TheChek News Flow

- Websites of online betting companies will remain available for bettors to claim their remaining funds until Oct 5th

- Govt will not return license money to betting firms

**Context: Brazil licensed online sports betting and casino games in January 2025, making a full ban a sharp reversal for operators that invested in the market. Lula had already advocated a ban, so the direction was signaled; the consequential change is the timetable for shutting down licensed operations and advertising. The September 25 measure reportedly stopped new customer deposits immediately and set October 6 for betting sites to cease operations.

Related: EWZ FLTR.UK USD/BRL PWL.IE.OLD DKNG FLUT

Good morning,

Attached is a short note on the shift from closed to open-weight AI models.

The viral "80/20 to 20/80 in 12 weeks" claim is based on one record day at Vercel. On a monthly basis, open models went from about 36% to 56% of tokens between July and August. OpenRouter shows the same trend.

Three takeaways:

Happy to discuss.

Best regards,

Laurent

US stock markets remained near all-time highs this week despite higher oil prices and surging interest rates. The exploding popularity of Meta’s personal AI agent Muse, and the promise it could bring AI to the masses through Meta’s billions of monthly and daily active users propelled AI sentiment. Meta’s narrative largely overshadowed continued signs of cracks in the financing cogs for key data center projects and rising corporate AI bond spreads. Breadth narrowed, with a small subset of technology names driving the overall performance of the topline indices. For the week, the S&P added 1.2%, the DJIA rose 0.3%, and the Nasdaq gained 2.1%.

US Treasury yields broke out to new cycle highs climbing above 5% in the benchmark 10-year yield. Investors seemed take the higher rates in stride, perhaps because the driver appeared to be signs of a robust US economy rather than dislocation in the bond markets. S&P PMI’s revealed the strongest growth surveyed in 5-years accompanied by stubbornly high inflation levels tracking back to 2022. Aug preliminary durable goods data topped expectations, in particular, the closely watched proxy for business spending capital goods orders surged. Fed commentary was decidedly hawkish, setting expectations that policy markers very well could hike again in October and perhaps two more times into 2027. Oil prices remained tightly correlated to interest rates climbing this week amid another barrage of headlines regarding the Mid-East and potential measures Western governments could take to offset rising energy costs. Iran and US officials met on the sidelines of the UN general assembly in New York but no new breakthrough appeared imminent despite discussions on reopening the Strait.

Chinese President Xi arrived in Washington for the second summit this year with President Trump. The two sides agreed to extend the previously instituted trade truce by two months to January 10th, with US officials referring to it as a “compliance” period. Agreements were said to be reached on further subsets of goods for trade, but as usual details were sparse with additional information promised next week.

Outside of the news made by Meta’s new shopping AI agent, a few other AI-sector stories were highlighted in the week’s corporate news. Akamai shares were lifted on a new circular investment deal in which it agreed to support Anthropic’s CPU workloads while offering the client company warrants that could convert into a 5% common equity stake in Akamai. Meanwhile, Oracle sent some shivers through the sector as it sent a force majeure notice over its New Mexico data center, trying to put off payments on the project if it is delayed. Laboratory services companies names were hit on Tuesday after CMS announced it had found significant overcharges for their services to Medicare and would seek payment curtailments that could trim costs for Americans by $1B annually. On the inflationary side of the ledger, Celanese announced its fourth straight price increase this year for key industrial chemicals. McDonalds shares hit fresh 52-week lows as its investor day brought to light an $8.5B franchisee support plan and management warned that elevated inflation would keep customer traffic flat. And Tesla stock was dinged on Friday based on a report that its plans to ramp up Optimus production was hitting a snag due to supplier constraints related to the complex hand assemblies for the humanoid robots.

(US) CMS Announces New Preliminary Medicare Payment Rates for Laboratory Services, Saving Taxpayers an Estimated $1B Annually; Determined that Medicare has been paying 16% more than private payors

(CA) Bank of Canada (BOC) Gov Macklem: We don't want to raise rates and restrain growth if inflationary pressures are contained; If new US tariffs remain in place, growth could be roughly halved in the fourth quarter, to below 1%

CE Raises again acetyl product prices in Americas and EMEA, effective immediately [**TTN Note: Celanese had announced broad Acetyl price actions in February, March and May]

BABA *CEO Wu: Aims to make global data center capacity operated by Alibaba Cloud >20GW by 2032; notes the launch of the Zhenwu V900 chip in Q1 2027 - comments from the Alibaba Apsara Conference

