during times of tension or conflict”.

When asked what role European militaries should play in the Indo-Pacific, Hegseth said a “big one”, before adding that Washington would prefer they focus their efforts on the Euro-Atlantic region.

He said there was “something to be said for the fact that China . . . does not appreciate the presence of other countries [in the region] on occasion”, and it could be “useful” if Beijing factored the presence of European militaries into its calculus.

But he stressed: “We would much prefer that the overwhelming balance of European investment be on that continent.”

Kaja Kallas, the top EU foreign policy official, reminded the forum that former Japanese prime minister Fumio Kishida had stressed that the Euro-Atlantic and Indo-Pacific theatres were connected and that countries in one region had a security stake in the other.

Kallas told the FT she had privately stressed to Hegseth that the two regions were “very much interrelated” from a security perspective.

“We are doing more for our own defence, but we need to be there for our partners [in Asia],” said Kallas, adding that EU interests in Asia ranged from maritime security to cyber security.

Kallas noted the economies of the EU, US and other countries that have concerns about China — Australia, Canada, India, Japan, South Korea, Mexico and New Zealand — totalled $60tn in scale, compared to $18tn for China. “That also becomes a military deterrent,” she said.

Kallas said the economic argument “resonated” with Hegseth. But she added that the trade wars launched by President Donald Trump were undermining efforts to counter China.

“They think that having these trade wars with everybody is making them stronger. I actually think that it’s making all the alliances and all the allies . . . weaker when you want to confront the economic power that China has,” Kallas said.

Kallas said she had asked Hegseth if the US was worried that its rhetoric — particularly over Taiwan — had the potential to spark a miscalculation in Beijing. He said the US did not see it that way and stressed that Washington was not seeking conflict with China, she said.

Zack Cooper, an Asia defence expert at the American Enterprise Institute think-tank, said Hegseth “hedged” his response on the European role in Asia.

“He seemed to suggest that a European presence in Asia could be helpful for deterrence of China, but also made clear that Europe should still prioritise operations in its own region,” Cooper said.

China hit back against Hegseth later on Saturday, accusing the US of trying to “provoke, split, instigate confrontation and stir up the region”.

Rear Admiral Hu Gangfeng, vice-president of China’s National Defense University, called his comments “fabrications reversing black and white” and said he was “a thief crying ‘catch the thief’”.

FT : Anglo American’s $11bn platinum spin-off makes London market debut

Anglo American’s $11bn platinum spin-off makes London market debut
Demerger marks significant milestone for corporate overhaul and refocus on copper and iron ore


The $11bn platinum business being spun out of Anglo American will debut a secondary listing in London on Monday, in a significant milestone for the restructuring of the FTSE 100 mining company.

Valterra, formerly known as Anglo American Platinum, is the world’s most valuable platinum producer and has benefited from a recent upturn in prices for the metal used in catalytic converters.

The spin-off marks the biggest step yet by Anglo American as it implements an overhaul developed last year while it fought off a hostile £39bn offer by rival miner BHP.

The slimmed down Anglo American could be a more attractive takeover target once the demerger is complete, according to analysts and bankers.

The company is also disposing of its nickel, coal and diamonds businesses to focus on copper and iron ore.

Valterra has its primary listing in Johannesburg. Its London-listed shares will be distributed to Anglo American shareholders — differing from a traditional initial public offering in which shares are priced at an attractive level to engineer a first day rise.

Because Anglo American is a member of the FTSE 100 and Valterra is not, the passive index tracker funds that receive Valterra shares are expected to sell them, potentially leading to a rocky start.

“The risk of volatility is high, given the quantum of trading that has to be done in the first couple of days,” said Ben Davis, analyst at RBC. He calculated that about 8 per cent of Valterra’s stock, or 21mn shares, would be distributed to passive index funds that are likely to sell their holdings.

Anglo American has taken steps to minimise disruption during the transaction, including by reducing its Valterra holding from 78.6 per cent to 66.7 per cent over the past year. It will retain just under 20 per cent of the platinum company.

The short-term outlook for platinum prices has improved because of the slower adoption of electric vehicles and the sustained use of internal combustion engines that often use platinum and palladium in their catalytic converters.

Platinum prices touched a two-year high last week, after rising 20 per cent since the start of the year.