ODFL Raises tariff rates 4.9% under the existing ODFL 559, 670, and 550 tariffs, effective from Oct 5th; Aims to offset continued cost pressures related to real estate, equipment, technology, and competitive wages and benefits

(US) Pres Trump: Have been talking with Iran, even today officials talked for three hours; Discussed energy, immigration and Rolls Royce with UK PM Burhman

(SA) SAUDI ARABIA SAID TO BE RESTARTING EAST-WEST OIL PIPELINE; PREPARES TO RESUME CRUDE OIL EXPORTS FROM YANBU PORT LATER TODAY - CGTN'S X POST

(US) Fed's Collins (non-voter): Now see an increased likelihood of future scenarios in which inflation remains notably above 2%; Supported last week's rate hike, will help return inflation to target

(EU) EURO ZONE SEPT ADVANCE CONSUMER CONFIDENCE: -16.5 V -16.0E

(US) SEPT RICHMOND FED MANUFACTURING INDEX: -2 V 2E; Volume of new orders: -6

(US) TREASURY $69B 2-YEAR NOTE AUCTION DRAWS 4.787% V 4.204% PRIOR; BID-TO-COVER: 2.63X V 2.60X PRIOR AND 2.58 OVER THE LAST 12 AUCTIONS

DEEPSEEK.IPO China probes DeepSeek and Moonshot over data breaches to Claude - The Information

IONQ Demonstrates real-time quantum error correction decoding on a single CPU; Says breakthrough removes a major bottleneck in fault-tolerant quantum computing, enabling real-time error correction across millions of operations without slowing down execution time

(IR) Iran Senior official: Tehran is reviewing the US response to its proposal to end hostilities; There are still many differences between Iran and the US but diplomacy continues

(US) White House: Not considering diesel export ban, any report is "fake news" [denies earlier Politico report of a 90-day diesel ban being planned]

(US) Reportedly White House making plans for a 90-day diesel export ban, despite split within the Administration and the energy industry - Politico

(SA) TankerTrackers.com: Our month-on-month sightings show that Saudi Arabia's crude oil loadings along at its east coast are up sevenfold

(PL) Polish Army Official: Russian military helicopter made brief incursion into polish airspace from Kaliningrad; Airspace incursion said to be only for 42 seconds

(US) TREASURY $70B 5-YEAR NOTE AUCTION DRAWS 5.033% V 4.393% PRIOR, BTC 2.21 V 2.37 PRIOR

(US) SEPT PRELIMINARY S&P MANUFACTURING PMI: 57.0 V 53.7E (highest since May 2022 and on track for 13th straight expansion); Overall rate of inflation hitting the highest since October 2022

(US) DOE CRUDE: +3.0M V -0.5ME; GASOLINE: -1.7M V 0ME; DISTILLATE: -0.4M V -0.5ME

(ZA) SOUTH AFRICA CENTRAL BANK (SARB) RAISES INTEREST RATE BY 25BPS TO 7.25%; AS EXPECTED

META Insurify blocks Meta's Muse AI shopping agent from the insurance marketplace, stating that Muse strips the context of insurance carrier quotes for coverage – press

MCD Targets 2030 operating margin in low-to-mid 50% range and +1.5pp chicken and beverage share gains; Targets nearly 2.5% contribution from unit expansion to Systemwide sales growth in 2027, moderating to about 2% by 2030 - Investor Day

MCD 09:30 ET investor_meeting: Expects Q3 SSS slightly negative, with comps turning positive in September

GM 03:00ET JPMorgan US All Stars Conf: GM remains “very much on track with our higher range” as it approaches the end of Q3; There is “no trigger for stopping repurchasing” and remains committed to buybacks while its free-cash-flow yield stays attractive and the stock trades at a low multiple.

ANTHROPIC.IPO Launches life sciences research lab; Claude AI identifies previously uncharacterized CRISPR-like enzyme system in bacteriophages

(US) Pres Trump: Encouraged by more balanced trading relationship with China; Will be discussing issues in security, AI and technology - White House comments

(CN) China Pres Xi: We must avoid conflicts and increase points of cooperation; We have a responsibility to manage AI - statement from White House

(CN) Chinese President Xi: We have competition with the US on AI, though we can also cooperate

(IR) US and Iran said to discuss phased deal to reopen Strait and end blockade – press

(IR) Iran Semi-Official Fars: Conflict with U.S could expand further; Next phase could reach Indian Ocean - citing Supreme Leader Advisor Safavi

(RU) Reportedly US intelligence has warned several European govts that Russia may be preparing a drone operation against Spain, France or Italy - Spanish press

(FR) French President Macron: Maybe we could think about releasing strategic oil reserves in a coordinated way; CIA has not warned France about Russian threats

(US) Fed Pres Paulson (voter): September inflation drove rate hike; May need to raise rates again to address inflation; Inflation remains stubbornly elevated and some modest further tightening may be warranted

(US) Treasury debt buyback targets coupons maturing 2037-2046; Receives $10.5B of offers for buyback, accepts $4.1B (v maximum of $6B for the operation; falls short of maximum for 2nd week in a row)

(US) TREASURY $44B 7-YEAR NOTE AUCTION DRAWS 5.085% V 4.512% PRIOR; BID-TO-COVER RATIO: 2.42X V 2.50X PRIOR AND 2.48X OVER THE LAST 12 AUCTIONS

(US) INITIAL JOBLESS CLAIMS: 197K V 201KE; CONTINUING CLAIMS: 1.719M V 1.74ME

(US) WEEKLY EIA NATURAL GAS INVENTORIES: +53 BCF VS. +52 BCF TO +54 BCF INDICATED RANGE

ARAMCO.SA CEO: Any interruption can be fixed within days due to redundant and resilient infrastructure

ORCL Sends force majeure notice over New Mexico data center and trying to put off payments on project if it is delayed - press

AKAM Secures $11.6B, 7-year Anthropic cloud commitment; Potential expansion of up to $9B; Issues warrants for 7.7M shares to Anthropic

SNX Reports Q3 $5.68 adj v $4.64e, Rev $21.6B v $18.8Be; Guides Q4 very strong

RPI.UK CEO: Memory prices are at or near their peak, easing pressure that has forced the low-cost computer maker to raise prices as component costs surged - post earnings comments

HMB.SE Reports Q3 (SEK) Op 6.04B v 5.03Be, Rev 57.2B v 56.8Be; Sees Sept sales +1% local FX; Op includes the positive one-time effect related to tariffs

(IR) Reportedly the US and Iran talks have entered 'technical stage' - Al-Jazeera reporter

(US) Fed's Williams (moderate, voter): Can't ignore persistent supply shocks; Tariffs generally don't produce sustained inflation

(US) Fed said to be working on a plan to raise the asset thresholds that trigger stricter oversight of big banks - press

(US) SEPT FINAL UNIVERSITY OF MICHIGAN CONFIDENCE: 48.1 V 47.5E

ORCL Traders circulating WSJ article from this morning saying Oracle’s lease for the New Mexico facility contains “hell-or-high-water” terms, meaning the agreement cannot be terminated and Oracle remains obligated to make rent payments regardless of whether power has been secured to operate the data centers

TSLA Optimus reportedly hits production snags around its intricate robot hand assemblies due to supplier constraints - The Information

The flurry of fundraising discussions reflects the boom times for startups that provide access to frontier models and help them customize open-source models.

These startups have seen usage grow as developers take advantage of advances in open-source AI, which can often be cheaper than those from OpenAI and Anthropic. Rather than running open-source models on their own chips, which can be difficult to set up and expensive due to a shortage of such chips, many developers prefer to access the models through an easy-to-use application programming interface, such as the ones offered by Fireworks and Fal.

However, such companies could face pressure as developers of closed-source models like OpenAI and Anthropic become more aggressive with cutting prices. Amjad Masad, CEO of coding startup Replit, said at The Information’s AI Agenda Live conference Wednesday that his company is likely using less open-source AI these days than at the beginning of the year, due to how cheap some OpenAI models have gotten.

What’s more, the inference providers are at risk of a margin squeeze as the cost of the compute they rent from cloud providers spikes. These inference companies have historically had gross margins of around 50%, below the level of best-in-class software providers, which usually see 70%-plus gross margins.

Inference providers argue that they will be able to improve their margins through optimizing the ways the models run on chips. Together AI, which provides inference as well as rents out AI servers, has also been buying chip servers and renting them out from its own data centers.

This week delivered a bountiful supply of big startup funding rounds, led by two $400 million financings for cybersecurity unicorns Island and Cyera. Rounding out the week were large financings for startups across hot sectors, including foundational AI, drug discovery, neurotech, and even rainmaking.

1. Island, $400M, cybersecurity: Island, a developer of tools for secure enterprise digital operations, raised $400 million in Series F financing. Evolution Equity Partners led the round, which set a $6.4 billion valuation for the Dallas-based company, more than double its 2024 valuation.