Valterra chief executive Craig Miller said this month that the new company would be “more agile and more decisive” as a standalone business.

“Instead of competing for capital with other commodities in a diversified company, we get to invest that capital back into the quality assets that we have,” he said.

Anglo American is reorganising its shares with an approximately 12 per cent consolidation designed to keep the share price at roughly the same level as before the split.

FT : BYD plans EV assault on Japan’s $18bn Mr Bean minicar sector

BYD plans EV assault on Japan’s $18bn Mr Bean minicar sector
‘Kei’ car launch next year by China’s leading electric vehicle maker seen as ‘black ship’ moment for country

China’s BYD is planning an assault on one of the quirkiest parts of Japan’s car market, highlighting its bold global ambitions by challenging the likes of Toyota in its own back yard.

The leading electric vehicle maker, whose cars overtook Tesla in European sales last month, plans to release a low-cost battery-powered kei car in Japan next year. The unique class of boxy minicars was worth $18bn in sales there last year and makes up about 40 per cent of the world’s fourth-largest car market.

BYD aims to loosen the decades-long dominance of the segment by Japanese carmakers including Toyota, Honda, and Nissan.

Atsuki Tofukuji, president of BYD Auto Japan, said it saw an opening for low-cost miniature EVs of a similar size to “Mr Bean’s Austin Mini Cooper”, as high taxes push up conventional fuel prices and petrol stations rapidly disappear in depopulating rural Japan.

“Kei cars fit the Japanese way of life extremely well,” he said in an interview with the Financial Times. “If customers properly understand the economic rationale, they are sufficiently willing to buy kei cars that aren’t made by the existing major brands.”

Chinese carmakers have been snatching sales away from Japanese carmakers in their traditional stronghold of south-east Asia, but the planned kei car is among BYD’s first to be designed for an overseas market without being sold first in China. Key details, such as driving range, price and the vehicle’s appearance, have yet to be unveiled.

Local bloggers have compared the latest challenge on home soil to the arrival of Commodore Matthew Perry’s black ships in the 1850s, which made clear the power and technology imbalance between Japan and the west.

However, analysts cautioned BYD would face an uphill battle to attract Japanese customers, who are fiercely loyal to homegrown producers, distrustful of Chinese brands and demand top-notch service from dealers. EV sales in Japan have also been abysmal at less than 60,000 units or just over 1 per cent of the market in 2024, according to official data.

The vehicle launch, scheduled for the second half of 2026, is set to come at a crucial time for Japan’s car sector. Profits could be crushed by US President Donald Trump’s tariffs and Washington is negotiating to reduce “non-tariff” barriers for foreign groups in Japan’s car market.

Foreign brands make up less than 6 per cent of the Japanese car market, with Tofukuji echoing Trump’s gripes about Japan’s onerous vehicle testing regime.

BYD entered the Japanese market in 2013 and offers three models; however, sales have been sluggish, with only 2,221 units sold in the year to March.

Executives from Shenzhen visited Japan two years ago and realised minicars were more popular than they had thought, prompting the push to widen its product offerings.

The carmaker plans to raise its number of stores in Japan to 100 by the end of the year, but many of the current 61 outlets face “tough” operating conditions, Tofukuji said. With the new EV minicar, he is confident of reaching a break-even point of 150 units per store — which would equate to 15,000 annual sales in total.

BYD’s new car will be cheaper than the compact Dolphin that sells for ¥2.9mn ($20,700). Nissan’s Sakura EV minicar, which has a driving range of 180 kilometres on a single charge, sells for ¥2.6mn.

Japan may not be the only target for BYD’s mini EV, considering how the masters of “supercompact” cars are themselves eyeing potential markets in India, Europe and other regions.

“Kei EVs are likely to gain more opportunities to thrive globally,” said Toshihiro Suzuki, chief executive of Suzuki, a pioneer of the cheap minicar, when asked about the BYD threat.

While suited to Japan’s tight roads and parking spaces, the kei cars’ popularity has been driven by the tax and insurance breaks given, if they meet certain conditions. They include not exceeding maximum dimensions, an engine smaller than 660cc, and a power output of less than 47 kilowatts.

Developing a specialised engine for the Japanese market has historically been too onerous for many foreign car manufacturers; however, Tofukuji expects to use cheap, readily available batteries and motors in its minicar.