2. Cyera, $400M, cybersecurity: Cyera, a provider of enterprise data security tools that govern both humans and AI agents, picked up $400 million in Series G extension funding led by Evolution Equity Partners and backed by Goldman Sachs Growth Equity. The round brings total funding for New York-based Cyera to $2.7 billion, per Crunchbase data.

3. Snorkel AI, $350M, foundational AI: San Francisco-based Snorkel AI, provider of tools for frontier labs and AI teams to develop specialized training data and environments, secured $350 million in Series E funding. Insight Partners and S32 led the round, valuing the 7-year-old company at $3.2 billion, and it now has more than $375 million in annual recurring revenue.

4. Enveda, $311M, biotech: Enveda, an AI-enabled drug discovery startup, closed on $311 million in Series E financing led by Catalio Capital Management and joined by a long list of new and existing investors. The round brings the Boulder, Colorado-based company’s total capital raised since inception to more than $845 million.

5. Precision Neuroscience, $250M, neurotech: New York-based Precision Neuroscience, a startup focused on brain-computer interface technology, secured $250 million in Series D funding with Pershing Square and the Ackman Oxman Institute as lead investors.

6. Hubble Network, $200M, wireless communications: Hubble Network, operator of a satellite network that extends connectivity to Bluetooth devices, pulled in $200 million in Series C funding. Smith Point Capital led the financing, which set a $1.6 billion valuation for the Seattle-based company.

7. Rightway, $155M, pharmacy benefits: New York-based Rightway, a provider of pharmacy benefits and care navigation services, raised $155 million in Series E funding led by Francisco Partners. The startup will use the financing in part to expand its AI capabilities.

8. (tied) Rainmaker, $100M, cloud seeding: El Segundo, California-based Rainmaker, a startup focused on atmospheric research and producing new freshwater through cloud seeding, picked up $100 million in Series B funding. The round includes investments from Noa, Upfront Ventures, DCVC, Lowercarbon Capital and Dream Ventures.

8. (tied) Numeral, $100M, tax compliance: San Francisco-based Numeral, an AI-powered sales tax compliance platform, closed on a $100 million Series C round led by Insight Partners.

8. (tied) Micro1, $100M, AI data: San Francisco-based Micro1, a provider of AI training data to major AI labs, has reportedly raised a fresh funding round of more than $100 million at a valuation of $4 billion, according to a Forbes article citing people familiar with the deal.

One of Anthropic’s earliest investors, Jaan Tallinn dances hip-hop and warns about ‘racing to build a technology that could end humanity’

JAAN TALLINN spent this past week in New York at the United Nations General Assembly, his latest stop in a year of long-haul trips to tell entrepreneurs, investors, policymakers and anyone else who will listen: AI could end humanity.

One of Anthropic’s earliest investors, Tallinn stands to make billions in the coming months from the artificial-intelligence company’s expected initial public offering. Concerns about AI motivated him to invest.

On the February trip from an AI summit in New Delhi to an ethical AI conference in Paris, Tallinn chartered a jet for a group that included AI researchers Stuart Russell and Yoshua Bengio and a classical pianist named Serene. They debated machine consciousness at 40,000 feet over flutes of champagne.

For over a decade Tallinn has been making the case for AI safety that spilled into public view in recent weeks when Anthropic researcher Jacob Coxon resigned and warned that AI could spin out of control.

“Unfortunately, I believe we are not taking this threat seriously enough and that we are racing to build a technology that could end humanity,” Tallinn said in a statement. “If more people demand the right to understand the risk and speak up about the risks of recklessly developing this technology, then we and our children will all stand a better chance of surviving.”

Tallinn has many fears: the race between AI labs, the U.S. rivalry with China, AI’s growing ability to improve itself. He has imagined apocalyptic scenarios like AI data centers snapping up land once used for agriculture and causing mass-starvation or AI engineers altering the earth’s atmosphere, making it inhospitable to humans.

Tallinn’s view, according to friends and colleagues, is that if he didn’t invest in Anthropic, an investor unconcerned with safety would have taken his place. He believes he can have the most positive impact by investing in AI companies, and using his returns to invest in nonprofits that support AI safety.

The AI-safety community is divided over whether the best way to encourage safe AI development is to work at or invest in the companies developing the technology, or to support independent safety research without fueling the AI race.

“All good, talented engineers who are mindful of that risk basically have a decision to make,” said Rauno Miljand, the managing partner at Tallinn’s investment firm, Metaplanet: “Run to the shelter and try to spend as much time with loved ones, or to try to impact the process and steer the probabilities that humanity will survive.”