“One clear advantage unique to EVs is the ease with which their powertrains can be designed and manufactured,” he said.

FT : Is the ECB certain to cut interest rates on Thursday?

Is the ECB certain to cut interest rates on Thursday?
Market Questions is the FT’s guide to the week ahead

When the 26 members of the European Central Bank’s governing council meet on June 5 in Frankfurt, anything but another quarter-point cut in its key deposit rate would be a huge surprise.

Financial markets are pricing in a 97.5 per cent probability of such a move, according to LSEG data, which would lower borrowing costs to 2 per cent. This is the lowest in more than two years and half the level in June 2024, when the ECB started to ease monetary conditions.

That followed an unprecedented 15-month period of rapid rises to get inflation back under control. In the wake of supply chain disruptions and Russia’s full-scale invasion of Ukraine, inflation had shot up to close to 11 per cent in late 2022, more than five times above the ECB’s medium-term inflation target of 2 per cent.

Preliminary inflation data for May, which will be released on Tuesday, is expected to show annual inflation has hit the 2 per cent target, according to a Reuters poll. A stronger euro versus the dollar combined with a fall in energy prices and a potential rise of imports from China in the wake of the global trade war could all “lead to lower inflation in the euro area”, said ECB chief economist Philip Lane in a recent interview with the Frankfurter Allgemeine Zeitung.

New forecasts on GDP and inflation, which the ECB will also publish on Thursday, could indicate problems ahead. Still, ECB president Christine Lagarde is unlikely to give any meaningful guidance about the future rate path. Frankfurt’s rate setters have maintained a wait-and-see attitude, stressing that they face an extreme level of uncertainty and prefer not to commit to any path for future rate decisions. Olaf Storbeck

How is the US labour market faring during the trade war?
The strength of the American job market will be scrutinised on Friday when the Bureau of Labor Statistics releases its latest batch of non-farm payroll data.

Economists polled by Reuters expect to see the US adding 130,000 jobs in May, down from 177,000 in April and 272,000 in May 2024.

The US is adding fewer jobs compared with this time last year as Donald Trump ally Elon Musk has led a push to downsize the federal government. Outside of Washington, many companies have slowed or frozen hiring for new roles as President Donald Trump’s trade war has put markets on a rollercoaster.

Next week’s data follows a rise in jobless claims in a late May report that suggested “some loosening in labour market conditions”, said Nancy Vanden Houten, lead US economist at Oxford Economics. She also expects the waves of federal lay-offs that started in February to accelerate in the coming months.

“Continued claims continue to creep higher, confirming that workers who lose their jobs are finding it tougher to find new employment,” Vanden Houten said.

Federal Reserve staff had forecast in the latest Federal Open Market Committee minutes that US jobless numbers would rise and remain higher than the natural rate of unemployment, given the heightened possibility of an economic recession, Goldman Sachs analysts noted. Will Schmitt

Will the BoC cut rates this Wednesday?
The Bank of Canada’s interest rate decision on June 4 should shed more light on the effect Trump’s trade war has had on the bank’s expectations for economic growth.

In April, in the midst of high market volatility, the BoC kept overnight interest rates unchanged at a target of 2.75 per cent. Given the trade tensions with the US, Andrew Hencic, director of TD Economics, said two cuts of 25 basis points each could help support Canada’s economy without risking more price inflation.

The current rate could come down to 2.25 per cent by the end of the year, he said. “We think that enough slack has accumulated in the economy that there’s space for the central bank to cut its lending rate a little bit more without too much inflationary pressure coming through,” Hencic added.

However, hopes for a rate cut at the BoC’s June meeting were hit by stronger than expected April consumer price index data in mid-May. “There was a dramatic shift in market pricing — from a 70 per cent chance of a cut to 30 per cent — after the last CPI report,” said Jason Daw, the head of interest rate strategy at RBC in Toronto.

Markets are now pricing in a 22 per cent chance of a cut, according to LSEG data.

Tariffs will have a trivial impact on Canadian inflation in Daw’s view. But given that CPI has recently been above expectations, the central bank will struggle to defend rate reductions too soon.

While the labour market has been “squishy for two months . . . the bar to restarting the cutting cycle is high.” The direction of economic growth “should be down but the magnitude is tricky”, said Daw.