TALLINN, 54, was born in Estonia—the small Baltic country with a tech hub that punches above its weight—and raised behind the Iron Curtain, an upbringing that encouraged his belief in entrepreneurship, free expression and information sharing. His parents were an architect and a film director. A self-described super nerd, he first got access to a computer at age 14.

After earning a theoretical physics degree, he helped build the file-sharing application Kazaa, which introduced music piracy to many, followed by Skype, in the early 2000s, which Microsoft later bought for $8.5 billion.

Tallinn was searching for his next project in 2008 when he stumbled onto the work of AI researcher Eliezer Yudkowsky, a leader of the rationalist community, an intellectual movement known for being concerned about the risks of AI. Yudkowsky is famous for his prolific writing on AI alignment; his 660,000 word fan fiction, “Harry Potter and the Methods of Rationality;” and a recent book “If Anyone Builds It, Everyone Dies.”

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Eliezer Yudkowsky at an AI protest outside OpenAI headquarters.

Eliezer Yudkowsky during a San Francisco protest against AI. Jason Henry/Bloomberg News

After debating with Yudkowsky, Tallinn was fully convinced of AI’s catastrophic potential. Tallinn became a major donor to AI-safety organizations, including Yudkowsky’s Machine Intelligence Research Institute, as well as effective altruist groups such as the Centre for Effective Altruism. Effective altruism is a philosophy focused on doing good in the world, including through charitable giving, and preventing AI from doing harm.

Ranked Estonia’s wealthiest person by local media, with an estimated $12 billion fortune, he’s funded AI safety initiatives with about $170 million, according to a list he published of his donations. He also co-founded the Cambridge Centre for the Study of Existential Risk and the Future of Life Institute.

In 2011, Tallinn connected with Holden Karnofsky, who co-founded the charity evaluator GiveWell and Dario Amodei, who was working with the organization, to discuss AI risks. During a phone call with the two future Anthropic leaders that same year, Tallinn made a bleak prediction he’s become known for, according to a transcript published by Coefficient Giving, which grew out of GiveWell.

“I estimate the probability of us dying from an AGI disaster in double digits,” he said, according to the transcript. “To me it’s as though we are trying to defuse a bomb.”

Amodei was less certain: “The way I think about it, there may or may not be a bomb,” he responded. “Maybe the actions we associate with defusing the bomb are the ones most likely to set off the bomb.”

Although they disagreed, Amodei and Tallinn stayed in touch.

Tallinn kept investing. He was an early backer of the AI lab DeepMind and served on its board before it was acquired by Google in 2014.

“In the case of DeepMind, the founders really didn’t want to listen to him and didn’t,” said Sebastian Mallaby, author of the book on DeepMind, “The Infinity Machine.” “He didn’t succeed in having any influence.”

That said, DeepMind’s success earned Tallinn clout. Over time, the scope of Metaplanet’s investments expanded and now include SpaceXAI, the Boring Company and smart ring company Oura, which is also planning an IPO.

He cemented a reputation among friends and fellow investors as someone who would voice his concerns often and openly, including with those who didn’t share them.

People who know Tallinn describe him as surprisingly upbeat, despite his deep fears of an AI apocalypse. He takes solace in movies—the Richard Linklater romance “Before Sunset” is among his favorites—hip-hop dancing and learning Japanese. He trains regularly with a dance instructor and practices freestyle dancing, from San Francisco to his favorite city, Tokyo.

“He literally goes dancing, sleeps for four or five hours, comes in and gives a talk at [charitable organization] The Elders, goes home, takes a nap and then does some meetings over dinner,” said Sean Ó hÉigeartaigh, a Cambridge University AI researcher and friend. “If this stuff wasn’t going on, he would spend all of his time dancing and coding.”

IN 2021, shortly after Amodei and others exited OpenAI in part over safety concerns and started a new company called Anthropic, Tallinn agreed to lead a $124 million Series A investment. The round also included Facebook co-founder Dustin Moskovitz, Jane Street’s James McClave, the Center for Emerging Risk Research and former Google CEO Eric Schmidt. It valued the young startup at $461 million, according to data firm PitchBook.

Anthropic CEO Dario Amodei speaking virtually to the UN General Assembly Security Council during an AI briefing.

Dario Amodei speaks virtually during a Security Council meeting regarding AI during the United Nations General Assembly this month. Sarah Yenesel/EPA/Shutterstock

Absent from the group: traditional venture capitalists. Much of the venture capital establishment didn’t put money into Anthropic because they viewed it as a David to OpenAI’s Goliath.

Tallinn backed Anthropic in hopes his perspective would be heard in rooms where dangerous technology was being developed, he has said in interviews. Though influencing Anthropic’s leaders also proved difficult.

As it grew larger, individual stakeholders had “less and less voice,” Tallinn said in an episode of the Manifold podcast this year.

Miljand, the Metaplanet managing partner, has been trying to figure out how to use the proceeds the firm anticipates from an Anthropic IPO that could top $2 trillion in support of humanity, he said.

And if Anthropic doesn’t succeed after all, Miljand said he and Tallinn will still have reason to celebrate.

“If it turns out that Anthropic fails and goes to zero, then that’s a good thing because then we probably didn’t reach ASI and humanity just bought itself additional years,” said Miljand, referring to artificial superintelligence, or AI more capable than humans.

“It’s kind of a win-win,” he said.

The president is skeptical that Tehran will meet his demands

President Trump has rejected Iran’s proposal for a seven-day ceasefire and has told aides he expects to resume bombing Iran after the November midterms, U.S. officials said.

Tehran’s proposal would have reopened the Strait of Hormuz and resumed nuclear talks in return for the U.S. lifting its blockade of Iranian ports, which is causing deep damage to the country’s economy. Trump says openly that Tehran is begging for a deal after the midterms that dismantles its nuclear program.

But privately Trump is skeptical Iran would meet his demands and has told his staff that he sees a renewed bombing campaign as likely, the officials said.

Trump’s current position indicates the conflict’s stage—a liminal space between war and peace—is likely to tilt back toward hostilities. But the president, who has declared victory since the earliest days of the seven-month fight, alternates between pursuing diplomacy, ordering airstrikes and tightening sanctions around Iran. His views today could shift as the war drags over the coming weeks, officials said, and could be affected by the results of the midterms.

The level of strikes Trump is contemplating couldn’t be determined. He is reluctant to resume major combat operations, the officials said, partly because the U.S. wants to reserve dwindling munitions for other contingencies. But Trump has also announced massive attacks to push through diplomatic deadlocks in U.S.-Iran negotiations, sometimes following through but always stepping back from his most audacious threats, including wiping out the entirety of Iranian civilization.

Trump told the United Nations this week politics don’t enter his mind when aiming to pry nuclear fuel from Iran.

“The Republican Party is running, and I’ll be helping them, but I am not running. I gave absolutely no credence and will not give credence through the election when it comes to Iran,” he told world leaders during the annual General Assembly in New York. “The only thing that does is that Iran will never have a nuclear weapon.”

Trump has also told Republicans to pretend he is on the ballot when they head to the polls.

A U.S. official said Washington and Tehran are still negotiating through mediators, including on the nuclear issue. An American-led effort to ensure oil tankers sail through the Strait of Hormuz despite Iranian threats has lessened the urgency for an agreement, the official said.

Qatar and other regional mediators have been working around the U.N. General Assembly to reinvigorate talks between Iran and the U.S. In a meeting in Qatar Sunday, Iran broached the idea of a seven-day pause in fighting that could pave the way to end Iran’s attacks on shipping in exchange for the U.S. lifting its blockade, people familiar with the matter said.

The seven-day proposal entails that the U.S. should lift its naval blockade, unfreeze some Iranian assets, lift sanctions on Iranian oil exports and, in exchange, Iran will open the Strait of Hormuz and start negotiations on its nuclear program.

The U.S. has told Iran and the mediators that Trump has no intention of lifting the maritime embargo, officials familiar with the matter said. The U.S. believes economic pressure will eventually force Tehran to sign an agreement with terms that are favorable to Washington and the Arab states along the Persian Gulf.

Arab mediators said Iranian diplomats have presented a number of proposals to end the war and acknowledged the deepening economic crisis in their country. But the Islamic Revolutionary Guard Corps, the powerful paramilitary and economic force that has essentially run Iran since the war began in February, has said that it won’t entertain new formulas for an agreement and that it is prepared for a long war.

The Revolutionary Guard wants to return to the terms closer to the preliminary deal Trump struck with Iran in June. That agreement promised to provide relief from sanctions on oil sales, grant access to Iran’s frozen assets and acknowledge a role for Tehran administering the Strait of Hormuz in exchange for opening the waterway.

A U.S. Arm-Twisting Campaign Is Cutting Iran Off From the Rest of the World

A former banker now with Treasury Department made a secretive trip, warning countries to end flights and cut off banks

A top U.S. Treasury Department official hopscotched across the Middle East and Europe this month with a warning to Iran’s trading partners: You either trade with Tehran or Washington.

The commercial strongarming is working.

In recent days, Iran has seen its airlines cut off from critical regional routes and its top commercial bank stopped from transacting in the United Arab Emirates and Turkey, both actions that came on top of longstanding sanctions and the continuing U.S. naval blockade.

A growing distrust of Tehran by Gulf Arab states has made the pressure campaign more effective, as the U.S. works to end a war that has sent American fuel prices soaring. The administration is committed to the hardball strategy even as Iran dangles diplomatic overtures, including the offer of a seven-day halt to attacks in an effort to win economic relief.

“We’re seeing a new urgency from our partners,” said the Treasury official, Jonathan Burke, a former managing director at Citi in London. “They’re taking it very seriously.”

British lawyer Nigel Kushner, who has advised companies on Iran sanctions for two decades, said he had never seen such intense pressure applied on Iran’s banking and aviation sectors.

“The U.S. has achieved greater impact in a matter of weeks than during the lengthier campaigns commenced from 2010,” Kushner said.

Iranian President Masoud Pezeshkian, speaking this week at the United Nations General Assembly, acknowledged the pain the sanctions are causing but said his nation would stand up to the pressure.

“The resistance of the Iranian people will only increase in the face of sanctions,” Pezeshkian said. “We will never bow our head or bend at the knee.”

Iran has faced a growing burden of sanctions since the 1979 Islamic Revolution and the U.S. Embassy hostage crisis. Despite losing contact with the dollar system and overseas assets, however, Tehran has managed to hang on to vital air links and banking connections with neighbors across the Middle East.

The war this year has soured many Gulf countries on those ties. Iran lashed out at targets including energy infrastructure in countries such as the U.A.E., a key commercial conduit to the world. The paramilitary Islamic Revolutionary Guard Corps continues to attack ships around the Strait of Hormuz, the narrow mouth of the Persian Gulf that had been the gateway for about a fifth of the world’s oil. Meanwhile, Iranian-backed Houthi rebels in Yemen have seized territory along the Bab al-Mandeb Strait, the Red Sea’s version of the Hormuz chokepoint, and have attacked Saudi oil infrastructure.

Now Iran’s trade partners face the prospect of the U.S. turning on them if they fail to break some of Tehran’s last remaining connections to the outside world.

“Iran has been a problem for 50 years, and we’ve kind of reached our peak at tolerating this problem,” said Burke, who is an assistant secretary for terrorist financing.

Middle East nations have taken notice of the U.S. view, starting with Oman, the first stop on Burke’s regional tour.

Oman long has served as an intermediary between Iran and the West, but has faced growing threats from Trump as the Iran war continued. Burke’s first target was flights by Iranian carrier Mahan Air, a private carrier linked to the Islamic Revolutionary Guard Corps and thought by the West to funnel arms, troops and supplies. Though the airline had been sanctioned by the U.S., Oman and others allowed their flights.

“I’ve had calls with some of these partners for months, raising Mahan Air,” Burke said. “I pull up FlightRadar, and I can see a flight in between the countries while we’re on the call. I’m like, ‘How can you possibly allow this?’ ”

Oman’s government saw Burke’s visit as a sign the U.S. was serious about enforcing its sanctions and that refusing to cooperate could hurt their economy, Middle Eastern officials familiar with the matter said. Within a week, Muscat banned all Mahan flights and, after new U.S. restrictions on Iranian aviation came into force, followed up Wednesday by blocking all Iran airlines.

Burke then flew to meet officials in the U.A.E. While an important U.S. ally in the region, the U.A.E. also maintains longstanding cultural and economic ties with Iran that have given Tehran a crucial back door to the global financial system.

In conversation there, Burke mentioned recent action against the local branch of an Egyptian bank that had dealings with Iran, people familiar with the matter said.

This week, Emirati officials banned local branches of Bank Melli Iran—the Islamic Republic’s biggest commercial lender—from conducting transactions involving Iran.

“The action strikes at the plumbing of Iran’s external commerce,” said Mustapha Pakzad, a former Iranian financial intermediary who used the bank in the past to help Iranian clients pay for goods.

On Thursday, the Emirates banned all flights by Iranian airlines, a move likely to disrupt commerce.

Burke also traveled to Turkey, which then canceled Mahan flights as well. Ankara also canceled the license of one of Iran’s largest private lenders, Bank Mellat, an institution that serves as a conduit for trade transactions between Iran and Turkey.

Overall, the Treasury Department met with more than 50 countries. Diplomats reached out to nations like Azerbaijan and Georgia, which also shut out Iran’s airlines.

Some routes out into the world remain for Iran. Mahan still flies to China and Russia, two of Iran’s biggest partners. The Treasury Department has sanctioned Iranian-affiliated businesses and agents in both countries, though Burke said discussions with them are part of broader political negotiations with the White House.

Burke finished his two-week trip in London, where he visited the Foreign Office and the U.K. Treasury. The U.K. has announced it won’t renew waivers for Iranian banks that have been working in Europe’s financial capital.

That action could effectively shut down London’s Bank Melli subsidiary, whose British license is due for renewal next month—piling even more pressure onto Tehran.

“The impact of sanctions is only effective if you can convince them you are very serious,” said Matthew Levitt, who served as the deputy assistant secretary for intelligence and analysis at the Treasury Department in the George W. Bush administration. “But the truth is in the pudding. It only works if you keep the pressure up.”

EU turns to Norway and Canada for space launch sites

Space commissioner is touring potential locations for launchers as the bloc tries to boost its satellite capabilities

The EU will have to look beyond its borders to find launch pads to hit its ambitious satellite targets, the European space commissioner has said.

Andrius Kubilius told the FT that the bloc will need to use sites in Norway, the UK and Canada as it forecasts a sixfold increase in rocket launches by 2034.

“We are targeting launching capabilities as a very, very important priority in space,” Kubilius said, ahead of a “launch tour” where he will visit sites across Europe where launchers exist or could be developed. “It is critical for us.”

The EU is building its own constellation intended to give an alternative to Elon Musk’s Starlink, plus a secure government satellite network. He said there would also be demand from member states and commercial providers. 

Over the next eight years, compared with the 2016 — 2024 period, the number of national defence satellites will grow from about 20 to almost 300. 

Government satellites will increase from nearly 70 to nearly 630. Commercial satellites will almost double from 1,000 satellites, the commissioner said.

The EU will require 62 launches a year by 2034 for Galileo Copernicus, secure satellite connectivity and a new planned Earth Observation governmental service. The Ariane 6 rocket using the main European Space Agency pad in French Guiana — which is a French overseas territory — can cope with 10 launches annually and needs to reach 14, he said.

The European Space Agency, the main engine of space activity on the continent, is mostly made up of EU members but is not an EU body. The UK and Norway are ESA members, and Canada is a partner. It is also considering where to invest more money in launch capability.

“We’re really expanding our launching capabilities . . . on the European continent, or in the neighbourhood, like Andøya [in Norway], like Scotland. Portugal is looking for possibilities in the Azores. Canada can be another,” Kubilius said.

European sites are at a disadvantage for technical reasons compared with counterparts at the equator for some satellite launches.

Launches at latitudes near the equator — such as French Guiana — can help cut fuel consumption. The equator is the widest part of Earth relative to the North Pole–South Pole axis on which the planet spins, meaning that locations here spin fastest because they are covering more distance with each orbit.

In practical terms, this means that a satellite launched east in the direction of Earth’s spin gets a free velocity boost like a slingshot of about 1,675km/h. That number would be zero at the poles.

Sites near the equator are best, too, for the launch of so-called geostationary satellites. These occupy a fixed point relative to Earth, which means they have to orbit above the equator in order to mimic the planet’s own rotation.

A further consideration in choosing satellite launch locations is that they should be away from population centres, in case of crashes or falling debris. This is more problematic for Europe than for some regions, as much of the continent is relatively densely populated.

Germany’s Isar Aerospace this month became the first commercial company to deliver satellites into orbit from Europe, using Andøya. It is building a spaceport in Nova Scotia.  

Kubilius, a trained physicist, said European companies also needed to “look into rockets — how to scale up, how to develop new types.”

The EU is building a new Iris² multi-orbit constellation, expanding the Galileo navigation system and Copernicus, its Earth observation network.

Musk’s SpaceX launched 170 rockets last year, while Europe launched just eight. Kubilius is going to replicate a “Missile Tour” he did this spring to learn how to boost capacity for missiles for Ukraine.

“I am going on what we call a Launching Tour. I will go around launch pads and I will go around the major producers of rockets.” 

He said the missile tour was “very informative for us”. We understood what some of the problems are and what we need to do.”

He also said the EU needed more sites that could launch heavy payloads, which currently only French Guiana can.

However, there would be increased need for so-called “micro launching” not just for satellites but possibly space weapons. 

“We’re talking not about space for defence, but . . . defence for space. How to defend our capabilities in space and how to have possibilities to react immediately [to attack]. Those micro-launchers can be very, very important.”